<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
SVI HOLDINGS, INC.
(Name of Issuer)
Common Stock, par value $0.0001 per share
(Title of class of securities)
784872 103
(CUSIP number)
Russell A. Schechter
7979 Ivanhoe Avenue, Suite 500
La Jolla, California 92037
(619) 551-2365
(Name, address and telephone number of person authorized
to receive notices and communications)
December 4, 1997
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-l(b)(3) or (4), check the following
box [_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on the following page(s))
<PAGE> 2
SCHEDULE 13D
CUSIP No. 784872 103 PAGE 2
PAGES
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Softline Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of South Africa
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
16,536,000
NUMBER OF
- ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
- ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 16,536,000
PERSON
- ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
16,536,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
59.27%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------
<PAGE> 3
PAGE 3
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Statement") relates to the
common stock, par value $0.0001 per share (the "Shares"), of SVI Holdings,
Inc., a Nevada corporation (the "Company"). The principal executive offices of
the Company are located at 7979 Ivanhoe Avenue, Suite 500, La Jolla CA 92037.
ITEM 2. IDENTITY AND BACKGROUND.
(a)The entity filing this schedule 13D is Softline Limited.
(b)-(c)Softline Limited is a South African company. The business address
of the company is Softline House, 16 Commerce Crescent, Eastgate Extension 13,
Sandton, 2148, South Africa.
(d)The entity filing this schedule 13D has not been convicted in the
past five years in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e)No member of the entity filing this schedule 13D was a party, during
the last five years, to any civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a judgement, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Softline Limited acquired its shares of the Company's common
stock pursuant to agreements which resulted in a change of control of the
Company. The Company filed Form 8-K regarding this transaction on October 24,
1997.
On October 24, 1997, SVI Holdings, Inc. (the "Company") and certain of
its stockholders entered into a series of interlocking agreements with
Softline Limited ("Softline") and Hosken Consolidated Investments Limited
("HCI") as described in more detail below. Both Softline and HCI are South
African companies listed on the Johannesburg Stock Exchange (the "JSE").
These agreements provide for the acquisition in total by Softline of
approximately 16.5 million shares of the outstanding common stock of the
Company, of which approximately 12.5 million shares are being issued by the
Company. This will represent approximately 60% of the Company's outstanding
common stock. Softline will acquire five million shares of the Company's
common stock in exchange for all of the capital stock of IBIS Systems Limited,
a United Kingdom company ("IBIS"), which specializes in the development of
software solutions for the construction and heavy equipment rental industries.
In addition, Softline will acquire approximately 7.5 million shares of the
Company's common stock in exchange for cash in the amount of approximately
$7.3 million and the worldwide distribution rights (excluding Africa) to the
Brilliant accounting package and certain technology related to Brilliant.
Finally, Softline will acquire from certain stockholders of the Company,
including members of the Board of Directors and the Company's current majority
stockholder, an additional four million shares of the Company's common stock
in exchange for cash and Softline shares.
<PAGE> 4
PAGE 4
ITEM 4. PURPOSE OF THE TRANSACTION.
The purpose of the transaction was for the Company to acquire IBIS,
the technology rights to the Brilliant range of accounting software and
additional capital.
(a) Softline has been granted an option to acquire an additional
203,000 shares of the common stock of SVI Holdings, Inc. at an
exercise price of $2.00 per share.
(b) As part of the agreements entered into on October 24, 1997 (the
"Agreements"), the Company acquired 100% of the issued capital of
IBIS from Softline in exchange for 5,000,000 shares in the common
stock of SVI Holdings, Inc.
(c) The Company will dispose of it remaining interest in Softline
comprising 19,876,000 shares for cash. Proceeds on the sale of
the Softline shares will realize approximately $6 million and
result in a pre-tax gain of approximately $4,5 million in the
first quarter of the 1998 financial year.
(d) None
(e) As a result of the Agreements, the company will issue an
additional 12,536,000 shares of the Common Stock of the Company.
(f) None
(g) Not Applicable
(h) Not Applicable
(i) None
(j) None
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Statement, the Reporting Persons
beneficially owned in the aggregate 16,536,000 Shares, constituting 59.27% of
the outstanding Shares (the percentage of Shares owned being based upon
27,897,648 Shares outstanding at December 1, 1997). The Reporting entity may
be deemed to have direct beneficial ownership of Shares as follows:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF OUTSTANDING SHARES
- ---- ---------------- -----------------------------
<S> <C> <C>
Softline Limited 16,536,000 59.27%
</TABLE>
(b) Not Applicable
(c) The following transaction in the issuer common stock was
effected within 60 days of the date of this statement:
<TABLE>
<CAPTION>
Date No.of Shares Sale/Purchase Price per Share
<S> <C> <C> <C> <C>
12/04/97 16,536,000 Purchase 2.00
</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Other than as disclosed in this Schedule, to the best of the
knowledge of the Reporting Persons, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting
Persons or between the Reporting Persons and any other person with respect to
any securities of the Company, including but not limited to transfer or voting
of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
<PAGE> 5
PAGE 5
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------- -----------
<S> <C>
1 Sale of Shares Agreement between Softline and the Company for the
acquisition of IBIS.
2 Share Swap Agreement between the Company and Softline for the trade
of 7,536,000 SVI Shares for 22,130,448 shares in Softline.
3 Renunciation agreement between SVI, HCI and Softline providing for
the sale of 22,130,448 Softline shares to HCI.
4 Subscription Agreement.
5 Agreement between SVI, HCI and Softline recording that all the other
agreements are indivisible.
</TABLE>
SIGNATURES
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information contained in this
Statement is true, complete and correct.
Dated: December 10,1997
/s/Ivan Epstein
- -------------------
Softline Limited
By:/s/ Ivan Epstein
----------------------
<PAGE> 1
SALE OF SHARES AGREEMENT
between
SOFTLINE HOLDINGS (PTY) LIMITED
(Registration Number 96/00595/07)
and
SVI HOLDINGS LIMITED
(Registration Number - N/A )
<PAGE> 2
Table of contents belowTABLE OF CONTENTS
No.HeadingPage
1THE PARTIES 1
2INTRODUCTION 1
3INTERPRETATION 1
4CONDITIONS PRECEDENT 5
5SALE 6
6WARRANTIES 6
7ADJUSTMENT TO THE PURCHASE CONSIDERATION 7
8CLOSING 7
9JURISDICTION 8
10COUNTERPARTS 9
11ARBITRATION 9
12BREACH 10
13DOMICILIA AND NOTICES 11
14GENERAL 12
15COSTS 12
16SIGNATORIES 13
<PAGE> 3
1 THE PARTIES
1.1 SOFTLINE HOLDINGS (PTY) LIMITED
(Registration number 96/00595/07)
1.2 SVI HOLDINGS LIMITED
(Registration number - N/A )
2 INTRODUCTION
2.1 Pursuant to negotiations between the parties to this agreement and
HCI, the agreements were reached.
2.2 In terms of agreements reached between Softline, Anniston, Systems
and Nagel:
2.2.1 Anniston acquired trade marks on 13 August 1997;
2.2.2 Clubdene acquired the business on 13 August 1997.
2.3 The parties to this agreement wish to record the sale of Clubdene
and Anniston to SVI Holdings and certain matters ancillary thereto, on
the terms and conditions detailed hereunder.
3 INTERPRETATION
3.1 The headings of the clauses in this agreement are for the purpose
of convenience and reference only and shall not be used in the
interpretation of, nor modify nor amplify the terms of this agreement,
nor any clause hereof.
3.2 In this agreement, unless a contrary intention clearly appears:
3.2.1 words importing -
3.2.1.1 any one gender, include the other two genders;
3.2.1.2 the singular, shall include the plural and vice versa;
3.2.1.3 natural persons, include created entities and vice
versa;
3.3 The following expressions bear the meanings assigned to them below
and cognate expressions bear corresponding meanings -
3.3.1"The Acquisition of Trade Marks Agreement" means the agreement in terms
of which Anniston acquired trade marks on 13 August 1997 a copy of which
has been initialled by the parties for the purposes of identification.
<PAGE> 4
3.3.2"The Acquisition of Business Agreement" means the agreement
in terms of which Clubdene acquired the business on 13 August 1997 a
copy of which has been initialled by the parties for the purposes of
identification;
3.3.3"the agreements" means:
3.3.3.1 The Sale Agreement entered into between HCI and SVI
Holdings;
3.3.3.2 The Subscription Agreement entered into between HCI,
Softline and persons identified in Schedule I of that agreement;
3.3.3.3 The Renunciation Agreement entered into between SVI Holdings, HCI
and Softline all of which have been initialled by the parties to
this agreement for the purposes of identification.
3.3.3.4 The Stock Purchase Agreement and Joint Escrow Instructions entered
into between Claudav Holdings, BVI and Softline.
3.3.4"Anniston" means ANNISTON VENTURES LIMITED, a company incorporated in
the British Virgin Islands.
3.3.5"the Anniston equity" means the entire issued share capital in and loan
claims against Anniston;
3.3.6"Clubdene" means CLUBDENE LIMITED, a company incorporated in the United
Kingdom, registration number 3410598;
3.3.7"the Clubdene equity" means the entire issued share capital in and loan
claims against Clubdene;
3.3.8"the closing date" means the third business day after the fulfilment of
the conditions precedent detailed in each of the agreements;
3.3.9"the effective date" means 1 July 1997;
3.3.10"HCI" means HOSKEN CONSOLIDATED INVESTMENTS LIMITED, registration
number 73/0711106)
3.3.11"IBIS" means IBIS SERVICE LIMITED, a company registered in the United
Kingdom.
3.3.12"IBSL Group" means IBSL GROUP LIMITED, a company registered in the
United Kingdom.
3.3.13"Nagel" means PETER NAGEL;
3.3.14"prevailing Rand/Pound exchange rate" means the spot rate of exchange
quoted by Nedbank, a division of Nedcor Limited, at 11h00 on the
relevant date for conversion for the sale by telegraphic transfer by
Nedbank, a division of Nedcor Limited, of an equivalent amount of
British pounds sterling against payment in South African Rands;
3.3.15"Softhold" means SOFTLINE HOLDINGS (PTY) LIMITED,
registration number 96/00595/07;
<PAGE> 5
3.3.16"Softline" means SOFTLINE LIMITED, registration number
77/02304/06;
3.3.17 SVI means SVI Holdings Incorporated, a corporation incorporated in
accordance with the laws of the state of Nevada, United States
of America;
3.3.18"the signature" date means the date upon which the last party hereto
signs this agreement;
3.3.19"systems for business" means a company incorporated in the British
Virgin Islands.
3.4 The definitions detailed in the acquisition of business agreement
and the acquisition of trade marks agreement shall, to the extent
necessary, be deemed to have been incorporated in this agreement,
mutatis mutandis.
3.5 If a provision in a definition is a substantive provision conferring
rights or imposing obligations on a party notwithstanding that it
is only in the definition clause, effect will be given to it as if it
were a substantive provision in the body of the agreement.
3.6 When any number of days is prescribed in this agreement, same
shall be a business day reckoned exclusively of the first and
inclusively of the last day.
3.7 Where figures are referred to in numerals and in words, if there
is any conflict between the two, the words shall prevail.
4 CONDITIONS PRECEDENT
4.1 The coming into force of this agreement is subject to the fulfilment of
the following conditions precedent:
4.1.1 the agreements being concluded;
4.1.2 the written approval of The Johannesburg Stock Exchange having been
obtained, insofar as may be necessary, for the transactions
referred to in this agreement and the transactions arising herefrom;
4.1.3 to the extent necessary, the South African exchange control
approval having been obtained;
4.1.4 the increase to the Softline share capital being implemented.
4.1.5 the increase to the SVIH share capital being implemented.
4.2 Each of the parties shall use its respective reasonable endeavours
to procure the fulfilment of the conditions precedent. If, despite such
endeavours, the conditions or any of them are not fulfilled (or waived)
on or before 17 November 1997 or by such extended date as the parties
hereto may agree to in writing, then the transaction referred to in this
agreement shall fail to come into existence and neither party shall have
any claim against the other party arising therefrom, save in
circumstances where a party deliberately frustrates the fulfilment of
any of the conditions or is in breach of this clause 4.
<PAGE> 6
4.3 To the extent that any party shall not have performed in terms of
this clause 4, the parties shall do whatever shall be requisite in order
to restore the status quo ante.
5 SALE
5.1 Softline sells to SVI Holdings, which purchases, the Anniston
equity and the Clubdene equity, with effect from the effective date, as
one indivisible transaction, subject to the terms and conditions set out
in this agreement.
5.2 The purchase consideration for the Anniston equity and the Clubdene
equity shall be 5 000 000 (five million) shares in the issued share
capital of SVI Holdings, which shares shall rank pari passu in all
respects with the existing SVI Holdings shares in issue and shall be
credited as fully paid.
5.3 The purchase consideration shall be payable on the closing date.
6 WARRANTIES
6.1 Softline makes no warranties save for the warranties and
representations set forth in Appendix "A" hereto in respect of the sale
of the Anniston equity or the Clubdene equity, and the parties record
that Anniston and Clubdene were shelf companies incorporated for the
purpose of acquiring the business pursuant to the Acquisition of
Business Agreement, and the trade marks pursuant to the Acquisition of
Trade Marks Agreement.
6.2 Save for the warranties and representations set out in Appendix
"A", and the warranties and representations contained in The Acquisition
of Trade Marks Agreement and The Acquisition of Business Agreement (and
which flow as a consequence of law to SVI) the sale of the Anniston
equity and the Clubdene equity shall be voetstoots.
7 ADJUSTMENT TO THE PURCHASE CONSIDERATION
It is recorded in clause 9.2 of the acquisition of trade marks agreement
that an additional purchase consideration shall be payable by Anniston to
Systems for Business. Notwithstanding the sale of the Anniston equity
as referred to in clause 5 above, Softline shall continue to fulfil the
obligation to pay such additional purchase consideration, provided that
where such additional purchase consideration, when added to the purchase
consideration of uk1,450,000 (one million four hundred and fifty thousand
pounds) (detailed in clause 7.1 of the Acquisition of Trade Marks
Agreement) exceeds an amount of R45.million (forty-five million rand)
(determined at the then prevailing rand/pound exchange rate), any such
additional amounts of money payable in terms of clause 9.2 of the
Acquisition of Trade Marks Agreement shall be payable by SVI Holdings at
the relevant time.
<PAGE> 7
8 CLOSING
At 17h00 South African time on the closing date, representatives of
Softline shall meet at the offices of Attorneys Fluxman Rabinowitz -
Raphaely Weiner and representatives of SVI shall meet at the offices of
Attorneys Solomon Ward Seidenwurm and Smith, at which meeting the parties
shall deliver to their respective attorneys the following:
8.1 deliver to SVI, in reasonably acceptable form, the share
certificates in respect of the Anniston equity, together with duly signed
and
currently dated share transfer forms in respect thereof, which shall be
signed in blank as to transferee, and a written cession of any loan
account claims;
8.2 deliver to SVI, in reasonably acceptable form, the share
certificates in respect of the Clubdene equity, together with duly signed
and currently dated share transfer forms in respect thereof, which shall
be signed in blank as to transferee, and a written cession of any loan
account claims;
8.3 place under the control of SVI Holdings the books, assets, records
and documents of Anniston and Clubdene;
8.4 deliver to Softline, in reasonably acceptable form, the share
certificates in respect of SVI shares, together with duly signed and
currently dated share transfer forms in respect thereof, which shall be
signed in blank as to transferee, and a written cession of any loan
account claims.
8.5 Consequent upon the deliveries detailed in clauses 8.1 to 8.4, a
representative of each of the attorneys shall telephone the other them
and confirm receipt of the relevant documents whereupon the attorneys
shall hold the documents in trust and arrange for the delivery to each
other of the relevant documents.
9 JURISDICTION
This agreement shall be interpreted in accordance with the laws of the
Republic of South Africa and each of the parties consents to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa, or its successor at the relevant time, and
all appeal courts therefrom or any other court of competent jurisdiction,
where relief sought is of an urgent nature and where failure to obtain
such relief shall result in irreparable harm.
10 COUNTERPARTS
This agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective
when all counterparts have been signed by each of the parties.
<PAGE> 8
11 ARBITRATION
11.1 In the event of a dispute arising between either of the parties to
this agreement, the dispute shall be determined in accordance with the
arbitration procedures detailed in clause 11.2 below. Nothing in this
clause will prevent either party from approaching the High Court of South
Africa for relief of an urgent nature pending the institution of
proceedings in terms of this clause 11.
11.2 Save where otherwise provided in this agreement, any dispute
between the parties hereto in regard to:
11.2.1 the formation of; or
11.2.2 the interpretation of; or
11.2.3 the effect of; or
11.2.4 the carrying out of; or
11.2.5 any other matter arising out of or in connection with
this agreement, its breach or its termination shall be submitted
to and decided by arbitration.
11.3 The arbitration shall be held informally but otherwise under the
provisions of the Arbitration Laws, being Act No.43 of 1965, as amended
from time to time, or any Act passed in substitution for it, it being the
intention as far as possible that the arbitration shall be held and
concluded within 90 (ninety) days after it has been demanded. The
parties shall be entitled to be represented at the arbitration.
11.4 The arbitrator shall be an independent person agreed upon between
the parties to the dispute or, failing such agreement within 28 (twenty
eight) days of either party calling for agreement, an independent person
appointed by the President of The Law Society of the Transvaal at the
request of either party.
11.5 The decision of the arbitrator shall be final and binding upon the
parties and shall be carried into effect by them and made an order of any
competent court, including any decision regarding the costs of the
arbitration which the arbitrator shall be empowered to make.
12 BREACH
Save as otherwise provided in this agreement, should either party commit
a breach of any material provisions of this agreement and fail to remedy
such breach within 14 (fourteen) days after receiving written notice from
the aggrieved party requiring the defaulting party to do so, then the
aggrieved party shall be entitled, without prejudice to the aggrieved
party's other rights in law, to cancel this agreement or to claim
immediate specific perfordmance of all the defaulting party's
obligations, whether or not due for performance, in either event without
prejudice to the aggrieved party's right to claim damages.
<PAGE> 9
13 DOMICILIA AND NOTICES
13.1 The parties choose domicilium citandi et executand 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:
Softhold: c/o Ivan Epstein
16 Commerce Crescent
Eastgate Extension 13
Sandton
Fax: 444-7233
SVI Holdings: Barry M Schechter
7979 Ivanhoe Avenue
Suite 500
La Jolla
California
92037
c/o Norman L Smith
Solomon Ward Seidenwurm and Smith
401 B Street
Suite 1200
San Diego
California
92101
Fax: (619) 231 4755
13.2 Either party may at any time change its domicilium by notice in
writing.
13.3 Any notice given in connection with this agreement shall be
delivered by hand or sent by prepaid registered post or by telefax to
the domicilium chosen by the party concerned.
13.4 A notice given as set out above shall be deemed to have been duly
given if delivered on the date of delivery or, if sent by post 10 (ten)
days after posting, or if sent by telefax, on the day that the telefax
is transmitted.
14 GENERAL
14.1 No agreement varying, adding to, deleting from or cancelling this
agreement and no waiver, whether specifically, implicitly or by conduct
of any right to enforce any term of this agreement, shall be effective
unless reduced to writing and signed by or on behalf of the parties.
<PAGE> 10
14.2 This agreement constitutes the sole and exclusive agreement
between the parties relating to the transactions and matters recorded
herein and no warranties, representations or other terms and conditions
of whatsoever nature not expressly recorded herein, shall be of any
force or effect.
14.3 No indulgence, extension of time, relaxation or latitude which
either party ("the grantor") may show, grant or allow to the other party
("the grantee") shall constitute a waiver by the grantor of any of its
rights hereunder, and the grantor shall not thereby be prejudiced or
estopped from exercising any of its rights against the grantee which may
have then already arisen or which may thereafter arise.
15 COSTS
The costs of drafting and drawing this agreement and all attendances
incidental thereto shall be borne and paid in equal shares by the
parties hereto.
16 SIGNATORIES
THUS DONE AND SIGNED BY THE PARTIES AS FOLLOWS:
For: SOFTLINE HOLDINGS (PTY) LIMITED
Director, duly authorised
By: /s/ Ivan Epstein
Date: October 21, 1997
Place: Johannesburg, South Africa
For: SVI HOLDINGS LIMITED
Director, duly authorised
By: /s/ Barry Schechter
Date: October 21, 1997
Place: Johannesburg, South Africa
<PAGE> 1
SHARE SWAP AGREEMENT
This Share Swap Agreement ("Agreement") is made as of October 21, 1997, by and
between SVI HOLDINGS, INC., a Nevada corporation or its designee ("SVIH"), and
SOFTLINE LIMITED, a South African Company ("Softline").
1. Recital.
This Agreement is made with reference to the following recital of
essential facts:
1.1. SVIH desires to exchange 7,536,000 Shares in its capital stock (the
"SVIH
Shares") for 28,755,448 Shares in the capital stock of Softline (the "Softline
Shares") plus the Technology Assets (as defined below).
1.2. Softline desires to exchange the Softline Shares plus the Technology
Assets for the SVIH Shares.
1.3. The parties intending to be legally bound, agree as set forth below:
2. Definitions.
For purposes of this Agreement, the following definitions shall apply:
2.1. "Closing" has the meaning defined in Section 3.2.
2.2. "Closing Date" means a date to be agreed between the parties to this
Agreement, but in no event later than November 17, 1997.
2.3. "Contemplated Transactions" means all of the transactions contemplated
by
this Agreement, including:
(a) Transfer of the SVIH Shares to Softline;
(b) Transfer of the Softline Shares to SVIH;
(c) Delivery of the Technology Assets to SVIH;
(d) The performance by SVIH and Softline of their respective covenants and
obligations under this Agreement.
<PAGE> 2
2.4. "Contract" means any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
2.5. "Governing Authorization" means any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any governmental body or pursuant to
any legal requirement.
2.6. "Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity.
2.7. "Proceeding" means any action, arbitration, audit, hearing,
investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise
involving, any governmental body or arbitrator.
2.8. "Technology Assets" means software programs, object and source code, all
associated products, know-how and enhancements which together comprise
packages called "Brilliant" and/or "Brilliant Accounting" that enables retail,
wholesale, distribution, and/or manufacturing enterprises to conduct all their
transactions in an integrated, computerized environment and includes all
intellectual property rights of every kind in and to such software programs,
object and source code, products and know-how, the name "Brilliant" and all
associated goodwill.
3. Sale and Delivery of the SVIH Shares, the Softline Shares and the
Technology Assets; Closing; Additional Agreements.
3.1. Delivery and Transfer.
Subject to the terms and conditions of this Agreement, at the Closing:
(a)
SVIH will transfer and deliver to Softline the SVIH Shares, and (b) Softline
will transfer and deliver to SVIH the Softline Shares and the Technology
Assets.
3.2. Closing.
Consummation of the delivery and transfer (the "Closing") provided for in
this Agreement will take place, after all conditions specified in Sections 6
and 7 are satisfied or waived by the appropriate party, at the offices of
Solomon Ward Seidenwurm and Smith at 401 B Street, Suite 1200, San Diego,
California 92101. Closing shall only occur after telephonic approval of
Softline's counsel, Bruce Rubenstein, to be confirmed by fax. Subject to the
provisions of Section 8, failure to consummate the exchange provided for in
this Agreement on the date and time and at the place determined pursuant to
this Section 3.2 will not result in the termination of this Agreement and will
not relieve any party of any obligation under this Agreement.
<PAGE> 3
3.3. Closing Obligations.
At the Closing:
(a) Softline will deliver to SVIH:
(i) a bill of sale and such other instruments as may be necessary or
desirable, in SVIH's reasonable discretion, for the assignment and conveyance
of marketable title to the Technology Assets to SVIH;
(ii) Certificates representing the Softline Shares in a form reasonably
acceptable to Softline and capable of renunciation.
(iii) a certificate executed by the Softline representing and warranting to
SVIH that each of Softline's representations and warranties in this Agreement
was accurate in all respects as of the date of this Agreement and is accurate
in all respects as of the Closing Date as if made on the Closing Date; and
(iv) such other documents as may be required pursuant to Section 6 below.
(b) Subject to Softline's performing all its obligations including, in
accordance with Paragraph 3.3(a) above, SVIH will deliver to Softline:
(i) certificates representing the SVIH Shares;
(ii) a certificate executed by SVIH to the effect that, except as otherwise
stated in such certificate, each of SVIH's representations and warranties in
this Agreement was accurate in all respects as of the date of this Agreement
and is accurate in all respects as of the Closing Date as if made on the
Closing Date.
4. Representations and Warranties of Softline.
Softline represents and warrants to SVIH as follows:
4.1. Organization and Good Standing.
Softline is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate authority to conduct its business as it is now being conducted, and
to own or use the properties and assets that it purports to own or use.
Softline is duly qualified to do business under the laws of each jurisdiction
where applicable law requires such qualification.
4.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation of
Softline, enforceable against Softline in accordance with its terms. Softline
has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
<PAGE> 4
(b) Neither the execution and delivery of this Agreement nor the consummation
or performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any provision
of the Articles and Memorandum of Association of Softline, or (B) any
resolution adopted by the board of directors or the shareholders of Softline;
(ii) to the best of Softline's reasonable knowledge, contravene, conflict
with, or result in a violation of, or give any governmental body or other
Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any legal requirement or any
order to which Softline, or the Technology Assets, may be subject;
(iii) to the best of Softline's reasonable knowledge, contravene, conflict
with, or result in a violation of any of the terms or requirements of, or give
any governmental body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorization that is held by Softline
that relates to the Contemplated Transactions;
(iv) result in the imposition or creation of any encumbrance upon or with
respect to any of the assets owned or used by Softline.
Softline is not nor will be required to give any notice to or obtain any
consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3. Title to Assets.
Softline is, and as of the Closing Date will be, the sole and absolute owner
of the Technology Assets and has and will have as of the Closing Date good and
marketable title to the Technology Assets, free and clear of any security
interests, conditional sales agreements, liens, claims, charges, reversions,
reservations, restrictions, preferential rights of purchase, encumbrances,
encroachments, burdens or other defects of title. There has been no grant,
assignment or other transfer of any rights in the Technology Assets other than
Softline's retention of the non-transferable exclusive right, in perpetuity,
to distribute the products produced by the Technology Assets in the Republic
of South Africa, providing such distribution is limited to sale to retail
customers for exclusive use in South Africa.
4.4. Legal Proceedings; Orders.
There are no Proceedings by or against Softline or that otherwise relates to
or may affect the Technology Assets, and, to the best of Softline's knowledge,
no such Proceeding has been threatened or is pending.
4.5. Intellectual Property.
(1) Know-How. The Technology Assets include all know-how necessary for the
use, operation, marketing, sale, licensing, and further development of the
Technology Assets by SVIH.
<PAGE> 5
(2) Trademarks. Softline is in the process of registering trademarks and
tradenames with respect to the Technology Assets and will assign or cede to
SVIH all of Softline's rights or benefits relating to or arising from such
registrations. Softline is the owner of all right, title, and interest in and
to each of such marks, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims. No such mark is
infringed or, to Softline's best knowledge, no such mark infringes or is
alleged to infringe any trade name, trademark, or service mark of any third
party.
(3) Copyrights. Softline is the owner of all right, title, and interest in
and to each of the copyrights existing with respect to the Technology Assets,
free and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims. To the best of Softline's knowledge, no
such copyright is infringed or infringes or is alleged to infringe any
copyright of any third party or is a derivative work based on the work of a
third party.
(4) Trade Secrets. The Technology Assets include all trade secrets,
confidential information, customer lists, software, technical information,
data, process technology, plans, and drawings, materially necessary for the
use, operation, marketing, sale, licensing, and further development of the
Technology Assets by SVIH.
4.6. The Softline Shares.
4.6.1. Softline is the registered and beneficial owner of the Softline Shares
and has good and marketable title to the Softline Shares, free and clear of
any
liens, claims, charges or other encumbrances whatsoever.
4.6.2. There are no outstanding options or rights effecting the Softline
Shares.
4.6.3. The delivery to SVIH of the Softline Shares pursuant to the provisions
of this Agreement will transfer to SVIH valid title thereto, free and clear of
all liens, encumbrances, restrictions and claims of every kind.
4.6.4. The Softline Shares rank pari passu with all other issued shares of
Softline.
4.7. Disclosure.
(a) No representation or warranty of Softline in this Agreement omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading. The
exhibits and schedules attached or prepared in connection with this Agreement
are accurate and complete and not misleading.
(b) To the best of Softline's knowledge and belief there is no fact known to
Softline that has specific application to the Technology Assets and that
materially adversely affects or, as far as any Softline can reasonably
foresee, materially threatens, the use, marketability, or value of the
Technology Assets.
<PAGE> 6
4.8. Brokers or Finders.
Except for a commission payable solely by Softline, Softline and its
officers have incurred no obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other similar payment
in connection with this Agreement.
4.9. Securities Representations and Warranties of Softline.
Softline hereby represents and warrants as follows, all of which
representations and warranties are being relied upon by SVIH to establish that
the offer and sale of the SVIH Shares is exempt from the registration and
qualification requirements of federal and applicable state registration and
qualification requirements, and shall survive the acquisition of the SVIH
Shares by Softline:
4.9.1. Softline and Softline's advisors, have had an opportunity to ask
question of and receive answers from SVIH, or persons acting on SVIH' behalf,
concerning the subject offering of the SVIH Shares, and all such questions
have
been answered to the full satisfaction of Softline. Softline has requested and
received such documents and financial statements as Softline deems necessary
in order to fully evaluate the risks associated with investing in SVIH and to
make an informed investment decision.
4.9.2. Softline understands and acknowledges that all documents, records and
books pertaining to an investment in the SVIH Shares have been made available
for inspection to Softline and its legal, tax, and business advisors, and that
the documents, records, and books of SVIH will be available upon reasonable
notice, for inspection by Softline during reasonable business hours at SVIH's
principal place of business. No oral representations have been made, or oral
information furnished, to Softline or Softline's advisors in connection with
the offering of the SVIH Shares which was in any way inconsistent with written
materials, documents, records, and books of SVIH furnished to or made
available to Softline.
4.9.3. Softline acknowledges that it has been provided all pleadings,
documents
and materials related to the litigation where SVIH obtained a preliminary
injunction in the United States District Court (Southern District of
California) against certain defendants, including Park Financial Group, Inc.
("Park Financial"), Edwin Wood, Bank Martinique, Brink, Hudson & LaFever,
Ltd., Walmur & Co., Pacific International Securities, Inc., Union Securities,
Ltd., Corporate Stock Transfer, Inc., BLB Financial, Inc., Brian Walsh, Brian
Johanson, Luke di Angelo, Gary Robinson, Bear Stearns & Co., Inc., and
Philadelphia Depository Trust Company, in order to prevent the transfer of any
of the two million shares of SVIH's common stock that had been delivered to
Park Financial in contemplation of a loan to be secured by a pledge of stock
that was never funded by Park Financial.
4.9.4. Softline's financial condition is such that (a) it has adequate means
of
providing for its current needs and possible personal contingencies, (b) it
has no need for liquidity in this investment, (c) it is able to bear the
substantial economic risks of an investment in the SVIH Shares for an
indefinite period time, and (d) at the present time, it could afford a
complete
loss of its investment in the SVIH Shares.
<PAGE> 7
4.9.5. Softline understands and acknowledges the risks related to a
transaction
of this nature.
4.9.6. Softline acknowledges and understands that the SVIH Shares have not
been
registered under the Securities Act of 1993, as amended (the "Act") (nor
registered or qualified under the securities laws of any state) in reliance
upon an exemption from registration for non-public offerings and certain
related factors. Softline understands that the SVIH Shares may not be sold
and must be held indefinitely unless they are subsequently registered under
the Act or an exemption from registration is available or may otherwise be
sold in accordance with applicable law. Softline further understands that SVIH
is under no obligation to register the SVIH Shares unless SVIH makes the
election to register other of SVIH's Shares. SVIH will place upon the
certificates issued to Softline the appropriate legends reflecting this
restriction.
4.9.7. Softline understands that SVIH is relying in large part on Softline's
representations and warranties as set forth in this paragraph 4.9 for purposes
of claiming exemptions from the above referenced securities registration
requirements.
4.9.8. Softline's purchase of the SVIH Shares is for Softline's own account
and
not with a view to or for sale in connection with any distribution of the SVIH
Shares, and no other person has a direct or indirect beneficial interest in
the SVIH Shares.
4.9.9. Softline is a South African limited company authorized and otherwise
duly qualified to purchase and hold the SVIH Shares. Softline has its
principal
place of business as set forth on the signature page of this Agreement and has
not been formed for the specific purpose of acquiring the SVIH Shares.
4.9.10. All information which Softline has provided to SVIH concerning
Softline, Softline's financial condition, and/or the knowledge of financial
and
business matters of the person making the investment decision on behalf of
Softline, is correct and complete as of the date set forth at the end of this
Agreement, and if there should be any adverse change in such information prior
to Softline's investment being accepted by SVIH, Softline will immediately
provide SVIH with such information. The information contained in this
Agreement is complete and accurate and may be relied upon by SVIH.
4.9.11. Softline acknowledges that SVIH has requested information regarding
whether Softline qualifies as an Accredited Investor, as such term is defined
in
Securities and Exchange Commission Rule 501(a). In light of the foregoing,
and in addition to the other representations and warranties being made
Softline in this Agreement, Softline hereby represents, warrants, and confirms
that it qualifies as an Accredited Investor.
<PAGE> 8
4.9.12. Softline acknowledges and understands that no predictions may be made
as
to the revenues or return which Softline might expect to receive from an
investment in SVIH and that any representation to the contrary is unauthorized
and may not be relied upon.
5. Representations and Warranties of SVIH.
SVIH represents and warrants to Softline as follows:
5.1. Organization and Good Standing.
SVIH is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada.
5.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation of
SVIH, enforceable against SVIH in accordance with its terms. SVIH has the
absolute and unrestricted right, power, and authority to execute and deliver
this Agreement and to perform its obligations under this Agreement.
(b) Neither the execution and delivery of this Agreement by SVIH nor the
consummation or performance of any of the Contemplated Transactions by SVIH
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:
(i) any provision of SVIH's Memorandum and Articles of Incorporation;
(ii) any resolution adopted by the board of directors or the stockholders of
SVIH;
(iii) any legal requirement or order to which SVIH may be subject; or
(iv) any Contract to which SVIH is a party or by which SVIH may be bound.
SVIH is not and will not be required to obtain any consent from any Person in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
5.3. Certain Proceedings.
There is no pending Proceeding that has been commenced against SVIH and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To SVIH's
knowledge, no such proceeding has been threatened.
5.4. Brokers or Finders.
SVIH and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement and will indemnify
and hold Softline harmless from any such payment alleged to be due by or
through SVIH as a result of the action of SVIH or its officers or agents.
<PAGE> 9
5.5. The SVIH Shares.
5.5.1. SVIH is the registered and beneficial owner of the SVIH Shares and
has
good and marketable title to the SVIH Shares, free and clear of any liens,
claimS, charges or other encumbrances whatsoever.
5.5.2. There are no outstanding options or rights effecting the SVIH Shares.
5.5.3. The delivery to Softline of the SVIH Shares pursuant to the provisions
of this Agreement will transfer to Softline valid title thereto, free and
clear
of all liens, encumbrances, restrictions and claims of every kind.
5.5.4. The SVIH Shares rank pari passu with all other issued shares of SVIH.
6. Conditions Precedent to SVIH's Obligation to Close.
SVIH's obligation to exchange the SVIH Shares and to take the other actions
required to be taken by SVIH at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by SVIH, in whole or in part):
6.1. Accuracy of Representations.
All of Softline's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually and subject to qualifications set forth in such
representations and warranties), must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if made on the Closing Date.
6.2. Softline's Performance.
All of the covenants and obligations that Softline is required to perform or
to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.
6.3. No Proceedings.
There must not have been commenced or threatened any Proceeding (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the
Contemplated Transactions.
6.4. No Prohibition.
Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material
violation of, or cause SVIH or any Person affiliated with SVIH to suffer any
material adverse consequence under, (a) any applicable legal requirement or
order, or (b) any legal requirement or order that has been published,
introduced, or otherwise formally proposed by or before any governmental body.
<PAGE> 10
6.5. Consummation of Related Transaction.
SVIH must have, either prior to or concurrently with the Closing,
consummated the various agreements entered into with Softline and/or Hosken
Consolidated Investments Limited and others including the Sale Agreement, the
Subscription Agreement and the Renunciation Agreement (the "Related
Transactions")
7. Conditions Precedent to Softline's Obligation to Close.
Softline's obligation to exchange the Softline Shares and the Technology
Assets and to take the other actions required to be taken by Softline at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Softline, in whole or
in part):
7.1. Accuracy of Representations.
All of SVIH's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.
7.2. No Injunction.
There must not be in effect any legal requirement or any injunction or other
order that (a) prohibits the delivery of the Technology Assets by Softline to
SVIH, and (b) has been adopted or issued, or has otherwise become effective,
since the date of this Agreement.
7.3. Consummation of the Related Transactions.
The Related Transactions shall have been consummated prior to or
concurrently with the Closing.
8. Termination.
8.1. Termination Events.
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either SVIH or Softline if a material breach of any provision of this
Agreement has been committed by the other party and such breach has not been
waived or cured on or before fourteen (14) days after written notice from the
non-breaching party; provided that if the breaching party has reasonably
commenced curing the breach within such 14 day period but if such breach is
incapable of being cured within such period, the 14 day period shall be
reasonably extended to enable the breaching party to complete cure the breach.
(b) (i) by SVIH if any of the conditions in Section 6 have not been satisfied
as of the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of SVIH to comply with its
obligations under this Agreement) and SVIH has not waived such condition on or
before the Closing Date; or (ii) by Softline, if any of the conditions in
Section 7 has not been satisfied of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of
Softline to comply with its obligations under this Agreement) and Softline has
not waived such condition on or before the Closing Date;
<PAGE> 11
(c) by mutual consent of SVIH and Softline; or
(d) by either SVIH or Softline if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before October 31,
1997, or such later date as the parties may agree upon.
8.2. Effect of Termination.
Each party's right of termination under Section 8.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 8.1, all further obligations of
the parties under this Agreement will terminate, provided, however, that if
this Agreement is terminated by a party because of the breach of the Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
8.3. No Rescission Remedy. Without prejudice to any other right
or remedy of the parties from and after the Closing neither party may rescind
this Agreement.
9. Indemnification; Remedies.
9.1. Survival.
All representations, warranties, covenants, and obligations in this
Agreement, and any other certificate or document delivered pursuant to this
Agreement, will survive the Closing.
9.2. Indemnification and Payment of Damages by Softline.
For a period of three years from the date of this Agreement, Softline will
indemnify and hold harmless SVIH for, and will pay to SVIH the amount of, any
loss, liability, claim, damage, expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty made by such Softline in
this Agreement or any other certificate or document delivered by Softline
pursuant to this Agreement;
(b) any breach of any representation or warranty made by such Softline in
this Agreement as if such representation or warranty were made on and as of
the Closing Date; or
(c) any breach by such Softline of any covenant or obligation of such
Softline in this Agreement;
(d) any claim arising from or relating to an alleged Patent, Trademark,
Copyright or other infringement with respect to the Technology Assets.
<PAGE> 12
(e) Any matter relating to Softline's ownership of the Technology Assets
prior to Closing;
The remedies provided in this Section 9.2 will not be exclusive of or limit
any other remedies that may be available to SVIH or the other Indemnified
Persons.
9.3. Indemnification and Payment of Damages by SVIH.
For a period of 3 year from the date of this Agreement, SVIH will indemnify
and hold harmless Softline, and will pay to Softline the amount of any damages
arising, directly or indirectly, from or in connection with (a) any breach of
any representation or warranty made by SVIH in this Agreement or in any
certificate delivered by SVIH pursuant to this Agreement, (b) any breach by
SVIH of any covenant or obligation of SVIH in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made
by such Person with SVIH (or any Person acting on its behalf) in connection
with any of the Contemplated Transactions.
10. Voting Agreement.
Softline will act in all capacities and vote the shares of capital stock of
SVI now or hereafter owned or controlled by it so as to cause and maintain the
election to the Board of Directors of SVIH (the "Board") a majority of the
directors of the Board who are the nominees of the Board for a period of three
years following the date of this Agreement.
11. Restrictions on Transfer of Shares by Softline.
Softline will not sell, assign, transfer, pledge, hypothecate, or otherwise
encumber or dispose of in any way, all or any part of or interest in the
shares of capital stock of SVIH now or hereafter owned or held by it for a
period of three years following the date of this Agreement. Any sale,
assignment, transfer, pledge, hypothecation or other encumbrance or
disposition of shares of the capital stock of SVIH not made in conformance
with this Agreement shall be null and void, shall not be recorded on the books
of SVIH and shall not be recognized by SVIH. SVIH will place upon the
certificates issued to Softline the appropriate legends reflecting this
restriction.
12. General Provisions.
12.1. Expenses.
Except as otherwise expressly agreed to by the parties in writing, each
party to this Agreement will bear expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including the fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
12.2. Public Announcements.
Any public announcement or similar publicity with respect to this Agreement
or the Contemplated Transactions will be issued, if at all, at such time and
in such manner as the parties may approve in writing which approval shall not
be unreasonably withheld.
<PAGE> 13
12.3. Notices.
Each notice and other communication required or permitted to be given under
this Agreement ("Notice") must be in writing. Notice is duly given to another
party upon: (a) hand delivery to the other party, (b) receipt by the other
party when sent by facsimile to the address and number for such party set
forth below (provided, however, that the Notice is not effective unless a
duplicate copy of the facsimile Notice is promptly given by one of the other
methods permitted under this paragraph), (c) fourteen business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to
the party as set forth below, or (d) the next business day after the Notice
has been deposited with a reputable overnight delivery service, postage
prepaid, addressed to the party as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation
of delivery from the delivery-service-provider.
To SVIH:Barry M. Schechter
Chief Executive Officer
SVI Holdings, Inc.
7979 Ivanhoe Avenue, Suite 500
La Jolla, CA 92037
Phone: (619) 551-2365
Fax: (619) 551-5067
Copy to:Norman L. Smith, Esq.
Solomon Ward Seidenwurm & Smith
401 B Street, Suite 1200
San Diego, CA 92101
Phone: (619) 231-0303
Fax: (619) 231-4755
To Softline:Softline Limited
P.O. Box 76182
Wendywood 2144
South Africa
Phone: 011-27-11321-2701
Fax: 011-27-11-444-7233
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
12.4. Jurisdiction; Service of Process.
Except as provided below, all actions and proceedings arising in connection
with this Agreement must be tried and litigated exclusively in the State and
Federal courts located in the County of San Diego, State of California, which
courts have personal jurisdiction and venue over each of the parties to this
Agreement for the purpose of adjudicating all matters arising out of or
related to this Agreement. Each party authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as
contemplated by this paragraph by registered or certified mail, return receipt
requested,
<PAGE> 14
postage prepaid, to its address for the giving of notices set forth in this
Agreement.
12.5. Further Assurances.
Each party to this Agreement shall execute and deliver all instruments and
documents and take all actions as may be reasonably required or appropriate to
carry out the purposes of this Agreement.
12.6. Waiver.
Any waiver of a default or provision under this Agreement must be in
writing. No such waiver constitutes a waiver of any other default or
provision concerning the same or any other provision of this Agreement. No
delay or omission by a party in the exercise of any of its rights or remedies
constitutes a waiver of (or otherwise impairs) such right or remedy. A
consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
12.7. Entire Agreement and Modification.
This Agreement and all documents specifically referred to and executed in
connection with this Agreement: (a) contain the entire and final agreement of
the parties to this Agreement with respect to the subject matter of this
Agreement, and (b) supersede all negotiations, stipulations, understandings,
agreements, representations and warranties, if any, with respect to such
subject matter, which precede or accompany the execution of this Agreement.
This Agreement may be modified only by a contract in writing executed by the
party to this Agreement against whom enforcement of the modification is
sought.
12.8. Assignments, Successors, and No Third-Party Rights.
Softline may not voluntarily or by operation of law assign, hypothecate,
delegate or otherwise transfer or encumber all or any part of its rights,
duties or other interests in this Agreement without the prior written consent
of SVIH, which consent may be withheld in SVIH's sole and absolute discretion.
Any such transfer in violation of this paragraph is void. Subject to the
foregoing and any other restrictions on transferability contained in this
Agreement, this Agreement is binding upon and inures to the benefit of the
successors-in-interest and assigns of each party to this Agreement. Nothing
in this Agreement is intended to confer any rights or remedies on any person
or entity other than the parties to this Agreement and their respective
successors-in-interest and permitted assignees.
12.9. Severability.
Each provision of this Agreement is valid and enforceable to the fullest
extent permitted by law. If any provision of this Agreement (or the
application of such provision to any person or circumstance) is or becomes
invalid or unenforceable, the remainder of this Agreement, and the application
of such provision to persons or circumstances other than those as to which it
is held invalid or unenforceable, are not affected by such invalidity or
unenforceability.
12.10. Section Headings, Construction.
The headings of the paragraphs of this Agreement have been included only for
convenience, and shall not be deemed in any manner to modify or limit any of
the provisions of this Agreement, or be used in any manner in the
interpretation of this Agreement.
<PAGE> 15
12.11. Time of Essence.
Time and strict and punctual performance are of the essence with respect to
each provision of this Agreement.
12.12. Governing Law.
This Agreement is governed by and construed in accordance with the laws of
the State of California, irrespective of California's choice-of-law
principles.
12.13. Counterparts.
This Agreement may be executed in counterparts, each of which is deemed an
original and all of which together constitute one document. All exhibits
attached to and referenced in this Agreement are incorporated into this
Agreement.
12.14. Arbitration.
Any dispute, controversy or claim arising out of or related to this
Agreement shall be finally settled by arbitration in accordance with the Rules
of Conciliation and Arbitration of the International Chamber of Commerce.
(a) In the event of any conflict between these Rules and this Section, the
provisions of this Section will govern. The arbitration shall take place in
San Diego, California. The selection of an arbitrator shall be approved by
agreement between the parties to this Agreement or, if the parties cannot so
agree within 30 days after written notice by either party that it intends to
seek arbitration with respect to a particular dispute, such arbitrator shall
be appointed by Presiding Judge of the Superior Court for the County of San
Diego, California.
(b) The arbitration shall be conducted in the English language. Relevant
documents in other languages shall be translated into English if the
arbitrators so direct. In arriving at their award, the arbitrators shall make
every effort to find a solution to the dispute in the provisions of this
Agreement and shall give full effect to all parts thereof. If a solution
cannot be found in the provisions of the Agreement, the arbitrators shall
apply the laws of the state of California.
(c) The parties agree that after either has filed a notice of demand for
arbitration of any dispute subject to arbitration under this Agreement, they
shall, upon request, make discovery and disclosure of all materials relevant
to the subject of the dispute. The arbitrators shall make the final
determination as to any discovery disputes between the parties. Examination
of witnesses by the parties and by the arbitrators shall be permitted. A
written transcript of the hearing shall be made and furnished to the parties.
The cost of this transcript shall be borne equally by the parties.
(d) The arbitrators shall state the reasons upon which the award is based.
The award of the arbitrators shall be final and binding upon the parties.
Judgment upon the award may be entered in any court having jurisdiction. An
application may be made to any such court for a judicial acceptance of the
award and an order for enforcement.
<PAGE> 16
SVIH:SVI HOLDINGS, INC.,
a Nevada corporation
By: /s/ Barry Schechter
Barry Schechter
Chief Executive Officer
Softline:SOFTLINE LIMITED
By: /s/ Ivan Epstein
Ivan Epstein
Chief Executive Officer
<PAGE> 17
TABLE OF CONTENTS
Page
1.Recital.
2.Definitions.
3.Sale and Delivery of the SVIH Shares, the Softline Shares and the
Technology Assets; Closing; Additional Agreements.
3.1.Delivery and Transfer.
3.2.Closing.
3.3.Closing Obligations.
4.Representations and Warranties of Softline.
4.1.Organization and Good Standing.
4.2.Authority; No Conflict.
4.3.Title to Assets.
4.4.Legal Proceedings; Orders.
4.5.Intellectual Property.
4.6.The Softline Shares.
4.7.Disclosure.
4.8.Brokers or Finders.
4.9.Securities Representations and Warranties of Softline.
5.Representations and Warranties of SVIH.
5.1.Organization and Good Standing.
5.2.Authority; No Conflict.
5.3.Certain Proceedings.
5.4.Brokers or Finders.
5.5.The SVIH Shares.
6.Conditions Precedent to SVIH's Obligation to Close.
6.1.Accuracy of Representations.
6.2.Softline's Performance.
6.3.No Proceedings.
6.4.No Prohibition.
6.5.Consummation of Related Transaction.
7.Conditions Precedent to Softline's Obligation to Close.
7.1.Accuracy of Representations.
7.2.No Injunction.
7.3.Consummation of the Related Transactions.
8.Termination.
8.1.Termination Events.
8.2.Effect of Termination.
9.Indemnification; Remedies.
9.1.Survival.
9.2.Indemnification and Payment of Damages by Softline.
9.3.Indemnification and Payment of Damages by SVIH.
10.Voting Agreement.
11.Restrictions on Transfer of Shares by Softline.
12.General Provisions.
12.1.Expenses.
12.2.Public Announcements.
12.3.Notices.
12.4.Jurisdiction; Service of Process.
12.5.Further Assurances.
12.6.Waiver.
12.7.Entire Agreement and Modification.
<PAGE> 18
12.8.Assignments, Successors, and No Third-Party Rights.
12.9.Severability.
12.10.Section Headings, Construction.
12.11.Time of Essence.
12.12.Governing Law.
12.13.Counterparts.
12.14.Arbitration.
<PAGE> 1
RENUNCIATION AGREEMENT
between
SVI HOLDINGS INC.
and
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
and
SOFTLINE LIMITED
<PAGE> 2
TABLE OF CONTENTS
1. INTERPRETATION
2. INTRODUCTION 6
3. CONDITIONS PRECEDENT 7
4. RENUNCIATION 8
5. CONSIDERATION 9
6. ISSUE AND ALLOTMENT 9
7. WARRANTIES 10
8. BREACH 11
9. ARBITRATION 11
10. TRANSACTIONS INDIVISIBLE 13
11. STATEMENT OF INTENTION 13
12. PRESS ANNOUNCEMENTS 14
13. MISCELLANEOUS MATTERS 14
14. COUNTERPART 14
<PAGE> 3
1.
INTERPRETATION
1.1 In this agreement unless the context indicates a contrary intention -
1.1.1 "Agreement" means this agreement;
1.1.2 "Company" means Softline Limited, Registration Number 77/02304/06, a
company incorporated with limited liability in accordance with the Company
Laws of the Republic of South Africa;
1.1.3 "Closing Date" means 17 November 1997, or such later date after the
fulfilment of the conditions as may be agreed to in writing by the Parties,
which agreement shall not be unreasonable withheld;
1.1.4 "Conditions" means the Conditions Precedent referred to in clause 3;
1.1.5 "HCI" means Hosken Consolidated Investments Ltd, Registration Number
73/07111/06, a company incorporated with limited liability in accordance with
the Company Laws of the Republic of South Africa;
1.1.6 "Parties" means HCI, SVI and the Company;
1.1.7 "Sale Agreement" means a written agreement between SVI and HCI entered
into at approximately the same time as this Agreement, relating to the sale by
SVI to HCI of 20 000 000 ordinary shares in the capital of the Company;
1.1.8 "Shares" means 22 130 448 fully paid up ordinary shares in the capital
of the Company ranking pari passu in all respects with each of the existing
issued ordinary shares in the capital of the Company, to be issued pursuant to
the Share Swap Agreement;
1.1.9 "Share Swap Agreement" means a written agreement between HCI and the
Company entitled "Share Swap Agreement" entered into at approximately the same
time as this Agreement;
1.1.10 "Subscription Agreement" means a written agreement between HCI and
the Company entered into at approximately the same time as this Agreement,
relating to the allotment and issue to HCI of 25 763 097 ordinary shares in
the capital of the Company;
1.1.11 "SVI" means SVI Holdings Inc., a corporation incorporated in
accordance with the laws of the State of Nevada, United States of America;
1.2 Words importing the singular shall include the plural and vice versa.
1.3 Words importing the masculine gender shall include the other genders
and
vice versa and natural persons shall include juristic persons and vice versa.
1.4 The heading to the paragraphs of this agreement are inserted for
purposes of reference only and shall not affect the interpretation of any
provisions to which they relate.
1.5 In the event that any definition in this clause 1 contains substantive
provisions, then such provisions shall be given effect to as if same were
incorporated into the main body of this agreement.
1.6 When any number of days are 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 official public holiday in South
Africa in which event the last day shall be the next succeeding day which is
not a Saturday, Sunday or official public holiday in South Africa.
1.7 The terms and conditions of this Agreement shall be binding upon, and
shall inure for the benefit of, the Parties and their permitted assigns and
successors-in-title.
<PAGE> 4
2. INTRODUCTION
2.1 In terms of the Share Swap Agreement the Company has, inter alia, agreed
to exchange the Shares for certain fully paid up shares in SVI.
2.2 SVI has agreed to renounce in favour of HCI all its right, title and
interest in and to the Shares upon the terms and subject to the conditions
contained herein.
2.3 In discharge of its obligations under the Share Swap Agreement, the
Company will allot, issue and deliver the Shares to HCI.
2.4 Accordingly the Parties agree as follows.
3. CONDITIONS PRECEDENT
3.1 This Agreement is subject to the fulfilment of the following Conditions
Precedent which may occur concurrently with consummation of this Agreement -
3.1.1 the conclusion of the Subscription Agreement and the due fulfilment of
the Conditions Precedent contained therein;
3.1.2 the conclusion of an agreement ("the SVI Subscription Agreement")
between SVI and the Company relating to the SVI shares for which the Company
is to subscribe as contemplated in the Share Swap Agreement in a form
satisfactory to SVI in its reasonable discretion;
3.1.3 the written approval of the Johannesburg Stock Exchange having been
obtained, insofar as may be necessary, for the transactions referred to in
this Agreement and relevant transactions and documentation flowing therefrom;
3.1.4 Exchange Control approval, to the extent necessary, having been
obtained.
3.2 If the Conditions in clause 3.1 are not fulfilled by 17 November 1997,
or such later date as shall have been agreed to in writing by the Parties
prior to that date, which agreement shall no be unreasonably withheld, this
Agreement shall be of no further force and effect and the Parties shall be
restored as near as possible to the position in which they would have been had
this Agreement not been entered into. The Parties shall not have any claims
against each other as a result of non-fulfilment of the Conditions except for
such claims, if any, that may result from a deliberate frustration by one of
them of the fulfilment thereof.
4. RENUNCIATION
Subject to the fulfilment of the Conditions, and against payment of the
consideration referred to in clause 5.1, SVI renounces in favour of HCI all
its right, title and interest in and to the Shares on the terms of this
Agreement.
5. CONSIDERATION
5.1 The consideration payable by HCI to SVI in respect of the renunciation
shall be an amount of ZAR35 408 717,00 (Thirty Five Million Four Hundred and
Eight Thousand Seven Hundred and Seventeen South African Rands).
5.2 Payment of the consideration shall be made to SVI in cash on the Closing
Date in the manner contemplated in clause 6 against delivery of the Shares to
HCI.
<PAGE> 5
6. ISSUE AND ALLOTMENT
At 10h00 on the Closing Date representatives of the Parties shall meet at the
offices of Fluxman Rabinowitz - Raphaely Weiner to consummate the transactions
contemplated in this Agreement and at that meeting -
6.1 the Company shall -
6.1.1 allot, issue and deliver the Shares to HCI; and
6.1.2 execute and deliver to SVI the SVI Subscription Agreement referred to in
clause 3.1.2; and
6.2 HCI shall cause to be wired to the trust account of Solomon Ward
Seidenwurm & Smith the US dollar equivalent of ZAR35 408 717,00 in immediately
available currency of the United States of America.
7. WARRANTIES
7.1 SVI warrants that -
7.1.1 the Shares shall rank pari passu in all respects with the existing
shares in the Company; and
7.1.2 the Shares shall be credited as fully paid.
7.2 Except for the warranties specifically given in this Agreement, SVI
gives no further warranties, express or implied, in respect of the Shares.
8. BREACH
Should either Party fail to comply with any of its obligations under this
Agreement and persist in such failure for a period of 14 (fourteen) days after
the date of receipt of written notice from the other Party ("the Innocent
Party") requiring it to carry out the obligation/s in question, then and in
such event, the Innocent Party shall be entitled (in addition to and without
prejudice to any other rights available at law) either to cancel this
Agreement or to enforce performance of the terms hereof, in either event
without prejudice to its right to claim and recover such damages as it may be
able to prove that it has sustained.
9. ARBITRATION
9.1 Should any dispute arise between the Parties in regard to -
9.1.1 the interpretation ;
9.1.2 the effect ;
9.1.3 a breach;
9.1.4 the termination of
9.1.5 any matter arising out of the termination;
of this Agreement, that dispute shall be decided by arbitration before a
single arbitrator in the manner set out in this clause 9.
9.2 The arbitrator shall be appointed by the Parties and failing agreement,
shall be appointed by the President of the Arbitration Foundation of South
Africa ("AFSA").
9.3 The arbitration shall be held at Sandton in the Republic of South
African in accordance with the rules of AFSA.
9.4 The arbitration shall be held as quickly as possible after it is
demanded with a view to it being completed within 90 (ninety) days after it
has been so demanded.
9.5 This clause is severable from the rest of the Agreement and shall,
therefore, remain in effect even if this Agreement is terminated.
<PAGE> 6
9.6 Notwithstanding the place of execution or performance of this Agreement
or the domicile of the Parties hereto, this Agreement and all modifications
and amendments hereof shall be governed by and construed under and in
accordance with the Laws of the Republic of South Africa.
10. TRANSACTIONS INDIVIBLE
All the transactions and arrangements contained in or contemplated by this
Agreement constitute a single and indivisible transaction.
11. STATEMENT OF INTENTION
The Parties undertake at all times to do all such things as may be open to
them and necessary for, or incidental to, the putting into effect or
maintenance of the terms, conditions and/or import of this Agreement, save
where any particular provision contained in this Agreement imposes upon any
one or other Party the obligation (to the exclusion of the other Party) to do
any act, matter or thing, in which event it shall not be the obligation of all
the Parties (by the inclusion of this clause in this Agreement) to procure the
doing of such act, matter or thing, but it shall only be the obligation of the
Party who is specifically directed thereto.
12. PRESS ANNOUNCEMENTS
None of the Parties shall publish to any third party the fact of or any
information concerning the conclusion of this Agreement without the written
consent of each of the others of them, save for any publication required by
the Johannesburg Stock Exchange (and then only after full consultation with
each of the other Parties) or save as required by law or to implement this
Agreement.
13. MISCELLANEOUS MATTERS
13.1 Postal address
13.1.1 Any written notice in connection with this agreement may be
addressed -
(i)in the case of HCI to :
address :P O Box 5251
Cape Town
8000
telefax no :(021) 262-777
and shall be marked for the attention of :
John Copelyn;
(ii)in the case of the Company to :
address :P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Ivan Epstein.
<PAGE> 7
(iii) in the case of SVI to :
address:c/o Softline Limited
P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Barry Schechter
[copy to Norman L Smith
Solomon Ward Seidenwurm & Smith
401 B Street
Suite 1200
San Diego
California, 92101
telefax (619) 231-4755]
13.1.2 Any Party may change that Party's address or telefax number for
this purpose to any other postal address or telefax number in the Republic of
South Africa, on written notice to the other Parties.
13.1.3 A notice sent to any Party at its address of telefax number
provided in terms of clause 13.1.1 or clause 13.1.2 shall be deemed to have
been duly given :
(i)7 (seven) days after posting, if posted by registered post to the
Party's address in terms of this sub-clause;
(ii)on delivery, if delivered to the Party's physical address in terms of
either this sub-clause or the next sub-clause dealing with service of legal
documents;
(iii)on despatch, if sent to the Party's then telefax number and confirmed by
registered letter posted no later than the next business day.
13.2 Address for service of legal documents
13.2.1 The Parties choose the following addresses at which documents in
legal proceedings in connection with this agreement may be served (i.e. their
domicilium citandi et executandi) :
(i)in the case of HCI:
address:5th Floor, 150 Rhodes Building
St George's Mall
Cape Town.
(ii)in the case of the Company:
address:Softline House
16 Commerce Crescent
Eastgate Ext. 13
Sandton, 2148
(iii)in the case of SVI:
address:c/o Norman L Smith
Solomon Ward Seidenwurm & Smith, 401 B Street, Suite
1200, San Diego, California
92101
13.2.2 any Party may change that Party's address for this purpose to
another physical address in the Republic of South Africa, by notice in writing
to the other Parties.
<PAGE> 8
13.3 Entire contract
This agreement contains the entire understanding between the Parties and all
the express provisions agreed on by the Parties relating to the subject matter
of the agreement and the Parties waive the right to rely on any express
provisions not contained in this agreement.
13.4 Variation and cancellation
No agreement varying or cancelling this agreement shall be effective unless
reduced to writing and signed by or on behalf of all the Parties.
13.5 Waiver
No waiver by a Party of any right under this agreement shall be effective
unless reduced to writing and signed by or on behalf of such Party.
13.6 Indulgences
No indulgences granted by a Party shall constitute a waiver or abandonment of
that Party's rights under this agreement; accordingly, that Party shall not
be precluded, as a consequence of having granted such indulgence, from
exercising any rights against any other Party which may have arisen in the
past or which may arise in the future.
13.7 Cession
Except as specifically contemplated in this agreement, no Party may cede any
rights nor delegate any obligations in terms of this agreement without the
prior written consent of the other Parties.
13.8 Costs
13.8.1 Any costs, including attorney and own client costs, incurred by a
Party arising out of the breach by any other Party of any of the provisions of
this agreement shall be borne by the Party in breach.
13.8.2 Each Party shall bear that Party's own legal costs of and
incidental to the negotiating, drafting, settlement and preparation of this
Agreement.
<PAGE> 9
14. COUNTERPART
This Agreement may be executed in counterparts, each of which shall be deemed
an original and all of which together with constitute one document.
SIGNED at Johannesurg, South Africa, on this the 21st. day of October 1997.
for: HOSKEN CONSOLIDATED INVESTMENTS LIMITED
per: By: /s/ John Copelyn
Director, duly authorised.
SIGNED at Johannesburg, South Africa, on this the 21st day of October 1997.
for: SOFTLINE LIMITED
per: By: /s/ Ivan Epstein
Director, duly authorised.
SIGNED at Johannesburg, South Africa, on this the 21st day of October 1997
for: SVI HOLDING INC.
per: By: /s/ Barry Schechter
Director, duly authorised.
<PAGE> 1
SUBSCRIPTION AGREEMENT
between
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
and
SOFTLINE LIMITED
and
THE PERSONS IDENTIFIED IN SCHEDULE 1 HERETO
<PAGE> 2
TABLE OF CONTENTS
Page No.
1. INTERPRETATION 3
2. INTRODUCTION 7
3.CONDITIONS PRECEDENT 7
4.SUBSCRIPTION FOR SHARES 9
5. NO WARRANTIES 10
6.BOARD OF DIRECTORS 10
7.VOTING POOL 10
8.DISPOSITION OF SHARES 11
9.FREEDOM TO DISPOSE OF
SHARES TO MEMBERS OF THE
SAME GROUP 15
10.BREACH 17
11.ARBITRATION 17
12.TRANSACTIONS INDIVISIBLE 19
13.STATEMENT OF INTENTION 19
14.PRESS ANNOUNCEMENTS 19
15.MISCELLANEOUS MATTERS 20
16.COUNTERPART 24
<PAGE> 3
1.INTERPRETATION
1.1 In this agreement, unless the context clearly indicates a contrary
intention, the words hereinbelow defined shall have the meanings assigned to
them, and cognate expressions shall bear corresponding meanings.
1.1.1"Agreement" means this agreement;
1.1.2 "Business Day" means any day other than a Saturday, Sunday or official
public holiday in the Republic of South Africa;
1.1.3"Board" means the board of directors of the Company as constituted from
time to time;
1.1.4"Closing Date" means 18 November 1997, or such other date after the
fulfilment of the Conditions as may be agreed upon by the Parties in writing;
1.1.5"Company" means Softline Limited, registration number 77/02304/06, a
company incorporated with limited liability in accordance with the Company
Laws of the Republic of South Africa;
1.1.6"Conditions" means the conditions precedent recorded in clause 3;
1.1.7"HCI" means Hosken Consolidated Investments Limited, registration number
73/07111/06, a company incorporated with limited liability in accordance with
the Company Laws of the Republic of South Africa;
1.1.8"Parties" means the signatories to this agreement;
1.1.9"Renunciation Agreement" means a written agreement, to be entered into
between HCI, SVI and the Company at approximately the same time as this
Agreement, in terms of which SVI is to renounce in favour of HCI all its
right, title and interest in and to 22 130 448 fully paid up shares in the
capital of the Company which the Company has agreed to issue and allot to SVI
in terms of the Share Swap Agreement;
1.1.10"Sale Agreement" means an agreement, to be entered into between HCI
and SVI at approximately the same time as this Agreement, in terms of which
HCI has agreed to purchase from SVI, which has agreed to sell to HCI, 20 000
000 shares in the capital of the Company ranking pari passu in all respects
with each of the other issued ordinary shares in the capital of the Company
for a purchase consideration of R30 000 000,00;
1.1.11"Shareholders" means each of the persons identified in Schedule 1
hereto.
1.1.12"Share Swap Agreement" means a written agreement to be entered into
between SVI and the Company at approximately the same time as this Agreement,
in terms of which the Company has agreed to issue to SVI certain fully paid up
ordinary shares in the capital of the Company in return for certain fully paid
up ordinary shares in the capital of SVI;
<PAGE> 4
1.1.13"Subscription Shares" means the 25 763 097 ordinary shares in the
capital of the Company for which HCI is to subscribe in terms of clause 4
hereof;
1.1.14"SVI" means SVI Holdings Inc.;
1.1.15"SVI Shares" means the shares to be acquired by HCI in terms of the
Sale Agreement and the Renunciation Agreement;
1.1.16"Voting Pool Agreement" means the voting pool agreement entered into
by the Shareholders in terms of which the Shareholders have regulated the
voting rights attaching to their shares in the Company and their rights to
dispose of those shares.
1.2 Words importing the singular shall include the plural and vice versa.
1.3 Words importing the masculine gender shall include the other genders and
vice versa and natural persons shall include juristic persons and vice versa.
1.4 The headings to paragraphs of this agreement are inserted for purposes of
reference only and shall not affect the interpretation of any provisions to
which they relate.
1.5 In the event that any definition in this clause 1 contains substantive
provisions, then such provisions shall be given effect to as if same were
incorporated into the main body of this agreement.
1.6 When any number of days of 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 official public holiday in South
Africa in which event the last day shall be the next succeeding day which is
not a Saturday, Sunday or official public holiday in South Africa.
1.7The terms and conditions of this Agreement shall be binding upon, and
shall inure for the benefit of, the Parties and their permitted assigns and
successors-in-title.
2.INTRODUCTION
2.1 Subject to the fulfilment of the Conditions, HCI wishes to acquire and
subscribe for the Subscription Shares.
2.2The purpose of this agreement is to regulate the terms and conditions
upon which HCI is to acquire and subscribe for, and the Company is to allot
and issue, the Subscription Shares.
3.CONDITIONS PRECEDENT
3.1This agreement is subject to the fulfilment of the following conditions
precedent which the Parties contemplate shall occur concurrently with the
consummation of this Agreement -
<PAGE> 5
3.1.1 the written approval of the Johannesburg Stock Exchange having been
obtained, insofar as may be necessary, for the transaction referred to in this
agreement and relevant transactions and documentation flowing therefrom;
3.1.2 the publication of a press announcement giving full details of the
subscription as contemplated in paragraph 5.90 of the Johannesburg Stock
Exchange Listing Requirements.
3.1.3 the conclusion of the Sale Agreement;
3.1.4 the conclusion of the Renunciation Agreement and the due fulfilment of
the Conditions Precedent contained therein;
3.1.5 the Shareholders procuring the sale of 2 954 972 shares in the Company
to HCI at R1,60 per share, such that after the implementation thereof, and the
implementation of this Agreement, the Renunciation Agreement and the Sale
Agreement, HCI will hold 25% (twenty five percent) of the issued share capital
of the Company;
3.1.6 all the intended Parties agreeing to be bound by the terms of this
agreement. The obligations and liabilities of Hi-Score Investment Holdings
(Pty) Ltd and Chester Industries Ltd shall be restricted to those arising from
clauses 3.1.5, 7, 8 and 9 of this Agreement
3.2 If the Conditions are not fulfilled by 18 November 1997, or by such
later date as shall have been agreed to by the Parties in writing prior to
that date,this agreement shall cease to be of any further force or effect and
the Parties shall be restored as near as may be possible to the position in
which they would have been had this agreement not been entered into. The
Parties shall not have any claims against each other as a result of such
non-fulfilment of the Conditions except for such claims, if any, as may result
from a deliberate frustration by a Party of the fulfilment thereof.
4.SUBSCRIPTION FOR SHARES
4.1 At 10h00 on the Closing Date representatives of the Company and HCI
shall meet at the offices of Fluxman Rabinowitz - Raphaely Weiner and at such
meeting
- -
4.1.1 HCI shall subscribe for the Subscription Shares and the execution of
this Agreement on behalf of HCI shall be deemed sufficient application for
that purpose.
4.1.2 the Subscription Shares shall be issued at a subscription price of
R1,55 per share ("the Subscription Price");
4.1.3 HCI shall pay the Subscription Price to the Company against delivery of
the Subscription Shares; and
4.1.4 the Company shall, against payment of the Subscription Price, allot,
issue and deliver the Subscription Shares to HCI.
4.2 Each of the Subscription Shares shall rank pari passu in all respects
with each of the existing issued ordinary shares in the capital of the
Company.
<PAGE> 6
5.NO WARRANTIES
It is recorded that the Shareholders do not give any warranties, express or
implied, in respect of the Shares other than those expressly recorded, and
applicable to each of them respectively, herein.
6.BOARD OF DIRECTORS
The Shareholders shall procure the appointment of Larry Nestadt, Marcel
Golding and John Copelyn as directors of the Board with effect from the
Closing Date.
7.VOTING POOL
7.1 On the Closing Date the Voting Pool Agreement shall be deemed to have
been cancelled.
7.2 For so long as HCI owns not less than 10 000 000 (ten million) shares in
the issued capital of the Company, each of the Shareholders irrevocably
undertakes in favour of HCI not to enter into any agreement or arrangement
with any of the other Shareholders which will or may have the effect of
regulating the voting rights attaching to their shares in the Company without
the prior written consent of HCI; except as set forth in clause 6 above.
8.DISPOSITION OF SHARES
8.1 For so long as HCI is a shareholder in the Company neither HCI nor any
of the Shareholders shall sell, transfer, pledge or otherwise dispose of all
or any of their shares in the Company except in accordance with the following
procedures and subject to the provisions of this clause :
8.1.1 Before transferring its shares, or any of them, in the Company (such
shares being hereinafter referred to as "the Offered Shares") the party
proposing to transfer the same ("the Disponer") shall give written notice by
facsimile ("the Transfer Notice") that it proposes transferring the Offered
Shares -
8.1.1.1 to HCI and the Company if the Disponer is one or more of the
Shareholders;
8.1.1.2 to the Shareholders, c/o the Company if the Disponer is HCI;
("the Recipient");
8.1.2 the Transfer Notice shall -
8.1.2.1 in the case of Nedcor Bank Ltd specify the price which the Disponer
requires for the Offered Shares which shall be expressed in South African
currency, or shall be expressed to be the market price from time to time;
8.1.2.2 in the case of any of the Shareholders specify the price which the
Disponer requires for the Offered Shares which shall be expressed in South
African currency; ("the Required Price");
<PAGE> 7
8.1.2.3 specify the payment terms upon which the Disponer is prepared to
sell the Offered Shares;
and once given shall not be revocable except with the consent of the
Recipient;
8.1.3 for a period of 3 (three) Business Days immediately following the
receipt or deemed receipt of the Transfer Notice, HCI, if one of the
Shareholders is the Disponer, or the Shareholders, if HCI is the Disponer,
shall have the right and option to purchase the Offered Shares at the Required
Price and on the terms and conditions specified in the Transfer Notice, which
right -
8.1.3.1 shall be exercisable by written notice to HCI, if HCI is the
Disponer, or to the Company, if one of the Shareholders is the Disponer, given
and received within the said period;
8.1.3.2 shall, if duly exercised, give rise to a sale and purchase of the
Offered Shares at the price and on the other terms and conditions contained in
the Transfer Notice; provided that a Recipient shall have no claim or
entitlement to ownership of the Offered Shares unless it shall have tendered
payment in accordance with the terms of the Disponer's offer;
8.1.3.3 shall, subject to clause 8.1.5, if not so exercised by any
shareholder, lapse and fall away;
8.1.4 If HCI is the Disponer, the right and option referred to in clause 8.1.3
may be exercised by the Recipients -
8.1.4.1 jointly by way of a single notice to the Disponer signed by all the
Recipients, in which event the Recipients shall be deemed to purchase the
Offered Shares pro rata to their existing shareholdings in the Company or in
such other proportions, if any, as may be agreed between them in writing;
8.1.4.2 separately, provided that in the event of competition, regardless of
the fact that each of the Recipients or any of them may have purported to
exercise the option in respect of all the Offered Shares or in respect of a
greater proportion of the Offered Shares than that attributable to their
existing shareholdings in the Company, the Recipients shall be deemed to
purchase the Offered Shares in proportion to their existing shareholdings in
the Company.
8.1.5 If the Offered Shares shall not be purchased in their entirety, the
Disponer shall have the right, on written notice given to those Recipients who
had exercised the option, to treat the option as though it had been declined
if such Recipients do not give notice of their intention to purchase the
remaining Offered Shares in accordance with this clause 8. Should the
Disponer wish to exercise its rights in terms of this clause 8.1.5 it shall do
so by giving the written notice to the relevant Recipient within 7 (seven)
days after the lapse of the option;
<PAGE> 8
8.1.6 Should the said option not be exercised, or be deemed to have been
declined or, should same have been exercised in part and the Disponer have
exercised his election in clause 8.1.5, the Disponer shall be free at any time
within 1 (one) week after the elapse of the said option period to transfer the
Offered Shares, or the remaining portion thereof, as the case may be, to any
person on a bona fide sale at a price not being less than the Required Price
and on not more favourable terms and conditions than those contained in the
Transfer Notice; provided that -
8.1.6.1 the Recipient/s may require to be satisfied in such manner as
it/they may reasonably require that the interest offered is being transferred
in pursuance of a bona fide sale for the consideration stated in the Transfer
Notice without any deduction, rebate or allowance whatsoever, and if not so
satisfied may refuse to register the instrument of transfer; and
8.1.6.2 if the Disponer shall have exercised his rights in terms of clause
8.1.4, he shall not be entitled to conclude a sale with a third party unless
the third party agrees to purchase, and purchases, all the Offered Shares.
8.2 For the purposes of clause 8.1, the term "transfer" shall in addition to
its ordinary meaning, mean "sell, alienate or otherwise dispose of".
8.3 The terms of this clause 8 shall cease to apply at any time that HCI
owns less than 50 000 000 (fifty million) share in the issued share capital of
the Company.
9. FREEDOM TO DISPOSE OF SHARES TO MEMBERS OF THE SAME GROUP
9.1 Subject to the remaining provisions of this clause 9 notwithstanding
anything else to the contrary contained in this Agreement, a member of the
Company ("Transferor Member") shall be entitled to freely dispose of its
entire Shareholding (and not only a portion thereof) to any company ("the
Permitted Transferee") which is a member of the same "Group" as such
Transferor Member.
For the purpose of this clause 9, "Group" means -
9.1.1 any two or more companies which are subsidiaries of the same holding
company or one of which is the subsidiary of the other; plus
9.1.2 such holding company, and "holding company" and "subsidiary" shall
respectively have the meanings contemplated in the Companies Act No. 61 of
1973.
9.2 No shares shall be disposed of in terms of this clause 9 unless prior to
such disposal, the Permitted Transferee in writing undertakes to all the
members of the Company, other than the Transferor member, to be bound by the
provisions of this Agreement.
<PAGE> 9
9.3 If a Permitted Transferee holds shares in the Company at a time when
such Permitted Transferee ceases to be a subsidiary or holding company of the
Transferor Member, any one or more of the other members of the Company shall
be entitled at any time to require the Transferor Member in question and such
Permitted Transferee to ensure that the shares held by the Permitted
Transferee are transferred back to the Transferor Member or, at the election
of the Transferor Member, to any subsidiary or holding company of such
Transferor Member.
10.BREACH
Should any Party ("the Breaching Party") fail to comply with any of its
obligations under this agreement and persist in such failure for a period of
14 (fourteen) days after the date of receipt of written notice from any other
Party ("the Innocent Party") requiring the Breaching Party to carry out the
obligation in question, then and in such event the Innocent Party shall be
entitled (in addition to and without prejudice to any other rights available
at law) either to cancel this agreement or to enforce performance of the terms
hereof, in either event without prejudice to its right to claim and recover
such damages as it may be able to prove it has sustained.
11.ARBITRATION
11.1 Should any dispute arise between the parties in regard to -
11.1.1 the interpretation ;
11.1.2 the effect ;
11.1.3 a breach;
11.1.4 the termination of
11.1.5 any matter arising out of the termination;
of this agreement, that dispute shall be decided by arbitration before a
single arbitrator in the manner set out in this clause 11.
11.2 The arbitrator shall be appointed by the parties and failing agreement,
shall be appointed by the President of the Arbitration Foundation of South
Africa ("AFSA").
11.3 The arbitration shall be held at Sandton in the Republic of South
African in accordance with the rules of AFSA.
11.4 The arbitration shall be held as quickly as possible after it is
demanded with a view to it being completed within 90 (ninety) days after it
has been so demanded.
11.5 This clause is severable from the rest of the agreement and shall,
therefore, remain in effect even if this agreement is terminated.
<PAGE> 10
11.6 Notwithstanding the place of execution or performance of this agreement
or the domicile of the parties hereto, this agreement and all modifications
and amendments hereof shall be governed by and construed under and in
accordance with the Laws of the Republic of South Africa.
12.TRANSACTIONS INDIVISIBLE
All transactions and arrangements contained in or contemplated by this
Agreement
constitute a single and indivisible transaction.
13.STATEMENT OF INTENTION
The Parties undertake at all times to do all such things as may be open to
them and necessary for or incidental to the putting into effect or maintenance
of the terms, conditions and/or import of this Agreement, save where any
particular provision contained in this Agreement imposes upon any one or other
Party the obligation (to the exclusion of the other Party) to do any act,
matter or thing, in which event it shall not be the obligation of all the
Parties (by the inclusion of this clause in this Agreement) to procure the
doing of such act, matter or thing, but it shall only be the obligation of the
Party who is specifically directed thereto.
14.PRESS ANNOUNCEMENTS
None of the Parties shall publish to any third party the fact of or any
information concerning the conclusion of this Agreement without the written
consent of each of the others of them, save for any publication required by
the Johannesburg Stock Exchange (and then only after full consultation with
each of the other Parties) or save as required by law or to implement this
Agreement.
15.MISCELLANEOUS MATTERS
15.1 Postal address
15.1.1 Any written notice in connection with this agreement may be
addressed -
15.1.1.1 in the case of HCI to :
address :P O Box 5251
Cape Town
8000
telefax no :(021) 262-777
and shall be marked for the attention of :
John Copelyn;
15.1.1.2 in the case of the Company to :
address :P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Ivan Epstein.
<PAGE> 11
15.1.1.3 in the case of the Shareholders to :
address :P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Ivan Epstein.
15.1.2 Any Party may change that Party's address or telefax number for this
purpose to any other postal address or telefax number in the Republic of South
Africa, on written notice to the other Parties.
15.1.3 A notice sent to any Party at its address of telefax number provided
in terms of clause 15.1.1 or clause 15.1.2 shall, unless the contrary is
proved,
be deemed to have been duly given :
15.1.3.17 (seven) days after posting, if posted by registered post to the
Party's address in terms of this sub-clause;
15.1.3.2 on delivery, if delivered to the Party's physical address in terms
of either this sub-clause or the next sub-clause dealing with service of legal
documents;
15.1.3.3 on despatch, if sent to the Party's then telefax number and
confirmed by registered letter posted no later than the next business day.
15.2 Address for service of legal documents
15.2.1 The Parties choose the following addresses at which documents in
legal proceedings in connection with this agreement may be served (i.e. their
domicilium citandi et executandi) :
15.2.1.1 in the case of HCI:
address :5th Floor, 150 Rhodes Building
St George's Mall
Cape Town.
15.2.1.2 in the case of the Company:
address :Softline House
16 Commerce Crescent
Eastgate Ext. 13
Sandton, 2148
15.2.1.3 in the case of the Shareholders :
address :c/o Ivan Epstein
Softline House
16 Commerce Crescent
Eastgate Ext. 13
Sandton, 2148.
15.2.2 any Party may change that Party's address for this purpose to
another physical address in the Republic of South Africa, by notice in writing
to the other Parties.
<PAGE> 12
15.3 Entire contract
This agreement contains the entire understanding between the Parties and all
the express provisions agreed on by the Parties relating to the subject matter
of the agreement and the Parties waive the right to rely on any express
provisions not contained in this agreement.
15.4 Variation and cancellation
No agreement varying or cancelling this agreement shall be effective unless
reduced to writing and signed by or on behalf of all the Parties.
15.5 Waiver
No waiver by a Party of any right under this agreement shall be effective
unless reduced to writing and signed by or on behalf of such Party.
15.6 Indulgences
No indulgences granted by a Party shall constitute a waiver or abandonment of
that Party's rights under this agreement; accordingly, that Party shall not
be precluded, as a consequence of having granted such indulgence, from
exercising any rights against any other Party which may have arisen in the
past or which may arise in the future.
15.7 Cession
Except as specifically contemplated in this agreement, no Party may cede any
rights nor delegate any obligations in terms of this agreement without the
prior written consent of the other Parties.
15.8 Costs
15.8.1 Any costs, including attorney and own client costs, incurred by a
Party arising out of the breach by any other Party of any of the provisions of
this agreement shall be borne by the Party in breach.
15.8.2 Each Party shall bear that Party's own legal costs of and incidental
to the negotiating, drafting, settlement and preparation of this Agreement.
<PAGE> 13
16.COUNTERPART
This Agreement may be executed in counterparts, each of which shall be deemed
an original and all of which together with constitute one document.
SIGNED at Johannesburg, South Africa on this the 21st day of October 1997.
for: HOSKEN CONSOLIDATED INVESTMENTS LIMITED
per: By: /s/ John Copelyn
Director, duly authorised.
SIGNED at Johannesburg, South Africa, on this the 21st day of October 1997.
for: SOFTLINE LIMITED
per: By: /s/ Ivan Epstein
Director, duly authorised.
<PAGE> 14
SCHEDULE 1
SCHEDULE OF SHAREHOLDERS
Domicilia
Chester Industries Ltd
Carlos Dos Santos
Nedbank Nominees Ltd
The Roselyn Jacobs Family Trust
The Alan Bruce Family Trust
The Susan Barbara Family Trust
Tower Hill International Corp
C.A.T. Trust
Sudash (Pty) Ltd
S.V.I. Holdings Inc
Ivan Epstein Family Trust
Steven Cohen Family Trust
Alan Osrin Family Trust
<PAGE> 1
A G R E E M E N T
between
SVI HOLDINGS INC
("SVI")
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
("HCI")
SOFTLINE HOLDINGS (PROPRIETARY) LIMITED
("Softhold")
and
SOFTLINE LIMITED
("Softline")
<PAGE> 2
1.1 HCI, Softline and certain persons identified in Schedule 1 hereto
and initialed by the parties for the purpose of identification, are to enter
into the Subscription Agreement, a copy of which is initialed by the parties
for the purpose of identification.
1.2 SVI and HCI will enter into a Sale Agreement for 20 000 000
Softline shares which rank parri passu in all respects with the existing
shares of Softline and are credited as filly paid.
1.3 SVI, HCI and Softline will enter into the Renunciation Agreement,
a copy of which is initialled by the parties for the purpose of
identification.
1.4 SVI and Softline will enter into the Share Swop Agreement, a copy
of which is initialled by the parties for the purpose of identification.
1.5 Softline, Softhold and SVI will enter into the Sale of Shares
Agreement, a copy of which is initialled by the parties for the purpose of
identification.
1.5a Claudav Holdings BVI and various other parties will enter
into a transaction for the exchange of 4 000 000 SVI shares in exchange for 21
176 471 Softline shares.
1.6 The parties wish to record their relationship inter se in respect
of the agreements referred to in clauses 1.1 to 1.5 inclusive above
(collectively "the agreements").
Rand Dollar Exchange Rate
Softline undertakes that in the event of the Rand Dollar exchange rate
exceeding R4.70 to one US Dollar, then Softline undertakes to pay in any
additional amount that requires to be paid to SVI, in such reasonable
acceptable manner.
2 INDIVISIBLE CONTRACT
2.1 The parties record that the agreements are indivisible from one
another, notwithstanding the fact that they shall have been concluded at
different times.
2.2 In the event of the failure to come into effect of any of the
agreements, or the failure of the implementation of any of the agreements,
then all of the agreements shall be deemed to have failed and the parties
shall be restored, as near as possible, to their status quo ante.
2.3 The parties record that the agreements shall be concluded and
implemented by no later than 17 November 1997 or such later date as the
parties may agree upon.
Future Share Issues
Softline recognises that it is the intention of HCI to remain with at least
25% of the issued share capital of Softline. Softline shall use its best
endeavours to avail HCI of any reasonable opportunity to retain its minimum
25% shareholding which shall include, but not be limited to offering to HCI
any shares which become the subject of a vendor placing.
<PAGE> 3
3 GENERAL
3.1 No agreement varying, adding to, deleting from or cancelling this
agreement, and no waiver whether specifically, implicitly or by conduct of any
right to enforce any term of this agreement, shall be effective unless reduced
to writing and signed by or on behalf of the parties. It is recorded that
there exists no collateral and/or other agreements and that this is the sole
agreement entered into by and between the parties.
3.2 This agreement constitutes the sole and exclusive agreement
between the parties relating to the transactions and matters recorded herein,
and no warranties, representations or other terms and conditions of whatsoever
nature not expressly recorded herein, shall be of any force or effect.
3.3 No indulgence, extension of time, relation or latitude which any
party ("the grantor") may show, grant or allow to any other party ("the
grantee") shall constitute a waiver by the grantor of any of its rights and
the grantor shall not thereby be prejudiced or estopped from exercising any of
its rights against the grantee which may have then already arisen or which may
thereafter arise.
THUS DONE AND SIGNED BY THE PARTIES HERETO AS FOLLOWS:
For: SVI HOLDINGS INC
Director, duly authorised
By: /s/ Barry Schechter
Date: October 21, 1997
Place: Johannesburg, South Africa
For: HOSKEN CONSOLIDATED INVESTMENTS LIMITED
Director, duly authorised
By: /s/ John Copelyn
Date: October 21, 1997
Place: Johannesburg, South Africa
For: SOFTLINE HOLDINGS (PROPRIETARY) LIMITED
Director, duly authorised
By: /s/ Ivan Epstein
Date: October 21, 1997
Place: Johannesburg, South Africa
For: SOFTLINE LIMITED
Director, duly authorised
By: /s/ Ivan Epstein
Date: October 21, 1997
Place: Johannesburg, South Africa
