Document:

ex101.htm

    Exhibit
10.1

     

    
      Share
Purchase Agreement

       

      The Pride
Group (QLD) Pty Ltd ACN 086 453 269 (Company)

       

      WPCS
Australia Pty Ltd ACN 128 426 602 (Buyer)

       

      Robert
Edwin William Paynter;

       

      Peter
Stewart McDonald;

       

      Nigel
Kernick;

       

      Mark
Stephen Eaton;

       

      J.C.
Paynter Pty Limited as trustee for the Paynter Family Trust,

       

      David
Charles Bugler & Katherine Susan Bugler as trustee for the ESF Trust;
and

       

      Stephen
Paul Mullane & Marie Mullane as trustee for the Mullane Family
Trust  (Sellers)

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    

    TABLE
OF CONTENTS

     

    
      
        
          	
                   

                	
                  

                    BACKGROUND

                  

                	1 
	
                	
                  OPERATIVE
      PART

                	1 
	
                  1

                	
                  DEFINITIONS
      AND INTERPRETATION

                	
                  1

                
	
                  1.1

                	
                  Definitions

                	
                  1

                
	
                  1.2

                	
                  Interpretation

                	
                  5

                
	
                  1.3

                	
                  Time
      of the essence

                	
                  6

                
	
                  1.4

                	
                  Sellers
      bound

                	
                  6

                
	
                  2

                	
                  SALE
      AND PURCHASE OF SHARES

                	
                  6

                
	
                  2.1

                	
                  Sale
      and purchase

                	
                  6

                
	
                  2.2

                	
                  Title
      property and risk

                	
                  6

                
	
                  2.3

                	
                  Conditions
      Precedent

                	
                  6

                
	
                  2.4

                	
                  Waiver
      of Conditions

                	
                  6

                
	
                  2.5

                	
                  Failure
      of Condition Precedent

                	
                  7

                
	
                  2.6

                	
                  Termination
      Prior to Completion

                	
                  7

                
	
                  3

                	
                  PAYMENT
      OF PURCHASE PRICE

                	
                  7

                
	
                  3.1

                	
                  Amount
      of Purchase Price

                	
                  7

                
	
                  3.2

                	
                  Payment
      of Purchase Price

                	
                  7

                
	
                  3.3

                	
                  Net
      tangible asset value adjustment

                	
                  9

                
	
                  3.4

                	
                  Escrowed
      Funds

                	
                  9

                
	
                  3.5

                	
                  Conditions
      Subsequent

                	
                  10

                
	
                  4

                	
                  BUYER’S
      ACCESS TO INFORMATION

                	
                  10

                
	
                  4.1

                	
                  Access
      to information

                	
                  10

                
	
                  4.2

                	
                  Access
      during Business Hours

                	
                  10

                
	
                  4.3

                	
                  No
      diminishing of warranties

                	
                  10

                
	
                  4.4

                	
                  Cooperation
      by staff and representatives

                	
                  10

                
	
                  4.5

                	
                  Confidentiality

                	
                  10

                
	
                  5

                	
                  CONDUCT
      OF BUSINESS UP TO COMPLETION

                	
                  10

                
	
                  5.1

                	
                  Conduct
      of business

                	
                  10

                
	
                  5.2

                	
                  Prohibitions

                	
                  11

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  5.3

                	
                  Consents

                	
                  12

                
	
                  5.4

                	
                  Other
      Actions

                	
                  13

                
	
                  5.5

                	
                  No
      Solicitation

                	
                  13

                
	
                  5.6

                	
                  Preservation
      of records

                	
                  13

                
	
                  5.7

                	
                  Publicity

                	
                  13

                
	
                  5.8

                	
                  Use
      of name

                	
                  14

                
	
                  5.9

                	
                  Employment
      Agreements

                	
                  14

                
	
                  5.10

                	
                  Board
      of Directors

                	
                  14

                
	
                  5.11

                	
                  Financial
      statements

                	
                  14

                
	
                  5.12

                	
                  Elimination
      of non-business financial obligations

                	
                  14

                
	
                  5.13

                	
                  Dividends

                	
                  14

                
	
                  6

                	
                  COMPLETION

                	
                  14

                
	
                  6.1

                	
                  Date
      and place for Completion

                	
                  14

                
	
                  6.2

                	
                  Obligations
      of the Sellers on Completion

                	
                  14

                
	
                  6.3

                	
                  Obligations
      of the Buyer on Completion

                	
                  15

                
	
                  6.4

                	
                  Directors’
      meeting – the Company

                	
                  16

                
	
                  6.5

                	
                  Bank
      authorities and minimum balance

                	
                  16

                
	
                  6.6

                	
                  Shareholder
      loan accounts

                	
                  16

                
	
                  6.7

                	
                  Capital
      and in specie distributions

                	
                  16

                
	
                  6.8

                	
                  No
      debts incurred up to Completion

                	
                  16

                
	
                  7

                	
                  WARRANTIES
      AND REPRESENTATIONS ABOUT THE COMPANY

                	
                  16

                
	
                  7.1

                	
                  Material
      events

                	
                  17

                
	
                  7.2

                	
                  Non-budgeted
      expenditure

                	
                  17

                
	
                  7.3

                	
                  Carriage
      of business

                	
                  17

                
	
                  7.4

                	
                  Dividends

                	
                  17

                
	
                  7.5

                	
                  Australian
      Securities & Investments Commission

                	
                  17

                
	
                  7.6

                	
                  Third
      party consents

                	
                  17

                
	
                  7.7

                	
                  No
      winding up

                	
                  18

                
	
                  7.8

                	
                  No
      external administration

                	
                  18

                
	
                  7.9

                	
                  Incorporation
      of the Company

                	
                  18

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  7.10

                	
                  Authority
      to carry on business

                	
                  18

                
	
                  7.11

                	
                  Board
      & Shareholder approval

                	
                  18

                
	
                  7.12

                	
                  Authority
      to perform Agreement

                	
                  18

                
	
                  7.13

                	
                  Authorised
      and issued Share capital

                	
                  18

                
	
                  7.14

                	
                  Ownership
      of issued Shares

                	
                  19

                
	
                  7.15

                	
                  Share
      options, warrants, calls and other agreements

                	
                  19

                
	
                  7.16

                	
                  Shareholder
      rights of pre-emption

                	
                  19

                
	
                  7.17

                	
                  Shareholder
      agreements

                	
                  19

                
	
                  7.18

                	
                  Company
      records

                	
                  19

                
	
                  7.19

                	
                  Minute
      Books

                	
                  19

                
	
                  7.20

                	
                  Subsidiaries

                	
                  19

                
	
                  7.21

                	
                  Financial
      statements

                	
                  20

                
	
                  7.22

                	
                  Records
      and books of account

                	
                  21

                
	
                  7.23

                	
                  Absence
      of undisclosed liabilities

                	
                  21

                
	
                  7.24

                	
                  Taxes

                	
                  21

                
	
                  7.25

                	
                  Accounts
      receivable

                	
                  22

                
	
                  7.26

                	
                  Inventory

                	
                  23

                
	
                  7.27

                	
                  Fixed
      Assets

                	
                  23

                
	
                  7.28

                	
                  Real
      property matters

                	
                  24

                
	
                  7.29

                	
                  Leases

                	
                  24

                
	
                  7.30

                	
                  Intellectual
      property rights

                	
                  24

                
	
                  7.31

                	
                  Insurance
      policies

                	
                  25

                
	
                  7.32

                	
                  Banking
      and personnel lists

                	
                  26

                
	
                  7.33

                	
                  Third
      party contracts

                	
                  26

                
	
                  7.34

                	
                  Compliance
      with the law

                	
                  28

                
	
                  7.35

                	
                  Litigation
      and disputes

                	
                  28

                
	
                  7.36

                	
                  Absence
      of certain changes or events

                	
                  29

                
	
                  7.37

                	
                  Employee
      benefit plans

                	
                  30

                
	
                  7.38

                	
                  Service
      warranties and service liabilities

                	
                  31

                
	
                  7.39

                	
                  Company
      assets

                	
                  31

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  7.40

                	
                  Absence
      of certain commercial practices

                	
                  31

                
	
                  7.41

                	
                  Licenses,
      permits, consents and approvals

                	
                  32

                
	
                  7.42

                	
                  Environmental
      matters

                	
                  32

                
	
                  7.43

                	
                  Broker

                	
                  32

                
	
                  7.44

                	
                  Related
      party transactions

                	
                  33

                
	
                  7.45

                	
                  Anti-Money
      Laundering and Counter Terrorism Financing Act

                	
                  33

                
	
                  7.46

                	
                  Disclosure

                	
                  33

                
	
                  7.47

                	
                  Software
      Licence Agreements

                	
                  34

                
	
                  8

                	
                  WARRANTIES
      AND REPRESENTATIONS ABOUT THE SELLERS

                	
                  34

                
	
                  8.1

                	
                  Shares
      unencumbered

                	
                  34

                
	
                  8.2

                	
                  No
      Claim on the Company

                	
                  34

                
	
                  8.3

                	
                  Standing
      & solvency

                	
                  34

                
	
                  8.4

                	
                  Authority

                	
                  34

                
	
                  8.5

                	
                  Third
      party consents

                	
                  34

                
	
                  8.6

                	
                  Litigation

                	
                  35

                
	
                  8.7

                	
                  Broker

                	
                  35

                
	
                  8.8

                	
                  Anti-Money
      Laundering and Counter Terrorism Financing Act

                	
                  35

                
	
                  9

                	
                  WARRANTIES
      AND REPRESENTATIONS ABOUT THE BUYER

                	
                  35

                
	
                  9.1

                	
                  Incorporation

                	
                  35

                
	
                  9.2

                	
                  Authority

                	
                  35

                
	
                  9.3

                	
                  Third
      party consents

                	
                  36

                
	
                  9.4

                	
                  Litigation

                	
                  36

                
	
                  9.5

                	
                  Broker

                	
                  36

                
	
                  9.6

                	
                  Anti-Money
      Laundering and Counter Terrorism Financing Act

                	
                  36

                
	
                  10

                	
                  COMPANY
      TAXATION

                	
                  37

                
	
                  10.1

                	
                  Tax
      periods beginning before and ending after the Completion
    Date

                	
                  37

                
	
                  10.2

                	
                  Refunds
      and tax benefits

                	
                  38

                
	
                  10.3

                	
                  Cooperation
      on Tax matters

                	
                  38

                
	
                  11

                	
                  INDEMNIFICATION

                	
                  39

                
	
                  11.1

                	
                  Sellers’
      indemnities

                	
                  39

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	 
      	 
      
	
                  11.2

                	
                  Buyer’s
      indemnities

                	
                  39

                
	
                  11.3

                	
                  Limitations

                	
                  40

                
	
                  11.4

                	
                  Procedures

                	
                  40

                
	
                  11.5

                	
                  Professional
      indemnity insurance

                	
                  41

                
	
                  11.6

                	
                  Taxation
      of indemnity payments

                	
                  41

                
	
                  11.7

                	
                  Stamp
      Duty Indemnity – Bugler Transaction

                	
                  41

                
	
                  12

                	
                  RESTRAINT
      OF TRADE

                	
                  41

                
	
                  12.1

                	
                  Restraint

                	
                  41

                
	
                  12.2

                	
                  Area
      of restraint

                	
                  42

                
	
                  12.3

                	
                  Period
      of restraint

                	
                  42

                
	
                  12.4

                	
                  Capacity
      of restraint

                	
                  43

                
	
                  12.5

                	
                  Severability

                	
                  43

                
	
                  12.6

                	
                  Exceptions

                	
                  43

                
	
                  13

                	
                  CONFIDENTIALITY

                	
                  43

                
	
                  13.1

                	
                  Confidentiality
      and use

                	
                  43

                
	
                  13.2

                	
                  Exceptions

                	
                  44

                
	
                  13.3

                	
                  Notification
      of breach

                	
                  44

                
	
                  13.4

                	
                  Remedies
      for breach of confidentiality

                	
                  44

                
	
                  13.5

                	
                  Survival
      of terms

                	
                  44

                
	
                  14

                	
                  TRANSFER
      DUTY AND LEGAL COSTS

                	
                  44

                
	
                  14.1

                	
                  Transfer
      Duty

                	
                  44

                
	
                  14.2

                	
                  Legal
      costs

                	
                  44

                
	
                  14.3

                	
                  Goods
      and Services Tax

                	
                  44

                
	
                  15

                	
                  GENERAL

                	
                  44

                
	
                  15.1

                	
                  Amendment

                	
                  44

                
	
                  15.2

                	
                  No
      waiver

                	
                  44

                
	
                  15.3

                	
                  Entire
      agreement

                	
                  44

                
	
                  15.4

                	
                  Severability

                	
                  45

                
	
                  15.5

                	
                  Survival
      of representations and warranties

                	
                  45

                
	
                  15.6

                	
                  Further
      assurances and good faith

                	
                  45

                
	
                   

                	 
      	 
      
	
                  15.7

                	
                  Specific
      Performance

                	
                  45

                
	
                  15.8

                	
                  Successors
      and assigns

                	
                  45

                
	
                  15.9

                	
                  Privity
      of contract

                	
                  45

                
	
                  15.10

                	
                  Assignment

                	
                  45

                
	
                  15.11

                	
                  Notices

                	
                  46

                
	
                  15.12

                	
                  Party
      acting as trustee

                	
                  46

                
	
                  15.13

                	
                  Governing
      law

                	
                  47

                
	
                  15.14

                	
                  Counterparts
      & exchange by fax

                	
                  47

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  SCHEDULE
      1 – AGREEMENT DETAILS

                	
                  48

                
	
                  SCHEDULE
      2 – PARTY DETAILS

                	
                  49

                
	
                  SCHEDULE
      3 – COMPANY SHARES

                	
                  50

                
	
                  SCHEDULE
      4 – COMPANY SUBSIDIARIES

                	
                  51

                
	
                  SCHEDULE
      5 – THIRD PARTY CONSENTS

                	
                  52

                
	
                  SCHEDULE
      6 – SPECIAL INCOME IN FINANCIAL STATEMENTS

                	
                  53

                
	
                  SCHEDULE
      7 – COMPANY LIABILITIES

                	
                  54

                
	
                  SCHEDULE
      8 – TAX RETURNS

                	
                  55

                
	
                  SCHEDULE
      9 – ACCOUNTS RECEIVABLE

                	
                  56

                
	
                  SCHEDULE
      10 – INVENTORY

                	
                  57

                
	
                  SCHEDULE
      11 – FIXED ASSETS

                	
                  58

                
	
                  SCHEDULE
      12 – LEASES

                	
                  59

                
	
                  SCHEDULE
      13 – INTELLECTUAL PROPERTY RIGHTS

                	
                  60

                
	
                  SCHEDULE
      14 – INSURANCE POLICIES

                	
                  61

                
	
                  SCHEDULE
      15 – THIRD PARTY CONTRACTS

                	
                  62

                
	
                  SCHEDULE
      16 – LEGAL VIOLATIONS & INFRINGEMENTS

                	
                  63

                
	
                  SCHEDULE
      17 – LITIGATION & DISPUTES

                	
                  64

                
	
                  SCHEDULE
      18 – ACTIONS OUTSIDE ORDINARY COURSE OF BUSINESS

                	
                  65

                
	
                  SCHEDULE
      19 – EMPLOYEE PROGRAMS

                	
                  66

                
	
                  SCHEDULE
      20 – SERVICE WARRANTIES & SERVICE LIABILITIES

                	
                  67

                
	
                  SCHEDULE
      21 – COMPANY ASSETS

                	
                  70

                
	
                  SCHEDULE
      22 – CERTAIN COMMERCIAL PRACTICES

                	
                  71

                
	
                  SCHEDULE
      23 – LICENCES, CONSENTS, PERMITS & APPROVALS

                	
                  72

                
	
                  SCHEDULE
      24 – ENVIRONMENTAL MATTERS

                	
                  78

                
	
                  SCHEDULE
      25 – BROKERS

                	
                  79

                
	
                  SCHEDULE
      26 – RELATED PARTY TRANSACTIONS

                	
                  80

                
	
                  SCHEDULE
      27 – CONDITIONS PRECEDENT

                	
                  81

                
	
                  SCHEDULE
      28– CONDITIONS SUBSEQUENT

                	
                  83

                
	
                  EXECUTION

                	 
      

        

      

      

 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     SHARE
PURCHASE AGREEMENT

     

    THIS AGREEMENT is made
this                                                                      day
of November2009

     

    
      	
              BETWEEN

            	
              THE PRIDE GROUP (QLD) PTY
      LTD ACN 086 453
      269 of 155 Currie Street, Nambour Qld 4560 (the
      "Company");

            

    

     

    
      	
              AND

            	
              WPCS AUSTRALIA PTY LTD ACN 128
      426 602 care of Mullins Lawyers, Level 21 Riverside Centre, 123
      Eagle Street, Brisbane in the State of Queensland, 4000, Australia (the
      “Buyer”);

            

    

     

    
      	
              AND

            	
              THE SHAREHOLDERS DESCRIBED IN
      SCHEDULE 1 (the “Sellers”)

            

    

     

    
      	
              AND

            	
              THE
      DIRECTORS DESCRIBED IN SCHEDULE 2.

            

    

     

    BACKGROUND

     

    
      	
              (A)  

            	
              The
      Company has issued Share capital of AUSD$227,670.13 comprising of 97,939
      fully paid up A Class Ordinary
Shares.

            

    

     

    
      	
              (B)  

            	
              The
      Sellers are together the holders of the fully paid A Class Ordinary Shares
      in the Company, the amount so held by each is detailed next to their
      respective names in Schedule 2.

            

    

     

    
      	
              (C)  

            	
              The
      Company has the assets and liabilities described in the Financial
      Statements.

            

    

     

    
      	
              (D)  

            	
              Each
      of the Sellers has agreed to sell the Shares to the Buyer for valuable
      consideration with effect on the Completion Date on the terms and
      conditions set out in this
Agreement.

            

    

     

    OPERATIVE
PART

     

    
      	
              1  

            	
              DEFINITIONS
      AND INTERPRETATION

            

    

     

     

    
      	
              1.1  

            	
              Definitions

            

    

     

     In this
Agreement, unless the context otherwise requires:

     

    
      	
              1.1.1  

            	
              “A-GAAP” means the
      Australian generally accepted accounting principles incorporating all
      generally accepted Australian measurement standards as published by the
      Australian Accounting Standards Board at the date of this
      Agreement.

            

    

     

    
      	
              1.1.2  

            	
              “Agreement” means this
      Share Purchase Agreement, including the
  schedules.

            

    

     

     

    
      	
              1.1.3  

            	
              “AUSD” means Australian
      currency and Australian dollars and
cents.

            

    

     

     

    
      	
              1.1.4  

            	
              “Balance Sheet” has the
      meaning set out in Clause 7.21.4.

            

    

     

     

    
      	
              1.1.5  

            	
              “Balance Sheet Date” has
      the meaning set out in Clause 7.21.4.

            

    

     

     

    
      	
              1.1.6  

            	
              “Bank” means each bank
      where the Company has a bank
account.

            

    

     

     

    
      	
              1.1.7  

            	
              “Basket” has the meaning
      set out in Clause 11.3.1.

            

    

     

     

    
      	
              1.1.8  

            	
              “Board” means the board
      of Directors of the Company.

            

    

     

     

    
      	
              1.1.9  

            	
              “Bugler Transaction”
      means the transaction whereby the Company acquired the business conducted
      by David Charles Bugler and Katherine Susan Bugler as trustee for the BSF
      Trust.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              1.1.10  

            	
              “Business”
      means:

            

    

     

     

    
      	
               
      

            	
              (a)
      

            	
              electrical
      and services provider specialising in government and commercial sectors;
      and

            

    

     

     

    
      	
              (b)  

            	
              any
      business to be conducted by the Company as at the date of this
      Agreement.

            

    

     

     

    
      	
              1.1.11  

            	
              “Business Day” means a
      day other than a Saturday, Sunday or any day on which banks are not open
      for business at the place where Completion
  occurs.

            

    

     

     

    
      	
              1.1.12  

            	
              “Business Hours” means
      from 9.00 am to 5.00 pm on any Business
Day.

            

    

     

     

    
      	
              1.1.13  

            	
              “Business Premises”
      means 1/40 Wilson Avenue, Woombye Qld
4559.

            

    

     

     

    
      	
              1.1.14  

            	
              “Buyer Indemnified
      Parties” has the meaning set out in Clause 11.1.1.

            

    

     

     

    
      	
              1.1.15  

            	
               “Claim” means any
      claim, notice, demand, action, proceeding, litigation, investigation or
      judgment whether based in contract, tort, statute or
      otherwise.

            

    

     

     

    
      	
              1.1.16  

            	
              “Company” means The
      Pride Group (Qld) Pty Ltd ACN 086 453 269 and all of its
      Subsidiaries.

            

    

     

     

    
      	
              1.1.17  

            	
              “Company Records” means
      the original certificate of Incorporation, Constitution, cheque books,
      financial and accounting books and records, Common Seal, Register of
      Members, Register of Mortgages and Charges, Minute Books, Books of
      Account, Documents of Title and all records, documents and papers relating
      to the business and property of the
Company.

            

    

     

     

    
      	
              1.1.18  

            	
              “Completion” means the
      Completion of the sale and purchase of the Shares under this Agreement on
      the Completion Date.

            

    

     

     

    
      	
              1.1.19  

            	
              “Completion Balance
      Sheet” means the Balance Sheet of the Company on the Completion
      Date.

            

    

     

     

    
      	
              1.1.20  

            	
              “Completion Date” means
      the date for Completion set out in Schedule
1.

            

    

     

     

    
      	
              1.1.21  

            	
              “Conditions Precedent”
      means each of the conditions detailed in Schedule
  27.

            

    

     

     

    
      	
              1.1.22  

            	
              “Conditions Subsequent”
      means each of the conditions detailed in Schedule
  28.

            

    

     

     

    
      	
              1.1.23  

            	
              “Confidential
      Information” means the information, forms, business plans,
      marketing databases, financial and accounting information, specifications,
      processes, statements, formulae, trade secrets, drawings and data (and
      copies and extracts made of or from that information and data)
      concerning:

            

    

     

     

    
      	
              (a)  

            	
              the
      operations and dealings of the
Company;

            

    

     

     

    
      	
              (b)  

            	
              the
      organisation, finance, customers, markets, suppliers, intellectual
      property and know-how of the
Company;

            

    

     

     

    
      	
              (c)  

            	
              those
      operations and transactions of a Party concerning the Company and that
      Party's Shareholding in the Company;
and

            

    

     

     

    
      	
              (d)  

            	
              the
      contents and subject matter of this
Agreement;

            

    

     

    which is
not in the public domain, except by the failure of a Party to perform and
observe its covenants and obligations under this Agreement.

     

    
      	
              1.1.24  

            	
              “Constitution” means the
      Constitution of the Company from time to
time.

            

    

     

     

    
      	
              1.1.25  

            	
              “Director” means a
      Director of the Company from time to
time.

            

    

     

     

    
      	
              1.1.26  

            	
              “DMC” means Dedicated
      Monitoring Centre Pty Ltd ACN 129 319
473.

            

    

     

     

    
      	
              1.1.27  

            	
              “Effective Date” means 1
      November 2009.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              1.1.28  

            	
              “Employee Program”
      means:

            

    

     

     

    
      	
              (a)  

            	
              all
      employee share or benefit plans within the meaning of Division 13 of the
      Income Tax Assessment Act 1997 (Cth), including, but not limited to
      multiple employer welfare arrangements, plans to which more than one
      unaffiliated employer contributes, and employee benefit plans (such as
      foreign or excess benefit plans) which do not qualify under the
      aforementioned Division 13; and

            

    

     

     

    
      	
              (b)  

            	
              all
      share and stock option plans, bonus or incentive award plans, severance
      pay policies or agreements, deferred compensation agreements, supplemental
      income arrangements, vacation plans, and all other employee benefit plans,
      agreements, and arrangements not described in (A)
  above.

            

    

     

     

    
      	
              1.1.29  

            	
              “Employment Agreement”
      has the meaning set out in Clause 5.9.1.

            

    

     

     

    
      	
              1.1.30  

            	
              “Environmental Laws” has
      the meaning set out in Clause 7.42.1(a).

            

    

     

     

    
      	
              1.1.31  

            	
              “Escrow Agreement” means
      the agreement between the Company, Buyer and Sellers in regard to the
      Escrowed Funds.

            

    

     

     

    
      	
              1.1.32  

            	
              “Escrowed Funds” has the
      meaning set out in Clause 3.4.1.

            

    

     

     

    
      	
              1.1.33  

            	
              “Expenses” has the
      meaning set out in Clause 11.1.1(d).

            

    

     

     

    
      	
              1.1.34  

            	
              “Filings” has the meaning
      set out in Clause 7.41.3.

            

    

     

     

    
      	
              1.1.35  

            	
              “Financial Statements”
      has the meaning set out in Clause 7.21.1
      prepared pursuant to the Corporations
Act.

            

    

     

     

    
      	
              1.1.36  

            	
              “Fixed Asset” has the
      meaning set out in Clause 7.27.1.

            

    

     

     

    
      	
              1.1.37  

            	
              “Government Body”
      means:

            

    

     

     

    
      	
              (a)  

            	
              a
      government, whether foreign, federal, state, territorial or
      local;

            

    

     

     

    
      	
              (b)  

            	
              a
      department, office or minister of a
government;

            

    

     

     

    
      	
              (c)  

            	
              a
      commission, commissioner, delegate, instrumentality, agency, board or
      other governmental, semi-governmental, judicial, administrative, monetary
      or fiscal authority, whether statutory or not;
  or

            

    

     

     

    
      	
              (d)  

            	
              any
      person, body politic or other thing exercising an executive, legislative,
      judicial or other governmental function of any country or political
      subdivision of any country;

            

    

     

     

    
      	
              (e)  

            	
              any
      public authority constituted by or under a law of any country or political
      subdivision of any country; and

            

    

     

     

    
      	
              (f)  

            	
              any
      person deriving a power directly or indirectly from any other Government
      Body.

            

    

     

     

    
      	
              1.1.38  

            	
              “GST” has the meaning set
      out in the GST Act.

            

    

     

     

    
      	
              1.1.39  

            	
              “GST Act” means the A New
      Tax System (Goods and Services Tax) Act 1999
  (Cth).

            

    

     

     

    
      	
              1.1.40  

            	
              “Income Tax Laws” means
      the Income Tax Assessment Act 1997 (Cth), Income Tax Assessment Act 1936
      (Cth) and any and all subordinate legislation, rulings, orders,
      directions, by-laws and other statutory and administrative instruments
      made under them, as amended or replaced from time to
  time.

            

    

     

     

    
      	
              1.1.41  

            	
              “Independent Accounting
      Firm” means an independent accounting firm mutually appointed by
      the Sellers and the Buyer, or in the absence of such agreement, by the
      president for the time being of the Institute of Chartered Accountants in
      Australia.

            

    

     

     

    
      	
              1.1.42  

            	
              “Intangibles” has the
      meaning set out in Clause 7.30.2.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              1.1.43  

            	
              “Legal Proceedings”
      includes any :

            

    

     

     

    
      	
              (a)  

            	
              Claims
      or proceedings brought by any
person;

            

    

     

     

    
      	
              (b)  

            	
              any
      alternative dispute resolution process (including, without limitation,
      mediation, arbitration and expert determination processes);
      and

            

    

     

     

    
      	
              (c)  

            	
              actions,
      assessments, audits, investigations or proceedings by any Government
      Body.

            

    

     

     

    
      	
              1.1.44  

            	
              “Liability” means all
      actual and/or contingent liabilities, losses, damages, outgoings,
      obligations, costs and expenses of whatever
  description.

            

    

     

     

    
      	
              1.1.45  

            	
              “Licenses” has the
      meaning set out in Clause 7.41.1.

            

    

     

     

    
      	
              1.1.46  

            	
              “Losses” has the meaning
      set out in Clause 11.1.1(d).

            

    

     

     

    
      	
              1.1.47  

            	
              “Majority Shareholders”
      means:

            

    

     

     

    
      	
              (a)  

            	
              Robert
      Edwin William Paynter;

            

    

     

     

    
      	
              (b)  

            	
              Mark
      Stephen Eaton;

            

    

     

     

    
      	
              (c)  

            	
              JC
      Paynter Pty Ltd as trustee for the Paynter Family
  Trust;

            

    

     

     

    
      	
              (d)  

            	
              David
      Charles Bugler and Katherine Susan Bugler as trustee for the ESF
      Trust;

            

    

     

     

    
      	
              (e)  

            	
              Stephen
      Paul Mullane and Marie Mullane as trustee for the Mullane Family
      Trust.

            

    

     

     

    
      	
              1.1.48  

            	
              “Material Adverse Effect”
      has the meaning set out in Clause 7.1.1.

            

    

     

     

    
      	
              1.1.49  

            	
              “Multi-Employer Plan”
      means a (pension or non-pension) employee benefit plan to which more than
      one employer contributes and which is maintained pursuant to one or more
      collective bargaining agreements.

            

    

     

     

    
      	
              1.1.50  

            	
              “Net Tangible Asset
      Value” or “NTAV” has the meaning
      set out in Clause 3.3.1.

            

    

     

     

    
      	
              1.1.51  

            	
              “New Board” means, upon
      the retirement of the Retiring Directors and the appointment of the New
      Directors under this Agreement, the Board constituted by the New
      Directors.

            

    

     

     

    
      	
              1.1.52  

            	
              "New Directors" means
      the person or persons described as such in Schedule
  2.

            

    

     

     

    
      	
              1.1.53  

            	
              “Party” means a Party to
      this Agreement.

            

    

     

     

    
      	
              1.1.54  

            	
               “Permitted
      Dividend” means nil.

            

    

     

     

    
      	
              1.1.55  

            	
              “Pro Rata Amount” has
      the meaning set out in Clause 10.1.5(a).

            

    

     

     

    
      	
              1.1.56  

            	
              “Public Officer” means
      the Public Officer of the Company registered pursuant to the Income Tax
      Laws.

            

    

     

     

    
      	
              1.1.57  

            	
              “Purchase Price” means
      the price for the sale and purchase of the Shares described as such in
      Schedule 1.

            

    

     

     

    
      	
              1.1.58  

            	
              “Retiring Director”
      means each Director described as such in Schedule
  2.

            

    

     

     

    
      	
              1.1.59  

            	
              “Seller Indemnified
      Parties” has the meaning set out in Clause 11.2.1.

            

    

     

     

    
      	
              1.1.60  

            	
              “Share Certificate”
      means a certificate issued by the Company to one of its Shareholders in
      accordance with its constitution, evidencing the Shareholder's
      Shareholding in the Company.

            

    

     

     

    
      	
              1.1.61  

            	
              “Share Transfer Form”
      means a security transfer form prepared in accordance with the
      Corporations Act for the transfer of Shares in a company incorporated
      under that Act.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              1.1.62  

            	
              “Shareholder” means a
      person who holds Shares in the
Company.

            

    

     

     

    
      	
              1.1.63  

            	
              “Shares” means Shares in
      the Company being 97,939 Ordinary A Class
  Shares.

            

    

     

     

    
      	
              1.1.64  

            	
              “Subsidiary” or "Subsidiaries" has the
      meaning set out in Clause 7.20.1.

            

    

     

     

    
      	
              1.1.65  

            	
              “Tax”
    means:

            

    

     

     

    
      	
              (a)  

            	
              any
      and all federal, state, local and foreign taxes, assessments and other
      governmental charges, duties, impositions and liabilities relating to
      taxes, including taxes based upon or measured by gross receipts, income,
      profits, sales, use and occupation, and value added, ad valorem, transfer,
      franchise, withholding, payroll, recapture, employment, excise and
      property taxes and escheatment payments, together with all interest,
      penalties and additions imposed with respect to such amounts and any
      obligations under any agreements or arrangements with any other person
      with respect to such amounts and including any liability for taxes of a
      predecessor entity;

            

    

     

     

    
      	
              (b)  

            	
              any
      liability for the payment of any amounts of the type described in Clause
      1.1.65(a) as a result of being or ceasing to
      be a member of an affiliated, consolidated, combined or unitary group for
      any period; and

            

    

     

     

    
      	
              (c)  

            	
              any
      liability for the payment of any amounts of the type described in Clause
      1.1.65(a) or 1.1.65(b) as a result of any express or implied
      obligation to indemnify any other person or as a result of any obligations
      under any agreements or arrangements with any other person with respect to
      such amounts and including any liability for taxes of a predecessor
      entity.

            

    

     

     

    
      	
              1.1.66  

            	
              “Tax Return” has the
      meaning set out in Clause 7.24.1, which
      specifically includes income tax returns and business activity
      statements.

            

    

     

     

    
      	
              1.1.67  

            	
              “Third Party Contract”
      has the meaning set out in Clause 7.33.1.

            

    

     

     

    
      	
              1.1.68  

            	
              “US-GAAP” means the
      generally accepted accounting principles incorporating all generally
      accepted measurement standards as applied in the United States of America
      at the date of this Agreement.

            

    

     

     

    
      	
              1.1.69  

            	
              “Videofied” means Video
      Alarm Technologies Pty Ltd ACN 124 252
035.

            

    

     

     

    
      	
              1.2  

            	
              Interpretation

            

    

     

     

     In this
Agreement, unless otherwise stated or the context otherwise
requires:

     

     

    
      	
              1.2.1  

            	
              singular
      includes plural and vice versa;

            

    

     

     

    
      	
              1.2.2  

            	
              any
      gender includes each other gender;

            

    

     

     

    
      	
              1.2.3  

            	
              a
      reference to a person includes a reference to an individual, corporation,
      incorporated or unincorporated association, trust, partnership and
      governmental or quasi-governmental department, council, agency, authority
      or other body;

            

    

     

     

    
      	
              1.2.4  

            	
              a
      reference to writing includes any means of representing or reproducing
      words, figures, drawings or symbols in a visible, tangible form, in
      English;

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              1.2.5  

            	
              a
      reference to any currency or amount of dollars or cents is a reference to
      Australian (AUS) currency and Australian (AUS) dollars and cents
      (‘AUSD’);

            

    

     

     

    
      	
              1.2.6  

            	
              a
      reference to any legislation or to any provision of any legislation
      includes any modification or re-enactment of it, any legislative provision
      substituted for it and all regulations and statutory instruments issued
      under it;

            

    

     

     

    
      	
              1.2.7  

            	
              a
      reference to any Party includes a reference to each of its staff and
      successors and permitted assigns, as well as any liquidator, provisional
      liquidator, receiver, manager or administrator, Officer duly appointed
      under the Corporations Act, any person authorised to act on its behalf
      under power of attorney, and any other person duly authorised in writing
      to act on its behalf in respect of any of the purposes of provisions of
      this Agreement;

            

    

     

     

    
      	
              1.2.8  

            	
              a
      reference to any agreement or document is that agreement or document as
      amended, novated, supplemented, varied or replaced from time to time,
      except to the extent prohibited by this Agreement or that other agreement
      or document;

            

    

     

     

    
      	
              1.2.9  

            	
              a
      reference to "conduct" includes any omission and any representation,
      statement or undertaking, whether or not in
  writing;

            

    

     

     

    
      	
              1.2.10  

            	
              a
      reference to the "knowledge", "belief" or "awareness" of any person in
      relation to a matter means the knowledge, belief or awareness that the
      person would have if it had made all reasonable enquiries in the
      circumstances;

            

    

     

     

    
      	
              1.2.11  

            	
              mentioning
      anything after "include", "includes" or "including" does not limit what
      else might be included;

            

    

     

     

    
      	
              1.2.12  

            	
              headings
      are used for ease of reference and convenience only and are not to be
      construed as forming any part of this Agreement;
  and

            

    

     

     

    
      	
              1.2.13  

            	
              where
      any word or phrase is given a defined meaning, other than grammatical form
      of that word or phrase has a corresponding
  meaning.

            

    

     

     

    
      	
              1.3  

            	
              Time
      of the essence

            

    

     

     

    
      	
              1.3.1  

            	
              Time
      is of the essence of this
Agreement.

            

    

     

     

    
      	
              1.4  

            	
              Sellers
      bound

            

    

     

     

    
      	
              1.4.1  

            	
              The
      parties acknowledge and agree that this agreement binds each of the
      Sellers personally and, for the avoidance of doubt, clauses 6, 7, 8, 10, 11, 12 and 13 of this Agreement bind each of the Sellers
      personally.

            

    

     

     

    
      	
              2  

            	
              SALE
      AND PURCHASE OF SHARES

            

    

     

     

    
      	
              2.1  

            	
              Sale
      and purchase

            

    

     

     

    
      	
              2.1.1  

            	
              The
      Sellers hereby agree to sell to the Buyer, and the Buyer agrees to buy
      from the Sellers, all the issued Shares of the Company owned by the
      Sellers, for the Purchase Price, on the terms and conditions of this
      Agreement on the Completion Date.

            

    

     

     

    
      	
              2.2  

            	
              Title
      property and risk

            

    

     

     

    
      	
              2.2.1  

            	
              The
      title to, property in and risk of the Shares remain solely with the
      Sellers until Completion, upon which title to, property in and risk of the
      Shares shall pass to the Buyer with effect on and from the Completion
      Date.

            

    

     

     

    
      	
              2.3  

            	
              Conditions
      Precedent

            

    

     

    The
Parties agree that they will use all reasonable endeavours to satisfy the
Conditions Precedent to the reasonable satisfaction of the Buyer prior to the
Completion Date.

     

    
      	
              2.4  

            	
              Waiver
      of Conditions

            

    

     

    A
Condition Precedent may only be waived in writing by the Buyer and will be
effective only to the extent specifically set out in that waiver.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              2.5  

            	
              Failure
      of Condition Precedent

            

    

     

    If the
Conditions Precedent have not been satisfied by the Completion Date, despite the
reasonable endeavours of the Parties, the Buyer may terminate this
Agreement.

     

    
      	
              2.6  

            	
              Termination
      Prior to Completion

            

    

     

     

    
      	
              2.6.1  

            	
              Termination
      grounds

            

    

     

     

    
      	
              (a)  

            	
              This
      Agreement may be terminated prior to Completion as
  follows:

            

    

     

     

    
      	
              (i)  

            	
              at
      the election of the Buyer or the Sellers, if Completion shall not have
      occurred by 5.00 pm in Brisbane on or after 19 November
    2009;

            

    

     

     

    
      	
              (ii)  

            	
              by
      the mutual written consent of the Sellers and the
  Buyer.

            

    

     

     

    
      	
              2.6.2  

            	
              Termination
      procedure

            

    

     

     

    
      	
              (a)  

            	
              In
      the event of termination and abandonment by the Buyer pursuant to Clause
      2.6.1(a)(i), written notice thereof shall
      forthwith be given to the other Party or Parties, and this Agreement shall
      terminate, and the purchase of the Shares hereunder shall be abandoned,
      without further action by the Buyer or the
  Sellers.

            

    

     

     

    
      	
              (b)  

            	
              If
      this Agreement is terminated as provided herein, each party shall
      redeliver all documents, work papers and other material of any other
      party, whether so obtained before or after the execution of this
      Agreement, to the party furnishing the
same.

            

    

     

     

    
      	
              2.6.3  

            	
              Effect
      of termination

            

    

     

     

    
      	
              (a)  

            	
              Subject
      to Clause 2.6.3(b), in the event that this
      Agreement is validly terminated as provided herein, then each of the
      parties shall be relieved of their duties and obligations arising under
      this Agreement after the date of such termination and such termination
      shall be without liability to the Buyer, the Company or any
      Seller.

            

    

     

     

    
      	
              (b)  

            	
              Nothing
      in Clause 2.6.3(a) shall relieve the Buyer or
      any Seller of any liability for a breach of this
  Agreement.

            

    

     

     

    
      	
              3  

            	
              PAYMENT
      OF PURCHASE PRICE

            

    

     

     

    
      	
              3.1  

            	
              Amount
      of Purchase Price

            

    

     

     

    
      	
              3.1.1  

            	
              The
      purchase price for the Shares shall be an amount equal to up to Four
      Million dollars ($4,000,000) (the “Purchase Price”), subject to adjustment
      under Clause 3.2.2.

            

    

     

     

    
      	
              3.2  

            	
              Payment
      of Purchase Price

            

    

     

     

    
      	
              3.2.1  

            	
              The
      Purchase Price will be paid as
follows:

            

    

     

     

    
      	
              (a)  

            	
              On
      the Completion Date, the Buyer shall pay Two Million dollars ($2,000,000)
      to the Sellers (the “Completion Payment”), which shall be paid by wire
      transfer of immediately available funds into an account designated by the
      Sellers; and

            

    

     

     

    
      	
              (b)  

            	
              the
      Buyer shall pay $1,000,000 (the “First Twelve Month Payment”) to the
      Sellers on the date calculated by reference to 3.2.9 in the event the Company’s earnings before
      interest and taxes (“EBIT”) for the period ending twelve months from the
      Effective Date (the "First Twelve Month Period"), shall equal or exceed
      $1,200,000 (the “First Twelve Month Target EBIT”);
  and

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              the
      Buyer shall pay $1,000,000 (the “Second Twelve Month Payment”) to the
      Sellers on the date calculated by reference to 3.2.9 in the event the Company’s EBIT for the
      second twelve month period ending two years from the Effective Date (the
      "Second Twelve Month Period") shall equal or exceed $1,200,000 (the
      “Second Twelve Month Target EBIT”).

            

    

     

     

    
      	
              3.2.2  

            	
              The
      Buyer shall cause to be prepared and delivered to the Seller a calculation
      of the Company’s EBIT, with any supporting documentation reasonably
      required by the Sellers, for each of the First Twelve Month Period and the
      Second Twelve Month Period for review by the Seller within 45 days of the
      end of each of the First Twelve Month Period and the Second Twelve Month
      Period.

            

    

     

     

    
      	
              3.2.3  

            	
              The
      Sellers must, within 14 days of receipt of the calculation of the
      Company's EBIT for the relevant 12 month period notify the Buyer whether
      it agrees or disagrees with the calculation of the Company's EBIT, and if
      it disagrees, provide reasonable evidence in support of such
      disagreement.

            

    

     

     

    
      	
              3.2.4  

            	
              In
      the event that the Sellers disagree with the calculation of the Company's
      EBIT for a relevant twelve month period (a "Dispute"), the Parties must
      enter into good faith negotiations to resolve the Dispute.  If
      after a period of 14 days the Sellers and Buyer are unable to resolve the
      Dispute, the Seller and the Buyer shall submit the Dispute for resolution
      to an Independent Accounting Firm, which shall determine the Company's
      EBIT for the relevant twelve month period, and shall report its
      determination to the Parties.  Such report shall be final and
      binding on the Parties to this
Agreement

            

    

     

     

    
      	
              3.2.5  

            	
              Despite
      the previous subclauses, the determination of the Company’s EBIT for the
      First Twelve Month Period and the Second Twelve Month Period and payment
      of the First Twelve Month Payment and Second Twelve Month Payment shall be
      completed within 90 days after the end of each respective twelve month
      period.

            

    

     

     

    
      	
              3.2.6  

            	
              To
      the extent the actual EBIT for the First Twelve Month Period is less than
      the First Twelve Month Target EBIT, the First Twelve Month Payment shall
      be reduced by the percent of shortfall between the actual EBIT for the
      First Twelve Month Period and the First Twelve Month Target
      EBIT.

            

    

     

     

    
      	
              3.2.7  

            	
              To
      the extent the actual EBIT for the Second Twelve Month Period is less than
      the Second Twelve Month Target EBIT, the Second Twelve Month Payment shall
      be reduced by a percentage equivalent to that of the shortfall between the
      actual EBIT for the Second Twelve Month Period and the Second Twelve Month
      Target EBIT.

            

    

     

     

    
      	
              3.2.8  

            	
              It
      is understood that each year shall be calculated independently and
      shortfalls or surpluses of target amounts shall not be carried between the
      years.

            

    

     

     

    
      	
              3.2.9  

            	
              The
      First Twelve Month Payment and the Second Twelve Month Payment shall be
      paid within ten days after the Sellers' receipt, review and acceptance of
      the financial statements of the Company and the calculation of the
      Company's EBIT for each relevant twelve month period, or in the event of a
      Dispute, within ten days of receipt of the determination of the Company's
      EBIT by the Independent Accounting
Firm.

            

    

     

     

    
      	
              3.2.10  

            	
              The
      Parties shall bear the costs associated with the appointment the
      Independent Accounting Firm equally and shall otherwise bear their own
      costs and expenses in relation to the
Dispute.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              3.2.11  

            	
              The
      Purchase Price shall be paid by bank cheque, electronic funds transfer or
      such other means approved in writing by the
  Sellers.

            

    

     

     

    
      	
              3.2.12  

            	
              The
      Purchase Price shall be apportioned between the Sellers as set out in
      Schedule 1.

            

    

     

     

    
      	
              3.3  

            	
              Net
      tangible asset value adjustment

            

    

     

     

    
      	
              3.3.1  

            	
              Within
      45 days after the Completion Date, the Sellers shall cause to be prepared
      and delivered to the Buyer a calculation of the company’s Net Tangible
      Asset Value as of the Effective Date, with all supporting documentation
      reasonably required by the Sellers.  Net tangible asset value is
      defined as total assets minus total liabilities minus intangible assets in
      accordance with US-GAAP (“NTAV”).

            

    

     

     

    
      	
              3.3.2  

            	
              The
      Buyer shall have a period of 75 days after receipt of the Sellers’
      calculation of the NTAV under Clause 3.3.1 to
      review the NTAV calculation.  If the Buyer agrees with the NTAV
      calculation, the Buyer shall notify the Sellers of that
      fact.  If the Buyer disagrees with the NTAV calculation, the
      Buyer shall notify the Sellers of its disagreement with the NTAV
      calculation and of the reason or reasons for its
    disagreement.

            

    

     

     

    
      	
              3.3.3  

            	
              In
      the event the Sellers and the Buyer are unable to agree upon the NTAV
      after good faith negotiations for a period of 20 days after notification
      by the Buyer of its disagreement under Clause 3.3.2, the Sellers or the Buyer shall submit
      such dispute for resolution to an Independent Accounting Firm, which shall
      determine the NTAV and shall report its determination to the
      Parties.  Such report shall be final and binding on the Parties
      to this Agreement.

            

    

     

     

    
      	
              3.3.4  

            	
              The
      Parties shall bear the costs associated with the appointment of the
      Independent Accounting Firm equally and shall otherwise bear their own
      costs and expenses in relation to such
  disagreement.

            

    

     

     

    
      	
              3.3.5  

            	
              The
      Parties shall cooperate with one another and provide reasonable access to
      all pertinent books and records to the other
  Party.

            

    

     

     

    
      	
              3.3.6  

            	
              In
      the event that the NTAV as of the Effective Date is less than
      AUD1,200,000, the Purchase Price shall be reduced by the amount of the
      shortfall.

            

    

     

     

    
      	
              3.3.7  

            	
              In
      the event that the NTAV as of the Effective Date is greater than
      AUD1,200,000, the Purchase Price shall be increased by the amount of the
      excess, which amount shall be paid in cash to the Sellers within five (5)
      Business Days of the determination of the NTAV under Clause 3.3.2 or 3.3.3 as
      applicable.

            

    

     

     

    
      	
              3.4  

            	
              Escrowed
      Funds

            

    

     

     

    
      	
              3.4.1  

            	
              In
      order to satisfy any amounts which the Sellers may be required to deliver
      to the Buyer as a result of a deficiency in the NTAV or any
      indemnification claims, AUD200,000 shall be retained out of the Purchase
      Price and deposited on the Completion Date by the Buyer into an escrow
      account until the NTAV as at the Completion Date shall be
      determined.  Any deficiency in the NTAV shall be paid from the
      escrow account to the Buyer (the “Escrowed
  Funds”).

            

    

     

     

    
      	
              3.4.2  

            	
              The
      Escrowed Funds shall be held for the benefit of the Sellers in accordance
      with their pro rata ownership of the Shares as set out in Schedule
      2.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              3.4.3  

            	
              The
      Escrowed Funds shall be held in accordance with the terms and conditions
      set forth in the escrow agreement annexed to this
    Agreement.

            

    

     

     

    
      	
              3.5  

            	
              Conditions
      Subsequent

            

    

     

     

    The
parties agree after Completion they will use their best endeavours to satisfy
the Conditions Subsequent.

     

     

    
      	
              4  

            	
              BUYER’S
      ACCESS TO INFORMATION

            

    

     

     

    
      	
              4.1  

            	
              Access
      to information

            

    

     

     

    
      	
              4.1.1  

            	
              The
      Sellers and the Company agree that, prior to the Completion Date, the
      Buyer shall be entitled, through its officers, employees and
      representatives (including, without limitation, its legal advisors and
      accountants), to make such investigation of the properties, businesses and
      operations of the Company and its Subsidiaries and such examination of the
      books, records and financial condition of the Company and its Subsidiaries
      as it reasonably requests and to make extracts and copies of such books
      and records.

            

    

     

     

    
      	
              4.2  

            	
              Access
      during Business Hours

            

    

     

     

    
      	
              4.2.1  

            	
              Any
      such investigation and examination shall be conducted during regular
      Business Hours and under reasonable circumstances, and the Sellers shall
      cooperate, and shall cause the Company and its Subsidiaries to cooperate,
      fully in the investigation.

            

    

     

     

    
      	
              4.3  

            	
              No
      diminishing of warranties

            

    

     

     

    
      	
              4.3.1  

            	
              No
      investigation by the Buyer prior to or after the date of this Agreement
      shall diminish or obviate any of the representations, warranties,
      covenants or agreements of the Sellers contained in this Agreement or the
      Seller Documents.

            

    

     

     

    
      	
              4.4  

            	
              Cooperation
      by staff and representatives

            

    

     

     

    
      	
              4.4.1  

            	
              In
      order that the Buyer may have full opportunity to make such physical,
      business, accounting and legal review, examination or investigation as it
      may reasonably request of the affairs of the Company and its Subsidiaries,
      the Sellers shall cause the officers, employees, consultants, agents,
      accountants, attorneys and other representatives of the Company and its
      Subsidiaries to cooperate fully with such representatives in connection
      with such review and examination.

            

    

     

     

    
      	
              4.5  

            	
              Confidentiality

            

    

     

     

    
      	
              4.5.1  

            	
              It
      is agreed and understood that all information provided pursuant to this
      Clause 4 is subject to the terms and
      conditions of confidentiality set out in Clause 12.5.

            

    

     

     

    
      	
              5  

            	
              CONDUCT
      OF BUSINESS UP TO COMPLETION

            

    

     

     

    
      	
              5.1  

            	
              Conduct
      of business

            

    

     

     

    
      	
              5.1.1  

            	
              The
      Sellers must ensure that, until Completion, the
  Company:

            

    

     

     

    
      	
              (a)  

            	
              manages
      and conducts its business as a going concern with all due care and in
      accordance with normal and prudent practice having regard to the nature of
      its business and good commercial practice and so as to comply with all
      applicable laws, regulations, ordinances and
  codes;

            

    

     

     

    
      	
              (b)  

            	
              uses
      its best endeavours to maintain the goodwill, profitability and value of
      its business;

            

    

     

     

    
      	
              (c)  

            	
              protects
      and maintains each of its assets and property in their current condition,
      ordinary wear and tear excepted;
and

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)  

            	
              maintains
      the books, accounts and records of the Company in the ordinary course of
      business consistent with past practices, continues to collect accounts
      receivable and pay accounts payable utilizing normal procedures and
      without discounting or accelerating payment of such accounts, and complies
      with all contractual and other obligations applicable to the operation of
      the Company.

            

    

     

     

    
      	
              5.2  

            	
              Prohibitions

            

    

     

     

    
      	
              5.2.1  

            	
              Except
      as otherwise expressly contemplated by this Agreement or with the prior
      written consent of the buyer, prior to Completion the Sellers shall not,
      and shall cause the Company to not:

            

    

     

     

    
      	
              (a)  

            	
              declare,
      set aside, make or pay any dividend or other distribution in respect of
      the Share capital of the Company (other than the Permitted Dividends) or
      repurchase, redeem or otherwise acquire any outstanding shares of the
      capital stock or loan capital or other securities of, or other ownership
      interests in, the Company;

            

    

     

     

    
      	
              (b)  

            	
              transfer,
      issue, sell or dispose of any shares of capital stock or loan capital or
      other securities of the Company or grant options, warrants, calls or other
      rights to purchase or otherwise acquire shares of the capital stock or
      loan capital or other securities of the
Company;

            

    

     

     

    
      	
              (c)  

            	
              effect
      any recapitalisation, reclassification, Share split or like change in the
      capitalisation of the Company;

            

    

     

     

    
      	
              (d)  

            	
              amend
      the certificate of incorporation or Constitution or by-laws of the
      Company;

            

    

     

     

    
      	
              (e)  

            	
              except
      for trade payables and for indebtedness for borrowed money incurred in the
      ordinary course of business and consistent with past practice, borrow
      monies for any reason or draw down on any line of credit or debt
      obligation, or become the guarantor, surety, endorser or otherwise liable
      for any debt, obligation or liability (contingent or otherwise) of any
      other person, or change the terms of payables or
    receivables;

            

    

     

     

    
      	
              (f)  

            	
              subject
      to any lien (except for leases that do not materially impair the use of
      the property subject thereto in their respective businesses as presently
      conducted), any of the properties or assets (whether tangible or
      intangible) of the Company;

            

    

     

     

    
      	
              (g)  

            	
              acquire
      any material properties or assets or sell, assign, transfer, convey, lease
      or otherwise dispose of any of the material properties or assets (except
      for fair consideration in the ordinary course of business consistent with
      past practice) of the Company except, with respect to the items listed in
      Schedule 18, as previously consented to by the
  Buyer;

            

    

     

     

    
      	
              (h)  

            	
              cancel
      or compromise any debt or claim or waive or release any material right of
      the Company except in the ordinary course of business consistent with past
      practice;

            

    

     

     

    
      	
              (i)  

            	
              enter
      into any commitment for capital expenditures out of the ordinary
      course;

            

    

     

     

    
      	
              (j)  

            	
              permit
      the Company to enter into any transaction or to make or enter into any
      contract which by reason of its size or otherwise is not in the ordinary
      course of business consistent with past
  practice;

            

    

     

     

    
      	
              (k)  

            	
              permit
      the Company to enter into or agree to enter into any merger or
      consolidation with, any corporation or other entity, and not engage in any
      new business or invest in, make a loan, advance or capital contribution
      to, or otherwise acquire the securities of any other
    person;

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              (l)  

            	
              except
      for transfers of cash pursuant to normal cash management practices, permit
      the Company to make any investments in or loans to, or pay any fees or
      expenses to, or enter into or modify any contract with  any
      Seller or any affiliate of any Seller;
or

            

    

     

     

    
      	
              (m)  

            	
              agree
      to do anything prohibited by this Clause 5.2
      or anything which would make any of the representations and warranties of
      the Sellers in this Agreement untrue or incorrect in any material respect
      as of any time through to and including the Completion
    Date;

            

    

     

     

    
      	
              (n)  

            	
              hire
      any new employee or terminate the employment of any employee or alter the
      terms of employment (including the terms of superannuation or any other
      benefit) of any employee except in the ordinary course of business,
      including:

            

    

     

     

    
      	
              (i)  

            	
              materially
      increasing the annual level of compensation of any employee of the
      Company;

            

    

     

     

    
      	
              (ii)  

            	
              increasing
      the annual level of compensation payable or to become payable by the
      company to any of its executive
officers;

            

    

     

     

    
      	
              (iii)  

            	
              granting
      any unusual or extraordinary bonus, benefit or other director o indirect
      compensation to any employee, director or
  consultant;

            

    

     

     

    
      	
              (iv)  

            	
              increasing
      the coverage or benefits available under any (or create any new) severance
      pay, termination pay, vacation pay, company awards, salary continuation
      for disability, sick leave, deferred compensation, bonus or other
      incentive compensation, insurance, pension or other employee benefit plan
      or arrangement made to, for, or with any of the directors, officers,
      employees, agents or representatives of the Company or otherwise modify or
      amend or terminate any such plan or arrangement;
  or

            

    

     

     

    
      	
              (v)  

            	
              enter
      into any employment, deferred compensation, severance, consulting
      non-competition or similar agreement (or amend any such agreement) to
      which the Company is a party or involving a director, officer or employee
      of the Company in his or her capacity as a director, officer or employee
      of the Company;

            

    

     

     

    
      	
              (o)  

            	
              enter
      into, terminate or alter any term of any material contract or
      commitment;

            

    

     

     

    
      	
              (p)  

            	
              except
      in the usual conduct of the business, incur any liabilities whether
      material, actual or contingent;

            

    

     

     

    
      	
              (q)  

            	
              except
      in the usual conduct of the business, dispose of, agree to dispose of,
      encumber or grant an option over, or any interest in, any of the Company’s
      assets;

            

    

     

     

    
      	
              (r)  

            	
              pass
      any special resolution of the Shareholders of the Company;
    or

            

    

     

     

    
      	
              (s)  

            	
              alter
      its issued Share capital in any way including by reduction of capital or
      Share buyback.

            

    

     

     

    
      	
              5.3  

            	
              Consents

            

    

     

     

    
      	
              5.3.1  

            	
              The
      Sellers shall use their best efforts, and the Buyer shall cooperate with
      the Sellers, to obtain at the earliest practicable date all consents and
      approvals required to consummate the transactions contemplated by this
      Agreement, including, without limitation, the consents and approvals
      referred to in Clause 7.6 of this Agreement;
      provided, however, that neither the Sellers nor the Buyer shall be
      obligated to pay any consideration therefore to any third party from whom
      consent or approval is requested.

            

    

     

     

    
      	
              5.4  

            	
              Other
      Actions

            

    

     

     

    
      	
              5.4.1  

            	
              Each
      of the Sellers and the Buyer shall use its best efforts to (i) take all
      actions necessary or appropriate to consummate the transactions
      contemplated by this Agreement, and (ii) cause the fulfilment at the
      earliest practicable date of all of the conditions to their respective
      obligations to consummate the transactions contemplated by this
      Agreement.

            

    

     

     

    
      	
              5.5  

            	
              No
      Solicitation

            

    

     

     

    
      	
              5.5.1  

            	
              The
      Sellers will not, and will not cause or permit the Company or any of the
      Company's directors, officers, employees, representatives or agents
      (collectively, the "Representatives") to, directly or indirectly: (i)
      discuss, negotiate, undertake, authorize, recommend, propose or enter
      into, either as the proposed surviving, merged, acquiring or acquired
      corporation, any transaction involving a merger, consolidation, business
      combination, purchase or disposition of any amount of the assets or
      capital stock or other equity interest in the Company other than the
      transactions contemplated by this Agreement (an "Acquisition
      Transaction"), (ii) facilitate, encourage, solicit or initiate
      discussions, negotiations or submissions of proposals or offers in respect
      of an Acquisition Transaction, (iii) furnish or cause to be furnished, to
      any person, any information concerning the business, operations,
      properties or assets of the Company in connection with an Acquisition
      Transaction, or (iv) otherwise cooperate in any way with, or assist or
      participate in, facilitate or encourage, any effort or attempt by any
      other person to do or seek any of the foregoing.  The Sellers
      will inform the Buyer in writing immediately following the receipt by any
      Seller, the Company or any Representative of any proposal or inquiry in
      respect of any Acquisition
Transaction.

            

    

     

     

    
      	
              5.6  

            	
              Preservation
      of records

            

    

     

     

    
      	
              5.6.1  

            	
              The
      Sellers and the Buyer agree that each of them shall preserve and keep the
      records held by them relating to the business of the Company (including
      but not limited to books, records and accounts, financial information,
      correspondence, production records, employment records and other similar
      information) for a period of six (6) years from the Completion Date and
      shall make such records and personnel available to the other as may be
      reasonably requested by such party in connection with, among other things,
      any insurance claims by, legal proceedings against or governmental
      investigations of the Sellers or the Buyer or any of their affiliates or
      in order to enable the Sellers or the Buyer to comply with their
      respective obligations under this Agreement and each other agreement,
      document or instrument contemplated under this
  Agreement.

            

    

     

     

    
      	
              5.7  

            	
              Publicity

            

    

     

     

    
      	
              5.7.1  

            	
              None
      of the Sellers nor the Buyer shall issue any press release or public
      announcement concerning this Agreement or the transactions contemplated
      hereby without obtaining the prior written approval of the other Party,
      which approval will not be unreasonably withheld or delayed, unless, in
      the sole judgment of the Buyer or the Sellers, disclosure is otherwise
      required by applicable law or by the applicable rules of any stock
      exchange on which the Buyer lists securities, provided that, to the extent
      required by applicable law, the party intending to make such release shall
      use its best efforts consistent with such applicable law to consult with
      the other party with respect to the text
  thereof.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              5.8  

            	
              Use
      of name

            

    

     

     

    
      	
              5.8.1  

            	
              The
      Sellers hereby agree that upon the Completion and consummation of the
      transactions contemplated hereby, the Company shall have the sole right to
      the use of the name "Pride Electronic Security Systems" and the Sellers
      shall not, and shall not cause or permit any affiliate to, use such name
      or any variation or simulation of this
  Agreement.

            

    

     

     

    
      	
              5.9  

            	
              Employment
      Agreements

            

    

     

     

    
      	
              5.9.1  

            	
              On
      or prior to the Completion Date:

            

    

     

     

    
      	
              (a)  

            	
              Robert
      Edwin William Paynter shall enter into an employment agreement with the
      Buyer;

            

    

     

     

    
      	
              (b)  

            	
              Stephen
      Paul Mullane shall enter into an employment agreement with the Company;
      and

            

    

     

     

    
      	
              (c)  

            	
              Mark
      Stephen Eaton shall enter into an employment agreement with the
      Company.

            

    

     

     

    
      	
              5.10  

            	
              Board
      of Directors

            

    

     

     

    
      	
              5.10.1  

            	
              The
      Board of Directors of the Company as and from the Completion Date shall
      consist of Robert Edwin William Paynter, Andrew Hidalgo, Joseph Heater and
      Charles Madenford.

            

    

     

     

    
      	
              5.11  

            	
              Financial
      statements

            

    

     

     

    
      	
              5.11.1  

            	
              If
      required for the purposes of the United States Securities and Exchange
      Commission, the Sellers shall cooperate with the Buyer, to provide all
      information required for the completion of audited financial statements of
      the Company for the years ended 30 June 2007, 2008 and 2009, and delivered
      no later than 60 days from the Completion Date.  The costs of
      such financial statements shall be borne by the
  Buyer.

            

    

     

     

    
      	
              5.12  

            	
              Elimination
      of non-business financial
obligations

            

    

     

     

    
      	
              5.12.1  

            	
              On
      or prior to the Completion Date, the Company shall eliminate all financial
      obligations which are not directly related to the business and operations
      of the Company on terms acceptable to the Buyer in its sole
      discretion.

            

    

     

     

    
      	
              5.12.2  

            	
              The
      Company shall repay in full any and all loans which are owed by or due
      from the Company to the Sellers on or before the Completion
      Date.

            

    

     

     

    
      	
              5.13  

            	
              Dividends

            

    

     

     

    
      	
              5.13.1  

            	
              Prior
      to the Effective Date, the Sellers may procure that the Company declares
      the Permitted Dividend, provided always that the declaration of such
      dividend will not have the effect of reducing the NTAV as at the Effective
      Date below AUD$1,200,000.00.

            

    

     

     

    

     

     

    
      	
              6  

            	
              COMPLETION

            

    

     

     

    
      	
              6.1  

            	
              Date
      and place for Completion

            

    

     

     

    
      	
              6.1.1  

            	
              Completion
      of this Agreement must take place on the Completion Date at the Place for
      Completion set out in Schedule 1.

            

    

     

     

    
      	
              6.2  

            	
              Obligations
      of the Sellers on Completion

            

    

     

     

    
      	
              6.2.1  

            	
              At
      Completion, the Sellers must deliver or cause to be delivered to the
      Buyer:

            

    

     

     

    
      	
              (a)  

            	
              the
      Share Certificates in respect of the Shares free and clear of any and all
      liens;

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              valid
      Share Transfer Forms for the transfer of the Shares, duly completed and
      signed by the Sellers;

            

    

     

     

    
      	
              (c)  

            	
              each
      consent and waiver referred to in Clause 7.6
      of this Agreement, in a form reasonably satisfactory to the Buyer, with
      respect to the transactions contemplated by this
  Agreement;

            

    

     

     

    
      	
              (d)  

            	
              the
      Certificate of Incorporation or Registration of the
    Company;

            

    

     

     

    
      	
              (e)  

            	
              the
      common seal (and any duplicate common seal, Share seal or official seal),
      if any, of the Company;

            

    

     

     

    
      	
              (f)  

            	
              a
      copy of the Constitution of the
Company;

            

    

     

     

    
      	
              (g)  

            	
              the
      financial records of the Company;

            

    

     

     

    
      	
              (h)  

            	
              the
      minute books and other records of meetings or resolutions of members and
      Directors of the Company;

            

    

     

     

    
      	
              (i)  

            	
              all
      registers of the Company (including the register of members, register of
      options, register of charges) all in proper order and condition and fully
      entered up to the Completion Date;

            

    

     

     

    
      	
              (j)  

            	
              all
      cheque books, financial and accounting books and records, copies of
      taxation returns and assessments, mortgages, leases, agreements, insurance
      policies, title documents, licences, indicia of title, certificates and
      all other records (including electronic records), papers, books and
      documents of the Company;

            

    

     

     

    
      	
              (k)  

            	
              a
      duly completed authority for the alteration of the signatories of each
      bank account of the Company in the manner required by the Buyer by notice
      before the Completion Date;

            

    

     

     

    
      	
              (l)  

            	
              all
      current permits, licences and other documents issued to the Company under
      any legislation or ordinance relating to its business
      activities;

            

    

     

     

    
      	
              (m)  

            	
              the
      written resignations of each Director, Secretary and Public Officer of the
      Company in accordance with Clause 6.4;

            

    

     

     

    
      	
              (n)  

            	
              the
      Employment Agreement signed by Robert Edwin William Paynter for
      countersignature by the Buyer at
Completion;

            

    

     

     

    
      	
              (o)  

            	
              any
      other document which the Buyer requires to obtain good title to the Shares
      and to enable the Buyer to cause the registration of the Shares in the
      name of the Buyer or its nominee including any power of attorney under
      which any document delivered under this Agreement has been signed;
      and

            

    

     

     

    
      	
              (p)  

            	
              the
      Escrow Agreement signed by all relevant
parties.

            

    

     

     

    
      	
              6.2.2  

            	
              At
      Completion each of the Sellers must confer on the Buyer title to the
      Shares and place the Buyer in operating control of the Company, the
      business and the assets of the
Company.

            

    

     

     

    
      	
              6.2.3  

            	
              At
      Completion each of the Sellers must do and execute all other acts and
      documents which this Agreement requires the Seller to do or execute at
      Completion.

            

    

     

     

    
      	
              6.3  

            	
              Obligations
      of the Buyer on Completion

            

    

     

     

    
      	
              6.3.1  

            	
              At
      Completion, the Buyer must:

            

    

     

     

    
      	
              (a)  

            	
              pay
      the Completion Payment in accordance with Clause 3.2.1(a);

            

    

     

     

    
      	
              (b)  

            	
              produce
      for sighting by the Sellers the written consents of Andrew Hidalgo, Joseph
      Heater and Charles Madenford to their appointment as Directors of the
      Company with effect on and from the Completion
  Date;

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              countersign
      the Employment Agreement and Escrow Agreement;
  and

            

    

     

     

    
      	
              (d)  

            	
              do
      and execute all other acts and documents which this Agreement requires the
      Buyer to do or execute at
Completion.

            

    

     

     

    
      	
              6.4  

            	
              Directors’
      meeting – the Company

            

    

     

     

    
      	
              6.4.1  

            	
              At
      Completion, a meeting of the Directors of the Company must be held at
      which:

            

    

     

     

    
      	
              (a)  

            	
              the
      Board must approve of the registration of the transfer of the Shares, the
      issue of a new Share Certificate for the Shares in the name of the
      transferee and the cancellation of the existing Share
      Certificates;

            

    

     

     

    
      	
              (b)  

            	
              the
      New Directors, Secretary and Public Officers of the Company as nominated
      in Schedule 2 are appointed to their respective offices of the
      Company;

            

    

     

     

    
      	
              (c)  

            	
              each
      existing Director, Secretary and Public Officer of the Company other than
      Robert Edwin William Paynter shall retire with effect from the end of that
      meeting, with each such retirement being by written notice by the retiring
      person acknowledging that the person has no claim against the Company
      whether in respect of salary, fees, compensation or entitlement for loss
      of office; and

            

    

     

     

    
      	
              (d)  

            	
              all
      existing authorities to operate bank accounts are revoked and the persons
      nominated by the Buyer by notice prior to the Completion Date appointed as
      signatories of the bank accounts.

            

    

     

     

    
      	
              6.4.2  

            	
              At
      Completion, the Board must provide to the Buyer with the signed minutes of
      meeting and the written resignations of the Retiring Directors and the
      Retiring Secretary in Clause 6.4.1(c).

            

    

     

     

    
      	
              6.5  

            	
              Bank
      authorities and minimum balance

            

    

     

     

    
      	
              6.5.1  

            	
              The
      Company must cause to be executed and must provide at Completion all bank
      authorities necessary to ensure the New Board may fully and effectually
      operate the accounts of the Company immediately following
      Completion.

            

    

     

     

    
      	
              6.6  

            	
              Shareholder
      loan accounts

            

    

     

     

    
      	
              6.6.1  

            	
              All
      debts owing to the Company by any of the Sellers must be repaid in full on
      or before Completion.

            

    

     

     

    
      	
              6.7  

            	
              Capital
      and in specie distributions

            

    

     

     

    
      	
              6.7.1  

            	
              The
      Sellers shall not make any distributions of the Company capital after the
      Effective Date to the Sellers.

            

    

     

     

    
      	
              6.8  

            	
              No
      debts incurred up to Completion

            

    

     

     

    
      	
              6.8.1  

            	
              The
      Shareholders and Retiring Directors agree that the Company shall not incur
      any debts nor pay any money on any account whatsoever after the date of
      this Agreement without the written consent of the Buyer except in the
      ordinary course of business.

            

    

     

     

    
      	
              7  

            	
              WARRANTIES
      AND REPRESENTATIONS ABOUT THE
COMPANY

            

    

     

    The
Sellers jointly and severally warrant and represent to the Buyer that each of
the following sub-clauses of this Clause 7 are and
shall remain true and correct as from the date of this Agreement up to and
including the Completion Date:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
      	
              7.1  

            	
              Material
      events

            

    

     

     

    
      	
              7.1.1  

            	
              As
      far as the Sellers are aware, no event has occurred between the Balance
      Sheet Date and the Completion Date which has had or may have a material
      effect on the profitability or value of the Company or the value of the
      Shares occurs prior to Completion (“Material Adverse
    Effect”).

            

    

     

     

    
      	
              7.2  

            	
              Non-budgeted
      expenditure

            

    

     

     

    
      	
              7.2.1  

            	
              The
      Company will not incur any non-budgeted expenditure between the date of
      this Agreement and Completion without the prior written consent of the
      Buyer.

            

    

     

     

    
      	
              7.3  

            	
              Carriage
      of business

            

    

     

     

    
      	
              7.3.1  

            	
              The
      Company owns and carries on the Business at the Business
      Premises.  The Business of the Company will be carried on
      lawfully and in the ordinary and usual course of business until Completion
      and no onerous, unusual or long term contract and no guarantee or
      indemnity will be entered into by the Company without the Buyer’s prior
      written fully informed consent.

            

    

     

     

    
      	
              7.4  

            	
              Dividends

            

    

     

     

    
      	
              7.4.1  

            	
              The
      Sellers and the Directors will not declare or pay any dividends (other
      than the Permitted Dividends) with respect to any of the Shares of the
      Company on or after the Effective Date or make any other distribution of
      property or assets without the prior written consent of the
      Buyer.

            

    

     

     

    
      	
              7.5  

            	
              Australian
      Securities & Investments
Commission

            

    

     

     

    
      	
              7.5.1  

            	
              The
      Company has complied with all of its statutory filing and lodgement
      obligations to the Australian Securities & Investments Commission,
      including in relation to the lodgement of all company returns, statutory
      and governmental notifications, and answers to
    requisitions.

            

    

     

     

    
      	
              7.5.2  

            	
              The
      Company and/or its Directors are not under investigation by the Australian
      Securities & Investments Commission in relation to any breach or
      suspected breach of the Corporations Act, the Australian Securities and
      Investments Commission Act, or any other statute administered by the
      Australian Securities & Investments
  Commission.

            

    

     

     

    
      	
              7.6  

            	
              Third
      party consents

            

    

     

     

    
      	
              7.6.1  

            	
              The
      Sellers and the Directors joint and severally warrant and represent that
      all third party consents necessary under any agreement or arrangement with
      the Company with respect to the sale of the Shares under this Agreement or
      the appointment of the New Board have been or will be obtained by the
      Company or have been or will be waived in writing by the relevant third
      parties, prior to Completion.

            

    

     

     

    
      	
              7.6.2  

            	
              Except
      as set forth in Schedule 5 and subject to Clause 7.6.3, no consents or approvals of any public
      body or authority and no consents or waivers from other parties to leases,
      licenses, franchises, permits, indentures, agreements or other instruments
      (“Third Party Consents”) are:

            

    

     

     

    
      	
              (a)  

            	
              required
      for the lawful Completion and consummation of the transactions
      contemplated hereby; or

            

    

     

     

    
      	
              (b)  

            	
              necessary
      in order that the Business conducted by the Company prior to the
      Completion Date can continue to be conducted by the Company in the same
      manner immediately after the Completion
Date;

            

    

     

    nor will
the Completion and consummation of the transactions contemplated hereby result
in creating, accelerating or increasing any liability of the Company, except
where the failure of any of the foregoing would not have a Material Adverse
Effect.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
      	
              7.6.3  

            	
              The
      Sellers do not give any warranty or representation as to whether the Buyer
      requires any Third Party Consents to lawfully complete and consummate the
      transactions under this Agreement or to conduct the Business after
      Completion.

            

    

     

     

    
      	
              7.7  

            	
              No
      winding up

            

    

     

     

    
      	
              7.7.1  

            	
              The
      Sellers jointly and severally warrant and represent that the Company is
      not in liquidation or has passed any resolution that it be wound up and no
      application for its winding up has been presented or threatened nor has
      any notice or purported notice under Section 459E of the Corporations Act
      been given to the Company.

            

    

     

     

    
      	
              7.8  

            	
              No
      external administration

            

    

     

     

    
      	
              7.8.1  

            	
              The
      Sellers jointly and severally warrant and represent that no external
      administrator of any kind has been appointed nor is the appointment of an
      external administrator of any kind threatened, in relation (as applicable)
      to the Shares, the Company or the whole or any part of the undertaking or
      assets of the Company and no event has occurred which entitles (or would,
      with the giving of notice or the lapse of time, entitle) any person (other
      than the Company) to appoint or seek the appointment by a court of an
      external administrator of any kind.

            

    

     

     

    
      	
              7.9  

            	
              Incorporation
      of the Company

            

    

     

     

    
      	
              7.9.1  

            	
              The
      Company is a corporation duly organized, validly existing and in good
      standing under the laws of the Commonwealth of
  Australia.

            

    

     

     

    
      	
              7.9.2  

            	
              The
      Company does not carry on business or provide services outside
      Australia.

            

    

     

     

    
      	
              7.10  

            	
              Authority
      to carry on business

            

    

     

     

    
      	
              7.10.1  

            	
              The
      Company has full power, capacity and authority (corporate and otherwise)
      to carry on its business and has all permits and licenses that are
      necessary to the conduct of its business or to the ownership, lease or
      operation of its properties and assets, except where the failure to have
      such permits and licenses would not have a Material Adverse
      Effect.

            

    

     

     

    
      	
              7.11  

            	
              Board
      & Shareholder approval

            

    

     

     

    
      	
              7.11.1  

            	
              The
      execution of this Agreement and the delivery of this Agreement to the
      Buyer and the sale contemplated in this Agreement have been, or will be
      prior to Completion, duly authorized by the Company’s Board of Directors
      and by the Company’s stockholders having full power and authority to
      authorize such actions.

            

    

     

     

    
      	
              7.12  

            	
              Authority
      to perform Agreement

            

    

     

     

    
      	
              7.12.1  

            	
              Subject
      to any consents required under Clause 7.6,
      the Sellers and the Company have the full legal right, power and authority
      to execute, deliver and carry out the terms and provisions of this
      Agreement, and this Agreement has been duly and validly executed and
      delivered on behalf of Sellers and the Company and constitutes a valid and
      binding obligation of each Seller and the Company enforceable in
      accordance with its terms.

            

    

     

     

    
      	
              7.13  

            	
              Authorised
      and issued Share capital

            

    

     

     

    
      	
              7.13.1  

            	
              The
      Company’s issued Share capital consists of 97,939 A Class Ordinary Shares
      which Shares have been issued to the Sellers and constitute the Shares the
      subject of sale and purchase under this Agreement.  All of the
      Shares are duly authorized, validly issued and fully
  paid.

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              7.14  

            	
              Ownership
      of issued Shares

            

    

     

     

    
      	
              7.14.1  

            	
              The
      Sellers are the lawful recorded owners of all the Shares, free and clear
      of any liens, pledges, encumbrances, charges, claims or restrictions of
      any kind, except as set forth in Schedule 3, and have, or will have on the
      Completion Date, the absolute, unilateral right, power, authority and
      capacity to enter into and perform this Agreement without any other or
      further authorization, action or proceeding, except as specified in this
      Agreement.

            

    

     

     

    
      	
              7.15  

            	
              Share
      options, warrants, calls and other
agreements

            

    

     

     

    
      	
              7.15.1  

            	
              There
      are no authorized or outstanding subscriptions, options, warrants, calls,
      contracts, demands, commitments, convertible securities or other
      agreements or arrangements of any character or nature whatever under which
      any Seller or the Company are or may become obligated to issue, assign or
      transfer any shares of capital stock of the Company except as set forth in
      Schedule 3.

            

    

     

     

    
      	
              7.15.2  

            	
              Upon
      the delivery to Buyer on the Completion Date of the certificate(s)
      representing the Shares, Buyer will have good, legal, valid, marketable
      and indefeasible title to all the then issued and outstanding shares of
      capital stock of the Company, free and clear of any liens, pledges,
      encumbrances, charges, agreements, options, claims or other arrangements
      or restrictions of any kind.

            

    

     

     

    
      	
              7.15.3  

            	
              The
      Company will not alter the Share capital of the Company in any way
      (including but not limited to the issue of new Shares) prior to
      Completion.

            

    

     

     

    
      	
              7.16  

            	
              Shareholder
      rights of pre-emption

            

    

     

     

    
      	
              7.16.1  

            	
              Any
      rights of pre-emption with respect to the Shares contained in the
      Constitution or any other agreement have been waived by the Shareholders
      or have been extinguished in full.

            

    

     

     

    
      	
              7.17  

            	
              Shareholder
      agreements

            

    

     

     

    
      	
              7.17.1  

            	
              There
      is no existing shareholders agreement or similar document binding the
      Sellers as shareholders and the
Company.

            

    

     

     

    
      	
              7.18  

            	
              Company
      records

            

    

     

     

    
      	
              7.18.1  

            	
              The
      copies of the Company’s Constitution, and any and all by-laws and
      subordinate instruments to the Company’s Constitution, as the case may be
      (certified as of the date of this Agreement as true, correct and complete
      by the Company’s secretary or assistant secretary), all of which have been
      delivered to the Buyer, are true, correct and complete as of the date of
      this Agreement.

            

    

     

     

    
      	
              7.19  

            	
              Minute
      Books

            

    

     

     

    
      	
              7.19.1  

            	
              The
      minute books of the Company which have been provided to the Buyer prior to
      the Completion Date:

            

    

     

     

    
      	
              (a)  

            	
              each
      contain true, correct and complete minutes and records of the meetings,
      proceedings and other actions to which they pertain;
  and

            

    

     

     

    
      	
              (b)  

            	
              contain
      all minutes  which the Company is required to keep and maintain
      under the Corporations Act, tax legislation or any other applicable
      Australian law.

            

    

     

     

    
      	
              7.20  

            	
              Subsidiaries

            

    

     

     

    
      	
              7.20.1  

            	
              Any
      and all businesses, entities, enterprises and organizations in which the
      Company has any ownership, voting or profit and loss sharing percentage
      interest (each called a “Subsidiary”) are identified in Schedule 4,
      together with the Company’s interest in this
  Agreement.

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              7.20.2  

            	
              Except
      as set forth in Schedule 4 or 26:

            

    

     

     

    
      	
              (a)  

            	
              the
      Company has made no advances to, or investments in, nor owns beneficially
      or of record, any securities of or other interest in, any business,
      entity, enterprise or organization;

            

    

     

     

    
      	
              (b)  

            	
              there
      are no arrangements through which the Company has acquired from, or
      provided to, any of the Sellers or their affiliates any goods, properties
      or services

            

    

     

     

    
      	
              (c)  

            	
              there
      are no rights, privileges or advantages now enjoyed by the Company as a
      result of the ownership of the Company by the Sellers which, to the
      knowledge of the Sellers or the Company, might be lost as a result of the
      Completion and consummation of the transactions contemplated by this
      Agreement.

            

    

     

     

    
      	
              7.20.3  

            	
              Each
      entity shown on Schedule 4 is duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation, and has
      full corporate power to own all of its property and to carry on its
      business as it is now being
conducted.

            

    

     

     

    
      	
              7.20.4  

            	
              Also
      set forth on Schedule 4 is a list of jurisdictions in which each
      Subsidiary is qualified as a foreign corporation.  Such
      jurisdictions are the only jurisdictions in which the ownership or leasing
      of property by each Subsidiary or the conduct of its business requires it
      to be so qualified.

            

    

     

     

    
      	
              7.20.5  

            	
              All
      of the outstanding share capital or shares or capital stock of each
      Subsidiary have been duly authorized and validly issued, are fully paid
      and non-assessable, and, except as set forth on Schedule 4, are owned, of
      record and beneficially, by the Company, and on the Completion Date will
      be owned by the Company, free and clear of all liens, encumbrances,
      equities, options or claims
whatsoever.

            

    

     

     

    
      	
              7.20.6  

            	
              No
      Subsidiary has outstanding any other equity securities or securities
      options, warrants or rights of any kind that are convertible into equity
      securities of such Subsidiary, except as set forth on Schedule
      4.

            

    

     

     

    
      	
              7.21  

            	
              Financial
      statements

            

    

     

     

    
      	
              7.21.1  

            	
              The
      Sellers have delivered, or will deliver prior to Completion, to the Buyer
      copies of the following financial statements (which include all notes and
      schedules attached to it), all of which are true, complete and correct,
      have been prepared from the books and records of the Company in accordance
      with A-GAAP consistently applied with past practice and fairly present the
      financial condition, assets, liabilities and results of operations of the
      Company as of the date of this Agreement and for the periods covered by
      this Agreement the compiled balance sheet of the Company at 30 June 2007,
      2008 and 2009, and the related statements of operations of the Company for
      the period then ended (such statements, including the related notes and
      schedules to it, are referred to in this Agreement as the “Financial
      Statements” ).

            

    

     

     

    
      	
              7.21.2  

            	
              In
      such Financial Statements, the statements of operations do not contain any
      items of income not earned in the ordinary course of business except as
      set forth in Schedule 6, and the financial statements for the interim
      periods indicated include all adjustments, which consist of only normal
      recurring accruals, necessary for such fair presentation.  There
      are no facts known to any of the Sellers or the Company that, under
      generally accepted accounting principles consistently applied, would alter
      the information contained in the foregoing Financial Statements in any
      material way.

            

    

     

     

    
      	
              7.21.3  

            	
              The
      final Completion Balance Sheet will be complete and correct in all
      material respects determined in accordance with
  A-GAAP.

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
              7.21.4  

            	
              For
      the purposes of this Agreement, the balance sheet of the Company as of 30
      June 2009 is referred to as the “Balance Sheet” and 30 June 2009 is
      referred to as the “Balance Sheet
Date”.

            

    

     

     

    
      	
              7.22  

            	
              Records
      and books of account

            

    

     

     

    
      	
              7.22.1  

            	
              The
      records and books of account of the Company reflect all material items of
      income and expense and all material assets, liabilities and accruals, have
      been, and to the Completion Date will be, regularly kept and maintained in
      conformity with A-GAAP applied on a consistent basis with preceding
      years.

            

    

     

     

    
      	
              7.23  

            	
              Absence
      of undisclosed liabilities

            

    

     

     

    
      	
              7.23.1  

            	
              Except
      as and to the extent reflected or reserved against in the Company’s
      Financial Statements or disclosed in Schedule 7 or in the Completion
      Balance Sheet, there are no liabilities or obligations of the Company of
      any kind whatsoever, whether accrued, fixed, absolute, contingent,
      determined or determinable, and including without
    limitation:

            

    

     

     

    
      	
              (a)  

            	
              liabilities
      to former, retired or active employees of the Company under any pension,
      health and welfare benefit plan, vacation plan or other plan of the
      Company;

            

    

     

     

    
      	
              (b)  

            	
              tax
      liabilities incurred in respect of or measured by income for any period
      prior to the close of business on the Balance Sheet Date, or arising out
      of transactions entered into, or any state of facts existing, on or prior
      to said date;

            

    

     

     

    
      	
              (c)  

            	
              tax
      liabilities incurred in respect of or measured by income for any period
      prior to the close of business on the Completion Date, or arising out of
      transactions entered into, or any state of facts existing, on or prior to
      said date;

            

    

     

     

    
      	
              (d)  

            	
              contingent
      liabilities in the nature of an endorsement, guarantee, indemnity or
      warranty, and there is no condition, situation or circumstance existing or
      which has existed that could reasonably be expected to result in any
      liability of the Company which is of a nature that would be required to be
      disclosed on its Financial Statements in accordance with A-GAAP;
      and

            

    

     

     

    
      	
              (e)  

            	
              liabilities
      to any former contractors or agents of the
  Company;

            

    

     

    other
than liabilities and contingent liabilities incurred in the ordinary course of
business since the Balance Sheet Date consistent with the Company’s recent
customary business practice, none of which is materially adverse to the
Company.

     

    
      	
              7.24  

            	
              Taxes

            

    

     

     

    
      	
              7.24.1  

            	
              The
      Company has timely filed all federal, state, local and foreign returns,
      business activity statements, information and reports (“Tax Returns”)
      relating to Taxes required to be filed by the Company with any Tax
      authority effective through to the Completion
  Date.

            

    

     

     

    
      	
              7.24.2  

            	
              All
      such Tax Returns are true, correct and complete in all respects, except
      for immaterial amounts where such would not have a Material Adverse
      Effect.

            

    

     

     

    
      	
              7.24.3  

            	
              The
      Company has paid all Taxes shown to be due on such Tax
      Returns.

            

    

     

     

    
      	
              7.24.4  

            	
              Except
      as listed on Schedule 8, the Company is not currently the beneficiary of
      any extensions of time within which to file any Tax
    Returns.

            

    

     

     

    
      	
              7.24.5  

            	
              The
      Sellers and the Company have furnished and made available to the Buyer
      complete and accurate copies of all income and other Tax Returns and any
      amendments to it filed by the Company in the last four (4)
      years.

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              7.24.6  

            	
              The
      Company, as of the Completion Date, will have withheld and accrued or paid
      to the proper authority all Taxes required to have been withheld and
      accrued or paid, except for immaterial amounts where such would not have a
      Material Adverse Effect.

            

    

     

     

    
      	
              7.24.7  

            	
              The
      Company has not been delinquent in the payment of any Tax nor is there any
      Tax deficiency outstanding or assessed against the Company.  The
      Company has not executed any unexpired waiver of any statute of
      limitations on or extending the period for the assessment or collection of
      any Tax.

            

    

     

     

    
      	
              7.24.8  

            	
              There
      is no dispute, claim, or proposed adjustment concerning any Tax liability
      of the Company either:

            

    

     

     

    
      	
              (a)  

            	
              claimed
      or raised by any Tax authority in writing;
or

            

    

     

     

    
      	
              (b)  

            	
              based
      upon personal contact with any agent of such Tax authority, and there is
      no claim for assessment, deficiency, or collection of Taxes, or proposed
      assessment, deficiency or collection from the Australian Taxation Office
      or any other governmental authority against the Company which has not been
      satisfied.

            

    

     

     

    
      	
              7.24.9  

            	
              The
      Company is not a party to nor has it been notified in writing that it is
      the subject of any pending, proposed, or threatened action, investigation,
      proceeding, audit, claim or assessment by or before the Australian
      Taxation Office or any other governmental authority, nor does the Company
      have any reason to believe that any such notice will be received in the
      future.

            

    

     

     

    
      	
              7.24.10  

            	
              Except
      as set forth on Schedule 8, neither the Australian Taxation Office nor any
      state or local taxation authority has ever audited any Tax Return of the
      Company.

            

    

     

     

    
      	
              7.24.11  

            	
              The
      Company has not filed any requests for rulings with the Australian
      Taxation Office.

            

    

     

     

    
      	
              7.24.12  

            	
              Except
      as provided to the Company’s accountants, no power of attorney has been
      granted by the Company or its Subsidiaries with respect to any matter
      relating to Taxes of the Company.

            

    

     

     

    
      	
              7.24.13  

            	
              There
      are no Tax liens of any kind upon any property or assets of the Company,
      except for inchoate liens for Taxes not yet due and
    payable.

            

    

     

     

    
      	
              7.24.14  

            	
              Except
      for immaterial amounts which would not have a Material Adverse Effect, the
      Company has no liability for any unpaid Taxes which has not been paid or
      accrued for or reserved on the Financial Statements in accordance with
      A-GAAP, whether asserted or unasserted, contingent or
      otherwise.

            

    

     

     

    
      	
              7.24.15  

            	
              There
      is no contract, agreement, plan or arrangement to which the Company is a
      party as of the date of this Agreement, including but not limited to the
      provisions of this Agreement, covering any employee or former employee of
      the Company that, individually or collectively, would reasonably be
      expected to give rise to the payment of any amount that would not be
      deductible pursuant to the Income Tax
Laws.

            

    

     

     

    
      	
              7.24.16  

            	
              There
      is no contract, agreement, plan or arrangement to which the Company is a
      party or by which it is bound to compensate any individual for excise
      taxes.

            

    

     

     

    
      	
              7.24.17  

            	
              The
      Company is not a party to, nor has any obligation under any tax-sharing,
      tax indemnity or tax allocation agreement or
  arrangement.

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
       

      
        	
                7.25  

              	
                Accounts
      receivable

              

      

       

       

    

    
      	
              7.25.1  

            	
              The
      accounts receivable of the Company shown on the Balance Sheet Date, and
      those to be shown in the Financial Statements, are, and will be, actual
      bona fide receivables from transactions in the ordinary course of business
      representing valid and binding obligations of others for the total dollar
      amount shown thereon, and as of the Balance Sheet Date were not (and
      presently are not) subject to any recoupments, set-offs, or
      counterclaims.

            

    

     

     

    
      	
              7.25.2  

            	
              The
      accounts receivable of the Company shown on the Effective Date, and those
      to be shown in the Financial Statements, are, and will be, actual bona
      fide receivables from transactions in the ordinary course of business
      representing valid and binding obligations of others for the total dollar
      amount shown thereon, and as of the Completion Date as far as the Sellers
      are aware were not (and presently are not) subject to any recoupments,
      set-offs, or counterclaims.

            

    

     

     

    
      	
              7.25.3  

            	
              To
      the best of Sellers’ knowledge, except as set forth on Schedule 9, all
      such accounts receivable are, and will be collectible in amounts not less
      than the amounts (net of reserves) carried on the books of the Company,
      including the  Financial Statements, and will be paid in
      accordance with their terms.

            

    

     

     

    
      	
              7.25.4  

            	
              Except
      as listed on Schedule 9, all such accounts receivable are and will be
      actual bona fide receivables from transactions in the ordinary course of
      business.

            

    

     

     

    
      	
              7.26  

            	
              Inventory

            

    

     

     

    
      	
              7.26.1  

            	
              The
      inventories of the Company are located at the locations listed on Schedule
      10.

            

    

     

     

    
      	
              7.26.2  

            	
              Except
      as disclosed in Schedule 10, the inventories of the Company shown on its
      Balance Sheet (net of reserves) are carried at values which reflect the
      normal inventory valuation policy of the Company of stating the items of
      inventory at lower of cost or market in accordance with A-GAAP
      consistently applied.

            

    

     

     

    
      	
              7.26.3  

            	
              Inventory
      acquired since the Balance Sheet Date has been acquired in the ordinary
      course of business and valued as set forth
  above.

            

    

     

     

    
      	
              7.26.4  

            	
              The
      Company will maintain the inventory in the normal and ordinary course of
      business from the date of this Agreement through the Completion
      Date.

            

    

     

     

    
      	
              7.27  

            	
              Fixed
      Assets

            

    

     

     

    
      	
              7.27.1  

            	
              Except
      for items disposed of in the ordinary course of business, all machinery,
      tools, furniture, fixtures, equipment, vehicles, leasehold improvements
      and all other tangible personal property (“Fixed Assets”) of the Company
      currently being used in the conduct of its Business, or included in
      determining the net book value of the Company on the Balance Sheet Date,
      together with any machinery or equipment that is leased or operated by the
      Company, are in fully serviceable working condition and
      repair.

            

    

     

     

    
      	
              7.27.2  

            	
              The
      Fixed Assets shall be maintained in such condition from the date of this
      Agreement through the Completion
Date.

            

    

     

     

    
      	
              7.27.3  

            	
              Except
      as described on Schedule 11, all Fixed Assets owned, used or held by the
      Company are situated at its business premises and are currently used in
      its Business.

            

    

     

     

    
      	
              7.27.4  

            	
              Schedule
      11 describes all Fixed Assets owned by or an interest in which is claimed
      by any other person (whether a customer, supplier or other person) for
      which the Company is responsible (copies of all agreements relating to it
      being attached to said Schedule 11), and all such property is in the
      Company’s actual possession and is in such condition that upon the return
      of such property in its present condition to its owner, the Company will
      not be liable in any amount to such
owner.

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
              7.27.5  

            	
              There
      are no outstanding requirements or recommendations by any insurance
      company that has issued a policy covering
  either:

            

    

     

     

    
      	
              (a)  

            	
              such
      Fixed Assets; or

            

    

     

     

    
      	
              (b)  

            	
              any
      liabilities of the Company relating to operation of the Business, or by
      any board of fire underwriters or other body exercising similar functions,
      requiring or recommending any repairs or work to be done on any Fixed
      Assets or any changes in the operations of the Business, any equipment or
      machinery used in this Agreement, or any procedures relating to such
      operations, equipment or machinery.

            

    

     

     

    
      	
              7.27.6  

            	
              All
      Fixed Assets of the Company are set forth on Schedule
  11.

            

    

     

     

    
      	
              7.27.7  

            	
              The
      Company only needs the Fixed Assets in order to operate the
      Business.

            

    

     

     

    
      	
              7.28  

            	
              Real
      property matters

            

    

     

     

    
      	
              7.28.1  

            	
              The
      Company does not own any real property as of the date of this Agreement
      and has not owned any real property during the three (3) years preceding
      the date of this Agreement.

            

    

     

     

    
      	
              7.29  

            	
              Leases

            

    

     

     

    
      	
              7.29.1  

            	
              All
      leases of real and personal property of the Company are described in
      Schedule 12, are in full force and effect and constitute legal, valid and
      binding obligations of the respective parties to it enforceable in
      accordance with their terms, except as limited by bankruptcy, insolvency,
      reorganization, moratorium or similar laws relating to or affecting
      generally the enforcement of creditor’s rights, and have not been assigned
      or encumbered.

            

    

     

     

    
      	
              7.29.2  

            	
              The
      Company has performed in all material respects the obligations required to
      be performed by it under all such leases to date and it is not in default
      in any material respect under any of said leases, except as set forth in
      Schedule 12, nor has it made any leasehold improvements required to be
      removed at the termination of any lease, except
  signs.

            

    

     

     

    
      	
              7.29.3  

            	
              No
      other party to any such lease is in material default under the
      lease.

            

    

     

     

    
      	
              7.29.4  

            	
              Except
      as noted on Schedule 12, none of the leases listed thereon require the
      consent of a third party in connection with the transfer of the
      Shares.

            

    

     

     

    
      	
              7.30  

            	
              Intellectual
      property rights

            

    

     

     

    
      	
              7.30.1  

            	
              The
      Company owns, or possesses adequate licenses or other rights to use, all
      patents, software, trademarks, service marks, trade names and copyrights
      and trade secrets, if any, necessary to conduct its Business as now
      operated by it.

            

    

     

     

    
      	
              7.30.2  

            	
              The
      patents, software, trademarks, service marks, copyrights, trade names and
      trade secrets, if any, registered in the name of or owned or used by or
      licensed to the Company and applications for any of this Agreement (the
      “Intangibles”) are described or referenced in Schedule
  13.

            

    

     

     

    
      	
              7.30.3  

            	
              The
      Sellers hereby specifically acknowledge that all right, title and interest
      in and to all patents and software listed on Schedule 13 as patents owned
      by the Company are owned by the Company or the Company has a right to use
      same and that the ownership of such patents and software will be
      transferred as part of the Company to Buyer as part of the transaction
      contemplated under this Agreement.

            

    

     

     

    
      	
              7.30.4  

            	
              No
      officer, director, shareholder or employee of the Company or any relative
      or spouse of any such person owns any patents or patent applications or
      any inventions, software, secret formulae or processes, trade secrets or
      other similar rights, nor is any of them a party to any license agreement,
      used by or useful to the Company or related to its business except as
      listed in Schedule 13.

            

    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              7.30.5  

            	
              All
      of the Intangibles are valid and in good standing to the best of Sellers’
      knowledge, and are free and clear of all liens, security interests,
      charges, restrictions and encumbrances of any kind whatsoever, and have
      not been licensed to any third party except as described in Schedule
      13.

            

    

     

     

    
      	
              7.30.6  

            	
              The
      Company has not been charged with, nor has it infringed, nor to the
      Sellers’ knowledge is it threatened to be charged with infringement of,
      any patent, proprietary rights or trade secrets of others in the conduct
      of its business, and, to the date of this Agreement, neither the Sellers
      nor the Company has received any notice of conflict with or violation of
      the asserted rights in intangibles or trade secrets of
    others.

            

    

     

     

    
      	
              7.30.7  

            	
              The
      Company is not now manufacturing any goods under a present permit,
      franchise or license, except as set forth in said Schedule
    13.

            

    

     

     

    
      	
              7.30.8  

            	
              The
      Completion and consummation of the transactions contemplated hereby will
      not alter or impair any rights of the Company in any such Intangibles or
      in any such permit, franchise or license, except as described in Schedule
      13.

            

    

     

     

    
      	
              7.30.9  

            	
              The
      Intangibles and the Company’s tooling, manufacturing and engineering
      drawings, process sheets, specifications, bills of material and other like
      information and data are in such form and of such quality and will be
      maintained in such a manner that the Company can, following the
      Completion, design, produce, manufacture, assemble and sell the products
      and provide the services provided by it so that such products and services
      meet applicable specifications and conform with the standards of quality
      and cost of production standards met by
it.

            

    

     

     

    
      	
              7.30.10  

            	
              The
      Company has the sole and exclusive right to use its corporate and trade
      names in the jurisdictions where it transacts
  business.

            

    

     

     

    
      	
              7.31  

            	
              Insurance
      policies

            

    

     

     

    
      	
              7.31.1  

            	
              There
      is set forth in Schedule 14 a list and brief description of all insurance
      policies on the date of this Agreement held by the Company or on which it
      pays premiums, including, without limitation, professional indemnity,
      workers compensation, public risk, business risk, key man, fidelity,
      building, contents, life and title insurance policies, which description
      includes the premiums payable by it
thereunder.

            

    

     

     

    
      	
              7.31.2  

            	
              Schedule
      14 also sets forth, in the case of any life insurance policy held by the
      Company, the name of the insured under such policy, the cash surrender
      value of this Agreement and any loans under
it.

            

    

     

     

    
      	
              7.31.3  

            	
              All
      such insurance premiums in respect of such coverage have been, and to the
      Completion Date will be, paid in full, if due and
  owing.

            

    

     

     

    
      	
              7.31.4  

            	
              All
      claims, if any, made against the Company which are covered by such
      policies have been, or are being, settled or defended by the insurance
      companies that have issued such
policies.

            

    

     

     

    
      	
              7.31.5  

            	
              Up
      to the Completion Date, such insurance coverage will be maintained in full
      force and effect and will not be cancelled, modified or changed without
      the express written consent of the Buyer, except to the extent the
      maturity dates of any such insurance policies expiring prior to the
      Completion Date.

            

    

     

     

    
      	
              7.31.6  

            	
              No
      such policy has been, or to the Completion Date will be, cancelled by the
      issuer of this Agreement, and, to the knowledge of the Sellers and the
      Company, between the date of this Agreement and the Completion Date, there
      shall be no increase in the premiums with respect to any such insurance
      policy caused by any action or omission of the Sellers or of the
      Company.

            

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
              7.31.7  

            	
              Upon
      the Completion Date, all life insurance policies maintained by the Company
      in respect of the Sellers (or relatives of the Sellers) shall be assigned
      to each respective Seller.

            

    

     

     

    
      	
              7.31.8  

            	
              The
      Company has not made any insurance claims (other than WorkCover and motor
      vehicle claims) in the past 5
years.

            

    

     

     

    
      	
              7.32  

            	
              Banking
      and personnel lists

            

    

     

     

    
      	
              7.32.1  

            	
              The
      Sellers and the Company will deliver to the Buyer promptly after the
      Completion Date the following accurate lists and summary descriptions
      relating to the Company:

            

    

     

     

    
      	
              (a)  

            	
              The
      name of each bank in which the Company has an account or safe deposit box
      and the names of all persons authorized to draw thereon or have access to
      it.

            

    

     

     

    
      	
              (b)  

            	
              The
      names, current annual salary rates and total compensation for the
      preceding fiscal year of all of the present directors and officers of the
      Company, and any other employees whose current base accrual salary or
      annualized hourly rate equivalent is AUD$20,000 or more, together with a
      summary of the bonuses, percentage compensation and other like benefits,
      if any, paid or payable to such persons for the last full fiscal year
      completed, together with a schedule of changes since that date, if
      any.

            

    

     

     

    
      	
              (c)  

            	
              A
      schedule of workers’ compensation payments of the Company over the past
      five (5) full fiscal years and the fiscal year to date, a schedule of
      claims by employees of the Company against the workers’ compensation fund
      for any reason over such period, identification of all compensation and
      medical benefits paid to date on each such claim and the estimated amount
      of compensation and medical benefits to be paid in the future on each such
      claim.

            

    

     

     

    
      	
              7.33  

            	
              Third
      party contracts

            

    

     

     

    
      	
              7.33.1  

            	
              There
      is included in Schedule 15 a list of the following items (whether written
      or oral) relating to the Company, which list identifies and fairly
      summarizes each item (collectively “Third Party
    Contracts”):

            

    

     

     

    
      	
              (a)  

            	
              all
      collective bargaining and other labour union agreements (if
      any);

            

    

     

     

    
      	
              (b)  

            	
              all
      employment agreements with any officer, director, employee or
      consultant;

            

    

     

     

    
      	
              (c)  

            	
              all
      employee pension, health and welfare benefit plans, group insurance,
      bonus, profit sharing, severance, vacation, hospitalization, and
      retirement plans, post-retirement medical benefit plans, and any other
      plans, arrangements or custom requiring payments or benefits to current or
      retiring employees;

            

    

     

     

    
      	
              (d)  

            	
              all
      joint venture contracts of the Company or affiliates relating to the
      Business;

            

    

     

     

    
      	
              (e)  

            	
              all
      contracts of the Company relating
to:

            

    

     

     

    
      	
              (i)  

            	
              obligations
      for borrowed money;

            

    

     

     

    
      	
              (ii)  

            	
              obligations
      evidenced by bonds, debentures, notes or other similar
      instruments;

            

    

     

     

    
      	
              (iii)  

            	
              obligations
      to pay the deferred purchase price of property or services, except trade
      accounts payable arising in the ordinary course of
    business;

            

    

     

     

    
      	
              (iv)  

            	
              obligations
      under capital leases;

            

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              (v)  

            	
              debt
      of others secured by a lien on any asset of the Company;
    and

            

    

     

     

    
      	
              (vi)  

            	
              debts
      of others guaranteed by the
Company;

            

    

     

     

    
      	
              (f)  

            	
              all
      agreements of the Company relating to the supply of raw materials for and
      the distribution of the products of its business, including without
      limitation all sales agreements, manufacturer’s representative agreements
      and distribution agreements of whatever magnitude and nature, and any
      commitments to or for them;

            

    

     

     

    
      	
              (g)  

            	
              all
      contracts that individually provide for aggregate future payments to or
      from the Company of AUD$50,000 or more, to the extent not included in
      Clauses 7.33.1(a) to 7.33.1(d);

            

    

     

     

    
      	
              (h)  

            	
              all
      contracts of the Company that have a term exceeding one year and that may
      not be cancelled without any liability, penalty or premium, to the extent
      not included in 7.33.1(a)  through
      (e)
above;

            

    

     

     

    
      	
              (i)  

            	
              a
      complete list of all outstanding powers of attorney granted by the
      Company; and

            

    

     

     

    
      	
              (j)  

            	
              all
      other contracts of the Company material to the business, assets,
      liabilities, financial condition, results of operations or prospects of
      the Business taken as a whole to the extent not included
      above.

            

    

     

     

    
      	
              7.33.2  

            	
              Except
      as set forth in Schedule 15:

            

    

     

     

    
      	
              (a)  

            	
              all
      contracts, agreements and commitments of the Company set forth in Schedule
      15 are valid, binding and in full force and effect;
  and

            

    

     

     

    
      	
              (b)  

            	
              neither
      the Company nor, to the best of Sellers’ knowledge, any other party to any
      such contract, agreement, or commitment has materially breached any
      provision of this Agreement or is in default thereunder;
    and

            

    

     

     

    
      	
              (c)  

            	
              the
      Company and the Sellers have complied with all obligations of the QBuild
      agreements and government protocols in respect of these contracts which
      are detailed in Schedule 15.

            

    

     

     

    
      	
              7.33.3  

            	
              Except
      as set forth in Schedule 15, the sale of the Shares by the Sellers in
      accordance with this Agreement will not result in the termination of any
      contract, agreement or commitment of the Company set forth in Schedule 15
      and immediately after the Completion, each such contract, agreement or
      commitment will continue in full force and effect without the imposition
      or acceleration of any burdensome condition or other obligation on the
      Company resulting from the sale of the Shares by the
    Sellers.

            

    

     

     

    
      	
              7.33.4  

            	
              True
      and complete copies of the contracts, leases, licenses and other documents
      referred to in this Schedule 15 will be delivered to the Buyer, certified
      by a Director or the Secretary of the Company as true, correct and
      complete copies, not later than four weeks from the date of this Agreement
      or ten Business Days before the Completion Date, whichever is
      sooner.

            

    

     

     

    
      	
              7.33.5  

            	
              There
      are no pending disputes with customers or vendors of the Company regarding
      quality or return of goods involving amounts in dispute with any one
      customer or vendor, whether for related or unrelated claims, in excess of
      AUD$5,000 except as described on Schedule 15, all of which will be
      resolved to the reasonable satisfaction of Buyer prior to the Completion
      Date.

            

    

     

     

    
      	
              7.33.6  

            	
              To
      the best knowledge of Sellers and the Company, there has not been any
      event, happening, threat or fact that would lead them to believe that any
      of said customers or vendors will terminate or materially alter their
      business relationship with the Company after completion of the
      transactions contemplated by this
Agreement.

            

    

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    
      	
              7.33.7  

            	
              The
      Company has no material reliance either directly or indirectly upon
      revenue of DMC and Videofied in regards to operating the Business and any
      commercial dealings between the Company, DMC and Videofied have at all
      times been at arm's length.

            

    

     

     

    
      	
              7.33.8  

            	
              The
      operation of DMC and Videofied does not interfere with the operations of
      the Company.

            

    

     

     

    
      	
              7.34  

            	
              Compliance
      with the law

            

    

     

     

    
      	
              7.34.1  

            	
              The
      Company is not in violation of any applicable federal, state, local or
      foreign law, regulation, award or order or any other, decree or
      requirement of any governmental, regulatory or administrative agency or
      authority or court or other tribunal (including, but not limited to, any
      law, regulation order or requirement relating to securities, properties,
      business, products, manufacturing processes, advertising, sales or
      employment practices, terms and conditions of employment, superannuation,
      occupational safety, health and welfare, conditions of occupied premises,
      product safety and liability, civil rights, or environmental protection,
      including, but not limited to, those related to waste management, air
      pollution control, waste water treatment or noise abatement), except where
      such would not have a Material Adverse
Effect.

            

    

     

     

    
      	
              7.34.2  

            	
              Except
      as set forth in Schedule 16, the Company has not been and is not now
      charged with, or to the best knowledge of the Sellers or the Company under
      investigation with respect to, any violation of any applicable law,
      regulation, order or requirement relating to any of the foregoing, nor, to
      the best knowledge of any Seller or the Company after due inquiry, are
      there any circumstances that would or might give rise to any such
      violation.

            

    

     

     

    
      	
              7.34.3  

            	
              The
      Company has filed all reports required to be filed with any governmental,
      regulatory or administrative agency or
  authority.

            

    

     

     

    
      	
              7.34.4  

            	
              The
      Company has complied with the Trade Practices Act
  1974.

            

    

     

     

    
      	
              7.34.5  

            	
              The
      Company has performed all work in accordance with the applicable
      Australian Standards.

            

    

     

     

    
      	
              7.34.6  

            	
              The
      Company is not in violation of the Privacy
Act.

            

    

     

     

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
       

      
        	
                7.35  

              	
                Litigation
      and disputes

              

      

    

     

    
      	
              7.35.1  

            	
              Except
      as specifically identified on the Balance Sheet or footnotes to it or set
      forth in Schedule 17:

            

    

     

     

    
      	
              (a)  

            	
              There
      are no legal, administrative, arbitration or other proceedings or
      governmental investigations pending or, to the best knowledge of Sellers
      or the Company, threatened, against the Sellers or the Company, relating
      to its Business or the Company or its properties (including leased
      property), or the transactions contemplated by this Agreement, nor is
      there any basis known to the Company or any Seller for any such
      action.

            

    

     

     

    
      	
              (b)  

            	
              There
      are no judgments, decrees or orders of any court, or any governmental
      department, commission, board, agency or instrumentality binding upon
      Sellers or the Company relating to its Business or the Company the effect
      of which is to prohibit any business practice or the acquisition of any
      property or the conduct of any business by the Company or which limit or
      control or otherwise adversely affect its method or manner of doing
      business.

            

    

     

     

    
      	
              (c)  

            	
              No
      work stoppage has occurred and is continuing or, to the knowledge of
      Sellers or the Company, is threatened affecting its Business, and to the
      best of Sellers’ knowledge, no question involving recognition of a
      collective bargaining agent exists in respect of any employees of the
      Company.

            

    

     

     

    
      	
              (d)  

            	
              There
      are no pending labour negotiations or, to the best of Sellers’ knowledge,
      union organization efforts relating to employees of the
      Company.

            

    

     

     

    
      	
              (e)  

            	
              There
      are no charges of discrimination (relating to sex, age, race, national
      origin, handicap or veteran status) or unfair labour practices pending or,
      to the best knowledge of the Sellers or the Company, threatened before any
      governmental or regulatory agency or authority or any court relating to
      employees of the Company.

            

    

     

     

    
      	
              (f)  

            	
              No
      legal proceedings have been instituted or threatened or claim or demand
      made against the Sellers, the Company, or the Buyer seeking to restrain or
      prohibit or to obtain substantial damages with respect to the Completion
      and consummation of the transactions contemplated hereby, and there shall
      not be in effect any order by a governmental body of competent
      jurisdiction restraining, enjoining or otherwise prohibiting the
      Completion and consummation of the transactions contemplated
      hereby.

            

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    
       

      
        	
                7.36  

              	
                Absence
      of certain changes or events

              

      

       

    

    
      	
              7.36.1  

            	
              The
      Company has not, since the Balance Sheet Date, and except in the ordinary
      course of business consistent with past practice and/or except as
      described on Schedule 18:

            

    

     

     

    
      	
              (a)  

            	
              incurred
      any material obligation or liability (absolute, accrued, contingent or
      otherwise), except in the ordinary course of its Business consistent with
      past practice  or in connection with the performance of this
      Agreement, and any such obligation or liability incurred in the ordinary
      course is not materially adverse, except for claims, if any, that are
      adequately covered by insurance;

            

    

     

     

    
      	
              (b)  

            	
              discharged
      or satisfied any lien or encumbrance, or paid or satisfied any obligations
      or liability (absolute, accrued, contingent or otherwise) other
      than:

            

    

     

     

    
      	
              (i)  

            	
              liabilities
      shown or reflected on the Balance Sheet;
and

            

    

     

     

    
      	
              (ii)  

            	
              liabilities
      incurred since the Balance Sheet Date in the ordinary course of business
      that were not materially adverse;

            

    

     

     

    
      	
              (c)  

            	
              increased
      or established any reserve or accrual for taxes or other liability on its
      books or otherwise provided therefore,
except:

            

    

     

     

    
      	
              (i)  

            	
              as
      disclosed on the Balance Sheet; or

            

    

     

     

    
      	
              (ii)  

            	
              as
      may have been required under generally accepted accounting principles due
      to income earned or expense accrued since the Balance Sheet Date and as
      disclosed to the Buyer in writing;

            

    

     

     

    
      	
              (d)  

            	
              mortgaged,
      pledged or subjected to any lien, charge or other encumbrance any of its
      assets, tangible or intangible;

            

    

     

     

    
      	
              (e)  

            	
              sold
      or transferred any of its assets or cancelled any debts or claims or
      waived any rights, except in the ordinary course of business and which has
      not been materially adverse;

            

    

     

     

    
      	
              (f)  

            	
              disposed
      of or permitted to lapse any patents or trademarks or any patent or
      trademark applications material to the operation of its
      Business;

            

    

     

     

    
      	
              (g)  

            	
              incurred
      any significant labour trouble or granted any general or uniform increase
      in salary or wages payable or to become payable by it to any director,
      officer, employee or agent, or by means of any bonus or pension plan,
      contract or other commitment increased the compensation of any director,
      officer, employee or agent;

            

    

     

     

    
      	
              (h)  

            	
              authorized
      any capital expenditure for real estate or leasehold improvements,
      machinery, equipment or moulds in excess of AUD$5,000.00 in the
      aggregate;

            

    

     

     

    
      	
              (i)  

            	
              except
      for this Agreement or as otherwise disclosed in this Agreement or in any
      schedule to this Agreement, entered into any material
      transaction;

            

    

     

     

    
      	
              (j)  

            	
              issued
      any stocks, bonds, shares or other corporate securities, or made any
      declaration or payment of any dividend or any distribution in respect of
      its capital stock; or

            

    

     

     

    
      	
              (k)  

            	
              experienced
      damage, destruction or loss (whether or not covered by insurance)
      individually or in the aggregate materially and adversely affecting any of
      its properties, assets or Business, or experienced any other material
      adverse change or changes individually or in the aggregate affecting its
      financial condition, assets, liabilities or
  Business.

            

    

     

     

    
      	
              7.37  

            	
              Employee
      benefit plans

            

    

     

     

    
      	
              7.37.1  

            	
              Schedule
      19 lists a description of the only Employee Programs (as defined below)
      that have been maintained (as such term is further defined below) by the
      Company at any time during the five (5) years prior to the date of this
      Agreement.

            

    

     

     

    
      	
              7.37.2  

            	
              There
      has not been any failure of any party to comply with any laws applicable
      with respect to any Employee Program that has been maintained by the
      Company, except where such would not have a Material Adverse
      Effect.

            

    

     

     

    
      	
              7.37.3  

            	
              With
      respect to any Employee Programs now or previously maintained by the
      Company, there has occurred no breach of any duty under the Income Tax
      Laws or other applicable law which could result, directly or indirectly in
      any taxes, penalties or other liability to the Buyer, the Company or any
      affiliate, except for immaterial exceptions which would not have a
      Material Adverse Effect.

            

    

     

     

    
      	
              7.37.4  

            	
              No
      litigation, arbitration, or governmental administrative proceeding (or
      investigation) or other proceeding (other than those relating to routine
      claims for benefits) is pending or, to the best knowledge of the Company
      and Seller, threatened with respect to any such Employee
      Program.

            

    

     

     

    
      	
              7.37.5  

            	
              Except
      as set forth in Schedule 19, neither the Company nor any affiliate has
      ever:

            

    

     

     

    
      	
              (a)  

            	
              provided
      health care or any other non-pension benefits to any employees after their
      employment was terminated or has ever promised to provide such
      post-termination benefits; or

            

    

     

     

    
      	
              (b)  

            	
              maintained
      an Employee Program provided to such employees including, without
      limitation, any Multi-Employer
Plan.

            

    

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    
      	
              7.37.6  

            	
              For
      purposes of this Clause 7.37, an entity
      “maintains” an Employee Program if such entity sponsors, contributes to,
      or provides (or has promised to provide) benefits under such Employee
      Program, or has any obligation (by agreement or under applicable law) to
      contribute to or provide benefits under such Employee Program, or if such
      Employee Program provides benefits to or otherwise covers employees of
      such entity (or their spouses, dependents, or
    beneficiaries);

            

    

     

     

    
      	
              7.37.7  

            	
              The
      transfer of the Sale Shares to the Buyer will not cause an increase in the
      obligations of the Company:

            

    

     

     

    
      	
              (a)  

            	
              under
      any award, enterprise agreement or other industrial instrument applicable
      to the Company; or

            

    

     

     

    
      	
              (b)  

            	
              to
      make contributions to a superannuation fund or an increase in any benefits
      payable from a superannuation fund.

            

    

     

     

    
      	
              7.38  

            	
              Service
      warranties and service liabilities

            

    

     

     

    
      	
              7.38.1  

            	
              The
      service warranties and re-supply policies of the Company in effect on the
      date of this Agreement and the types of services to which they apply are
      described on Schedule 20.

            

    

     

     

    
      	
              7.38.2  

            	
              Schedule
      20 also sets forth all service liability claims involving amounts in
      controversy in excess of AUD$5,000 that are currently either pending or,
      to the best of the Sellers’ and the Company’s knowledge, threatened
      against the Company.

            

    

     

     

    
      	
              7.38.3  

            	
              The
      Sellers are not aware of any reason why the future cost of performing all
      such obligations and paying all such service liability claims with respect
      to services provided prior to the Completion Date will not exceed the
      average annual cost thereof for said past three year
    period.

            

    

     

     

    
      	
              7.39  

            	
              Company
      assets

            

    

     

     

    
      	
              7.39.1  

            	
              The
      assets of the Company are located at the locations listed on Schedule
      21.

            

    

     

     

    
      	
              7.39.2  

            	
              Except
      as described in Schedule 21, the assets of the Company are, and together
      with the additional assets to be acquired or otherwise received by the
      Company prior to the Completion, will at the Completion Date be,
      sufficient in all material respects to carry on the operations of the
      Business as now conducted by the
Company.

            

    

     

     

    
      	
              7.39.3  

            	
              The
      Company is the only business organization through which the Business is
      conducted.

            

    

     

     

    
      	
              7.39.4  

            	
              Except
      as set forth in Schedules 12 or 21, all assets used by the Sellers and the
      Company to conduct the Business are, and will on the Completion Date be,
      owned by the Company.

            

    

     

     

    
      	
              7.40  

            	
              Absence
      of certain commercial practices

            

    

     

     

    
      	
              7.40.1  

            	
              Except
      as described on Schedule 22, neither the Company nor any Seller has made
      any payment (directly or by secret commissions, discounts, compensation or
      other payments) or given any gifts to another business concern, to an
      agent or employee of another business concern or of any governmental
      entity (domestic or foreign) or to a political party or candidate for
      political office (domestic or foreign), to obtain or retain business for
      the Company or to receive favourable or preferential treatment, except for
      gifts and entertainment given to representatives of customers or potential
      customers of sufficiently limited value and in a form (other than cash)
      that would not be construed as a bribe or
  payoff.

            

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
              7.41  

            	
              Licenses,
      permits, consents and approvals

            

    

     

     

    
      	
              7.41.1  

            	
              The
      Company has, and at the Completion Date will have, all licenses, permits
      or other authorizations of governmental, regulatory or administrative
      agencies or authorities including the Electrical Safety Act 2002 and
      Security Providers Act 2008 (collectively, “Licenses”) required to conduct
      the Business, except for any failures of such which would not have a
      Material Adverse Effect. All Licenses of the Company are listed on
      Schedule 23.

            

    

     

     

    
      	
              7.41.2  

            	
              At
      the Completion, the Company will have all such Licenses which are material
      to the conduct of the Business and will have renewed all Licenses which
      would have expired in the interim.

            

    

     

     

    
      	
              7.41.3  

            	
              Except
      as listed in Schedule 23, no registration, filing, application, notice,
      transfer, consent, approval, order, qualification, waiver or other action
      of any kind (collectively, a “Filing”) will be required as a result of the
      sale of the Shares by Sellers in accordance with this Agreement
      either:

            

    

     

     

    
      	
              (a)  

            	
              to
      avoid the loss of any License or the violation, breach or termination of,
      or any default under, or the creation of any lien on any asset of the
      Company pursuant to the terms of, any law, regulation, order or other
      requirement or any contract binding upon the Company or to which any such
      asset may be subject; or

            

    

     

     

    
      	
              (b)  

            	
              to
      enable Buyer (directly or through any designee) to continue the operation
      of the Company and the Business substantially as conducted prior to the
      Completion Date.

            

    

     

     

    
      	
              7.41.4  

            	
              All
      such Filings will be duly filed, given, obtained or taken on or prior to
      the Completion Date and will be in full force and effect on the Completion
      Date.

            

    

     

     

    
      	
              7.42  

            	
              Environmental
      matters

            

    

     

     

    
      	
              7.42.1  

            	
              Except
      as set forth on Schedule 24:

            

    

     

     

    
      	
              (a)  

            	
              the
      operations of the Company, to the best knowledge of Sellers, are in
      compliance with all applicable laws promulgated by any governmental entity
      which prohibit, regulate or control any hazardous material or any
      hazardous material activity (“Environmental Laws”) and all permits issued
      pursuant to Environmental Laws or otherwise except for where
      non-compliance or the absence of such permits would not, individually or
      in the aggregate, have a Material Adverse
  Effect;

            

    

     

     

    
      	
              (b)  

            	
              the
      Company has obtained all permits required under all applicable
      Environmental Laws necessary to operate its Business, except for any
      failures of such which would not have a Material Adverse
      Effect;

            

    

     

     

    
      	
              (c)  

            	
              the
      Company is not the subject of any outstanding written order or Third Party
      Contract with any governmental authority or person respecting
      Environmental Laws or any violation or potential violations of this
      Agreement; and

            

    

     

     

    
      	
              (d)  

            	
              the
      Company has not received any written communication alleging either or both
      that the Company may be in violation of any Environmental Law, or any
      permit issued pursuant to Environmental Law, or may have any liability
      under any Environmental Law.

            

    

     

     

    
      	
              7.43  

            	
              Broker

            

    

     

     

    
      	
              7.43.1  

            	
              Except
      as specified in Schedule 25, the Company has not retained any broker in
      connection with any transaction contemplated by this
      Agreement.

            

    

     

     

    
      	
              7.43.2  

            	
              The
      Company shall not be obliged to pay any fee or commission associated with
      the retention or engagement by the Company of any broker in connection
      with any transaction contemplated by this
  Agreement.

            

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              7.44  

            	
              Related
      party transactions

            

    

     

     

    
      	
              7.44.1  

            	
              Except
      as described in Schedule 26, all transactions during the past five (5)
      years between the Company and any current or former Shareholder or any
      entity in which the Company or any current or former Shareholder had or
      has a direct or indirect interest have been fair to the Company as
      determined by the Board of
Directors.

            

    

     

     

    
      	
              7.44.2  

            	
              No
      portion of the sales or other on-going business relationships of the
      Company is dependent upon the friendship or the personal relationships
      (other than those customary within business generally) of any Seller,
      except as described in Schedule 26.

            

    

     

     

    
      	
              7.44.3  

            	
              The
      Company has recorded in the accounts of the Company all forgiven or
      cancelled indebtedness owing to the Company by any seller or
      employee.

            

    

     

     

    
      	
              7.45  

            	
              Anti-Money
      Laundering and Counter Terrorism Financing
Act

            

    

     

     

    
      	
              7.45.1  

            	
               The
      Company has not been designated, and is not owned or controlled, by a
      terrorist or suspected terrorist as defined or contemplated under the
      Anti-Money Laundering and Counter Terrorism Financing Act
      (Cth).

            

    

     

     

    
      	
              7.45.2  

            	
              The
      Sellers hereby acknowledge that the Buyer seeks to comply with all
      applicable laws concerning money laundering and related
      activities.

            

    

     

     

    
      	
              7.45.3  

            	
              In
      furtherance of those efforts, the Sellers hereby represent, warrant and
      agree that:

            

    

     

     

    
      	
              (a)  

            	
              none
      of the cash or property that the Sellers have contributed or paid or will
      contribute and pay to the Company has been or shall be derived from, or
      related to, any activity that is deemed criminal under Australian law;
      and

            

    

     

     

    
      	
              (b)  

            	
              no
      contribution or payment by the Company to the Buyer, to the extent that
      they are within the Company’s control shall cause the Buyer to be in
      violation of the laws governing secret commissions or of the Anti-Money
      Laundering and Counter Terrorism Financing
Act.

            

    

     

     

    
      	
              7.45.4  

            	
              The
      Sellers shall promptly notify the Buyer if any of the above
      representations cease to be true and accurate regarding the Sellers or the
      Company.

            

    

     

     

    
      	
              7.45.5  

            	
              The
      Sellers agree to provide the Buyer any additional information regarding
      the Company that the Buyer reasonably requests to ensure compliance with
      all applicable laws concerning money laundering and similar
      activities.

            

    

     

     

    
      	
              7.46  

            	
              Disclosure

            

    

     

     

    
      	
              7.46.1  

            	
              All
      statements contained in any schedule, certificate, opinion, instrument, or
      other document, excluding any financial projection or projections,
      delivered by or on behalf of the Sellers or the Company pursuant to this
      Agreement shall be deemed representations and warranties by each Seller
      and the Company in this Agreement.

            

    

     

     

    
      	
              7.46.2  

            	
              No
      statement, representation or warranty by the Sellers or the Company in
      this Agreement or in any schedule, certificate, opinion, instrument, or
      other document, excluding any financial projection or projections,
      furnished or to be furnished to the Buyer pursuant to this Agreement
      contains or will contain any untrue statement of a material fact or omits
      or will omit to state a material fact required to be stated in this
      Agreement or necessary to make the statements contained in this Agreement
      not misleading or necessary in order to provide a prospective Buyer of the
      Business of the Company with full and fair disclosure concerning the
      Company, its Business, and the Company’s
  affairs.

            

    

     

     

    
      	
              7.46.3  

            	
              The
      Company and the Buyer have or have been given or have received information
      satisfactory to verify the accuracy of any and all backlogs (based on
      orders received), add-backs, key client relationships and the tangibility
      of assets of the Company.

            

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              7.47  

            	
              Software
      Licence Agreements

            

    

     

    The
Company has all current software licence agreements needed for the operation of
the Business and the Company has not breached the agreements.

     

    
      	
              8  

            	
              WARRANTIES
      AND REPRESENTATIONS ABOUT THE
SELLERS

            

    

     

    The
Sellers severally warrant and represent to the Buyer that each of the following
sub-clauses of this Clause 8 are and shall remain
true and correct as from the date of this Agreement up to and including the
Completion Date:

     

    
      	
              8.1  

            	
              Shares
      unencumbered

            

    

     

     

    
      	
              8.1.1  

            	
              Each
      of the Sellers' Shares are legally held by the relevant Seller and are not
      subject to any encumbrance, lien or interest in favour of any person or
      company.

            

    

     

     

    
      	
              8.2  

            	
              No
      Claim on the Company

            

    

     

     

    
      	
              8.2.1  

            	
              As
      at the date of this Agreement each Seller does not have any subsisting
      Claim against the Company for any Liability incurred by the Seller arising
      from:

            

    

     

     

    
      	
              (a)  

            	
              any
      breach of contract, tort, fraud or negligence (excluding negligence
      relating to the provision of services under an existing or subsisting
      agreement with the Company) by the Company;
or

            

    

     

     

    
      	
              (b)  

            	
              any
      failure by the Company to fulfil its statutory obligations (including but
      not limited to document, filing and monetary obligations regulated by the
      Australian Securities & Investments Commission and the Australian
      Taxation Office).

            

    

     

     

    
      	
              8.3  

            	
              Standing
      & solvency

            

    

     

     

    
      	
              8.3.1  

            	
              Each
      Seller:

            

    

     

     

    
      	
              (a)  

            	
              if
      an individual, is not currently bankrupt or insolvent;
  and

            

    

     

     

    
      	
              (b)  

            	
              if
      a company, is a corporation duly organised, validly existing and in good
      standing under the laws of the Commonwealth of Australia and is not
      insolvent or in receivership or under administration or has entered into
      an arrangement with its creditors.

            

    

     

     

    
      	
              8.4  

            	
              Authority

            

    

     

     

    
      	
              8.4.1  

            	
              The
      execution and delivery of this Agreement and the Completion and
      consummation of the transactions contemplated in this Agreement have been,
      or will prior to Completion be, duly and validly approved and acknowledged
      by all necessary corporate action on the part of each Seller that is a
      company.

            

    

     

     

    
      	
              8.4.2  

            	
              The
      execution of this Agreement and the delivery of this Agreement to each
      Seller that is a company and the purchase contemplated in this Agreement
      have been, or will be prior to Completion, duly authorized by the Seller’s
      Board of Directors having full power and authority to authorize such
      actions.

            

    

     

     

    
      	
              8.5  

            	
              Third
      party consents

            

    

     

     

    
      	
              8.5.1  

            	
              The
      execution and delivery of this Agreement, the acquisition of the Shares
      from each Seller and the Completion and consummation of the transactions
      in this Agreement contemplated, and the compliance with the provisions and
      terms of this Agreement, are not prohibited by the Constitution or
      Memorandum and/or Articles of Incorporation or By-laws of the Seller and
      will not violate, conflict with or result in a breach of any of the terms
      or provisions of, or constitute a default under, any court order,
      indenture, mortgage, loan agreement, or other agreement or instrument to
      which the Seller is a party or by which it is
  bound.

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              8.5.2  

            	
              No
      consent, waiver, approval, order, permit or authorization of, or
      declaration or filing with, or notification to, any person or governmental
      body is required on the part of the Seller in connection with the
      execution and delivery of this Agreement or any other agreement referenced
      in this Agreement or the compliance by Seller with any of the provisions
      of this Agreement or of this
Agreement.

            

    

     

     

    
      	
              8.6  

            	
              Litigation

            

    

     

     

    
      	
              8.6.1  

            	
              There
      are no legal proceedings pending or, to the best knowledge of each Seller,
      threatened that are reasonably likely to prohibit or restrain the ability
      of the Seller to enter into this Agreement or consummate the transactions
      contemplated hereby.

            

    

     

     

    
      	
              8.7  

            	
              Broker

            

    

     

     

    
      	
              8.7.1  

            	
              Subject
      to Schedule 25, no Seller has retained any broker in connection with any
      transaction contemplated by this
Agreement.

            

    

     

     

    
      	
              8.7.2  

            	
              The
      Company shall not be obliged to pay any fee or commission associated with
      the retention or engagement by any Seller of any broker in connection with
      any transaction contemplated by this
Agreement.

            

    

     

     

    
      	
              8.8  

            	
              Anti-Money
      Laundering and Counter Terrorism Financing
Act

            

    

     

     

    
      	
              8.8.1  

            	
              No
      Seller nor any Seller’s subsidiaries has been designated, and is not owned
      or controlled, by a terrorist or suspected terrorist as defined or
      contemplated under the Anti-Money Laundering and Counter Terrorism
      Financing Act (Cth) or any corresponding law of the United States of
      America or of any State in the United States of
  America.

            

    

     

     

    
      	
              8.8.2  

            	
              Each
      Seller hereby acknowledges that the Buyer seeks to comply with all
      applicable laws concerning money laundering and related
      activities.

            

    

     

     

    
      	
              8.8.3  

            	
              Each
      Seller shall promptly notify the Buyer if any of the above representations
      cease to be true and accurate regarding the Seller or any of its
      subsidiaries.

            

    

     

     

    
      	
              8.8.4  

            	
              Each
      Seller agrees to provide the Buyer any additional information regarding
      the Seller or any of its subsidiaries that the Buyer reasonably requests
      to ensure compliance with all applicable laws concerning money laundering
      and similar activities.

            

    

     

     

    
      	
              9  

            	
              WARRANTIES
      AND REPRESENTATIONS ABOUT THE BUYER

            

    

     

    The Buyer
warrants and represents to the Sellers that each of the following sub-clauses of
this Clause 9 are and shall remain true and correct
as from the date of this Agreement up to and including the Completion
Date:

     

    
      	
              9.1  

            	
              Incorporation

            

    

     

     

    
      	
              9.1.1  

            	
              The
      Buyer is an Australian wholly owned subsidiary of WPCS International
      Incorporated, a corporation duly organised, validly existing and in good
      standing under the laws of the State of Delaware in the United States of
      America.

            

    

     

     

    
      	
              9.2  

            	
              Authority

            

    

     

     

    
      	
              9.2.1  

            	
              The
      execution and delivery of this Agreement and the Completion and
      consummation of the transactions contemplated in this Agreement have been,
      or will prior to Completion be, duly and validly approved and acknowledged
      by all necessary corporate action on the part of the
  Buyer.

            

    

     

     

    
      	
              9.2.2  

            	
              The
      execution of this Agreement and the delivery of the executed Agreement to
      the Sellers and the purchase contemplated in this Agreement have been, or
      will be prior to Completion, duly authorised by the Buyer’s Board of
      Directors having full power and authority to authorise such
      actions.

            

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              9.3  

            	
              Third
      party consents

            

    

     

     

    
      	
              9.3.1  

            	
              The
      execution and delivery of this Agreement, the acquisition of the Shares by
      Buyer and the Completion and consummation of the transactions in this
      Agreement contemplated, and the compliance with the provisions and terms
      of this Agreement, are not prohibited by the Articles of Incorporation or
      By-laws of the Buyer and will not violate, conflict with or result in a
      breach of any of the terms or provisions of, or constitute a default
      under, any court order, indenture, mortgage, loan agreement, or other
      agreement or instrument to which the Buyer is a party or by which it is
      bound.

            

    

     

     

    
      	
              9.3.2  

            	
              No
      consent, waiver, approval, order, permit or authorization of, or
      declaration or filing with, or notification to, any person or governmental
      body is required on the part of the Buyer in connection with the execution
      and delivery of this Agreement or any other agreement referenced in this
      Agreement or the compliance by Buyer with any of the provisions of this
      Agreement or of this Agreement.

            

    

     

     

    
      	
              9.4  

            	
              Litigation

            

    

     

     

    
      	
              9.4.1  

            	
              There
      are no legal proceedings pending or, to the best knowledge of the Buyer,
      threatened that are reasonably likely to prohibit or restrain the ability
      of the Buyer to enter into this Agreement or consummate the transactions
      contemplated hereby.

            

    

     

     

    
      	
              9.5  

            	
              Broker

            

    

     

     

    
      	
              9.5.1  

            	
              The
      Buyer has not retained any broker in connection with any transaction
      contemplated by this Agreement.

            

    

     

     

    
      	
              9.5.2  

            	
              The
      Sellers shall not be obliged to pay any fee or commission associated with
      the retention or engagement by the Buyer of any broker in connection with
      any transaction contemplated by this
Agreement.

            

    

     

     

    
      	
              9.6  

            	
              Anti-Money
      Laundering and Counter Terrorism Financing
Act

            

    

     

     

    
      	
              9.6.1  

            	
              The
      Buyer certifies that neither the Buyer nor any of its subsidiaries has
      been designated, and is not owned or controlled, by a terrorist or
      suspected terrorist as defined or contemplated under the Anti-Money
      Laundering and Counter Terrorism Financing Act (Cth) or any corresponding
      law of the United States of America or of any State in the United States
      of America.

            

    

     

     

    
      	
              9.6.2  

            	
              The
      Buyer hereby acknowledge that the Company and the Sellers seek to comply
      with all applicable laws concerning money laundering and related
      activities.

            

    

     

     

    
      	
              9.6.3  

            	
              In
      furtherance of those efforts, the Buyer hereby represents, warrants and
      agrees that:

            

    

     

     

    
      	
              (a)  

            	
              none
      of the cash or property that the Buyer has contributed or paid or will
      contribute and pay to the Sellers has been or shall be derived from, or
      related to, any activity that is deemed criminal under Australian law;
      and

            

    

     

     

    
      	
              (b)  

            	
              no
      contribution or payment by the Buyer or any of its subsidiaries to the
      Sellers, to the extent that they are within the Buyer’s control shall
      cause the Sellers or the Company to be in violation of the laws governing
      secret commissions or of the Anti-Money Laundering and Counter Terrorism
      Financing Act.

            

    

     

     

    
      	
              9.6.4  

            	
              The
      Buyer shall promptly notify the Sellers if any of the above
      representations cease to be true and accurate regarding the Buyer or any
      of its subsidiaries.

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	
              9.6.5  

            	
              The
      Buyer agrees to provide the Sellers any additional information regarding
      the Buyer or any of its subsidiaries that the Sellers reasonably requests
      to ensure compliance with all applicable laws concerning money laundering
      and similar activities.

            

    

     

     

    
      	
              10  

            	
              COMPANY
      TAXATION

            

    

     

     

    
      	
              10.1  

            	
              Tax
      periods beginning before and ending after the Completion
    Date

            

    

     

     

    
      	
              10.1.1  

            	
              The
      Company or the Buyer (with the assistance of the Sellers) shall prepare or
      cause to be prepared and delivered to Sellers in draft any Tax Returns of
      the Company for Tax periods that begin before the Completion Date and end
      after the Completion Date.

            

    

     

     

    
      	
              10.1.2  

            	
              Sellers
      shall have a period of 30 days after receipt of draft Tax Returns under
      Clause 10.1.1 to review the draft Tax Returns
      and to notify the Buyer as to whether he disagrees with the whole or any
      aspect of the draft Tax Returns.  If the Sellers agree with the
      draft Tax Returns, the Sellers shall notify the Buyer of that fact and the
      Company and the Buyer shall thereafter be free to lodge the Tax Return
      pursuant to the remaining provisions of this Clause 10.  If the Sellers disagree with the
      whole or any part of the draft Tax Returns, he shall notify the Buyer of
      his disagreement and of the reason or reasons for his
      disagreement.

            

    

     

     

    
      	
              10.1.3  

            	
              In
      the event the Buyer and Sellers are unable to agree upon the draft Tax
      Returns after good faith negotiations for a period of 20 days after
      notification by the Sellers of their disagreement under Clause 10.1.2, the Buyer and Sellers shall submit such
      dispute for resolution to an Independent Accounting Firm, which shall
      determine the dispute and report to the Parties.  Such report
      shall be final, binding and conclusive on the Parties to this
      Agreement.  Upon receipt of the report, the Company and the
      Buyer shall thereafter be free to lodge the Tax Return pursuant to the
      remaining provisions of this Clause 10.  The legal fees and expenses of
      the Independent Accounting Firm shall be apportioned between the parties
      as follows:

            

    

     

     

    
      	
              (a)  

            	
              the
      Sellers shall bear the proportion of the legal fees and expenses, equal to
      the number of days in the period covered by the Tax Return prior to the
      Effective Date, divided by the total number of days in the period covered
      by the Tax Return; and

            

    

     

     

    
      	
              (b)  

            	
              the
      Company or the Buyer shall bear the proportion of the legal fees and
      expenses, equal to the number of days in the period covered by the Tax
      Return on and from the Effective Date, divided by the total number of days
      in the period covered by the Tax
Return.

            

    

     

     

    
      	
              10.1.4  

            	
              To
      the extent such Taxes are not fully reserved for in the Company’s
      financial statements or able to be discounted by any instalments of such
      Taxes which have been prepaid by the Company to the relevant taxing
      authority, the Sellers shall pay to the Company an amount equal to the
      unreserved portion of such Taxes that relates to the portion of the Tax
      period ending on the Completion Date.  Such payment, if any,
      shall be paid by the Sellers within fifteen (15) days after receipt of
      written notice from the Company or the Buyer that such Taxes were paid by
      the Company or the Buyer for a period beginning prior to the Completion
      Date.

            

    

     

     

    
      	
              10.1.5  

            	
              For
      the purposes of this Clause 10.1, in the case
      of any Taxes that are imposed on a periodic basis and are payable for a
      Taxable period that includes (but does not end on) the Completion Date,
      the portion of such Tax that relates to the portion of such Tax period
      ending on the Completion Date
shall:

            

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              in
      the case of any Taxes other than Taxes based upon or related to income or
      receipts, be deemed to be the amount of such Tax for the entire Tax period
      multiplied by a fraction the numerator of which is the number of days in
      the Tax period ending on the Completion Date and the denominator of which
      is the number of days in the entire Tax period (the “Pro Rata Amount”);
      and

            

    

     

     

    
      	
              (b)  

            	
              in
      the case of any Tax based upon or related to income or receipts, be deemed
      equal to the amount that would be payable if the relevant Tax period ended
      on the Completion Date.

            

    

     

     

    
      	
              10.1.6  

            	
              All
      determinations necessary to give effect to the foregoing allocations shall
      be made in a reasonable manner as agreed to by the
  Parties.

            

    

     

     

    
      	
              10.2  

            	
              Refunds
      and tax benefits

            

    

     

     

    
      	
              10.2.1  

            	
              Any
      Tax refunds that are received after the Completion Date by the Sellers
      that belong to the Company (other than Tax refunds received in connection
      with such Sellers individual tax returns), or the Buyer, and any amounts
      credited against Tax to which the Buyer or the Company become entitled,
      shall be for the account of the Company, and the Sellers shall pay over to
      the Company any such refund or the amount of any such credit within
      fifteen (15) days after receipt or entitlement to
  it.

            

    

     

     

    
      	
              10.2.2  

            	
              In
      addition, to the extent that a claim for refund or a proceeding results in
      a payment or credit against Tax by a taxing authority to the Sellers
      (other than Tax received in connection with such Sellers individual tax
      returns), the Sellers shall pay such amount to the Company within fifteen
      (15) days after receipt or entitlement to
it.

            

    

     

     

    
      	
              10.3  

            	
              Cooperation
      on Tax matters

            

    

     

     

    
      	
              10.3.1  

            	
              The
      Buyer, the Company and the Sellers shall cooperate fully, as and to the
      extent reasonably requested by each other Party, in connection with the
      filing of any Tax Returns pursuant to this Clause 10 and any audit, litigation or other proceeding
      with respect to Taxes.

            

    

     

     

    
      	
              10.3.2  

            	
              Such
      cooperation shall include the retention and (upon any other Party’s
      reasonable request) the provision of records and information which are
      reasonably relevant to any such audit, litigation or other proceeding and
      making employees available on a mutually convenient basis to provide
      additional information and explanation of any material provided under this
      Agreement.

            

    

     

     

    
      	
              10.3.3  

            	
              The
      Company and the Sellers agree:

            

    

     

     

    
      	
              (a)  

            	
              to
      retain all books and records with respect to Tax matters pertinent to the
      Company relating to any taxable period beginning before the Completion
      Date until the expiration of five (5) years (and, to the extent notified
      by the Buyer or the Sellers, any extensions of that period) after the
      respective Tax periods, and to abide by all record retention agreements
      entered into with any taxing authority;
and

            

    

     

     

    
      	
              (b)  

            	
              to
      give each other Party reasonable written notice prior to transferring,
      destroying or discarding any such books and records and, if the other
      Party reasonably requests, the Company or the Sellers, as the case may be,
      shall allow the Party to take possession of such books and
      records.

            

    

     

     

    
      	
              10.3.4  

            	
              The
      Buyer and the Sellers further agree, upon request, to use their
      commercially reasonable best efforts to obtain any certificate or other
      document from any governmental authority or any other person as may be
      necessary to mitigate, reduce or eliminate any Tax that could be imposed
      (including, but not limited to, with respect to the transactions
      contemplated by this Agreement).

            

    

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
              10.3.5  

            	
              The
      Buyer and the Sellers further agree, upon requested, to provide each other
      Party with all information that either Party may be required to report
      pursuant to the Income Tax Laws, the Taxation Administration Act and all
      subordinate legislation, regulations, rulings, directions and statements
      made under them.

            

    

     

     

    
      	
              11  

            	
              INDEMNIFICATION

            

    

     

     

    
      	
              11.1  

            	
              Sellers’
      indemnities

            

    

     

     

    
      	
              11.1.1  

            	
              Subject
      to Clause 11.3 of this Agreement, the Sellers
      hereby agree to jointly and severally indemnify and hold the Buyer, the
      Company or its successors, (collectively, the "Buyer Indemnified Parties")
      harmless from and against:

            

    

     

     

    
      	
              (a)  

            	
              any
      and all Liabilities of the Company of every kind, nature and description,
      absolute or contingent, existing as against the Company prior to and
      including the Completion Date or thereafter coming into being or arising
      by reason of any state of facts existing, or any transaction entered into,
      on or prior to the Completion Date, except to the extent that the same
      have been fully provided for in the Balance Sheet, or disclosed in the
      notes to it or were incurred in the ordinary course of business between
      the Balance Sheet date and the Completion
Date;

            

    

     

     

    
      	
              (b)  

            	
              subject
      to Clause 14.2, any and all Liabilities based
      upon, attributable to or resulting from the failure of any representation
      or warranty of the Sellers set forth in Clauses 7 and 8of this
      Agreement to be true and correct in all respects as of the date
      made;

            

    

     

     

    
      	
              (c)  

            	
              any
      and all Liabilities based upon, attributable to or resulting from the
      breach of any covenant or other agreement on the part of the Sellers under
      this Agreement;

            

    

     

     

    
      	
              (d)  

            	
              any
      and all notices, actions, suits, proceedings, claims, demands,
      assessments, judgments, costs, penalties and expenses, including
      reasonable attorneys' and other professionals' fees and disbursements
      (collectively, "Expenses") incidental to any and all Liabilities with
      respect to which indemnification is provided hereunder, net of any and all
      insurance proceeds from insurance settlements connected therewith
      (collectively, "Losses"); and

            

    

     

     

    
      	
              (e)  

            	
              any
      breach of Part 2J.3 of the Corporations Act
  2001.

            

    

     

     

    
      	
              11.2  

            	
              Buyer’s
      indemnities

            

    

     

     

    
      	
              11.2.1  

            	
              Subject
      to Clause 11.3, the Buyer hereby agrees to
      indemnify and hold the Sellers and their respective directors, officers,
      employees, affiliates, agents, successors and assigns (collectively, the
      "Seller Indemnified Parties") harmless from and
  against:

            

    

     

     

    
      	
              (a)  

            	
              any
      and all Losses based upon, attributable to or resulting from the failure
      of any representation or warranty of the Buyer set forth in Clause 9 of this Agreement to be true and correct as of
      the date made;

            

    

     

     

    
      	
              (b)  

            	
              any
      and all Losses based upon, attributable to or resulting from the breach of
      any covenant or other agreement on the part of the Buyer under this
      Agreement or arising from the ownership or operation of the Company from
      and after the Completion Date, unless such claim is for a pre-Completion
      matter; and

            

    

     

     

    
      	
              (c)  

            	
              any
      and all Expenses incident to the
foregoing.

            

    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	
              11.3  

            	
              Limitations

            

    

     

     

    
      	
              11.3.1  

            	
              An
      indemnifying party shall not have any liability under Clause 11.1.1(b) or Clause 11.2.1(a) of this Agreement unless the aggregate
      amount of Losses and Expenses to the indemnified parties finally
      determined to arise thereunder based upon, attributable to or resulting
      from the failure of any representation or warranty to be true and correct,
      exceeds AUD$50,000 (the “Basket”) and, in such event, the indemnifying
      party shall be required to pay the entire amount of such Losses and
      Expenses to a maximum amount of the Purchase
  Price.

            

    

     

     

    
      	
              11.3.2  

            	
              The
      indemnity provided by each Seller pursuant to clause 11.1 and the warranties provided under this
      Agreement:

            

    

     

     

    
      	
              (a)  

            	
              are
      limited for each Seller severally to a maximum amount being the portion of
      the Purchase Price actually received by that Seller as expressed in
      Schedule 1 of this Agreement;

            

    

     

     

    
      	
              (b)  

            	
              cease
      to be of any force or effect on and from the date that is 2 years after
      the Completion Date;

            

    

     

     

    
      	
              (c)  

            	
              is
      of no effect to the extent that the amount or claim is recoverable under
      an insurance policy held by the Company or is the subject of a tax
      deduction in favour of the Company.

            

    

     

     

    
      	
              11.4  

            	
              Procedures

            

    

     

     

    
      	
              11.4.1  

            	
              In
      the event that any legal proceedings shall be instituted or that any claim
      or demand ("Claim") shall be asserted by any person or entity in respect
      of which payment may be sought under Clause 11.1 or 11.2 of
      this Agreement (regardless of the Basket referred to above), the
      indemnified party shall reasonably and promptly cause written notice of
      the assertion of any Claim of which it has knowledge which is covered by
      this indemnity to be forwarded to the indemnifying
  party.

            

    

     

     

    
      	
              11.4.2  

            	
              The
      indemnifying party shall have the right, at its sole option and expense,
      to be represented by counsel of its choice, which must be reasonably
      satisfactory to the indemnified party, and to defend against, negotiate,
      settle or otherwise deal with any Claim which relates to any Losses
      indemnified against hereunder.

            

    

     

     

    
      	
              11.4.3  

            	
              If
      the indemnifying party elects to defend against, negotiate, settle or
      otherwise deal with any Claim which relates to any Losses indemnified
      against hereunder, it shall within fourteen (14) days (or sooner, if the
      nature of the Claim so requires) notify the indemnified party of its
      intent to do so.

            

    

     

     

    
      	
              11.4.4  

            	
              If
      the indemnifying party elects not to defend against, negotiate, settle or
      otherwise deal with any Claim which relates to any Losses indemnified
      against hereunder, fails to notify the indemnified party of its election
      as in this Agreement provided or contests its obligation to indemnify the
      indemnified party for such Losses under this Agreement, the indemnified
      party may defend against, negotiate, settle or otherwise deal with such
      Claim.

            

    

     

     

    
      	
              11.4.5  

            	
              If
      the indemnified party defends any Claim, then the indemnifying party shall
      reimburse the indemnified party for the Expenses of defending such Claim
      upon submission of periodic bills.

            

    

     

     

    
      	
              11.4.6  

            	
              If
      the indemnifying party shall assume the defence of any Claim, the
      indemnified party may participate, at his or its own expense, in the
      defence of such Claim provided, however, that such indemnified party shall
      be entitled to participate in any such defence with separate counsel at
      the expense of the indemnifying party
if:

            

    

     

     

    
      	
              (a)  

            	
              so
      requested by the indemnifying party to participate;
  or

            

    

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    
      	
              (b)  

            	
              in
      the reasonable opinion of counsel to the indemnified party, a conflict or
      potential conflict exists between the indemnified party and the
      indemnifying party that would make such separate representation
      advisable;

            

    

     

    and
provided, further, that the indemnifying party shall not be required to pay for
more than one such counsel for all indemnified parties in connection with any
Claim.

     

    
      	
              11.4.7  

            	
              The
      Parties agree to cooperate fully with each other in connection with the
      defence, negotiation or settlement of any such
  Claim.

            

    

     

     

    
      	
              11.4.8  

            	
              After
      any final judgment or award shall have been rendered by a court,
      arbitration board or administrative agency of competent jurisdiction and
      the expiration of the time in which to appeal there from, or a settlement
      shall have been consummated, or the indemnified party and the indemnifying
      party shall have arrived at a mutually binding agreement with respect to a
      Claim hereunder, the indemnified party shall forward to the indemnifying
      party notice of any sums due and owing by the indemnifying party pursuant
      to this Agreement with respect to such matter and the indemnifying party
      shall be required to pay all of the sums so due and owing to the
      indemnified party by wire transfer of immediately available funds within
      ten (10) Business Days after the date of such
  notice.

            

    

     

     

    
      	
              11.4.9  

            	
              The
      failure of the indemnified party to give reasonably prompt notice of any
      Claim shall not release, waive or otherwise affect the indemnifying
      party's obligations with respect to it except to the extent that the
      indemnifying party can demonstrate actual loss and prejudice as a result
      of such failure.

            

    

     

     

    
      	
              11.5  

            	
              Professional
      indemnity insurance

            

    

     

     

    
      	
              11.5.1  

            	
              The
      Buyer will cause the Company to maintain all insurances which the Sellers
      (acting reasonably) believe are relevant or necessary for a period of
      three (3) years after the Completion
Date.

            

    

     

     

    
      	
              11.5.2  

            	
              The
      Buyer’s obligations in this Clause 11 are
      subject to the requirements of any insurer or insurers who may indemnify
      (or be obliged to indemnify) in respect of any Claims in respect of which
      the Sellers might otherwise be required to indemnify the Buyer or the
      Company.

            

    

     

     

    
      	
              11.6  

            	
              Taxation
      of indemnity payments

            

    

     

     

    
      	
              11.6.1  

            	
              The
      Sellers and the Buyer agree to treat any indemnity payment made pursuant
      to this Clause 11 as an adjustment to the
      Purchase Price for federal, state, local and foreign income tax
      purposes.

            

    

     

     

    
      	
              11.7  

            	
              Stamp
      Duty Indemnity – Bugler Transaction

            

    

     

     

    
      	
              11.7.1  

            	
              The
      Sellers absolutely indemnify the Buyer and Company (its directors and
      officers) in regard to any assessment for stamp duty (including duty
      penalty and interest) payable in regard to the Bugler Transaction together
      with any legal costs.

            

    

     

     

    
      	
              11.7.2  

            	
              The
      limitations detailed in clause 11.3 do not
      apply in regard to clause 11.7.1.

            

    

     

     

    
      	
              12  

            	
              RESTRAINT
      OF TRADE

            

    

     

     

    
      	
              12.1  

            	
              Restraint

            

    

     

     

    
      	
              12.1.1  

            	
              The
      Sellers agree with the Buyer that in order to protect the goodwill of the
      Company, the Buyer and the Business, neither the Sellers nor any of their
      affiliates will directly or indirectly at any time do any of the
      following:

            

    

     

     

    
      	
              (a)  

            	
              canvass
      or solicit (other than for the Buyer) services which are the same as or
      similar to the services of the Business, or business which is the same as
      or similar to the Business of the Company, in the 12 months prior to the
      Commencement Date, from any person who is or has been in the 12 months
      prior to the Commencement Date a client or customer of the
      Company;

            

    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              subject
      to Clause 12.6, engage or be concerned or
      interested in any business which provides goods or services that are the
      same or similar to and which compete with the whole or a material part of
      the Business of the Company or the
Buyer;

            

    

     

     

    
      	
              (c)  

            	
              approach
      any employee, agent, representative, contractor, supplier, vendor,
      customer, franchisee, lender or investor of the Company or the Buyer with
      a view to offering them alternative employment with the
      Sellers;

            

    

     

     

    
      	
              (d)  

            	
              do
      or say anything harmful to the reputation of any group
      company;

            

    

     

     

    
      	
              (e)  

            	
              do
      or say anything which may lead a person to cease, curtail or alter the
      terms of its dealings with the
Company;

            

    

     

     

    
      	
              (f)  

            	
              represent
      itself as being in any way connected with or interested in or associated
      with:

            

    

     

     

    
      	
              (i)  

            	
              the
      Company (except as the prior owner of the Shares);
  or

            

    

     

     

    
      	
              (ii)  

            	
              any
      other business carried on by the Buyer or by the
  Company;

            

    

     

     

    
      	
              (g)  

            	
              use
      a name which is similar to the present name of the
  Company;

            

    

     

     

    
      	
              (h)  

            	
              use
      any of the intellectual property;

            

    

     

     

    
      	
              (i)  

            	
              disclose
      or use to its advantage or the disadvantage of the
  Buyer:

            

    

     

     

    
      	
              (i)  

            	
              the
      name of any customer of the
Company;

            

    

     

     

    
      	
              (ii)  

            	
              any
      of the intellectual property; or

            

    

     

     

    
      	
              (iii)  

            	
              any
      of the trade secrets, secret or confidential operations, processes or
      dealings of, or any confidential information relating to, the Company or
      its organisations, finances, transactions, customers or affairs;
      or

            

    

     

     

    
      	
              (j)  

            	
              make
      any negative statement of any kind concerning the Company, the Buyer or
      its affiliates, or their directors, officers or agents, except as such may
      be compelled by legal proceedings or governmental action or
      authority.

            

    

     

     

    
      	
              12.2  

            	
              Area
      of restraint

            

    

     

     

    
      	
              12.2.1  

            	
              The
      restraint in Clause 12.1 applies within each
      of the following areas:

            

    

     

     

    
      	
              (a)  

            	
              Australia;

            

    

     

     

    
      	
              (b)  

            	
              the
      State of Queensland; and

            

    

     

     

    
      	
              (c)  

            	
              Brisbane,
      Townsville, Sunshine Coast, Gold Coast, Mackay, Townsville,
      Cairns.

            

    

     

     

    
      	
              12.3  

            	
              Period
      of restraint

            

    

     

     

    
      	
              12.3.1  

            	
              The
      restraint in Clause 12.1 applies for the
      period commencing on the Completion Date and end on the later to occur
      of:

            

    

     

     

    
      	
              (a)  

            	
              the
      fifth anniversary of the Completion
Date;

            

    

     

     

    
      	
              (b)  

            	
              the
      fourth anniversary of the Completion
Date;

            

    

     

     

    
      	
              (c)  

            	
              the
      third anniversary of the Completion
Date;

            

    

     

     

    
      	
              (d)  

            	
              the
      second anniversary of the Completion Date;
and

            

    

     

     

    
      	
              (e)  

            	
              the
      first anniversary of the Completion
Date.

            

    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    
      	
              12.4  

            	
              Capacity
      of restraint

            

    

     

     

    
      	
              12.4.1  

            	
              The
      restraint in Clause 12.1 applies to the
      Sellers and each its Directors, Shareholders and Delegates
      acting:

            

    

     

     

    
      	
              (a)  

            	
              either
      alone or in partnership or association with another
  person;

            

    

     

     

    
      	
              (b)  

            	
              as
      buyer, agent, representative, director, officer or, only in the case of
      the Majority Shareholders, an
employee;

            

    

     

     

    
      	
              (c)  

            	
              as
      member, shareholder, debenture holder, note holder or holder of any other
      security;

            

    

     

     

    
      	
              (d)  

            	
              as
      trustee of or as a consultant or adviser to any person (other than the
      Buyer); or

            

    

     

     

    
      	
              (e)  

            	
              in
      any other capacity.

            

    

     

     

    
      	
              12.5  

            	
              Severability

            

    

     

     

    
      	
              12.5.1  

            	
              Clauses
      12.1 has effect as comprising each of the
      separate provisions which results from each combination of an area
      referred to in Clause 12.2, a period referred
      to in Clause 12.3, and a capacity referred to
      in Clause 12.4.  Each of these
      separate provisions operates concurrently and
    independently.

            

    

     

     

    
      	
              12.5.2  

            	
              If
      any separate provision referred to in Clause 12.5.1 is unenforceable, illegal or void, that
      provision is severed and the other provisions remain in
    force.

            

    

     

     

    
      	
              12.5.3  

            	
              The
      Sellers and each of its Directors, Shareholders and Delegates each
      acknowledge that each of those separate provisions is a fair and
      reasonable restraint of trade.

            

    

     

     

    
      	
              12.6  

            	
              Exceptions

            

    

     

     

    
      	
              12.6.1  

            	
              Clause
      12.1 does not apply to the Employment
      Agreement.

            

    

     

     

    
      	
              12.6.2  

            	
              Clause
      12.1 does not prevent a Seller from owning
      securities of any publicly-owned corporation listed on any recognised
      stock exchange, engaged in any such business, provided that the total
      amount of securities of each class owned by the Seller in such
      publicly-owned corporation (other than the Buyer) does not exceed two
      percent (2%) of the outstanding securities of such
  class

            

    

     

     

    
      	
              12.6.3  

            	
              Clause
      12.1 does not apply to the continued ownership
      by any or all of the Sellers holding an interest in the businesses owned
      and operated by DMC and Videofied.

            

    

     

     

    
      	
              13  

            	
              CONFIDENTIALITY

            

    

     

     

    
      	
              13.1  

            	
              Confidentiality
      and use

            

    

     

     

    
      	
              13.1.1  

            	
              Subject
      to Clause 13.2, each Party must not, unless
      authorised by the other Parties in writing or necessary to perform its
      obligations under this Agreement:

            

    

     

     

    
      	
              (a)  

            	
              disclose,
      reveal or make available to any person any Confidential
      Information;

            

    

     

     

    
      	
              (b)  

            	
              permit
      or allow any Confidential Information to be disclosed, revealed or made
      available to any person;

            

    

     

     

    
      	
              (c)  

            	
              use
      or attempt to use any Confidential Information in any manner which may be
      reasonably likely to damage, injure or cause any loss, either directly or
      indirectly, to the Company;

            

    

     

     

    
      	
              (d)  

            	
              use
      or attempt to use any Confidential Information in any manner for the
      purpose (whether sole, dominant or collateral) of gaining, directly or
      indirectly, an advantage for any person other than a person authorised to
      be in receipt of such advantage under this
  Agreement;

            

    

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    
      	
              (e)  

            	
              make
      improper or unconscionable use of any Confidential Information;
      or

            

    

     

     

    
      	
              (f)  

            	
              access,
      use, copy, replicate, modify, corrupt or change in any way any
      Confidential Information.

            

    

     

     

    
      	
              13.2  

            	
              Exceptions

            

    

     

     

    
      	
              13.2.1  

            	
              A
      Party does not breach Clause 13.1 by
      performing an act or omitting to perform an act in circumstances where it
      is legally compelled to do so.

            

    

     

     

    
      	
              13.3  

            	
              Notification
      of breach

            

    

     

     

    
      	
              13.3.1  

            	
              Each
      Party who becomes aware of any unauthorised disclosure of the Confidential
      Information or other breach of this Clause 12.5 must immediately notify the Company of that
      fact.

            

    

     

     

    
      	
              13.4  

            	
              Remedies
      for breach of confidentiality

            

    

     

     

    
      	
              13.4.1  

            	
              Each
      Party acknowledges that damages may not be a sufficient remedy for a
      breach of this Clause 12.5 and an interim or
      permanent injunction is a reasonable remedy available to the Company if a
      breach of this Clause 12.5 is reasonably
      anticipated.

            

    

     

     

    
      	
              13.5  

            	
              Survival
      of terms

            

    

     

     

    
      	
              13.5.1  

            	
              The
      terms and conditions of this Clause 12.5
      survive any expiration or termination of this
  Agreement.

            

    

     

     

    
      	
              14  

            	
              TRANSFER
      DUTY AND LEGAL COSTS

            

    

     

     

    
      	
              14.1  

            	
              Transfer
      Duty

            

    

     

     

    
      	
              14.1.1  

            	
              The
      Buyer must bear and is responsible for any and all transfer duty on or in
      respect of this Agreement, the instruments of transfer under this
      Agreement, and any instrument or transaction contemplated by or ancillary
      to this Agreement.

            

    

     

     

    
      	
              14.2  

            	
              Legal
      costs

            

    

     

     

    
      	
              14.2.1  

            	
              Each
      Party shall bear its own legal costs of and in connection with this
      Agreement and the Completion.  The Company will not pay any of
      the legal or accounting costs of the Seller in regard to this
      transaction.

            

    

     

     

    
      	
              14.3  

            	
              Goods
      and Services Tax

            

    

     

     

    
      	
              14.3.1  

            	
              The
      Purchase Price includes the Seller's liability for GST (if any) on the
      sale and purchaser of Shares under this Agreement.  The Buyer is
      not obliged to pay any additional amount to the Sellers on account of GST
      on or in respect of any supply under or in connection with this
      Agreement.

            

    

     

     

    
      	
              15  

            	
              GENERAL

            

    

     

     

    
      	
              15.1  

            	
              Amendment

            

    

     

     

    
      	
              15.1.1  

            	
              This
      Agreement may be amended only by another agreement executed by all Parties
      who may be affected by the
amendment.

            

    

     

     

    
      	
              15.2  

            	
              No
      waiver

            

    

     

     

    
      	
              15.2.1  

            	
              No
      failure to exercise and no delay in exercising any right, power or remedy
      under this Agreement will operate as a waiver, and nor will any single or
      partial exercise of any right, power or remedy preclude any other or
      further exercise of that or any other right, power or
    remedy.

            

    

     

     

    
      	
              15.3  

            	
              Entire
      agreement

            

    

     

     

    
      	
              15.3.1  

            	
              Subject
      to any amendment of this Agreement under Clause 15.1, this Agreement constitutes the sole and
      entire agreement between the
Parties.

            

    

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      	
              15.3.2  

            	
              No
      warranties, representations, guarantees or other terms or conditions of
      any kind not contained and recorded in this Agreement are of any force or
      effect.

            

    

     

     

    
      	
              15.4  

            	
              Severability

            

    

     

     

    
      	
              15.4.1  

            	
              If
      any provision of this Agreement is invalid or unenforceable, the balance
      of this Agreement shall remain in
effect.

            

    

     

     

    
      	
              15.5  

            	
              Survival
      of representations and warranties

            

    

     

     

    
      	
              15.5.1  

            	
              Subject
      to Clause 15.5.2, the Parties hereby agree
      that the representations and warranties contained in this Agreement or in
      any certificate, document or instrument delivered in connection herewith,
      shall survive the execution and delivery of this Agreement, and the
      Completion hereunder, regardless of any investigation made by the
      Parties.

            

    

     

     

    
      	
              15.5.2  

            	
              Any
      claims or actions with respect to it (other than claims for
      indemnifications with respect to the representation and warranties
      contained in Clauses 7.13 to 7.17, 7.24, 7.37 and 7.42 which
      shall survive for periods coterminous with any applicable statutes of
      limitation or, in respect of taxation assessments, any applicable
      statutory taxation assessment amendment periods) shall terminate unless
      within twenty-four (24) months after the Completion Date written notice of
      such claims is given to the Sellers or such actions are
      commenced.

            

    

     

     

    
      	
              15.6  

            	
              Further
      assurances and good faith

            

    

     

     

    
      	
              15.6.1  

            	
              Each
      Party must take all steps, execute all documents and do everything
      reasonably required by the other Party to give effect to any of the
      transactions contemplated by this
Agreement.

            

    

     

     

    
      	
              15.6.2  

            	
              Each
      Party agrees to act in good faith towards each other Party in observing
      the terms and performing their respective obligations under this
      Agreement.

            

    

     

     

    
      	
              15.7  

            	
              Specific
      Performance

            

    

     

     

    
      	
              15.7.1  

            	
              The
      Sellers acknowledge and agree that the breach of this Agreement would
      cause irreparable damage to the Buyer and that the Buyer will not have an
      adequate remedy at law.

            

    

     

     

    
      	
              15.7.2  

            	
              The
      obligations of the Sellers under this Agreement, including, without
      limitation, the Sellers' obligation to sell the Shares to the Buyer, shall
      be enforceable by a decree of specific performance issued by any court of
      competent jurisdiction, and appropriate injunctive relief may be applied
      for and granted in connection
therewith.

            

    

     

     

    
      	
              15.7.3  

            	
              Such
      remedies shall, however, be cumulative and not exclusive and shall be in
      addition to any other remedies which any party may have under this
      Agreement or otherwise.

            

    

     

     

    
      	
              15.8  

            	
              Successors
      and assigns

            

    

     

     

    
      	
              15.8.1  

            	
              This
      Agreement shall be binding upon and inure to the benefit of the parties
      and their respective successors and permitted
  assigns.

            

    

     

     

    
      	
              15.9  

            	
              Privity
      of contract

            

    

     

     

    
      	
              15.9.1  

            	
              Nothing
      in this Agreement shall create or be deemed to create any third party
      beneficiary rights in any person or entity not a party to this Agreement
      except as provided below.

            

    

     

     

    
      	
              15.10  

            	
              Assignment

            

    

     

     

    
      	
              15.10.1  

            	
              No
      assignment or novation of this Agreement or of any rights or obligations
      hereunder may be made by either the Sellers or the Buyer (by operation of
      law or otherwise) without the prior written consent of the other Parties
      and any attempted assignment without the required consents shall be
      void;

            

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
              15.11  

            	
              Notices

            

    

     

     

    
      	
              15.11.1  

            	
              Each
      notice given under this Agreement:

            

    

     

     

    
      	
              (a)  

            	
              must
      be typed or in legible writing;

            

    

     

     

    
      	
              (b)  

            	
              must
      be in the English language; and

            

    

     

     

    
      	
              (c)  

            	
              must
      be addressed to the Party at that Party's address, or sent to the Party at
      that Party’s facsimile number, given in Schedule 1;
  and

            

    

     

     

    
      	
              (d)  

            	
              must
      be signed by the Party giving it.

            

    

     

     

    
      	
              15.11.2  

            	
              Each
      notice given under this Agreement may only be served personally, by
      prepaid post or by facsimile
transmission.

            

    

     

     

    
      	
              15.11.3  

            	
              Each
      notice given under this Agreement may only be served personally, by
      prepaid post or by facsimile transmission. In this
  regard:

            

    

     

     

    
      	
              (a)  

            	
              Subject
      to Clause 15.11.4, if a notice given under
      this Agreement is served personally, it is deemed to be served the day it
      is served.

            

    

     

     

    
      	
              (b)  

            	
              Subject
      to Clause 15.11.4, if a notice given under
      this Agreement is served by prepaid post, it is deemed to be served two
      Business Days after posting.

            

    

     

     

    
      	
              (c)  

            	
              If
      a notice given under this Agreement is served by facsimile transmission
      within Business Hours, it is deemed to be served when the facsimile
      machine through which it was sent produces a report indicating a
      successful transmission of the
notice.

            

    

     

     

    
      	
              (d)  

            	
              If
      a notice given under this Agreement is served by facsimile transmission
      outside Business Hours, it is deemed to be served at the commencement of
      the next Business Hour after the time when the facsimile machine through
      which it was sent produces a report indicating a successful transmission
      of the notice.

            

    

     

     

    
      	
              15.11.4  

            	
              If
      a delivery or receipt is outside Business Hours, the notice is taken to
      have been given during Business Hours on the next Business
      Day.

            

    

     

     

    
      	
              15.12  

            	
              Party
      acting as trustee

            

    

     

     

    
      	
              15.12.1  

            	
              If
      a Party enters into this Agreement as trustee of a trust, the Party and
      its successors as trustee of the trust are liable under this Agreement in
      their own right and as trustee of the trust.  Nothing releases
      the Party from any liability in its personal capacity.  The
      Party warrants that:

            

    

     

     

    
      	
              15.12.2  

            	
              all
      the powers and discretions conferred by the deed establishing the trust
      are capable of being validly exercised by the Party as trustee and have
      not been varied or revoked;

            

    

     

     

    
      	
              15.12.3  

            	
              the
      trust is a valid and subsisting
trust;

            

    

     

     

    
      	
              15.12.4  

            	
              the
      Party is the sole trustee of the trust and has full and unfettered power
      under the terms of the deed establishing the trust to enter into and be
      bound by this Agreement on behalf of the
trust;

            

    

     

     

    
      	
              15.12.5  

            	
              this
      Agreement is executed and entered into as part of the due and proper
      administration of the trust and for the benefit of the beneficiaries of
      the trust; and

            

    

     

     

    
      	
              15.12.6  

            	
              no
      restriction on the Party's right of indemnity out of, or lien over, the
      trust's assets exists, or will be created or permitted to exist, and that
      right has priority over the right of the beneficiaries to the trust's
      assets.

            

    

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    
      	
              15.13  

            	
              Governing
      law

            

    

     

     

    
      	
              15.13.1  

            	
              This
      Agreement is governed by and construed in accordance with laws applicable
      in the State of Queensland,
Australia.

            

    

     

     

    
      	
              15.13.2  

            	
              Each
      Party submits to the respective jurisdictions (including, where
      applicable, the non exclusive jurisdictions) of the courts of Queensland,
      Australia, as well as all other Australian courts or tribunals having
      jurisdiction over laws applicable in the State of Queensland,
      Australia.

            

    

     

     

    
      	
              15.13.3  

            	
              Any
      proceedings in respect of any cause of action arising under this Agreement
      must be instituted, heard and determined in a court of competent
      jurisdiction in Queensland,
Australia.

            

    

     

     

    
      	
              15.14  

            	
              Counterparts
      & exchange by fax

            

    

     

     

    
      	
              15.14.1  

            	
              This
      Agreement may be executed in any number of counterparts and all
      counterparts taken together shall constitute one and the same
      instrument.

            

    

     

     

    
      	
              15.14.2  

            	
              Each
      Party may execute this Agreement by signing a facsimile copy of the same
      and serving the signed copy by hand, mail or facsimile on each other
      Party.

            

    

     

    ~~~~~~~~~~~~~

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    EXECUTION

     

     

    Executed
as an Agreement.

     

     

    

     

    
      	
              Executed
      by THE PRIDE GROUP (QLD)
      PTY LTD ACN 086 453 269 in accordance with section 127 of the Corporations Act
      2001:

               

            	
              )

              )

              )

               

            	 
      
	
              ______________________________

              Director/Company
      Secretary

            	 
      	
              ______________________________

              Director

            
	 
      	 
      	 
      
	
              ______________________________

              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              ______________________________

              Name
      of Director

              (BLOCK
      LETTERS)

            

    

     

    

     

    
      	
              Executed
      by WPCS AUSTRALIA PTY LTD
      ACN 128 426 602 in accordance with section 127 of the Corporations Act
      2001:

               

            	
              )

              )

              )

               

            	 
      
	
              ______________________________

              Director/Company
      Secretary

            	 
      	
              ______________________________

              Director

            
	 
      	 
      	 
      
	
              ______________________________

              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              ______________________________

              Name
      of Director

              (BLOCK
      LETTERS)

            

    

     

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    

    

    
      	
              Executed
      by ROBERT EDWIN WILLIAM
      PAYNTER

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by PETER STUART
      MCDONALD

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      	
              Executed
      by NIGEL
      KERNICK

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by MARK STEPHEN
      EATON

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by J.C. PAYNTER PTY
      LIMITED ACN 002 365 844 as trustee for the Paynter Family Trust in
      accordance with section 127 of the Corporations Act
      2001:

               

               

            	
              )

              )

              )

               

            	 
      
	
              Director/Company
      Secretary

            	 
      	
              Director

            
	 
      	 
      	 
      
	
              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              Name
      of Director

              (BLOCK
      LETTERS)

            

    

    

    

    
      	
              Executed
      by DAVID CHARLES
      BUGLER as trustee for the ESF Trust

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by KATHERINE SUSAN
      BUGLER as trustee for the ESF Trust by her duly appointed Attorney,
      DAVID CHARLES
      BUGLER

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by STEPHEN PAUL
      MULLANE as trustee for the Mullane Family Trust

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by MARIE MULLANE
      as trustee for the Mullane Family Trust by her duly appointed Attorney
      STEPHEN PAUL
      MULLANE

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Nameex102.htm

    

    

    Exhibit
10.2

    
      

       

      

      Escrow
Agreement

       

      The Pride
Group (QLD) Pty Ltd ACN 086 453 269 (Company)

       

      WPCS
Australia Pty Ltd ACN 128 426 602 (Buyer)

       

      Robert
Edwin William Paynter, Peter Stuart McDonald, Nigel Kernick, Mark Stephen Eaton,
J.C. Paynter Pty Limited as trustee for the Paynter Family Trust, David Charles
Bugler & Katherine Susan Bugler as trustee for the ESF Trust and Stephen
Paul Mullane & Marie Mullane as trustee for the Mullane Family Trust (Sellers)

       

      Mullins
Lawyers (Escrow
Agent)

       

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

    

    

    TABLE
OF CONTENTS

     

    
      
        	 
      	
                BACKGROUND

              	
                3

              
	 
      	
                OPERATIVE
      PART

              	
                3

              
	
                1

              	
                DEFINITIONS
      & INTERPRETATION

              	
                3

              
	
                1.1

              	
                Definitions

              	
                3

              
	
                1.2

              	
                Interpretation

              	
                3

              
	
                2

              	
                ESCROWED
      FUNDS

              	
                4

              
	
                2.1

              	
                Appointment
      of Escrow Agent

              	
                4

              
	
                2.2

              	
                Payment
      of Escrowed Funds

              	
                4

              
	
                2.3

              	
                Retention
      of Escrowed Funds

              	
                4

              
	
                2.4

              	
                Reduction
      of Purchase Price

              	
                5

              
	
                2.5

              	
                Release
      of Escrowed Funds

              	
                5

              
	
                2.6

              	
                Rights
      and obligations Escrow Agent

              	
                5

              
	
                3

              	
                APPOINTMENT
      OF COUNSEL

              	
                6

              
	
                3.1

              	
                Reimbursement
      of fees and disbursements

              	
                6

              
	
                3.2

              	
                Indemnity

              	
                6

              
	
                4

              	
                GENERAL

              	
                7

              
	
                4.1

              	
                Action
      by Escrow Agent

              	
                7

              
	
                4.2

              	
                Amendment

              	
                7

              
	
                4.3

              	
                No
      waiver

              	
                7

              
	
                4.4

              	
                Entire
      agreement

              	
                7

              
	
                4.5

              	
                Further
      assurances

              	
                7

              
	
                4.6

              	
                Severability

              	
                7

              
	
                4.7

              	
                Assignment

              	
                7

              
	
                4.8

              	
                Party
      acting as trustee

              	
                7

              
	
                4.9

              	
                Notices

              	
                8

              
	
                4.10

              	
                Governing
      law

              	
                8

              
	
                 

              	
                

                  EXECUTION

                

              	10

      

      

    

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

      ESCROW
AGREEMENT

    

     

    THIS AGREEMENT is made
this                                                                      day
of 2009

     

    
      	
              BETWEEN

            	
              THE PRIDE GROUP (QLD) PTY LTD
      of 155 Currie Street, Nambour Qld 4560 (the
    “Company”);

            

    

     

    
      	
              AND

            	
              WPCS AUSTRALIA PTY LTD ACN 128
      426 602 care of Mullins Lawyers, Level 21 Riverside Centre, 123
      Eagle Street, Brisbane in the State of Queensland, 4000, Australia (the
      “WPCS”);

            

    

     

    
      	
              AND

            	
              THE SHAREHOLDERS DESCRIBED IN
      ATTACHED SCHEDULE  (the
  “Shareholders”);

            

    

     

    
      	
              AND

            	
              MULLINS LAWYERS of Level
      21, Riverside Centre, 123 Eagle Street, Brisbane Qld 4000 (the ‘Escrow
      Agent’).

            

    

     

     

    BACKGROUND

     

     

    
      	
              (A)  

            	
              The
      Company, the Buyer and the Shareholders together with the directors of the
      Company have entered into a Share Purchase Agreement on or about the date
      of this Agreement (the "Share Purchase Agreement") regarding the
      respective sale and purchase of the 97,939 fully paid ordinary A Class
      shares of the Company.

            

    

     

    
      	
              (B)  

            	
              As
      required by Clause 3.4 of the Share Purchase Agreement, WPCS and the
      Shareholders wish to provide for the escrow of certain monies pursuant to
      the Share Purchase Agreement, and desire that the Escrow Agent hold such
      monies pursuant to the provisions of this Agreement.  The Escrow
      Agent is willing to hold such cash pursuant to the provisions of this
      Agreement.

            

    

     

    OPERATIVE
PART

     

    
      	
              1  

            	
              DEFINITIONS
      & INTERPRETATION

            

    

     

    
      	
              1.1  

            	
              Definitions

            

    

     

     

    
      	
              1.1.1  

            	
              “Buyer” means the WPCS
      Australia Pty Ltd ACN 128 426 602;

            

    

     

     

    
      	
              1.1.2  

            	
              “Commencement date”
      means the date of this Agreement;

            

    

     

     

    
      	
              1.1.3  

            	
              “Company” means The
      Pride Group (Qld) Pty Ltd ACN 086 453
269;

            

    

     

     

    
      	
              1.1.4  

            	
              “Escrow Account” means
      the account maintained by the Escrow Agent in terms of this
      Agreement;

            

    

     

     

    
      	
              1.1.5  

            	
              “Escrow Agent” means
      Mullins Lawyers;

            

    

     

     

    
      	
              1.1.6  

            	
              “Escrowed Funds” means
      the sum of AUD$200,000;

            

    

     

     

    
      	
              1.1.7  

            	
              “Schedule” means the
      schedule to this Agreement;

            

    

     

     

    
      	
              1.1.8  

            	
              “Seller” means the
      Shareholders described in the attached
Schedule;

            

    

     

     

    
      	
              1.1.9  

            	
              “NTAV” means the net tangible asset
      value adjustment as determined by Clauses 3.3.7 and 3.3.8 of the Share
      Purchase Agreement.

            

    

     

     

     All
capitalized terms contained herein and not otherwise defined shall have the
meaning ascribed to them in the Share Purchase Agreement.

     

     

    
      	
              1.2  

            	
              Interpretation

            

    

     

     

     In the
interpretation of this Agreement, unless the context otherwise
requires:

     

     

    
      	
              1.2.1  

            	
              singular
      includes plural and vice versa;

            

    

     

     

    
      	
              1.2.2  

            	
              any
      gender includes each other gender;

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              1.2.3  

            	
              a
      reference to a person includes a reference to an individual, corporation,
      incorporated or unincorporated association, trust, partnership and
      governmental or quasi-governmental department, council, agency, authority
      or other body;

            

    

     

     

    
      	
              1.2.4  

            	
              a
      reference to writing includes any means of representing or reproducing
      words, figures, drawings or symbols in a visible, tangible form, in
      English;

            

    

     

     

    
      	
              1.2.5  

            	
              a
      reference to any legislation or to any provision of any legislation
      includes any modification or re-enactment of it, any legislative provision
      substituted for it and all regulations and statutory instruments issued
      under it;

            

    

     

     

    
      	
              1.2.6  

            	
              a
      reference to any party includes a reference to each of its staff and
      successors and permitted assigns, as well as any liquidator, provisional
      liquidator, receiver, manager or administrator duly appointed under the
      Corporations Act, any person authorised to act on its behalf under power
      of attorney, and any other person duly authorised in writing to act on its
      behalf in respect of any of the purposes of provisions of this
      Agreement;

            

    

     

     

    
      	
              1.2.7  

            	
              a
      reference to any agreement or document is that agreement or document as
      amended, novated, supplemented, varied or replaced from time to time,
      except to the extent prohibited by this Agreement or that other agreement
      or document;

            

    

     

     

    
      	
              1.2.8  

            	
              a
      reference to "dollars" or "$" is to Australian (AUSD) currency and
      Australian (AUSD) dollars and cents Australian
  currency;

            

    

     

     

    
      	
              1.2.9  

            	
              a
      reference to "conduct" includes any omission and any representation,
      statement or undertaking, whether or not in
  writing;

            

    

     

     

    
      	
              1.2.10  

            	
              a
      reference to the "knowledge", "belief" or "awareness" of any person in
      relation to a matter means the knowledge, belief or awareness that the
      person would have if it had made all reasonable enquiries in the
      circumstances;

            

    

     

     

    
      	
              1.2.11  

            	
              mentioning
      anything after "include", "includes" or "including" does not limit what
      else might be included;

            

    

     

     

    
      	
              1.2.12  

            	
              headings
      are used for ease of reference and convenience only and are not to be
      construed as forming any part of this Agreement;
  and

            

    

     

     

    
      	
              1.2.13  

            	
              where
      any word or phrase is given a defined meaning, other than grammatical form
      of that word or phrase has a corresponding
  meaning.

            

    

     

     

    
      	
              2  

            	
              ESCROWED
      FUNDS

            

    

     

     

    
      	
              2.1  

            	
              Appointment
      of Escrow Agent

            

    

     

     

    
      	
              2.1.1  

            	
              WPCS
      and the Shareholders hereby appoint the Escrow Agent to hold the Escrowed
      Funds, in a trust account, and the Escrow Agent accepts such appointment,
      subject to the terms and conditions
hereof.

            

    

     

     

    
      	
              2.1.2  

            	
              The
      Escrowed Account shall be denominated in
AUSD.

            

    

     

     

    
      	
              2.2  

            	
              Payment
      of Escrowed Funds

            

    

     

     

    
      	
              2.2.1  

            	
              The
      parties acknowledge that WPCS has, prior to the execution of this Escrow
      Agreement, delivered by way of electronic transfer to the Escrow Agent the
      Escrowed Funds and hereby irrevocably instructs the Escrow Agent to deal
      with the Escrowed Funds on and subject to the terms
  hereof.

            

    

     

     

    
      	
              2.3  

            	
              Retention
      of Escrowed Funds

            

    

     

     

    
      	
              2.3.1  

            	
              The
      Escrow Agent shall retain the Escrowed Funds until the NTAV of the Company
      as of the Completion Date shall be
determined.

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              2.4  

            	
              Reduction
      of Purchase Price

            

    

     

     

    
      	
              2.4.1  

            	
              In
      the event the NTAV as of the Effective Date shall be less than
      AUSD$1,200,000, the Purchase Price shall be reduced by the amount of the
      shortfall and such amount shall be released to
  WPCS.

            

    

     

     

    
      	
              2.4.2  

            	
              The
      balance of any amount remaining after the delivery of payments required
      pursuant to Clause 2.4.1 above (the “Escrow
      Payment”) shall be delivered to the Shareholders within three (3) business
      days of either:

            

    

     

     

    
      	
              (a)  

            	
              the
      date that the Seller gives notice of its agreement with the Buyer’s
      calculation of the NTAV under Clause 3.3.2 of the of the Share Purchase
      Agreement; or

            

    

     

     

    
      	
              (b)  

            	
              the
      date that the NTAV is determined by an Independent Accounting Firm under
      Clause 3.3.3 of the Share Purchase
Agreement.

            

    

     

     

    
      	
              2.5  

            	
              Release
      of Escrowed Funds

            

    

     

     

    
      	
              2.5.1  

            	
              The
      Escrow Agent shall only deliver the Escrowed Funds
  upon:

            

    

     

     

    
      	
              (a)  

            	
              written
      notification signed by each of the Shareholders and WPCS of final
      determination of the NTAV, or

            

    

     

     

    
      	
              (b)  

            	
              delivery
      to the Escrow Agent of a written determination of the NTAV by an
      Independent Accounting Firm under Clause 3.3.3 of the Share Purchase
      Agreement.

            

    

     

     

    
      	
              2.5.2  

            	
              Notwithstanding
      Clause 2.5.1, the Escrow Agent shall, from
      time to time, deliver all or some of the Escrowed Funds to WPCS or the
      shareholders in accordance with such written instructions, jointly
      executed by WPCS and the shareholders, as the Escrow Agent may
      receive.

            

    

     

     

    
      	
              2.6  

            	
              Rights
      and obligations Escrow Agent

            

    

     

     

    
      	
              2.6.1  

            	
              The
      Escrow Agent shall at all times comply with the requirements of the Trust
      Accounts Act 1973 (Qld), the Trust Accounts Regulation 1999 (Qld) and
      Legal Professional Act 2007 with respect to the receipt, management and
      disbursement of the Escrowed Funds under this Agreement, and the parties
      to this Agreement acknowledge and agree that those requirements prevail
      over the provisions of this Agreement to the extent of any inconsistency
      between them.

            

    

     

     

    
      	
              2.6.2  

            	
              Subject
      to Clause 2.6.1, the Escrow Agent shall not
      be under any duty to give the Escrowed Funds any greater degree of care
      than it gives its own similar property, and it shall have no liability
      hereunder, except for the wilful breach of its duties
      hereunder.

            

    

     

     

    
      	
              2.6.3  

            	
              Subject
      to Clause 2.6.1, the Escrow Agent shall have
      no duties or responsibilities except those expressly set forth herein and
      no implied duties or obligations should be read into this Escrow Agreement
      against the Escrow Agent.  The Escrow Agent need not refer to,
      and will not be bound by, the provisions of any other agreement, except
      for definitions of terms contained in the Share Purchase
      Agreement.

            

    

     

     

    
      	
              2.6.4  

            	
              The
      Escrow Agent may consult with counsel and shall be fully protected with
      respect to any action taken or omitted by it in good faith on advice of
      counsel.

            

    

     

     

    
      	
              2.6.5  

            	
              The
      Escrow Agent makes no representation as to the validity, value,
      genuineness or the collectibility of any security or other document or
      instrument held by or delivered to
it.

            

    

     

     

    
      	
              2.6.6  

            	
              The
      Escrow Agent will receive no compensation for its services
      hereunder.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              2.6.7  

            	
              In
      the event that the Escrow Agent shall be uncertain as to its duties or
      rights hereunder, or shall receive instructions from WPCS and the
      Shareholders or both of them, with respect to the Escrowed Funds, which,
      in its opinion, are in conflict with any of the provisions
      hereof:

            

    

     

     

    
      	
              (a)  

            	
              it
      shall be entitled to refrain from taking any action, and in doing so shall
      not become liable in any way or to any person for its failure or refusal
      to comply with such conflicting demands, and it shall be entitled to
      continue so to refrain from acting and so refuse to act until it shall be
      directed otherwise, in writing, jointly by WPCS and the shareholders or
      until it shall receive a final determination of a court of law,
      arbitration panel, or similar adjudicative body,
  or

            

    

     

     

    
      	
              (b)  

            	
              it
      may commence an action in any court of competent jurisdiction to seek an
      adjudication of the rights of WPCS and the
  shareholders.

            

    

     

     

    
      	
              2.6.8  

            	
              The
      Escrow Agent may act in reliance upon any notice, instruction,
      certificate, statement, request, consent, confirmation, agreement or other
      instrument which it believes to be genuine and to have been signed by a
      proper person or persons, and may assume that any of the officers of WPCS
      or the shareholders purporting to act on behalf of WPCS or the
      shareholders in giving any such notice or other instrument in connection
      with the provisions hereof has been duly authorized to do
    so.

            

    

     

     

    
      	
              3  

            	
              APPOINTMENT
      OF COUNSEL

            

    

     

     

    
      	
              3.1  

            	
              Reimbursement
      of fees and disbursements

            

    

     

     

    
      	
              3.1.1  

            	
              In
      the event that the Escrow Agent retains counsel or otherwise incurs any
      legal fees by virtue of any provision of this Escrow Agreement, the
      reasonable fees and disbursements of such counsel and any other liability,
      loss or expense which the Escrow Agent may thereafter suffer or incur in
      connection with this Escrow Agreement or the performance or attempted
      performance in good faith of its duties hereunder shall be paid (or
      reimbursed to it) by WPCS and the Shareholders, jointly and
      severally.

            

    

     

     

    
      	
              3.1.2  

            	
              In
      the event that the Escrow Agent shall become a party to any litigation in
      connection with its functions as Escrow Agent pursuant to this Escrow
      Agreement, whether such litigation shall be brought by or against it, the
      reasonable fees and disbursements of counsel to the Escrow Agent including
      the amounts attributable to services rendered by members or associates of
      Escrow Agent at the then prevailing hourly rate charged by them and
      disbursements incurred by them, together with any other liability, loss or
      expense which it may suffer or incur in connection therewith, shall be
      paid (or reimbursed to it) by WPCS and the Shareholders, jointly and
      severally, unless such loss, liability or expense is due to the wilful
      breach by the Escrow Agent of its duties
  hereunder.

            

    

     

     

    
      	
              3.2  

            	
              Indemnity

            

    

     

     

    
      	
              3.2.1  

            	
              WPCS
      and the Shareholders severally hereby unconditionally agree to indemnify
      the Escrow Agent and hold it harmless from and against any and all taxes
      (including federal, state and local taxes of any kind and other
      governmental charges), expenses, damages, actions, suits or other charges
      incurred by or brought or assessed against it
  for:

            

    

     

     

    
      	
              (a)  

            	
              anything
      done or omitted by it in the performance of its duties hereunder,
      or

            

    

     

     

    
      	
              (b)  

            	
              on
      account of acting in its capacity as an Escrow Agent or stakeholder
      hereunder, except as a result of its wilful breach of its duties under
      this Escrow Agreement.

            

    

     

     

    
      	
              3.2.2  

            	
              All
      reasonable expenses incurred by the Escrow Agent in connection with the
      performance of its duties hereunder shall be paid (or reimbursed to it) by
      WPCS and the Shareholders,
severally.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              3.2.3  

            	
              The
      agreements contained in this 3.2 shall
      survive any termination of the duties of the Escrow Agent
      hereunder.

            

    

     

     

    
      	
              4  

            	
              GENERAL

            

    

     

     

    
      	
              4.1  

            	
              Action
      by Escrow Agent

            

    

     

     

    
      	
              4.1.1  

            	
              WPCS
      and the Shareholders hereby acknowledge that the acts of the Escrow Agent
      are purely ministerial and do not represent a conflict of interest for the
      Escrow Agent to act, or continue to act, as counsel for any party to this
      Agreement with respect to any litigation or other matters arising out of
      this agreement or otherwise.

            

    

     

     

    
      	
              4.2  

            	
              Amendment

            

    

     

     

    
      	
              4.2.1  

            	
              This
      Agreement may be amended only by another agreement executed by all parties
      who may be affected by the
amendment.

            

    

     

     

    
      	
              4.3  

            	
              No
      waiver

            

    

     

     

    
      	
              4.3.1  

            	
              No
      failure to exercise and no delay in exercising any right, power or remedy
      under this Agreement will operate as a waiver.  Nor will any
      single or partial exercise of any right, power or remedy preclude any
      other or further exercise of that or any other right, power or
      remedy.

            

    

     

     

    
      	
              4.4  

            	
              Entire
      agreement

            

    

     

     

    
      	
              4.4.1  

            	
              Subject
      to Clause 4.2, this Agreement constitutes the
      sole and entire agreement between the parties.  No warranties,
      representations, guarantees or other terms or conditions of any kind not
      contained and recorded in this Agreement are of any force or
      effect.

            

    

     

     

    
      	
              4.5  

            	
              Further
      assurances

            

    

     

     

    
      	
              4.5.1  

            	
              Each
      party must take all steps, execute all documents and do everything
      reasonably required by the other party to give effect to any of the
      transactions contemplated by this
Agreement.

            

    

     

     

    
      	
              4.6  

            	
              Severability

            

    

     

     

    
      	
              4.6.1  

            	
              If
      any provision of this Agreement is invalid and not enforceable in
      accordance with its terms, all other provisions which are self-sustaining
      and capable of separate enforcement without regard to the invalid
      provisions are and continue to be valid and enforceable in accordance with
      their terms.

            

    

     

     

    
      	
              4.7  

            	
              Assignment

            

    

     

     

    
      	
              4.7.1  

            	
              The
      rights and obligations of each party under this Agreement are
      personal.  They cannot be assigned, charged or otherwise dealt
      with, and no party shall attempt or purport to do so without the prior
      written consent of all the parties.

            

    

     

     

    
      	
              4.8  

            	
              Party
      acting as trustee

            

    

     

     

    
      	
              4.8.1  

            	
              If
      a party enters into this Agreement as trustee of a trust, the party and
      its successors as trustee of the trust are liable under this Agreement in
      their own right and as trustee of the trust.  Nothing releases
      the party from any liability in its personal capacity.  The
      party warrants that:

            

    

     

     

    
      	
              (a)  

            	
              all
      the powers and discretions conferred by the deed establishing the trust
      are capable of being validly exercised by the party as trustee and have
      not been varied or revoked;

            

    

     

     

    
      	
              (b)  

            	
              the
      trust is a valid and subsisting
trust;

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              the
      party is the sole trustee of the trust and has full and unfettered power
      under the terms of the deed establishing the trust to enter into and be
      bound by this Agreement on behalf of the
trust;

            

    

     

     

    
      	
              (d)  

            	
              this
      Agreement is executed and entered into as part of the due and proper
      administration of the trust and for the benefit of the beneficiaries of
      the trust; and

            

    

     

     

    
      	
              (e)  

            	
              no
      restriction on the party's right of indemnity out of, or lien over, the
      trust's assets exists, or will be created or permitted to exist, and that
      right has priority over the right of the beneficiaries to the trust's
      assets.

            

    

     

     

    
      	
              4.9  

            	
              Notices

            

    

     

     

    
      	
              4.9.1  

            	
              Each
      notice given under this Agreement:

            

    

     

     

    
      	
              (a)  

            	
              must
      be typed or in legible writing;

            

    

     

     

    
      	
              (b)  

            	
              must
      be in the English language;

            

    

     

     

    
      	
              (c)  

            	
              must
      be signed by the party giving the notice;
and

            

    

     

     

    
      	
              (d)  

            	
              be
      addressed to the party at that party's address given at the beginning of
      this Agreement, or to a facsimile machine located at that address (as
      applicable);

            

    

     

     

    
      	
              4.9.2  

            	
              Each
      notice given under this Agreement may only be served personally, by
      prepaid post or by facsimile transmission.  In that
      regard:

            

    

     

     

    
      	
              (a)  

            	
              Subject
      to Clause 4.9.3, if a notice given under this
      Agreement is served personally, it is deemed to be served the day it is
      served.

            

    

     

     

    
      	
              (b)  

            	
              Subject
      to Clause 4.9.3, if a notice given under this
      Agreement is served by prepaid post, it is deemed to be served two
      business days after posting.

            

    

     

     

    
      	
              (c)  

            	
              If
      a notice given under this Agreement is served by facsimile transmission
      within Business Hours, it is deemed to be served when the facsimile
      machine through which it was sent produces a report indicating a
      successful transmission of the
notice.

            

    

     

     

    
      	
              (d)  

            	
              If
      a notice given under this Agreement is served by facsimile transmission
      outside Business Hours, it is deemed to be served at the commencement of
      the next Business Hour after the time when the facsimile machine through
      which it was sent produces a report indicating a successful transmission
      of the notice.

            

    

     

     

    
      	
              4.9.3  

            	
              If
      delivery or receipt is outside Business Hours, the notice is taken to have
      been given during Business Hours on the next Business
  Day.

            

    

     

     

    
      	
              4.10  

            	
              Governing
      law

            

    

     

     

    
      	
              4.10.1  

            	
              This
      Agreement is governed by and construed in accordance with laws applicable
      in the State of Queensland,
Australia.

            

    

     

     

    
      	
              4.10.2  

            	
              Each
      party submits to the respective jurisdictions (including, where
      applicable, the non-exclusive jurisdictions) of the courts of Queensland,
      Australia, as well as all other Australian courts or tribunals having
      jurisdiction over laws applicable in the State of Queensland,
      Australia.

            

    

     

     

    
      	
              4.10.3  

            	
              Any
      proceedings in respect of any cause of action arising under this Agreement
      must be instituted, heard and determined in a court of competent
      jurisdiction in Queensland,
Australia.

            

    

     

     

    ~~~~~~~~

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
1

     

     

    (SHAREHOLDERS)

     

    

    
      	 
      	 
      
	
              Robert
      Edwin William Paynter

              of
      13 Kimberley Court, Buderim Qld 4556

            	
              32,180
      A Class Shares

            
	
              Peter
      Stuart McDonald

              of
      78 Carter Road, Nambour Qld 4560

            	
              2,000
      A Class Shares

            
	
              Nigel
      Kernick

              of
      10-12 Dunbar Road, Burpengary Qld 4505

            	
              2,000
      A Class Shares

            
	
              Mark
      Stephen Eaton

              of
      18 Stevenson Street, Calamvale Qld 4116

            	
              6,500
      A Class Shares

            
	
              J.C.
      Paynter Pty Limited as trustee for the Paynter Family Trust

              of
      13 Kimberley Court, Buderim Qld 4556

            	
              6,933
      A Class Shares

            
	
              David
      Charles Bugler & Katherine Susan Bugler as trustee for the ESF
      Trust

              of
      43 Marawa Drive, Buddina Qld 4575

            	
              32,893
      A Class Shares

            
	
              Stephen
      Paul Mullane and Marie Mullane as trustee for the Mullane Family
      Trust

              of
      15 Kapilano Crescent, Mountain Creek Qld 4557

            	
              15,433
      A Class Shares

            
	
              Total

            	
              97,939
      A Class Shares

            

    

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    EXECUTION

    Executed
as an Agreement.

     

    
      	
              Executed
      by WPCS AUSTRALIA PTY LTD
      

              ACN 128 426 602 in
      accordance with section 

              127
      of the Corporations Act
      2001:

               

               

            	
              )

              )

              )

               

            	 
      
	
              Director/Company
      Secretary

            	 
      	
              Director

            
	 
      	 
      	 
      
	
              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              Name
      of Director

              (BLOCK
      LETTERS)

            

    

     

    

     

    
      	
              Executed
      by ROBERT EDWIN WILLIAM
      PAYNTER

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by PETER STUART
      MCDONALD

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by NIGEL
      KERNICK

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by MARK STEPHEN
      EATON

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by J.C. PAYNTER PTY
      LIMITED 

              ACN 002 365 844 as trustee for
      the Paynter Family Trust in accordance with section 

              127
      of the Corporations Act
      2001:

               

               

            	
              )

              )

              )

               

            	 
      
	
              Director/Company
      Secretary

            	 
      	
              Director

            
	 
      	 
      	 
      
	
              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              Name
      of Director

              (BLOCK
      LETTERS)

            

    

    

    

    
      	
              Executed
      by DAVID CHARLES BUGLER
      as trustee for the ESF Trust

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by KATHERINE SUSAN
      BUGLER as trustee for the ESF Trust by her duly appointed Attorney,
      DAVID CHARLES
      BUGLER

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by STEPHEN PAUL MULLANE
      as trustee for the Mullane Family Trust

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by MARIE MULLANE
      as trustee for the Mullane Family Trust by her duly appointed Attorney
      STEPHEN PAUL
      MULLANE

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

            	 
      	 
      

    

    

    

    
      	
              Executed
      by THE PRIDE GROUP (QLD)
      PTY LTD ACN 086 453 269 in accordance with section 127 of the Corporations Act
      2001:

               

               

            	
              )

              )

              )

               

            	 
      
	
              Director/Company
      Secretary

            	 
      	
              Director

            
	 
      	 
      	 
      
	
              Name
      of Director/Company Secretary

              (BLOCK
      LETTERS)

            	 
      	
              Name
      of Director

              (BLOCK
      LETTERS)

            

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    
      	
              Executed
      by MULLINS LAWYERS
      for and on behalf of the Firm by an authorised
    officer

            	 
      	 
      
	
              at (suburb)

            	 
      
	 
      	 
      
	
              on (date)

            	 
      
	 
      	 
      	
              Signature

            
	
              in
      the presence of:

            	 
      	 
      
	 
      	 
      
	 
      
	 
      
	
              Witness

            	 
      
	 
      	 
      
	 
      	 
      
	
              Name

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}]]