Exhibit 10.1
SHARE PURCHASE AGREEMENT
DATED 22 DECEMBER 2006
Mr Franz M. Müller, Ms Milla Müller, Ms Giuseppina Pavesi Müller and Ms Doretta
Brugnera
and
Lindsay Italia S.r.l.
Relating to the sale and purchase of
the entire issued share capital
of Flagship Holdings Limited and of no. 43 shares representing 0.597% of the
issued share
capital of Snoline S.p.A.

 

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CONTENTS

          Clause   Page
1. INTERPRETATION
    2  
2. SALE AND PURCHASE OF THE SHARES
    2  
3. CONDITIONS PRECEDENT
    3  
4. COMPLETION
    4  
5. WITHDRAWAL AND TERMINATION
    5  
6. PURCHASE PRICE
    5  
7. FIRST DEMAND BANK GUARANTEE
    6  
8. GUARANTEES
    6  
9. WARRANTIES
    6  
10. INDEMNITY
    8  
11. SPECIFIC INDEMNITY
    9  
12. REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
    9  
13. DIRECTORSHIP AGREEMENT
    9  
14. PROTECTIVE COVENANTS
    9  
15. ANNOUNCEMENTS AND CONFIDENTIALITY
    11  
16. LANGUAGE AND NOTICES
    12  
17. FURTHER ASSURANCES
    13  
18. ASSIGNMENT
    13  
19. PAYMENTS
    13  
20. GENERAL
    15  
21. WHOLE AGREEMENT
    16  
22. GOVERNING LAW AND JURISDICTION
    16  
 
       
Schedule
       
The Sellers
    17  
Flagship
    18  
Snoline
    19  
Properties
    20  
Owned Properties
    20  
Leased Properties
    20  
Warranties
    21  
Limits on Liability – Procedure of Indemnification
    34  
Directorship Agreement
    37  
Pre-Completion
    47  
Completion
    49  
Sellers’ Obligations
    49  
Purchaser’s Obligations
    51  
Completion Balance Sheet
    52  
Preparation of the Completion Balance Sheet
    52  
Interpretation
    53  
Transfer deed
    57  
Pro-forma financial statements
    69  
List 1
    71  
List 2
    73  
Abstract from the cadastral register
    76  
Signatories
    94  

 

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          Clause   Page
Annexes
       
1.8 – Disclosure on litigation
    77  
2.3 – Disclosure on position since account date
    79  
2.4 – Disclosure on government grants
    80  
2.5 – Disclosure on bank accounts
    81  
2.6 — Disclosure on financing agreements
    82  
3.1 – Material Contracts
    85  
3.5 – Disclosure on powers of attorney
    86  
5 – Disclosure on properties
    87  
6 – Disclosure on employees
    88  

 

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Agreed Forms of:

(1)   Directorship Agreement,   (2)   First Demand Bank Guarantee   (3)   Joint
Instructions

 

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THIS AGREEMENT is made on 22 December 2006
BETWEEN:

(1)   THE PERSONS whose names and addresses are set out in column (A) of the
schedule headed “The Sellers” (each a Seller and together the Sellers); and  
(2)   Lindsay Italia S.r.l., a company incorporated under the laws of Italy,
whose registered office is at Via Manzoni 41, 20121 Milan, Italy, with an issued
and paid-up capital of Euro 10,000, registered with the Companies’ Register of
Milan under number/Vat Code 0502489063, duly represented by Richard William
Parod, acting as chairman of the board of directors, duly authorised under a
resolution of the board of directors of 15 December 2006, attached as Appendix 2
(the Purchaser).

BACKGROUND:

(A)   The Sellers collectively own all the issued share capital of Flagship
Holdings Ltd, a company incorporated under the laws of England and Wales with
company No. 05150712 and whose registered office is at 4A Albert Street,
Windsor, Berkshire, SL4 5BU (Flagship).   (B)   Flagship, in its turn, owns
No. 7,157 shares of Snoline S.p.A. a company incorporated under the laws of
Italy whose registered office is at Trezzo sull’Adda (MI), Via Francesco Baracca
19, with an issued and paid-up capital of Euro 309,600.00, registered with the
Companies’ Register of Milan, VAT and Registration No. 00751770157 (Snoline),
whereas the remaining No. 43 shares of Snoline are owned by Mr Franz M. Müller.
  (C)   Snoline is active in the production of road marking and safety products,
street furniture, passive safety devices for reducing the consequence of
vehicles’ impacts and building materials.   (D)   The Sellers wish to sell and
the Purchaser wishes to purchase all the issued share capital of Snoline through
the sale and purchase (a) from the Sellers of the entire capital of Flagship and
(b) from Mr. Müller of his shareholding in Snoline on the terms and subject to
the conditions set out in this agreement.

IT IS AGREED as follows:

1.   INTERPRETATION   1.1   In addition to terms defined elsewhere in this
agreement, the definitions and other provisions in the schedule headed
“Interpretation” apply throughout this agreement, unless the contrary intention
appears.   1.2   In this agreement, unless the contrary intention appears, a
reference to a clause, subclause or schedule is a reference to a clause,
subclause or schedule to this agreement. The schedules form part of this
agreement.   1.3   The headings in this agreement are for convenience only and
do not affect its interpretation.

 

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2.   SALE AND PURCHASE OF THE SHARES   2.1   Subject to the Conditions Precedent
being satisfied or, where permitted, waived, (i) each of the Sellers shall sell
and the Purchaser shall purchase the Flagship Shares and (ii) Mr. Müller shall
sell and the Purchaser shall purchase the Snoline Shareholding as a means to
acquire control over the entire issued capital of Flagship and Snoline, as well
as over the businesses operated and assets owned by Snoline. The transfer of the
shares under the present subclause 2.1 will be effective starting from
00:01 a.m. of 28 December 2006.   2.2   The Flagship Shares and the Snoline
Shareholding shall be sold free from all Encumbrances and together with all
rights attaching to them, including the right to the full amount of all
dividends which may be allocated to the Shares for the current year which
started on 1 January 2006.   2.3   The ownership of the Flagship Shares and the
Snoline Shareholdings shall be transferred to the Purchaser at Completion
against payment of the Purchase Price in accordance with clause 6.   2.4   The
Sellers acknowledge that the Purchaser enters into this agreement in reliance on
the representations, warranties and undertakings on the part of the Sellers set
out in this agreement.   2.5   Each Seller irrevocably waives all rights of
pre-emption or the benefit of any standstill or transfer restrictions which
he/she may have (whether under the Flagship and/or Snoline constitutional
documents or otherwise) in respect of the transfer to the Purchaser of the
Flagship Shares and of the Snoline Shareholding or any of them.   3.  
CONDITIONS PRECEDENT   3.1   Conditions precedent to all parties’ obligations  
    The sale and purchase of the Flagship Shares and of the Snoline Shareholding
under clause 2 is conditional on:

  (a)   there being no pending or threatened actions or proceedings by or before
any court or other governmental body or agency which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this agreement.

3.2   Conditions precedent to the Purchaser’s obligations       The Purchaser’s
obligations to purchase the Flagship Shares and of the Snoline Shareholding and
pay the purchase price as set out under clause 2 are further conditional on:

  (a)   none of the following events taking place on or before Completion:

  (i)   any breach of the Warranties coming to the Purchaser’s attention whether
as a result of a Seller notifying such breach to the Purchaser or the Purchaser
becoming aware of the breach; and     (ii)   a Seller being in breach of any
obligation on its part under this agreement which, if that breach is capable of
remedy, is not adequately remedied 30 Business Days of the Purchaser notifying
that Seller that the breach must be remedied;

 

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  (iii)   anything else occurring (except something arising from an act or
omission of the Purchaser);

      which, only in the case of subclause 3.2 (a) (iii) above has, or would be
likely to have a Material Adverse Effect;     (b)   Snoline: (i) has obtained
irrevocable waivers from the Banks in connection with the Loan Agreements,
providing for the banks’ consent to the Companies’ change of shareholding and
for the execution of the transaction contemplated in this agreement or,
alternatively (ii) Snoline has obtained written evidence that the relevant
requests for the above waivers have been duly filed with the Banks it being
understood that in this latter case clause 11 shall apply.     (c)   The
repayment in full of the Shareholders’ Loan by Snoline so that Snoline has been
released from any liability thereunder.

3.3   The Purchaser may waive all or any of Conditions Precedent, except for
Conditions Precedent under subclause 3.1 above (either in whole or in part) at
any time by notice to the Sellers.   3.4   Each of the parties shall act in good
faith to procure (so far as it is so able to procure) that the Conditions
Precedent are satisfied on or before Completion.   3.5   The party responsible
for the satisfaction of any of the Conditions Precedent shall promptly notify
the other parties of (i) the satisfaction of the relevant Condition Precedent or
(ii) the occurrence of any action, fact or event that makes, or can be
reasonable expected to make, the satisfaction of any of the Conditions Precedent
impossible or unlikely. This notice must be given on or before the [third] day
after the party becomes aware of the same.   3.6   If all the Conditions
Precedent are not fulfilled or, where possible, waived by the Purchaser on or
before 29 December, 2006:

  (a)   except for this subclause and the clauses 15, 16, 20.5, 20.7 and 22 and
schedule headed “Interpretation”, all the other clauses of this agreement shall
lapse and cease to have effect; but     (b)   the lapsing of those provisions
shall not affect any accrued rights or liabilities of any party.

4.   COMPLETION   4.1   Subject to subclause 3.6, Completion shall take place at
the offices of Unicredit at 9 a.m. on the 27 December 2006 provided that
advanced notice has been given in accordance with subclause 3.5 that all the
Conditions Precedent are satisfied or, where permitted, waived by the Purchaser
or at such other time and on such other date as the Sellers and the Purchaser
may agree. Unicredit will act as escrow agent for the Purcahser and the Sellers
in accordance with the joit instructions in the Agreed Form.   4.2   Pending
Completion (and whether or not the Conditions Precedent are satisfied or, where
permitted, waived) the provisions of the schedule headed “Pre-Completion” shall
apply.

 

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4.3   At Completion:

  (a)   the Sellers shall do or procure to be done those things set out in
Part 1 of the schedule headed “Completion”; and     (b)   the Purchaser shall do
or procure to be done those things set out in Part 2 of that schedule.

4.4   The actions described in the schedule headed “Completion” shall occur at
Completion and shall be deemed simultaneous and constituting a single
transaction, so that no action or transaction may be considered complete until
all the other actions or transactions relating to the Completion have been
completed pursuant to this agreement.   5.   WITHDRAWAL AND TERMINATION   5.1  
If for any reason the Sellers do not do or procure to be done all those things
set out in Part 1 of the schedule headed “Completion”, the Purchaser may elect
(in addition and without prejudice to all other rights or remedies available to
it) to withdraw from (recedere) this agreement or to fix a new date for
Completion.   5.2   If the Purchaser elects not to complete the purchase of the
Flagship Shares and of the Snoline Shareholding in any of the circumstances
mentioned sub clause 5.1, or if the Purchaser terminates or otherwise withdraws
from this agreement due to any of the Sellers’ default in connection with their
obligations under this agreement, then (but without prejudice to any other
rights or remedies available to the Purchaser) the Sellers shall indemnify the
Purchaser against all costs, charges and expenses incurred by it in connection
with the negotiation, preparation, termination or withdrawal of this agreement.
  6.   PURCHASE PRICE   6.1   The Purchaser shall pay to the Sellers the Initial
Purchase Price in cash by wire transfer of immediately available funds to the
Sellers’ designated accounts according to clause 19, as follows:

      Euro 12,500,000 in cash by wire transfer of immediately available funds to
the Sellers’ designated accounts.

6.2   The Initial Purchase Price is based on Snoline’s Pro-Forma Financial
Statements which show a total Shareholders Equity amounting to Euro 2,900,000
and on Flagship’s unaudited accounts as of 31 December 2005 which show a
Shareholders Equity amounting to Pound Sterling 98,890.   6.3   The Initial
Purchase Price shall be adjusted following Completion as follows:

  (a)   If Snoline’s Shareholder’s Equity is less than Euro 2,900,000, by
deducting, Euro per Euro, the amount by which Shareholder’s Equity is less than
2,900,000; and     (b)   If Flagship’s Shareholder’s Equity is less than Pound
Sterling 98,890, by deducting, Pound for Pound, the amount by which
Shareholder’s Equity is less than Pound Sterling 98,890.

 

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6.4   If as a result of such adjustment:

  (a)   the amount of the Initial Purchase Price is reduced, the Sellers shall
pay to the Purchaser in cash a sum equal to that reduction; and     (b)   the
Initial Purchase Price adjusted according to this provision shall be the
Purchase Price for the Shares.

6.5   Such payment shall be made according to clause 19 within 60 Business Days
following the day on which Snoline’s and Flagship’s Shareholder’s Equity are
determined in accordance with the schedule headed “Completion Balance Sheet”.
Any payment made pursuant to this subclause 6.4 will decrease the First Demand
Bank Guarantee accordingly.   7.   FIRST DEMAND BANK GUARANTEE   7.1   At
Completion the Sellers shall provide the Purchaser with the duly executed First
Demand Bank Guarantee in the Agreed Form. The First Demand Bank Guarantee shall
be effective for a two-year period starting from Completion (the Final Date).  
7.2   Any amount due to the Purchaser in respect of a Claim or otherwise under
this agreement shall, on becoming due, be paid to the Purchaser out of the First
Demand Bank Guarantee to the extent of the sum provided therein.   7.3   If a
Claim is outstanding at the Final Date (ie it has not been settled in accordance
with subclause 7.4), the Sellers shall provide the Purchaser with a new first
demand bank guarantee having the same form of the First Demand Bank Guarantee
but with an amount equal to the relevant outstanding Claim’s amount increased by
10% but not exceeding the amount of the First Demand Bank Guarantee in place at
the Final Date (the New First Demand Guarantee). The New First Demand Bank
Guarantee shall be effective upon occurrence of the earlier of (a) the
expiration of a two years term or (b) the date of final settlement of the
relevant Claim.   7.4   For the purpose of this clause and of the First Demand
Bank Guarantee, a Claim shall be regarded as settled if:

  (a)   The Claim is withdrawn; or     (b)   The Sellers and the Purchaser so
agree in writing; or     (c)   a competent court or an arbitrator panel, as
applicable, has awarded judgment in respect of the Claim and, where relevant,
the period for lodging an appeal has expired without the appeal having been
lodged.

7.5   Nothing in this clause limits any rights or remedies available to the
Purchaser to recover any amount due to it in respect of a Claim or otherwise
under this agreement. To the extent that the First Demand Guarantee is
insufficient to satisfy in full any amount so due to the Purchaser, the excess
shall be paid to the Purchaser by the Sellers.

 

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8.   GUARANTEES   8.1   The Purchaser shall procure that within 30 Business Days
from Completion each Seller is released from all guarantees and indemnities
given by them in respect of obligations of any of the Companies and pending
their release, the Purchaser shall indemnify them against all liabilities under
those guarantees and indemnities.   8.2   The Purchaser’s obligation to procure
the release of any such guarantee or indemnity shall be fully satisfied and
discharged (and the Sellers will have no action to claim any damage) by its
agreeing to assume the liability of the relevant Seller under or in respect of
the guarantee or indemnity, without providing any security or depositing any
cash or other asset.   9.   WARRANTIES   9.1   The Sellers represent and warrant
to the Purchaser that:

  (a)   except as specifically disclosed to the Purchaser in the Annexes, each
of the statements set out in the schedule headed “Warranties” is and will at
Completion be true and accurate;     (b)   all information relating to the
Companies or their respective assets or affairs which would be material to a
purchaser for value of the Shares, undertakings or assets of the Companies is
contained in this agreement and the Annexes; and     (c)   all information
contained or referred to in the Annexes is true and accurate and fairly
presented and that nothing has been omitted from the Annexes which renders any
of that information incomplete or misleading.

9.2   Each of the Warranties set out in the several paragraphs of the schedule
headed “Warranties” is separate and independent and, except as expressly
provided to the contrary in this agreement, is not limited:

  (a)   by reference to any other warranty; or     (b)   by any other term in
this agreement; or     (c)   by anything in the Annexes which is not expressly
referenced to the Warranty concerned.

9.3   Each Seller acknowledges that the Warranties are material and the accuracy
and completeness of the Warranties is essential to the Purchaser’s decision to
enter into this agreement and pay the Purchase Price.   9.4   Any due diligence
review, audit or other investigation or inquiry undertaken or performed by or on
behalf of the Purchaser will not limit, qualify or amend the Warranties,
irrespective of the knowledge received (or which should have been received) by
the Purchaser. The Sellers’ Warranties shall therefore only be limited,
qualified or amended by the matters specifically disclosed in the Annexes.   9.5
  The Sellers shall notify the Purchaser, by way of a supplement to the Annexes,
of any matter arising after the date of this agreement and before Completion
which constitutes (or would

 

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          constitute) a breach of any of the Warranties when repeated at
Completion. However, any such supplement:

  (a)   may only relate to events occurring after the date of this agreement and
before Completion;     (b)   will be for information purposes only; and     (c)
  will not change the liabilities or obligations of the Sellers unless
specifically agreed in writing by the Purchaser.

    Any such supplement will be disregarded for the purposes of the fulfilment
of the Conditions Precedent and the Purchaser may elect not to complete the
purchase of the Shares by giving notice to the Sellers. If the Purchaser so
elects:

  (i)   except for this subclause, the clauses 15, 16, 20.5, 20.7 and 22 and
schedule headed “Interpretation”, all the other clauses of this agreement shall
lapse and cease to have effect;     (ii)   the lapsing of those provisions shall
not affect any accrued rights or liabilities of either party; and     (iii)  
the Sellers shall indemnify the Purchaser against all costs, charges and
expenses incurred by it in connection with the negotiation and preparation of
this agreement and in discharging its obligations under it only in case that the
Purchaser’s decision not to complete the transaction is attributable to any of
the Sellers’ breach of their obligations under this agreement.

    Furthermore, even if the Purchaser agrees to close, any supplemental
disclosure will not cure any default or breach under this agreement or operate
as a disclosure which would refrain the Purchaser from claiming (i) any
indemnification for breach of Warranty or (ii) any other indemnity provided
under this agreement.   10.   INDEMNITY   10.1   Without prejudice to any other
remedy available to the Purchaser or its ability to claim damages on any basis
which is available to it by reason of any of the Warranties being untrue,
misleading, incomplete or breached each Seller shall, at the direction of the
Purchaser, indemnify the Purchaser, Flagship and/or Snoline or (in the case of
liability to another person which has not been discharged) the person to whom
the liability has been incurred, including officers, employees and agents (each,
a Beneficiary), against:

  (a)   any deficiency or liability of the Beneficiary, including liabilities of
any nature, payments, losses (including minusvalenze), damages, obligations,
claims, expenses and any other costs (including labour, social security,
environmental, tax, product or third party liability), whether accrued,
contingent or otherwise, which arises from any of the Warranties being untrue,
misleading, incomplete or breached and which would not have existed or arisen if
the Warranty in question had not been untrue, misleading, incomplete or
breached;

 

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  (b)   any default by the Sellers under any obligation under this agreement;  
  (c)   any overstatement of an asset (insussistenze o minusvalenze di poste
attive) or understatement of a liability (passività attuali o potenziali),
whether accrued, contingent or otherwise, which should have been recorded in
Flagship’s and/or Snoline’s Accounts and have not been so recorded; and     (d)
  any costs and damages, including a loss in value of the Shares suffered as a
result of the above.

10.2   The liability of the Sellers under this clause shall be subject to the
limitations contained in, and to the other provisions of, the schedule headed
“Limits on Liability” and any Claim shall be subject to the provisions of that
schedule.   10.3   Any payment made by the Sellers under this clause shall, to
the extent possible, be deemed to be a reduction in the Purchase Price for the
sale of the Flagship Shares.   10.4   Without prejudice to any other rights or
remedies available to it, the Purchaser, after full enforcement of the First
Demand Bank Guarantee, may deduct from any amount payable by it under this
agreement (if any) or under any other agreement executed pursuant to this
agreement any sum due to it under this agreement (including in respect of any
breach of the obligations, Warranties and undertakings on the part of the
Sellers).   11.   SPECIFIC INDEMNITY   11.1   The indemnification obligations
set forth by this clause 11 shall not be subject to clause 10 nor to any of the
exclusions and limitations set forth by this agreement.   11.2   In case of non
occurrence of the event mentioned under subclause 3.2 b (i), the Sellers
undertake to indemnify the Purchaser and the Company from any liability,
payments, losses, damages, obligations, claims, expenses and any other costs
whether accrued, contingent or otherwise, relating to any pre-payment premium as
provided under the relevant Loan Agreement which the Company will be required to
make in case any of the Banks elect to accelerate the relevant Loan Agreement.  
12.   REPRESENTATIONS AND WARRANTIES BY THE PURCHASER   12.1   The Purchaser
represents and warrants to the Sellers as follows:

  (a)   the Purchaser has all requisite power and authority to execute and
perform this agreement and carry out the transactions contemplated thereby;    
(b)   this agreement constitutes the legal, valid and binding obligation of the
Purchaser enforceable in accordance with its terms;     (c)   The Purchaser will
be exclusively liable for any finder’s fee or any type of brokerage commission
in relation to or in connection with the transactions contemplated by this
agreement as a result of any agreement or understanding with the Purchaser;

 

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  (d)   compliance with the terms of this agreement and the agreements referred
to in this agreement which are to be entered into by the Purchaser or one or
more members of the Purchaser’s Group will not constitute a default or a breach
under any provision of:

  (i)   the Purchaser’s memorandum or articles of association or other
constitutional documents; or     (ii)   any order, judgment, decree or
regulation or any other restriction of any kind by which the Purchaser or the
respective member is bound; or     (iii)   any agreement or contract to which
the Purchaser or the respective member is a party or by which it is bound;

13.   DIRECTORSHIP AGREEMENT   13.1   On Completion, the Sellers shall procure
that Mr Franz Müller enters into the directorship agreement with the Purchaser
in the Agreed Form.   14.   PROTECTIVE COVENANTS   14.1   Subject to the
Directorship Agreement, each Seller covenants with the Purchaser and each
Company, as applicable, that he/she shall not:

  (a)   for a period of three years from Completion be directly or indirectly
concerned in any Business which is competitive or likely to be competitive with
Snoline; or     (b)   for a period of three years from Completion and except on
behalf of Snoline, canvass or solicit orders for goods of similar type to those
being manufactured or dealt in or for services similar to those being provided
by Snoline at Completion from any person who is at Completion or has been at any
time within the year prior to Completion a customer of Snoline; or     (c)   for
a period of three years from Completion induce or attempt to induce (within the
meaning set forth by Italian regulation and case law on unfair competition) any
supplier of Snoline to cease to supply, or to restrict or vary the terms of
supply, to Snoline; or     (d)   for a period of five years from Completion
induce or attempt to induce (within the meaning set forth by Italian regulation
and case law on unfair competition) any director (amministratore), manager or
senior/key employee (dirigenti e quadri) of Snoline to leave the employment of
Snoline; or     (e)   for a period of two years, make use of or (except as
required by law or any competent regulatory body) disclose or divulge to any
third party any information of a secret or confidential nature relating to the
business or affairs of Snoline or its customers or suppliers; or     (f)   use
or (insofar as he/she can reasonably do so) allow to be used (except by the
Companies) any trade name used by Flagship and/or Snoline at Completion or any
other name intended or likely to be confused with such a trade name.

 

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    Each of the Sellers acknowledge and agree that full consideration has been
given to the covenants under subclause 14.1 in the determination of the Purchase
Price.   14.2   For the purposes of this clause:

  (a)   a Seller is concerned in the Business if he/she carries it on as
principal or agent or if:

  (i)   he/she is a partner, director, employee, secondee, consultant or agent
in, of or to any person who carries on the Business; or     (ii)   he/she has
any direct or indirect financial interest (as shareholder or otherwise) in any
person who carries on the Business; or     (iii)   he/she is a partner,
director, employee, secondee, consultant or agent in, of or to any person who
has a direct or indirect financial interest (as shareholder or otherwise) in any
person who carries on the Business,

      disregarding any financial interest of a person in securities which are
held for investment purposes only if that person, the Sellers and any person
connected with him or them (the Investors) are together interested in securities
which amount to less than five per cent. of the issued securities of that class,
and which, in all circumstances, carry less than five per cent. of the voting
rights (if any) attaching to the issued securities of that class, and provided
that none of the Investors is involved in the management of the business of the
issuer of the securities or of any person connected with it other than by the
exercise of voting rights attaching to the securities; and     (b)   references
to Flagship and/or Snoline include their respective successors in business.

14.3   Each of the restrictions in each paragraph or subclause above shall be
enforceable independently of each of the others and its validity shall not be
affected if any of the others is invalid.   14.4   The covenants in this clause
may be enforced against the Sellers only by (i) the Purchaser and/or
(ii) Flagship and/or Snoline as a third party beneficiary under article 1411 of
the Civil Code. The provisions of this clause may be varied or terminated by
agreement between the Sellers and the Purchaser (which may also release or
compromise any liability in whole or in part) without the consent of any of the
Companies.   14.5   The Purchaser acknowledges that Mr Franz Müller’s
performance of the Directorship Agreement shall not be considered as in breach
of the covenants in this clause.   15.   ANNOUNCEMENTS AND CONFIDENTIALITY  
15.1   For a period of two years following Completion, neither the Sellers nor
the Purchaser shall make (or permit any other member of the Seller’s Group or
the Purchaser’s Group to make) any announcement concerning this sale and
purchase or any ancillary matter before, on or after Completion.   15.2   Each
Seller shall for a period of three years following Completion,

 

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  (a)   keep confidential all information provided to it by or on behalf of the
Purchaser or otherwise obtained by or in connection with this agreement which
relates to any member of the Purchaser’s Group; and     (b)   if after
Completion a Seller holds confidential information relating to Flagship and/or
Snoline, it shall keep that information confidential and, to the extent
reasonably practicable, shall return that information to the Purchaser or
destroy it, in each case without retaining copies.

15.3   The Purchaser shall and shall procure that, for a period of three years
following Completion the Purchaser’s Group shall keep confidential all
information provided to it by or on behalf of the Sellers or otherwise obtained
by or in connection with this agreement which relates to any of the Sellers.  
15.4   Nothing in this clause prevents any announcement being made or any
confidential information being disclosed:

  (a)   with the written approval of the other parties, which in the case of any
announcement shall not be unreasonably withheld or delayed; or     (b)   to the
extent required by law or any competent regulatory body, but a party required to
disclose any confidential information shall promptly notify the other parties,
where practicable and lawful to do so, before disclosure occurs and co-operate
with the other parties regarding the timing and content of such disclosure or
any action which the other parties may reasonably elect to take to challenge the
validity of such requirement; the Sellers hereby acknowledge and agree that
Lindsay Manufacturing Co., the ultimate shareholder of the Purchaser, is a
listed company and it shall, and will, disclose this agreement and the
transactions contemplated herewith to the relevant competent authorities.

15.5   Nothing in this clause prevents disclosure of confidential information by
any party:

  (a)   to the extent that the information is in or comes into the public domain
other than as a result of a breach of any undertaking or duty of confidentiality
by any person; or     (b)   to that party’s professional advisors, auditors or
bankers, but before any disclosure to any such person, the relevant party shall
procure that he is made aware of the terms of this clause and shall use its best
endeavours to procure that such person adheres to those terms as if he were
bound by the provisions of this clause.

16.   LANGUAGE AND NOTICES   16.1   The language of this agreement is and the
transactions envisaged by it are English and all notices, demands, requests,
statements, certificates or other documents or communications shall be in
English unless otherwise agreed. The parties acknowledge that they fully
understand and agree to all the provisions of this agreement.

 

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16.2   Any notice or other formal communication given under this agreement must
be in writing and may be delivered or sent by post or fax to the party to be
served at his address appearing in this agreement]as follows:

  (a)   to the Sellers at:         Mr Franz M. Müller         Via Scheiwiller 1,
Milan, Italy         Fax no.: +39 0254020454 (c/o Avv. Mauro Barbieri)        
With copy to:         Avv. Mauro Barberi         Piazzetta Guastalla 10        
20122 Milan, Italy         fax no.: +390254020454     (b)   to the Purchaser at:
        Lindsay Italia S.r.l.         c/o Lindsay Manufacturing Co.         2707
N. 108th Street, Suite 102         Omaha, NE 68164- USA         Fax no.: +1
4028296836         marked for the attention of the President and CEO,        
With copy to:         Avv. Giovanni Gazzaniga         Allen & Overy         Via
Manzoni 41         20121 Milan, Italy         fax no.: +39 0229049333

or at such other address or fax number as he may have notified to the other
parties in accordance with this clause. Any notice or other document sent by
post shall be sent by registered mail return receipt requested.

 

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16.3   Any notice or other formal communication shall be deemed to have been
given:

  (a)   if delivered, at the time of delivery; or     (b)   if posted, on the
day of receipt, provided it is sent by registered mail requesting a return
receipt; or     (c)   if sent by fax, on the date of transmission as shown on
the return receipt, if transmitted before 5.00 p.m. (addressee’s time) on any
Business Day, and in any other case on the Business Day following the date of
transmission.

17.   FURTHER ASSURANCES

17.1   On or after Completion each Seller and Mr Franz Müller, as applicable,
shall execute and do (or procure to be executed and done by any other necessary
party) all such deeds, documents, acts and things as the Purchaser may from time
to time require in order to vest any of the Flagship Shares and the Snoline
Shareholding in the Purchaser or its assignee or as otherwise may be necessary
to give full effect to this agreement.

17.2   In relation to Flagship, the Sellers shall procure the convening of all
meetings, the giving of all waivers and consents and the passing of all
resolutions as are necessary under the laws of England and Wales, its articles
of association or any agreement or obligation affecting it to give effect to
this agreement.

18.   ASSIGNMENT

No party may assign any of its rights or transfer any of the obligations under
this agreement without the prior written consent of the other parties save that
the Purchaser’s indemnity rights under clauses 10 and 11 of this agreement may
be assigned by the Purchaser to (i) any other member of the Purchaser’s Group
and by such member to any other member of the Purchaser’s Group and/or
(ii) financial entities. The Seller’s consent is hereby deemed granted and
Purchaser agrees to notify the Sellers as soon as reasonably practicable after
any such assignment in accordance with Article 1407 of the Civil Code.

19.   PAYMENTS   19.1   Unless otherwise expressly stated, all payments to be
made under this agreement shall be made in Euro to the party to be paid as
follows:

  (a)   to the Sellers in immediately available funds (valuta fissa a favore del
beneficiario) to the account of the Sellers at:     (b)   to the Purchaser or in
immediately available funds (valuta fissa a favore del beneficiario) to the
account of the Purchaser as communicated in writing to the Sellers 3 Business
Day before the due date of the relevant payment.

19.2   If a party defaults in the payment when due of any sum payable under this
agreement, it shall pay interest on that sum from the date on which payment is
due until the date of actual payment (after as well as before judgment) at the
EURIBOR above three months.

 

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19.3   If any Seller is required by law to make a deduction or withholding in
respect of any sum payable under this agreement and the Purchaser shall not be
capable to obtain at the same time benefit of the above deductions or
withholding, he shall, at the same time as the sum which is the subject of the
deduction or withholding is payable, pay to the Purchaser such additional amount
as shall be required to ensure that the net amount received by the Purchaser
will equal the full amount which would have been received by it had no such
deduction or withholding been required to be made.

20.   GENERAL

20.1   The receipt of the Sellers for any sum or document to be paid or
delivered to a Seller will discharge the Purchaser’s obligation to pay or
deliver it to that Seller.

20.2   The invalidity or ineffectiveness of any clause of this agreement shall
not affect the validity of the remainder of this agreement but, in the event of
invalidity of a clause, parties agree to negotiate in good faith to replace such
clause, or portions, with other valid and effective clauses having substantially
the same effect, reflecting the subject matter and purpose of this agreement.

20.3   The transfer of the Flagship Shares and of the Snoline Shareholding are
and shall only be governed by the provisions of this agreement. This agreement
shall not be varied (novato) by reason of, or as a consequence of, the above
transfers. The contractual terms and warranties relating to the transfer of the
Flagship Shares and of the Snoline Shareholding are and shall be governed by the
provisions of this agreement, which shall remain in full force and effect after
the transfer of the Flagship Shares.

20.4   Each of the obligations, Warranties and undertakings set out in this
agreement (excluding any obligation which is fully performed at Completion)
shall continue in force after Completion and will not be affected by the waiver
of any Condition Precedent or any notice given by the Purchaser in respect of
any Condition Precedent.

20.5   Where any obligation, representation, warranty or undertaking in this
agreement is expressed to be made, undertaken or given by two or more of the
Sellers, they shall be jointly and severally responsible (solidalmente
responsabile) in respect of it. The Sellers shall be entitled to the Purchase
Price in the proportions shown in the schedule headed “The Sellers”.

20.6   The Purchaser may release or compromise in whole or in part the liability
of any Seller under this agreement or grant any time or other indulgence without
affecting the liability of any other Seller.

20.7   The Sellers hereby irrevocably appoint Mr. Franz Müller as their
attorney-in-fact and representative (procuratore). The representative is
authorised to (a) send and receive all communications required or permitted
under this agreement, (b) give all consents, (c) settle any disputes, (d) sign
all written waivers and modifications, and (e) exercise the rights and fulfil
all obligations of the Sellers in connection with this agreement, in each case
on behalf of and in the name of the Sellers. The Sellers shall notify the
Purchaser in writing of any changes in the identity of their representative,
provided, however, that the Sellers may replace the representative only with the
Purchaser’s consent (not to be unreasonable withheld) and grant to the new
representative all of the above-mentioned powers

20.8   Each party shall pay the costs and expenses incurred by it in connection
with the entering into and completion of this agreement, including without
limitation in respect of their obligations in

 

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    satisfying the Conditions Precedent and the other requirements for
transferring the Flagship Shares.   20.9   The rights of each party under this
agreement:

  (a)   may be exercised as often as necessary;     (b)   unless otherwise
expressly provided in this agreement, are cumulative and not exclusive of rights
and remedies provided by law; and     (c)   may be waived only in writing and
specifically.

    Delay in the exercise or non-exercise of any such right is not a waiver of
that right.   21.   WHOLE AGREEMENT

21.1   This agreement and the documents referred to in it and any agreements
executed by the parties on the date of this agreement contain the whole
agreement between the parties relating to the transactions contemplated by this
agreement and supersede all previous agreements between the parties relating to
these transactions.

21.2   Nothing in this agreement limits or excludes any liability for fraud
(dolo) or wilful misconduct (colpa grave).

22.   GOVERNING LAW AND JURISDICTION

22.1   This agreement is governed by the laws of the Republic of Italy.

22.2   Save as otherwise set out in this agreement, any dispute arising out of
or in connection with this agreement shall be finally settled by arbitration in
English, by a panel composed of three arbitrators appointed in accordance with
the Rules for International Arbitration of the Milan Chamber for National and
International Arbitrations (the Rules). The place of arbitration shall be Milan.

22.3   The arbitration panel shall act on the following basis:

  (a)   the panel shall render its decision within 120 days from the date it
accepts office;     (b)   the panel shall decide, pursuant to the Rules, in
accordance with the rules of law (secondo diritto);     (c)   the final award
shall also fix the costs of the arbitration and decide which of the parties or
in what proportion the parties shall bear them; and     (d)   the award of the
arbitrators shall be final and binding and shall not be subject to appeal.

THIS AGREEMENT is signed in two originals, one for the Purchaser and the other
one for the Sellers, and each party acknowledges receipt of their original.

 

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PART 1
WARRANTIES

  1.   General     2.   Accounts and Financial     3.   Commercial     4.   Tax
and Social Security     5.   Properties     6.   Employees

1.   GENERAL   1.1   Accuracy of recitals and schedules       The particulars
relating to Flagship and Snoline and the Properties set out in the recitals and
the Schedules to this Agreement are true and accurate.

1.2   Incorporation, good standing, articles of association, statutory books and
returns

  (a)   Snoline is società per azioni (joint stock company) duly organised,
validly existing and in good standing under the laws of Italy and has all
requisite power and authority to carry-on its business as currently conducted.  
  (b)   Flagship is a limited liability company duly organised, validly existing
and in good standing under the laws of England and Wales and has all requisite
power and authority to carry on its business as currently conducted.     (c)  
The copy of the memorandum and articles of association (or the equivalent
constitutional documents) of Flagship is accurate and complete and has annexed
or incorporated copies of all resolutions or agreements required by the
Companies Acts or other applicable laws to be so annexed or incorporated.    
(d)   The register of members and other statutory books and registers of the
Companies are and have been properly kept, are fully updated and no notice or
allegation that any of them is incorrect or should be rectified has been
received and the Sellers are not aware of any allegation having been made that
any of them is incorrect or should be rectified.     (e)   All returns and
particulars, resolutions and other documents which the Companies are required by
law to file with or deliver to the registrar of companies or his equivalent have
been correctly made up and duly filed or delivered.

1.3   Corporate Capital and Shares

  (a)   The Flagship Shares, details of which are set out opposite “issued
capital” in schedule 2, constitute the whole of the issued and allotted share
capital of Flagship.

 

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      The Snoline Shares, details of which are set out opposite “issued capital”
in schedule 3, constitute the whole of the issued and allotted share capital of
Snoline. .     (b)   The Shares are duly issued, validly subscribed and fully
paid. There are no Encumbrances with regard to the Shares. There are no
authorised or outstanding option, right of pre-emption, right to acquire the
Shares nor is there any commitment to give or create any of the foregoing.    
(c)   The Sellers have all requisite power and authority to dispose of the
Flagship’s Shares and the Snoline Shareholding, as applicable, in accordance
with the terms and conditions set out in the Agreement and to perform their
respective obligations hereunder, and there are no persons whose consent is
required to perform the transactions contemplated in this agreement.

1.4   Assets

  (a)   With the exception of the assets which are the subject matters of the
lease agreements (Contratti di leasing) referred to in Annex 2.6, the Companies
have full title to or have the right to use, as reflected in the respective
accounts and/or in the Accounts, and have exclusive possession of, all tangible
and intangible assets that they currently use, free of any Encumbrances.     (b)
  Neither Company has since the Accounts Date disposed of any assets included in
the Accounts or any assets acquired or agreed to be acquired since the Accounts
Date other than in the ordinary course of its business.     (c)   None of the
tangible and intangible property and assets of either Company (other than the
Properties) is subject to any Encumbrance.     (d)   The assets of each Company
comprise all the assets necessary for the continuation of its business as
carried on at the date of this Agreement.     (e)   All material tangible
assets, including without limitation hardware and software, used by the
Companies, are in good repair and conditions, subject to normal wear and tear
deriving from their use, fit for the purpose for which they are used.     (f)  
All the records, archives and systems (including without limitation computer
systems) and all data and information of the Companies are recorded, stored,
maintained or operated or otherwise held by the Companies or by service
providers which are under the Companies’ exclusive control supervision. All such
data and information are complete, fully accessible and properly secured.

1.5   Compliance with law       The Companies and all of its directors,
officers, agents and employees (during the course of their duties) are and have
been in compliance with all applicable laws and regulations relating to the
operations and conduct of their respective businesses including without
limitation any anti-money laundering laws and regulations, laws on the
protection of personal data, laws on the protection of competition in the
market, laws on health and safety in the work place and environmental laws.

 

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    To the best knowledge of the Sellers after careful enquiry, the Companies
have not received any notice by the competent authorities of alleged violation
of any such law or regulation, and there are no circumstances that may give rise
to any such notice.

1.6   Licences and consents       The Companies have all the governmental or
administrative authorisations, licenses, permits, certifications and
registrations necessary for the carrying out of their activities as currently
carried out, and for the regular use of their assets as currently used, any such
governmental or administrative authorisations, licenses, permits, certifications
and registrations are in full force and effect and, to the best knowledge of the
Sellers, after careful enquiry, there are no circumstances that may cause the
revocation, cancellation or suspension of any of them.

1.7   Insider contracts       Except for the Directorship Agreement, neither
Company is a party to any contract or arrangement in which any of the Sellers is
interested, directly or indirectly.

1.8   Litigation       With the exception of the matters specifically disclosed
in Annex 1.8, the Companies are not engaged in any pending arbitration,
litigation, dispute resolution procedure, judicial or administrative
proceedings, no such arbitration, litigation, dispute resolution procedure or
proceedings are pending or threatened and, to the best knowledge of the Sellers,
after careful enquiry, there are no circumstances which may cause any
arbitration, litigation, dispute resolution procedure or proceedings.

1.9   Insolvency

  (a)   The Companies are not insolvent and there are no circumstances which
require or would enable any insolvency proceedings to be commenced in respect of
any of the Companies.     (b)   The Companies are not in a situation as provided
for in articles 2446 and 2447 of the Italian Civil Code (reduction of the
capital for losses).     (c)   None of the Sellers is or has been bankrupt nor
has a petition been presented to make any of them bankrupt.

1.10   Capacity and consequences of sale

  (a)   The Sellers have the requisite power and authority to enter into and
perform this agreement.     (b)   The agreement constitutes binding obligations
on the Sellers in accordance with its terms.     (c)   The execution of and
compliance by the Sellers with the terms of this agreement does not and will
not:

 

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  a.   conflict with or constitute a default under any provision of:

  1)   any agreement or instrument to which any of the Companies or any of the
Sellers is a party; or     2)   the articles of association (or equivalent
documents) of any of the Companies; or     3)   any lien, lease, order,
judgment, award, injunction, decree, ordinance or regulation or any other
restriction of any kind or character by which any Company or any of the Sellers
is bound; or

  b.   relieve any other party to a contract with any of the Companies of its
obligations or enable that party to vary or terminate its rights or obligations
under that contract; or     c.   result in the creation or imposition of any
lien, charge or encumbrance of any nature on any of the property or assets of
any of the Companies.

1.11   Consents       The Sellers may enter into this agreement and consummate
the transactions contemplated hereby without the necessity of obtaining the
prior consent, authorisation, or approval from any third parties or public
authorities.

 

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2.   ACCOUNTS AND FINANCIAL   2.1   Accuracy of Accounts

  (a)   The Flagship Accounts:

  (i)   have been prepared under the historical cost convention (as modified for
the revaluation of land and buildings) and in accordance with GAAP, the
Companies Acts and other applicable statutes and regulations;     (ii)   have
been prepared in accordance with the special provisions of the Companies Acts
relating to small companies and with the English law Financial Reporting
Standard for Smaller Entities (effective January 2005);     (iii)   correctly
state the assets of Flagship and give a true and fair view of the state of
affairs of Flagship as at 31 December 2005 and of the profit or loss of Flagship
for the period ended on the 31 December 2005;     (iv)   contain (as appropriate
under GAAP) specific provisions, accruals or creditors adequate to cover, or
full particulars in notes, of all Taxation (including deferred taxation) and
other liabilities (whether quantified, contingent or otherwise) of Flagship as
at 31 December 2005; and     (v)   are not affected by any unusual or
non-recurring items.

  (b)   The Snoline Accounts:

  (i)   give a true and fair view of Snoline and have been prepared in
compliance with the Italian accounting principles (“principi contabili nazionali
e relativi criteri adottati dall’Ordine dei Dottori e Ragionieri
Commercialisti”) applied on basis consistent with the previous year, fully and
fairly reflect the assets and liabilities and the operational results of Snoline
and contain provisions adequate to cover, or full particulars in the notes of,
all liabilities of Snoline. There were at the Accounts Date no liabilities,
either actual or contingent, which are not fully provided for or disclosed in
the Accounts and would have been required according to Italian accounting
principles.     (ii)   The pro-forma financial statements as of 30
September 2006 give a true and fair view of Snoline and, subject to their
interim status, have been prepared in compliance with the Italian accounting
principles. As of 30 September 2006, there were no liabilities, either actual or
contingent, which are not fully provided for or disclosed in the financial
statements as of 30 September 2006.     (iii)   All account receivables
(including all tax advances and credits) contained in the Snoline Accounts, as
well as those that would have been shown were the Snoline Accounts to have been
drawn up at the Completion Date, are valid, true and represent such amounts in
accordance with the Italian accounting principles.

 

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  (iv)   To the best knowledge of the Sellers, after careful enquiry, since 31
December 2005,there have not been any events that would have caused a material
adverse affect in financial status and operational status of the Companies.

2.2   Books and records       All accounts, books, ledgers, and other financial
records of each Company

  (2)   have been properly maintained and contain accurate records of all
matters required to be entered in them by the Companies Acts or Italian Law; and
    (3)   give a true and fair view of the matters which ought to appear in
them.

2.3   Position since Accounts Date       Since the Accounts Date:

  (4)   each Company has conducted its business in the ordinary course;     (5)
  Except as disclosed in Annex 2.3, Flagship has not incurred in any indebtness
nor it made any payment with the exception of the payments relating to its
management in the ordinary course of business;     (6)   limited to Flagship, no
asset of a value or price in excess of Euro 10,000 has been acquired or disposed
of or agreed to be acquired or disposed of by Flagship on capital account, and
no contract involving expenditure by it on capital account in excess of Euro
10,000 in total has been entered into by Flagship;     (7)   limited to
Flagship, there has been no disposal or acquisition of any asset or supply of
any service or business facility of any kind by or to Flagship in circumstances
where the consideration actually received or receivable for the disposal,
acquisition or supply was less than or exceeds the consideration which could be
deemed to have been received for tax purposes;     (8)   so far as the Sellers
are aware, no event has occurred which would entitle any third party (with or
without the giving of notice) to call for the repayment of indebtedness of
either Company prior to the normal maturity date;     (9)   Flagship has not
made any payment or incurred any liability to any Seller, or any person
connected with any Seller except as otherwise provided for under this agreement;
and

2.4   Dividends and distributions       In connection with Flagship, no dividend
or other distribution of profits or assets, including any distribution within
the meaning of Part VI and section 418 of the Taxes Act 1988 under English law,
has been or agreed to be declared, made or paid by Flagship since the Accounts
Date.       All dividends or other distributions of profits or assets declared,
made or paid in the last 5 (five) years by each Company have been declared, made
and paid in accordance with law and its articles of association.

 

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2.5   Government grants       With the exception of the matters specifically
disclosed in Annex 2.4, neither Company is subject to any arrangement for
receipt or repayment of any grant, subsidy or financial assistance from any
government department or other body.

2.6   Bank accounts       The statement of the Companies’ bank accounts and of
the credit or debit balances on them attached as Annex 2.5 is correct, neither
Company has any other bank or deposit account (whether in credit or overdrawn)
not included in the statement and since the date of that statement there has not
been any payment out of any of the accounts except for due and routine payments.

2.7   Financing Agreements       With the exception of the matters specifically
disclosed in Annex 2.6, the Companies are not party to any loan agreement or in
any other financial arrangement of sort (including, without limitations, long
term loan agreements, bridge loans, mezzanine loans, financial leases (contratti
di leasing finanziario)), with their respective shareholders, with banks,
financial institutions or other third parties. The shareholders’ loan granted by
the Sellers to Flagship has been fully repaid and discharged by Flagship with no
claim upon, and/or liability of, the latter.

 

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3.   COMMERCIAL   3.1   Material contracts

  (a)   Except for (i) contracts related to the day-to-day business, such as,
without limitation, utilities and the like; (ii) banking arrangements listed in
Annex 2.6;, (iii) employment contracts listed in Annex 6 and (iv) the contracts
listed in Annex 3.1, there do not exist any contracts, whether oral or written,
in the course of performance between any of the Companies, on the one side, and
third parties, on the other, the performance of which commits the Companies to
pay an amount greater than Euro 50,000 per contract, or the duration of which
exceeds 3 (three) years without the right of the Companies to withdraw without
penalties by giving a notice period of no more than 12 (twelve) months.     (b)
  All contracts to which the Companies are party are in full force and effect.
To the best knowledge of the Sellers, after careful enquiry, no default has
occurred under, and neither of the Companies, nor any persons for the actions of
which the Companies are liable, are in breach of any agreement or other legal
undertaking by which they are bound.     (c)   All orders collected by the
Companies before the date of this Agreement have been done in the ordinary
course of business of the Companies.     (d)   Except for the Directorship
Agreement, the Companies are not party to any agreement with the Sellers.    
(e)   To the best knowledge of the Sellers, after careful enquiry, neither the
execution of this agreement nor the performance of the obligations hereunder
have, or shall have, the effect of granting any party with whom any of the
Companies has entered into, the right to withdraw from or terminate any such
agreements.

3.2   Intellectual Property Rights

  (a)   To the best knowledge of the Sellers, after careful enquiry, no
activities of any Company (or of any licensee under any licence granted by a
Company) infringe or are likely to infringe any Intellectual Property Rights of
any third party and no claim has been made against any Company or any such
licensee in respect of such infringement and the Sellers are not aware of any
allegation of such infringement made.     (b)   Each Company owns or has
licensed to it all Intellectual Property Rights it requires to carry on its
business as such business has been carried on during the year prior to the date
of this Agreement and such rights and that Company’s ability to use such rights
in the manner which they were used prior to the Completion Date will not be
adversely affected by the acquisition of the Companies by the Purchaser.

 

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3.3   Insurance

All the assets of an insurable nature have at all material times been insured
for adequate insurable value according to the rules and usage of Italian law
against those risks normally insured against by persons carrying on the same
classes of business as those carried on by Flagship and Snoline and each Company
is now and has at all material times been adequately covered by insurance
policies against the risks relating to is activities and, to the best knowledge
of the Sellers, after their reasonable enquiries, no such insurance will be
materially adversely affected by the purchase of Flagship by the Purchaser.
During the past 3 years the Companies have not been denied insurance for any
reason with respect to any material insurance policy for which they applied.

3.4   Data and Records

  (a)   For the purposes of this paragraph 3.4:

Data Protection Legislation means all statutes, enacting instruments, common
law, regulations, directives, codes of practice, circulars, guidance notes,
decisions, recommendations and the like (whether in Italy for Snoline, in the
United Kingdom for Flagship or the European Union for both) concerning the
protection and/or processing of personal data.

  (b)   All the records and systems (including but not limited to computer
systems) and all data and information of each Company are recorded, stored,
maintained, operated or otherwise held exclusively by one or more Company or by
service providers under the exclusive control of one or more Company, and in
each case are not wholly or partly dependent on any facilities or means
(including any electronic, mechanical or photographic process, computerised or
otherwise) which are not under the exclusive ownership and control of: (i) one
or more Company; or (ii) service providers under the exclusive ownership and
control of one or more Company. No Company has disclosed to any third party any
such records, control and other systems, data and information.     (c)   Each
Company has complied with all relevant requirements of Data Protection
Legislation, including the following:

  (v)   the data protection principles established in that legislation;     (vi)
  requests from data subjects for access to data held by it; and     (vii)   the
requirements relating to the registration of data controllers with the national
competent authority.

  (d)   No Company has received a notice or allegation from either the UK
Information Commissioner or from any other data regulator in any other
jurisdiction, a data controller or a data subject alleging non-compliance with
any Data Protection Legislation (including any data protection principles),
requiring a Company to change or delete any data or prohibiting the transfer of
data to a place outside the United Kingdom or Italy (as applicable).

 

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  (e)   No individual has claimed or has the right to claim compensation from
any Company under any Data Protection Legislation, including for unauthorised or
erroneous processing or loss or unauthorised disclosure of data.

3.5   No Powers of Attorney       No Company has granted any power of attorney
or similar authority, other than listed in Annex 3.5, which remains in force.

 

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4.   TAX AND SOCIAL SECURITY

  (a)   The Companies: (i) have duly and timely complied with all requirements
in the matter of Tax; (ii) have duly and timely filed all compulsory Tax returns
with the competent Tax authorities and institutes and the information provided
thereby are correct, complete and not misleading; (iii) have fully and timely
made all payments, assessments, withholdings as well as fully and timely paid
any penalties and interest with respect to Taxes as resulting from the filed
returns and any notice, assessment or injunction received from any relevant Tax
authority or institute; (iv) have made adequate and full provisions in the
Accounts for all Tax obligations and liabilities; and (v) have not received any
assessment, injunction, request for payment which remain outstanding and unpaid,
or other communication from any Tax authority or institute over the last six
years and there are no circumstances that may give raise to any such assessment,
injunction or request for payment.     (b)   Snoline has requested the Revenues
Office of Gorgonzola a formal statement for compliance and tax regularity by
means of a form dated 12 December 2006, No. Prot. 2006054971 Progr.
No. 2006011008.     (c)   With the exception of the reserve for revaluation, the
distributable reserves of the Companies as shown in the relevant Accounts are
freely distributable and the distribution of the said reserves will not give
rise to any Tax liability in the hands of the Companies under Tax laws and
regulations in force at the Completion Date.     (d)   The Companies are not
subject to any Tax grouping arrangements that will be negatively impacted by the
transactions contemplated herein. All transactions between the Companies have
been carried out on an arms’ length basis.     (e)   The Companies are not
subject to any Tax related proceedings or disputes pending before any authority
or any other competent body. No inspection, assessment or dispute by any
competent body is expected or formally threatened against any of the Companies.
    (f)   The Companies have not been a party to any transaction or series of
transactions which is or forms part of a scheme for the evasion (equals
evasione) of Tax or which can reasonably be considered as such.     (g)   For
the purpose of Tax, the Companies are and have been resident only in the
jurisdiction in which they are incorporated and do not have nor had a permanent
establishment or permanent representative or other taxable presence in any
jurisdiction other than in which they are resident for Tax purposes. The
Companies do not constitute neither have constituted a permanent establishment
nor have been a permanent representative of another person.

 

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5.   PROPERTIES       Title

5.1   The Properties shown in Annex 5 comprise all of the real estate properties
owned by the Companies. The information set out in Annex 5 is true and accurate
in all respects.

5.2   With the exception of the matters specifically disclosed in Annex 5, there
are no other rights in favour of third parties or matters not referred to on the
registered title deed.

5.3   None of the Properties are subject to any right, interest, condition,
restriction, obligation, stipulation, servitude, option or other right or
informal arrangement in favour of any third party not referred to in the title
deeds to the Properties and there is no agreement or commitment to give or
create any of the foregoing. The Municipality of Trezzo sull’Adda has expressed
final and unconditional consent to the change of ownership of Snoline, either
directly or through its holding company, Flagship, by means of two letters
addressed to Snoline dated respectively 4 December 2006 and 13 December 2006.

5.4   There are no outstanding actions, disputes, claims or demands between any
Company and any third party affecting the Properties except in the ordinary
course of their business.

5.5   Save for fixtures and fittings belonging to any tenant or user of the
Properties all fixtures and fittings at the Properties are any Company’s own
absolute property and are free from Encumbrances.       Development at the
Properties

5.6   To the best knowledge of the Sellers, after careful enquiry, no
development at, or use of, the Properties for which the Companies may be held
liable has been or is being undertaken in breach of the applicable planning and
building legislation or any regulations, by-laws, orders, consents or
permissions made or given thereunder and the actual use of the Properties is the
permitted use under the relevant planning legislation.

5.7   To the best knowledge of the Sellers, after careful enquiry:

  (i)   there is no outstanding notice or order (statutory or otherwise)
relating to the Properties or any business carried on at, or the use of, the
Properties;     (ii)   there are no planning, development or road proposals
within the vicinity of the Properties which might affect the Properties or the
access to, or the business carried on at, the Properties.

 

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    Environmental Matters   5.8   To the best knowledge of the Sellers, after
careful enquiry, the Companies comply and have complied with the Environmental
Laws from time to time in force in Italy and in the United Kingdom, as
applicable.

5.9   The Companies have paid all duties, taxes and fees (if any) required by or
arising out of any Environmental Laws, including those concerning waste disposal
and water discharges.

5.10   No material work is required in connection with the Properties in order
to secure compliance with or maintain any existing environmental licence or
authorisation or to comply with Environmental Laws.

5.11   The Sellers have disclosed full details of any environmental and/or
health and safety assessment, audit or investigation conducted and any other
environmental and/or health and safety report prepared by them or on behalf of
either Company whether mandatory or not.

5.12   To the best knowledge of the Sellers, after careful enquiry: (i) no
dangerous substance has been used, disposed of, stored, generated, released,
buried, transported, or emitted at, on, from, under or to the Properties;
(ii) the land on which the Properties are construed, including the soil, subsoil
and groundwater, are free from contamination by any dangerous substance.      
Miscellaneous

5.13   No Company has any existing or contingent liabilities (whether as
original tenant, subsequent assignee, guarantor or otherwise) in respect of any
properties previously occupied by it or in which it owned or held any interest
including, without limitation, leasehold premises assigned or otherwise disposed
of.

 

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6. EMPLOYEES

  (a)   The number and qualification of the employees of the Companies as of 11
December 2006 are indicated in Annex 6. The information contained in Annex 6 are
true, valid and correct as of Completion Date.     (b)   The employees of the
Companies are subject to employment contracts in accordance with applicable laws
and national collective bargaining agreements and, as far as the Sellers are
aware, the Companies are and, since their incorporation, have been in
substantial compliance with the employment contracts they are or were party to
and of the laws, regulations and collective bargaining agreements applicable
thereto as well as to employment and labour matters in general. The Company is
party of (i) a collective bargaining agreement at company level dated 21
December 1988, subsequently renewed and currently in force and (ii) a local
collective bargaining agreement at company level dated 16 December 1996 and
renewed on 23 January 2006.     (c)   The Companies are and have been in
compliance with the relevant applicable laws and regulations on health and
safety in work places.     (d)   To the best knowledge of the Sellers, after
careful enquiry, the Companies have fully discharged their obligations and
liabilities to their employees when due and have made all required accrual for
any future liabilities to their employees. There are no circumstances
outstanding which might result in any of the current or former employees of the
Companies to claim any damages, different qualification or additional
compensation from the Companies or to apply for re-hiring on the grounds of
illegitimate termination of their employment. The Companies have not received
any notice announcing or threatening the filing of any such claim. With the
exception of the information specifically disclosed in Annex 6, the Companies
have not entered into any agreement with any of their employees, which would
entitle such employees to payment of periodic bonuses not provided for by the
national collective bargaining agreement applicable to the employees of the
Companies.     (e)   To the best knowledge of the Sellers’, after reasonable
enquiry, there are no persons (including without limitation the Sellers) who
rendered services to any of the Companies in such a manner to allow them to
claim that they should be qualified as employees of the Companies and there are
no circumstances allowing any Tax or social security authority to make any claim
in such respect.     (f)   The directors and statutory auditors of the Companies
do not have any claim against any of the Companies in relation to their office.
    (g)   The Companies are not engaged in any arbitration, judicial or
administrative proceedings concerning labour matters. With the exception of the
information specifically disclosed in Annex 6, to the best knowledge of the
Sellers, after their reasonable enquire, there are no proceedings of such nature
threatened or announced and, to the best of the Sellers’ knowledge, there are no
circumstances that may cause any such proceedings.

 

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IN WITNESS WHEREOF this agreement has been entered into at Milan on the date set
out at the first page of this Agreement.

     
 
   
LINDSAY ITALIA S.R.L.
   
 
   
 
   
 
   
MR FRANZ MÜLLER
   
 
   
 
   
 
   
LINDSAY MANUFACTURING CORPORATION
   
 
   
 
   
Data:                     
   

Lindsay Italia Srl

 

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PRE-COMPLETION

1.   Access

Pending Completion the Sellers shall:

  (i)   procure that the Purchaser, its agents and representatives are given
full access to the Properties and to the books and records of the Companies
during normal business hours on any Business Day and on reasonable notice to the
Sellers;     (ii)   provide such information regarding the businesses and
affairs of the Companies as the Purchaser may require.

2.   Conduct of business

Pending Completion each Seller shall procure that the business of the Companies
will be carried on in the ordinary course, consistent with past and current
practice (senza soluzione di continuità rispetto al passato). In particular,
each Seller shall exercise all rights and powers available to him so as to
procure that, except with the written consent of the Purchaser, the Companies
shall not:

  (a)   incur any expenditure not in the ordinary course of business; or    
(iii)   dispose of or grant any option or right of pre-emption in respect of any
part of its assets except in the ordinary course of trading; or     (iv)  
borrow any money, save for an aggregate amount of Euro 500,000; or     (v)  
enter into any unusual contract or commitment or:

  (1)   grant any lease or third party right in respect of any of the Properties
or transfer or otherwise dispose of any of the Properties;     (2)   make any
loan;     (3)   enter into any leasing, hire purchase or other agreement or
arrangements for payment on deferred terms; or

  (vi)   declare, make or pay any dividend or other distribution or do or allow
to be done anything which renders its financial position less favourable than at
the date of this agreement; or     (vii)   grant, issue or redeem any mortgage,
charge, debenture or other security or give any guarantee or indemnity; or    
(viii)   make any change in the terms and conditions of employment of any of its
directors or employees or employ or terminate (except for good cause) the
employment of any person; or

 

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  (ix)   make, or announce to any person any proposal to make, any change or
addition to any retirement/death/disability benefit (as defined in section 1 of
the schedule headed “Warranties”) of or in respect of any of its directors or
employees or former directors or former employees (or any dependant of any such
person) or to the Scheme (as defined in that section) (other than any change
required by law or grant or create any additional retirement/death/disability
benefit (as so defined); or     (x)   permit any of its insurances to lapse or
do anything which would make any policy of insurance void or voidable; or    
(xi)   create, issue, purchase or redeem any class of share or loan capital; or
    (xii)   pass any resolution of its shareholders or any class of
shareholders, whether in general meeting or otherwise; or     (xiii)   agree,
conditionally or otherwise, to do any of the foregoing; or     (xiv)   in any
other way depart from the ordinary course of its day-to-day trading.

3.   Notice of any change       Each Seller shall immediately notify the
Purchaser of any matter or thing which arises or becomes known to him/her before
Completion which constitutes (or would after the lapse of time constitute) a
misrepresentation or a breach of any of the Warranties or the undertakings or
other obligations on the part of any Seller under this agreement.   4.  
Communication on the new members of the board of directors       At least two
Business Days before Completion, the Purchaser shall notify to the Sellers a
communication (i) indicating the names of the persons to be appointed on the
board of directors of the Companies on Completion and (ii) undertaking to hold
the Sellers harmless against any loss they may suffer due to the appointment
under (i).   5.   Banks’ waivers       Pending Completion, each Seller shall
procure that Snoline obtains the relevant waivers by the banks with which has
entered into loan agreements currently in force, providing for the banks’
consent to the Companies’ change of shareholding.   6.   Shareholders’ loan    
  Pending Completion, Mr. Franz M. Müller and Flagship shall deliver a
declaration, duly executed by each of them, stating that the Shareholders’ Loan
has been paid in full and acknowledging that they have no claim against the
Companies for any reason whatsoever.

 

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COMPLETION
PART 1
SELLERS’ OBLIGATIONS
At Completion the Sellers shall procure:

(a)   the delivery to the Purchaser of:

  (i)   duly executed transfers in favour of the Purchaser or its nominee(s) of
all the Flagship Shares;     (ii)   duly executed transfer (girata) in favour of
the Purchaser or its nominee(s) of the shares representing the Snoline
Shareholding;     (iii)   the share certificate(s) representing the Flagship
Shares (or an express indemnity in a form satisfactory to the Purchaser in the
case of any found to be missing);     (iv)   the First Demand Bank Guarantee.  
  (v)   written evidence that the Sellers have obtained the irrevocable waivers
from the Banks in connection with the Loan Agreements as set out in subclause
3.2(b)(i) or that the relevant requests for the above waivers have been duly
filed with the Banks as set out in subclause 3.2(b)(ii);     (vi)   written
confirmation from the Sellers that the Shareholders’ Loan has been fully repaid,
and that Snoline has no further liability thereunder;     (vii)   the
directorship agreement of Mr Franz Muller with Lindsay Italia S.r.l.and Lindsay
Manufacturing in the Agreed Form duly executed by the relevant executive;    
(viii)   resignations of Mssrs. Giuseppina Pavesi, Claudio Lambri, Doretta
Brugnera, Luigi Covini as director of Snoline, in each case to be expressed to
take effect on Completion and acknowledging that such director has no claim
against Snoline whether for loss of office, accrued remuneration or otherwise;  
  (ix)   resignation of mr Franz M. Muller as manager (dirigente) of Snoline,
effective as of 31 December 2006;     (x)   signed copies of the minutes of the
meetings referred to in paragraphs (b) below; and

(b)   that a board meeting of Flagship is held at which it is resolved that:

  (i)   Mr. Richard W. Parod is appointed as additional director;

 

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  (ii)   the stock transfer forms referred to in paragraph (a) above are
approved for registration;

(c)   that a shareholders’ meeting of Snoline is held at which it is resolved
that:

  (i)   Messrs Franz Muller, Richard W. Parod and Owen Denman are appointed as
directors of Snoline, and Mr. Richard W. Parod is appointed as chairman of the
board of directors;

(d)   that the Purchaser, Lindsay Manufacturing Co. and Mr Muller enter into the
Directorship Agreement in the Agreed Form.

 

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PART 2
PURCHASER’S OBLIGATIONS
Subject to the Sellers having done or procured to be done those things set out
in Part 1 of this schedule, at Completion the Purchaser shall:

  (a)   make a payment to each Seller of that proportion of the Initial Purchase
Price which is payable in cash on Completion in accordance with clause 6.1 as
set against his name in column (c) of schedule 1;     (b)   deliver to Mr Franz
Muller a duly executed counterpart of the Directorship Agreement of Mr Franz
Muller with Lindsay Manufacturing and Lindsay Italia S.r.l. in the Agreed Form,
duly executed by Lindsay Manufacturing and Lindsay Italia S.r.l..

 

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INTERPRETATION

1.   In this agreement:

“Accounts” means in respect of Flagship, the abbreviated unaudited accounts for
the period from 1 July 2005 to 31 December 2005, and in respect of Snoline, the
financial statements as of 31 December 2005;
“Accounts Date” means 31 December 2005;
“Banks” means Banca Nazionale del Lavoro S.p.A., Banca Intesa S.p.A., Credito
Artigiano S.p.A. and Banca Popolare di Bergamo S.p.A.;
“Beneficiary” has the meaning given in Clause 10.1;
“Business” means the business of manufacturing, leasing or selling road or
highway safety products
“Business Day” means (i) any day other than a Saturday, Sunday or a day on which
commercial banks in Milan, Italy are required or permitted by law to close and
(ii) the period from 23 December to 8 January included;
“Claim” means any claim received by third parties which may result in a loss for
Flagship, Snoline and/or the Purchaser;
“Completion” means the execution of this agreement described by Clause 4, as
well as the completion of any related operation, which pursuant to Clause 4 of
the agreement shall occur on the Completion Date;
“Completion Balance Sheet” has the meaning given in Schedule 10, paragraph 2;
“Completion Date” means the date when Completion takes place;
“Condition(s) Precedent” means the condition(s) precedent to the relevant
obligations, as provided for by Clause 3;
“Companies” means Snoline and Flagship and Company means any of them;
“Companies Acts” means the English law Companies Act 1985 as amended and
supplemented from time to time and the Companies Act 2006.”Data Protection
Legislation” has the meaning given in Schedule 5, Part 1, Clause 3.4;
“Directorship Agreement” means the directorship agreement in the Agreed Form;
“Draft Completion Balance Sheet” has the meaning given in Schedule 10, paragraph
1;
“Encumbrances” means pledges, encumbrances, liens or any other third party
rights;
“Final Date” has the meaning given in Clause 7;

 

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“First Demand Bank Guarantee” means the first demand bank guarantee for an
amount of Euro 1,500,000 issued by Unicredit in the Agreed Form;
“Flagship” has the meaning given in Recital (A);
“Flagship Shares” means the shares representing 100% of Flagship’s corporate
capital;
“Independent Accountants” means the accountants to be appointed by the President
of Ordine Dottori Commercialisti di Milano upon request of the most diligent
Party;
“Initial Purchase Price” means Euro 12,500,000;
“Insolvency Act” means the English law Insolvency Act 1986 as amended and
supplemented from time to time;
“Investors” has the meaning given in Clause 14.2;
“Joint Instructions” means the written instructions jointly given by the Sellers
and the Purchaser to Unicredit to act at Completion as an escrow agent in the
interest of both Parties in the Agreed Form;
“Loan Agreements” means the loan agreements between (i) Mediocredito Regionale
Lombardo (currently Banca Intesa S.p.A.) and Snoline dated 30 May 1997,
(ii) Credito Artigiano S.p.A. and Finlombarda – Finanziaria per lo Sviluppo
della Lombardia S.p.A., on one side, and Snoline, on the other side, dated 24
May 2002, (iii) Banca Intesa S.p.A. and Snoline dated 29 June 2005 and (iv)
Banca Popolare di Bergamo S.p.A. and Snoline dated 30 January 2004;
“Material Adverse Effect” means any change, effect or set of circumstances
(including, but not limited to, any breach of covenant, breach or inaccuracy of
any representation or warranty contained in this agreement) relating to the
Companies (regardless of whether foreseeable at the time of the Parties’
execution of this agreement) that, individually or in the aggregate, is
materially adverse to the Companies, provided that the liability or the
reduction in the value of the Companies caused by such material adverse effect
has, or will have, a value equal to or greater than Euro 1,200,000 in the
aggregate;
“New First Demand Guarantee” has the meaning given in Clause 7;
“Pro-forma Financial Statements” means Snoline’s pro-forma interim financial
statements as of 30 September 2006 attached to the present Contract as
Schedule 13.
“Properties” means [the properties shortly described in schedule 4 and includes
every part of each of them] and “Property” means any one of them;
“Purchase Price” means the Initial Purchase Price adjusted pursuant to clause 6;
“Purchaser” has the meaning given in the heading;
“Purchaser’s Group” means any entity that, at the time of the determination,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with the Purchaser;
“Rules” has the meaning given in Clause 22.2;

 

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“Seller” or “Sellers”: has the meaning given in the heading;
“Shareholder’s Equity” means the net worth (patrimonio netto);
“Shareholders’ Loan” means the shareholders’ loan to Snoline by Mr. Franz M.
Müller and Flagship whose outstanding amount as of the date of this agreement is
equal to Euro 79,000 (including any interest accrued);
“Shares” means collectively Flagship Shares and Snoline’s shares;
“Snoline” has the meaning given in Recital (B);
“Snoline Shares” means the shares representing 100% of Snoline’s corporate
capital;
“Snoline Shareholding” means No. 43 shares representing 0.597% of Snoline’s
corporate capital;
“Tax” means any tax, charge, fee, levy, impost, duty or governmental fee or
other like assessment or charge of any kind, including all income, gross
receipt, gain, sales, use, employment, franchise, profits, excise, property,
value added and other tax, fee, stamp tax and duty, assessment or charge of any
kind, together with any interest and penalty, addition to tax or additional
amount imposed by any taxing authority with respect thereto.
“Third Part Claim” has the meaning given in Schedule 6, Clause 6;
“Unicredit” means Unicredit Private Banking with offices at Via Catena 4, Milan,
Italy acting as an escrow agent in accordance to the Joint Instructions in the
Agreed Form.
“Warranties” means the representations and warranties set out in the schedule
headed “Warranties”.

2.   In this agreement:

  (a)   words denoting persons shall include bodies corporate and unincorporated
associations of persons;     (b)   references to an individual include his
estate and personal relatives up to the fourth grade; and     (c)   [subject to
the clause headed “[Assignments]”,] references to a party to this agreement
include references to the successors or assigns (immediate or otherwise) of that
party.     (d)   any reference importing a gender includes the other genders;

3.   Where any provision is qualified or phrased by reference to the ordinary
course of business, such reference shall be construed as meaning the customary
course of trading for the business in the place where the business is located1.
  4.   The singular shall include the plural and vice versa.

 

1   Article 1368 of the Civil Code

 

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5.   Notwithstanding the clause headed “Language”, where in this agreement an
Italian term is given in italics or in italics and in brackets after an English
term and there is any inconsistency between the Italian and the English, the
meaning of the Italian term shall prevail.   6.   The expressions “shall use its
best efforts” or “shall use its best endeavours” or any similar expression shall
be construed as an “obbligazione di mezzo” under Italian law.   7.   The words
“shall cause” or “shall procure that” (or any similar expression) shall be
construed as “promessa dell’obbligazione o del fatto del terzo” in accordance
with article 1381 of the Civil Code.   8.   All time periods referred to in this
agreement, unless otherwise stated, shall be counted in days. A “day” is defined
as the 24-hour period starting and finishing at midnight. Such time periods
shall commence at midnight following the triggering event and shall terminate at
midnight following the expiration date, unless this date does not fall on a
Business Day, in which case the expiration date shall be postponed to the next
Business Day, in accordance with article 1187 of the Civil Code.   9.   The
qualification “to the best knowledge of the Sellers” shall be satisfied if one
or more of the Sellers had knowledge on the relevant matter.   10.   The
qualification “after careful enquiry” shall be construed according to the
diligenza qualificata required from a sophisticated businessman pursuant to
article 1176 subsection 2 of the Italian Civil Code.

 

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SIGNATORIES
SIGNED by FRANZ MULLER (for the Snoline Shareholding)
SIGNED by Avv. Mauro Barbieri on behalf of FRANZ MULLER
SIGNED by Avv. Mauro Barbieri on behalf of DORETTA BRUGNERA
SIGNED by Avv. Mauro Barbieri on behalf of MILLA MULLER
SIGNED by Avv. Mauro Barbieri on behalf of GIUSEPPINA PAVESI
SIGNED by Richard William Parod
for LINDSAY ITALIA S.R.L.