AGREEMENT TO SELL MEMBERSHIP INTERESTS
…………………………..(Identity No: …………….)
(hereinafter referred to as “……”)
……………………….. (Identity No: ………………………..)
(hereinafter referred to as “………”)
(Both …….. and ……. shall be referred to collectively as “the Sellers”)
…………………………………. (Identity No: xxxxxxxxxxxxxx)
(hereinafter referred to as the “Purchaser”)
(Registration No. ………………………..)
(hereinafter referred to as “the _____________”)
WHEREBY THE PARTIES AGREE AS FOLLOWS:
- In this Agreement and in its annexures (other than documents prepared before the Signature Date):
- section and clause headings are for convenience only and are not to be used in its interpretation; an expression which donates:
- any gender includes the genders;
- a natural person includes a juristic person and vice versa;
- the singular includes the plural and vice versa.
- In this Agreement, unless the context indicates a contrary intention, the following words and expressions bear the meanings assigned to them in their corresponding definition provisions, and cognate expressions bear corresponding meanings:
- “Auditors” means Messrs ………………………..of ………………….Street;
- “Close Corporations Act” means the Close Corporations Act 69 of 1984,as amended;
- “Company” or “…………” means ……………………. CC with registration No………………………having its business premises at ………………………………………….;
- “Current Account Claims” means all amounts owing by …….. to the Sellers on loan account;
- “First Effective Date” means, ..th of ……. 20..;
- “2ND Effective Date” means, ..th of …………… 20..;
- “Premises” means the business premises being rented by ….. at ……….;
- “Liabilities” means in relation to ……….. all liabilities and provisions of whatsoever nature or kind existing at the First Effective Date, the cause of action of which arose prior to the First Effective Date;
- “Accounts” means the internally prepared and unaudited financial statements of …….. for and in respect of the period between the Effective Date and the Closing Date, a copy of which shall be furnished to the Purchasers on demand;
- “Parties” means the parties to this Agreement, and “Party” means any one of them;
- “Prime Rate” means the publicity quoted rate (per cent, per annum) from time to time charged by the Standard Bank of South Africa Limited for similar amounts on unsecured overdraft to its prime customers in good standing in the private sector, as certified by any manager of that bank whose appointment it shall not be necessary to prove, calculated on a daily basis and compounded monthly in arrears;
- “Purchaser” means ……………………. (Identity No: ………………);
- “..” means …………………….. (Identity No: ……………………….);
- “..” means …………………. (Identity No: ………………….);
- “Sellers” means “..” and “..” collectively;
- “Sellers’ Claims” means all amounts owing by ……. to the Seller on the Effective Date from any cause whatsoever, whether by way of loan account or otherwise, and includes any interest accrued thereon;
- “Signature Date” means the date of signature of this Agreement by the Party last signing;
1.3 Words and expressions defined in any clause shall, unless the application of any such word or expression is specifically limited to that clause, bear the meaning assigned to such word or expression throughout this Agreement.
1.4 Terms other than those defined within this Agreement and its annexures will be given their plain English meaning, and those terms, acronyms, and phrases known in the media industry will be interpreted in accordance with their generally accepted meanings.
1.5 Defined terms appearing in this Agreement and its annexures in title case shall be given their meaning as defined, while the same terms appearing in lower case shall be interpreted in accordance with their plain English meaning, and shall, unless the context otherwise requires, include the terms as defined.
1.6 A reference to any statutory enactment shall be construed as a reference to that enactment as at the Signature Date and as amended or substituted from time to time.
1.7 No provision herein shall be construed against or interpreted to the disadvantage of a Party by reason of such Party having or being deemed to have structured, drafted or introduced such provision.
1.8 The words “include” and “including” mean “include without limitation” and “including without limitation”. The use of the words “include” and “including” followed by a specific example or examples shall not be construed as limiting the meaning of the general wording preceding it: the application of the eiusdem generis rule is excluded.
1.9 Unless specifically otherwise provided, all amounts in this Agreement are exclusive of value-added tax.
1.10 Any communication required to be in writing in terms of this Agreement shall only be valid if either written or printed in a paper based form. The provisions of the Electronic Communications and Transactions Act, No. 25 of 2002, in this regard are expressly excluded from this Agreement.
- The Sellers are each the registered holders and beneficial owners of a __% member’s interest in _____________ and, collectively, the beneficial owners of __% of the business which owns _____________ Flight Training Academy situated at _________________
- The Purchaser wish to purchase from the Sellers their __% members interest in _____________, and the Sellers are prepared to sell each of their __% members’ l interests in _____________ to the Purchaser on the terms and subject to the conditions herein contained.
- In order to ensure that _____________’s F.A.A. licence is not adversely effected, the Purchaser shall purchase and take transfer of a ___% member’s interest from each Seller, and then, after 6 months have passed, he shall purchase a further _____________ member’s interest from each Seller.
3.1 On the First Effective Date each Seller hereby sells to the Purchaser who hereby purchases a ____% member’s interest in _____________, collectively making up a _____________ member’s interest.
- Notwithstanding the Signature Date, the first sale will be deemed to have taken place on the First Effective Date and risk in and benefit attaching to the __% member’s interest will be deemed to have passed to the Purchaser on the First Effective Date.
- On the Second Effective date each Seller hereby sells to the Purchaser who hereby purchases a further _____________ member’s interest in _____________, collectively making up a further _____________ member’s interest.
3.4 Notwithstanding the Signature Date, the second sale will be deemed to have taken place on the Second Effective Date and risk in and benefit attaching to the _____________ member’s interest will be deemed to have passed to the Purchaser on the Second Effective Date.
3.5 The purchase price for each _____________ member’s interest shall be ________
- Possession, occupation and effective control of each respective _____________ member’s interest in _____________ by the Purchaser will be transferred to the Purchaser on the First and Second Effective Dates respectively, subject to the condition that the Purchaser has paid the purchase price of R _________ per _____________ member’s interest.
- This Agreement is subject to the fundamental term that, notwithstanding the delivery by the Sellers to the Purchasers of each _____________ member’s interest in _____________, the Seller’s title in and to and ownership of the member’s interest and the Sellers’ claims will not pass to the Purchaser and ownership therein will remain vested in the Sellers until the purchase consideration, together with any accrued interest thereon, has been paid in full in accordance with the provisions of this Agreement.
- On the First and Second Effective Dates respectively, the Sellers shall sign all documentation necessary to give effect to the transfer of the respective __% members’ interests in _____________ from the Sellers to the Purchaser.
- CONSIDERATION AND PAYMENT
4.1 The consideration payable by the Purchaser to the Seller for each _____________ member’s interest in _____________ is the sum of R ______ to be paid on the date of signature hereof.
- The Purchaser shall not be liable to pay any interest to the Sellers, provided that they pay all purchase consideration timeously.
- All payments from the Purchaser shall be made to the Sellers into their _____ Bank, _______Branch Account with branch code: _______ and bank account number: _________ by electronic transfer of immediately available and freely transferable funds to such account as the payee may reasonably designate, free of any deductions or set-off whatsoever, in the currency of the Republic of South Africa.
- If the Purchaser fails to make any payments timeously as required by this agreement, then he shall be liable to pay interest at the Prime Rate plus _____________ prevailing at the time of the late payment.
- SUSPENSIVE CONDITION
This agreement is subject to the condition that the Purchaser acquires a loan from any bank for the full purchase price of R ________ within __ days of signature hereof. Should the Purchaser fail to obtain the aforementioned finance this agreement shall be of no force and effect and neither party shall have any claim against each other.
- EFFECTIVE DATES
6.1 The First Effective date of the sale of the first _____________ members interest shall be the __of ______ irrespective of the date of signature hereof.
6.2 The Second Effective Date of the sale of the second _____________ members interest shall be the __ of ________ irrespective of the Date of Signature hereof.
- The Sellers hereby indemnify the Purchaser against and hold him harmless from all claims, liability, damage, loss, penalty, expense and cost (including legal costs on an attorney-and-client scale) of any nature whatsoever which the Purchaser may sustain as a result of or attributable to:
- any liability, whether actual or contingent, of whatsoever nature or kind and howsoever arising, the cause of action of which arose prior to the First Effective Date not reflected and fully brought to account in the Accounts;
- any liabilities for taxation not fully provided for in the Accounts arising from or out of profits or income for all periods prior to the First Effective Date, for which purpose the term “taxation” will include:
- normal taxation;
- secondary taxation on companies;
- value-added tax;
- any employment related levies;
- all other forms of taxation;
- any penalties or interest levied or imposed as a result of any of the above, save to the extent of any specific provision made in respect thereof in the Accounts.
- WARRANTIES, OBLIGATIONS/UNDERTAKINGS AND INDEMNITY BY THE PURCHASER
- The Purchaser has the legal capacity and has taken all necessary action required to empower and authorise the Purchaser to enter into and implement this Agreement on the terms and conditions herein set out.
- This Agreement constitutes an agreement valid and binding on the Purchaser and enforceable against him in accordance with its terms.
- It is recorded that no value-added tax is included in the Purchase Price. In the event that the sale of member’s interest should attract any value-added tax or transfer duty, same shall be paid by the Purchaser who hereby indemnifies and holds the Sellers harmless against any claim for such payment.
- The Purchaser undertakes to insure _____________ and its employees with specific reference to all instructor pilots and ground staff comprehensively and adequately for all third party; public indemnity and contingent liability for damage to aircraft and/or occupants of aircraft, and/or students and/or ground staff and to furnish proof of this insurance on immediately request. Failure to properly insure as undertaken in this clause shall constitute a material breach of this agreement.
- The Purchaser indemnifies the sellers against and holds them harmless from all claims, liability, damage, loss, penalty, expense and cost (including legal costs on an attorney-and-client scale) of any nature whatsoever which the Sellers may sustain as a result of damage to an aircraft; pilot; student; customer; 3rd party; employee with effect from the First Effective Date.
No announcements of any nature whatsoever shall be made by or on behalf of either Party relating to this transaction without the prior consent of the other Party, save for any announcement or other statement required to be made in terms of the provisions of any law, in which event the Party obliged to make such statement shall first consult with the other Party in order to enable them in good faith to agree to the content of such announcement.
The Parties undertake at all times to co-operate with each other in good faith and to carry out this Agreement and to implement all transactions and steps contemplated herein. The Parties further undertake not to take any action or to omit taking any action which will result in delaying or impeding the implementation of this Agreement.
11.1 Save where otherwise specifically provided, should the Sellers commit any breach of this Agreement in so far as such breach concerns a warranty given by the Sellers, the Purchaser will be entitled to terminate this Agreement only if such breach constitutes a material breach. A breach will not be deemed to be a material breach if:
11.1.1 it is capable of being remedied within a reasonable time and is so remedied after written notice calling upon the Seller to do so within 14 (fourteen) days of such notice; or alternatively,
11.1.2 it is incapable of being remedied is not remedied within the period set out in 11.1.1 above, if payment in money will compensate for such breach and such payment is made within 14 (fourteen) days after written request for such payment.
11.2 Subject to the provisions of 11.1 above, if a Party commits a material breach of this Agreement and fails to remedy such breach within 14 (fourteen) days of written notice requiring the breach to be remedied, then the Party giving the notice will be entitled, at its option, either to cancel this Agreement and claim damages or alternatively to claim specific performance of all the defaulting party’s obligations, together with damages, if any, whether or not such obligations have fallen due for performance.
11.3 In the event of it being necessary to take action at law as contemplated herein the defaulting party shall be liable for all legal costs of suit or application on the scale as between Attorney and own client and action may be instituted in the Magistrate’s court irrespective of the sum involved.
- NOTICES AND DOMICILIA
- The Parties choose as their respective domicilia citandi et executandi for the purpose of legal proceedings and for the purposes of giving or sending any notice provided for or necessary in terms of this Agreement, the following addresses:
Provided that a Party may change its domicilium to any other physical address or telefax number within the Republic of South Africa by written notice to the other Party to that effect. Such change of address will be effective 7 (seven) days after receipt of the notice of the change of domicilium.
- All notices to be given in terms of this Agreement will be in writing and:
12.2.1 if delivered by hand during business hours, be rebuttably presumed to have been received on the date of delivery;
12.2.2 if sent by telefax during business hours be rebuttably presumed to have been received on the date of successful transmission of the telefax; any telefax sent after business hours or on a day which is not a business day will rebuttably be presumed to have been received on the following business day.
- Any notice in terms of this Agreement shall only be validly given if in written or printed paper based form. For the avoidance of doubt, where any provision of this Agreement requires either Party to perform any act in writing, this requirement will only be satisfied if such performance is made in a written or printed based paper form. The provisions of the Electronic Communications and Transactions Act No. 25 of 2002, in this regard being expressly excluded from this Agreement and data messages (as defined in that Act) are excluded as a valid form of notice in terms hereof.
- Notwithstanding the above, any notice given in writing, including one sent by data message, actually received by the Party to whom the notice is addressed, will be deemed to have been properly given and received notwithstanding that such notice has not been given in accordance with the provisions of this clause.
- This Agreement constitutes the whole of the Agreement between the Parties hereto relating to the matters dealt with herein and, save to the extent otherwise provided herein, no undertaking, representation, term or condition relating to the subject matter of this Agreement not incorporated in this Agreement shall be binding on any of the Parties.
- No variation, addition, deletion, or agreed cancellation will be of any force or effect unless in writing and signed by or on behalf of the Parties hereto. Failure or delay on the part of any Party hereto in exercising any right, power or privilege hereunder will constitute or be deemed to be a waiver thereof, nor will any single or partial exercise thereof or the exercise of any other right, power or privilege.
- Save as otherwise herein provided, neither this Agreement nor any part, share or interest therein nor any rights or obligations hereunder may be ceded, assigned, or otherwise transferred without the prior written consent of the other Party or Parties.
- Any consent or approval required to be given by any Party in terms of this Agreement will, unless specifically otherwise stated, not be unreasonably withheld.
- This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement as at the date of signature of the Party last signing one of the counterparts. The Parties undertake to take whatever steps may be necessary to ensure that each counterpart is duly signed by each of them without delay.
- BENEFIT OF THE AGREEMENT
This Agreement will endure for the benefit of and be binding upon the successors in title and permitted assigns of the Parties hereto or either of them.
- APPLICABLE LAW AND JURISDICTION
This Agreement will in all respects be governed by and construed under the laws of the Republic of South Africa.
The Purchaser and Seller shall each pay __% of R ____ plus VAT to _____________ Attorneys for drafting his agreement.
SIGNED at this day of 20_____________.
- ______________________ _________________________
(In her personal capacity as seller and in her capacity as duly authorized member of
SIGNED at this day of 20_____________.
- ______________________ _________________________
(In his personal capacity as seller and in her capacity as duly authorized member of
SIGNED at this day of 20_____________.
- ______________________ _________________________