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COMPREHENSIVE GUARANTEE PROGRAMME

RESIDENTIAL INDEMNITY LTD GUARANTEE

The Residential Indemnity Ltd Guarantee is designed to provide you with peace of mind when embarking on the building of a new home with a Signature Homes Franchise Partner, covering:

Loss of deposit

Non-completion of the dwelling

Structural defects for ten years

Weathertightness defects for ten years

Non-structural defects for two years

We recommend that you read the terms and conditions of the Guarantee carefully and you are welcome to discuss any questions you might have with us.

Please note that you should not make a payment to the builder in excess of what is stated in the Building Agreement (apart from agreed Variations and PC Sums), make a payment before the completion of the stage as described by the Building Agreement, commence building without a building or, if appropriate, resource consent, commence building without an unconditional Building Agreement, or breach any of the terms and conditions contained within the Building Agreement. If you undertake any of the work yourself, engage any sub-trades directly or purchase any materials and/or services directly, the provisions of this Guarantee exclude any such activities and/or undertakings.

The Builder must provide to Residential Indemnity Ltd (RIL):

Immediately upon the signing of the Building Agreement;

The completed Comprehensive Guarantee Document (in its entirety), together with a copy of the executed Building Agreement, including the plans, specifications and addendum.

Before construction commences;

A copy of the Building Consent as issued by the relevant Local or Territorial Authority.

When construction is completed;

The Certificate of Practical Completion; and

A copy of the Code Compliance Certificate where the Builder is required to provide under the terms of the Building Agreement.

To make a Claim:

For claims for Non-Completion or Loss of Deposit, email Residential Indemnity Ltd (RIL) on info@ril.co.nz, or call (09) 415 2468

For claims for Defects (quality and/or materials) you must first give notice to the Builder requiring them to remedy the defect. If the Builder fails to do so within a reasonable time please email RIL on info@ril.co.nz, or call (09) 415 2468, with the relevant details including:

Your Guarantee number

Name of your builder

Description of the defect

Please Note

The Loss of Deposit and Non-Completion cover applies from the time that the Application for the Guarantee is accepted by RIL to Practical Completion.

We recommend that you and your legal advisors read the terms and conditions of the Guarantee carefully.

When you enter into a Building Agreement with the Builder, complete the Application Form and provide this to RIL.

GUARANTEE APPLICATION PROCESS

Before construction commences, the Builder will send to RIL

Original completed Comprehensive Guarantee Document (in its entirety) and a copy of the executed Building Agreement, including the plans, specifications and addendum.

RIL will send to the client:

A signed covering letter and the original Comprehensive Guarantee, including the terms & conditions that you signed.

N.B: If you have not had a response from us within fourteen days of sending your Application, please contact RIL.

When the house is completed, the Builder will send to RIL

A copy of the Code Compliance Certificate and a copy of the Certificate of Practical Completion.

INFORMATION & CHECKLIST FOR THE BUILDER

Complete this form with your client.

Upon signing the Building Agreement, complete the Comprehensive Guarantee Document and send with the following:

A copy of the Building Agreement

A copy of the Plans

A copy of the Addendum/Specifications

When the house is completed, we will require:

A copy of the Certificate of Practical Completion;

A copy of the Code Compliance Certificate.

Date Sent

When you have completed this Comprehensive Guarantee Document please send to:

Parties to the Building Agreement

Builder Legal Name

Trading Name (if different to above)

Client

Full Name/s as stated in the Building Agreement (IF A TRUST, PLEASE PROVIDE FULL NAMES OF ALL TRUSTEES)

Building Agreement Details

Number

Contract Price (GST incl.) $ Deposit

Date Contract signed

If an alteration:

Does your Building Agreement include any remedial work? Yes No

If yes, please advise details of work

Building Consent Authority

Name of Building Consent Authority

If consent not attached, advise expected date to be uplifted

Who is to uplift Code Builder Client Compliance Certificate?

Details of work undertaken by the Client

(All subcontractors, services, material and work arranged, supplied or paid for directly by the Client, are the Client’s responsibility and are excluded from the Guarantee. Please list all such work with estimated values.) $ $ $ $

AGREEMENTS AND DECLARATION

The Client and Builder agree that:

This Application forms the basis of and will be incorporated into the Residential Indemnity Guarantee (RIL) now being applied for by the Builder for the benefit of the Client.

RIL and/or its representatives are authorized to obtain from any other party such information the client they consider relevant for the assessment of this Application, which RIL may retain.

RIL and/or its representatives are authorized to disclose information contained in this Application, together with any other information obtained in assessing the Application for any purposes associated with or arising out of this guarantee to such person or persons as they in their sole discretion may decide.

The Residential Indemnity Guarantee being applied for is not effective until the Application has been accepted by RIL and that acceptance has been confirmed to the Client and the Builder in writing.

An acceptance letter will be sent to the Client as confirmation of the issue of a Residential Indemnity Guarantee.

The Builder will not commence the Work until the Residential Indemnity Guarantee has been issued.

The Client agrees that:

The Client will perform all of the Client’s obligations under the Building Agreement, and acknowledges that the Client has read and agrees to be bound by the terms and conditions of the Residential Indemnity Guarantee. The Client acknowledges that any breach or default of the Building Agreement will void this Guarantee.

The Builder agrees that:

The Builder will perform all of the Builders obligations under the Building Agreement, and acknowledges that the Builder has read and agrees to be bound by the terms and conditions of the Guarantee and Indemnity.

The Builder will perform all of the Builder’s obligations set out under any existing, ongoing, or future regulations or statute relating to the Building Agreement.

The Client by its authorised signatory declares that all of the information being supplied under this Application is true and correct, and no information has been withheld which may affect the acceptance of this Application.

Company or Trust Name

Signatories Full Name

Signature

Signatories Full Name

Signature

Signatories Full Name

Signature

Date

The Builder by its authorised signatory declares that all of the information being supplied under this Application is true and correct, and no information has been withheld which may affect the acceptance of this Application.

Company or Trust Name Date

Signatories Full Name

Signature

This is an application only for the Residential Indemnity Guarantee. Should this meet our requirements, acceptance will be by written notification to the Builder and the Client.

REQUEST FOR TRANSFER

Please read: Clauses 24 of the Guarantee Terms and Conditions

This is a request for transfer only and is not an offer to transfer the Guarantee. The Transferee should read all the Terms and Conditions of the Guarantee prior to completing and signing this application.

Please fill in all applicable areas.

Request for transfer

Guarantee Number

The Original Client (Transferor) and the next Pending New Owner (Transferee) jointly and severally warrant that the following information is true and correct in each and every particular.

Transferor

I the undersigned Transferor hereby request that the Residential Indemnity Guarantee on the Dwelling or Works specified by the Guarantee Number above, is transferred to the Transferee detailed below. I hereby certify that I have no knowledge of any action taken by any party, or myself, which might invalidate the Guarantee.

Transferor’s Name(s)

(please list all Owners)

Dwelling located at

Email address

The settlement of the purchase was on

Signature (Transferor)

Date

Transferee

I the undersigned Transferee hereby confirm that I am the pending New Owner of the Dwelling or Works specified by the Guarantee Number on the previous page.

I hereby certify that I have no knowledge of any existing damage or Defect to the Dwelling or Works that may give rise to a claim on the Guarantee.

I hereby acknowledge acceptance of the $450.00 + GST transfer fee.

Transferee Name(s): (please list all new Owners)

Signed (transferee) (each new Owner must sign in)

Date

Transfer Checklist

Upon completing your request for transfer, please send the following: The original “Comprehensive Guarantee Programme”

A copy of the Sale and Purchase Agreement

A copy of the Certificate of Practical Completion

A copy of the Code of Compliance Certificate

When you have completed the “Request for Transfer” section, please send it with all of the above documentation to:

Residential Indemnity Limited PO Box 305 393

Triton Plaza AUCKLAND 0757 or email to info@RIL.co.nz

RESIDENTIAL INDEMNITY GUARANTEE

Residential Indemnity Limited (RIL) will guarantee the performance of the Builder’s obligations to the Client, under the Building Agreement and indemnify the Client from any losses suffered by the Client as a result of the Builder’s non-performance of the obligations, on the terms and conditions set out herein, subject to the acceptance by RIL of the Application for the benefits provided under this Guarantee and Indemnity.

SECTION A: COVERAGE

RIL will, during the period of coverage specified in Clause 4, guarantee and indemnify the Client named in the Schedule for loss or damage suffered in respect of the Works as a result of: Loss of Deposits

Non-Completion

Defects

LOSS OF DEPOSITS

1. Where the Client has lost the Deposit paid due to the Builder’s Default, RIL will indemnify the Client against any such loss up to RIL’s Liability for Loss.

Prior to the commencement of the Works on the Section (excluding site preparation), the liability of RIL shall be limited to any monies paid to the Builder pursuant to the Contract, subject however to the limitation herein.

Any Claim for the loss of a Deposit, or part thereof, shall be limited to the value of the difference (if any) between the Deposit actually paid, and the value of any Works carried out by the Builder pursuant to the Building Agreement including the value of any plans, permits, consents, levies and commissions obtained or owing.

NON-COMPLETION

2. Where the Non-Completion of the Works is due to the Builder’s Default, RIL will complete the Works, provided that where the costs of completing the Works exceeds RIL’s Liability for Loss, any such excess will be payable by the Client.

DEFECTS

3. Where the Client suffers loss as a result of a failure by the Builder to:

(a) supply materials used in construction of the Work that are in good order, suitable for the purpose for which they will be used, and new, unless otherwise stated in the Agreement;

(b) carry out the Work with reasonable care and skill, in a proper and competent manner, and in accordance with the plans, standards, quality, specifications (including manufacturers’ specifications), laid down under the Contract, and to complete the Work by the date (or within the period) specified in the Contract, or, if no date is so specified, within a reasonable time;

(c) carry out the Work in accordance with and in compliance with all relevant laws and regulations, including inter-alia the Building Act 2004 and any regulations there under, and the building and (if any) resource consents;

(d) design or build or supply suitable materials where that failure causes the collapse or partial collapse of the Works or the ingress of moisture to those parts of the Works constructed above ground level and is a result of a Computer Virus present in a computer or other electronic equipment used by the Builder to deisgn the Works an/ or formulate the specification.

And where there is a Builder’s Default, RIL will remedy any such defects up to the value of RIL’s Liability for the Loss.

PERIOD OF COVER

4. The period of cover will commence on the date the Building Agreement is entered into, and will end:

(a) In the event of the loss arising from a Non-Structural Defect – two (2) years from Practical Completion of the Works, or the termination of the Agreement (whichever is earlier); or

(b) In the event of the loss arising from a Structural Defect – ten (10) years from Practical Completion of the Works, or the termination of the Agreement (whichever is earlier); or

(c) In the event of loss arising from a Weathertightness Defect – ten (10) years from Practical Completion of the Works, of the termination of the Agreement (whichever is earlier).

The liability of RIL referred to in Clause 4 herein shall be limited to RIL’s liability for loss.

SECTION B: LIMITATIONS

5. RIL’s liability for loss will not exceed the Building Agreement Contract Price stated in the Schedule or the limits of this Guarantee, whichever is the lesser. RIL shall not be liable for any legal costs, professional fees or any other expenses unless they directly relate to the cost of successfully enforcing a claim against RIL.

6. RIL shall not be liable for any additional loss or damage caused by the delay on the part of the Client in notifying RIL or the Builder of a fact or circumstance giving rise to a possible Claim.

7. RIL shall not incur any liability under Clause 1 or 2 herein due to Loss of Deposits or Non-Completion of the Works, or for any loss arising from non-compliance with any regulations where the Client is a Developer, and any other liability incurred by RIL shall be limited to liability under clause 3 but only in respect of any subsequent Client (not being a developer) of the building or land in respect of which the Works are being carried out.

8. Where the loss or damage under this Guarantee and Indemnity is also covered by any other policies of insurance or indemnity agreements, then the liability under this Guarantee and Indemnity shall only provide indemnity in excess of the amount for which the Client is entitled to indemnity under such other policies or indemnity agreements.

9. If the land on which the Work is being carried out is subject to multiple titles under the Unit Titles Act 1972 or to cross leasing or otherwise in multiple ownership, and a Claim is paid by RIL in respect of common property of the property or multiple complex, then the amount of cover shall be reduced by an amount equal to the amount paid under the Claim, divided by the number of homes comprising the complex.

10. RIL will not be liable for any fines, penalties, or liquidated damages arising from the actions or conduct of the Builder.

11. RIL will not be liable for any penalties or other costs arising from the building not being completed by the Guaranteed Completion Date offered under the terminated Building Agreement provided however that RIL will as soon as practicable after the approval of any claim advise the Client of a new Guaranteed Completion Date and the remedies available to the Client under the terminated Building Agreement for failure to meet the Guaranteed Completion Date will be deemed to be available to the Client in relation to the new Guaranteed Completion Date.

12. Where at the Client’s request, an Alternative Building Guarantee has been approved for the Works, the liability of RIL under this Guarantee will, where the maximum cover offered by the Alternative Building Guarantee is less than the maximum cover under this Guarantee, be limited only to the difference between the maximum cover offered by the Alternative Building Guarantee and the maximum cover offered by this Guarantee (if any) and will be payable only after all relief available under the Alternative Building Guarantee has been provided and paid in full.

SECTION C: CLAIMS

13. The Client must:

(a) notify both the Builder and RIL or its appointed representative promptly in writing upon becoming aware of some fact or circumstance that may give rise to a Claim under this Guarantee and Indemnity, and RIL will not be liable for any loss or damage where the Client does not make a claim within 14 days of first becoming aware of the fact or circumstance giving rise to the possible Claim;

(b) comply with the reasonable directions of RIL or its appointed representative, and take all reasonable precautions to avoid or minimize loss or damage under this Guarantee and Indemnity;

(c) for a claim under Section A1 (Loss of Deposit) or A2 (Non-Completion), make available to the Client’s solicitor such information to enable the Client’s solicitor to give to RIL an accurate Client’s Solicitor’s Certificate or alternatively make available to RIL such information as may reasonably be required by RIL to enable RIL to establish that there are sufficient monies available to the Client to pay the balance of the Building Agreement Price as set out in the Building Agreement.

(d) not undertake any remedial or rectification works without first notifying the Builder and RIL or its appointed representative, and receiving approval to do so in writing, unless the works are necessary to prevent further loss or damage;

(e) provide RIL and the Builder (or any person appointed by RIL) reasonable access to the Building or Section for the purpose of inspection and rectification or completion of the Works;

(f) facilitate the subgroation of its rights to RIL and, if required by RIL, shall prosecute any Claim for indemnity or damages to recover amounts paid by RIL to any other person or persons;

(g) not admit, exclude, or limit its rights against the Builder or any other party, or settle or defend any Claims without the prior written approval of RIL;

(h) permit RIL (at its sole discretion), to conduct any proceedings on behalf of the Client arising out of or concerning the Building Agreement and the parties obligations there under against any person or persons and will provide all information and assistance reasonably required by RIL for the conducts of any such proceedings;

(i) not, after it has lodged the Claim, make any payment under the Building Agreement to any person or persons other than RIL without the express written consent of RIL, which consent may be withheld at it’s absolute discretion;

(j) permit RIL to recover from the Client any monies it is not able to recover as a result of any breach by the Client of this clause.

14. The Builder must:

(a) facilitate the subgroation of its rights to RIL and if required by RIL prosecute any proceedings for indemnity or damages to recover amounts paid by RIL to any other person or persons;

(b) permit RIL (at its sole discretion) to conduct any proceedings on behalf of the Builder arising out of or concerning the Building Agreement and the parties’ obligations there under against any person or persons and will provide all information and assistance reasonably required by RIL for the conduct of any such proceedings;

(c) not admit, exclude or limit its rights against the Client or any other party, or settle or defend any Claims without the prior written approval of RIL;

(d) co-operate fully with RIL in the claim process including but not limited to:

(i) Making available copies of all relevant Building Deeds, plans, addendums, specifications, Building and Resource Consents and correspondence; and

(ii) Giving full financial details of the construction of each home the subject of each Building Agreement; and

(iii) Ensuring that any replacement builder and RIL receives all information, documents and anything else relevant to the appropriate Building Agreement.

15. The Client may not make a Claim under the Guarantee and Indemnity unless all sums properly due and payable under the Building Agreement (including release of any retention’s) prior to the date of termination of the Building Agreement have been paid by the Client as they fall due.

16. The Client, RIL, and the Builder agree that:

(a) The terms of this Agreement and any disputes arising under it and the remedies available and the agreements reached between the parties, are confidential to the Parties; and

(b) They will not make any announcements or disclosures relating to this Agreement of any Claims, liens, or circumstances arising under this Agreement without the prior written approval of the others unless the law requires otherwise.

SECTION D: EXCLUSIONS

17. RIL shall not be liable for any Claim for loss or damage:

(a) arising from any improvements on the Section which are not part of the Works and such exclusion of liability

will include exclusion of liability arising from any improvements on the Section undertaken by any builder or subcontractor whether an Approved Builder or not where those improvements are not part of the Works.

(b) arising from any malfunction in any electrical or mechanical appliances except where the malfunction is attributable to the workmanship or other fault of the Builder as part of the Work;

(c) to retaining structures, unless such Works are integral to the Building construction, and require the issue of a Building Consent under the Building Act 2004, and the loss or damage to the Works:

(i) could result in water penetration into a building;

(ii) could adversely affect health or safety; or

(iii) are not completed because of a Builder’s Default;

(d) to any landscaping, fencing or paths, swimming pools, spas or saunas, and any Council/Utility Company supply services or drains that are not part of the Work;

(e) from an event which is normally covered by a policy of general insurance;

(f) from an event which is or should be covered by any warranty from any manufacturer, supplier or installer;

(g) where the Works are carried out using framing timber for exterior walls that are not treated against decay to a standard of at least H1 Plus, unless the cladding is brick veneer with a ventilated, drained cavity of at least 40mm;

(h) where a water-drying or drainage system is not in place where face-fixed and sealed wall claddings are used;

(i) arising from any seepage, pollution, mould, contamination, war (whether declared or not), invasion, rebellion, nuclear radiation, or expropriation, confiscation or nationalization by or under of any Government, Public, or Local Authority;

(j) arising from exposure of natural timbers, or the normal drying out, or any other fair wear and tear of the Work;

(k) arising from, or made worse by, the failure of the Client to employ and maintain reasonable action or protection measures to minimize any loss or damage from borer or other pest infestation;

(l) arising from an act of God, earthquake, or act of nature, the force of which exceeds that allowed for under any New Zealand standard;

(m) arising from any personal injury;

(n) for loss of use, or any consequential loss of any kind, including but not limited to fines, penalties, liquidated damages, provided however that the reasonable costs of accommodation incurred by the Client from the loss of use of the Works (where the Client has at the request of RIL or any contractor employed by RIL, vacated the Works to permit remedial work of any defects to be completed) will be reimbursed by RIL;

(o) arising from a Contractual dispute between the Builder and the Client, except where otherwise specifically covered under this Guarantee and Indemnity;

(p) for demolition unless such demolition is required to complete the Works or to effect repairs to any defects under Clause 3 of Section A;

(q) where specified exclusions have been added to the attached Schedule;

(r) where the Client has failed to properly maintain the Works;

(s) where the Work is any structure other than a Household Unit as defined in Section 7 of Building Act 2004 or an Early Childhood Centre as defined by RIL from time to time.

SECTION E: GENERAL

18. The liability of RIL under this Guarantee and Indemnity shall extend to any acts or omissions of any party contracted to the Builder in performing the Work which results in the loss or damage referred to under Clause 1 to 3 herein.

19. RIL may, at its sole option, meet its obligations or any part of them by arranging an alternative builder to carry out or complete the Works.

20. RIL will keep the Work insured against all usual risks including loss or damage by fire, theft or willful damage to the full insurable value of the Work from the date of termination of the Building Agreement until a new Building Agreement with a replacement builder (if any) becomes unconditional in all respects or the completion of the Work, whichever is the earlier, provided that RIL has instructed the Client in writing to terminate the Building Agreement.

21. If the Client;

(a) agrees to the cancellation of the Guarantee and Indemnity following termination of the Building Agreement

which is the subject of this Guarantee and Indemnity; or

(b) makes a false, fraudulent or misleading Claim under this Guarantee and Indemnity; or

(c) is in Default and RIL has given the Client a Remedial Notice and the Client has not complied with the Remedial Notice within 14 days of receiving it from RIL;

Then RIL may immediately cancel the cover provided under this Guarantee and Indemnity by written notice.”

22. RIL shall not cancel this Guarantee and Indemnity, or avoid liability, or otherwise refuse to make a payment under this Guarantee and Indemnity to the Client on the grounds that the Builder:

(a) makes a false, fraudulent or misleading Claim under this Guarantee and Indemnity;

(b) breaches its duty of utmost good faith to RIL;

23. Where RIL is obliged to make a payment under this Guarantee and Indemnity for Works not completed or designs or reports not prepared at the time of termination of the Building Agreement, RIL shall be entitled to demand, and:

(a) The Client hereby agrees to assign to RIL all rights of action the Client may have, to recover any payment made by the Client to the Builder and either directly or through the Builder to any subcontractors, agents, employees, architects, engineers or other advisors of the Builder, where such payment was on account of Works to be undertaken or designs or reports to be prepared which were not undertaken or prepared in accordance with the Building Agreement; and

(b) The Builder agrees to assign to RIL or to RIL’s order such Contracts as RIL in its sole discretion may direct and the Builder will not be able to claim any adjustments or payments whatsoever such adjustments or payments to include but not be limited to Work in Progress. The Builder hereby irrevocably appoints RIL (and every officer of RIL) as the Builder’s attorney to execute any documents required to give effect to the assignments referred to in this Clause upon the terms set out in this Clause. The Builder acknowledges and agrees that the appointment of RIL to be its attorney is made for valuable consideration and is irrevocable.

24. The benefits of this Guarantee and Indemnity may be transferred to subsequent purchasers providing the prior approval of RIL is obtained, and provided a statement of no known defects is provided to RIL by the Client and the subsequent purchaser, immediately prior to the transfer. If approval in writing is not obtained prior to the date of transfer, the benefits of this Guarantee and Indemnity will not be transferable to the purchaser or any subsequent purchaser or purchasers.

25. The Builder warrants to the Client and RIL that it will comply with each and all of the Builders obligations referred to or implied in this Guarantee and Indemnity.

26. Any notice to the Client may be delivered or posted or sent by fax to the last known address of the Client, and shall be deemed given in the case of posting, by the next working day after posting.

27. Every notice or communication to RIL shall be in writing and sent by mail to the office of the Agent of RIL:

Residential Indemnity Limited

PO Box 305 393

Triton Plaza

AUCKLAND 0757

Phone: 09 415 2468

SECTION F: DEFINITIONS

An “Approved Builder” as defined catches a FP or any other builder approved by RIL but this has been expanded slightly to remove any doubt that it includes sub-contractors.

“Alternative Building Guarantee” means a scheme under which the Client is offered similar protection against the failure of the Builder to perform the Builder’s obligations under the Building Agreement as is offered by this Guarantee.

“Bond” means the bond entered into from time to time between RIL and the ANZ Bank for the sum of $1,000,000.00 or such sum as RIL may at its sole discretion decide to support all guarantees.

“Builder” means the Builder specified in the Schedule herein or any builder approved in writing by RIL to carry out the Work in substitution for the Builder.

“Builders Default” means the Builder;

a) dying, disappearing or becoming legally incapable; or

b) becoming insolvent; or

c) having its registration under any statutory requirement cancelled or suspended; or d) wrongly failing or refusing to complete the Work so that the Building Agreement is terminated.

“Building Consent” means the Building Consent issued by the relevant Authority under the Building Act 2004 for the Works.

“Building Agreement” means the Signature Homes Building Agreement entered into between the Builder and the Client for the carrying out of the Works, and is referred to in the Schedule herein.

“Client” means the person for whom the Building is being built under the Building Agreement, and as named on the Schedule.

“Client’s Solicitor’s Certificate” means a certificate whereby the Client’s solicitor certifies to RIL that the Client:

(a) has arranged finance and it has been accepted in writing; and

(b) has sufficient cash to pay the difference between the finance arranged and the balance of the Building Agreement Price as set out in the Building Agreement; and

(c) is registered proprietor of the Section in the Building Agreement or will at the date for payment of the balance outstanding under the Building Agreement be registered as proprietor of the Section.

“Claim” means where the context permits, a Claim made by the Client under this Guarantee and Indemnity.

“Contract Price” means the total price pursuant to the Building Agreement.

“Certificate of Practical Completion” means a Certificate issued by an Independent Certifier, that the Work is Practically Completed in accordance with the Building Agreement or any agreement executed in replacement of the Building Agreement to complete the Work.

“Computer Virus” means a piece of code which is capable of copying itself and typically has a detrimental effect, such as corrupting the system or destroying data.

“Default” means:

a) a Default (as that term is defined in the Building Agreement) under the Building Agreement; or b) the failure of the Client to perform or observe any covenant or obligation herein to be performed or observed by the Client whether expressed or implied.

“Deposit” means the payments payable under Clauses 6 (a) and (b) of the Schedule for the Building Agreement.

“Defect” means a shortcoming or imperfection in work done or materials supplied.

“Developer” means any Client who is building for the purpose of resale and not personal occupation.

“Disappearance” means cannot be found after due search or inquiry.

“Guarantee and Indemnity Period” means the period of Guarantee and Indemnity specified in Clause 4 herein.

“Independent Certifier” means Davis Langdon New Zealand Limited (www.davislangdon.com) or such other suitably qualified certifier of similar standing, independent of the Builder as the Builder or RIL may from time to time nominate.

“Insolvent” is where the Builder being an individual who becomes bankrupt, or being a company is put into Receivership, Liquidation or Administration.

“Non-Structural Defect” in relation to Building, means a Defect in the Works other than a Structural Defect or Weathertightness Defect.

“Personal Injury” means bodily injury, death, sickness, disease, shock, fright, mental anguish, false arrest or imprisonment, wrongful eviction, wrongful detention, malicious prosecution, humiliation, libel, slander, or assault or battery.

“Possession Date” means the date the Builder gives Possession of the Building to the Client or Practical Completion, whichever is earlier.

“Practical Completion” means the Works have been completed except for minor defects and minor omissions which do not prevent the Works from being used for their intended purpose and which can be remedied in the Maintenance Period or at such other time agreed without causing unnecessary inconvenience to the Client and where there is a dispute Practical Completion will be evidenced by the issue of a Certificate of Practical Completion.

“Remedial Notice” means a written notice given pursuant to Clause 21 setting out the grounds for termination and the action to be taken by the Client to avoid termination.

“Schedule” means the Schedule of this Guarantee and Indemnity.

“Section” means the area where Works will be undertaken.

“RIL’s Liability for Loss” means;

a) The refund of the Deposit; or

b) The difference between the cost of completing the Works (where that cost exceeds the Sales Contract Price) and the Sales Contract Price payable by the Client under the Building Agreement

As the case may be provided that RIL’s Liability for Loss will not exceed the total amount determined annually by an independent Actuary to be sufficient to meet the obligations of RIL under this Guarantee and indemnity such amount to include funds available to RIL under the Bond and from retained cash reserves.

“Structural Defect” in relation to a Building, means any Defect in a Structural Element of the Building that is attribute to defective design, defective or faulty workmanship or defective materials (or any combination of these) that:

(a) results in, or a likely to result in, the Building or any part of the Building being required by or under any law to be closed or prohibited from being used or;

(b) prevents, or is likely to prevent, the continued practical use of the Building or any part of the Building; or

(d) results in, or is likely to result in, a threat of imminent collapse that may reasonably be considered to cause destruction of the Building or physical damage to the Building or any part of the Building.

“Structural Element” in relation to a Building, means:

(a) any internal or external load-bearing component of the Building that is essential to the stability of the Building or any part of it, including (but not limited to), foundations, floors, walls, roofs, columns and beams; or

(b) any component (including weatherproofing) that forms part of the external walls or roof of the Building.

“Weathertightness Defect” in relation to a Building, means any Defect which has arisen where water has penetrated the Building because of some aspect of its design, construction or alteration, or of materials used in its construction or alteration and such penetration of water has caused damage to the building to the extent that it:

(a) results in, or a likely to result in, the Building or any part of the Building being required by or under any law to be closed or prohibited from being used or;

(b) prevents, or is likely to prevent, the continued practical use of the Building or any part of the Building; or

“Works” means the building work required pursuant to the Building Agreement.

Words in the singular include the plural; in any gender include the other gender; and person includes any incorporated or unincorporated entity. Words used on this guarantee unless otherwise defined, have the same meaning as when used in the Building Agreement.