BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

2008 Annual Report on Form 10-K

EXHIBIT 10.25

VICTA AGREEMENT

 

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Schedule 1

Warranties

 

1. Accuracy of Information

 

  1.1 So far as the Vendor is aware, the information concerning the Business
prepared by or on behalf of the Vendor and contained in the Disclosure Material
is accurate in all material respects. So far as the Vendor is aware, none of
that information is misleading in any material particular, whether by inclusion
of misleading information or omission of information or both.

 

  1.2 The Vendor has not knowingly withheld any information from the Purchaser
which is material in the context of the Victa Companies or the Business or
because the Vendor believed that information would affect the Purchaser’s
willingness to proceed in the purchase of the Shares on the terms of this
Agreement.

 

  1.3 All copies of documents provided by the Vendor or the Guarantor to the
Purchaser are true copies in all material respects.

 

2. Records

 

  2.1 The Records:

 

  (a) are in the possession of the Company;

 

  (b) have been properly maintained; and

 

  (c) so far as the Vendor is aware, do not contain material inaccuracies or
discrepancies of any kind.

 

3. Authority

 

  3.1 The Vendor is the registered holder and beneficial owner of the Shares and
there are no Security Interests or Claims of any Person over or affecting the
Shares.

 

  3.2 This Agreement constitutes a legal, valid and binding obligation of the
Vendor and the Guarantor enforceable in accordance with its terms by appropriate
legal remedy.

 

  3.3 The Vendor and the Guarantor:

 

  (a) have taken all necessary action to authorise the execution, delivery and
performance of this agreement with its terms; and

 

  (b) have full power to enter into and perform their obligations under this
Agreement and can do so without the consent of any other person.

 

  3.4 The execution, delivery and performance by the Vendor and the Guarantor of
this Agreement and each transaction contemplated by this Agreement does not or
will not (with or without the lapse of time, the giving of notice or both)
contravene, conflict with or result in a breach of or default under:

 

  (a) any term or provision of any Security Interest; or

 

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  (b) any Law,

to which it is a party or is subject or by which it is bound.

 

  3.5 An insolvency event has not occurred to the Vendor or the Guarantor.

 

4. The Company

 

  4.1 Each of the Victa Companies:

 

  (a) is duly incorporated and validly exists under the law of its place of
incorporation;

 

  (b) has full corporate power and authority to own its assets and business and
to carry on the Business as conducted at Completion;

 

  (c) is not insolvent and no receiver has been appointed over any part of its
assets and no such appointment has been threatened;

 

  (d) is not in liquidation and no proceedings have been brought or threatened
for the purpose of winding it up;

 

  (e) is not a member of any partnership or other unincorporated association
(other than a recognised trade association); or

 

  (f) is not the responsible entity, manager, trustee, representative or
custodian of any trust or managed investment scheme (within the meaning of the
Corporations Act);

 

  (g) has conducted its affairs in all material respects in accordance with all
applicable laws and in accordance with its constitution;

 

  (h) does not trade under a name other than its corporate name (excluding
trademarks or business names set out in Schedule 3, Schedule 5 or Schedule 6).

 

  4.2 The Victa Companies’ constitutions produced to the Purchaser prior to
executing this Agreement are true copies and include all amendments made up to
the Completion Date, and no resolution to alter a Victa Companies’ constitution
except as produced to the Purchaser have been passed.

 

  4.3 So far as the Vendor is aware, there are no facts, matters or
circumstances which give any person the right to apply to liquidate or wind up
any Victa Company.

 

  4.4 No administrator has been appointed to any Victa Company nor has any deed
of company arrangement been executed or proposed in respect of each Victa
Company.

 

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  4.5 No Victa Company has entered into an arrangement, compromise or
composition with or assignment for the benefit of its creditors or a class of
them.

 

  4.6 No Victa Company is (or is taken to be under applicable legislation)
unable to pay its debts, other than a debt or claim the subject of a good faith
dispute, and has not stopped or suspended, or threatened to stop or suspend, the
payment of all or a class of its debts.

 

  4.7 The Company is not the holder or beneficial owner of any shares or other
capital in any body corporate (wherever incorporated) save all the shares in VL.

 

  4.8 VL is not the holder or beneficial owner of any shares or other capital in
any body corporate (wherever incorporated).

 

5. The Shares

 

  5.1 The Shares comprise the whole of the issued share capital of the Company.

 

  5.2 The Shares have been validly allotted and are fully paid and no moneys are
owing in respect of them.

 

  5.3 The Shares have not been issued in violation of any pre-emptive or similar
rights of any member or former member of the Company or of the terms of any
agreement by which the Vendor or the Company are bound.

 

  5.4 There is no shareholder agreement, voting trust, proxy or other agreement
or understanding relating to the voting of the Shares.

 

  5.5 There are no agreements, arrangements or understandings in place in
respect of the Shares under which the Company is obliged at any time to issue
any shares or other securities in the Company.

 

  5.6 There is no restriction on the sale or transfer of the Shares to the
Purchaser except for the requirement to present the relevant share certificates
and for the consent of the directors of the Company to, and the requirement to
pay any applicable stamp duty on the transfer before, the registration of the
transfers of the Shares.

 

  5.7 The Vendor is the legal owner of the Shares free from all Security
Interests and there is no agreement to give or create any Security Interest over
the Shares.

 

  5.8 The Vendor has full power and authority to transfer to the Purchaser good
legal and equitable title to the Shares free from all Security Interests.

 

  5.9 The Company has not made available any interest in a managed investment
scheme.

 

  5.10 Subject to clause 11, the Company has not entered into any agreements,
arrangements or understandings which may require it to issue further shares in
the Company.

 

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  5.11 Except for the Purchaser’s rights under this Agreement, no Person has any
written or oral agreement, option or warrant or any right or privilege (whether
by Law, pre-emptive or contractual), capable of becoming such for the purchase
or acquisition of any shares or securities (including unissued shares or units)
in the capital of any Victa Company.

 

6. Financial Position

 

  6.1 The Provisional Accounts:

 

  (a) were prepared in accordance with the Accounting Standards;

 

  (b) show a true and fair view of:

 

  (i) the financial position of the Victa Companies as at the Accounts Date;

 

  (ii) the performance of the Victa Companies for the financial period ended on
the Accounts Date.

 

  (c) are not affected by any unusual or non-recurring item other than:

 

  (i) any inter-company group charges; and

 

  (ii) compensation received from the South Australian government;

 

  (d) take account of all gains and losses whether realised or unrealised
arising from foreign currency transactions;

 

  (e) include all reserves and provisions necessary to cover all liabilities for
long service leave and annual leave entitlements in respect of the Victa
Companies; and

 

  (f) include reserves and provisions for Taxation that are sufficient to cover
all tax liabilities in respect of all periods up to the Accounts Date.

 

  6.2 Since the Accounts Date, the Victa Companies have conducted the Business
in all material respects in the normal course and as a going concern.

 

  6.3 Since the Accounts Date, there has been no material adverse change in the
working capital of the Victa Companies.

 

  6.4 Since the Accounts Date, there has been no material adverse change in the
turnover, financial position or prospects of the Victa Companies.

 

  6.5 The Company has not and is not engaged in financing of a type which is not
required to be shown or reflected in its accounts.

 

  6.6 As at Completion there will be no set-off arrangement between the Company
and any other person.

 

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  6.7 Since the Accounts Date:

 

  (a) except for disposals of Trading Stock in the ordinary and usual course of
business the Company has not disposed of any material asset in the possession or
under the control of the Victa Companies. The Victa Companies have not created a
Security Interest over or declared themselves trustee of any of their assets.

 

  (b) No material asset has been acquired by the Company for materially more
than market value or sold for materially less than market value.

 

  (c) No decision has been made to defer any material capital expenditure of the
Company.

 

  (d) No authorisation from which the Victa Companies benefit has been
terminated or has expired and in either case could reasonably be expected to
have a material adverse effect on the profitability of the Business.

 

  (e) No share or loan capital, security or other right convertible into shares
or loan capital has been issued by any Victa Company.

 

7. NZ Business

 

  7.1 Immediately prior to Completion, Sunbeam NZ was the legal and beneficial
owner of the NZ Assets and NZ Business and has the legal right to transfer the
NZ Assets to the NZ Purchaser.

 

  7.2 The NZ Assets:

 

  (a) are all those assets used in the NZ Business;

 

  (b) are free of any Security Interests; and

 

  (c) as at Completion, will be the absolute property of, and legally and
beneficially owned by the NZ Purchaser.

 

  7.3 Pending Completion, the NZ Business will continue to be carried out by
Sunbeam NZ so as to maintain the same as a going concern.

 

  7.4 Sunbeam NZ is the employer of all the NZ Employees and has provided the
Purchaser with the material employment details of the NZ Employees.

 

  7.5 No NZ Employee is subject to any covenant that would restrict in any way
the conduct of their employment with the NZ Business.

 

  7.6 The NZ Business complies with its obligations relating to the working
environment for all employees in accordance with all applicable legislation, and
Sunbeam NZ as at the Completion Date is not subject to any claims by any NZ
Employee.

 

8. Assets

 

  8.1

Each tangible asset of or represented as belonging to any Victa Company, in the
accounts of the Victa Companies (other than Trading Stock disposed of since
31 December 2007 in the ordinary and usual course of business) (Asset), is the
absolute property of, and legally and beneficially owned by, the

 

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Victa Companies free of any Security Interest, except for any item disclosed in
the Disclosure Material as being subject to hire purchase, lease or rental
agreements.

 

  8.2 All plant, machinery, vehicles and equipment (including computer
equipment) owned or used by the Victa Companies in the Business (Plant and
Equipment) with a written down value of $50,000 or more:

 

  (a) is, consistent with its age, in good repair and condition;

 

  (b) is in satisfactory working order and has been maintained in accordance
with prudent business practice;

 

  (c) is not dangerous or unsuitable for the purpose for which it is used; and

 

  (d) to the best of the Vendor’s knowledge and belief, is capable of doing the
work for which it was designed or purchased.

 

  8.3 The Plant and Equipment register is complete and accurate in all material
respects. It sets out, in respect of each item recorded in it, the date the item
was acquired, its cost, current book value and current tax depreciated value.

 

  8.4 All Trading Stock is of good and merchantable quality. The Trading Stock
is fit for the purpose for which it is intended to be used. The Trading Stock
conforms with all relevant descriptions, specifications and standards.

 

  8.5 So far as the Vendor is aware, all Assets owned, leased or hired by the
Victa Companies are located at the Other Premises or NSW Premises (other than
any vehicles in the course of being used for the purposes of the Business and
Trading Stock in transit or being held in reserve at other locations disclosed
to the Purchaser) and are all the assets used in the Business.

 

  8.6 As at Completion, no Asset is owned by any person other than the Victa
Companies.

 

  8.7 No notice has been served on the Company by any Governmental Agency which
might materially impair, prevent or otherwise interfere with the Company’s use
of or proprietary rights in any of its Assets.

 

9. Contracts

 

  9.1 Full details of all Contracts material to the operation of the Business
(Material Contracts) have been fully disclosed in writing to the Purchaser.
There have been no material oral or written modifications, amendments or waivers
with respect to any of the terms of any Material Contract that have not been
disclosed in the Disclosure Material.

 

  9.2 No Material Contract:

 

  (a) is outside the ordinary and usual course of business;

 

  (b) is not on arm’s length terms (including, in particular, in respect of any
loan provided by the Company);

 

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  (c) is with the Vendor (or a person controlling or controlled by the Vendor)
and under which a Victa Company is required to give a material financial benefit
to the Vendor (or a person controlling or controlled by the Vendor), other than
agreement or arrangement on arms length terms or one which is terminable on
reasonable notice; or

 

  (d) limits the freedom of any Victa Company of any or its officers, employees
or agents, to engage in any type of business or activity, including in
competition with any person or in any area, relating to the Business as carried
on at Completion.

 

  9.3 No party to any Material Contract is entitled:

 

  (a) to terminate the Material Contract or accelerate the maturity or
performance of any obligation;

 

  (b) to require the adoption of terms less favourable; or

 

  (c) to do anything which would adversely affect the interests, Business or
assets of the Victa Companies,

by reason of any change in the legal or beneficial ownership of the Shares or
any of them or the performance of this Agreement.

 

  9.4 Each of the Material Contracts is valid, binding and enforceable against
the parties to it. No Victa Company (and, so far as the Vendor is aware) no
other party to any Material Contract is:

 

  (a) in material default; or

 

  (b) but for the requirements of notice or lapse of time or both, would be in
material default,

where such default will, or would reasonably be likely to, have a materially
adverse effect upon the value of the Business.

 

  9.5 So far as the Vendor is aware there are no set offs, counter claims, or
other claims or rights of third parties in respect of any Material Contract
which could materially diminish or impair the benefits of them to the Purchaser.

 

  9.6 So far as the Vendor is aware all documents (other than those which have
ceased to have any legal effect) to which any Victa Company is a party which
attract stamp duty in any State or Territory of Australia or elsewhere, have
been duly and properly stamped and no such documents which are outside any such
State or Territory would attract stamp duty if they were brought into such State
or Territory of Australia.

 

  9.7 No Victa Company has made any offers, tenders or quotations which are
still outstanding and capable of giving rise to a contract by the unilateral act
of a third party other than in the ordinary course of the Business.

 

  9.8 Neither Victa Company has been notified of, or agreed or consented to, any
actual or intended amendment to the prices or other terms or conditions of the
Material Contracts other than in the ordinary course of the Business.

 

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  9.9 No other party to any Material Contract has informed the Victa Companies
in writing that it intends to change its current relationship with the Business
in any manner which would adversely affect the Business.

 

  9.10 All security (including any guarantee or indemnity) held by any Victa
Company is valid and enforceable by the Victa Company against the grantor in
accordance with the terms of the security.

 

  9.11 The Vendor is not aware of any reason or circumstance which might cause a
Material Contract to not be fully performed and completed in accordance with its
terms which would have an adverse effect upon the value of the Business; or

 

  9.12 As at the date of this Agreement, the Vendor has not received any written
notice of any reason or circumstance which may result in a Claim being made
against any Victa Company under a Material Contract or in the termination or
non-renewal of a Material Contract which would have a material adverse effect
upon the value of the Business.

 

10. SA Settlement Agreement

 

  10.1 The Company is not in breach of the SA Settlement Agreement.

 

  10.2 All payments by the Company under the SA Settlement Agreement will be
paid in full in accordance with the SA Settlement Agreement on or before the
Completion Date and the Company will have no further liability under the SA
Settlement Agreement.

 

  10.3 Save for the Liability of the Company under the SA Settlement Agreement,
there is no further liability owed by the Company to the Government of South
Australia except in the ordinary course of business.

 

11. Intellectual Property

 

  11.1 A Victa Company is the legal and beneficial owner, registered proprietor
of, or applicant in respect of the Owned Intellectual Property free and clear of
any restrictions, liens, charges, encumbrances and other rights.

 

  11.2 Prior to any transfer or assignment in accordance with clause 9, the
Group Member referred to as the owner of the Sunbeam Intellectual Property set
out in Schedule 6 is the legal and beneficial owner of, registered proprietor
of, or applicant in respect of the Sunbeam Intellectual Property set out next to
that Group Member’s name in Schedule 6.

 

  11.3 Schedule 5 contains a complete and accurate list of all Owned
Intellectual Property owned by any Victa Company.

 

  11.4 The Victa Companies do not use or require in the Business any material
Intellectual Property other than the Owned Intellectual Property, Sunbeam
Intellectual Property and Third Party Intellectual Property.

 

  11.5 So far as the Vendor is aware the Owned Intellectual Property is valid,
subsisting and enforceable.

 

  11.6 The Company has validly registered all its Business Names.

 

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  11.7 All renewal, application and other fees and steps required for the
maintenance, prosecution, enforcement and use of the Owned Intellectual Property
that is material to the operation of the Business have been paid or taken.

 

  11.8 Copies of all material licences and agreements relating to Third Party
Intellectual Property entered into by the Company are set out in the Disclosure
Material.

 

  11.9 Each item of the Owned Intellectual Property is registered. So far as the
Vendor is aware no person has sought or threatened to challenge any such
registration. So far as the Vendor is aware the Company has used all Owned
Intellectual Property which is material to the operation of the Business in a
manner sufficient to maintain any such registrations and the rights of the
Company.

 

  11.10 Each item of the Sunbeam Intellectual Property is registered. So far as
the Vendor is aware no person has sought or threatened to challenge any such
registration. So far as the Vendor is aware Sunbeam NZ has used all Sunbeam
Intellectual Property which is material to the operation of the Business in a
manner sufficient to maintain any such registrations.

 

  11.11 So far as the Vendor is aware there is no fact, matter or circumstance
which would, or would be likely to:

 

  (a) render void or voidable any registration in respect of any Owned
Intellectual Property or Sunbeam Intellectual Property which is material to the
operation of the Business or lead to the removal of any such registration from
the relevant intellectual property register; or

 

  (b) lead to the refusal for registration of any pending application for any
Owned Intellectual Property or Sunbeam Intellectual Property which is material
to the operation of the Business.

 

  11.12 So far as the Vendor is aware all steps have been taken that are
necessary or desirable in order to protect, defend, enforce or maintain the
Owned Intellectual Property and Sunbeam Intellectual Property which is material
to the operation of the Business.

 

  11.13 To the best of the Vendor’s knowledge, no third party is infringing or
making unauthorised use of any of the Owned Intellectual Property or Sunbeam
Intellectual Property.

 

  11.14 To the best of the Vendor’s knowledge the activities of the Victa
Companies are not currently breaching or infringing the rights relating to
Intellectual Property of any third party which would have a materially adverse
effect upon the value of the Business.

 

  11.15 None of the Owned Intellectual Property or Sunbeam Intellectual Property
is currently or has been the subject of any material actual, threatened or
anticipated dispute, challenge, litigation, opposition or administrative
proceedings and the Vendor is not aware that any such Claim is threatened or
likely.

 

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  11.16 At Completion, the Victa Companies will own the Owned Intellectual
Property and so far as the Vendor is aware have an enforceable right to use all
Third Party Intellectual Property used in and/or necessary to carry on the
Business in the manner carried on at Completion and to fulfil any currently
existing plans or proposals.

 

  11.17 At Completion, the Sunbeam Intellectual Property will be the absolute
property of, and legally owned by a Victa Company or the NZ Purchaser.

 

  11.18 After Completion, the Group will not make any further use or disclosure
of the Confidential Information and acknowledge that the Purchaser may make any
such use or disclosure of the Confidential Information as it thinks fit and the
Vendor or Guarantor are not party to any confidentiality undertakings or similar
restrictions which would prevent the Purchaser from receiving, disclosing, using
or dealing with any information relating to the Victa Companies.

 

  11.19 The Victa Companies conduct Business only under their corporate names or
the Business Names set out in Schedule 3. All Business Names used, are
registered in the name of a Victa Company.

 

  11.20 So far as the Vendor is aware all renewal, application and other fees
required for the maintenance of the Business Names and Domain Names prior to
Completion have been paid. So far as the Vendor is aware the use of those Domain
Names and Business Names does not materially infringe the rights of any third
party, is not contrary to law and there is no event, circumstance or dispute
(whether actual, threatened or anticipated) which could materially affect the
use by the Company of the Domain Names and the Business names. The Company has
not licensed, authorised or permitted any person to use a name incorporating all
or part of the Domain Names or Business Names.

 

12. Employees

 

  12.1 The Disclosure Material contains material details of all Employees and NZ
Employees as at the date of disclosure and accurate particulars of all State and
Federal industrial awards or agreements (whether registered or not) that apply
to the Employees.

 

  12.2 There is no industrial dispute affecting the Employees or NZ Employees.

 

  12.3 None of the current or former Employees or NZ Employees has made a
worker’s compensation claim that remains unresolved and to the best of the
Vendor’s knowledge and belief none of them has any existing injury, disability
or illness which will materially affect his or her ability to perform his or her
normal duties as an employee in the Business.

 

  12.4 Neither the Vendor, any Victa Company, or Sunbeam NZ has received any
notice of any breach by it of its legal or contractual obligations concerning
the employment or termination of employment of any of the current or former
Employees or NZ Employees.

 

  12.5 Subject to any applicable legislation or rule of law relating to unlawful
termination, unfair dismissal, unfair contract agreements or arrangements and
the need to give the required period of notice on termination, all contracts of
employment of any Employee or NZ Employee may be terminated by one month’s
notice or less, or by reasonable notice.

 

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  12.6 No Employee or NZ Employee has given notice (which has not yet expired or
been rescinded) terminating his or her contract of employment or is under notice
of dismissal other than in the ordinary and usual course of business.

 

  12.7 There is no agreement, arrangement or understanding between any Victa
Company or Sunbeam NZ and a union or any representative of it in respect of the
Employees or NZ Employees except as disclosed in the Disclosure Material.

 

  12.8 Each Victa Company and Sunbeam NZ has in relation to each current and
former Employee and NZ Employee employed by it, complied in all material
respects with all obligations imposed on it under all statutes (including in
respect of all worker’s compensation obligations), regulations, orders, awards,
enterprise agreements and codes of conduct and practice relevant to conditions
of employment and to the relationship between it and the Employees and NZ
Employees and any union.

 

  12.9 So far as the Vendor is aware all Employees who are not Australian
citizens, or in the case of NZ Employees, not New Zealand citizens, have the
right to work in Australia or New Zealand as the case may be, and have validly
issued visas or other documentation establishing these rights.

 

  12.10 Except as disclosed to the Purchaser no Employee or NZ Employee is
entitled to any bonus or similar payment that is linked to the transactions
contemplated by this Agreement.

 

13. Superannuation

 

  13.1 As at the date of this Agreement, the only superannuation schemes or
other pension arrangements to which the Victa Companies contributes or is
required to contribute in respect of the Employees are external superannuation
funds, other than the salary continuance policy currently in operation the
details of which have been disclosed in the Disclosure Materials.

 

  13.2 Each Victa Company will not be liable to pay the superannuation guarantee
charge or any other amount pursuant to the Superannuation Guarantee
(Administration) Act 1992 (Cth) in respect of any of its directors, employees or
contractors for any contribution period (as defined in the Superannuation
Guarantee (Administration) Act 1992 (Cth)) up to Completion.

 

  13.3 Otherwise than in the ordinary course of administration, there are no
outstanding and unpaid contributions to any superannuation funds on the part of
each Victa Company.

 

  13.4 In relation to each of its directors, employees and contractors, each
Victa Company makes employer contributions to any superannuation funds at the
level necessary to avoid a superannuation shortfall under the Superannuation
Guarantee (Administration) Act 1992 (Cth).

 

  13.5 Except as disclosed in the Disclosure Materials (and for the avoidance of
doubt excluding deductions via salary sacrifice as directed by Employees), each
Victa Company makes employer contributions to any superannuation funds at the
minimum level necessary to avoid a superannuation shortfall under the
Superannuation Guarantee (Administration) Act 1992 (Cth).

 

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  13.6 The Victa Companies and Sunbeam NZ are not under any present legal
liability or voluntary commitment (whether or not legally binding) to pay any
person any pension, superannuation, allowance, retirement gratuity or like
benefits other than contributions to any superannuation funds as described in
the previous provisions of warranty 13.

 

  13.7 In respect of the Transferring Employees, Sunbeam NZ has complied with
its obligations under the KiwiSaver Act 2006 (New Zealand) in all material
respects.

 

  13.8 Except as disclosed to the Purchaser Sunbeam NZ does not have in
existence any share incentive scheme, share option scheme, profit-sharing
scheme, bonus incentive scheme or scheme providing benefits of any other nature
for the benefit of the Transferring Employees.

 

14. Real Property

 

  14.1 As at Completion, the Victa Companies do not have any interest in land
except in respect of the NSW Premises under the NSW Lease.

 

  14.2 The Company has exclusive occupation of the NSW Premises.

 

  14.3 There is no event, circumstance or dispute (whether actual, threatened or
anticipated) which could adversely affect:

 

  (a) the exclusive occupation and quiet enjoyment of the NSW Premises by the
Company; or

 

  (b) the enforcement by the Company of any rights and entitlements as lessee of
the NSW Premises.

 

  14.4 The Disclosure Material contains an accurate copy of the NSW lease in
respect of the NSW Premises.

 

  14.5 So far as the Vendor is aware, the Company is not in default under or in
breach of any term of the NSW Lease which would have a materially adverse effect
upon the value of the Business. So far as the Vendor is aware, there are no
circumstances subsisting under which the landlord of the NSW Lease may have any
right or claim of any kind against any Victa Company under or in connection with
the NSW Premises which would have a materially adverse effect upon the value of
the Business.

 

  14.6 The NSW Premises has all services necessary for its proper enjoyment and
use and the passage and provision of such services is uninterrupted and to the
best of the Vendor’s knowledge and belief, there exists no imminent or likely
interruption of such passage or provision.

 

  14.7 The NSW Premises has all means of access and egress necessary for its
proper enjoyment and use.

 

  14.8 There is no sub-lease or licence granted by the Company in respect of the
NSW Premises.

 

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  14.9 To the best of the Vendor’s knowledge, there are no covenants,
restrictions or arrangements affecting the NSW Premises which are of an onerous
or unusual nature or conflict with the present use of all or any part of the NSW
Premises.

 

  14.10 The current use of the NSW Premises by the Company for the carrying on
of the Business does not breach any Law.

 

  14.11 The Company has paid all rent and other outgoings which have become due
and payable by the Company in respect of the NSW Premises.

 

  14.12 The Vendor has not received any notice from any Governmental Agency or
from any other person concerning the NSW Premises which has not been complied
with. To the best of the Vendor’s knowledge and belief, there are no proposals
made or intended to be made by any Governmental Agency or any other person:

 

  (a) concerning the acquisition or resumption of the whole or any part of the
NSW Premises;

 

  (b) requiring the doing of work or expenditure of money on or in relation to
the NSW Premises or any footpath or road adjoining any of the land on which any
of the NSW Premises are situated; or

 

  (c) which would adversely affect the whole or any part of the land on which
the NSW Premises are situated.

 

  14.13 All buildings or other improvements made by any Victa Company at the NSW
Premises are in good repair and condition and are fit for the purpose for which
they are at present used.

 

  14.14 To the best of the Vendor’s knowledge, the NSW Premises are not subject
to any material defect.

 

15. Environment

 

  15.1 Each Environmental Authorisation has been obtained. Each such
Environmental Authorisation is and has been at all relevant times effective and
there is no proposal to revoke, suspend, modify or not renew any authorisation.

 

  15.2 Each Victa Company complies with each such Environmental Authorisation
and the Vendor is not aware of any breach or likely breach of any such
Environmental Authorisation. Neither the Vendor nor any Victa Company, so far as
the Vendor is aware, has received any notice, order, claim, demand or like
communication from a Governmental Agency which might adversely affect the use of
the Other Premises or NSW Premises for the conduct of the Business.

 

  15.3 No Victa Company has given a bond or security deposit in favour of any
Governmental Agency in connection with any Environmental Authorisation which
relates to the Business or the Other Premises or NSW Premises.

 

  15.4

No Victa Company has received written notice of any action, or cause of action,
or actual, pending or threatened Claim in relation to the presence or

 

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release into the Environment of Contamination or Pollution resulting from the
occupation of the Other Premises or NSW Premises by the Victa Companies and
there have been no such actions or Claims against any Victa Company in the past
3 years.

 

  15.5 No Victa Company has any liability under any environmental law in
relation to the Vendor’s previous operation of a manufacturing facility in
Campsie, NSW.

 

  15.6 No Victa Company has applied asbestos, cadmium, chromium, lead, mercury,
PBBs, PBDEs, PCBs or any of their derivatives or any ozone depleting substances
in the processes used to manufacture products at the NSW Premises.

 

16. Compliance with laws

 

  16.1 Each Victa Company has complied in all material respects with applicable
laws and legal requirements of statutory bodies where non compliance will, or
would reasonably be likely to have a materially adverse effect upon the value of
the Business.

 

  16.2 There is no outstanding correspondence between the Victa Companies and
the Australian Securities and Investments Commission.

 

  16.3 All returns, notices and other documents required to be lodged or given
by each Victa Company under the Corporations Act and other relevant acts and
regulations have been duly and properly prepared and lodged or given.

 

17. Litigation

 

  17.1 There is no litigation, prosecution, mediation, arbitration or other
proceeding in progress, or so far as the Vendor is aware pending or threatened,
against the Vendor in respect of any Victa Company and to the best of the
Vendors’ knowledge and belief, there are no circumstances which are likely to
give rise to any such litigation, prosecution, mediation, arbitration or other
proceeding, except for any workers compensation or WorkCover claims disclosed in
the Disclosure Materials.

 

  17.2 No Victa Company is subject to any unsatisfied judgement or any order,
award or decision handed down in any litigation, arbitration, other alternative
dispute proceeding or administrative proceeding.

 

  17.3 Apart from the specific disclosure in the matter of Thomas Long (as
executor of the estate of the late Eric Thompson) in the Dust Diseases Tribunal
of New South Wales, no asbestos related claims have been suggested, notified,
made or filed against any Victa Company.

 

18. Insurance

 

  18.1 The Disclosure Material contains complete and accurate particulars of all
insurance policies taken out by or for the benefit of the Victa Companies.

 

  18.2 Each insurance policy held by each Victa Company is currently in full
force and effect and all applicable premiums paid.

 

  18.3 So far as the Vendor is aware, nothing has been done or omitted to be
done which would make any policy of insurance void or voidable or which would
permit an insurer to cancel the policy or refuse or reduce a claim or materially
increase the premiums payable under the policies.

 

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  18.4 Each Victa Company is, and has been for the past three years, insured
with insurance companies duly authorised to carry on insurance business in
Australia (or where appropriate, outside Australia) on the terms of the policies
disclosed in the Disclosure Materials.

 

  18.5 There are no material claims made by any Victa Company or any person on
its behalf under any insurance policy held or previously held by any Victa
Company which are outstanding. So far as the Vendor is aware no event has arisen
which may give rise to a material claim under any insurance policy. Without
limiting the preceding provisions, any claim which might be made against any
Victa Company by an employee or third party in respect of any accident or injury
is fully covered by insurance, subject to deductibles.

 

  18.6 No Victa Company has been notified by any insurer that it is required or
it is advisable for it to carry out any maintenance, repairs or other works in
relation to any of its assets.

 

  18.7 The Company has effected all insurances required by Law to be effected by
it, subject to deductibles.

 

19. Information Technology

 

  19.1 The information technology and telecommunications systems, hardware and
software owned or used by the Victa Companies in the conduct of the Business as
at the date of this agreement (Systems) comprise all the information technology
and telecommunications systems, hardware and software necessary for the conduct
of the Business as conducted at Completion, other than any Systems that may be
made available for use by the Victa Companies in accordance with clause 19 and
Schedule 7.

 

  19.2 The Victa Companies either own or are validly licensed to use the
Software other than any Software that may be made available for use by the Victa
Companies in accordance with clause 19 and Schedule 7.

 

  19.3 To the best of each Vendor’s knowledge and belief, no unauthorised or
unlicensed information technology is stored on any system or premises used by
any Victa Company.

 

20. Restructure

 

  20.1 The Restructure will not have any Tax consequences or other consequences
to:

 

  (a) the Victa Companies; and

 

  (b) the proposed transaction under this Agreement.

 

21. Taxation

 

  21.1 The Victa Companies have paid all Taxes and will not become subject to
any Tax in excess of the provision for Tax included in the Completion Accounts.

 

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  21.2 The Victa Companies have:

 

  (a) paid, or the accounts fully provide for, all Taxes (including GST,
payroll, penalties and interest) which they have or may become liable to pay in
respect of the period up to and including the Completion Date;

 

  (b) complied with all of its respective obligations under any statutory
provisions requiring the deduction or withholding of Tax from amounts paid by
the Victa Companies and have properly accounted for any Tax so deducted or
withheld to any Tax authority (other than amounts which have not yet become due
to be paid);

 

  (c) complied with any applicable obligation to register for the purposes of
any goods and services, purchase, value added, sales or other similar Tax in any
part of the world and has complied in all material respects with its obligations
under any Tax law relating to such Tax;

 

  (d) filed or lodged all Tax and duty returns required by tax law (including,
but not limited to, all laws imposing or relating to income tax, fringe benefits
tax, goods and service tax, sales tax, payroll tax, land tax, water and
municipal rates and stamp and customs duties); and

 

  (e) no outstanding Tax Authority assessments or deemed assessments.

 

  21.3 The only liabilities for Tax of the Victa Companies that have arisen or
may arise on or before the Completion Date are, or will be, liabilities arising
out of the normal business and trading activities of the Victa Companies.

 

  21.4 Without limiting warranty 21.3:

 

  (a) all amounts of Tax required by law to be deducted by the Victa Companies
from the remuneration of employees (as defined in section 221A of the Tax Act)
have been duly deducted and where appropriate duly paid to any Tax Authority;
and

 

  (b) the Victa Companies have deducted all amounts of withholding Tax and Tax
required by law to be withheld and has punctually paid those Taxes to the
relevant Tax Authority.

 

  21.5 No Group Company, including the Victa Companies:

 

  (a) is involved in any audit of any of its income tax returns or any dispute
with any Tax Authority for the collection of Tax and the Vendor is not aware of
any circumstances which may give rise to an audit, investigation or dispute.

 

  (b) has not entered into or been a party to any transaction which contravenes
the anti-avoidance provisions of any Tax Law;

 

  (c) has not taken any action which has or might later or prejudice any
arrangements, agreement or tax ruling which has previously been negotiated with
or obtained from any Tax Authority; and

 

  (d) has not made any income tax private binding ruling requests, objections or
amended assessments with respect to its lodged income tax returns.

 

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  21.6 No dividend has been paid, authorised or declared by the Victa Companies:

 

  (a) in respect of which the required franking amount (as provided for in
section 160AQE of the 1936 Tax Act) has exceeded the franked amount (as defined
in section 160APA of the 1936 Tax Act) of the dividend; or

 

  (b) which has been franked with franking credits or exempting credits
(whichever is applicable) in excess of the required franking amount,

which would result in a franking debit (as defined in section 160APX of the 1936
Tax Act) or any Victa Company being liable to pay franking deficit tax or
franking additional tax under the 1936 Tax Act or 1997 Tax Act.

 

  21.7 No Victa Company has:

 

  (a) made a frankable distribution (as defined in section 202-40(1) of the 1997
Tax Act) in breach of the benchmark rule (as defined in section 203-25 of the
1997 Tax Act) giving rise to the consequences in section 203-50 of the 1997 Tax
Act;

 

  (b) been subject to a franking debit (as defined in section 205-30 of the 1997
Tax Act) under sections 204-15 or 204-25 of the 1997 Tax Act;

 

  (c) been subject to a determination, or made any distribution in circumstances
which would entitle any Tax Authority to make a determination, by the Tax
Authority imposing any additional franking debit or Tax on the Group Company
under sections 45, 45A, 45C, 160AQCB, 160AQCBA or 177EA of the 1936 Tax Act, or
under Division 204 of the 1997 Tax Act;

 

  (d) notified the Tax Authority, or made any distribution in circumstances
which require the Group Company to notify the Tax Authority, in accordance with
section 205-45 of the 1997 Tax Act; and

 

  (e) made a distribution which has been franked with franking credits in excess
of the maximum franking credit for the distribution (as provided for in
Subdivision 202-D of the 1997 Tax Act).

 

  21.8 At Completion, the Victa Companies will not have a franking deficit (as
provided for in section 105-40(2) of the 1997 Tax Act.

 

  21.9 The Victa Companies have complied with the provisions of Part IIIAA of
the 1936 Tax Act and Part 3-6 of the 1997 Tax Act and has maintained records of
franking debits and franking credits which are sufficient for the purposes of
that legislation.

 

  21.10 Except in respect of this Agreement:

 

  (a) all documents which are necessary to establish title of each Victa Company
to an asset have had stamp duty or other Taxes of a similar nature paid in full
in accordance with all applicable Laws;

 

  (b) required to be created by any Victa Company under a Law relating to stamp
duty or a Tax of a similar nature have been created and have had stamp duty or
other Taxes of a similar nature paid in full in accordance with all applicable
laws;

 

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  (c) all Taxes payable in respect of every deed, agreement or other documents
and transactions to which each Victa Company is a party, or that any Victa
Company has an interest in enforcing, have been paid and no such deed, agreement
or other document is unstamped or insufficiently stamped.

 

  21.11 All Tax returns made by the Victa Companies have complied with the
requirements of the relevant Tax Authority.

 

  21.12 There are no outstanding disputes, or question or demands between any
Victa Company and any Tax Authority (whether in Australia or elsewhere).

 

  21.13 All Taxes of whatever nature which any Victa Company has been liable to
pay have been paid.

 

22. Consolidated Group

 

  22.1 The Group has formed a Consolidated Group.

 

  22.2 The Guarantor has not failed to satisfy a Group Tax Liability when it has
become due.

 

  22.3 The TSFA is valid and binding and complies with all requirements of the
Tax Law.

 

  22.4 The entire amount of the Group Tax Liability at all times has been
allocated reasonably and the methodology for tax sharing in the TSFA provides
for the reasonable apportionment of Tax.

 

  22.5 No Group Company has received any notice from any Tax Authority in
relation to any matter concerning the TSFA or any breach of any obligation or
Liability of any Group Company.

 

  22.6 The Victa Companies have discharged all their Liabilities under the TSFA
and in particular but without limitation have paid their reasonable allocation
of their Liability under the TSFA as at the Completion Date.

 

  22.7 Neither the TSFA or the entry by the parties into the TSFA constituted a
breach of Division IV Part IVA of the Tax Act. The TSFA was not entered into as
part of an arrangement which was to prejudice any Tax Authority’s recovery of
some or all of the Group Tax Liability.

 

  22.8 All PAYG instalments have been paid when due and all Tax Liabilities of
the Guarantor are properly taken up in the Guarantor’s accounts.

 

  22.9 The Guarantor has provided the TSFA to the relevant Tax Authority. No Tax
Authority has served a notice requesting a copy of the TSFA in the approved form
which has not been complied with.

 

  22.10 The Tax Authority has not determined that the TSFA is invalid.

 

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  22.11 If the Guarantor becomes liable for a CGT Event L5, no part of the
amount of that Liability will form part of the contribution amount owed by any
Victa Company.

 

  22.12 No circumstance has arisen whereby a contributing member has or would
become jointly or severally liable for an amount due to any Tax Authority.

 

  22.13 All Taxes due by the Victa Companies on their own account prior to
entering into the TSFA have been fully paid.

 

23. Powers of Attorney

 

  23.1 There is no power of attorney or other authority in force that is able to
bind any Victa Company other than normal authorities under which their officers
or employees may conduct the business of the Victa Companies in the ordinary
course.

 

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