EXHIBIT 10.1
LOAN AGREEMENT
between
ABSA BANK LIMITED
Registration number: 1986/004794/06
("the Lender")
and
CIVIWIZE (PROPRIETARY) LIMITED
(in the process of changing its name to EARN-A-CAR ASSETS 1 (PROPRIETARY)
LIMITED) Registration number: 2011/105918/07
("the Borrower")
1. INTERPRETATION
In this Agreement, unless inconsistent with or otherwise indicated by the
context -
1.1 words importing -
1.1.1 any one gender includes the other two genders;
1.1.2 the singular includes the plural and vice versa;
1.1.3 natural persons includes created entities (corporate or
unincorporated) and vice versa;
1.2 the following terms shall have the meanings assigned to them
hereunder and cognate expressions shall have corresponding
meanings, namely -
1.2.1 "acting as an expert and not as an arbitrator" means, in the
context of any person determining any matter or dispute in terms of
this Agreement, such person doing so on the following basis:
1.2.1.1 such person shall investigate the matter or dispute in such manner
as he in his sole discretion considers appropriate;
1.2.1.2 in carrying out his investigations, such person shall be entitled
to consult with any or all of the Parties, or with any other person
and to take advice from any third party;
1.2.1.3 in the absence of fraud or manifest error, bias or failure to
properly apply his mind, the determination of such person shall be
final and binding on the Parties;
1.2.1.4 the costs and charges of such person shall be borne by that Party
which, in the sole discretion of such person, is the appropriate
Party to bear such charges, provided that such person shall be
entitled to direct that the costs and charges be borne by all or
certain of the Parties, in such ratios as such person may
determine;
1.2.2 "Advance Date" means the date on which the Agreement becomes
unconditional in accordance with its terms;
1.2.3 "Agreement" means this loan agreement together with all Annexures
hereto;
1.2.4 "Applicable Laws" means all applicable laws, ordinances,
regulations, judgments and orders of any competent court, central
bank or governmental agency or authority having the force of law in
any relevant jurisdiction;
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1.2.5 "Asset Cover Ratio" means the ratio which the Trade Value plus
available cash (being the credit balance reflected in the
Borrower's bank accounts at any point in time) bears to the
aggregate Loan Amount, from time to time;
1.2.6 "Auditors" means UHY Hellman (SA);
1.2.7 "Breakage Costs" means, in relation to any pre-payment in whole or
in part, of the Loan Amount pursuant to the occurrence of an Event
of Default or any prepayment on a date not being an Interest
Payment Date, all reasonable direct costs, charges, damages, losses
or liabilities which the Lender may suffer and/or incur, as a
result of the unwinding or other termination of any swap agreement,
forward interest rate agreement or other financial instrument
and/or transaction (of whatsoever nature) entered into by the
Lender in whole or in part to fund, maintain and/or otherwise meet
its obligations to the Borrower in respect of the Agreement, or to
hedge its exposure to the Borrower under the Agreement, or any part
thereof;
1.2.8 "Bonus Payments" means payments outside of the usual salary
payments made by Earn-A-Car (which salaries shall be market
related);
1.2.9 "Borrower" means Civiwize (Pty) Limited (in the process of changing
its name to Earn-A-Car Assets 1 (Proprietary) Limited) registration
number 2011/105918/07, a company incorporated with limited
liability in accordance with the company laws of the Republic of
South Africa;
1.2.10 "Business Day" means any day except a Saturday, Sunday or official
public holiday in the Republic of South Africa;
1.2.11 "Capital" means an amount of R25 000 000.00 (twenty-five million
Rand);
1.2.12 "Change in Law" means any -
1.2.12.1 introduction, abolition, withdrawal or variation of any Applicable
Laws; or
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1.2.12.2 change in any interpretation, or the introduction or making of any
new or further interpretation in respect of any Applicable Laws,
provided, in each case, that such interpretation applies generally
to and is complied with generally by institutions registered as
financial service providers,
which comes into effect after the Signature Date;
1.2.13 "Change Event" means the occurrence of any events or circumstances
envisaged in 13 below;
1.2.14 "Ceded Rights" means the "Ceded Rights" as that term is defined in
the Cession and Pledge;
1.2.15 "Cession and Pledge" means a written agreement entered into between
Earn-A-Car and the Lender on or about the Signature Date in terms
of which Earn-A-Car cedes all its rights, title and interest in and
to the Ceded Rights to the Lender;
1.2.16 "Companies Act" means the Companies Act, 71 of 2008;
1.2.17 "Covenant Certificate" means, in respect of each Quarter, the
written certificate setting out the maintenance or breach of the
Financial Covenants;
1.2.18 "Customer" means any person who has concluded a Rental Agreement
with Earn-A-Car;
1.2.19 "Dispute Auditors" means such independent auditors, which are not
the Borrower's nor the Lender's auditors, but which are among the
major auditing firms in the Republic of South Africa and which are
appointed by the Lender and the Borrower by agreement or, failing
agreement, by the South African Institute of Chartered Accountants;
1.2.20 "Dispute Notice" means a written notice given by the Borrower or
the Lender in terms of this Agreement, in which the party giving
the notice requires that the dispute which has arisen must be
resolved by the Dispute Auditors;
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1.2.21 "Distribution" means a "distribution" as that term is defined in
the Companies Act;
1.2.22 "Earn-A-Car" means Earn-A-Car (Proprietary) Limited, registration
number 2005/003692/07, a company duly registered and incorporated
with limited liability in accordance with the company laws of the
Republic of South Africa;
1.2.23 "Earn-A-Car Loan Agreement" means a written agreement executed
between Earn-A-Car and the Borrower on or about the Signature Date
in terms of which the Borrower agrees to lend and advance to
Earn-A-Car an amount not exceeding R10 million;
1.2.24 "Earn-A-Car Vehicle" means each motor vehicle owned by and/or
registered in the name of Earn-A Car as title holder and/or owner;
1.2.25 "EBITDA" means the consolidated earnings of Earn-A-Car and the
Borrower before interest, Taxes, depreciation and amortisation as
reflected in the consolidated income statement of Earn-A-Car, as
determined in accordance with IFRS;
1.2.26 "Event of Default" means any of the following events -
1.2.26.1 the Borrower failing to pay an amount owing to the Lender under
this Agreement on the due date for payment thereof and remaining in
default for a period of 2 (two) Business Days from the date of
receipt of written notice from the Lender demanding that such
failure be remedied; or
1.2.26.2 the Borrower breaching any of its obligations under this Agreement
and failing to remedy such breach within 7 (seven) Business Days of
the date of receipt of written notice from the Lender demanding
that such breach be remedied; or
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1.2.26.3 the Borrower breaching any of the Financial Covenants and failing
to remedy that breach within 10 (ten) Business Days of that breach
coming to its attention; or
1.2.26.4 the Borrower committing any act which would, if it were a natural
person, constitute an act of insolvency for the purposes of Section
8 of the Insolvency Act, 24 of 1936; or
1.2.26.5 a resolution is proposed or passed by the shareholders or directors
of the Borrower to voluntarily wind up the Borrower, or to commence
business rescue proceedings and/or to appoint a business rescue
practitioner in respect of the Borrower, or the Borrower becomes
subject to any liquidation or judicial management order, whether
provisional or final, or any trustee, liquidator, curator or
judicial manager is appointed in respect of the Borrower or any of
its assets, or anything analogous to the foregoing occurs in any
jurisdiction including but not limited to any business rescue
proceedings as contemplated in the Companies Act; or
1.2.26.6 the Borrower enters into, or attempts to enter into, any compromise
or similar arrangement with its creditors generally or with any
single creditor for an amount in excess of R1,000,000.00 (one
million rand); or
1.2.26.7 the Borrower fails to satisfy a judgment against it in an amount of
not less than R1,000,000.00 (one million rand) within 30 (thirty)
days after becoming aware of the judgment, except that if steps
have been initiated within the 30 (thirty) days to appeal, review
or rescind the judgment and to procure suspension of execution; or
1.2.26.8 the Borrower repudiates any of the Transaction Documents to which
it is a party; or
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1.2.26.9 the Auditors issue a report in terms of Section 45 of the Auditing
Profession Act No.26 of 2005 in regard to the Borrower; or
1.2.26.10 the Transaction Documents are or become illegal, unlawful or
unenforceable in any material respect and are not amended within a
period of 5 (five) Business Days after the Borrower becomes aware
thereof, so as to become legal, lawful and enforceable; or
1.2.26.11 a Material Adverse Change occurs in relation to the Borrower; or
1.2.26.12 the board of the Borrower resolves to commence business rescue
proceedings or the Borrower or any of its agents, officers or
employees take any other steps contemplated under the Companies Act
in anticipation of business rescue proceedings; or
1.2.26.13 if a court makes an order placing the Borrower under supervision
and/or commencing business rescue proceedings at any time during
the course of any liquidation proceedings or proceedings to enforce
any security against the Borrower; or
1.2.26.14 any agreement or obligation or any provision of an agreement to
which the Borrower is party is cancelled or suspended (whether
entirely, partially, or conditionally) whether under section 136(2)
of the Companies Act or otherwise, by the Borrower or any
liquidator, business rescue practitioner, receiver, administrative
receiver, administrator, compulsory manager or other similar
officer in respect of the Borrower or any of its assets;
1.2.26.15 any representation or statement made or deemed to be made by the
Borrower in the Transaction Documents or any other document
delivered by or on behalf of the Borrower under or in connection
with any Transaction Document is or proves to have been incorrect
or misleading in any material respect when made or deemed to be
made.
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1.2.26.16 any of the Borrower's Financial Indebtedness (or any amount payable
in respect of its Financial Indebtedness) is not paid when due
(after the expiry of any originally applicable grace period); or
1.2.26.17 any of the Borrower's Financial Indebtedness:
1.2.26.17.1 becomes prematurely due and payable prior to the stated maturity
or, if the Financial Indebtedness arises under a guarantee, prior
to the stated maturity of the Financial Indebtedness which is the
subject of the guarantee; or
1.2.26.17.2 is placed on demand;
1.2.26.17.3 is capable of being declared by or on behalf of a creditor to be
prematurely due and payable or of being placed on demand; or
1.2.26.17.4 is terminated or closed out or is capable of being terminated or
closed out,
in each case, as a result of an Event of Default or any provision
having a similar effect (howsoever described); or
1.2.26.17.5 any commitment of a provider of Financial Indebtedness to it is
cancelled or suspended, or is capable of being cancelled or
suspended by such provider, in each case, as a result of an Event
of Default or any provision having a similar effect (howsoever
described);
1.2.26.18 a default by Earn-A-Car of its Senior Debt;
1.2.27 "Financial Covenants" means the financial covenants to be
maintained by the Borrower as follows -
1.2.27.1 an Asset Cover Ratio of not less than 1.5 times;
1.2.27.2 a Senior Debt Interest Cover Ratio of not less than 2.5 times;
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1.2.27.3 a Gearing Ratio of not more than 60%;
1.2.28 "Financial Indebtedness" includes any obligation for the payment or
repayment of money, whether actual or contingent, present or
future, secured or unsecured, and whether incurred as principal or
surety or otherwise;
1.2.29 "Gearing Ratio" means the ratio which the Loan Amount plus all
Senior Debt advanced to Earn-A-Car bears to the sum of the Total
Assets, from time to time;
1.2.30 "Guarantee" means a written agreement entered into by Earn-A-Car in
favour of the Lender on or about the Signature Date in terms of
which Earn-A-Car guarantees the obligations of the Borrower under
and in terms of this Agreement;
1.2.31 "Increased Costs" means any decrease in the net after Tax return on
capital achieved by the Lender which is attributable to the Lender
entering into, performing, maintaining or funding its obligations
under this Agreement;
1.2.32 "Interest" means the accrued interest in terms of clause 6 below;
1.2.33 "Interest Payment Date" means, in respect of each Quarter, the last
Business Day of that Quarter, until final repayment of the Capital
and the date of final repayment of the Capital, if that date falls
on a date other than the last Business Day of a Quarter, it being
recorded that the first Interest Payment Date shall be 30th
September 2012, notwithstanding that such date does not fall on the
last Business Day of a Quarter;
1.2.34 "Interest Rate" means, in respect of each Quarter, a nominal annual
compounded quarterly rate being 500 (five hundred) basis points
above JIBAR as at the corresponding Reset Date;
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1.2.35 "JIBAR" means, on each Reset Date, the three month rate for
deposits in Rand, which appears on the Reuters screen SAFEY page
under caption "Yield" (or on the SAFEX nominated successor screen
for JIBAR) as updated for the relevant date at 11h00 Johannesburg
time. If such rate does not appear on the Reuters screen, the rate
will be determined by the Lender on the basis of the average of the
three month deposit rates for Rand for the required period, as
quoted by four South African banks;
1.2.36 "Lender" means ABSA Capital (a division of Absa Bank Limited,
registration number 1986/004794/06), an authorised financial
services provider;
1.2.37 "Lease Agreement" means a written agreement executed between the
Borrower and Earn-A-Car on or about the Signature Date, in terms of
which the Borrower agrees to lease the Motor Vehicles to Earn-A-Car
on certain terms and conditions;
1.2.38 "Loan Amount" means the Capital together with Interest thereon;
1.2.39 "Management" means the management of Earn-A-Car, comprising John
Storey with identity number 620122 5048 089 and Bruce John
Dunnington, with identity number 6107255034081;
1.2.40 "Material Adverse Change" shall be a change in the circumstances of
the Borrower which in the reasonable opinion of the Lender will, or
is likely to, have a material adverse effect on -
1.2.40.1 the assets, operations (including but not limited to information
technology employed in the tracking of vehicles), property or
financial condition of the Borrower;
1.2.40.2 the ability of the Borrower to perform its obligations in terms of
the Transaction Documents on due date; or
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1.2.40.3 the validity or enforceability of, one or more of the Transaction
Documents or the rights or remedies of the Lender thereunder;
1.2.41 "Matrix" means Mix Telematics Africa (Proprietary) Limited,
registration number 2004/019797/07, trading as Matrix, a company
duly registered and incorporated with limited liability in
accordance with the company laws of the Republic of South Africa;
1.2.42 "Maturity Date" means the third anniversary of the Advance Date;
1.2.43 "Month" means each of the named months of the Gregorian calendar;
1.2.44 "Motor Vehicles" means the new motor vehicles acquired by the
Borrower for the purpose of leasing these Motor Vehicles to
Earn-A-Car;
1.2.45 "Notarial Bond" means the special notarial bond registered over the
Motor Vehicles and the Earn-A-Car Vehicles, in favour of the
Lender;
1.2.46 "Parties" means the Lender and the Borrower and "Party" means
either of them as the context may indicate;
1.2.47 "Penalty Interest" means, in respect of any overdue amount owing on
the Loan Amount, interest calculated thereon at a rate being 200
basis points above the Interest Rate from the due date for payment
thereof to the date of actual payment;
1.2.48 "Performance Data" means, in respect of each Motor Vehicle and
Earn-A-Car Vehicle, the performance data set out in Annexure 1.2.48
hereto; -
1.2.49 "Quarter" means each period of 3 Months commencing on 1 July, 1
October, 1 January and 1 April respectively in each calendar year;
1.2.50 "Reference Banks" means, in relation to JIBAR, the principal office
in Johannesburg of the Lender, FirstRand Bank Limited, The Standard
Bank of South Africa Limited, Nedbank Limited and Investec Bank
Limited, or such other banks as may be appointed by the Lender in
consultation with the Borrower;
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1.2.51 "Relevant Interbank Market" means in relation to rand, the
Johannesburg interbank market;
1.2.52 "Rental" means the rental payable by Customers to Earn-A-Car in
terms of the Rental Agreements;
1.2.53 "Rental Agreement" means a rental agreement, enduring for a period
of no more than 48 (forty-eight) months, concluded between
Earn-A-Car and a Customer, substantially on the terms of the
Specimen Rental Agreement;
1.2.54 "Repayment Period" means the period of 3 (three) years from the
Advance Date until the Maturity Date;
1.2.55 "Reset Date" means the Advance Date in respect of the Quarter in
which the Advance Date occurs and thereafter, in respect of each
subsequent Quarter until repayment of the Loan Amount, the first
Business Day of that Quarter;
1.2.56 "Security Cession" means a written agreement executed between the
Borrower and the Lender at about the same time as this Agreement,
in terms of which the Borrower cedes and pledges its rights, title
and interest in and to its bank accounts to the Lender;
1.2.57 "Senior Debt" means all debt which ranks ahead of the Subordinated
Debt;
1.2.58 "Senior Debt Interest Cover Ratio" means the ratio which EBITDA
bears to the consolidated accrued Interest on the Capital and other
Senior Debt of the Borrower and Earn-A-Car (as reflected in
Earn-A-Car's consolidated management accounts), expressed as a
percentage;
1.2.59 "Signature Date" means the date on which this Agreement is signed
by the Party signing last;
1.2.60 "Specimen Rental Agreement" means the draft Rental Agreement
attached hereto as Annexure 1.2.60;
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1.2.61 "Subordinated Debt" means in respect of a loan advanced to
Earn-A-Car by a third party lender, the debt owing to that lender
by Earn-A-Car, which lender has subordinated its claim against
Earn-A-Car in favour of senior ranking creditors of Earn-A-Car;
1.2.62 "Tax" means any tax, duty, levy, surcharge or imposition of any
nature whatsoever and any penalty and interest payable in respect
thereof, which may be lawfully imposed under the laws of the
Republic of South Africa and terms "Taxation" and "Taxes" shall
bear corresponding meanings;
1.2.63 "Total Assets" means the consolidated total assets of Earn-A-Car
and the Borrower as reflected in the consolidated balance sheet of
Earn-A-Car, as determined in accordance with IFRS excluding the
value of all intangible assets and goodwill;
1.2.64 "Trade Value" means, in respect of each Motor Vehicle and each
Earn-A-Car Vehicle that is subject to the Notarial Bond, the lower
of the book value and the market value of that motor vehicle as set
out in the most recent publication of Mead & McGrouther;
1.2.65 "Transaction Documents" means -
1.2.65.1 this Agreement;
1.2.65.2 the Earn-A-Car Loan Agreement;
1.2.65.3 the Cession and Pledge;
1.2.65.4 the Security Cession;
1.2.65.5 the Guarantee;
1.2.65.6 the Lease Agreement; and
1.2.65.7 the Notarial Bonds;
1.3 a reference to a party includes that party's successors and
permitted assigns;
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1.4 any reference to an enactment is to that enactment, as amended, as
of the date of signature thereof, and as amended or re-enacted from
time to time;
1.5 if any provision in a definition or the introduction in this
Agreement is a substantive provision conferring rights or imposing
duties on any party, notwithstanding that it is only in the
definition or introduction clause, effect shall be given to it as
if it were a substantive provision in the operative part of this
Agreement;
1.6 if a date stipulated for the performance of any obligation in terms
of this Agreement falls on a day not being a Business Day, then the
due date for performance of that obligation shall be the next
succeeding Business Day;
1.7 when any period is prescribed in this Agreement, that period shall
be reckoned exclusively of the first day and inclusively of the
last day unless the last day is not a Business Day, in which case
the last day shall be the next succeeding Business Day;
1.8 the rule of construction that this Agreement shall be interpreted
against the Party responsible for the drafting or preparation of
this Agreement shall not apply;
1.9 this Agreement shall be governed and construed and interpreted in
accordance with the laws of the Republic of South Africa.
2. INTRODUCTION
2.1 It is recorded that the Lender has agreed to lend and advance the
Capital to the Borrower on the Advance Date.
2.2 The Parties now wish to set out the terms and conditions applicable
to the Loan.
2.3 Now, therefore, the Parties agree as follows.
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3. CONDITIONS PRECEDENT
3.1 The whole of this Agreement, (other than the provisions of clause
1, this clause 3 and clause 14 shall be of full force and effect
from the Signature Date) is conditional upon the following
conditions precedent -
3.1.1 the Financial Covenants being maintained before the Advance Date
and on the Advance Date following the advance of the Capital;
3.1.2 receipt of a written undertaking in favour of the Lender by
Management, who, having made loans to Earn-A-Car, will not claim
nor demand repayment of their loans until final settlement of the
Lender's claims under and in terms of this Agreement;
3.1.3 receipt by the Lender of a written opinion from Prinsloo, Tindle &
Andropoulos Inc. confirming that the Transaction Documents are
legal, valid, binding and enforceable on the parties thereto;
3.1.4 receipt of a written opinion by the Lender from senior counsel that
the Rental Agreements are not subject to the National Credit Act,
34 of 2005;
3.1.5 the execution of all board and/or shareholder resolutions
authorising the execution of this Agreement by the Borrower; and
3.1.6 the execution of the Transaction Documents (other than the Notarial
Bond over the Earn-A-Car Vehicles, which shall be executed within 7
(seven) days after the Signature Date and the Notarial Bond over
the Motor Vehicles, subject to the provisions of clause 10.7.2) and
those agreements becoming unconditional in accordance with their
terms, other than in respect of this Agreement.
3.2 Unless the conditions in clause 3.1 are fulfilled on or before the
Signature Date, or within such further period as the Parties may
agree in writing, this Agreement (other than the provisions of
clause 1, this clause 3 and clause 14) shall be of no force or
effect and the STATUS QUO ANTE shall be restored between the
Parties.
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4. PURPOSE
4.1 The Capital is intended to be utilised:
4.1.1 for the advance of a loan in an amount not exceeding R10 000 000.00
(ten million Rand) by the Borrower to Earn-A-Car in terms of the
Earn-A-Car Loan Agreement to be utilised by Earn-A-Car for the
settlement of its Senior Debt; and
4.1.2 for the acquisition by the Borrower of Motor Vehicles to be leased
to Earn-A-Car in terms of the Lease Agreement.
4.2 The Borrower shall not be entitled to utilise the Capital for any
other purpose without the prior written consent of the Lender.
5. THE LOAN
5.1 On the Advance Date the Lender lends and advances the Capital to
the Borrower, which borrows same, on the terms and conditions
contained in this Agreement.
5.2 The Capital is advanced by the Lender to the Borrower in one lump
sum on the Advance Date by the Lender making payment into the
Borrower's bank account held with The Standard Bank of South Africa
Limited under bank account number 022278214, at its Hyde Park
branch (with branch code 6605).
6. INTEREST
6.1 The Loan Amount shall bear interest calculated at the Interest
Rate.
6.2 Interest shall be calculated on a day to day basis, based on the
actual number of days elapsed (on the basis of a 365 day year)
during each Quarter, and shall be paid to the Lender in cash on
each Interest Payment Date from the first Interest Payment Date to
the date of final repayment.
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7. REPAYMENT OF THE CAPITAL
7.1 The Capital (together with Interest thereon, as determined in
accordance with the provisions of clause 6 above), shall be repaid
to the Lender in cash in equal quarterly instalments (as to
Capital) during the Repayment Period on each Interest Payment Date
to the date of final repayment into a bank account nominated by the
Lender in writing, on or before the Advance Date.
7.2 Notwithstanding the provisions of clause 7.1 above, the Borrower
shall be entitled, on any - Interest Payment Date prior to the
Maturity Date, to repay the whole or any portion of the Capital in
tranches of no less than R2 million (two million Rand) plus
Breakage Costs on not less than 30 (thirty) Business Days' prior
written notice to the Lender.
7.3 Upon early repayment of the whole or any portion of the Capital as
contemplated in clause 7.2 - above, that portion of the Capital
repaid shall not thereafter be available for draw down by the
Borrower under the Agreement.
8. REPAYMENT OF THE LOAN AMOUNT
8.1 The Borrower may, on any Interest Payment Date, repay the Loan
Amount on or before the Maturity Date, whereafter the Agreement
shall terminate.
8.2 Notwithstanding the provisions of clause 8.1 above, upon the
occurrence of an Event of Default- -
8.2.1 the Loan Amount shall become immediately due and payable;
8.2.2 the Lender shall be entitled to demand specific performance; and
8.2.3 the Lender shall be entitled to claim Breakage Costs.
8.3 Whenever the Borrower is obliged to effect payment of any amount to
the Lender in terms of the Loan Amount, such payment shall be made
in cash by way of electronic transfer into a bank account nominated
by the Lender in writing on or before the due date for payment
thereof.
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8.4 All payments made by the Borrower to the Lender in terms of this
Agreement shall be paid in cash, without any deduction or set-off
and free of any bank charges.
9. INTEREST ON OVERDUE AMOUNTS
Any amount not paid on due date shall bear Penalty Interest from
the due date until it is paid.
10. UNDERTAKINGS BY THE BORROWER
The Borrower hereby undertakes from the Advance Date until the
Maturity Date, that:
10.1 it will not dispose of any of the Motor Vehicles without the prior
written consent of the Lender, unless such Motor Vehicles are
obsolete, written off or are bought by lessees in the ordinary
course of business in accordance with the standard policies and
procedures of Earn-A-Car;
10.2 it will retain the proceeds of any Motor Vehicles disposed of in
terms of 10.1 above; -
10.3 it will not make any Distributions without the prior written
consent of the Lender,
10.4 it will, to the extent reasonably possible, maintain the Motor
Vehicles in good working order;
10.5 it will procure the installation of a vehicle tracking device into
each Motor Vehicle with the vehicle tracking service provider
Matrix, or such other service provider, with the prior approval of
the Lender;
10.6 it will not incur any additional debt, other than that envisaged in
terms of the Transaction Documents;
10.7 it will submit to the Lender a copy of the following documents -
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10.7.1.1 the audited financial statements of the Borrower within 90 (ninety)
days after such audited financial statements have been signed off
by the Auditors;
10.7.1.2 the quarterly management accounts of the Borrower in respect of
each Quarter, within 45 (forty-five) days of the end of that
Quarter;
10.7.1.3 the quarterly Performance Data in respect of each Quarter within 10
(ten) Business Days of the end of that Quarter;
10.7.1.4 the Covenant Certificate, in respect of each Quarter, substantially
in the form of the draft certificate attached hereto as Annexure
10.7.1.4, within 15 (fifteen) Business Days of the end of that
Quarter; and
10.7.2 it will procure the execution of the Notarial Bond over the Motor
Vehicles within 30 (thirty) days of the acquisition of the Motor
Vehicles, in any event, by the end of the first Quarter following
the Advance Date.
11. MARKET DISRUPTION
11.1 If a Market Disruption Event occurs in relation to the Loan Amount
for any Quarter, then the rate of interest on the Loan Amount for
that Quarter shall be the rate per annum which is the sum of -
11.1.1 the Margin;
11.1.2 the rate notified by the Lender as soon as practicable and in any
event before interest is due to be paid in respect of that Quarter,
to be that which expresses as a percentage rate per annum the cost
of the Lender of funding the Loan Amount from whatever source it
may reasonably select; and
11.1.3 any mandatory cost, if any.
11.2 In this Agreement Market Disruption Event means -
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11.2.1 at or about 11h00, 2 (two) Business Days before commencement of the
relevant Quarter JIBAR is not available and none or only one of the
Reference Banks supplies a rate to the Lender to determine JIBAR
for the relevant Quarter; or
11.2.2 before close of business on the relevant day for the relevant
Quarter, the Borrower receives notification from the Lender, that
the cost to them of obtaining matching deposits in the Relevant
Interbank Market is in excess of JIBAR, for the relevant Quarter.
11.3 The Lender must promptly notify the Borrower of a Market Disruption
Event.
12. WARRANTIES BY THE BORROWER
The Borrower hereby warrants that -
12.1 it has not traded before and has no assets and/or liabilities;
12.2 it is a corporation duly registered and existing under the laws of
the Republic of South Africa;
12.3 the Borrower will have complied with all laws affecting its affairs
and business;
12.4 each Transaction Document to which the Borrower is a party gives
rise to legal, valid and binding obligations, enforceable against
the Borrower;
12.5 the execution of the Transaction Documents to which the Borrower is
a party has been duly authorised by the board of directors of the
Borrower (which authorisation has not been countermanded or
revoked), and does not contravene any law or any contractual
obligation binding on the Borrower;
12.6 no encumbrance exists over all or any of its assets, save for the
encumbrances created, or to be created in terms of the Notarial
Bond or the Transaction Documents;
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12.7 no Event of Default has occurred and no fact or circumstance has
occurred which, with the expiry of the applicable remedy period or
the giving and expiry of any applicable notice will constitute an
Event of Default;
12.8 no creditor of the Borrower has taken any action or proceedings
against the Borrower to recover any amounts payable by the Borrower
to such creditor.
13. CHANGE IN CIRCUMSTANCES
13.1 If by reason of~
13.1.1 any Change in Law; and/or
13.1.2 a requirement or a request by any statutory or monetary authority
to maintain special deposits or reserve assets,
there are any Increased Costs, the Lender shall be entitled (but
not obliged) to calculate such an increased Interest Rate as will
have the effect, if interest accrues at such increased Interest
Rate, of placing the Lender in the same financial position it
would have been in had the Change Event not occurred (such rate
the "Recalculated Rate").
13.2 The Lender shall deliver a written notice (the "Adjustment Notice")
to the Borrower in which it advises the Borrower of the Change
Event which has occurred, the Recalculated Rate and the manner in
which it has calculated such rate, such notice to contain all such
additional information (if any) as the Borrower could reasonably be
expected to require in order to enable it to satisfy itself that
the Lender's calculation of the Recalculated Rate is correct.
Interest shall thereafter and with effect from the date on which
the applicable Increased Costs are first incurred by the Lender,
accrue on the Loan Amount at the Recalculated Rate.
13.3 If the Borrower wishes to dispute the correctness of any
Recalculated Rate, it shall do so by delivering written notice to
that effect (a "Dispute Notice") to the Lender within 30 (thirty)
days after receipt by it of the Adjustment Notice. The Borrower
shall, in its Dispute Notice, set out its calculation of the
Recalculated Rate.
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13.4 If the Borrower delivers a Dispute Notice to the Lender~
13.4.1 the parties shall refer the matter for determination to the Dispute
Auditors;
13.4.2 the Dispute Auditors shall determine the Recalculated Rate;
13.4.3 the Dispute Auditors shall, in making his determination, act as an
expert and not as an arbitrator and shall be entitled to adopt such
procedure and to rely on such evidence as he may deem appropriate;
13.4.4 the determination by the Dispute Auditors shall be final and
binding on the parties;
13.4.5 the Dispute Auditors' costs in making their determination shall be
paid by the party whose quantification of the Recalculation Rate is
furthest from the Dispute Auditors' determination thereof, or if
the parties' determinations are equidistant from the Dispute
Auditors' determination, by the parties in equal shares.
13.5 If the Borrower disputes the correctness of any Recalculated Rate
(in the manner envisaged in 13.3 above), then, pending the
determination of such dispute by the Dispute Auditors (as envisaged
in 13.3 above) -
13.5.1 interest shall nevertheless accrue at the disputed Recalculation
Rate as if the Lender's calculation of such Recalculated Rate is
correct;
13.5.2 within 30 (thirty) Business Days after receipt by the parties of
the Dispute Auditors' determination (1) if any payment of any
interest calculated at the Recalculation Rate has been made by the
Borrower, the party indebted to the other as a result of such
determination shall make payment of such indebtedness to the other
party, or (2) if no payment of interest calculated at the
Recalculation Rate has been made, the Loan Amount shall be adjusted
accordingly.
13.6 This clause 13 shall not apply to any Increased Costs attributable
to any change in the rate of tax on the overall net income of the
Lender.
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14. MISCELLANEOUS MATTERS
14.1 ADDRESS FOR SERVICE OF LEGAL DOCUMENTS AND OTHER NOTICES
14.1.1 The Parties choose the following addresses at which notices and
documents in legal proceedings in connection with this Agreement
may be served (ie their DOMICILIUM CITANDI ET EXECUTANDI):
14.1.1.1 The Lender: 15 Alice Lane;
Sandton;
telephone: (011)895-6000;
telefacsimile: (011)895-7803
attention: Head of Documentation Services Absa Capital
14.1.1.2 the Borrower: Office 1, The Falls Centre
Cnr Great North & Webb
Northmead, Benoni, 1501
14.1.2 The notice shall be deemed to have been duly given on delivery, if
delivered to the Party's physical address.
14.1.3 A Party may change that Party's address for this purpose to another
physical address in South Africa, by notice in writing.
14.2 ENTIRE CONTRACT
This Agreement contains all the express provisions agreed on by
the Parties with regard to the subject matter of the Agreement
and the Parties waive the right to rely on any alleged express
provision not contained in writing and signed by the Parties.
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14.3 NO REPRESENTATIONS
Neither Party may rely on any representation which allegedly
induced that Party to enter into this Agreement, unless the
representation is recorded in this Agreement.
14.4 VARIATION, CANCELLATION AND WAIVER
No agreement varying, adding to, deleting from or cancelling this
Agreement, and no waiver of any right under this Agreement, shall
be effective unless reduced to writing and signed by or on behalf
of the Parties.
14.5 INDULGENCES
No indulgence granted by a Party shall constitute a waiver or
abandonment of any of the Party's rights under this Agreement.
Accordingly, a Party shall not be precluded, as a consequence of
having granted an indulgence, from exercising any rights against
the other Party which may have arisen in the past or which may
arise in the future.
14.6 COSTS
14.6.1 the Borrower shall bear all legal costs of and incidental to the
negotiation, drafting and preparation of this Agreement.
14.6.2 any costs, including attorney and own client costs, incurred by
either Party arising out of the breach by the other Party of any of
the provisions of this Agreement shall be borne by the Party in
breach.
14.7 ASSIGNMENT
14.7.1 The Lender shall be entitled, without notice to the Borrower, to
cede all or any of its rights under this Agreement to Momentum
Group Limited, registration number 1904\002186\06, or to any other
third party, at the discretion of the Lender. The Borrower shall,
if requested to do so by the Lender and the cessionary/ies in
writing, make payments under this Agreement directly to such
cessionary/ies and shall execute such documents as may be required
to confer on that cessionary all the rights of a "Lender".
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14.7.2 The Borrower shall not be entitled to cede any of its rights or
delegate any of its obligations under and in terms of this
Agreement.
14.8 SIGNATURE IN COUNTERPART
This Agreement may be signed in counterparts, each of which shall be an
original, but which together shall constitute one document.
Signed at Sandton, South Africa this 29th day of May 2012
AS WITNESSES -
1 /s/ /s/
--------------------------------- ---------------------------------
for: ABSA Bank Limited
2 /s/
---------------------------------
Signed at Sandton, South Africa this 29th day of May 2012
AS WITNESSES -
1 /s/ /s/ Bruce Dunnigton
--------------------------------- ---------------------------------
for:Civiwize (Pty) Limited
2 /s/
---------------------------------
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ANNEXURE 1.2.47
PERFORMANCE DATA
26
ANNEXURE 1.2.60
SPECIMEN RENTAL AGREEMENT
27
ANNEXURE 10.7.1.4
COVENANT CERTIFICATE
28