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JNC
JNC
Johnnic Holdings Limited - Settlement Agreement Between The Trustees
Johnnic Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1889/000429/06)
("Johnnic")
ISIN: ZAE000024352
Share code: JNC
SETTLEMENT AGREEMENT BETWEEN THE TRUSTEES FOR THE TIME BEING OF THE FABCOS TRUST
("the Trust"), FABVEST INVESTMENT HOLDINGS LIMITED ("Fabvest") (together, "the
Fabcos Group") AND JOHNNIC
1. Johnnic has entered into an agreement with the Trust and Fabvest in terms
of which it is agreed to settle various disputes which have arisen between
them in connection with the implementation of:
1.1 the Johnnic Sale Agreement ("the Johnnic Sale Agreement") being the written
agreement between Fabvest and Johnnic dated 3 October 2004 pursuant to
which Fabvest sold to Johnnic which purchased 50% of all the issued share
capital in Fabcos Investment Holding Company Limited ("FIH") in two
tranches of 25% each. The first tranche was implemented. The second
tranche ("the Second Tranche") is the subject of arbitration proceedings
between Johnnic and Fabvest ("the Arbitration")
1.2 the Transaction Agreement ("the Transaction Agreement") being the written
agreement between the Trust, Hosken Consolidated Investments Limited
("HCI"), Fabvest and Fabulous Gaming and Leisure Diversified Investments
Limited signed on 16 May 2005, as amended, which provides that, through a
series of transactions, HCI shall acquire the entire issued share capital
of Fabvest and through it 50% of FIH or if Fabvest is successful in the
Arbitration, 75% of FIH. Johnnic has opposed the transaction in
proceedings before the Securities Regulation Panel, various gaming
authorities and the High Court of South Africa where it has applied to set
aside the Transaction Agreement on the basis that it contravenes Section 38
of the Companies Act, 61 of 1973 ("the Section 38 Application")
2. In terms of the Settlement Agreement, it is agreed that the disputes will
be settled as follows:
2.1 the sale by Fabvest to Johnnic of the Second Tranche will be implemented
forthwith;
2.2 Johnnic agrees to withdraw all its objections to the Transaction Agreement
and agrees not to pursue them with the intent that the Transaction
Agreement may be fully implemented in accordance with its terms. It is
also agreed that, subject to the agreement of HCI, the acquisition by HCI
of Fabvest may be restructured so that instead of HCI acquiring the entire
issued share capital of Fabvest, it shall acquire from Fabvest all the
issued shares in the capital of FIH which are not held by Johnnic ("the
FIH Acquisition") and for such purposes Johnnic irrevocably and
unconditionally waives:
2.2.1 all its pre-emptive rights to purchase any shares in FIH;
2.2.2 any rights that it may have to any offer in terms of the Securities
Regulation Code on Takeovers and Mergers ("the Code") and any rights it may
have under such Code in respect of the FIH Acquisition. HCI would be
required to make an offer to Johnnic under the Code, if it directly or
indirectly acquires control (as defined in the Code) of FIH, and Johnnic
has no intention of selling its shareholding in FIH at this point;
2.3 Johnnic will withdraw the Section 38 Application.
3. The Johnnic Board unanimously resolved to enter into the settlement
summarised above.
Midrand
27 January 2006
Legal advisors to Johnnic
Webber Wentzel Bowens
Sponsor to Johnnic
Merrill Lynch South Africa (Pty) Ltd
Date: 27/01/2006 03:34:59 PM Produced by the JSE SENS Department
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