Sale Agreement

between

The shareholders of Xxxxxxxx Xxxxxx Xxxx Management Pty Limited ACN 087 978

970 as at the SKMM Scheme Record Date

(SKMM Sellers)

and

The shareholders of Xxxxxxxx Xxxxxx Xxxx Holdings Limited ACN 001 024 102 as at the SKMH Scheme Record Date

(SKMH Sellers)

and

Xxxxxxxx Xxxxxx Xxxx Management Pty Limited (ACN 087 978 970) of 000 Xxxxxxxx

Xxxxxx, Xx Xxxxxxxx XXX 0000, Xxxxxxxxx

(SKMM)

and

Xxxxxxxx Xxxxxx Xxxx Holdings Limited (ACN 001 024 102) of 000 Xxxxxxxx Xxxxxx, Xx Xxxxxxxx XXX 0000, Xxxxxxxxx

(SKMH)

and

Jacobs Australia Holdings Company Pty. Ltd. (ACN 165 641 592) of Xxxxx 0, 000

Xx Xxxxx Xx, Xxxxxxxxx, 0000 Xxxxxxxxx

(Jacobs)

and

the Sellers' Representatives

Xxxxx Day

Xxxxx 00, Xxxxxx Xxxxx

00 Xxxxxxx Xxxxxx

Xxxxxx XXX 0000

Tel: 00 0 0000 0000

Fax: 00 0 0000 0000

xxx.xxxxxxxx.xxx

Date 2013

Parties

The shareholders of Xxxxxxxx Xxxxxx Xxxx Management Pty Limited ACN 087 978 970 as at the SKMM Scheme Record Date (SKMM Sellers)

The shareholders of Xxxxxxxx Xxxxxx Xxxx Holdings Limited ACN 001 024 102 as at the

SKMH Scheme Record Date (SKMH Sellers)

(each a Seller and collectively the Sellers)

Xxxxxxxx Xxxxxx Xxxx Management Pty Limited (ACN 087 978 970) of 000 Xxxxxxxx Xxxxxx, Xx

Xxxxxxxx XXX 0000, Xxxxxxxxx (SKMM)

Xxxxxxxx Xxxxxx Xxxx Holdings Limited (ACN 001 024 102) of 000 Xxxxxxxx Xxxxxx, Xx Xxxxxxxx

XXX 0000, Xxxxxxxxx (SKMH)

Xxxxxx Australia Holdings Company Pty. Ltd. (ACN 165 641 592) of Xxxxx 0, 000 Xx Xxxxx

Xx, Xxxxxxxxx, 0000 Xxxxxxxxx (Jacobs)

the Sellers' Representatives

Recitals


1	The registered holders of the Sale Shares for the purposes of this Agreement will be those persons specified in the Sellers' Notice, being all of the SKMM Sellers and the SKMH Sellers, each holding the Sale Shares specified against that person's name.


2	The boards of directors of SKMM and SKMH have resolved that SKMM and SKMH should propose the Schemes. The effect of the Schemes will be that all of the Sale Shares will be transferred to Jacobs.

On 8 September 2013, SKMM, SKMH, Jacobs and Jacobs Guarantor entered into the Merger Implementation Deed in respect of the Schemes on the terms set out therein. The parties have agreed that Jacobs shall be entitled to recover in respect of certain matters relating to the Sellers and the SKM Group, and this Agreement sets out, amongst other things, the recourse Jacobs is to have as against the Sellers in respect of those matters and the terms on which it may recover for Loss.


4	Each of the Sellers' Representatives has been appointed by the Sellers and is duly authorised to act as attorney for all of the Sellers with respect to taking all actions required or permitted to be taken on behalf of all of the Sellers in accordance with the terms of this Agreement.

This Agreement witnesses as follows:

1. Interpretation

1.1 Definitions

The meanings of the terms used in this Agreement are set out below.



Accounting Standards	means: (a) accounting standards as that term is defined in the Corporations Act; and (b) to the extent not inconsistent with paragraph (a), generally accepted accounting standards, principles and practices, as consistently applied in Australia.
Accounts	means the audited consolidated accounts (comprising a balance sheet and profit and loss account) for SKMH and its controlled entities for the twelve months to, and as of the Accounts Date.



Accounts Date	means 24 June 2012
Accounts Receivable	means all accounts, billed (trade receivables) and unbilled (work in progress), owed to any member of the SKM Group as at the Locked Box Date, including book debts, but excluding prepaid expenses and other debtors (such other debtors to include any Taxing Authority), in all cases net of (i) specific provisions for bad or doubtful debts as at the Locked Box Date, (ii) specific provisions for doubtful work in progress as at the Locked Box Date and, (iii) with respect to accounts in excess of $100,000, the elements of Negative WIP that represent a specific provision or Direct Offset in respect of such account as at the Locked Box Date, in the case of (i) and (ii), as set forth in document 01.05.03 in the Data Site, and in the case of (iii), as agreed in good faith by the SKM Parties and Jacobs prior to Implementation.
Accounts Receivable Guarantee	means any Adjustment to the Additional Scheme Consideration in respect of Accounts Receivable in accordance with clause 7.
Actual Deduction Amount	has the meaning given in clause 4.2(b).
Additional Amount	has the meaning given in clause 11.2.
Additional Scheme Consideration	has the meaning given in the Merger Implementation Deed.
Adjustment	has the meaning given in clause 3.2(a).
Adjustment Event	has the meaning given in the GST Act.
Adjustment Statements	means each of the matters in Schedule 2.
Age Based Liability Compromise	means (i) the schemes of arrangement and (ii) the deeds of release between the relevant members of the SKM Group and their respective employee and former employee shareholders in relation to certain age-based provisions historically included in the SKM Group Shareholding Plan.
Agreement	means this Sale Agreement.
Amount Incurred	has the meaning given in clause 11.5(a).
Anti-Corruption Law	means the United States Foreign Corrupt Practices Act of 1977, the United Kingdom Xxxxxxx Xxx 0000 and the Australian Criminal Code Amendment (Bribery of Foreign Public Officials) Act 1999 (Cth) (in each case, as amended from time to time) and all other Laws that prohibit the bribery of, the providing of or the acceptance of unlawful gratuities, facilitation payments or other benefits to or from, any Government Official or any other person, as well as any such prohibitions of an International Funding Institution.
Approved Schemes	has the meaning given in paragraph 23.8(f) of Schedule 2.
Arbitral Tribunal	has the meaning given in clause 13.2(a).
Business	means the business conducted by the SKM Group.
Business Day	has the meaning given in the Merger Implementation Deed.
Chilean Shareholder Loan	means each loan deed entered into between SKMH and a Seller or its nominee who is resident in Chile in connection with the SKM Group Internal Restructure.
Claim	has the meaning given in the Merger Implementation Deed.
Compensated Amount	has the meaning given in clause 8.6(a)(2).
Confidentiality Deed	has the meaning given in the Merger Implementation Deed.
Consideration	has the meaning given in clause 11.1.
Corporations Act	means the Corporations Xxx 0000 (Cth).
CVR Notes	means the contingent value rights loan notes issued by SKMH in connection with the Age Based Liability Compromise.
CVR Tax Deduction	has the meaning given in clause 8.6(c).



Data Site	means the electronic data site set up in connection with the transactions contemplated hereunder pursuant to which the Disclosure Materials have been made available to Jacobs.
Direct Offset	means, with respect to an account, the set off of the unbilled portion (work in progress) against a Negative WIP balance which relates to one contractual arrangement which has been established for operational expediency.
Disclosure Letter	has the meaning given in the Merger Implementation Deed.
Disclosure Materials	means all written information provided by or on behalf of the SKM Group to Jacobs or Jacobs' Representatives in the electronic data room established by the SKM Group in connection with the Due Diligence process.
Dividend Shares	has the meaning given in the Merger Implementation Deed.
Due Diligence	means the enquiries Jacobs has made into the business, finances and affairs of the SKM Group prior to the entry into this Deed.
Duty	has the meaning given in the Merger Implementation Deed.
Effective Date	has the meaning given in the Merger Implementation Deed.
Encumbrance	has the meaning given in the Merger Implementation Deed.
Environment	means the natural and man made environment, including air (whether within buildings or within other natural or man made structures above or below ground), water (whether under or within land or in drains or sewers and inland waters), land and any living organisms or systems supported by those media.
Environmental Claim	means any Claim or Loss arising (i) pursuant to, or in connection with, an actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Substances; (iii) from any abatement, removal, remedial, corrective or other response action taken in connection with Hazardous Substances or Environmental Law or otherwise; or (iv) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources, wildlife or the Environment.
Environmental Law	means all applicable Laws, regulations, judgments, orders, instructions or awards of any court or competent authority and all codes of practice, industry agreements and guidance notes which relate or apply to the Environment or human health and safety and includes all Laws relating to actual or threatened emissions, seepages, discharges, escapes, releases or leaks of pollutants, contaminants or Hazardous Substances and those Laws relating to the creation, handling, storage or disposal of the same.
Environmental Permits	has the meaning given in paragraph 24.1 of Schedule 2.
Escrow Account	means the interest-bearing account administered by the Escrow Agent in accordance with the Escrow Deed in respect of the Additional Scheme Consideration.
Escrow Agent	has the meaning given in the Merger Implementation Deed.
Escrow Amount	means the amount (including any accrued interest) standing to the credit of the Escrow Account at the relevant time.
Escrow Deed	means the deed between the Sellers' Representatives, Jacobs and the Escrow Agent so entitled that will contain provisions reflecting the operation of the Escrow Account and the Escrow Agent's payment obligations described in this Agreement.



Event	means any transaction, event, circumstance, action or omission, including the execution of and completion of this Agreement and any Transaction Document, any of the Adjustment Statements being untrue, inaccurate or misleading as at the dates on which they are given (or deemed to be given), the issuance, grant, exercise, release, transfer, exchange, vesting, variation, disposal, redemption or cancellation at any time of shares or securities (including a right to acquire shares or securities or an interest in shares or securities),any change in the residence of any person for the purposes of any Tax or any member of the SKM Group becoming, being or ceasing to be a member of a group of companies (however defined) or becoming or ceasing to be associated or connected with any person for the purposes of any Tax, and in any one case or more whether alone or in any combination.
Finally Determined	means the determination in respect of any Claim, which has either been (i) consented to in writing by a Sellers' Representative; (ii) has become due and payable under applicable law and cannot be disputed, appealed, compromised or otherwise contested under applicable Law; (iii) has been determined pursuant to a final, nonappealable judgement or similar determination of the Arbitral Tribunal, a Tax Authority, court or other tribunal of competent jurisdiction; or (iv) settled or compromised by Jacobs following the Sellers’ Representatives unreasonably withholding or delaying its consent pursuant to clause 9.7(a)(5).
First Adjustment Amount	means $60,000,000.
First Adjustment Date	means 1 December 2014.
First Unresolved Claims Quantum	means the quantum (or estimated quantum) of any Claims by Jacobs which have been notified to the Sellers' Representatives in a Notice of Claim before the First Adjustment Date and have not been Finally Determined as at the First Adjustment Date.
Founder Share Transfer Agreement	has the meaning given in the Merger Implementation Deed.
Government Agency	has the meaning given in the Merger Implementation Deed.
Government Contract	means any contract, sub-contract, agreement or arrangement, joint venture, basic ordering agreement, letter contract, purchase order, delivery order, task order, grant, cooperative agreement, change order, arrangement or other commitment or funding vehicle of any kind relating to any business between any member of the SKM Group and a Government Agency or company owned by a Government Agency as the prime contracting party.
Government Contract Bid	means any and all quotations, bids and proposals for awards of new Government Contracts made by the SKM Group for which no award has been made and for which the SKM Parties believe there is a reasonable prospect that such an award to the relevant member or members of the SKM Group may yet be made.
Government Official	means any officer or employee of any government or any department, agency or instrumentality thereof, or of any government-owned or government-controlled corporation or any public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality, corporation or a public international organization.
GST	means goods and services tax, sales tax, turnover tax or similar value added tax levied or imposed in Australia under the GST Law or otherwise on a supply.
GST Act	means the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
GST Group	has the same meaning as in the GST Act.
GST Law	has the same meaning as in the GST Act.



Hazardous Substances	means any substance or organism which alone or in combination with others is capable of causing harm to human health or damage to the Environment and includes any hazardous or toxic materials, pollutants and Waste.
Historic Tax Returns	means any Tax Returns or filings relating to a period commencing and ending before the Implementation Date which were also filed prior to the Implementation Date.
Historic Transaction Costs	means all actual transaction costs and expenses of the SKM Group incurred in the period from 31 March 2013 through 23 August 2013 itemised in the list provided by the SKM Parties to Jacobs prior to the Operative Date, which list has been initialled by the SKM Parties and Jacobs.
ICC	has the meaning given in clause 13.1.
Implementation	has the meaning given in the Merger Implementation Deed.
Implementation Date	has the meaning given in the Merger Implementation Deed.
Income Expenses	has the meaning given in clause 23.2(c)(7) of Schedule 2.
Income, Profits or Gains	means income, profits, gains and any other consideration, value, receipt or measure by reference to which Tax is chargeable or assessed.
Indebtedness	has the meaning given in the Merger Implementation Deed.
Indirect Tax or Indirect Taxes	has the meaning given in the Merger Implementation Deed.
Initial Scheme Consideration	has the meaning given in the Merger Implementation Deed.
Insurance Deduction Notice	has the meaning given in clause 4.2(b).
Insurance Policy	means any policy of insurance in respect of which any member of the SKM Group or Jacobs is able to recover any Loss suffered by it, which such Loss arises from a Recovery Matter, including (without limitation) the Specified Insurance Policies, and Insurance Policies means all of them.
Intellectual Property	means collectively, (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all foreign or domestic design patents, utility patents and pending applications therefor and all renewals, reissues, reexaminations, divisionals, continuations, continuations in part and extensions thereof; (ii) all trademarks, service marks, trade names, trade dress, logos and all internet domain name registrations and all applications, registrations and renewals in connection therewith; (iii) all published and unpublished works of authorship, copyrights (registered or unregistered), databases, web sites, computer source code, executable code, programs and other software (including all machine readable code, printed listings of code, documentation and related property and information, whether embodied in software, firmware or otherwise) and all applications, registrations and renewals in connection therewith (if any); and (iv) all trade secrets, know how, inventions and other confidential proprietary technical, business and other information including production processes and techniques, research and development information, technology, drawings, specifications, designs, plans, proposals, technical data, copyrightable technical data, financial marketing and business data and customer and supplier lists and information.
Interim Accounts	means the unaudited accounts (comprising a balance sheet and profit and loss account) for SKMH and its controlled entities for the period ending and as at 9 December 2012.
International Funding Institution	has the meaning given in the Merger Implementation Deed.
Jacobs Guarantor	has the meaning given in the Merger Implementation Deed.
Xxxxxx Group	has the meaning given in the Merger Implementation Deed.



Jacobs Indemnified Party	has the meaning given in the Merger Implementation Deed.
Jacobs Information	has the meaning given in the Merger Implementation Deed.
Jacobs Specified Person	means (i) the General Counsel, (ii) the Vice President and Corporate Secretary or (iii) any Executive Vice President, in each case, of Jacobs Guarantor.
Joint Direction	means a joint written instruction signed by Jacobs and a Sellers’ Representative to the Escrow Agent in accordance with the Escrow Deed in respect of amounts in the Escrow Account.
Law	means any national, federal, regional, provincial, state, municipal, local or foreign law or enforceable ordinance, order, decree, rule or regulation.
Leakage	has the meaning given in the Merger Implementation Deed.
Leased Real Estate	means any property leased, used or occupied by any member of the SKM Group pursuant to a Real Property Lease.
Legal Opinion	has the meaning given in clause 9.1(f).
Locked Box Date	has the meaning given in the Merger Implementation Deed.
Locked Box Date Accounts	means the pro forma combined balance sheet of the SKM Group (together with supporting balance sheets) as at (and including) the Locked Box Date, as set out in Schedule 3 to this Agreement.
Loss	has the meaning given in the Merger Implementation Deed.
Management Accounts	means the unaudited consolidated accounts (comprising a balance sheet and profit and loss account) for SKMH and its controlled entities for the twelve months to, and as of 23 June 2013.
Material Contract	has the meaning given in the Merger Implementation Deed.
MEC Group	means Multiple Entry Consolidated Group as defined in the Income Tax Assessment Xxx 0000.
Merger	has the meaning given in the Merger Implementation Deed.
Merger Implementation Deed	means the Merger Implementation Deed dated 8 September 2013 among the SKM Parties, Jacobs and Jacobs Guarantor.
Negative WIP	means xxxxxxxx in excess of costs and accrued earnings on contracts in progress.
Notice of Claim	has the meaning given in clause 9.1(a).
Notice of Dispute	has the meaning given in clause 9.2(a).
Operative Date	has the meaning given in the Merger Implementation Deed.
Owned Intellectual	means all Intellectual Property owned by the SKM Group.
PAYG Instalments	has the meaning given in the Australian Tax Administration Xxx 0000.
PAYG Withholding	has the meaning given in the Australian Tax Administration Xxx 0000.
Plan	has the meaning given in paragraph 28.1 of Schedule 2.
Pre-Implementation Leakage	has the meaning given in the Merger Implementation Deed.
Pre-Implementation Tax Return	means any Tax Returns or filings relating to a period which includes a period before Implementation but due to be filed or lodged after Implementation.
Previous Accounts	means the audited consolidated accounts (comprising a balance sheet and profit and loss account) for SKMH and its controlled entities for the financial years ending, and as at, 26 June 2011 and 27 June 2010.
Proportionate Share	means in respect of an SKMH Scheme Shareholder, the number of SKMH Scheme Shares held by that SKMH Scheme Shareholder on the SKMH Scheme Record Date as a proportion of the aggregate number of SKMH Scheme Shares outstanding and on issue at such time.



Real Property Lease	means any contract, sub-contract, agreement or arrangement currently in effect pursuant to which any member of the SKM Group leases real property.
Recovered Amount	has the meaning given in clause 8.6(a)(3).
Recovery Matters	means the matters set out in clause 8.1 on the basis of which Jacobs, the SKM Parties and the Sellers have agreed that the Additional Scheme Consideration (and in the case of a Title Adjustment Statement, the Initial Scheme Consideration) may be adjusted in accordance with clause 8.2.
Registered Intellectual Property	has the meaning given to that term in paragraph 29.1 of Schedule 2.
Recipient	has the meaning given in clause 11.2.
Related Persons	has the meaning given in the Merger Implementation Deed.
Release Notice	has the meaning given in clause 9.3(a).
Released Amounts	has the meaning given in clause 8.2.
Relevant Seller	means the particular Seller to whom a Title Adjustment Statement
Representative	has the meaning given in the Merger Implementation Deed.
Rights	means all dividends or other accreditations, rights, distributions, entitlements or benefits of whatever kind, either cash or otherwise (including, without limitation, all rights to receive distributions and to receive or subscribe for shares and all other distributions or entitlements declared, paid or issued by the SKM Group) declared, paid, or arising or accruing directly or indirectly in respect of the Sale Shares or the shares of a member of the SKM Group after the Implementation Date.
Sale Shares	1 for the Sellers, the SKMM Scheme Shares and the SKMH Scheme Shares, 2 for each Seller, the number of shares specified against that Seller's name in the Sellers' Notice, and all Rights attaching to those securities.
Sanctioned Countries	means Burma (Myanmar), Cuba, Iran, North Korea, Sudan and Syria.
Sanctions Laws and Regulations	means sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (including, without limitation, a person designated as a “specially designated national” or “blocked person” thereunder), the U.S. Department of State, the U.S. Department of Commerce’s Bureau of Industry and Security, the Department of Foreign Affairs and Trade of Australia, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority, including but not limited to any requirements imposed by, or based upon, the obligations or authorities set forth in the U.S. Trading With the Enemy Act, the U.S. International Emergency Economic Powers Act, the U.S. United Nations Participation Act, the U.S. Syria Accountability and Lebanese Sovereignty Act, Iranian Transaction Regulations, the Comprehensive Iran Sanctions Accountability and Divestment Act of 2010, the Iran Sanctions Act, the National Defense Authorization Acts for Fiscal Years 2012 and 2013, the Iran Threat Reduction and Syria Human Rights Act of 2012, all as amended, any of the foreign assets control regulations of the U.S. Department of Treasury (including, without limitation, 31 CFR, Subtitle B, Chapter V), all as amended, any enabling legislation or executive order relating thereto, or any similar sanctions imposed or administered by or based upon the obligations or authorities of the Department of Foreign Affairs and Trade of Australia, Her Majesty’s Treasury, the European Union or the United Nations Security Council or other relevant sanctions authority.
Schemes	means the SKMM Scheme and the SKMH Scheme.
Scheme Booklet	has the meaning given in the Merger Implementation Deed.



Scheme Consideration	means the sum of the Initial Scheme Consideration and the Additional Scheme Consideration.
Second Adjustment	means $60,000,000.
Second Adjustment Date	means the date that is three (3) years from the Implementation Date, or if such date is not a Business Day then the first Business Day after such date.
Second Unresolved Claims Quantum	means the quantum (or estimated quantum) of any Claims by Jacobs which have been notified to the Sellers' Representatives in a Notice of Claim on or after the First Adjustment Date and before the Second Adjustment Date and have not been Finally Determined as at the Second Adjustment Date.
Sellers' Notice	means the notice setting forth each of the SKMH Scheme Shareholders and SKMM Scheme Shareholders and the number of Sale Shares held by each, substantially in the form of Schedule 6.
Sellers’ Representatives	means as at the date of this Agreement the individuals named in Schedule 1 and thereafter any replacement Sellers’ Representative designated and approved under clause 2.1(c).
Sellers' Representative Costs Account	means the interest-bearing account administered by the Sellers’ Representatives in accordance with this Agreement in respect of the Sellers’ Representative Costs Amount.
Sellers' Representative Costs Amount	means the amount (including any accrued interest) standing to the credit of the Sellers’ Representative Costs Account at the relevant time.
Significant Customer	means any customer of the SKM Group from which the SKM Group derived revenues of $12,000,000 or greater in any of the SKM Group’s three fiscal years ended 23 June 2013.
Significant Supplier	means any supplier of the SKM Group to which the SKM Group paid $12,000,000 or greater for goods or services in any of the SKM Group’s three fiscal years ended 23 June 2013.
SKM AUS Group	means all Australian subsidiaries that are members of the SKM Group as well as SKMIH.
SKM AUS Consolidated Group	means the consolidated group as defined in the Australian Income Tax Assessment Act 1997 as at the Implementation Date as set forth on Schedule 4.
SKM Group	has the meaning given in the Merger Implementation Deed.
SKM Group Agreed	means the steps to effect the SKM Group Internal Restructure set
SKM Group Internal Restructure	means the restructure of the SKM Group on the terms set out in the SKM Group Agreed Restructure Steps.
SKM Group Shareholding Plan	has the meaning given in the Merger Implementation Deed.
SKM NZ	has the meaning given in the Merger Implementation Deed.
SKM Parties	has the meaning given in the Merger Implementation Deed.
SKM Specified Person	has the meaning given in the Merger Implementation Deed.
SKM Thailand	means Xxxxxxxx Xxxxxx Xxxx (Thailand) Co. Limited.
SKMH Initial Scheme Consideration	has the meaning given in the Merger Implementation Deed.
SKMH Scheme	means the scheme of arrangement between SKMH and the holders of the SKMH Scheme Shares pursuant to section 411 of the Corporations Act.
SKMH Scheme Consideration	has the meaning given in the Merger Implementation Deed.
SKMH Scheme Record Date	has the meaning given in the Merger Implementation Deed.
SKMH Scheme Share	has the meaning given to Scheme Share in the SKMH Scheme.
SKMH Scheme Shareholder	has the meaning given in the Merger Implementation Deed.



SKMH Share	has the meaning given in the SKMH Scheme.
SKMIH	means Xxxxxxxx Xxxxxx Xxxx International Holdings LLC.
SKMM Scheme	means the scheme of arrangement between SKMM and the holders of the SKMM Scheme Shares pursuant to section 411 of the Corporations Act.
SKMM Scheme Consideration	has the meaning given in the Merger Implementation Deed.
SKMM Scheme Record Date	has the meaning given in the Merger Implementation Deed.
SKMM Scheme Share	has the meaning given to Scheme Share in the SKMM Scheme.
SKMM Scheme Shareholder	has the meaning given in the Merger Implementation Deed.
SKMM Share	has the meaning given in the SKMM Scheme.
Specified Insurance Policies	has the meaning given in the Merger Implementation Deed.
Supplier	has the meaning given in clause 11.2
Tax or Taxation	has the meaning given in the Merger Implementation Deed.
Tax Act	means the ITAA 36, the ITAA 97, the Taxation Administration Act 1953 (Cth), the Income Tax Rates Xxx 0000 (Cth) and A New Tax System (Goods and Services Tax) Xxx 0000 (Cth), each in Australia and in each case as amended.
Tax Assessment	means any assessment, demand, determination or other similar notice of a liability for Tax issued by or on behalf of any Tax Authority by virtue of which any member of the SKM Group or any other person either is liable to make a payment of Tax or will, with the passing of time, become liable (in the absence of any successful application to postpone any such payment) and shall also mean any self-assessment made by the SKM Group or any other person in respect of any amount of Tax which any of them either is liable to pay or will, with the passing of time, become liable to pay.
Tax Authority	has the meaning given in the Merger Implementation Deed.
Tax Law	means any Law relating to either Tax or Duty as the context requires and includes tax Laws and implementing guidance, or published practice of the relevant Tax Authority in each country that may be applicable.
Tax Refund	has the meaning given in clause 8.6(b).
Tax Returns	means all returns, declarations, reports, claims for refund, information statements and other documents relating to Taxes, including all schedules and attachments thereto, and including all amendments thereof.
Third Party Claim	means any Claim by a third party (including any Government Agency or foreign government agency) against a member of the SKM Group or the Xxxxxx Group, in respect of which an Adjustment may occur in accordance with clause 3.2(a).
Third Party Shareholder Arrangements	means every agreement or arrangement pursuant to which an individual or entity other than another member of the SKM Group holds legal or beneficial title to any shares in a member of the SKM Group. Title Adjustment Statement means an A
Title Adjustment Statement	means an Adjustment Statement in paragraph 7.1 or 8 of Schedule 2.
Transaction Costs Estimate	means the estimate of all transaction costs and expenses of the SKM Group from 24 August 2013 through the Implementation Date (including amounts payable after the Implementation Date) itemised in the list provided by the SKM Parties to Jacobs prior to the Operative Date, which list has been initialled by the SKM Parties and Jacobs.



Transaction Documents	has the meaning given in the Merger Implementation Deed.
Unpaid Accounts Receivable	has the meaning given in clause 7.1.
Warehoused Shares	means any shares in a member of the SKM Group which were purchased by another member of the SKM Group from a departing shareholder pursuant to the SKM Group Shareholding Plan and are held beneficially or legally by that member of the SKM Group.
Waste	means any discarded, unwanted, broken, spoiled or surplus substance, material or article.

1.2 Interpretation

In this Agreement, headings are for convenience only and do not affect interpretation and, unless the context requires otherwise:


(a)	except as set forth in clause 11.7, any capitalised term used but not defined in this Agreement shall have the meaning given in the Merger Implementation Deed;


(b)	words importing the singular include the plural and vice versa


(c)	words importing a gender include any gender;


(d)	other parts of speech and grammatical forms of a word or phrase defined in this Agreement have a corresponding meaning;


(e)	a reference to a person includes an individual, the estate of an individual, a corporation, an authority, an association or a joint venture, a partnership, a trust, any other entity and any Government Agency;


(f)	a reference to a clause, party, attachment, exhibit or schedule is, unless otherwise indicated, a reference to a clause of, and a party, attachment, exhibit and schedule to this Agreement, and a reference to this Agreement includes any attachment, exhibit and schedule;


(g)	any reference to an Australian Law or Australian legal term for any action, remedy, method of juridical proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than Australia, be deemed to include a reference to that which most nearly approximates to the Australian legal term in that jurisdiction;


(h)	a reference to a statute, regulation, proclamation, ordinance or by law includes all statutes, regulations, proclamations, ordinances or by laws amending, consolidating or replacing it, whether passed by the same or another Government Agency with legal power to do so, and a reference to a statute includes all regulations, proclamations, ordinances and by laws issued under that statute;


(i)	a reference to any document (including this Agreement) is to that document as varied, novated, ratified or replaced from time to time;


(j)	references to "costs" and/or "expenses" incurred by a person shall not include any amount in respect of Indirect Tax comprised in such costs or expenses for which either that person or, if relevant, any other member of any group to which that person belongs for Indirect Tax purposes is entitled to recover (whether by credit, repayment or otherwise);


(k)	the word "includes" in any form is not a word of limitation;


(l)	a reference to "$" or "dollar" is to Australian currency;


(m)	a reference to immediately available funds is a reference to funds made available in Australian currency by electronic funds transfer or cheque;


(n)	a reference to any time is, unless otherwise indicated, a reference to that time in Sydney, Australia;


(o)	a reference to a liability incurred by any person includes any liability of that person arising from or in connection with any obligation (including indemnities and all other obligations owed as principal or guarantor):


(1)	whether liquidated or not;


(2)	except in relation to Loss, whether present, prospective or contingent; and


(3)	whether owed, incurred or imposed by or to or on account of or for the account of that person alone, severally or jointly or jointly and severally with any other person;


(p)	a reference to a party using or an obligation on a party to use its best endeavours or reasonable endeavours does not oblige that party to:

(1) pay money:


(A)	in the form of an inducement or consideration to a third party to procure something (other than the payment of immaterial expenses or costs, including costs of advisers and filing fees, to procure the relevant thing); or


(B)	in circumstances that are commercially onerous or unreasonable in the context of this Agreement;

(2) provide other valuable consideration to or for the benefit of any person; or

(3) agree to commercially onerous or unreasonable conditions; and


(q)	a term defined in or for the purposes of the Corporations Act has the same meaning when used in this Agreement.

1.3 Business Day

Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.

1.4 Sellers and SKM Party Knowledge

Where an Adjustment Statement states that it is "to the best of the knowledge" of the Sellers or an SKM Party or the SKM Parties (or with a similar qualification as to the knowledge or awareness of the Sellers or the SKM Parties), the Sellers or SKM Party will be deemed to know or be aware of a particular fact, matter or circumstance, if any SKM Specified Person is aware of that fact, matter or circumstance after having made due and careful enquiry in respect of the relevant Adjustment Statement, it being acknowledged by the SKM Parties that such enquiry has been made.

1.5 Contra proferentem excluded

No term or condition of this Agreement will be construed adversely to a party solely on the ground that the party was responsible for the preparation of this Agreement or a provision of it.

1.6 Entry into this document

Each party acknowledges that it has entered into this Agreement for valuable consideration.

2. Sellers' Representatives

2.1 Designation of Sellers' Representatives

(a)

Subject to clause 2.1(c), each of the Sellers irrevocably designates each of the Sellers' Representatives as the Seller’s attorney with respect to the taking of all actions required or permitted to be taken by the Sellers' Representatives or any Seller under this Agreement and any of the Transaction Documents, including the binding of the Sellers with respect to their obligations under this Agreement and the receipt of any funds due to any Seller under this Agreement, and entering into any document (including any deed, such as a deed of settlement) on behalf of the Sellers.


(b)	Until the later of (i) the Second Adjustment Date and (ii) the date on which the remaining Escrow Amount is paid to the SKMH Scheme Shareholders or Xxxxxx as the case may be, there shall be, at all times, a minimum of three Sellers’ Representatives.


(c)	If at any time there are fewer than three Sellers' Representatives, the remaining Sellers’ Representative(s) shall, by notice in writing to Xxxxxx, designate a replacement person or persons, whose appointment shall be subject to the approval of Xxxxxx, not to be unreasonably withheld.


(d)	Unless expressly stated by this Agreement, a decision of the Sellers' Representatives will be made by agreement of a majority of the Sellers' Representatives then appointed.

2.2 Sellers to be bound


(a)	Any act by any of the Sellers' Representatives that is authorised by this Agreement will constitute an act of all Sellers and will be binding upon each Seller.

(b)

Xxxxxx is entitled to conclusively deal with the Sellers' Representatives (or any one of them), and may rely upon any act of the Sellers' Representatives (or any one of them) that is authorised by this Agreement or any other Transaction Document as being the act of each and every Seller and shall not be required to undertake any enquiries as to whether such Sellers' Representative has been authorised in carrying out such act pursuant to clause 2.3(a).


(c)	Each Seller releases the Xxxxxx Indemnified Parties from any liability for any acts done by it when acting in accordance with any instruction or act of any Sellers' Representative that is authorised by this Agreement or any other Transaction Document.

2.3 Power with respect to disputes


(a)	Each Sellers' Representative will have authority to act on behalf of any Seller with respect to the handling of any dispute under this Agreement or any other Transaction Document.


(b)	Each Seller will be bound by all actions taken and all documents executed by any Sellers' Representative in connection with any dispute arising under this Agreement or any other Transaction Document.

2.4 Sellers' Representatives costs

(a)

Each Seller agrees that the amount deposited in the Sellers’ Representative Costs Account by Xxxxxx in accordance with the SKMH Scheme and the relevant Deed Poll will be held in the Sellers’ Representative Costs Account (and not released except in accordance with clause 2.4(b) or 2.4(d)) and used for the purpose of reimbursing to the Sellers' Representatives, or paying, the reasonable costs and expenses (whether out-of-pocket expenses, accounting fees or legal costs or expenses or otherwise) incurred by the Sellers' Representatives in performing the functions specified in this Agreement, including (in the case of a Sellers' Representative that is not an employee of the Xxxxxx Group) fees, time- based or otherwise, for performing their role.


(b)	To the extent that the costs and expenses referred to in this clause 2.4 have been incurred by the Sellers' Representatives, the Sellers' Representatives may, after notification to Xxxxxx, by way of an authorization signed by two Sellers’ Representatives, withdraw amounts from the Sellers’ Representative Costs Account w

hich are sufficient to either reimburse the Sellers' Representatives or pay the costs and expenses. For the avoidance of doubt, the requirement to give notification to Xxxxxx in this clause 2.4(b) is not a requirement to seek Xxxxxx’ consent.


(c)	Any withdrawal of amounts from the Sellers’ Representative Costs Account under this clause 2.4 is in reduction of the Sellers' Representative Costs Amount.

(d)

On the later of the Second Adjustment Date and the date that all Claims notified by Xxxxxx to the Sellers' Representatives in a Notice of Claim before the Second Adjustment Date have been Finally Determined, the Sellers’ Representatives will withdraw (subject to authorization by two Sellers’ Representatives) from the Sellers’ Representative Costs Account and pay (i) to each SKMH Scheme Shareholder, in immediately available funds, his or her Proportionate Share of

75% of the remaining Sellers' Representative Costs Amount and (ii) to Xxxxxx, in immediately available funds, 25% of the remaining Sellers' Representative Costs Amount.


(e)	The Sellers agree that any bank charges or taxes (in respect of interest) arising in relation to the Sellers’ Representative Costs Account or the Sellers’ Representative Costs Amount may be deducted or paid (as appropriate) directly from the Sellers’ Representative Costs Amount:

(1) in the case of the bank charges, by the bank; and

(2) in the case of taxes, by the Sellers’ Representatives,

if the relevant withdrawal is authorized by two Sellers' Representatives.


(f)	For the avoidance of doubt, nothing in this clause 2.4 is intended to impose any obligations or liabilities, or confer or limit any right, power or discretion, on Xxxxxx or any member of the Xxxxxx Group.

2.5 Release of Sellers' Representatives

Each Seller releases the Sellers' Representatives from, and agrees not to make, any claim against a Sellers' Representative arising from, or in respect of, any act or omission by that Sellers' Representative under this Agreement, other than any claim arising as a result of wilful misconduct or fraud on the part of that Sellers' Representative.

2.6 Notices

Notices or communications to or from any Sellers' Representative will constitute notice to or from all Sellers for the purpose of this Agreement and the other Transaction Documents.

2.7 Copy of Disclosure Materials

Xxxxxx shall permit such law firm as is nominated by the Sellers' Representatives to keep a copy of the Disclosure Materials until all Claims under the Recovery Matters have been Finally Determined, provided that the Disclosure Materials are held in confidence by the law firm nominated by the Sellers' Representatives and that upon the later of:


(a)	the Second Adjustment Date; and


(b)	the date on which any Claims by Xxxxxx relating to or in respect of the Recovery Matters which were notified to the Sellers' Representatives in a Notice of Claim before the Second Adjustment Date have been Finally Determined,

on the basis that such law firm will undertake to Xxxxxx to promptly deliver to Xxxxxx the Disclosure Materials and any copies of the Disclosure Materials following such date or, upon the request of Xxxxxx, promptly destroy all such documentation, and notify Xxxxxx of their destruction. For the avoidance of doubt, such law firm may retain any documents which it is required by law to retain and any documents which form part of files that it maintains in the ordinary course of its practice.

3. Adjustments

3.1 Initial payments

The parties acknowledge that Scheme Consideration will be paid to the Sellers (or into the Escrow Account or Sellers’ Representative Costs Account, as applicable) in accordance with the Schemes.

3.2 Adjustments


(a)	Subject to clauses 8 and 9, the Additional Scheme Consideration will be adjusted downward one dollar for each dollar:


(1)	in respect of Leakage in accordance with clauses 4.3 and 6;


(2)	under the Accounts Receivable Guarantee in accordance with clause 7; and/or


(3)	in respect of any Recovery Matter in accordance with clause 8.2,

(each an Adjustment) such that the amount of the Additional Scheme Consideration paid to the SKMH Scheme Shareholders will be reduced by the amount of such Adjustment in the manner set out in clause 4.


(b)	Where a Claim relates to a Title Adjustment Statement of a particular Seller which is untrue, inaccurate or misleading:


(1)	the maximum aggregate amount that may be released from the Escrow Account to Xxxxxx in accordance with clause 9 in respect of such a Claim is the Relevant Seller’s Proportionate Share of the Escrow Amount; and


(2)	where the amount of the Claim exceeds the Relevant Seller’s Proportionate Share of the Escrow Amount, the Initial Scheme Consideration will be adjusted downward by an amount equal to the Adjustment less the Relevant Seller’s Proportionate Share of the Escrow Amount.


(c)	Any adjustment to the Initial Scheme Consideration after the Implementation Date can only be effected by Xxxxxx making a Claim against the individual Relevant Seller.

4. Payments and Escrow

4.1 Initial payments

In accordance with the Schemes and the Deed Polls, on the Implementation Date, Xxxxxx will:


(a)	pay, in immediately available funds, the Initial Scheme Consideration (as adjusted under the terms of this Agreement, if applicable) less $1,500,000 into the bank account nominated by the Sellers' Representatives for that purpose;


(b)	pay in immediately available funds, $2,000,000 into the Sellers’ Representative Costs Account; and


(c)	pay, in immediately available funds, the Additional Scheme Consideration into the Escrow Account.

The Sellers’ Representative Costs Account will be administered by the Sellers’ Representatives in accordance with the terms of this Agreement. The Escrow Account will be administered by the Escrow Agent in accordance with the terms of the Escrow Deed.

4.2 Release of Escrow Amount for Claims and Costs


(a)	Xxxxxx and the Sellers' Representatives must procure that following any Joint Direction or Release Notice in accordance with the terms of clause 9, the Escrow Agent withdraws the amount specified in such Release Notice or direction from the Escrow Account and pays that amount to the appropriate party.

(b)

If a member of the Xxxxxx Group or a member of the SKM Group makes a claim under an Insurance Policy for any Loss suffered by it and such claim is admitted by the relevant insurer, Xxxxxx must promptly serve a notice on the Escrow Agent and the Sellers' Representatives (Insurance Deduction Notice) stipulating the amount of deduction required to be paid in order to seek reimbursement under the relevant Insurance Policy (Actual Deduction Amount) together with written evidence from the relevant insurer showing the Actual Deduction Amount. Within five Business Days of receipt of the Insurance Deduction Notice by the Escrow Agent and the Sellers' Representatives, Xxxxxx and the Sellers' Representatives must deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to Xxxxxx, in immediately available funds, the Actual Deduction Amount.


(c)	For the avoidance of doubt, once any amount is released from the Escrow Amount in accordance with this clause 4 and clause 9, Xxxxxx shall not be concerned as to how that is distributed by the Escrow Agent amongst the Sellers.

4.3 Pre-Implementation Leakage

Within ten Business Days following Implementation, Xxxxxx and the Sellers’ Representatives shall deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to Xxxxxx, in immediately available funds, an amount equal to the Pre-Implementation Leakage (if any).

4.4 First Adjustment Date


(a)	On the First Adjustment Date, Xxxxxx and the Sellers' Representatives must, subject to clause 4.4(c) below, deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to each SKMH Scheme Shareholder his or her Proportionate Share, in immediately available funds, of an amount equal to the First Adjustment Amount less the sum of:

(1) the First Unresolved Claims Quantum;


(2)	any Adjustments or Actual Deduction Amounts released to Xxxxxx before the First Adjustment Date; and


(3)	any Actual Deduction Amounts contained in an Insurance Deduction Notice that is received by the Escrow Agent before the First Adjustment Date.


(b)	Following the First Adjustment Date, Xxxxxx and the Sellers’ Representatives must:


(1)	within five Business Days of the final resolution of any Claim included in the First Unresolved Claims Quantum; and


(2)	to the extent that such Claim is Finally Determined in the favour of the Sellers,

deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay each SKMH Scheme Shareholder, in immediately available funds, his or her Proportionate Share of the First Unresolved Claims Quantum associated with such Claim and the balance must be dealt with in accordance with this clause 4.4 and clause 9 (as applicable); provided, however, that with respect to each such Claim, the amount released to the SKMH Scheme Shareholders pursuant to this clause 4.4(b), if any, shall not exceed: (i) the First Adjustment Amount less the sum of the amounts set forth in clauses 4.4(a)(2) and 4.4(a)(3), less (ii) the then remaining balance of the First Unresolved Claims Quantum.

(c)

If an Adjustment or a Claim included in the First Unresolved Claims Quantum relates to a Title Adjustment Statement that is untrue, inaccurate or misleading and is Finally Determined in favour of Xxxxxx, then the Sellers’ Representatives shall procure that in releasing any funds payable from the Escrow Amount to the Relevant Seller under this clause 4.4, such amount will be reduced by the lesser of the amount payable to that Relevant Seller and the amount of that Adjustment or Claim, and each other SKMH Scheme Shareholder will receive an amount equal to the amount that they would have received under this clause 4.4 had that Adjustment or Claim not have occurred.

4.5 Second Adjustment Date


(a)	On the Second Adjustment Date, Xxxxxx and the Sellers’ Representatives must, deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to each SKMH Scheme Shareholder his or her Proportionate Share, in immediately available funds, of an amount equal to the Escrow Amount less the sum of:


(1)	the Second Unresolved Claims Quantum;


(2)	the quantum (or estimated quantum) of any Claims included in the First Unresolved Claims Quantum which have not been Finally Determined as of the Second Adjustment Date; and


(3)	any Actual Deduction Amounts contained in an Insurance Deduction Notice that is received by the Escrow Agent on or after the First Adjustment Date.


(b)	Following the Second Adjustment Date, Xxxxxx and the Sellers’ Representatives must:


(1)	within five Business Days of the final resolution of any Claim included in the Second Unresolved Claims Quantum or the First Unresolved Claims Quantum; and


(2)	to the extent that such Claim is Finally Determined in the favour of the Sellers,

deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to each SKMH Scheme Shareholder, in

immediately available funds, his or her Proportionate Share of the Second Unresolved Claims Quantum or First Unresolved Claims Quantum (as the case may be) associated with such Claim, and the balance must be dealt with in accordance with this clause 4.5 and clause 9 (as applicable).

(c)

Following the Second Adjustment Date, if an Adjustment or a Claim included in (i) the Second Unresolved Claims Quantum or (ii) the First Unresolved Claims Quantum but not resolved as of the Second Adjustment Date, relates to a Title Adjustment Statement that is untrue, inaccurate or misleading and is Finally Determined in favour of Xxxxxx, then the Sellers’ Representatives shall procure that in releasing any funds payable from the Escrow Amount to the Relevant Seller under this clause 4.5, such amount will be reduced by the lesser of the amount payable to that Relevant Seller and the amount of that Adjustment or Claim, and each other SKMH Scheme Shareholder will receive an amount equal to the amount that they would have received under clause 4.5(a) had that Adjustment or Claim not have occurred.

(d)

Following the Second Adjustment Date, after all Claims included in (i) the Second Unresolved Claims Quantum or (ii) the First Unresolved Claims Quantum but not resolved as of the Second Adjustment Date, have been Finally Determined, Xxxxxx and the Sellers’ Representatives will deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to pay to the SKMH Scheme Shareholders, in immediately available funds, their Proportionate Share of the remaining Escrow Amount (if any).

4.6 Payment of interest

If Xxxxxx and the Sellers' Representatives are required to direct the Escrow Agent to pay any amount from the Escrow Account to the SKMH Scheme Shareholders under clause

4.4 or 4.5 they must, on the date of such payment, also direct the Escrow Agent to pay

each SKMH Scheme Shareholder, or procure that each SKMH Scheme Shareholder be paid in immediately available funds, such amount equal to the interest on the SKMH Scheme Shareholder’s Proportionate Share of the relevant amount, accruing from and including the Implementation Date and up to but not including the day payment is made under clause 4.4 or 4.5.

4.7 Releases

With effect from the Effective Date, each Seller irrevocably and unconditionally releases each member of the SKM Group from, and agrees not to make, any claim (including, without limitation, but for the avoidance of doubt, any claim relating to Tax and amounts in respect of Tax) against, any member of the SKM Group or any of their respective officers, employees, agents (including the Escrow Agent) or advisers in respect of, arising out of or in connection with:


(a)	the Seller's previous ownership of the Sale Shares; and


(b)	the SKM Group Internal Restructure.

4.8 Chilean Loans, CVR Notes and shareholder current accounts


(a)	SKMH shall procure that any sums due to SKMH under the Chilean Shareholder Loans shall be set-off (on the Implementation Date) against the SKMH Initial Scheme Consideration payable to such Seller in accordance with the terms of the Chilean

Shareholder Loans and each Seller who is a party to the Chilean Shareholder Loans hereby grants their consent to such set-off and deduction.


(b)	SKMH shall procure that all sums due to holders of CVR Notes pursuant to the terms thereof are paid on the Implementation Date.


(c)	SKMH shall procure that balances of all shareholder current accounts are paid to the relevant SKMH Shareholder on or prior to the Implementation Date.

5. Implementation


5.1	Implementation

Implementation must take place at the offices of Xxxxx Day in Sydney on the

Implementation Date.


5.2	Delivery of Sellers' documents

The Sellers’ Representatives on behalf of the Sellers will procure that the SKM Parties, at

Implementation, (a) deliver to Xxxxxx any forms of proxy required to give effect to clause 10 and (b) deliver and make available to Xxxxxx (as applicable) the items specified in clause 4.3(a)(xxi) of the Merger Implementation Deed.


5.3	Board meeting

In accordance with the Schemes and the Merger Implementation Deed, each of the Sellers will procure that a meeting of the directors of each of the SKM Parties is convened on or before Implementation as contemplated by clause 4.3(a)(xix) of the Merger Implementation Deed.

6. Leakage

To the extent that any Leakage occurs between the Locked Box Date and the Implementation Date which has not already been subject to an Adjustment in accordance with clause 4.3:


(a)	the Additional Scheme Consideration will be reduced on a dollar-for-dollar basis by the amount of such Leakage; and


(b)	subject to clause 9, Xxxxxx and the Sellers’ Representatives will deliver a Joint Direction to the Escrow Agent instructing the Escrow Agent to withdraw from the Escrow Account and pay to Xxxxxx, in immediately available funds, the amount of such Leakage.

7. Accounts Receivable Guarantee

7.1

To the extent that any Accounts Receivable have not been collected within one year of the Implementation Date (or, where such Accounts Receivable remain due in accordance with the terms of the relevant contract under which they were created, within 180 days of their respective due dates, but in any event not later than the Second Adjustment Date) (collectively, the Unpaid Accounts Receivable), the Additional Scheme Consideration will be reduced by the amount of Unpaid Accounts Receivable and the relevant amounts will be released from the Escrow Account to Xxxxxx in accordance with clause 9 and the terms of this Agreement generally.


7.2	Xxxxxx shall use such efforts to collect the Accounts Receivable as it uses in the collection of its own accounts receivable.

8. Recovery Matters

8.1 Recovery Matters

The Recovery Matters are that:


(a)	Adjustment Statements: Each of the Adjustment Statements was true, accurate and not misleading as at the Operative Date, the Second Court Date and the Effective Date and is true, accurate and not misleading on the Implementation Date. Each of the Adjustment Statements will remain in full force and effect after the Implementation Date.


(b)	No Xxxxxx Indemnified Party suffers or incurs any Losses, directly or indirectly, arising out of or in connection with:


(1)	work performed: any act, error or omission in respect of any work performed in connection with a project by any member of the SKM Group in the period prior to the Implementation Date;


(2)	anti-corruption laws: non-compliance with applicable Anti-Corruption Laws arising from acts or omissions by or on behalf of any member of the SKM Group or their current or former directors, officers, employees or agents in the period up to the Implementation Date;


(3)	financial statements: any errors, inaccuracies or misstatements in the financial statements of the SKM Group for fiscal years 2004 through 2013 filed in accordance with the Corporations Act;

(4)

shareholding matters: the SKM Group Internal Restructure, the exercise of the NZ Call Option contemplated by clause 3.1(m) of the Merger Implementation Deed, the redemption of the Dividend Shares contemplated by clause 3.1(o) of the Merger Implementation Deed, the Warehoused Shares, the Third Party Shareholder Arrangements, the Age Based Liability Compromise, the Founder Share Transfer Agreement or any challenge by a Seller in respect of the Implementation of the Schemes;


(5)	environmental matters: breach of applicable Environmental Laws in connection with the operation of the SKM Group and the conduct of its business during the period up to the Implementation Date;


(6)	Tax matters: any liability to Tax of any member of the SKM Group that arises in consequence of:


(A)	an Event that occurred (or was deemed to occur under a Tax Law or any Transaction Document) on or before the Implementation Date, provided that the provisions of this clause 8.1(b)(6)(A) shall not extend to any Duty arising solely as a consequence of Xxxxxx failing to comply with its obligations under clause 12.1 (Stamp duty); or


(B)	any Income, Profits or Gains that were earned, accrued or received (or deemed to be earned, accrued or received under a Tax Law or any Transaction Document) before the Implementation Date;


(C)	any payments to the Sellers under this Agreement or any other Transaction Document and for these purposes shall include payments of the Escrow Amount and any payments in connection with, or in respect of, the redemption of the Dividend Shares contemplated by clause 3.1(o) of the Merger Implementation Deed; or


(D)	to the extent that there has been a set-off by Xxxxxx in accordance with clause 8.6(c)(1) or 8.6(c)(2), the CVR Tax Deduction referred to in clause 8.6(c) being:


(i)	denied by a Tax Authority; or


(ii)	certified by the auditors of Xxxxxx as not being available for deduction or credit by Xxxxxx, XXXX or SKM NZ,

in each case, at any time on or prior to the Second Adjustment

Date.


(c)	The Sellers acknowledge that, notwithstanding that the SKM Parties have represented and warranted that each of the Adjustment Statements is true, accurate and not misleading as of the Operative Date, Xxxxxx shall be entitled to recover the full Loss suffered in respect of any Claim (subject to the limitations in clauses 8.3 and 8.4) without any right of contribution from the SKM Parties.

8.2 Claims under the Recovery Matters

To the extent that a Xxxxxx Indemnified Party suffers or incurs any Loss in respect of a

Recovery Matter, including where:


(a)	a Xxxxxx Indemnified Party suffers or incurs any Loss because an Adjustment Statement was untrue, inaccurate or misleading on the date given (or deemed given); or


(b)	a Xxxxxx Indemnified Party suffers or incurs any Loss arising out of or in connection with a matter described in clause 8.1(b),

and that Claim succeeds or is admitted by a Sellers' Representative in accordance with clause 9 then, subject to the limitations in clauses 8.3 and 8.4, the Additional Scheme Consideration will be reduced by any Loss suffered or incurred by the Xxxxxx Indemnified Parties in connection with such Claim and the relevant amounts (Released Amounts) will be released from the Escrow Account to Xxxxxx in accordance with clause 9 and the terms of this Agreement generally. The Released Amounts will be treated as a reduction in the SKMH Scheme Consideration.

8.3 Monetary and time limitations on Claims

Any Claim made by Xxxxxx under this Agreement is subject to the limitations and qualifications set out in this clause 8.3 and clauses 8.4, 8.5, 8.6 and 9:


(a)	timing: Xxxxxx must give written notice to the Sellers’ Representatives of the nature of the Claim in accordance with clause 9.1 on or before the Second Adjustment Date;


(b)	maximum: save in respect of Claims related to fraud or wilful misconduct or Title Adjustment Statements that are untrue, inaccurate or misleading, the maximum

aggregate amount which may be released to Xxxxxx from the Escrow Account under this Agreement in respect of all Claims is the Additional Scheme Consideration;

(c)

proportionate share: for the avoidance of doubt, where Xxxxxx has a Claim for a Title Adjustment Statement that is untrue, inaccurate or misleading, then (without prejudice to any other Claims Xxxxxx may have against the Relevant Seller under this Agreement) the maximum aggregate amount which may be released from the Escrow Account to Xxxxxx in respect of such a Claim in accordance with clauses 9 is the Relevant Seller's Proportionate Share of the Additional Scheme Consideration;


(d)	monetary thresholds: save in respect of a Claim related to (i) fraud or wilful misconduct, (ii) a Title Adjustment Statement which is untrue, inaccurate or misleading, (iii) Leakage or (iv) clause 8.1(b)(6)(D), Xxxxxx will not be entitled to recover on a Claim under this Agreement unless:


(1)	the Loss under such Claim exceeds $2,000,000, in which case, Xxxxxx will be entitled to recover the full amount of such Loss, subject to the limitations in clause 8.3(d)(2); and


(2)	the aggregate Losses under all Claims exceed $12,000,000, in which case, Xxxxxx will be entitled to recover the amount of such Losses in excess of $12,000,000.

For the avoidance of doubt, once the threshold set forth in clause 8.3(d)(2) has been satisfied, such threshold will no longer apply and all Losses in excess of such threshold shall thereafter be recoverable by Xxxxxx, subject to the limitations set forth in clause 8.3(d)(1). Any and all Claims in respect of the Accounts Receivable Guarantee will be treated as a single Claim for purposes of this clause 8.3(d).

(e)

calculation of thresholds: where it is necessary to determine whether a monetary limit or threshold set out in this clause 8.3 has been reached or exceeded and the value of the relevant Claim (or any part of the relevant Claim) is expressed in a currency other than Australian dollars, the value of each such Claim shall be translated into Australian dollars at the mid-market A$ exchange rate as quoted by Bloomberg on the date of receipt by the Sellers' Representatives of written notification from Xxxxxx in accordance with clause 9.1 (or, if such day is not a Business Day, the Business Day immediately preceding such day).

8.4 Further limitation


(a)	Subject to clauses 8.4(b), 8.4(c) and 8.4(d), Xxxxxx shall not be entitled to damages or any other payment in respect of a Claim (including from the Escrow Account) to the extent that it relates to the Recovery Matters if:


(1)	Disclosure Letter: the matters giving rise to the Claim were fairly and accurately disclosed in the Disclosure Letter (and, for the avoidance of doubt, the contents of the Data Site shall not be deemed to be so disclosed save to the extent they are fairly and accurately disclosed in, or incorporated by reference with specificity into, the Disclosure Letter);


(2)	change in law: the Claim is increased as a result of:


(A)	the enactment or amendment of any Law following the Implementation Date (including legislation which has a

retrospective effect or any increase in the rates of Tax announced after the Implementation Date); or

a change in the judicial interpretation of any Law following the

Implementation Date;


(3)	provision: the Loss in respect of the Claim has been expressly included as a specifically identifiable (and not general) provision, allowance, reserve or accrual in the Locked Box Date Accounts;


(4)	pre-Implementation Date actions: the Claim arises from an act or omission by or on behalf of a member of the SKM Group before the Implementation Date that was done or made:


(A)	with the prior written consent of Xxxxxx; or


(B)	at the express written direction of Xxxxxx after the Operative Date;


(5)	change in accounting policy: the Claim would not have arisen but for a change in the accounting policy of any member of the SKM Group after the Implementation Date;


(6)	loss recovered from third party: the Claim has been paid in immediately available funds by a third party, including payment under an Insurance Policy;


(7)	insured claim: where Xxxxxx is entitled to bring a claim under an Insurance Policy in respect of the underlying facts and circumstances giving rise to the Claim, Xxxxxx does not use reasonable endeavours to first pursue its right of recovery under such Insurance Policy in accordance with clause 9;


(8)	Insurance Policy: Xxxxxx or any Representative of Xxxxxx takes any action (including by way of omission) that renders any Insurance Policy invalid or incapable of responding to the Claim;


(9)	mitigation: Xxxxxx does not take reasonable steps to satisfy any common law duty to mitigate its Loss;


(10)	remedy: the matter giving rise to the Claim is capable of remedy and within 20 Business Days after receiving the Notice of Claim the Sellers remedy the matter to the satisfaction of Xxxxxx acting reasonably and without any cost to Xxxxxx; or


(11)	consequential loss: the Loss in respect of the Claim is special, indirect or consequential Loss arising prior to the Implementation Date.


(b)	The limitations in clause 8.4(a)(1) (Disclosure Letter), 8.4(a)(2) (Change in Law) and 8.4(a)(11) (Consequential Loss) do not apply to the Recovery Matters, except for the Recovery Matter in clause 8.1(a) (Adjustments Statements).


(c)	The limitation in clause 8.4(a)(4) (Pre-Implementation Date Actions) does not apply to the Recovery Matters in clause 8.1(b)(4) (Shareholding Matters).


(d)	The limitation in clause 8.4(a)(4)(A) (Pre-Implementation Date Actions, clause (A)) does not apply to the Recovery Matters in clause 8.1(b)(6) (Tax Matters).

8.5 Remedies

Save in respect of fraud or wilful misconduct and Claims in respect the Title Adjustment Statements, Xxxxxx’ sole remedy against the Sellers under this Agreement is through an Adjustment in accordance with (and subject to) this Agreement and in no event is Xxxxxx entitled to rescind this Agreement or seek any other form of recourse against the Sellers or the SKM Parties in relation to the Recovery Matters.

8.6 No double recovery


(a)	Subsequent recovery from third party: Subject to clause 8.6(d), if:


(1)	Xxxxxx makes a Claim under this Agreement that succeeds or is admitted by a Sellers’ Representative in accordance with clause 9; and


(2)	Xxxxxx is compensated for any Loss in connection with such Claim by an amount received from Escrow Account (the Compensated Amount) in accordance with clause 9; and


(3)	Xxxxxx subsequently receives a payment from a third party (including from a Tax Authority or under an Insurance Policy, but excluding any member of the SKM Group or any other member of the Xxxxxx Group) in recovery or reimbursement of, or compensation for, the Loss in respect of the Claim (the Recovered Amount);

Xxxxxx shall as soon as reasonably practicable pay into the Escrow Account the Recovered Amount, less all reasonable costs of recovery or any Tax payable in respect of the amount received, provided always that the Recovered Amount shall not exceed the Compensated Amount.


(b)	Repayments of pre-Implementation Date Taxes: Subject to clause 8.6(d), Xxxxxx shall as soon as reasonably practicable pay into the Escrow Account an amount equal to any payment received from a Tax Authority in respect of any Tax paid by any SKM Group member before the Implementation Date to such Tax Authority (a Tax Refund), provided that such Tax Refund:


(1)	was not treated as an asset in the Locked Box Date Accounts; or


(2)	does not arise from an Event occurring after Completion or as a result of any Tax reliefs or Tax attributes of any member of the Xxxxxx Group excluding the members of the SKM Group.

(c)

Tax deductions relating to SKMH’s payment of the CVR Notes: Subject to clause 8.6(d), if SKMH or SKM NZ obtains a Tax deduction or credit arising as a result of the payment by SKMH (whether as principal for itself or as agent for SKM NZ) of sums due to the holders of CVR Notes paid in accordance with clause 4.8(b) (the CVR Tax Deduction), then an amount equal to the amount by which a liability to Tax of SKMH or SKM NZ is reduced by the use or set-off of the CVR Tax Deduction shall, following the filing by Xxxxxx Guarantor with the U.S. Securities and Exchange Commission of its Form 10-K for fiscal year 2014:


(1)	first, be set off against any payment then due from the Sellers under this Agreement; and


(2)	to the extent there is an excess, be carried forward to set off against any future payments that may become due from the Sellers under this Agreement.


(d)	Dealing with amounts paid into the Escrow Account and Xxxxxx’ obligations: Notwithstanding any other provision in this Agreement to the contrary, the parties hereby agree that:


(1)	any amounts which are paid into the Escrow Account in accordance with the provisions of clause 8.6(a) or 8.6(b) shall be available to be used to satisfy any Claims made by Xxxxxx in accordance with the terms of this Agreement; and


(2)	following the Second Adjustment Date, Xxxxxx shall not be required or under any obligation to take any action under any of clauses 8.6(a),

8.6(b) and 8.6(c).

9. Conduct of Claims

9.1 Notification and pursuit of claims

If any Xxxxxx Specified Person becomes aware of any circumstances which constitute or are reasonably likely (whether alone or with any other circumstances or with the passage of time) to constitute a Claim by Xxxxxx for Leakage, under the Accounts Receivable Guarantee or for the Recovery Matters, Xxxxxx must (and, where applicable, must cause each member of the Xxxxxx Group to):

(a)

notice: no later than 60 Business Days after becoming aware of such circumstances, give the Sellers' Representatives notice of the Claim, setting out in a reasonable level of detail the circumstances as then known to the Xxxxxx Group (including the quantum, or estimated quantum (being an amount estimated by Xxxxxx reasonably and in good faith), of any alleged Claim) and whether it is in respect (i) Leakage, (ii) the Accounts Receivable Guarantee, (iii) a specific Adjustment Statement or (iv) a specific Recovery Matter (Notice of Claim) and if on account of (ii), (iii) or (iv) above, provide details of such specific Account Receivable, Adjustment Statement or Recovery Matter, as the case may be. The Notice of Claim must specify whether or not Xxxxxx believes that the Loss in respect of the Claim is capable of being recovered under an Insurance Policy and the reasons for such belief. The Notice of Claim must be given irrespective of whether or not Xxxxxx forms the view that the Loss in respect of a Claim is capable of being recovered under an Insurance Policy. Xxxxxx must also, on an on-going basis, keep the Sellers’ Representatives reasonably informed of all material developments in relation to the matter. If a Notice of Claim is not given by Xxxxxx within the 60 Business Day period referred to in this clause 9.1(a), Xxxxxx shall not be prevented from bringing such a Claim, nor shall it extinguish the liability of the Sellers in respect of such a Claim but rather it shall be taken into account in calculating the liability of the Sellers in respect of the matter in question in that to the extent that such liability was increased as a result of the failure to give notice in accordance with this clause 9.1(a) that increase in liability is to be disregarded;


(b)	access: without prejudice to the validity of any Claim, give the Sellers' Representatives and their advisers reasonable access to:


(1)	the employees of the SKM Group; and


(2)	the documents, records and accounts of the SKM Group,

during normal business hours (and permit the Sellers' Representatives and their advisers to take copies of any documents, records or accounts) to enable the Sellers' Representatives and their advisers to obtain information relating to the Claim or potential Claim;


(c)	notification of insurers: where Xxxxxx believes that the relevant insured party may be entitled to recover for such Claim under an Insurance Policy, promptly notify the relevant insurer of the Claim and the matters giving rise to the Claim, in accordance with the terms of the relevant Insurance Policy;

(d)

information sharing: where Xxxxxx or the relevant insured party may be entitled to recover for such Claim under an Insurance Policy, promptly provide the Sellers' Representatives with all correspondence which it has with any insurer in respect of any Insurance Policy and keep the Sellers' Representatives apprised of any material discussions it has with any relevant insurer in respect of such Claim. The Sellers' Representatives and their advisers will be entitled to attend and participate in any such discussions;


(e)	reasonable endeavours: where Xxxxxx or the relevant insured party may be entitled to recover for such Claim under an Insurance Policy, use all reasonable endeavours to recover to the fullest extent possible under that Insurance Policy;

(f)

legal opinion: where Xxxxxx or the relevant insured party may be entitled to recover for such Claim under an Insurance Policy, if the relevant insurer gives Xxxxxx notice that the applicable Insurance Policy will not respond to the relevant matter or Claim, then Xxxxxx and the Sellers' Representatives will jointly select and brief appropriately experienced senior counsel (the identity of whom must be jointly agreed by Xxxxxx and the Sellers' Representatives) to provide a written opinion about whether there are any reasonable grounds on which the insurer's position in respect of denying cover may be challenged and if so, recommendations about the steps that should be taken in pursuing that claim (Legal Opinion). The cost of obtaining that advice will be borne equally by Xxxxxx and the Sellers' Representatives;

(g)

pursuit of Claim under Insurance Policy: if the Legal Opinion concludes that it is more likely than not that the insurer's position in denying cover could successfully be challenged, Xxxxxx must continue to use reasonable endeavours to ensure the relevant Insurance Policy responds to the claim and implement the steps recommended by senior counsel that provided the Legal Opinion (including commencing litigation against the relevant insurer if, in the opinion of the senior counsel, it is more likely than not that Xxxxxx would be successful in such litigation) provided that if the claim under the Insurance Policy remains unresolved by the First Adjustment Date or the Second Adjustment Date (as the case may be), then the quantum (or estimated quantum) of any Claims under the Notice of Claim shall be included in the First Unresolved Claims Quantum or Second Unresolved Claims Quantum (as the case may be). The Sellers' Representatives must also implement the steps recommended by the senior counsel that provided the Legal Opinion, if required to do so;

(h)

pursuit of Claim under Additional Scheme Consideration: if the Legal Opinion concludes that it is more likely than not that the insurer's position in denying cover could not successfully be challenged, then Xxxxxx must serve a Notice of Claim on the Sellers' Representatives in respect of such Claim specifying that the Claim is not capable of being recovered by an Insurance Policy and the provisions of this clause 9 shall apply except for the provisions of clauses 9.1(c) through 9.1(g). If the Notice of Claim served by Xxxxxx under this clause 9.1(h) is given before the First Adjustment Date or before the Second Adjustment Date (as the case may be) and the Claim remains unresolved by either of those dates, then the quantum (or estimated quantum) of any Claims under the Notice of Claim shall be included in the First Unresolved Claims Quantum or Second Unresolved Claims Quantum (as the case may be); and

(i)

Government Agency: where the Loss in respect of the Notice of Claim arises from a fine, criminal sanction or penalty (whether actual or prospective) imposed by a Government Agency, to the extent permitted by applicable Law, promptly provide the Sellers' Representatives with copies of all correspondence which it has with such Government Agency and keep the Sellers' Representatives apprised of any material discussions it has with such Government Agency in respect of such Claim. Subject to privilege, confidentiality and approval of the Government Agency, the Sellers' Representatives and the Sellers’ Representatives’ advisers will be entitled to attend and participate in any such discussions.

For the avoidance of doubt, the provisions of clauses 9.1(c) through 9.1(i) shall not apply to Claims for Leakage or under the Accounts Receivable Guarantee.

9.2 Notice of dispute

(a)

If the Sellers' Representatives dispute a Notice of Claim, they may issue a notice (Notice of Dispute) to Xxxxxx and the Escrow Agent specifying full details of why they dispute the Notice of Claim and the monetary amount (if any) admitted by the Sellers' Representatives as being owing to Xxxxxx. For the avoidance of doubt, the Sellers' Representatives will not be required to, and will not, issue a Notice of Dispute where the Loss in respect of a Claim is capable of recovery under an Insurance Policy and the Claim has been admitted by the relevant insurer in respect of such Loss or where a Claim has been Finally Determined.

(b)

If no Notice of Dispute is received by Xxxxxx and the Escrow Agent within 60 Business Days of receipt by the Sellers' Representatives of the relevant Notice of Claim (or where the Notice of Claim indicates that Xxxxxx believes that the Claim is capable of being recovered under an Insurance Policy, within 60 Business Days after Xxxxxx issues a Notice of Claim under clause 9.1(h)) the Sellers' Representatives are to be taken to have agreed with the Claim by Xxxxxx set out in the Notice of Claim and clause 9.3 applies.


(c)	If a Notice of Dispute is received by Xxxxxx and the Escrow Agent within 60 Business Days of receipt by the Sellers' Representatives of the relevant Notice of Claim (or where the Notice of Claim indicates that Xxxxxx believes that the Claim is capable of being recovered under an Insurance Policy), within 60 Business Days after Xxxxxx issues a Notice of Claim under clause 9.1(h):


(1)	which admits a lesser amount than was claimed by Xxxxxx in the Notice of Claim, clause 9.4 applies; or


(2)	which disputes the whole of the amount claimed by Xxxxxx in the Notice of Claim, clause 9.5 applies, then the Sellers' Representatives or Xxxxxx may initiate proceedings pursuant to clause 13 to resolve the extent to which Xxxxxx is entitled to have amounts released to it from the Additional Scheme Consideration in respect of such Claims.

9.3 Release

(a) After 30 Business Days have elapsed from Xxxxxx issuing a Notice of Claim under clause 9.1(a) (or where the Notice of Claim indicates that Xxxxxx believes it is entitled to recover such Claim under an Insurance Policy, after 30 Business Days have elapsed from Xxxxxx issuing a Notice of Claim under clause 9.1(h)) Xxxxxx may issue, in accordance with clause 9.6, a notice (Release Notice) to the Escrow Agent and the Sellers' Representatives requesting the release of the Additional Scheme Consideration to no greater extent than the quantum (or estimated quantum) of the Claim or Claims referred to in that Notice of Claim. For the avoidance of doubt, Xxxxxx cannot issue a Release Notice where Xxxxxx is entitled to recover the Loss in respect of a Claim under an Insurance Policy and such Claim is admitted by the relevant insurer in respect of such Loss unless the amount of the Claim that has been admitted by the relevant insurer is less than the full amount of the Loss.

(b) If:


(1)	the Escrow Agent and the Sellers' Representatives receive Release Notice; and


(2)	the Escrow Agent and Xxxxxx have not received a Notice of Dispute within 60 Business Days of receipt by the Sellers' Representatives of the relevant Notice of Claim (or where the Notice of Claim indicates that Xxxxxx believes that the Claim is capable of being recovered under an Insurance Policy), within 60 Business Days after Xxxxxx issues a Notice of Claim under clause 9.1(h),

Xxxxxx and the Sellers' Representatives must deliver a Joint Direction to the Escrow Agent instructing the agent to withdraw the amount specified in the Release Notice from the Escrow Account and pay that amount to Xxxxxx in immediately available funds.

9.4 Lesser Amount Disputed

If:


(a)	the Escrow Agent and the Sellers' Representatives receive a Release Notice in accordance with clause 9.3; and


(b)	the Escrow Agent and Xxxxxx receive a Notice of Dispute in accordance with clause 9.2(c)(1), then the Sellers' Representatives and Xxxxxx must:


(1)	deliver a Joint Direction to the Escrow Agent instructing the agent to withdraw the amount specified in the Notice of Dispute as owing to Xxxxxx from the Escrow Account and pay that amount to Xxxxxx in immediately available funds; and


(2)	ensure that the Escrow Agent deals with the amount equal to the difference between the amount specified in the Release Notice and the

amount specified in the Notice of Dispute once the portion of the Claim subject to the Notice of Dispute has been Finally Determined.

9.5 Disputed claim

If:


(a)	the Escrow Agent and the Sellers' Representatives receive a Release Notice in accordance with clause 9.3; and


(b)	the Escrow Agent and Xxxxxx receive a Notice of Dispute in accordance with clause 9.2(c)(2),

the Sellers' Representatives and Xxxxxx must ensure that the Escrow Agent deals with the amount specified in the Release Notice in accordance with the Finally Determined Claim.

9.6 Delivery of Release Notice

Any Release Notice must be delivered to both the Sellers' Representatives and the

Escrow Agent.

9.7 Conduct of Third Party Claims


(a)	Following receipt of a Notice of Claim which involves a Third Party Claim, Xxxxxx shall:


(1)	as soon as practicable notify the Sellers' Representatives in writing;


(2)	promptly give such information and access to personnel, premises, chattels, documents and records as the Sellers' Representatives may reasonably request;


(3)	subject to clause 9.7(a)(4) below, be entitled, in its absolute discretion, to take such action as it shall deem necessary to avoid, dispute, deny, defend, resist, appeal, compromise or contest such Third Party Claims or liability (including, without limitation, making counterclaims or other claims against third parties);


(4)	10 Business Days before making any settlement or compromise of a Third Party Claim which has been notified to the Sellers' Representatives which is in respect of an amount in excess of $2,000,000, seek the prior written consent of the Sellers' Representatives (such consent not to be unreasonably withheld or delayed) in respect of such settlement or compromise.


(5)	For the purposes of clause 9.7(a)(4), where the Third Party Claim relates to a Tax Assessment and the Sellers' Representatives have withheld or delayed giving consent, consent shall be deemed to have been unreasonably withheld or delayed in (but not limited to) the following circumstances:


(A)	where such Third Party Claim is likely to affect materially adversely either the future liability of the member of SKM Group concerned, or any other member of the Xxxxxx Group, to Tax and/or the reputation or the business or financial interests of any of them or of any person connected with any of them (and for the purposes

of this clause (A) only, a future liability to Tax is material if it is an amount exceeding $500,000); or


(B)	if Xxxxxx has obtained advice from an appropriate tax adviser of international standing that any appeal against, or challenge to, such Third Party Claim is more likely than not to fail.

(b)

Any failure by Xxxxxx and/or the Xxxxxx Group to comply with the provisions of this clause 9.7 shall not prevent any claim by Xxxxxx or extinguish any liability of the Sellers under the Recovery Matters but shall be taken into account in calculating any such liability of the Sellers in that to the extent that such liability was increased by such failure that increase in liability is to be disregarded.

9.8 Escrow Agent's fees

Xxxxxx must pay all fees of the Escrow Agent and in respect of establishing the Escrow Account in accordance with the Escrow Deed and must continue to pay such fees until all amounts held in the Escrow Account have been released by the Escrow Agent in accordance with this Agreement and the Escrow Deed.

9.9 Pre-lmplementation Tax Returns and Historic Tax Returns


(a)	During the period prior to the First Adjustment Date:


(1)	Xxxxxx must ensure that every material pre-lmplementation Tax Return relating to a member of the SKM Group that is lodged after the Implementation Date:


(A)	is delivered to the Sellers' Representatives in final draft form at least one month before the relevant member of the SKM Group lodges that return; and

(B)

incorporates any amendments that Xxxxxx determines in its sole discretion are reasonably requested (within 14 days of delivery in final draft form to the Sellers’ Representatives in accordance with clause 9.9(a)(1)(A)) by the Sellers' Representatives in respect of the treatment of transactions or events that occurred prior to the Implementation Date and Xxxxxx is obliged to give the Sellers' Representatives and their advisers access that Xxxxxx determines in its sole discretion is reasonable to the employees and records of SKM Group that pertain to the period prior to the Implementation Date for the purposes of reviewing any pre- lmplementation Tax Return; and

(2)

Xxxxxx must not make any amendment to any pre-Implementation Tax Returns or Historic Tax Returns unless such amendment (determined in Xxxxxx’ sole discretion): (i) is required by applicable Tax Law; (ii) is required by a Tax Authority; (iii) arises out of a revised Tax Assessment issued by the relevant Tax Authority; (iv) arises as a result of an audit; (v) is required to correct a position taken in respect of the SKM Group Internal Restructure; or (vi) is otherwise agreed between Xxxxxx and the Sellers’ Representative. If any such amendments are made, Xxxxxx will inform the Sellers' Representatives of any amendment of, or objection or appeal in relation to, any pre-lmplementation Tax Return or Historic Tax Returns within 30 Business Days of such amendment, objection or appeal.


(b)	The Sellers' liability in respect of the failure of any Adjustment Statement relating to Tax to be true, accurate and not misleading is reduced to the extent that such failure has arisen solely from a failure by Xxxxxx to comply with clause 9.9(a).

9.10 No Withholding

Xxxxxx shall not withhold or deduct for or on account of Tax from any payments made by it under clause 4.1.

9.11 Quarterly Meetings


(a)	Xxxxxx agrees that it will procure that a Xxxxxx Specified Person or his or her designee meet with the Sellers’ Representatives at least once every three months until the Second Adjustment Date to discuss any Claims already notified to the Sellers’ Representatives pursuant to this Agreement and identify any potential or likely Claims of which any Xxxxxx Specified Person is aware.


(b)	Xxxxxx agrees that it will use reasonable endeavours prior to each such meeting to identify any potential or likely Claims it may have under this Agreement.

10. Terms of Acceptance

Each Seller:


(a)	is bound to transfer its Sale Shares to Xxxxxx in accordance with the terms set out in the applicable Scheme and in this Agreement;


(b)	with effect from the date of this Agreement, irrevocably appoints Xxxxxx (or any nominee or nominees of Xxxxxx) severally as their exclusive attorney, with power to do all things which they could lawfully do in relation to the Sale Shares or in exercise of any right derived from the holding of the Sale Shares, including:


(1)	attending and voting (in person or by proxy) at any meeting of the SKMM or SKMH shareholders or signing any resolution of SKMM or SKMH shareholders;


(2)	demanding a poll for any vote taken at any meeting of SKMM or SKMH shareholders;


(3)	proposing or seconding any resolution to be considered at any meeting of SKMM or SKMH shareholders;


(4)	requisitioning the convening of any meeting of SKMM's or SKMH's shareholders and convening a meeting pursuant to any such requisition;


(5)	notifying the SKM Parties that its address in the records of SKMM and SKMH for all purposes, including the dispatch of notices of meeting, annual reports and distributions, should be altered to an address nominated by Xxxxxx; or


(6)	doing all things incidental and ancillary to any of the foregoing;

and agrees that in exercising the powers conferred by that power of attorney, the attorney may act in the interests of Xxxxxx (or its nominee or nominees); and

Xxxxxx for all Rights in respect of that Seller's Sale Shares.

11. GST


11.1	Any consideration or amount payable under this Agreement, including any non-monetary consideration (as reduced in accordance with clause 11.5 if required) (Consideration) is exclusive of GST.


11.2	If GST is or becomes payable on a Supply made under or in connection with this Agreement, an additional amount (Additional Amount) is payable by the party providing consideration for the Supply (Recipient) equal to the amount of GST payable on that Supply as calculated by the party making the Supply (Supplier) in accordance with the GST Law.


11.3	The Additional Amount payable under clause 11.2 is payable at the same time and in the same manner as the Consideration for the Supply, and the Supplier must provide the Recipient with a Tax Invoice. However, the Additional Amount is only payable on receipt of a valid Tax Invoice.

11.4

If an Adjustment Event varies the amount of GST payable by the Supplier in respect of a Supply under or in connection with this Agreement, the Supplier will adjust the amount payable by the Recipient to take account of the Adjustment Event. The Supplier will issue an Adjustment Note to the Recipient within 14 days after becoming aware of the Adjustment Event. Any payment will be made by the Recipient to the Supplier or by the Supplier to the Recipient within seven days of the Supplier issuing an Adjustment Note to the Recipient. Any payment under this clause 11.4 is deemed to be an increase or decrease (as appropriate) of the additional amount payable under clause 11.2.

11.5 Despite any other provision in this Agreement:

(a)

if an amount payable under or in connection with this Agreement (whether by way of reimbursement, indemnity or otherwise) is calculated by reference to an amount incurred by a party, whether by way of cost, expense, outlay, disbursement or otherwise (Amount Incurred), the amount payable must be reduced by the amount of any Input Tax Credit to which that party is entitled in respect of that Amount Incurred; and


(b)	no Additional Amount is payable under clause 11.2 in respect of a Supply to which section 84-5 of the GST Law applies.


11.6	Any reference in this clause to an Input Tax Credit to which a party is entitled includes an Input Tax Credit arising from a Creditable Acquisition by that party but to which the Representative Member of a GST Group of which the party is a member is entitled.


11.7	Any term in this clause 11 or paragraph 23 of Schedule 2 starting with a capital letter that is not defined herein or therein has the same meaning as the term has in the A New Tax System (Goods & Services Tax) Xxx 0000 (Cth).

12. General

12.1 Stamp duty


(a)	Xxxxxx will be liable for and duly pay all Duty (including any fine or penalty and excluding any financial institutions' duty) on or relating to the Transaction Documents (

but not, for the avoidance of doubt, any Duty (including fine or penalty) arising in consequence of the SKM Group Internal Restructure).


(b)	If a party other than Xxxxxx pays any Duty (including any fine or penalty and excluding any financial institutions' duty) on or relating to the Transaction Documents (but not, for the avoidance of doubt, any Duty (including fine or

penalty) arising in consequence of the SKM Group Internal Restructure) Xxxxxx must pay that amount to that party upon demand.

12.2 Legal costs

Subject to any express provision in the Transaction Documents to the contrary, each party will bear its own legal and other costs and expenses relating directly or indirectly to the preparation of, and performance of its obligations under, this Agreement.

12.3 Amendment

This Agreement may only be varied or replaced by a document in writing duly executed by Xxxxxx, the SKM Parties and the Sellers' Representatives.

12.4 Rights cumulative

Subject to any express provision in this Agreement to the contrary, the rights of a party under this Agreement are cumulative and are in addition to any other rights of that party.

12.5 Approvals and consent

Subject to any express provision in this Agreement to the contrary, a party may conditionally or unconditionally give or withhold any consent to be given under this Agreement and is not obliged to give its reasons for doing so.

12.6 No Merger

The rights and obligations of the parties will not merge on the completion of any transaction contemplated by this Agreement. They will survive the execution and delivery of any assignment or other document entered into for the purpose of implementing a transaction.

12.7 Further assurance

Each party will promptly execute all documents and do all things that any other party from time to time reasonably requires of it to effect, perfect or complete the provisions of this Agreement and any transaction contemplated by it.

12.8 Governing law

This Agreement is governed by and is to be construed in accordance with the laws applicable in New South Wales.

12.9 Jurisdiction

Except as provided in clause 13, each party:


(a)	irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of New South Wales and any courts which have jurisdiction to hear appeals from any of those courts; and


(b)	waives any right to object to any proceedings being brought in those courts for any reason.

12.10 Assignment


(a)	Subject to clause 12.10(b), no party may assign any right under this Agreement without the prior written consent of, in the case of the Sellers or the Sellers’ Representatives, Jacobs and, in the case of Jacobs or the SKM Parties, the Sellers' Representative. A party may withhold consent in its absolute discretion.


(b)	Each of Jacobs or the SKM Parties may, after providing reasonable notice to the Sellers' Representatives, assign any right under this Agreement to a member of the Xxxxxx Group provided that such member of the Xxxxxx Group enters into a deed poll containing a guarantee of the assignee's rights and obligations in a form reasonably required by the Sellers' Representatives.

12.11 Service of process

Without preventing any other mode of service, any document in an action (including any writ of summons or other originating process or any third or other party notice) may be served on any party by being delivered to or left for that party at its address for service of notices under clause 13.

12.12 Waivers and variation


(a)	A provision of, or a right, discretion or authority created under, this Agreement may not be:

(1) waived except in writing signed by the party granting the waiver; and

(2) varied except in writing signed by the parties.


(b)	A failure or delay in exercise, or partial exercise, of a power, right, authority, discretion or remedy arising from a breach of, or default under, this Agreement does not result in a waiver of that right, power, authority, discretion or remedy.


(c)	A single or partial waiver of a right relating to this Agreement does not prevent any other exercise of that right or the exercise of any other right.


(d)	A party is not liable for any loss, cost or expense of any other party caused or contributed to by the waiver, exercise, attempted exercise, failure to exercise or delay in the exercise of a right.

12.13 Entire agreement


(a)	This Agreement, the other Transaction Documents and the Confidentiality Deed embody the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede any prior negotiation, arrangement, understanding or agreement with respect to the subject matter hereof and thereof including the Memorandum of Understanding dated 15 March 2013 (among Jacobs Guarantor a

nd the SKM Parties) and all subsequent amendments thereto with respect to the subject matter or any term of those documents.


(b)	Each party acknowledges it has not entered into any Transaction Document in reliance on any representation other than one expressly set out or incorporated by reference in a Transaction Document.

12.14 Counterparts

This Agreement may consist of a number of counterparts and if so the counterparts taken together constitute one and the same instrument.

12.15 Joint and several liability

Unless the context requires otherwise, an obligation of two or more persons in this

Agreement binds them severally but not jointly.

12.16 Severability

Any provision in this Agreement that is invalid or unenforceable in any jurisdiction is to be read down for the purpose of that jurisdiction, if possible, so as to be valid and enforceable, and otherwise shall be severed to the extent of the invalidity or unenforceability, without affecting the remaining provisions of this Agreement or affecting the validity or enforceability of that provision in any other jurisdiction.

13. Dispute Resolution by International Arbitration

13.1 Arbitration


(a)	Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including any Claim, shall be submitted to the International Chamber of Commerce (the ICC) for final resolution by arbitration under the ICC Rules of Arbitration for the time being in force, which Rules are deemed to be incorporated by reference into this clause.

(b) The place of the arbitration will be Sydney, New South Wales, Australia.

13.2 Appointment of Arbitral Tribunal


(a)	An Arbitral Tribunal will be appointed, comprising three arbitrators (Arbitral Tribunal).

(b)

Each of Jacobs and the Sellers' Representatives will nominate one arbitrator. The two arbitrators so appointed will appoint the presiding arbitrator. If either party fails to nominate an arbitrator within 30 days of receiving written notice of the nomination of an arbitrator by the other party, such arbitrator will be appointed by the President of the International Court of Arbitration of the ICC. If the arbitrators appointed by the parties fail to agree upon the presiding arbitrator within 30 days of the appointment of the second arbitrator, the presiding arbitrator will be appointed by the President of the International Court of Arbitration of the ICC.


(c)	In the case of the Jacobs and Sellers' Representatives nominated arbitrators, neither arbitrator will be of United States or Australian nationality respectively (whether or

not the party appointment is made by the party or pursuant to a default process) and the presiding arbitrator must not be of either United States or Australian nationality.

13.3 Conduct of Hearing

The Arbitral Tribunal may, for the purposes of hearing witnesses or the parties, consultation among its members or for inspection of documents, goods or other property, conduct hearings and convene meetings at any place it considers appropriate.

13.4 Language

The language to be used in the arbitral proceedings will be English.

13.5 Governing Law

The law governing:

(a) the arbitration agreement constituted by this clause; and

(b) the arbitral proceedings conducted hereunder, will be the law of New South Wales.

13.6 Confidential information and consolidation of arbitral proceedings

The parties agree that sections 23C to 23G inclusive (confidential information) and section 24 (consolidation of arbitral proceedings) of the International Arbitration Act 1974 (Cth) will apply to arbitrations under this Agreement.

13.7 Costs

All costs and expenses attributable to the Arbitrator shall be allocated among the parties to the arbitration in such manner as the Arbitrator shall determine to be appropriate under the circumstances.

14. Notices

Any notice or other communication under or in connection with this Agreement

(a) must be in legible writing;

(b) must be addressed as shown below:



Party	Address	Addressee	Fax
Sellers' Representatives or the Sellers	c/o Xxxxxxxx Xxxxxx Xxxx Management Pty Limited 000 Xxxxxxxx Xxxxxx Xx Xxxxxxxx, XXX 0000 Xxxxxxxxx	Gunninder Xxxxx Xxxxxx	+ 612 9032 1267
Jacobs	c/o Jacobs Engineering Group Inc. 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, XX 00000 XXX With a copy to:	Xxxxxxx X. Xxxxxx	+ 1 626 578 3511
	Xxxx Xxxxxxxx LLP 000 Xxxxx Xxxxxx Xxxxxx 00xx Xxxxx Xxx Xxxxxxx, XX 00000 XXX	Xxxxxx X. Xxxxxx	x0 000 000 0000
SKMM	Xxxxxxxx Xxxxxx Xxxx Management Pty Limited 000 Xxxxxxxx Xxxxxx Xx Xxxxxxxx, XXX 0000 Xxxxxxxxx	Xxxx Xxxxxxxxx	+ 612 9032 1267
XXXX	Xxxxxxxx Knight Xxxx Holdings Limited 000 Xxxxxxxx Xxxxxx Xx Xxxxxxxx, XXX 0000 Xxxxxxxxx	Xxxx Xxxxxxxxx	+ 612 9032 1267

(or as otherwise notified by that party to the other party from time to time);


(c)	must be signed by the party making the communication or by a person duly authorised by that party;


(d)	must be delivered or posted by prepaid post to the address, or sent by fax to the fax number, of the addressee, in accordance with clause (b); and


(e)	is regarded as received by the addressee:


(1)	if sent by prepaid post, on the third Business Day after the date of posting to an address within Australia, and on the fifth Business Day after the date of posting to an address outside Australia;

(2)

if sent by fax, at the local time (in the place of receipt of that fax) which then equates to the time at which that fax is sent as shown on the transmission report which is produced by the machine from which that fax is sent and which confirms transmission of that fax in its entirety (provided that the fax is legible on its face), unless that local time is not a Business Day, or is after 5.00pm on a Business Day in the place of receipt, when that communication will be regarded as received at 9.00am on the next Business Day; and


(3)	if delivered by hand, on delivery at the address of the addressee as provided in clause 13, unless delivery is not made on a Business Day, or after 5.00pm on a Business Day, when that communication will be regarded as received at 9.00 am on the next Business Day.


(f)	A party may from time to time change its address or numbers for service by notice to the other party.

Schedules



Table of contents
1		Sellers’ Representatives
2		Adjustment Statements
3		Locked Box Date Accounts
4		SKM AUS Consolidated Group
5		SKM Group Agreed Restructure Steps
6		Sellers' Notice

Schedule 1

Sellers' Representatives

Gunninder Xxxxx Xxxxxx

Xxxxx Xxxx

Xxxx Xxxxxx

Schedule 2

Adjustment Statements


1.	Accuracy of Information.


1.1	No information (other than Jacobs Information as to which no representation is made) contained in the Scheme Booklet, as at the date the Scheme Booklet is dispatched to SKMH and SKMM Shareholders, will contain any statement which is materially misleading or deceptive, whether by virtue of the inclusion of misleading information or the omission of material information or both.


1.2	The information provided in the Disclosure Materials and by the SKM Parties through the Due Diligence process has been collated and provided in good faith and the Disclosure Materials disclose all information which a reasonable person would expect to have a material effect on the price or value of the SKMH Shares and SKMM Shares as at the Operative Date.


2.	Corporate Matters.

Each member of the SKM Group is a corporation or limited liability company, as applicable, duly organised, validly existing and registered under the Laws of the jurisdiction of its incorporation or formation. Each member of the SKM Group has the legal power, capacity and authority to own or lease its properties and assets as and where currently owned or leased and to carry on all business activities as such business is conducted on the date of this Agreement. The Disclosure Materials contain accurate and complete copies of the constitutional documents (or other charter documents, as applicable) of each member of the SKM Group, each as in full force and effect on the date hereof, and the affairs of each member of the SKM Group have been conducted in accordance with such documents. Each member of the SKM Group is duly qualified to do business in each jurisdiction in which the nature of its business or the ownership of its assets makes such qualification necessary. Section 2 of the Disclosure Letter lists each of the jurisdictions in which SKMM, SKMH and each other operating member of the SKM Group is qualified or licensed to do business.


3.	Insolvency.


3.1	No member of the SKM Group is insolvent and no receiver has been appointed over any part of their assets and no such appointment has been threatened.


3.2	No member of the SKM Group is in liquidation and no proceedings have been brought or threatened for the purpose of winding up any of them.


3.3	To the best of the knowledge of the SKM Parties, there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up any member of the SKM Group.


3.4	No administrator has been appointed to any member of the SKM Group nor has any deed of company arrangement been executed or proposed in respect of any member of the SKM Group.


3.5	No member of the SKM Group has entered into an arrangement, compromise or composition with or assignment for the benefit of its creditors or a class of them.


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


4.	Documentation.

Accurate and complete copies of the register of shareholders of SKMM, SKMH and SKM NZ are attached as Appendix 2 to the Disclosure Letter. SKMH has made available to Jacobs in the Disclosure Materials a true, correct and complete copy of the board minutes of the SKM Parties since 1 January 2009. Each member of the SKM Group has maintained its books, records and accounts in accordance with all material Laws of the relevant corporate legislation applicable in the jurisdictions in which they operate.


5.	Capitalisation.

The issued share capital of each member of the SKM Group and the issued and outstanding amounts and record holders thereof are set forth in Section 5 of the Disclosure Letter. No member of the SKM Group has agreed to issue any other share capital other than to employees of the SKM Group pursuant to the SKM Group Shareholding Plan. All outstanding share capital of each member of the SKM Group has been duly authorised and validly issued and is fully paid. No such outstanding share capital was issued in violation of the constitutional or charter documents of the issuing entity, any legal requirement, any order or any contract or in violation of the pre-emptive rights of any person. There are no outstanding or authorised, and no member of the SKM Group has agreed to issue any, warrants, options, subscriptions, puts, calls, rights, convertible, exercisable or exchangeable securities, or other commitments, transactions, arrangements, understandings or agreements of any character relating to the issued or unissued share capital of any member of the SKM Group or pursuant to which any member of the SKM Group is or may become obligated to issue or sell any of its share capital other than to employees of the SKM Group pursuant to the SKM Group Shareholding Plan. There are no outstanding or authorised, and no member of the SKM Group has agreed to issue any, stock appreciation, phantom stock, interest in the ownership or earnings of any member of the SKM Group or similar rights. There are no accrued but unpaid dividends on any outstanding share capital of any member of the SKM Group.


6.	Organisation; Group Structure and SKM Group Internal Restructure.


6.1	All steps under the SKM Group Internal Restructure have been completed in accordance with applicable Law and the relevant constitutions of the companies involved, and no notice has been received from any third party to terminate any Material Contract with any member of the SKM Group on a change of control as a result of the implementation of such steps.


6.2	O.D.S. Investments Pty Ltd is the sole legal owner of the founder share in SKMM, which was duly transferred from BG Nominees Pty Ltd to O.D.S. Investments Pty Ltd for valuable consideration, and any and all Tax liabilities incurred by the SKM Group in connection with that transfer have been duly paid and discharged.


6.3	SKMM has no subsidiaries other than SKMH and the other members of the SKM Group.

Other than the members of the SKM Group, neither SKMM, SKMH nor any member of the SKM Group:


(a)	owns (legally or beneficially) any share capital, or any interest convertible into, exercisable for the purchase of or exchangeable for any share capital in any other person;


(b)	is obligated to form or participate in, provide funds to, or make any loan, capital contribution or other investment in, or assume any liability of any person; or


(c)	is a member of any partnership or other unincorporated association (other than a recognised trade association) or is the responsible entity, manager, trustee, representative or custodian of any trustee or managed investment scheme (within the meaning of the Corporations Act).


6.4	Save as set out in Section 6.4 of the Disclosure Letter, there were no third party equity or shareholding interests in the SKM Group (being shareholdings held other than through

the SKM Group Shareholding Plan) within the twelve months prior to the entry into of the Merger Implementation Deed. True, correct and complete copies of all Third Party Shareholder Arrangements that were in force or effect in the twelve months prior to the entry into of the Merger Implementation Deed have been provided in the Disclosure Materials.

6.5

True, correct and complete copies of all acquisitions of, or mergers with, any material business, asset, entity or undertaking by the SKM Group since 1 January 2003 have been provided in the Disclosure Materials. Since 1 January 2003, the SKM Group has not entered into any disposals of any material business, asset, entity or undertaking. There are no transitional services under which the SKM Group receives services and there are no purchase price amounts due, payable or outstanding to any of the relevant sellers thereunder (whether payable in cash or scrip consideration) by the SKM Group.


7.	Restrictions on Transfer.

7.1

There are no voting trust agreements, powers of attorney, shareholder agreements, proxies or any other contracts to which any Seller is a party or by which any of them are bound relating to the sale, transfer, voting, registration, acquisition, distribution rights or disposition of any of the SKMM Scheme Shares or the SKMH Scheme Shares or otherwise granting any person any right in respect of the SKMM Scheme Shares or the SKMH Scheme Shares, and (except for the requirement to present the relevant share certificates and for the consent of the directors of the relevant company and the requirement to pay any applicable stamp duty or duty on the transfer before registering such transfer) there are no existing restrictions on the transfer of the SKMM Scheme Shares or the SKMH Scheme Shares.

7.2

There are no voting trust agreements, powers of attorney, shareholder agreements, proxies or any other contracts to which any member of the SKM Group is a party or by which any of them are bound relating to the sale, transfer, voting, registration, acquisition, distribution rights or disposition of any of the share capital of any member of the SKM Group or otherwise granting any person any right in respect of the share capital of any member of the SKM Group, and (except for the requirement to present the relevant share certificates and for the consent of the directors of the relevant company and the requirement to pay any applicable stamp duty or duty on the transfer before registering such transfer) there are no existing restrictions on the transfer of the share capital of any member of the SKM Group.


8.	Title to Shares.

Each SKMH Shareholder and each SKMM Shareholder is the legal and beneficial owner of the respective SKMH Shares and SKMM Shares set forth opposite its name on the Sellers' Notice, free and clear of any Encumbrances, and on the Implementation Date will deliver to Jacobs valid title to such shares free and clear of all Encumbrances. Each such SKMH Shareholder and SKMM Shareholder has the full right, power, capacity and authority to sell, transfer and deliver to Jacobs the full ownership in the shares to be sold by such SKMH Shareholder and SKMM Shareholder pursuant to this Agreement and to consummate the transactions contemplated herein.


9.	Capacity and Authority.

9.1

SKMH (on behalf of itself and the SKMH Sellers), SKMM (on behalf of itself and the SKMM Sellers), the Sellers’ Representatives and each other member of the SKM Group (as applicable) has full corporate power and authority to enter into this Agreement and each other agreement contemplated hereby to which it is a party (including the Transaction Documents) and to consummate the transactions contemplated herein and therein.


9.2	The execution and delivery of this Agreement by each of the SKM Parties and the

Sellers’ Representatives has been, and the execution and delivery of each other

agreement contemplated hereby to which the SKM Parties and any Sellers’ Representative is a party has and will be, duly and validly authorised by all necessary court or corporate action on the part of each of the SKM Parties.


9.3	This Agreement has been, and each such other agreement will be, duly and validly executed and delivered by the SKM Parties, and this Agreement and such other agreement are and shall constitute the legal, valid and binding obligations of the SKM Parties, enforceable against them in accordance with their respective terms.


10.	Events Since the Locked Box Date.

Since the Locked Box Date:


(a)	each member of the SKM Group has conducted its business in all material respects in the ordinary and usual course consistent with past practice and without any interruption or alteration in its scope, nature or manner, in each case so as to maintain the same as a going concern;


(b)	there has been no material adverse change in the financial condition, assets, liabilities, revenues or profitability of the SKM Group;


(c)	there has been no reduction in the value of the net tangible assets of the SKM Group on the basis of the valuations adopted in the Interim Accounts;

(d)

the SKM Group has not entered into any transaction which gives rise (now or through the passage of time) to a material liability to Taxation (or would have done so but for the availability of any relief, allowance, deduction or credit), other than corporation Tax on actual income (and not chargeable gains or deemed income) of the business of the SKM Group arising from transactions entered into in the ordinary course of business;


(e)	the SKM Group has not lost any Significant Customer or source of financing or been materially adversely affected by abnormal trading factors and, to the best of the knowledge of the SKM Parties, no facts exist that are likely to give rise to any such effect whether before or after the Implementation Date;


(f)	no material debtor has been released on terms that it pays materially less than the book value of any debt (other than settlement discounts on the usual terms which have been set out in the Disclosure Letter), written off or proved to be irrecoverable to any extent;


(g)	other than pursuant to the SKM Group Shareholding Plan and the SKM Group Internal Restructure, no member of the SKM Group has issued shares, or granted an option over its shares, or agreed to make such an issue or grant such an option, other than to another member of the SKM Group;


(h)	no member of the SKM Group has issued or agreed to issue securities convertible into shares, other than to another member of the SKM Group;


(i)	no member of the SKM Group has made any change to its constitution other than a change to facilitate the Merger or the SKM Group Internal Restructure;


(j)	no member of the SKM Group has entered into a contract or commitment restraining any member of the SKM Group from competing with any person or conducting activities in any market;


(k)	no member of the SKM Group has created, or agreed to create, any mortgage, charge, lien or other encumbrance over the whole, or a substantial part, of its business or property

other than in the ordinary course of business or other than a lien which arises by operation of law or legislation securing an obligation that is not yet due;


(l)	no member of the SKM Group has provided financial accommodations other than to another member of the SKM Group;


(m)	no member of the SKM Group has entered into or resolved to enter into a transaction with any related party of SKM (other than a related party which is a member of the SKM Group) as defined in section 228 of the Corporations Act;


(n)	no member of the SKM Group has voluntarily changed any accounting policy applied by it to report its financial position;


(o)	other than in the ordinary course of business, no member of the SKM Group has made any material amendment to the terms and conditions of its employees;


(p)	no member of the SKM Group has converted all or any of its securities into a larger or smaller number of securities;


(q)	no member of the SKM Group has reduced, or resolved to reduce, its capital in any way;


(r)	no member of the SKM Group has entered into a buy-back agreement or resolved to approve the terms of a buy-back agreement under the Corporations Act other than in respect of the Warehoused Shares;


(s)	no member of the SKM Group has issued, or agreed to issue, or granted an option to subscribe for, debentures (as defined in section 9 of the Corporations Act) other than to a member of the SKM Group;

(t)

no member of the SKM Group has agreed to pay, declared, paid or made or incurred a liability to pay or make, a dividend or any other form of distribution of profits or capital, other than the declaration and payment by any member of the SKM Group of a dividend, where the recipient of that dividend was a member of the SKM Group other than redemption of the Dividend Shares contemplated by clause 3.1(o) of the Merger Implementation Deed;


(u)	no member of the SKM Group has disposed, or agreed to dispose, of shares in any other member of the SKM Group other than in respect of the Warehoused Shares;

(v)

no member of the SKM Group has acquired, leased or disposed of, or agreed to acquire, lease or dispose of, or offered, proposed or announced an acquisition of, any entity, business or assets (including the release or waiver of the whole or part of any Indebtedness), other than (A) in the ordinary course of business or (B) as legally committed in any contract fairly and accurately disclosed to Jacobs in the Disclosure Letter;

(w)

other than in the ordinary course of business or as legally committed in any contract disclosed in the Disclosure Letter, no member of the SKM Group has entered into any contract or commitment (or any series of related contracts or commitments) that is for a period of 5 years or more, or requires or may result in expenditure by any member of the SKM Group (either alone or together with any other member of the SKM Group) of $10,000,000 or more in any year, or pursuant to which any member of the SKM Group has undertaken capital expenditures in excess of $10,000,000;


(x)	no member of the SKM Group has incurred any financial indebtedness or issued any indebtedness or debt securities (or forgiven or agreed to forgive any indebtedness which is owed by a person) other than to another member of the SKM Group, other than in the ordinary course of business or pursuant to advances under its credit facilities currently

in existence where the funds drawn pursuant to those advances are used in the ordinary course of business, to fund the redemption of the Dividend Shares as contemplated by clause 3.1(o) of the Merger Implementation Deed or in connection with a purpose that is contemplated and permitted in clause (v) above;


(y)	no member of the SKM Group:


(1)	has paid any bonus to any director or officer of a member of the SKM Group, other than bonuses payable to executives for the year ended 23

June 2013 in accordance with the employment terms of that executive in existence and in the ordinary and usual course of business on the basis of principles consistent with those applied for the payment of bonuses by that member of the SKM Group for the year ended 24 June 2012

(provided that, for the avoidance of doubt, the payment of any bonus in accordance with such employment terms requires that the applicable performance targets or benchmarks relating to the payment of the bonus are satisfied and that any other applicable conditions are fulfilled);


(2)	has increased the remuneration or compensation of any executive director or executive of any member of the SKM Group other than in accordance with that member's normal salary review procedure conducted in good faith and in the ordinary course of business on the basis of principles consistent with those applied for the normal salary review procedure;


(3)	has granted to any director or executive of any member of the SKM Group any increase in severance or termination pay or superannuation entitlements; or


(4)	made or agreed to make any material change to the terms of, or waived any material claims or rights under, or waived the material benefit of any provisions of, any contract of employment with any executive of any member of the SKM Group;


(z)	no member of the SKM Group:


(1)	has changed the material terms of any Material Contract;


(2)	has paid, discharged or satisfied any claims, liabilities or obligations in any material respect under any Material Contract other than the payment, discharge or satisfaction consistent with past practice and in accordance with its terms; or


(3)	waived any material claims or rights under, or waived the benefit of any material provision of, any Material Contract; and


(aa)	no member of the SKM Group has agreed to settle any action, suit, arbitration, legal or administrative proceeding, actual or pending and whether made by or against the SKM Group, where the amount of that settlement exceeds $2,000,000.


11.	No Conflict.

11.1

Neither the execution and delivery of this Agreement or any other agreement contemplated hereby (including the Transaction Documents) to which any member of the SKM Group is a party nor the consummation or performance of any of the transactions contemplated hereunder or thereunder will (i) contravene, conflict with, or result in a violation of or default under any provision of the constitutional or charter documents of any member of the SKM Group; (ii) contravene, conflict with, or result in a breach of or default under any law, rule, regulation, writ, order, injunction, judgment or any order to which any member of the SKM Group or any of their assets are subject, or require any consent, action, approval, order or authorization of, or declaration or filing from or

with, any Government Agency thereunder; or (iii) breach or conflict with, or result in a default under, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Material Contract (or give rise to any requirement to request or obtain counterparty consent under any such contract), or result in the imposition or creation of any material Encumbrance upon or with respect to any of the assets owned, leased or licensed by any member of the SKM Group in each case other than as set out in Section 11.1 to the Disclosure Letter.

11.2

To the best of the knowledge of the SKM Parties, there are no facts relating to the identity or circumstances of any member of the SKM Group that would prevent or materially delay obtaining any approvals from any Government Agency required for execution and delivery of this Agreement or the other Transaction Documents or consummation of the transactions contemplated by this Agreement or the other Transaction Documents.

12. Financial Statements.


12.1	The Accounts and the Previous Accounts, (i) have each been prepared on a proper and consistent basis in accordance with Law and the Accounting Standards, (ii) show a true and fair view of the financial position of the SKM Group as at the dates at which they have been prepared and its financial performance and cash flows for the accounting reference periods then ended.


12.2	The Management Accounts and the Locked Box Date Accounts were prepared in good faith in accordance with applicable Law and the Accounting Standards, and on a basis consistent with that adopted for the preparation of the Accounts, and with due care and attention, and are not materially misleading or deceptive.


12.3	To the best of the knowledge of the SKM Parties, KPMG will complete their audit of the Management Accounts not later than 30 September 2013, and their report thereon will be consistent with their report on the Accounts and will not contain any qualifications with respect thereto.

12.4 The cash balances of the SKM Group as of 31 March 2013 were not less than

$160,000,000.


12.5	Since 25 June 2011, there has been no change in the accounting practices or policies applied by the SKM Group, except as required by Law or as set forth in the notes to the Accounts.

13. Debt.

Section 13 of the Disclosure Letter contains, as of the date of this Agreement, a true, correct and complete listing of all indebtedness for borrowed money (including hedging arrangements) of each member of the SKM Group, the outstanding principal balance thereof as of a recent practicable date, the interest rates payable in respect thereof, and the dates of maturity thereof. Except as disclosed in Section 13 of the Disclosure Letter, all of such indebtedness may be prepaid at any time, without premium, prepayment penalties, termination fees or other fees or charges. No member of the SKM Group has sent or received any written notice of breach, termination, intent to amend or intent not to renew or cure with respect to any of its contracts or arrangements relating to such indebtedness. No member of the SKM Group has given any guarantee or provided any other financial support in respect of the obligations or undertakings of any person other than a member of the SKM Group.

14. Internal Controls.

14.1

The records, systems, controls, data and information of each member of the SKM Group are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerised or not) that are under the exclusive ownership or direct control of another member of the SKM Group or a third party service provider with whom the member of the SKM Group has entered into a contractual arrangement for the recording, storing, maintenance and/or operating of the records, systems, controls, data or information (including all means of access thereto and therefrom), except for any non-exclusive ownership

and non-direct control that would not have a materially adverse effect on the system of internal accounting controls of any member of the SKM Group described in the following sentence. Since 1 January 2009, the SKM Parties have devised and maintained a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the timely preparation and reliability of financial statements in accordance with the Accounting Standards, including but not limited to providing reasonable assurance that: (i) transactions are executed in accordance with management's authorisation; (ii) transactions are recorded as necessary to permit the timely preparation of financial statements in conformity with the Accounting Standards and all relevant Laws and to maintain accountability for assets; (iii) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (iv) no member of the SKM Group maintains off-the-books accounts or more than one set of books, records or accounts.

14.2

Other than any material weaknesses identified in internal audit reports that have been provided to Xxxxxx in the Disclosure Materials at folders 06.10, 05.01.46 and 06.11.09 of the Data Site, to the best of the knowledge of the SKM Parties, there are no significant deficiencies in the design or operation of the internal controls of any member of the SKM Group that adversely affect their ability to record, process, summarise, and report financial data. The officers of the SKM Parties have identified via internal audit reports any material weaknesses in internal controls known to such officers and any fraud that involves employees who have a significant role in the internal controls. The SKM Parties have made available to Xxxxxx in the Disclosure Materials a summary of any such disclosures that have been made by management to the auditors since 1 January 2009.

15. Absence of Undisclosed Liabilities

Except for liabilities recorded or disclosed in the Locked Box Date Accounts, there are no outstanding material liabilities of any member of the SKM Group that are required to be recorded or disclosed in the Locked Box Date Accounts in accordance with the Accounting Standards, except (a) those arising subsequent to the Locked Box Date in the ordinary course of business and consistent with past practice; and (b) obligations under contracts to which any member of the SKM Group is a party.

16. Bank Accounts.

Section 16 of the Disclosure Letter contains a true, correct and complete list of all deposit and disbursement accounts and safe deposit boxes maintained by each member of the SKM Group with any bank, brokerage house or other financial institution.

17. Title to and Condition of the Assets.

Each member of the SKM Group has good and marketable title to, a valid leasehold interest in, or has the valid and enforceable right to use, all personal property and assets reflected in the Locked Box Date Accounts or acquired by any of them since the date thereof, in each case free and clear of all Encumbrances. Such assets constitute all of the assets necessary for the conduct of business as currently conducted by the members of the SKM Group. The tangible personal property and fixtures of the members of the SKM Group (i) is, as a whole and consistent with its age, in reasonable operating condition and repair, ordinary wear and tear excepted, (ii) has been maintained in all material respects in accordance with generally accepted industry practice, and (iii) is adequate for the uses to which it is being put.

18. Contracts.


18.1	Section 18.1 of the Disclosure Letter lists all Material Contracts. Complete, up to date and accurate copies of each of the Material Contracts, and all material amendments thereto, have been provided to Xxxxxx in the Disclosure Materials at the Data Site folders referenced in Section 18.1 of the Disclosure Letter.


18.2	Each Material Contract is legal, valid, binding, enforceable and in full force and effect against the member of the SKM Group party thereto and, to the best of the knowledge of the SKM Parties, the other parties thereto.

18.3

No member of the SKM Group and, to the best of the knowledge of the SKM Parties, no other person who is a party to any Material Contract, is in material breach or material default under any Material Contract (with or without the lapse of time, or the giving of notice, or both). To the best of the knowledge of SKM Parties, no member of the SKM Group has done or permitted to be done anything that would be reasonably likely to cause any Material Contract to be terminated. No member of the SKM Group has sent, nor have any of them received, any written notice of breach, termination, intent to materially amend or intent to not renew or cure with respect to any Material Contract that is not currently resolved.


18.4	Each Material Contract for the performance of work by any member of the SKM Group or their Related Persons has been approved pursuant to the SKM Group’s contract approval process.


18.5	Since 1 January 2008, no bankable feasibility study reports have been prepared by the SKM Group that contain estimates, that are capable of being relied upon, of mineral quantities or qualities where any member of the SKM Group has been named as the

‘Competent Person’ or ‘Qualified Person’ (as such terms are defined under applicable codes, rules or regulations).


18.6	Except as set forth in Section 18.6 of the Disclosure Letter, no member of the SKM Group is party to a performance or other guarantee relating to any contract for goods or services. No beneficiary of any such guarantee has attempted to enforce the applicable guarantee, and neither SKM Party is aware of any circumstances which would permit a beneficiary to enforce any such guarantee.


18.7	Each relevant member of the SKM Group is fully indemnified by BHP Billiton in respect of any Loss arising out of the lease or rental termination in respect of several holiday units and bungalows at Aspen Parks in connection with the Fluor SKM Iron Ore (FAST) engineering project and joint venture.

19. Government Contracts.


19.1	Since 31 August 2008, with respect to every Government Contract and, to the extent noted below, each Governmental Contract Bid:


(a)	no fraud or fraudulent certifications were used in obtaining any Government Contract;


(b)	no member of the SKM Group has violated any material applicable legal requirement or agreement with the Government Agency pertaining to such Government Contract or Government Contract Bid; and


(c)	neither a Government Agency nor any third party has asserted any material claim or initiated any dispute proceeding against any member of the SKM Group with respect to any material claim that is not currently resolved, and no member of the SKM Group has asserted any material claim or initiated any dispute proceedings directly or indirectly against any such party that is not currently resolved.

19.2

No member of the SKM Group and none of their respective directors, officers or employees and, to the best of the knowledge of the SKM Parties, none of their respective affiliates or Related Persons are, or since 31 August 2008 have been, under administrative, civil or criminal investigation, indictment, audit or, to the best of the knowledge of the SKM Parties, internal investigation, with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Government Contract Bid with any Government Agency. No member of the SKM Group has made a voluntary disclosure to any Government Agency with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Government Contract Bid with any Government Agency that has led or would reasonably be expected to lead, either before or after the date hereof, to any of the consequences set forth in the immediately preceding sentence or any other material damage, penalty assessment, recoupment of payment or disallowance of cost.

19.3

No member of the SKM Group and none of their respective directors, officers or employees and, to the best of the knowledge of the SKM Parties, none of their respective affiliates or Related Persons currently are, or have been since 31 August 2008, the subject of any suspension or debarment proceedings by any Government Agency. No member of the SKM Group and none of their respective directors, officers or employees and, to the best of the knowledge of the SKM Parties, none of their respective affiliates or Related Persons has, with respect to any Government Contract or any Government Contract Bid: (i) made any unlawful expenditures relating to political activity to Government Officials or others; (ii) made or offered or solicited or accepted any contributions, payments, gifts, gratuities, or any other item of any value in violation of the laws, regulations or requirements of any Government Agency; or (iii) violated in any material respect any applicable legal requirement.

20. Compliance with Legal Requirements; Governmental Authorisations.

20.1

Except with respect to (a) labour and employment matters (which are addressed in paragraphs 26 and 27 below), (b) employee benefit matters (which are addressed in paragraph 28 below), (c) Environmental Laws (which are addressed in paragraph 24 below): (i) each member of the SKM Group has complied with and is in compliance with all material applicable Laws, legal requirements and governmental orders; (ii) no SKM Party has received any notice in writing that any proceeding is filed or threatened against any member of the SKM Group with respect to any alleged violation by any of them of any material legal requirements; (iii) there is no outstanding written correspondence between any member of the SKM Group and any Government Agency with respect to any alleged violation by any of them of any material legal requirements, (iv) each member of the SKM Group, to the best of their knowledge, has all material licenses, permits, franchises and authorisations that are required by all applicable legal requirements in the operation of the Business or are necessary for the operation of the Business as presently being conducted in each applicable jurisdiction, and (v) no SKM Party has received any notice in writing that the licenses, permits, franchises and authorisations (as applicable) issued to the members of the SKM Group are not in full force and effect or are not in compliance with such governmental authorisations or that such governmental authorisations will be terminated or become terminable or impaired as a direct result of the transactions contemplated hereby. Each relevant member of the SKM Group is in compliance

with the material terms of each applicable license, permit, franchise and authorisation (and the applicable Law under which such license, permit, franchise or authorisation was granted). Without limiting the generality of the foregoing, SKM Thailand is in compliance in all material respects with the Foreign Business Law of Thailand.

20.2

Section 20.2 of the Disclosure Letter sets forth all licenses, permits, franchises and authorisations referred to in paragraph 20.1(iv), true, correct and complete copies of which have been provided in the Disclosure Materials. All material certificates, filings and other documents and materials required by any Government Agency to be filed or submitted by any member of the SKM Group under applicable legal requirements or governmental authorisations have been so filed or submitted.

21. Sanctions.


21.1	Since 1 January 2008, no member of the SKM Group, nor to the best knowledge of the SKM Parties, any person acting on behalf of any member of the SKM Group, has carried on business with (i) any person that was at the time of such business located or organized in any Sanctioned Country or (ii) any person that was at the time of such business the target of Sanctions Laws and Regulations.

22. Anti-Bribery and Anti-Corruption Laws.

22.1

Neither SKM Party and, to the best of the knowledge of the SKM Parties, no other member of the SKM Group or any person or entity acting on behalf of any member of the SKM Group, has at any time since 1 January 2008, taken any action, directly or indirectly, that would result in a violation of any applicable Anti-Corruption Law (including anti-money laundering Laws). The SKM Parties and, to the best knowledge of the SKM Parties, all other members of the SKM Group have conducted the Business in compliance with all applicable Anti-Corruption Laws.

22.2

Neither SKM Party and, to the best of the knowledge of the SKM Parties, no other member of the SKM Group or any of their respective directors, officers or employees or any person or entity acting on behalf of any member of the SKM Group in connection with the operation of the Business, has at any time since 1 January 2008 been under administrative, regulatory, civil or criminal investigation, indictment, audit or internal investigation with respect to any suspected, alleged or actual violation of any Anti- Corruption Law, and neither SKM Party is aware of any circumstances likely to give rise to such action or investigation.

22.3

Since 1 January 2008, to the best of the knowledge of the SKM Parties, no member of the SKM Group nor any of their respective directors, officers or employees, nor any person or entity acting on behalf of any member of the SKM Group in connection with the operation of the Business, has made any offer, payment, promise or authorisation of the payment of any money, or other property, gift, promise to give, or authorisation of the giving of anything of value, directly or indirectly, to: (i) any Government Official; (ii) any political party, party official or candidate for public office; (iii) any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to anyone described in (i) or (ii) above. To the best of the knowledge of the SKM Parties, since January 1 2008, no payments or transfers of value have been made by or on behalf of any member of the SKM Group, that are an unlawful means of obtaining business or retaining business, or securing an improper business advantage.


22.4	Since 1 January 2008, no member of the SKM Group, nor to the best of the knowledge of the SKM Parties, any person or entity acting on behalf of any member of the SKM Group,

has accepted or received any unlawful contributions, payments, gifts, or expenditures in connection with the operation of the Business.


22.5	No member of the SKM Group has ever been debarred or, to the best of the knowledge of the SKM Parties, blacklisted, by any client or any direct or indirect International Funding Institution due to (i) alleged fraudulent conduct or (ii) alleged conduct that would result in a violation of any applicable Anti-Corruption Law.


22.6	Without limiting the generality of paragraph 1.2, all written information supplied to Xxxxxx or its Representatives in connection with the matters described in this paragraph 22 during the Due Diligence process was complete and accurate to the best of the SKM Parties’ knowledge.


22.7	The members of the SKM Group acknowledge and agree that in connection with the implementation of the transactions contemplated by this Agreement and the other Transaction

Documents, none of them will pay or incur any cost or expense where it would be unlawful to do so.

23. Taxes.

23.1 General


(a)	All Tax Returns of the members of the SKM Group due prior to Implementation have been timely and properly filed, and all such returns were true, correct and complete in all material respects at the time of filing.


(b)	No Tax liens have been filed against the assets of any member of the SKM Group.

(c)

No member of the SKM Group has entered into any concession, agreement or arrangement that extends the period of assessment or amended assessment or payment of any Tax (or is otherwise a beneficiary of any extension of time within which to file any return except as is provided for in the ordinary conduct and administrative practices of particular jurisdictions) and no Tax Authority has operated or agreed to operate any special arrangement (being an arrangement which is not based on relevant Tax Law or any published Tax practice) in relation to the Tax affairs of any member of the SKM Group.


(d)	Each member of the SKM Group has complied with all material obligations under laws relating to Taxes under the Tax Law.


(e)	Taxes due and payable after Implementation in respect of each member of the SKM Group’s activities up to Implementation have been properly provided for in the Locked Box Date Accounts.


(f)	The amount of the provision for Tax in respect of each member of the SKM Group contained in the Locked Box Accounts was, at the Locked Box Accounts Date, adequate.


(g)	No event has occurred which has prevented or could prevent a member of the SKM Group obtaining the benefit of any deferred tax asset provided for in the Locked Box Date Accounts.

(h)

Each member of the SKM Group has prepared and kept all records necessary to correctly determine and assess all Taxes payable in respect of each member of the SKM Group’s activities up to Implementation. For the avoidance of doubt, “all records” includes preserving all Tax advice and analysis for such periods whether prepared internally or received from advisors; permanent records with respect to Tax basis information with respect to assets and shares; and counterparty provided information (such as residency and status claims by employees as they may relate to proper payroll withholding).

(i)

Within the past five years, no member of the SKM Group has paid or become circumstances by reason of which it or they may become liable to pay to any Tax Authority, any penalty, fine, surcharge or interest in respect of any Taxation (including in respect of any failure to make any return, give any notice or supply any information to any Tax Authority or to pay any Taxation on the due date for payment).


(j)	No member of the SKM Group has ever been party to, utilised or implemented any Tax equalisation with, or in respect of, any employee, shareholder, contractors or other person.


(k)	No US Entity Classification Elections (Forms 8832) have been filed with respect to any member of the SKM Group for US Tax purposes, except as provided in Section 23.1(k) to the Disclosure Letter.


(l)	The acquisition or disposal of any of the Warehoused Shares has not subjected any member of the SKM Group to any Tax.


(m)	The SKM Group is not aware of any circumstances under which the redemption of any shares or stock which were issued to any shareholder of any member of the SKM Group on or prior to Implementation will be treated other than as a redemption for Tax purposes.

23.2 Tax payments


(a)	All Tax payable by each member of the SKM Group on Income, Profits or Gains for Tax periods ending before Implementation has, to the best of SKM’s knowledge, been correctly assessed and duly paid in accordance with the Tax Laws set out in the respective jurisdictions.


(b)	All PAYG Instalments (or similar instalment payments under any equivalent Tax Law) payable by each member of the SKM Group on instalment income for instalment periods ending before Implementation have been correctly assessed and duly paid in accordance with the Tax Laws set out in the respective jurisdictions.


(c)	In relation to each member of the SKM Group’s activities up to Implementation:


(1)	the Tax consequences of all transactions involving foreign currency entered by any member of the SKM Group have been correctly determined in calculating the Tax payable in respect of those transactions for the income years ending before Implementation and the provision for Tax in the Locked Box Date Accounts;


(2)	no member of the SKM Group has, and will not before Implementation have, any attribution interests in non-resident trusts or foreign investment funds;


(3)	no member of the SKM Group has, and will not before Implementation have, any interests in Income, Profits or Gains of any trusts, or limited partnerships;

(4)

all choices, elections, rollovers and other like matters relating to the income tax and corporation tax affairs of the members of the SKM Group which have been taken into account in assessing income tax payable up to Implementation have been duly made (in writing), are included in the income tax and corporation tax records of members of the SKM Group, and have (where necessary to be valid) been duly furnished to the applicable Tax Authority;

(5)

all loss transfers, transfers of deductions, and other like matters relating to the income tax and corporation tax affairs of the members of the SKM Group which have been taken into account in assessing income tax and writing), are included in the income tax and corporation tax records of the members of the SKM Group, and have (where necessary to be valid) been duly furnished to the applicable Tax Authority;

(6)

except as disclosed in any Disclosure Supplement, no assets (of a value greater than $100,000) of any member of the SKM Group are or have been financed by limited recourse debt, held under a lease or hire purchase, treated for income tax purposes as owned by another person, or subject to section 51AD or Division 16D of Part III of Australia’s Income Tax Assessment Xxx 0000 or subject to Division 250 of Australia’s Income Tax Assessment Xxx 0000;

(7)

to the best of SKM’s knowledge, all rents, interest, or other sums of an income nature (Income Expenses) paid under any obligation incurred by any member of the SKM Group prior to Implementation have been, and to the best of the knowledge of the SKM Parties, such Income Expenses which any member of the SKM Group is under an existing obligation to pay in the future will be, under current law and applicable accounting practice, deductible for the purposes of Tax;


(8)	all research and development deductions claimed by any member of the SKM Group up to Implementation have been validly claimed, and all associated research and development registrations have been duly obtained and kept in force up to Implementation;


(9)	no member of the SKM AUS Consolidated Group has ever been, and up to Implementation will not be subject to Tax as a superannuation or insurance entity, a Tax exempt entity, a dual resident entity, a trustee, or any other kind of entity

other than an Australian resident company subject to Tax at the ordinary company Tax rate on its income.

23.3 Tax Consolidation

Except as set forth on Section 23.3 of the Disclosure Letter, no member of the SKM Group is bound by, or a party to, any Tax allocation, Tax indemnity or Tax sharing agreement or arrangement nor do any of them have an obligation to make any payments under any such agreement or arrangement.

23.4 Australian Consolidation


(a)	Each member of the SKM AUS Group is a subsidiary member of the SKM AUS Consolidated Group, and within the meaning of Part 3-90 of Australia’s Income Tax Assessment Xxx 0000:

(1) the SKM AUS Consolidated Group was formed on 7 July 2003;


(2)	the SKM AUS Consolidated Group is not a MEC Group for the purposes of section 719-5 of Australia’s Income Tax Assessment Xxx 0000;


(3)	each member of the SKM AUS Group became a subsidiary member of the SKM AUS Consolidated Group on the date the SKM AUS Consolidated Group was formed or such later date as SKMH has notified to Xxxxxx in Section 23.4(a)(3) of the Disclosure Letter and will remain a subsidiary member until completion;


(4)	no member of the SKM AUS Group has been a head company or subsidiary member of any other consolidated group or MEC Group;


(5)	all group liabilities of the SKM AUS Consolidated Group for any pre- Implementation period in which any member of the SKM AUS Group is a contributing member have been or will be correctly assessed and duly paid by the head company of the SKM AUS Consolidated Group;


(6)	all group liabilities of the SKM AUS Consolidated Group are and until the Implementation Date will be covered by one or more valid Tax sharing agreements under section 721-25 of Australia’s Income Tax Assessment Xxx 0000;


(7)	if a copy of any such Tax sharing agreement has been or is demanded by the Commissioner of Taxation at any time before Implementation, it has been or will be supplied to the Commissioner within the time required to ensure the agreement does not cease to cover the group liabilities;


(b)	The head company of the SKM AUS Consolidated Group has not claimed any bad debt deductions for any debts which are assets of any member of the SKM AUS Group.

23.5 Capital gains; degrouping gains


(a)	The implementation of the transaction contemplated by this Agreement will not give rise to any deemed disposal or realisation by any member of the SKM Group of any asset or liability for any Tax purpose or otherwise trigger any claw-back of Taxes.


(b)	So far as SKM is aware, no member of the SKM Group has disposed of or acquired any asset in circumstances such that a price other than the price actually paid may be substituted for Tax purposes

(c)

To the best of SKM’s knowledge, if any member of the SKM Group disposed of each of its assets (except trading stock and work-in-progress) for a consideration equal to the book value of that asset as shown in or adopted for the purposes of the Accounts to a person not connected with it and by way of bargain at arm's length, no liability to Tax would arise by reference to any actual or deemed profit or gain and no member of the SKM Group has acquired any such asset except by way of bargain at arm's length and from an unconnected person.


(d)	Each member of the SKM Group has sufficient records of past events to permit accurate calculation of the Taxation liability or relief which would arise on the disposal or termination on Implementation of each asset owned by each member of the SKM Group.


(e)	SKMH has disclosed in Section 23.5(e) of the Disclosure Letter complete and accurate details as to the Tax basis in the shares and/or stock of each of its subsidiaries.

23.6 Franking, etc.


(a)	No franking account of a member of the SKM AUS Group will be in deficit before, or just after Implementation. Each member of the SKM AUS Consolidated Group’s franking account at Implementation will have a surplus of not less than $50,000,000.


(b)	In relation to each member of the SKM AUS Consolidated Group’s activities up to

Implementation:


(1)	each member has kept accurate franking account records at all times up to Implementation;


(2)	each member will have no liabilities for franking Tax before, or just after Implementation;


(3)	neither a member of the SKM Group, nor the head company of any consolidated group or MEC Group of which any member of the SKM Group becomes a member at or after Implementation, will incur any liability for franking Tax by reason of anything happening to any member of the SKM Group before Implementation, or by reason of any Tax paid

by any member of the SKM Group before Implementation being refunded after Implementation;


(4)	no member has ever been, and up to Implementation will not become, an exempting company or a former exempting company


(5)	no member has ever had, and up to Implementation will not have, a tainted share capital account;


(6)	no member will have any liability to pay untainting Tax after Implementation by reason of anything happening to it before Implementation;


(7)	all dividends or other frankable distributions paid by any member before Implementation have complied or will comply with the benchmark rule in section 203 25 of Australia’s Income Tax Assessment Xxx 0000;


(8)	SKMH has not made a linked distribution (as defined in section 204-15 of Australia's Income Tax Assessment Act 1997), issued tax exempt bonus shares (as defined in section 204-25 of the Income Tax Assessment Act

1997), streamed a distribution within the meaning of section 204-30 of

Australia's Income Tax Assessment Xxx 0000;


(9)	no member will suffer a penalty by reason of over declaring conduit foreign income on any frankable distribution made before Implementation.


(c)	SKMH has disclosed in Section 23.6(c) of the Disclosure Letter complete and accurate details as to the franking balance or imputation credit balance in SKM New Zealand following the SKM Group Internal Restructure.

23.7 Withholding Taxes


(a)	To the best of SKM’s knowledge, each member of the SKM Group has withheld, deducted and duly paid all amounts due for or on account of any withholding tax or like impost for or on account of Tax as should have been made to any Tax Authority.


(b)	To the best of SKM’s knowledge, each member of the SKM Group has duly withheld, deducted or paid (as the case requires), in respect of all payments or non-cash benefits made or provided to another person before Implementation, the correct amounts due for or on account of any Tax, including without limitation:


(1)	any PAYG Withholding tax due on dividends, interest, royalties or other payments or non-cash benefits paid or provided to or for the benefit of non-residents or recipients with addresses outside Australia;


(2)	any PAYG Withholding tax due on transactions with persons failing to quote a Tax file number or an Australian Business Number;


(3)	any PAYG Withholding tax due on any other transactions;


(4)	any other withholding tax or like Tax due on any payments or non-cash benefits.

23.8 Employee and contractor Taxes

(a)

Except as otherwise disclosed or provided for in the Locked Box Date Accounts, no member of the SKM Group has any liabilities arising as a result of any failure to withhold, deduct or pay amounts due for or on account of any Tax in respect of any payments or non-cash benefits made or provided to employees, contractors or any other persons providing labour or services before Implementation, including without limit any amounts payable on account of:

(1) PAYG Withholding;


(2)	fringe benefits tax;


(3)	superannuation guarantee charge;


(4)	payroll tax;


(5)	workers’ compensation levies or contributions;


(6)	HECS, HELP, family Tax benefit, child support or other social security items or national insurance contributions; or


(7)	any similar taxes in any country to which the SKM Group member may be subject to tax or required to withhold with respect to payments to employees.

(b) Each member of the SKM Group has complied with all obligations in respect of

Tax file numbers of employees.


(c)	No member of the SKM Group has ever been, and will not before Implementation become, a member of a payroll tax group.


(d)	Each employee of any member of the SKM Group that is employed, situated or working outside of their home jurisdiction for more than a period of six months in any given year has been properly registered with, and placed on, the applicable local payroll.


(e)	Each member of the SKM Group which is required by applicable Tax law to operate payroll in respect of direct or indirect contractions has properly operated such payroll and has duly paid all payroll Taxes in respect of such contractions.


(f)	Section 23.8(f) of the Disclosure Letter contains details of all employee benefits schemes approved by any Tax Authority (Approved Schemes).

(g)

All employee share plans in respect of which employees of members of the SKM Group have claimed concessions or exemptions (pursuant to former Division 13A of Part III of the Income Tax Assessment Xxx 0000 or Division 83A of Australia’s Income Tax Assessment Xxx 0000 or any similar provision in any other jurisdiction) have been administered in compliance with the conditions required to obtain such concessions and exemptions.

(h) The share plans in respect of which employees of the SKM Group are members:


(1)	have not resulted in any securities being issued at a discount for the purposes Division 83A of Australia’s Income Tax Assessment Xxx 0000 or any other predecessor provision or any similar provision in any other jurisdiction;


(2)	have not resulted in the issue of any restricted securities within the meaning of Part 7 of the United Kingdom’s Income Tax (Earnings and Xxxxxxxx) Xxx 0000 or any similar provision in any other jurisdiction; or


(3)	have not resulted in the issue of any securities which has subjected a member of the SKM Group to any form of Tax in respect of their issue.

(i)

No employee of any member of the SKM Group or any person who is, has been or could be, treated as an employee of any member of the SKM Group for Taxation purposes by any Tax Authority has held, exercised or otherwise disposed of any shares, securities, options over shares or securities or interests in shares or securities in respect of which any member of the SKM Group has had to on or prior to Implementation, or may have to following Implementation, account for income Tax or national insurance, social fund or similar contributions liabilities (or equivalent obligations in any jurisdiction), whether or not through PAYG, the United Kingdom’s Pay As You Earn or any equivalent payroll or withholding system in any other jurisdiction.


(j)	No amount paid by any member of the SKM Group to any shareholder as a dividend or on a redemption of shares or securities has prior to Implementation been, and to the best of SKM’s knowledge, will following Implementation be, characterized or re-characterized as compensation or employment income by any Tax Authority.


(k)	No current or former shareholder of any member of the SKM Group that is (or was) resident for Tax purposes in the UK has made an election under section 431 of the United Kingdom’s Income Tax (Earnings and Pensions) Xxx 0000.


(l)	Each member of the SKM Group has duly filed Tax Returns in respect of, and duly paid, any personal income Taxes and social security, or national insurance, contributions (whether in the home and/or host country) of all individuals employed or engaged by the relevant member of the SKM Group that is on a foreign assignment.

23.9 Indirect Taxes


(a)	Each member of the SKM Group, which is required to be registered for Indirect Taxes, is duly registered, and will remain duly registered up to Implementation (and, where required by applicable Law, is a Taxable person for the purposes of any Indirect Tax legislation or regulation).


(b)	Each member of the SKM Group has paid when due the correct amount of Indirect Taxes payable before Implementation on any supply, importation or other transaction occurring before Implementation and will not have any liability for Indirect Taxes payable after Implementation on any such supply, importation or other transaction, except insofar as is provided for in the Locked Box Date Accounts.


(c)	No member of the SKM Group has claimed any input Tax credits or reduced input Tax credits for Indirect Tax purposes before Implementation to which it is not entitled.


(d)	All supplies made by the members of the SKM Group are subject to Indirect Taxes. No member of the SKM Group has been denied full credit or allowance for all Indirect Taxes paid or suffered by it.


(e)	All Indirect Tax invoices or other documents required to be issued to any person or agency under applicable Indirect Tax legislation or regulation (including, without limitation, the GST Law) in respect of all supplies, importations or other transactions made by any member of the SKM Group before Implementation have been or will be correctly prepared and duly issued.


(f)	So far as SKM is aware, no member of the SKM Group will have, under current law and applicable accounting practice, any liabilities after Implementation to pay increased amounts of consideration, or any form of indemnity or gross up, on account of Indirect Taxes payable by any other person on any supply, importation or other transaction occurring before Implementation.


(g)	As at Implementation, the “Financial Acquisitions Threshold” as defined in Australia’s A New Tax System (Goods and Services Tax) Xxx 0000 has not been exceeded for the last 5 years.


(h)	To the best of the knowledge of the SKM Parties, no wholesale sales Tax or like impost will be payable by any member of the SKM Group after Implementation by reason of any transactions entered into by a member of the SKM Group before Implementation.


(i)	Except as disclosed by SKMH in Section 23.9(i) of the Disclosure Letter, no member of the SKM Group has been treated as a member of a group for the purposes of any Indirect Tax legislation, and has not applied for such treatment

or, if it has been so treated, it has accounted to the representative member of the relevant group for all Indirect Tax that is properly attributable to it.


(j)	Each member of the SKM Group has duly paid all duties of customs and excise payable on any imports, or any production, manufacture, sale or distribution, of goods or other items, before Implementation.


(k)	No member of the SKM Group has claimed, and will not before Implementation claim, diesel fuel rebates.

23.10 Stamp Taxes; Customs and Excise

(a)

Other than in respect of the Transaction Documents, all Duty and transfer Taxes (including any interest, penalty or fine) payable by any member of the SKM Group (including on all material contracts, agreements, deeds, securities or other instruments (including relating to the SKM Group Internal Restructure) to which any member of the SKM Group is party, or to which any member of the SKM Group has agreed to pay the Duty, or which have been executed for any member of the SKM Group’s benefit to the date of this Agreement or for which it may be necessary or desirable in proving title of any member of the SKM Group to any asset it owns at Implementation) have been assessed and duly paid and all documents and instruments duly stamped, and SKMH has disclosed in Section

23.10(a) of the Disclosure Letter all stamp duties and transfer Taxes in relation to any transactions incurred on or prior to Implementation.


(b)	No member of the SKM Group will incur new liabilities on account of stamp duties after the date of this Agreement and before Implementation, except as disclosed in Section 23.10(b) of the Disclosure Letter.


(c)	No Duty (including land rich/landholder duty and any interest, penalty or fine), land Tax or similar Tax or Duty has been or will be payable in respect of any transactions before Implementation relating to shares or other interests held directly or indirectly in any member of the SKM Group.


(d)	SKMH has disclosed in Section 23.10(d) of the Disclosure Letter full details of any corporate reconstruction relief or any other form of stamp duty or duty relief (as applicable), exemption or concession that has been allowed or claimed in respect of any transactions relating to any member of the SKM Group or any of their property or assets before Implementation.


(e)	Neither entry into this Agreement nor any of the transactions it contemplates will cause any member of the SKM Group to become liable to pay any amounts to any person, Government Authority or Tax Authority in relation to any stamp duty or duty (as applicable) relief, exemption or concession previously claimed by any member of the SKM Group or any other person.

23.11 PRRT and other mining Taxes

No member of the SKM Group has incurred, and will not before Implementation incur, any liabilities for petroleum resource rent Tax, mining royalties, petroleum royalties, or like imposts.

23.12 Land Tax


(a)	No member of the SKM Group holds any real estate such that it would be treated as a real estate holding company for any Tax purposes or has otherwise, and will not before Implementation incur, any liabilities for land Tax or like imposts.


(b)	No member of the SKM Group has been, and will not before Implementation become, a member of a land Tax group.


(c)	No member of the SKM Group has incurred, and will not before Implementation incur, any liabilities for any congestion levy or like imposts.


(d)	All municipal or council rates and levies or like imposts payable by any member of the SKM Group in respect of any assessment period for those imposts commencing before Implementation, have been correctly assessed and duly paid, or disclosed in Section 23.12 of the Disclosure Letter.

23.13 Foreign (Non-Australian) Taxes


(a)	The territories which are given in Section 23.13 of the Disclosure Letter as being those in which the SKM Group is treated as being resident for Tax purposes are the only territories whose Tax Authorities seek to charge Tax on the worldwide profits or gains of that member of the SKM Group.


(b)	No member of the SKM Group has ever:


(1)	filed Tax returns to any Tax authority;


(2)	paid Tax on Income, Profits or Gains to any Tax Authority (except in some instances by way of withholding); or


(3)	otherwise had a taxable presence,

in any other territory except as disclosed in Section 23.13 of the Disclosure Letter.

23.14 Rulings and Registrations


(a)	All assumptions as to facts or otherwise on which a Tax Authority has relied in giving any Tax ruling and clearance were valid at the time the Tax ruling or clearance was obtained by the SKM Group and SKM has no reason to believe they will not remain valid and no member of the SKM Group has acted or failed to act in any way which has or might alter, prejudice or infringe any tax ruling.

(b)

All registrations required to be obtained by each member of the SKM Group in respect of each member of the SKM Group's activities up to Implementation for the purposes of any Tax law before Implementation (including, without limitation, any required for the purposes of income Tax, Indirect Taxes, Australian Business Number laws, Tax file number laws, PAYG withholding, payroll Tax, land Tax, or customs and excise duties) have been duly obtained and will be duly maintained up to Implementation.

23.15 Tax invoices, statements etc.

To the best of the knowledge of the SKM Parties, any statement, information, Tax ruling request, invoice, notice, computation, election or return which has been made, filed, lodged or submitted to a Tax Authority in respect of any Tax or Tax matter:


(a)	is true, correct and complete;


(b)	discloses all material facts which should be disclosed under any relevant Tax Law;


(c)	is not false, misleading or deceptive; and


(d)	has been made, filed, lodged or submitted on time.

23.16 Tax audits and disputes

(a)

Save as set out in Section 23.16(a) of the Disclosure Letter (which contains a list of all audits of all returns of the members of the SKM Group, if any, for the last five (5) years and any adjustments formally assessed as a result of such audits have been paid, reserved against or settled), no member of the SKM Group is subject to any audit, investigation, review or enquiry by any person or Tax Authority in relation to Taxes.


(b)	To the best of the knowledge of the SKM Parties, in relation to each member of the SKM Group there is no planned or on-going investigation, enquiry, audit or non-routine visit by any Tax Authority and there are no facts which might cause

such an investigation, enquiry, audit or non-routine visit to be instituted or that will result in an obligation by any member of the SKM Group to pay any additional amount of Taxes.


(c)	No member of the SKM Group is party to any litigation, court proceedings or other dispute with any person or Tax Authority in relation to Taxes.


(d)	No member of the SKM Group has given to any other person or Tax Authority any indemnities, guarantees or warranties with respect to Taxes

23.17 Transfer Pricing


(a)	To the best of the knowledge of the SKM Parties, there are no circumstances which could cause any Government Agency to make any adjustment for Tax purposes, or require any such adjustment to be made, to the terms on which any related party transaction is treated as taking place, and no such adjustment has been made or attempted in fact.


(b)	Without prejudice to the generality of the preceding paragraph, no member of the SKM Group is or could be treated as thinly capitalised for any Tax purpose. To the best of the knowledge of the SKM Parties, there are no circumstances which could cause any Tax Authority to deny relief for interest paid by any Company, and no such relief has been denied in fact.

23.18 Secondary Liabilities

SKM is not aware of any transaction, act, omission or event which has occurred and in consequence of which any member of the SKM Group is or may be held liable for any Tax of any person or may otherwise be held liable for or to indemnify any person in respect of Tax that is primarily or directly chargeable against or attributable to any person other than the applicable member of the SKM Group concerned.

23.19 Group matters


(a)	Section 23.19 of the Disclosure Letter gives details of all Tax consolidation, grouping arrangements and agreements in connection with being a member of a group for any Tax purpose that each member of the SKM Group has been party to prior to Implementation.


(b)	No member of the SKM Group is or shall become liable to Tax as a result of the entering into or performance of this Agreement or any other Transaction Document.


(c)	No member of the SKM Group is, and will not be, obliged to make or entitled to receive any payment in respect of any amount surrendered by way of Tax relief to or by such member of the SKM Group in respect of any period ending on or before Implementation.


(d)	SKMIH has no U.S. shareholders, assets or income which is effectively connected with the conduct of a trade or business carried out in the U.S. as defined in the Internal Revenue Code of 1986 and the regulations and pronouncements thereunder

23.20 Tax Avoidance


(a)	To the best of the knowledge of the SKM Parties, no transactions to which the SKM Group is and was a party constitute or form part of any Tax avoidance scheme in any jurisdiction.

(b)

No member of the SKM Group has been knowingly involved in any transaction or series of transactions which, or any part of which, may for any Tax purposes need to be specifically disclosed to a Government Agency other than as part of routine periodic compliance or which is at risk of being disregarded, re- characterised or reconstructed by reason of any motive to avoid, reduce or delay a possible liability to Tax.

23.21 Reorganisations and mergers

No member of the SKM Group has claimed or been granted exemptions from Tax in connection with reorganisations or mergers. Reorganisations or mergers which take effect on or before Implementation will not give rise to the assessment or payment of Tax after Implementation.

23.22 Intangible Assets and Intellectual Property

For the purposes of this paragraph, references to intangible fixed assets mean intangible fixed assets, goodwill and intellectual property. Section 23.22 of the Disclosure Letter sets out the amount of expenditure on each of the intangible fixed assets of each member of the SKM Group and provides the basis on which any deduction or allowance relating to that expenditure has been taken into account in the Locked Box Accounts or, in relation to expenditure incurred since the Locked Box Accounts Date, will be available to the relevant member of the SKM Group. No

circumstances have arisen since the Locked Box Accounts Date by reason of which that basis might change.

24. Compliance with Environmental Laws.


24.1	Section 24.1 of the Disclosure Letter sets forth a schedule of complete, up to date and accurate material permits, licenses and other authorisations issued under any Environmental Law applicable to any member of the SKM Group (Environmental Permits).

24.2

Since 1 January 2008, no member of the SKM Group has received notice from any Government Agency or any third party notifying them of (i) any Hazardous Substances which have been generated, treated, stored, handled or removed from or disposed of on the Leased Real Estate that could give rise to material liability of any member of the SKM Group pursuant to any Environmental Law, or (ii) any Hazardous Substances which have migrated onto the Leased Real Estate from any adjacent property or which have migrated, emanated or originated from the Leased Real Estate onto any other property.


24.3	The members of the SKM Group have obtained all material governmental authorisations and approvals, certificates, consents, licenses, orders and permits or other similar authorisations from any person required for the operation of the Business and their use of the Leased Real Estate required by any Environmental Law.

24.4

Each member of the SKM Group is in compliance in all material respects with all applicable Environmental Laws and all Environmental Permits. No member of the SKM Group has received any notice, order, claim, demand or like communication from a Government Agency or any other person to revoke, review, suspend, modify, terminate, challenge, not renew or commence any other proceedings in respect of any Environmental Permit.


24.5	To the best of the knowledge of the SKM Parties, there exists no filed or notified Environmental Claim against any member of the SKM Group or, to the best of the knowledge of the SKM Parties, the owner of the Leased Real Estate.

25. Insurance.

Section 25 of the Disclosure Letter lists all insurance policies, bonds, letters of credit and other surety arrangements currently maintained by any member of the SKM Group and any self-insurance arrangement by or affecting any member of the SKM Group or their assets, and the SKM Parties have made available to Xxxxxx in the Disclosure Materials in folder 06.03 of the Data Site a true, complete and correct copy of each such policy, bond, letter of credit and other arrangement. Each such insurance policy and bond has been fully paid and is in full force and effect, and no member of the SKM Group has received notice of any cancellation or threat of cancellation of such insurance or bond, amendments or increases in deductibles or premiums. Each member of the SKM Group is in compliance with all statutory obligations and contractual requirements under Material Contracts to maintain insurance. To the best of the knowledge of the SKM Parties, there is no basis for the assertion against any member of the SKM Group of any retroactive adjustment to any insurance premiums payable by any member of the SKM Group. Section 25 of Disclosure Letter sets forth all (i) material professional indemnity or errors and omissions or (ii) other claims in excess of $25,000 that have been made against such insurance policies in the last five (5) years or which the SKM Parties have received written notice may be made against any member of the SKM Group. Except as disclosed in Section 25 of the Disclosure Letter, all such claims have been reported to the appropriate insurers in a timely fashion. Since 1 January 2010, there has not been any claim by any member of the SKM Group made under any such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies. No member of the SKM Group has been refused any insurance by any insurance carrier at any time during the past three (3) years.

26. Personnel Matters.

The SKM Parties have provided to Xxxxxx in the Disclosure Materials at folders 04.03.37 and 02.02.07 of the Data Site a true, correct and complete list of all officers, employees, directors, independent contractors, consultants, secondees and expatriates of each member of the SKM

Group (for purposes of paragraphs 26, 27 and 28, each, an “employee”) as of 26 August 2013 (with respect to the Disclosure Materials at folder

04.03.37) and 02 September 2013 (with respect to the Disclosure Matters at folder

02.02.07), together with their date of employment and rates of salary, wages or commissions. None of the directors or officers of any member of the SKM Group has a service contract in respect of their holding of office beyond the Implementation Date, and

no director receives additional remuneration (other than expenses) over and above their service terms for acting as an officer or director. A true, correct and complete copy of the personnel policies and procedures of each member of the SKM Group current to 27

August 2013 has been made available to Xxxxxx in the Disclosure Materials at folder

04.09 of the Data Site. Other than as set forth in Section 26 of the Disclosure Letter, no member of the SKM Group has entered into any contract with any employee entitling such person to a bonus or other payment upon the consummation of the transactions contemplated hereby. Other than as set forth in Section 26 of the Disclosure Letter, no member of the SKM Group is a party to any agreement with any employee that cannot be terminated by any member of the SKM Group by giving notice of sixty (60) calendar days or less, and without liability to any member of the SKM Group for such termination other than payment of standard accrued entitlements and payment for services rendered through the termination date.

27. Labour Practices.

27.1 With respect to the employees of a member of the SKM Group:

(a)

the members of the SKM Group are in compliance with all applicable legal and contractual obligations and other legal requirements concerning the employees or otherwise relating to the employment of or service relationship with labour including, without limitation, provisions thereof relating to wages, hours, equal opportunity, collective bargaining, wrongful discharge, workplace safety, discrimination, immigration and the payment of taxes and social charges;


(b)	no industrial dispute or other labour or employment related proceedings have been filed or notified against any member of the SKM Group or, to the best of the knowledge of the SKM Parties, threatened, relating to labour, employment or service provider matters;

(c)

except as disclosed pursuant to paragraph (f) below, no member of the SKM Group is a party to or in negotiation for any contract with any union, works council, labour organisation, labour relations tribunal or authority, employee group or similar entity which affects the employment of employees of, or the service relationship with, any member of the SKM Group, including, but not limited to, any collective bargaining agreements, labour contracts, or works council agreements;

d) Except as disclosed pursuant to paragraph (f) below:


(1)	to the best of the knowledge of the SKM Parties, none of the employees of any member of the SKM Group are in the process of being organised by or into labour organisations, trade unions or associations, works councils or any other employee representative bodies;


(2)	no member of the SKM Group has agreed to recognise any union or other collective bargaining unit, and no union or collective bargaining unit has been certified as representing any of the employees of any member of the SKM Group; and


(3)	no member of the SKM Group has been subject to a strike, involuntary slowdown or other involuntary work stoppage during the three year period immediately preceding the date hereof and, to the best of the knowledge of the SKM Parties, there are no such strikes, slow-downs or work stoppages threatened against any member of the SKM Group.


(e)	Section 27.1(e) of the Disclosure Letter contains details of all:

(1) agreement or award based transitional instruments;

(2) Fair Work Australia approved enterprise agreements;

(3) modern awards;

(4) workplace determinations;

(5) individual flexibility arrangements; and

(6) guarantees of annual earnings

within the meaning of the Xxxxxxxxxx Xxxx Xxxx Xxx 0000 and similar applicable Laws in other jurisdictions and associated regulations to which any member of the SKM Group is a party and/or which apply to the SKM Group.


(f)	None of the employees of any member of the SKM Group has made a worker’s compensation claim or is on a medical leave which will materially affect their ability to perform their normal duties as employees in the business of any member of the SKM Group or that otherwise will result in any material liability to any member of the SKM Group in the aggregate.


(g)	To the best of the knowledge of the SKM Parties, each employee of the SKM Group has all necessary licenses and permits required by any Government Agency to allow such person to perform the duties currently assigned to him or her.


27.2	Any terminations of employment prior to Implementation have been made in compliance with applicable Law.

28. Benefit Plans.

28.1

There is not and has not been since 1 January 2009 any bonus, incentive or deferred compensation, pension, superannuation, defined benefits, retirement, profit-sharing, savings, employment, consulting, compensation, stock purchase, stock option, phantom stock or other equity-based compensation, severance pay, termination, change-in- control, retention, salary continuation, vacation, sick leave, disability, death benefit, group insurance, hospitalisation, medical, dental, health insurance, life, loan, educational assistance, or other fringe benefit plans, programs, agreements and arrangements (each, a Plan) maintained by any member of the SKM Group for the benefit of any employee or former employee of any member of the SKM Group, other than any such Plan that has been established, maintained and operated solely in accordance with its

terms and applicable legal and contractual requirements. Section 28.1 of the Disclosure Letter lists each Plan, true, correct and complete copies of the documents setting out all of the terms and benefits in respect of which have been made available to Xxxxxx in the Disclosure Materials at folder 04.14 of the Data Site.

28.2

Since 1 January 2009, the SKM Group has paid the full amount of its superannuation commitment required to be paid under the Superannuation Guarantee (Administration Act) 1992 (Cth) for every employee of the SKM Group for the period up to Implementation. Since the Locked Box Date, there has been no modification, amendment, or other circumstance other than as required by law that increased benefits under any Plan or will result in a significant increase in the cost of maintaining or funding any Plan.

28.3

Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, either alone or in connection with any other event, will entitle any current or former employee of any member of the SKM Group to any payment or result in any payment becoming due, increase the amount of any compensation due, or result in the acceleration of the time of any payment due to any such person.

28.4

With respect to each Plan for which a separate fund of assets is or is required to be maintained, full and timely payment has been made of all amounts required of any member of the SKM Group, under the terms of each such Plan or applicable legal requirements (determined without regard to any waiver of legally applicable funding requirements), and any contractual commitment, as applied through the Implementation Date. The fair market value of the assets of each such Plan equals or exceeds the present value of all benefits liabilities under that Plan. Each Plan may be amended or terminated (including with respect to benefits provided to retirees and other former employees) without liability at any time after Implementation. There is no material obligation for health, life insurance, or other welfare benefits following termination of employment under any Plan.

28.5

All employer and employee contributions to each Plan required by applicable legal requirements or by the terms of such Plan or pursuant to any contractual obligation (including contributions to all mandatory provident fund schemes) have been made or, if applicable, accrued on the Locked Box Date Accounts in accordance with Accounting Standards in the applicable jurisdiction applied to such matter. Each Plan required to be registered has been registered and has been maintained in good standing with the applicable Government Agency. Each member of the SKM Group and to the best of the knowledge of the SKM Parties, each person or entity that has an obligation under a Plan has timely performed each of its obligations with respect to each Plan.


28.6	There are six participants in the Emergency Services and State Super Scheme in respect of the SKM Group.

29. Intellectual Property.

29.1

Section 29.1 of the Disclosure Letter lists all of the following Intellectual Property that is owned, licensed or used by the SKM Group: (i) all patents, all pending applications relating to any inventions or designs and all renewals, reissues, divisionals, continuations, continuations-in-part and extensions of the foregoing; (ii) all registered trademarks, registered service marks and trademark and service xxxx applications; (iii) all registered copyrights and copyright applications and all renewals and extensions; and (iv) all domain name registrations (items referenced in clauses (i) through (iv) are referred to collectively as the Registered Intellectual Property). To the best of the knowledge of the SKM Parties, all Registered Intellectual Property (excluding pending applications) are valid, subsisting, and enforceable.


29.2	Section 29.2 of the Disclosure Letter lists: (i) all out-licenses; and (ii) all in-licenses (excluding shrink-wrap, click-wrap, click-through or other similar internal end use licenses with respect to off-the-shelf or generally available personal computer software), under

which any member of the SKM Group is entitled to receive, or obligated to pay, as the case may be, fees (including support and maintenance fees) of more than $500,000 per annum following the Implementation Date.

29.3

SKMM, SKMH or another member of the SKM Group owns or has a valid and enforceable right to use all material Intellectual Property needed to conduct the Business as currently conducted. All Owned Intellectual Property is owned exclusively by SKMM, SKMH or another member of the SKM Group free and clear of all Encumbrances. All renewal, application and other fees required for the maintenance and prosecution of the Registered Intellectual Property prior to Implementation have been paid.


29.4	There are no filed or notified proceedings or, to the best of the knowledge of the SKM Parties, written threats of proceedings (including offers to license) or claims:


(a)	by any person against any member of the SKM Group relating to the use by any member of the SKM Group of any Intellectual Property, challenging the ownership of or rights to the same, or alleging that any member of the SKM Group or any of their products or services infringe or misappropriate any Intellectual Property rights of such person; or


(b)	asserted by any member of the SKM Group against any person relating to any Intellectual Property; and


(c)	to the best of the knowledge of the SKM Parties, during the last three (3) years, there have been no infringing uses by third parties of the Owned Intellectual Property.

29.5

To the best of the knowledge of the SKM Parties, since 1 January 2009, no member of the SKM Group has interfered in, infringed upon, misappropriated, violated or otherwise come into conflict with any Intellectual Property rights of any third party, and no member of the SKM Group has received any written charge, complaint, claim or notice (including an offer to license) alleging any such interference, infringement, misappropriation or violation.


29.6	Since 1 January 2009, the members of the SKM Group have adopted commercially reasonable practices to protect their Intellectual Property and other confidential information. To the best of the knowledge of the SKM Parties, no person has taken, or omitted to take, any action that has resulted in the loss of protection of any trade secret or any confidential information of a member of the SKM Group.

30. Owned Real Property.

Since 1 January 2009, no member of the SKM Group has owned any real property.

31. Leased Real Estate.

Section 31 of the Disclosure Letter lists each Real Property Lease. Each Real Property Lease is in full force and effect against, and is the valid and legally binding obligation of, the member of the SKM Group party thereto and, to the best of the knowledge of the SKM Parties, each other party thereto. The SKM Parties have made available to Jacobs in the Disclosure Materials at folders 09.03 and 09.05 of the Data Site a true, correct and complete copy of each Real Property Lease, and except as set forth in Section 31 of the Disclosure Letter, no member of the SKM Group is negotiating any new contract, sub- contract, agreement or arrangement for the lease of real property or any material amendment to a Real Property Lease. Each of the Real Property Leases represents the entire agreement between SKMM, SKMH or other member of the SKM Group as applicable, and the applicable landlord. So far as the SKM Parties are aware, no Real Property Lease has, since 1 January 2009, been terminated or cancelled other than on the terms of the Real Property Lease, and no leasehold interest of any member of the SKM Group in any Real Property Lease has been assigned or encumbered, and each is free and clear of all Encumbrances. No member of the SKM Group and, to the best of the knowledge of the SKM Parties, no other party to a Real Property Lease is in default under such Real Property Lease, and no notice of default under such Real Property

Lease has been sent or received by any member of the SKM Group. No condition exists which, but for the giving of notice or the passage of time, or both, would constitute a default by any member of the SKM Group or, to the best of the knowledge of the SKM Parties, any other party pursuant to any Real Property Lease. No SKM Party has received written notice of any proceeding or order against any member of the SKM Group or, to the best of the knowledge of the SKM Parties, any other party which would require the repair, alteration or correction of any existing condition of any portion of any Leased Real Estate. Except as set forth in Section 31 of the Disclosure Letter, there are no licenses, occupancy agreements, options, rights, concessions or other agreements or arrangements, written or oral, granting to any person the right to use or occupy any of the Leased Real Estate. The current use and operation of the Leased Real Estate is in material compliance with all applicable zoning, building codes and other land use Laws imposed by any Government Agency regulating the use or occupancy of such Leased Real Estate or the activities conducted thereon, and all necessary permits and approvals required under any Law or by any Government Agency for the use and operation of the Leased Real Estate were obtained. No member of the SKM Group has received any written notice from any Government Agency that any of the improvements on the Leased Real Estate or the use of the Leased Real Estate violates any material use or occupancy restrictions, any covenant of record or any zoning or building legal requirement. The members of the SKM Group enjoy peaceful and quiet possession of all of the Leased Real Estate in accordance with the terms of the Real Property Lease and have not received any written notice from any landlord asserting the existence of a

default under any such Real Property Lease and have not been informed in writing that the landlord under any such Real Property Lease has taken action or threatened to terminate such lease before the expiration date specified in such Real Property Lease.

32. Affiliate Transactions.


32.1	Save as set out in Section 32.1 of the Disclosure Letter, there are no material transactions, arrangements and other relationships between and/or among the members of the SKM Group, any of their respective directors, officers or employees.


32.2	No member of the SKM Group now has, or at any time in the last two (2) years has had, either directly or indirectly, a material interest in:


(a)	any person which furnishes or sells or during such period furnished or sold services or products to any member of the SKM Group or purchases or during such period purchased from any member of the SKM Group any goods or services, or otherwise does or during such period did business with any member of the SKM Group; or


(b)	any contract or commitment to which the members of the SKM Group are or during such period were a party or under which they are or were obligated or bound or to which any of their properties may be or may have been subject (excluding contracts and commitments related to ordinary course employment benefits and obligations).

33. Relations with Customers and Suppliers.

No Significant Supplier or Significant Customer of any member of the SKM Group has cancelled any contract since 1 January 2009, or has indicated to any member of the SKM Group an intention to cancel or not renew any contract that is renewable by its terms or to not exercise any option to extend any contract that contains an option to extend, and to the best of the knowledge of the SKM Parties, there has been no threat by any supplier not to provide products, supplies or services (including utilities) to any member of the SKM Group. No supplier has made any assignment of its accounts receivable due from any member of the SKM Group to a third party or made any other similar factoring arrangement.

34. Client List.

Section 34 of the Disclosure Letter contains a complete, up to date and accurate list of all material customers and clients of any member of the SKM Group since 1 January 2009 where the SKM Group has received fees in excess of $2,000,000.

35. Personal Injury and Professional and Product Liability.

There are no (i) filed or notified or, to the best of the knowledge of the SKM Parties, threatened claims against any member of the SKM Group based on any personal injury, damage to property or professional or products liability resulting from any product manufactured or sold, services provided or work performed by any member of the SKM Group on or before Implementation, or (ii) filed or notified or, to the best of the knowledge of the SKM Parties, threatened claims against any member of the SKM Group based on any breach of any express or implied warranty given by any member of the SKM Group (if any), product recalls, or any similar claim resulting from any product manufactured or sold or services provided by any of them on or before Implementation.

36. Finders' Fees.

Except for the fees and expenses due to Xxxxxxxxx & Co. Australia Pty Ltd, which will be paid by SKMH, no member of the SKM Group or any of their Related Persons has dealt with any agent, finder, broker or other representative in any manner which could result in Jacobs or any member of the SKM Group (after Implementation) being liable for any fee or commission in the nature of a finder's fee or originator's fee in connection with the subject matter of this Agreement or the transactions contemplated hereby.

37. Proceedings.

There is no material action, suit, litigation, prosecution, investigation, mediation, arbitration or legal or administrative proceeding: (i) filed or notified against any member of the SKM Group; (ii) threatened against any member of the SKM Group of which an SKM Party has received written notice; (iii) to the best of the knowledge of the SKM Parties, has been, threatened against any third party relating to the properties or assets of any member of the SKM Group; and/or (iv) to the best of the knowledge of the SKM Parties, relating to the business of the SKM Parties. There is no outstanding judgment, sanction, order, writ, injunction or decree of any court, Government Agency or arbitration tribunal against any member of the SKM Group or, to the best of the knowledge of the SKM Parties, against a third party affecting the properties, assets, personnel, business activities or employees of any member of the SKM Group.

38. Restrictions on Business Activities and Conflicts of Interest.

38.1

Save as provided in Section 38.1 of the Disclosure Letter, there is no agreement, arrangement, contract, judgment, injunction, order, sanction or decree binding on any member of the SKM Group that has the effect of prohibiting, restricting or materially impairing after the Implementation Date the business of the SKM Group, including, in each case, on the application of the terms of such agreement, arrangement, contract, judgment, injunction, order, sanction or decree.


38.2	No member of the SKM Group or any of their Related Persons has violated the terms of the Settlement Deed by and among Hamersley Iron Pty Limited, Technological Resources Pty Limited and Xxxxxxxx Xxxxxx Xxxx Pty Limited, dated as of 18 October

2011, relating to restrictions on performing work relating to autonomous technology or remote operating centres in the mining industry.

39. Transaction Costs.

The Historic Transaction Costs are complete and accurate, and the Transaction Costs Estimate has been prepared in good faith having first consulted with the relevant Advisers of the SKM Parties.

Executed in accordance with section 127 of the Corporations Xxx 0000 by Xxxxxxxx Xxxxxx Xxxx Management Pty. Limited (for itself and in its capacity as attorney for the SKMM Sellers):



/S/ Xxxxx Xxxxxxx		/S/ Gunninder Xxxxx Xxxxxx
Director Signature		Director/Secretary Signature

Xxxxx Xxxxxxx		Gunninder Xxxxx Xxxxxx
Print Name		Print Name

Executed in accordance with section 127 of the Corporations Xxx 0000 by Xxxxxxxx Xxxxxx Xxxx Holdings Limited (for itself and in its capacity as attorney for the SKMH Sellers):



/S/ Xxxxx Xxxxxxx		/S/ Gunninder Xxxxx Xxxxxx
Director Signature		Director/Secretary Signature

Xxxxx Xxxxxxx		Gunninder Xxxxx Xxxxxx
Print Name		Print Name

Signature Page to Merger Implementation Deed

Executed in accordance with section 127 of the Corporations Xxx 0000 by Xxxxxx Australia Holdings Company Pty. Ltd.:



/S/ Xxxxxx Xxx Xxxxxxx		/S/ Xxxxxxx X. Xxxxxx
Director Signature		Director/Secretary Signature

Xxxxxx Xxx Xxxxxxx		Xxxxxxx X. Xxxxxx
Print Name		Print Name

Xxxxxx Engineering Group Inc.:

/S/ Xxxxxx Xxx Xxxxxxx

Officer Signature

Xxxxxx Xxx Xxxxxxx

Print Name

Print Title

Signature Page to Merger Implementation Deed

Executed by Gunninder Xxxxx Xxxxxx in the presence of:



/S/ Xxxxxxxx Xxxxx Xxxxxxxxx		/S/ Gunninder Xxxxx Xxxxxx
Witness Signature		Signature

Xxxxxxxx Xxxxx Xxxxxxxxx
Print Name

Executed by Xxxxx Xxxx in the presence of:



/S/ Xxxxxxxx Xxxxx Xxxxxxxxx		/S/ Xxxxx Xxxx
Witness Signature		Signature

Xxxxxxxx Xxxxx Xxxxxxxxx
Print Name

Executed by Xxxx Xxxxxx in the presence of:



/S/ Xxxxxxxx Xxxxx Xxxxxxxxx		/S/ Xxxx Xxxxxx
Witness Signature		Signature

Xxxxxxxx Xxxxx Xxxxxxxxx
Print Name

Signature Page to Merger Implementation Deed

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Sale Agreement

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