TELKOM SA LIMITED a company incorporated under the laws of the Republic
of South Africa and having its registered office at ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ("Telkom");THINTANA COMMUNICATIONS LLC a limited liability company organised
under the laws of the State of Delaware of the United States of America and
having its registered office at #2 Read's Way, Suite 222, Corporate Commons,
New Castle, Delaware 19720, United States of America (the "SEP");
SBC INTERNATIONAL-MANAGEMENT SERVICES, INC., a corporation
organised under the laws of the State of Delaware of the United States of America,
and having its registered office at #2 Read's Way, Suite 222, Corporate
Commons, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
TELEKOM MANAGEMENT SERVICES SDN. BHD., a corporation organised
under the laws of Malaysia and having its principal offices located at ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ("TMS").In this Agreement, Telkom, the SEP, SBCI-MSI and TMS are referred to
individually as a "Party" and collectively as the "Parties".
(A) Pursuant to a Share Transfer Agreement (as herein defined) the SEP has
acquired thirty percent (30%) of the share capital of Telkom and
established a strategic alliance with respect to Telkom;
(B) In furtherance of such strategic alliance, Telkom and the SEP desire to
transform Telkom into an economically successful world-class
telecommunications operator, and also desire that Telkom will strive to
meet the following strategic objectives in the conduct of its business to the
extent such objectives are consistent with such transformation:
- develop genuine economic empowerment of Disadvantaged Groups
- satisfy economically viable demand for basic needs in telephony
service for all South Africans and increase coverage of priority
customers, such as educational and medical facilities, community
centres and governmental agencies;
- transform Telkom into a company representative of the
demographics of the Republic of South Africa;
- create opportunities for training and skills development in the
telecommunications sector within the Republic of South Africa
- assist economic growth in South Africa by providing a national
telecommunications infrastructure which will promote the creation
of an "information society";
- promote the maintenance of employment within the core areas of
Telkom, to the extent possible;
- promote a culture of consultation with Telkom's employees
regarding the terms and conditions of their employment and the
- facilitate Telkom's management and employees in resolving any
conflicts on a timely and effective basis;
- facilitate a policy of affirmative action within Telkom with respect
to recruitment, appointments and transformation of Telkom's
- facilitate the empowerment of Disadvantaged Groups by developing
supportive procurement policies, including training programs; and
- accomplish all of the foregoing in a commercially reasonable
manner within the framework of the operation of a commercial
(C) SBC International South Africa LLC ("SBCISA"), a limited liabilitycompany organised under the laws of the State of Delaware of the United
States of America, and Telekom Malaysia-Africa Sdn. Bhd. ("TMA"), acorporation organised under the laws of Malaysia, are members of the
(D) In furtherance of the strategic objectives identified in Recital B above, the
SEP has agreed to provide (or cause to be provided) certain Personnel (as
herein defined) to Telkom and the SEP will be entitled to provide (or cause
to be provided) certain Personnel to Telkom, to provide the Strategic
Services (as herein defined) on the terms and conditions of this Agreement.
(E) SBCI-MSI, an Affiliate (as herein defined) of SBCISA, is an international
telecommunications management company with extensive expertise and
experience related to the management and operation of telecommunication
networks that provide a wide range of wireline, wireless and video
(F) TMS, an Affiliate of TMA, is a management company with extensive
expertise and experience in the area of telecommunications, and specifically
in the use of wireless technology applications in rural network buildouts;
(G) SBCI-MSI and TMS have agreed to provide Personnel at the request and
direction of the SEP to provide the Strategic Services on the terms and
conditions of this Agreement;
1 Definitions and Interpretation
means Personnel who provide Strategic Services
but who are not assigned to work in South Africa for at least six (6)
means in respect of any person, any other person which
controls, is controlled by, or is under common control with the first person
(where control is the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of any person
through ownership of shares, debentures, partnership interests or otherwise)
and shall include, without limitation, when used with respect to (i) any
person, any subsidiary of such person and (ii) the SEP, Affiliates of the
SEP and those of its owners;
means the board of directors of Telkom;
shall mean the consummation of the acquisition of Telkom
Shares pursuant to the Share Transfer Agreement, including the execution
and delivery of the Shareholders' Agreement by all of the parties thereto;
means the date of this Agreement;
means South African groups historically
discriminated against on the grounds of race, colour, origin or gender in
or "US$" means the lawful currency for the time being of the
United States of America;
"Exchange Control Approvals"
means any and all exchange control or
similar governmental approvals which shall, from time to time, be required
for the payment by Telkom of the amounts provided for herein in
connection with the provision of the Strategic Services or for the transfer of
such amounts from South Africa to any other jurisdiction;
means the exclusivity period for the provision of
certain telecommunications services specified in the PSTS Licence;
means Personnel who provide Strategic Services
and who are assigned to work in South Africa for six (6) or more
consecutive months but less than one (1) year;
means a senior executive of Telkom who reports
directly to the chief executive officer of Telkom and has primary
responsibility for management of a Management Group;
"International Personnel" means Personnel who provide Strategic Services
and who immediately prior to providing such services to Telkom were not
domiciled in either Malaysia or the United States;
"Long-Term Personnel" means Personnel who provide Strategic Services
and who are assigned to work in South Africa for not less than one (1)
"Malaysian Personnel" means Personnel who provide Strategic Services
and who immediately prior to providing such services to Telkom were
"Management Group" means a management group managed by a Group
Executive, as reflected in the Management Structure;
"Management Structure" means the management structure of Telkom as
set forth on Appendix A, attached hereto, as amended from tune to tune in
accordance with the Shareholders' Agreement;
"Managing Executive" means a senior executive of Telkom who reports
directly to a Group Executive, as reflected in the Management Structure;
"Minister" means the Minister for Posts, Telecommunications and
Broadcasting of the Republic of South Africa;
"Permit" shall mean any work, residence, immigration or other permit,
licence or clearance which, under the laws of South Africa, is required to
be obtained and/or maintained by the SEP, any Personnel Provider and/or
Personnel in connection with the provision of the Strategic Services
"Personnel" means any person who provides Strategic Services under this
"Personnel Provider" means, with respect to any Personnel, any person
which directly or indirectly provides such Personnel to Telkom at the
request of the SEP for the purpose of providing the Strategic Services; and
for purposes of this Agreement, shall include, without limitation, (i) SBC-
MSI and TMS (to the extent they provide Personnel pursuant to Clause 3 of
this Agreement) and (ii) such other Affiliates of SBCISA and TMA,
respectively, chosen by the SEP in its sole and absolute discretion which
may from time to time provide Personnel at the request of the SEP to
perform the Strategic Services as contemplated by Clause 2 of this
"PSTS Licence" means the licence for the provision of public switched
telecommunications services issued to Telkom by the Minister pursuant to
Section 36 of the Telecommunications Act;
Licence" means the licence for radio frequency spectrum and radio
stations issued to Telkom by the Minister pursuant to Section 30 of the
"Review Committee" means a committee which shall consist of three (3)
members, one (1) of which shall be appointed by each of Telkom, SBCISA
means all senior managers of Telkom other than the
chief executive officer of Telkom, any Group Executive or any Managing
means the Group Executives, Managing Executives
and Senior Managers indicated in the Management Structure as being
appointees of the SEP and whom the SEP is entitled to appoint pursuant to
the provisions of the Shareholders' Agreement;
"Shares" means the ordinary shares of Telkom, each of R10.00 par value;
"Share Transfer Agreement"
means the Share Transfer Agreement among
the SEP, Telkom and the Minister and dated March 26, 1997;
"Shareholders' Agreement"
means the Agreement among the Minister, the
SEP and Telkom and dated 14 May, 1997;
means SBC International, Inc., a company incorporated under the
laws of the State of Delaware of the United States of America, and a parent
company of SBCISA and SBCI-MSI on the date hereof;
means the Republic of South Africa;
means certain management and technical services and
advice to be provided to Telkom and its subsidiaries by Personnel in
accordance with the terms and conditions of this Agreement, which relate
to the following: business management, oversight of personnel matters,
development and implementation of marketing plans and other corporate
strategies, network planning and supervision, network operations, budget
planning, payroll processing, internal financial support services, technical
advice and assistance, regulatory compliance, customer billing and other
Act" means the Telecommunications Act, No. 103
of 1996 of the laws of South Africa as in effect on the date hereof and as
amended from time to tune;
Agreement" means the Thintana Communications LLC Limited
Liability Company Agreement dated February 26, 1997, between SBCISA
shall mean this Agreement and the Share
Transfer Agreement, the Shareholders' Agreement, the Thintana
Agreement, the PSTS Licence, the Radio Licence, the Value Added
Network Licence, the Memorandum and Articles of Association of Telkom
as in effect from tune to time, and each other agreement, document,
instrument or certificate contemplated hereby or thereby or delivered
means the two (2) year period immediately following
means Personnel who provide Strategic Services and
who immediately prior to providing such services to Telkom were
domiciled in the United States;
"U. S. Telecommunications Act"
Telecommunications Act of 1996, as amended; and
Network Licence" means the licence for the provision of
value added network services issued to Telkom by the Minister pursuant to
Section 40 of the Telecommunications Act.
(a) references to a person include, without limitation an individual,
firm, a body corporate, and an unincorporated association of
(b) references to a natural person include his or her estate and personal
(c) references to a party to this Agreement include references to the
successors or permitted assigns and transferees of its rights and/or
obligations (immediate or otherwise) of that party.
(3) Any reference to a statutory provision shall include such provision and any
regulations made in pursuance thereof.
(4) The singular shall include the plural and words importing the masculine
gender shall include the feminine and neuter genders and vice versa.
(5) Sub-clauses (1) to (4) above apply unless the contrary intention appears.
(6) The headings in this Agreement do not affect its interpretation and
references to Clauses are references to clauses to this Agreement.
(7) Any Annex, Appendix or Schedule to this Agreement shall take effect as if
set out in this Agreement and references to this Agreement shall include its
Annexes, Appendices and Schedules.
2 Strategic Services and Personnel
(1) From the date of this Agreement until the expiration or termination hereof
in accordance with Clause 10 below, the SEP shall be entitled to (i)
provide Personnel to Telkom to serve as SEP Appointments to provide the
Strategic Services and, in the sole and absolute discretion of the SEP, (ii)
arrange for the provision of such Personnel directly to Telkom by
Personnel Providers, including, without limitation, by SBCI-MSI or TMS
pursuant to Clause 3 below.
(2) During the Exclusivity Period, the (i) SEP shall, subject to obtaining any
Permits, be obligated to provide Personnel to Telkom to serve as SEP
Appointments which are Group Executives and Managing Executives to
provide the Strategic Services to Telkom and (ii) the SEP shall be entitled,
in its sole and absolute discretion, to arrange for the provision of such
Personnel directly to Telkom by Personnel Providers, including, without
limitation, by SBCI-MSI or TMS pursuant to Clause 3 below.
(3) The SEP shall be entitled to provide to Telkom (or arrange to be provided
to Telkom) Long-Term Personnel, Full-Time Personnel and Additional
Personnel for purposes of Clauses 2(1) and 2(2) hereof, and Telkom shall
be obligated to engage such Personnel, to perform Strategic Services;
provided, that for each year of the Exclusivity Period and Transition
Period, fees payable by Telkom to the SEP and all Personnel Providers
hereunder in connection with their provision of Personnel shall not exceed
the annual amounts set forth on Schedule 3; provided further, that if in any
such year amounts payable under this Agreement to the SEP and Personnel
Providers exceed in the aggregate the amount set forth in Schedule 3 with
respect to such year, Telkom and the SEP shall negotiate in good faith to
reach agreement regarding additional fees, if any, to be paid by Telkom to
the SEP or any Personnel Provider for Personnel thereafter provided to
Telkom during such year. Notwithstanding anything contained in this
Agreement to the contrary, in addition to the Personnel to be provided
pursuant to Clauses 2(1) and 2(2) above, the SEP shall be entitled to
provide (or arrange to be provided) to Telkom a number of Personnel (not
to exceed thirty (30) at any one time) at no cost to Telkom, and Telkom
shall be obligated to engage such Personnel.
(4) Subject to Clause 3, all Personnel shall be selected in the sole and absolute
discretion of the SEP, and such discretion shall include whether Personnel
are Malaysian Personnel, International Personnel or U. S. Personnel.
(5) Subject to Clause 3, the SEP, in its sole and absolute discretion may, from
time to time, substitute (or arrange for the substitution of) Malaysian
Personnel or U. S. Personnel provided to Telkom to provide the Strategic
Services with International Personnel (and vice versa). In the event that
any International Personnel are provided to Telkom to provide Strategic
Services, Telkom shall pay a fee to the SEP or the Personnel Provider
which provides such Personnel, as applicable, with respect to any such
International Personnel, in accordance with Clause 5 in an amount equal to
the corresponding fee set forth with respect to U. S. Personnel in Schedule
(6) The rights of the SEP to provide (or arrange for the provision of)
Personnel set forth in Clauses 2(1), 2(3), 2(4) and 2(5) above are subject to
and limited by the provisions contained in Section 4 of the Shareholders'
(7) Telkom shall be obligated to engage Personnel provided to it by the SEP or
a Personnel Provider pursuant to this Clause 2 in the position for which
they are provided. No Personnel provided by the SEP or any Personnel
Provider to Telkom hereunder shall be deemed an employee or agent of
Telkom by virtue of such arrangement. No Personnel provided to Telkom
by any Personnel Provider hereunder shall be deemed an employee or agent
3 Provision of Personnel by SBCI-MSI and TMS
(1) SBCI-MSI shall, upon the request of and in consultation with the SEP,
provide Personnel to Telkom for purposes of Clause 2 above. Such
Personnel may be either U. S. Personnel or International Personnel and
shall be removed and replaced by SBCI-MSI upon the request of the SEP
from time to time; provided, that SBCI-MSI shall be entitled to provide
Personnel hereunder which are not employed by SBCI-MSI or its Affiliates
at the time that SBCI-MSI proposes to provide such Personnel to Telkom
only with the prior written consent of TMA, such consent not to be
(2) TMS shall, upon the request of and in consultation with the SEP, provide
Personnel to Telkom for purposes of Clause 2 above. Such Personnel may
be either Malaysian Personnel or International Personnel and shall be
removed and replaced by TMS upon the request of the SEP from time to
time; provided, that TMS shall be entitled to provide Personnel hereunder
which are not employed by TMS or any of its Affiliates at the time that
TMS proposes to provide such Personnel to Telkom only with the prior
written consent of SBCISA, such consent not to be unreasonably withheld.
(3) The Parties hereby acknowledge that neither SBCI-MSI nor TMS shall
provide Personnel to Telkom except at the request of, and in consultation
with, the SEP in accordance with Clauses 3(1) and 3(2) as applicable.
4 Additional Contribution
In the event that, during the term of this Agreement, the members of the
SEP or any of their respective Affiliates sell, licence or otherwise generally
make available technology or intellectual property (e. g.. patented software,
technical information or know how) to third parties, the SEP undertakes to
use its reasonable endeavours to cause such members or Affiliates, as
applicable, to offer such technology or intellectual property, as the case
may be, to Telkom on terms and conditions which are no less favorable
than those upon which such members or Affiliates actually provide such
technology or intellectual property to any such third party.
(1) Subject to other applicable provisions of this Clause 5 below, Telkom shall
pay a fee to each person that directly provides Personnel to Telkom (i. e..
the SEP or a Personnel Provider and including, if applicable and without
limitation, SBCI-MSI or TMS) with respect to such Personnel as follows:
(a) with respect to any Long-Term Personnel provided to Telkom to
provide Strategic Services, the amount per annum (payable monthly)
set forth in Schedule 1 attached hereto, pro rated for any partial
year of this Agreement in which such Personnel are provided to
(b) with respect to any Full-Tune and Additional Personnel provided to
Telkom to provide Strategic Services, an amount per month during
each year of the term of this Agreement set forth in Schedule 2
attached hereto, pro rated for any partial month in which such
Personnel are provided to Telkom.
(2) Each Person that directly provides Personnel to Telkom (i. e., the SEP or a
Personnel Provider and including, if applicable and without limitation,
SBCI-MSI or TMS) shall submit to Telkom monthly invoices in Dollars for
all fees payable hereunder by Telkom including fees for services provided
by the Personnel to Telkom in the immediately preceding month. Such
invoices shall set forth the Personnel provided to Telkom by such Personnel
Provider who provided Strategic Services during the period elapsed under
each invoice. Telkom shall, within thirty (30) days from the date of such
invoices, pay such monthly invoices in full as herein provided. In the
event that Telkom fails to pay any amounts due under this Agreement
within such thirty (30) day period and in the manner herein provided, any
such unpaid amounts shall bear interest at the rate of fifteen (15%) per
annum, from the date of expiration of such thirty (30) day period to the
date Telkom pays such amounts to the SEP or such Personnel Provider.
(3) All amounts payable hereunder by Telkom to the SEP or any Personnel
Provider (including, if applicable, SBCI-MSI and TMS) shall be paid in
Dollars in New York, New York by wire transfer of immediately available
funds to the respective accounts specified from time to time by the SEP or
the applicable Personnel Provider. Such payments shall be made free from
any set-off, withholding or deduction which, if payable in connection with
any payments due or made hereunder shall be borne and paid by Telkom,
and such payments will be increased by any value-added tax for which the
SEP or any Personnel Provider, as applicable, shall be liable in respect of
such payments. In the event that Telkom is required by any law or
regulation to make any deduction or withholding (on account of tax or
otherwise) from any payment to be made under this Agreement, then
Telkom shall, together with such payment, pay such additional amount as
to ensure that the SEP and each such Personnel Provider receives (free and
clear of any tax or other deductions or withholdings) the full amount which
it would have received if no such deduction or withholding had been
(1) Telkom agrees to discharge promptly all costs and obligations payable or to
be performed by it in respect of the Strategic Services and will provide the
Personnel with such assistance and access to its facilities, operations and
staff as Telkom would ordinarily provide employees employed by Telkom
in positions which are equal to (or substantially equal to) or lower than
positions for which such Personnel have been provided to Telkom in terms
of seniority and responsibility. Telkom further agrees to provide the SEP
and each Personnel Provider with such assistance as the SEP and each
Personnel Provider may reasonably request to enable the SEP and each
such Personnel Provider to obtain and maintain any Permit.
(2) Telkom and the SEP agree that on the date which is three (3) months after
the Commencement Date, they shall meet and, in good faith, consult with
each other to (i) identify additional strategic objectives of Telkom and (ii)
consider whether and the extent to which the SEP should provide (or
arrange for the provision of) additional Personnel to Telkom to provide
Strategic Services. In the event that Telkom and the SEP, pursuant to such
consultation, reach agreement with respect to items (i) and (ii), then, the
Parties agree, subject to Clause 22 below, to take all such actions as may
be reasonably necessary to amend the provisions of this Agreement to give
effect to such agreement.
(3) The Parties agree that, upon the request of either of Telkom or the SEP,
but not more than once in any quarter, the Review Committee shall meet
and, in good faith, review the performance of the Personnel.
(4) The Parties agree that, notwithstanding any provision to the contrary
contained herein, in the event of the expiration or termination of this
Agreement in accordance with Clause 10 hereof; if (i) at the time of any
such expiration or termination the SEP owns at least fifteen percent (15%)
of the then issued Shares and (ii) either of Telkom or the SEP so requests,
then the Parties will negotiate, in good faith, to extend the term of this
Agreement for a mutually agreed period.
7. Settlement of Disputes
(1) The Parties shall in good faith attempt to resolve any dispute, controversy
or claim between or among any of them arising out of or relating to this
Agreement or the breach, termination or invalidity thereof (hereafter, a
"dispute") amicably. Any dispute which they have been unable to resolve
by mutual agreement shall be submitted to binding arbitration as provided
below, at the written request of any Party in accordance with the provisions
of Clause 13 of this Agreement.
(2) Any dispute which cannot be resolved amicably shall be exclusively and
finally resolved by arbitration conducted in accordance with the
UNCITRAL Arbitration Rules (the "Rules") as at present in force (except
as modified below); provided that such arbitration may not be commenced,
unless the Parties to the dispute otherwise agree, until the thirty-first (31st)
day after the written request referred to in Clause 7(1) has been received
by the other Party or Parties to such dispute. The Appointing Authority
under the Rules shall be the Secretary General for the tune being of the
International Chamber of Commerce (the "ICC") International Court of
(3) There shall be three (3) arbitrators. The claimant(s), irrespective of
number, shall appoint jointly one arbitrator; the respondent(s) irrespective
of number, shall appoint jointly the second arbitrator; and a third
arbitrator, who shall serve as presiding arbitrator, shall be appointed as
provided in the Rules. In the event that any respondent or joint
respondents shall fail to appoint an arbitrator, such arbitrator shall be
appointed by the Appointing Authority.
(4) A sole respondent may join a Party other than the claimant in the
arbitration within fifteen (15) days after receipt by the respondent of
notification from the claimant of the appointment of an arbitrator, provided
that the right to relief by the respondent against such joined Party depends
on the determination of substantially the same question of law or fact
which, if separate actions were instituted, would arise on each action. In
the event of such joinder, the arbitrator to be appointed by the respondent
pursuant to Clause 7(3) above shall be appointed jointly by the respondent
and the joined party, and if they fail to so jointly appoint, such arbitrator
shall be appointed by the Appointing Authority. Once the arbitration panel
is constituted, upon the request of the claimant the panel shall render a
decision as to whether such joinder was appropriate based on the terms of
this Clause 7(4), and if the arbitration panel determines that such joinder
was not appropriate then it shall sever the joined claim from the pending
(5) The place of arbitration shall be Gauteng Province, South Africa and the
award shall be deemed rendered in South Africa. The arbitrators may
conduct proceedings or portions of proceedings at venues they deem
convenient. The language of the arbitration shall be English. The
foregoing notwithstanding, the place of arbitration for disputes between or
among the SEP, SBCISA, TMS and/or any other Personnel Provider shall
(6) The arbitrators shall be able to read, write and converse fluently in
English. The presiding arbitrator shall not be a national of any country in
which any Party or ultimate parent of such Party is domiciled.
(7) In addition to the powers expressly provided in the Rules, the arbitrators
shall have the power to (i) investigate any matter, fact or thing which they
consider necessary or desirable in connection with the dispute submitted to
the arbitral panel and, for that purpose, shall have the widest powers of
investigating all the books, records, documents and other materials in the
possession of the Parties or under their control, and the right to make or
have made copies thereof and/or take extracts therefrom and the right to
have such documents or copies thereof produced and/or delivered at any
place reasonably requested by the arbitrators for the aforesaid purposes, (ii)
inspect goods and property of the Parties, (iii) question under oath the
Parties (including their officers, directors and employees), (iv) summon
witnesses to appear at the hearing before the arbitral panel and (v) record
evidence. The arbitrators shall hold hearings and render their award as
(8) In connection with any arbitral proceeding commenced under this Clause,
each Party shall have the power to (i) request and inspect documents and
other materials in the possession of any Party or under their control, make
or have made copies thereof and/or take extracts therefrom and have such
documents or copies thereof produced and/or delivered at any place
reasonably requested by such Party for the aforesaid purposes, (ii) present
oral evidence at any hearing conducted before the arbitral panel, (iii)
interview witnesses to appear at any hearing conducted before the arbitral
panel, (iv) cross-examine witnesses summoned by the other Party at any
hearing conducted before the arbitral panel and (v) submit other evidence to
the arbitral panel as such panel may permit;
(9) In rendering their decision, the arbitrators shall be bound by the Agreement
and shall interpret the Agreement under the laws of South Africa. In
addition to the foregoing, the arbitrators are empowered to act ex acquo et
bono in the event that the laws or regulations of the Republic of South
Africa would cause an unfair result. The arbitrators' decision shall be
reasoned and shall be rendered in writing, shall be final and binding upon
the Parties and shall be carried into effect and may be enforced and
confirmed as a judgment or an order of any competent court at the instance
(10) In any arbitration proceedings under this Clause 7, the arbitrators shall be
empowered to award monetary damages, including, without limitation,
consequential, direct and punitive damages, to the extent permitted by
South African law. If one or more Parties prevail on all or substantially all
of the claims of any arbitration proceedings under this Clause 7, the other
Party or Parties not prevailing shall pay all fees and expenses of the
arbitrators, the ICC and of such prevailing Party or Parties, including such
Party's or Parties' reasonable attorneys' fees. Any monetary award made
hereunder shall be made in Dollars and payable free of any tax or other
deduction, and shall include (i) interest from the date of any breach or
other violation of this Agreement to the date on which such award is paid
at a fair rate determined by the arbitrators and (ii) any additional amounts
necessary to compensate the Party or Parties to whom such award is made
pursuant to this Clause for any taxes imposed on such Party or Parties or
its or their owners with respect to such amount (except for income taxes
payable with respect to any such award that is paid to satisfy a claim for
amounts which, if paid as and when due as claimed, would have constituted
taxable income to such Party or Parties).
(11) In any arbitration proceeding under this Clause 7, the arbitrators shall be
authorised to order specific performance of any obligations arising under
(12) This Clause shall not preclude any Party from obtaining relief by way of
motion proceedings on an urgent basis or from instituting any interdict,
injunction or any similar proceedings in any court of competent jurisdiction
in order to preserve the subject matter of the arbitration or the availability
of effective relief pending the decisions of the arbitrators. Notwithstanding
anything contained in the Rules to the contrary, the Parties shall not be
restricted from making any disclosures required by law or enforceable legal
process, or by the rules of any securities exchange or regulatory authority
having jurisdiction over any such Party.
(13) In any arbitration proceedings under this Clause 7, the Parties shall remain
bound by the provisions of Clause 11 of this Agreement.
8. Representations, Warranties and Undertakings
(1) On the date hereof, each of the SEP and Telkom represents and warrants to
(a) it is a company duly incorporated or otherwise formed with limited
liability and validly existing in good standing under the jurisdiction
in which it is formed and has full power, authority and legal right to
own its property and assets and to carry on its business subject to
the terms of any licence required to be held by it to carry on such
(b) it has full power, authority and legal right to enter into this
Agreement and to engage in the transactions contemplated hereby
and has taken or obtained all necessary corporate and other action to
authorise the execution and performance of this Agreement;
(c) this Agreement constitutes the legal, valid and binding obligation of
that Party and is enforceable in accordance with its terms;
(d) neither the execution of this Agreement nor the performance by that
Party of any of its obligations or the exercise of any of its rights
hereunder will conflict with or result in a breach of any treaty, law,
regulation, judgment, court order, authorisation or agreement or
obligation applicable to that party or cause any limitation placed on
that Party or on the powers of that Party's directors to be exceeded;
(e) all authorisations legally required from any governmental or other
authority or from the shareholders or creditors of that Party for ▇▇
▇▇ accordance with the execution, validity and performance of this
Agreement, other than Permits related to the provision of Personnel,
have been obtained and are in full force and effect;
(f) that Party is not in default under any treaty, law, regulation,
judgment, court order, authorisation, or agreement or obligation
applicable to it or its assets or revenues, the consequences of which
default could materially and adversely affect its ability to perform
its obligations under this Agreement;
(g) no litigation, arbitration or administrative proceeding is currently
taking place or pending or, to the knowledge of that Party,
threatened against that Party or its assets which proceeding could
materially and adversely affect the ability of that party to perform
its obligations under this Agreement;
(h) that Party is generally subject to civil and commercial law and to
legal proceedings and neither that Party nor any of that Party's
assets or revenues is entitled to any immunity or privilege
(sovereign or otherwise) from any set-off, judgment, execution,
attachment or other legal process.
(2) The SEP represents, warrants and undertakes that:
(a) (i) it has or will have the capacity, and is or will be in a position to
provide, the Strategic Services to Telkom (or it is or will be in a
position to cause one or more suitably qualified Personnel Providers
with adequate capacity to provide the Strategic Services to Telkom);
(ii) it has or will have (or such Personnel Providers have or will
have) the technical resources to provide the Strategic Services to
Telkom; (iii) it has or will have (or such Personnel Providers have
or will have) available to them persons with the requisite skills,
qualifications and experience to meet the SEP's obligations under
this Agreement; and (iv) during the term of this Agreement this will
(b) the carrying out of its obligations pursuant to this Agreement will
not conflict with or constitute a breach of, or default under, any
contract or agreement or arrangement to which it is a party or by
which it may be bound, nor will any such action result in any
violation of any treaty, law, judgment or court order save where
absence of such title or conflict with, breach of or default under any
contract, agreement or arrangement or violation of any treaty, law,
judgment or court order would not in any such case materially or
adversely affect the ability of the SEP to perform its obligations
(c) the Strategic Services will be provided with reasonable care and
skill and in a manner that is consistent with good industry practice.
(3) Each Party undertakes that such Party shall use its reasonable endeavours
to comply with and cause its Affiliates to comply with all applicable laws
of South Africa, and Telkom and its Affiliates shall not at any time conduct
any business or take any act which would cause the SEP, its owners, any
Personnel Providers or any of their Affiliates to be in violation of such
laws. Also, the SEP, SBCI-MSI and TMS shall (and the SEP shall cause
each other Personnel Provider to) comply with all laws, rules and
regulations applicable to them in connection with the provision of
Personnel. In addition to the foregoing, Telkom acknowledges that
SBCISA, SBCI, SBCI-MSI and their Affiliates are subject to the United
States Communications Act of 1934, as amended by the
Telecommunications Act of 1996 and as amended from time to time, and
Telkom shall not and Telkom shall cause its Subsidiaries to not take any act
which would cause SBCISA, SBCI, SBCI-MSI or any of their Affiliates to
be deemed to be engaged in the provision of (i) long distance
telecommunications services, (ii) alarm monitoring services or (iii) any
other services which, in the opinion of SBCISA are prohibited by such Act
in the "In-Region" states as defined in Section 271(i)(l). The Parties
acknowledge that the "In-Region" states of the United States of America
applicable to SBCISA, SBCI, SBCI-MSI and their Affiliates currently
include the States of Arkansas, Kansas, Missouri, Oklahoma and Texas.
(1) None of the SEP, the Personnel or any Personnel Provider, any of their
Affiliates, officers, directors, and each of their respective assignees,
subcontractors, directors, officers, shareholders, employees or agents shall
be liable to Telkom or any of its Affiliates for any claim, loss, damage or
expense whatsoever sustained or incurred by Telkom or its Affiliates as a
result of the actions or the failure to act of the SEP, the Personnel or such
Personnel Provider; provided, that the SEP fully shall indemnify and hold
Telkom or any of its Affiliates, officers, directors and each of their
respective assignees, subcontractors, directors, officers, shareholders,
employees or agents harmless from and against any claims, damages or
liabilities actual or alleged, costs and expenses, including attorneys' fees
and expenses (including investigative costs) arising directly from the wilful
misconduct of the Personnel in connection with the provision of the
Strategic Services to Telkom in accordance with the terms of this
Agreement. Notwithstanding anything contained herein to the contrary,
none of the SEP, the personnel or any personnel Provider or any Affiliate
thereof or any other person shall have any liability to Telkom or its
Affiliates whatsoever for any indirect losses, consequential or incidental
damages, including, without limitation, loss of profits or goodwill,
sustained or claimed by any person, firm, company or organisation
whatsoever and howsoever arising, including, without limitation, as a result
of the performance or non-performance hereunder by the SEP, the
Personnel or any Personnel Provider.
(2) Telkom shall fully indemnify and hold the SEP, the Personnel, any
Personnel Provider and their Affiliates and each of their respective
assignees, subcontractors, directors, officers, shareholders, employees and
agents, harmless from and against any claims, damages or liabilities, actual
or alleged, costs and expenses, including attorneys' fees and expenses
(including investigative costs) arising directly from Telkom's acts related to
this Agreement, except to the extent caused by the wilful misconduct of the
SEP, the Personnel or the Personnel Provider, as the case may be.
(3) Telkom shall fully indemnify and hold the Personnel harmless from and
against any claims, damages or liabilities, actual or alleged, costs and
expenses, including attorneys' fees and expenses (including investigative
costs) arising from acts of the Personnel to the same extent that Telkom
would ordinarily indemnify its officers, directors, representatives and/or
employees, as the case may be.
(4) Telkom shall maintain officer and director insurance with respect to the
Personnel as Telkom ordinarily maintains with respect to the officers and
directors of Telkom generally.
(1) This Agreement shall commence on the Commencement Date and shall
continue in force until terminated pursuant to Clause 10(2) or 10(3).
(2) This Agreement shall automatically terminate upon the occurrence of any
(a) unless otherwise mutually agreed by the Parties, upon the expiration
of the Transition Period;
(b) the SEP ceases to hold an ownership percentage of at least fifteen
(15%) in the issued share capital of Telkom; provided, that if the
Exclusivity Period is extended, then, at the request of Telkom, this
Agreement shall continue in effect notwithstanding that the SEP
ceases to hold at least fifteen percent (15%) of the issued share
capital of Telkom until the earlier of (i) the date on which the
Exclusivity Period (as so amended) terminates and (ii) the sixth
anniversary of the date hereof.
(c) the liquidation or dissolution of either of Telkom or the SEP;
(3) This Agreement shall terminate, at the option of the SEP, upon the
occurrence of any of the following:
(a) the failure of Telkom to pay, in the manner herein provided, any
payment due hereunder within thirty (30) days after receipt of notice
(b) the failure of Telkom to comply with its obligations under Clause
(c) at any time Exchange Control Approvals terminate or lapse or are
revoked and are not renewed or reinstituted;
(d) the Shareholders' Agreement terminates for any reason or the
Minister (as therein defined) breaches any of the terms thereof; or
(e) the consent rights, board and committee representation rights or any
other rights granted to the SEP under the Shareholders' Agreement
or Telkom's Memorandum and Articles of Association are deemed
or become unenforceable for any reason; or
(f) Telkom ceases to be a significant provider of telecommunications
services for any reason whatsoever.
(4) In addition, this Agreement may be terminated by SBCI-MSI or TMS (with
respect to themselves only) by written notice to the other Parties as
(a) SBCI-MSI may terminate this Agreement with respect to itself, and
TMS may terminate this Agreement with respect to itself, in the
event that the terminating Party (SBCI-MSI or TMS, as applicable)
declares bankruptcy or seeks legal protection from its creditors;
(b) SBCI-MSI may terminate this Agreement with respect to itself if
none of SB CISA or any of its Affiliates owns an equity interest in
(c) TMS may terminate this Agreement with respect to itself if none of
TMA or any of its Affiliates owns any equity interest in the SEP.
Notwithstanding any provision contained herein to the contrary, a
termination by either SBCI-MSI or TMS pursuant to this Clause 10(4) (as
applicable, the "Terminating Party") shall be effective only with respect to
the Terminating Party and shall have no effect on the rights, obligations, or
duties of any other Party hereto (all of which rights, obligations and duties
shall continue in full force and effect).
(5) If this Agreement terminates pursuant to Clause 10(2) or 10(3) hereof (or
with respect to a Terminating Party pursuant to Clause (10)(4) hereof), all
further obligations of the Parties hereto (or of such Terminating Party, as
applicable) shall terminate and no damages or other compensation shall be
payable by any Party (or by such Terminating Party, as applicable), except
that nothing in this Clause 10(5) shall relieve any Party (or by such
Terminating Party, as applicable) hereto of any liability for any breach of
this Agreement that occurred prior to termination or release any Party (or
such Terminating Party, as applicable) from the continued application of
any provisions of this Agreement expressed to be applicable after
(1) The Parties recognize that any and all information, know-how and
management material and expertise (collectively, "Confidential
Information") disclosed by any Party or any Personnel Provider or any of
their respective employees, agents or other representatives under this
Agreement or in connection with the provision of Strategic Services
(whether directly or indirectly) is the exclusive property of such Party or
Personnel Provider, as applicable. Subject to Clause 4, each of the Parties
(the "recipient") agrees in relation to the Confidential Information of any
(a) to use the Confidential Information of any owner solely for the
purposes contemplated by this Agreement and as necessary in
connection with the business and affairs of Telkom;
(b) to keep such information confidential and to disclose it only to their
or their Affiliates' officers, directors, employees, representatives,
consultants and professional advisers or such other persons who
have a need to know such information in connection with the
business or affairs of Telkom or the recipient or their respective
Affiliates, who are aware of the recipient's obligations of
confidentiality hereunder with respect to such information and have
agreed to comply with such obligations (it being understood that any
recipient which discloses any Confidential Information to any other
person shall be responsible for any further use or disclosure of such
information in breach of the restrictions contained herein).
(c) at any time requested by an owner in writing, and upon termination
of this Agreement, promptly deliver (or caused to be delivered) to
the owner or, if requested by the owner, destroy (or cause to be
destroyed), in either case without retaining any copies thereof, all of
the owner's Confidential Information in the possession or control of
the recipient or its Affiliates or their respective officers, directors,
employees, representatives, consultants and professional advisors.
This Clause (c) is applicable to all documentation and other
materials (including magnetic and optical storage media) and all
copies thereof containing or embodying Confidential Information,
including documentation and materials such as specifications,
manuals, training material, written instructions, schedules and plans.
(2) The foregoing notwithstanding, no recipient shall be obligated to treat
information as Confidential Information of an owner under this Agreement if :
(a) such information enters the public domain other than in breach of
this Clause 11 or any other obligation of confidentiality owed to the
(b) such information was lawfully received by the recipient from a third
party who, to the knowledge of such recipient at the time of
disclosure, was not subject to any duty of confidentiality, directly or
indirectly, to the owner thereof;
(c) such information was expressly in the files of, or known to, the
recipient (or its officers, directors, employees, representatives,
consultants or professional advisors), provided, that knowledge
thereof was not obtained, to the knowledge of such recipient, as a
result of a disclosure by a third party in violation of any duty of
confidentiality, directly or indirectly, to the owner thereof; or
(d) such information is independently developed by the recipient (or its
officers, directors, employees, representatives, consultants or
professional advisors) or on their behalf without the use of
Confidential Information of the owner thereof.
(3) No Party hereto shall be restricted in disclosing any Confidential
Information of any owner if and then only to the extent that such disclosure
is required by law or enforceable legal process, or by the rules of any
securities exchange or regulatory authority having jurisdiction over such
party, provided the party required to make such disclosure (a) provides the
owner of such Confidential Information notice of such requirement as soon
as practicable after the party obligated to make such disclosure learns of
such requirement, and thereafter consults with the owner thereof before
making any disclosure of such information and (b) takes all reasonable
steps (including steps reasonably requested by the owner thereof and any
Party which is an Affiliate of such owner) to oppose or prevent the
disclosure, to limit, to the maximum extent reasonably possible, the scope
of such disclosure and to obtain confidential treatment by the recipient of
(4) The provisions of this Clause 11 shall survive termination of this
Agreement for a period of two (2) years from the date of such termination.
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the Republic of South Africa.
The Parties choose their addresses set out below as their domicilium citandi
et executandi ("domicilium") for all purposes arising from or pursuant tothis Agreement. All notices, requests, demands and other communications
required or permitted to be given pursuant to or in connection with the
requirements of this Agreement shall be in writing and signed by the Party
or by a duly authorised officer of the Party giving such notice and shall be
addressed as follows to the other Party at the addresses set out below or
such other address as may from tune to tune be notified to the other Party
in writing for such purposes and shall be sent by overnight or similar
express courier, hand delivery or electronic or other facsimile transmission:
To Telkom: Telkom SA Limited
▇▇▇ ▇▇▇▇▇▇▇▇ of South Africa
Facsimile: ▇▇▇ ▇▇ ▇▇▇ 3911
To the SEP: Thintana Communications LLC
New Castle, Delaware 19720
Facsimile: ▇▇ ▇▇▇ ▇▇▇ 2838
Telephone: +1 302 579 5003
with copies by facsimile, which shall not constitute notice and which if not
sent will not constitute a failure to send notice, to
SBC International South Africa LLC
Facsimile: ▇▇ ▇▇▇ ▇▇▇ 2838
Telephone: ▇▇ ▇▇▇ ▇▇▇ 5003
Mr. Nor Zainal Abdul Rahman
Telekom Malaysia-Africa Sdn. Bhd.
Facsimile: +60 3 283 2415
Telephone: ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
For service of legal process purposes:
Wilmington, Delaware 19801
Facsimile: ▇▇ ▇▇▇ ▇▇▇ 5049
Telephone: ▇▇ ▇▇▇ ▇▇▇ 7581
Attention: ▇▇▇▇▇▇▇ Thompson
SBC International South Africa LLC
New Castle, Delaware 19720
Facsimile: ▇▇ ▇▇▇ ▇▇▇ 2838
Telephone: ▇▇ ▇▇▇ ▇▇▇ 5003
with a copy by facsimile, which does not constitute
notice and which if not sent will not constitute a
failure to send notice, to:
SBC International South Africa LLC
Facsimile: ▇▇ ▇▇▇ ▇▇▇ 2838
Telephone: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
To TMS: Telekom Management Services Sdn. Bhd.
with a copy by facsimile, which does not constitute
notice and which if not sent will not constitute a
failure to send notice, to:
Mr. Nor Zainal Abdul Rahman
Telkom Malaysia-Africa Sdn. Bhd.
Facsimile: +60 3 283 6014
Telephone: ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Any of the Parties shall be entitled from time to time by written notice to
all of the other Parties to vary its domicilium to any other address within
the Republic of South Africa which is not a post office box or poste
restante. Any notice given by any Party to any of the other Parties which:
(a) is delivered by hand during normal business hours of the addressee
at the addressees' domicilium for the time being shall be presumed
to be received by the addressee at the time of delivery; or
(b) is transmitted by electronic or other facsimile transmission (with
receipt confirmed) to the addressee at the addressee's domicilium
for the time being shall be presumed to have been received by the
addressee on the first Business Day following the successful
▇▇ notice given under this Agreement shall be effective unless and until it
is actually received by the addressee.
This Agreement, including its Schedules, contains the entire agreement and
understanding of the Parties in relation to its subject matter and supersedes
all prior oral or written negotiations, agreements, representations,
understandings or arrangements (if any) between or among the Parties with
respect to its subject matter, including expressly the MTSA and the
Original SSA, but expressly not including the Share Transfer Agreement
and the Shareholders' Agreement.
Subject to Clause 16 below, this Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the Parties except as follows:
(1) Telkom may do so only with the prior written consent of the SEP;
(2) the SEP may do so only with the prior written consent of Telkom;
(3) SBCI-MSI and TMS, respectively, may do so only with the prior
written consent of the SEP.
The SEP and each Personnel Provider may subcontract any part of the
Strategic Services to any person which is and remains an owner of the SEP
or an Affiliate of such owner and, with the consent of Telkom, to a third
party supplier. Any such sub-contracting shall not relieve the SEP from its
responsibility to provide (or arrange for the provision of) the Strategic
Services for which it shall remain primarily liable.
17 . Waiver of Sovereign Immunity
The Parties recognise and acknowledge that this Agreement and the
transactions contemplated by this Agreement constitute a commercial
transaction. To the extent that any Party (including the assignee of a
Party's rights or obligations under this Agreement) may be entitled, in any
jurisdiction, to claim sovereign immunity or any other immunity, as the
case may be, from the jurisdiction of any court or arbitral tribunal, or from
any legal process, including but not limited to any order, attachment,
judgment or award, such Party hereby irrevocably agrees not to claim or
assert, and hereby irrevocably waives, such sovereign or other immunity.
The Parties intend the foregoing waiver of sovereign immunity to be no
less broad than any waiver permitted by the State Immunity Act of 1978 of
None of the SEP, SBCI-MSI, TMS or any other Personnel provider shall
have any liability for any failure or delay in complying with any provision
of this Agreement if, and to the extent and for so long as, that compliance
is prevented or substantially hindered by any act of God, government,
flood, tempest, severe weather conditions, war (whether declared or not),
civil disturbances, revolution, riot, insurrection, other natural disasters, act
of terrorism, sabotage, strike, failure to acquire any Permit, labour dispute,
other public emergencies or any other cause whatsoever which is
substantially beyond the control of the SEP, SBCI-MSI, TMS or any other
Personnel Provider, as applicable.
This Agreement may be executed in one or more counterparts and in
separate counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same legal document.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law but if any
provision of this Agreement shall be unenforceable and invalid under
applicable law such provision shall be ineffective only to the extent of such
unenforceability or invalidity and the remaining provisions of this
Agreement shall continue to be binding and in full force and effect.
None of the terms of this Agreement shall be deemed to have been waived
by any Party unless such waiver is in writing and signed by that Party.
The waiver by any Party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any provision of this
Agreement or of any further breach of the provisions so waived. No
extension of tune for the performance of any obligation or act hereunder
shall be deemed to be an extension of tune for the performance of any
22. Amendments and Modifications
This Agreement may not be modified, amended, cancelled or changed in
any respect except in writing by a person who is authorised to do so by the
board or similar governing authority of the Parties against whom such
modification, amendment, cancellation or change is sought.
23. No Partnership or Agency
Nothing in this Agreement shall be deemed to create any relationship of
employer and employee, joint venturers, partners, fiduciaries or agents
between or among any of the Parties or entitle any Party to commit or bind
any other Party in any manner. Each Party is and, in all capacities
hereunder, shall remain an independent contractor.
24. Third Party Beneficiaries
Each Personnel Provider not a Party to this Agreement (and their
respective Affiliates, assignees, subcontractors, directors, officers,
shareholders, employees or agents) is an express third party beneficiary of
the terms and conditions of this Agreement which are expressly applicable
to Personnel Providers. In addition, TMA and SBCISA are express third
party beneficiaries of Clauses 3(1) and 3(2), respectively.
IN WITNESS of which the Parties have executed this Agreement on the date first
SIGNED by TELKOM SA LIMITED
by its duly authorised representative
by its duly authorised representative
SIGNED by SBC INTERNATIONAL-
MANAGEMENT SERVICES, ▇▇▇.
▇▇ its duly authorised representative
SIGNED BY TELEKOM MANAGEMENT
▇▇ its duly authorised representative
The undersigned, being the duly elected, qualified and acting
Secretary of Telkom SA Limited, a company duly registered in accordance
with the laws of the Republic of South Africa ("Telkom"), in connection with the Closing of the transactions under the Share Transfer Agreement dated
as of March 26, 1997 (the "Share Transfer Agreement") among Telkom, the
Minister for Posts, Telecommunications and Broadcasting of the Government
of the Republic of South Africa (the "Minister") and Thintana
Communications LLC, a limited liability company organised under the laws of
the State of Delaware of the United States of America acting, in his capacity
as acting Secretary of Telkom, HEREBY CERTIFIES THAT:
A. PRE-CLOSING BOARD RESOLUTIONS
1. Attached hereto as Exhibit A-1 is a true and correct
copy of certain resolutions duly and validly adopted by the Board on 14
March 1997 relating to the general authorisation of the Share Transfer
Agreement and the transactions contemplated thereby (the "Transaction");
and such resolutions have not been amended, modified or rescinded, are in
full force and effect on the date hereof and are the only resolutions adopted
by the Board with respect to the matters referred to therein (except that
such matters have been ratified pursuant to the resolutions referred to in
2. Attached hereto as Exhibit A -2 is a true and correct
copy of certain resolutions, in the form of a unanimous written consent, duly
and validly adopted by the Board on 12 May 1997 relating to the following;
and such resolutions have not been amended, modified or rescinded, are in
full force and effect on the date hereof and are the only resolutions adopted
by the Board with respect to the matters referred to therein (except that the
matters referred to in e. below were the subject of the resolutions referred to
in 1. above and were ratified pursuant to and as described in the resolutions
referred to in C. below).
a. The following committees:
(i) Telkom's Operating Committee (as defined in the
Shareholders' Agreement);
(ii) Telkom's HRRC (as defined in the Shareholders'
(iii) Telkom's Workers Committee (as defined in the
Shareholders' Agreement);
(iv) Telkom's Audit Committee; and
(v) Telkom's Remuneration Committee;
b. The Permitted Dividend;
c. The Management Structure;
The Schedule of Authorisations; and
e. The general ratification and approval of the Transaction.
3. Attached hereto as Exhibit A-3 is a true and correct
copy of certain resolutions, in the form of a written consent, executed by
certain members of the Board (as indicated in Exhibit A-3) relating to the
appointment of Dikgang Moseneke as acting Chief Executive Officer of
Telkom; such resolutions were confirmed by the full Board at a meeting of
the Board held on 14 May 1997 reference at C. below and have not been
amended, modified or rescinded, are in full force and effect on the date
hereof, with such confirming resolutions, and are the only resolutions
adopted by the Board with respect to the matters referred to therein.
B. PRE-CLOSING SHAREHOLDER RESOLUTIONS
1. Attached hereto as Exhibit B-1 is a true and correct
copy of certain resolutions duly and validly adopted by the Minister as the
sole shareholder of Telkom on 29 April 1997 relating to the following,
together with Forms CM-11, CM-15, CM-25A and CM-26 evidencing the filing
of the resolutions referred to in a. and b. below with the Registrar of
Companies of the Republic of South Africa (the "Registrar"); and such
resolutions have not been amended, modified or rescinded, are in full force
and effect on the date hereof and are the only resolutions adopted by the
shareholders of Telkom with respect to the matters referred to therein:
a. The allotment of two (2) ordinary shares of Telkom, par
value R1. 00 per share ("Shares") to the Minister;b. The approval of the Articles;
c. The appointment of the nominees of the SEP to the
Board as contemplated by the Shareholders'
d. The consolidation of the share capital of Telkom from
5, 000, 000, 000 authorised and 3, 899, 222, 730 issued
Shares to 500, 000, 000 authorised and 389, 922, 273
issued ordinary shares par value R10. 00 each, and the
increase of Telkom's authorised share capital from
R5, 000, 000, 000 divided into 500, 000, 000 ordinary par
value shares of R10.00 each to R10, 000, 000, 000 divided
into 1, 000, 000, 000 ordinary par value shares of R10.00
2. Attached hereto as Exhibit B-2 is a true and correct
copy of certain resolutions duly and validly adopted by the Minister as the
sole shareholder of Telkom on 30 April 1997 relating to the appointment of
Dikgang Moseneke as acting Chief Executive Officer of Telkom; and such
resolutions have not been amended, modified or rescinded, are in full force
and effect on the date hereof and are the only resolutions adopted by the
shareholders of Telkom with respect to the matters referred to therein.
3. Attached hereto as Exhibit B-3 is a true and correct
copy of certain resolutions duly and validly adopted by the Minister as the
sole shareholder of Telkom on 9 May 1997 relating to the approval of an
amendment to article 13.2.1.2 of the Articles as described in such resolutions
(the "Amendment") (together with Forms CM-25A and CM-26 as filed with
the Registrar); and such resolutions have not been amended, modified or
rescinded, are in full force and effect on the date hereof and are the only
resolutions adopted by the shareholders of Telkom with respect to the
matters referred to therein.
4. Attached hereto as Exhibit B-4 is a true and correct
copy of certain resolutions duly and validly adopted by the Minister as the.
sole shareholder of Telkom on 9 May 1997 relating to the appointment of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ S. Mbali; and such resolutions have not been
amended, modified or rescinded, are in full force and effect on the date
hereof and are the only resolutions adopted by the shareholders of Telkom
with respect to the matters referred to therein:
5. Attached hereto as Exhibit B-5 is a true and correct
copy of certain resolutions duly and validly adopted by the Minister as the
sole shareholder of Telkom on 13 May 1997 relating to the approval of the
allotment of the Subscription Shares and the payment of the Permitted
Dividend; and such resolutions have not been amended, modified or
rescinded, are in full force and effect on the date hereof and are the only
resolutions adopted by the shareholders of Telkom with respect to the
matters referred to therein.
C. CLOSING DATE BOARD RESOLUTIONS
Attached hereto as Exhibit C is a true and correct copy of
certain resolutions duly and validly adopted by the Board on 14 May 1997
relating to the following; and such resolutions have not been amended,
modified or rescinded, are in full force and effect on the date hereof and are
the only resolutions adopted by the Board with respect to the matters
a. The ratification of the Transaction and the prior actions
of the Board in relation thereto prior to Closing;
b. The ratification of the resolution referred to in A. 3. above
regarding the appointment of Dikgang Moseneke as
acting Chief Executive Officer of Telkom; and
c. The appointment of ▇▇▇▇▇ ▇▇▇▇▇▇ as acting Human
Resources Officer of Telkom.
D. CLOSING DATE SHAREHOLDER RESOLUTIONS
Attached hereto as Exhibit D is a true and correct copy of
certain resolutions, in the form of a unanimous written consent, duly and
validly adopted by the shareholders of Telkom on 14 May 1997 relating to
the ratification of certain matters approved by the Minister, as sole
shareholder, prior to the Closing; and such resolutions have not been
amended, modified or rescinded, are in full force and effect on the date
hereof and are the only resolutions adopted by the shareholders of Telkom
with respect to the matters referred to therein.
E. FILING OF NEW MEMORANDUM AND ARTICLES OF ASSOCIATION
Attached hereto as Exhibit E-1 and Exhibit E-2 are true and
correct copies of the Articles and the Amendment thereto as filed with the
Registrar on 29 April 1997 and 9 May 1997, respectively, together with the
respective Forms CM-25A and CM-26 endorsed by the Registrar evidencing
such filings; and no other amendment or other document relating to or
affecting the Articles has been filed with the Registrar since 9 May 1997.
F. ALLOTMENT OF SHARES TO MINISTER
1. Attached hereto as Exhibit F-1 is a true and correct copy
of the Form CM-15 as filed with the Registrar on 29 April 1997 registering the
allotment of the issuance of two (2) Shares to the Minister.
2. Attached hereto as Exhibit F-2 is a true and correct copy
of the Minister's application to Telkom for the subscription of two (2) Shares
3. Attached hereto as Exhibit F-3 is a true and correct copy
of Telkom's acceptance of the Minister's application for the subscription of
two (2) Shares dated 29 April 1997.
G. SHARE CERTIFICATES AND SHARE CAPITAL OF TELKOM
1. Attached hereto as Exhibit G-1 is a true and correct copy of
the following share certificates representing the number of ordinary par value
shares of Telkom indicated below; each such share certificate was issued on
the date indicated below with respect to such certificate and either remains
issued on the date hereof or was cancelled on the date indicated below:
Cert. No. No. Shares Par Issued Cancelled
1 1 R1.00 30 Sept. 1991 29 April 1 9 9 7
2 3, 899, 222, 727 R1.00 18 June 1993 29 April 1997
3 2 R1.00 29 April 1997 29 April 1997
4 167, 109, 546 R10.00 29 April 1997 14 May 1997
5 222, 812, 727 R10.00 29 April 1997
6 167, 109, 546 R10.00 14 May 1997
7 167, 109, 546 R10.00 14 May 1997
2. Attached hereto as Exhibit G-2 is a true and correct copy of
the official Register of Members of Telkom immediately after the Closing on
14 May 1997 (the "Register Time") which records:
(i) all issuances of share capital of Telkom from the date of
incorporation of Telkom up to and including the Register
Time (including the persons to whom such share capital
was issued and the number of shares and the classes
thereof so issued to such persons);
(ii) all transfers of share capital of Telkom from the date of
incorporation of Telkom up to and including the Register
Time (including the persons to whom such share capital
was transferred and the number of shares and the
classes thereof so transferred to such persons); and
(iii) the ownership of all of the share capital of Telkom as of
the Register Time (including the persons who own such
share capital and the number of shares and the classes
Attached hereto as Exhibit H is a true and correct copy of a
resolution duly and validly adopted by the HRRC (as defined in the
Shareholders' Agreement) at a meeting held on 14 May 1997 relating to the
appointment of certain Initial SEP Appointments (as defined in the
Shareholders' Agreement); and such resolution has not been amended,
modified or rescinded, is in full force and effect on the date hereof and is the
only resolution adopted by the HRRC with respect to the matters referred to
Each of the persons executing on behalf of Telkom the Share
Transfer Agreement, the Shareholders' Agreement, the Strategic Services
Agreement and each other agreement, instrument, certificate or other
document executed by Telkom in connection therewith has been duly
authorised to execute, and has so executed; such documents in the name
and on behalf of Telkom, and his or her signature is such person's genuine
Any capitalised term used but not otherwise defined herein
shall have the meaning ascribed thereto in the Share Transfer Agreement.
this 14th day of May, 1997.
I have hereunto subscribed my name
The undersigned, Adv. Dikgang Moseneke, being the Chairman
of Telkom, does hereby certify on this 14th day of May, 1997, that Loumie
Smit is the duly elected qualified and acting Secretary of Telkom and that
the signature set forth above is ▇▇▇▇▇▇ ▇▇▇▇'▇ true and correct ▇▇▇▇▇▇▇▇▇.
▇▇▇▇: Adv. Dikgang Moseneke /S/
[Signature Page to Certificate of Secretary]
(COMPANY REGISTRATION NUMBER 91/05476/06)
DIRECTORS MEETING, NO 2 OF 1997,
HELD IN THE BOARD ROOM, TELKOM TOWER NORTH,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ 14 MARCH 1997
3. 2 Resolution to complete SEP transaction {Item 7. 2 of agenda)As part of the SEP process, 'Telkom obtained a legal opinion from Deneys Reitz
Attorneys on the legality of the SEP transaction. A similar opinion was obtained
by the Ministry from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇).
The two opinions were contrary to each other and the Board was posed with the
question whether the transaction should in the circumstances go ▇▇▇▇▇.
▇▇ was unanimously AGREED. by the Board that the transaction should be
concluded. The decision was also supported by the advisors, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
The Chairperson tabled the resolution document which addressed the conclusion
The Board subsequently RESOLVED that
- the investment by SBC Communications and Telekom Malaysia, through
Thintana Communications LLC (a United States limited liability company and
referred to below as the "SEP"), for a 30% interest in the Company (the
"Transaction") broadly on the terms described to the meeting be APPROVED
IN PRINCIPLE, insofar as the Transaction relates to matters to be approved
and/or effected by the Company;
- in connection with the Transaction, the subscription by the Ministry of
shares in the Company and the subsequent transfer of those shares to the
SEP be APPROVED, subject to the approval of shareholders of the necessary
capital increase and of the grant of authority to allot such shares and to the
allotment on closing of the Transaction;
- each of the Share Transfer Agreement, Disclosure Schedule, Shareholders
be in principle APPROVED, subject to any further modifications,
amendments or variations which the Chairperson on behalf of the Directors
may approve (it being recognised that such variations may include a
restructuring of the Share Transfer Agreement into a share transfer
agreement and a separate subscription agreement) and that the Chairperson,
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS 1
We, the persons whose names appear below and who have signed this
document (or other documents in the same form), are all the Directors of
Telkom and we hereby unanimously resolve that the following resolutions are
passed as written resolutions in accordance with article 19. 1 of the articles of
association of Telkom and agree that they shall be as valid and effective as if
they had been passed at a meeting of the Board duly convened and held:
1. Words and expressions defined in the Shareholders' Agreement (as
defined in the Share Transfer Agreement referred to below) shall have
the same meanings in these resolutions as those ascribed to them in the
Shareholders' Agreement, unless the context should otherwise require.
2. Share Transfer Agreement and Ancillary Documents
2. 1 It is noted that the Share Transfer Agreement which provides for
the acquisition by a Strategic Equity Partner of 30% of the
company's issued share capital was duly entered into on
26 March 1997 among the Minister for Posts, Telecommunications
and Broadcasting of the Government of the Republic of South
Africa (the "Minister") as vendor, the Company ("Telkom") andThintana Communications LLC (the "SEP") as purchaser; and that
the Closing (as defined in the Share Transfer Agreement) of the
transactions under the Share Transfer Agreement is due to take
place once the conditions precedent set forth therein are satisfied
(which the board has been informed is expected to occur in
2. 2 It is further noted that in connection with the execution of the
Share Transfer Agreement, certain letters of undertaking were
entered into by Telkom. Copies of such letters have been made 2
available for inspection by the Board.
2. 3 A copy of the Share Transfer Agreement with its appendices has
been made available to the Board, including (i) Appendix E which
sets out the form of the Shareholders' Agreement and (ii)
Appendix F which sets out the form of the Strategic Services
Agreement. It is further noted that the Shareholders' Agreement
will be entered into among the same three parties at the Closing
of the transactions under the Share Transfer Agreement, and the
Telkom and the SEP (and such additional parties as
contemplated by clause 6(3) of such Agreement) at the Closing
of the transactions under the Share Transfer Agreement.
2. 4 It is further noted that, in accordance with the requirements of the
Share Transfer Agreement, the new Memorandum and Articles of
Association (the "Articles"), the form of which is set out in
Appendix A to the Share Transfer Agreement, were adopted. by
Telkom and registered with the Registrar of Companies in
accordance with the requirements of the Companies Act of 1973
on 29 April, 1997, and are therefore in force. It is noted that the
adoption of the Articles and the filing thereof with the Registrar of
Companies was authorised by the Minister as Telkom's sole
shareholder by written consent dated 29 April 1997 (the
2. 5 It is further noted that, in furtherance of the Closing of the
transactions under the Share Transfer Agreement, pursuant to the
Shareholder Consent the Minister authorised a consolidation and
recapitalisation of the share capital of Telkom (collectively, the 3
"Capital Reorganisation"), which was consummated as follows:
(a) On 29 April, 1997, Telkom allotted and issued two (2)
additional ordinary par value shares to the Minister such
that, upon the issuance thereof, the Minister owned
3, 899, 222, 730 ordinary par value shares;
(b) On 29 April, 1997, Telkom consolidated its existing share
capital consisting of 5, 000, 000, 000 authorised and
3, 899, 222, 730 issued ordinary par value shares of R1. 00
each such that, after the consolidation, Telkom's share
capital consisted of 500, 000, 000 authorised and
389, 922, 273 issued ordinary par value shares of R10. 00
(c) On 29 April, 1997, Telkom increased its authorised share
capital (effective upon the filing of the Articles as described
in 2. 4 above) from R5, 000, 000, 000 consisting of
500, 000, 000 ordinary par value shares of R10. 00 each to
R10, 000, 000, 000 consisting of 1, 000, 000, 000 ordinary par
value shares of R10. 00 each.
2. 6 It is further noted that article 15. 1 of the new Articles which
"Notwithstanding anything to the contrary anywhere
in these Articles, the Directors shall be obliged, so
far as may be permitted by law, to act in
accordance with and give effect to any
Shareholders Agreement in respect to all matters 4
within the authority of the Board under these
Articles and the Statutes. "
2. 7 In any event the Board considers, and it hereby unanimously
resolves that it is in the best interests of Telkom that it co-operate
in ratifying and approving the transactions contemplated by the
Share Transfer Agreement by, among other things, (a)
establishing an Operating Committee, a Human Resources
Review Committee, an Audit Committee and a Remuneration
Committee, adopting and implementing the Management
Structure (including the appointment of SEP Appointments) and
adopting and implementing the Schedule of Authorisations all as
required in terms of the Shareholders' Agreement and the
Articles, (b) recommending the Permitted Dividend and (c)
authorising all the other matters required of Telkom for the
Closing of the Share Transfer Agreement and for compliance with
and each other Transaction Document.
It is resolved that in terms of the powers vested in the Board by the
Articles, and in accordance with the Shareholders' Agreement, an
Operating Committee be and is hereby established with effect from the
Closing until the end of the Transition Period as follows:
The Operating Committee shall consist of 5 ex officio voting 5
members and 5 ex officio non-voting members as follows:
(a) from the date of the Closing until the second anniversary
of that date, and during the Transition Period, the
Operating Committee shall be comprised of:
CEO, the COO, the CFO, the HRO and the
CTO, in each case for the time being, as the 5 ex
officio voting members; and
(ii) the CSO, the Deputy COO, the Deputy CFO, the
Deputy CSO and the Head of Training, in each
case for the time being, as the 5 ex officio non-
(b) from the second anniversary of the date of the Closing
until the end of the Exclusivity Period, the Operating
Committee shall be comprised of:
CEO, the COO, the CSO, the HRO, and the
CTO, in each case, for the time being, as the 5 ex
officio voting members; and
(ii) the CFO, the Deputy CFO, the Deputy CSO, the
Deputy COO and Head of Training, in each case for
the time being, as the 5 ex officio non-voting
(c) The CEO shall be the chairperson of the Operating 6
(d) If any member of the Operating Committee is at the same
time a Director of Telkom, then, unless otherwise expressly
resolved by the Board in these resolutions, the alternate of
such member appointed in terms of the Articles shall be
permitted to exercise all rights, duties and functions
(including, without limitation attend meetings of the
Operating Committee and act and vote at such meetings
and to sign written resolutions) of such member in respect
of the Operating Committee, to the same extent as such
alternate is entitled to exercise the rights, duties and
functions of such member in respect of the Board under
3. 2 Authority of the Operating Committee
(a) The Operating Committee shall have (and the Board
accordingly delegates to it) the exclusive power and
(i) implement the Business Plan, the Training
Programme and the Annual Budget; and implement
(in conformity with the Business Plan, the Training
Programme and the Annual Budget) all issues and
matters relating to achievement of Telkom's
obligations under the Licences, including, without
limitation, network expansion, equipment
procurement, tariff setting and packaging, customer
(ii) prepare, review and recommend to the Board
Business Plans and any amendment of the
Business Plans as provided in the Shareholders'
Agreement and each and any business plan of any
Subsidiary and any amendment of such business
(iii) prepare, review and recommend to the Board the
Annual Budgets and any amendment of the Annual
Budgets and all budgets of each Subsidiary and
any amendment of such budgets, and approve
such Annual Budget and budgets (and
amendments) to the extent provided in the
(iv) prepare, review and recommend to the Board the
Training Programme and amendments to the
Training Programme as provided in the
(v) implement the Management Structure and
recommend to the Board any amendment thereto;
(vi) elect to extend the Exclusivity Period pursuant to
(vii) review and recommend to the Board any
amendment to the Schedule of Authorisations; and
(viii) delegate authority to, and direct members of,
Telkom's management with respect to any matters
that are within the authority of the Operating
Committee pursuant to this resolution and the
(b) The Operating Committee may authorise or delegate any
authority to incur any expenditure (or series of related
expenditures) or engage in any transaction (or series of
related transactions) in excess of the authority granted any
individual member of Telkom's management under the
Schedule of Authorisations as long as the matter for which
authority is exercised or delegated is provided for in the
applicable Business Plan or Annual Budget.
(c) It is noted that the authority conferred on the Operating
Committee pursuant to this resolution may not be revoked
and that any decisions or actions made or taken by the
Operating Committee under that authority may not be
countermanded, amended or supplemented by the Board
otherwise than in accordance with the provisions of the
Shareholders' Agreement and the Articles. It is resolved
that Telkom and the Board comply with the foregoing.
(d) It is further noted that under the Shareholders' Agreement
and the Articles, the authority conferred on the Operating
Committee is subject to certain rights of the members of
Telkom in respect of matters reserved for the approval of 9
certain members. It is also noted that under the
Shareholders' Agreement and the Articles, certain matters
within the authority of the Operating Committee are
reserved for the approval of the nominees of certain
members on such committee. It is resolved that the
authority of the Operating Committee be subject to and
limited by such provisions of the Shareholders' Agreement
3. 3 Meetings of the Operating Committee
(a) Number of Meetings and Voting
The Operating Committee may meet for the dispatch of
business, adjourn and otherwise regulate its meetings ▇▇
▇▇ thinks fit, provided that the Operating Committee shall
meet at least once every month.
A quorum of the members of the Operating Committee
shall exist only if at least 3 voting members (or their
alternates) are present; provided, that notwithstanding that
a quorum may be present at any meeting of the Operating
Committee, no action shall be taken at any such meeting
(other than a decision to dissolve or adjourn such
meeting) unless (i) either the CEO or HRO (or one of their
respective alternates) is present and (ii) a nominee of the
SEP is present. If neither the CEO nor the HRO (and
neither of their respective alternates) is present at a
meeting of the Operating Committee otherwise duly
constituted, the meeting shall be dissolved or adjourned
for at least 24 (twenty four) hours, and if such meeting is
so adjourned then the presence of the CEO or HRO (or
one of their respective alternates) shall not be required to
take any action at any resulting adjourned meeting. If a
nominee of the SEP is not present at a meeting of the
Operating Committee otherwise duly constituted, the
meeting shall be dissolved or adjourned for at least 24
(twenty four) hours and if such meeting is so adjourned
then the presence of a nominee of the SEP shall not be
required to take any action at any resulting adjourned
Either the CEO or the COO may convene a meeting of the
Operating Committee at any time. At the request of either
the CEO or the COO the secretary of Telkom shall
The Operating Committee shall determine the number of
days notice to be given for Operating Committee meetings
(and the adjournment thereof) and the form and the
medium for giving any such notice.
(e) Dissolution and Adjournment of Meetings
The chairperson of the Operating Committee may, with the
consent of any meeting at which a quorum is present (and
shall if so directed by the meeting), dissolve any meeting
of the Operating Committee or adjourn and give notice
accordingly of any meeting of the Operating Committee
from time to time and from place to place. Should a
quorum not be present at any meeting of the Operating
Committee within thirty minutes after the appointed time,
the chairperson of the meeting shall (i) adjourn such
meeting to such time and such place as the meeting shall
determine or (ii) dissolve such meeting.
(f) Business at Adjourned Meetings
No business shall be transacted at the resumption of any
adjourned meeting of the Operating Committee other than
the business left unfinished at the meeting from which the
(g) Chairperson of Operating Committee Meetings
The CEO shall act as the chairperson of meetings of the
Operating Committee; provided, that if at any meeting the
CEO is not present in person within 5 minutes after the
time appointed for holding the meeting, the voting
members present shall elect a person to be chairperson of
the meeting. The CEO shall not be considered present in
person at the meeting (for the purpose of acting as
chairperson of the meeting only) by virtue of his alternate
being present at said meeting.
All matters put to vote at any meeting of the Operating
Committee shall be approved only by an affirmative vote
of a majority of the members of such committee, and in
the event of an equality of votes with respect to any matter
to be considered by the Operating Committee, (i) during
the Exclusivity Period, a nominee of the SEP shall have a
casting vote; and (ii) during the Transition Period, a
nominee of the Minister shall have a casting vote.
The Operating Committee shall cause minutes to be kept,
which shall include the following particulars:
(i) the names of the voting members and non-voting
members present (or, as the case may be, their
alternates) at each meeting of the committee; and
(ii) all resolutions proposed and passed or not passed
and such other proceedings at each meeting as the
The secretary of Telkom shall act as secretary of the
Operating Committee; provided, that if at any meeting the
secretary of Telkom is not present in person within 5
minutes after the time appointed for holding the meeting
or if the voting members present otherwise determine, the
voting members present shall elect a person to be
secretary of the meeting.
The minutes of each meeting of the Operating Committee
shall be signed by (i) the chairperson of the meeting or by
the chairperson of the next succeeding meeting and (ii) a
nominee of the SEP present at the meeting at which the
Any extract from or copy of the minutes of a meeting of
the Operating Committee purporting to be signed by (i) a
nominee of the SEP and (ii) the chairperson of the meeting
or by any voting member of the committee or by the
secretary of such meeting, shall be prima facie proof of the
(I) Committee Meetings by Conference Call
The Operating Committee may meet by telephone or video
conference if all members can hear all other members.
Unless otherwise expressly resolved by the Board in these
resolutions, a member of the Operating Committee which
participates in a meeting of the Operating Committee by
either of these means shall be considered present at such
meeting for all purposes.
The SEP and the Minister may from time to time designate
representatives who may attend any and all meetings of
the Operating Committee. The number of representatives
whom the SEP and the Minister designate for attendance
at any meeting of the Operating Committee, respectively,
may equal, but shall not exceed, the number of members
of the Operating Committee who are Directors or
managers of Telkom nominated or appointed by the SEP
and the Minister, respectively, pursuant to the
Shareholders' Agreement. Such representatives may be
designated by the SEP and the Minister, respectively, for
attendance at any meeting by notice to the Operating
Committee at any time prior to the commencement of such
meeting. Any such representatives who attend a meeting
of the Operating Committee shall be entitled to address
the Operating Committee at the request of any member
thereof with respect to any matter on the agenda for the
3. 4 Written Resolutions of the Operating Committee
A duly minuted resolution in writing signed by all the voting
members of the Operating Committee or, as the case may
be, their respective alternates, shall be as valid and
effectual as a resolution passed at a meeting of the
Operating Committee duly called and constituted.
(b) Requirements for Written Resolutions
Any such written resolution may consist of one or more
documents signed by one or more voting members of the
Operating Committee (or as the case may be, their
respective alternates), shall have regard to the provisions
of Section 242(2) of the Companies ▇▇▇ ▇▇▇▇ and shall be
delivered to the secretary of Telkom without delay and be
recorded by him or her in the company's minute book for
Each such written resolution shall be deemed to have
been passed on the day it was signed by the last voting
member, unless a statement to the contrary is made in the
(d) Confirmation of Written Resolution
A written resolution which is not signed by all the voting
members of the Operating Committee shall be inoperative
until confirmed by a meeting of the Operating Committee.
3. 5 Reports to the Board
The CEO shall report on all action and activities taken by the
Operating Committee and on the current operations and status
of the company at each meeting of the Board.
3. 6 Term of the Operating Committee
Unless determined otherwise by the Board and approved by the
members in accordance with the requirements of the
Shareholders' Agreement and the Articles, the Operating
Committee (i) shall continue to exist throughout the duration of
the Exclusivity Period and the Transition Period, and (ii) shall
cease to exist after the end of the Transition Period and any
powers or authorities delegated to it during the Exclusivity Period
and the Transition Period shall thereupon revert to the Board.
3. 7 Conflicts with Shareholders' Agreement
In the event of any conflict between this resolution regarding the
Operating Committee and the provisions of the Shareholders'
Agreement, the provisions of the Shareholders' Agreement shall
4. Human Resources Review Committee
It is resolved that in terms of the powers vested in the Board by the
Articles and in accordance with the Shareholders' Agreement, a Human
Resources Review Committee (the "HRRC") shall be and is hereby
established with effect from the Closing until the end of the Transition
(a) The HRRC shall consist of the Chairperson of Telkom, the
CEO, the COO, the HRO (all as ex officio members) and
at least 3 non-executive directors, two (2) of which shall be
Directors appointed (and removed and replaced) from time
to time by the Board to serve on the HRRC and one (1) of
which one shall be a Director appointed (and removed and
replaced) from time to time by the SEP to serve on the
HRRC. All of those members shall be voting members.
The HRRC shall also include the Head of Training as an ex
officio non-voting member. The non-executive Directors
initially chosen by the Board to serve as members of the
HRRC shall be Ms. ▇▇▇▇▇ ▇▇▇▇▇▇ and Mr. ▇▇▇▇ Molobi,
and the Board acknowledges that the non-executive
Director initially chosen by the SEP to serve as a member
of the HRRC is Nor Zainal ▇▇▇▇▇ ▇▇▇▇▇▇, which the Board
hereby appoints to the HRRC. All of such non-executive
Directors shall remain as voting members of the HRRC
unless and until they resign or are removed and/or
replaced. The SEP shall have the right to remove and
replace its nominee at any time and from time to time by
notice to Telkom. Such removal and replacement shall be
deemed effective and approved by the Board upon receipt
(b) The chairperson of the HRRC shall be the Chairperson of
Telkom for the time being. In the absence of the
Chairperson of Telkom, a non-executive Director
nominated by the Minister shall chair the HRRC.
(c) If any member of the HRRC is at the same time a Director
of Telkom, then, unless otherwise expressly resolved by
the Board in these resolutions, the alternate of such
member appointed in terms of the Articles shall be
permitted to exercise all rights, duties and functions
(including, without limitation attend meetings of the HRRC
and act and vote at such meetings and to sign written
resolutions) of such member in respect of the HRRC, to
the same extent as such alternate is entitled to exercise
the rights, duties and functions of such member in respect
of the Board under the Articles.
4. 2 Authority of the HRRC
(a) For the duration of its existence the HRRC shall have (and
the Board accordingly hereby delegates to it) the exclusive
(i) recommend to the Board policy guidelines on
human resource development within Telkom that
are in compliance with the Business Plan, the
Annual Budget and the Training Programme; and
(ii) recommend to the Board guidelines for, and
monitor compliance with, affirmative action and
empowerment programmes that duly take into
account reports and recommendations of the HRO
and are in conformity with the Business Plan, the
Annual Budget and the Training Programme.
It is noted that in terms of the Shareholders' Agreement
the Board may in its sole discretion adopt the policies
referred to in paragraph (i) above and the guidelines
referred to paragraph (ii) above, as a Reserved Matter,
only upon the recommendation of the HRRC. It is
resolved that Telkom and the Board comply with such
requirements of the Shareholders' Agreement.
(b) For the duration of its existence the HRRC shall have (and
the Board accordingly hereby delegates to it) the power
and authority to do the following in accordance with and
as contemplated by the Shareholders' Agreement:
(i) nominate and appoint (and remove and replace)
the Deputy COO, Deputy CFO and Deputy CSO;
(ii) consult with the SEP regarding SEP Appointments
and to approve their appointment to Telkom's
(c) It is noted that the authority conferred on the HRRC
pursuant to this resolution may not be revoked and that
any decisions or actions made or taken by the HRRC
under that authority may not be countermanded, amended
or supplemented by the Board otherwise than in
accordance with the provisions of the Shareholders'
Agreement and the Articles. It is resolved that Telkom and
the Board comply with the foregoing.
(d) It is noted that under the Shareholders' Agreement and the
Articles, the authority conferred on the HRRC is subject to
certain rights of the members with respect to matters
reserved for the approval of such members. It is also
noted that under the Shareholders' Agreement, certain
matters within the authority of the HRRC are reserved for
the approval of the nominees of certain members on such
committee. It is resolved that the authority of the HRRC be
subject to and limited by such rights.
4. 3 Meetings of the HRRC
(a) Number of Meetings and Voting
The HRRC may meet for the dispatch of business, adjourn
and otherwise regulate its meetings as it thinks fit.
A quorum of the members of the HRRC shall exist only if
at least 3 voting members (or their alternates) are present.
Notwithstanding that a quorum may be present at any
meeting of the HRRC, no action shall be taken at any such
meeting (other than the decision to dissolve or adjourn the
meeting) unless a nominee of the SEP is present (if the
SEP is entitled to nominate a member of the HRRC). If a
nominee of the SEP is not present at a meeting of the
HRRC otherwise duly constituted, the meeting shall be
dissolved or adjourned for at least 24 (twenty four) hours,
and if such meeting is adjourned then the presence of a
nominee of the SEP shall not be required to take any
action at any resulting adjourned meeting.
The chairperson of the HRRC may, and the secretary of
Telkom at the request of any member shall, convene a
meeting of the HRRC at any time.
The HRRC shall determine the number of days notice to
be given for HRRC meetings (and the adjournment
thereof) and the form and the medium for giving any such
(e) Dissolution and Adjournment of Meetings
The chairperson of the HRRC may, with the consent of any
meeting at which a quorum is present (and shall if so
directed by the meeting), dissolve a meeting of the HRRC
or adjourn and give notice accordingly of any meeting of
the HRRC from time to time and from place to place.
Should a quorum not be present at any meeting of the
HRRC within thirty minutes after the appointed time, the
chairperson of the meeting shall (i) adjourn such meeting
to such time and such place as the meeting shall
determine or (ii) dissolve such meeting.
(f) Business at Adjourned Meetings
No business shall be transacted at the resumption of any
adjourned meeting of the HRRC other than the business
left unfinished at the meeting from which the adjournment
(g) Chairperson of HRRC Meetings
The chairperson of the HRRC shall act as the chairperson
of meetings of the HRRC; provided, that if at any meeting
the chairperson is not present in person within 5 minutes
after the time appointed for holding the meeting, the
members present shall elect a person to be chairperson of
the meeting. The chairperson of the HRRC shall not be
considered present in person at any meeting (for the
purpose of acting as chairperson of the meeting only) by
virtue of his alternate being present at said meeting.
All the voting members of the HRRC shall be entitled to
vote at its meetings. All matters put to a vote at any
meeting shall be approved only by an affirmative vote of a
majority of members of such committee, and in the event
of an equality of vote with respect to any matter to be
considered by the HRRC, the chairperson of the meeting
shall have a casting vote.
The HRRC shall cause minutes to be kept, which shall
include the following particulars:
(i) the names of the voting members and non-voting
members present (or, as the case may be, their
alternates) at each meeting of the committee; and
(ii) all resolutions proposed and passed or not passed
and such other proceedings at each meeting as the
The secretary of Telkom shall act as secretary of the
HRRC; provided, that if at any meeting the secretary of
Telkom is not present in person within 5 minutes after the
time appointed for holding the meeting or if the voting
members present otherwise determine, the voting
members present shall elect a person to be secretary of
The minutes of each meeting of the HRRC shall be signed
by (i) the chairperson of the meeting or by the chairperson
of the next succeeding meeting and (ii) a nominee of the
SEP present at the meeting at which the proceedings take
place (if such a nominee is present at such meeting).
Any extract from or copy of the minutes of a meeting of
the HRRC, purporting to be signed by (i) a nominee of the
SEP and (ii) the chairperson of the meeting or by any
voting member of the committee or by the secretary of
such meeting shall be prima facie proof of the contents of
(I) Committee Meetings by Conference Call
The HRRC may meet by telephone or video conference if
all members can hear all other members. Unless
otherwise expressly resolved by the Board in these
resolutions, a member of the HRRC which participates in
a meeting of the HRRC by either of these means shall be
considered present at such meeting for all purposes.
The SEP and the Minister may from time to time designate
representatives who may attend any and all meetings of
the HRRC. The number of representatives whom the SEP
and the Minister, respectively, designate for attendance at
any meeting of the HRRC may equal, but shall not exceed,
the number of members of the HRRC who are Directors or
managers of Telkom nominated or appointed by the SEP
and the Minister, respectively, pursuant to the
Shareholders' Agreement. Such representatives may be
designated by the SEP and the Minister, respectively, for
attendance at any meeting by notice to the HRRC at any
time prior to the commencement of such meeting. Any
such representatives who attend a meeting of the HRRC
shall be entitled to address the HRRC at the request of
any member thereof with respect to any matter on the
agenda for the applicable meeting.
4. 4 Written Resolution of the HRRC
A duly minuted resolution in writing signed by all the voting
members of the HRRC or, as the case may be, their
respective alternates, shall be as valid and effectual as a
resolution passed at a meeting of the HRRC duly called
(b) Requirements for Written Resolutions
Any such written resolution may consist of one or more
documents signed by one or more voting members of the
HRRC (or as the case may be, their respective alternates),
shall have regard to the provisions of Section 242(2) of the
Companies ▇▇▇ ▇▇▇▇ and shall be delivered to the
secretary of Telkom without delay and be recorded by him
or her in the company's minute book for the HRRC.
Each such written resolution shall be deemed to have
been passed on the day it was signed by the last voting
member, unless a statement to the contrary is made in the
(d) Confirmation of Written Resolution
A written resolution which is not signed by all the voting
members of the HRRC shall be inoperative until confirmed
by a meeting of the HRRC.
The Chairperson of Telkom shall report on matters within the
areas of authority of the HRRC at each meeting of the Board.
The HRRC shall continue to exist until such time as otherwise
determined by the Board and by the members of Telkom in
accordance with the requirements of the Shareholders'
Agreement and the Articles.
4.7 Conflicts with Shareholders' Agreement
In the event of any conflict between this resolution regarding the
HRRC and the provisions of the Shareholders' Agreement, the
provisions of the Shareholders' Agreement shall prevail.
It is resolved that, effective from the Closing, the HRO be charged with
the duty to establish and act as the chairperson of a committee, to be
known as the "Workers Committee" in accordance with the requirements
of the Shareholders' Agreement, as follows:
5.1 the committee shall be comprised of representatives of senior
management and employees of Telkom, including their trade
5.2 the committee shall be established for the purposes of co-
ordinating: (i) matters relating to human resources development,
(ii) issues arising under the Labour Relations Act, and (iii) such
other matters relating to the foregoing as may be raised from time
to time by the members of the committee;
5.3 the committee shall meet regularly with the HRO and HRRC to
discuss implementations of policy guidelines and initiatives
designed to promote and extend the policies developed within
5.4 during the Exclusivity Period and for so long thereafter as the
SEP shall be a Significant Shareholder, the SEP shall be entitled
to nominate a representative (who may be an executive Director
for so long as the SEP is entitled to appoint an executive
Director) to serve as a member of the committee.
It is resolved that in terms of the powers vested in the Board by the
Articles and in accordance with the Shareholders' Agreement, an Audit
Committee shall be and is hereby established with effect from the
Closing as follows (it being hereby resolved that all prior resolutions of
this Board as currently or previously constituted relating to Telkom's
Audit Committee are hereby to be superseded in their entirety as of the
Closing so that they are of no further force or effect from the Closing):
(a) The Audit Committee shall consist of 3 non-executive
Directors, the CFO for the time being (as an ex officio
member) and the head of the Company's internal audit
unit for the time being (as an ex officio member). All those
members shall be voting members. The Board
acknowledges that on the date hereof Hennie Engelbrecht
is the head of the Company's internal audit unit. The non-
executive Directors initially appointed by the Board to
serve as members of the Audit Committee shall be Mr.
▇▇▇▇▇ ▇▇▇▇▇▇▇, Ms. ▇▇▇▇▇▇ Jokoet and Mr. Randall
Stephenson. All of such non-executive Directors shall
remain as voting members of the Audit Committee unless
and until they resign or are removed and/or ▇▇▇▇▇▇▇▇.
▇▇ is noted that in terms of the Shareholders' Agreement,
for so long as the Minister or the SEP is a Significant
Shareholder he or it shall be entitled to nominate at least
1 representative to serve as a full voting member of the
Audit Committee. The Board acknowledges that of the full
voting members appointed as above, Fatima Jokoet is the
initial representative of the Minister, and Mr. Randall
Stephenson is the initial representative of the SEP. The
Minister shall have the right to remove and replace its
representative at any time and from time to time by notice
to Telkom; and such removal and replacement shall be
deemed effective and approved by the Board upon receipt
by Telkom of such notice. The SEP also shall have the
right to remove and replace its representative at any time
and from time to time by notice to Telkom; and such
removal and replacement shall be deemed effective and
approved by the Board upon receipt by Telkom of such
(b) The chairperson of the Audit Committee shall be Ms.
Fatima Jokoet (or such other non-executive Director who
the Board from time to time chooses to serve as
chairperson of the Audit Committee).
(c) If any member of the Audit Committee is at the same time
a Director of Telkom, then, unless otherwise expressly
resolved by the Board in these resolutions, the alternate of
such member appointed in terms of the Articles shall be
permitted to exercise all rights, duties and functions
(including, without limitation, attending meetings of the
Audit Committee and act and vote at such meetings and
to sign written resolutions) of such member in respect of
the Audit Committee, to the same extent as such alternate
is entitled to exercise the rights, duties and functions of
such member in respect of the Board under the Articles.
6.2 Authority of the Audit Committee
The Audit Committee shall have (and the Board accordingly
hereby delegates to it) the power and authority to:
(a) conduct internal audits of Telkom;
(b) review the draft interim and final accounts of Telkom;
(c) review and recommend changes to the statutory audit of
(d) monitor the internal accounting and audited systems of
(e) conduct, or have conducted externally, in accordance with
best practice a corporate governance audit measuring
compliance by Telkom to the leading benchmark from time
to time on proper corporate governance, that will be
included in the annual report of Telkom and which shall
address inter alia: (i) Telkom's progress regarding the
advancement of individuals from groups historically
discriminated against on the grounds of race and gender;
(ii) consultation with workers in Telkom; (iii) the adherence
of Telkom to the highest standards of ethical corporate
behaviour; and (iv) ethical behaviour of Directors.
6.3 Meetings of the Audit Committee
(a) Number of Meetings and Voting
The Audit Committee may meet for the dispatch of
business, adjourn and otherwise regulate its meetings ▇▇
A quorum of the members of the Audit Committee shall
exist only if at least 3 voting members (or their alternates)
are present. Notwithstanding that a quorum may be
present at any meeting of the Audit Committee, no action
shall be taken at any such meeting (other than the
decision to dissolve or adjourn the meeting) unless (i) a
nominee of the Minister (or an alternate of a nominee of
the Minister)' is present (if the Minister is entitled to
nominate a member of the Audit Committee) and (ii) a
nominee of the SEP (or an alternate of a nominee of the
SEP) is present (if the SEP is entitled to nominate a
member of the Audit Committee). If no nominee of the
Minister (and no alternate of a nominee of the Minister) is
present at a meeting of the Audit Committee otherwise
duly constituted, the meeting shall be dissolved or
adjourned for at least 24 (twenty four) hours, and if such
meeting is adjourned then the presence of a nominee of
the Minister (or an alternate of a nominee of the Minister)
shall not be required to take any action at any resulting
adjourned meeting. If no nominee of the SEP (and no
alternate of a nominee of the SEP) is present at a meeting
of the Audit Committee otherwise duly constituted, the
meeting shall be dissolved or adjourned for at least 24
(twenty four) hours, and if such meeting is adjourned then
the presence of a nominee of the SEP (or an alternate of
a nominee of the SEP) shall not be required to take any
action at any resulting adjourned meeting.
The chairperson of the Audit Committee may, and the
secretary of Telkom at the request of any member of the
Audit Committee shall, convene a meeting of the Audit
The Audit Committee shall determine the number of days
notice to be given for the Audit Committee meetings (and
the adjournment thereof) and the form and the medium for
(e) Dissolution and Adjournment of Meetings
The chairperson of the Audit Committee may with the
consent of any meeting at which a quorum is present (and
shall if so directed by the meeting), dissolve a meeting of
the Audit Committee or adjourn and give notice
accordingly of any meeting of the Audit Committee from
time to time and from place to place. Should a quorum
not be present at any meeting of the Audit Committee
within thirty minutes after the appointed time, the
chairperson of the meeting shall (i) adjourn such meeting
to such time and such place as the meeting shall
determine or (ii) dissolve such meeting.
(f) Business of Adjourned Meetings
No business shall be transacted at the resumption of any
adjourned meeting of the Audit Committee other than the
business left unfinished at the meeting from which the
(g) Chairperson of Audit Committee Meetings
The chairperson of the Audit Committee shall act as the
chairperson of meetings of the Audit Committee; provided
that if at any meeting the chairperson is not present in
person within 5 minutes after the time appointed for
holding the meeting (or if the voting members present at
such meeting so desire), the voting members present shall
elect a person to be chairperson of the meeting. The
chairperson of the Audit Committee shall not be
considered present in person at any meeting (for the
purpose of acting as chairperson of the meeting only) by
virtue of his alternate being present at said meeting.
All the voting members of the Audit Committee shall be
entitled to vote at its meetings. All matters put to a vote at
any meeting of the Audit Committee shall be approved
only by an affirmative vote of a majority of members of
such committee, and in the event of an equality of votes
with respect to any matter to be considered by the Audit
Committee, the chairperson of the meeting shall have a
The Audit Committee shall cause minutes to be kept,
which shall include the following particulars:
(i) the names of the voting members and non-voting
members present (or, as the case may be, their
alternates) at each meeting of the committee; and
(ii) all resolutions proposed and passed or not passed
and such other proceedings at each meeting as the
The secretary of Telkom shall act as secretary of the Audit
Committee; provided, that if at any meeting the secretary
of Telkom is not present in person within 5 minutes after
the time appointed for holding the meeting (or if the voting
members present at such meeting so desire), the voting
members present shall elect a person to be secretary of
The minutes of each meeting of the Audit Committee shall
be signed by (i) the chairperson of the meeting or by the
chairperson of the next succeeding meeting and (ii) a
nominee of the SEP present at the meeting at which the
Any extract from or copy of the minutes of a meeting of
the Audit Committee purporting to be signed by (i) a
nominee of the SEP and (ii) the chairperson of the meeting
of the committee or the secretary of such meeting shall be
prima facie proof of the contents of the minutes.
(I) Committee Meetings by Conference Call
The Audit Committee may meet by telephone or video
conference if all members can hear all other members.
Unless otherwise expressly resolved by the Board in these
resolutions, a member of the Audit Committee which
participates in a meeting of the Audit Committee by either
of these means shall be considered present at such
meeting for all purposes.
The SEP and the Minister may each from time to time
designate one (1) representative who may attend any and
all meetings of the Audit Committee. Such representative
may be designated by the SEP and the Minister,
respectively, for attendance at any meeting by notice to
the Audit Committee at any time prior to the
commencement of such meeting. Any such
representatives who attend a meeting of the Audit
Committee shall be entitled to address the Audit
Committee at the request of any member thereof with
respect to any matter on the agenda for the applicable
6. 4 Written Resolution of the Audit Committee
A duly minuted resolution in writing signed by all the voting
members of the Audit Committee or, as the case may be,
their respective alternates, shall be as valid and effectual
as a resolution passed at a meeting of the Audit
Committee duly called and constituted.
(b) Requirements for Written Resolutions
Any such written resolution may consist of one or more
documents signed by one or more voting members of the
Audit Committee (or as the case may be, their respective
alternates), shall have regard to the provisions of Section
242(2) of the Companies ▇▇▇ ▇▇▇▇ and shall be delivered
to the secretary of Telkom without delay and be recorded
by him or her in Telkom's minute book for the Audit
Each such written resolution shall be deemed to have
been passed on the day it was signed by the last voting
member, unless a statement to the contrary is made in the
(d) Confirmation of Written Resolution
A written resolution which is not signed by all the voting
members of the Audit Committee shall be inoperative until
confirmed by a meeting of the Audit Committee.
6. 5 Reports to the Board
The chairperson of the Audit Committee shall report on matters within
the areas of authority of the Audit Committee at each meeting of the
6. 6 Term of the Audit Committee
The Audit Committee shall continue to exist unless and until such time
as otherwise determined by the Board in accordance with the
requirements of the Shareholders' Agreement and the Articles.
6.7 Conflicts with Shareholders' Agreement
In the event of any conflict between this resolution regarding the Audit
Committee and the provisions of the Shareholders' Agreement, the
provisions of the Shareholders' Agreement shall prevail.
7. Remuneration Committee
It is resolved that in terms of the powers vested in the Board by the
Articles and in accordance with the Shareholders' Agreement, a
Remuneration Committee shall be and is hereby established with effect
from the Closing as follows (it being hereby resolved that all prior
resolutions of this Board as currently or previously constituted relating
to Telkom's Remuneration Committee are hereby superseded in their
entirety as of the Closing so that they are of no further force or effect
(a) The Remuneration Committee shall consist of the
Chairperson of Telkom and four (4) other Directors,
provided that the majority of the Remuneration Committee
shall be non-executive Directors as required by the
Articles. The Directors initially appointed by the Board to
serve as members of the Remuneration Committee shall
be Ms. ▇▇▇▇▇ ▇▇▇▇▇▇, Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Professor
Ahmed ▇▇▇▇ and ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇. All of such
Directors shall remain as voting members of the
Remuneration Committee unless and until they resign or
are removed and/or ▇▇▇▇▇▇▇▇.
▇▇ is noted that in terms of the Shareholders' Agreement for
so long as the Minister or the SEP is a Significant
Shareholder he or it shall be entitled to nominate at least
1 representative to serve as a full voting member of the
Remuneration Committee. The Board acknowledges that
of the full voting members appointed as above Wendy
Luhabe is the initial representative of the Minister and
Mr. ▇▇▇ ▇▇▇▇▇▇▇▇▇ is the initial representative of the SEP.
The Minister shall have the right to remove and replace its
representative at any time and from time to time by notice
to Telkom; and such removal and replacement shall be
deemed effective and approved by the Board upon receipt
by Telkom of such notice. The SEP also shall have the
right to remove and replace its representative at any time
and from time to time by notice to Telkom; and such
removal and replacement shall be deemed effective and
approved by the Board upon receipt of the notice.
(b) The Chairperson of Telkom shall be the ex-officio
chairperson of the Remuneration Committee.
(c) If any member of the Remuneration Committee is at the
same time a Director of Telkom, then, unless otherwise
expressly resolved by the Board in these resolutions, the
alternate of such member appointed in terms of the
Articles shall be permitted to exercise all rights, duties and
functions (including, without limitation, attend meetings of
the Remuneration Committee and act and vote at such
meeting and to sign written resolutions) of such member
in respect of the Remuneration Committee, to the same
extent as such alternate is entitled to exercise the rights,
duties and functions of such member in respect of the
Board under the Articles.
7. 2 Authority of the Remuneration Committee
(a) The Remuneration Committee shall have (and the Board
accordingly hereby delegates to it) the power and
authority to review the terms upon which the executive
Directors and the senior managers of Telkom are
employed and remunerated and to make
recommendations to the Board about those terms.
7.3 Meetings of the Remuneration Committee
(a) Number of Meetings and Voting
The Remuneration Committee may meet for the dispatch
of business, adjourn and otherwise regulate its meetings
A quorum of the members of the Remuneration Committee
shall exist only if at least 3 voting members (or their
alternates) are present. Notwithstanding that a quorum
may be present at any meeting of the Remuneration
Committee, no action shall be taken at any such meeting
(other than the decision to dissolve or adjourn the
meeting) unless (i) a nominee of the Minister (or an
alternate of a nominee of the Minister) is present (if the
Minister is entitled to nominate a member of the
Remuneration Committee) and (ii) a nominee of the SEP
is present (if the SEP is entitled to nominate a member of
the Remuneration Committee). If no nominee of the
Minister (and no alternate of a nominee of the Minister) is
present at a meeting of the Remuneration Committee
otherwise duly constituted, the meeting shall be dissolved
or adjourned for at least 24 (twenty four) hours, and if
such meeting is adjourned then the presence of a nominee
of the Minister (or an alternate of a nominee of the SEP)
shall not be required to take any action at any resulting
adjourned meeting. If no nominee of the SEP (and no
alternate of a nominee of the SEP) is present at a meeting
of the Remuneration Committee otherwise duly constituted,
the meeting shall be dissolved or adjourned for at least 24
(twenty four) hours, and if the meeting is adjourned then
the presence of a nominee of the SEP (or an alternate of
a nominee of the SEP) shall not be required to take any
action at any resulting adjourned meeting.
The chairperson of the Remuneration Committee may, and
the secretary of Telkom at the request of any member of
the Remuneration Committee shall, convene a meeting of
the Remuneration Committee at any time.
The Remuneration Committee shall determine the number
of days notice to be given for the Remuneration
Committee meetings and the form and the medium for
(e) Dissolution and Adjournment of Meetings
The chairperson of the Remuneration Committee may with
the consent of any meeting at which a quorum is present
(and shall if so directed by the meeting), dissolve any
meeting of the Remuneration Committee or adjourn and
give notice accordingly of any meeting of the
Remuneration Committee from time to time and from place
to place. Should a quorum not be present at any meeting
of the Remuneration Committee within thirty minutes after
the appointed time, the chairperson of the meeting shall (i)
adjourn such meeting to such time and such place as the
meeting shall determine or (ii) dissolve such meeting.
(f) Business of Adjourned Meetings
No business shall be transacted at the resumption of any
adjourned meeting of the Remuneration Committee other
than the business left unfinished at the meeting from which
the adjournment took place.
(g) Chairperson of Remuneration Committee Meetings
The chairperson of the Remuneration Committee shall act
as the chairperson of meetings of the Remuneration
Committee; provided that if at any meeting the chairperson
is not present in person within 5 minutes after the time
appointed for holding the meeting (or if the voting
members of present at such meeting so desire), the
members present shall elect a person to be the
chairperson of the meeting. The chairperson of the Audit
Committee shall not be considered present in person at
any meeting (for the purpose of acting as chairperson of
the meeting only) by virtue of his alternate being present
All matters put to a vote at any meeting shall be approved
only by an affirmative vote of a majority of members of
such committee, and in the event of an equality of votes
with respect to any matter to be considered by the
Remuneration Committee, the chairperson of the meeting
shall have a casting vote.
The Remuneration Committee shall cause minutes to be
kept, which shall include the following particulars:
(i) the names of the voting members and non-voting
members present (or, as the case may be, their
alternates) at each meeting of the committee; and
(ii) all resolutions proposed and passed or not passed
and such other proceedings at each meeting as the
The secretary of Telkom shall act as secretary of the
Remuneration Committee; provided, that if at any meeting
the secretary of Telkom is not present in person within 5
minutes after the time appointed for holding the meeting
(or if the voting members present at such meeting so
desire), the voting members present shall elect a person
to be secretary of the meeting.
The minutes of each meeting of the Remuneration
Committee shall be signed by (i) the chairperson of the
meeting or by the chairperson of the next succeeding
meeting and (ii) a nominee of the SEP present at the
meeting at which the proceedings take place.
Any extract from or copy of the minutes of a meeting of
the Remuneration Committee purporting to be signed by
(i) a nominee of the SEP and (ii) the chairperson of the
meeting or by any voting member of the committee or by
the secretary of such meeting shall be prima facie proof of
the contents of the minutes.
(I) Committee Meetings by Conference Call
The Remuneration Committee may meet by telephone or
video conference if all members can hear all other
members. Unless otherwise expressly resolved by the
Board in these resolutions, a member of the Remuneration
Committee which participates in a meeting of the
Remuneration Committee by either of these means shall
be considered present at such meeting for all purposes.
The SEP and the Minister may each from time to time
designate one (1) representative who may attend any and
all meetings of the Remuneration Committee. Such
representative may be designated by the SEP and the
Minister, respectively, for attendance at any meeting by
notice to the Remuneration Committee at any time prior to
the commencement of such meeting. Any such
representatives who attend a meeting of the Remuneration
Committee shall be entitled to address the Remuneration
Committee at the request of any member thereof with
respect to any matter on the agenda for the applicable
7. 4 Written Resolutions of the Remuneration Committee
A duly minuted resolution in writing signed by all the voting
members of the Remuneration Committee or, as the case
may be, their respective alternates, shall be as valid and
effectual as a resolution passed at a meeting of the
Remuneration Committee duly called and constituted.
(b) Requirements for Written Resolutions
Any such written resolution may consist of one or more
documents signed by one or more voting members of the
Remuneration Committee (or as the case may be, their
respective alternates), shall have regard to the provisions
of Section 242(2) of the Companies ▇▇▇ ▇▇▇▇ and shall be
delivered to the secretary of Telkom without delay and be
recorded by him or her in the company's minute book for
the Remuneration Committee.
Each such written resolution shall be deemed to have
been passed on the day it was signed by the last voting
member, unless a statement to the contrary is made in the
(d) Confirmation of Written Resolution
A written resolution which is not signed by all the voting
members of the Remuneration Committee shall be
inoperative until confirmed by a meeting of the
7. 5 Reports to the Board
The chairperson of the Remuneration Committee shall report on
matters within the areas of authority of the Remuneration
Committee at each meeting of the Board.
7. 6 Term of the Remuneration Committee
The Remuneration Committee shall continue to exist unless and
until such time as otherwise determined by the Board with the
approval of the members in accordance with the requirements of
the Shareholders' Agreement and the Articles.
7.7 Conflicts with Shareholders' Agreement
In the event of any conflict between this resolution regarding the
Remuneration Committee and the provisions of the Shareholders'
Agreement, the provisions of the Shareholders' Agreement shall
8. Recommendation of Permitted Dividend
8.1 It is resolved that the Board recommends to the Minister as the
sole shareholder of Telkom for Telkom's financial year ended 31
March 1997 that a dividend of R400, 000, 000 (four hundred million
Rand)) be declared and that it be paid to the Minister as the sole
shareholder at any time before the date of the Closing.
8.2 It is noted that the amount of R400, 000, 000, so recommended,
does not exceed 25% of Telkom's profits available for distribution
after making all of the payments and provisions required to be
made, establishing all of the reserves required to be established
and taking into account all of the matters required to be taken
into account, in each case as provided in articles 24. 1. 1 through
24. 1. 5 of the Articles.
9. Implementation of Management Structure Effective from the Closing
9.1 It is resolved that the Management Structure (including reporting
lines) for the most senior members of management, including the
executive Directors and all executives who report directly to the
executive Directors, as set out in Appendix C to the Shareholders'
Agreement, be adopted with effect from and so as to take effect
on the Closing of the transactions under the Share Transfer
Agreement. A copy has been made available to the Board.
9.2 It is noted that pursuant to the Shareholders' Agreement, the
Management Structure so adopted may be amended by the
Board and the members (i) only as a Reserved Matter with the
approval of the members as a Reserved Matter in accordance
with the requirements of the Shareholders' Agreement and only
in accordance with the Articles and (ii) during the Exclusivity
Period, only upon the recommendation of the Operating
Committee. It is resolved that Telkom and the Board comply with
and give effect to such provisions.
9.3 It is resolved further that the Management Structure adopted in
terms of paragraph 9. 1 above shall be implemented by the
company promptly on and with effect from the Closing and
thereafter maintained in accordance with and subject to the
provisions of the Shareholders' Agreement.
9.4 It is resolved that the HRRC's approval from time to time of the
appointment of any SEP Appointment to Telkom's management
in accordance with the authority delegated to the HRRC shall be
deemed ratified and approved by the Board for all purposes
without any further action by the Board.
10. Schedule of Authorisations
10.1 It is resolved that the Schedule of Authorisations establishing the
extent of the authority of certain members of Telkom's senior
management, as set forth in Appendix D to the Share Transfer
Agreement, be and is hereby adopted with effect from and so as
to take effect on the Closing of the Share Transfer Agreement,
and shall be applied and given effect to with effect from then. (A
copy of appendix D to the Shareholders' Agreement is attached
to this resolution for ease of reference).
10.2 It is resolved further that each member of Telkom's management
to whom the Schedule of Authorisation applies shall be
authorised to act on behalf of Telkom without further approval
only to the extent expressly provided in that schedule and
included in the then current Annual Budget of Telkom.
10.3 It is resolved (a) that the Schedule of Authorisations so adopted
may be amended by the Board only as a Reserved Matter in
accordance with the requirements of the Shareholders'
Agreement and the Articles; and (b) that any manager who acts
outside the scope of the authority delegated to him or her in
accordance with the resolutions in paragraphs 10. 1 and 10. 2
above shall be removed by Telkom at the instance of the Minister
or the SEP in accordance with their rights under the
11. General Authorisation
11.1 It is resolved that all prior actions of the officers, directors and
representatives of Telkom in connection with the consummation
of the Capital Reorganisation, and the negotiation and execution
of the Share Transfer Agreement, the letters of undertaking and
each of the other Transaction Documents to which Telkom is a
party are ratified, approved and confirmed in all respects.
11.2 It is resolved further that pursuant to the requirements of the
Share Transfer Agreement Telkom, shall execute and deliver the
and each of the other Transaction Documents to which Telkom
is to be a party at such times and as may be required pursuant
to and in furtherance of the Closing of the transactions
contemplated by the Share Transfer Agreement.
11.3 It is resolved further that the Chairperson of Telkom and each
executive director of Telkom shall be and each of them hereby is
authorised and directed to execute the agreements referred to in
11. 2 above in the name and on behalf of Telkom and to execute
all other documents of every kind and do everything else which
he in his sole discretion considers necessary or desirable to
enable Telkom to implement, carry out or otherwise give effect to
the provisions of the Share Transfer Agreement, the
Shareholders' Agreement, the letters of undertaking and the
Documents to which Telkom is to be a party (including any of the
other appendices or documents attached to or otherwise forming
part of the Share Transfer Agreement).
11.4 It is resolved further that the Chairperson of Telkom and each
executive director of Telkom be, and each of them hereby is,
authorised and directed, to negotiate and agree to any
amendment, addition or deletion to the form of any of the
documents referred to in 11. 2 and 11. 3 above as is deemed
necessary or appropriate, in the sole discretion of the
Chairperson or any such executive director executing the same,
with the approval by the Board of any such amendments,
additions, or deletions being conclusively evidenced by the
execution of such document so modified by the Chairperson or
the applicable executive director of Telkom.
12. Approval of the Matters Required for the Closing of the Share
It is resolved that all of the following matters be and are hereby
approved for the purposes of the Closing of the transactions under the
Share Transfer Agreement:
12.1 the transfer of the 167, 109, 546 issued ordinary shares of Telkom
(registered in the name of the State President on behalf of the
Government of the Republic of South Africa) from the State
President to the SEP pursuant to and subject to the terms and
conditions of the Share Transfer Agreement;
12. 2 the registration by the secretary of Telkom of that transfer in
Telkom's register of members, subject to the transfer form lodged
for the purposes of the transfer being duly stamped;
12.3 the issue of a share certificate to the SEP for the shares so
transferred to it bearing the legend set forth in Appendix K to the
Share Transfer Agreement;
12.4 the allotment to the State President on behalf of the Government
of the Republic of South Africa of 167, 109, 546 unissued ordinary
shares of Telkom with effect from the date of the Closing,
pursuant to and subject to the terms and conditions of the Share
12.5 the entry of the name of the State President on behalf of the
Government of the Republic of South Africa in the register of
allotments and in the register of members and an issue of a share
certificate to him for all the shares so allotted to him, bearing the
legend set forth in Appendix K to the Share Transfer Agreement;
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 97-04-30
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 4/29/97
Date of signature 4/29/97
Date of signature 4/29/97
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Name: /S/
Date of signature
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 4-29-97
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 30 April 1997
Minister For Posts, Telecommunications and
Broadcasting of The Government of the Republic
of South Africa (the Minister) and Telkom SA
Thintana Communications LLC (Thintana)
We are pleased to learn from your letter of todays date to Chairman Moseneke that
the Chairman has agreed to become Telkoms interim Managing Director until a
suitable permanent replacement can be found. We have every confidence that,
through Chairman Mosenekes leadership, a solid management foundation will be
created between Telkoms current managers and Thintana
_____4/29/97______________________
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 30/4/1997
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Name: /S/ Nor ▇▇▇▇▇▇ ▇▇▇▇▇▇
Date of signature April 30 1997
Name: /S/ Nor ▇▇▇▇▇ ▇▇▇▇▇▇
Date of signature April 30 1997
WRITTEN RESOLUTIONS OF ALL THE DIRECTORS OF TELKOM SA
We the persons whose names appear below and who have signed this document (or other
documents in the same form), are all the directors of the company and we hereby
unanimously resolve that the following resolutions are passed as written resolutions in
accordance with Article 19.1 of the companys Articles of Association (the Articles)
and agree that they shall be valid and effective as if they had been passed at a meeting of
the Board, duly convened and held:
1. It is resolved that subject to the unanimous approval of the shareholders, as required by
article 14.1.1 of the Articles, Mr. E.D. Moseneke, who is the chairperson of the company,
be and is hereby appointed in terms of article 20.3 to serve also as the acting chief
executive officer of the company until a new chief executive officer can be appointed to
replace Dr. ▇▇▇▇▇ ▇▇▇▇▇ who has resigned, but in no event for a period of more than 12
2. The remuneration committee be and are hereby authorised to negotiate with Mr.
Moseneke the terms of his appointment as the acting chief executive officer, for the
limited period specified in paragraph 1, provided that no final agreement shall be made
with Mr. Moseneke without the prior written approval of the Government of South Africa
(represented by the Minister for Posts, Telecommunications and Broadcasting) as the
present sole shareholder and Thintana Communications LLC as the prospective new
shareholder of the company.
Date of signature 1st May 1997
(Company Registration Number: 91/05476/06)
RESOLUTIONS PASSED BY THE SOLE SHAREHOLDER
OF TELKOM SA LIMITED IN TERMS OF ITEM 11. 2. 1
OF ITS ARTICLES OF ASSOCIATION
In Attendance: Minister ▇▇▇ ▇▇▇▇▇▇ (Representing the Shareholder)
Adv ED Moseneke (Chairperson of the Board of Directors)
Secretary: Mr GA Smit (Office of the Company Secretary:
1.1 Authorisation to Board to allot and issue two additional shares to the State
President of the Republic of South Africa
It is hereby RESOLVED as an ORDINARY RESOLUTION that the Directors be and are
hereby AUTHORISED to allot and issue two ordinary shares at par value of R1, 00, to
the Government of the Republic of South Africa.
1.2 Resignation of existing Directors
a. the following Directors have RESIGNED from the company with effect from the
b. the following Directors still remain Directors of the Company:
Adv ED Moseneke, SC, as Chairperson of the Board; and
Dr ▇▇ ▇▇▇▇▇ as Managing Director and Chief Executive Officer of the
1.3 Appointment of new Board
It was RESOLVED as an ORDINARY RESOLUTION that the following persons be
and are hereby APPOINTED to the Board of the Company:
Adv Dikgang Moseneke - Chairperson 3 years
▇▇▇▇▇ ▇▇▇▇▇ - Chief Executive. Officer 3 years
(▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Alternate Director) -
(▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ - Alternate Director) -
(▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - Alternate Director) -
(▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - Alternate Director) -
(▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Alternate Director) -
Mr ▇▇▇▇▇ K Mosunkutu 2 years
Alternate Directors for Telkom's Directors will be appointed at a later stage.
The meeting NOTED that interviews with regard to the appointment of a Human
Resources Officer are currently in progress. It was further AGREED that all
persons, save for the Managing Director and Chief Executive Officer be appointed
as Board members without referring to their future executive roles, if any.
It was NOTED that the persons whose names in paragraph 3 above are denoted
by an asterisk have been nominated by Thintana Communications LLC ("the SEP")
in anticipation of its rights to do so upon the closing of the Share. Transfer
Agreement dated 26 March 1997 among the Minister for Posts,
Telecommunications and Broadcasting of the Republic of South Africa, the
The following resolutions are hereby APPROVED as SPECIAL RESOLUTIONS:
a. that the existing 5 000 000 000 (five billion) authorised and 3 899 222 730
(three billion eight hundred and ninety nine million, two hundred and twenty
two thousand seven hundred and thirty) issued ordinary par value shares of
R1, 00 each in the capital of the company be and are hereby
CONSOLIDATED into 500 000 000 (five hundred million) authorised and
389 922 273 (three hundred and eighty nine million, nine hundred and
twenty two thousand, two hundred and seventy three) issued ordinary par
value shares of R10, 00 (ten rand) each;
b. that, subject to the adoption of Special Resolution 2(a) above, the
authorised share capital of the company, namely R5 000 000 000 (five
billion rand) divided into 500 000 000 (five hundred million) ordinary par
value shares of R10, 00 (ten rand) each, be and is hereby increased to
R10 000 000 000 (ten billion rand) divided into 1 000 000 000 (one billion)
ordinary par value shares of R10, 00 (ten rand) each; and
c. that subject to the adoption of special resolution 2(b) above, the
Memorandum and Articles of Association of the company be SUBSTITUTED
by the Memorandum and Articles of Association annexed hereto and
IDENTIFIED as such by the signature of the Chairperson.
The following resolutions were hereby APPROVED as SPECIAL RESOLUTIONS:
a. that the existing 5 000 000 000 (five billion) authorised and 3 899 222 730
(three billion eight hundred and ninety nine million, two hundred and twenty
two thousand seven hundred and thirty) issued ordinary par value shares of
Rl,00 each in the capital of the company be and are hereby
CONSOLIDATED into 500 000 000 (five hundred million) authorised and
389 922 273 (three hundred and eighty nine million, nine hundred and
twenty two thousand, two hundred and seventy three) issued ordinary par
value shares of R10, 00 (ten rand) each;
b. that, subject to the adoption of Special Resolution 2(a) above, the
authorised share capital of the company, namely R5 000 000 000 (five
billion rand) divided into 500 000 000 (five hundred million) ordinary par
value shares of R10, 00 (ten rand) each, be and is hereby increased to
R10 000 000 000 (ten billion rand) divided into 1 000 000 000 (one billion)
ordinary par value shares of R10, 00 (ten rand) each; and
c. that, subject to the adoption of special resolution 2(b) above, the
Memorandum and Articles of Association of the company be SUBSTITUTED
by the Memorandum and Articles of Association annexed hereto and
IDENTIFIED as such by the signature of the Chairperson.
Admin Regs Schedule 2 - Forms
Refer to accompanying pdf document, for clearer tables Form. CM 15
▇▇▇▇▇▇ OF ALLOTMENT OF SHARES
Registration No. of Company
Name of company TELKOM SA LIMITED
Date of allotment of shares 29 APRIL 1997
Authorised capital of company:
Shares subscribed for in memorandum of association:
Class of shares | Nominal amount
Number of shares previously issued, paid-up capital and stated capital, including shares
subscribed for in the memorandum:
Summary of issued capital prior to allotment:
Amount of issued paid-up capital..
Total issued capital . . .
Shares comprising this allotment:
(a) Shares allotted otherwise than for cash:
(b) The consideration for which the shares have been allotted is as follows:
A copy of the contract, in writing, constituting the title of the allottee, together with any contract of sale, or for service or other.
consideration in respect of which the allotment was made, must be attached. If the contract is not in writing, a memorandum containing.
particulars of such contract must be attached.
(For particulars of allottees see overleaf. )
(c) The names and addresses of the allottees:
Address of allottee of shares
Issued capital- at date of this return:
No. of Class of amount of on prem
shares shares each share each share acco
Summary of total issued capital as at the date of this return
Amount of issued paid-up capi:
Premium a c c o u n t . .
Refer to accompanying pdf document for clearer table
ber stamp of company, if any, or ▇▇
(To be completed by company)
of receipt of return of allotments, ▇▇▇▇▇.
Date of receipt by Registrar
intiug Specifications. --To be obtained from the Registrar of Companies, Pretoria,
PAYMENT OF FEES ON INCREASE OF CAPITAL
Paste revenue receipt here
Affix revenue stamps here
Impress revenue franking machine impression here
Registration. No, of Company
INCREASE OF PAR VALUE SHARE CAPITAL
Amount of total capital after increase
DIVISION OF SHARE CAPITAL
Existing number of shares
Number of shares being increased
Total number of shares after increase
INCREASE OF NO PAR VALUE SHARE CAPITAL
existing stated capital R_
Existing number of shares
Number of shares being increased
Total number of shares after increase
Number of shares Class of shares
CERTIFICATE BY THE AUDITOR OF THE COMPANY RELATING TO THE VALUATION OF
EXISTING SHARES IN TERMS OF SECTION 75 (3) (b) (ii) OF THE ACT
being the auditor(s) of the company, hereby certify that
number of issued shares is
The class of issued shares is
The value of each share is
d (b) that, if each new share is issued at the same value per share as the existing value per share, the stated capital would be R.
rubber stamp of the company. If any or of the secretaries
R 5 000 000 000-00 R 10 000 000 000-00
(To be lodged in duplicate)
Registration No. of company
Dare notice given to members
Special resolution passed in terms of section 75 55 56 and 02 of the Act/paragraph of the memorandum/
article 19.1 of the articles.
Copy of notice convening meeting attached.
Consent to waive period of notice of meeting (CM 25) attached/no
Date resolution passed 15/03/99
CONTENTS OF RESOLUTION ( Use reverse side if necessary)
Rubberstamp of company, if any or of ▇▇▇▇▇▇▇▇▇▇▇.
Director/Secretary/Manager
Delete whichever not applicable.
AND OF CLOSE CORPORATIONS
To be completed by company.
Herewith copy of special resolution as registered.
Registration No. of company
Name of company Telkom SA Limited
NOT valid unless stamped by Registrar of Companies.
REPUBLIEK VAN SUID-▇▇▇▇▇▇ ▇▇▇▇/FORM CM25A
MAATSKAPPYWET. 1973 / COMPANIES ACT, 1973
Toestemming om Spesiale Besluit op Vergadering
waarvan ▇▇▇▇▇▇ ▇▇▇ gegee is nie voor te stel en aan te neem
Consent to propose and pass Special Resolution at Meeting
of which notice has not been given
(Artikel 199(3A) / Section 199(3A))
Registrasiekantoor vir ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇. 0001
Companies Registration Office
P. ▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇.
▇▇▇▇ van maatskappy Telkom SA Limited
Registrasienommer van Maatskappy
Registration number of Company
Ons, die ondergetekendes, synde at die lede van bogenoemde maatskappy, stem toe en komooreen dat daar op die algemene vergadering
We, the undersigned, being all the members of the above-mentioned company, consent and agree that at the general meeting
die maatskappy wat op -1997-04-29
the company to be held on
word en waarvan ▇▇▇▇▇▇ ▇▇▇ gegee is nie, 'n besluit met betrekking tot
and of which notice has not been given, a resolution relating to .
as 'n spesiale besluit voorgestel en aangeneem mag word,
may be proposed and passed as a special resolution.
Handtekening/Signature /S/ ▇▇▇ Naidoo
Datum/Date Handtekening/Signature
Datum/Date Handtekening/Signature
Datum/Date Handtekening/Signature
Ek sertifiseer dat die lede van die maatskappy wie se handtekeninge hierbo aangebring is al die lede van die maatskappy is.
I certify that the members of the company whose signatures are. affixed above are all the members of the company.
Moet by spesiale besluit wat vir registrasie ingedien word, aangeheg ▇▇▇▇.
▇▇ be attached to special resolution lodged for registration.
WRITTEN RESOLUTIONS OF THE SOLE SHAREHOLDER OF TELKOM SA
I, ▇▇▇ ▇▇▇▇▇▇, in my capacity as the Minister for Posts, Telecommunications and
Broadcasting of the Government of the Republic of South Africa and acting on behalf of
the Government, which is the sole shareholder of the company, resolve that the following
resolutions are passed as written resolutions in accordance with Article 8. 7 of the
company's Articles of Association (the "Articles") and agree that they shall be valid and
effective as if they had been passed at a general meeting, duly convened and held:
1. ADV DIKGANG MOSENEKE be and is hereby appointed as a director of the company
2. That, upon and with effect from the resignation of Dr. ▇▇▇▇▇ ▇▇▇▇▇, the present chief
executive officer of the company, the Board of directors be authorised in terms of Article
14. 1. 1 of the Articles to appoint Mr. E. D. Moseneke, who is the chairperson of the
company to serve also as the acting chief executive officer of the company until a new
chief executive officer can be appointed, but in no event for a period of more than 12
(twelve) months.
Signed at PRETORIA on 30 April 1997
/S/
▇▇▇ Naidoo
Minister of Posts, Telecommunication and Broadcasting
(To be lodged in duplicate)
Registration No. of company
Name of company Telkom SA Limited
Date notice given to members
Special resolution passed in terms of section 62
19 Date resolution passed 9 - 05 - 1997
Copy of notice convening meeting attached.
Consent to waive period of notice of meeting (CM 25)attached/not attached. -
CONTENTS OF RESOLUTION (Use reverse side if necessary)
Rubber stamp of company, if any or of secretaries.re.
Delete whichever not ▇▇▇▇▇▇▇▇▇▇.
▇▇ be completed by company.
Herewith copy of special resolution as registered.
Registration No. of company
Name of company Telkom SA Limited
Postal address Private Bag X 881
Not valid unless stamped by Registrar of Companies.
article 13.2.1.2 of the ▇▇▇▇▇▇▇▇.
REPUBLIEK VAN SUID-AFRIKA
MAATSKAPPYWET, 1973 / COMPANIES ACT, 1973
Toestemming om Spesiale Besluit op Vergadering
waarvan ▇▇▇▇▇▇ ▇▇▇ gegee is nie voor te stel en aan te neem
Consent to propose and pass Special Resolution at Meeting
of which notice has not been given
(Artikel 199(3A) / Section 199(3A)
Registrasiekantoor vir ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, 0001
Companies Registration Office
P. ▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
Name of company Telkom SA Limited
Registration number of Company
Ons, die ondergetekendes. synde al die lede van bogenoemde maatskappy, stem toe en kom ooreen dat daar op die algemene vergadering
We, the undersigned, being all the members of the above-mentioned company, consent and agree that at the general
van die maatskappy wat op
of the company to be held on 97 . 05 . 09
sou word en waarvan ▇▇▇▇▇▇ ▇▇▇ gegee is nie, 'n besluit met betrekking tot
of which notice has not been given, a resolution relating to an amendment to the articles of association
as 'n spesiale besluit voorgestel en aangeneem mag word,
may be proposed and passed as a special resolution.
Handtekening/Signature /S/
Ek sertifiseer dat die lede van die maatskappy wie se handtekeninge hierbo aangebring is al die lede van die maatskappy is.
I certify that the members of the company whose signatures are affixed above are all the members of the company.
Handtekening/Signature /S/
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
SPECIAL RESOLUTION PASSED BY THE SOLE
SHAREHOLDER OF TELKOM SA LIMITED
It is RESOLVED that the articles of association of the Company be and they are
hereby amended by the deletion of the existing Article 13, 2. 1. 2 and the Insertion
in its stead of a new Article 13. 2. 1. 2 as follows:
"13. 2. 1. 2 A Member of parliament of the Republic of South Africa or any
provincial, legislative or local authority or any municipal or other council in the
Republic of South Africa unless otherwise determined by the unanimous approval
of the Shareholders, provided that if any such approval is given by Shareholders
for any such Member to be a Director it may not be given so as to permit the
Member to be a Director for more than twelve (12) months from the date of his or
her appointment or to permit more than one such appointment at any time. "
Notwithstanding its registration at a later date with the Registrar of Companies,
this resolution shall be effective from the date it was signed by the shareholder.
Signed by the sole shareholder of The company:
WRITTEN RESOLUTIONS OF THE SOLE SHAREHOLDER OF TELKOM SA LIMITED
I, ▇▇▇ ▇▇▇▇▇▇, in my capacity as the Minister for Posts, Telecommunications and
Broadcasting of the Government of the Republic of South Africa and acting on behalf
of the Government, which is the sole shareholder of the company, resolve that the
following resolutions are passed as written resolutions in accordance with Article 8. 7
of the company's Articles of Association and agree that they shall be as valid and
effective as if they had been passed at a general meeting, duly convened and held:
1. It is resolved that the directors of the company be and are hereby authorised
to allot and issue 1 67 109 546 ordinary shares of the company, having a par
value of R10, 00 each, to the State President of South Africa on behalf of the
Government of South Africa, in accordance with and pursuant to the
requirements of the Share Transfer Agreement which was entered into on 26
March 1997 among the Minister for Posts, Telecommunications and
Broadcasting of the Government of the Republic of South Africa, the company
and Thintana Communications LLC.
2. It is noted that the directors of the company have recommended for payment
to the company's sole shareholder a dividend of R400 000 000 for the
company' s financial year ended 31 March 1997; and that such dividend be
paid to the company's sole shareholder at any time before the date of the
Closing as defined in the Share Transfer Agreement referred to in paragraph 1.
3. It is resolved that a dividend of R400 000 000 be declared as payable to the
Government of the Republic of South Africa as the sole shareholder of the
company at the date of this resolution and that the dividend be paid at any
time before that date of Closing.
/S/
MINISTER FOR POSTS, TELECOMMUNICATIONS
AND BROADCASTING OF THE GOVERNMENT OF
THE REPUBLIC OF SOUTH AFRICA
[Signature Page to Pre-Closing Shareholder Resolution Divi/Allot]
WRITTEN RESOLUTION OF THE SOLE SHAREHOLDER OF TELKOM SA
I, ▇▇▇ ▇▇▇▇▇▇, in my capacity as the Minister for Posts, Telecommunications and
Broadcasting of the Government of the Republic of South Africa and acting on behalf of
the Government, which is the sole shareholder of the company, resolve that the following
resolution is passed as a written resolution in accordance with Article 8. 7 of the company's
Articles of Association (the "Articles") and agree that it shall be valid and effective as if it
had been passed at a general meeting, duly convened and held:
The following persons be and are hereby appointed as a director of the company:
Signed at Johannesburg on May 1997
/S/
▇▇▇ NAIDOO
Minister for Posts, Telecommunications and Broadcasting
FUNDS M E M O R A N D U M
(a) The SEP shall instruct Citibank N. A., 1 1 1 Wall Street, New York, New York
to transfer by electronic funds transfer settled through New York for receipt
not later than 1 1 : 00 a. m. New York time and for value on the date of the
(i) the sum of two hundred sixty-one million Dollars (US$261, 000, 000)
from the SEP's account numbered ▇▇▇▇▇▇▇▇ with Citibank N. A., 111
Wall Street, New York, New York to the Dollar account of the South
African Reserve Bank numbered ▇▇▇▇▇▇▇▇ with Citibank N. A., 1 ▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ for the credit of the Minister for
Posts, Telecommunications and Broadcasting (the instruction and telex
advice for such payment to refer to the portion of the Purchase Price
under Share Transfer Agreement to be retained by the Minister for
Posts, Telecommunications and Broadcasting for the Exchequer
Account of the Government of the Republic of South Africa); and
(ii) the sum of one billion Dollars (US$1, 000, 000, 000) from the SEP's
account numbered ▇▇▇▇▇▇▇▇ with Citibank N. A., 1 1 ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ to the Dollar account of the South African Reserve
Bank numbered ▇▇▇▇▇▇▇▇ with Citibank N. A., 1 1 ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ far the credit of the Minister for Posts,
Telecommunications and Broadcasting (the instruction and telex advice
for such payment to refer to the portion of the Purchase Price to be
used by the Minister for Posts, Telecommunications and Broadcasting
to pay the Subscription Price under the Share Transfer Agreement).
(b) Simultaneous with the issuance of instructions referred to in 1 (a) above:
(i) the SEP shall instruct Citibank N. A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ to transfer the Purchase Price Stamp Duty (as defined below)
from the SEP's account numbered ▇▇▇▇▇▇▇▇ with Citibank N. A., 111
Wall Street, New York, New York to the Dollar account of the South
African Reserve Bank ▇▇▇▇▇▇▇▇ with Citibank N. A., 111 Wall Street,
New York, New York for the credit of the Minister of Finance (the
transfer instructions and telex advice for such payment to refer to the
stamp duty payable in respect of the Purchase Price under the Share and
Transfer Agreement), by electronic funds transfer for value on the date
of the Closing. The "Purchase Price Stamp Duty" means six million
three hundred and five thousand Dollars (US$ 6, 305, 000), which is the
product of (x) the Purchase Price and (y) five one-thousandths (0, 005);
(ii) The Minister of Finance shall instruct the South African Reserve Bank
to (x) convert the Purchase Price Stamp Duty thus received into South
African Rand at the rate agreed upon by the South African Reserve
Bank and the Department of Finance, and (y) transfer by electronic
funds transfer such Purchase Price Stamp Duty thus converted into
Rand to the South African Revenue Service account number
1462000118 with Nedbank, Branch ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ upon receipt of the Purchase Price Stamp Duty pursuant to
the payment referred to in l(b)(i).
2. PAYMENT BY THE MINISTER TO TELKOM
Simultaneous with the issuance of instructions referred to in l(a) and l(b)
above the Minister for Posts, Telecommunications and Broadcasting shall
instruct the South African Reserve Bank to transfer by electronic funds transfer
one billion Dollars (US$1, 000, 000, 000) for the Subscription Price to Telkom's
deposit account no. 040-00-041-02 held with the South African Reserve Bank
immediately upon receipt by the South African Reserve Bank of the Purchase
Price payment referred to in l(a)(ii) above. This deposit will be evidenced by a
Fixed Deposit Contract of the South African Reserve Bank (the form of which
is attached hereto) delivered by the South African Reserve Bank to Telkom at
the Closing immediately upon the making of such deposit and such amount will
be held on deposit in such account by Telkom with the South African Reserve
Bank until the Due Date of the Forward Exchange Contract (as defined
therein) between the South African Reserve Bank and Telkom established on
3. PAYMENT OF STAMP DUTY BY TELKOM
Immediately upon receipt of the payment of the Subscription Price referred to
in 2 above, Telkom shall pay the Subscription Price Stamp Duty by certified
bank cheque to the agent of the South African Revenue Service present at the
place of Closing. The "Subscription Price Stamp Duty" means the Rand
equivalent of five million Dollars (US$5, 000, 000), which is the product of (i)
the Rand equivalent of one billion Dollars (US$ 1, 000, 000, 000) (calculated at
the exchange rate agreed upon by the South African Reserve Bank and the
Department of Finance) and (ii) five one-thousandths (0, 005).
4. TRANSFER INSTRUCTIONS AND TELEPHONIC AND TELEX
(a) At least two Business Days prior to the Closing, the SEP, the Minister
for Posts, Telecommunications and Broadcasting, Telkom and the
Minister of Finance shall each furnish the forms of the transfer
instructions to be given by them (as provided above) to the parties to
which they are to provide copies thereof on the date of the Closing as
provided in paragraph 4(b).
(b) The SEP shall provide the Minister for Posts, Telecommunications and
Broadcasting copies of its transfer instructions under paragraph 1 above
immediately upon issuing the same and shall instruct the paying bank to
give the South African Reserve Bank immediate telex and telephonic
advice of the payments under paragraph 1. The Minister for Posts,
Telecommunications and Broadcasting shall provide Telkom with
copies of the instructions given by that Minister under paragraph 2
immediately upon issuing the same. The Minister of Finance shall
provide the SEP with copies of the instructions given by that Minister
to the South African Reserve Bank under paragraph l(b)(ii).
(c) The Minster for Posts, Telecommunications and Broadcasting shall use
his reasonable endeavours to ensure that the Minster of Finance
complies with the terms of this Funds Memorandum.
(a) If for any reason the payments referred to in paragraph l(a) above are not
made for value on the date of the Closing, the SEP shall pay interest on such
sums to the Minister for Posts, Telecommunications and Broadcasting from
and including the date of the Closing to the value date of payment at the
Federal Funds Rate, and the Minister for Posts, Telecommunications and
Broadcasting shall account to Telkom for such interest as is received from the
SEP in respect of the amount required to be credited to the Minister's Account
for Telkom. Interest shall accrue from day to day, shall be calculated on the
basis of the actual number of days elapsed in a 360-day year, and shall be
(b) If the payment under paragraph 2 is not credited to Telkom's Account on the
date of receipt by the Minister for Posts, Telecommunications and
Broadcasting of the payment under paragraph l(a)(ii) and is not made for value
on the date of the Closing, the Minister for Posts, Telecommunications and
Broadcasting may (but shall not be obliged to) invest such sum overnight and
shall account to Telkom for the proceeds of any such investment.
6. TAXES AND OTHER DEDUCTIONS
All sums payable by the SEP under paragraph 1 shall be paid in full without set-off or
counterclaim or any restriction or condition and free and clear of any tax or other
deductions or withholdings of any nature. If the SEP or any other person is required
by any law or regulation to make any deduction or withholding (on account of tax or
otherwise) from any payment, the SEP shall, together with such payment, pay such
additional amount as will ensure that the Minister for Posts, Telecommunications and
Broadcasting receives (free and clear of any tax or other deductions or withholdings
the full amounts the said Minister would have received if no such deduction or
withholding had been required. The SEP shall promptly forward to the Minister for
Posts, Telecommunications and Broadcasting copies of official receipts or other
evidence showing that the full amount of any such deduction or withholding has been
paid over to the relevant taxation or other authority.
7. IMPLICATION OF PAYMENTS BY THE SEP
Payment by the SEP to the South African Reserve Bank, acting as the agent of the
Government of the Republic of South Africa (represented by the Minister for Posts,
Telecommunications and Broadcasting) in accordance with l(a) above will comprise
discharge of the SEP's obligations under Clauses 2. 02 and 4. 04 of the Share Transfer
Agreement. In addition, it is the intent of the Parties that payment by the SEP to the
South African Reserve Bank, acting as the agent of the Government of the Republic of
South Africa (represented by the Minister of Finance and the South African Revenue
Service) in accordance with paragraphs l(b)(i) and l(b)(ii), above respectively, will
comprise payment of the Purchase Price Stamp Duty by the SEP without further action
with respect to such funds.
Appendix M: Post-Closing Post Office Act Amendments
A ▇▇▇▇ to amend the Post Office Act (such amendment, the "Post Office
Amendment Act") shall be enacted by the Parliament of the Republic of South Africa, as
1. Section 3(5): Section 3(5) of the Post Office Act, as amended, shall be deleted
in its entirety and replaced with the following:
"Notwithstanding the provisions of the Companies Act, the postal company
shall not have more than one member, and the telecommunications
company may have less than seven members. "
2. Section 12W(1): Section 12W(1) of the Post Office Act, as amended, shall be
deleted in its entirety and replaced with the following with effect from the date
"(1) Subject to the provisions of subsections (2) and (3), the postal
company may for as long as all its issued equity shares are held by the
State and the telecommunications company may for as long as the majority
of its issued equity shares are held by the state, and notwithstanding
anything to the contrary contained in the Companies Act, issue stock,
securities, bills, promissory notes, debentures, debenture stock, obligations
or other financial instruments as proof of a loan of money, and may
negotiate or have them listed in the same manner and on the same
financial markets or on the same stock exchange as is customary in the
case of similar financial instruments issued by the State. "
3. Retroactive Effective Date: The Post Office Amendment Act shall include the
"This Act shall have retroactive operation from the date of commencement
of the Post Office Amendment Act, 1997 (Act No. 11 of 1997). "
The retroactive date in the above provision may include a date different from the
date of commencement of the Post Office Amendment Act, 1997 (Act No. 11 of
1997), but only so long as such date is on or before 14 May 1997.
