AFFIDAVIT OF VINCENT CHANG

1. I have my true place of abode at 49 Norbrook Drive, Kingston 8, in the parish of St. Andrew, my postal address is 25a Half Way Tree Road, Kingston 5, in the parish of St. Andrew, and I am the Second Defendant herein. I am also a Shareholder and Director of the First Defendant.

2. I have been in the fast food business in Jamaica for almost thirty (30) years. I am the founder, Managing Director and principal shareholder of Tastee Limited, the makers of Tastee patties and chicken, and I am also the sole owner of "Twisters", a fast food restaurant on Knutsford Boulevard in Kingston. For some time, I was a shareholder in Creamy Corner Limited. I was appointed an Officer of the Order of Distinction by the Government of Jamaica for my services to the entertainment industry as a result of my staging and promotion of the "Tastee Talent" shows for the last     years.

3. Although I am a subscriber in the first Defendant, I had almost nothing to do with its incorporation nor with its operation during its early years. A group of businessmen John Chang, Petius Chang, Arthur Chai Onn and Cleve Stewart, decided in 1970/71 to acquire a restaurant known as "Cee Bees" which had been operating at 1 Cargill Avenue for many years. Petius Chang is my brother and John Chang, my uncle.

4. They asked me to be a part of the venture because I had already established a credit rating in the industry, and they thought that I could assist them in obtaining financing. Furthermore, because they were otherwise full time employed, (some in financial institutions) they preferred that their names did not appear on the incorporation or other documents.

5. I was advised by John Chang and verily believe that there had been labour problems at the restaurant, and that for that reason, they decided to change the name. I do not know why the name "McDonald" was chosen, nor who Sandra McDonald is. I did not give any instructions for the incorporation of the company and mainly subscribed to the Memorandum given to me by Attorney-at-law Fern Chen who I verily believe was acting on the instructions of John Chang. I beg to refer to her Affidavit filed in this matter.

6. I have seen the Affidavit of Kenneth Hadland ("the Hadland Affidavit") sworn to on the 2nd day of October, 1995, and filed herein and have seen Exhibit F, the letter from Frank Myers dated 23rd August, 1973. I do not recall having the discussion referred to in that letter, but I could well have said that Albert Chung was the person in charge of the business and that I would have to speak to him. That statement would not have been due to my "Chinese inscrutability", but to my lack of involvement in and my genuine ignorance of the nature of the company's operations.

7. For the first few years of its operations Albert Chung was solely responsible for the operation of the restaurant, operated by the first Defendant, (McDonald's Jamaica). He left Jamaica in or about the year , and for the first time, I became actively involved in the business. Exhibited hereto (VC 1 and VC 2) are letters dated 27th December, 1973, and 5th July, 1976, from Mair Russell & Partners. That firm handled the First Defendant's accounts for most of the seventies, and up to , all their correspondence was with Albert Chung. Thereafter, they corresponded with me.

8. Shortly after its incorporation, and by Agreement dated the 3rd day of December, 1971, (VC 3), the First Defendant acquired the shares in Cee Bees Limited. The restaurant business which that Company carried on at 1 Cargill Avenue had already acquired substantial goodwill. I exhibit hereto copies of the licences issued under the Licences, Trade & Business Law between 1965 and 1972 in relation to the restaurant at 1 Cargill Avenue.

9. In 1973, the first Defendant opened two other restaurants at Port Royal Streets. Exhibited hereto marked is a copy of the Certificate of Registration issued by the Kingston & St. Andrew Corporation. They were the "McDonald's Buttery" which was an upscale restaurant serving dishes such as lobster thermider and "McDonald's Fast Food" which, like McDonald's Jamaica, served fast food. By the mid seventies, business in downtown Kingston was very bad and the Port Royal Street restaurants were closed. McDonald's Jamaica remained open throughout the seventies, however, trading at all times under the name "McDonald's".

10. McDonald's Jamaica was particularly successful during the early seventies. It won the "Most Improved Restaurant" over the 1972-1973 period in a competition organized by the Public Health Office of the Kingston & St. Andrew Corporation, and it had a substantial trade in hamburgers. Exhibited are copies of import licences No. 303099 and 303103.

11. By the late 1970's all the persons referred to in paragraph 3 hereof had left Jamaica and the business, and I had taken over the operating of the restaurant. In 1978, Austin Chung joined the Company. An agreement was entered into which resulted in my having 60% of the shares in the first Defendant, and Austin Chung having 40%. Exhibited hereto marked are copies of that agreement and of the first Defendant's letter dated 14th February 1979, to its then attorneys, Messrs Livingston, Alexander & Levy who prepared the Agreement.

12. My relationship with Austin Chung deteriorated very badly by 1981. We could not agree on many matters to do with the management of the restaurant, and this is one of the main factors that led to the proposal in Daley Walker & Lee Hing's letter dated 3rd July, 1981, (exhibit K to the Hadland Affidavit) being made. I eventually acquired Austin Chung's shares in the business.

13. In 1984, there was a fire at the restaurant, and it was closed for a few months while it was being repaired. That was the only time between 1971 and 1992 that the restaurant was closed for any significant period.

14. As a result of the difficulties the first Defendant was having in finding a good Manager, it decided in 1985 to lease the premises and the business, and on the 2nd day August 1985, the First Defendant entered into a Lease with Anthony Lue. The lease was for a period of three (3) years, and on its expiry, Mr. Lue held over for a further period of three years. I exhibit hereto are copies if tge lease and of letter dated January 8, 1991, from Attorney-at-law, Fern Chen, to me.

15. The building was not being satisfactorily maintained by Mr. Lue, and he did not vacate the premises on the expiry of the second three-year term. I therefore gave him notice to quit (VC ) which expired at the end of September 1992. Mr. Lue actually left a few months after the expiry of the Notice.

16. The First Defendant decided to have the building completely refurbished and renovated and the services of Stephen Nash & Associates (Architects & Planners) were retained in early 1993. Exhibited is a copy of one of their invoices dated April 7, 1993. Carrying out of the renovation work was significantly delayed because I had taken the view that the nature of the refurbishing did not require that we seek or obtain building approval from the Parish Council, and I might neither sought nor obtained such approval. The renovation work began in 1993, but the Kingston & St. Andrew Corporation took the view that the proposed work was so substantial that building approval was needed, and a stop order was served on the First Defendant.

17. Later in 1993, I contacted The Workshop Company Ltd. who had recently done the design for Twisters on my behalf, to redesign McDonalds. Detailed plans had to be prepared and submitted to the Parish Council and formal approval applied for, and approval was not obtained until July 1994.

18. As a result of all these delays, the refurbishing of the building was not completed until mid 1995, and as a result, the restaurant was closed for over two years. At all times, however, the "McDonald" sign remained up, and the building was never "derelict" as alleged in paragraph 15 of the Hadland Affidavit. The refurbished restaurant should have opened in August 1995, and I beg to refer to the Affidavit of Thalia Chung filed herein which explains the reasons for further delay in its opening.

19. I now respond further to some of the specific allegations in the Hadland Affidavit. Paragraph 3: I certainly do not agree that "any person residing in the Caribbean" and in particular in Jamaica, would be well aware the Plaintiff's restaurant business, or would associate the name "McDonald's" with their business. Prior to last month, the Plaintiff never operated a restaurant in Jamaica, nor sold any products here nor had any customers here. No doubt many Jamaicans have heard of the Plaintiff and the fact that they operate fast food restaurants in other countries, but that "knowledge" would not make them familiar with the Plaintiff's products nor cause them to associate other restaurants such as McDonald's Jamaica with the Plaintiff.

20. Paragraph 6

21. Paragraph 7

• (a) The Plaintiff receives between 1,500 and 2,750 customer complaints of food poisoning each year. It also receives numerous complaints of "foreign bodies" in food sold by them. This was admitted by the Plaintiff's Head of Training, John Acathon, on the 22nd of February, 1995, in the course of the trial in London of McDonald's Corporation v Dave Morris and Helen Steele.

• (b) The Plaintiff has admitted responsibility for a serious food poisoning outbreak in Preston in the United Kingdom in 1991, when several customers were hospitalized as a result of eating burgers contaminated by potentially deadly E.Coli 01578 bacteria.

• (c) The Plaintiff has admitted responsibility for a similar food poisoning outbreak in Oregon and in Michigan in the United States which affected 47 people. The Plaintiff often cooks its hamburgers at less than the internal minimum temperature recommended by an expert on food poisoning, Colin Clarke, retained by them. In the course of the same trial, John Hawkes, the Plaintiff's Chief Marketing Officer in the United Kingdom, admitted that the advertising standards authority has forced the Plaintiff to withdraw newspaper advertisements for misleading the public into believing that the company had fewer additives in their food than are in fact used.

• (d) Mr. Hawkes also confirmed that in 1991, the Plaintiff conducted a survey in the United Kingdom which revealed that customers characterized the company as being "loud, brash, american, successful, complacent, uncaring, insensitive, disciplinarian, insincere, suspicious and arrogant".

• (e) David Green, the Plaintiff's Senior Vice President of Marketing from the United States admitted in the course of the said trial that three Attorneys General had demanded that a particular advertising campaign be withdrawn as being deceptive, and an attempt to "pull the wool over the public's eyes" as their food was "on the whole not nutritious".

• (f) David Walker, the Chairman and Owner of McKay Foods, the sole supplier of beef to the Plaintiff in the United Kingdom admitted that raw beef which was micro-biologically tested and characterized as "unsatisfactory" because it had a total colony of more than 10 million bacteria per gram, was not rejected but was routinely used for McDonald's hamburgers.

22. The source for the above information which I verily believe is true and accurate is the transcript of the trial obtained through the internet.

23. Paragraph 12

24. Paragraph 13

25. Paragraphs 19 & 20

26. Paragraph 21

27. Paragraphs 23 & 24

• (a) McDonald's Jamaica (and indeed is true of all the restaurants in which I have an interest) has never had any incidents of food poisoning;

• (b) McDonald's Jamaica has never been accused of misleading advertising in relation to the quality of its foods;

• (c) McDonald's Jamaica does not and has never used meat which has been tested and found to be "unsatisfactory";

• (d) McDonald's Jamaica "flame broils" its hamburgers, which is a much more cooking method than is used by the Plaintiff whose hamburgers are cooked on a solid "grain" which does not allow the grease to be properly drained;

• (e) McDonald's Jamaica seasons its meat and only uses fresh or chilled beef. As far as I am aware, the Plaintiff uses frozen unseasoned beef;

• (f) McDonald's Jamaica's milk shake are made on order with fresh milk and hard ice cream and a blender. The Plaintiff's milk shake are pre-made in a machine with softened ice cream and the texture and constitution of their milk shake is therefore significantly different;

• (g) McDonald's Jamaica serves a number of Jamaican dishes, and although the taste of the Jamaican public has changed over the years, contents of the menu have not changed significantly. Exhibited as VC   and VC   are copies of the menus used at McDonald's Jamaica in 1971, 1973 and today, respectively.

28. In view of the fact that the First Defendant has been operating in Jamaica under the same name for over twenty years, and in view of the matters set out in the preceding paragraph, it is my opinion more likely that any constitution between the operations of the two entities is more likely to damage the first Defendant than the Plaintiff. I do not agree that the continued operation of the first defendant's business in its present form will cause the Plaintiff any irreparable damage.

29. The Hadland affidavit indicates that the Plaintiff threatens and intends to open a restaurant in Kingston. If they do so, that may well cause confusion in the minds of the first Defendant's clients and customers. The Plaintiff would, in those circumstances, be passing off its business as that of the first Defendant's, and would be taking on and stealing the goodwill that the first Defendant has built up in Jamaica over the last twenty-four years.

30. Damage will thereby be caused if the first Defendant's reputation an goodwill which would not be readily or easily quantifiable for the purpose of making an award of damages should the first Defendant succeed in its counterclaim at the trial of this action. The first Defendant owns the property at 1 Cargill Avenue and all the equipment and stock of the business. Apart from the goodwill of the business, its assets are worth more than Twenty Million Dollars. I own numerous pieces of real estate and the other business referred to earlier, and the Defendant therefore has adequate financial resources to pay any damages which the Plaintiff may suffer as a result of an injunction against it as prayed.

31. I hereby undertake on behalf of the First Defendant to pay any damages which the Plaintiff may suffer as a result of a grant of an injunction as prayed in the Summons filed on its behalf in the event that the first defendant fails at the trial of this action, and in the event that this Honourable Court is of the Opinion that the Plaintiff has suffered such damages as a result of such injunction.