Offer To Purchase A Farming Enterprise As A Going Concern

CAPELAND

OFFER TO PURCHASE

I, the undersigned, ______

Identity Number: ______

Trust/Close Corporation/Company Nr ______

Marital Status ______

Address ______

Telephone ______Fax ______

Resident of South Africa YES/NO ______

(Hereinafter referred to as the ‘’Purchaser/s”) hereby offer to purchase through the agency of CAPELAND, TULBAGH certain farming enterprise which includes certain farming property (with all buildings, if any) known as ______situate ______in extent ______

(hereinafter referred to as the “Property”) as more fully described in

Title Deed No ______

From ______

Identity Number ______

Marital Status ______2

Address ______

Telephone ______Fax ______

Resident of Replublic of South Africa YES/NO ______

(hereinafter referred to as ‘’the Seller/s”) subject to following terms and conditions:

1. PURCHASE PRICE

1.1 The purchase price of the farming enterprise is the amount of R______, made up as follows:

1.1.1 The purchase price of the property is the amount of R______;

1.1.2 The purchase price of the moveable property, referred to in Clause 17, is the amount of R______, as per the annexed list marked Annexure “A”.

1.1.3 The purchase price of shares and /or rights to deliver, referred to in Clause 22, is the amount of R______, also listed on Annexure ’’A’’.

2. PAYMENT

The full purchase price as set out above is payable as follows:

2.1 A deposit of R______against signature hereof to ______which amount shall be kept in trust and temporarily invested by the said firm in an interest bearing account, interest for the credit of the Purchaser. 3

2.2 The balance of R______against registration of transfer of the property in the name of the Purchaser, his orders, heirs, executors or administrators, which amount the purchaser undertakes to pay to the Seller or its nominees.

3. GUARANTEES

The Purchaser shall on demand deliver one or more acceptable bank guarantees to the transferring attorneys in favour of the Seller or his nominees for payment of the purchase price or any outstanding portion thereof against registration of transfer.

4. POSSESSION

Possession shall be given to the Purchaser on date of registration of transfer, subject to all provisions relating to occupation hereinafter set out and any existing leases.

5. OCCUPATION

5.1 Vacant occupation of the Property shall be given to the Purchaser by the Seller on the ______, as from which date the Property shall be at the sole risk of the Purchaser in respect of all profit and loss relating to the Property.

5.2 The Purchaser shall not be entitled to effect any structural changes to the Property before registration of transfer without the prior written consent of the Seller, which consent shall be within the sole discretion of the Seller, who shall be obliged to vacate the property if this agreement is cancelled for whatever reason, and it is recorded that no lease is created by the aforementioned provisions. Vacant occupation shall also be subject to all existing leases (if any).

6. OCCUPATIONAL INTEREST

If occupation of the Property and the date of registration of transfer differ, then the party enjoying occupation of the Property while it is registered in the name of the other party shall pay occupational interest to the other party at the rate of ______%(______percent) per annum calculated on the balance of the purchase price, payable monthly in 4

advance. Occupational interest is payable to______at ______.

7. VAT

7.1 It is recorded that the Property forms part of the assets of a going concern, as more fully set out elsewhere and that it is envisaged that VAT would be payable at a zero rate.

7.2 The Purchaser is liable for the payment of VAT in respect of the purchase price of the Property whether such VAT would be payable at a standard rate or zero rate. In the event that the transaction is not allowed by the Receiver of Revenue as a going concern transaction, VAT at standard rate shall be payable by the Purchaser to the transferring attorneys before registration of transfer and shall have to be included in the amount of any guarantee to be delivered in respect of payment of the purchase price as set out above.

7.3 It is further recorded that the enterprise sold in terms hereof is an income generating business.

7.4 The Seller further guarantees that at the date of signature hereof, up to the date of registration of transfer, the Seller shall be a registered vendor as defined in Section 1 of the Value Added Tax Act and shall be registered in terms of Section 23 of the Act.

7.5 The Purchaser guarantees that at the date of registration of transfer he will be a registered vendor.

7.6 Regarding the sale of the business the following is recorded:

7.6.1 The business represents an enterprise referred to in section 1 of the Value Added Tax Act.

7.6.2 The business shall be an income generating business as at the date of registration of transfer. 5

7.6.3 All components necessary for the conduct of the business as a going concern is in terms hereof sold by the Seller to the Purchaser.

7.6.4 The sale of the business in terms of this Agreement is the sale of a going concern and it is envisaged that VAT would be payable at a zero rate in terms of Section 11(1)(e) of the VAT Act.

7.6.5 The purchase price has been calculated on the assumption that VAT would be payable at a zero rate as set out above.

7.6.6 The Seller and Purchaser hereby undertake to deliver to the transferring attorneys a copy of the relevant VAT Registration Certificate as soon as possible.

7.7 In the event of VAT being levied in respect of such supply at a rate other than 0% (zero percent), the Seller shall be entitled to recover such VAT from the Purchaser.

7.8 In the event of it being determined by the Revenue Authorities that anyone of the persons comprising the Seller is not registered for VAT for the purposes of the transaction recorded in this deed of sale, having the effect that transfer duty instead of VAT is payable, the Seller in question shall be entitled to recover such transfer duty from the Purchaser.

7.9 The amount recoverable pursuant to clauses 7.6 and 7.7 shall be paid by the Purchaser to the Seller by not later than the 3rd (third) business day following delivery by the Seller to the Purchaser of the documentation required in terms of the VAT Act or the Transfer Duty Act (as the case may be) to permit the Purchaser to claim a deduction in respect of such VAT in terms of Section 16(3) of the VAT Act.

8. COST OF TRANSFER

8.1 The Purchaser/s is liable for payment of conveyancing fees in respect of the 6

transfer and all other disbursements and costs in connection with the registration of transfer, such costs being payable on request by the transferring attorneys.

8.2 The Purchaser /s is liable for the costs of drawing this document, if any.

8.3 Any reference to transfer costs, conveyancing fees etc. shall include the VAT payable in respect of the said costs for which the Purchaser shall also be liable.

9. INTEREST ON ARREARS

Notwithstanding any contrary provisions contained herein, the parties specifically agree that, in the event of the registration of transfer being delayed by any circumstances not attributable to the Seller or if any payment is not made on or before due date, the outstanding purchase price or any balance thereof shall bear interest at the prime bank overdraft lending rate from time to time of First National Bank. The said interest shall be calculated as from the due date or the date on which transfer could have been registered, were it not for the delay, both days included.

10. TRANSFER

Transfer of the property shall be passed by Attorneys, ______(hereinafter also referred to as the transferring attorneys) and shall be given and taken as soon as possible.

11. RATES AND TAXES

The rates and taxes and any other charges levied by any government or other authority in respect of the property, including charges for water and electricity, shall be apportioned so that the Seller shall be liable for the portion up to the occupation date, whilst the Purchaser will be liable for the portion as from the occupation date.

12. VOETSTOOTS

12.1 The property is sold subject to all the conditions and servitudes mentioned or referred to in the title deed or as contained in the records of the Deeds Office in Cape Town pertaining to the property. 7

12.2 The property is sold according to the extent thereof as reflected in the title deed of the property. If upon a resurvey of the property the extent thereof should be found to differ from the extent stated in the title deed, the Seller will not be liable for any deficiency and the Purchaser will be entitled to any excess.

12.3 The property is sold subject to the provisions of any road widening scheme, zoning regulations or other law or regulation relating to the property.

12.4 The property is sold voetstoots, as it stands and the Seller does not give any warranties or make any representations, whether express or implied, in respect of the condition or state of repair of the property or the property in general.

12.5 For the avoidance of doubt it is recorded and agreed that the Purchaser does not take over any other asset or liability in relation to the farming business conducted by the Seller on the property, save as specifically agreed in this deed of sale.

12.6 The Purchaser hereby declares that he is fully aware of and satisfied with the condition and state of the property hereby sold as well as the terms and conditions of employment of the employees and the Seller shall not be liable for any defects, whether patent or latent. It is recorded that the Purchaser has conducted his own investigations to determine whether to conclude this agreement of sale.

12.7 If required by the Purchaser, the Purchaser shall for his own account appoint a land surveyor to survey the fixed property or to obtain any diagram in respect of the property.

13. MORTGAGE BOND

This sale is subject to the suspensive condition that a mortgage bond is granted to the Purchaser/s by a financial institution against security of the Property by ______for an amount of R______, failing which this offer shall lapse and the parties shall have no further rights and obligation with regard thereto, including brokerage. The Purchaser/s undertakes to make 8

the necessary application for the loan immediately and to do everything in his capacity to obtain the loan. Should the Purchaser/s fail to make the said application within 14 (fourteen) days, then it shall be deemed that the Purchaser/s has waived the benefit of this clause and this clause shall lapse accordingly and be of no further force and effect.

The provisions of this clause are exclusively for the benefit of the Purchaser/s and the Purchaser/s shall accordingly be entitled to waive the benefits arising from the provisions of this clause at any stage.

14. BROKERAGE

14.1 It is recorded that CAPELAND was the effective cause of this transaction and that it is accordingly entitled to estate agents commission in the amount of R______plus VAT, or alternatively such other amount as the Seller and CAPELAND may have agreed in writing.

14.2 The agents’ entitlement to such commission is unconditional once due and shall be payable upon transfer of the property, or where this agreement is breached by the Purchaser or the Seller, or consensually cancelled, immediately upon such breach or such cancellation. The Seller undertakes to pay the commission and hereby irrevocably authorises the agents, on transfer to deduct the commission plus VAT from any amount it may be holding in trust in terms of this agreement, or, if there is no such amount held or if the proceeds thereof are insufficient to meet the full commission, then the Seller hereby irrevocably instructs the transferring attorneys to pay the amount, or the balance of the amount due, as the case may be, to the agents as a first draw against the proceeds of the sale.

15. BREACH

In the event of the Purchaser failing to fulfill any of the terms and conditions of this Deed of sale, within 10 (ten) days after having received written notice to comply with any of the terms and conditions of this Deed of Sale, by registered post of by telefax from the Seller or his Agent, which notice shall be deemed to have been received by the Purchaser 5 (five) days after the posting thereof or on the same day as the telefaxing thereof, the Seller shall have the right to either: 9

(a) cancel the sale by registered letter or telefax addressed to the Purchaser, in which event the Purchaser shall forfeit all monies paid to the Seller or his Agent in terms hereof, without prejudice to the Seller’s other legal rights and remedies and the right to claim damages; or

(b) claim immediate payment of the purchase price and the fulfillment of all the terms and conditions hereof.

In the event where the agreement is due to the breach by the Purchaser, CAPELAND shall be entitled to claim the commission from the Purchaser.

16. COMPANY OR CC

In the event of the Property being purchased by a trustee for a company or CC to be formed, the said company must be formed within 30 (thirty) days of the date of signature hereof and must ratify this agreement within 7 (seven) days thereafter, failing which it shall be deemed that the initial Purchaser purchased the Property.

The said Purchaser shall then be bound by the terms and conditions of this agreement in his personal capacity.

17. MOVABLE PROPERTY

17.1 The Property is sold together with all fixed and movable property of a permanent nature, including pumps, pipelines, permanent irrigation systems, electrical fittings, pelmets and curtains, rails, build in cupboards and blinds, if any. The Seller warrants that all movables assets contained in Annexure “A” are his sole and exclusive property and are fully paid for and free of any right of retention, mortgage, lien or any other encumbrance, and all fixed and movable property is sold voetstoots.

17.2 Notwithstanding anything to the contrary, ownership of the movable assets as set out above and contained in Annexure “A”, shall only pass to the Purchaser upon date of registration of transfer and receipt of payment of the purchase price. 10

17.3 The Purchaser undertakes to ensure all movable property as from the date of occupation, to the satisfaction of the Seller, until such time as the purchase price has been paid in full, and undertakes to cede such policy to the seller as collateral security, if so required, by the Seller.

18. DOMICILIUM

It is agreed by the parties that their respective addresses as herein before set out shall be the addresses to which all notices or other documents may be sent to either the parties and relating to the performance or non-performance of any of the terms and conditions of this agreement.

19. JURISDICTION

The Purchaser hereby consents to the jurisdiction of the Western Cape High Court, Cape Town (Cape Provincial Division) and to the jurisdiction of any Magistrate’s Court having jurisdiction in respect of his person for any cause arising from this agreement or cancellation of this agreement. The Seller, in his sole discretion, may elect the forum in which to institute any action and may recover all costs incurred including wasted costs of transfer and collection costs on a scale as between an attorney and his own client.

20. VARIATION

This Deed of Sale is the entire agreement between the parties and no amendment hereto or cancellation is valid unless reduced in writing and signed by both parties. The Purchaser acknowledges that no undertakings, promises, warranties or representations have been made by the Seller or his agent save as set out in this deed of sale.

21. OCCUPIER

21.1 The parties expressly declare that they are aware of the provisions of the Extension of Security of Tenure Act, 1997. The farm workers as listed on the annexed “B” are resident on the property and may be entitled to protection in terms of the Act. The parties agree that all risk in respect of any potential claims arising from the provisions of the Act, shall be borne solely by the Purchaser / Seller. 11

21.2 The reference to vacant occupation in clause 5 of this agreement shall not include vacant occupation of the dwellings occupied by the said occupiers.

22. FARMWORKERS

22.1 The farmworkers listed on the attached list Annexure “C” are in the employ of the Seller. The Seller declares that there are no claims pending made by any of the said farmworkers in terms of the Labour Relations Act of 1996 or the Basic Conditions of Employment Act and that no farmworker has any right or claim to extraordinary leave, accumulated leave, payment in lieu of leave, pension or any other similar right, claim or benefit for renumeration or loss of his employment. The Seller shall be liable for payment of any leave or other benefits due or payable to the said farmworkers as at the date of occupation and the Purchaser shall be liable for payment of any such claims or benefits as from the date of occupation.

22.2 (a) The Purchaser undertakes and shall be obliged to employ the said farmworkers on the same or better conditions as in terms of their existing employment agreements;

ALTERNATIVELY

(b) The Seller shall be obliged to terminate the employment agreements of the farmworkers listed in Annexure “C”, which employment agreements are not be taken over by the Purchaser. The Seller shall be liable to pay to the farmworkers any monies or benefits payable in terms of all applicable legislation.

23. SHARES AND / OR RIGHTS TO DELIVER INCLUDED IN THE PURCHASE PRICE

It is recorded that the Seller/s owns the undermentioned shares and/or rights to deliver, which shares and/or rights to deliver are included as part of the assets of the going concern hereby sold to the Purchaser/s. ______12

The Purchaser/s undertakes to apply for membership of the relevant co-operatives/ institutions as soon as possible after signature of his agreement and the Seller/s undertakes to sign the necessary documents for transfer of the said shares to the Purchaser/s as soon as possible, but no later than 30 (thirty) days after registration of transfer.

24. FARMING ACTIVITIES

The Seller shall from the date hereof until the date of transfer, continue to conduct the farming enterprise at his own cost (unless otherwise agreed in this agreement). The Seller shall proceed with farming activities making use of acceptable agricultural principles in the relevant industry.

25. DEBTORS AND CREDITORS

Amounts owing by debtors to the Seller are not included in this sale and the Seller is entitled to recover such debts for his own account. The Seller is also liable for all creditors as at the date of registration of transfer.

26. ELECTRICAL CERTIFICATE

The Seller/s is obliged at his own cost to furnish the Purchaser/s with a certificate that complies with the requirements contained in Government Gazette/s R2920 of 23 October 1992, that the electrical installations of the Property hereby sold comply with the Electrical Installation Regulations of the Occupational Health and Safety Act, 1993.

27. WATER

It is recorded that the water provision to the Property falls under the jurisdiction of the ______Irrigation Board. The Property is listed for ______hectares of irrigation water. Subject to the provisions of the Water Act the Purchaser/s can apply for membership of the said Irrigation Board, which he undertakes to do as soon as possible after signature hereof. The Seller/s shall be obliged to settle all outstanding water levies and taxes on date of registration of transfer. The Purchaser/s is liable for payment of water levies and taxes as from date of occupation of the Property. 13

28. DISCLOSURE

The Purchaser/s expressly declares that he has inspected the Title Deed of the Property and all the assets of the Property sold in terms hereof and that he is fully aware and informed in respect of all the servitude’s, conditions, restrictions and all relevant facts relating to the farming activities, sources of water, access roads et cetera.

29. SPECIAL CONDITIONS

______

30. LAPSE OR OFFER

This offer is irrevocable until 24:00 on ______and is binding on the parties after acceptance hereof by the Seller/s at any time prior to the abovementioned date whether the Purchaser/s has been notified of the acceptance of the offer or not. 14

31. AGENCY

______, acting herein on behalf of CAPELAND, hereby accepts the benefits and obligations of the agent as is set out in this agreement (stipulatio alteri) and in particular of the provisions of clause 15.

THIS DONE AND SIGNED by the parties hereto at the places and on the dated hereafter set forth.

SIGNED by the SELLER/S at ______on the _____ day of ______20____

AS WITNESSES:

1. ______SELLER/S 2. ______

SIGNED by the PURCHASER/S at ______on the _____ day of ______20___

AS WITNESSES:

1. ______PURCHASER/S 2. ______15

SIGNED by the AGENT at ______on the _____ day of ______20____

AS WITNESSES:

1. ______SELLER/S 2. ______16

ANNEXURE “A”

LIST OF MOVABLE PROPERTY INCLUDED AS PER CLAUSE 17 AND LIST OF SHARES AND RIGHTS TO DELIVER IN TERMS OF CLAUSE 23

______17

ANNEXURE “B”

LIST OF OCCUPIERS REFERRED TO IN CLAUSE 21

______18

ANNEXURE “C”

LIST OF FARMWORKERS REFERRED TO IN CLAUSE 22

______