**Table of contents**     Parties  1 Background  1 Agreement  1 1 Interpretation  1 2 Sale and purchase of Shares  10 3 Purchase Price and payment  10 4 Conditions  12 5 Purchase Price adjustment  15 6 Earn-Out adjustment  18 7 Conduct of Business during the Interim Period  20 8 Pre-Completion matters  22 9 Completion  24 10 Warranties  27 11 Tax indemnity  33 12 Risk  38 13 Notice to complete and remedies on default  39 14 Restraint of trade  40 15 Confidentiality and publicity  41 16 Notices  42 17 Miscellaneous  43 18 Overriding Limitations of Liability  45 Execution  48 Schedule 1 Warranties and representations  52 Schedule 2 Disclosed Information  65 Schedule 3 Premises  66 Schedule 4 Form of Working Capital Statement  67 Schedule 5 Accounting Policies  68 Schedule 6 Due Diligence Material  72 KENSINGTON SWAN | AGREEMENT FOR SALE AND PURCHASE OF SHARES IN ELECTROPAR LIMITED
 
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     Schedule 7 Key Contracts  73 Schedule 8 Retention Agreement  74 Schedule 9 Target EBITDA Statement  75 Schedule 10 Cameron’s Employment Agreement  76 Schedule 11 Sensitive Materials  77 Schedule 12 QDS Agreement  78 Schedule 13 Form of Deeds of Covenant  79 Schedule 14 Form of Employment Agreements for TonyLachlan Wallace and Grant Lachlan Wallace  80 Schedule 15 EBITDA Inclusions and Exclusions  81 KENSINGTON SWAN | AGREEMENT FOR SALE AND PURCHASE OF SHARES IN ELECTROPAR LIMITED
 
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**Agreement**dated __________ 2010Parties**1** **Tony Lachlan Wallace, Grant Lachlan Wallace and Helen Amelia Wallace**each of Auckland, astrustees of the Wallace Family Trust (‘**Wallace Trust**’)**2** **Grant Lachlan Wallace, Tony Lachlan Wallace and Alison Kay Wallace**each of Auckland, astrustees of the T&A Wallace Family Trust (‘**T&A Trust**’)**3** **Cameron Lachlan Wallace, Grant Lachlan Wallace and Tony Lachlan Wallace**each of Auckland, astrustees of the Cameron Wallace Trust (‘**CW Trust**’)**4** **Preformed Line Products Company**a company at 660 Beta Drive, Mayfield Village, Ohio, USA(‘**Purchaser**‘)BackgroundA The Vendors are the owners of the Shares. B The Vendors have each agreed to sell and the Purchaser has agreed to purchase the Shares on the terms and conditions setout in this Agreement.Agreement**1** **Interpretation** 1.1 **Definitions**: In this Agreement unless the context otherwise requires:‘**Accounting Date**’ means 31 March 2010‘**Accounting Policies**’ means the accounting standards, policies and processes set out inSchedule 5‘**Accounts Receivable**’ means all amounts owed to any Group Company by debtors of the Businessat the Completion Date in respect of goods or services sold, supplied or otherwise providedby that Group Company prior to the close of business on the Completion Date‘**Adjustment Date**’ means the date five working days after the Completion Working CapitalStatement is complete in accordance with clause 5.7‘**Agreed Form**’ means in a form agreed to by the parties prior to execution of this Agreementand initialled by or on behalf of the Vendors and the Purchaser for the purposes ofidentification‘**Agreement**’ means this agreement (including the background, schedules and annexures) as itmay be amended pursuant to clause 17.3‘**Assets**’ means all the assets owned by the Group Companies which are utilised in the conductof the Business including Inventory, Fixed Assets, Intellectual Property, AccountsReceivable, rights under Business Contracts and Leases, the Records and, in respect of theCompany, includes shares in the Subsidiary Company
 
 

 
‘**Bill Rate**’ means the mid or “FRA” rate for 90 day bank accepted bills (expressed as apercentage) as quoted on Reuters page BKBM (or any successor page) at or about 10.45 am onthe first working day of the period in respect of which that rate of interest is to becalculated, and thereafter at intervals of 90 days from that working day‘**Business**’ means the electrical engineering manufacturing and supply business, each asundertaken by the Group in the period prior to the Completion Date‘**Business Contracts**’ means all contracts and agreements entered into by a Group Companyprior to the Completion Date to the extent that those contracts or agreements are inexistence and have not been fully performed at the Completion Date**‘Cameron’s Employment Agreement’**means the employment agreement to be entered into betweenthe Company and Cameron Lachlan Wallace the form of which is annexed to this Agreement atSchedule 10‘**Company**’ means Electropar Limited (Company Number 48108) and when the context permitsincludes the Subsidiary Company‘**Companies Act**’ means the Companies Act 1993‘**Completion**’ means completion of the sale and purchase of the Shares pursuant to thisAgreement‘**Completion Date**’ means the last working day of the month in which all of the Conditionshave been satisfied or waived in accordance with this Agreement‘**Completion Notice**’ means a notice served under clause 13.1‘**Completion Working Capital Statement**’ means a document in the form set out in Part B ofSchedule 4 setting out the Working Capital of the Group at the Completion Date, prepared inaccordance with clauses 5.1 and 5.2‘**Condition Date**’ means 14 July 2010‘**Conditions**’ means the conditions precedent contained in clause 4.1‘**Confidentiality Agreement**’ means a certain agreement dated 18 November 2009 between theCompany and the Purchaser‘**Current Account Balances**’ means the total amount of all indebtedness owed by any GroupCompany to the Vendors immediately prior to Completion (including interest (if any) thereonto Completion)‘**Data Room**’ means the online data room maintained by or on behalf of the Vendors throughwhich the Purchaser and its officers, employees, agents, advisors and financiers have hadaccess to information and material relating to the Shares, Business and Assets‘**Default Interest Rate**’ means the Bill Rate plus 5%‘**Defaulting Party**’ means a party who fails to comply with a Completion Notice‘**Deposit**’ means the amount of $1,100,000.00
 
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‘**Disclosed Information**’ means the categories of information specified in Schedule 2‘**Disclosure Letter**’ means the Agreed Form letter from the Vendors to the Purchaser executedand delivered immediately before execution of this Agreement‘**Due Diligence Material**’ means: a the documents and material contained in the Data Room (including all writtenanswers to questions) and listed in the index annexed to this Agreement as Schedule 6,or in the case of written answers to questions contained on a CD ROM and annexed tothis Agreement at Schedule 6; and b the Sensitive Materials‘**Earn-Out Accounts**’ means the consolidated profit and loss statement of the Group forthe Earn-Out Period, to be prepared in accordance with clause 6‘**Earn-Out Amount**’ means the amount, if any, calculated under clause 6.8‘**Earn-Out Determination Date**’ means the second working day after the date on which theEarn-Out Accounts and the EBITDA become final and binding on the Vendors and the Purchaserunder clause 6.7 of this Agreement‘**Earn-Out Period**’ means the period from the Completion Date to the first anniversary ofthe Completion Date‘**EBITDA**’ means the consolidated earnings before interest, tax, depreciation and amortisationof the Group for the Earn-Out Period calculated in accordance with clause 6 and as shown inthe Earn-Out Accounts and agreed by the parties, deemed to be agreed by the parties ordetermined by the Independent Accountant (as the case may be) under clause 6.6‘**Employees**’ means the employees of the Group from time to time‘**Encumbrance**’ includes any present or future mortgage, charge, hire purchase or chattellease agreement, pledge or lien, hypothecation, security interest (as defined in section17(1)(a) of the PPSA), preferential right or any other encumbrance of whatever nature, butexcludes (except in relation to the Shares) any Permitted Encumbrance‘**Environment**’ means the environment or surroundings including (without limitation) air,water and land‘**Environmental Law**’ means any law in effect on or prior to Completion relating or pertainingto the Environment, including the Resource Management Act 1991, the Building Act 2004 andthe Hazardous Substances and New Organisms Act 1996‘**External Third Party Debt**’ means any amount owed by a Group Company to Westpac New ZealandLimited as at the Completion Date, including any costs or fees payable as a result of anyearly repayment of such amount pursuant to clause 8.3b, but not including (for the avoidanceof doubt) any amount relating to the performance bond facility held by the Group withWestpac New Zealand Limited‘**Financial Statements**’ means the financial statements for the Group for the financial yearended 31 March 2010 as annexed to this Agreement marked ‘A’
 
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‘**Fixed Assets**’ means all plant, fixtures and fittings, furniture, equipment and machinery(whether fixed or movable), tools and dies, spares, tools and vehicles owned by each GroupCompany, but for the avoidance of doubt does not include Inventory‘**Group**’ means the Company and the Subsidiary Company‘**Group Company**’ means a member of the Group‘**Independent Accountant**’ has the meaning given to that term in clause 5.6a‘**Information Memorandum**’ means the information memorandum relating to the Business datedNovember 2009 (including any supplement to it or replacement of it)‘**Insurance Policies**’ means all existing policies of insurance for the Group as listed in theDue Diligence Material‘**Intellectual Property**’ means all intellectual and industrial property rights owned by anyGroup Company including the following: a patents and designs including applications and registrations b trade marks, trade names, business names, domain names, logos, websites andtrading indicia c inventions, discoveries and trade secrets owned by the Group, whether or notcapable of protection by a patent, and d confidential information, trade secrets and know-how of the Group including inrelation to data, specifications and drawings, technical information, financialinformation, sales and marketing information, business systems, customer and supplierlists‘**Interest Rate**’ means 5% per annum‘**Interim Period**’ means the period between the date of this Agreement and the close ofbusiness on the Completion Date‘**Inventory**’ means the stock-in-trade of the Business as at the Completion Date including rawmaterials, ingredients, work in progress, goods in transit, finished goods, third partyproducts, stores, consumables, spare parts, promotional, packing and packaging materials,office supplies and all operating supplies or other maintenance items including fuels andoils‘**Key Contracts**’ means the contracts listed in Schedule 7 to this Agreement‘**Key Personnel**’ means Grant Wallace, Tony Wallace, Cameron Wallace, Chris Burbridge, SimonPratt, Greg Barclay, Stephen Blackhall and Mike Barker‘**Material Matter**’ means a new matter uncovered by the Purchaser in the Sensitive Materialsduring the Sensitive Materials Verification which new matter has a value of $1,000,000 ormore‘**Leased Plant**’ means such plant, equipment, machinery, furniture, fixtures and fittings,spares, tools and vehicles used by the Group which are the subject of any equipment leases,hire purchase or conditional sales agreements
 
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‘**Leases**’ means the leases of the Premises‘**Licences and Permits**’ means all licences, consents, approvals and permits (of a statutoryor regulatory nature) which are required for the ongoing operation of the Business‘**Non-Defaulting Party**’ means a party who has given a Completion Notice‘**NZGAAP**’ means generally accepted accounting practice as defined in the Financial ReportingAct 1993‘**OIO Condition**’ means the Condition inserted for the benefit of the Purchaser and theVendors pursuant to clause 4.1a, by which the Purchaser obtains approval of the OverseasInvestment Office to the purchase of the Shares on terms and conditions satisfactory in allrespects to the Purchaser and the Vendors each acting reasonably‘**Ordinary Course of Business**’ means any activity which is within the usual scope of theBusiness when considered over the 24 month period prior to the date of this Agreement‘**Permitted Encumbrance**’ means: a any security interest in collateral or an interest in goods (or their proceeds)that falls under clause (a) of the definition of “Purchase Money Security Interest” inthe PPSA, or a security interest incidental thereto; and b any security interest in collateral (including the Assets) securing theExternal Third Party Debt, being a general security interest over all present and afteracquired property of the Company‘**PPSA**’ means the Personal Property Securities Act 1999‘**Premises**’ means the premises occupied by the Group for the purposes of the Business, a listof which is set out in Schedule 3‘**Purchase Price**’ means the purchase price for the Shares as detailed in clause 3.1 andincludes, for the avoidance of doubt, the adjustments in clauses 5.8 and 6.9‘**Purchaser’s Solicitor**’ means Russell McVeagh, Level 30, 48 Shortland Street, Auckland,attention David Hoare‘**QDS Agreement**’ means that agreement between the Company and the Wallaces in the formattached at Schedule 12‘**Records**’ means all files, records, customer lists and customer records, and all advertisingmaterial, circulars, promotional material, accounting and Inventory records, engineeringdrawings and records, employment contracts and employee records, contracts and agreementsevidencing Business Contracts, Leases and other like material relating to the Business, theGroup Companies’ statutory books, registers, accounts, records and Taxation returns
 
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‘**RelatedParty**’, in relation to a Restrained Party, means a member of a Restrained Party’simmediate family, or any trust, company, or other entity controlled by or associated withthe Restrained Party or a member of the Restrained Party’s immediate family‘**Relief**’ means, in relation to a Tax Claim, any relief, loss, allowance, credit, deductionor set-off available to any person, or any right to repayment of Tax‘**Restrained Parties**’ means Tony Lachlan Wallace and Grant Lachlan Wallace and their RelatedParties, but specifically excludes Cameron Lachlan Wallace‘**Retention Agreement**’ means an agreement between the parties and the Vendors’ Solicitor inrelation to the Retention Amount, the form of which is annexed to this Agreement at Schedule8‘**Retention Amount**’ means initially the amount of $3,000,000, reducing in the manner providedin clause 5.1 of the Retention Agreement‘**Sensitive Materials**’ means copies of the materials and information listed in Schedule 11‘**Sensitive Materials Verification**’ means the Purchaser’s review of the Sensitive Materialsto be carried out by the Purchaser under clause 4.3‘**Shares**’ means all the shares issued by the Company as at the Completion Date (including allnew shares issued to the Vendors prior to the Completion Date pursuant to clause 8.2), which shares are, as at the date of this Agreement, held by the Vendors in the following manner: a 500,000 ordinary shares in the Company held by the T&A Trust  b 490,000 ordinary shares in the Company held by the Wallace Trust  c 10,000 ordinary shares in the Company held by the CW Trust‘**Subsidiary Company**’ means Electropar Pty Limited (ACN 112 297 935)‘**Surviving Clauses**’ means each of clauses 7.4, 15, 17.12 and 17.13‘**Target EBITDA Statement**’ means that form of document set out in Schedule 9‘**Target Working Capital Statement**’ means that document set out in Part A of Schedule 4setting out the estimated Working Capital of the Business at the Completion Date‘**Tax**’ includes any past, present or future form of tax, levy, impost, duty, rate, charge,fee, deduction or withholding imposed, assessed or levied by any Tax Agency, including anyreassessments thereof, and any interest, penalties, fines, costs, charges, and otherliabilities lawfully imposed by any Tax Agency arising from or payable in respect of suchtax, and ‘**Taxation**’ shall have a corresponding meaning
 
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‘**Tax Agency**’ means any governmental agency or other person, whether within New Zealand,Australia or not, and including the New Zealand Inland Revenue Department, Australian TaxOffice, Customs Department or Accident Compensation Corporation (or any equivalent overseasbody) that collects, imposes or otherwise administers Tax‘**Tax Claim**’ includes any notice, demand, assessment, letter or other document issued, oraction taken, by or on behalf of any Tax Agency as a result of which any Group Company maybe placed under any or any increased liability for Tax or may be deprived of any Relief(whether or not within New Zealand) which might otherwise have been available to thePurchaser or the Group Company‘**Tax Indemnity**’ means the indemnity set out in clause 11‘**Tax Warranties**’ means the warranties made by the Vendors in clause 18 of Schedule 1 and theterm. ‘**Tax Warranty**’ has a corresponding meaning‘**Title and Authorisation Warranties**’ means the warranties given by the Vendors in clauses1.1, 1.2, 1.3a, 1.3c, 1.4, 2.1-2.6 (inclusive) and 2.8 of Schedule 1‘**Unconditional Period**’ means the period between the day after the date of satisfaction ofthe Conditions and the day before the Completion Date‘**Vendors**’ means each of the Wallace Trust, the T&A Trust and the CW Trust, in theproportions set out in clause 18.1 and otherwise subject to the limitations set out inclauses 18.2 to 18.6 and each such person is a ‘**Vendor**‘‘**Vendors’ Solicitor**’ means Kensington Swan, Barristers & Solicitors, 18 Viaduct HarbourAvenue, Auckland, attention Chris Parke‘**Wallaces**’ means Grant Lachlan Wallace, Tony Lachlan Wallace and Cameron Lachlan Wallace‘**Warranty**’ means the warranties made by the Vendors in Schedule 1 and ‘**Warranties**’ has acorresponding meaning‘**Warranty Claim**’ means any claim made by the Purchaser arising out of a breach of anyWarranty‘**Working Capital**’ means at any given time an amount equal to the Accounts Receivable andInventory of the Group (of the types provided for in the Target Working Capital Statement),minus the accounts payable of the Group (of the types provided for in the Target WorkingCapital Statement)1.2 **Construction of certain references**In this Agreement unless the context otherwise requires, any reference to:an ‘**associated person**’ of another person means an associated person of that person if deemedto be so under subpart YB of the Income Tax Act 2007‘**governmental agency**’ means any government in any jurisdiction whether central, regional,territorial or local and includes any agency or government department, minister, office,regulatory board of enquiry or commission, agency, body or organisation whatsoevera ‘**law**’ includes common or customary law and any constitution, decree, judgment,legislation, order, ordinance, regulation, statute, treaty or other legislative measure, ineach case of any relevant jurisdiction (and ‘**lawful**’ and ‘**unlawful**’ shall be construedaccordingly)
 
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a ‘**person**’ includes any individual natural person, company, corporation, partnership, firm,joint venture, association (whether corporate or unincorporated), trust, organisation,governmental agency, Minister of the Crown, state or agency of a state (in each case,whether or not having separate legal personality), and includes, in each case, a person’sexecutors, administrators, successors and permitted assignsa ‘**related company**’ means a related company as defined in the Companies Act provided thatthe definition of ‘**company**’ includes a company wherever incorporated‘**Significant**’ means sufficiently material to the existing position or the future prospectsof the Group taken as a whole so as to be likely to affect the judgement of a reasonablepurchaser for value of the Shares by causing it to reduce its assessment of the value of theShares by an amount in excess of $1,100,000 and ‘**Significantly**’ has a corresponding meaninga ‘**working day**’ means a day (other than Saturday or Sunday) on which registered banks areopen for business in Auckland but excludes any day in the period from 24 December in anyyear to 5 January in the following year (both inclusive).1.3 **General construction**In interpreting this Agreement the following rules must be applied unless the contextotherwise requires: a **Headings**: Clause and other headings are for reference only and are not an aidin interpretation. b **Statutes**: References to statutory provisions will include references to allregulations, orders, rules or notices made under that statute and references to astatute or regulation will be construed as references to those statutes or regulationsas they may be amended or re-enacted or as their application is modified by otherprovisions from time to time. c **Clauses and Schedules**: References to clauses, background, schedules orannexures are to clauses of or schedules, background and annexures to this Agreement,and the background, schedules and annexures referred to form part of this Agreement andwill have the same effect as if set out in the body of this Agreement. d **Currency**: References to currency and a reference to ‘$’ or ‘dollar’ are, unlessotherwise stated, to New Zealand currency; e **Parties**: References to a party are to a party to this Agreement and includethat party’s executors, administrators, successors in title and permitted assigns. f **Periods of Time**: All periods of time include the day on which the periodcommences and also the day on which the period ends. g **Non-Working Day**: Any date which is not a working day, upon or by which anythingis due to be done by any party, will be deemed to be a reference to the next workingday.
 
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 h **Number and Gender**: Words importing the plural include the singular and viceversa and words importing gender include all genders. i **Negative Obligations**: Any obligation not to do something will be deemed toinclude an obligation not to suffer, permit or cause that thing to be done. j **Obligations of Vendors**: All warranties, representations, indemnities,covenants, agreements and obligations given or entered into by the Vendors are deemedtohave been given or entered into by the Vendors in the proportions and subject to thelimitations provided for in clause 18.1. k **Including**: The word ‘including’ in any form is not a word of limitation.  l **Vendors’ Awareness**: i Any reference in this Agreement, the Due Diligence Material, theDisclosure Letter or in any other of the Disclosed Information to the knowledge,information, belief or awareness of the Vendors (or any similar expression) is areference to the actual knowledge, at the date at which the statement is actuallymade, of the Wallaces only and does not include any facts or circumstances ofwhich any such person has constructive knowledge only. ii In addition to clause i, any reference in clauses 6.2, 6.3, 8.2, 8.3,8.4, 11.2 and 20.2 of Schedule 1 to the knowledge, information, belief orawareness of the Vendors (or any similar expression) is also a reference to theactual knowledge, at the date at which the statement is actually made, of the KeyPersonnel (excluding the Wallaces) (and in respect of clause 11.2 only, KeyPersonnel is deemed to be Greg Barclay only), and does not include any facts orcircumstances of which any such person has constructive knowledge only. m **Best/Reasonable Endeavours**: Where any provision of this Agreement requires aparty to use its ‘best endeavours’ or its ‘reasonable endeavours’ to procure thatsomething is done or happens, such provision will not include any obligation to pay anyconsideration or provide any compensation or any financial or other incentive to anyperson to procure that the thing be done or happens, unless and to the extent theactual thing to be done or to happen requires payment of a defined amount. n **Interpretation**: Nothing in this Agreement is to be interpreted against a partysolely on the ground that the party put forward this Agreement or any part of it. o **Consents and approvals**: If the doing of any act, matter or thing under thisAgreement is dependent on the consent or approval of a party or is within thediscretion of a party, the consent or approval may be given or the discretion may beexercised conditionally or unconditionally or withheld by the party in its absolutediscretion, unless expressly provided otherwise.
 
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**2** **Sale and purchase of Shares**2.1 **Agreement**The Vendors agree to sell, and the Purchaser agrees to purchase and take a transfer of, thelegal and beneficial title to the Shares for the Purchase Price and on the terms andconditions set out in this Agreement.2.2 **Clear title**On Completion each Vendor must give to the Purchaser, in respect of those Shares owned bythat Vendor, clear title to those Shares free from all Encumbrances.2.3 **Rights attaching to Shares**On Completion the Shares will pass to the Purchaser together with all rights attaching tothem at the Completion Date.**3** **Purchase Price and payment**3.1 **Purchase Price**The purchase price for the Shares is $20,500,000 less the amount of any External Third PartyDebt at the Completion Date, or where such External Third Party Debt is nil then plus anycash in bank accounts of the Group at the Completion Date, and subject to adjustment inaccordance with clauses 5.8 and 6.9.3.2 **Payments**The Purchase Price must be paid as follows: a On the date this Agreement is signed by all parties the Purchaser must pay tothe Vendors the Deposit in part payment of the Purchase Price. b On the Completion Date, the Purchaser shall pay: i to the Vendors, the balance of the Purchase Price due after paymentof the Deposit, less the Retention Amount; and ii to the Vendors’ Solicitor, the Retention Amount to be held inaccordance with clause 3.3 and the Retention Agreement. c Any amount payable pursuant to clause 5.8 shall be paid on the Adjustment Date,together with interest on such amount at the Interest Rate from the Completion Date tothe date of actual payment in accordance with clause 5.9. d Any amount payable pursuant to clause 6.9 shall be paid on the Earn-OutDetermination Date.3.3 **Retention terms**On the Completion Date in accordance with clause 3.2bii the Purchaser will pay the RetentionAmount to the Vendors’ Solicitor to be held on trust for the Purchaser and the Vendors assecurity for any claim under or in connection with this Agreement, or at law, made inaccordance with this Agreement, and otherwise subject to the terms set out in the RetentionAgreement.
 
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3.4 **Place for payment**The parties agree that: a payment of any amounts due to the Vendors must be made to the Vendors or theVendors’ Solicitor or such other person at such place within New Zealand as the Vendorsmay reasonably stipulate prior to 3 p.m. on the date that payment is due; and b payments of any amounts due to the Purchaser must be made to the Purchaser orthe Purchaser’s Solicitor or such other person at such place within New Zealand asthe Purchaser may reasonably stipulate prior to 3 p.m. on the date that payment is due.3.5 **Lowest Purchase Price**The parties acknowledge that the Purchase Price is the lowest price that they would haveagreed upon with respect to the Shares at the time this Agreement was executed on the basisof payment in full at the time at which the first right in the Shares is to be transferred.For the purposes of this clause the term ‘first right’ in the Shares shall bear the samemeaning as the word ‘right’ in Subpart YA of the Income Tax Act 2007. The tax position takenby both parties in their tax returns will be consistent with the position recorded in thisclause.3.6 **Non-payment of Deposit**The Vendors may not cancel this Agreement for non-payment of the Deposit payable inaccordance with clause 3.2a unless the Vendors have first given to the Purchaser 3 workingdays notice in writing of the Vendors’ intention to cancel and the Purchaser has failedwithin that time to remedy that default. No notice of cancellation will be effective if,before the expiry of the 3 working day period referred to in the notice, the Deposit hasbeen paid.3.7 **Deposit in trust**The Deposit payable in accordance with clause 3.2a must be paid to the Vendors’ Solicitors,to be held by them in an interest bearing trust account in the joint names of the Vendorsand the Purchaser and applied as follows: a if this Agreement is avoided pursuant to clause 4.4, 10.3 or 12.1, or cancelledby the Purchaser pursuant to clause 13.3, the Deposit and interest thereon (less anyapplicable withholding taxes and administration fees with respect to any interestthereon) shall immediately be refunded to the Purchaser; b upon Completion or if this Agreement is cancelled by the Vendors pursuant toclause 13.3, the Deposit and interest thereon (less any applicable withholding taxesand administration fees with respect to any interest thereon) shall immediately be paidto the Vendors,and the parties hereby irrevocably authorise the Vendors’ Solicitors to so make the abovepayments and deductions when necessary.
 
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3.8 **Default in payment**In the event of default by any party in payment of any amount under this Agreement the partyin default must pay to the party to whom payment is due interest on the amount unpaid at theDefault Interest Rate computed on a daily basis from the date on which such amount shouldhave been paid until the date of actual payment but without prejudice to any other rights orremedies of the non-defaulting party in respect of such default.3.9 **Payments**Each party shall pay all amounts payable under this Agreement in immediately availablecleared funds: a free of any restriction or condition; b free of and (except to the extent required by law in respect of any amount ofinterest payable) without any deduction or withholding on account of any tax; and c without any deduction or withholding on account of any other amount, whether byway of set-off, counterclaim or otherwise.**4** **Conditions** 4.1 **Conditions**   Completion of this Agreement is conditional upon: a the OIO Condition being satisfied; b a clearance being given under the Commerce Act 1986 to the transfer of theShares to the Purchaser; c consents having been obtained in a form acceptable to the Purchaser to thechange of control of the Company from the counterparties to each of the Key Contractswhich require such consent; and d the Purchaser undertaking the Sensitive Materials Verification and confirming(or being deemed to have confirmed) that no Material Matter was identified inaccordance with the process set out in clause 4.3.The Conditions in clauses 4.1a and 4.1b have been inserted for the benefit of the Purchaserand the Vendors and the Conditions in clauses 4.1c and 4.1d have been inserted for thebenefit of the Purchaser.4.2 **Reasonable endeavours**Each of the parties must co-operate with the others and (as appropriate) use theirreasonable endeavours to ensure that the Conditions are fulfilled. Without limiting thegenerality of the foregoing: a Each party must in a timely manner make all necessary and appropriateapplications and supply all necessary and appropriate information for the purpose ofenabling the Conditions to be fulfilled, it being acknowledged that within one workingday of the date of this Agreement the applications necessary under clauses 4.1a and4.1b will be submitted.
 
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 b No party may withdraw or procure the withdrawal of any application made orinformation supplied under clause 4.2a. c No party may take any action that would or would be likely to prevent or hinderthe fulfilment of the Conditions. d Each party must: i supply to the other party copies of all applications made and allinformation supplied for the purposes of enabling the Conditions to be fulfilled(subject to the terms of any previously agreed confidentiality protocol betweenthe parties); ii keep the other party informed in a timely manner of the status of anydiscussions or negotiations with relevant third parties regarding the Conditions;and iii promptly notify the other party on becoming aware of the fulfilmentof any Condition or of any Condition becoming incapable of being fulfilled, and ineach case provide the other party with reasonable evidence as to such satisfactionor not.4.3 **Sensitive Materials Verification** a Immediately following the date of this Agreement, the Vendors shall provide thePurchaser with access to the Sensitive Materials to enable the Purchaser to conduct theSensitive Materials Verification. The parties agree that access to the SensitiveMaterials is given for verification purposes only, and on the good faith understandingthat the Purchase Price is fixed, and will not change unless a Material Matter isidentified by the Purchaser from the Sensitive Materials during the Sensitive MaterialsVerification. b The Purchaser must complete the Sensitive Materials Verification and notify theVendors by no later than 5pm on the fifth working day following the date the SensitiveMaterials are provided to the Purchaser, whether or not it considers it has identifieda Material Matter (‘**Material Matters Notice**’). c If the Purchaser considers that it has identified a Material Matter, theMaterial Matters Notice must specify the matter or matters in detail together with: i the Purchaser’s reasons for believing that the matter is a MaterialMatter, including the quantum of the value assessed by the Purchaser in respect ofthe relevant Material Matter; and ii such other information as the Vendors reasonably request to assistthem to consider the matter identified. d If the Purchaser does not specify any Material Matters in the Material MattersNotice, or does not give a Material Matters Notice prior to or on the date specifiedin clause 4.3b, the Purchaser shall be deemed not to have identified any MaterialMatters and the Condition in clause 4.1d is deemed to have been satisfied in allrespects.
 
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 e The Vendors shall, within 5 working days of receipt of all information requiredunder clause 4.3c, notify the Purchaser whether or not they agree that the matter ormatters identified by the Purchaser constitute a Material Matter. If the Vendors agree,the Condition in clause 4.1d is deemed to have not been satisfied and clause 4.4 willapply. The Vendors shall be deemed to have agreed with the Purchaser, and thePurchaser’s reasons under clause 4.3c, if no notice is given by them within the periodspecified in this clause 4.3e. f If the Vendors give notice to the Purchaser within the period specified inclause 4.3e that they do not agree that the matter or matters identified by thePurchaserconstitute a Material Matter, then the parties shall endeavour to reach agreement onthe dispute. If the dispute is not resolved within 5 working days of the Vendors’notice, either party may require by written notice that the dispute be settled bydetermination in accordance with clause 5.6, in which case the role of the IndependentAccountant under that procedure will be to determine whether or not the matter ormatters identified constitute a Material Matter. g If the Independent Accountant appointed in accordance with clause 4.3fdetermines that the matter or matters identified in the Material Matters Noticeconstitutes a Material Matter, the condition in clause 4.1d will not be satisfied andclause 4.4 shall apply. h If the Independent Accountant determines that the matter or matters identifiedin the Material Matters Notice do not constitute a Material Matter, the condition inclause 4.1d shall be deemed to have been satisfied on the date of the IndependentAccountant’s decision.4.4 **Termination**If: a either of the Conditions in clauses 4.1a or 4.1b have not been fulfilled or (tothe extent that they are capable of waiver) waived by both parties by the ConditionDate; b the Condition in clause 4.1c has not been fulfilled or (to the extent that itis capable of waiver) waived by the Purchaser by the Condition Date; or c the Condition in clause 4.1d has not been fulfilled or (to the extent that itis capable of waiver) waived by the Purchaser by the date five working days followingthe date of this Agreement, or if a Material Matters Notice is given by the Purchaserunder clause 4.3c, stating that it has identified a Material Matter, then the date onwhich the Condition in clause 4.1d is deemed to be satisfied or not in accordance withclause 4.3,either party may by notice in writing to the other parties at any time after the ConditionDate terminate this Agreement. Upon such termination: d this Agreement will, except as set out in the Surviving Clauses, be of nofurther force or effect; and e the parties will be released from their respective obligations under it and,except as otherwise expressed or implied in this Agreement, no party will have anyclaim against any other party arising under or in connection with this Agreement exceptin respect of any breach arising prior to the date of termination; and f the Deposit shall immediately be returned to the Purchaser in accordance withclause 3.7a.
 
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**5** **Purchase Price adjustment**5.1 **Completion Working Capital Statement**As soon as practicable after the Completion Date, but in any event not later than 30 workingdays following the Completion Date, the Vendors will procure the preparation of theCompletion Working Capital Statement to determine the value of the Working Capital of theGroup at the Completion Date and any adjustment to the Purchase Price required pursuant toclause 5.8.5.2 **Basis of preparation**The Completion Working Capital Statement will be prepared, and the Working Capital at theCompletion Date must be calculated, using the following principles and practices applied inthe following order of priority: a in accordance with the Accounting Policies and (to the extent not inconsistent)the Financial Statements; and b on a basis consistent with the preparation of, and in the same format as(including the same line items), the Target Working Capital Statement.5.3 **Access to information**The Purchaser must in connection with the preparation of the Completion Working CapitalStatement by the Vendors: a provide or ensure the timely provision of all information and assistance,including making available (at no cost to the Vendors) Peter Greenall and such otherpersonnel which may be requested by the Vendors; b permit the Vendors and their representations to have access to and takeextracts from or copies of any of the Records, together with the Purchaser’s and theGroups’ Inventory, accounting and computer systems as necessary to prepare theCompletion Working Capital Statement, and for such purpose the Purchaser must, and mustprocure that the Company does, continue to maintain and operate all such relevantRecords, systems and the like; c at no charge to the Vendors provide to the Vendors sufficient office space atthe Company’s head office from which to prepare and calculate the Completion WorkingCapital Statement.5.4 **Delivery of Completion Working Capital Statement**Once the Completion Working Capital Statement has been prepared the Vendors will deliver theCompletion Working Capital Statement to the Purchaser for review.
 
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5.5 **Dispute Notice** a If the Purchaser disputes or disagrees with any aspect of the deliveredCompletion Working Capital Statement, which aspect the Purchaser reasonably considerswill have a material effect (being an amount in excess of $50,000) on the calculationof the value of the Working Capital at the Completion Date, the Purchaser must, notlater than thirty working days after the date of delivery of the Completion WorkingCapital Statement by the Vendors to the Purchaser, deliver to the Vendors a writtenreport (‘**Working Capital Dispute Notice**’) setting out, to the extent the Purchaser isable to: i full details of each of the matters in dispute or disagreement(‘**Working Capital Dispute**’); ii a separate dollar value for each of those matters; and iii full details of the reasons why each of those matters is disputed. b During the thirty working day period following the delivery of any WorkingCapital Dispute Notice the Purchaser and the Vendors will procure that their respectiveadvisors consult in good faith with a view to resolving any Working Capital Dispute.5.6 **Dealing with a Working Capital Dispute Notice** a If the Purchaser and the Vendors are unable (whether through their respectiveadvisors or directly) to resolve any Working Capital Dispute within thirty working days(or such longer period as the parties agree) of the delivery of a Working CapitalDispute Notice, either party may thereafter by notice in writing to the other partyelect to have the Working Capital Dispute resolved by an independent accounting firm tobe agreed on by the parties (or, failing agreement within five working days, chosen bythe President for the time being of the Auckland branch of the New Zealand Institute ofChartered Accountants or nominee) (‘**Independent Accountant**’). b The Independent Accountant will be engaged by the parties jointly. TheIndependent Accountant shall act as an expert and not as an arbitrator, and accordinglythe provisions of the Arbitration Act 1996 shall not apply or govern the resolution ofany Working Capital Dispute by the Independent Accountant. c The matters in Working Capital Dispute must be referred to the IndependentAccountant by written submissions of the Vendors and the Purchaser which must attach: i the Completion Working Capital Statement (together with any working papers);  ii the Working Capital Dispute Notice;  iii a written response from the Vendors to the Working Capital Dispute Notice; and  iv an extract of the relevant provisions of this Agreement. d Each party shall be entitled to make one submission in writing to theIndependent Accountant (‘**Party Submission**’), which must be delivered within ten workingdays after the date of appointment of the Independent Accountant, and shall be entitledto make one reply in writing to the Party Submission of the other party, which replymust be delivered within five working days of the delivery of that Party Submission.Neither party shall be entitled to make any further submission or reply unless theIndependent Accountant requests both parties to provide a submission or reply, andneither party shall be entitled to make any submission except in writing.
 
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 e The Independent Accountant will be instructed to, as soon as practicable, andwhere reasonably possible within ten working days of receipt by the IndependentAccountant of all the Party Submissions, to determine all Working Capital Disputesand conclude the form of the Completion Working Capital Statement. In so doing, theIndependent Accountant shall apply the principles for preparation of the CompletionWorking Capital Statement set out in clause 5.2. f The Vendors and the Purchaser must promptly supply the Independent Accountantwith any information, assistance and co-operation requested in writing by theIndependent Accountant in connection with its determination. All correspondence betweenthe Independent Accountant and a party must be copied to the other party. g The determination of the Independent Accountant pursuant to clause 5.6e will beconclusive and binding on the parties, and will not be subject to further review,challenge or adjustment by either party except in the case of manifest error. h The costs and expenses of the Independent Accountant will: i where any Working Capital Dispute Notice is upheld, be paid by the Vendors; ii where any Working Capital Dispute Notice is rejected, be paid for bythe Purchaser.5.7 **Completion Working Capital Statement complete**The Completion Working Capital Statement will be deemed to be complete, conclusive andbinding on the parties, and will not be subject to further review, challenge or adjustmentby either party: a If no Working Capital Dispute Notice is submitted within the time periodreferred to in clause 5.5a, on the expiry of that period; or b If a Working Capital Dispute Notice is submitted within the time periodreferred to in clause 5.5a, then on the sooner of: i the Vendors and the Purchaser resolving the relevant Working CapitalDispute(s) the subject of the Working Capital Dispute Notice by agreement; or ii the Independent Accountant delivering to the Purchaser and theVendors its determination pursuant to clauses 5.6e and 5.6g.
 
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5.8 **Adjustment payments**On the Adjustment Date: a if the amount of the Working Capital as disclosed in the Completion WorkingCapital Statement exceeds $7,000,000, then the Purchaser will pay the amount of theexcess to the Vendors; or b if the amount of the Working Capital as disclosed in the Completion WorkingCapital Statement is less than $7,000,000, then the Vendors will refund the amount ofsuch shortfall to the Purchaser.A payment made by the Vendors under this clause is to be treated as a reduction in thePurchase Price and a payment made by the Purchaser under this clause is to be treated as anincrease in the Purchase Price.5.9 **Interest on Adjustment Payments**The party making any payment on the Adjustment Date under clause 5.8 shall, in addition tosuch sum due, make payment of interest on such sum due at the Interest Rate from theCompletion Date until the date such sum is actually paid.**6** **Earn-Out adjustment**6.1 **Preparation of Earn-out Accounts**As soon as practicable following the expiry of the Earn-Out Period, but in any event notlater than 30 working days following the expiry of the Earn-Out Period, the Purchaser mustprocure the preparation of the Earn-Out Accounts to determine the value of the EBITDA of theGroup over the Earn-Out Period, and whether any additional Purchase Price is payable to theVendors pursuant to clause 6.9.6.2 **Basis of preparation**The Earn-Out Accounts will be prepared, and the EBITDA for the Earn-Out Period must becalculated, using the following principles and practices applied in the following order ofpriority: a taking into account each of the EBITDA inclusions, and specifically excludingeach of the EBITDA exclusions, set out in Schedule 15 to this Agreement; b in accordance with theAccounting Policies and (to the extent not inconsistent)the Financial Statements; c on a basis consistent with the preparation of, and in the same format(including the same line items) as, the Target EBITDA Statement; d to the extent not inconsistent with the above, on a basis consistent with pastpractice of the Group in the period prior to the date of thisAgreement; and e to the extent not inconsistent with the above, in accordance with NZGAAP.6.3 **Delivery of Completion Working Capital Statement**Once the Earn-Out Accounts have been prepared the Purchaser will deliver the Earn-OutAccounts to the Vendors for review.
 
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6.4 **Access to information to review draft Earn-Out Accounts**The Purchaser must ensure the Vendors and their representatives are allowed to examine allworking papers, accounts and Records relating to the draft Earn-Out Accounts reasonablyrequired by them for the purpose of reviewing and assessing the draft Earn-Out Accounts andthe calculation of the EBITDA.6.5 **Earn-Out Dispute Notice** a If the Vendors dispute or disagree with any aspect of the delivered Earn-OutAccounts, the Vendors must, not later than thirty working days after the date ofdelivery of the Earn-Out Accounts by the Purchaser to the Vendor, deliver to thePurchaser a written report (‘**Earn-Out Dispute Notice**’) setting out, to the extent theVendors are able to: i full details of each of the matters in dispute or disagreement(‘**Earn-Out Dispute**’); ii a separate dollar value for each of those matters; and  iii full details of the reasons why each of those matters is disputed. b During the fifteen working day period following the delivery of any Earn-OutDispute Notice the Purchaser and the Vendors will themselves, and will procure thattheir respective advisors, consult in good faith with a view to resolving any Earn-OutDispute.6.6 **Dealing with an Earn-Out Dispute Notice**If the Purchaser and the Vendors are unable (whether through their respective advisors ordirectly) to resolve any Earn-Out Dispute within fifteen working days (or such longer periodas the parties agree) of the delivery of an Earn-Out Dispute Notice, either party maythereafter by notice in writing to the other party elect to have the Earn-Out Disputeresolved by an independent accounting firm and if so, the terms of clause 5.6 will applywith all references to ‘Working Capital Dispute’ changed to ‘Earn-Out Dispute’ and allreferences to ‘Working Capital Dispute Notice’ changed to ‘Earn-Out Dispute Notice’.6.7 **Earn-Out Accounts complete**The Earn-Out Accounts will be deemed to be complete, conclusive and binding on the parties,and will not be subject to further review, challenge or adjustment by either party: a If no Earn-Out Dispute Notice is submitted within the time period referred toin clause6.5a, on the expiry of that period; or b If an Earn-Out Dispute Notice is submitted within the time period referred toin clause 6.5a then on the sooner of: i the Vendors and the Purchaser resolving the relevant Earn-OutDispute(s) the subject of the Earn-Out Dispute Notice by agreement; or ii the Independent Accountant delivering to the Purchaser and theVendors its determination pursuant to clauses 6.6, 5.6e and 5.6g.
 
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6.8 **Calculation of Earn-Out Amount** a The Earn-Out Accounts will include a calculation of the additional amount ofPurchase Price to be paid by the Purchaser using the following formula:         X = (A-B) (C-B) x $1,500,000Where:X = the Earn-Out Amount, being the additional Purchase Price (if any) payable to theVendorsA = EBITDA as disclosed in the Earn-Out AccountsB = $3,500,000C = $5,200,000Subject to subclause 6.8b, in no event shall X exceed $1,500,000. b If A, as defined under subclause 6.8a above is greater than $5,200,000, thenthe Earn-Out Amount shall be the amount of $1,500,000 (calculated pursuant to subclause6.8a) plus an additional 50 cents for every dollar of EBIDTA earned by the Companyabove $5,200,000 as disclosed in the Earn-Out Accounts (‘**Additional Earn-Out**’). In noevent shall the Additional Earn-Out exceed $500,000. c Notwithstanding the rest of this clause 6.8, in no event shall the totalEarn-Out Amount calculated pursuant to subclauses 6.8a and b exceed $2,000,000.6.9 **Payment of Earn-Out**On the Earn-Out Determination Date the Purchaser must pay to the Vendors the applicableEarn-Out Amount (if any) calculated in accordance with clause 6.8. A payment made by thePurchaser under this clause is to be treated as an increase in the Purchase Price.6.10 **Purchaser’s obligations following Completion**During the Earn-Out Period the Purchaser will not, without the written agreement of theVendors, take any step or action, or omit to take any step or action, the substantialpurpose or effect of which is intended to lead to or which may result in an artificialdecrease in EBITDA.**7** **Conduct of Business during the Interim Period**7.1 **Ordinary Course of Business**Subject at all times to and without restricting the Vendors obligations under clause 8.2,throughout the Interim Period the Vendors must procure that the Business is carried on inits Ordinary Course of Business and, without limiting the generality of the foregoing, theVendors must procure that, without the prior written consent of the Purchaser (not to beunreasonably withheld), none of the Group Companies: a enter into any major transaction (as defined in the Companies Act);  b buy back, issue or redeem any shares, options or other securities;  c make any change to its constitution;
 
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 d grant any Encumbrance over any of the Assets other than (for the avoidance ofdoubt) the creation and issue of any performance bond by a Group Company in theOrdinary Course of its Business; e increase the salary or wage or vary the terms or conditions of employment ofany Employee unless obligated to do so by law or under the terms of any Employee’sindividual or collective employment contract; f do any act or make any omission which constitutes, and must do anythingreasonably necessary to prevent, a material breach or default under any Lease orBusiness Contract or any other breach or default which entitles the counterparty tothat Lease or Business Contract to terminate that Lease or Business Contract; g  enter into any agreement for the purchase, disposal or lease of plant orequipment nor incur or commit to any item of capital expenditure with (in either case)a value in excess of $50,000; h licence, transfer, assign or otherwise dispose of any Intellectual Property; i terminate or vary in any material respect any Lease or Business Contract orenter into (or renew) any agreement or commitment which is not entered into in theOrdinary Course of Business or where the entry into of such agreement or commitmentimposes a liability on the relevant Group Company in excess of $250,000; j employ any new employee with an annual remuneration package in excess of$100,000, or terminate the employment of any Employee except for the termination of anyEmployee’s employment for cause; k create or incur any liabilities or indebtedness (whether contingent orotherwise) except normal liabilities or indebtedness incurred in the Ordinary Course ofBusiness; l pay or make any dividend or other distribution; m pay any fees or provide any benefit to any director other than salaries andother benefits payable to such directors as employees of the Company to the levels paidprior to execution of this Agreement and disclosed to the Purchaser; n sell, lease, license, abandon or otherwise dispose of any material assetsexcept in the Ordinary Course of Business,it being acknowledged and agreed the Purchaser has consented to certain activities intendedto be carried out by the Company during the Interim Period as outlined in a memorandum fromTony Wallace dated 3 May 2010 disclosed to the Purchaser in the Data Room.7.2 **Purchaser’s consent**Where the Vendors are required to seek the consent of the Purchaser to any of the mattersset out in clause 7.1, such consent will not be unreasonably withheld or delayed and thePurchaser will use its best endeavours to provide a response to the Vendors as soon asreasonably possible, but not later than three working days after having first received suchrequest from the Vendors. Where the Purchaser has not responded to the Vendors within threeworking days, the Purchaser will be deemed to have given its consent to such matter. Theparties acknowledge for the purposes of this clause, all requests for consent of thePurchaser must be sent to Dennis F. McKenna and the Purchaser confirms Dennis F. McKenna hasall necessary power and authority to act on behalf of the Purchaser in this respect.
 
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7.3 **Purchaser’s access/actions**Throughout the Interim Period the Vendors must: a allow the Purchaser and its representatives reasonable access during normalbusiness hours to any of the Premises, the Employees and the Records; b promptly give to the Purchaser all information the Purchaser may reasonablyrequire concerning the affairs of the Business; c promptly notify the Purchaser of any legal claims, proceedings orinvestigations which may occur, be threatened or commenced against any Group Company;and d without limiting the Vendors’ obligations under clauses 7.3a to 7.3c, procurethat the Group Companies consult with the Purchaser whenever reasonably required by thePurchaser in relation to the management, operations and affairs of the Business,provided that in so doing the Purchaser will not unreasonably interfere with the day to dayoperation of the Business.7.4 **Return of information**If this Agreement is terminated, the Purchaser shall promptly return to the Vendors allwritten or recorded information relating to the Group and the Business which the Purchaserhas obtained and thereafter each party: a shall maintain confidentiality in respect of all information provided by or onbehalf of the other party prior to or following signing of this Agreement; and b shall not use any such information for any purpose or disclose any suchinformation to any other person without the prior written consent of the party fromwhom the information was obtained,and the above covenants are in addition to and not in substitution for any covenants givenby the Purchaser (or any related company of the Purchaser) pursuant to the ConfidentialityAgreement.**8** **Pre-Completion matters**8.1 **Third party consents**The parties acknowledge and agree that: a The provisions of certain of the Leases and some of the Business Contracts deema change in ownership of the Company or a change in control of the relevant GroupCompany to be an assignment of its interest in the relevant lease or contract and/orentitle the relevant counter party to exercise its rights of termination, unless theconsent of the counter party is given to such change of ownership or control.
 
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 b During the Interim Period, each of the parties will use their reasonableendeavours to obtain such consents provided however that nothing in this clause 8.1bwill require any party to: i Make any payment to a counter party under any such Lease or BusinessContract or to any other person so as to obtain such consent other than anypayment required under the relevant Lease in connection with that consent; ii procure any guarantee in relation to any such Lease or BusinessContract (except to the extent such Lease or Business Contract may (pursuant toits terms) require the assignee to provide any guarantee); or iii agree to any amendment, alteration or waiver of any Business Contractor Lease. c Subject to clause 4.4 in respect of Key Contracts only, should any consent notbe forthcoming the Purchaser is not entitled to cancel this Agreement or seek anycompensation from the Vendors, or otherwise claim any breach of this Agreement by theVendors.8.2 **Current Account Balances**On or prior to Completion the Vendors will take such steps as are reasonably necessary tocapitalise the Current Account Balances by the issue of further ordinary shares by theCompany to the Vendors equal to the amount of the Current Account Balances.8.3 **External Third Party Debt**The Purchaser acknowledges that, subject to the consent of Westpac New Zealand Limited beingforthcoming on terms reasonably acceptable to the parties, all External Third Party Debtshall remain in place at the Completion Date and will thereafter remain the obligation ofthe Group Companies and the Purchaser, provided that: a the Wallaces are fully released from all guarantees, indemnities and othersimilar obligations they may have given as at the Completion Date to Westpac NewZealand Limited in respect of the External Third Party Debt; and b if consent of Westpac New Zealand Limited is not able to be obtained in a formreasonably acceptable to the parties, and/or the required releases are not forthcoming,then all External Third Party Debt must be repaid by the Purchaser simultaneous with orprior to Completion.8.4 **Repayment of Debt**The Vendors shall ensure that: a all amounts owed by the Vendors, Electropar Africa (Proprietary) Limited, theRestrained Parties or their Related Parties (if any) to any Group Company have beenrepaid in full on or prior to the Completion Date; and b all amounts owed by any Group Company to the Vendors, Electropar Africa(Proprietary) Limited, the Restrained Parties or their Related Parties (if any) havebeen repaid in full on or prior to the Completion Date, or in the case of the CurrentAccount Balances have been capitalised in accordance with clause 8.2, excluding anyamounts owed in the Ordinary Course of Business to the Murray Wallace Trust or GLTProperties Limited, which amounts will be paid in accordance with the arrangements inplace between those persons and the relevant Group Company or Group Companies andexcluding any amounts owed to the Wallaces pursuant to the QDS Agreement which amountswill be paid in accordance with the QDS Agreement.
 
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8.5 **Release of Guarantees** a The Vendors and the Purchaser will respectively use their best endeavours toobtain a release of the Vendors, or the Wallaces, from all guarantees, indemnities andother similar obligations which any Vendor or Wallace may have given at or at any timeprior to the Completion Date in respect of the obligations of the Group. In so doing,the Purchaser acknowledges that it may be obliged to, and will if required, arrange orprovide satisfactory alternative security. b If a release cannot be obtained, the Purchaser will thereafter irrevocably andunconditionally indemnify the Vendors and each of the Wallaces against all liabilityarising in respect of the period after the Completion Date under any guarantee,indemnity or other obligation in respect of which a release cannot be obtained.The parties agree that the acknowledgements and agreements given in this clause 8.5 arepromises which confer, and are intended to confer, a benefit upon each of the Wallaces (aswell as the Vendors) and accordingly the provisions of the Contracts (Privity) Act 1982shall apply, and such promises will be enforceable by the Wallaces directly against thePurchaser.**9** **Completion**9.1 **Day and place**Completion must take place prior to 4 pm on the Completion Date at the offices of theVendors’ Solicitor.9.2 **Transfer**On the Completion Date, the Vendors must: a deliver to the Purchaser: i transfers of the Shares to the Purchaser duly executed by each of theVendors and in registrable form; ii the share certificates for the Shares or a certificate by a directorof the Company that no certificates have been issued for the Shares; iii an original resolution of the directors of the Company approving thetransfer of the Shares to the Purchaser and directing that upon receipt of suchshare transfer the name of the Purchaser be entered in the register of members ofthe Company; iv original resolutions of the directors of each Group Company revokingall mandates to bankers and giving authority in favour of the persons nominated bythe Purchaser by notice in writing to the Vendors not later than five working daysprior to Completion to operate the bank accounts of the relevant Group Company;
 
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 v the written resignations of the directors of each Group Company andan acknowledgement from each of them that none of them has any claim against thatGroup Company on any account whatsoever; vi an original resolution of the shareholders of the Company and of eachGroup Company appointing such persons to be the directors of the Company andrelevant Group Company from Completion as are nominated by the Purchaser by noticein writing to the Vendors not later than five working days prior to Completion; vii reasonable evidence that the Vendors have satisfied their obligationspursuant to clause 8.2; viii unconditional releases of all Encumbrances over the Shares and/or theAssets; ix evidence of such consents (as are available at Completion) given inaccordance with clause 8.1 by the landlord(s) of the Premises or any counter partyto a Business Contract; x executed forms of the deeds of covenant as provided for in clause14.6; xi reasonable evidence that, in relation to Electropar Africa(Proprietary) Limited (‘**Electropar Africa**’): A the Company has completed a transfer of its shares inElectropar Africa to any person other than a Group Company; B Electropar Africa has changed its company name to a namethat does not include ‘Electropar’; and C the Wallaces have resigned as directors of ElectroparAfrica; xii reasonable evidence that Electropar Pte. Limited (company number201004704N) (“**Electropar Singapore**”) has been wound up or that all steps necessaryto wind up Electropar Singapore have been taken, and that all of the assets ofElectropar Singapore, including, without limitation: A all Intellectual Property (including, without limitation,technical data, information and know-how) concerning the drawing, design,manufacturing procedure, installation and use of the “Quick Disconnect”device described in Schedule 1 to the QDS Agreement; and B New Zealand patent application no. 583865,has been transferred to the Company; xiii two copies of Cameron’s Employment Agreement signed by CameronLachlan Wallace; xiv two copies of the Retention Agreement duly signed by the Vendors andthe Vendors’ Solicitor;
 
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 xv two copies of the QDS Agreement duly signed by the Wallaces; xvi two copies of the employment agreement for Grant Lachlan Wallace, inthe form set out in Schedule 14 to this Agreement, signed by Grant LachlanWallace; xvii two copies of the employment agreement for Tony Lachlan Wallace, inthe form set out in Schedule 14 to this Agreement, signed by Tony Lachlan Wallace. b cause to be delivered into the control of the new directors of the Companyappointed under the resolution referred to in clause 9.2avi the share register, minutebooks, all books of account and all other Records of and relating to each Group Companyas are available, provided that ‘delivery’ of such items shall be deemed to besatisfied by leaving such items at the relevant Group Company’s registered office.9.3 **Vendors’ access to records following Completion**Following Completion, the Purchaser shall allow the Vendors and the Vendors’ employees andadvisors such access to the Records as shall be reasonably required by the Vendors to allowthe Vendors or their employees or advisors to complete taxation returns, to comply withother statutory obligations, to defend third party claims and to exercise rights pursuant tothis Agreement, and for such purpose the Purchaser agrees to preserve all the Records for aperiod of at least 6 years following Completion.9.4 **Purchaser’s obligations**In addition to its obligations under clause 3.2b, the Purchaser will deliver to the Vendorson the Completion Date: i two copies of the Retention Agreement duly signed by the Purchaser;  ii a copy of Cameron’s Employment Agreement duly signed by the Company;  iii two copies of the QDS Agreement duly signed by the Company. iv a copy of the employment agreement for Grant Lachlan Wallace, in theform set out in Schedule 14 to this Agreement, signed by the Company; and v a copy of the employment agreement for Tony Lachlan Wallace, in theform set out in Schedule 14 to this Agreement, signed by the Company.9.5 **Completion simultaneous**The actions to take place specified in clauses 3, 9.2 and 9.4 must take place on the sameday. If one action does not take place on the Completion Date, then without prejudice toany rights available to any party as a consequence: a there is no obligation on any party to undertake or perform any of the otheractions; b to the extent that such actions have already been undertaken, the parties mustdo everything reasonably required to reverse those actions; and c the Vendors and the Purchaser must each return to the other all documentsdelivered to it under clause 9.2 and 9.4 and must each repay to the other all paymentsreceived under clause 3, without prejudice to any other rights any party may have inrespect of that failure.
 
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**10** **Warranties**10.1 **Vendors Warranties**The Vendors hereby give the Warranties and will (subject to any matter specific in theWarranties to the contrary) be deemed to repeat those Warranties again on the CompletionDate.10.2 **Separate and independent**Each of the Warranties are separate and independent and except as expressly provided, willnot be limited by reference to any other paragraph or anything in this Agreement and willcontinue to subsist notwithstanding Completion.10.3 **Breach**If it should become apparent at any time prior to or at Completion that there has been abreach of any Warranty or any other term of this Agreement by the Vendors then: a if such breach of Warranty or breach of this Agreement is Significant, then thePurchaser may cancel this Agreement by notice in writing to the Vendors prior to or atCompletion and upon such cancellation the Vendors shall refund to the Purchaser theDeposit and any other moneys paid on account of the Purchase Price, and thereafter thisAgreement shall (except for the Surviving Clauses) be of no further force or effect,the parties will be released from their respective obligations under it and except asexpressed or implied in this Agreement no party will have any claim against any otherparty arising under or in connection with this Agreement; b if such breach of Warranty or breach of this Agreement is not Significant, orthe Purchaser does not give notice of termination in accordance with clause 10.3a priorto or at the time for Completion, then the Purchaser shall not be entitled to cancelthis Agreement or withhold any amount due on Completion, but must proceed to Completionwithout prejudice to any other right or remedy available to the Purchaser arising underthis Agreement.10.4 **Disclosed information**The Warranties (other than the Tax Warranties) are given subject to, and the Vendors are notliable to make any payment for any Warranty Claim (other than in respect of the TaxWarranties), to the extent of: a any exception, qualification, information, fact, matter, liability or thingfairly disclosed in the Disclosed Information; and b any matter or thing done, or omitted to be done, in accordance with anyprovision of this Agreement, or at the request in writing or with the approval inwriting of the Purchaser.
 
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10.5 **Exclusions from Warranty Claims**No fact, event or circumstance will give rise to, and the Vendors are not liable to make anypayment for, a Warranty Claim (other than in respect of the Tax Warranties), to the extentthe relevant facts, events or circumstances: a are expressly provided for under the terms of this Agreement; b arise because of a change or changes in any law or accounting policies, or theintroduction of any new law or accounting policies, after the date of this Agreement,or the withdrawal or change of any law or administrative practice of any governmentalagency, including any law or change to a law which takes effect retrospectively, or theimposition of any Tax not imposed, or the increase in any Tax imposed, as at the dateof this Agreement; c are made good or have been made good without cost, loss or liability to thePurchaser or any Group Company; d would not have arisen but for: i a breach of law or contract, or commission of a tort by the Purchaseror (after Completion) any Group Company which is not caused by any act or omissionby or on behalf of any Vendor (which shall include, without limitation, the breachof any Warranty) or by or on behalf of any Group Company prior to Completion; ii any other obligation or commitment entered into by or on behalf ofthe Purchaser or any related company of the Purchaser (including any GroupCompany) after Completion; or iii the Purchaser or any related company of the Purchaser (including anyGroup Company) after Completion admitting liability in respect thereof other thanin accordance with clause 10.9; e relate to or are connected with any future or prospective financialinformation, forecasts, estimates or projections in respect of which, notwithstandingany term of this Agreement, the Vendors make no warranty or representation (whether asto reasonableness, accuracy, completeness or otherwise) or accept any liabilitywhatsoever, whether in respect of any Warranty Claim or for any other loss, claim ordamage whatsoever and whether under or in respect of any matter arising from thisAgreement or otherwise in relation to the sale of the Shares to the Purchaser; f result in a savings in Tax to the Purchaser or any Group Company (“**TaxSaving**”), but where the Group is unable to utilise the Tax Saving in the income year inwhich the claim is made, the value of such Tax Savings is to be calculated on a netpresent value basis applying the following assumptions that (i) the relevant rate ofTax referable to the Tax Saving will be that applying at the date of the claim, unlessa new rate of Tax has been enacted or announced, in which case that new rate willapply; (ii) the discount rate will be 5% per annum; and (iii) each item of the TaxSaving is deemed to have arisen six months following the first day of each relevantperiod in which the Tax Saving is predicted by the Purchaser to arise; or g relate to any liability, loss, claim or damage in respect of which there is aspecific provision or reserve for that amount in the Completion Working CapitalStatement.
 
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10.6 **Time Limits on Claims**The Vendors will have no obligation or liability to the Purchaser or any other personwhatsoever in respect of any Warranty Claim, or for any other loss, claim or damagewhatsoever under or in respect of any matter arising from this Agreement or otherwise inrelation to the sale of the Shares to the Purchaser (other than in respect of the TaxIndemnity and Tax Warranties in respect of which clause 11.3 applies, and any breach ofclause 14), unless: a written notice of the relevant Warranty Claim or other claim under or inrespect of any matter arising from this Agreement or the sale of the Shares setting outspecific details of the relevant claim is received by the Vendors not later than 24months after the Completion Date; and b the Purchaser has notified the Vendors of the relevant Warranty Claim or otherclaim (including giving reasonable details of the nature of the relevant claim) as soonas reasonably practicable after the Purchaser becomes aware that a matter, information,event or circumstance is reasonably likely to give rise to such a claim, and in anyevent not more than 40 working days after the Purchaser becomes aware that the matter,information, event or circumstance is reasonably likely to give rise to such a claim.If the Purchaser does not comply with this obligation, the Vendors will not be liableto the Purchaser to the extent that such failure increases the amount of the claim orthe Vendors’ liability in respect of the claim.Notwithstanding any other provision of this Agreement, and to the fullest extent permittedby law, the Vendors are not liable under any Warranty Claim or other claim under or inrespect of any matter arising from this Agreement or the sale of the Shares (other than inrespect of the Tax Indemnity and Tax Warranties in respect of which clause 11.3 applies, andany breach of clause 14), unless, within 12 months of the date the Vendors are notified ofthe relevant Warranty Claim or other claim in accordance with clause 10.6a either: i the Purchaser has issued or served legal proceedings against theVendors in respect of the Warranty Claim or other relevant claim; or ii the Warranty Claim or other relevant claim has been agreed,compromised or settled or the Vendors have assumed conduct of a Third Party Claimunder clause 10.9 in connection with the relevant claim.10.7 **Dollar Thresholds on Claims**The Vendors will have no obligation or liability to the Purchaser or any other personwhatsoever in respect of any Warranty Claim (other than in respect of the Tax Warranties),unless: a the resultant loss to the Purchaser in respect of the Warranty Claim exceeds$30,000; and b the total of all qualifying Warranty Claims exceeds $300,000 but, for theavoidance of doubt, if such amount is exceeded the Vendors’ liability will (subject atall times to clause 18) be for the total amount of the relevant claims and will not belimited to the excess over $300,000 provided for in this clause.In calculating whether such thresholds are reached any associated claims for interest, goodsand services tax and legal and other professional costs and expenses should be excluded.
 
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10.8 **Aggregate maximum liability**Notwithstanding any other provision of this Agreement, but subject at all times to clause18, the Vendors’ total aggregate liability in respect of: a all Warranty Claims (other than in respect of the Tax Warranties and the Titleand Authorisation Warranties) and for any other loss, claim or damage whatsoever andwhether under or in respect of any matter arising from this Agreement or the sale ofthe Shares (other than in respect of the Tax Indemnity and any breach of clause 2.1,2.2, 8.4, 14 or 15) will be limited to an aggregate maximum sum equivalent to$5,000,000; and b all claims to which clause 10.8a does not apply will be limited to an aggregatemaximum sum equivalent to the Purchase Price,provided that, at no such time shall the Vendors’ total aggregate liability to the Purchaserin respect of (and subject to the individual claim limits set out within) clauses 10.8a. and10.8b. ever exceed the Purchase Price.10.9 **Third Party Claims**The parties agree and acknowledge that: a Subject to clause 11.7 which will prevail in relation to any Tax Claim, shouldany event occur or any claim arise against the Purchaser or any Group Company inrespect of which the Purchaser may seek to make a Warranty Claim against the Vendors orin respect of which the Purchaser may seek to make any other claim against the Vendorsand which relates to a claim by, or a liability to, any third party (‘**Third PartyClaim**’) the following provisions will apply: i the Purchaser must promptly give notice to the Vendors of such matter(including reasonable details thereof) and the Purchaser must not itself, and willprocure that no Group Company shall, make any payment or admission of anyliability in respect of the Third Party Claim, or take any other steps which mayin any way prejudice the defence of the Third Party Claim, without the priorwritten consent of the Vendors; ii the Vendors may, at their option, in the name of the Purchaser or therelevant Group Company, but in full consultation at all times with the Purchaserso that the reputation of the Purchaser and the relevant Group Company are notunreasonably harmed, prosecute or defend any proceedings relating to any suchliability or claim and for such purpose the Purchaser will at the Vendors’ cost(except in relation to costs of making employees available for short intervalswhich does not unduly interfere with their normal employee responsibilities, whichwill be met by the Group) provide reasonable assistance to the Vendors in respectof such proceedings including making available to the Vendors all suchinformation, books and Records and employees as the Vendors may reasonably requirefor the purposes of such proceedings. b If the Vendors or the Purchaser and/or the relevant Group Company is whollysuccessful in defending the proceedings, the reasonable costs of the defence shall beborne by the Purchaser and/or the relevant Group Company.
 
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 c If the Vendors or the Purchaser and/or the relevant Group Company is not whollysuccessful in defending the proceedings, the costs of the defence shall be borneentirely by the Vendors. d Where the Vendors are liable for the costs of the defence and have paid allamounts required to be paid to the Purchaser in respect of such defence, then any costsor other judgment proceeds in favour of the Purchaser, any Group Company or the Vendorsin relation to the Third Party Claim are immediately payable to the Vendors withoutwithholding or deduction (except as required by law in respect of any amount ofinterest payable) and to the extent of the Vendors’ aggregate liability for those costsand in respect of that claim. In all other circumstances such costs or other proceedsmay be retained by, and shall be payable to, the Purchaser or the relevant GroupCompany.10.10 **Assignment of cause of action** a If any payment has been made by the Vendors to the Purchaser or any GroupCompany in respect of any Third Party Claim or otherwise pursuant to this Agreement,the Purchaser and/or the Group Company concerned will (at the request of the Vendors,and the Purchaser agrees to procure any Group Company to comply with such request)assign to the Vendors (or nominee) or otherwise hold in trust for it to the extent ofsuch payment, the relevant benefit or part thereof of any debt, claim, cause of action,rights or other matter (if capable of assignment) in respect of which the payment hasbeen made. b If the rights to the claim against the third party cannot be assigned to theVendors (or nominee), the Purchaser shall (at the request of the Vendors) comply, andcause any Group Company to comply, with all reasonable directions of the Vendors (ornominee) in pursuing such claim, provided that the Vendors shall indemnify thePurchaser and the Group Company against all reasonable costs, charges, liabilities andexpenses (except in relation to costs of making employees available for short intervalswhich does not unduly interfere with their normal employee responsibilities, which willbe met by the Group) that they may incur as a result of their complying with theVendors’ (or nominee’s) directions.10.11 **Reimbursement for amounts recovered** a If, in respect of any matter which would give rise to a breach of Warranty orany other claim under this Agreement in excess of $100,000, any Group Company isentitled to claim under any policy of insurance of that Group Company, the Purchasershall use, and will procure that each Group Company uses, its reasonable endeavours torecover all such claims from the insurers of the applicable Group Company. b The Purchaser will reimburse the Vendors in cash for amounts paid by theVendors to the Purchaser or any Group Company in respect of any claim, action orproceeding taken by the Purchaser in relation to this Agreement, whether in relation toa Warranty Claim or otherwise, to the extent to which the same is recovered by thePurchaser or any Group Company from any third party, provided that the Purchaser andthe Company shall be entitled to first deduct from such amount its reasonable costs andexpenses in pursuing any such claim, action or proceeding against any third party.
 
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10.12 **Duty to mitigate**The Purchaser acknowledges that it has a common law duty to mitigate any loss in respect ofany Warranty Claim (or any other claim, action or proceeding under or in respect of thisAgreement) and will take, and will procure that each Group Company takes, all such steps asare reasonable to fulfil that common law duty.10.13 **Payment of Warranty Claims**A payment made by the Vendors for any breach of Warranty, or in respect of any other breachof this Agreement, is to be treated as a reduction in the Purchase Price.10.14 **No double claim**The Purchaser must not recover more than once in respect of any one loss under thisAgreement.10.15 **Purchaser Warranties**The Purchaser hereby warrants to the Vendors that: a The Purchaser has full power and authority to enter into this Agreement and(subject to satisfaction of the Conditions) to carry out the transactions provided forin this Agreement. b The execution, delivery and performance of this Agreement and the confirmationof these transactions by the Purchaser has been duly authorised. c This Agreement has been duly executed by the Purchaser and is valid and bindingupon the Purchaser. d Neither the entry into this Agreement, nor the exercise of any right or theperformance of any obligation under it will: i contravene any law to which the Purchaser is subject; ii conflict with, or result in the breach of, any agreement,arrangement, obligation or duty to which the Purchaser is party, or by which thePurchaser may be bound; or iii breach any of the documents constituting the Purchaser or cause anylimitation on any of the Purchaser’s powers. e The Purchaser has obtained or will by Completion have obtained (as the case maybe) all requisite or necessary clearances, authorisations or consents from suchregulatory authorities as may be necessary, whether in New Zealand or overseas, for theentry into this Agreement and Completion. f The Purchaser is not insolvent or unable to pay its debts as they fall due andwill not become so as a result of entry into this Agreement or performance of itsobligations under this Agreement.
 
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10.16 **No reliance on matters outside of Agreement**The Purchaser acknowledges and warrants to the Vendors that, except for the Warrantiesexpressly provided for in this Agreement: a It enters into this Agreement solely as a result of, and it relies solely upon,its own judgment, due diligence, inquiries, advice and knowledge concerning theBusiness, each Group Company and the Shares. b None of the Vendors, any associated person of the Vendors nor any of theirrespective advisers, employees, officers or agents has given, or will give, anyrepresentation or warranty as to the future prospects of, or any forecast informationin relation to, the Group or the Business, and the Purchaser has not relied upon anysuch information. c It has not relied on any statement, representation or warranty, whether expressor implied, made by or on behalf of the Vendors, any associated person of the Vendorsor any of their respective advisers, employees, officers or agents, or arising from anyconduct by or on behalf of the Vendors, any associated persons of the Vendors or any oftheir respective advisers, employees, officers or agents, which is not set out in thisAgreement. d It accepts that none of the Vendors, any associated persons of the Vendors, orany of their respective advisers, employees, officers or agents has made or will at anytime make any representation or give any warranty (whether express or implied) as tothe accuracy, content, completeness, value or otherwise of, or have or accept anyliability (whether arising in contract, tort or by operation of law) in respect of anyinformation whatsoever provided or available to or used by the Purchaser or itsemployees, agents or advisers in connection with the Business or the transactionsevidenced by this Agreement and the Purchaser irrevocably waives any claim against itin relation to such information. e References in this and the previous sub-clauses to ‘advisers’ includeKensington Swan and Westpac Corporate Finance and the acknowledgements, waivers andagreements given in this clause 10.16 are promises which confer, and are intended toconfer, a benefit upon and to be enforceable by, the respective advisers, employees,officers or agents of the Vendors and associated persons for the purposes of theContracts (Privity) Act 1982.10.17 **Remedies for breach of the Warranties**Subject to clause 10.3a, the Purchaser acknowledges that its sole remedy for a breach of theWarranties is damages.**11** **Tax indemnity**11.1 **Tax**Subject to clause 10.8b and the remaining provisions of this clause 11, the Vendors herebyindemnify and will keep indemnified the Purchaser and each Group Company from and againstany Tax Claim assessed against any Group Company, including as a result of a breach of a TaxWarranty, to the extent such liability arises wholly or partly (in which case the Vendors’liability is limited to that part only) in relation to any period or part period ending onor before the Completion Date (except where such Tax Claim arises as a result of the windingup of Electropar Singapore or the transfer of Electropar Singapore’s assets to the Company,in which case the Tax liability giving rise to the TaxClaim may arise at any time), including without limitation where the Tax liability arisesbecause of the denial of any Relief.
 
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11.2 **Reduction of Purchase Price**Any payment required to be made by the Vendors to the Purchaser or any Group Companypursuant to clause 11.1 (including in respect of any breach of a Tax Warranty): a must, where it relates to a liability for Tax, be made at least three workingdays prior to the last day on which payment of such Tax may be made by the Purchaser orthe relevant Group Company without incurring any liability for any penalty or interest; b where clause 11.2a. does not apply, must be paid no later than ten working daysafter notice of demand in writing is made by the Purchaser or the relevant GroupCompany on the Vendors; and c when made will be deemed to constitute a refund of and reduction in thePurchase Price.11.3 **Time limit**Written notice of any claims under this clause 11 must be made no later than 31 March 2016except where the relevant claim arises from a Taxation return made by a Group Company beforethe Completion Date being fraudulent or wilfully misleading or omitting all mention ofincome which is of a particular nature or derived from a particular source. The Vendorswill have no liability or responsibility whatsoever in respect of any claims under thisclause 11, including for any Tax Claim or as a result of a breach of a Tax Warranty, madeafter this time.11.4 **Limitation on liability for tax**The liability of the Vendors for claims under this clause 11, or for breach of any TaxWarranty, will not extend to any Tax Claim or any other claim under this Agreement to theextent that: a such an amount has already been provided for or reserved against in theCompletion Working Capital Statement (‘**Provision or Reserve**’); b the Provision or Reserve in respect of such an amount is insufficient only byreason of any change in a statutory provision, including an increase in rates ofTaxation made after the date of the Completion Working Capital Statement; c the liability for Tax has arisen from the disposal of assets after theCompletion Date under section CG 1 of the Income Tax Act 2007 (or similar provision forAustralian tax purposes); d the liability for the Tax has been incurred as a result of any change inaccountancy, reporting or filing procedures adopted by the Purchaser or any GroupCompany after the Completion Date without the written consent of the Vendors in eachcase unless the change is required by New Zealand law; e which would not have arisen, or would have been reduced, but for a failure oromission on the part of the Purchaser or any Group Company after Completion tomake a claim or election to give any notice or take any other action that was notifiedin writing to the Purchaser by the Vendors within two months of the Completion Date;
 
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 f any Relief is available to the Purchaser or any Group Company in relation toany period ending before the Completion Date that is able to alleviate or reduce theparticular liability for Tax; g an increased liability for Tax in one period is or will be offset by a reducedliability for Tax in another period, but the Vendors will reimburse the Purchaser orthe relevant Group Company for the after tax cost of any interest, penalties and finesincurred by the Purchaser or relevant Group Company which would not have been incurredif the particular liability had not occurred in the first period; h the Purchaser or any relevant Group Company, without the written consent of theVendors, amends or requests an amendment to any Tax return filed by the Group prior tothe Completion Date or to any Tax return agreed between the parties and filed pursuantto clause 11.6, unless the change is required by New Zealand law; i the Purchaser or any Group Company, without the written consent of the Vendors,has made a payment (except as required by law) or admission of liability in respect ofany Tax Claim or any other claim under this Agreement in relation to Tax; or j where the liability arises from the Purchaser or (post Completion) any GroupCompany making a voluntary disclosure to any Tax Agency of an amount of Tax for whichthe Vendor would otherwise have to indemnify the Purchaser under clause 11.1, withoutthe prior written consent of the Vendor, which consent will not be unreasonablywithheld.11.5 **Tax indemnity is for net position** a The Vendors’ aggregate liability under clause 11.1 is limited to the net,overall liability for Tax incurred by the relevant Group Company, or the net, overallloss of Relief suffered by the relevant Group Company after taking into account anyreduction in liability for Tax or increase in Relief, whether arising from any TaxClaim or not, and whether the actual reduction in liability or increase in Reliefoccurs before the event giving rise to the Tax Claim. b If, during the period during which the Purchaser is entitled to make any claimunder the Tax Indemnity, the Group has reductions in its liability for Tax or increasesin Relief with the result that it proves to have overpaid Tax, any such reductions orincreases will be taken into account in determining the net liability (if any) of theVendors. c For purposes of clause 11.5a, where a Group Company is unable to utilise thereduction in liability for Tax or increase in Relief in the income year in which theclaim is made, such reduction in liability for Tax or increase in Relief shall bereduced on a net present value basis, such value to be calculated on the assumptionsthat (i) the relevant rate of Tax referable to the reduction in liability for Tax orincrease in Relief will be that applying at the date of the claim, unless a new rate ofTax has been enacted or announced, in which case that new rate will apply; (ii) thediscount rate will be 5% per annum; and (iii) each item of the reduction in liabilityfor Tax or increase in Relief is deemed to have arisen six months following the firstday of eachrelevant period in which the reduction in liability for Tax or increase in Relief ispredicted by the Purchaser to arise.
 
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 d If the Vendors have paid any amounts under the Tax Indemnity and, by 31 March2016, the Group has had reductions in its Tax liability or increases in Relief for anyperiod ending on or before the Completion Date which have not previously been takeninto account in this clause 11.5, the Purchaser will immediately repay to the Vendorsan amount equal to the lesser of: i the aggregate of such unaccounted for reductions in liability and/orincreases in Relief; and ii the total amounts paid by the Vendors (if any) under clause 11.1.11.6 **Returns for the year end** a The Vendors will prepare, sign and file an income Tax return for the Companyfor the financial year ended 31 March 2010 on or before the Completion Date. b The Purchaser must procure that: i the Company prepares, signs and files an income Tax return for thefinancial year within which the Completion Date falls; and ii Electropar Pty Ltd prepares, signs and files an income Tax return forthe financial year ended 30 June 2010 and also for the income year within whichthe Completion Date falls.Such Tax returns must be filed in time to meet each Group Company’s obligations under therelevant Tax laws. The Purchaser must further procure that each Group Company consults andagrees with the Vendors any variations in the information in the Tax returns specified atsub clause b that would give rise to any change in the liability for Tax from that shown inthe Completion Working Capital Statement. The Purchaser shall procure that the relevantGroup Company takes into account reasonable comments of the Vendors in relation to any suchTax returns, prior to finalising and filing that Tax Return. Costs of the Group’s taxadvisors will be met by the Group.11.7 **Notice of taxation claims**If the Purchaser or any Group Company receives a Tax Claim which may give rise to a claimunder the Tax Indemnity against the Vendors or the breach of a Tax Warranty, the Purchaserwill give notice of that Tax Claim, breach of Tax Warranty or other claim to the Vendorspromptly but not later than 20 working days after receiving notice of the Tax Claim. If thePurchaser does not comply with this obligation, the Vendors will not be liable to thePurchaser to the extent that such failure increases the amount of the claim or the Vendors’liability in respect of the claim. For the purpose of this clause the Purchaser or a GroupCompany will receive notice of a Tax Claim on the date of receipt by it of a notice oradvice from a relevant Tax Agency, in either case in writing, which imposes an obligation onthe Company to pay Tax in relation to a period ending on or before the Completion Date.
 
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11.8 **No admission**Subject to clause 11.12, the Purchaser will ensure that no payment (except to the extentrequired by law) or admission of liability in respect of the Tax Claim is made or othersteps are taken which may in any way prejudice any challenge or defence to that Tax Claimwithout the prior written consent of the Vendors which consent shall not be unreasonablywithheld or delayed.11.9 **Dispute of Tax Claims**Subject to 11.12, the Purchaser shall permit the Vendors (at the Vendors’ cost) to take suchsteps as the Vendors (in their sole discretion) consider fit (including the appointment ofany legal or other advisor), in the name of the relevant Group Company or the Purchaser, tochallenge or defend any Tax Claim in any court or tribunal, or otherwise and to enter intonegotiations, discussions or dealings with the Inland Revenue Department (or any other TaxAgency) relating to the Tax Claim.11.10 **Successful challenge**If any challenge or appeal taken by the Vendors (in respect of which the Purchaser haspreviously received a payment under clause 11.1) is ultimately successful in whole or inpart, and the Purchaser or the relevant Group Company receives any Tax credit or refund inrespect of a period ending on or before the Completion Date, the Purchaser or the relevantGroup Company will promptly pay to the Vendors (to the extent that it does not exceed thatamount previously paid by the Vendors) an amount equal to the amount of that Tax credit orrefund together with any interest (net of Tax) which the Purchaser or the Group Company hasreceived on such Tax credit or refund.11.11 **Consultation**The Vendors will consult with the Purchaser and its professional advisers in relation to theconduct and progress of all such Tax Claims and will keep the Purchaser and its professionaladvisers fully informed of the progress of disputes procedures and court procedures andprovide the Purchaser with copies of relevant documents. The Vendors will, followingconsultation, take into account all reasonable concerns and issues raised by the Purchaserin all action that is taken by the Vendors following such consultation.11.12 **Expenses**All reasonable third party costs and expenses which are properly incurred by the Purchaseror the Group Company in connection with any objection, challenge or appeal on a Tax Claimtaken by the Vendors pursuant to clause 11.9 (except in relation to costs of makingemployees available for short intervals which does not unduly interfere with their normalemployee responsibilities, which will be met by the Group) will be paid by the Vendors,provided any individual costs or expenses that are expected to exceed $5,000 are firstapproved in writing by the Vendors.11.13 **Information**The Vendors may by notice request, and the Purchaser shall not later than fifteen workingdays after it receives such notice provide, access to any additional information (includingrecords or documents) which in the reasonable opinion of the parties is necessary ordesirable to enable the Vendors to determine the appropriateness of anypayment it may be required to make or receive under this clause 11, or which information theVendors may require in the dispute or defence of any Tax Claim pursuant to, or otherwise topursue any rights available to it under, this clause 11.
 
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**12** **Risk**12.1 **Damage prior to Completion**In the event that prior to Completion any of the Premises, Fixed Assets or Inventory aredestroyed or damaged and such destruction or damage has not been made good in all materialrespects by repair or replacement by the Completion Date, then: a if the destruction or damage is on the Completion Date sufficient to result in: i a loss in the value of the Fixed Assets and Inventory which is Significant; or ii a loss or damage to the Premises resulting in a material impact onthe Purchaser’s ability to operate the Business following Completion in theOrdinary Course of Business,then the Purchaser may cancel this Agreement by notice in writing to the Vendorswhereupon the Purchaser will be entitled to the return of the Deposit and any othermoneys paid by the Purchaser to the Vendors on account of the Purchase Price andthereafter this Agreement shall (except for the Surviving Clauses) be of no furtherforce or effect, the parties will be released from their respective obligations underit and no party will have any claim against any other party arising under or inconnection with this Agreement; or b if the destruction or damage is on the Completion Date not within the scope ofclause 12.1a above or the Purchaser has not given notice of cancellation pursuant toclause 12.1a prior to the time for Completion, then the Purchaser shall complete thepurchase of the Shares for the Purchase Price, and any adjustment necessary to reflectsuch destruction or damage shall be made in arriving at the Working Capital figure inthe Completion Working Capital Statement and any reduction in the Purchase Pricereflected in those payments to be made on the Adjustment Date.12.2 **Insurance**The Vendors must procure that the Group maintains until Completion all Insurance Policiesand will not change any policy to reduce the insurance cover or otherwise alter the terms ofcover to the possible detriment of the Purchaser or the Group.
 
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12.3 **Dispute**In the event of any dispute between the parties as to whether any destruction or damage ison the Completion Date of such a value or impact as to trigger those rights available to thePurchaser under clause 12.1a, then either party may refer the issue to an independent expertappointed by agreement between the parties, but failing agreement within 2 working dayseither party may require the President for the time being (or nominee) of the New ZealandInstitute of Valuers to appoint such independent expert who will act as an independentexpert and not as an arbitrator. The decision of the independent expert shall be final andbinding on the parties, except in the case of manifest error. The costs of the independentexpert shall be borne: a where clause 12.1ai applies, by the party whose value immediately prior toreferral to the independent expert is further from the value attributed to that/thoseassets by the independent expert; and b where clause 12.1aii applies, by the party whose assessment of the impact ofthe loss or damage is rejected by the independent expert.12.4 **Dispute at Completion**Where any dispute under clause 12.3 is not resolved at Completion, then Completion shall besuspended pending resolution of the Dispute, and the Completion Date shall be extended to bethe date which is 5 working days after the date on which the applicable Dispute is resolvedin accordance with clause 12.3 or otherwise by agreement between the parties.12.5 **Purchaser’s undertaking**The Purchaser undertakes to procure that the Company maintains, from the Completion Dateuntil the expiry of the period referred to in clause 10.6a, all Insurance Policies, orreplace the Insurance Policies with new policies providing the same or substantially similarinsurance coverage.**13** **Notice to complete and remedies on default**13.1 **Notice**If Completion does not take place on the Completion Date either party may at any timethereafter serve on the other party notice in writing to settle in accordance with thisclause. A Completion Notice will be effective only if the party serving it is at the timeof service either in all material respects ready, able and willing to proceed to Completionor is not so ready, able and willing to settle only by reason of the default or omission ofthe other party.13.2 **Obligation to complete**Upon service of a Completion Notice, the party on whom the notice is served must proceed toCompletion within 12 working days after the date of service of the notice (excluding the dayof service) and, in respect of that period, time will be of the essence but withoutprejudice to any intermediate right of cancellation by either party.13.3 **Remedies for default**If any party does not comply with the terms of a Completion Notice served by the other partythen, without prejudice to any other rights or remedies available at law or in equity, theNon-Defaulting Party may: a sue the Defaulting Party for specific performance; and/or  b cancel this Agreement; and/or  c sue the Defaulting Party for damages.
 
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13.4 **Extension of time**A party serving a Completion Notice may at the request or with the consent of the otherparties extend the term of the notice for 1 or more specifically stated periods of time andthereupon the term of the Completion Notice will be deemed to expire on the last day of theextended period or periods and it will operate as though this clause stipulated suchextended period(s) of notice in lieu of the period otherwise applicable and time will be ofthe essence of the Agreement accordingly. An extension may be given either before or afterthe expiry of the period otherwise applicable and time will be of the essence of theAgreement accordingly.13.5 **Specific performance**Nothing in this clause will preclude a party from suing for specific performance withoutgiving a Completion Notice.**14** **Restraint of trade**14.1 **Covenants**In consideration of the Purchase Price paid to the Vendors, the Vendors covenant with thePurchaser and each Group Company that they will not, and will ensure that no RestrainedParty will, for a period of two years from the Completion Date within New Zealand, Australiaand South Africa: a either directly or indirectly carry on or in any way assist or be interestedin, either alone or in partnership with or as manager, agent, director, financier orshareholder of, any person in any business the same as or substantially in competitionwith the Business as conducted by the Group at Completion (‘**Restricted Business**’)**provided that**nothing contained in this clause will prevent any Restrained Party frombeing employed or engaged by the Purchaser or the Group in any capacity and undertakingthat Restrained Party’s activities in fulfilment of that role; b directly or indirectly or on behalf of or in conjunction with any person,solicit or entice any of the Employees to terminate their employment with the Group orinduce or endeavour to induce any existing or future customer of the Business to ceaseto be or fail to become a customer of the Business.14.2 **Additional covenants**The Vendors further covenant with the Purchaser and each Group Company that following theCompletion Date they will not, and will ensure that no Restrained Party will: a disclose any information of a secret or confidential nature relating to theaffairs of the Business; or b represent that they are in any way connected with or interested in the affairsof the Business, other than as necessary for a Restrained Party to fulfil its role asan employee of the Group in the period post Completion.
 
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14.3 **Waiver**The provisions of this clause may from time to time be waived in writing in whole or in partby the Purchaser or the Company either with or without conditions. To the extent of anysuch waiver and on compliance with such conditions (if any), the Restrained Party(s)concerned will be relieved of their obligations under this clause. Any such waiver may notbe withdrawn by the Purchaser or Company.14.4 **Severability**While the covenants contained in clauses 14.1 and 14.2 are considered by the parties to bereasonable in all circumstances, if one or more should be held to be invalid as anunreasonable restraint of trade or for any other reason whatsoever but would have been heldvalid if part of the wording thereof had been deleted or the period thereof reduced or therange of activities or area dealt with thereby reduced in scope, such covenants shall applywith such modifications as may be necessary to make them valid and effective.14.5 **Exclusion of Cameron Wallace**The Purchaser acknowledges and agrees that the CW Trust and Cameron Lachlan Wallacepersonally are not bound (whether directly or indirectly) by the provisions of the aboveclause 14.1 and that to the extent necessary to achieve such intention the Purchaserunconditionally and irrevocably release the CW Trust and Cameron Lachlan Wallace from theeffect of the operation of the provisions of clause 14.1.14.6 **Deed of Covenants**The Vendors must procure that, on the Completion Date, Grant Lachlan Wallace and TonyLachlan Wallace each enter into and deliver to the Purchaser a deed of covenant with thePurchaser binding each of them to the restraints set out in clause 14.1 and 14.2. Such deedof covenant shall be in the form set out in Schedule 13 to this Agreement.**15** **Confidentiality and publicity**15.1 **Confidentiality**No party may reveal any information concerning this Agreement or its subject matter to anythird party other than: a as required by law;  b in good faith and in proper furtherance of the objects of this Agreement; c to those of its employees, officers, professional or financial advisers andbankers as reasonably necessary but only on a strictly confidential basis; d to enforce its rights or to defend any claim or action under this Agreement; or  e information already in the public domain through no fault of that party.
 
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15.2 **Publicity**No party may issue any press release or information or other public announcement concerningthis Agreement or its subject matter to the news media without the priorapproval of all parties, except where such is required by law, in which case the partyproposing to issue the press release or make the public announcement must use reasonableendeavours to consult with the other parties prior to issuing or making the same.**16** **Notices**16.1 **Service of notices**Any notice given pursuant to this Agreement must be in writing and signed by a person dulyauthorised by the sender. Any such notice will be deemed to be validly given if personallydelivered, posted, or forwarded by facsimile transmission to the address of the party to benotified set forth below or to such other address as the party to be notified may designateby written notice given to all other parties:   **Vendors:** **Trustees in the T&A Wallace Family Trust**  387 Riddell Road  Glendowie  Auckland, 1071     Facsimile: +64 9 309 4276  Attention: Tony Wallace     **Trustees in the Wallace Family Trust**  439 Riddell Road  Glendowie