eliquor Reg Nr: 2012/118850/07 SELLER & PURCHASER SIGNATURE ABOVE

Transcription

1 Copyright eliquor Main Reg Nr: 2012/118850/07 Contact Fax Page 1

2 ELIQUOR : CONTRACT FOR PURCHASE OF GOODS AGREEMENT ENTERED INTO BY AND BETWEEN: SELLER / SUPPLIER: Registered Name: eliquor Reg Nr: 2012/118850/07 and BUYER / PURCHASER: Registered Name: BUYER / PURCHASER: Trading Name: t/a BUYER / PURCHASER: Delivery / Physical Address: (LOCATION) BUYER / PURCHASER: Postal Address: BUYER / PURCHASER: VAT Registration Number: BUYER / PURCHASER: Telephone Number/s: BUYERS/ PURCHASER: Facsimile Number/s: BUYER / PURCHASER: Address/s: This Contract for Sale of Goods / Equipment Inventory is made this day,20 by and between eliquor CIPC Reg Nr: 2012/118850/07 ( Seller / Supplier ) and, ID Nr, ( Buyer ) with its principal place of business at ( Delivery Address ), for the purchase of the goods described below: Page 2

3 Qty. Item # Description Price Total 1 CoolingZone 1 x 4 Door Walk in Beer Fridge / Coldroom 2 Liquor License 1 x Full Submission for Off Consumption / Liquor Store License. 3 Shelving Store Shelving sufficient for stores up to 80m2 Floor space 4 CCTV 4 Channel / Camera CCTV Camera DVR Recording System 5 Supplier Online Supplier Application Access to be Completed by applicant & Onsite Store Training. 6 POS 1x Point Of Sale Counters and 1x Retail Trading System TOTAL: R , 00 a. Terms. This Contract shall begin on, 20, and end upon the last delivery for the quantity specified in this agreement, unless the parties agree otherwise. However, if, as of such date, Buyer is in arrears on the account, Seller may then cancel this Contract and sue for damages, including lost profits, offsetting the deposit there against, and further recover its cost of suit including attorney fees. b. Delivery. Buyer will give Seller 5 days advance notice regarding the quantity requested for delivery. c. Risk Of Loss. The risk of loss from any casualty to the Goods, regardless of the cause, will be the responsibility of the Buyer once the goods have been delivered by the Seller. d. Acceptance. Buyer will have the right to inspect the goods upon receipt, and within two (2) business days after delivery, Buyer must give notice to Seller of any claim for damages on account of condition, quality, or grade of the goods, and Buyer must specify the basis of the claim in detail. Failure of Buyer to comply with these conditions will constitute irrevocable acceptance of the goods by Buyer. DISCLOSURE: On entering into this Agreement or any other agreement or transaction with ELIQUOR during the term of any continuation of it, to make full disclosure of all material circumstances and of everything known to it in respect of the subject matter of the contract, agreement or transaction which would be likely to influence the conduct of ELIQUOR Page 3

4 including in particular the disclosure of other agencies, stores or outlets in which the PURCHASER is interested, directly or indirectly. FORCE MAJEURE: In the event of the parties been delayed or hindered in or prevented from fulfilling any terms of this Agreement by any cause whatsoever which is beyond the immediate control of the parties, including but not limited to any strike, lock-out, labour dispute, war, riot, civil commotion, delay in transport, any order or regulation of any Government or other lawful authority, act of God, shortage of material, breakdowns in machinery or failure of any source of supply, then no right of action shall there by arise or accrue against one Party in favour of the other Party for damages or otherwise. The fact that a labour dispute could be resolved by the Party involved acceding to the demands made of it shall not make it a circumstance within the reasonable control of the Party. Any inability to meet a payment due by either Party to the other because of lack of funds shall in no circumstances be treated as an event of force majeure. 1. INTERPRETATION: In this agreement and in all/any annexure to this agreement (other than documents/accounts prepared before the date of signature of this agreement):- 1.1 Clause headings are for convenience and are not to be used in its interpretation; Unless the context indicates a contrary intention and expressions which denotes: Any gender includes the other gender; A natural person includes a juristic person and vice versa; The singular includes the plural and vice versa; Words importing natural persons shall include a reference to bodies, corporate and other legal personae and vice versa; A reference to a party in a document includes that party's successors and permitted assigns; 1.2 In this agreement the following expressions bear the meanings assigned to them below and cognate expressions bear corresponding meanings: The/this agreement means the agreement as set out herein together with all appendices hereto (if applicable) Any reference to an enactment is to that enactment as at the date of signature hereof and as amended or reenacted from time to time; 1.3 Where the day on or by which anything is to be done is not a business day, it shall be done on or by the first business day thereafter; 1.4 When any number of days is prescribed in this agreement, same shall be reckoned exclusively of the first and inclusively of the last day, unless the last day falls on a Saturday, Sunday or Public Holiday, in which case, the last day shall be the next succeeding day which is not a Saturday, Sunday or Public Holiday; 1.5 A reference to a document includes an amendment or supplement to, or replacement or notation of that document; 1.6 The captions appearing in this agreement are for reference purposes only and shall not affect the interpretation hereof; 1.7 If any provision is a definition (or under this heading "Interpretation" and/or any other heading in this agreement) and is a substantive provision conferring rights or imposing obligations on any party, notwithstanding that it is only in the definition (or such other clause) effect shall be given to it as if it were a substantive provision in the body of the agreement; 1.8 Where figures are referred to in numerals and words, if there is any conflict between the two, the words shall prevail. 2. DEFINITIONS: In this agreement, unless the context otherwise requires, the following words and expressions shall have the meanings assigned to them hereunder: 2.1 effective date accounts shall mean the financial statements of the PURCHASER for the period ending on the day immediately preceding the effective date; 2.2 "the Act" shall mean the Companies Act, No. 61 of 1973, as amended; Page 4

5 2.3 "the business" shall mean the business conducted at the premises as constituted by the sale assets and the leased assets; 2.4 "closing date" shall mean the first business day after the fulfilment (or waiver) of the last of the conditions, or such other date as may be mutually agreed amongst all of the parties in writing; 2.5 "condition" shall mean the suspensive condition to which this agreement is subject as set forth in clause 7 below; 2.6 "debtors" shall mean the claims against the debtors of the business as at the effective date (if applicable); 2.7 "effective date" shall mean the date on which this agreement is signed by both parties; 2.8 "fixed assets" shall mean the fixtures and fittings, furniture and office equipment of the business as set out in the schedule of the floor plan attached hereto as Annexure "A"; 2.9 "goodwill" shall mean the goodwill of the business; 2.10 law shall mean to take particular care to comply fully with the requirements of all relevant laws and regulations, including, but not limited to those in terms of the National Consumer Protection Act 68 of 2008, Companies Act 71 of 2008, Labour Relations Act 66 of 1995, Occupational Health and Safety Act 85 of 1993, Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972, National Water Act 36 of 1998, any similar amending or supervening legislation or regulation; 2.11 "leased assets" shall mean the assets held by the PURCHASER, as supplied by supplier, as at the effective date, in terms of lease, instalment, sale, rental or credit agreements (when and/if applicable); 2.12 "marks and intellectual property" shall mean the patents, trademarks, trade and business names, logos, colour schemes, symbols, emblems, insignia, fascia, slogans, copyrights, know-how, information, drawings, plans and other identifying materials whether or not registered or capable of registration and all other proprietary rights whatsoever owned by or available to ELIQUOR adopted or designated now or at any time hereafter by ELIQUOR for use in connection with the business, brands and designs exclusively owned by the SELLER and whether registered or not and used in connection with the business; 2.12 "name/s" shall mean ELIQUOR /ELIQUOR 2.13 nominated principal shall mean where the PURCHASER is a separate legal entity, the person (approved by ELIQUOR ) to represent the PURCHASER in its dealings with SELLER and where the PURCHASER is not a legal entity, the person, approved in writing, to manage the businesses and to represent the PURCHASER in its dealings with SELLER or the person designated by SELLER to manage the businesses on the PURCHASER s behalf in terms of this Agreement; 2.14 "premises" shall mean the premises of trade ADDRESS OF PREMISES OF TRADE forming part of the property currently utilised for the operation of the businesses together with other improvements thereon; 2.15 "prime rate" shall mean the publicly quoted basic rate of interest per annum, at which commercial banks lend on overdraft to its ordinary clients compounded monthly in arrear and calculated on a three hundred and sixty five (365) day year (irrespective of whether a leap year or not); 2.16 products shall mean all products approved by ELIQUOR to be stocked and sold in the businesses 2.17 "PURCHASER" shall mean APPLICANT BUYING INTO THE CONCEPT 2.18 retail systems shall mean the comprehensive and distinctive system for the retailing of a full range of products, the retailing of an extensive range of liquor/convenience items and provision of goods related facilities and utilising and comprising the Intellectual Property and certain standard operational procedures (including but not limited to specify layout, fitting out and operation of outlets and other related facilities) confidential information, plans, directions, specifications, standards, methods, management and advertising techniques, business stationary and identification schemes, including the distinctive colour scheme and branding peculiar to the ELIQUOR brand, commonly known as the ELIQUOR Visual Retail Image, computer operating software, insignia, parts of which are contained in the manuals; 2.19 "sale assets" shall mean collectively the debtors, fixed assets, marks, stock, and goodwill; 2.20 "sale liabilities" shall mean the liabilities of the PURCHASER as at the effective date, including any liability for taxation of whatsoever nature; 2.21 "the SELLER" shall mean ELIQUOR 2.22 fees shall mean the fees set out in clauses 4.5 and 25.3 at R 1 000,00 per month, payable on a monthly basis by the PURCHASER to the SELLER in consideration for fees payable in respect of the operation of the Liquor retail store in respect of turn-over; 2.23 training manuals and/or modules shall mean any policy and procedure manuals, modules and instructions (including without limitation any relating to Brand and/or Visual Identity) any information produced by ELIQUOR and/or any service provider which may require amendment from time to time for operational purposes; 2.24 "signature date" shall mean the date of signing of this agreement by the last signing party hereto; Page 5

6 2.25 "stock" shall mean all the stock of the business as at the effective date, including goods in transit (being stock purchased by the PURCHASER prior to the effective date, but not yet delivered to the premises as at the effective date); 2.26 "VAT" shall mean Value Added Tax; 2.27 "VAT Act" shall mean the Value Added Tax Act, No 89 of 1991, as amended; 2.28 Trading date shall mean the date on which the business starts to trade; 2.29 variation shall mean no amendment or variation of any provisions of this Agreement shall be valid and binding unless recorded in writing, and signed by both parties hereto or by the party against whom the amendment is sought to be enforced; 2.30 waiver shall mean that no failure by either party given to it hereunder or to insist upon strict compliance by the other party with any obligation or condition hereof and no practice of the parties at variance with the terms hereof shall constitute a waiver of any of the party s rights hereunder. 3. SALE: Whereas the SELLER, ELIQUOR, is the intellectual property inventor of a concept of setting up legally licensed entry level liquor stores operating under the style and business name ELIQUOR, hereinafter referred to as the business and the PURCHASER is desirous to buy into the concept and to set up a liquor store under this concept on the terms and conditions as set out herein, the Parties agree as follows: 3.1 The SELLER hereby sells to the PURCHASER which hereby purchases the business into the concept and to set up a liquor store under this concept as per store layout plan submitted to theliquor board ; 3.2 The purchase is: Effective with effect from the effective date, being the date on which the agreement has been signed by both parties; and Subject to the timorous fulfilment or waiver of the condition. 4. PURCHASE PRICE: The purchase price of the business is R 195, (Excluding VAT). All payments shall be paid into the business account of eliquor. (Available on Request by Region.) PURCHASER will forward payment according to the terms as set out hereunder to ELIQUOR as soon as contract is validated by acceptance and signature of this agreement by both parties and payment of the deposit (4.1) has been affected. 4.1 Deposit: R 30, (Excluding VAT) on signature of the agreement, before compiling business plan; 4.2 Before: R 30, (Excluding VAT) before online submission of liquor license; 4.3 Before commencement of the installation of the cold room, shop fittings and fixtures; Week 1: R 90, (Excluding VAT); 4.4 Before Cash Registers and Store Signage is delivered and installed; Week 2: R 30, (Excluding VAT); 4.5 Before CCTV Cameras is delivered and installed; Week 3: R 15, (Excluding VAT). 5. DRAWING AND SIGNING OF CONTRACTS: If PURCHASER wishes to use a legal expert to finalize or sign this agreement, then these legal costs shall be paid by the PURCHASER. Cost of the preparation and drawing of this agreement has been paid to a registered legal Attorney. 6. EXPENSES: Expenses for the account of the PURCHASER will be as follows (Unforeseen expenses excluded):- 6.1 Contract and legal expenses as set out in paragraph 31 below; 6.2 Water and electricity and connection fees in respect thereof; 6.3 Rental and deposit in respect thereof; 6.4 Plumbing in respect of the set-up of the store; 6.5 Electrical work in respect of the set-up of the store; 6.6 Any structural changes which might be necessary to the premises; Page 6

7 6.7 All trading licenses/liquor license and fees in respect thereof as required by South African Government and/or the local municipality and all regional service council levies due for all relevant periods; 6.8 The PURCHASER shall have a permanent ADSL line installed on his/her cost to ensure accessibility via ; 6.9 The PURCHASER shall have a security system installed by a reputable Security Company on his/her own account. 7. CONDITIONS / PROTECTION OF INTELLECTUAL PROPERTY: Appointment of PURCHASER is subject to, that the PURCHASER performing the requirements of this Agreement, ELIQUOR grants to the PURCHASER the exclusive right to conduct business at the premises approved to use, use of the supplied ELIQUOR equipment, the Intellectual Property relating to the business and the manuals and modules, all in accordance with the ELIQUOR Agreement. ELIQUOR reserves the right to grant similar rights to other persons or entities in respect of the operation of further business opportunities. Unless otherwise specified in this Agreement, the PURCHASER is not an agent of ELIQUOR and the PURCHASER has no right or authority to bind ELIQUOR or to pledge ELIQUOR s credit except as may be provided for in this Agreement. Neither the PURCHASER nor the PURCHASER s staff is employees of ELIQUOR. Notwithstanding this, ELIQUOR has the right to verify the PURCHASER s compliance with labour, taxation and other laws and regulations, provided that this shall not relieve the PURCHASER of its sole and exclusive responsibility for due compliance. 7.1 The transaction set out in clause 3 supra is subject to the suspensive condition that: The PURCHASER has the obligation to source and ascertain 3 (three) potential, available properties, after which these premises are subject to the SELLER s approval; The PURCHASER shall obtain security of tenure with regard to the premises; The PURCHASER shall obtain insurance on the business and the PURCHASER shall be liable to pay the monthly premiums in respect thereof; 7.2 Each of the parties shall use its respective best endeavours to procure the fulfilment of the condition. If, despite such endeavours, the condition is not fulfilled (or waived) by or by such extended date as the parties hereto may agree in writing on the basis that no party shall unreasonably withhold its consent to an extension, then the PURCHASER has the right to cancel this agreement, and herewith agrees to an agreement cancellation fee of R30 000, 00 (Thirty Thousand Rand). The PURCHASER acknowledges that the clientele and all other rights in and associated with the Intellectual Property and the ELIQUOR outlets business model vest absolutely in ELIQUOR and that the PURCHASER has no claims of any nature to any element of the Intellectual Property. The PURCHASER hereby agrees: 7.4 Not to cause or permit anything which may damage, threaten or endanger the Intellectual Property or other Intellectual Property belonging to ELIQUOR and/or its affiliates title to it or assist or allow others to do so; To notify ELIQUOR of any suspected infringement of the Intellectual Property or other Intellectual Property of ELIQUOR and/or its affiliates; To take such reasonable action as ELIQUOR shall direct, at the expense of ELIQUOR, in relation to such infringement; To only affix such notices to the ELIQUOR s products or their packaging or advertising associated with the business as ELIQUOR shall direct; To compensate and indemnify ELIQUOR and/or its affiliates for any use by the PURCHASER of the Intellectual Property otherwise than in accordance with this Agreement; To indemnify ELIQUOR and/or its affiliates for any liability incurred to third parties for any use of the Intellectual Property otherwise than in accordance with this Agreement; on termination of this Agreement forthwith to cease to use the Intellectual Property; Not to tamper with any markings or name plates or other indications, of the source of origin, of the ELIQUOR s products, this may be placed on products by ELIQUOR ; Not to use the Intellectual Property otherwise than as permitted by the Agreement; Not to use any name or mark similar to or capable of being confused with the trade names or the trademarks or other Intellectual Property, in the businesses; not at any time attack or challenge the right of ELIQUOR to the Intellectual Property or to induce or procure any other person to attack of challenge such rights; not to use the Intellectual Property except directly in the business; to use the trade names in the business as its only trade names; to display such notices concerning the Intellectual Property or the relationship between the parties on its stationary and at the premises as is stipulated in the manuals from time to time; Page 7

8 8. PURCHASE CONSIDERATION: 8.1 The purchase consideration for the sale of the business is the shop layout as per ELIQUOR profile including all the fixtures as per the said profile; and 8.2 Stock valued +/-R 120, (Excluding Vat); is excluded in purchase price of R , 00 (Excluding Vat). 8.3 Pending payment of the balance of the purchase consideration, ownership in and to the sale assets will remain vested in the SELLER. 9. STOCK COUNTS (IN EVENT OF HANDOVER): On the day immediately preceding the effective date, or on such other day as the parties may mutually agree in writing, the parties will conduct a physical count of the stock mentioned in paragraph 8 supra in accordance with the following provisions: 9.1 Each of the parties will be entitled to appoint one or more representatives to be present at the stock count; 9.2 Within seven (7) days of completion of the stock count, a certificate reflecting the stock count shall be prepared and initialled by the parties; 10. POSSESSION, OWNERSHIP AND CONTROL: 10.1 On the trading date: The SELLER will place the PURCHASER in possession of the business at the premises; and The risk in, benefit to and control of the business and the sale assets will pass to the PURCHASER; Accordingly, with effect from the effective date but subject to clause 10.2 below, the PURCHASER hereby accepts delivery of the business and the sale assets; 10.2 Ownership in and to the business and the sale assets shall pass to the PURCHASER upon payment in full of the whole of the purchase consideration The parties shall use their respective best endeavours to procure whatever consents, if any, may be required for the passing of the rights and obligations in terms hereof. If and insofar as such consents cannot be obtained, then that fact shall not as between the SELLER and the PURCHASER, negate the provisions hereof, but the SELLER and the PURCHASER shall act in all respects as if such rights and obligations had passed accordingly and the SELLER shall continue, as against all affected third parties, to hold such rights and be liable for such obligations, for the benefit and risk of the PURCHASER and, as regards liabilities, under indemnity from the PURCHASER The right granted to the PURCHASER to operate the business, shall extend only to the premises and the PURCHASER agrees that it will not make any use of nor permit or authorise any use directly or indirectly of the ELIQUOR outlet or the Intellectual Property except in terms of this Agreement, nor will it knowingly offer or provide any information or assistance concerning the ELIQUOR outlet or the Intellectual Property to any other person, company or entity, except if expressly requested to do so by ELIQUOR In respect of signage, to exhibit at the premises and to obtain and maintain at the PURCHASER s cost and expenses, where necessary, consents and licences, and to keep illuminated where appropriate a ELIQUOR or other identification sign in respect of the Intellectual Property which will be provided on loan and erected and maintained by ELIQUOR and to exhibit such other signs and advertising matter as may be required from time to time by ELIQUOR and not to erect, exhibit nor display any signs on the premises or on the ELIQUOR equipment save with ELIQUOR s prior written consent and only on terms and conditions acceptable by ELIQUOR The right hereby granted shall not create in the PURCHASER s favour any tenancy or any right in the nature of tenancy and without limiting the generality of the foregoing, the Retail Licence shall not confer on the PURCHASER any right to exclude from the premises, ELIQUOR, its employees or agents or any person authorised by ELIQUOR. ELIQUOR and/or its authorised agents shall be at liberty to enter upon the premises at any reasonable time and upon reasonable notice, to enter upon the premises and so have access to all equipment and records of the business for the purposes of ascertaining whether the provisions of this agreement are being complied with In respect of compliance with the Law, to take out and timorously renew at the PURCHASER s cost all licences and permits necessary for the operation of the business from the premises and generally to comply with all statutes, bylaws, regulations and requirements of any government or other competent authority relating to the PURCHASER and the conduct of the business as well as any conditions of title pertaining to the property and in respect of the accounts and records of the business, to maintain at the premises in a form approved by ELIQUOR, full and accurate books of accounts of the business shall keep detailed management and accounting records pertaining to profit and loss accounts, all supporting invoices, delivery notes and vouchers, to use the Page 8

9 management account systems and other financial systems and software specified by ELIQUOR, to permit ELIQUOR or its duly authorised agent either electronically or otherwise during business hours to inspect such accounts and records and to take copies thereof at the expense of ELIQUOR. If required by ELIQUOR, to allow ELIQUOR or its agent to audit the PURCHASER s books, accounts, computer systems and records in order to verify all information provided to ELIQUOR, cost of any such audit shall be borne by ELIQUOR, unless there is a discrepancy of 5% (Five per cent) with the report provided by the PURCHASER to ELIQUOR, in which case the PURCHASER will bear such costs. At the PURCHASER s cost, to procure that annual audited financial statements in respect of the business are prepared and sent to ELIQUOR, in a format specified by ELIQUOR by no later than 120 (one hundred and twenty) days after the financial year end for such business The PURCHASER acknowledges that the right to use the Intellectual Property is subject to the provisions, that, the Intellectual Property is and will remain the property of ELIQUOR or any other person from whom ELIQUOR has acquired the right to use this. ELIQUOR shall install on the premises all trademarks, logos and signage lighting considered appropriate by ELIQUOR for the image of the ELIQUOR outlet. ELIQUOR may at any time install additional or substituted trademarks and may remove and/or replace any of the trademarks or other aspects of the Intellectual Property which ELIQUOR reasonably consider necessary or desirable for the image of the ELIQUOR outlet. The PURCHASER will use its best endeavours to protect the Intellectual Property and in particular to comply with all the requirements of this Agreement in the best interest of both ELIQUOR and PURCHASER In respect of Health, Safety, Security and Environmental, to operate the business in a proper and safe manner, having regards to the products handled and stored, do all things reasonable necessary to ensure that the operation of the business does not cause or is likely to cause injury to persons or property To comply with all the requirements and carry out all prescribed checks in respect of health, hygiene, safety and environmental matters as prescribed by Law, as amended from time to time, the PURCHASER acknowledges that he is familiar with the Law pertaining thereto To ensure that adequate fire fighting equipment is installed on the premises and is regularly serviced, in order to maintain good working order and conditions and to replace any such equipment if it becomes missing. To ensure that the PURCHASER s staff are at all times properly trained in, are aware of and comply with health, hygiene, safety, security in environmental standards prescribed by Law, to permit ELIQUOR to enter the premises and inspect the safety standards and procedures at any time and the level of compliance of the standards and procedures with ELIQUOR s standard and procedures To follow any recommendation or instruction made by ELIQUOR in regard to safety standards and procedures, as contained in a Health and Safety Security and Environmental Audit for ELIQUOR outlets compiled by ELIQUOR a copy of which report shall be handed to the PURCHASER or his representative To take particular care to comply fully with the requirements of all relevant laws and regulations, included, but not limited to those in terms of the Occupational Health and Safety Act 85 of 1993, as amended, the National Environmental Management Act 107 of 1998, as amended, The National Water Act 36 of 1998, as amended, any similar, amending or supervening legislation or regulation, and the appointment of the necessary safety representative and to allow ELIQUOR to conduct HSSE audits at the premises and to fully co-operate with ELIQUOR in this regard. 11. WARRANTIES: PURCHASER to ensure that adequate financial resources are available to the ELIQUOR outlet by way of working capital and otherwise to ensure that the PURCHASER is able to fulfil all the obligations herein contained and to pay all expenses of and incidental to the conduct of the business The SELLER hereby gives and makes to the PURCHASER the warranties and representations set out below on the basis that: The SELLER acknowledges that this agreement is entered into by the PURCHASER relying on each of such warranties and representations; and The PURCHASER will not be entitled to cancel this agreement as a consequence of the breach of any of such warranties or representations, unless the breach is a material one which goes to the root of this agreement and is incapable of being remedied by the payment of monetary compensation or otherwise, or if so capable of being remedied, the SELLER fails so to remedy the breach within thirty (30) days of receipt of written notice calling upon it so to do If any dispute shall arise as to whether: Any breach is a material breach which goes to the root of the agreement; or The breach is incapable of being remedied by the payment of monetary compensation or otherwise; or If it is capable of being remedied by the payment of monetary compensation or otherwise, whether the SELLER has failed to do so within the specified period, then such dispute shall be referred for determination, mutatis mutandis, in accordance with the provisions of 13 below. 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10 11.3 The SELLER warrants that: It is the sole and beneficial owner of the business and is entitled to sell and pass ownership of the business and the sale assets to the PURCHASER; Save as may be specifically set out herein, none of the sale assets are, or as at the closing date will be, subject to any lien, hypothec or encumbrance and the SELLER is able to give free and unfettered title thereof to the PURCHASER; No person has, nor will any person on the effective date have, any option or right to acquire any of the sale assets or any other assets of the business other than in the ordinary and normal course of business; The SELLER is not in default of any material obligation affecting the business, whether under this agreement or under any legislation; No person who has any claim in connection with the business, has instituted proceedings in a division of the High Court and/or in any Magistrate's Court having jurisdiction, nor is the SELLER aware of any circumstances which may give rise thereto; All of the fixed assets comprising the business will be in good and proper working order; All of the marks used in the business have been disclosed to the PURCHASER and ELIQUOR agrees to the usage thereof, whilst trading under this agreement The PURCHASER confirms that he/she is fully aware that the name ELIQUOR is a name that is and will be used for a series of similar stores bearing the name The SELLER agreed not to enact any similar business by the same and/or other name based on the same principal within 5 kilometres from the business premises of the PURCHASER s business by the name of ELIQUOR ; To the best of the SELLER's knowledge and belief, the use of the name/s does not infringe, nor will it infringe any rights of any third party; No other person has the right to exploit the rights attaching to the name/s accept the SELLER and on the concept as set out in paragraph 3; Between the effective date and the closing date, the SELLER will not bind the business to any agreement of any nature whatsoever, other than in the ordinary and regular course of business; All amounts owing by the SELLER in respect of VAT payable for transactions concluded by or on behalf of the business and effective date will have been paid and the SELLER hereby indemnifies the PURCHASER against any liability arising in respect thereof; To the best of the SELLER's knowledge and belief, the SELLER has disclosed to the PURCHASER all material facts and circumstances which are or might be material to a purchaser of the business; The tangible assets of the business will be fully insured by the PURCHASER against all risks and such insurance will not expire until a period being at least 30 (thirty) days after the closing date; There are no liabilities of the SELLER, actual or contingent or conditional, which are not disclosed in connection with the business. 12. STAFF AND CLOTHING / MANAGEMENT OF THE BUSINESS: The PURCHASER undertakes to ELIQUOR, to employ sufficient, properly trained staff throughout the term of this agreement to enable the PURCHASER properly and efficiently to discharge the obligations in terms hereof in an efficient and friendly manner to the high standards and satisfaction of ELIQUOR, to ensure that all staff and other persons required for the operation of the business have been employed in accordance with the efficient recruitment of staff and have completed all training required in terms of this agreement, to document all conditions of employment including grievance and disciplinary procedures in writing and to act strictly in accordance therewith, to observe minimum wage standards and to remunerate all employees in accordance with applicable legislation in respect of minimum wage standards, including, without limitation bargaining council and collective agreements and to negotiate with them in this regard if necessary in order, to ensure as far as it is reasonably possible that the business are operated by a stable and motivated staff complement. If the PURCHASER is an individual, to personally conduct the business during normal trading hours as specified in this agreement and outside these hours to keep a suitably qualified person acceptable to ELIQUOR in charge of the premises and the business, if the PURCHASER is a juristic person, to keep the Nominated Principal in charge of the premises and the business at all times, who will then have the full power and authority to represent the PURCHASER and to enter into transactions with ELIQUOR on behalf of the PURCHASER, to ensure that the Nominated Principal completes the training required in terms of the prescribed manuals/modules, to procure that the Nominated Principal manages the business efficiently and effectively so as to ensure fulfilment and adherence by the PURCHASER of its obligations in terms of this agreement, it being acknowledged by the PURCHASER that it remains fully responsible and accountable for adherence to its obligations in this agreement. If the employment or service of any Nominated Principal in operating the business should terminate for any reason, including death or physical incapacity, to ensure the a replacement acceptable to ELIQUOR (acceptance to be in writing) is appointed within 60 days thereafter, provided that in the interim period nothing shall relieve the PURCHASER from at all times adhering to its obligations in terms of this agreement. During periods of necessary Page 10

11 absence from the business by the PURCHASER and/or the Nominated Principal to ensure that a competent authorised representative acceptable to ELIQUOR is placed in charge of the business and to notify ELIQUOR of the fact that such person is in charge of the business. If required by ELIQUOR to appoint a Nominated Principal designated by ELIQUOR in writing in order to manage the business on behalf of the PURCHASER during the period between such time as the PURCHASER received notification of termination of any right of occupation of the premises for any reason and the time that the PURCHASER actually vacates the premises. To ensure that the manager in charge of the business on a day-to-day basis wears the uniform prescribed by ELIQUOR at all times while on duty. And so to ensure that such uniform is at all times clean and neat in appearance The PURCHASER hereby undertakes to ensure that all staff members are fully dressed and trained to maintain excellent service; 12.2 To offer contracts of employment to all members of staff in accordance with all labour legislation current and in future, when employing and managing staff; and To ensure that all employees will wear the promotional brand clothing supplied free of cost by the various suppliers for the periods as negotiated by the said suppliers. 13. INSOLVENCY ACT PROVISIONS: 13.1 The parties agree that notice of this transaction will not be published as contemplated in Section 34 of the Insolvency Act 1936 ("the Act") 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 Act The PURCHASER shall have no duty to resist any proceedings to attach or to take possession of any of the sale assets by any person against whom this transaction is void in terms of the Act as a consequence of notice of this transaction not having been 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 If the PURCHASER gives notice to the SELLER in terms of clause 13.3, then the SELLER shall within fourteen (14) days of receipt by it of such notice, procure that the sale assets concerned are released from attachment and returned to the PURCHASER. If the SELLER shall fail to procure such release and return, then the SELLER shall within seven (7) days from the expiry of the fourteen (14) day period aforesaid, replace the attached assets and pay to the PURCHASER whatever damages it may have suffered as a result of such attachment and/or pay to the PURCHASER the replacement value of such assets and such damages as the PURCHASER may have suffered as a result of such attachment. 14. DISPUTE RESOLUTION: 14.1 If any dispute shall arise in respect of any provision contained in this agreement, then such dispute shall: If it shall be of a legal nature, be referred to a senior partner having not less than ten (10) years experience in commercial law of any of the larger law firms in; and If it shall be of an accounting nature, be referred to a senior partner of any of the international firms of accountants practicing in, who shall act as an expert and who, in determining such dispute shall, if he deems it necessary, be entitled to receive oral or written representations from the parties and whose decision shall be final and binding upon the parties and, in the absence of manifest error, not be subject to review The parties shall jointly nominate the expert provided that if the parties shall be unable to agree either on the category in which the dispute falls or on the identity of the expert, within seven (7) days of the nomination being called for in writing, then the expert shall be nominated by the President for the time being of the Law Society of or its successor in title or the Executive Director of the South African Institute of Chartered Accountants or its successor in title, as the case may be It is the intention of the parties that any dispute referred to an expert in terms of this clause 14 shall be resolved within twenty one (21) days of the date of the expert being nominated. Accordingly, if the expert shall be unable to resolve the dispute within such period, then the party raising the dispute shall be entitled to terminate the mandate of the expert and institute proceedings in respect of the dispute in any competent Court having jurisdiction The provisions of this clause 14 shall not preclude either party from approaching any Court of competent authority for an interdict or other injunctive relief or an urgent nature. 15. BREACH: Should: Page 11

12 (i) The PURCHASER fails to pay timorously and in full any amount due to ELIQUOR in terms of this Agreement or breach the provisions of Clause 15; (ii) The PURCHASER commit any breach or permit the commission of any breach of any other term of this Agreement and fail to remedy this within 20 (twenty) days of receiving written notice from ELIQUOR calling on it to do so; (iii) The PURCHASER commits an act of insolvency; (iv) The PURCHASER fail to satisfy a default judgement within 10 (ten) days of it being entered against it; (v) The PURCHASER fail to satisfy any other judgement or to take it on appeal or review within 21 (twenty one) days of it being entered against it; (vi) The PURCHASER compromise or attempt to compromise any of its liabilities with its creditors generally or any class of its creditors; (vii) The PURCHASER s tenancy or ownership of either the premises or any other portion of the property, terminated for any reason in terms of the Agreement relating thereto; (viii) Should any of the schedules to this Agreement terminate because of a breach thereof by the PURCHASER or if unlawfully cancelled by the PURCHASER, it is withdrawn or is not executed or cancelled by the PURCHASER and/or any signatory other than ELIQUOR thereto; (ix) The PURCHASER be convicted of any offence under the Criminal Procedure Act 51 of 1977, as amended, and/or attempt to or commit, in the reasonable opinion of ELIQUOR, any such offence in its business dealings with ELIQUOR ; then in any of those events ELIQUOR shall immediately be entitled to any or all of the following remedies, without prejudice to its other rights in terms of this Agreement: (a) To require the PURCHASER, on written notice, to pay immediately all amounts due to ELIQUOR by the PURCHASER; (b) to require the PURCHASER to sell the business to a PURCHASER accredited by ELIQUOR in terms of its then prevailing criteria for assessing PURCHASER; (c) to cancel this Agreement on written notice to the PURCHASER without prejudice to the accrued claims of either party or to any claim that ELIQUOR may have for damages arising out of such breach or premature cancellation of this Agreement or otherwise; (d) to require the PURCHASER to cease the operation of the business or any part of the business and to cease supplying the PURCHASER with supplies under the supplier Agreement, until the particular breach has been remedied; If and/or above has been invoked and if the PURCHASER for whatever reason disputes ELIQUOR s rights to lawfully cancel this Agreement, then the PURCHASER agrees that pending resolution of such dispute as provided or otherwise, he shall cease operating the business and ELIQUOR shall be entitled to appoint a Nominated Principal designated by it in writing and at the PURCHASER s cost to manage on behalf of the PURCHASER on terms and conditions stipulated by ELIQUOR pending the resolution of the said dispute. If the said dispute is resolved in the PURCHASER s favour, ELIQUOR shall withdraw the Nominated Principal so appointed by it, refund the PURCHASER s costs referred to in this clause in respect of such Nominated Principal and the PURCHASER shall be reinstated to operate the business; The termination of this Agreement will not relieve the PURCHASER of any obligation under this Agreement which is expressed to continue or is capable of continuing after the termination of the Agreement. The parties hereby agree that should ELIQUOR exercise its rights in terms of this Agreement and similar rights in terms of the schedules hereto and: (a) require the PURCHASER, on written notice, to pay immediately all amounts due to ELIQUOR by the PURCHASER whether or not they are then payable; (b) to require the PURCHASER to sell the business to a PURCHASER accredited by ELIQUOR in terms of its then prevailing criteria for assessing PURCHASER; (c) cancel that Agreement on written notice to the PURCHASER without prejudice to the accrued claims of either party or to any claim that ELIQUOR may have for damages arising out of breach or the premature cancellation of that Agreement or otherwise; and/or (d) require the PURCHASER to cease the operation of the business or any part of the business in respect of that Agreement and to cease supplying the PURCHASER with supplies under the ELIQUOR Supplier Agreement, until the particular breach has been remedied. Then in any of those events ELIQUOR shall immediately be entitled to exercise and implement similar rights as listed above in terms of other PURCHASER Agreement/s it has in place with the PURCHASER, notwithstanding the fact that the PURCHASER may not in any way have breached any of its obligations in respect of the said other Agreements; Notwithstanding the abovementioned rights, ELIQUOR will endeavour, as far as reasonable possible, in the event of a breach of this Agreement by the PURCHASER giving rise to the remedies set out above to afford the PURCHASER the opportunity to sell the business/es in the manner set out below; Page 12

13 In the event that ELIQUOR gives notice to the PURCHASER that it requires the PURCHASER to sell the business in the manner contemplated above, the PURCHASER must conclude a Deed of Sale within a period of 60 (sixty) days from receipt of such notice, unconditional but for the obtaining, by the new PURCHASER, of a retail license issued by the applicable Department of Law, or an institution that succeeds it insofar as the issuing of rental licenses for the operation of the business for the retail of products is concerned; In order to give effect to ELIQUOR s general rights and duties under this Agreement, the PURCHASER shall not conclude a sale of business Agreement with a new PURCHASER without the prior written approval of ELIQUOR ; Notwithstanding herein contained shall preclude ELIQUOR from invoking the provisions at any time during or after this process. In the event that ELIQUOR terminates the Agreement, ELIQUOR may offer to the PURCHASER, from the proceeds of any fees, entry fee or like payment by the new PURCHASER taking over the business an amount in respect of compensation for the value of the business, less any claim that ELIQUOR may have for damages arising out of the breach or premature cancellation of this Agreement or otherwise as compensation for the value of the business Subject to Clause 15.2 below, should any party breach any of its obligations in terms hereof and persist in such breach for a period of seven (7) days after written notice will have been given to it by the other party, the aggrieved party shall be entitled without prejudice to any rights which it may have in terms hereof or at law, to: Obtain an order for specific performance and damages; or Cancel this agreement and claim damages Notwithstanding anything to the contrary contained in clause 14 above, the parties agree that no party shall be entitled to cancel this agreement unless the breach complained of is a material breach going to the root of the contract and is incapable of being remedied by the payment of monetary compensation or otherwise or if so capable of being remedied, the defaulting party fails so to remedy the breach within thirty (30) days of receipt of written notice calling upon it so to do. If any dispute shall arise as to whether: Any breach is a material breach which goes to the root of the contract; or The breach is incapable of being remedied by the payment of monetary compensation or otherwise; or If it is capable of being remedied by the payment of monetary compensation or otherwise, whether the defaulting party has failed to do so timorously, then such dispute shall be determined, mutatis mutandis, in accordance with the provisions of clause 14 above Any amount falling due for payment by any party in terms of or pursuant to this agreement including any amount which may be payable as damages shall bear interest thereon, at the prime rate, and reckoned from the due date for payment (or, in the case of any amount payable by way of damages, with effect from the date upon which those damages are sustained) to the actual date of payment thereof, both dates inclusive All costs, charges and expenses of whatsoever nature which may be incurred by any party in enforcing its rights in terms hereof including, without limitation, legal costs on the scale as between attorney and own client and collection commission, irrespective of whether any action has been instituted shall be recoverable from the party against which such rights are successfully enforced. 16. ADDRESSES AND NOTICES: 16.1 For the purpose of this agreement, including the giving of notices in terms hereof and the serving of legal process, the parties choose domicilium citandi et executandi ("domicilium") as follow: The PURCHASER at: ; The SELLER at: ; 16.2 A party may at any time change its domicilium by notice in writing, provided that the new domicilium is in the Republic of South Africa and consists of, or includes, a physical address at which process can be served Any notice given in connection with this agreement may be delivered by hand; or be sent by prepaid registered post; to the domicilium chosen by the party concerned. Any notice or process delivered on any party in connection with any matter or subject arising out of this agreement or any notice shall be deemed to have been delivered if handed to any responsible person at the domicilium chosen by any party and it shall not be necessary to hand such process or notice to any party personally A notice given as set out above shall be presumed to have been duly delivered: on the date of delivery if delivered by hand; On the fourth day from the date of posting including the date of posting if posted by pre-paid registered post from within the Republic of South Africa; and On the fourteenth day from the date of posting including the date of posting if posted from outside the Republic of South Africa. Page 13