Document:

a50499472ex10_2.htm

Exhibit 10.2

 

Layne Christensen Company

Executive Short-Term Incentive Plan 

 

Effective Date

 

Layne Christensen Company ("Layne") establishes this Short-Term Incentive Plan ("STI Plan" or "Plan") effective as of January 1, 2013.

 

Compensation Philosophy

 

Layne's compensation philosophy is to structure compensation to drive financial and strategic growth and build long-term stockholder value while attracting and retaining valued talent in the markets and industries Layne serves.

 

Plan Objective

 

The intent of the STI Plan is to provide competitive cash compensation ("STI Bonuses") that rewards Participants for their performance and their contributions to Layne's overall performance. The STI Plan is an important component of a Participant's total compensation package, designed to communicate key annual corporate and individual objectives, reward efforts that achieve these objectives and align employee performance bonuses with Layne's shareholders' interests in a manner that motivates executives and employees to maximize shareholder value.

 

Plan Overview

 

This Plan is a bonus plan for certain Corporate Executives and Division Presidents selected by Layne to participate in the Plan ("Participants"). The Plan is designed to reward Participants for their roles in the achievement of Layne’s goals for the one-year performance period. All STI Bonuses under the Plan are conditioned upon achievement of one or more "Primary Goal(s)" and the achievement of one or more "Secondary Goal(s)." Primary Goal(s) achievement applies separately at the corporate-level and division level. For example, if corporate level Primary Goals(s) are not achieved, no STI Bonuses under the Plan will be made to corporate-level employees participating in the Plan even if there is achievement of one or more of the Secondary Goal(s).  However, if division-level Primary Goal(s) are achieved then division-level employees will become eligible to receive STI Bonuses (assuming the applicable Secondary Goals are met) even if the corporate-level Primary Goal(s) were not achieved.

 

Each Participant in the Plan has a target-level STI Bonus opportunity ("Target STI Opportunity"), expressed as a percentage of that Participant's base salary, based on the Participant's job position and level within the Company. Such Target STI Opportunity is reduced (by up to 50% of the Participant's targeted bonus) if Secondary Goal(s) achievement is less than 100% but over a minimum required threshold, and increased (by up to 100% of the Participant's targeted bonuses) if Secondary Goals(s) achievement is more than 100%.

 

  

  

  

 

Eligibility

 

The Compensation Committee (the "Compensation Committee") of Layne's Board of Directors (the "Board"), in consultation with Layne's Chief Executive Officer ("CEO"), shall select and recommend to the Board the Participants from the group of Layne's Corporate Executives and Division Presidents it desires to participate in the Plan.  An eligible employee will only become a Participant if the Board approves the Committee's recommendation. Participation in the STI Plan in one year does not automatically guarantee participation in a future year.

 

Performance Period

 

Each calendar year is a separate performance period ("Performance Period").

 

Establishment of Performance Period Primary Goal(s) and Secondary Goal(s)

 

For each Performance Period Layne shall establish:

 

	
 ●  

	
The Primary Goal(s) at one or both of a Corporate Level and Division Level; and

 

	
 ●  

	
The Secondary Goal(s) at one or more of a Corporate Level, Division Level, and individual performance level.

 

"Corporate Level" goals are based on consolidated financial results of Layne and its subsidiaries. "Division Level" goals are based on the financial results of that division.

 

The Primary Goal(s) for each Performance Period will be determined by the Compensation Committee based upon recommendations from the CEO and then reviewed and approved by the Board. Except as otherwise provided herein, each Participant's Target STI Opportunity will be recommended by the CEO to the Compensation Committee and, if approved by the Compensation Committee, the Compensation Committee shall recommend such Target STI Opportunity to the Board for its approval. Except with respect to the CEO or as provided herein, all Secondary Goal(s) will be developed by the CEO with the assistance of Layne's Chief Administrative Officer, submitted to the Compensation Committee for approval and recommendation, and if the Compensation Committee approves of such Secondary Goal(s), submitted to the Board for its review and approval. The Compensation Committee will recommend the Secondary Goal(s) relating to the CEO to the Board, and for approval by the Board. All Primary Goal(s) and Secondary Goal(s) for a Performance Period will be established by the end of the first quarter of each Performance Period.

 

Primary Goal(s)

 

Primary Goal(s) are established and measured at the Corporate Level and the Division Level. A Corporate Level Primary Goal applies solely to Corporate level employees, and a Division Level Primary Goal applies solely to Division level employees.

 

  

  

  

 

The Corporate level and the Division level Primary Goals are a function of return on net assets ("Return on Net Assets" or "RONA"). Corporate Level RONA is calculated as Layne's consolidated fiscal year's earnings before interest and taxes (inclusive of STI amounts) ("Consolidated EBIT") divided by the average of Layne's consolidated net assets for the fiscal year. Division Level RONA (calculated separately for each applicable division) is calculated as the applicable division's income before taxes (inclusive of STI amounts) ("IBT") divided by the average of the division's net assets for the fiscal year. These are referred to as "Corporate RONA" and "Division RONA", respectively.

 

Secondary Goals

 

All Participant's Secondary Goals will include:

 

	
 ●  

	
A specific, measurable Corporate Level and/or Division Level goal that can be attained by the end of the Performance Period; and

 

	
 ●  

	
 As many as four different individual level performance goals that can be attained by the end of the Performance Period.

 

The applicable weighting for Participants based on their job position and level is attached as Appendix A to this Plan. The weighting among the individual-level goals shall be determined by the Participant's manager in consultation with the Chief Administrative Officer.

 

Targeted STI Opportunity and Payout of Performance Awards

 

If the Primary Goal(s) applicable to a Participant is achieved for a Performance Period and the Participant's relevant Secondary Goal(s) threshold level of achievement is attained, then the Participant shall be eligible for payment of an STI Bonus. Performance at the minimum threshold shall result in payment of 50% of the Participant's Targeted STI Opportunity. Performance at or above the maximum goal level shall result in payment of 200% of the Participant's Targeted STI Opportunity. The percentage of the Participant's Targeted STI Opportunity that shall be paid for performance within the applicable performance range shall be determined through linear interpolation of the goal's minimum, maximum and target values. The applicable Targeted STI Opportunities for Participants based on their job position and level is attached as Appendix B to this Plan.

 

Attainment of performance awards is to be determined by the Compensation Committee after the end of the Performance Period and then recommended to the Board for its approval. All payouts are made in cash.  Once determined pursuant to the terms and conditions set forth herein, the Board has the ability to increase or decrease individual Participant bonuses by up to 50%. A Participant must be employed by Layne on the last date of the Performance Period to be eligible to receive payout of a performance award; provided, however, the Board may, in its sole discretion, agree to waive such last date of the Performance Period requirement if in its judgment such waiver is warranted and/or such acceleration is in the best interests of the Company. Payout of performance awards will occur no later than two and one-half (2-1/2) months following the end of the Performance Period.

 

  

  

  

 

Administration

 

The Compensation Committee is responsible for overseeing the administration of the STI Plan for Participants and reviewing and recommending to the Board the payments pursuant to the STI Plan.  The Board shall have complete discretion over the STI Plan and shall determine the final STI Plan performance goals and performance awards for the CEO, based upon recommendations from the Compensation Committee. The Board shall have the sole authority to interpret and construe the Plan and decisions made by the Board shall be final and binding upon all parties concerned.

 

The Compensation Committee determines whether the applicable performance thresholds and performance goals have been attained, based upon audited financial results for the Performance Period and shall make recommendations as to such attainment to the Board for its approval.  Where needed, the Compensation Committee will receive reports from Finance/Accounting regarding the calculation and tracking of financial performance which relates to performance goals, and will receive reports from Layne's human resources department regarding performance goals that are not based upon financial measures.

 

The Board retains the right to reassess performance goals and performance awards in light of unanticipated extenuating circumstances, or other reasons, and to increase or decrease the conditions of a performance goal or the value of a performance award as the result of its reassessment.

 

The Board may amend or terminate the Plan at any time, in its sole discretion.

 

This Plan confers no right to continued employment or otherwise change a Participant's status as an "at-will" employee.

 

The law of the state of Delaware shall be controlling in all matters relating to the Plan, unless superseded by Federal law.

 

  

  

  

 

APPENDIX A – PERFORMANCE DRIVERS AND WEIGHTS

 

 

	
Performance Drivers and Weights

	  	  	
Performance Drivers*

	
Title / Band

	
Level

	
One Layne

Cons.

	
Division

	
Individual

	
Total

	
CEO

	
0

	
80%

	  	
20%

	
100%

	
Corporate Executives (COO, CFO, GC, CAO)

	
1 Corp.

	
80%

	  	
20%

	
100%

	
Division Presidents

	
1 Div.

	
20%

	
70%

	
10%

	
100%

 

  

  

  

 

APPENDIX B - TARGETED STI OPPORTUNITIES

 

 

 

	
TITLE

	
LEVEL

	
 

THRESHOLD

50% OF TARGET 

STI BONUS 

PAYABLE IF 

80% OF GOAL 

ACHIEVED

	
TARGET

100% OF 

TARGET STI 

BONUS 

PAYABLE IF 

100% OF GOAL 

ACHIEVED

	
MAXIMUM

200% OF 

TARGET STI 

BONUS 

PAYABLE IF 

120% OR MORE 

OF GOAL 

ACHIEVED

	
CEO

	
0

	
50%

	
100%

	
200%

	
CORPORATE EXECUTIVES (COO, CFO, GC, CAO)

	
1 CORP.

	
30%

	
60%

	
120%

	
DIVISION PRESIDENTS

	
1 DIV.

	
30%

	
60%

	
120%Exhibit 10.1

                            ASSET PURCHASE AGREEMENT

THIS AGREEMENT dated the 31st day of May, 2012.

BETWEEN:

          JERVIS EXPLORATIONS INC.

          (the "Vendor")

                                                               OF THE FIRST PART

AND:
          PRWC ENERGY INC.

          (the "Purchaser")

                                                              OF THE SECOND PART

WHEREAS:

A. The Vendor is the registered and beneficial owner of various mineral claims
(hereinafter the "CLAIMS"), collectively called WC Uranium Property. The Claims
of the Vendor are more particularly described in Schedule "A" attached hereto
and forming part of this Agreement;

B. The Vendor has agreed to sell and the Purchaser has agreed to purchase all of
the Claims of the Vendor in accordance with the terms of this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the terms and
covenants herein and other good and valuable consideration, the receipt and
sufficiency of which each party acknowledges, the parties hereto agree as
follows:

1. PURCHASE AND SALE OF ASSETS

1.1 SALE OF ASSETS. Subject to the terms and conditions of this Agreement, the
Vendor hereby sells, assigns and transfers to the Purchaser, and the Purchaser
hereby purchases the Vendor's Claims.

1.2 PURCHASE PRICE. The purchase price payable by the Purchaser to the Vendor
for the Vendor's Claims is USD $8,500 (the "PURCHASE PRICE"), subject to a
carried 3% Net Smelter Royalty as described in Appendix "A".
<PAGE>
1.3 PAYMENT OF THE PURCHASE PRICE. The Purchase Price will be paid by the
delivery of a cheque.

1.4 DELIVERY OF CLAIMS. The Vendor delivers to the Purchaser, on execution
hereof, all of the Claims unconditionally and free and clear of all liens,
charges, or encumbrances, except where disclosed.

2. COVENANTS OF THE PARTIES

2.1 COVENANTS. The parties undertake to keep the information with respect to
this Agreement, the terms herein, and any related, underlying or subsequent
agreements (the "INFORMATION") confidential and not to directly or indirectly
disclose the Information at any time to any person or persons or use the
Information for any purpose whatsoever.

3. REPRESENTATIONS OF THE VENDOR

3.1 REPRESENTATIONS. The Vendor represents and warrants to the Purchaser as
follows, with the intent that the Purchaser will rely on the representations in
entering into this Agreement, and in concluding the purchase and sale
contemplated by this Agreement:

     (a)  CAPACITY TO SELL. The original Vendor is JERVIS EXPLORATIONS INC..
          having the power and capacity to own and dispose of the Claims and to
          enter into this Agreement and carry out its terms to the full extent;

     (b)  AUTHORITY TO SELL. The execution and delivery of this Agreement, and
          the completion of the transaction contemplated by this Agreement has
          been duly and validly authorized by all necessary corporate action on
          the part of the Vendor, and this Agreement constitutes a legal, valid
          and binding obligation of the Vendor enforceable against the Vendor in
          accordance with its terms except as may be limited by laws of general
          application affecting the rights of creditors;

     (c)  SALE WILL NOT CAUSE DEFAULT. Neither the execution and delivery of
          this Agreement, nor the completion of the purchase and sale
          contemplated by this Agreement will:

          (i)  violate any of the terms and provisions of the constating
               documents or bylaws or articles of the Vendor, or any order,
               decree, statute, bylaw, regulation, covenant, restriction
               applicable to the Vendor or the Claims;

          (ii) give any person the right to terminate, cancel or otherwise deal
               with the Claims; or

                                       2
<PAGE>
          (iii) result in any fees, duties, taxes, assessments or other amounts
               relating to the Claims becoming due or payable other than tax
               payable by the Purchaser in connection with the purchase and
               sale;

     (d)  ENCUMBRANCES. The Vendor owns and possesses and has a good marketable
          title to the Claims free and clear of all legal claims, mortgages,
          liens, charges, pledges, security interest, encumbrances or other
          claims, except where as disclosed;

     (e)  LITIGATION. There is no litigation or administrative or governmental
          proceeding or inquiry pending or, to the knowledge of the Vendor,
          threatened against or relating to the Claims, nor does the Vendor know
          of or have reasonable grounds that there is any basis for any such
          action, proceeding or inquiry;

     (f)  NO DEFAULTS. Except as otherwise expressly disclosed in this Agreement
          there has not been any default in any obligation to be performed under
          any of the Claims, which are in good standing and in full force and
          appropriate effect; and

     (g)  GOOD STANDING. Prior to closing this Agreement, the Vendor will
          maintain, as required, the Claims in good standing.

4. COVENANTS OF THE VENDOR

4.1 PROCURE CONSENTS. The Vendor will diligently and expeditiously take all
reasonable steps requested by the Purchaser to obtain all necessary consents to
effect the transfer of the Claims.

4.2 COVENANT OF INDEMNITY. The Vendor will indemnify and hold harmless the
Purchaser from and against:

     (a)  any and all liabilities, whether accrued, absolute, contingent or
          otherwise, existing at closing and which are not agreed to be assumed
          by the Purchaser under this Agreement;

     (b)  any and all losses, claims, damages and costs incurred or suffered by
          the Purchaser arising out of the breach or inaccuracy of any
          representation or warranty of the Vendor contained in this Agreement;
          and

     (c)  any and all actions, suits, proceedings, demands, assessments,
          judgments, costs and legal and other expenses incident to any of the
          foregoing.

4.3 EXECUTION OF ALL NECESSARY DOCUMENTS. The Vendor will execute all necessary
documents including such assignments as the Purchaser may require to effect the
transfer of all of the Claims, including but not limited to, internet contracts
and internet names.

                                       3
<PAGE>
5. REPRESENTATIONS OF THE PURCHASER

5.1 REPRESENTATIONS. The Purchaser represents and warrants to the Vendor as
follows, with the intent that the Vendor will rely on these representations and
warranties in entering into this Agreement, and in concluding the purchase and
sale contemplated by this Agreement:

     (a)  STATUS OF PURCHASER. The Purchaser is a corporation duly incorporated,
          validly existing and in good standing and has the power and capacity
          to enter into this Agreement and carry out its terms; and

     (b)  AUTHORITY TO PURCHASE. The execution and delivery of this Agreement
          and the completion of the transaction contemplated by this Agreement
          has been duly and validly authorized by all necessary corporate action
          on the part of the Purchaser, and this Agreement constitutes a legal,
          valid and binding obligation of the Purchaser enforceable against the
          Purchaser in accordance with its terms except as limited by laws of
          general application affecting the rights of creditors.

6. COVENANTS OF THE PURCHASER

6.1 CONSENTS. The Purchaser will at the request of the Vendor execute and
deliver such applications for consent and such assumption agreements, and
provide such information as may be necessary to obtain the consents referred to
in paragraph 4.1 and will assist and cooperate with the Vendor in obtaining the
consents.

6.2 EXECUTION OF ALL NECESSARY DOCUMENTS. The Purchaser will execute all
necessary documents as the Vendor may require to effect the transfer of all of
the Claims.

7. SURVIVAL OF REPRESENTATIONS AND COVENANTS

7.1 VENDOR'S REPRESENTATIONS AND COVENANTS. All representations, covenants and
agreements made by the Vendor in this Agreement or under this Agreement will,
unless otherwise expressly stated, survive closing and any investigation at any
time made by or on behalf of the Purchaser will continue in full force and
effect for the benefit of the Purchaser.

7.2 PURCHASER'S REPRESENTATIONS AND COVENANTS. All representations, covenants
and agreements made by the Purchaser in this Agreement or under this Agreement
will, unless otherwise expressly stated, survive closing and any investigation
at any time made by or on behalf of the Vendor and will continue in full force
and effect for the benefit of the Vendor.

                                       4
<PAGE>
8. LIABILITIES NOT ASSUMED

8.1 LIABILITIES NOT ASSUMED. The Purchaser will not assume any liabilities of
the Vendor. The Purchaser will not be responsible for any liability of the
Vendor, past, present or future, relating to the Claims, and the Vendor will
indemnify and save harmless the Purchaser from and against any such claim.

9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER

9.1 CONDITIONS. All obligations of the Purchaser under this Agreement are
subject to the fulfillment of the following conditions:

     (a)  VENDOR'S REPRESENTATIONS. The Vendor's representations contained in
          this Agreement will be true.

     (b)  VENDOR'S COVENANTS. The Vendor will have performed and complied with
          all agreements, covenants and conditions as required by this
          Agreement.

     (c)  CONSENTS. The Purchaser will have received duly executed copies of the
          consents or approvals referred to in paragraph 4.1.

9.2 EXCLUSIVE BENEFIT. The foregoing conditions are for the exclusive benefit of
the Purchaser and any such condition may be waived in whole or in part by the
Purchaser delivering to the Vendor a written waiver to that effect signed by the
Purchaser.

10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR

10.1 CONDITIONS. All obligations of the Vendor under this Agreement are subject
to the fulfillment of the following conditions:

     (a)  PURCHASER'S REPRESENTATIONS. The Purchaser's representations contained
          in this Agreement will be true.

     (b)  PURCHASER'S COVENANTS. The Purchaser will have performed and complied
          with all covenants, agreements and conditions as required by this
          Agreement.

     (c)  CONSENTS OF THIRD PARTIES. All consents or approvals required to be
          obtained by the Vendor for the purpose of selling, assigning or
          transferring the Claims have been obtained, provided that this
          condition may only be relied upon by the Vendor if the Vendor has
          diligently exercised its best efforts to procure all such consents or
          approvals and the Purchaser has not waived the need for all such
          consents or approvals.

                                       5
<PAGE>
10.2 EXCLUSIVE BENEFIT. The foregoing conditions are for the exclusive benefit
of the Vendor and any such condition may be waived in whole or in part by the
Vendor delivering to the Purchaser a written waiver to that effect signed by the
Vendor.

11. GENERAL

11.1 GOVERNING LAW. This Agreement and each of the documents contemplated by or
delivered under or in connection with this Agreement are governed exclusively
by, and are to be enforced, construed and interpreted exclusively in accordance
with the laws of British Columbia which will be deemed to be the proper law of
the Agreement.

11.2 PROFESSIONAL FEES. Each of the parties will bear the fees and disbursements
of their respective lawyers, advisers and consultants engaged by them
respectively in connection with the transactions contemplated by this Agreement
prior to the closing.

11.3 ASSIGNMENT. No party will assign this Agreement, or any part of this
Agreement, without the prior written consent of the other party. Any purported
assignment without the required consent is not binding or enforceable against
any party.

11.4 ENUREMENT. This Agreement ensures to the benefit of and binds the parties
and their respective successors and permitted assigns.

11.5 NOTICE. All notices required or permitted to be given under this Agreement
will be in writing and personally delivered to the address of the intended
recipient set out on the first page of this Agreement or at such other address
as may from time to time be notified by any of the parties in the manner
provided in this Agreement.

11.6 FURTHER ASSURANCES. The parties will execute and deliver all further
documents and take all further action reasonably necessary or appropriate to
give effect to the provisions and intent of this Agreement and to complete the
transactions contemplated by this Agreement.

11.7 REMEDIES CUMULATIVE. The rights and remedies under this Agreement are
cumulative and are in addition to and not in substitution for any other rights
and remedies available at law or in equity or otherwise. Any party to this
Agreement may terminate this Agreement if any other party is in breach of or
defaults under any material term or condition of this Agreement or has made a
material misrepresentation in this Agreement. No single or partial exercise by a
party of any right or remedy precludes or otherwise affects the exercise of any
other right or remedy to which that party may be entitled.

11.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and there are no representations, express or implied, statutory or
otherwise and no collateral agreements other than as expressly set out or
referred to in this Agreement.

                                       6
<PAGE>
11.9 HEADINGS. The division of this Agreement into sections and the insertion of
headings are for convenience only and do not form part of this Agreement and
will not be used to interpret, define or limit the scope, extent or intent of
this Agreement.

11.10 SEVERABILITY. Each provision of this Agreement is severable. If any
provision of this Agreement is or becomes illegal, invalid or unenforceable, the
illegality, invalidity or unenforceability of that provision will not affect the
legality, validity or enforceability of the remaining provisions of this
Agreement.

11.11 SCHEDULES. The Schedules attached hereto form an integral part of this
Agreement.

11.12 TIME OF THE ESSENCE. Time will be of the essence of this Agreement.

11.13 COUNTERPARTS. This Agreement and all documents contemplated by or
delivered in connection with this Agreement may be executed and delivered by
facsimile or original and in any number of counterparts, and each executed
counterpart will be considered to be an original. All executed counterparts
taken together will constitute one agreement.

IN WITNESS WHEREOF the parties have duly executed this Agreement by their duly
authorized officers effective the first day and year written above.

VENDOR: JERVIS EXPLORATIONS INC.

PURCHASER: PRWC ENERGY INC.

                                       7
<PAGE>
                                  SCHEDULE "A"

THIS IS SCHEDULE "A" to the Asset Purchase Agreement.

                               MINERAL CLAIM TITLE

TO:      WAYNE MIDDLETON
         PRWC ENERGY INC.

FROM:    JERVIS EXPLORATIONS INC.

Re:      WC URANIUM PROPERTY PAYMENT

PROPERTY: The Property consists of the following Claims:

NAME                       NUMBER           HECTARES          EXPIRY DATE
----                       ------           --------          -----------
WC URANIUM                 #985362           481.50           May 10, 2013

Terms: $8,500 USD, due upon receipt of Property Report, plus 3% Net Smelter
Return as described in Appendix "A"

                                       8
<PAGE>
APPENDIX "A" - ROYALTY

                             3% NET SMELTER RETURNS

1. In this Agreement, "3% NET SMELTER RETURNS" means 3% of the net amount of
money received by the Purchaser for its own account from the sale of ore, or ore
concentrates or other mineral products from the Claims to a smelter or other
mineral products buyer after deduction of smelter and/or refining charges, ore
treatment charges, penalties and any and all charges made by the purchaser of
ore, concentrates, or other mineral products, less any and all transportation
costs which may be incurred in connection with the transportation of ore or
concentrates, less all umpire charges which the purchaser may be required to
pay.

2. Payment of Net Smelter Returns by the Purchaser to the Vendor shall be made
semi-annually within 60 days after the end of each fiscal half year of the
Purchaser and shall be accompanied by unaudited financial statements pertaining
to the operations carried out by the Purchaser on the Claims. Within 90 days
after the end of each fiscal year of the Purchaser in which Net Smelter Returns
are payable to the Vendor, the records relating to the calculation of Net
Smelter Returns for such year shall be audited and any resulting adjustments in
the payment of Net Smelter Returns payable to the Vendor shall be made
forthwith. A copy of the said audit shall be delivered to the Vendor within 30
days of the end of such 90-day period.

3. Each annual audit shall be final and not subject to adjustment unless the
Vendor delivers to the Purchaser written exceptions in reasonable detail within
six months after the Vendor receives the report. The Vendor, or its
representative duly authorized in writing, at its expense, shall have the right
to audit the books and records of the Purchaser related to Net Smelter Returns
to determine the accuracy of the report, but shall not have access to any other
books and records of the Purchaser. The audit shall be conducted by a chartered
or certified public accountant of recognized standing. The Purchaser shall have
the right to condition access to its books and records on execution of a written
agreement by the auditor that all information will be held in confidence and
used solely for purposes of audit and resolution of any disputes related to the
report. A copy of the Vendor's report shall be delivered to the Purchaser upon
completion, and any discrepancy between the amount actually paid by the
Purchaser and the amount which should have been paid according to the Vendor's
report shall be paid forthwith, one party to the other. In the event that the
said discrepancy is to the detriment of the Vendor and exceeds 5% of the amount
actually paid by the Purchaser, then the Purchaser shall pay the entire cost of
the audit.

4. Any dispute arising out of or related to any report, payment, calculation or
audit shall be resolved solely by arbitration as provided in the Agreement. No
error in accounting or in interpretation of the Agreement shall be the basis for
a claim of breach of fiduciary duty, or the like, or give rise to a claim for
exemplary or punitive damages or for termination or rescission of the Agreement
or the estate and rights acquired and held by the Purchaser under the terms of
the Agreement.

                                       9

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