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Dr DS Grieve investor summary 27 feb 2006
 

Dr DS Grieve investor summary 27 feb 2006

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Early financial proposal prepared by Dr DS Grieve to coax and entice early investors into his web of deceit and lies. The walls came crumbling down in December 2009 when an investor called for return ...

Early financial proposal prepared by Dr DS Grieve to coax and entice early investors into his web of deceit and lies. The walls came crumbling down in December 2009 when an investor called for return of funds and it was discovered that Grieve was paying early investors interest direct from investments by later investors - a bonafide Ponzi scheme.

Grieve submitted all business into voluntary liquidation after an initial application for simultaneous liquidation was rejected by The Master of The High Court in Pretoria.

Grieve defrauded all his investors, former patients, friends and family.

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    Dr DS Grieve investor summary 27 feb 2006  Dr DS Grieve investor summary 27 feb 2006 Document Transcript

    • Confidential Proposal by Dr D S Grieve On DR DS Grieve Bridging Solutions (Pty) Ltd ShareholdingFor attention: __________________________ Dr D S Grieve 27-02-2006
    • Table of contents:1. Executive summary page 32. Introduction page 43. Typical financial examples page 74. Some of the standard procedures & a SWOT analysis page 105. Marketing & current clientele page 11 5.1 marketing to current clientele page 11 5.2 new target market page 11 5.3 Agents page 11 5.4 Continued support page 11 5.5 General page 116. Annexure “A” (Contract examples) Annexure A7. Annexure “B” (Cash flow example) Annexure B 2
    • 1. Executive SummaryThank you for allowing me the opportunity to introduce you to my business concept. Ihave taken this presentation and divided it into sections allowing me to introducemyself, the plan, the projections, the returns, the concepts and the basic structure ofthe business.In concept my plan is to lend money to clients introduced to me by attorneys. All theseclients should have a property transaction in progress. The principle allows for shortterm funding as a bridging solution for people wanting their proceeds sooner thantheir deals are registered at the deeds office.What makes this very secure is, that at no time do I lend money without a guaranteebeing held from a bank. As will be discussed in detail later.There are two contracts I currently use:1. Transfer duty bridging: This is where I charge the client a fee of 3,5% plus vat for the contract and an interest of prime plus 4% for the duration of the agreement.2. Transaction Bridging: This type of deal is where someone wants his or her property profits before the deal has been registered at the deeds office. For this type of bridging a fee of 4,5% is levied. If the date of registration takes longer than 30 days a penalty fee of R 1,32 per day per thousand rand plus vat is levied.I would not limit this business by only looking at these two types of contracts, howeverthat is what has been working very well for the last two years. The net effect is apotential return of between 18 to 22% per annum to all informed shareholders whoinvest in this business.The initial intention is to raise 10 million rand from shareholders to give eachshareholder a share in Dr DS Grieve Bridging Solutions(Pty) Ltd as to legally bring theirmoney into the business in a share purchase or shareholders loan and then pay theirreturns out to them on a profit share basis linked to the total each shareholder, invests.Should a shareholder at any stage wish to withdraw his investment he would need togive a reasonable two to three month notice to withdraw his cash out of the business.He would then need to return his share holding to the company when he receives hisfunds. The monies would be paid out in the form of interest.Basically this opportunity gives the client the ideal chance to earn a good secure returnon his money without having any sleepless nights. 3
    • More details follow……2. IntroductionA little about myself:Born: 28 August 1970Matriculated: 1989Studied the following:MBChB (General Practioner) Worked as such for 5 years while I studied further throughManchester Business School and did an AMP that included the following subjects:  Financial accounting  Management accounting  Economics  Business management  Human resourcesArrays of other subjects in the business field were also studied.I left medicine and purchased Cynthias Restaurant (Maroelana) in 2003, which I havemanaged very successfully for the past three and a half years.I am also a shareholder and a member of the board of trustees of the WildernessProtea Hotel.I also have been running a small bridging business with a debtor’s book of varyingbetween R 4 -5million for the last two years, and this is the promising business I amreferring to.I have already raised almost R 5 million rand for this business and some of that moneyis already working for my investor and I. Of this 2 million rand is my own funds andcontribution to the business.I am looking at raising another R 5 million to invest in this project structure in the stylethat will explain itself as you continue to peruse this document.A little more about the business:I am planning to structure the business in a Pty (ltd). The plan is to give eachshareholder a share. Each investor’s share will entitle him to a profit share of apercentage equal to his capital contribution, as will be explained in detail by means ofan example. The normal shareholding will give him the legal right to have his profitspaid out either by way of dividends or interests, giving us the legal right to take thefunds and apply them to the business of bridging. The shares also give us a legalchannel of distributing the profits to the investors. Each investor or preference shareholder will have the right to peruse the management statements and all financialrecords at all times. 4
    • The full intentions from the outset will be, to have the books audited by an externalauditing firm and to have non-audited management statements available on a monthlybasis.The shareholder will be able to look forward to having management statements sentto him for a calendar month no later than the 15th of the following month andpayments will be affected on the 15th of every month for the returns accrued in theprevious month.I have already built up a fairly strong clientele and will easily expand this by theextensive marketing I am planning to do.Currently I have raised the following funds: 1. Myself R 2 000 000-00 2. Investor 1 & 2 R 3 000 000-00I am looking to find at least another R 5 000 000-00 or more to be used as alreadyexplained. I would also like to achieve this with as few as possible, hand selectedinformed investors.I will have the books audited by JG Els Auditors on an annual basis. My in-house auditorand myself will handle all contracts and management statements. For referencepurposes the auditor’s address and details are as follows: J.G. Els Charted Accountants (SA) PO Box 16614 Lyttleton 0140 1st floor Agnone House 53 Adriana Circle Gateway Park RooihuiskraalI have attached copies of my current agreements to this document as examples inannexure ‘A’. Please realise they are as used in my current company DR DS GrieveIncorporated. They will obviously need to be changed to the new entities name.My intention is to pay almost 50% of all proceeds directly to the shareholders, as I willexplain in the next chapter. There will be a few direct overheads I will deduct for thesole purpose of business over heads, I will then make a distribution on the basis of 50%of the profits multiplied by the portion each investor holds as capital of the totalcapital. E.g.Shareholder holds 1/10 of the total capital of R 10 000 000-00 5
    • That means he has invested R 1 000 000-00If the profit after predetermined overheads is R 380 000-00 per month he receives 1/10of 50%.The calculation is as follows:GP= R 380 00050% paid out to investors (R 380 000-00 x 50% =R 190 000-00)Investor B receives his share on the 15th of the month which would be calculated as1/10th of R 190 000-00= R 19 000-00pm.More detailed calculations and explanation of predetermined overheads follows in thenext chapter.Gearing is also an option to be utilised that could potentially achieve returns for theinvestors up to 30% per year. An example of this is illustrated by a document inannexure “B”.References to my business: 1. Dawid Fourie tell: 0828924763 2. Jaapie Combrink tell: 0833571919 3. Typical financial examples 6
    • A Typical monthly income statement would look something as follows.Income generated from a capital base of 10 Million based on an average of 4% permonth.Income from profits, fees & Interest R 400 000-00Income from contracts R 10 000-00Gross profit R 410 000-00Direct overheadsAudit & book keeping fees R 5 000-00Telephone & Fax R 2 000-00Bank fees & interest R 1 000-00Stationary & other R 2 000-00Provision for bad debts R 10 000-00Indirect overheads R 20 000-00Gross profit R 380 000-0050% is distributed to invetors380k/2 = R 190 000-00Each shareholder is then paid his return based onhis investment account. If he has R 2 Million in the systemhe would receive 2/10 x R190 000-00 whichis then 38 000-00 that x 12 months would givehim a return of 456 000-00 which is 22.8%.Not too bad!Profit retained after distribution R 190 000-00To be applied to indirect overheads:  Marketing  Entertaining clients  Petrol  Cell phone  Support staff  Office rental, electricity, etc.  Salaries  Furniture  Computers  Fax machines, copiers  Other, including my drawings 7
    • Basically I will perform all marketing, entertainment, rentals and other overheads onmy account. For this I take half the distributable income to cover the necessaryexpenses to perform the business and the remainder I draw out and leave thecompany with a zero profit balance each year so that there is no taxable retainedincome in the business. This does leave all distributions taxable in each individual’shands.On the model currently presented we should achieve an average return of 18-22% perannum as a return for each investor, this is not a bad return considering the currentmoney market rates are less than 6% per annum. This is obviously a before tax profit.What also makes this an attractive investment is that all loans are based on bankguarantees and/or backed by attorney’s undertakings. If not, sessions and bonds areput in place over fixed property with sufficient equity in place. So the capital will beand is always well protected.Liabilities.It would be of good service to the company if an overdraft facility can be put in placeto ensure that the entire capital amount can be used to build a debtors book of R10million rand.This would ensure that contracts can roll over and that no clients have to wait formoney to return before they borrow from us.This would in short ensure that every cent from each investor could work to themaximum for him or her self.A typical & idealistic balance sheet should read as follows:AssetsDebtors book R 10 000 000-00Current account (investors returns due) R 190 000-00Total Assets R 10 190 000-00LiabilitiesMembers loan accounts R 10 000 000-00Members returns due R 190 000-00Total Liabilities R 10 190 000-00The overdraft facility will be a potential liability however that will have a positive netresult for the following reasons:  Allow for faster money movement.  Allow for the roll over of contracts and then each investor would benefit from a slightly higher return.  Would allow for every cent to be borrowed out and thus allow us to have a lower reserve level for current clientele.  Would allow for higher earnings percentage 8
    • A cash flow for a 12 month period is attached as annexure ‘B’ this represents theincome and expenses anticipated for the next twelve months. However this is stillsubject to change as far as the tax component is concerned, that being if we need todeclare a dividend as apposed to paying out a variable interest to shareholders, this isstill subject to auditors investigation and will be detailed as soon as is finalised.Further a scenario when gearing of 50% is used is also sketched as part of annexure ‘B’.4. Some of the standard procedures & a SWOT analysis 9
    •  Monthly management statements would be generated and e-mailed to all investors  Payments to investors/members would be made on the 15th of every month  All contracts, undertakings would be available for all investors to peruse  Any issue should be resolved through the company’s auditors  Any shareholder wishing to withdraw will have to notify us of his or her intention of such in writing and also resign as a shareholder of the company  Such withdrawal could take up to 3 months to effect  Occasionally a free agent may be used who will be given a commission for his duties however this will be seen as an out of contract arrangement and his commission would be in addition to our normal fees charged. Therefore it would not affect our profitability.This list is also something that will be added to, on a frequent basis so as to keep allinvestors and financial institutions happy.Strengths: Weaknesses:  Quick & speedy results to  Other players in the market with clients lower rates  Super fast turn around times on  Potential changes to the banking applications act that may affect our way of  Easy secure way to generate a doing business cash flow  Not enough capital for the  Can be managed with very little demand, even though there are office space and fixed monthly other players in the market place overheads  This investment is for cash flow  This investment is a cash flow and not for capital growth investmentOpportunities: Threats:  Many attorneys looking for  Interest rates changing could bridging solutions for their reduce the demand, however there clients are other “financing”  The whole country is our opportunities available oyster, there is a massive  Other players as competition could demand for large amounts of place pressure on the demand. money, for short term bridging  Once a large debtors book has been built up, a bank will help with gearing to finance another 50-60% of the book to increase the returns dramatically5. Marketing and Current Clientele5.1 Marketing to current clientele 10
    • I would strongly focus on my current client on making them very happy with my service levels and to ensure that they talk to their friends so that word of mouth does the rest. My current customer list is small and can be easily extended given the extra capital. I currently service the following customers frequently with substantial debtors books in each of their practices:  Bert Smith Attorneys  Kondred Kunssman Attorneys  Salti Verziano (sic Salvatore Veneziano )  MC Van Der Berg  Peet Viljoen  And a few others on a more ad hoc basis5.2 New target market I have my eyes set on various practices for the new capital generated, and these are just a few of the first potential clients I will approach. Then any investor with any relation or connection to an attorney’s firm is welcome to give me a lead and I will soon follow it up and show them why we have grown so fast.5.3 Agents I have occasionally made use of agents too. This is where a third party is involved in brining in a contract, I normally charge an extra fee which is payable to the agent and this has no impact on our normal profit.5.4 Continued support All these clients like to be treated and made to feel special. So the whole wine and dine thing becomes an important thing to do. So I need to treat them every now and again all these “functions” are financed out of my half of the profits and has no impact on the profitability to the investors5.5 General The list of attorneys and clients to provide with bridging solutions is endless and carries on and on. It is not just my intention to stay in Pretoria looking for clients. I have a few leads into Johannesburg and will be focusing on the whole of Gauteng in this coming year and then the year after that perhaps the whole of South Africa. One of the fastest ways we have grown was by referral and word of mouth, and on average we can grow by 2 million per month with almost no effort. So with some effort I would certainly get the desired result which would be to grow a debtors book of in excess of R 10 000 000-00, in fact my current debtors book is 11
    • already over R 5 million and I am already having to show clients away, ratherterrible I would say!!! 12
    • Annexure “A”: Sample contracts Bridging agreement Dr D S Grieve Incorporated REG 2000/012109/21P.O. Box 12095 Tel: David Grieve – 082 927 9734 13
    • Clubview 0014 Fax: 012 – 460 0793 BRIDGING Agreement (individual) To apply for bridging at our company, the client and attorney must complete our application forms. Together with these forms we need the following documentation:  Bond approval letter (formally granted)  Offer to purchase (not for 2nd bonds)  Copy of cancellation figures (if applicable)  Copy of signed guarantee issued for cancellation figure (if applicable)  Breakdown of costs – from attorney  Copy of latest water & lights for a further bond or take over bonds  Copy of rates & taxes figures on property with selling of the property  Copy of I.D.  Letter of undertaking/guarantee in favour of Dr D S Grieve Inc for the 100% amount  Letter of confirmation o That all the clients has signed all transfer documentation; o That, if applicable, any deposits has been paid o When registration is expected (from attorney)  If clients are married in community of property, both parties must sign application forms  If client is married out of community of property but the property is registered in more than one persons name, all parties need to sign the application forms  If the property is in a Trust, Company or CC’s name, we need the relevant documentation  If the property is in a Trust, Company or CC’s name, we also need a deed of surety document signed by all the partners/directors/trustees, separately.  It there is a subject transaction involved; we also need a copy of that Deed of Sale as well as the bond grant letter, cancellation figures, rates & taxes. We offer a running period of 30 days at 4,5 % plus VAT calculated on the 80 % amount. If the transaction exceeds the 30day period, we then charge an additional fee of R1-32 per R1000-00 per day plus VAT. We would like to confirm that at first we only advance 80 % of the undertaking amount, meaning that should the undertaking be for R12 500-00 we only advance R10 000-00. On date of registration we use of the 20 % amount that was held back to cover our costs and then we will refund the client with the difference. Feel free to contact me should you have any further inquiries regarding this matter. We look forward to being of assistance to you. Yours faithfully, DAVID GRIEVECONSULTANTS: Dr D S Grieve Incorporated REFERRING PARTY:DAVID: 082 927 9734Sanet Botha: 072 142 3966 2000/012109/21 CONTACT NUMBER: Reference (file) number: _____________________ 14
    • Fax: (012) 460 0793 BRIDGING AGREEMENT ENTERED INTO BY AND BETWEEN Dr D S Grieve Incorporated (HEREINAFTER REFERRED TO AS “DR D S Grieve Inc”) ANDBY: ________________________________________________________________ (HEREINAFTER REFERRED TO AS “THE CLIENT”) CLIENT / APPLICANT INFORMATIONINDIVIDUALSurname : _____________________________________________First names : ___________________________________________Identity Number : _______________________________________(Copy attached)Passport Number : _____________________________________(If no ID number)Marital Status : Single ‫ڤ‬ Married ANC ‫ڤ‬ Married COP ‫ڤ‬ Divorced ‫ڤ‬ Widow/er ‫ڤ‬Postal Address : ______________________________________________________________Residential Address : _________________________________________________________(which is the client’s chosen Domicilium citandi et executandi as contemplated inClause 9.1.2 hereunder)Home Tel No : _________________ Cell : __________________ Fax : _________________Employer name : _________________________ Work Tel No: ________________________LEGAL ENTITY – Company of Close Corporation or Trust (If applicable)Name : ____________________________ Registration Number : ______________________Postal Address : ______________________________________________________________Registered Office Address : ____________________________________________________(which is the client’s chosen Domicilium citandi et executandi as contemplated inClause 9.1.2 hereunder)Tel No : _____________________ Cell : __________________ Fax No: ________________ADDITIONAL INFORMATION (Y=Yes, N=No, NA=Not Applicable)Copy of Sale agreement? Y ‫ ڤ‬AN ‫ ڤ‬N ‫ ڤ‬Proof of Cancellation figures? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬Suspensive conditions fulfilled? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ Written proof of bond? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ 15
    • Sectional title register open? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ Copy of Water & Elec Acc? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬Letter of Undertaking attached? Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ Copy of CC/Company docs. Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬Resolution to sell property Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ Resolution to sign contract(if CC/Company) if CC/Company Y ‫ ڤ‬N ‫ ڤ‬NA ‫ڤ‬ACCOUNT DETAILS FOR DEPOSIT TO BE MADE:1. BANK: ______________________ 2. ACCOUNT NO: __________________________3. BRANCH NO: ________________ 4. TYPE OF ACCOUNT: ____________________5. ACCOUNT NAME : _______________________________________________________TRANSACTION DETAILS:6. PARTIES NAMES: ______________________________________________________7. PROPERTY DESCRIPTION: _____________________________________________8. ATTORNEY DETAILS: __________________________________________________9. CONTACT NUMBERS: __________________________________________________10. CONTACT PERSON: ____________________________________________________11. AMOUNT REQUESTED (MAXIMUM 80 % OF SURPLUS AVAILABLE): TO BE COMPLETED BY ATTORNEY12. SELLING PRICE/BOND VALUE R ________________________________________ Less: All costs & expenses R ________________________________________ Bonds/encumbrances R _____________ Bond holder ________________ SURPLUS AVAILABLE R ________________________________________13. SURPLUS SOLD (100 %)14. ADDITIONAL FEE AFTER 30-DAY INITIAL PERIOD (R1-25 per R1000-00 per R1000-00 per day + VAT) Calculated on the amount advanced1. RECORDAL: FOR OFFICE USE ONLY15. PURCHASE PRICE AT 4.5 % + VAT 1.1 It is recorded and agreed that the Client has entered into the transaction as16. DATE AMOUNT ADVANCED recorded above from which a surplus has resulted CHQ NO 16
    • 1.2 On acceptance by Dr D S Grieve Inc of this Agreement and against payment by Dr D S Grieve Inc to the Client, the Client hereby sells his/her/its rights to surplus, as recorded, to Dr D S Grieve Inc who accepts same.2. PROCEDURE: In the event of the Client wishing to sell his/her/its rights to the surplus, the following procedure is to implemented: 2.1 The Client shall complete and sign all and any documentation required by Dr D S Grieve Inc from time to time; 2.2 The Client shall furnish to Dr D S Grieve Inc all and any documentation Required by Dr D S Grieve Inc in order to give effect to this Bridging Agreement; 2.3 Upon receipt of the Agreement, Dr D S Grieve Inc shall, at its discretion notify the Client in writing of its willingness to accept the offer or not. Dr D S Grieve Inc shall notify the Client of its election within a reasonable time of receipt of the offer: 2.4 The acceptance by Dr D S Grieve Inc of the terms and conditions stated in this Agreement shall constitute a valid and binding Bridging agreement and the Client sells his/her/its rights to the surplus to Dr D S Grieve Inc. 2.5 The Conveyancer / Bond Attorney will furnish Dr D S Grieve Inc with a Letter of Undertaking to pay Dr D S Grieve Inc the surplus sold on date of registration of transfer of the transaction as recorded above; 2.6 On conclusion of the Bridging Agreement, Dr D S Grieve Inc shall pay to the client 80 % of the surplus sold, as soon as it is reasonably possible after the Agreement is accepted; 2.7 The Conveyancer / Bond Attorney will pay to Dr D S Grieve Inc the surplus sold in full as reflected in this Agreement together with any fees payable to Dr D S Grieve Inc on the terms and conditions contemplated in this Agreement; 2.8 Upon receipt by Dr D S Grieve Inc of payment of the surplus sold in full from the Conveyancer / Bond Attorney on behalf of the Client, the purchase price, less the surplus sold less the fees (the final payment) shall be paid by Dr D S Grieve Inc to the Client, if applicable; 2.9 The final payment shall be paid to the client by Dr D S Grieve Inc, if applicable on the same day it is received and cleared in the banking account or when Dr D S Grieve Inc is notified of the payment and it is subsequently cleared and if this day is a Saturday, Sunday or Public Holiday, then the first working day thereafter.3. WARRANTIES – CLIENT: 17
    • The Client warrants (and each warranty shall be deemed to be a material warranty relied upon by Dr D S Grieve Inc in concluding this agreement) in favour of Dr D S Grieve Inc that: 3.1 The sale agreement is a legally binding agreement which is enforceable in law and which contains all the terms and conditions between the purchaser and the client; 3.2 To the extent that the sale agreement contains any suspensive conditions, such conditions have been fulfilled; 3.3 The client is not aware of any facts or circumstances which may cause a delay in the transfer of the property referred to in the sale agreement; or registration of the bond. 3.4 The client shall not terminate the Conveyancer / Bond Attorney’s mandate in any circumstances or for whatever reason, save where the Conveyancer / Bond Attorney has acted dishonestly, or where the Conveyancer / Bond Attorney has breached a material term of the relationship; 3.5 The client shall keep Dr D S Grieve Inc apprised in regard to matters relating to the transfer of the property or registration of the Bond, in general and in particular in regard to any event or circumstances which may arise subsequent to the signing of this agreement; 3.6 The client shall not agree to nor effect any amendments to the sale agreement or Bond documents without prior to written consent of Dr D S Grieve Inc. 3.7 The information contained herein is correct, complete and accurate in every way; 3.8 The balance owing to the mortgagor is the amount owing immediately proceeding the signature of this agreement; 3.9 The client has complied timeously with all his/her/its obligations owed to the mortgagor in respect of the mortgage bond registered over the property; 3.10 The client has undertaken not to encumber or hypothecate the property in any manner what is inconsistent with any matter, acknowledgement or warranty contained in this agreement; 3.11 No other person has any claim to the surplus or ancillary rights nor the rights and claims ceded; 3.12 The client acknowledges that Dr D S Grieve Inc has relied on the correctness of the above warranties in determining to conclude this agreement and to the extent that Dr D S Grieve Inc may itself at any time make any independent enquiries as to the correctness or otherwise of the information and/or warranties; 3.13 No other undertakings have been made or given which would reduce the proceeds to an amount lower than the amount discounted and payable to Dr D S Grieve Inc.4. PAYMENT 18
    • 4.1 The surplus sold, together with all fees referred to in Clause 5 below, shall be paid to Dr D S Grieve Inc by the Conveyancer / Bond Attorney on behalf of the Client on date of registration of transfer of the transaction or by the client within 120 (one hundred and twenty) days of the surplus paid to the Client by Dr D S Grieve Inc. 4.2 Notwithstanding what is contained in Clause 4.1 above, and without prejudice to any rights that Dr D S Grieve Inc may have in terms of this Agreement and/or in law, Dr D S Grieve Inc shall in the event of it not receiving payment of the surplus sold and fees on the dates stated in 4.1 above, be entitled at its sole discretion to extend the payment date in respect of the date of payment of the said surplus sold and the fees and any other terms relating thereto. 4.3 Should a shortfall occur after payment has been received form the Conveyancer / Bond Attorney in terms of the Letter of Undertaking, the shortfall shall be payable by the Client to Dr D S Grieve Inc within 7 (seven) days after demand has been made for such payment. 4.4 In the event of the transaction being cancelled, the Client and/or Conveyancer / Bond Attorney shall immediately advise Dr D S Grieve Inc within 24 (twenty four) hours of such occurrence and the client shall be liable to pay the surplus sold and fees referred to in Clause 5 below, within 7 (seven) days of date of cancellation.5. FEES 5.1 It is recorded and agreed that in addition to the Client paying Dr D S Grieve Inc 80 % of the surplus sold as stated in Paragraph 12 above, the Client shall be liable for fees as stated hereunder. 5.2 The client shall pay Dr D S Grieve Inc a fee of 4.5 % plus VAT of the amount advanced for the initial fixed period of 30 days calculated from the date that payment was made by Dr D S Grieve Inc to the client. 5.3 In the event of the transaction exceeding the initial 30 day period as contemplated in clause 5.2 above the Client shall pay Dr D S Grieve Inc an additional fee equal to R1-25 plus VAT per R1000-00 per day of the amount advanced calculated from the first day after the initial period until such date as Dr D S Grieve Inc received payment of all amounts contemplated in terms of this agreement.6. BREACH Should the Client: 6.1 Fail to make payment of any amount owing in terms of this agreement and fails to remedy such breach within 7 (seven) days of receipt of notice of such failure; or 6.2 Commit a breach of any of the terms, conditions and/or warranties of this agreement or if any surety for, or co-principal debtor with the Client breaches any of the terms, conditions and/or warranties of any agreement between it and Dr D S Grieve Inc, and fails to remedy such breach within 7 (seven) days of receipt of notice of such breach, or 6.3 Allow any judgement against it to remain unsatisfied for a period of 14 (fourteen) days; or commit any act referred to as an act of Insolvency in the Insolvency Act No 24 of 1934 (as amended); or 19
    • 6.4 Compromise or attempt to compromise, or defer payment of any debt owing by it to any of its Creditors; or 6.5 Be provisionally or finally sequestrated in the event of the client being a natural person or partnership; 6.6 Be provisionally or finally wound up, liquidated or placed under judicial management in the event of the Client being a Company or Close Company; Then upon the happening of any of the aforesaid events, Dr D S Grieve Inc shall have the right without prejudice to any other rights, which may thereupon be available to it, to: claim immediate payment of the outstanding amounts due in terms of this agreement.7. CERTIFICATE BY Dr D S Grieve Inc A Certificate under the signature of Dr D S Grieve Inc (the appointment or qualification or authority of such person signing on behalf of Dr D S Grieve Inc need not be proved) as to the amount due and/or owing by the Client and/or Dr D S Grieve Inc, at any time subsequent to the signature hereof and the due date for repayment of such amount, and/or the extent of the Client’s obligations hereunder, and/or the computation of the amount due and/or owing by the Client, shall be – 7.1 Binding on the Client and prima facie proof of the amount of the Client’s indebtedness hereunder; and 7.2 Valid and enforceable as liquid document against the Client for the purpose of obtaining provisional sentence or Judgement against the Client.8. SECURITY FOR LEGAL COSTS The Client does irrevocably waive and abandon any right that it may have, to call upon Dr D S Grieve Inc, in litigation or other proceedings, to furnish security for costs, whether such right is embodied in the Companies Act No. 61 of 1973 (as amended), or the Magistrate’s Court Act No. 32 of 1944 (as amended)), or the Supreme Court Act No. 59 of 1959 (as amended), or Rules promulgated pursuant to or in connection with any of the aforesaid Acts.9. DOMICILIUM CITANDI ET EXECUTANDI 20
    • 9.1 The parties choose as their domicilia citandi et executandi for all purposes Under this agreement, whether in respect of court process, notices or other documents or communications of whatsoever nature (including the exercise of any option), the following address: 9.1.1 Dr D S Grieve Inc Physical: Plot 367 Cornwall Hill Estate Irene Postal: P.O. Box 12095 Clubview 0014 Telefax: 012 – 460 0793 9.1.2 CLIENT The given address as reflected by the client on the client information sheet on page 1 and 2 of this agreement.10. GENERAL 10.1 Dr D S Grieve Inc shall be entitled to cede and/or assign its rights against the Client as well as any of its rights in terms of this agreement, and in so doing shall be entitled to fragment such rights so that a number of persons or entities may become the transferees of such rights. 10.2 The Client shall not be entitled to cede any of its rights or assign any of its rights and obligations in terms of this agreement without the prior written Consent of Dr D S Grieve. 10.3 This agreement constitutes the whole agreement between the Client and Dr D S Grieve and no addition to or variation, agreed cancellation or novation of this agreement and no waiver of any rights arising from this agreement or its breach or termination shall be of any force or effect unless reduced to writing and signed by the Client and Dr D S Grieve Inc. 10.4 Any provision in this agreement, which is found to be inoperative, shall be severable from the remaining provisions, which remaining provisions shall be deemed to be the agreement between the Client and Dr D S Grieve Inc. 10.5 The Client agrees that Dr D S Grieve Inc may perform any credit check prior to the accepting of this agreement and at any time thereafter.DATED _____________________ ON THIS THE _____ DAY OF ______________2004.CLIENT : _______________________________________________________Dr D S Grieve Inc __________________________________________________ SCHEDULE 1 21
    • TRANSACTION DETAIL:1. PARTIES NAMES: _________________________________________________2. PROPERTY DESCRIPTION: __________________________________________WARRANTIES: CONVEYANCER / BOND ATTORNEYThe Conveyancer / Bond Attorney warrants (and each warranty shall be deemed to be a materialwarranty relied upon by Dr D S Grieve Inc in concluding this agreement) in favour of Dr D SGrieve Inc that:1. The sale agreement is a legally binding agreement which is enforceable in law and which contains all the terms and conditions between the purchaser and the client;2. To the extent that the sale agreement contains any suspensive conditions, such conditions have been fulfilled;3. The Conveyancer / Bond Attorney has been instructed to attend to and is proceeding with the transfer of the property; or registration of the bond;4. The Conveyancer / Bond Attorney has received an irrevocable instruction that upon transfer of the property or registration of the Bond, he/she is to make payment of the surplus to Dr D S Grieve Inc and that the Conveyancer / Bond Attorney has accepted such instructions and that Dr D S Grieve Inc will receive an independent undertaking from the Conveyancer / Bond Attorney which shall not in any way derogate from this warranty.5. The balance owing to the mortgagor is the amount owing immediately proceeding the signature of this agreement;6. The client has complied timeously with all his/her/its obligations owed to the mortgagor in respect of the Mortgage bond registered over the property;7. No other person has any claim to the surplus or ancillary rights nor the rights and claims ceded;8. No other undertakings have been made or given which would reduce the proceeds to an amount lower than the amount discounted and payable to Dr D S Grieve Inc;9. All relevant documentation required for transfer of the property involved or the registration of the bond, have been signed by all relevant parties.______________________________________ _______________________ATTORNEY DATE______________________________________ _______________________Dr D S Grieve Inc 22
    • Sample agreement Transfer duty 23
    • Dr D S Grieve Incorporated Reg 2000/012109/21 Sanet Botha P.O. Box 12095 David Grieve Clubview 0824610083 0014 082 927 9734 TRANSFER DUTY FINANCING AGREEMENT Entered into between Dr D S Grieve Inc Registration number: 2000/012109/21 (hereinafter referred to as “Dr D S Grieve Inc”) AND ATTORNEY FIRM’S NAME: ___________________________________________ (Hereinafter referred to as “The Attorney”) THIRD PARTY AGREEMENT PARTICULARSSELLERS NAME _______________________________________________PURCHASER’S NAME __________________________________________ (iii) PURCHASE PRICE R____________________________________________ (iv) BOND GRANTOR ______________________________________________ (v) BOND AMOUNT R_____________________________________________ (vi) PROPERTY DESCRIPTION ______________________________________ _______________________________________________________________ B. TRANSACTION DETAILS (i) COMMENCEMENT DATE _______________________________________ (ii) MAXIMUM CAPITAL TO BE ADVANCED _________________________ COMPRISING OF: - TRANSFER DUTY R_________________________________________ - RATES & TAXES R __________________________________________ Fax: 012 – 460 0793 ______________ Initial (iii) ADMINISTRATION FEE (3 % PLUS VAT) MINIMUM R150 R________________________ 24
    • (iv) PRINCIPAL DEBT COMPRISING OF MAXIMUM }Office use CAPITAL AND ADMINISTRATION FEE R __________________(v) FINANCE CHARGES AT THE RATE OF 4 % ABOVE THE PRIME OVERDRAFT RATE (AS QUOTED BY STANDARD BANK OF SOUTH AFRICA LIMITED) AND CALCULATED DAILY AND PAYABLE ON THE AMOUNT ADVANCED FROM THE COMMENCEMENT DATE TO DATE OF REPAYMENT.C. ATTORNEY INFORMATION(i) TRUST ACCOUNT: BANK NAME _________________________________(ii) ACCOUNT NAME: ______________________________________________(iii) BRANCH: _____________________________________________________(iv) ACCOUNT NUMBER: ___________________________________________ ______________ Fax: 012 460 0793 InitialD. TERMS AND CONDITIONS 1. THE ATTORNEY’S OBLIGATIONS 25
    • The Attorney undertakes unto and in favour of Dr D S Grieve Inc that: (i) The maximum capital sum will only be utilised for the purpose of the payment of Transfer Duty and/or Rates and Taxes, as the case may be, and for no other purpose whatsoever. (ii) The maximum capital sum shall be deposited directly into the Attorneys Trust Account. (iii) The Attorney will, on request, furnish a certified copy of the Transfer Duty receipt reflecting the payment of the Transfer Duty to the South African Revenue Services on demand to Dr D S Grieve Inc.2. THE ATTORNEY’S WARRANTIESThe Attorney warrants unto and in favour of Dr D S Grieve Inc that: (i) an Agreement of Sale for the property (as referred to in A of the Agreement) has been concluded and all suspensive conditions in relation thereto have been fulfilled or waived. (ii) All material facts relating to the transaction are true and correct in every aspect.3. THE ATTORNEY’S UNDERTAKINGSThe Attorney hereby irrevocably undertakes to: (i) pay Dr D S Grieve Inc the Transfer Duty and/or Rates and Taxes financed within a period of 72 hours from the date of registration of transfer of theproperty as described above. (ii) pay Dr D S Grieve Inc the administration fee and finance charges as set out above within a period of 72 hours from the date of registration of transfer of the property as described above. (iii) in the event of cancellation of the transaction, to pay to Dr D S Grieve Inc all the amounts due including the administration fee and finance charges within a period of 30 days after cancellation. (iv) pay Dr D S Grieve Inc on demand all the amounts due including the administration fee and finance charges in the event of the transaction being outstanding for a period of more than 90 days. Dr D S Grieve Inc shall be entitled at its sole discretion to extend the payment date to such a date as it may be prepared to accept. The Attorney shall not be entitled to rely on any such extended payment date, unless it has received written confirmation from an authorised Director of Dr D S Grieve Inc to this effect.4. CERTIFICATE OF INDEBTEDNESSA certificate under the hand of any Manager and/or Director (whose appointment is shall not benecessary to prove) for the time being of Dr D S Grieve Inc, as to any amounts due or owingby the Attorney in terms of or arising out of this Agreement, shall be prima facie proof of suchamounts for all purposes including pleadings, provisional sentence and summary judgementproceedings. _____________ Fax: 012 – 460 0793 Initials5. GENERAL 26
    • (i) It is agreed that each clause of this Agreement is severable, the one from the other, and if any clause is found to be defective or unenforceable for any competent court, then the remaining clauses shall be of full force and effect and constitute to be of full force and effect. (ii) No addition to or variation, agreed cancellation or novation of this agreement and no waiver of any rights arising from this agreement or its breach or termination shall be of any force or effect unless educed to writing and signed by both the Attorney and an authorised Director of Dr D S Grieve Inc. ADDITIONAL DOCUMENTATION REQUIRED COPY OF RATES & TAXES ACCOUNT (to be furnished at all times when Requesting Rates & Taxes) COPY OF SALE AGREEMENT (to be furnished if the requested capital amount is above R10 000-00) PROOF OF BOND/FUNDS (to be furnished if the requested capital amount is above R 15 000-00)THUS DONE AND SIGNED by the parties at the places and on the dates reflectedbeneath signatures.AS WITNESS:1. ___________________________ _____________________________ Dr D S Grieve Inc DATE: ___________________ PLACE: ___________________AS WITNESS:1. ____________________________ ______________________________ THE ATTORNEY (SIGNATURE) DATE: ____________________ PLACE: ___________________ CONTACT PERSON: ___________________________ Fax : 012 – 460 0793 _____________ Initials 27
    • Annexure “B”:Sample Cash flow statements 28