-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZ6ww5vVoak1kIQrK5s8Y6vMJ1ppQ6l60+m56XnhoM3i9iIroIap9wMf28Oe4m0d Ga9JeioHvhcMaCY2/VLqrg== 0000866535-97-000021.txt : 19971216 0000866535-97-000021.hdr.sgml : 19971216 ACCESSION NUMBER: 0000866535-97-000021 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19971215 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SVI HOLDINGS INC CENTRAL INDEX KEY: 0000866535 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PLASTIC PRODUCTS [3080] IRS NUMBER: 841131608 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-51775 FILM NUMBER: 97737784 BUSINESS ADDRESS: STREET 1: 7979 IVANHOE AVENUE STREET 2: STE 500 CITY: LA JOLLA STATE: CA ZIP: 92037 BUSINESS PHONE: 6195512365 MAIL ADDRESS: STREET 1: 7979 IVANHOE AVENUE STREET 2: STE 500 CITY: LA JOLLE STATE: CA ZIP: 92037 FORMER COMPANY: FORMER CONFORMED NAME: WILSON CAPITAL INC DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SOFTLINE LTD CENTRAL INDEX KEY: 0001048746 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 7979 IVANHOE AVE., STE. 500 CITY: LA JOLLA STATE: CA ZIP: 92037 SC 13D 1 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)) 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 - ------------------------------------------------------------------------------ 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. 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:
NAME NUMBER OF SHARES PERCENT OF OUTSTANDING SHARES - ---- ---------------- ----------------------------- Softline Limited 16,536,000 59.27%
(b) Not Applicable (c) The following transaction in the issuer common stock was effected within 60 days of the date of this statement:
Date No.of Shares Sale/Purchase Price per Share 12/04/97 16,536,000 Purchase 2.00
(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. 5 PAGE 5 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. INDEX TO EXHIBITS
Exhibit Number Description - -------- ----------- 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.
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 ---------------------- EX-1 2 SALE OF SHARES AGREEMENT 1 SALE OF SHARES AGREEMENT between SOFTLINE HOLDINGS (PTY) LIMITED (Registration Number 96/00595/07) and SVI HOLDINGS LIMITED (Registration Number - N/A ) 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 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. 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; 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. 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. 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. 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. 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. 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 EX-2 3 SHARE SWAP AGREEMENT 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. 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. 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. 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. 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. 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. 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. 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. 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. 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; 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. 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. 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, 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. 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. 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 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. 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. EX-3 4 RENUNCIATION AGREEMENT 1 RENUNCIATION AGREEMENT between SVI HOLDINGS INC. and HOSKEN CONSOLIDATED INVESTMENTS LIMITED and SOFTLINE LIMITED 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 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. 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. 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. 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. 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. 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. 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. EX-4 5 SUBSCRIPTION AGREEMENT 1 SUBSCRIPTION AGREEMENT between HOSKEN CONSOLIDATED INVESTMENTS LIMITED and SOFTLINE LIMITED and THE PERSONS IDENTIFIED IN SCHEDULE 1 HERETO 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 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; 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 - 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. 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"); 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; 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. 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. 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. 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. 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. 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. 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 EX-5 6 INDIVISIBLE AGREEMENT 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") 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. 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 -----END PRIVACY-ENHANCED MESSAGE-----