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DATED 1999
(1) NEWSHELF 126 (PROPRIETARY) LIMITED (whose name is in the course of being
changed to JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED)
(2) JLM INDUSTRIES INC
(3) ICI SOUTH AFRICA (PROPRIETARY) LIMITED
(4) IMPERIAL CHEMICAL INDUSTRIES PLC
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SALE AGREEMENT
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INDEX
1 INTERPRETATION
2. PREAMBLE
3 SALE OF BUSINESS
4 PRICE
5 PAYMENT
6 CLOSING ACCOUNTS
7 VAT 10
8 POSSESSION 11
9 BOOKS, RECORDS AND CUSTOMERS
10 CONDITIONS PRECEDENT
11 ASSIGNMENT OF CONTRACTS 13
12 DEBTORS 14
13 STOCKTAKING
14 LEASEHOLD INTERESTS 15
15 EMPLOYEES
16 LICENCES 18
17 WARRANTIES
18 VOETSTOOTS
19 PUBLICATION 19
20 NAME 19
21 INTELLECTUAL PROPERTY RIGHTS
22 ANNOUNCEMENTS 20
23 INDEMNITY 20
24 AGENTS COMMISSION
25 RESTRAINT
26 BREACH
27 DISPUTES
28 APPLICABLE LAW AND JURISDICTION 24
29 CONFIDENTIALITY 24
30 TRANSITIONAL SERVICES 24
31 AUTHORITY 25
32 DOMICILIUM AND NOTICES
33 GENERAL 27
34 COSTS
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SALE AGREEMENT
between
(1) NEWSHELF 126 (PROPRIETARY) LIMITED (whose name is in the process of
being changed to JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED)
(2) JLM INDUSTRIES INC
(3) ICI SOUTH AFRICA (PROPRIETARY) LIMITED
(4) IMPERIAL CHEMICAL INDUSTRIES PLC
1 INTERPRETATION
In this agreement -
1.1 Clause headings are for convenience and shall not be used in its
interpretation;
1.2 unless the context clearly indicates a contrary intention -
1.2.1 an expression which denotes -
1.2.1.1 any gender includes the other genders;
1.2.1.2 a natural person includes an artificial person and vice versa;
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1.2.1.3 the singular includes the plural and vice versa;
1.2.2 the following expressions shall bear the meanings assigned to them
below and cognate expressions bear corresponding meanings -
1.2.2.1 "Auditors" - KPMG or such other Auditors as may be appointed by
the Seller acting in its sole discretion from time to time;
1.2.2.2 "Bank" - First National Bank of South Africa Limited;
1.2.2.3 "Business" - the Colours and Industrial Chemicals Division of
the Seller as at the Effective Date being the Sale Assets but, for
the avoidance of doubt, excluding the Uniqema businesses of
surfactants, lubricants and textile auxiliaries;
1.2.2.4 "Business Assets" - the Contracts, Debts, Fixed Assets, Goodwill
and Stock;
1.2.2.5 "Closing Date" - 5pm (South African time) on 31 August 1999;
1.2.2.6 "Conditions" - the Conditions precedent set out in Clause 10;
1.2.2.7 "Contracts" - those Contracts relevant to the conduct of the
Business more fully detailed in Part I of Schedule A but
excluding those Contracts more fully detailed in Part II of
Schedule "A";
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1.2.2.8 "Debts" - all claims of the Seller against the debtors of the
Business as at the Closing Date;
1.2.2.9 "Effective Date" - the date of signature of this agreement by the
last signing party;
1.2.2.10 "Field of Activity" - provision of the service of, or the
setting up of, a business for the distribution of the Restricted
Products (or any of them) in competition with the Business;
1.2.2.101 "Fixed Assets" - the Fixed Assets more fully detailed in the
schedule annexed marked "B";
1.2.2.11 "Goodwill" - the Goodwill of the Business as at the Closing
Date;
1.2.2.13 "Group" - in relation to either party means all companies that
are for the time being a subsidiary or holding company of the
party concerned or a subsidiary of that party's holding
company;
1.2.2.14 "ICI PLC" - Imperial Chemical Industries PLC (Company Number
218019), a company incorporated under the laws of England and
Wales and having its principal place of business at 0
Xxxxxxxx Xxxxxx XX0X 0XX;
1.2.2.12 "Initial Purchase Price" - the initial purchase price determined
in accordance with the provisions of Clause 4;
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1.2.2.16 "Intellectual Property Rights" - any intellectual property
including, without limitation, patents, trademarks, copyrights,
registered designs, right of confidence in know-how or technical
or commercial information generally;
1.2.2.17 "JLM" - means JLM Industries Inc, a company incorporated under the
laws of the United States of America and having its principal
place of business at 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxxxx
00000, Xxxxxx Xxxxxx of America;
1.2.2.18 "Liabilities" - (save as otherwise specifically referred to herein)
all actual liabilities of the Seller relating to the Business,
as at the Closing Date, as set forth in the Closing Balance
Sheet (including without limitation all trade creditors), together
with those other liabilities more specifically referred to in the
schedule attached hereto and marked "Schedule I" as such schedule
may be amended from time to time;
1.2.2.139 "Leasehold Interests" - collectively means -
1.2.2.19.1 Lakeland Shareblock - Unit 20; Hartbeespoort Dam;
1.2.2.19.2 Sable River Timeshare (3 weeks);
1.2.2.19.3 Fancourt Timeshare Lodge 000 Xxxxxx (4 weeks);
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1.2.2.20 "Purchaser" - Newshelf 126 (Proprietary) Limited (whose name is in
the process of being changed to JLM INDUSTRIES (SOUTH AFRICA)
(PROPRIETARY) LIMITED), a company incorporated under the laws of
South Africa with company number 96/09440/07 and having its
principal place of business at Building No 3, Harrowdene Office
ark, Western Service Road, Woodmead, Sandton, South Africa;
1.2.2.21 "Reserve Bank" - The Reserve Bank of South Africa;
1.2.2.22 "Restricted Products" - those products distributed by the Business
by virtue of the contracts listed in Schedule A Part I
("Included Contracts") and the Supply Agreements and any other
product distributed by the Business at the Closing Date but, for
the avoidance of doubt, excluding the those contracts listed in
Schedule A Part II ("Excluded Contracts") and the excluded
relationships listed in Schedule G ("Excluded Relationships");
1.2.2.23 "Sale Assets" - the Contracts, Debts, Fixed Assets, Goodwill,
Leasehold Interests and Stock;
1.2.2.24 "Seller" - ICI South Africa (Proprietary) Limited (Registration
No. 94/10248/07) a company incorporated under the laws of the
Republic of South Africa and having its principal place of
business at Building No 3, Harrowdene Office Park, Western
Service Road, Woodmead, Sandton, South Africa;
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1.2.2.25 "Stock" - the stock-in-trade of the Business as at the Closing
Date, including goods in transit (being Stock of the Business
purchased by the Seller prior to the Closing Date but not yet
delivered at that date) but excluding Stock sold by the Seller
and not delivered to the buyer thereof at the Closing Date;
1.2.2.26 "Supply Agreements" - those distribution and/or supply arrangements
between the Seller and any other member of the Seller's Group
for such of those products listed in Schedule H (as may be
modified by the Seller from time to time) as may be reflected by
written agreement executed as at the Closing Date, such written
agreements to reflect, and be no more onerous to the Business
than, the usual and customary commercial terms of the Seller or
any other relevant member of the Seller's Group;
1.2.2.27 "Territory" - means the Republic of South Africa and Mozambique.
2. PREAMBLE
The Purchaser wishes to acquire the Business as hereinafter provided.
3 SALE OF BUSINESS
3.1 Notwithstanding the date of signature of this agreement, and subject
to fulfilment of the Conditions precedent and closing, the Seller
sells to the Purchaser which indivisibly purchases the Business as a
going concern, with effect from the Closing Date, on which date all
risk in and benefits attaching to the Business shall pass to the
Purchaser.
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3.2 With effect from the Closing Date, the Purchaser shall assume
responsibility for and undertakes to settle the Liabilities, as and when
they fall due for payment. Should the Purchaser fail to pay any such
liability on due date, then, without prejudice to the Seller's rights, the
Seller shall be entitled, at its discretion, to pay same, on behalf of the
Purchaser, and to recover from the Purchaser all amounts so paid, and
interest thereon at the rate charged by the Bank to its prime customers on
overdraft from time to time plus three percent, subject to the maximum
rate permitted by law from time to time. Such rate of interest may be
evidenced by a certificate to be issued by any manager of the Bank and it
shall not be necessary to prove his appointment.
4 PRICE
4.1 The price payable by the Purchaser to the Seller for the Business Assets
shall be R26,515,000.00 consisting of the values for net current assets,
net fixed assets and goodwill as more fully detailed in part 1 of the
schedule annexed marked "C".
4.2 The price payable by the Purchaser to the Seller for the Leasehold
Interests shall be R754,500.00 as more fully detailed in part 2 of the
schedule annexed marked "C".
4.3 The price payable for the Business Assets and Leasehold Interests shall
together represent the Initial Purchase Price of R27,269,500.00.
5 PAYMENT
5.1 Notwithstanding the assumption of liabilities by the Purchaser pursuant
to the provisions of Clause 3.2, and in addition thereto, the Purchaser
shall pay the Initial Purchase Price to the Seller at the Closing Date.
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5.2 After Closing, the Initial Purchase Price shall be adjusted by a closing
account in accordance with Clause 6 and the balance paid to the relevant
party in accordance with that Clause 6.
5.3 In the event that the Purchaser fails to pay the sum of R27,269,500.00 to
the Seller on the Closing Date, the Seller shall be entitled, in its
discretion, and by written notice to the Purchaser to that effect, to
summarily cancel this agreement, without the Purchaser being afforded
notice of breach, and the Purchaser shall have no claim against the Seller
arising out of any such cancellation.
5.4 Without limiting the provisions of Clause 5.2, any balance of the purchase
price outstanding from time to time shall accrue interest at the rate
charged by the Bank to its prime customers on overdraft from time to time
plus three percent, subject to the maximum rate permitted by law from time
to time. Such rate of interest may be evidenced by a certificate to be
issued by any manager of the Bank and it shall not be necessary to prove
his appointment.
6 CLOSING ACCOUNTS
6.1 Within 6 weeks of the Closing Date, the Seller shall provide a post
completion audited balance sheet (to include the Leasehold Interests
represented at the values more specifically set out in Schedule C annexed
hereto) and an adjustment account (together "the Closing Accounts") in
accordance with the provisions of this Clause 6. The balance on the
Closing Account shall represent the final purchase price to be paid for
the Business Assets and the Leasehold Interests ("the Final Purchase
Price").
6.2 The Seller shall prepare a balance sheet of the Business as at the Closing
Date ("the Closing Balance Sheet") and procure it to be audited by the
Auditors, such accounts to be prepared and audited on the basis of
accounting policies and practices set out in the ICI Controllers Manual,
the terms of which comply with and are at least as onerous as the
generally accepted accounting standards of the Republic of South Africa.
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6.3 The Seller shall prepare an adjustment account in respect of the Business
and shall procure its certification by the Auditors ("the Adjustment
Account"). The Adjustment Account shall reflect as -
6.3.1 credits - that proportion of any amount paid before the Closing Date
that relate to any period after the Closing Date in respect of those
matters more fully detailed in Clause 6.3.2 which the broken portion of
that period commencing at the Closing Date bears to the entire period
for which the payment was made and any other amount paid before the
Closing Date which may be recoverable after the Closing Date;
debits - that proportion of any item referred to in Clause 6.3.2 owing
at the Closing Date that relate to any period prior to the Closing Date
which the broken portion of that period ending at the Closing Date bears
to the entire period for which the item is owed.
6.3.2 The Adjustment Account shall be in respect of inter alia rates and
taxes, electricity, water, sewerage, effluent disposal and insurance
premiums, deposits paid to any local authority in respect of
electricity, water or any other services, and rental in respect of any
of the premises utilised for purposes of conducting the Business.
6.4 For the avoidance of doubt, the Purchaser shall be entitled, at its own
cost, to review the Closing Accounts.
6.5 The Seller and the Purchaser shall use all reasonable endeavors to agree
the Closing Accounts within 7 days of their delivery to the Purchaser. If
the parties fail to agree the Closing Accounts within this time, the
matters in dispute shall be dealt with in accordance with Clause 27.
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6.6 Any net credit balance between the Initial Purchase Price and the Final
Purchase Price shall be paid by the Purchaser to the Seller and any net
debit balance between the same shall be paid by the Seller to the
Purchaser, within seven days of the Closing Accounts being finalized ,
either by agreement between the Seller and the Purchaser or by the
decision of the Auditors in accordance with Clause 27. Interest shall
accrue on the balance of any late payment due under this Clause in
accordance with Clause 5.4.
7 VAT
7.1 It is recorded that as -
7.1.1 the parties agree that the Business is -
7.1.1.1 an enterprise capable of separate operation;
7.1.1.2 being sold as a going concern;
7.1.2 the parties agree that the aforesaid enterprise will constitute an
income earning activity on the Effective Date and Closing Date; and
7.1.3 the assets necessary to carry on the enterprise are being disposed of by
the Seller to the Purchaser;
7.1.4 the sale contained in this agreement falls within the ambit of Section
11(1)(e) of the VAT Act, and therefore VAT is payable at the rate of
zero percent.
7.2 Should the South African Commissioner for Inland Revenue rule that VAT is
payable at any rate other than zero percent in respect of the sale of the
Business, the Purchaser shall pay such VAT to the Seller when the Seller
is required to make payment thereof, against the delivery of a tax invoice
to the Purchaser.
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7.3 Each of the Seller and the Purchaser warrants in favor of the other that
it will be registered as a vendor in terms of the VAT Act, as at the
Closing Date.
8 POSSESSION
On the Closing Date, and subject to compliance by the Purchaser with the
provisions of Clause 5, the Seller shall place the Purchaser in possession of
the Business.
9 BOOKS, RECORDS AND CUSTOMERS
9.1 Notwithstanding the provisions of Clause 8, it is expressly acknowledged
and agreed by the Purchaser that ownership of all books and records
relating to the Business shall remain with the Seller, the Purchaser being
entitled to have reasonable access thereto, from time to time, on
reasonable notice to the Seller, provided that such access shall be
limited to the affairs of the Business and only in respect of matters
arising in the ordinary course of the Business.
9.2 Following upon signature of this agreement, the Purchaser shall be
entitled to visit customers and suppliers of the Seller on reasonable
notice and subject to the consent of any such customers and suppliers,
provided that the Seller is given reasonable notice of such visit, the
Seller or its duly authorized representative or nominee being entitled to
attend any such visit.
10 CONDITIONS PRECEDENT
10.1 Closing is conditional upon the fulfillment of the following Conditions
precedent, namely -
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10.1.1 the obtaining of all such Exchange Control approvals as may be required
of the Exchange Control authorities of the Reserve Bank for the
purposes of implementing this transaction;
10.1.2 the signing of a Sale of Shares Agreement (and such agreement itself
becoming unconditional) in the form of the agreement annexed hereto
marked "D";
10.1.3 this transaction being approved by the Boards of Directors of the
Seller and the Purchaser;
10.1.4 the Purchaser confirming the relationship between the Seller and its
material suppliers and customers, and the Purchaser further satisfying
itself that subsequent to closing, a substantial portion of the
material distribution and/or agency agreements currently in place with
the Seller's material suppliers as listed in Schedule A Part II will be
transferred to the Purchaser;
10.1.5 the Purchaser obtaining a credit facility and other necessary financial
requirements (including cash on closing) on terms and conditions
satisfactory to it in its sole discretion but sufficient for it to
fulfill its obligations under this Agreement;
10.1.6 the Seller carrying out such due diligence as it requires as regards
the background and financial strength of the Purchaser, as they may
affect the Purchaser's ability to complete this transaction;
10.1.7 the Seller assigning the benefit of the Supply Agreements to the
Purchaser.
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10.2 Each of the parties shall use reasonable endeavors to procure the
fulfillment of the Conditions in Clause 10.1 by not later than 23 August
1999.
10.3 If any of the Conditions in Clause 10.1 fail (and fulfillment thereof is
not waived by the parties in writing by 23 August 1999 or such later
date as may be agreed in writing between the parties) this agreement
shall cease to be of any further force and effect.
11 ASSIGNMENT OF CONTRACTS
11.1 The Seller hereby cedes, assigns and delegates all its rights and
obligations under the Contracts and the Supply Agreements to the
Purchaser with effect from the Closing Date, and the Purchaser hereby
accepts such cession, assignment and delegation, the Purchaser
undertaking to assume, from the Closing Date, all future performance
obligations under the Contracts and the Supply Agreements.
11.2 The parties undertake to co-operate with each other in order to procure
any approvals required of the Reserve Bank in order to give effect to the
provisions of Clause 11.1.
11.3 The following shall apply to the provisions of Clause 11.1 -
11.3.1 this agreement shall not constitute an assignment of the relevant
contract if the assignment would constitute a breach of the relevant
contract;
11.3.2 the parties shall use their respective reasonable endeavors to obtain
any consent required to give effect to any such assignment;
11.3.3 after closing and until the necessary consent is obtained, the
Purchaser shall perform all the obligations as agent for the Seller and
the Purchaser hereby indemnifies and holds the Seller harmless against
all such liabilities.
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11.4 The Purchaser indemnifies and holds the Seller harmless against any
claims arising out of the operation of any of the Contracts after the
Closing Date.
11.5 The foregoing provisions of this Clause 11 shall apply without limitation
to the agreement for the supply of computer services concluded between
the Seller and Zeneca Pharmaceuticals, a division of Zeneca South Africa
(Proprietary) Limited on 17 February 1998.
12 DEBTORS
12.1 The sale to the Purchaser of the Debts is subject to the condition that
if any of the Debts are not paid within one hundred and twenty days after
the Closing Date, those unpaid Debts which the Purchaser cedes to the
Seller in terms of Clause 12.2 will revert to the Seller.
12.2 Following upon expiry of the said one hundred and twenty day period, the
Purchaser shall be entitled in writing to cede to the Seller any of those
unpaid Debts.
12.3 Against receipt by the Seller of such cession, the Seller shall pay to
the Purchaser an amount equal to the face value of the Debts ceded.
Where any payments still require to be made by the Purchaser to the
Seller pursuant to the provisions of this agreement, then the amount
owing shall be set-off against such payments, it being deemed that the
Purchase Price shall have been reduced by a like amount.
13 STOCKTAKING
13.1 The Seller and the Purchaser shall procure a stock take prior to closing,
and on completion of the stocktaking, stock sheets reflecting the
quantity of the Stock to be transferred shall be signed by the Seller and
the Purchaser. Any disputes arising in relation to the stock take shall
be settled between the parties, failing which they shall be referred to
arbitration in accordance with Clause 27.
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13.2 The value of the Stock will be deemed the lower of into store cost price
of the Stock and the market value thereof. However, if the parties by
mutual agreement determine that any Stock is worthless, or is otherwise
hazardous, and requiring disposal, then the Seller shall bear the cost of
any such disposal.
14 LEASEHOLD INTERESTS
14.1 The parties undertake to do all such things and sign all such documents
as may be requisite or necessary for purposes of transferring the
Leasehold Interests to the Purchaser within a reasonable period following
upon signature of this agreement.
14.2 Notwithstanding the provisions of Clause 14.1, risk and benefit in and to
the Leasehold Interests shall pass to the Purchaser with effect from the
Closing Date.
15 EMPLOYEES
15.1 The Purchaser and the Seller agree that the employees of the Business
detailed in the schedule annexed hereto and marked "E" shall transfer to
the Purchaser on the Closing Date.
15.2 The Purchaser will have the option to use the services of the non-
transferring employees for a period of ninety days following the Closing
Date in order to implement its organizational strategy. The Purchaser
will, however, compensate the Seller for the actual labor and benefit
costs of the non-transferring employees during the said ninety day
implementation period, but will not be responsible for any severance,
pension or related costs of employees not ultimately retained by the
Purchaser.
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15.3.1 Save as provided in Clause 15.3.2 below, the Seller shall be
responsible for the redundancy of any non-transferring employees ("the
Redundant Employees"), which shall be carried out in accordance with
the Seller's usual practice of giving three month's notice of
termination ("the Notice Period") and will pay all redemption
(severance) payments and pension makeup.
15.3.2 The Seller shall be responsible for notice period payments of the
Redundant Employees during such proportion of the Notice Period (which
may be all or part) which falls before the Closing Date. The Purchaser
shall be responsible for notice period payments of the Redundant
Employees during such proportion of the Notice Period (which may be all
or part) which falls after the Closing Date.
15.4.1 Save as provided in Clauses 15.2 and 15.3 above, employees not
transferring will be the sole responsibility of the Seller, and
transferring employees will, from the Closing Date, be the sole
responsibility of the Purchaser. All compensation (including without
limitation pension and any other deferred compensation) of both
transferring and non-transferring employees shall remain the
responsibility of the Seller until the day prior to the Closing Date.
15.4.2 For the avoidance of doubt, any claims brought by the transferring
employees in relation to the terms of their transfer shall be the sole
responsibility of the Purchaser.
15.5 The Purchaser undertakes that -
15.5.1 for a period of one year calculated from the Closing Date, there will
be no redundancy of transferring employees directly as a result of this
transaction; and
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15.5.2 for a period of three years after the Closing Date, the contractual
remuneration and benefits, (including without limitation substantially
equivalent retirement benefits and medical benefits), of transferring
employees will be maintained.
15.6 The Purchaser will assume responsibility for all accrued leave
obligations of the transferring employees, hereby indemnifying and
holding, jointly and severally with JLM, the Seller harmless against all
such claims.
15.7 Any employee who takes up employment with the Purchaser and is a member
of any pension fund, provident fund or retirement fund as at the Closing
Date and consents to the transfer of his right to such funds shall be
transferred to a substantially equivalent pension, provident or
retirement fund nominated or established by the Purchaser, at the cost of
the Purchaser and the parties undertake to co-operate in order to give
effect thereto in accordance with the principles set out in clause 15.8
below. For the avoidance of doubt, the Seller shall have the right to
review the proposed pension plans of the Purchaser prior to the Closing
Date (or such other date as may be relevant) and to be consulted on the
implementation of any such plan.
15.8 In relation to the AECI Defined Benefit Fund the Seller shall procure
that the trustees of such fund shall transfer an amount equal to the
Accrued Service Actuarial Reserve referable to the transferring employees
consenting to such transfer who are members of such fund under the scheme
rules.
15.9 In relation to the ICI South Africa Defined Contribution Fund the Seller
shall procure that the trustees of such fund shall transfer an amount of
the fund referable to the transferring employees consenting to such
transfer who are members of such fund under the scheme rules.
15.10 The Seller shall procure the novation for the benefit of the Purchaser
of the agreement between the Seller and Southern Life governing the
funding of supplementary pension benefits for employees who commenced
employment with the Seller prior to 1 August 1992.
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15.11 The parties shall use all reasonable endeavors to secure the transfer of
such funds as soon as practicable after the Closing Date.
15.12 The Seller shall have no liability to the Purchaser in relation to the
funds referred to in Clauses 15.8, 15.9 and 15.10 or for the pension
rights of the transferring employees save as set out in these Clauses
15.8 to 15.12.
15.13 In the event of a dispute arising regarding the interpretation or
implementation of the provisions of Clause 15.2, then the provisions of
Clause 27.1 shall apply thereto, mutatis mutandis.
16 LICENCES
16.1 The parties undertake to co-operate and use all reasonable endeavors in
procuring that all trade and other licenses and registrations of any kind
in relation to the Business presently held by the Seller are transferred
to and/or granted in favor of the Purchaser, at the cost of the
Purchaser.
16.2 The Seller does not warrant that any such licenses and registrations will
be transferred to and/or granted in favor of the Purchaser or that any
such licenses and registrations will be renewed. Failing any such
transfer, grant or renewal, the Purchaser will have no claim against the
Seller, hereby irrevocably waiving such claims.
17 WARRANTIES
The Seller and ICI PLC jointly and severally give the Purchaser the warranties
more fully detailed in the scheduled annexed marked "F".
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18 VOETSTOOTS
The Purchaser acknowledges and agrees that save in respect of the warranties
more fully detailed in annexure "F", the Business and the Sale Assets are sold
voetstoots, and the Seller is not bound by any warranties, representations,
undertakings or the like, written or oral, express or implied, with regard to
the Business and the Sale Assets, the turnover or profits of the Business or any
other matter affecting the Business, other than those expressly set out herein.
19 PUBLICATION
The parties agree to dispense with the necessity for publishing in any way the
sale of the Business in terms of section 34 of the Insolvency Xxx 0000 ("the
Insolvency Act"), as amended. The Seller and ICI PLC jointly and severally
hereby indemnify and hold the Purchaser harmless against any claim arising out
of the failure to publish notice of the sale in terms of section 34 of the
Insolvency Act.
20 NAME
20.1 The Purchaser undertakes not to use the name "ICI" in any manner
whatsoever, including without limitation in its trading name, without the
prior written consent of the Seller first having been obtained, and with
effect from the Closing Date.
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20.2 For the avoidance of doubt, no rights have been granted to or acquired by
the Purchaser to use the registered trade xxxx "ICI Roundel" owned by
Imperial Chemical Industries PLC without the prior express written
authority of the Seller.
21 INTELLECTUAL PROPERTY RIGHTS
21.1 Without limiting the provisions of Clause 20 the Purchaser undertakes not
to use any trademark containing the letters "ICI', without the prior
written consent of the Seller first having been obtained.
21.2 For the avoidance of doubt, it is recorded that no Intellectual Property
Rights will be acquired by the Purchaser in respect of the Business.
22 ANNOUNCEMENTS
Announcement of this transaction through any of the media, shall not be
published without prior consultation and agreement between the parties.
23 INDEMNITY
23.1 Save as otherwise set out herein, the Seller and ICI PLC hereby jointly
and severally indemnify the Purchaser against all loss, liability,
damage, claim or expense which the Purchaser may suffer as a result of or
which may be attributable to any liabilities (whether constituting
Liabilities or otherwise) of the Business arising prior to or referable
to an act or default prior to the Closing Date.
23.2 With effect from the Closing Date (and in relation to sub-Clauses 23.2.3
and 23.2.4 below, during any period of employee consultation between the
Effective Date and the Closing Date, which for the avoidance of doubt may
only take place with the consent of the Seller), the Purchaser and JLM
jointly and severally indemnify the Seller against all loss, liability,
damage, claim or expense which the Seller may suffer arising out of:
23.2.1 the Liabilities;
23.2.2 the performance of the Contracts and the Supply Agreements;
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23.2.3 any contravention of the provisions of Chapter 8 of the Labour
Relations Act No 66 of 1995;
23.2.4 the operation of the Business after the Closing Date.
23.3 As soon as practicable upon becoming aware of any claim under this Clause
23, the claiming party shall serve written notice on the other setting
out such information as may be required to validate the claim. The party
receiving such notice shall within 31 days either:
23.3.1 pay the amount claimed (in full or in such proportion as may be agreed
in writing between the parties); or
23.3.2 refer the matter to arbitration in accordance with Clause 27.2 below.
23.4 Notwithstanding anything to the contrary herein, the indemnities given in
this Clause 23 shall remain in full force and effect notwithstanding any
cancellation or termination of this Agreement.
24 AGENTS COMMISSION
For the avoidance of doubt the parties agree that the Seller shall not be
responsible for paying the fees of any agents appointed by the Purchaser.
25 RESTRAINT
25.1 For the purpose of assuring to the Purchaser the full benefit of the
Business and the Goodwill and subject to the remaining provisions of this
Clause 25, the Seller covenants with the Purchaser that neither the
Seller nor any member of the Seller's Group will for a period of five
years from the Closing Date carry on or be engaged or involved in the
Field of Activity within the Territory.
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25.2 Furthermore, the Seller covenants with the Purchaser that neither the
Seller not any member of the Seller's Group will for a period of five
years from the Closing Date set up or acquire a rival distribution
company which is involved in the Field of Activity.
25.3 For the avoidance of doubt, nothing in this Clause 25 shall in any way
whatsoever prevent or restrict the ability of the Seller or any member of
the Seller's Group to continue to conduct or carry out the normal
operation of its existing businesses within the Field of Activity in the
Territory in an unfettered manner and to conduct and carry out the
Excluded Relationships.
25.4 Furthermore, the parties acknowledge that the relationship between the
Purchaser and any member of the Seller's Group under which the Purchaser
continues to distribute products for the Seller's Group after the Closing
Date will be governed solely by such individual agreements as may be in
force between the parties from time to time and to this extent nothing
whatsoever in Clause 25.1 or 25.2 above shall apply (either for the
duration of the individual agreements or at any time thereafter).
26 BREACH
26.1 Save as elsewhere provided herein, should either party commit a breach of
any provision of this agreement and fail to remedy such breach within ten
days after receiving written notice from the other party requiring it to
do so, then the party aggrieved by such breach shall be entitled, without
prejudice to its other rights in law, to cancel this agreement or to
claim specific performance of all of the defaulting party's obligations
whether or not such obligations would otherwise then have fallen due for
performance, in either event without prejudice to the aggrieved party's
right to claim damages.
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26.2 Notwithstanding the provisions of Clause 26.1 the Purchaser shall not be
entitled to cancel this agreement as a consequence of any breach by the
Seller of any of its obligations hereunder unless the breach is a
material breach of a material warranty or obligation and the breach is
incapable of being remedied by payment of fair and reasonable
compensation or, if it is capable of being remedied by payment of fair
and reasonable compensation, the Seller fails to pay the Purchaser such
compensation within thirty days of the amount thereof being determined by
agreement between the parties.
26.3 The Purchaser shall not have any claim against the Seller in respect of
any action arising out of a breach of warranty or otherwise arising in
terms of this agreement unless -
26.3.1 the aggregate of the amounts payable as a result of all such breaches
exceed the sum of R150 000. Any such claim shall further be limited to
the amount in excess of the said sum of R150 000 but shall not exceed
the purchase price in aggregate;
26.3.2 such claim is notified by the Purchaser to the Seller in writing prior
to the second anniversary of the Effective Date.
27 DISPUTES
27.1 Should any dispute arise between the parties regarding the determination
of the purchase price or under Clause 15.2, then such dispute may be
referred for determination, to the Auditors together with such auditors
as may be appointed by the Purchaser from time to time, acting jointly as
experts and not as arbitrators, and their determination shall be final
and binding on the parties and failing determination by them be referred
to an independent auditor to be appointed by the President for the time
being of the Law Society of Transvaal, whose decision shall be subject to
appeal.
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27.2 Save as provided in Clause 27.1, any other dispute arising from or in
connection with this agreement, including its interpretation and
implementation, may be finally settled in accordance with the Rules of
the Arbitration Foundation of Southern Africa, provided that -
27.2.1 the arbitrator shall be agreed between the parties, and failing
agreement within ten days of either party calling upon the other to
agree such arbitrator, such arbitrator shall be nominated by the
President for the time being of the Law Society of Transvaal (or its
successor in title);
27.2.2 the decision of the arbitrator shall be subject to appeal.
28 APPLICABLE LAW AND JURISDICTION
28.1 All matters arising out of or in connection with the interpretation,
implementation, termination or cancellation of this agreement shall be
governed in accordance with the laws of the Republic of South Africa
applicable from time to time and the laws of the Republic of South Africa
shall be deemed for all purposes to be the proper law of this agreement.
28.2 The parties hereby irrevocably consent to the exclusive jurisdiction of
the courts of the Republic of South Africa and England, in respect of any
appeal to be conducted in accordance with the provisions of Clause
27.2.2.
29 CONFIDENTIALITY
29.1 The Purchaser agrees that it will keep confidential all information
(whether in oral, written or electronic form) concerning the Seller
(including without limitation commercial, financial and contractual
information) which may come to the Purchaser's knowledge as a result of
this transaction ("the information") and the Purchaser undertakes not
to disclose this Information to third parties without the prior written
consent of the Seller for a period of five years from the Closing Date.
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29.2 Information shall not include that which is required to be disclosed by
law, regulation or any relevant authority, that which is previously known
to the Purchaser or becomes known to it through no breach of these
confidentiality undertakings by the Purchaser, or is in respect of
Information which enters into the public domain through no fault of the
Purchaser.
30 TRANSITIONAL SERVICES
The parties acknowledge and agree that business services support will be
supplied by the Seller to the Purchaser and the Purchaser to the Seller as and
when reasonably required and at the cost price thereof for a period of three
months after the Closing Date or until such later date as may be agreed in
writing between the parties.
31 AUTHORITY
31.1 All requisite internal and external authorities necessary for the
completion of this transaction shall be obtained by both parties, in
accordance with all applicable laws and regulations.
31.2 In addition to Clause 14, the Seller shall use all reasonable endeavours
to ensure that all assignments, orders, approvals, permits and
qualifications necessary to complete this transaction, including the
transfer of the Business Assets and Leasehold Interests, and which are
material to the operation of the Business, shall have been or will be
obtained.
32 DOMICILIUM AND NOTICES
32.1 The parties choose domicilium citandi et executandi for all purposes of
the giving of any notice, the payment of any sum, the serving of any
process and for any other purpose arising from this agreement, as follows
-
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32.1.1 the Seller - c/o The Company Secretary
ICI Plc
0 Xxxxxxxx
Xxxxxx XX0 X0XX
Xxxxxxx
telefacsimile - (0000) 000 000 0000
32.1.2 the Purchaser - c/o Xx Xxxxxxx Xxxxxxx
Building No 0 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxx
Xxxxx Xxxxxx
telefacsimile - (27) (00) 000 0000
with copies of the Purchaser's notice to go to Xxxx X Xxxxx Esq of JLM
Industries Inc, 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx
of America (fax (000) 000 0000) and Xxxx Xxxxxxxx Esq of Xxxxxx Xxxxxx &
Xxxxxxxxx Inc of 4th Floor The Forum 0 Xxxxx Xxxxxx Xxxxxxx Xxxxxxx 0000 Xxxxx
Xxxxxx (fax (27) (00) 000 0000.
32.2 Each of the parties shall be entitled from time to time, by written
notice to the other, to vary its domicilium to any other physical address
within England or the Republic of South Africa and/or its facsimile
number.
32.3 Any notice given and any payment made by any party to the other which -
32.3.1 is delivered by hand during the normal business hours of the addressee
at the addressee's domicilium for the time being shall be rebuttably
presumed to have been received by the addressee at the time of
delivery;
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32.3.2 is transmitted by facsimile to the addressee at the addressee's
facsimile address for the time being shall be presumed, until the
contrary is proved by the addressee, to have been received by the
addressee on the first business day following upon the date of
successful transmission thereof;
32.3.3 is posted by prepaid registered post from an address within England or
the Republic of South Africa to the addressee at the addressee's
domicilium for the time being shall be rebuttably presumed to have been
received by the addressee on the fourteenth day after the date of
posting. Any notice posted by prepaid registered post shall only be
valid if such notice is simultaneously telefaxed to the addressee.
33 GENERAL
33.1 This agreement, together with the appendices thereto, constitutes the
sole record of the agreement between the parties in regard to the subject
matter thereof.
33.2 Neither party shall be bound by any representation, express or implied
term, warranty, promise or the like not recorded herein or reduced to
writing and signed by the parties or their authorized representatives.
33.3 No addition to, variation, or agreed cancellation of this agreement or
any of the appendices hereto shall be of any force or effect unless in
writing and signed by or on behalf of the parties.
33.4 No indulgence which either party may grant to the other shall constitute
a waiver of any of the rights of the grantor.
34 COSTS
Each party shall bear its own costs of and incidental to the drawing and
preparation of this agreement.
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Signed at on 2000
for ICI South Africa (Proprietary) Limited
/s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
who warrants that he is duly authorised hereto
Signed at on 2000
for Imperial Chemical Industries PLC
----------------------------------------------
who warrants that he is duly authorised hereto
Signed at on2000
for Newshelf 126 (Proprietary) Limited
(whose name is in the process of being changed to JLM INDUSTRIES (SOUTH AFRICA)
(PROPRIETARY) LIMITED)
/s/ Xxxx X. Xxxxx
----------------------------------------------
who warrants that he is duly authorised hereto
