BUSINESS RESCUE PLAN - za · BUSINESS RESCUE PLAN Prepared in terms of Section 150 of the Companies Act, No. 71 of 2008 in respect of THATA UBEKE MANUFACTURING PROPRIETARY LIMITED

BUSINESS RESCUE PLAN

Prepared in terms of Section 150 of the Companies Act, No. 71 of 2008

in respect of

THATA UBEKE MANUFACTURING PROPRIETARY LIMITED

(Registration No. 2006/038624/07)

Prepared by

DAVE LAKE

(Senior Business Rescue Practitioner)

17th April 2015

2 | P a g e T U B B u s i n e s s R e s c u e P l a n

TABLE OF CONTENTS

1. Business Rescue Contextualised .................................................................................................... 4

2. Definitions and Interpretation ....................................................................................................... 6

3. Actions to be Taken By Affected Persons .................................................................................... 13

4. Business Rescue - Key Dates ........................................................................................................ 13

5. Structure of this Business Rescue Plan ........................................................................................ 14

6. Background to TUB and the Events Leading to its Business Rescue ........................................... 15

7. Overview of TUB Today ................................................................................................................ 17

8. Trading since the Commencement of Business Rescue .............................................................. 18

9. Significant Events Subsequent to the Commencement Date ..................................................... 20

10. Assets and Liabilities of the Company as at 28th February 2015 ............................................ 23

11. Assets of the Company ............................................................................................................. 24

12. Liabilities of the Company ........................................................................................................ 25

13. Proof of Claims ......................................................................................................................... 27

14. Creditors of the Company and their Claims as at the Commencement Date ........................ 27

15. Other Business Rescue Obligations of the Company .............................................................. 28

16. Net Asset Value of the Company ............................................................................................. 29

17. Probable Liquidation Dividend ................................................................................................ 30

18. Security Held by Creditors ........................................................................................................ 31

19. Informal Proposals from Creditors .......................................................................................... 33

20. Remuneration of the BRP ........................................................................................................ 33

21. Order of Distribution ................................................................................................................ 34

22. Outline of the Business Rescue Plan ........................................................................................ 35

23. Final Instalment of the Investor Loan ...................................................................................... 38

24. Conversion of the Investor Loan into ordinary shares in the Company ................................. 38

25. Roll-over of the Banking and Asset Finance Facilities ............................................................. 39

26. Shareholders’ agreement and memorandum of incorporation ............................................. 40

27. Securing a Short Term Loan ..................................................................................................... 40

28. Partial Release from Concurrent Creditor Claims ................................................................... 41

29. Subordination of the Revised Shareholder Loans ................................................................... 43

30. Business Rescue Costs .............................................................................................................. 43

31. Mechanism for the Settlement of Revised Trade Creditor Claims ......................................... 44

32. Monitoring of the Primary Bank Account................................................................................ 47

33. Potential Cash Realisations from Other Assets ....................................................................... 48

34. Ongoing Business of the Company .......................................................................................... 48


35. Treatment of Agreements ........................................................................................................ 52

36. Nature and Duration of the Moratorium ................................................................................ 52

37. Effect of the Business Rescue Plan on Employees .................................................................. 53

38. Effect of the Business Rescue Plan on Creditors ..................................................................... 53

39. Effect of the Business Rescue Plan on Shareholders .............................................................. 54

40. Benefits of the Adoption of the Business Rescue Plan ........................................................... 55

41. Creditors’ Consideration of this Business Rescue Plan ........................................................... 58

42. Projected Profit and Loss Accounts and Balance Sheets ........................................................ 60

43. Circumstances in which the Business Rescue will End ............................................................ 60

44. Approval and Adoption of this Business Rescue Plan ............................................................. 61

45. The Effect of Adoption of this Business Rescue Plan on Creditors ......................................... 61

46. Conditions for This Business Rescue Plan to Come Into Operation ....................................... 62

47. Substantial Implementation .................................................................................................... 62

48. Risks .......................................................................................................................................... 63

49. Late Proof of Claims ................................................................................................................. 63

50. Dispute Resolution ................................................................................................................... 64

51. Governing Law and Jurisdiction ............................................................................................... 65

52. Disclaimer ................................................................................................................................. 66

53. Severability ............................................................................................................................... 67

54. Practitioners Certificate ........................................................................................................... 67

SCHEDULES ........................................................................................................................................... 69

A : Creditors and voting interests

B : Trade Creditors

C : Shareholder loans

D : Costs treated as Business Rescue Costs

E : Probable liquidation dividend computation

F : Profit and Loss projections

G : Balance Sheet projections

H : Draft 2015 Annual Accounts

I : BRP Engagement Agreement


INTRODUCTION

1. Business Rescue Contextualised

1.1. In this Clause and throughout this Business Rescue Plan capitalised words, acronyms and

phrases shall have the meanings attributed to them in Clause 2 below.

1.2. Simply speaking, Business Rescue as a concept was introduced into South African law in

2011 in terms of the new Companies Act to provide Financially Distressed companies, in

appropriate circumstances, with the essential breathing space required for them to be

able to develop and implement a Business Rescue Plan to achieve the objectives in Clause

1.3 below.

1.3. The underlying objectives of Business Rescue in accordance with Section 128(1)(b)(iii) of

the Act are to restructure the affairs of a company in such a way that it maximises the

likelihood of the company continuing in existence on a solvent basis, or, if it is not possible

for the company to so continue in existence, results in a better return for the company’s

creditors or shareholders than would result from the immediate liquidation of the

company.

1.4. Chapter 6 of the Act in dealing with Business Rescue seeks to facilitate the rehabilitation

of Financially Distressed companies by providing for:

1.4.1. a temporary moratorium on the rights of claimants (e.g. creditors) against the

company;

1.4.2. the temporary supervision of the company by a business rescue practitioner;

and

1.4.3. the “rules of engagement” for entry into, process during, and exit from business

rescue proceedings;


during which proceedings the business rescue practitioner is required to develop and

implement, if approved, a business rescue plan to achieve the objectives set out in Clause

1.3 above.

1.5. The BRP, in relation to the Business Rescue proceedings of TUB, has in addition been

guided, inter alia, by Section 7(k) of the Act, which states that the purpose of the Act in

respect of Business Rescue is:

“to provide for the efficient rescue and recovery of financially distressed companies, in a

manner that balances the rights and interests of all relevant stakeholders” [BRP’s

emphasis].

1.6. The Business Rescue proceedings of TUB and this Business Rescue Plan have therefore

been conducted and structured by the BRP in a manner which seeks to achieve the

following objectives:

1.6.1. to rescue the Company by returning it to a state of solvency;

1.6.2. to recognise and address the interests of Creditors by, inter alia, providing for a

substantial settlement of their Claims in a manner that provides a swifter and

greater return than would be the case for such Creditors had the Company been

liquidated;

1.6.3. to secure a sustainable future for the Company after the implementation of the

Business Rescue Plan - which will ultimately be to the benefit of the Company’s

stakeholders (including its employees, suppliers, customers, shareholders,

post-commencement funders); and

1.6.4. to maintain an appropriate balance between the respective rights and interests

of each of the Company’s stakeholders.

1.7. The approach taken in the Business Rescue proceedings of the Company has rested on

four legs:

1.7.1. stabilising the Company whilst it is in Business Rescue proceedings;


1.7.2. resolving the immediate cash flow issues which were at the heart of the

Financial Distress which faced the Company at the Commencement Date;

1.7.3. providing funding and a mechanism to address the Claims against the Company;

and

1.7.4. addressing the future operational sustainability of the Company through:

1.7.4.1. optimising the cost base of the Company;

1.7.4.2. strategically repositioning the Company to drive revenue growth; and

1.7.4.3. providing sufficient working capital to support its recovery.

2. Definitions and Interpretation

2.1. In this Business Rescue Plan, unless the context indicates otherwise, the words and

expressions below shall have the following meanings (and cognate expressions shall bear

corresponding meanings):

2.1.1. “2015 Audited Accounts” means the annual financial statements of the

Company for the year ended 28th February 2015 which have been prepared and

audited by the Company’s Auditors during March/April 2015, and which will be

presented to the Board of Directors of the Company in the week following the

Publication Date, a draft copy of which is attached as Annexure H to this

Business Rescue Plan;

2.1.2. "Act" means the Companies Act, No. 71 of 2008;

2.1.3. "Adoption Date" means the date upon which the Business Rescue Plan is

approved and adopted in accordance with Sections 152(2) and 152(3)(b) of the

Act;

2.1.4. "Affected Persons" shall bear the meaning ascribed thereto in Section 128(1)(a)

of the Act, and in relation to the Company shall mean the shareholders,


creditors and employees of the Company (the employees of the Company not

being represented by any trade union);

2.1.5. “Audit Date” means the date of the 2015 Audited Accounts, being 28th February

2015;

2.1.6. “Auditors” means Boake Incorporated, being the Company’s auditors;

2.1.7. "BRP" means David Arthur Charles Lake, Identity Number 580704 5324 186,

who has been appointed in accordance with Section 129(3)(b) of the Act as the

business rescue practitioner of the Company;

2.1.8. “BRP Agreement” means the agreement concluded between the Company and

the BRP on or about 21st January 2015 in terms of which the BRP was appointed

by the Company, the fee related terms of which agreement are described in

Clause 20 and a copy of which agreement is attached as Schedule I;

2.1.9. "Business Day" shall bear the meaning given to that term in Section 1 of the

Act;

2.1.10. "Business Rescue" means the proceedings to facilitate the rehabilitation of the

Company as provided for in Chapter 6 of the Act;

2.1.11. "Business Rescue Costs" means the costs of the Business Rescue including the

BRP’s remuneration and expenses, and other claims arising out of the costs of

the Business Rescue proceedings as contemplated in Section 135(3) of the Act;

2.1.12. "Business Rescue Plan" means this document together with all of its Schedules,

prepared and published by the BRP in accordance with Section 150 of the Act

for consideration and possible approval by the Creditors of the Company;

2.1.13. "CIPC" means the Companies and Intellectual Property Commission;

2.1.14. "Claims" means secured, preferent and/or concurrent claims, as envisaged in

the Insolvency Act, against the Company, of whatsoever nature and from

whatsoever cause, including all claims arising out of any agreements entered

into by the Company, the cause of action in respect of which arose prior to or


on the Commencement Date and which are known to the Company and

accepted by the BRP;

2.1.15. "Claims Period" means the period from the Publication Date to the Effective

Date;

2.1.16. "Commencement Date" means the date on which Business Rescue commenced

in accordance with Section 129(2)(b) of the Act, being 20th January 2015;

2.1.17. "Company" (and/or “TUB”) means Thata uBeke Manufacturing Proprietary

Limited, a private limited liability company incorporated in South Africa under

registration number 2006/038624/07;

2.1.18. "Concurrent Creditors" means all Creditors having Claims which would qualify

as concurrent claims as envisaged in the Insolvency Act and the Act;

2.1.19. "Creditors" means all persons having Claims against the Company as at the

Commencement Date and for the period of the Business Rescue, excluding any

Claims that can be regarded as Post-Commencement Finance or as being

Business Rescue Costs, and which are known to the Company and have been

accepted by the BRP;

2.1.20. “Effective Date” means 31st May 2015;

2.1.21. "Financially Distressed" shall bear the meaning ascribed thereto in Section

128(1)(f) of the Act;

2.1.22. "First Payment Date" means on or before 8th June 2015;

2.1.23. “Free Funds” means all funds standing to the credit of the Company’s Primary

Bank Account at the close of business on the relevant measurement date;

2.1.24. "Insolvency Act" means the Insolvency Act No. 24 of 1936;

2.1.25. “Investor Loan” means the loan in the amount of R3.0 million advanced to the

Company by the Strategic Investor as Post-Commencement Finance in terms of

the Transaction Agreement;


2.1.26. "Lease" means the lease agreement in terms of which the Company is a tenant

of (and conducts its business from) an industrial and office property situated in

Jet Park, in force as at the Commencement Date;

2.1.27. “Net Asset Value” means the excess by which the total assets of the Company

exceed the total liabilities of the Company (excluding shareholder funds) from

time to time in the financial accounts of the Company;

2.1.28. “Notice of Meeting” means a notice of the S151 Meeting as contemplated in

terms of Section 151(2) of the Act;

2.1.29. "Post-Adoption Date Claims" means any and all Claims which may be lodged

with the BRP in writing by a Creditor of the Company during the Claims Period

and which Claims are accepted, in whole or in part, in writing by the BRP as

being valid and enforceable against the Company by no later than the First

Payment Date;

2.1.30. "Post-Commencement Finance" means post-commencement finance as

contemplated in Section 135 of the Act;

2.1.31. "Preferent Creditors" means those Creditors holding Claims which would

qualify as preferent claims as envisaged in terms of the Insolvency Act;

2.1.32. “Primary Bank Account” means the current account held by the Company with

its bankers into which the Company pays its trading receipts and from which it

pays its trading expenses, as provided for in Clause 31.

2.1.33. "Publication Date" means the date on which this Business Rescue Plan is

published in terms of Section 150(5) of the Act, being 17th April 2015;

2.1.34. "Rand" or "R" means the lawful currency of South Africa;

2.1.35. “Revised Shareholder Loans” means the revised net amount of Claims owing to

shareholders of the Company holding shareholder loans as contemplated in

Clause 28.6.2;


2.1.36. “Revised Trade Creditor Claims” means the revised net amount of Claims owing

to the trade creditors of the Company as contemplated in Clause 28.6.1;

2.1.37. “S151 Meeting” means a meeting convened in terms of Section 151 of the Act,

presided over by the BRP, attended by Creditors and any other Affected

Persons, and called for the purpose of considering the Business Rescue Plan;

2.1.38. "Secured Creditors" means those Creditors holding Claims which would qualify

as secured claims as envisaged in terms of the Insolvency Act;

2.1.39. “Short Term Loan” means the proposed short term loan in the amount of

approximately R2.0 million being sought by the BRP on behalf of the Company

to facilitate the early settlement of the Revised Trade Creditor Claims, as

described in Clause 27;

2.1.40. "South Africa" means the Republic of South Africa;

2.1.41. “Strategic Investor” means Bokama Trading and Projects Proprietary Limited, a

private limited liability company incorporated in South Africa under registration

number 2012/012077/07;

2.1.42. “Subsequent Payment Date” means on or before the 7th day of each calendar

month after the month in which the First Payment Date occurs, until such time

as the Revised Trade Creditor Claims have been settled in full;

2.1.43. "Substantial Implementation " means the fulfilment of the conditions set out

in Clause 47.1 to the satisfaction of the BRP;

2.1.44. “Termination Date” means the date on which the Business Rescue proceedings

will end in accordance with Clause 43 and at which date the Company will no

longer be in Business Rescue;

2.1.45. "Transaction Agreement" means the loan and investment agreement entered

into between the Company, the shareholders of the Company and the Strategic

Investor on or about 16th March 2015;

2.1.46. “TUB” means the "Company"; and


2.1.47. “VAT” means value added tax which is levied in respect of goods and services

in terms of the Value Added Tax Act, 1991.

2.2. Where any term is defined within the context of any particular Clause in this Business

Rescue Plan, the term so defined, unless it is clear from the Clause in question that the

term so defined has limited application to the relevant Clause, shall bear the meaning

ascribed to it for all purposes in terms of this Business Rescue Plan, notwithstanding that

that term may not have been defined in this definitions Clause.

2.3. This Business Rescue Plan shall be interpreted in accordance with the following principles:

2.3.1. a reference to a “person” includes a reference to an individual, partnership,

company, close corporation, other body corporate, a trust, an unincorporated

association or a joint venture and that person’s legal representatives,

successors and permitted assigns;

2.3.2. the words "hereof", "herein", "hereto" and "hereunder" and other words of

similar import refer to this Business Rescue Plan as a whole and not to any

particular part, Clause, sub-section or other sub-division or Schedule unless the

context or subject matter so requires;

2.3.3. a reference to a “Clause” or a “Schedule”, unless the context indicates

otherwise, are references to the designated Clause or Schedule of this Business

Rescue Plan;

2.3.4. words importing the masculine shall include a reference to the feminine and

vice versa;

2.3.5. words importing the singular shall include a reference to the plural and vice

versa;

2.3.6. reference to a document or agreement includes any amendment or supplement

to, or replacement or novation of that document or agreement;


2.3.7. any reference to legislation or a statute shall be a reference to such legislation

or statute as at the Publication Date and as amended, varied, re-enacted or

replaced from time to time;

2.3.8. the headings appearing in this Business Rescue Plan are for reference purposes

only and shall not affect the interpretation hereof;

2.3.9. if any provision is a definition and is a substantive provision conferring rights or

imposing obligations on any person, notwithstanding that it is only in the

definitions Clause (or such other Clause), effect shall be given to it as if it were

a substantive provision in the body of this Business Rescue Plan;

2.3.10. in the event that the day for performance of any obligation to be performed in

terms of this Business Rescue Plan should fall on a day which is not a Business

Day, the relevant day for performance shall be the immediately succeeding

Business Day;

2.3.11. the use of any expression covering a process available under South African law

(such as but not limited to a liquidation) shall, if any of the Affected Persons is

subject to the law of any other jurisdiction, be interpreted in relation to that

Affected Person as including any equivalent or analogous proceeding under the

law of such other jurisdiction;

2.3.12. where any number of days is prescribed in this Business Rescue Plan, that

number shall be determined exclusively of the first day and inclusively of the

last day, unless the last day falls on a day which is not a Business Day, in which

case the last day shall be the immediately succeeding Business Day;

2.3.13. where any term (whether capitalised or not) is not expressly defined in this

Business Rescue Plan but is defined in the Act, the definition in the Act shall

prevail;

2.3.14. the use of the word "including" followed by specific examples shall not be

construed as limiting the meaning of the general wording preceding it and the

eiusdem generis rule shall not be applied in the interpretation of such general

wording or such specific examples;


2.3.15. the words "other" and "otherwise" shall not be construed eiusdem generis with

any preceding words if a wider construction is possible;

2.3.16. all monetary amounts are stated exclusive of VAT and in South African Rand,

unless provided otherwise, where that amount is subject to VAT; and

2.3.17. the expiration or termination of this Business Rescue Plan shall not affect such

of the provisions of this Business Rescue Plan as expressly provide that they will

operate after any such expiration or termination or which of necessity must

continue to have effect after such expiration or termination, notwithstanding

that the Clauses themselves do not expressly provide for this.

3. Actions to be Taken By Affected Persons

3.1. If any Affected Person is in doubt as to what action should be taken by him/her in respect

of this Business Rescue Plan, such Affected Person is advised to consult his/her attorney,

accountant or other professional advisor.

3.2. Creditors will be invited to vote on the approval, rejection or amendment of this Business

Rescue Plan at a S151 Meeting of Creditors to be convened by the BRP on 30th April 2015,

being within ten days of the Publication Date.

4. Business Rescue - Key Dates

4.1. The Board of Directors of the Company passed a resolution to voluntarily enter business

Rescue proceedings on 19th January 2015. [Section 129(1) of the Act]

4.2. The Commencement Date for the business rescue proceeding of the Company was 20th

January 2015, being the date the appropriate documentation was filed with the CIPC.

[Section 129(2)(b) of the Act]

4.3. The BRP was appointed on 9th February 2015 with condonation for the delayed

appointment of the BRP having been granted to the Company by the CIPC on 27th January

2015. [Section 129(3) of the Act]

4.4. The first meeting of Employees was held on 12th February 2015. [Section 148 of the Act]


4.5. The first meeting of Creditors was held on 23rd February 2015. [Section 147 of the Act]

4.6. On or about 9th March 2015 the BRP requested written approval from the Creditors for

the extension of the period in which this Business Rescue Plan was to be published from

16th March 2015 to 17th April 2015. The requisite majority of Creditors approved the

extension with no Creditor having elected to oppose the extension requested. [Section

150(5)(b) of the Act]

4.7. This Business Rescue Plan will be published on 17th April 2015. [Section 150(5) of the Act]

4.8. A meeting to consider the Business Rescue Plan and to determine the future of the

Company will be held on 30th April 2015, [Section 151 of the Act]

5. Structure of this Business Rescue Plan

In accordance with Section 150(2) of the Act, this Business Rescue Plan has been divided into three

parts as follows:

5.1. PART A - BACKGROUND

This part sets out the background to the Company and the Business Rescue. This includes, inter

alia, information on the Company, the circumstances of its Financial Distress, material assets

held by the Company, Claims against the Company, and other information relevant to the

Business Rescue process and Business Rescue Plan.

5.2. PART B - PROPOSALS

This part provides, inter alia, the terms of the Business Rescue Plan and includes, inter alia,

proposed actions and relief, the benefits of adopting the Business Rescue Plan as opposed to

the Company being placed into liquidation, and the processes and steps required for the

Business Rescue Plan to be implemented.

5.3. PART C – ASSUMPTIONS, CONDITIONS AND GENERAL

This part sets out, inter alia, what conditions need to be fulfilled in order for the Business Rescue

Plan to become effective, the circumstances in which the Business Rescue proceedings will end,

projected financial information relating to the Company (in terms of the Business Rescue Plan),

and general information on the law, process and Business Rescue Plan.


PART A – BACKGROUND

6. Background to TUB and the Events Leading to its Business Rescue

6.1. TUB was established in 2006, and incorporated the operations previously undertaken by

Muirlenium Technology, a business which itself commenced business in 1999.

6.2. TUB’s business activities were initially focused around a land mine detection system

which was integrated into mine protected military vehicles. For some time TUB built its

business offering around its mine detection solutions (Pulse Induction Systems),

providing three generations of technological advancement to the safety of military

vehicles in conflict zones.

6.3. Recognising the vulnerability of being a single product/single customer business, TUB

began to widen its product offering to include electro mechanical products, becoming a

specialist developer and manufacturer of custom cable assemblies (harnesses) and

further developing its expertise beyond conventional wiring solutions to Controller Area

Network (CAN bus) applications, integrating multiplexed electronic and electrical

controls, monitoring and diagnostics – primarily for the same customer base.

6.4. The diversification strategy was partially successful, and over time TUB increased both its

product set and its customer base. Despite the diversification drive, however, TUB’s

customer base was still dominated by local (South African) manufacturers of Land

Systems (mine protected military transport vehicles) for export to international markets.

6.5. Attractive prospects for TUB’s future growth were supported by the growth in the sales

pipelines of TUB’s customers. Orders were placed with TUB, and new orders were

beckoning if TUB was able to deliver the required capacity. TUB thus elected to invest in

new staff, new premises, and capital equipment for a new printed circuit board

production facility.

6.6. It is worth noting the following extract from an article published in the Business Day on

5th March 2015:


“Global demand for SA’s arms is taking a knock …. Authorised exports of conventional

weapons last year declined to less than 10% of what the country sold three years ago,

after a two-thirds decline in 2013, according to the National Conventional Arms Control

Committee (NCACC). … Last year’s R880m in exports compares with R3.2bn worth of

arms sold in 2013 and R10.6bn in 2012.”

6.7. Whilst not an arms manufacturer, TUB was no exception to this severe market downturn,

suffering significant falls in its turnover as its defence related customers’ own orders

dwindled in line with world demand – the result of (inter alia) the withdrawal of US troops

from combat zones such as Afghanistan and Iraq.

6.8. TUB’s turnover over this period illustrates the story in graphic terms. For the financial

years ended 28th February, TUB’s revenue was:

6.8.1. R105 million in 2010/2011;

6.8.2. R124 million in 2011/2012;

6.8.3. R114 million in 2012/2013;

6.8.4. R65 million in 2013/2014; and

6.8.5. R42 million in 2014/2015.

6.9. TUB therefore found itself squeezed in between the jaws of falling revenues on one side

and a high fixed cost base on the other. Whilst the Company was still technically solvent

during the 2014/2015 financial year (its balance sheet showing a positive Net Asset

Value), cash flow was chronically short and during that year the Company was only kept

liquid (commercially solvent) by cash injections from the Company’s shareholders.

6.10. In late December 2014/early January 2015 the Board of Directors of the Company

considered its projected cash flow forecasts, and determined that the Company was

indeed Financially Distressed in that it appeared to be reasonably unlikely that the

company would be able to pay all of its obligations as they became due and payable

within the immediately ensuing six months due to cash flow constraints.


6.11. Having considered the alternatives open to the Company, including liquidation, and

having consulted with a number of external parties (including the BRP), the Board of

Directors of the Company resolved in January 2015 to voluntarily enter into Business

Rescue proceedings.

7. Overview of TUB Today

7.1. TUB has evolved substantially over the years. TUB today is engaged in many facets of

electronic and electro-mechanical innovation and manufacture, and has world class design

and manufacturing facilities located at its factory in Boksburg, Johannesburg.

7.2. As the business stands today, TUB has competencies in:

7.2.1. electrical and electronic design and manufacture;

7.2.2. military and commercial vehicle harness design and manufacture;

7.2.3. control panel design and manufacture;

7.2.4. printed circuit board concept, design, assembly and industrialisation;

7.2.5. Photovoltaic inverter manufacture; and

7.2.6. turnkey product development.

7.3. The directors of TUB at the Commencement Date were:

7.3.1. James Hinton;

7.3.2. Warren Muir; and

7.3.3. Leon Theron.

7.4. The only issued securities of the Company at the Commencement Date were ordinary

shares in the Company. The ordinary shareholders of the Company at the

Commencement Date were:

7.4.1. Warren Muir: 255 shares, representing 65.2% of the issued shares of the

company;


7.4.2. James Hinton: 67 share shares, representing 17.1% of the issued shares of the

company;

7.4.3. Eben Swanepoel: 46 shares, representing 11.8% of the issued shares of the

company; and

7.4.4. Andrew Smit: 23 shares, representing 5.9% of the issued shares of the company.

7.5. TUB operates its business from its modern office and factory premises in Jet Park,

Boksburg. These premises are leased from its landlord, Blane & Company (Sales) (Pty)

Limited.

7.6. As at the Commencement Date, the Company had 80 full time employees and 15 part

time employees.

8. Trading since the Commencement of Business Rescue

8.1. Business Rescue is a traumatic time for all of the stakeholders of the company concerned.

Generally in such circumstances staff fear for the security of their future employment,

customers are nervous that existing orders might not be fulfilled – and are reluctant to

place new orders, suppliers are concerned about their claims that have been frozen – and

are reluctant to increase their exposure to the company by supplying further goods and

services, funders naturally wish to secure their own positions, shareholders are anxious

about their investments, and management have to run a business at the same time as

they are managing a crisis.

8.2. In addition to the additional (and significant) administrative and other business rescue

related requirements set out in Chapter 6 of the Act, there is an immediate need,

therefore, to stabilise the business and, as far as possible, regain the confidence of the

stakeholders noted in the previous paragraph. Maintaining and boosting staff and

management morale is vital. Retaining existing orders and securing new orders from

customers is the lifeblood for the future survival for the Company, as it is for any

company. Resolving constraints to the future supply of the raw goods and services

required by the Company to produce its products is equally important in this period.


8.3. The circumstances of TUB at the commencement of Business Recue proceedings was no

different from that described above. Soon after the Commencement Date, the BRP

together with the TUB directors set about meeting with and/or contacting as many of

these stakeholders as possible – both in order to ensure the continuity of sales orders

being placed with the business, and to secure the Company’s ability to produce its

products to fulfil these orders.

8.4. Despite the trying conditions of the Business Rescue proceedings, staff and management

excelled, suppliers and customers were very supportive and, as a direct result, January,

February and March 2015 were positive trading months for TUB.

8.5. The Company generated revenue at an average of R2.9 million per month over the first

10 months of the 2014/2015 financial year (March to December 2014). After entering

Business Rescue in mid-January 2015, TUB’s turnover for January 2015 was R4.9 million,

for February 2015 was R6.9 million, and for March 2015 was R6.8 million.

8.6. A strong effort has been put into driving sales for the Company. This has included:

8.6.1. structuring arrangements with existing customers to secure their support,

resulting in the retention of existing orders and the generation of new orders;

8.6.2. reviving orders that had been delayed or cancelled through engagement and

negotiation with counterparties;

8.6.3. a significant effort by the sales team; and

8.6.4. opening up new markets and customer opportunities for TUB (see Clause 9.1

below).

8.7. The order book of the Company, as at the Publication Date, shows firm forward orders of

approximately R50.9 million.

8.8. Initiatives to release working capital into the system have been undertaken to balance

the cash inflows and outflows during this Business Rescue period where, not surprisingly,

credit facilities from suppliers have been virtually non-existent and the Company’s bank

account was frozen and its overdraft facilities suspended.


8.9. Notwithstanding this, the period from the Commencement Date to the Publication Date

in fact saw significant net cash generation by the Company.

8.10. The stabilisation of the Company whilst in Business Rescue can therefore be said to have

been predominately achieved and the Company has already enjoyed some measure of

revitalisation.

9. Significant Events Subsequent to the Commencement Date

9.1. Strategic Investor/Post-Commencement Finance

9.1.1. A strategic investor into the Company was secured. Bokama Trading and

Projects Proprietary Limited (the Strategic Investor) entered into a binding

Transaction Agreement with the Company on 16th March 2015.

9.1.2. The Strategic Investor has subscribed for, and with effect from 18th March

became the holder of, 51% of the issued share capital of the Company. This

subscription was made for a nominal sum.

9.1.3. Ms Nana Sabelo, a historically disadvantaged South African female, is the sole

shareholder of the Strategic Investor. The Company is now, therefore, 51%

“black woman owned and controlled”.

9.1.4. The Board of Directors of the Company has been restructured in line with the

change in shareholding and now has a 50% representation of historically

disadvantaged South Africans, with Ms Sabelo being appointed as the company

Chairperson.

9.1.5. Ms Sabelo is an experienced businesswoman with an impressive curriculum

vitae. She will lead business development for the Company, and has already

applied her proven business development skills to positive effect on TUB.

9.1.6. The operational management team of the Company has been fully restructured

and strengthened. In addition to Ms Sabelo, a new chief operating officer (who

is both female and historically disadvantaged) has been appointed, as well as a

new divisional general manager for TUB’s Electro Mechanical Division.


9.1.7. The empowerment of TUB’s shareholder interests, board composition and

management team has opened up a very significant market that was previously

not accessible to the Company, in particular amongst the South African

government owned and controlled organisations such as Denel, Prasa, Eskom,

and Transnet.

9.1.8. In terms of the Transaction Agreement, the Strategic Investor is obliged to

advance a loan in the amount of R3.0 million to the Company. Of this amount,

R2.0 million has already been advanced to the Company, and the balance of

R1.0 million will be advanced to the Company on or before 30th April 2015.

9.1.9. The Investor Loan constitutes Post-Commencement Finance.

9.1.10. The Investor Loan will be converted into ordinary shares in the Company when,

inter alia, the Business Rescue Plan for the Company is approved by the

Company’s Creditors.

9.1.11. If the Business Rescue Plan is not approved on or before 30th June 2015, the

outstanding amount of the Investor Loan must be repaid by the Company to the

Strategic Investor.

9.2. Asset realisation

9.2.1. Since the Commencement Date the management team have sought to convert

contingent assets and sundry debtors into cash.

9.2.2. These efforts continue to be fruitful and have yielded approximately R3 million

in cash to date. It is anticipated that further proceeds of approximately R2

million is likely to be yielded as part of the Business Rescue Plan

implementation.

9.3. Roll over of existing financing arrangements

9.3.1. The Company’s overdraft and banking facilities held with Standard Bank, which

were suspended shortly after the commencement of Business Rescue, were

released and reinstated during March 2015.


9.3.2. Discussions have progressed with Standard Bank and My Data to maintain and

continue the provision of overdraft and asset finance facilities to TUB on terms

consistent with those which were in place at the Commencement Date.

9.4. Securing Short Term Loan Finance

9.4.1. The BRP has commenced discussions with potential lenders with a view to

securing approximately R2.0 million of short term (approximately one year)

financing for the Company.

9.4.2. The primary purpose of this Short Term Loan will be to provide cash funds to

accelerate the repayment of the Revised Trade Creditor Claims of the

Company’s trade creditors.

9.4.3. Finalisation of negotiations with the potential lenders will require, inter alia, a

positive review of the 2015 Audited Accounts (which accounts will be available

shortly after the Publication Date) and the approval of the Business Rescue Plan

by Creditors.

9.4.4. Whilst the intention would be for the Short Term Loan, if secured, to be

advanced prior to the Implementation Date, a later advancement would still be

sought if this were not the case. Affected Persons are advised, however, that

there can be no certainty that the Short Term Loan will be secured.

9.4.5. The impact of the Short Term Loan not being secured would be one of timing –

lengthening the time that it will take to fully settle the Revised Trade Creditor

Claims in terms of this Business Rescue Plan.

9.5. Necessary Operating Costs of the Company

9.5.1. Certain costs which were considered to be necessary to the continued

operation of the Company during its Business Rescue proceedings, and/or to

have been considered to be net positive in their contribution to the Business

Rescue proceedings being successful (as defined in the Act), have been treated

as part of the Business Rescue Costs in terms of Section 135(3) of the Act.


9.6. Suspension of contractual obligations

9.6.1. Certain obligations contractually due for payment by the Company during

Business Rescue were partially suspended by the BRP in order to support the

liquidity of the Company during this time.

9.6.2. The most notable of these was rental payments in respect of the Company’s

premises in Boksburg (pursuant to the Lease) and certain plant and equipment

rented by TUB.

9.7. Set-off and other arrangements

9.7.1. The BRP successfully concluded set-off arrangements with two companies

(separately), each of which was both a supplier to, and customer of, the

Company.

9.7.2. The BRP also successfully concluded a supply arrangement with a customer of

the Company to secure the continuation of sales orders being placed with the

Company by such customer.

9.7.3. As a direct result of these arrangements, material new sales orders have been

placed with TUB by these companies, plus the continuity of supply of

strategically important input goods and services from these companies

(required by TUB to complete sales orders for other customers) was secured.

9.7.4. In all cases this resulted in positive trading, the stabilisation of TUB whilst in

Business Rescue, and a generally favourable net return to the Company and the

Affected Persons.

10. Assets and Liabilities of the Company as at 28th February 2015

10.1. Management accounts for TUB are not reconciled or prepared on a monthly basis in a

format that would make the reconstruction of a full and detailed balance sheet for the


Company as at the Commencement Date practical or necessarily valuable in terms of this

Business Rescue Plan.

10.2. The 2015 Audited Accounts were, however, prepared and audited by the Company’s

Auditors during March/April 2015 and will be presented to the Board of Directors of TUB

for ratification in the week following the Publication Date.

10.3. In this regard, draft 2015 Audited Accounts (awaiting ratification) are attached as

Schedule H. It is not anticipated that there will be any material changes to the financial

statements in their final approved form.

10.4. As the Audit Date is only five and a half weeks after the Commencement Date, and only

six weeks prior to the Publication Date, the BRP respectfully submits that, due to the

independent verification by the Auditors as well as the accuracy and reconciliations

underlying the 2015 Audited Accounts, the Affected Persons will be better served with

the material financial information included in this Business Rescue Plan being compiled

with reference to and extracted from the draft 2015 Audited Accounts rather than the

financial and other information generated and compiled with reference to the internal

management accounts and information systems of the Company.

10.5. This is particularly relevant as the balance sheet of the Company as at 28th February 2015

has been closely scrutinised by management and the Auditors in the light of recent events

and a number of relevant balance sheet adjustments have been made.

11. Assets of the Company

11.1. The table below provides a summary of the assets of the company as extracted from the

draft 2015 Audited Accounts.


11.2. Notes

11.2.1. Plant and equipment is recorded at its depreciated book value. An independent

valuation of plant and equipment has been undertaken which supports the

value shown above as well as providing the “forced sale” value applied in the

probable liquidation dividend computation in Schedule E.

11.2.2. Inventories are valued at the lower of cost and selling price less costs to

complete and sell.

11.2.3. Other debtors constitute, inter alia, accruals, deposits and a state training

authority grant.

12. Liabilities of the Company

12.1. The table below provides a summary of the liabilities of the Company as extracted from

draft 2015 Audited Accounts.

ASSETS Rand

Plant & Equipment 9 616 503

WIP and finished goods 2 676 018

Stock 7 167 416

Stock & WIP 9 843 434

Debtors - Trade 6 296 796

Debtors - Other 1 452 449

Debtors 7 749 246

Cash and Bank 3 478 482

Investments 155 887

Cash & Near Cash 3 634 369

Total Assets 30 843 551


12.2. Notes

12.2.1. The Standard Bank’s overdraft facility has been secured in terms of a General

Notarial Bond over all of the Company’s movable property and effects, including

all of the Company’s debtors.

12.2.2. Both Standard Bank and My Data have provided asset based finance to TUB, in

each case having effective security in terms of the asset(s) so financed. Standard

Bank’s General Notarial Bond provides further security to the asset finance

provided by the bank.

12.2.3. Pre-commencement trade creditors represent the holders of trade creditor

Claims (per Schedule B).

12.2.4. Other taxes are primarily PAYE and VAT.

12.2.5. Equipment rentals agreements/commitments have been capitalised in

accordance with IFRS.

12.2.6. Shareholder loans have not been subordinated in any manner.

CREDITORS & EQUITY Rand

Bank overdraft 2 644 781

Asset finance 4 429 014

Bank and asset finance 7 073 796

Pre-commencement Trade Creditors 8 562 347

Current Trade Creditors 1 186 446

Trade creditors 9 748 793

Taxation creditors 1 005 168

Sundry Creditors & Accruals 645 434

Capitalised rentals 2 219 378

Other liabilities 3 869 980

Shareholder loans 1 898 472

Total Liabilities 22 591 041

Shareholder funds 8 252 511

Equity and Liabilities 30 843 551


13. Proof of Claims

13.1. The Act does not expressly set out the manner in which Claims should be adjudicated.

13.2. The value of the Claims against the Company (both trade and other creditors) as at the

Commencement Date have been reconciled by the Company (with reference to the

Company’s own records) to the satisfaction of the BRP.

13.3. Furthermore the value of the Claims have been communicated to known Creditors and,

where differences have arisen, these have been reconciled between the Company and

the Creditor(s) in question.

13.4. The BRP has not carried out an audit of the Claims, but has satisfied himself as to

processes that have been undertaken by the Company to reconcile the Claims.

13.5. Clause 49 below sets out the process for late claims to be lodged with the BRP by those

persons who believe they have a valid claim against the Company as at the

Commencement Date which has not been recognised in this Business Rescue Plan.

14. Creditors of the Company and their Claims as at the Commencement Date

14.1. The Creditors of the Company as at the Commencement Date were R17.58 million in

aggregate, as set out in Schedule A. The Creditors can be broken down into those that

are Secured Creditors, and those that are not (the latter being Concurrent Creditors).

There were no subordinated Creditors.

14.2. The Secured Creditors are:

14.2.1. Standard Bank (overdraft) R2.69 million

14.2.2. Standard Bank (asset finance) R2.48 million

14.2.3. My Data (asset finance) R1.95 million

14.2.4. Total Secured Creditors R7.12 million


14.3. The Concurrent Creditors are:

14.3.1. Trade creditors (see Schedule B) R8.56 million

14.3.2. Shareholder loans (see Schedule C) R1.90 million

14.3.3. Total Concurrent Creditors R10.46 million

15. Other Business Rescue Obligations of the Company

15.1. Other Business Rescue obligations of the Company that are required to be addressed in

this Business Rescue Plan are those that have arisen (or will arise) subsequent to the

Commencement Date, these comprising Post-Commencement Finance and Business

Rescue Costs.

15.2. The Post-Commencement Finance obligations of the Company are:

15.2.1. loan advanced to the Company by the Strategic Investor as at the Publication

Date: R2.0 million

15.2.2. loan to be advanced to the Company by the Strategic Investor on or before 30th

April 2015: R1.0 million

15.2.3. Total Post-Commencement Finance obligations R3.0 million

15.3. Business Rescue Costs comprise the BRP’s remuneration, his expenses, and other costs

associated with the Business Rescue proceedings and the preparation of this Business

Rescue Plan.

15.3.1. The costs of the BRP have for the duration of the Business Rescue been charged

in accordance with Clause 20.1, and will be substantially settled prior to the

S151 Meeting.

15.3.2. The BRP will continue to charge for his services in accordance with Clause 20.1

until the Termination Date. On the assumption that this Business Rescue Plan

is adopted and that there are no unforeseen complications arising, it is

estimated that the BRP’s remuneration accruing between the Adoption Date

and the Termination Date will be approximately R200,000.


15.3.3. In accordance with Section 143(2) of the Act, Schedule I and Clause 20.2, the

BRP’s Contingency Fee is anticipated to be R500,000.

15.3.4. Accrued expenses relating to advisors engaged in respect of the Business

Rescue (as provided for is Section 135(3) of the Act) will be substantially settled

prior to the S151 Meeting.

15.3.5. The costs of advisors to be incurred in the period between the Adoption Date

and the Termination Date is estimated to be approximately R100,000. These

will be paid to the advisors concerned as and when invoiced to the Company.

15.3.6. Unpaid operating costs of the Company during the Business Rescue proceedings

which will be treated as Business Rescue Costs (as provided for is Section 135(3)

of the Act) amount to approximately R0.80 million (see Schedule D) and will be

settled with the service providers concerned prior to the Effective Date.

15.3.7. The total of the Business Rescue Cost obligations (actual and estimated) to be

addressed in this Business Rescue Plan is therefore anticipated to be

approximately: R1.7 million

16. Net Asset Value of the Company

16.1. The net asset value of the Company as at 28th February 2015 in accordance with the draft

2015 Audited Accounts, as prepared and audited by the Company’s Auditors, was R8.25

million.

16.2. The draft 2015 Audited Accounts are provided as Schedule H of this Business Rescue Plan.

16.3. Clauses 11 and 12 above reflect the assets and liabilities (respectively) of the Company as

at the Audit Date.

16.4. For the purposes of this Business Rescue Plan, the BRP has estimated the Net Asset Value

of the Company at the Commencement Date by calculating and applying a simple

adjustment (actual turnover less pro-rata costs for the period in question) to the Net

Asset Value of the Company at 28th February 2015.


16.5. Whilst this estimation has been included as a reference point for Affected Persons in their

review of the Business Rescue Plan, the BRP does not intend that it will have any material

effect on the proposals set out in this Business Rescue Plan as the resulting figures are no

more than comparative figures for reference purposes only.

16.6. Noting the above Clauses, the estimated Net Asset Value of the Company as at the

Commencement Date was R7.58 million.

17. Probable Liquidation Dividend

17.1. In terms of Section 150(2)(a)(iii) of the Act, the Business Rescue Plan is required to include

a statement of the probable dividend that would be received by Creditors, in their specific

classes, if the Company were to have been placed in liquidation.

17.2. In order to take advantage of the independent verification, accuracy and reconciliations

underlying the draft 2015 Audited Accounts, the computation of the probable liquidation

dividend was made on the assumption that the liquidation occurred on the Audit Date,

rather than at the Commencement Date. The BRP respectfully submits that the Affected

Persons will be better served with the liquidation dividend being calculated in this

manner than using the financial and other information generated and compiled with

reference to the internal systems and information of the Company as at the

Commencement Date.

17.3. The calculation in support of the probable liquidation dividend has been undertaken by

the BRP and reviewed by the Auditors, and by reference to the work that the Auditors

have undertaken in the audit of the Company’s records and accounts for the year ended

on the Audit Date.

17.4. The computation of the probable liquidation dividend as at the Audit Date is provided in

Schedule E. Affected Persons are, however, cautioned to exercise their own judgement

in relation to the assumptions implicit in the probable liquidation dividend calculation.

17.5. Schedule E calculates the probable dividend payable to the various classes of Creditor in

the event of the liquidation of the Company as at the Audit Date to be as follows:

17.5.1. to Secured Creditors:

17.5.1.1. Standard Bank (overdraft) 100 cents in the Rand


17.5.1.2. Standard Bank (asset finance) 100 cents in the Rand

17.5.1.3. My Data (asset finance) 100 cents in the Rand

17.5.2. to Concurrent Creditors:

17.5.2.1. Trade creditors (per Schedule B) 40 cents in the Rand

17.5.2.2. Shareholder loans (per Schedule C) 40 cents in the Rand

17.6. Noting the Commencement Date Net Asset Value adjustment referred to in Clause 16

above, the BRP is of the opinion that it would be reasonable to adjust the computation

of the liquidation dividends payable in Clause 17.5.2 by the same differential to reflect an

approximation of the probable liquidation dividend that would have been paid to

Concurrent Creditors in the event that the liquidation of the Company had been triggered

on the Commencement Date (the Secured Creditors still receiving 100 cents in the Rand).

17.7. This computation indicates that the probable dividend that would have been paid to

Concurrent Creditors in the event of the liquidation of the Company on the

Commencement Date (as envisaged in the Act) would have been approximately 35 cents

in the Rand.

17.8. The BRP further notes that a commonly applied assumption to matters of this nature is

that a liquidator could be expected to take two years (or more) to finalise and make

payment of the applicable liquidation dividends. Neither the time value of money nor

any additional costs incurred in this period have been factored into the above

calculations.

17.9. It would not be unreasonable, therefore, to consider a discount factor of approximately

10% to reflect the time value of money related to this two year period. This would result

in the present value of the probable liquidation dividend payable to Concurrent Creditors

in the event of the liquidation of the Company on the Commencement Date being

approximately 32 cents in the Rand.

18. Security Held by Creditors

18.1. The following Creditors hold security in terms of the Company’s assets as at the

Publication Date:


18.1.1. The Standard Bank of South Africa Limited (“Standard Bank”): Standard Bank

holds a General Notarial Bond (the “GNB”) in terms of which the Company has

hypothecated in favour of Standard Bank, inter alia, all of the moveable

property and effects of the Company, including all debts of whatever nature

owing to the Company, as security in respect of the overdraft, asset finance and

other borrowings (including the usual costs and interest provisions related

thereto) advanced to the Company from time to time by Standard Bank.

18.1.2. Standard Bank: Standard Bank has financed equipment (plant and machinery)

acquired by the Company valued at approximately R3.2 million, of which

approximately R2.5 million of the capital value (excluding interest on future

instalments) remained outstanding as at the Commencement Date. Ownership

of the equipment financed remains with Standard Bank until such times as the

Company has paid all of the instalments due and fulfilled all of its obligations in

terms of the applicable financing agreements. The advances made by Standard

Bank in these equipment finance facilities are also secured in respect of the

GNB.

18.1.3. My Data Automation AB (“My Data”): My Data has financed equipment (plant

and machinery) acquired by the Company valued at approximately US$692,081,

of which approximately US$168,992 of the capital value (excluding interest on

future instalments) remained outstanding as at the Commencement Date.

Ownership of the equipment financed remains with My Data until such times

as the Company has paid all of the instalments due and fulfilled all of its duties

in terms of the financing agreements.

18.1.4. Bokama Trading and Projects (Pty) Limited: As security for the Investor Loan the

Company has pledged to the Strategic Investor, for as long as the Investor Loan

remains outstanding and/or unconverted into TUB equity, the Company’s

reversionary rights to all of the Company’s interests of any nature whatsoever

in all book and other debts owing to the Company.

18.2. It is also recorded that in terms of the Lease agreement with the Company’s landlord, the

landlord is protected by a bank guarantee, issued by Standard Bank on behalf of the

Company, which guarantee is only extinguished after all claims of the landlord have been

settled on termination of the Lease. The current value of the guarantee is R0.45 million.


19. Informal Proposals from Creditors

19.1. In Terms of Section 150(2)(a)(vi) of the Act the BRP confirms that this Business Rescue

Plan does not include any proposal made informally to the BRP or the Company by a

Creditor of the Company.

19.2. The BRP further confirms that, as at the Publication Date, he is not aware of any Creditor

planning to make any such proposal.

20. Remuneration of the BRP

20.1. In terms of the BRP Engagement Agreement, attached as Schedule I, the BRP is entitled

to be remunerated by the Company at a rate of R1,500 per hour for the BRP’s services

pertaining to the Business Rescue (“Base Fees”).

20.2. In terms of Section 143(2) of the Act the BRP is entitled to propose and receive

contingency fees on the attainment of particular outcomes (“Contingency Fee”). In terms

of the attached BRP Engagement Agreement, the BRP and the Company have agreed to

Contingency Fee arrangements of this nature.

20.3. As a term of this Business Rescue Plan, the Contingency Fee will become effective upon

the approval of this Business Rescue Plan by Creditors at the S151 Meeting, noting

herewith that the shareholders of the Company have already confirmed their approval of

the BRP’s fee proposals.

20.4. The Contingency Fee will become payable subject to Substantial Implementation and on

the Termination Date, but will be subject to the payment concessions granted by the BRP

in Clause 30.4.


PART B – PROPOSALS

21. Order of Distribution

21.1. In term of Chapter 6 of the Act, and as advanced in Merchant West Working Capital

Solutions Proprietary Limited v Advanced Technologies and Engineering Company

Proprietary Limited and Others [unreported judgment no 13/12406 in the South Gauteng

High Court. per: Kgomo J at para 21], creditors in business rescue proceedings are to be

paid in the following order of priority:

21.1.1. the business rescue practitioner, for remuneration and expenses, and other

persons (including legal and other professionals) for costs of business rescue

proceedings;

21.1.2. employees for any remuneration which became due and payable after Business

Rescue proceedings began;

21.1.3. secured lenders or other creditors for any loan or supply made after business

rescue proceedings began, i.e. Post-Commencement Finance;

21.1.4. unsecured lenders or other creditors for any loan or supply made after business

rescue proceedings began, i.e. Post-Commencement Finance;

21.1.5. secured lenders or other creditors for any loan or supply made before Business

Rescue proceedings began;

21.1.6. employees for any remuneration which became due and payable before

Business Rescue proceedings began; and

21.1.7. unsecured lenders or other creditors for any loan or supply made before

Business Rescue proceedings began


22. Outline of the Business Rescue Plan

22.1. A straightforward company liquidation is relatively easy to understand in concept:

practically the business stops trading altogether; all contracts stop; all employment is

terminated; all of its assets are sold over a period; liquidation expenses are met; and what

is left is paid to creditors at the end of that period based upon the security they hold

and/or their place in the pecking order of payment priority.

22.2. Providing a Business Rescue proposal for a company, such as this, where an implicit

component of the proposal is the continued existence and trading of the company, is a

little less easy to conceptualise. Throughout the process the business continues to trade,

assets and liabilities therefore change daily in the normal course of business, and there is

no firm point of suspended animation at which one can measure or direct which assets

will be utilised to meet the outstanding claims. For example the bank balance changes

daily as the business receives payment from its customers and makes payments to its

suppliers (etc.).

22.3. To provide for an understandable and workable solution in the fluid circumstances of the

Company, this Business Rescue Plan has been structured based on the following

principles (assuming the adoption of the Business Rescue Plan):

22.3.1. The Company will continue in business, trading as a going concern as it has since

the Commencement Date, notwithstanding the concurrent process to

implement this Business Rescue Plan;

22.3.2. 31st May 2015 will become the “Effective Date” for the Business Rescue Plan;

22.3.3. 7th June 2015 shall become the “First Payment Date” for the Business Rescue

Plan;

22.3.4. Prior to the Effective Date the BRP and/or the Company (as the case may be)

will endeavour, inter alia, to:

22.3.4.1. receive the outstanding balance of R1.0 million of the Investor

Loan from the Strategic Investor (as described in Clause 23);


22.3.4.2. convert the R3.0 million Investor Loan into ordinary shares in the

Company (as described in Clause 24);

22.3.4.3. reach written confirmation on the roll-over of the Standard Bank

and Mydata funding facilities (as described in Clause 25);

22.3.4.4. adopt and implement a new shareholders’ agreement and

memorandum of incorporation for TUB (as described in Clause 26);

22.3.4.5. settle the relevant Business Rescue Costs (as described in Clause

30);

22.3.4.6. secure the Short Term Loan in the amount of approximately R2.00

million (as described in Clause 27);

22.3.4.7. settle the Company’s normal monthly trading expenses,

operational expenses, and/or other obligations as they become

due and payable; and

22.3.4.8. collect all debts due owing and payable to the Company.

22.3.5. 25% of all Concurrent Creditor Claims (trade creditors and shareholder loans)

will be compromised and the Company permanently released therefrom (as

described in Clause 28).

22.3.6. Shareholder loans will, in addition, be subordinated to the Claims of trade

creditors and will not be eligible for repayment until such times as the Claims of

trade creditors have been extinguished in full (as described in Clause 29).

22.3.7. On the First Payment Date, the Company shall utilise the Free Funds available

as at the close of business on the Effective Date to settle some or all of the

remaining Claims of the trade creditors. Payments shall be made to such

Creditors pro-rata to the value of their Claims (as described in Clause 31).

22.3.8. On or before the 7th day of each month after the month in which the First

Payment Date occurs (each being a “Subsequent Payment Date”) and until such

time as the Claims of the trade creditors have been extinguished, the Company


shall pay to the trade creditors the Free Funds available as at the close of

business on the last Business Day of the month immediately prior to the

Subsequent Payment Date (as described in Clause 31).

22.4. Once the BRP is satisfied that the above steps, processes and/or procedures have been

successfully implemented, waived and/or are operating appropriately, as the case may

be, the BRP will declare that the Business Rescue Plan has been substantially

implemented and, subject to the other components of the Business Rescue Plan having

been implemented, shall terminate the Business Rescue Proceedings of TUB.

22.5. The BRP is cognisant of the need to balance the additional time that may be invested in

further securing the matters set out in Clauses 22.3.4 above - against the competing

requests for a Business Rescue Plan to be published and implemented as soon as possible

by:

22.5.1.1. the Company in order to relieve itself of the negative connotations of

being in Business Rescue proceedings;

22.5.1.2. the Creditors who are anxious for a resolution of their outstanding

Claims against the Company;

22.5.1.3. the Act which encourages a swift resolution of Business Rescue

proceedings; and

22.5.1.4. the directors, employees, shareholders, customers, bankers and other

stakeholders who are anxious to return to “business as usual”.

It is a judgement call as to when is the right time to stop the stabilisation/planning process

within Business Rescue and to give Creditors the opportunity to vote on the proposed

Business Rescue Plan. The BRP is of the view that the timing implicit in this Business

Rescue Plan strikes an appropriate balance in this regard, granting the Claims of trade

creditors the appropriate priority to benefit from Free Funds generated by the Company.


23. Final Instalment of the Investor Loan

23.1. The Strategic Investor, the shareholders of the Company and the Company have

concluded the Transaction Agreement in terms of which the Strategic Investor agreed to

advance a Post-Commencement Finance loan of R3.0 million to the Company.

23.2. In terms of the Transaction Agreement:

23.2.1. R2.0 million of this Investor Loan was paid to the Company during March 2015;

and

23.2.2. The balance of R1.0 million of the Investor Loan is to be advanced on or before

30th April 2015.

23.3. All conditions relating to the advancement of this R1.0 million have been fulfilled.

23.4. The BRP has no reason to believe that this commitment will not be met.

24. Conversion of the Investor Loan into ordinary shares in the Company

24.1. The Transaction Agreement provides further that the full amount of the Investor Loan

(including 72% of any interest accrued thereon) shall be converted into ordinary shares

in TUB subject to the fulfilment (or waiver) of the conditions below:

24.1.1. the Net Asset Value of the Company as reflected in the 2015 Audited Accounts

being at least R8.0 million;

24.1.2. a business rescue plan prepared by the BRP and published by the Company in

terms of Section 150 of the Act having been approved at a meeting of Creditors

and any other holders of a voting interest, called for the purpose of considering

the business rescue plan in terms of Section 151 of the Act (and any suspensive

conditions contained in such business rescue plan applicable to the conversion

having been fulfilled and/or waived); and

24.1.3. the Strategic Investor having advanced the full amount of the Investor Loan to

the Company.


24.2. The first of these conditions (Clause 24.1.1) will be satisfied subject to there being no

material adjustment to the draft 2015 Annual Accounts attached as Schedule H. The third

condition (Clause 24.1.3) has been partially satisfied (the Company has already received

R 2.00 million into its bank account) and the balance of R1.0 million is contractually bound

to be received from the Strategic Investor by the end of April 2015. The fulfilment of the

second condition (Clause 24.1.2) will be determined by the Creditors in terms of their

approval, or not, of the Business Rescue Plan for TUB.

24.3. The conversion of the Investor Loan will be achieved by way of a subscription for one

additional share in the Company by the Strategic Investor, the subscription price being

equal to the conversion value of the Investor Loan (being R3.0 million plus 72% of the

accrued interest thereon).

24.4. The conversion of the Investor Loan into ordinary shares in TUB will:

24.5. increase the Net Asset Value of the Company by R3.0 million;

24.6. provide working capital for the Company;

24.7. deliver greater financial security to all Creditors; and

24.8. provide funding that will contribute to the timely settlement of Creditor Claims.

24.9. The BRP will endeavour to complete and implement the conversion of the Investor Loan

before the Effective Date.

24.10. If the Business Rescue Plan is not approved on or before 30th June 2015, the outstanding

amount of the Investor Loan must be repaid by the Company to the Strategic Investor.

25. Roll-over of the Banking and Asset Finance Facilities

25.1. The Standard Bank facilities that were suspended shortly after the Commencement Date

have been released and reinstated:

25.1.1. an overdraft facility in the amount of R2.7 million has been confirmed; and

25.1.2. asset finance facilities of in the amount of R2.48 million have been reinstated.


25.2. Discussions have commenced with Standard Bank to review all funding facilities and seek

a more attractive funding package for the Company, including an increase of the

overdraft level to R3.0 million.

25.3. Discussions are underway with My Data to confirm to the reinstatement of the pre-

Commencement Date facilities:

25.3.1. the final instalment of R0.39 million relating to an asset finance facility was

settled in April 2015; and

25.3.2. the remaining asset finance facility of R1.56 million will remain in place on

unchanged terms.

25.4. Rolling over these secured facilities will mean that Free Funds generated will not be

required to provide for an early settlement of these obligations, and the security

underlying these obligations remains in place. Servicing of these facilities in the normal

course of business has been budgeted for in the Company’s projected cash flow forecasts.

25.5. The BRP will endeavour to complete the confirmation of the roll-over of the Standard

Bank and Mydata funding facilities by the Effective Date.

26. Shareholders’ agreement and memorandum of incorporation

26.1. The BRP will oversee the adoption and implementation of a new shareholders’

agreement and memorandum of incorporation for TUB.

26.2. It is anticipated that these documents will be completed and implemented before the

Effective Date.

27. Securing a Short Term Loan

27.1. The BRP and the Company have commenced discussions with potential lenders with

regards to the advancement to the Company of a Short Term Loan (one year duration) of

approximately R2.0 million to TUB.

27.2. The sole purpose of the Short Term Loan will be to accelerate the repayment of the

Concurrent Creditor Claims of the Company’s trade creditors.


27.3. Finalisation of negotiations with regards to the Short Term Loan require (inter alia) the

potential lenders’ positive review of the 2015 Financial Statements (which accounts will

be provided to the financial institutions shortly after the Publication Date) and the

approval of the Business Rescue Plan by Creditors.

27.4. Whilst the intention would be for the Short Term Loan, if secured, to be advanced to TUB

prior to the Implementation Date, a later advancement would still be sought if this were

not the case.

27.5. Affected Persons are advised, however, that there can be no certainty that the Short

Term Loan will be secured. The impact of the Short Term Loan not being secured would

be one of timing, resulting only in the lengthening of the anticipated time that it would

take for the Claims of trade creditors to be fully extinguished in terms of this Business

Rescue Plan.

28. Partial Release from Concurrent Creditor Claims

28.1. The restructuring and rehabilitative measures that have been undertaken to restore the

Company to commercial solvency and to reposition the Company strategically will still

take some time to become fully effective and embedded.

28.2. The BRP is of the opinion that it is important to provide the Company with sufficient

financial and cash flow flexibility to fully recover from the Financial Distress which was

the root cause of its voluntary entry into Business Rescue proceedings.

28.3. Not to provide such flexibility could undermine the sustainability of the Business Rescue,

and could contribute to a return to the Financial Distress originally faced by the Company.

28.4. Negotiations with regard to the Short Term Loan have been premised on the

strengthening of the balance sheet of TUB as envisaged in this Clause 28.

28.5. In order to secure the sustainable solvency of TUB and to balance the interests of all

stakeholders in terms of this Business Rescue Plan, 25% of all Claims owing to Concurrent

Creditors will be compromised and the Company permanently released therefrom.

28.6. In effect this will result in:


28.6.1. a reduction in the total of trade creditor Claims owing and payable by the

Company, as currently set out in Schedule B, from a current amount owing of

R8.56 million to a revised amount owing of R6.42 million (the “Revised Trade

Creditor Claims”); and

28.6.2. a reduction of the total of shareholder loan Claims owing and to be repaid by

the Company, as currently set out in Schedule C, from a current amount owing

of R1.90 million to a revised amount owing of R1.42 million (the “Revised

Shareholder Loans”).

28.7. Furthermore this Business Rescue Plan requires that the Revised Shareholder Loans be

subordinated to the Revised Trade Creditor Claims, and will not be eligible for servicing

or repayment until such times as, inter alia, the Revised Trade Creditor Claims have been

paid in full.

28.8. The Revised Trade Creditor Claims (being 75% of the original Claims) will be settled from

the Free Funds of the Company with effect from the Effective Date in terms of the

mechanism set out in Clause 31.

28.9. The Claims in Schedule B will bear no interest in the period from the Commencement

Date until the Adoption Date, and the Revised Trade Creditor Claims will bear no interest

in the period from the Adoption Date until the date that the Revised Trade Creditor

Claims are settled in full.

28.10. For the sake of clarity it is recorded that each Concurrent Creditor listed in Schedules B

or C can calculate the net amount of the revised Claim that will be owing and paid to

him/her by multiplying the Rand amount of the Claim shown against his/her name in the

relevant Schedule by a factor of 75%.

28.11. It is expressly recorded that this Clause, once the Business Rescue Plan has been

approved by Creditors in terms of Section 152(2) of the Act, becomes binding in respect

of all Concurrent Creditor Claims against the Company (where the cause of action in

respect of which arose prior to or on the Commencement Date) whether actual or

contingent, known or unknown, from whatsoever cause and howsoever arising, whether

recorded in Schedules B and C or not.


29. Subordination of the Revised Shareholder Loans

29.1. As noted above, the Revised Shareholder Loans will be subordinated to the Revised Trade

Creditor Claims and will not be eligible for repayment or any other form of servicing until

such times (inter alia) as the Revised Trade Creditor Claims have been repaid in full.

29.2. The Revised Shareholder Loans will bear no interest during this period.

30. Business Rescue Costs

30.1. The further Base Fees payable to the BRP and incurred in the period between the

Adoption Date and the Termination Date are estimated to be R200,000. These fees will

be paid to the BRP as and when they arise and are invoiced to the Company in accordance

with the BRP Engagement Agreement.

30.2. The further costs of advisors to be incurred in the period between the Adoption Date and

the Termination Date is estimated to be R100,000. These costs will be paid to the

advisors in question as and when they are incurred and are invoiced to the Company.

30.3. The outstanding necessary operating costs of TUB which will be treated as Business

Rescue Costs (as set out in Schedule D) amount to approximately R0.80 million and will

be settled with the service providers concerned prior to the Effective Date.

30.4. Whilst the BRP’s Contingency Fee (see Clause 20.2) is technically an obligation of the

Company that is prioritised for payment in terms of the Act, the BRP has agreed for this

fee to be paid to him in five equal monthly instalments, the first payment date being 5

Business Days after the Termination Date, and the following four payment dates being at

one month intervals thereafter.

30.5. The reason for this concession, without the BRP in any other way waiving the

prioritisation rights to which the BRP is entitled in terms of the Act, is to relieve early cash

flow pressure on the company, to demonstrate the BRP’s own confidence in the Business

Rescue Plan, and to allow for a greater cash payment in respect of Revised Trade Creditor

Claims in those early months.


31. Mechanism for the Settlement of Revised Trade Creditor Claims

31.1. The Company shall, until such times as the Revised Trade Creditor Claims have been

settled in full, maintain a single trading bank account with its then primary banker (the

“Primary Bank Account”).

31.2. As at the Publication Date the Company’s Primary Bank Account is a current account held

with Standard Bank with an approved overdraft limit of R2.7 million.

31.3. The consolidated balance currently held in the bank accounts of the Company as at the

close of business two days prior to the Publication Date was R4.4 million. The balances

held in the various bank accounts will be consolidated into the Primary Bank Account

before the Implementation Date.

31.4. It is recorded that the following amounts will be specifically excluded from the Primary

Bank Account:

31.4.1. A deposit held by Standard Bank on behalf of the Company in the amount of

approximately R0.46 million relating to the rental guarantee given by Standard

Bank to the Company’s landlord.

31.4.2. Balances of R10,000 or less held by the Company in various foreign exchange,

savings or other such bank accounts.

31.5. In the period from the Adoption Date until the First Payment Date the Company:

31.5.1. shall pay into the Primary Bank Account any and all receipts from:

31.5.1.1. trade debtors of the Company;

31.5.1.2. sundry debtors of the Company;

31.5.1.3. the Strategic Investor;

31.5.1.4. other bank accounts held by the Company (in terms of Clauses 31.3

and 31.4);

31.5.1.5. the Short Term Loan; and


31.5.1.6. any cash realisations from the disposal of assets of the Company in

the ordinary and regular course of business.

31.5.2. shall pay from the Primary Bank Account:

31.5.2.1. any Business Rescue Costs arising in respect of Clauses 30.1 and 30.2;

31.5.2.2. all Business Rescue Costs as provided for in Clause 30.3; and

31.5.2.3. the Company’s normal monthly trading expenses, operational

expenses, and other obligations as they become due and payable.

31.5.3. shall not be entitled to pay from the Bank Account:

31.5.3.1. any ex gratia or bonus payments to employees or directors of the

Company (except to the extent that Section 136 of the Act requires

otherwise);

31.5.3.2. any dividends to the Company Shareholders;

31.5.3.3. any amount relating to outstanding shareholders loans; and /or

31.5.3.4. the cost of any asset acquired outside the ordinary course of business.

31.6. On the First Payment Date, the Company shall pay to the holders of Revised Trade

Creditor Claims the Free Funds held in the Primary Bank Account as at the close of

business on the Effective Date. Payments shall be made to holders of Revised Trade

Creditor Claims pro-rata to the value of their Claims.

31.7. In the period between the First Payment Date and the first Subsequent Payment Date,

and in any period between sequential Subsequent Payment Dates until such times as the

Revised Trade Creditor Claims have been settled in full, the Company:

31.7.1. shall pay into the Primary Bank Account any and all receipts from:

31.7.1.1. trade debtors of the Company;

31.7.1.2. sundry debtors of the Company;


31.7.1.3. the Short Term Loan (if not already received);

31.7.1.4. any cash realisations from the assets of the Company.

31.7.2. shall pay from the Primary Bank Account:

31.7.2.1. any Business Rescue Costs arising in respect of Clauses 30.1 and 30.2;

31.7.2.2. any Business Rescue Cost as provided for in Clause 30.4 (for five

Subsequent Payment Dates only); and

31.7.2.3. the Company’s normal monthly trading expenses, operational

expenses, and other obligations as they become due and payable.

31.7.3. shall not be entitled to pay from the Bank Account:

31.7.3.1. any dividends to the Company Shareholders;

31.7.3.2. any amount relating to outstanding shareholders loans; and /or

31.7.3.3. the cost of any asset acquired outside the ordinary course of business.

31.8. On each Subsequent Payment Date, and until such time as the Revised Trade Creditor

Claims have been settled in full, the Company shall pay to the holders of Revised Trade

Creditor Claims the Free Funds held in the Primary Bank Account as at the close of

business on the final Business Day of the month immediately prior to the relevant

Subsequent Payment Date. Payments shall be made to the holders of Revised Trade

Creditor Claims pro-rata to the value of their Claims.

31.9. The Company will advise the holders of Revised Trade Creditor Claims of each payment

made to them in respect of such Claims, and shall maintain an account of payments made

and balances outstanding in respect of each such Creditor.

31.10. For the sake of clarity it is recorded that the underlying intention of the relevant sub-

Clauses in this Clause 31 relating to the Primary Bank Account is to provide a fair measure

of the Free Funds that have been generated by the Company in the normal course of its

business during the period in question such that all relevant Free Funds, less the costs of


Business Rescue, can be quantified and made available to settle outstanding Revised

Trade Creditor Claims until such time as the Revised Trade Creditor Claims have been

settled in full.

31.11. For indicative purposes only, the current cash flow forecasts prepared by the Company

and reviewed by the BRP indicate that the settlement of Revised Trade Creditor Claims,

assuming that the Short Term Loan is only secured after the Effective Date, is anticipated

to be achieved in the following manner:

31.11.1.1. approximately c.7% settled on First Payment Date;

31.11.1.2. approximately c.48% (cumulatively) settled by 7th July 2015;

31.11.1.3. approximately c.61% (cumulatively) settled by 7th August 2015;

31.11.1.4. the balance settled monthly thereafter, with full settlement

anticipated before the end of the 2015 calendar year.

31.12. It is stressed that the above forecasts have not been audited, are for information

purposes only, are not undertakings made on behalf of the Company or the BRP, will be

entirely dependent on actual events and outcomes between the Publication Date and

each of the payment dates in question, and therefore should be treated by Creditors with

the appropriate level of caution.

32. Monitoring of the Primary Bank Account

32.1. Until the Termination Date the BRP will monitor the activities of the Company to satisfy

himself that all relevant funds are collected as expeditiously as is practical in the

circumstances and are deposited in the Primary Bank Account, that inappropriate

payments are not made from the funds held in the Primary Bank Account, and that the

underlying intention set out in Clause 31.10 is met.

32.2. For any Subsequent Payment Date falling after the Termination Date, and therefore after

the BRP has completed his role as the practitioner in terms of the Business Rescue, prior

to each payment date the Chief Executive Officer of the Company will:


32.2.1. review the material payments and receipts to and from the Primary Bank

Account over the previous month;

32.2.2. confirm that Primary Bank Account has been managed in accordance with

Clause 31;

32.2.3. measure the Free Funds available for the payment date in question;

32.2.4. provide the holders of Revised Trade Creditor Claims with written confirmation

of the findings of Clauses 32.2.2 and 32.2.3 above, to be sent to such Creditors

together with the relevant payment notification.

33. Potential Cash Realisations from Other Assets

33.1. The Company is seeking to generate and/or release cash into the Primary Bank Account

through a number of initiatives in addition to those already described elsewhere in this


33.2. The purpose of these initiatives is to increase the amount of Free Funds available to settle

the holders of Revised Trade Creditor Claims.

33.3. Included in these initiatives are:

33.3.1. the settlement of legacy obligations and entitlements relating to work

undertaken with a key customer over a period of the previous two years; and

33.3.2. realising investment assets held by the Company.

33.4. Any funds realised in this manner will be paid into the Primary Bank Account.

34. Ongoing Business of the Company

34.1. There are a number of changes, initiatives and developments which the BRP considers

have and will contribute to the rehabilitation of TUB. The more significant of these are

discussed below in order that they may be considered by Affected Persons in the context

of “the likelihood of the company continuing in existence on a solvent basis” (Section

128(1)(B)(iii) of the Act).


34.2. The inherent potential of the Company has been significantly transformed through the

introduction, during the Business Rescue process, of the Strategic Investor. The Company

is now 51% black female owned and controlled. The Board of Directors of the Company

now has a 50% representation of historically disadvantaged South Africans, with Ms

Sabelo being the company Chairperson. The operational management team of the

Company has been fully restructured and strengthened with the addition of Ms Sabelo

as well as a new chief operating officer and a new divisional general manager for the

Electro Mechanical Division.

34.3. The empowerment of TUB’s shareholder interests, board composition and management

team has opened up a market that was previously not previously accessible to the

Company, in particular amongst the South African government owned and controlled

organisations such as Denel, Prasa, Eskom, and Transnet.

34.4. A review of the financial and operational records of TUB would indicate that the Company

began its recovery in late 2014, but not in time to avoid the Financial Distress that was

the trigger for the Business Rescue proceedings. The three months whilst the Company

has been in Business Rescue proceedings have been, notwithstanding the burden of the

Business Rescue proceedings, positive trading months for the Company.

34.5. After averaging monthly sales of R2.9 million over the first 10 months of the 2014/2015

financial year (March to December 2014), TUB’s turnover for the period January to March

2015 averaged R6.2 million. Revenue for the full 2015/2016 financial year has been

forecast by management to be R73.9 million. The forward order book for the Company

as at the Publication Date shows firm forward orders of some R50.9 million, of which

R24.2 million will fall in the current financial year.

34.6. Structuring arrangements with a number of existing customers has resulted in the

retention of existing orders and the generation of new orders from those customers.

Material orders on a project that had been delayed/cancelled have been brought back

on stream and are anticipated to commence in the second half of the current financial

year. Most significantly the empowerment of TUB (see Clause 9.1 above) has opened up

a new market for TUB in amongst the government controlled entities. As a first step in

this regard significant progress has already been made to secure TUB’s supplier status

with Denel.


34.7. TUB has addressed its cost base. Whilst broadly maintaining its gross profit margins,

overhead costs reduced from R42.5 million in 2013/2014 to R37.9 million in 2014/15

(notwithstanding the impact of inflation over that period). Significant further cost cutting

has been achieved. The forecast for overhead costs for 2015/2016 is approximately R31.1

million.

34.8. The staff compliment in the period from 2011/2012 to 2014/2015 reduced from

approximately 109 members of staff to approximately 91 members of staff. During the

Business Rescue proceedings permanent staff numbers have fallen by a further 8 people.

The Company has managed this loss of staff through reorganisation and has not sought

to replace each departing member of staff. It is considered that staff numbers are now

appropriate for the business plan envisaged for 2015/2016.

34.9. A material asset finance agreement was completed and the final payment in relation to

that agreement will be settled prior to the Effective Date. The Company is considering

options to replace two equipment rental agreements with asset finance arrangements

which will be cash flow neutral, but financially beneficial to the Company.

34.10. The Company occupies two floors of a mixed office and factory floor premises in Jet Park,

Boksburg in terms the Lease which was in force at the Commencement Date.

34.10.1. The Lease was entered into during 2012/2013 when the prospects and turnover

of TUB were booming.

34.10.2. The premises now occupied by TUB are well in excess of those which are

required to effectively operate and manage the current business of TUB. The

financial drain relating to this “excess” expenditure is considered by the BRP to

be material in the context of this Business Rescue Plan.

34.10.3. The landlord was approached by the BRP shortly after the Commencement Date

and advised of the above, with a request that if they were able to separately let

a portion of the property then occupied by TUB, the BRP and the Company

would be pleased to accommodate that. An amicable solution to the matter

was, and indeed remains, the intention of both parties.


34.10.4. During the Business Rescue proceedings, the payment obligations of TUB in

terms of the Lease were partially suspended by the BRP in terms of Section

136(2)(a) of the Act.

34.10.5. Certain potential occupiers of space within the leased premises were

approached by TUB and the landlord, but none of these potential tenants took

up the opportunity to sub-let space in the leased premises.

34.10.6. The BRP caused the Company to fully vacate the entire first floor of the leased

premises before the end of March, this area constituting approximately 40% of

the leased premises by value. The landlord was advised of this, and the BRP re-

engaged with the landlord to propose and negotiate a just and reasonable

solution in the circumstances.

34.10.7. The BRP has made what he considers to be a fair proposal to the landlords. If

accepted, this proposal will be formalised in the period between the Adoption

Date and the Substantial Implementation Date.

34.10.8. If the BRP’s proposal is not accepted by the landlord, an application will be

made to court in terms of Section 136(2)(b) of the Act for an order that the

Company’s obligations in terms of the first floor be cancelled in the Lease as

proposed.

34.11. The directors of TUB at the Publication Date are:

34.11.1. Nana Sabelo;

34.11.2. Mauwane Kotane;

34.11.3. Thuthu Khumalo;

34.11.4. James Hinton;

34.11.5. Warren Muir; and

34.11.6. Leon Theron.

34.12. The ordinary shareholders of the Company at the Publication Date are:


34.12.1. Nana Sabelo: 406 Shares representing 51.0% of the issued shares of the

Company;

34.12.2. Warren Muir: 255 shares representing 32.0% of the issued shares of the

Company;

34.12.3. James Hinton: 67 shares representing 8.4% of the issued shares of the

Company;

34.12.4. Eben Swanepoel: 46 shares representing 5.7% of the issued shares of the

Company; and

34.12.5. Andrew Smit: 23 share representing 2.9% of the issued shares of the Company.

35. Treatment of Agreements

35.1. Other than as specifically provided for in this Business Rescue Plan, in particular in respect

of the Lease, the existing memorandum of association and shareholders’ agreement, and

the arrangements contemplated in Clauses 28 and 29, this Business Rescue Plan is not

anticipated to have any material impact on the Agreements to which the Company is

known by the BRP to be a Party.

36. Nature and Duration of the Moratorium

36.1. In terms of Section 150(2)(b)(i) of the Act, the Business Rescue Plan must include the

nature and duration of any moratorium for which the Business Rescue Plan makes

provision.

36.2. The moratorium imposed by Section 133 of the Act in respect of any legal proceedings,

including enforcement action, against the Company, or in relation to any property

belonging to the Company or in its possession, shall remain in force until the Termination

Date, and shall terminate when the Business Rescue proceedings end in accordance with

the provisions of Section 132(2) of the Act.


37. Effect of the Business Rescue Plan on Employees

37.1. During the Business Rescue proceedings, 8 employees resigned from the Company and

were not replaced.

37.2. If this Business Rescue Plan is approved and implemented as envisaged, and the Company

performs broadly in line with its expectations, it is not envisaged that there will be any

further requirement for job losses related to the Business Rescue.

38. Effect of the Business Rescue Plan on Creditors

38.1. For the Secured Creditors of the Company:

38.1.1. the Company will be returned to a state of commercial solvency, the

strategic repositioning of the Company will have been achieved, the Claims

of Secured Creditors will be rolled over in full, and such Claims will be

serviced and met in full by TUB in the normal course of business and as was

anticipated prior to Business Rescue;

38.1.2. any arrears relating to the contractual arrangements between Secured

Creditors and the Company which arose before or during Business Rescue

will be settled prior to the Effective Date;

38.1.3. security held by the Secured Creditors will remain in place and undiminished

(other than in the ordinary course of business); and

38.1.4. the balance sheet of the Company, and therefore its Net Asset Value relative

to the Claims of Secured Creditors, will be enhanced by the conversion of

the Investor Loan into equity and the partial release of the Company in

respect the Claims of all Concurrent Creditors.

38.2. For the Concurrent Creditors of the Company:

38.2.1. the Company will be returned to a state of commercial solvency, the

strategic repositioning of the Company will have been achieved, and 75% of

the Claims of Concurrent Creditors will be maintained and ultimately settled

by the Company;


38.2.2. for trade creditors, their Revised Trade Creditor Claims will be repaid from

the Free Funds of the Company with effect from the Effective Date;

38.2.3. Free Funds available to settle Revised Trade Creditor Claims will be boosted

by the receipt of the Investor Loan and the conversion of the same into TUB

equity;

38.2.4. Free Funds available to settle Revised Trade Creditor Claims may be further

boosted if and when the Short Term Loan is secured and received;

38.2.5. the balance sheet of the Company and therefore its Net Asset Value relative

to all Creditor Claims will be strengthened by the conversion of the Investor

Loan into equity and the partial release proposed in respect the Claims of

Concurrent Creditors; and

38.2.6. the Claims of shareholders in respect of shareholder loans will be

subordinated to the Claims of trade creditors. Shareholder loans will not be

eligible for servicing or repayment until such times as the Residual Trade

Creditor Claims have been settled in full.

39. Effect of the Business Rescue Plan on Shareholders

39.1. The shareholdings of the shareholders of the Company at the Commencement Date will,

as a result of the introduction of the Strategic Investor, be diluted by 51%.

39.2. The shareholders of the Company at the Commencement Date, the Strategic Investor and

the Company will, prepare, negotiate and finalise:

39.2.1. a Shareholders’ Agreement to be concluded between the Company, the

Strategic Investor and the Company’s shareholders; and

39.2.2. a Memorandum of Incorporation to be adopted by the Company in

substitution for its existing memorandum of incorporation as contemplated

in Section 16(5)(a) of the Act.

39.3. The Company will be returned to a state of commercial solvency, its balance sheet will be

strengthened, and its strategic positioning will be significantly enhanced. The


shareholders of the Company at the Commencement Date will participate in all of these

benefits, albeit in smaller proportions than was the case prior to Business Rescue.

39.4. Those shareholders of the Company at the Commencement Date having Claims in terms

of shareholder loans will maintain 75% of the value of such Claims, but will be required

to subordinate their remaining Claims in favour of the Residual Trade Creditor Claims.

40. Benefits of the Adoption of the Business Rescue Plan

40.1. Section 150(2)(b)(iv) of the Act requires that the Business Rescue Plan sets out the

benefits of adopting the Business Rescue Plan as opposed to the benefits that would be

received by Creditors if the Company were to be placed into liquidation.

40.2. As has been recorded elsewhere in this Business Rescue Plan, the BRP has sought (in

accordance with Section 7(k) of the Act) to maintain a balance between the rights of all

of the relevant stakeholders in the Business Rescue proceedings and in this Business

Rescue Plan. This section therefore considers all such stakeholders.

40.3. The Clauses below contrast the outcome of the Company theoretically being placed into

liquidation on the Commencement Date against the outcome of the Company voluntarily

entering into Business Rescue proceedings and having this Business Rescue Plan

approved and implemented, taking into account the probable liquidation dividend

computation set out in Clause 17.

40.4. The Company

40.4.1. Liquidation of the Company would have resulted in an immediate termination

of the business of TUB with negative consequences for all stakeholders,

including creditors, suppliers, customers, employees, SARS and shareholders.

40.4.2. This Business Rescue Plan provides for the continuation of the Company, to the

benefit of all stakeholders. Furthermore the Business Rescue Plan (coupled

with the initiatives completed prior to its adoption):

40.4.2.1. strengthens the balance sheet of the Company (enhancing its

technical solvency);


40.4.2.2. addresses the cash flow crisis which faced the Company at the

Commencement Date (enhancing its commercial solvency); and

40.4.2.3. addresses the strategic positioning of the Company (primarily

through the introduction of the Strategic Investor, but also through

other initiatives to drive revenue and reduce costs).

40.4.3. The Business Rescue Plan therefore achieves the first stated aim of business

rescue, being the maximisation of “the likelihood of the company continuing in

business on a solvent basis” (Section 128(1)(b)(iii) of the Act).

40.5. Returns to Creditors

40.5.1. In a liquidation scenario:

40.5.1.1. Secured Creditors would be likely to receive a full return on their

Claims in accordance with Clause 17.5.1;

40.5.1.2. trade Creditors, being Concurrent Creditors, would be anticipated

to receive 35 cents in the Rand in respect of their Claims, which if

discounted for the time value of money implicit in a two year

liquidation would be worth approximately 32 cents in the Rand at

the Commencement Date; and

40.5.1.3. shareholder loan Creditors, being Concurrent Creditors, would be

anticipated to receive 35 cents in the Rand in respect of their

Claims, which if discounted for the time value of money implicit in

a two year liquidation would be worth approximately 32 cents in

the Rand at the Commencement Date.

40.5.2. In a Business Rescue Plan scenario:

40.5.2.1. Secured Creditors will receive a full return on their Claims, in

addition to which the security of their position is enhanced by the

strengthening of TUB’s balance sheet;


40.5.2.2. trade Creditors, being Concurrent Creditors, will receive 75 cents

in the Rand in respect of their Claims, compared to the 32 to 35

cents in the Rand value of their probable liquidation dividend; and

40.5.2.3. shareholder loan Creditors, being Concurrent Creditors, will

receive 75 cents in the Rand in respect of their Claims, compared

to the 32 to 35 cents in the Rand value of their probable liquidation

dividend.

40.5.3. The Business Rescue Plan therefore achieves the first half of the second stated

aim of business rescue, being that it results in “a better return for the company’s

creditors …” (Section 128(1)(b)(iii) of the Act).

40.6. Returns to Shareholders

40.6.1. In a liquidation scenario shareholders would receive no value on their shares.

40.6.2. In a Business Rescue Scenario, the Company will be returned to a state of

commercial solvency, its balance sheet will be strengthened, and its strategic

positioning will be significantly enhanced. The shareholders of the Company

will continue to participate in all of these benefits.

40.6.3. The Business Rescue Plan therefore achieves the second half of the second

stated aim of business rescue, being that it results in “a better return for the

company’s [creditors or] shareholders” (Section 128(1)(b)(iii) of the Act).

40.7. Employees

40.7.1. In a liquidation scenario all 90 of the current employees (permanent and

temporary) of TUB would, unless the Company was sold as a going concern and

employees were transferred in accordance Section 197 of the Labour Relations

Act, lose their jobs.

40.7.2. In a Business Rescue Scenario all 90 of the current employees of TUB will retain

their jobs, and if the initiatives put in place to enhance the sales of TUB are fully

successful, there is a reasonable likelihood of further employment

opportunities arising within TUB.


40.8. Timing

40.8.1. Liquidation of the Company can be anticipated to take around two years to

complete, depending on the complexity of the estate.

40.8.2. This Business Rescue, if this Business Rescue Plan is approved and Substantial

Implementation is achieved by mid June 2015, which is the BRP’s aim and

expectation, will have taken less than five months to complete from the

Commencement Date until the Termination Date.

40.9. Fees and Costs

40.9.1. The BRP submits that the entire costs of Business Rescue, constituted by the

fees of the BRP and the costs of advisors in respect of the Business Rescue

process, will be significantly lower than the equivalent costs should the

Company be liquidated.

41. Creditors’ Consideration of this Business Rescue Plan

41.1. As noted, the BRP is required to develop and implement a Business Rescue Plan in a

manner that maximises the likelihood of the Company continuing in existence on a

solvent basis, or results in a better return for the Company’s Creditors than would result

from the immediate liquidation of the Company.

41.2. This Business Rescue Plan seeks to both secure a continued existence for the Company

on a solvent basis, and to give a substantially better return to Creditors than would result

from an immediate liquidation.

41.3. It stands to reason, therefore, that this Business Rescue Plan should be assessed by each

Creditor by considering, inter alia:

41.3.1. the timing and monetary value of the settlement of the Creditor’s Claim as

proposed in this Business Rescue Plan versus the estimated timing and

monetary value of the settlement of the Creditor’s Claim in a liquidation

scenario;


41.3.2. the value to the Creditor of future business with the Company on the

assumption that TUB is indeed rescued and continues to trade in a solvent

manner;

41.3.3. the social and economic value of rescuing the Company, its jobs, its exports, its

dependent companies, and its taxes;

41.3.4. the likelihood of the Business Rescue Plan achieving these aims; and

41.3.5. the short timeframe in which this Business Rescue will have been concluded

from the Commencement Date until the anticipated Termination Date.


PART C – ASSUMPTIONS, CONDITIONS AND GENERAL

42. Projected Profit and Loss Accounts and Balance Sheets

42.1. Projected profit and loss accounts for TUB for the three years ending 28th February 2016,

2017 and 2018 are provided in Schedule F.

42.2. Projected balance sheets of TUB as at 28th February 2016, 2017 and 2018 are provided

in Schedule G.

42.3. These projected financial statements have been prepared on the basis that this Business

Rescue Plan is approved and implemented.

42.4. The projected financial statements assume, inter alia, that:

42.4.1. recent trends in sales within the Electronic Division (PCB) will be maintained;

42.4.2. orders received from and/or revived by customers will be fulfilled;

42.4.3. the Strategic Investor and the empowerment initiatives undertaken by the

Company will over time have a positive impact on the Company’s revenue line.

A relatively conservative approach has, in the Company’s projections, been

taken in this regard.

43. Circumstances in which the Business Rescue will End

43.1. This Business Rescue will end when:

43.1.1. this Business Rescue Plan, or any amended version of this Business Rescue Plan,

has been approved by Creditors in terms of Section 152(2) of the Act and duly

adopted in terms of Section 152(3)(b) of the Act AND in the opinion of the BRP,

Substantial Implementation (as provided for in Clause 47.1 below) has been

achieved AND the BRP files a notice of substantial implementation with the

CIPC in accordance with Section 132(2)(c)(ii) of the Act; or


43.1.2. this Business Rescue Plan, or any amended version of this Business Rescue Plan,

has been rejected by Creditors and neither the BRP nor any Affected Person has

acted to extend the Business Rescue proceedings in terms of Section 153 of the

Act; or

43.1.3. a court orders the conversion of these Business Rescue proceedings into

liquidation proceedings.

43.2. The date on which the Business Rescue proceedings of TUB end in accordance with Clause

43.1 above will be the Termination Date.

44. Approval and Adoption of this Business Rescue Plan

44.1. Within 10 business days of the Publication Date, the BRP will convene and preside over a

S151 Meeting scheduled for 30th April 2015 and called for the purpose of considering this


44.2. At the S151 Meeting, this Business Rescue Plan will be approved, in accordance with the

provisions of Section 152(2) of the Act, if:

44.2.1. it is supported by the holders of more than 75% of the Creditors' voting interests

that are voted; and

44.2.2. the votes in support of this Business Rescue Plan include at least 50% of the

independent creditors' voting interests that are voted.

44.3. The voting interests of Creditors, both full and independent, are provided in Schedule A.

44.4. As this Business Rescue Plan does not envisage any alteration to the rights of the holders

of any class of the Company’s securities, the approval of the plan in accordance with

Clause 44.2 above will also constitute the final adoption of the plan in accordance with

Section 152(3)(b) of the Act.

45. The Effect of Adoption of this Business Rescue Plan on Creditors

45.1. Following the adoption of this Business Rescue Plan the BRP, having been authorised to

do so by the holders of the requisite majority of the Creditors' voting interests, shall take


the necessary steps, or require that the Company take such steps, to implement this


45.2. In Accordance with Section 154(2) of the Act, once a Business Rescue Plan has been

approved and implemented in accordance with Chapter 6 of the Act, a Creditor is not

entitled to enforce any debt owed by the Company immediately before the beginning of

the Business Rescue proceedings, except to the extent provided for in the Business

Rescue Plan.

45.3. The BRP notes that Section 152(4) of the Act provides further that a Business Rescue Plan

that has been adopted in accordance with the Act is binding on the Company, on each of

the Creditors of the Company, and every holder of the Company's securities, whether or

not such a person:

45.3.1. was present at the S151 Meeting to approve the Business Rescue Plan;

45.3.2. voted in favour of adoption of the Business Rescue Plan; or

45.3.3. in the case of Creditors, had proven their Claims against the Company.

46. Conditions for This Business Rescue Plan to Come Into Operation

46.1. For this Business Rescue Plan to come into operation, it needs to be approved by the

Creditors of the Company in accordance with Clause 44.2, and thereby be adopted in

accordance with Clause 44.4.

47. Substantial Implementation

47.1. This Business Rescue Plan will be substantially implemented when the following

conditions have been met:

47.1.1. the outstanding balance of the Investor Loan has been received by the

Company;

47.1.2. the Investor Loan plus interest (as provided for in the Transaction Agreement)

has been converted into TUB equity;


47.1.3. the BRP has received written confirmation from Standard Bank and Mydata

confirming the roll-over of the funding facilities provided to the Company by

those lenders, to the satisfaction of the BRP;

47.1.4. the shareholders and the Company have adopted and implemented the new

shareholders’ agreement and memorandum of incorporation for TUB;

47.1.5. the Company has settled the relevant Business Rescue Costs as provided for in

Clauses 30.1 to 30.3; and

47.1.6. the Company has made its first payment to trade creditors in terms of the

arrangements contemplated in Clause 31.

47.2. When the BRP is satisfied that the conditions set out in Clause 47.1 have been met, the

Substantial Implementation of the Business Rescue Plan shall be deemed to have been

achieved, and the BRP will file a notice of substantial implementation with the CIPC in

accordance with Section 132(2)(c)(ii) of the Act whereupon the Business Rescue

Proceedings of TUB will be terminated.

48. Risks

48.1. The primary risks associated with this Business Rescue Plan are:

48.1.1. that any of the conditions set out in Clause 47.1 are not achieved;

48.1.2. that the Company does not secure the Short term Loan, thus lengthening the

period taken to repay in full the Revised Trade Creditor Claims;

48.1.3. that despite the steps taken (inter alia) to reposition the company strategically,

strengthen its management, address its cost and revenue drivers, strengthen

its balance sheet, and address its working capital, it is still unable for whatever

reason to maintain its current solvent trading status.

49. Late Proof of Claims

49.1. Any person with a potential claim which does not appear in Schedules A to C, and/or any

Creditor who/which disputes the Claim amount attributed to that Creditor in Schedules

A to C, is invited to submit his/her/its application to the BRP for his/her/its new or


supplementary Claim to be approved as a Post-Adoption Date Claim and included in the

implementation of the Business Rescue Plan.

49.2. The BRP will accept applications for Post-Adoption Date Claims to be approved during the

Claims Period.

49.3. The BRP will promptly adjudicate on such applications and shall advise any such

applicants of his approval or not of such applications before the First Payment Date.

49.4. Post-Adoption Date Claims which are approved by the BRP will be treated as Claims in

accordance with this Business Rescue Plan.

49.5. The BRP’s decision to approve, or not to approve, applications for Post-Adoption Date

Claims shall be made entirely at the discretion of the BRP. The BRP shall make such

decisions in good faith and based upon the evidence and representations relating to such

claims made to him by the applicant and, if appropriate in the circumstances, the

Company.

49.6. Applications for Post-Adoption Date Claims to be approved will not be accepted after the

Claims Period.

49.7. The BRP again notes that Section 152(4) of the Act provides that a Business Rescue Plan

that has been adopted in accordance with the Act is binding on each of the Creditors of

the Company, whether or not such a Creditor was present at the S151 Meeting to

approve the Business Rescue Plan, voted in favour of adoption of the Business Rescue

Plan, or had proven its Claim against the Company.

50. Dispute Resolution

50.1. Should a dispute occur between the BRP, the Company, any Affected Party and/or any

other person in relation to this Business Rescue Plan, and/or its interpretation, and/ or

its implementation, and/or the respective rights and obligations of the aforementioned

persons in terms of this Business Rescue Plan, then the matter shall be referred to and

decided by arbitration in accordance with this Clause 50.

50.2. Arbitration between the Parties shall be subject to the following terms and conditions:


50.2.1. there shall be 1 arbitrator who shall be, if the question in issue is:

50.2.1.1. primarily an accounting matter, an independent chartered accountant

of not less than ten years' standing;

50.2.1.2. primarily a legal matter, a practising attorney or advocate of not less

than ten years' standing; and

50.2.1.3. any other matter, a suitably qualified and independent person;

50.2.2. the appointment of the arbitrator shall be agreed upon between the parties,

but failing agreement between them within a period of five Business Days after

the arbitration has been demanded, any of the parties shall be entitled to

request the chairperson for the time being of the Arbitration Foundation of

Southern Africa to make the appointment and, in making his appointment, to

have regard to the nature of the dispute;

50.2.3. subject to the other provisions of this Clause 50, each arbitration shall be

submitted to and determined by arbitration in accordance with the Commercial

Arbitration Rules of the Arbitration Foundation of Southern Africa (as

amended), and the costs of any such arbitration shall be determined by the

arbitrator as part of his or her finding;

50.2.4. the decision of the arbitrator shall be final and binding on the parties

concerned, and may be made an order of any Court of competent jurisdiction.

50.3. The provisions of this Clause 50 will not preclude any Party from approaching any Court

with the relevant jurisdiction and authority for urgent and/or interim relief pending the

outcome of an arbitration in terms hereof or in respect of arbitration proceedings in

terms hereof.

51. Governing Law and Jurisdiction

51.1. This Business Rescue Plan shall in all respects be governed by and construed in

accordance with the law of South Africa, exclusive of any conflicts of laws principles that

could require the application of any other law, and all disputes, actions and other matters

in connection therewith shall be determined in accordance with such law.


51.2. Subject to Clause 50 (arbitration), the courts of South Africa shall have non-exclusive

jurisdiction to settle any dispute arising out of or in connection with this Business Rescue

Plan (including a dispute relating to the existence, validity or termination of this Business

Rescue Plan or any non-contractual obligation arising out of or in connection with this

Business Rescue Plan (whether in whole or in part)).

51.3. Nothing in this Business Rescue Plan shall prevent any Affected Party from seeking relief

on an urgent or interlocutory basis from any Court with the relevant jurisdiction and

authority.

52. Disclaimer

52.1. The BRP in the preparation of this Business Rescue Plan has relied on information

obtained from the books and records of the Company and meetings held with relevant

persons including the Company’s directors, management, staff, Auditors, suppliers,

customers, bankers, landlords, advisors and other service suppliers of the Company.

52.2. Whilst the BRP has made certain efforts to ensure the accuracy of the information

contained herein, it should be noted that the BRP’s investigations have been limited in

nature due to:

52.2.1. time constraints placed on practitioners by the Act;

52.2.2. pressure from Affected Persons to effect a reasonably paced rescue;

52.2.3. limited financial resources available to the Company (and therefore the BRP);

and

52.2.4. the negative consequences that would arise were the Company to be restrained

in Business Rescue proceedings for a protracted period of time.

52.3. The BRP has not carried out an audit of the Company’s documents, nor has he had

adequate opportunity to independently verify information provided to him by the

Company and/or third parties.


52.4. The BRP can therefore give no warranty or representation as to the accuracy of the

information contained in this Business Rescue Plan, save as to confirm, to the best of his

knowledge and belief, that:

52.4.1. such information is reasonably accurate and up to date; and

52.4.2. any projections provided are reasonable estimates made in good faith on the

basis of factual information and reasonable assumptions as set out in this


52.5. Statements and judgements made and opinions given in this Business Rescue Plan have

been made and given in good faith and in the belief that such statements, judgements

and opinions are not erroneous, false or misleading.

52.6. Neither the BRP nor any person engaged to assist in the Business Rescue process or in

the production of this Business Rescue Plan undertake any responsibility in any way

whatsoever to any person in respect of any errors in this Business Rescue Plan arising

from incorrect information that may have been provided to them.

53. Severability

53.1. Each of the provisions of this Business Rescue Plan shall be considered as separate terms

and conditions and in the event that this Business Rescue Plan is affected by any

legislation or any amendment thereto, or if the provisions herein contained are by virtue

of that legislation or otherwise, held to be illegal, invalid, prohibited or unenforceable,

then any such provisions shall be ineffective only to the extent of the illegality, invalidity,

prohibition or unenforceability and each of the remaining provisions hereof shall remain

in full force and effect as if the illegal, invalid, prohibited or unenforceable provision was

not a part hereof.

54. Practitioners Certificate

54.1. I, David Arthur Charles Lake, being the BRP of TUB and in accordance with Section 150(4)

of the Act confirm that:


54.1.1. the information contained herein and upon which I have relied is based on

information provided to me by the Company and persons related thereto (as is

more completely set out in Clause 52 above) and such information appears to

me to be reasonably accurate, complete and up to date;

54.1.2. all projections provided herein are considered by me to be reasonable

estimates made in good faith and on the basis of factual information and

reasonable assumptions as set out in this Business Rescue Plan; and

54.1.3. subject to this Business Rescue Plan being approved by the Creditors in terms

of Section 152 of the Act, and duly implemented in accordance with this

document, I believe that TUB can be rescued (as defined in the Act).

Signed in Johannesburg on 17th April 2015

______________________________________

Dave Lake

(in his capacity as Business Rescue Practitioner)


SCHEDULES

A: Creditors and voting interests

B: Trade Creditors

C: Shareholder Loans

D: Costs treated as Business Rescue Costs

E: Probable liquidation dividend computation

F: Profit and Loss projections

G: Balance sheet projections

H: Draft Annual Accounts (as at 28th February 2015)

I : BRP Engagement Agreement


SCHEDULE A : Creditors and voting interests

Claim in respect of

TUB's Business

Rescue Proceedings

Voting Interest

in respect of

Total Creditors

Voting Interest

in respect of

Independent

Creditors

Rands % %

AAD Drivetrain Systems (Pty) Ltd 70 369.87 0.400% 0.455%

Advanced Product Technology 12 909.36 0.073% 0.084%

Adams & Adams 9 955.20 0.057% 0.064%

Airsep Labs 5 814.00 0.033% 0.038%

Arrow Stationers CC T/A Arrow Office National 8 792.65 0.050% 0.057%

Avnet Kopp (Pty) Ltd 130 170.89 0.741% 0.842%

Bircraft cc 608 423.70 3.461% 3.938%

Blane & Co (Sales) (Pty) Ltd 1 255 132.59 7.140% 8.123%

Boake Incorporated 117 457.73 0.668% 0.760%

Bosco Printed Circuits (Pty) Ltd 21 944.68 0.125% 0.142%

Brabek (Pty) Ltd 45 478.31 0.259% 0.294%

BVH Electronics (Pty) Ltd 3 086.66 0.018% 0.020%

Central Circuits cc 25 704.72 0.146% 0.166%

Central Electronic Technologies CC 31 542.66 0.179% 0.204%

Composite Dimensions (Pty) Ltd 251 210.51 1.429% 1.626%

Computron Electronic Supplies CC 18 145.27 0.103% 0.117%

Community Monitoring Services (Pty) Ltd 1 470.00 0.008% 0.010%

Connector & Wire Services cc 99 311.10 0.565% 0.643%

Connector Technology (Pty) Ltd 19 506.16 0.111% 0.126%

Cox & McKay Electrical (Pty) (Ltd) 10 328.40 0.059% 0.067%

Crystal Signs CC 2 451.00 0.014% 0.016%

Dave Wauchope (Pty) Ltd 13 577.74 0.077% 0.088%

Delta Heavy Equipment cc 14 544.19 0.083% 0.094%

Diesel Electric 128 071.26 0.729% 0.829%

DS Communications 27 317.25 0.155% 0.177%

EBV Electrolink (Pty) Ltd 213 717.66 1.216% 1.383%

EDA Technologies 32 312.81 0.184% 0.209%

Electrocomp (Pty) Ltd 27 524.84 0.157% 0.178%

Electrocomp Express 10 781.68 0.061% 0.070%

Electro Mechanica (Pty) Ltd 1 091.09 0.006% 0.007%

Electronic Research & Design CC 5 700.00 0.032% 0.037%

The ERP Company 5 700.00 0.032% 0.037%

Festo 14 435.04 0.082% 0.093%

Fintech 4 556.74 0.026% 0.029%

Foampak Zarlit Pty Ltd 4 136.59 0.024% 0.027%

Geral Mcgowan Design Group 1 778.19 0.010% 0.012%

Green Gain Consulting (Pty) Ltd 6 178.80 0.035% 0.040%

GT Electronics CC 1 154.05 0.007% 0.007%

HellermannTyton 23 616.65 0.134% 0.153%

Hiconnex (Pty) Ltd 536 857.48 3.054% 3.474%

Hydraulic Pneumatic Supplies 2 473.80 0.014% 0.016%

Creditor Name


ICORP 16 418.80 0.093% 0.106%

Incight OD 1 140.00 0.006% 0.007%

Itec Shared Services (Pty) Ltd 1 344.38 0.008% 0.009%

Interference Testing & Consultancy Services (Pty) Ltd 9 120.00 0.052% 0.059%

IS Electronics (Pty) Ltd 45 077.39 0.256% 0.292%

Jaycor International (Pty) Ltd 9 646.80 0.055% 0.062%

Jojap Manufacturing CC 33 988.00 0.193% 0.220%

K.H. Distributors CC 21 777.52 0.124% 0.141%

Kraus & Naimer Pty Ltd 26 125.24 0.149% 0.169%

Lapp Southern Africa (Pty) Ltd 25 557.55 0.145% 0.165%

Laser Stencil Technology (Pty) Ltd 19 489.44 0.111% 0.126%

Lido Electrical (East Rand) (Pty) Ltd 5 572.18 0.032% 0.036%

Mantech Electronics (Pty) Ltd 25 726.27 0.146% 0.166%

Mavtech CC 30 291.83 0.172% 0.196%

Mechatrans CC 23 573.83 0.134% 0.153%

Mercedes-Benz Commercial Vehicles, East Rand 2 387.05 0.014% 0.015%

Metrofile (Pty) Ltd 1 368.00 0.008% 0.009%

Mica Paint & Hardware (Parkrand) 2 133.38 0.012% 0.014%

M.I.M. Stationers CC 4 402.03 0.025% 0.028%

Membrane Switch Technologies Pty Ltd 14 427.38 0.082% 0.093%

Muirlenium Technology (Pty) Ltd 228 000.00 1.297% 0.000%

W.Muir 1 027 926.25 5.848% 0.000%

Mydata Automation AB 1 947 431.67 11.079% 12.603%

Mykay Tronics CC 266 164.45 1.514% 1.723%

Nuvision Electronics 26 937.05 0.153% 0.174%

Oasis Water Benoni 2 193.49 0.012% 0.014%

Orapi Africa (Pty) Ltd 2 742.73 0.016% 0.018%

Phambili Interface 40 097.23 0.228% 0.259%

Phoenix Contact (Pty) Ltd 60 566.10 0.345% 0.392%

Midas Group (Pty) Ltd T/A Parts Incorporated Africa 8 472.75 0.048% 0.055%

Plastic Concepts (Pty) Ltd 1 071 780.32 6.097% 6.936%

Proactive Packaging CC 2 515.07 0.014% 0.016%

Quality Systems Improvement cc 19 750.50 0.112% 0.128%

Igmar Grewer t/a Quamba Tech Service 1 636.60 0.009% 0.011%

Radel (Pty) Ltd 1 050 692.06 5.977% 6.800%

Ricoh South Africa (Pty) Ltd 11 721.60 0.067% 0.076%

Ronelda Van Staden Attorneys (Re Errol Liesering) 10 510.50 0.060% 0.068%

RS Components SA 226 090.75 1.286% 1.463%

Sanral 405.73 0.002% 0.003%

Saftronics (Pty) Ltd 17 587.35 0.100% 0.114%

Semi Worldwide Distributors (Pty) Ltd 106 057.62 0.603% 0.686%

SES Sivan Electronic Supplies c.c. 25 122.27 0.143% 0.163%

A.Smit 24 788.59 0.141% 0.000%

Sondor Industries (Pty) Ltd 1 407.90 0.008% 0.009%

Spectrum Concepts 29 247.27 0.166% 0.189%

Splash Paints 18 946.80 0.108% 0.123%

Standard Bank 5 170 048.48 29.412% 33.459%

Star Tech 8 920.50 0.051% 0.058%

E.Swanepoel 845 757.22 4.811% 0.000%

Tank Industries A Division of ATC (Pty) Ltd 33 078.75 0.188% 0.214%


Techmet (Pty) Ltd 25 472.87 0.145% 0.165%

Telkom 281 308.95 1.600% 1.821%

Technical & General Distribution 2 622.00 0.015% 0.017%

Thys Redelinghuys Business Solutions 11 250.00 0.064% 0.073%

Trax Interconnect (Pty) Ltd 51 500.49 0.293% 0.333%

TRX Electronics CC 143 809.11 0.818% 0.931%

Tsoho 537 969.52 3.060% 3.482%

Turbo Fasteners (Pty) Ltd 44 892.88 0.255% 0.291%

Wabco 2 017.80 0.011% 0.013%

Warrens Way Engineering (Pty) Ltd. 35 923.73 0.204% 0.232%

Zetech CC 10 635.74 0.061% 0.069%

TOTAL 17 578 299.08 100.000% 100.000%


SCHEDULE B : Trade Creditors (pre-Commencement)

Claim recognised by the

BRP to be a Concurrent

Creditor of TUB (and a

trade creditor of the

Company)

Rands

AAD Drivetrain Systems (Pty) Ltd 70 369.87

Advanced Product Technology 12 909.36

Adams & Adams 9 955.20

Airsep Labs 5 814.00

Arrow Stationers CC T/A Arrow Office National 8 792.65

Avnet Kopp (Pty) Ltd 130 170.89

Bircraft cc 608 423.70

Blane & Co (Sales) (Pty) Ltd 1 255 132.59

Boake Incorporated 117 457.73

Bosco Printed Circuits (Pty) Ltd 21 944.68

Brabek (Pty) Ltd 45 478.31

BVH Electronics (Pty) Ltd 3 086.66

Central Circuits cc 25 704.72

Central Electronic Technologies CC 31 542.66

Composite Dimensions (Pty) Ltd 251 210.51

Computron Electronic Supplies CC 18 145.27

Community Monitoring Services (Pty) Ltd 1 470.00

Connector & Wire Services cc 99 311.10

Connector Technology (Pty) Ltd 19 506.16

Cox & McKay Electrical (Pty) (Ltd) 10 328.40

Crystal Signs CC 2 451.00

Dave Wauchope (Pty) Ltd 13 577.74

Delta Heavy Equipment cc 14 544.19

Diesel Electric 128 071.26

DS Communications 27 317.25

EBV Electrolink (Pty) Ltd 213 717.66

EDA Technologies 32 312.81

Electrocomp (Pty) Ltd 27 524.84

Electrocomp Express 10 781.68

Electro Mechanica (Pty) Ltd 1 091.09

Electronic Research & Design CC 5 700.00

The ERP Company 5 700.00

Supplier Name


Festo 14 435.04

Fintech 4 556.74

Foampak Zarlit Pty Ltd 4 136.59

Geral Mcgowan Design Group 1 778.19

Green Gain Consulting (Pty) Ltd 6 178.80

GT Electronics CC 1 154.05

HellermannTyton 23 616.65

Hiconnex (Pty) Ltd 536 857.48

Hydraulic Pneumatic Supplies 2 473.80

ICORP 16 418.80

Incight OD 1 140.00

Itec Shared Services (Pty) Ltd 1 344.38

Interference Testing & Consultancy Services (Pty) Ltd 9 120.00

IS Electronics (Pty) Ltd 45 077.39

Jaycor International (Pty) Ltd 9 646.80

Jojap Manufacturing CC 33 988.00

K.H. Distributors CC 21 777.52

Kraus & Naimer Pty Ltd 26 125.24

Lapp Southern Africa (Pty) Ltd 25 557.55

Laser Stencil Technology (Pty) Ltd 19 489.44

Lido Electrical (East Rand) (Pty) Ltd 5 572.18

Mantech Electronics (Pty) Ltd 25 726.27

Mavtech CC 30 291.83

Mechatrans CC 23 573.83

Mercedes-Benz Commercial Vehicles, East Rand 2 387.05

Metrofile (Pty) Ltd 1 368.00

Mica Paint & Hardware (Parkrand) 2 133.38

M.I.M. Stationers CC 4 402.03

Membrane Switch Technologies Pty Ltd 14 427.38

Muirlenium Technology (Pty) Ltd 228 000.00

Mykay Tronics CC 266 164.45

Nuvision Electronics 26 937.05

Oasis Water Benoni 2 193.49

Orapi Africa (Pty) Ltd 2 742.73

Phambili Interface 40 097.23

Phoenix Contact (Pty) Ltd 60 566.10

Midas Group (Pty) Ltd T/A Parts Incorporated Africa 8 472.75

Plastic Concepts (Pty) Ltd 1 071 780.32

Proactive Packaging CC 2 515.07

Quality Systems Improvement cc 19 750.50

Igmar Grewer t/a Quamba Tech Service 1 636.60

Radel (Pty) Ltd 1 050 692.06


Ricoh South Africa (Pty) Ltd 11 721.60

Ronelda Van Staden Attorneys (Re Errol Liesering) 10 510.50

RS Components SA 226 090.75

Sanral 405.73

Saftronics (Pty) Ltd 17 587.35

Semi Worldwide Distributors (Pty) Ltd 106 057.62

SES Sivan Electronic Supplies c.c. 25 122.27

Sondor Industries (Pty) Ltd 1 407.90

Spectrum Concepts 29 247.27

Splash Paints 18 946.80

Star Tech 8 920.50

Tank Industries A Division of ATC (Pty) Ltd 33 078.75

Techmet (Pty) Ltd 25 472.87

Telkom 281 308.95

Technical & General Distribution 2 622.00

Thys Redelinghuys Business Solutions 11 250.00

Trax Interconnect (Pty) Ltd 51 500.49

TRX Electronics CC 143 809.11

Tsoho 537 969.52

Turbo Fasteners (Pty) Ltd 44 892.88

Wabco 2 017.80

Warrens Way Engineering (Pty) Ltd. 35 923.73

Zetech CC 10 635.74

TOTAL 8 562 346.87


SCHEDULE C : Shareholder loans

Claim recognised by the

BRP to be a Concurrent

Creditor of TUB (and a

shareholder loan in

respect of the

Company)

Rands

W.Muir 1 027 926.25

A.Smit 24 788.59

E.Swanepoel 845 757.22

TOTAL 1 898 472.06

Shareholder Name


SCHEDULE D : Costs treated as Business Rescue Costs

Costs incurred during

Proceedings and treated as

"costs of the business rescue

proceedings" in accordance

with S.135(3) of the Act

Rand

Blane & Co (Sales) (Pty) Ltd 532 237.00

Fintech Underwriting (Pty) Limited 6 835.11

Muirlenium Technology (Pty) Ltd 114 000.00

Mykay Tronics CC 144 272.05

Total 797 344.16

Supplier Name


SCHEDULE E : Probable Liquidation Dividend Computation

1. In accordance with Section 150(2)(a)(iii) of the Act, this Business Rescue Plan is required to

include the probable “dividend” that would be received by Creditors, in their specific classes, if

the Company were to be placed in liquidation.

2. The calculation below in support of the probable liquidation dividend in relation to the Company

is based on the judgement of the BRP, and has been reviewed (but not audited) by the

Company’s Auditors.

3. Affected Persons are cautioned to exercise his/her/its own due diligence in relation to the

assumptions and calculations employed by the BRP to calculate the probable liquidation

dividend.

4. As noted in the body of this Business Rescue Plan, the probable liquidation dividend has initially

been calculated as if the immediate liquidation had been triggered at 28th February 2015 (the

Audit Date) in order to take advantage of the accuracy of the independent verification by the

Auditors as well as the accuracy and reconciliations underlying the financial statements for the

year ended on that date, and the adjustments that were made in those financial statements by

the Auditors. The BRP respectfully submits that the Affected Persons will be better served with

the liquidation dividend being calculated in this manner than using the financial and other

information generated and compiled with reference to the internal management accounts and

information of the Company as at the Commencement Date.

5. The draft financial statements of the Company as at the Audit Date have been provided in

Schedule H.

6. The following derivations and assumptions were made in determining the liquidation sale

valuation of the Company's assets:

6.1. the value ascribed to fixed assets was extracted from an independent valuation

carried out on the major plant and equipment held by the Company. The valuation

was undertaken by a qualified appraiser engaged by Standard Bank, and is dated 26th

February 2015. The valuation assessed the “forced sale” value of the assets assessed

to be R5.03 million. The BRP has added a further R0.25 million to this to reflect assets

held by the Company which were not included in the assessor’s valuation.


6.2. stock, work in progress and finished goods inventory have been anticipated to realise

20% of the book value thereof, a not unreasonable figure given the specialist nature

of much of this stockholding;

6.3. trade debtors have been anticipated to realise 80% of the book value thereof, taking

into account potential claims from customers were the Company to close its doors

and default on firm orders;

6.4. sundry debtors and accruals have been anticipated to realise 75% of the book value

thereof, taking into account the accrual nature of a portion of these assets;

6.5. cash, cash at bank and investments have been anticipated to realise 100% of the

accounting value thereof.

7. The costs of liquidation in terms of Section 89 of the Insolvency Act have been estimated at 15%

of the realisable value of the assets to estimate the aggregate of liquidator’s fees, auctioneers’

fees, master’s fee, bond of security, advertising costs, admin costs and legal costs over an

approximate two year liquidation period.

8. The secured and guaranteed creditors of the Company as at 28th February 2015 comprised

Standard Bank, My Data and the landlord (Blane and Company (Sales) (Pty) Ltd).

9. The table below sets out the computation of the net proceeds that it is estimated would be

available for distribution to the creditors and shareholders of the Company in the event of the

liquidation of the Company as at the Audit Date.

10. This calculates that the probable liquidation dividends payable would be:

10.1. to preferred creditors: 100 cents in the Rand;

10.2. to secured creditors: 100 cents in the Rand;

10.3. to concurrent creditors: 40 cents in the Rand; and

10.4. to shareholders: 0 cents in the Rand


Assets per Balance Sheet as at 28th

February 2015Rand

Valuation per probable liquidation

scenarioRand

Plant & Equipment 9 616 503 Forced sale value per independent

valuation5 277 000

WIP and finished goods 2 676 018 Valued at 20% of book value 535 204

Stock 7 167 416 Valued at 20% of book value 1 433 483

Debtors - Trade 6 296 796 Valued at 80% of book value 5 037 437

Debtors - Other 1 452 449 Valued at 75% of book value 1 089 337

Cash and Bank 3 478 482 Valued at 100% of book value 3 478 482

Investments 155 887 Valued at 100% of book value 155 887

Total Assets 30 843 551 Total asset realisation 17 006 830

Liquidation costs at 15% of realised

asset value(2 551 025)

Balance available 14 455 806

Preferred creditors

Employees (960 000)

SARS (1 005 168)

Balance available 12 490 638

Secured & guaranteed creditors (7 523 796)

Balance available for payment to

concurrent creditors4 966 842

Concurrent creditors at 20/02/2015

Trade creditors 9 748 793

Sundry Creditors 645 434

Shareholder loans 1 898 472

Total concurrent creditors 12 292 699

Cents in the Rand payable to

concurrent creditors40


SCHEDULE F : Profit and Loss Projections

2016 2017 2018

Rand Rand Rand

Revenue 75 164 000 88 756 800 102 070 320

Cost of Sales 36 690 513 46 597 320 53 586 918

Gross Profit 38 473 487 42 159 480 48 483 402

Other Income 1 000 000

39 473 487 42 159 480 48 483 402

Operating expenses 28 694 937 31 564 430 34 720 873

Operating Profit 10 778 550 10 595 050 13 762 529

Depreciation 3 700 000 3 250 000 2 630 000

Finance costs 591 000 413 000 275 000

Profit (Loss) before taxation 6 487 550 6 932 050 10 857 529

Taxation 2 108 400

Profit (Loss) for the year 6 487 550 6 932 050 8 749 129

That uBeke Manufacturing (Pty) Limited

Projected Profit And Loss Accounts

For the three years ended 28th February 2016, 2017 & 2018


SCHEDULE G : Balance Sheet Projections

2016 2017 2018Rand Rand Rand

Assets

Non-Current Assets

Propery, plant and equipment 7 916 503 4 666 503 2 036 503

7 916 503 4 666 503 2 036 503

Current Assets

Inventories 10 500 000 12 600 000 14 490 000

Trade and other receivables 11 550 000 13 860 000 15 939 000

Cash and cash equivalents 1 413 039 2 851 017 10 995 045

23 463 039 29 311 017 41 424 045

Total Assets 31 379 542 33 977 520 43 460 548

Equity and Liabilities

Equity

Share capital 28 000 596 28 000 596 28 000 596

Accumulated Profit / (Loss) -10 260 126 -3 328 076 5 421 052

Shareholder funds 17 740 470 24 672 520 33 421 648

Liabilities

Finance lease liabilities 3 850 000 2 100 000 1 000 000

Non-current Liabilites 3 850 000 2 100 000 1 000 000

Trade and other payables 3 750 000 4 500 000 5 175 000

Loans from shareholders 1 898 472

Finance lease laibilities 1 670 000 1 535 000 1 100 000

Operating lease liability 1 300 000 600 000

Current tax payable 225 000 270 000 2 418 900

Provisions 250 000 300 000 345 000

Bank loan 695 600

Current Liabilities 9 789 072 7 205 000 9 038 900

Total Liabilities 13 639 072 9 305 000 10 038 900

Total Equity and Liabilities 31 379 542 33 977 520 43 460 548

That uBeke Manufacturing (Pty) LimitedProjected Balance Sheets

As at 28th February 2016, 2017 & 2018


SCHEDULE H : Draft 2015 Annual Accounts

(Provided separately)


SCHEDULE I : BRP Engagement Agreement

The Board of Directors Thata uBeke Manufacturing (Pty) Ltd 5 Estee Ackerman Street Jet Park X62 Boksburg Johannesburg, 1459 Attention: James Hinton & Warren Muir

21st January 2015 Dear James and Warren, Letter of Agreement in terms of the Appointment of David Lake as the Business Rescue Practitioner for Thata uBeke Manufacturing (Pty) Limited

1. General

1.1. The Board of Directors (the “Board”) of Thata uBeke Manufacturing (Pty) Limited (the

“Company”) adopted a resolution placing the Company under voluntary business

rescue in terms of the provisions of Chapter 6 of the Companies Act, 71 of 2008 (as

amended) (“the Act”) on 19th January 2015 and filed the resolution with the Company

and Intellectual Property Commission (the “CIPC”) on 20th January 2015.

1.2. Subject to the terms and conditions as set out in this letter of agreement (“this

Letter”), and the approvals as required of the CIPC, the Company has appointed David

Lake (trading as Lake Strategic Solutions) as its Business Rescue Practitioner (the

“BRP”) in terms of the provisions of the Act.

1.3. This Letter sets out the terms and conditions of the appointment of David Lake as BRP

to the Company during the Company’s Business Rescue proceedings (the

“Proceedings”).

2. BRP’s Role, Duties and Powers

2.1. During the Proceedings, and in accordance with the Act, the BRP:

2.1.1. will assume full management control of the Company in substitution for its Board

and pre-existing management;

2.1.2. may delegate any power or function to any person or body who or which was

part of the Board or pre-existing management structure of the Company;


2.1.3. may:

2.1.3.1. remove from office any person who forms part of the pre-

existing management of the Company; or

2.1.3.2. appoint a person as part of the management of the

Company, whether to fill a vacancy or not, subject to certain

conditions (Section 140 (2) of the Act); and

2.1.4. will be responsible to:

2.1.4.1. develop a business rescue plan to be considered by

“Affected Persons” (as defined in the Act), in accordance

with the Act; and

2.1.4.2. implement any business rescue plan that has been adopted

in accordance with the Act.

2.2. In terms of the Act the BRP must (inter alia) investigate the Company’s affairs,

business, property and financial situation to assess whether there is a reasonable

prospect of the Company being rescued as contemplated in the Act.

2.3. The BRP has an obligation to report any contravention of any law, reckless trading,

fraud, misappropriation of assets or any other criminal activity and is further obliged

to rectify any identified contraventions, including recovering misappropriated assets.

2.4. The BRP will be responsible for all payments made from the bank accounts of the

Company, and payments to third parties may only be made after the BRP has

approved payment schedules together with supporting documents. The BRP has the

right to delegate these powers to any person who was part of the pre-existing Board

or management of the Company.

2.5. Should the BRP conclude at any time that the Company cannot be rescued, or fail to

have the business rescue plan as published by the BRP adopted by creditors, then the

BRP has the right to place the Company in liquidation and the directors will remain

responsible for the affairs of the Company.

2.6. The role, duty and powers of the BRP are not limited to those as set out above in this

paragraph 2, and may include any other duties and powers as prescribed in Chapter

6 of the Act or as specifically provided for in this Letter.

3. Directors and Management’s Duties and Responsibilities

3.1. The Board and directors of the Company record that they understand their duties and

obligations as set out in Chapter 6 of the Act and hereby undertake (inter alia) to :


3.1.1. execute their fiduciary duties and responsibilities as directors in terms of the

provisions of the Act under the direction and supervision of the BRP;

3.1.2. assist and co-operate fully with the BRP during the Proceedings;

3.1.3. provide all information as prescribed in Section 142 (3) of the Act fully, timeously

and in the manner as requested by the BRP;

3.1.4. be transparent in all their dealings with the BRP and understand that withholding

any relevant information, which becomes apparent later, could compromise the

success of the Proceedings;

3.1.5. continue to manage and control the day-to-day operations of the Company and

motivate employees to give their full support during the Proceedings and

implementation of any adopted rescue plan;

3.1.6. not to enter into negotiations or conclude or amend contracts of whatsoever

nature binding the Company without the written approval of the BRP;

3.1.7. communicate to the BRP any matter that could have a bearing on or

consequences for the Proceedings, whether it be a positive or adverse effect for

the Company;

3.1.8. direct to the BRP any enquiries from any third party regarding the Proceedings

or any relevant aspect of the affairs of the Company.

4. Business Rescue Proceedings

4.1. The BRP will initially engage with the management team to understand and assess

the immediate impact of the Proceedings on the Company, and its ability to continue

to operate on a day to day basis whilst the Proceedings are underway. The BRP will

agree with the Board and management team any immediate steps that may need to

be taken to preserve value and the interests of Affected Persons in the Company

during the period that the Proceedings are underway.

4.2. The BRP will thereafter undertake a detailed initial investigation of the affairs of the

Company to fully understand the extent and impact of the financial distress facing

the company, and to confirm that there is a reasonable prospect of the Company

being rescued (as defined in the Act). This investigation will include (inter alia): an

analysis of the financial, legal and other records of the Company; meetings with the

Company’s Board and management team; meetings with other Affected Persons

(including those persons with claims against the Company); a review of the

Company’s strategy, operations, premises, assets, order book, capabilities; and any

other process, analysis, inquiry or meeting that the BRP considers to be appropriate

to the investigation. If at the conclusion of this initial investigation the BRP considers:


4.2.1. that there is a reasonable prospect of the business being rescued, the BRP will

proceed with the development of a business rescue plan as provided for in 4.3

hereunder; or

4.2.2. that there is no reasonable prospect of a successful rescue, BRP must in terms of

Section 141 (2) of the Act so inform the Company and all Affected Persons and

apply to the court for an order discontinuing the Proceedings and placing the

Company into liquidation.

4.3. If the BRP concludes that there is reasonable prospect of the Company being rescued,

he will proceed with the development and publishing of a workable business rescue

plan (whilst overseeing the on-going operations of the Company). The rescue plan

will be formulated in consultation with all and any parties that the BRP considers can

positively contribute to a successful plan, including (without limitation) the Board,

shareholders, management, employees, creditors, suppliers, regulators, potential

funders, potential investors and/or potential business partners. The plan may

consider any or all of the affairs, business, property, debts, liabilities, rights,

obligations, assets and/or equities of the Company.

4.4. Upon having concluded and published a business rescue plan, the BRP will convene a

meeting/meetings in terms of Section 151 of the Act at which the proposed business

rescue plan will be considered and, if deemed necessary, amended and voted upon

and deal with the outcome of the meeting in terms of Sections 152 or 153 of the Act,

as the case may be.

4.5. The BRP will manage the process of implementation of an adopted business rescue

plan in conjunction with the Board, management team and involved third parties as

the case may be.

4.6. The Proceedings and the BRP’s mandate as set out in this letter will end when either:

4.6.1. The court sets aside the resolution that began the Proceedings, or converts the

Proceedings into liquidation proceedings; or

4.6.2. The BRP elects to terminate the Proceedings and files a notice of termination

with the CIPC; or

4.6.3. A business rescue plan has been proposed and rejected (in a vote) and no

relevant party has elected to extend the Proceedings; or

4.6.4. A business rescue plan has been proposed, approved and implemented - and the

BRP has filed a notice confirming that the rescue plan has been substantially

implemented.


4.7. It is recorded that the Proceedings could take a number of months to complete,

depending on the complexity of the problems facing the Company and the level of

co-operation given to the BRP by creditors, the Board, management, potential

investors and other Affected Parties.

5. Remuneration of the BRP

5.1. The Company agrees to pay the BRP a base fee (excluding VAT) at a rate of R1,500.00

per hour (“Base Fees”).

5.2. Where relevant services/expenses are not directly engaged/incurred by the Company

itself, the Company agrees to reimburse the BRP for the actual cost of any

disbursements made and/or expenses incurred on behalf of the Company in the

normal course that are reasonably made/incurred in the execution of the BRP’s

functions and duties during the Proceedings, including (but not limited to):

5.2.1. the hire of venues, if deemed necessary, for prescribed meetings with Affected

Parties;

5.2.2. advisory and/or administrative support at an hourly rate agreed upon between

the BRP and the Board;

5.2.3. professional fees for the services of any other professionals that may be required

during Proceedings; and

5.2.4. costs of travel (outside of Johannesburg) for matters directly related to the

Proceedings.

5.3. In terms of Section 143 (2) of the Act the BRP is entitled to propose and receive

contingency fees on the attainment of particular outcomes. The BRP in terms of his

appointment by the Company for the Proceedings as set out in this Letter proposes,

and the Company agrees, to the following contingency fee arrangements:

5.3.1. subject to the terms set out below in this paragraph 5.3, the BRP will receive a

“Contingency Fee” (excluding VAT) equal to: the aggregate total of hours

charged in respect of Base Fees by the BRP during the course of the Proceedings

multiplied by R3,500.00, minus the aggregate total of Base Fees (in Rands) paid

to the BRP during the course of the Proceedings. The motivation and

computation behind the Contingency Fee is to bring the aggregate of Base Fees

and Contingency Fees paid to a level equal to R3,500.00 per hour, which would

be an acceptable risk related hourly fee rate for a transaction of this nature

undertaken by the BRP;

5.3.2. the Contingency Fee (excluding VAT) will, however, be limited to a minimum fee

of R200,000.00 and a maximum fee of R500,000.00 in the event that the


Proceedings are completed within a period of six completed calendar month of

their commencement. In the event that the Proceedings take a period greater

than six calendar months to complete, the maximum of R500,000.00 stated

above will be reduced by R100,000.00 per month for each complete calendar

month over and above the six calendar months that it takes for the Proceedings

to be completed, subject however to the maximum fee never falling below the

minimum fee (i.e. R200,000.00);

5.3.3. the Contingency Fee becomes payable upon and subject to the successful

implementation of an approved business rescue plan for the Company, as set out

in paragraph 62 below;

5.3.4. the Board and the directors in their individual capacities have agreed to use

its/their best endeavours to procure that these contingency fee arrangements

are approved by the holders of the majority voting rights attached to the issued

shares of the Company;

5.3.5. the Board and the directors in their individual capacities have agreed to use

its/their best endeavours to procure that these contingency fee arrangements

are approved by the holders of the requisite voting rights at any meeting of the

creditors of the Company called for the purpose of considering these fee

arrangements.

5.4. Should the Company request that the BRP provide additional services after

completion of the Proceedings, a separate contract for such consulting services will

be negotiated between the parties.

6. Terms of Payment

6.1. The BRP will issue tax invoices on a bi-weekly basis for Base Fees, disbursements and

expenses in terms of paragraphs 5.1 and 5.2 above, which fees and/or expenses will

be payable within 5 business days of invoice presentation.

6.2. The Contingency Fee provided for in paragraph 5.3 will become payable on the date

the BRP files, in terms of Section 132 (c) (ii) of the Act, for substantial implementation

of the Company’s business rescue plan.

7. Indemnity

7.1. The BRP shall not be liable for any loss or damages, of whatsoever nature, due to any

act of omission, dishonesty, misrepresentation, and/or negligence on behalf of the

Company, its directors, employees or any third party in furnishing the BRP with

information which was used by the BRP in good faith.


7.2. The company indemnifies the BRP against any and all claims made against the BRP by

any party whatsoever in connection with the Proceedings and holds the BRP harmless

in respect of all costs and expenses, damages or loss in defence of such claims.

7.3. Should any litigation arise against the Company and/or the BRP during the

Proceedings, for whatsoever reason, the Company will advance the BRP all necessary

expenses in order to defend such litigation and indemnify the BRP against any

expense or liability that may arise from such litigation.

8. Governing law and jurisdiction

8.1. This engagement shall be governed by and interpreted in accordance with the laws

of the Republic of South Africa. The Courts of the Republic of South Africa shall have

exclusive jurisdiction in relation to any claim, dispute or difference concerning the

engagement and any matter arising from it.

9. Agreement of terms

9.1. This Letter sets out the entire terms agreed between the parties (being the Company,

the Board and the BRP) relating to this engagement. Any amendments, additions or

alterations to this agreement shall not be effective unless in writing and signed by a

duly authorised representative of each party.

9.2. By signing and returning the enclosed copy of this Letter you and the Company

confirm your agreement to the terms and conditions relating to the appointment of

David Lake as BRP to the Company as set out in this Letter.

Yours faithfully,

Dave Lake

Documents

BUSINESS RESCUE PLAN - za · BUSINESS RESCUE PLAN Prepared in terms of Section 150 of the Companies Act, No. 71 of 2008 in respect of THATA UBEKE MANUFACTURING PROPRIETARY LIMITED