EXHIBIT 2.2
SALE OF BUSINESS AGREEMENT
between
BURRE BAKERIES CC
and
XXXXXXXX XXXXX XXXXXX XXXXX
and
ASTORIA BAKERY (PROPRIETARY) LIMITED
and
FIRST SOUTH AFRICAN HOLDINGS (PROPRIETARY) LIMITED
and
FIRST SOUTH AFRICA CORP., LTD
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Xxxxxx Xxxxxxx Xxxxxx
TABLE OF CONTENTS
Page
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1. Introduction.............................................................................................1
2. Definitions and interpretation...........................................................................1
3. Preparation of the seller's 1996 financial statements and the ABL 1996 financial
statements...............................................................................................5
4. The sale.................................................................................................5
5. Risk.....................................................................................................6
6. Purchase price...........................................................................................6
7. Adjustments to and manner of payment of the first instalment.............................................8
8. Adjustments to and manner of payment of the third and fourth instalments.................................9
9. Restrictions on disposal of FSAH "B" shares..............................................................9
10. Put option...............................................................................................9
11. Security for payment of the purchase price..............................................................10
12. Set-off of damages against instalments of the purchase price............................................11
13. Delivery and related matters............................................................................12
14. Contracts and unfulfilled orders........................................................................12
15. Insolvency Act - section 34.............................................................................13
16. Employees...............................................................................................13
17. Pension fund............................................................................................14
18. Guarantees, suretyships and indemnities.................................................................14
19. Undertakings in respect of the premises.................................................................15
20. Warranties..............................................................................................16
20.1.1 assets...................................................................................16
20.1.2 manner of carrying on business...........................................................17
20.1.3 goodwill and scope of business...........................................................17
20.1.4 contracts................................................................................18
20.1.5 intellectual property rights.............................................................19
20.1.6 laws, regulations, consents, licences and permits........................................19
20.1.7 labour laws, regulations, determinations, agreements
and disputes.............................................................................19
20.1.8 insurance................................................................................20
20.1.9 employment, leave, remuneration and pension..............................................20
20.1.10 restraint of trade.......................................................................21
20.1.11 warranties regarding books of account....................................................21
20.1.12 environmental warranties.................................................................21
20.2.1 warranties relating to the business of ABL...............................................22
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Page
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20.2.2 assets of ABL............................................................................23
20.2.3 warranty regarding registration..........................................................23
20.2.4 warranties regarding capital structure and the shares....................................23
20.2.5 warranties regarding statutory requirements..............................................24
20.2.6 warranties regarding books of account and minutes........................................25
20.2.7 warranties regarding taxation............................................................25
20.2.7.1 administration...........................................................25
20.2.7.2 deductible payments......................................................26
20.3 disclosure...............................................................................26
21. Confidentiality.........................................................................................27
22. Restraints..............................................................................................28
23. Value-added tax.........................................................................................30
24. Breach..................................................................................................30
25. Mediation and arbitration...............................................................................31
26. Costs...................................................................................................33
27. Miscellaneous matters...................................................................................34
27.1 addresses for service of legal documents.................................................34
27.2 entire contract..........................................................................34
27.3 no representations.......................................................................34
27.4 variation, cancellation, waiver..........................................................35
27.5 indulgences..............................................................................35
27.6 cession..................................................................................35
27.7 applicable law...........................................................................35
27.8 jurisdiction.............................................................................36
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1. Introduction
1.1 The seller carries on the business, as defined. The business
is a going concern.
1.2 The seller wishes to sell and the purchaser wishes to
purchase the business as a going concern on the terms and
conditions set out below. The purchaser also requires
warranties and a restraint of trade from the warrantor and
the seller, which these persons are prepared to give.
1.3 The parties accordingly wish to enter into an agreement on
the terms and conditions set out below.
2. Definitions and interpretation
2.1 In this agreement, unless inconsistent with the context,
words referring to:
2.1.1 one gender include a reference to the other
genders;
2.1.2 the singular include the plural and vice versa;
2.1.3 natural persons include artificial persons and
vice versa.
2.2 Whenever a number of days is prescribed in this agreement,
such number shall be calculated excluding the first and
including the last day, unless the last day falls on a
Saturday, Sunday or official public holiday, in which case
the last day shall be the next day which is not a Saturday,
Sunday or official public holiday.
2.3 Any appendices to this agreement shall be deemed to form
part of this agreement.
2.4 The following expressions shall, unless otherwise stated or
inconsistent with the context in which they appear, bear the
following meanings and cognate expressions shall bear
corresponding meanings:
2.4.1 "ABL" - Astoria Bakery Lesotho (Proprietary)
Limited, registration no. 79/26, a company
incorporated under the laws of Lesotho;
2.4.2 "the ABL 1996 financial statements"- the audited
financial statements of ABL for the period ending
29 February 1996;
2.4.3 "the business" - means the business of the seller
conducted under the name "Astoria Bakeries" using
the sale assets and involving the manufacture of
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breads, confectioneries, and other rye or wheaten
products;
2.4.4 "the contracts" - those contracts of the seller
relating to the business, other than the agreement
between the seller and the Industrial Development
Corporation relating to a loan in an amount of
R2030000, used to finance buildings owned by
Ferndale Property cc;
2.4.5 "the creditors" - all trade creditors of the
seller as at the effective date;
2.4.6 "debts" - all of the claims of the seller against
the debtors of the business as at the effective
date;
2.4.7 "the effective date" - 1 July 1996;
2.4.8 "the employees" - those individuals employed by
the seller on the effective date;
2.4.9 "fixed assets" - those fixed assets used by the
seller in the conduct of the business at the
effective date;
2.4.10 "the first instalment"- the first instalment of
the purchase price specified in 6.1.1;
2.4.11 "the fourth instalment" - the fourth instalment of
the purchase price specified in 6.1.4;
2.4.12 "FSAC" - First South Africa Corp., Ltd,
registration number EC 21106, a company
incorporated under the laws of Bermuda, certain of
the shares of which are quoted on NASDAQ;
2.4.13 "FSAH"- First South African Holdings (Proprietary)
Limited, registration number 95/03959/07, a
private company incorporated according to the laws
of the Republic of South Africa, the "A" shares of
which are owned by FSAC;
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2.4.14 "FSAH "B" shares" - "B" shares in the capital of
FSAH;
2.4.15 "the intellectual property agreement"- the
agreement to be entered contemporaneously with
this agreement, relating to the sale of the
intellectual property in the recipes utilised by
the seller in the business, substantially in the
form of Appendix 1;
2.4.16 "the landlords" - Strydom Park Property cc and
Ferndale Property cc;
2.4.17 "the Lesotho shares"- the shares of ABL, formerly
owned by the warrantor and sold by the warrantor
to the seller;
2.4.18 "the premises" - the premises from which the
seller conducts the business;
2.4.19 "the purchaser" - Astoria Bakery (Proprietary)
Limited, registration number 96/10419/07, a
private company incorporated according to the laws
of the Republic of South Africa;
2.4.20 "the retained liabilities" - all the liabilities
of the business as at the effective date, whether
actual or contingent, other than the sale
liabilities;
2.4.21 "the sale assets" - the aggregate of:-
2.4.21.1 the fixed assets;
2.4.21.2 the stock;
2.4.21.3 the debts;
2.4.21.4 the Lesotho shares;
2.4.21.5 the trademarks;
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2.4.21.6 the rights of the seller arising on or
after the effective date under the
contracts;
2.4.22 "the sale liabilities" - the aggregate of:
2.4.22.1 the creditors;
2.4.22.2 the obligations of the seller under the
shareholder's loan; and
2.4.22.3 the obligations of the seller arising on
or after the effective date under the
contracts;
2.4.23 "the second instalment" - the second instalment of
the purchase price specified in 6.1.2;
2.4.24 "the seller" - Burre Bakeries CC, formerly Astoria
Bakery CC, registration number CK 92/04279/23, a
close corporation incorporated according to the
laws of the Republic of South Africa;
2.4.25 "the seller's 1996 financial statements"- the
audited financial statements of the seller for the
period ending 29 February 1996, to be prepared in
accordance with clause 3;
2.4.26 "the shareholder's loan"- the loan by the
warrantor to the seller, which the seller warrants
will be not less than R300000;
2.4.27 "signature date" - the date on which this
agreement is signed by the last party to do so;
2.4.28 "the stock" - means the stocks of ingredients,
work-in-progress and finished baked goods intended
for resale by the seller, on hand at the
commencement of business on the effective date;
2.4.29 "the trademarks" - the unregistered trademark
"Astoria" and the wheat sheaf logo used by the
seller in its business;
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2.4.30 "this agreement" - this agreement, and all the
appendices to this agreement;
2.4.31 "the third instalment"- the third instalment of
the purchase price specified in 6.1.3;
2.4.32 "the warrantor" - Xxxxxxxx Xxxxx Xxxxxx Xxxxx, the
sole member of the seller;
2.4.33 "the warranty date" - 24 October 1996.
3. Preparation of the seller's 1996 financial statements and the ABL 1996
financial statements
The seller's 1996 financial statements and the ABL 1996 financial
statements shall be prepared by the seller and ABL respectively and
audited by Messrs Kana & Associates. The seller and the warrantor
warrant that the seller's 1996 financial statements and the ABL 1996
financial statements:-
3.1 will, in the case of the seller, be prepared in accordance
with the Companies Act 61 of 1973 and with South African
generally accepted accounting practice, and in the case of
the ABL 1996 financial statements, will be prepared in
accordance with applicable Lesotho legislation and generally
accepted accounting practice;
3.2 will be prepared on the same basis and applying the same
accounting policies as for all prior years;
3.3 will not reflect any revaluation of assets;
3.4 will fairly present the financial position and state of
affairs of the seller or ABL, as applicable, at 29 February
1996 and the results of operations of the seller or ABL, as
applicable, for the period ended 29 February 1996; and
3.5 will be reported on without qualification by the seller's or
ABL's auditors, as the case may be.
4. The sale
4.1 With effect from the effective date the seller sells and the
purchaser purchases the business as a going concern. Such
sale encompasses inter alia the acquisition by the purchaser
of the sale assets and the assumption by the purchaser of
the sale liabilities.
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4.2 The sale will be deemed to have taken effect on the
effective date, notwithstanding the date on which this
agreement is signed.
4.3 Nothing contained in this agreement will operate to transfer
to the purchaser any asset or liability other than the sale
assets and the sale liabilities. In particular the sale
excludes the retained liabilities.
4.4 The seller shall discharge the retained liabilities and all
other debts, liabilities and obligations in connection with
the business not expressly assumed by the purchaser under
this agreement and shall indemnify the purchaser against all
costs, claims, demands and liabilities in respect of any of
those obligations or any failure of the seller to discharge
them.
4.5 The parties agree that:-
4.5.1 the sale of the business comprises the sale of the
seller's business as a going concern;
4.5.2 the business was an income-earning activity on the
effective date and on the warranty date;
4.5.3 the sale encompasses the sale of all assets
necessary for the conduct of the business.
5. Risk
The risk in and the benefit of the business will be deemed to have
passed to the purchaser on the effective date.
6. Purchase price
6.1 The purchase price of the business shall, (subject to a
minimum of R12000000), be the aggregate of the following
instalments as adjusted pursuant to clauses 7 or 8, as the
case may be-
6.1.1 a first instalment of R4000000 payable by the
issue of 186047 FSAH "B" shares, valued at US$5,00
per share converted into Rand at a fixed exchange
rate of R4,30 to the dollar. It is recorded that
this instalment was paid on or about 17 October
1996;
6.1.2 a second instalment of R8000000, payable in cash.
The second instalment will be paid on or before 31
July 1997;
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6.1.3 a third instalment equal to the pre-tax profits of
the purchaser for the year ending 30 June 1998,
less R2000000. The third instalment shall be paid
in cash and by the issue to the seller of FSAH "B"
shares. The amount payable in shares will be 40%
of the pre-tax profits of the purchaser for the
year ended 30 June 1998, prior to the R2000000
reduction. The balance of the third instalment
will be paid in cash. The FSAH "B" shares shall be
issued at a price equal to the US Dollar
denominated closing price of the ordinary NASDAQ
listed shares of FSAC on 30 June 1998, converted
into Rand at the spot rate of exchange of US
Dollars for South African Rand quoted by Nedbank
at close of business on 30 June 1998. This rate
shall be established, in the event of a dispute,
by a certificate given by any manager of Nedbank
whose designation it shall not be necessary to
prove and whose determination shall be proof of
the rate until the contrary is proved;
6.1.4 a fourth instalment, determined in accordance with
the formula:-
F = [25% x (4 x P)] - M
where
F is the value of the fourth instalment
to be determined;
P is the consolidated pre-tax profits of
the purchaser for the year ended 30 June
1999; and
M is the lesser of the Rand values of
the second and third instalments;
payable by the issue to the seller of FSAH "B"
shares. The FSAH "B" shares shall be issued at a
price equal to the US Dollar denominated closing
price of the ordinary NASDAQ listed shares of FSAC
on 30 June 1999, converted into Rand at the spot
rate of exchange of US Dollars for South African
Rand quoted by Nedbank at close of business on 30
June 1999. This rate shall be established, in the
event of a dispute, by a certificate given by any
manager of Nedbank whose designation it shall not
be necessary to prove and whose determination
shall be proof of the rate until the contrary is
proved.
6.2 Notwithstanding the preceding sub-clauses of this clause,
the purchase price, inclusive of the consideration for the
intellectual property, shall not exceed R24000000 in total.
In calculating this amount appreciation or depreciation of
the FSAH "B" shares shall be excluded.
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6.3 FSAH shall, if a disposal by the purchaser of all the FSAH
"B" shares comprised in the first instalment of the purchase
price realises less than R4000000, pay the difference
between R4000000 and the price realised by the seller to the
seller on demand, it being intended that the value of the
first instalment shall, provided that 7.1.1 and 7.1.2 are
complied with, be not less than R10000000. This sub-clause
shall apply only to disposals prior to 31 March 1999 (after
which FSAH will have no liability under this sub-clause) and
provided that 7.1.1 and 7.1.2 are complied with.
6.4 The purchase price shall be allocated as follows: -
6.4.1 to the debts, their face value as at the effective
date;
6.4.2 to the stock, its face value as at the effective
date;
6.4.3 to the Lesotho shares, the net asset value per
share;
6.4.4 to the trademarks, seller's valuation;
6.4.5 to the fixed assets, their tax value; and
6.4.6 the balance as to goodwill.
No value is attributed to the contracts.
6.5 The purchaser indemnifies the seller against any additional
tax the seller may incur as a result of any recoupment
arising pursuant to any allocation referred to in 6.4.4 or
6.4.5.
7. Adjustments to and manner of payment of the first instalment
7.1 The first instalment shall be reduced on a Rand for Rand
basis by the amount of:-
7.1.1 any distribution of after tax profit by the seller
or ABL in the nature of a dividend between 29
February 1996 and the date of signature of this
agreement; and
7.1.2 any amount paid by the seller to the warrantor in
breach of the warranty set out in 20.1.9.1 or
which is otherwise outside his normal
remuneration.
7.2 It is recorded that the first instalment was paid on the
warranty date.
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8. Adjustments to and manner of payment of the third and fourth instalments
8.1 Each of the third and fourth instalments will be paid within
14 days of the finalisation of the consolidated audited
accounts of the purchaser for the year concerned. The
purchaser and FSAH undertake to use all reasonable
endeavours to ensure that each such audit is finalised by no
later than 30 September of the relevant year.
8.2 In determining the pre-tax profit of the purchaser on which
each of the third and fourth instalments will be based, no
account shall be taken of interest incurred on borrowings to
finance any such instalment. Any such interest shall, for
the sole purpose of quantifying the relevant instalment, be
added back to the profit reflected in the financial
statements for the year concerned.
8.3 In the event of any unresolved dispute between the seller
and the purchaser as to the profit figure on which any of
the third or fourth instalments is based, the dispute shall
be resolved by an independent firm of auditors agreed by the
parties, and in the absence of agreement within 7 days,
appointed by the Chairman of the South African Institute of
Chartered Accountants. The determination of the auditor
shall be final and binding on the parties.
9. Restrictions on disposal of FSAH "B" shares
9.1 Notwithstanding 6.3, the seller and the warrantor undertake
that they shall not dispose of or attempt to dispose of, or
cede, pledge, assign or otherwise encumber any of the FSAH
"B" shares forming part of any instalment of the purchase
price prior to 30 September 1998, provided that this clause
shall not prevent a disposal of the shares by the seller to
the warrantor or a trust of which the warrantor is a
beneficiary.
9.2 Any sale in contravention of 9.1 shall be void and the
directors of FSAH shall not enter the name of the transferee
in the share register of FSAH or otherwise recognise any
title of the purported purchaser of the shares. In addition
FSAC shall be entitled to purchase the affected FSAH "B"
shares from the defaulting holder of FSAH "B" shares at par.
The rights conferred on FSAC and the obligations imposed on
the seller shall not prejudice any other rights available to
the purchaser FSAC or FSAH arising from such breach.
10. Put option
10.1 FSAC undertakes to procure that a non-resident third party,
("the option grantor"), will undertake to purchase from the
seller and/or the warrantor and/or their nominee or
successor-in-title all of the FSAH "B" shares to be issued
by the
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purchaser to the seller pursuant to this agreement, ("the
put option").
10.2 The material terms of the put option will be the following:-
10.2.1 it will only be exercisable when the seller or the
warrantor become entitled to sell the FSAH "B"
shares, determined in accordance with 9;
10.2.2 the price at which the put option may be exercised
shall be the net price received by the option
grantor from the sale on the open market in the
United States of an equivalent number of shares of
FSAC. For this purpose "net price" shall mean the
price for which the FSAC shares are sold less all
costs associated with the sale, including any
broker's commission;
10.2.3 although the put option may be exercised in
tranches each tranche shall comprise a minimum of
100 shares;
10.2.4 for so long as South African exchange control
regulations prescribe that South African residents
shall repatriate foreign currency to South Africa,
the seller acknowledges that any proceeds from any
sale of the option shares shall be repatriated to
South Africa.
11. Security for payment of the purchase price
11.1 As security for payment of the second instalment of the
purchase price by the purchaser and for the obligations of
FSAH imposed by 6.3, FSAH shall deliver to Xxxxxx Xxxxxxx
Xxxxxx, to hold in escrow, share certificates evidencing 50%
of the issued shares of the purchaser together with blank
signed transfer forms in respect of those shares, ("the
security documentation").
11.2 The parties shall procure that Xxxxxx Xxxxxxx Xxxxxx shall
hold the security documentation and deal with it as
follows:-
11.2.1 if the purchase price is paid in full in
accordance with this agreement Xxxxxx Xxxxxxx
Xxxxxx shall, on receipt of written notice from
the purchaser and the seller that the purchase
price has been paid in full, deliver the security
documentation to FSAH;
11.2.2 if the purchaser breaches its obligations to pay
any instalment of the purchase price in accordance
with this agreement, and fails to remedy such
breach in accordance with this agreement, Xxxxxx
Xxxxxxx Xxxxxx shall, upon receipt of either:-
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11.2.2.1 written notice signed by the seller and
the purchaser that the shares are to be
delivered to the seller; or
11.2.2.2 written notice signed by the seller and
accompanied by a copy of any judgement
or arbitral award finding in the
seller's favour that the purchase price
has not been paid in full;
deliver the security documentation to
the seller.
12. Set-off of damages against instalments of the purchase price
12.1 Should the seller or the warrantor breach any provision of
this agreement the purchaser shall be entitled to deduct
from the next instalment of the purchase price the amount of
any loss or damages suffered by the purchaser arising from
that breach as determined by a court or an arbitrator.
Should the damages exceed the amount of the next instalment
the excess may, at the purchaser's discretion, be carried
forward and be deducted from future instalments of the
purchase price until satisfaction.
12.2 The provisions of this clause shall be without prejudice to
any other right of the purchaser arising from a breach of
this agreement. In particular, the purchaser shall not be
obliged to wait until the date of payment of the next
instalment to recover its damages.
12.3 In the event of a dispute over whether the purchaser has
suffered any loss or damages arising from a breach of this
agreement, or in respect of the quantum of such damages, the
purchaser shall pay the amount claimed, to a maximum of the
cash portion of the following instalment, to Xxxxxx Xxxxxxx
Xxxxxx to invest in an interest-bearing trust account in
accordance with the provisions of section 78(2A) of the
Attorneys Act No 53 of 1979. The balance of the cash portion
in excess of the amount claimed shall be paid to the seller.
Upon determination of the amount of the loss or damages in
accordance with this agreement the difference, if any,
between the amount paid into trust and the amount of the
damages, together with a pro rata portion of interest earned
on the trust deposit, shall be paid to the seller and the
balance refunded to the purchaser.
12.4 Subject to 12.1 to 12.3 instalments of the purchase price
shall be paid to an account nominated by the seller, free of
exchange and without deduction or set-off. Bank and other
charges will be for the account of the purchaser.
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13. Delivery and related matters
13.1 It is recorded that the business has been delivered to the
purchaser. All books and records which may be held by the
seller are accordingly held by the seller as agent for the
purchaser.
13.2 The seller and the warrantor undertake to procure, not less
than 72 hours after the date of signature, or such longer
period as may be determined by the purchaser, that an
appointee of the purchaser will proceed to assume control of
the accounting function of the seller. Such person will,
within 60 days of his or her appointment, take over all of
the functions currently performed by Faspac (Pty) Ltd in
relation to the business. The seller will procure that
Faspac's appointment will be terminated at the expiry of the
60 day period and that all documents, books and records of
the business in the possession of Faspac or any of its
employees, officers of agents will be handed over to the
purchaser or its agent.
13.3 The seller and the warrantor undertake to procure, within 48
hours of the date of signature, that all bank accounts of
the business, including those of Astoria Bakeries Lesotho
(Pty) Ltd, will be transferred to Nedbank, a division of
Nedcor Bank Limited, and that the warrantor will be released
from all suretyships given in respect of existing accounts.
14. Contracts and unfulfilled orders
14.1 It is recorded that from the effective date the purchaser
has been entitled to the benefit of the contracts.
14.2 The seller shall indemnify the purchaser against all
actions, proceedings, costs, damages, claims and demands in
respect of any act or omission on the part of the seller in
relation to the contracts on or before 24 October 1996.
14.3 Insofar as the benefit or burden of any of the contracts
cannot effectively be assigned to the purchaser except with
the consent to the assignment from the person, firm or
company concerned then:
14.3.1 the seller shall use all reasonable endeavours to
procure the consent to assignment;
14.3.2 until the contract is assigned the purchaser
shall, as the seller's sub-contractor, perform all
the obligations of the seller under the contract
to be discharged after the warranty date and shall
indemnify the seller against all actions,
proceedings, costs, damages, claims and demands in
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respect of any failure on the part of the
purchaser to perform those obligations; and
14.3.3 until the contract is assigned the seller shall
(so far as it lawfully may) give all reasonable
assistance to the purchaser to enable the
purchaser to enforce its rights under the
contract.
14.3.4 The purchaser shall execute for its own benefit
any unfulfilled order accepted by the seller in
the ordinary course of business prior to the
effective date.
15. Insolvency Act - section 34
15.1 The sale of the business will not be published in terms of
section 34(1) of the Xxxxxxxxxx Xxx, 0000.
15.2 The seller indemnifies the purchaser against any loss or
damage which the purchaser may suffer as a result of notice
of this transaction not being published in terms of the
Insolvency Act.
15.3 The purchaser shall have no duty to resist any proceedings
to attach or to take possession of any of the assets by any
persons against whom this transaction is void in terms of
the Insolvency Act as a consequence of notice of this
transaction not being published as aforesaid; provided that
the purchaser shall be obliged to give written notice to the
seller as soon as it becomes aware of any such proceedings.
15.4 Should the purchaser give notice to the seller in terms of
16.3, and should the seller fail within 7 days of receipt by
it of such notice to procure that the assets concerned are
released from attachment or are returned to the purchaser,
as the case may be, then the purchaser shall be entitled to
settle the liability and recover the amount thereof from the
seller or, at the purchaser's discretion, to exercise the
remedies conferred on the purchaser by clause 24.
16. Employees
16.1 The purchaser undertakes to offer to employ all the
employees on the basis that:
16.2 the employment of all employees who accept the purchaser's
offer will be deemed to have commenced on the date of their
employment by the seller; and
16.2.1 any offer made by the purchaser will be on terms
and conditions which are no less favourable
overall than those enjoyed by the employees
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immediately prior to the effective date. In
particular the employees will receive credit for
past service with the seller.
16.2.2 All obligations to the employees who accept
employment with the purchaser shall be borne by
the purchaser.
16.3 The purchaser shall not be responsible for any costs of any
nature, including retrenchment costs, incurred by the seller
in connection with any employee who does not accept the
offer referred to in 16.1. The seller hereby irrevocably and
unconditionally agrees to indemnify the purchaser against
all loss, liability, damage or expense which the purchaser
may suffer or sustain as a result of or which may be
attributable to any act or omission by the seller in
relation to the employees of the seller or any of them or
any other event, matter or circumstances occurring or having
its origin prior to 24 October 1996 which relates to any of
those employees, whether as a consequence of the purchase
and sale of the business or otherwise, it being recorded,
without limiting the provisions of this clause, that the
purchaser shall not be responsible for the payment of any
compensation payable to any employee as a consequence of his
retrenchment or redundancy.
16.4 The purchaser, FSAC and FSAH undertake to procure that the
warrantor is appointed as chairman and managing director of
the purchaser.
17. Pension fund
The parties shall procure that the purchaser is substituted for the
seller as employee under the existing pension fund.
18. Guarantees, suretyships and indemnities
18.1 The purchaser undertakes to procure that the seller will be
released from any guarantees and suretyships given by the
seller in respect of the business, within 60 days of the
warranty date. The seller undertakes to give the purchaser
all necessary co-operation to assist the purchaser in
procuring the seller's release by such date.
18.2 If the purchaser is not able to obtain the release from the
guarantees and suretyships referred to in 18.1 or has not
done so at the time a claim is made against the seller under
any such guarantee or suretyship, the purchaser will
indemnify the seller and hold the seller harmless against
any claim made against the seller under the guarantee or
suretyship concerned and against all reasonable costs
incurred by the seller in obtaining its release from the
guarantees. In the event that such a claim is made the
seller shall forthwith notify the purchaser of the fact that
the claim has been made and of full particulars thereof and
the purchaser shall
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place the seller in funds to enable the seller to discharge
its liability under the suretyship or guarantee.
19. Undertakings in respect of the premises
19.1 The purchaser undertakes to purchase, at the purchaser's
election, either the shares (after conversion) of Strydom
Park Property cc (referred to in this clause as "Strydom
Park") and Ferndale Property cc, (referred to in this clause
as "Ferndale"), or the immovable properties owned by these
entities, being the premises, on the following material
terms and conditions:-
19.1.1 the purchaser shall not be obliged to purchase
either the properties or the shares referred to in
19.1 unless Cardington Investments (Pty) Ltd, the
food holding company which owns all the issued
shares of the purchaser, is converted to a public
company and listed on the Johannesburg Stock
Exchange prior to 31 December 1997;
19.1.2 the purchase price for the shares of Strydom Park
or the immovable property owned by it will be
R4000000, payable in cash;
19.1.3 the purchase price for the shares of Ferndale or
the immovable property owned by it will be
R2780000, which will be paid by the assumption of
the existing debt of the seller (subject to a
maximum of R2030000) to the Industrial Development
Corporation and as to the balance in cash;
19.1.4 no additional debt will be incurred by either
Strydom Park or Ferndale;
19.1.5 if shares are to be purchased normal warranties
will be given to the purchaser.
19.2 The purchaser will, within 30 days of the date of signature
of this agreement, enter into a lease agreement with each of
Ferndale and Strydom Park on the following material terms
and conditions:-
19.2.1 it will be for a period of 9 years and 11 months
commencing 1 July 1996; and
19.2.2 the rental will be an amount sufficient to give an
annual yield of 12,5% of the values set out in
19.1.2 and 19.1.3, escalating at 9% per annum
compounded.
19.3 To the extent that the amounts paid by the purchaser since 1
July 1996 in respect of rental and to the Industrial
Development Corporation differ from the amount of
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rental due pursuant to 19.2.2, the difference shall be paid
by the person or persons by whom it is due within 30 days of
the date of signature.
19.4 The warrantor, who is the sole member of Ferndale and
Strydom Park and the seller undertake to procure that
Strydom Park and Ferndale comply with the provisions of this
clause.
20. Warranties
20.1 The following warranties are, unless otherwise stated in
respect of any warranty, (in which case the specified period
shall apply), given as at the effective date, the warranty
date and for the entire period between those dates in
respect of the business of the seller. Each of the seller
and the warrantor accordingly warrants to the purchaser that
except as disclosed in writing to the purchaser prior to the
date of signature of this agreement:
20.1.1 assets
20.1.1.1 and except for agreements entered into
in the ordinary course of business, no
other person has any rights to or in
respect of the sale assets.
20.1.1.2 The fixed assets are in good order and
condition and fully operational apart
from breakdowns (in the ordinary course)
on the basis that:
20.1.1.2.1the purchaser shall be
entitled to have the same use
and enjoyment of such assets
as that which the seller had
prior to the date of signature
of this agreement;
20.1.1.2.2the seller is unaware of any
defects therein or any facts
or circumstances which may
cause any of such assets to
break down after the date of
signature of this agreement.
20.1.1.3 The seller has maintained a register of
the fixed assets in accordance with
generally accepted and sound accounting
practice.
20.1.1.4 Save as set out in xxxxxxxx 0, xxxx of
the sale assets are subject to any
mortgage, debenture or notarial bond,
cession or pledge or any other
encumbrance, or have been purchased
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under any hire-purchase or suspensive
sale agreement or are subject to any
lease.
20.1.1.5 None of the sale assets is subject to
any option or right of first refusal of
any person.
20.1.2 manner of carrying on business
Between 29 February 1996 and the warranty date-
20.1.2.1 the seller has continued to carry on the
business in the ordinary and regular
course;
20.1.2.2 the seller has not changed its normal
manner and method of carrying on
business;
20.1.2.3 save as resulted from the strike between
4 and 29 September 1996, there has been
no material adverse change in the
financial position of the business;
20.1.2.4 no assets have been acquired or sold
otherwise than in the ordinary, normal
and regular course of the business and
without the written consent of the
purchaser;
20.1.2.5 the seller has not incurred or become
committed to incur any capital
expenditure in respect of the business
save with the consent of the purchaser;
20.1.2.6 the seller has not entered into any
transaction save in the ordinary and
regular course of conduct of its
business;
20.1.3 goodwill and scope of business
Between 29 February 1996 and the warranty date the seller
will not have done or omitted to do anything which has or
will-
20.1.3.1 materially prejudice the goodwill; or
20.1.3.2 reduce the scope of the business; or
20.1.3.3 result in any customer or supplier of
the seller ceasing to do business with,
or varying the terms on which it does
business with, the business.
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20.1.4 contracts
20.1.4.1 All the contracts have been entered into
under normal credit terms and are
subject to payment in accordance with
those terms.
20.1.4.2 There is no single contract with a
customer or supplier which is of longer
duration than 6 months, and the seller
is not party to any unusual agreement.
20.1.4.3 Save as disclosed in Appendix 5, the
seller is not party to any contract with
any of its directors or employees
requiring more than one month's notice
of termination, or entitling any of them
to compensation on termination of
employment, or to participation in or
entitlement to a commission on profit.
20.1.4.4 The seller is not party to any agreement
which has not been entered into on an
arms-length basis and on terms which are
normal having regard to the nature of
its business.
20.1.4.5 Copies of all contracts and other
documents submitted to the purchaser in
connection with this agreement fully and
correctly reflect all the terms and
conditions thereof, are not subject to
any claim for rectification, and have
not been amended in any respect.
20.1.4.6 The contracts are in full force and
effect and the seller is not in breach
of any contract entered into between it
and any other person and has complied in
all material respects with its
obligations under such contract.
20.1.4.7 The seller and the warrantor are not
aware of any facts, matters or
circumstances which may give rise to the
cancellation of any of the contracts as
a result of any breach thereof by the
seller.
20.1.4.8 The transaction provided for in this
agreement does not constitute a breach
of any of the seller's contractual
obligations in respect of the business
nor will it entitle any person to
terminate any contract to which the
seller is a party in respect of the
business.
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20.1.5 intellectual property rights
20.1.5.1 The business conducted by the seller
does not infringe any patent, copyright,
trademark or other industrial property
rights or any other rights of any other
person and no person is entitled to an
order requiring the seller to change its
name or its trading style, or any of the
marks and designs applied by it to its
products;
20.1.5.2 the seller is the owner of the
trademarks;
20.1.5.3 no person has any option or right of
first refusal to purchase any of the
trademarks and no person other than ABL
has been granted any right to use any of
the trademarks.
20.1.6 laws, regulations, consents, licences and permits
20.1.6.1 The condition of the premises from which
the business is conducted satisfies the
requirements of all relevant authorities
for the grant of the same trade licences
as are presently held by the seller in
respect of the business on terms at
least as favourable as those which apply
to the seller.
20.1.6.2 All instructions which have, from time
to time, been issued by any inspector
appointed in terms of the Factories Act
have been carried out in respect of the
premises.
20.1.6.3 The seller has complied with all laws
and regulations affecting its affairs
and business.
20.1.6.4 The seller is in possession of all
consents, permits and licences necessary
for the conduct of its business and
affairs, and the seller and the
warrantor are not aware of any facts
which may give rise to the cancellation
of, or failure to renew, any such
licences, permits or consents or to
their only being renewed subject to the
imposition of onerous conditions not
presently applicable thereto.
20.1.7 labour laws, regulations, determinations,
agreements and disputes
20.1.7.1 The seller has complied with all wage
determinations and industrial
conciliation agreements which apply to
it, its business and its employees.
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20.1.7.2 The seller has complied with the
grievance procedures agreed to by it
with regard to grievances of and
relations with its employees.
20.1.7.3 The seller has complied with the labour
union recognition agreement (if any) to
which it is a party.
20.1.7.4 The seller is not party to any labour
disputes and is not obliged by law,
agreement, judgment or order of court,
to reinstate employees who have been
dismissed or will be dismissed.
20.1.8 insurance
20.1.8.1 The seller carries insurance cover in
respect of the business and the sale
assets against loss arising from
accident, fire, earthquake, flood,
burglary, theft, employer's liability,
workmen's compensation, public
liability, storm damage, civil
commotion, riot or political risk and
loss of profits, and such insurance will
continue to be effective for a period
terminating not earlier than thirty days
after the effective date; all premiums
due in respect of such insurance have
been paid and the seller has complied
with all of the conditions to which the
liability of the insurers under the
policies of insurance will be subject.
20.1.8.2 Neither the seller nor the warrantor is
aware of any facts, matters or
circumstances which may give rise to the
cancellation of the policies of
insurance referred to in clause 20.1.8.1
or the repudiation of any claims
thereunder or to such policies not being
renewed in the future or only being
renewed subject to the imposition of
onerous conditions not presently
applicable.
20.1.9 employment, leave, remuneration and pension
20.1.9.1 No employee or official of the seller is
entitled to any exceptional leave
privileges, accumulated leave, payment
in lieu of leave, pension or the like
and none of the terms on which any
employee of the business is employed
(including without limitation any terms
relating to compensation or
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benefits payable to that employee upon
his retrenchment or redundancy) will
have been changed since 31 October 1996.
20.1.9.2 On the warranty date the seller will not
in any material respect have improved
the terms of employment of or
remuneration payable to any of its
employees from that prevailing at 31
October 1996.
20.1.9.3 There is no known unfunded deficit in
respect of any future liability of any
pension or provident fund of which any
of the seller's employees are members;
provided that if there is any known
deficit in respect of services of any
such employees, as certified by any
actuary for the time being of the
pension fund, whether the seller has any
liability in respect thereof or not,
then without prejudice to the
purchaser's right as a result of the
breach of this warranty the purchaser
will be entitled to claim payment from
the seller and the warrantor jointly and
severally, of an amount equal to the
amount of such unfunded deficit.
20.1.10 restraint of trade
The seller is not bound by any restraint of trade
agreement.
20.1.11 warranties regarding books of account
The books and records of the business are
up-to-date and have been properly kept according
to law and will be capable of being written up
within a reasonable time.
20.1.12 environmental warranties
20.1.12.1 The seller complies with all conditions,
limitations, obligations, prohibitions
and requirements contained in any
environmental legislation or
regulations, by-laws, or ordinances
("environmental legislation") and the
warrantors are not aware of any facts or
circumstances which may lead to any
breach of any environmental legislation;
20.1.12.2 no poisonous, noxious, hazardous,
polluting, dangerous or environmentally
harmful substances or articles have been
produced, treated, kept at or deposited
at the premises where the seller carries
on business, or have been released or
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discharged from such premises and in
particular no matter or thing been
discharged into any public sewer or into
any drain or sewer connecting the public
sewer and has not contaminated the land
surrounding the premises or any water;
20.1.12.3 there are no deficiencies in the waste
disposal arrangements carried on at or
in respect of the premises which may
lead to a failure by the seller to
comply with any existing environmental
legislation or which will harm the
environment;
20.1.12.4 there have been no disputes claims or
investigations or other proceedings
pending or threatened regarding the use
of the seller's premises, or the release
of any substances from such premises;
20.1.12.5 there are no environmental claims,
investigations or other proceedings
pending or threatened against the seller
in respect of the business and there is
no actual or contingent liability of
either the seller or the warrantor to
make good, repair, reinstate or clean up
any property;
20.1.12.6 no water, whether surface or ground
water, has been contaminated, polluted
or the quality thereof altered in such a
way that the provisions of any water law
whether common law or statutory law will
have been breached.
20.2 The following warranties are, unless otherwise stated in
respect of any warranty, (in which case the specified period
shall apply), given as at the effective date, the warranty
date and for the entire period between those dates in
relation to ABL and its business. Each of the seller and the
warrantor accordingly warrants to the purchaser that except
as disclosed in writing to the purchaser prior to the date
of signature of this agreement:-
20.2.1 warranties relating to the business of ABL
The seller and the warrantor give to the
purchaser, in relation to the business of ABL, the
same warranties, mutatis mutandis, as are
contained in 20.1, other than the warranties set
out in 20.1.1. In interpreting such warranties,
references to South African legislation shall be
deemed to be references to equivalent Lesotho
legislation, and references to "the seller" shall,
unless intended clearly to refer to the seller, be
deemed to refer to ABL;
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20.2.2 assets of ABL
20.2.2.1 ABL owns all of the assets reflected in
the ABL 1996 financial statements and
has good and marketable title thereto,
and except for agreements entered into
in the ordinary course of business, no
other person has any rights to or in
respect of such assets.
20.2.2.2 The fixed assets of ABL are in good
order and condition and fully
operational apart from breakdowns (in
the ordinary course) and the seller and
the warrantor are unaware of any defects
therein or any facts or circumstances
which may cause any of such assets to
break down after the date of signature
of this agreement.
20.2.2.3 ABL has maintained a register of the
fixed assets in accordance with
generally accepted and sound accounting
practice.
20.2.2.4 None of the assets of ABL are subject to
any mortgage, debenture or notarial
bond, cession or pledge or any other
encumbrance, or have been purchased
under any hire-purchase or suspensive
sale agreement or are subject to any
lease, except as listed in Appendix 4.
20.2.2.5 None of the assets of ABL are subject to
any option or right of first refusal of
any person.
20.2.3 warranty regarding registration
20.2.3.1 ABL is a private company, duly
registered in accordance with the
provisions of the Lesotho Companies Act.
20.2.3.2 No steps have been taken or are
contemplated to deregister ABL.
20.2.4 warranties regarding capital structure and the
shares
20.2.4.1 The authorised share capital of ABL is
M100,000 divided into 100,000 ordinary
shares of M1 each.
20.2.4.2 The issued share capital of ABL is M100
divided into 100 ordinary shares of M1
each, fully paid and ranking pari passu
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in every respect, and the seller is the
sole beneficial owner of such shares.
20.2.4.3 Neither ABL nor its directors, have
issued or agreed to issue any further
shares (including bonus and
capitalisation shares) in the capital of
ABL, nor have they passed or agreed to
pass any resolution for the increase or
reduction of ABL's capital, or for the
creation or issue of any debentures or
securities, or for the alteration of the
memorandum or articles of association of
ABL.
20.2.4.4 ABL's share premium account, if any, has
not been reduced in any manner and ABL
has not transferred any amount from its
reserves (including its share premium
account) or undistributed profits to its
share capital or its share premium
account.
20.2.4.5 No person has any right or option or
right of first refusal to acquire any
shares in ABL, nor to subscribe for or
take up any of the unissued shares in
ABL, nor are any of the shares of ABL
subject to any lien or other
preferential right. In particular, the
seller and the warrantor warrant that
the seller is entitled to dispose of the
ABL shares to the purchaser and that
upon delivery the purchaser will be the
beneficial owner of the ABL shares to
the exclusion of all others.
20.2.4.6 No person has any right to obtain an
order for the rectification of the
register of members of ABL.
20.2.5 warranties regarding statutory requirements
20.2.5.1 ABL has complied with all the provisions
of the Lesotho Companies Act, the laws
relating to taxation and all other laws
and bylaws which affect it and its
property.
20.2.5.2 All statutory requirements of the
Lesotho company and taxation authorities
and all other authorities, governmental,
municipal or otherwise have been
complied with, and there are no matters
outstanding in connection with the
rendering of returns and the payment of
dues and levies.
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20.2.6 warranties regarding books of account and minutes
20.2.6.1 The books and records of ABL are
up-to-date and have been properly kept
according to law and will be capable of
being written up within a reasonable
time so as to record all of the
transactions of ABL.
20.2.6.2 The minute books of ABL contain all of
the resolutions passed by the directors
and the members of ABL.
20.2.7 warranties regarding taxation
20.2.7.1 administration
20.2.7.1.1The records of ABL include all
of the resolutions passed by
the directors and shareholders
of ABL;
20.2.7.1.2ABL is not a party to any tax
objection or appeal nor are
any such proceedings
threatened against or likely
to be instituted by or against
ABL, nor are the seller or the
warrantor aware of any
circumstances which may give
rise to the institution of any
such proceedings;
20.2.7.1.3no queries have been
addressed to ABL or to any of
its representatives by any
official administering any tax
nor have any objections with
regard to any tax been lodged
by ABL which have not been
fully disposed of;
20.2.7.1.4ABL has paid or provided for
or will, prior to the warranty
date, pay all tax where the
due date for payment of the
tax arises on or before the
warranty date; in respect of
any tax which is due for
payment after the warranty
date, adequate provision or
reserves for the payment of
that tax will have been made;
20.2.7.1.5ABL is not liable to pay any
penalty or interest in
connection with any claim for
tax;
20.2.7.1.6ABL is not subject to any
liability as a result of the
re-opening of any tax
assessment;
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20.2.7.1.7all necessary information,
notices and returns (all of
which are true and accurate
and none of which has been
disputed) have been properly
and timeously submitted by ABL
and there is no reason to
suppose that any such
information or return will not
in due course be accepted as
true and accurate by the
taxation authorities of
Lesotho;
20.2.7.1.8ABL has deducted or withheld
all tax which it is required
by law to deduct from any
payment to any person and has
accounted to tax authorities
for all tax so deducted;
20.2.7.1.9ABL has timeously lodged a
claim for any refund of tax to
which ABL is or may be
entitled;
20.2.7.2 deductible payments
no rents, interest, annual payments or
other similar expenditure incurred by
ABL and claimed in respect of any year
ended on or before 29 February 1996 will
be disallowed as a deduction wholly or
in part from the income of ABL.
20.3 disclosure
All facts and circumstances material to this transaction and
not known to the purchaser, or which would be material or
would be reasonably likely to be material to a purchaser of
the business, including the Lesotho shares and to the
purchase price thereof have been disclosed to the purchaser.
20.4 The liability of the warrantor and the seller under the
warranties is joint and several.
20.5 Each of the warranties set out above is without prejudice to
any other warranty and shall not be limited by any other
clause of this agreement.
20.6 Each warranty shall be deemed to be material and to be a
material representation inducing the purchaser to enter into
this agreement.
20.7 The fact that the seller and the warrantor have given the
purchaser the express warranties set out above shall not in
any way be construed as relieving the seller
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and the warrantor in any way from any liability which they
may have at common law arising out of a failure to disclose
any fact in relation to the business or affecting this
agreement.
20.8 The warrantor and the seller jointly and severally indemnify
and hold the purchaser harmless from and against any loss,
damages, claims, actions, liabilities, costs or expenses of
any nature whatsoever and howsoever incurred, which are
suffered or sustained by the purchaser pursuant to any
breach by the seller or the warrantor of any of the
warranties contained in this agreement.
20.9 The rights and remedies of the purchaser in respect of any
breach of the warranties shall not be affected by completion
or by the purchaser failing to exercise or delaying the
exercise of any right or remedy, except a specific and due
authorised written waiver or release, and no single or
partial exercise of any right or remedy shall preclude any
further or other exercise.
21. Confidentiality
21.1 Without the prior written consent of the other parties, each
party will keep confidential and will not disclose to any
person -
21.1.1 the details of this agreement, the details of the
negotiations leading to this agreement, and the
information handed over to such party during the
course of negotiations, as well as the details of
all the transactions or agreements contemplated in
this agreement; and
21.1.2 all information relating to the business or the
operations and affairs of the parties (together
"confidential information").
21.2 The parties agree to keep all confidential information
confidential and to disclose it only to their officers,
directors, employees, consultants and professional advisers
who:
21.2.1 have a need to know (and then only to the extent
that each such person has a need to know);
21.2.2 are aware that the confidential information should
be kept confidential;
21.2.3 are aware of the disclosing party's undertaking in
relation to such information in terms of this
agreement; and
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21.2.4 have been directed by the disclosing party to keep
the confidential information confidential and have
undertaken to keep the confidential information
confidential.
21.3 The obligations of the parties in relation to the
maintenance and non-disclosure of confidential information
in terms of this agreement do not extend to information
that:
21.3.1 is disclosed to the receiving party in terms of
this agreement but at the time of such disclosure
such information is known to be in the lawful
possession or control of that party and not
subject to an obligation of confidentiality;
21.3.2 is or becomes public knowledge, otherwise than
pursuant to a breach of this agreement by the
party who disclosed such confidential information;
21.3.3 is required by the provisions of any law, statute
or regulation, or during any court proceedings, or
by the rules or regulations of any recognised
stock exchange to be disclosed and subject to the
provisions of clause 21.4, the party required to
make the disclosure has taken all reasonable steps
to oppose or prevent the disclosure of and to
limit, as far as reasonably possible, the extent
of such disclosure and has consulted with the
other parties prior to making such disclosure.
21.4 Before any announcement or statement is made as required by
any law, statute or regulation, or the rules or regulations
of any recognised stock exchange, the parties shall use
their best endeavours to provide the other parties with a
written draft of the proposed announcement at least 48 hours
before the proposed time of the announcement and the
participants shall also use their best endeavours to agree
the wording and timing of all public announcements and
statements relating to confidential information. If a
written draft of the proposed announcement cannot be
provided to the other parties or agreement cannot be
reached, by the time that any such announcement or statement
must be made, the party in question shall be free to make
the relevant announcement or statement notwithstanding that
such agreement has not been reached, but in so doing it
shall not disclose more than the minimum information that it
is compelled to disclose. Copies of any public announcement
or statement shall be given to each other party in the most
expeditious manner reasonably available.
22. Restraints
22.1 The seller and the warrantor undertake to the purchaser that
for a period commencing on the effective date and
terminating on 30 June 2002 they will not,
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whether directly or indirectly, compete with the purchaser
or be interested in any business which trades in any field
of activity which is similar to any of the fields of
activity referred to in 22.2 and within any of the areas of
restraint set out in 22.3.
22.2 The fields of activity is respect of which the restraint
applies will be -
22.2.1 each and every activity conducted by the seller
and ABL on the warranty date or the preceding 12
month period;
22.2.2 any activity which is similar to an activity
contemplated in clause 22.2.1;
22.2.3 any new activity which is planned to be undertaken
by the seller or ABL as at the warranty date.
22.3 The areas of restraint referred to in 22.1 shall be South
Africa, Lesotho, Swaziland, Mozambique, Zimbabwe, Botswana,
Namibia and the Indian Ocean Islands.
22.4 For purposes of this clause, the seller and the warrantor
shall be deemed to be so "interested in a business", or
"competing with the purchaser" if either of them becomes
engaged or interested, whether directly or indirectly, and
whether as proprietor, partner, shareholder, agent,
consultant, financier or otherwise, in any company, firm,
business or undertaking which carries on business in any of
the fields referred to in 22.2 or in any of the areas
referred to in 22.3.
22.5 The seller and the warrantor acknowledge that:
22.5.1 the clients of the purchaser are or could be drawn
from all of the areas in which the restraints are
to be operative;
22.5.2 the purchaser would suffer substantial damage if
the seller or the warrantor were to operate a
business similar to that carried on by the
purchaser within the area to which, and during the
time in which, the restraints are to apply; and
22.5.3 the restraints are the minimum restraint required
by the purchaser to provide protection against
unfair competition. Should the reasonableness of
any provision contained in this clause be
disputed, the onus of providing that the provision
is unreasonable will rest on the party alleging
that the provision is unreasonable.
22.6 Each and every restraint contained in this clause is
separate and divisible from every other restraint in this
clause and from any other restraint so that if any one
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of the restraints is or becomes unenforceable for any reason
that restraint will be severable and will not affect the
validity of any other restraint contained in this clause.
23. Value-added tax
23.1 The parties record their understanding that the sale of the
business falls within the ambit of section 11(1)(e) of the
Value Added Tax Act, 89 of 1991, as amended, and accordingly
value-added tax is payable on the sale at the rate of zero
percent.
23.2 However, it is recorded that if the sale of the business in
terms of this agreement is subject to value-added tax, the
purchaser will pay to the seller value-added tax at the
prescribed rate on the purchase price against presentation
of the relevant tax invoice.
24. Breach
24.1 If a party breaches any provision of this agreement and
remains in breach for 14 days after written notice to that
party requiring that party to rectify that breach, the
aggrieved party shall be entitled, at its option:
24.1.1 to xxx for immediate specific performance of any
of the defaulting party's obligations under this
agreement, whether or not such obligation is then
due and to require the defaulting party to provide
security to the satisfaction of the aggrieved
party for the defaulting party's obligations; or
24.1.2 to cancel this agreement, in which case written
notice of the cancellation shall be given to the
defaulting party, and the cancellation shall take
effect on the giving of the notice. Neither party
shall be entitled to cancel this agreement unless
the breach is a breach of a term which goes to the
root of this agreement, and the remedy of specific
performance or damages would not adequately
prevent the aggrieved party from being materially
prejudiced.
24.2 If the breach is a breach of warranty as at a particular
date, notice to remedy such breach shall be given and the
breach shall be deemed to have been remedied if:
24.2.1 the defaulting party is able, within the period of
the notice, to prevent the aggrieved party from
being prejudiced or to make good any prejudice
suffered, and does so; or
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24.2.2 the defaulting party is able, but not within the
period of the notice, to prevent the aggrieved
party from being prejudiced or to make good any
prejudice suffered within the period of the
notice, and undertakes to do so and furnishes such
security in support of the undertaking as the
aggrieved party may require.
24.3 If the defaulting party is the purchaser or FSAH, and the
breach is the non-payment of any instalment of the purchase
price or a failure to comply with clause 6.3, and if the
purchaser fails to remedy such breach after having been
given notice to do so in accordance with this clause, the
seller shall be entitled to cancel this agreement and if the
seller does so the seller shall be entitled to have the
intellectual property which is the subject of the
intellectual property agreement assigned to the seller for
no consideration. The seller shall, in the event of
cancellation, deliver to FSAH, for no consideration, the
FSAH "B" shares forming part of the purchase price together
with blank signed transfer forms and shall be entitled to a
penalty as follows:-
24.3.1 FSAH shall forfeit to the seller all of the issued
shares of the purchaser and shall deliver to the
seller the share certificates in respect of such
shares, together with blank signed transfer forms
and letters of resignation of the directors of the
purchaser; and
24.3.2 the seller shall retain all trademarks and
intellectual property, and cash paid by the
purchaser on account of the purchase price.
Alternatively, and at the election of the seller, the seller
may claim damages.
24.4 The aggrieved party's remedies in terms of this clause are
without prejudice to any other remedies to which the
aggrieved party may be entitled in law.
25. Mediation and arbitration
25.1 Should any disputes or differences whatsoever arise at any
time between the parties concerning this agreement or its
construction or effect or as to the rights, duties and/or
liabilities of the parties or either of them under or by
virtue of this agreement or otherwise or as to any other
matter in any way arising out of the subject matter of this
agreement then either party:
25.1.1 may declare a dispute by delivering the details of
the dispute to the other party, and
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25.1.2 request that the dispute be referred by the
parties, without legal representation, to
mediation by a single mediator at a place and time
to be determined by him.
25.2 If, within 30 days of the delivery of the declaration of a
dispute, the parties have not agreed to accept mediation
then the dispute shall be determined by arbitration as
prescribed below.
25.3 If the parties agree to mediation then the mediator shall
be:
25.3.1 selected by agreement between the parties, or,
failing agreement,
25.3.2 nominated on the application of either party by
the president for the time being of the Law
Society of Transvaal, or its principal successor
in title.
25.4 The mediator shall, at his entire discretion, determine
whether the reference to him shall be made in the form of
written and/or oral representations providing that, in
making this determination, he shall consult the disputing
parties and be guided by their desires of the form in which
the representations are to be made.
25.5 The mediator shall, within a reasonable period after
receiving the representations, express in writing an opinion
on the matter and shall include his detailed reasons leading
to the opinion.
25.6 The mediator shall deliver a copy of his opinion to each
party.
25.7 The opinion so expressed by the mediator shall be final and
binding on the parties unless either party within 30 days of
the delivery of the opinion, notifies the other party of the
first party's unwillingness to accept the opinion.
25.8 The costs of mediation shall be determined by the mediator
and shall comprise:
25.8.1 the mediator's expenses, and
25.8.2 a fee which shall have been previously agreed by
the parties.
The costs shall be borne equally by the 2 parties and shall
be due and payable to the mediator on presentation to them
of his written account.
25.9 Each party shall bear the costs of any legal advice that
party may have obtained in connection with the mediation.
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25.10 The expressed opinion of the mediator shall not prejudice
the rights of the parties in any manner whatsoever in the
event of their proceeding to arbitration.
25.11 Any decision given by any representative of the parties in
accordance with any provision of this agreement prior to or
during the mediation shall not disqualify him from being
called as a witness and giving evidence before the
arbitrator on any matter whatsoever relevant to the dispute
or difference so referred to the arbitrator as provided in
this clause.
25.12 If either party to this agreement be unwilling to accept
mediation or be unwilling to accept the opinion expressed by
the mediator then either party may, by written notice
delivered to the other, within 30 days of the declaration of
the dispute if there be no mediation or within 30 days of
the issue of the mediator's opinion if mediation takes
place, require that the dispute be referred to arbitration.
25.13 Such arbitration shall be by a single arbitrator who shall
be:
25.13.1 selected by agreement between the parties or,
failing such agreement;
25.13.2 nominated on the application of either party by
the chairman for the time being of the Association
of Arbitrators.
25.14 The arbitrator shall have power to open up, review and
revise any certificate, opinion, decision, requisition or
notice relating to all matters in dispute submitted to him
and to determine all such matters in the same manner as if
no such certificate, opinion, decision, requisition or
notice had been issued.
25.15 Upon every or any such reference, the costs of and
incidental to the reference and award shall be in the
discretion of the arbitrator, who may determine the amount
of the costs, or direct them to be taxed as between attorney
and client or as between party and party and shall direct by
whom and to whom and in what manner they shall be borne and
paid.
25.16 The award of the arbitrator shall be final and binding on
the parties.
25.17 In all respects the arbitration shall be conducted in
accordance with the Rules for the Conduct of Arbitrations
published by the Association of Arbitrators and current at
the date the arbitrator is appointed or nominated.
26. Costs
26.1 Each party will bear its own costs of and incidental to the
negotiation, preparation and implementation of this
agreement.
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26.2 Any costs, including attorney and own client costs, incurred
by a party arising out of the breach by any other party of
any of the provisions of this agreement shall be borne by
the party in breach.
27. Miscellaneous matters
27.1 addresses for service of legal documents
27.1.1 The parties choose the following physical
addresses at which documents in legal proceedings
in connection with this agreement may be served
(ie their domicilia citandi et executandi):
27.1.1.1 the seller and the warrantor:
Xxx Xxx Xxxx xxx Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxx 0 Xxxxxxxx
27.1.1.2 the purchaser, FSAH and FSAC:
Xxxxxxxx Xxxxxxxx Xxxxxx Xx Xxxxxxx Xxx
0 Xxxxxxx Xxxx
27.1.2 The notice shall be deemed to have been duly given
on delivery. All notices will be delivered.
27.1.3 A party may change that party's address for this
purpose, by notice in writing to the other party.
27.1.4 A party may change that party's address for this
purpose to another physical address in the
Republic of South Africa, by notice in writing to
the other party.
27.2 entire contract
This agreement contains all the express provisions agreed on
by the parties with regard to the subject matter of the
agreement and the parties waive the right to rely on any
alleged express provision not contained in the agreement.
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27.3 no representations
No party may rely on any representation which allegedly
induced that party to enter into this agreement, unless the
representation is recorded in this agreement.
27.4 variation, cancellation and waiver
No contract varying, adding to, deleting from or cancelling
this agreement, and no waiver of any right under this
agreement, shall be effective unless reduced to writing and
signed by or on behalf of the parties.
27.5 indulgences
If any party at any time breaches any of that party's
obligations under this agreement, the other party ("the
aggrieved party"):
27.5.1 may at any time after that breach exercise any
right that became exercisable directly or
indirectly as a result of the breach, unless the
aggrieved party has expressly elected in writing
or by clear and unambiguous conduct, amounting to
more than mere delay, not to exercise the right.
(If the aggrieved party is willing to relinquish
that right the aggrieved party will on request do
so in writing.) In particular, acceptance of late
performance shall for a reasonable period after
performance be provisional only, and the aggrieved
party may still exercise that right during that
period;
27.5.2 shall not be estopped (ie precluded) from
exercising the aggrieved party's rights arising
out of that breach, despite the fact that the
aggrieved party may have elected or agreed on one
or more previous occasions not to exercise the
rights arising out of any similar breach or
breaches.
27.6 cession
No party may cede that party's rights or delegate that
party's obligations without the prior written consent of the
other parties, which shall not be unreasonably withheld.
27.7 applicable law
This agreement shall be interpreted and implemented in
accordance with the law of the Republic of South Africa.
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27.8 jurisdiction
The parties consent to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the Supreme Court.
Signed at Johannesburg on 14 January 1997.
As witness: for BURRE BAKERIES CC
----------
/s/ Danie Erasmus /s/ Xxxxxxxx Xxxxx
--------------------------------- ---------------------------------------
who warrants that he is duly authorised
Signed at Johannesburg on 14 January 1997.
As witness: for XXXXXXXX XXXXX
---------- XXXXXX XXXXX
/s/ Xxxxx Erasmus /s/ Xxxxxxxx Xxxxx
--------------------------------- ---------------------------------------
Signed at Johannesburg on 14 January 1997.
As witness: for ASTORIA BAKERY
---------- (PROPRIETARY) LIMITED
/s/ Xxxx Xxxxxx /s/ Corrie Roodt /s/ Xxxxxxxx Xxxxx
---------------------------------- ---------------------------------------
who warrants that he is duly authorised
Signed at Johannesburg on 14 January 1997.
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As witness: for FIRST SOUTH AFRICAN HOLDINGS
---------- (PROPRIETARY) LIMITED
/s/ Xxxx Xxxxxx /s/ Corrie Roodt
--------------------------------- ---------------------------------------
who warrants that he is duly authorised
Signed at Johannesburg on 14 January 1997.
As witness: for FIRST SOUTH AFRICA CORP., LTD
----------
/s/ Xxxx Xxxxxx /s/ Corrie Roodt
--------------------------------- ---------------------------------------
who warrants that he is duly authorised
-37-
A G R E E M E N T
between
THE BURRE FAMILY TRUST
and
FIRST SOUTH AFRICA CORP., LTD
1. DEFINITIONS
In this agreement the following terms will have the meanings assigned to
them in this clause:
1.1 The ASSIGNEE:
First South Africa Corp., Ltd
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxxx 00000
Xxxxxx Xxxxxx of America
1.2 The ASSIGNOR:
The Burre Family Trust
Xxxxxxxxx Reads Trust Company Limited
Xxxxxxxxx Xxxxx
Xxxxxx
Xx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
Channel Islands
1.3 The COMMENCEMENT DATE:
1 July 1996
1.4 The COPYRIGHT:
The copyright worldwide in the WORKS.
1.5 PARTY:
One of the PARTIES.
1.6 The PARTIES:
The ASSIGNEE and the ASSIGNOR.
1.7 The WORKS:
The recipes to be delivered pursuant to 3.2, being recipes owned by
the ASSIGNOR and all future recipes created by the ASSIGNOR.
-2-
1.8 The KNOW-HOW:
The information associated with the WORKS and necessary to exercise
the COPYRIGHT.
2. INTRODUCTION
2.1 The ASSIGNOR owns the COPYRIGHT and the KNOW-HOW.
2.2 The ASSIGNOR has agreed to assign the COPYRIGHT and the KNOW-HOW to
the ASSIGNEE subject to the terms and conditions of this agreement and with
effect from the COMMENCEMENT DATE.
3. ASSIGNMENT
3.1 The ASSIGNOR hereby assigns the whole of the COPYRIGHT and the KNOW-
HOW to the ASSIGNEE, together with all accrued rights in the COPYRIGHT and the
KNOW-HOW, including the right to claim relief for infringements of the COPYRIGHT
and the KNOW-HOW which may have occurred prior to the COMMENCEMENT DATE, which
assignment the ASSIGNEE hereby accepts.
3.2 The ASSIGNOR undertakes to deliver the WORKS to the ASSIGNEE within 48
hours of signature of this agreement.
4. ACKNOWLEDGMENTS
4.1 The ASSIGNOR acknowledges that after the COMMENCEMENT DATE the ASSIGNEE
will be entitled freely and upon such terms and conditions as the ASSIGNEE deems
fit:
4.1.1 To license, assign, and otherwise deal with the COPYRIGHT, the
KNOW-HOW and the WORKS; and
4.1.2 To modify and adapt the WORKS, whether to suit the needs of the
ASSIGNEE or those of any third party.
4.2 The ASSIGNOR acknowledges that this agreement transfers to the ASSIGNEE
and terminates all its rights to make use or avail itself of the COPYRIGHT and
the KNOW-HOW.
5. WARRANTY
The ASSIGNOR hereby warrants that:
5.1 It is the sole owner of the COPYRIGHT and the KNOW-HOW existing at the
-3-
COMMENCEMENT DATE.
5.2 It will be entitled to assign the whole of the future COPYRIGHT and the
KNOW-HOW to the ASSIGNEE.
5.3 As the case may be, the WORKS are and will be original and their making
has and will not constitute an infringement of the copyright or any other rights
of any third party.
5.4 Copyright does and will subsist in the WORKS, as the case may be.
6. REMUNERATION
In consideration for the assignment of the COPYRIGHT and the KNOW-HOW, the
ASSIGNEE paid to the ASSIGNOR on 24 October 1996, the US Dollar equivalent of
R6000000, together with interest in an amount of US$40000.
7. COMMENCEMENT
This agreement will be deemed to have commenced on the COMMENCEMENT DATE.
8. ADDRESSES
The PARTIES select the addresses set out in clauses 1.1 and 1.2 to this
agreement respectively as their addresses for the receipt of any written notices
required under this agreement or in respect of legal process relating to any
dispute connected with or arising from this agreement.
9. INTERPRETATION
9.1 Clause headings in this agreement will not be used in its
interpretation.
9.2 Unless the context clearly indicates a contrary intention an expression
in this agreement which denotes the singular will include the plural and vice
versa.
10. ENTIRE CONTRACT
This agreement constitutes the entire contract, and supersedes all previous
agreements and understandings, between the PARTIES with regard to the ?matters
dealt with in this agreement and no representations, terms, conditions or
warranties not contained in this agreement will be binding on the PARTIES.
11. VARIATION, CANCELLATION, AND WAIVER
No agreement varying, adding to, deleting from or cancelling this
agreement, and no waiver
-4-
of any right under this agreement, will be effective unless reduced to writing
and signed by or on behalf of the PARTIES.
12. INDULGENCES
No indulgence granted by a PARTY will constitute a waiver of any of that
PARTY's rights under this agreement. Accordingly, that PARTY will not be
precluded, as a consequence of having granted such indulgence, from exercising
any rights against the other which may have arisen in the past or which may
arise in the future.
13. CESSION AND DELEGATION
The ASSIGNEE shall be entitled to cede its rights and delegate its
obligations under this agreement only to its subsidiary, First South African
Holdings (Pty) Ltd, without reference to the ASSIGNOR.
14. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the
laws of the Republic of South Africa.
Signed at Johannesburg on 14 January 1997.
As witness:
-----------
/s/ Danie Erasmus /s/ Xxxxxxxx Xxxxx
_____________________________________ __________________________________
THE ASSIGNOR
Signed at Johannesburg on 14 January 1997.
As witness:
-----------
/s/ Xxxx Xxxxxx /s/ Corrie Roodt
_____________________________________ __________________________________
THE ASSIGNEE
-5-
Appendix 2
Management Agreement
MANAGEMENT AGREEMENT
between
XXXXXXXX XXXXXX XXXXX XXXXX
("the Manager")
-------------
and
FIRST SOUTH AFRICAN HOLDINGS (PROPRIETARY) LIMITED
(Registration No. 95/03959/07)
("FSAH")
----
and
ASTORIA BAKERY (PROPRIETARY) LIMITED
(Registration No. 96/10419/07)
("the Company")
-----------
--------------------------------------------------
Xxxxxx Xxxxxxx Xxxxxx
1 Introduction
1.1 The Company has entered into an agreement to purchase the business of
Burre Bakeries CC, formerly Astoria Bakery CC, ("the sale agreement").
1.2 The parties wish to enter into an agreement on the terms and
conditions set out below.
2 Period
Notwithstanding its date of signature, this agreement shall be effective
from 1 July 1996 and, save for the provisions of clauses 13 and 14, which
shall endure for the period specified therein and for clauses 15, 16 and
17, which shall endure until all matters and disputes arising from this
agreement have been resolved, shall continue for a period of 3 years
terminating on 30 June 1999.
3 Appointment
The Company appoints the Manager as its Manager to render to the Company
the services set out in this agreement, and the Manager accepts this
appointment, on the terms and conditions of this agreement. The
relationship of the Company and the Manager shall be that of employer and
employee.
4 Directorships and related matters
4.1 FSAH and the Company undertake to procure that the Manager will be
appointed as managing director and Chairman of the Company and of
Astoria Bakery Lesotho (Pty) Ltd, ("ABL"). The Manager, in his
capacity as a director of the Company and ABL, will not be subject to
rotation or retirement.
4.2 The Manager may appoint an alternate director in respect of ABL and
the Company.
4.3 FSAH and the Company undertake to procure that the board of directors
of ABL will initially be comprised of the following persons:-
4.3.1 the Manager;
4.3.2 Mr Wilfried Wesslau; and
4.3.3 Xx Xxxxxx Xxxxxxxx.
4.4 FSAH and the Company undertake to procure that the board of directors
of the Company will initially be comprised of the following persons:-
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4.4.1 the Manager;
4.4.2 Mrs H Xxxxxxx; and
4.4.3 Mr CJ Roodt.
5 Management of the business
5.1 Subject to clause 6 the Manager, as managing director and Chairman of
the Company, will be responsible for planning and supervising the
operations of the Company and its subsidiaries in accordance with this
agreement. The Manager shall ensure that the businesses of the Company
and its subsidiaries are run on proper business principles and that
proper provision is made for the ongoing growth and development of
such business. In particular the Manager shall ensure that the
businesses are not run so as to maximise short term profit at the
expense of longer term interests.
5.2 The Manager shall devote such time and attention (both during and
after business hours) to the performance of his duties as the
businesses of the Company and its subsidiaries may require. It is
recorded (without limiting the obligations of Manager to perform his
duties) that the parties anticipate that the Manager will be required
to devote 100% of his working time to the affairs of the Company and
its subsidiaries.
5.3 The parties record that it is their intention and the spirit of their
relationship that the expertise of the Manager in running the
business, and the Manager's understanding of the market should be
relied upon, exploited for the benefit of the Company and its
subsidiaries and transferred to other members of management.
Accordingly, the Manager undertakes, as part of his responsibilities,
to train the staff of the Company and its subsidiaries and shall
actively transfer his knowledge concerning the Company's and its
subsidiaries' business to other staff members.
5.4 FSAH and the Company acknowledge that the Manager has other existing
business interests, which the Manager shall be entitled to pursue and
develop, provided that the Manager shall not place such other
interests ahead of the interests of the Company and its subsidiaries
and provided further that the affairs of the Company and its
subsidiaries shall have first call upon the time and energies of the
Manager.
5.5 The Manager shall be entitled to develop new business interests with
the prior written consent of the Company and FSAH. Such consent shall
not be unreasonably withheld. The consent will not be deemed to be
unreasonably withheld if, inter alia, the proposed business is in
breach of the restraints set out in
-2-
clause 14 or if the Company or FSAH reasonably considers that the
business would divert too much of the time and attention of the
Manager away from, or otherwise interfere with, the performance of the
Manager's duties under this agreement.
6 Matters requiring consent of FSAH
Decisions in respect of the following fundamental matters affecting the
Company and each of its subsidiaries shall require the prior written
consent of FSAH, which shall not be unreasonably withheld:-
6.1 the approval of the annual budget, annual business plan, lease
expenditure and capital expenditure budgets and any amendment of the
annual business plan or the budgets;
6.2 the conclusion of any material contracts outside the ordinary course
of business;
6.3 the voluntary liquidation of the company concerned;
6.4 any capital investment or expenditure, however financed, in excess of
R500000 or any disposal of any of the capital assets of the company,
the sale proceeds or book value of which is in excess of R500000;
6.5 any sale, assignment, transfer or other disposition by the company of
any intangible assets such as goodwill, logos, names, trademarks,
copyright, patents or licences, or trademark, patent or licence
agreements;
6.6 any material change in the accounting policies as used for the audited
financial statements of any such company;
6.7 the furnishing by any such company of any encumbrances over any of its
assets or of any guarantees, suretyships, undertakings, indemnities or
other forms of intercession for the obligations of third parties;
6.8 the acquisition or incorporation of any direct or indirect
subsidiaries;
6.9 the acquisition of any shares or interest in any company, other form
of legal entity, business, partnership or other undertaking of
whatever nature;
6.10 the cessation of any material contract;
6.11 the incurrence of any general banking facilities, whether or not
utilised, any liability or borrowing, whether interest-bearing or not,
(collectively "borrowings") where
-3-
such borrowings exceed R100000;
6.12 the disposal by any such company of:
6.12.1 its business; or
6.12.2 any asset not in the ordinary course of business;
6.13 the payment of remuneration or fees to directors in their capacity as
directors or employees;
6.14 the appointment or removal of the auditors of any such company;
6.15 any increase or reduction in the salaries payable to any of the
Manager, or Xxx Xxxxxxx, Mr Wesslau or Xxx Xxxxxxxx; and
6.16 any material change to the core nature of the business of such company
or in the way such business is conducted.
7 Remuneration
7.1 The remuneration of the Manager and the manner in which that
remuneration is structured shall be determined by agreement of the
parties from time to time, it being the intention of the parties that
the Manager shall be remunerated at market-related rates for services
rendered pursuant to this agreement. It is recorded that the
remuneration has been calculated on the assumption that the Manager
will devote 100% of his working time to the performance of his duties
under this agreement.
7.2 The Company undertakes to accommodate, where possible, reasonable
requests from the Manager relating to the structuring of his
remuneration, provided that there are no negative taxation or other
consequences to the Company arising from such structuring. The initial
remuneration of the Manager is R500000, payable monthly in arrear in
12 equal monthly instalments, commencing 1 July 1996.
7.3 The remuneration of the Manager shall be reviewed annually by FSAH.
7.4 The Manager shall be entitled to become a member of the medical aid
scheme utilised by the Company and the Company shall pay 100% of the
Manager's membership fees.
7.5 The Manager shall be entitled to life and disability cover, on the
same basis as senior employees of the Company, in terms of the
Company's group life scheme,
-4-
(if any), from time to time.
7.6 The Manager shall be entitled to become a member of any pension or
provident fund established by the Company for employees of his or
similar status, in accordance with the rules of such fund.
8 Refund of disbursements and expenses
The Company shall refund to the Manager any disbursements made or expenses
incurred by the Manager in the course of the exercise of his duties
provided that vouchers supporting claims are submitted.
9 Holiday leave
The Manager shall be entitled to 30 working days leave on full pay for each
12 month period, which leave shall accrue on a pro rata monthly basis and
shall be taken at a time mutually acceptable to the Manager and the
Company. Any leave accruals in excess of 10 days at the end of the
Company's financial year shall, save with the written agreement of the
board of the Company, be forfeited.
10 Sick leave
10.1 Subject to 10.2, the Manager shall be entitled to 30 days sick leave
per completed 12 month cycle of employment.
10.2 Notwithstanding 10.1, should the Manager be precluded through
medically substantiated chronic ill health from performing his duties,
then the Company undertakes-
10.2.1 for the first 90 days of such indisposition, to pay the Manager
at the full rate of his remuneration; and
10.2.2 for the next 90 days of such indisposition, to pay the Manager
at the rate of half of his remuneration;
provided that if, after the lapse of an aggregate of 180
days, the Manager is unable to resume or properly perform
his duties, the Manager shall be deemed to be in default and
the provisions of clause 15 shall apply.
11 Copyright
11.1 The Manager acknowledges that the Company or its nominee shall become
the owner of the copyright in any work which is eligible for copyright
and which is
-5-
created or executed by the Manager, whether alone or with others, in
the course and scope of the performance of his duties under this
agreement.
11.2 In so far as it may be necessary, the Manager assigns to the Company
or, in the event of the Company appointing a nominee, such nominee,
the copyright in any such work.
12 Access to information
There shall be made available to the Manager full and free access to all
information for investigating and verifying the affairs of the Company and
its assets, liabilities and financial position including, without prejudice
to the generality of the foregoing, full and free access to all trading
records, accounts, books, bank statements and other financial records of
the Company.
13 Confidentiality
13.1 The Manager shall, during the period of this agreement and thereafter,
not disclose to any person whomsoever any information of any nature
regarding the Company, its group companies, its licensors, trading
partners or other associates or their businesses except to the extent
that:-
13.1.1 it is required for or in the discharge of his duties and
functions hereunder; or
13.1.2 he is reasonably required to do so in order to protect his
rights under this agreement, or is required to do so under the
provisions of any law which is binding on the Manager; or
13.1.3 such information is in the public domain other than as a result
of a breach of this clause by the Manager.
13.2 The Manager shall not, during his employment or thereafter, directly
or indirectly use or divulge (except as required by the terms and
nature of his employment) any of the trade secrets of the Company, its
group companies, licensors, trading partners or other associates. For
this purpose the term "trade secrets" shall include but shall not be
limited to the following matters:-
13.2.1 knowledge of and factors which constitute an influence over the
Company's clients and business associates;
13.2.2 the contractual arrangements between the Company and its
business associates;
-6-
13.2.3 the financial details of the Company's relationship with its
business associates;
13.2.4 the financial details (including terms) relating to the
Company's clients;
13.2.5 the names of clients and prospective clients;
13.2.6 details of the Company's financial structure and operating
results;
13.2.7 details of the remuneration paid by the Company to its various
employees and their duties;
13.2.8 the systems employed by the Company in the conduct of its
business;
13.2.9 the know-how and other information and techniques employed by
the Company in the conduct of its business; and
13.2.10 other matters which relate to the business of the Company and
in respect of which information is not readily available in
the ordinary course of business to a competitor of the Company.
14 Restraints and competing businesses
14.1 The Manager undertakes to FSAH, the Company and each of the Company's
subsidiaries that for a period of 6 years commencing on 1 July 1996
and terminating on 30 June 2002 he will not, without the prior written
consent of FSAH and the Company, and whether directly or indirectly as
shareholder, employee, financier, director, agent, officer,
consultant, adviser or otherwise-
14.1.1 compete with the Company in the fields of activity referred to
in 14.2 within the areas of restraint set out in 14.3;
14.1.2 persuade, induce, encourage or procure any employee of the
Company, or any person who was an employee of the Company
during the previous twelve months, to become employed by or
interested in any manner whatever in any field of activity
referred to in 14.2, or to terminate his employment with the
Company.
14.2 The fields of activity in respect of which the restraint applies will
be -
14.2.1 the business of the manufacture, distribution and retailing of
bread, pastries and other confectionery products;
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14.2.2 (as a separate restraint) any new business actively carried on,
or which the Company or any of its subsidiaries can demonstrate
in writing is actively contemplated by the Company or such
subsidiary at the date of termination of this agreement or any
extension of this agreement.
14.3 The areas of restraint referred to in this 14 shall be:-
14.3.1 the Republic of South Africa;
14.3.2 (as a separate restraint) Lesotho;
14.3.3 (as a separate restraint) Swaziland;
14.3.4 (as a separate restraint) Botswana;
14.3.5 (as a separate restraint) Namibia;
14.3.6 (as a separate restraint) Zimababwe;
14.3.7 (as a separate restraint) Mozambique; and
14.3.8 (as a separate restraint) the Indian Ocean Islands.
14.4 The Manager acknowledges-
14.4.1 that the customers of the Company and its subsidiaries are or
could be drawn from all of the areas in which the restraints
are to be operative;
14.4.2 that the Company, its subsidiaries and FSAH would suffer
substantial damage if the Manager were to operate a business
similar to that carried on by the Company or any of its
subsidiaries within the area to which, and during the time in
which, the restraint is to apply;
14.4.3 that the restraint is the minimum restraint required by FSAH,
the Company and the Company's subsidiaries to provide
protection against unfair competition upon termination of
employment and, moreover, that the restraint will not prevent
the Manager from obtaining a comparable position elsewhere
should his employment terminate and that in the circumstances
it is fair and reasonable, and necessary for the protection of
the interests of the Company, its subsidiaries and FSAH that
the Manager should be restrained in the manner set out in this
clause. Should the reasonableness of any provision contained
in this clause be disputed,
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the onus of proving that the provision is unreasonable will
rest on the Manager.
14.5 Each and every restraint contained in this clause is separate and
divisible from every other restraint in this clause and from any other
restraint so that if any one of the restraints is or becomes
unenforceable for any reason, that restraint will be severable and
will not affect the validity of any other restraint contained in this
14 or otherwise.
14.6 Insofar as the restraints are considered by the parties to be
reasonable in all the circumstances, they agree that if the
restraints, taken together, are adjudged to go beyond what is
reasonable in all the circumstances but would be adjudged reasonable
if part or parts of the wording of the restraints were deleted or
modified, the restraints shall apply with such words deleted or
modified.
14.7 The restraints contained in this clause will be capable of being
enforced by FSAH, or the Company or any of the Company's subsidiaries,
individually or collectively by any of them.
14.8 Each subsidiary of the Company may at any time accept the benefits
conferred on it by this clause by notice in writing given to the
Company and the Manager.
15 Default
15.1 If a party:-
15.1.1 commits a material breach of any provision going to the root of
this agreement and fails to remedy the breach within 10 days of
written notice to do so;
15.1.2 commits a second or subsequent breach of this agreement after
having remedied an earlier similar breach during the preceding
12 months after written notice to do so;
15.1.3 takes steps to place itself, or is placed, in liquidation or
sequestrations, whether voluntary or compulsory, or in judicial
management, in either case whether provisionally or finally;
15.1.4 (in the case of the Manager) does or omits to do anything, and
such act or omission would justify the summary dismissal of the
Manager;
the party shall be in default.
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15.2 If a party is in default the other party ("the aggrieved party") shall
be entitled, in ------------------- addition to all other remedies at
law, to:
15.2.1 cancel the agreement; or
15.2.2 uphold the agreement, in which event the aggrieved party may
require the party in default to provide security to the
reasonable satisfaction of the aggrieved party for the payment
of all amounts, and the performance of all other obligations,
owed by the party in default.
15.3 If a party is in default and the default is of a continuing nature, or
if the party is in breach of any provision of this agreement and has
been given written notice to remedy the breach, the aggrieved party:
15.3.1 may suspend performance of the aggrieved party's obligations
during the default or breach;
15.3.2 shall be entitled to a reasonable additional period for the
performance of the aggrieved party's obligations.
16 Mediation and arbitration
16.1 Should any disputes or differences arise at any time between the
parties concerning this agreement or its construction or effect or as
to the rights, duties and/or liabilities of the parties or either of
them under or by virtue of this agreement or otherwise or as to any
other matter in any way arising out of the subject matter of this
agreement then either party:
16.1.1 may declare a dispute by delivering the details of the dispute
to the other party, and
16.1.2 request that the dispute be referred by the parties, without
legal representation, to mediation by a single mediator at a
place and time to be determined by him.
16.2 If, within 30 days of the delivery of the declaration of a dispute,
the parties have not agreed to accept mediation then the dispute shall
be determined by arbitration as prescribed below.
16.3 If the parties agree to mediation then the mediator shall be:
16.3.1 selected by agreement between the parties, or, failing
agreement,
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16.3.2 nominated on the application of either party by the president
for the time being of Independent Mediation Service of South
Africa.
16.4 The mediator shall, at his entire discretion, determine whether the
reference to him shall be made in the form of written and/or oral
representations provided that, in making this determination, he shall
consult the disputing parties and be guided by their desires of the
form in which the representations are to be made.
16.5 The mediator shall, within a reasonable period after receiving the
representations, express in writing an opinion on the matter and shall
include his detailed reasons leading to the opinion.
16.6 The mediator shall deliver a copy of his opinion to each party.
16.7 The opinion so expressed by the mediator shall be final and binding on
the parties unless either party within 30 days of the delivery of the
opinion, notifies the other party of the first party's unwillingness
to accept the opinion.
16.8 The costs of mediation shall be determined by the mediator and shall
comprise:
16.8.1 the mediator's expenses, and
16.8.2 a fee which shall have been previously agreed by the parties.
The costs shall be borne equally by the parties to the dispute and
shall be due and payable to the mediator on presentation to them of
his written account.
16.9 Each party shall bear the costs of any legal advice that party may
have obtained in connection with the mediation.
16.10 The expressed opinion of the mediator shall not prejudice the rights
of the parties in any manner whatsoever in the event of their
proceeding to arbitration.
16.11 Any decision given by any representative of the parties in accordance
with any provision of this agreement prior to or during the mediation
shall not disqualify him from being called as a witness and giving
evidence before the arbitrator on any matter whatsoever relevant to
the dispute or difference so referred to the arbitrator as provided
in this clause.
16.12 If either party to this agreement be unwilling to accept mediation or
be unwilling to accept the opinion expressed by the mediator then
either party may, by written notice delivered to the other, within 30
days of the declaration of the dispute if there be no mediation or
within 30 days of the issue of the mediator's opinion if
-11-
mediation takes place, require that the dispute be referred to
arbitration.
16.13 Such arbitration shall be by a single arbitrator who shall be an
advocate of not less than 10 years standing if the dispute is
primarily a legal matter and a practising auditor of not less than 10
years standing if the matter is primarily an accounting matter:
16.13.1 selected by agreement between the parties or, failing such
agreement;
16.13.2 nominated on the application of either party by the chairman
for the time being of the Association of Arbitrators.
16.14 The arbitrator shall have power to open up, review and revise any
certificate, opinion, decision, requisition or notice relating to all
matters in dispute submitted to him and to determine all such matters
in the same manner as if no such certificate, opinion, decision,
requisition or notice had been issued.
16.15 Upon every or any such reference, the costs of and incidental to the
reference and award shall be in the discretion of the arbitrator, who
may determine the amount of the costs, or direct them to be taxed as
between attorney and client or as between party and party and shall
direct by whom and to whom and in what manner they shall be borne and
paid.
16.16 The award of the arbitrator shall be final and binding on the
parties.
16.17 In all respects the arbitration shall be conducted in accordance with
the Rules for the Conduct of Arbitrations published by the
Association of Arbitrators and current at the date the arbitrator is
appointed or nominated.
17 Miscellaneous matters
17.1 addresses for service of legal documents
17.1.1 The parties choose the following physical addresses at which
documents in legal proceedings in connection with this agreement
may be served (i.e., their domicilia citandi et executandi):
1. the Manager:
Xxx Xxx Xxxx xxx Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxx 0 Xxxxxxxx
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2. the Company and FSAH:
Xxxxxxxx Xxxxxxxx
Xxxxxx Xx
Xxxxxxx Xxx 0
Xxxxxxx Xxxx
17.1.2 The notice shall be deemed to have been duly given on delivery.
All notices will be delivered.
17.1.3 A party may change that party's address for this purpose, by
notice in writing to the other party.
17.1.4 A party may change that party's address for this purpose to
another physical address in the Republic of South Africa, by
notice in writing to the other party.
17.2 entire contract
This agreement contains all the express provisions agreed on by the
parties with regard to the subject matter of the agreement and the
parties waive the right to rely on any alleged express provision not
contained in the agreement.
17.3 no representations
No party may rely on any representation which allegedly induced that
party to enter into this agreement, unless the representation is
recorded in this agreement.
17.4 variation, cancellation and waiver
No contract varying, adding to, deleting from or cancelling this
agreement, and no waiver of any right under this agreement, shall be
effective unless reduced to writing and signed by or on behalf of the
parties.
17.5 indulgences
If any party at any time breaches any of that party's obligations
under this agreement, the other party ("the aggrieved party"):
17.5.1 may at any time after that breach exercise any right that
became exercisable directly or indirectly as a result of the
breach, unless the aggrieved party has expressly elected in
writing or by clear and
-13-
unambiguous conduct, amounting to more than mere delay, not to
exercise the right. (If the aggrieved party is willing to
relinquish that right the aggrieved party will on request do so
in writing.) In particular, acceptance of late performance shall
for a reasonable period after performance be provisional only,
and the aggrieved party may still exercise that right during
that period;
17.5.2 shall not be estopped (ie precluded) from exercising the
aggrieved party's rights arising out of that breach, despite
the fact that the aggrieved party may have elected or agreed on
one or more previous occasions not to exercise the rights
arising out of any similar breach or breaches.
17.6 cession
No party may cede that party's rights or delegate that party's
obligations without the prior written consent of the other parties,
which shall not be unreasonably withheld.
17.7 applicable law
This agreement shall be interpreted and implemented in accordance with
the law of the Republic of South Africa.
17.8 jurisdiction
The parties consent to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the Supreme Court.
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17.9 good faith
The parties shall act towards each other in the utmost good faith in
giving effect to this agreement.
Signed at Johannesburg on 14 January 1997
As witness:
/s/ Danie Erasmus /s/ Xxxxxxxx Xxxxx
_________________________________ ___________________________________
W BURRE
Signed at Johannesburg on 14 January 1997
As witness: for FIRST SOUTH AFRICAN HOLDINGS
(PROPRIETARY) LIMITED
/s/ Xxxx Xxxxxx /s/ Corrie Roodt
_________________________________ ___________________________________
who warrants that he is duly authorised
Signed at Johannesburg on 14 January 1997
As witness: for ASTORIA BAKERY
(PROPRIETARY) LIMITED
/s/ Xxxx Xxxxxx /s/ Corrie Roodt
_________________________________ ___________________________________
who warrants that he is duly authorised
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Appendix 3
Escrow Agreement
ESCROW AGREEMENT
1. Parties
The parties to this agreement are:
1.1 American Stock Transfer and Trust Company
a New York corporation
("Escrow agent")
1.2 First South Africa Corp., Ltd
a Bermuda company
("Parent")
1.3 First South African Holdings (Pty) Limited
a South African company
("FSAH")
1.4 Burre Bakeries cc
("Subscriber")
1.5 Xxxxxxx Xxxx
("Levy")
(hereinafter referred to as "the parties").
2. Recital
2.1 The authorised share capital of FSAH comprises 30 000 000 "A" class
ordinary shares of R0,0001 each and 10 000 000 "B" class ordinary
shares of R0,0001 each ("FSAH B class shares").
2.2 All of the issued A class ordinary shares in FSAH are owned by the
Parent.
2.3 The rights and obligations attached to the FSAH B class shares are
recorded in the extract from the articles of association of FSAH
attached as Schedule "l".
2.4 FSAH has agreed to allot and issue to the Subscriber, as part of the
purchase price of the Subscriber's business, that number of FSAH B
class shares as is determined pursuant to the sale of business
agreement ("the sale of business agreement") entered into between
Subscriber, FSAH, Xxxxxxxx Xxxxx Xxxxxx Xxxxx, Parent and Astoria
Bakery (Pty) Ltd ("subscription shares") and the Parent has agreed to
simultaneously allot and issue to the Escrow agent which has agreed to
subscribe for an equivalent number of its common stock ("Escrow
stock"). Escrow stock will be issued as part of each installment of
the purchase price of the Subscriber's business in accordance with the
sale of business agreement.
2.5 Insofar as prevailing circumstances and laws allow and subject to the
restrictions recorded herein the Parent and FSAH wish, by the,
conclusion and implementation of this agreement, to enable the
Subscriber to trade in the subscription shares for value and in
circumstances which are pari passu with the trading of the common
stock of the Parent.
2.6 In consideration of the mutual covenants and promises herein contained
and other good and valuable consideration the adequacy of which is
hereby acknowledged, the parties have reached the agreement recorded
herein.
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3. Appointment of Escrow agent
3.1 The Parent hereby appoints the Escrow agent to receive, hold and
dispose of the Escrow stock in accordance with the provisions of this
agreement.
3.2 The Escrow agent by its execution and delivery of this agreement
accepts its appointment as Escrow agent upon and subject to the terms
and conditions of this agreement.
3.3 The appointment of the Escrow agent will become effective against
delivery of the Escrow stock to the Escrow agent and will continue in
effect until the Escrow stock, all dividends or other benefits
accruing thereto and all proceeds derived from the sale or other
disposition thereof has been distributed in accordance with this
agreement ("Escrow period").
4. Issue of shares and stock
4.1 Against the allotment and issue to the Subscriber of the subscription
shares the Parent will allot and issue the Escrow stock to the Escrow
agent for a consideration of US$.01 per share payable to the parent on
behalf of the Escrow agent by Xxxxxxx Xxxx who will thereby acquire no
claim against the Escrow agent.
4.2 Against receipt of the Escrow stock the Escrow agent will confirm in
writing delivered to the Subscriber that the Escrow stock has been
delivered to it unconditionally, in negotiable form, subject only to
the restrictions contemplated by this agreement.
4.3 For the duration of the Escrow period the Escrow agent will retain
possession of and control over the Escrow shares and will at the
request of the Subscriber inform the
-3-
remaining parties of the physical location of all documents and
records evidencing the Escrow stock and requisite to trading therein.
4.4 Insofar as circumstances and the law allow, the Escrow agent will
retain the Escrow stock in negotiable and freely tradeable form
throughout the Escrow period, subject only to the restrictions
recorded in this agreement.
5. Escrow property
During the Escrow period the Escrow agent will receive all money,
securities, rights or property distributed in respect of the Escrow stock
including any such property distributed as dividends or pursuant to any
stock split, merger, recapitalisation, dissolution, total or partial
liquidation of the Parent (excluding only dividends paid to the Escrow
agent by the Parent to the extent that the Subscriber has in relation to
the same period been paid dividends on the Subscription shares): all such
property to be held and distributed as herein provided and hereinafter
referred to collectively as "Escrow property". Reference herein to Escrow
stock will be deemed to include the Escrow property deposited in escrow
pursuant thereto.
6. Escrow stock - rights, obligations and restrictions
6.1 None of the Escrow stock may be sold in contravention of the
restrictions set out in clause 10.1 of the sale of business agreement.
6.2 Subject to 6.1, the Escrow stock may only be sold and transferred in
compliance with this agreement and the Securities Act of 1933 as
amended and the rules and regulations promulgated thereunder.
6.3 For the duration of the Escrow period Xxxxxxx Xxxx will have the sole
power to vote the Escrow stock and any securities held in escrow as
part of the Escrow property to
-4-
which end the Escrow agent hereby irrevocably appoints Xxxxxxx Xxxx as
its proxy to vote the Escrow stock on its behalf at any meeting of the
shareholders of the Parent and at any adjournment thereof which shall
take place during the Escrow period. The Escrow agent undertakes that
it will execute and deliver to Levy a separate voting proxy in the
aforegoing terms referring specifically to the Escrow stock and any
securities comprising the Escrow property against demand by Levy
following delivery of the Escrow stock or other securities as the case
may be. Levy undertakes to vote the Escrow stock in the manner he
believes to be in the best interests of the subscriber.
6.4 Each certificate evidencing the Escrow stock will bear the following
legends in addition to any others required by law:
"The sale, transfer, hypothecation, negotiation, pledge,
assignment, encumbrance or other disposition of the shares
evidenced by this certificate are restricted by and are subject
to all of the terms, conditions and provisions of an escrow
agreement entered into amongst First South Africa Corp., Ltd,
First South African Holdings (Proprietary) Limited, American
Stock Transfer & Trust Company and Burre Bakery cc, a copy of
which may be obtained from the secretary of First South Africa
Corp., Ltd. No transfer, sale or other disposition of these
shares may be made unless the specific conditions of such
agreement are satisfied."
"The shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended. No
transfer, sale or other disposition of these shares may be made
unless a registration statement with respect to these shares has
become effective under the said Act or First South Africa Corp.,
Ltd. has furnished opinion of Counsel satisfactory in
registration is not required."
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7. Put option and related transactions
7.1 At any time during the Escrow period and provided that the Escrow
stock is capable of being sold in accordance with the provisions of
this agreement and the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, the Subscriber will be
entitled, on delivery to the Escrow agent or its agent in the Republic
of South Africa, Xxxxxx Xxxxxxx Xxxxxx or its principal successor-in-
practice, of written notice accompanied by the original share
certificate/s evidencing the put shares together with securities
transfer form/s relating thereto signed and completed in negotiable
form according to law ("put notice") to require and oblige the Escrow
agent to purchase the subscription shares or any part thereof but no
fewer than 100 subscription shares (or such lesser number as
constitutes all of the remaining subscription shares held by the
Subscriber) in relation to any single put notice, for the
consideration and upon the terms and conditions hereinafter recorded.
7.2 Against delivery of the put notice the Escrow agent will, in
compliance with applicable securities laws, offer for sale on any
exchange where the Escrow Stock is traded so much of the Escrow stock
as is equal to the subscription shares put to the Escrow agent in
terms of the put notice. Partial sales of Escrow Stock are acceptable
and in these circumstances the put will be deemed to have been
exercised only in respect of the amount of Escrow Stock actually sold
by the Escrow agent pursuant to 7.1.
7.3 The put notice will be unconditional and unqualified save only that
the Subscriber will be entitled to stipulate a minimum price
("prescribed price") expressed in US dollars per share at which he is
willing to sell the relevant subscription shares put to the Escrow
agent in terms of the put notice ("put shares"). If the put notice
contains a prescribed price:
-6-
7.3.1 the Escrow agent will not be entitled to sell the equivalent
number of Escrow stock pursuant to 7.2 above for a price less
than the prescribed price;
7.3.2 if the Escrow agent is unable to sell the equivalent number of
Escrow stock for a price at least equal to the prescribed price
within thirty days from delivery of the relevant put notice then
the put notice will automatically lapse and be of no further
force or effect;
7.3.3 the Escrow agent will, notwithstanding the prescribed price,
seek to achieve the best possible price for the Escrow stock as
expeditiously as possible pursuant to 7.2 above;
7.3.4 if the Escrow agent cannot achieve the sale of the relevant
Escrow stock for a price equal to or more than the prescribed
price it will inform the Subscriber of its inability to do so and
of the best price offered to it, in which event the Subscriber
will be entitled to withdraw the put notice.
7.4 Against the sale by the Escrow agent of the relevant number of Escrow
stock the Escrow agent will be deemed to have purchased the
subscription shares recorded in the relevant put notice ("put shares")
upon and subject to the following terms and conditions:
7.4.1 the price payable for the put shares will be equal to the price
payable for the equivalent Escrow stock sold less any applicable
brokerage fees, securities tax, duty or charge properly incurred;
7.4.2 the price for the put shares will be payable by the Escrow agent
to the Subscriber against receipt by the Escrow agent of the
price payable for the relevant Escrow stock sold;
-7-
7.4.3 as security for the payment of the price for the put shares the
Escrow agent will be deemed to have ceded, assigned and made over
unto and in favour of the Subscriber all of the Escrow agent's
right, title and interest in and to its claims for payment of the
price payable for the relevant Escrow stock sold.
7.5 Payment of any amount due to the Subscriber upon the sale of
subscription shares pursuant hereto will be made to the subscriber at
the domicilium chosen in terms of paragraph 12 below provided that
such place will be in the Republic of South Africa unless the
Subscriber is entitled, according to South African law, to receive
such payment outside the Republic of South Africa.
7.6 The Subscriber will not sell or otherwise transfer or dispose of the
subscription shares during the Escrow period except by the delivery of
put notices in accordance with the provisions of this agreement, or by
agreement with FSAH. If the subscription shares are disposed of
written notice thereof shall forthwith be given to the Escrow agent.
7.7 Unless a put notice has been delivered the Escrow agent will not be
entitled to sell, offer to sell or otherwise dispose of the Escrow
stock or any part thereof.
7.8 The Escrow agent will not be entitled to encumber the Escrow stock nor
expose it to any risk of attachment, forced sale, realisation or other
threat, direct or indirect in relation to the obligations of the
Escrow agent or any other person or by virtue of any judicial, quasi
judicial, bankruptcy or similar legal process.
7.9 Parent and FSAH undertake to procure that the Escrow stock will be
freely tradable at all times at which it is competent for the
Subscriber to give a put notice, on the basis that the Escrow stock,
being common stock of the Parent, will be registered
-8-
with the Securities and Exchange Commission and listed for trading on
NASDAQ in accordance with all applicable laws.
8. Rights and Obligations of Escrow agent
8.1 The Escrow agent is not and will not be deemed to be a trustee for any
party for any purpose and is merely acting hereunder with the limited
duties herein prescribed.
8.2 The Escrow agent does not have and will not be deemed to have any
responsibility in respect of any instruction, certificate or notice
delivered to it or in respect of the Escrow stock or any Escrow
property other than faithfully to carry out the obligations undertaken
in this agreement and to follow the directions or instructions
recorded in any notice delivered pursuant to this agreement.
8.3 The Escrow agent is not and will not be deemed to be liable for any
action taken or omitted by it in good faith and may rely upon and act
in accordance with the advice of its counsel without liability on its
part for any action taken or omitted in accordance with such advice.
In any event the Escrow agent's liability hereunder will be limited to
liability for gross negligence, wilful misconduct or bad faith on its
part.
8.4 The Escrow agent may conclusively rely upon and act in accordance with
any certificate, instruction, notice, letter, telegram, cablegram or
other written instrument believed by it to be genuine and to have been
signed by the proper party or parties.
8.5 The Parent agrees:
8.5.1 to pay the Escrow agent's reasonable fees and to reimburse it for
its reasonable expenses including attorneys fees incurred in
connection with its
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duties hereunder expeditiously so as not to impair or delay the
timeous implementation of this agreement and put notice delivered
pursuant hereto;
8.5.2 to save harmless, indemnify and defend the Escrow agent for,
from and against any loss, damage, liability, judgment, cost and
expense whatsoever, including reasonable counsel fees, suffered
or incurred by it by reason of or on account of any
misrepresentation made to it or its status or actions as Escrow
agent under this agreement except for any loss, damage,
liability, judgment, cost or expense resulting from gross
negligence, wilful misconduct or bad faith on the part of the
Escrow agent. The obligation of the Escrow agent to sell or
deliver the Escrow stock pursuant to this agreement will be
subject to the prior satisfaction upon written demand from the
Escrow agent of the Parent's obligations to save harmless,
indemnify and defend the Escrow agent and to reimburse the Escrow
agent or otherwise pay its reasonable fees and expenses
hereunder.
8.6 The Escrow agent will not be required to defend any legal proceedings
which may be instituted against it in respect of the subject matter of
this agreement unless requested to do so by the Subscriber, the Parent
or FSAH and indemnified to the Escrow agent's satisfaction against the
cost and expense of such defence by the party requesting such defence.
If any such legal proceeding is instituted against it the Escrow agent
agrees promptly to give notice of such proceedings to the remaining
parties. The Escrow agent will not be obliged to institute legal
proceedings of any kind.
8.7 The Escrow agent will not by act, delay, omission or otherwise be
deemed to have waived any right or remedy it may have under this
agreement or generally, unless such waiver be in writing, and no
waiver will be valid unless it is in writing, signed by the Escrow
agent and only to the extent expressly therein set forth. A waiver by
the Escrow agent under the terms of this agreement will not be
construed as a bar to or
-10-
waiver of the same or any other right or remedy which it would
otherwise have on other occasions.
8.8 The Escrow agent may resign as such hereunder by giving thirty days
written notice thereof to the remaining parties. Within twenty days
after receipt of such notice the remaining parties will deliver to the
Escrow agent written instructions for the release of the Escrow stock
and any Escrow property to a substitute Escrow agent which whether
designated by written instructions from the remaining parties or in
the absence thereof by instructions from a court of competent
jurisdiction to the Escrow agent, will be a bank or trust company
organised and doing business under the laws of the United States or
any state thereof. Such substitute Escrow agent will thereafter hold
any Escrow stock and any Escrow property received by it pursuant to
the terms of this agreement and otherwise act hereunder as if it were
the Escrow agent originally named herein. The Escrow agent's duties
and responsibilities hereunder will terminate upon the release of all
Escrow stock and Escrow property then held in escrow according to such
written instruction or upon such delivery as herein provided. This
agreement will not otherwise be assignable by the Escrow agent without
the prior written consent of the remaining parties.
9. Non-waiver
No relaxation or indulgence which any of the parties may afford to the
other/s shall in any way prejudice or be deemed to be a waiver of the
rights of the indulgent party and shall not preclude or stop the indulgent
party from exercising all or any of its rights hereunder and in particular
but without limiting or derogating from the aforegoing, any cancellation
hereof or accrued right of cancellation hereof.
-11-
10. Non-variation
10.1 No variation or amendment of this agreement will be of any force or
effect unless reduced to writing and signed by all the parties hereto.
10.2 No consensual termination of this agreement will be of any force or
effect unless reduced to writing and signed by all the parties hereto.
10.3 No waiver or abandonment of any party's rights arising from this
agreement, accrued or otherwise, will be of any force or effect as
against such party unless such waiver or abandonment is reduced to
writing and signed by the party waiving and abandoning such rights.
10.4 No oral statements and no conduct by a party relating to any purported
variation, amendment, cancellation, waiver or abandonment will estop a
party from relying upon the formalities prescribed in the preceding
sub-paragraphs of this paragraph.
11. Whole agreement
11.1 This agreement constitutes the whole agreement between the parties
with regard to the subject matter hereof and no representations, or
warranties, by commission or omission which are not recorded herein
shall be of any force or effect.
11.2 The parties acknowledge that they have not been induced or coerced to
enter into this contract by virtue of any representations, statements,
understandings, omissions or warranties made by the other party hereto
or any persons acting on their behalf which are not included herein.
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12. Miscellaneous matters
12.1 address
12.1.1 Any notice in connection with this agreement shall be delivered
by hand to the following addresses:
12.1.1.1 Escrow agent:
address: c/o American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
and shall be marked for the attention of Xx. Xxxx Xxxxxx.
12.1.1.2 Parent/FSAH:
address: 0000 Xxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
and shall be marked for the attention of Xxxxx Xxxxxxxxx;
copy to: Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx
Xxxxxxxx Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx.
12.1.1.3 Subscriber:
address: Xxx Xxx Xx xxx Xxxx Xxxxxxx Xxxxx
-00-
Xxxxxxxx Xxx 0
Xxxxxxxx
Xxxxxxxx xx Xxxxx Xxxxxx
and shall be marked for the attention of Xxxxxxxx Xxxxx
12.2 Any notice or payment sent to a party's domicilium citandi et
executandi as selected above shall be delivered by hand or sent by
telefax and shall be presumed, subject to proof to the contrary, to
have been received by such party on the day of such delivery by hand,
or if transmitted by telefax, on the day of transmitting same unless
it is not a business day in which event such telefax shall be deemed
to have been received on the following business day.
12.3 Any party shall be entitled to alter his domicilium citandi et
executandi in terms hereof by furnishing to the others of them written
notice of such alteration provided that such alteration shall only be
effective 7 (seven) days after receipt by the other party of such
notice.
13. Governing law
This agreement will be governed by and construed in accordance with the
laws of New York and will be binding upon and enure to the benefit of all
the parties hereto and their respective successors-in-interest and assigns.
14. Successor in title
In the event of the liquidation or deregistration of the Subscriber the
rights and obligations of the Subscriber under this agreement will be
assigned to Xx Xxxxxxxx Xxxxx Xxxxxx Xxxxx, or a trust of which he is a
beneficiary.
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15. Signature in counterpart
This agreement may be executed in several counterparts which taken together
will constitute a single instrument.
Signed at New York on 16 January 1997.
Witness: for American Stock Transfer and Trust
Company
/s/ Danie Erasmus /s/ Xxxxxxx X. Xxxxxx
----------------- ---------------------
Vice President
Signed at Johannesberg on 14 January 1997.
Witness: for First South Africa Corp., Ltd
/s/ Corrie Roodt
--------------------------- ----------------
Signed at Johannesberg on 16 January 1997.
Witness: for First South African Holdings (Pty) Ltd
/s/ Corrie Roodt
--------------------------- ----------------
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Signed at Johannesberg on 1997.
Witness: for Burre Bakeries cc
/s/ Xxxxxxxx Xxxxx
--------------------------- -------------------
Signed at Chicago on 14 January 1997.
Witness: Xxxxxxx Xxxx
/s/ Mikole Maddo /s/ Xxxxxxx Xxxx
---------------- ----------------
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Appendix 4
Encumbrances on assets - clauses 20.1.1.4 and 20.2.2.1
This appendix will be finally submitted by Faspac (Pty) Ltd within 30 days of
the date of signature. For interim purposes only it is recorded that certain
movable equipment has been financed by the IDC and may be subject to
encumbrances under the agreements with the IDC. Certain motor vehicles and
trucks are also financed, as are ancillary office and bakery equipment. All
encumbrances are normal and commercial given the nature of the contracts
concerned.
