SALE OF BUSINESS AGREEMENT
between
ASTORIA BAKERY CC
and
XXXXXXXX XXXXX
and
ASTORIA BAKERY (PROPRIETARY) LIMITED
and
FIRST SOUTH AFRICAN HOLDINGS (PROPRIETARY) LIMITED
and
FIRST SOUTH AFRICA CORP., LTD
Xxxxxx Xxxxxxx Xxxxxx
TABLE OF CONTENTS
1. Introduction
2. Definitions and interpretation
3. Suspensive conditions
4. Preparation of the seller's 1996 financial statements
and the ABL 1996 financial statements
5. The sale
6. Risk
7. Purchase price
8. Adjustments to and manner of payment of the first instalment
9. Adjustments to and manner of payment of the second,
third and fourth instalments
10. Restrictions on disposal of FSAH "B" shares
11. Put option
12. Security for payment of the purchase price
13. Set-off of damages against instalments of the purchase price
14. Completion
15. Contracts and unfulfilled orders
16. Insolvency Act - section 34
17. Employees
18. Pension fund
19. Guarantees, suretyships and indemnities
20. Warranties
20.1.1 assets
20.1.2 manner of carrying on business
20.1.3 goodwill and scope of business
20.1.4 contracts
20.1.5 intellectual property rights
20.1.6 laws, regulations, consents, licences and
permits
20.1.7 labour laws, regulations, determinations,
agreements and disputes
20.1.8 insurance
20.1.9 employment, leave, remuneration and pension
20.1.10 restraint of trade
20.1.11 warranties regarding books of account
20.1.12 environmental warranties
20.2.1 warranties relating to the business of ABL
20.2.2 assets of ABL
20.2.3 warranty regarding registration
20.2.4 warranties regarding capital structure and the
shares
20.2.5 warranties regarding statutory requirements
20.2.6 warranties regarding books of account and
minutes
20.2.7 warranties regarding taxation
20.2.7.1 administration
20.2.7.2 deductible payments
20.3 disclosure
21. Confidentiality
22. Restraints
23. Value-added tax
24. Breach
25. Mediation and arbitration
26. Costs
27. Miscellaneous matters
27.1 postal addresses
27.2 addresses for service of legal documents
27.3 entire contract
27.4 no representations
27.5 variation, cancellation, waiver
27.6 indulgences
27.7 cession
27.8 applicable law
27.9 jurisdiction
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. //, 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 breads,
confectioneries, and other pastry-related products;
2.4.4 "THE COMPLETION DATE"-the seventh day after the
fulfilment of the last-outstanding of the suspensive
conditions;
2.4.5 "THE CONTRACTS"-those contracts of the seller
relating to the business, all as identified in
Appendix 1 to this agreement;
2.4.6 "THE CREDITORS"-all trade creditors of the seller as
at the effective date;
2.4.7 "DEBTS"-all of the claims of the seller against the
debtors of the business as at the effective date;
2.4.8 "THE EFFECTIVE DATE"-1 July 1996;
2.4.9 "THE EMPLOYEES"-those individuals employed by the
seller to work in the business and listed in Appendix
2;
2.4.10 "THE EMPLOYMENT AGREEMENTS" - employment agreements
to be entered into between the purchaser and each of
Xxxxx Xxxxxxx, Wilfried Wesslau and Xxxxxx Xxxxxxxx
in a form acceptable to the purchaser;
2.4.11 "FIXED ASSETS" - those fixed assets used by the
seller in the conduct of the business and listed and
identified in Appendix 3;
2.4.12 "THE FIRST INSTALMENT"-the first instalment of the
purchase price specified in 7.1.1;
2.4.13 "THE FOURTH INSTALMENT"-the fourth instalment of the
purchase price specified in 7.1.4;
2.4.14 "FSAC" - First South Africa Corp., Ltd, registration
number , a company incorporated under the laws of
Bermuda, certain of the shares of which are quoted on
NASDAQ;
2.4.15 "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;
2.4.16 "FSAH "B" SHARES" - "B" shares in the capital of
FSAH;
2.4.17 "THE INTELLECTUAL PROPERTY AGREEMENT" - the agreement
to be entered into relating to the sale of the
intellectual property in the recipes utilised by the
seller in the business, substantially in the form of
Appendix 4;
2.4.18 "THE LANDLORD" - ;
2.4.19 "THE LESOTHO SHARES" -the shares of ABL, formerly
owned by the warrantor and sold by the warrantor to
the seller;
2.4.20 "THE MANAGEMENT AGREEMENT" - the management agreement
to be concluded between FSAH, the purchaser and the
warrantor, substantially in the form of Appendix 5;
2.4.21 "THE PREMISES" - the premises from which the seller
conducts the business;
2.4.22 "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;
2.4.23 "THE RETAINED LIABILITIES"-all the liabilities of the
business as at the effective date, whether actual or
contingent, other than the sale liabilities;
2.4.24 "THE SALE ASSETS" - the aggregate of:-
2.4.24.1 the fixed assets;
2.4.24.2 the stock;
2.4.24.3 the debts;
2.4.24.4 the Lesotho shares;
2.4.24.5 the trademarks;
2.4.24.6 the rights of the seller arising on or after
the effective date under the contracts;
2.4.25 "THE SALE LIABILITIES"-the aggregate of:
2.4.25.1 the creditors;
2.4.25.2 the obligations of the seller under the
shareholder's loan; and
2.4.25.3 the obligations of the seller arising on or
after the effective date under the
contracts;
2.4.26 "THE SECOND INSTALMENT"-the second instalment of the
purchase price specified in 7.1.2;
2.4.27 "THE SELLER" - Astoria Bakery CC, registration number
, a close corporation incorporated according to the
laws of the Republic of South Africa;
2.4.28 "THE SELLER'S 1996 FINANCIAL STATEMENTS" - the
audited financial statements of the seller for the
period ending 29February 1996, to be prepared in
accordance with clause 4;
2.4.29 "THE SHAREHOLDER'S LOAN"-the loan by the warrantor to
the seller, which the seller warrants will be not
less than R300000;
2.4.30 "SIGNATURE DATE" - the date on which this agreement
is signed by the last party to do so;
2.4.31 "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;
2.4.32 "THE SUSPENSIVE CONDITIONS" - the suspensive
conditions set out in clause 3;
2.4.33 "THE TRADEMARKS" - the unregistered trademark
"Astoria" and the wheat sheaf logo used by the seller
in its business;
2.4.34 "THIS AGREEMENT" - this agreement, and all the
appendices to this agreement;
2.4.35 "THE THIRD INSTALMENT"-the third instalment of the
purchase price specified in 7.1.3;
2.4.36 "THE WARRANTOR" - Xxxxxxxx Xxxxx, the sole member of
the seller.
3. SUSPENSIVE CONDITIONS
3.1 This rights and obligations of the parties under this
agreement (other than those set out in this clause 3 and
clauses 4, 21, 24, 25 and 26) are subject to and conditional
upon the fulfilment of the following suspensive conditions on
or before 30 September 1996, or such later date as may be
determined pursuant to clause 3.3:
3.1.1 the conclusion of written agreements of lease between
the purchaser and each of Strydom Park Property CC
and Ferndale Property CC in respect of the premises
for a period of 5 years, renewable at the option of
the purchaser for a further period of 5 years, on
market-related terms and conditions reasonably
acceptable to the purchaser;
3.1.2 the conclusion of the management agreement, the
intellectual property agreement and the employment
agreements, and the fulfilment of all conditions to
which those agreements are subject other than any
condition relating to the conclusion of this
agreement and its becoming unconditional;
3.1.3 the approval of the boards of directors of the
purchaser, FSAH and FSAC;
3.1.4 the completion by the purchaser or its agents of a
due diligence investigation into the affairs and
financial position of the seller yielding results
satisfactory to the purchaser, FSAH and FSAC. The
costs of this investigation shall be borne by the
purchaser; and
3.1.5 the preparation, completion and audit of the seller's
1996 financial statements and the ABL 1996 financial
statements in accordance with clause 4.
3.2 Each of the parties shall use its best endeavours to procure
fulfilment of the suspensive conditions. In particular, but
without limitation, the seller and the warrantor undertake to
make available all information requested by the purchaser, and
to answer all questions and deal with all queries posed by the
purchaser in the course of the due diligence investigation
referred to in 3.1.5.
3.3 The suspensive conditions are for the benefit of the purchaser
which may by written notice given to the seller prior to 30
September 1996, waive, or extend the period for, the
fulfilment of any condition.
3.4 If any of the suspensive conditions fail (and fulfilment
thereof is not waived in terms of 3.3), this agreement, (save
for the provisions of this clause and clauses 4, 21, 24, 25
and 26) shall cease to be of any further force and effect and
the parties shall be restored as nearly as may be possible to
the positions in which they would have been had this agreement
not been entered into. No party shall have any claim against
any other as a result of the failure of the conditions, except
for such claims, if any, as may result from a breach of the
provisions of this clause.
4. 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:-
4.1 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;
4.2 will be prepared on the same basis and applying the same
accounting policies as for all prior years;
4.3 will not reflect any revaluation of assets;
4.4 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
4.5 will be reported on without qualification by the seller's or
ABL's auditors, as the case may be.
5. THE SALE
5.1 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.
5.2 The sale will be deemed to have taken effect on the effective
date, notwithstanding the date on which this agreement is
signed.
5.3 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.
5.4 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.
5.5 The parties agree that:-
5.5.1 the sale of the business comprises the sale of the
seller's business as a going concern;
5.5.2 the business was an income-earning activity on the
effective date and will be an income-earning activity
on the completion date;
5.5.3 the sale encompasses the sale of all assets necessary
for the conduct of the business.
6. RISK
The risk in and the benefit of the business will be deemed to have
passed to the purchaser on the effective date. Between the effective
date and the completion date the seller shall conduct the business as
agent of and for the account of the purchaser.
7. PURCHASE PRICE
7.1 The purchase price of the business shall, (subject to a
minimum of R16000000), be the aggregate of the following
instalments as adjusted pursuant to clauses 8 or 9, as the
case may be-
7.1.1 a first instalment of R10000000 payable on the
completion date as to R6000000 in cash and as to
R4000000 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;
7.1.2 a second instalment equal to 4 times the consolidated
pre-tax profits of the purchaser for the year ended
30 June 1997,
multiplied by 25%, payable as to 60% in cash and as
to the balance 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 1997, 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 1997. 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;
7.1.3 a third instalment equal to 4 times the consolidated
pre-tax profits of the purchaser for the year ended
30 June 1998, multiplied by 25% and payable as to 60%
in cash and as to the balance 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 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;
7.1.4 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 as to 60% in cash and as to the balance 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.
7.2 Notwithstanding the preceding sub-clauses of this clause, the
purchase price shall not exceed R24000000 in total. In
calculating this amount appreciation or depreciation of the
FSAH "B" shares shall be excluded.
7.3 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 8.1.1 and 8.1.2 are complied
with, be not less than R10000000. This sub-clause shall apply
only to disposals prior to 31March1999 (after which FSAH will
have no liability under this sub-clause) and provided that
8.1.1 and 8.1.2 are complied with.
7.4 The purchase price shall be allocated as follows: -
7.4.1 to the debts, their face value;
7.4.2 to the stock, its face value;
7.4.3 to the Lesotho shares, R;
7.4.4 to the trademarks, R;
7.4.5 to the fixed assets, R; and
7.4.6 the balance as to goodwill.
No value is attributed to the contracts.
7.5 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 7.4.4 or 7.4.5.
8. ADJUSTMENTS TO AND MANNER OF PAYMENT OF THE FIRST INSTALMENT
8.1 The first instalment shall be reduced on a Rand for Rand basis
by the amount of:-
8.1.1 any distribution of after tax profit by the seller or
ABL in the nature of a dividend between 29 February
1996 and the completion date; and
8.1.2 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.
8.2 The first instalment will be paid on the completion date.
9. ADJUSTMENTS TO AND MANNER OF PAYMENT OF THE SECOND, THIRD AND FOURTH
INSTALMENTS
9.1 Each of the second, 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.
9.2 In determining the pre-tax profit of the purchaser on which
each of the second, 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.
9.3 In the event of any unresolved dispute between the seller and
the purchaser as to the profit figure on which any of the
second, third or fourth instalments is based, the dispute
shall be resolved by the auditors of the purchaser, whose
determination shall be final and binding on the parties.
10. RESTRICTIONS ON DISPOSAL OF FSAH "B" SHARES
10.1 Notwithstanding 7.3, 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.
10.2 Any sale in contravention of 10.1 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.
11. PUT OPTION
11.1 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 purchaser to the seller pursuant to this agreement, ("THE
PUT OPTION").
11.1 The material terms of the put option will be the following:-
11.1.1 it will only be exercisable when the seller or the
warrantor become entitled to sell the FSAH "B"
shares, determined in accordance with 10;
11.1.2 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;
11.1.3 although the put option may be exercised in tranches
each tranche shall comprise a minimum of 100 shares;
11.1.4 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.
12. SECURITY FOR PAYMENT OF THE PURCHASE PRICE
12.1 As security for payment of the purchase price by the purchaser
and for the obligations of FSAH imposed by 7.3, 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").
12.2 The parties shall procure that Xxxxxx Xxxxxxx Xxxxxx shall
hold the security documentation and deal with it as follows:-
12.2.1 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;
12.2.2 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:-
12.2.2.1 written notice signed by the seller and the
purchaser that the shares are to be
delivered to the seller; or
12.2.2.2 written notice signed by the seller and
accompanied by a copy of any judgement or
arbitral award finding in the purchaser's
favour that the purchase price has not been
paid in full;
deliver the security documentation to the seller.
13. SET-OFF OF DAMAGES AGAINST INSTALMENTS OF THE PURCHASE PRICE
13.1 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. 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.
13.2 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.
13.3 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 full amount 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. 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.
14. COMPLETION
14.1 Completion shall take place at the premises of the seller at
13h00 on the completion date.
14.2 On the completion date:
14.2.1 the seller shall deliver the business to the
purchaser by placing the purchaser in possession of
the business, and grant the purchaser occupation of
the premises;
14.2.2 the seller shall deliver to the purchaser a certified
copy of the s228 resolution referred to in 3.1.1;
14.2.3 the seller shall deliver to the purchaser such
documents, duly completed, as may be necessary to -
14.2.3.1 cede the contracts to the purchaser; and
14.2.3.2 transfer ownership of the other sale assets
to the seller, including all necessary
consents of third parties;
14.2.4 the seller shall deliver to the purchaser
comprehensive lists of its suppliers and customers
and of the prices and other material terms agreed to
with its customers, and all records of the business,
excluding books of account;
14.2.5 the seller shall perform all such other acts as may
be necessary or required by the purchaser to
facilitate completion.
14.3 Subject to the performance by the seller of its obligations
under clause 14.2 the purchaser shall pay the first instalment
of the purchase price to the seller by paying the cash portion
in cash and delivering to the seller share certificates in
respect of the FSAH "B" shares comprised in the first
instalment.
14.4 If for any reason the provisions of clause 14.2 or 14.3 are
not fully complied with on the completion date either the
seller or the purchaser may elect (in addition to and without
prejudice to all other rights or remedies available to it) to
rescind this agreement or to agree a new date for completion.
15. CONTRACTS AND UNFULFILLED ORDERS
15.1 From the completion date the purchaser shall:
15.1.1 be entitled to the benefit of the contracts;
15.1.2 carry out, perform and complete all the obligations
and liabilities to be discharged under the contracts
and which arise on or after the effective date; and
15.1.3 indemnify the seller against all actions,
proceedings, costs, damages, claims and demands in
respect of any failure on the part of the purchaser
to carry out, perform and complete those obligations
and liabilities.
15.2 Nothing in this agreement shall:
15.2.1 require the purchaser to perform any obligation
falling due for performance or which should have been
performed before the completion date; or
15.2.2 make the purchaser liable for any act, neglect,
default or omission in respect of any of the
contracts prior to the completion date or for any
claim, expense, loss or damage arising from any
failure to obtain the consent or agreement of any
third party to the entry into of this agreement or
from any breach of any of the contracts caused by
this agreement or completion.
15.3 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 the completion date.
15.4 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:
15.4.1 the seller shall use all reasonable endeavours to
procure the consent to assignment;
15.4.2 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 completion date and shall
indemnify the seller against all actions,
proceedings, costs, damages, claims and demands in
respect of any failure on the part of the purchaser
to perform those obligations; and
15.4.3 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.
15.5 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.
16. INSOLVENCY ACT - SECTION 34
16.1 The sale of the business will not be published in terms of
section 34(1) of the Xxxxxxxxxx Xxx, 0000.
16.2 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.
16.3 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.
16.4 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.
17. EMPLOYEES
17.1 The purchaser undertakes to offer to employ all the employees
on the basis that:
17.1.1 the employment of all employees who accept the
purchaser's offer will be deemed to have commenced on
the effective date; and
17.1.2 any offer made by the purchaser will be on terms and
conditions which are no less favourable overall than
those enjoyed by the employees immediately prior to
the effective date.
17.2 All obligations of the seller to the employees up to the
effective date, including all payments due in respect of
accrued leave and bonuses shall be borne by the seller. All
obligations to the employees who accept employment with the
purchaser arising on or after the effective date shall be
borne by the purchaser.
17.3 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 17.1. 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 the completion date 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.
17.4 The purchaser and the seller shall jointly consult with the
employees and/or their representatives prior to the completion
date in accordance with generally accepted industrial
relations practice.
The purchaser and the seller will agree in advance the form
that such consultation will take and in the absence of
agreement the form of consultation will be determined by the
seller.
17.5 The purchaser, FSAC and FSAH undertake to procure that the
warrantor is appointed as a director of the purchaser.
18. PENSION FUND
[INSTRUCTIONS REQUIRED].
19. GUARANTEES, SURETYSHIPS AND INDEMNITIES
19.1 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
completion 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.
19.2 If the purchaser is not able to obtain the release from the
guarantees and suretyships referred to in 19.1 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 place the seller
in funds to enable the seller to discharge its liability under
the suretyship or guarantee.
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 completion
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 The seller owns the sale assets 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 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:
20.1.1.2.1 the 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;
20.1.1.2.2 the 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 None of the sale assets 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.
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 completion 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 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;
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 completion 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 business with, or varying
the terms on which it does business with,
the business.
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
6months, and the seller is not party to any
unusual agreement.
20.1.4.3 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.
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.
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 that 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 benefits payable to that
employee upon his retrenchment or
redundancy) will have been changed since 29
February 1996.
20.1.9.2 On the completion 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 the date of signature of this
agreement.
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 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
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 completion
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;
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.
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 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.
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
20.2.7.1.1 The records of ABL include all of
the resolutions passed by the
directors and shareholders of ABL;
20.2.7.1.2 ABL 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;
20.2.7.1.3 no 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;
20.2.7.1.4 ABL has paid or will, prior to
the completion date, pay all tax
where the due date for payment of
the tax arises on or before the
completion; in respect of any tax
which is due for payment after the
completion date, adequate provision
or reserves for the payment of that
tax will have been made;
20.2.7.1.5 ABL is not liable to pay any
penalty or interest in connection
with any claim for tax;
20.2.7.1.6 ABL is not subject to any
liability as a result of the
re-opening of any tax assessment;
20.2.7.1.7 all 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;
20.2.7.1.8 ABL 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;
20.2.7.1.9 ABL 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 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 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
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, 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 completion 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 completion 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 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
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 7.3, 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 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
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.
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.
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 POSTAL ADDRESSES
27.1.1 Any written notice in connection with this agreement
may be addressed:
27.1.1.1 in the case of the seller and the warrantor
to:
address :
telefax no :
and shall be marked for the attention of [];
27.1.1.2 in the case of the purchaser, FSAH and FSAC
to:
address : P O Box 4001
Kempton Park
1620
telefax no : 974-7251
and shall be marked for the attention of
Corrie Roodt;
27.1.2 The notice shall be deemed to have been duly given:
27.1.2.1 14 days after posting, if posted by
registered post to the party's address in
terms of this sub-clause;
27.1.2.2 on delivery, if delivered to the party's
physical address in terms of either this
sub-clause or the next sub-clause dealing
with service of legal documents;
27.1.2.3 on despatch, if sent to the party's then
telefax or telex number and confirmed by
registered letter posted no later than the
next business day.
27.1.3 A party may change that party's address for this
purpose, by notice in writing to the other party. No
notice shall be necessary in respect of a new or
changed telefax or telex number.
27.2 ADDRESSES FOR SERVICE OF LEGAL DOCUMENTS
27.2.1 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):
27.2.1.1 the seller and the warrantor:
27.2.1.2 the purchaser, FSAH and FSAC:
27.2.2 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.
27.3 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.
27.4 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.
27.5 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.
27.6 INDULGENCES
If any party at any time breaches any of that
party's obligations under this agreement, the other party
("THE AGGRIEVED PARTY"):
27.6.1 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;
27.6.2 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.
27.7 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.
27.8 APPLICABLE LAW
This agreement shall be interpreted and implemented in
accordance with the law of the Republic of South Africa.
27.9 JURISDICTION
The parties consent to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the Supreme Court.
Signed at Randburg on 20th September 1996.
AS WITNESS: for ASTORIA BAKERIES CC
/s/ Xxx Xxxxxxx /s/ Xxxxxxxx Xxxxx
-------------------------- --------------------------
who warrants that he
is duly authorised
Signed at Randburg on 20th September 1996.
AS WITNESS: XXXXXXXX XXXXX
/s/ Xxx Xxxxxxx /s/ Xxxxxxxx Xxxxx
-------------------------- --------------------------
Signed at Randburg on 20th September 1996.
AS WITNESS: for Astoria (PROPRIETARY) LIMITED
/s/ Xxx Xxxxxxx /s/ Xxxxxxxx Xxxxx
-------------------------- --------------------------
who warrants that he
is duly authorised
Signed at Randburg on 20th September 1996.
AS WITNESS: for FIRST SOUTH
AFRICAN HOLDINGS
(PROPRIETARY) LIMITED
/s/ Xxx Xxxxxxx /s/ Xxxxxxxxx Roodt
-------------------------- --------------------------
who warrants that he
is duly authorised
Signed at Randburg on 20th September 1996.
AS WITNESS: for FIRST SOUTH AFRICA
CORP., LTD
/s/ Xxx Xxxxxxx /s/ Xxxxx Xxxxxxxxx
-------------------------- --------------------------
who warrants that he
is duly authorised
Appendix 1
CONTRACTS
Appendix 2
EMPLOYEES
Appendix 3
FIXED ASSETS
Appendix 4
INTELLECTUAL PROPERTY AGREEMENT
Appendix 5
MANAGEMENT AGREEMENT
