8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 20, 2008

THE SAINT JAMES COMPANY

(Exact name of registrant as specified in its charter)

North Carolina	000-13738	56-1426581
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Broadway Plaza, 520 Broadway, Suite 350 Santa Monica CA 90401

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (310) 739-5696

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

£Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 8 – OTHER EVENTS.

ITEM 8.01 – Other Events.

On October 21, 2008, we entered into a Heads of Agreement (the “HOA”) with Neqtar Wines PTY LTD (“Neqtar”), pursuant to which Neqtar and we agreed on certain potential terms of a potential future transaction. On March 17, 2008, Neqtar and Samson Investment Company (“Samson”) entered into a letter of intent (the “LOI”) setting forth certain terms of a proposed acquisition by Samson, or its nominee, of all of Neqtar’s outstanding shares of common stock. On October 20, 2008, we entered into a Designation, Assignment, and Assumption Agreement with Samson, in which we were designated by Samson as its nominee under the LOI, and Samson conveyed all of its right, title, and interest in the same to us and we granted a five-year warrant to Samson to purchase 120,000 shares of our common stock at a per-share exercise price of $10.00. As a result of our designation as Samson’s nominee under the LOI, we entered into preliminary transaction negotiations with Neqtar, which culminated in the execution of the HOA.

Pursuant to the HOA, we agreed that, upon the close of the potential future transaction between Neqtar and us, and in exchange for our tender of a certain to-be-determined purchase price (the “Proposed Neqtar Transaction”):

· we will own all of the shares of Neqtar’s common stock;

· we will lease, and eventually may purchase, certain facilities from Neqtar;

· Neqtar will be obligated to purchase a specified amount of wine from us annually;

· we will own certain of Neqtar’s inventory;

· we will grant Neqtar a security interest in substantially all of our assets and those assets acquired from Neqtar; and

· we will own certain of Neqtar’s trademarks.

In addition, Neqtar and we expect to make certain representations and warranties to each other in a definitive transaction document that are standard and customary in the wine industry for transactions of this size and magnitude. The Proposed Neqtar Transaction is subject to certain conditions precedent, including, but not limited to, the transfer of certain of SdS Beverages’ assets to Neqtar, satisfactory completion of certain due diligence regarding Neqtar and the Proposed Neqtar Transaction, a financing condition, receipt of an independent appraisal valuing Neqtar’s fair market value not less than $27 million in the aggregate, and the making of certain revisions to documents between Neqtar and Fosters.

In contemplation of the Proposed Neqtar Transaction or a similar future transaction, on June 6, 2008 we engaged an investment bank to advise and assist us in respect of the financing contingency for the Proposed Neqtar Transaction

We also issued a press release on October 27, 2008, attached as Exhibit 99.4, in which we announced that we entered into the HOA for the potential purchase of all of Neqtar’s shares of common stock.

2

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.	Description of Exhibit
10.2*	Heads of Agreement dated, October 21, 2008, between Neqtar Limited and The Saint James Company.
10.3*	Letter of Intent to Purchase Neqtar Wines PTY LTD and all Related Real Property and Interests of Seller, dated March 17, 2008, between Samson Investment Company and Neqtar Wines PTY LTD.
10.4*	Designation, Assignment, and Assumption Agreement, dated October 20, 2008, between Samson Investment Company and The Saint James Company.
10.5*	Common Stock Purchase Warrant in favor of Samson Investment Company, dated October 20, 2008.
99.4*	Press Release dated October 27, 2008.

* filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 27, 2008	THE SAINT JAMES COMPANY
	By:	/S/ WAYNE GRONQUIST
		President

3

Exhibit Index

Exhibit No.	Description of Exhibit
10.2	Heads of Agreement, dated October 21, 2008, between Neqtar Limited and The Saint James Company.
10.3	Letter of Intent to Purchase Neqtar Wines PTY LTD and all Related Real Property and Interests of Seller, dated March 17, 2008, between Samson Investment Company and Neqtar Wines PTY LTD.
10.4	Designation, Assignment, and Assumption Agreement, dated October 20, 2008, between Samson Investment Company and The Saint James Company.
10.5	Common Stock Purchase Warrant in favor of Samson Investment Company, dated October 20, 2008.
99.4	Press Release dated October 27, 2008.

4

EX-10.2

Heads of agreement

Neqtar Limited (Vendor)

Saint James Company (Purchaser)

MinterEllison
	LAWYERS

RIALTO TOWERS, 525 COLLINS STREET, MELBOURNE VIC 3000, DX 204 MELBOURNE

TEL: +61 3 8608 2000 FAX: +61 3 8608 1000

www.minterellison.com

Heads of agreement

Details		4
Agreed terms		5
1.	Defined terms and interpretation	5
1.1	Defined terms	5
1.2	Interpretation	6
1.3	Headings	7
2.	Status of heads of agreement	7
2.1	Intention to be legally bound	7
2.2	Entire agreement	8
3.	Sale	8
3.1	Agreement to sell	8
3.2	Share Sale Agreement	8
3.3	Conditions Precedent	8
4.	Negotiation of agreements	10
4.1	Co-operation	10
4.2	Costs	10
5.	Terms of Transaction Documents	10
5.1	Share Sale Agreement	10
5.2	Merbein Agreement	10
5.3	HwCg Sales and Marketing Agreement	11
5.4	Wine Inventory Agreement	12
5.5	Security Documents	12
5.6	Other Terms	13
6.	Terms of share sale agreement	13
6.1	Purchase Price	13
6.2	Payment of the Purchase Price	13
6.3	Pre-Completion Estimate	14
6.4	Post-Completion Adjustments	14
6.5	Intercompany Balances and Financial Indebtedness	14
6.6	Warranties	14
6.7	Obligations before Completion	14
6.8	Trade marks	15
7.	Timetable	15
8.	Due diligence	15
8.1	Access to materials	15
8.2	Copies of materials	16
9.	Termination	16
10.	Confidentiality and announcements	17
10.1	Terms and subject matter of heads of agreement	17

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 2

10.2	Return of confidential information	17
10.3	Public Announcements	17
10.4	Termination	18
11.	Further action	18
12.	Dispute resolution	18
13.	GST	18
14.	Governing law and jurisdiction	19
15.	Counterparts	19
Schedule 1 – Transfer Assets		20
Schedule 2 - Merbein Facilities		21
[This schedule is subject to discussion between David Stevenson and Neil MacKenzie]		21
1.	Merbein Facility	21
2.	Transitional Services	21
3.	Share Services	21
Schedule 3 – Warranties		22
Schedule 4 – Limitations		30
1.	Qualifications	30
2.	Acknowledgments	30
3.	No reliance	31
4.	Financial limits on Claims	32
5.	Time limits on Claims	32
6.	Other limits on Claims	33
7.	Maximum aggregate liability for Claims	33
8.	Notice of potential Claim	33
9.	Conduct of third party Claims	34
10.	Rights of the Purchaser	34
11.	Costs indemnity	34
12.	Warranty payments	35
13.	Benefits or credits received by the Company or the Purchaser	35
14.	Trade Practices Act	35
15.	Financial forecasts	35
Signing page		36

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 3

Details

Date

Parties

Name	Neqtar Limited (a company registered in England & Wales with company number 05581964)
Short form name	Vendor
Notice details	Thremhall, Start Hill, Bishop's Stortford, Hertfordshire, CM22 7TD, England Facsimile +44 0 1279 873501 Attention: Jim Furze

Name	Saint James Company, [a Nevada Company]
Short form name	Purchaser
Notice details	1117 East Putnam Avenue, Suite 210, Riverside, Connecticut 06878, USA Facsimile 203-801-9685 Attention: Jake Shapiro

Background

A The Shares are legally and beneficially owned by the Vendor.

B Subject to the terms of these heads of agreement, the Vendor has agreed to sell and the Purchaser has agreed to buy (or procure that its nominee buys) the Shares.

C The parties agree that they will work together to complete the transaction contemplated in these heads of agreement in accordance with the Timetable.

D These heads of agreement record the basis on which the parties will proceed to negotiate the Transaction Documents.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 4

Agreed terms

1. Defined terms and interpretation

1.1 Defined terms

In these heads of agreement:

Acquisition means the acquisition of the Shares by the Purchaser (or its nominee) as proposed under these heads of agreement.

Business means the business of manufacturing, selling and distributing wine, carried on by Neqtar Wines.

Business Day means a day that is not a Saturday, Sunday or public holiday in Victoria.

Claim includes a claim, notice, demand, action, proceeding, litigation, investigation, judgment, damage, loss, cost, expense or liability however arising, whether present, unascertained, immediate, future or contingent, whether based in contract, tort or statute and whether involving a third party or a party to these heads of agreement.

Company means Neqtar Australia Pty Ltd ACN 119 786 408.

Completion means completion of the Share Sale Agreement.

Corporations Act means the Corporations Act 2001 (Cth).

Disclosure Letter means the letter entitled “Disclosure Letter” given by the Vendor to the Purchaser on or about the date of this heads of agreement.

Due Diligence Material means the due diligence information and documents provided to the Purchaser in relation to the Company and Neqtar Wines, through a web based data room.

Encumbrance, in relation to any asset, means any right, title, claim, interest, power or remedy held or claimed by any third party in or to that asset (including, but without limitation, under any mortgage, charge, lien, pledge, trust or power).

EU means the European Union.

Final Payment Date means the date which is 12 months and one day after the date of Completion.

First Ranking Charge means the charge over the assets of the Purchaser, the Company and Neqtar Wines in favour of the Purchaser's financiers in relation to the provision of finance to the Purchaser for the Acquisition.

Fosters Contracts means the three contracts between Fosters and Neqtar Wines, being a contract processing contract, a wine supply contract and blending agreement.

Group means the Company and its subsidiaries.

Group Company means one of the Company and its subsidiaries.

HwCg meansHwCg Limited, a company incorporated in the United Kingdom (number 01613823).

HwCg Sales and Marketing Agreement means the agreement to be entered into at Completion on the terms set out in clause 5.3.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 5

Inventory means all the physical inventory of bulk wine, bottled wine and dry goods, which is owned by Neqtar Wines as at Completion.

Merbein Agreement means the agreement to be entered into at Completion on the terms set out in clause 5.2.

Merbein Facilities means the storage and blending facilities described in item 1 of Schedule 2 of these heads of agreement.

Neqtar Wines means Neqtar Wines Pty Ltd ACN 119 786 373.

Purchase Price means the purchase price for the Shares, as specified in clause 6.1.

Real Properties means any real properties owned or used by any Group Company.

SdS Beverages means SdS Beverages Pty Ltd (ACN 115 465 631).

Security Documents means:

(a) the deed of charge (and registered mortgage over the Company's real estate) to effect the terms contained in clause 5.5(a)(i); and

(b) a deed of priority (intercreditor agreement) between the Vendor and the holder of the First Ranking Charge, in respect of the charge referred to in clause 5.5(a)(i).

Share Sale Agreement means the formal share sale agreement to be entered into between the parties under which the Vendor agrees to sell the Shares to the Purchaser and the Purchaser (or its nominee) agrees to purchase the Shares from the Vendor for the Purchase Price.

Shares means all of the shares in the Company.

Sunset Date means 11:59pm 19 January 2009 or such other date as agreed in writing by the parties.

Timetable means the timetable referred to in clause 7.

Transaction Documents means:

(a) the Share Sale Agreement;

(b) the Wine Inventory Agreement;

(c) the Merbein Agreement;

(d) the HwCg Sales and Marketing Agreement;

(e) the Security Documents; and

(f) any other documents ancillary to any of the above.

Warranty means each of the representations and warranties to be given by the Vendor under these heads of agreement and under the Share Sale Agreement.

Wine Inventory means the Inventory to the extent it comprises bulk wine and bottled wine.

Wine Inventory Agreement has the meaning given in clause 5.4(c).

Wine Inventory Cost Forecast means the forecasts used by the Vendor to determine the cost price of the Wine Inventory, which will be provided to the Purchaser as part of the Due Diligence Material

1.2 Interpretation

In these heads of agreement, except where the context otherwise requires:

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 6

(a) the singular includes the plural and vice versa, and a gender includes other genders;

(b) another grammatical form of a defined word or expression has a corresponding meaning;

(c) a reference to a clause, paragraph, schedule or annexure is to a clause or paragraph of, or schedule or annexure to, these heads of agreement, and a reference to these heads of agreement includes any schedule or annexure;

(d) a reference to a document or instrument includes the document or instrument as novated, altered, supplemented or replaced from time to time;

(e) a reference to A$, $A, dollar or $ is to Australian currency;

(f) a reference to time is to Melbourne, Australia time;

(g) a reference to a party is to a party to these heads of agreement, and a reference to a party to a document includes the party's executors, administrators, successors and permitted assigns and substitutes;

(h) a reference to a person includes a natural person, partnership, body corporate, association, governmental or local authority or agency or other entity;

(i) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;

(j) a word or expression defined in the Corporations Act has the meaning given to it in the Corporations Act;

(k) the meaning of general words is not limited by specific examples introduced by including, for example or similar expressions;

(l) any deed, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally;

(m) any deed, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally;

(n) a rule of construction does not apply to the disadvantage of a party because the party was responsible for the preparation of this heads of agreement or any part of it; and

(o) if a day on or by which an obligation must be performed or an event must occur is not a Business Day, the obligation must be performed or the event must occur on or by the next Business Day.

1.3 Headings

Headings are for ease of reference only and do not affect interpretation.

2. Status of heads of agreement

2.1 Intention to be legally bound

(a) The parties intend that these heads of agreement are binding in accordance with their terms on and from the date of these heads of agreement, despite the fact that the parties may not have reached final agreement as to the specific form of each of the Transaction Documents.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 7

(b) The terms of these heads of agreement:

(i) are not merely statements of the current intention of the parties;

(ii) are intended to be legally binding on the parties; and

(iii) constitute a binding undertaking or representation concerning the Acquisition by both parties, even if the parties subsequently work together and take action or refrain from taking action on the assumption or in the expectation that the Transaction Documents will be executed.

2.2 Entire agreement

These heads of agreement constitute the entire agreement between the parties as to their subject matter and supersede all earlier understandings or agreements relating to the Acquisition.

3. Sale

3.1 Agreement to sell

Subject to the terms and conditions of these heads of agreement, the Vendor agrees to sell the Shares to the Purchaser and the Purchaser agrees to purchase the Shares, free and clear of all Encumbrances, for the Purchase Price.

3.2 Share Sale Agreement

The agreement between the Vendor and the Purchaser in clause 3.1 is subject to execution of the Share Sale Agreement between the Purchaser and the Vendor, and agreement on the form of the other Transaction Documents, on terms acceptable to both parties.

3.3 Conditions Precedent

The sale and purchase of the Shares will be subject to conditions precedent. . These conditions precedent will include:

(a) a condition that SdS Beverages transfer to Neqtar Wines the assets listed in Schedule 1, free from Encumbrances, on terms that are satisfactory to the Purchaser acting reasonably;

(b) a condition that the Purchaser raise debt and equity finance, on terms that are satisfactory to the Purchaser in its absolute discretion, in an amount that is sufficient to enable the Purchaser to pay:

(i) the Purchase Price;

(ii) the costs and expenses associated with the Acquisition; and

(iii) any other amounts payable by the Purchaser in connection with the Acquisition, and have sufficient working capital to support the Business;

(c) if the Acquisition is subject to the Foreign Acquisition and Takeovers Act 1975 (Cwlth)(“FATA”):

(i) the Purchaser receives notice that the Treasurer has no objection to the Acquisition; or

(ii) the period elapses during which the Treasurer may make an order under section 18 or 22 of FATA, without an order being made in relation to the Acquisition; or

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 8

(iii) if an interim order is made under section 22 of FATA, the subsequent period for making a final order prohibiting the Acquisition elapses, without a final order being made;

(d) a condition that Completion be conditional on the Purchaser receiving other approvals that are required by law and are necessary and reasonable for the operation of the Business, on terms that are satisfactory to the Purchaser acting reasonably;

(e) a condition that each Group Company obtains any material consents that it may reasonably require (or which the Purchaser reasonably believes the Group Company may require) in relation to the Acquisition from any third party, on terms satisfactory to the Purchaser

(f) a condition that the Purchaser receive valuations addressed to the Purchaser from a valuer satisfactory to the Purchaser and in form and substance satisfactory to the Purchaser, which valuations confirm that the tangible assets of Neqtar Wines have a fair market value of not less than $27 million in aggregate;

(g) the Fosters Contracts are amended in such manner that reflects commercial terms that substantially or effectively include:

(i) the Fosters Contracts are not due to terminate prior to 31 December 2010;

(ii) the contract processing agreement provides for Neqtar Wines to process not less than 8,000 tonnes of grapes per annum for Fosters on terms satisfactory to the Purchaser;

(iii) the wine sales agreement provides for Neqtar Wines to sell Fosters all the wine made from not less than 8,000 tonnes of grapes per annum owned by Neqtar Wines, on terms satisfactory to the Purchaser;

(iv) the prices payable by Fosters, in respect of the 16,000 tonnes of grapes per annum the subject of the contract processing agreement and the wine sales agreement, are increased by $40 per tonne;

(v) the blending agreement provides for Neqtar Wines to provide blending and storage services to Fosters in respect of not less than 15 million litres of wine per annum, on terms satisfactory to the Purchaser;

(vi) the terms of payment in the Fosters Contracts are as disclosed by the Vendor to the Purchaser;

(vii) the terms of the Fosters Contracts are otherwise consistent with the forecasts provided by the Vendor to the Purchaser and on which the Purchaser has relied;

(h) a condition that the Purchaser complete its due diligence in relation to the Group Companies and the Business and not become aware of any material matter that is not satisfactory to the Purchaser acting reasonably.; and.

(i) a condition that the Vendor obtain any necessary shareholder approval to the sale of the Shares to the Purchaser.

The conditions precedent are, except for the condition at clause 3.3(i), for the sole benefit of the Purchaser. The Vendor and the Purchaser must use reasonable endeavours to cause or procure satisfaction of the conditions precedent as soon as is reasonably practicable. The Vendor and the Purchaser must, on reasonable request from the other party, report to one another in reasonable detail and in writing, in relation to their progress with satisfaction of the conditions precedent. The Purchaser may waive any of the conditions by notice given to the Vendor. If any of the conditions are not satisfied on or before the Sunset Date, either party may terminate these heads of agreement (and each Transaction Document that has been executed) by notice given to the other party.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 9

4. Negotiation of agreements

4.1 Co-operation

(a) The parties must use reasonable endeavours to negotiate each of the Transaction Documents in accordance with the Timetable and, subject to clause 4.1(b) on the basis of these heads of agreement.

(b) The parties must use reasonable endeavours to minimise their respective costs of implementing the Acquisition, including considering any reasonable proposal to structure the transaction in a manner to minimise the costs of each of the parties.

(c) The Transaction Documents and other ancillary documents will be prepared by the Purchaser's lawyers, excluding the Merbein Agreement which is to be prepared initially by the Vendor's lawyers.

4.2 Costs

The parties will bear their own respective costs and expenses of negotiating and executing the Transaction Documents.

5. Terms of Transaction Documents

5.1 Share Sale Agreement

Subject to these heads of agreement, the parties will use reasonable endeavours to negotiate the Share Sale Agreement, on the basis set out in these heads of agreement, in particular in clause 6.

5.2 Merbein Agreement

(a) Subject to these heads of agreement, the parties agree that:

(i) subject to the Vendor obtaining any necessary consents, the Purchaser will procure that the Company will lease the Merbein Facilities from the Vendor or a related body corporate of the Vendor on an exclusive basis, for five years from the date of Completion;

(ii) the rent payable under the lease will be a total of $1,000,000 (excluding GST) payable by equal monthly instalments over the last two years of the lease;

(iii) The Purchaser will bear the costs as detailed and disclosed as winery recharge in the budget document provided in the Due Diligence Material. This disclosed cost is contained in all projected earnings to the Purchaser.

(iv) on the date which is five years from the date of Completion (Sale Date), subject to the Vendor obtaining any consents required by law, the Purchaser will procure that the Company will purchase, and the Vendor or a related body corporate of the Vendor will sell, the Merbein Facility for the fair market value of the Merbein Facility as at the Sale Date, as determined by an independent valuer, an arm's length valuation between a willing Vendor and Purchaser and otherwise as set out in the contract for sale of real estate to be attached to the Merbein Agreement containing terms and conditions usually included in an agreement relating to the sale of a similar property;

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 10

(v) the Purchaser will procure that the Company will provide SdS Beverages with transitional and shared services of the kind listed in items 2 and 3 of Schedule 2 of these heads of agreement for the consideration, and on and subject to the terms, set out in the Merbein Agreement; and

(vi) the Vendor will procure that SdS Beverages will provide the Company with transitional and shared services of the kind listed in items 2 and 3 of Schedule 2 of these heads of agreement for the consideration, and on and subject to the terms, set out in the Merbein Agreement; and

(vii) The independent valuer referred to in clause 5.2(a)(iv) will be such person as the Vendor and Purchaser may agree or, in default of agreement, a registered valuer of no less than 15 years experience appointed by the President of the Institute of Valuers.

(b) The parties will use reasonable endeavours to negotiate the Merbein Agreement, on the basis set out in these heads of agreement.

(c) The agreed form of the Merbein Agreement will be annexed to the Share Sale Agreement to be entered into at Completion.

5.3 HwCg Sales and Marketing Agreement

(a) Subject to these heads of agreement, the parties agree that the HwCg, the Vendor and Neqtar Wines will enter into a wine distribution agreement under which the Vendor will purchase (or cause or procure HwCg to purchase) a minimum of 1.728 million litres of wine (either as bulk or bottled wine) in each of the 2009 and 2010 vintages, subject to the terms set out in that distribution agreement, including (but without limitation) the following terms:

(i) the Vendor or HwCg will purchase from Neqtar Wines the quantity of wine made in the 2008 vintage as shown in the forecasts provided by the Vendor and on which the Purchaser has relied;

(ii) wine will be taken from the 2009-2010 vintages – whites taken and paid for by June in the year after the vintage year and reds by December in the year following the vintage year;

(iii) the wine styles or specifications to be supplied will be similar to the styles and specifications of the wine made in the 2008 vintage (or as otherwise agreed between the Vendor and the Purchaser);

(iv) the purchase price paid by HwCg or the Vendor for the wine will be cost (determined on an open book basis) plus a margin of $422,000 per annum;

(v) any volumes of wine to be supplied which are above the minimum will be negotiated and agreed on annual basis;

(vi) excluding any of the Vendor's existing suppliers, the Vendor will not buy any Australian wine without first giving the Company a first right of refusal to match the terms of the purchase; and

(vii) HwCg will distribute the wine in the United Kingdom and the EU (and will not distribute any of the wine outside the United Kingdom and the EU).

(b) The parties will use reasonable endeavours to negotiate the HwCg Sales and Marketing Agreement, on the basis set out in these heads of agreement.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 11

(c) The agreed form of the HwCg Sales and Marketing Agreement will be annexed to the Share Sale Agreement to be entered into at Completion.

5.4 Wine Inventory Agreement

(a) At Completion, the Purchaser will purchase the Inventory, excluding the Wine Inventory, on an as is, where is basis, on reasonable terms to be agreed between the parties.

(b) At Completion, the Vendor will cause or procure Neqtar Wines to sell or transfer the Wine Inventory to the Vendor, on an as is, where is basis, on terms that are satisfactory to the Purchaser acting reasonably.

(c) At Completion, the Vendor will enter into an agreement with Neqtar Wines (the Wine Inventory Agreement) under which Neqtar Wines will have:

(i) an obligation to draw down or buy some or all of the Wine Inventory from time to time to meets its obligations under the Fosters Contracts and the HwCg Sales and Marketing Agreement, at its cost price (determined on the same basis as has been used in the Wine Inventory Cost ForecastsError! Reference source not found.); and

(ii) a right to draw down or buy some or all of the Wine Inventory at any other time, and from time to time, for the purposes of other sales, at its cost price (determined on the same basis as has been used in the Wine Inventory Cost Forecasts) .

(d) Under the Wine Inventory Agreement the Purchaser must pay for any Wine Inventory that is drawn down by the last day of the month of in which that Wine Inventory was drawn down. Neqtar Wines will direct that payment by the Purchaser for the Wine Inventory is made directly to the Vendor. If Neqtar Wines has not drawn down all of the Wine Inventory within 12 months after the Completion Date then, on the expiration of that period, Neqtar Wines will draw down the balance of the Wine Inventory, at its cost price.

(e) Until Neqtar Wines draws down or buys any of the Wine Inventory, Neqtar Wines will retain possession and control of the Wine Inventory and store the Wine Inventory for the Vendor. The Vendor may grant a floating charge over the Wine Inventory and Neqtar Wines and the Vendor’s financier will enter into such agreements as are reasonably necessary to give effect to that security and the rights of Neqtar Wines to draw down the Wine Inventory.

(e) Prior to Completion, the Vendor will permit the Purchaser to inspect, sample and test the Wine Inventory and, immediately following that inspection, the Purchaser may reject any of the Wine Inventory that the Purchaser reasonably believes is not of good and merchantable quality or fit for the purpose for which it was made. Neqtar Wines will have no obligation to purchase any of the Wine Inventory that is rejected by the Purchaser under this clause prior to Completion.

(f) The parties will use reasonable endeavours to negotiate the Wine Inventory Agreement, on the basis of the terms set out in this clause 5.4.

(g) The agreed form of the Wine Inventory Agreement will be annexed to the Share Sale Agreement to be entered into at Completion.

5.5 Security Documents

(a) Subject to these heads of agreement, the parties agree that:

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 12

(i) with effect from Completion (or the first date on which financial assistance may be given by the Company or Neqtar Wines, if later) the Purchaser will grant or procure the grant of a fixed and floating charge over the Company, Neqtar Wines, all or substantially all of the Company's assets and all or substantially all of Neqtar Wines' assets, in favour of the Vendor to secure the payment by the Purchaser (or its nominee) of any amount of the Purchase Price which has not already been paid at Completion.

(ii) the charge referred to in clause 5.5(a)(i) will rank immediately behind the First Ranking Charge.

(b) The parties will use reasonable endeavours to negotiate the Security Documents, on the basis set out in these heads of agreement.

(c) The agreed form of the Security Documents will be annexed to the Share Sale Agreement to be entered into at Completion.

5.6 Other Terms

In addition to the terms set out in these heads of agreement, each of the Transaction Documents will contain such other terms as the Purchaser, the Vendor or their respective solicitors may reasonably require. Neither the Purchaser nor the Vendor will have any obligation to agree to any term that is inconsistent with these heads of agreement or any material term that is not set out in these heads of agreement.

6. Terms of share sale agreement

6.1 Purchase Price

The Purchase Price for the Shares comprises:

(a) $24,300,000 (or such other amount as the Vendor and the Purchaser may agree if the condition precedent in clause 3.3(f) is not satisfied)(Initial Purchase Price) ;

(b) $2,700,000 (Final Cash Consideration);

(c) plus an amount equal to the debtors of each Group Company as at Completion (excluding any bad or doubtful debts);

(d) less an amount equal to the creditors of the Company as at Completion (excluding any intercompany balance and financial indebtedness that is discharged at Completion); and

(e) less an amount equal to any present or future liabilities of any Group Company as at Completion (including, but without limitation, any liabilities for tax or employee entitlements in relation to the period prior to Completion).

6.2 Payment of the Purchase Price

(a) Subject to these heads of agreement, at Completion, the Purchaser must pay to the Vendor the Purchase Price (less the Final Cash Consideration).

(b) Subject to these heads of agreement, the Purchaser must pay to the Vendor the Final Cash Consideration on the Final Payment Date.

(c) The Purchaser will pay the Purchase Price by bank cheque or telegraphic transfer to an account nominated by the Vendor or otherwise in cleared funds.

(d) The Purchaser may set-off any amount due and payable by the Vendor or HwCg or any related body corporate (as defined in the Corporations Act) of the Vendor or HwCg to the Purchaser against any payment mentioned in clauses 6.2(a) or (b).

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 13

(e) If any claim for breach of Warranty is not fully and finally resolved as at the Final Repayment Date, the Purchaser may withhold from the payment of the Final Payment Date such amount as is reasonably necessary on account of that claim, pending final resolution of the claim.

6.3 Pre-Completion Estimate

Not less than 5 Business Days prior to Completion, the Vendor and the Purchaser must agree on an estimate of the amounts mentioned in clauses 6.1(c), (d) and (e) and the amount payable by the Purchaser at Completion, on account of the Purchase Price, will be based on those estimates. The Share Sale Agreement will contain a mechanism to resolve any dispute between the parties in relation to the estimates.

6.4 Post-Completion Adjustments

As soon as is practicable after Completion, the Vendor and the Purchaser must determine the actual amounts mentioned in clauses 6.1(c), (d) and (e) and make whatever adjustments are necessary on account of the Purchase Price payable as at Completion. The Share Sale Agreement will contain a mechanism to resolve any dispute between the parties in relation to the determination of the actual amounts.

6.5 Intercompany Balances and Financial Indebtedness

The Vendor must ensure that, at or prior to Completion, all of the financial indebtedness of each Group Company is repaid or discharged so that, at Completion, no Group Company has any liability for any financial indebtedness.

The Vendor must also ensure that, at or prior to Completion, all of the intercompany balances between each Group Company and the Vendor (or any related body corporate of the Vendor) are repaid or discharged so that, at Completion, no Group Company has any liability to the Vendor (or any related body corporate of the Vendor) and neither the Vendor, nor related body corporate of the Vendor, has any liability to any Group Company other than under the Transaction Documents.

6.6 Warranties

(a) Subject to the limitations set out in Schedule 4, the Vendor represents and warrants that, subject to the Disclosure Letter, the warranties set out in Schedule 3 are true and correct as at the date of these heads of agreement.

(b) The Vendor will provide warranties of the type usually provided on the sale of shares in a company conducting a business of a similar nature to the Business, which will be in substantially the same form as those contained in Schedule 3, together with such other warranties as the Purchaser or its solicitors may reasonably require.

(c) The warranties will be qualified by the limitations of the type usually included in a share sale agreement in relation to the sale of a shares in a company conducting a business of a similar nature to the Business, which will be in substantially the same form as those contained in Schedule 4.

6.7 Obligations before Completion

The Vendor must ensure that, in the period prior to Completion, no Group Company does, or agrees to do any of the following, without the prior written consent of the Purchaser:

(a) carry on business other than in the ordinary and usual course;

(b) incurs, or commits to, any capital expenditure, or series of capital expenditures, in excess of $250,000 in aggregate;

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 14

(c) dispose of, create an Encumbrance over, or declare itself trustee of any asset (other than for the sale of trading inventories in the ordinary and usual course of business);

(d) allot or issue any share or loan capital or securities or other rights convertible into share or loan capital;

(e) declare or pay any dividend or make any other distribution of profits, reduce its capital, buy-back any shares or repay any shareholders’ loan;

(f) change the terms of employment of any employee or engage any new employee; or

(g) make any alteration to its constitution.

6.8 Trade marks

Prior to Completion, HwCg will transfer or sell to Neqtar Wines all right, title and claim in and to the trade mark for the Barramundi brand (and all goodwill associated with the Barramundi brand) in all jurisdictions other than the United Kingdom and the EU, on terms and conditions that are satisfactory to the Purchaser and the Vendor in their absolute discretion. HwCg will retain ownership of the Barramundi trade mark and the goodwill associated with that trade mark under the laws of the United Kingdom and the EU.

7. Timetable

The parties must endeavour to meet the following timetable:

Event / deliverable	Date
Negotiation of Share Sale Agreement finalised	No later than 5 weeks from the date of execution of these heads of agreement.
Negotiation of Wine Inventory Agreement finalised	No later than 5 weeks from the date of execution of these heads of agreement.
Negotiation of Merbein Agreement finalised	No later than 5 weeks from the date of execution of these heads of agreement.
Negotiation of the HwCg Sales and Marketing Agreement finalised	No later than 5 weeks from the date of execution of these heads of agreement.
Negotiation of the Security Documents finalised	No later than 5 weeks from the date of execution of these heads of agreement.
Execution of Share Sale Agreement	No later than 5 weeks from the date of execution of these heads of agreement.
Completion	No later than 10 Business Days from the date of execution of the Transaction Documents or, if later, the date on which all of the conditions precedent have been satisfied or waived.

8. Due diligence

8.1 Access to materials

The Purchaser will continue to have access to the Data Room Material until Completion. In addition, with effect from the date of these heads of agreement, the Vendor must:

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 15

(a) provide the Purchaser and its advisers and authorised representatives with reasonable access to all books and records and assets of and under the control of any Group Company and to the Real Properties to enable the Purchaser, as is reasonably necessary to:

(i)conduct due diligence investigations in respect of the Business and the Group Companies;

(ii)investigate the accuracy of the Warranties; and

(iii)become familiar with the Business and the affairs of the Group Companies;

(b) must provide the Purchaser and its advisers and authorised representatives with all information and explanations that they might reasonably request in relation to the books and records referred to in clause 8.1(a) or the affairs of any Group Company; and

(c) will ensure that the relevant responsible officers and employees and auditors of each Group Company are available at all reasonable times for the purposes of this clause 8.

8.2 Copies of materials

The Purchaser and its advisers and authorised representatives may take copies from the books and records referred to in clause 8.1(a). The Purchaser must:

(a) ensure that any access under this clause 8 is exercised and conducted so as to avoid unreasonable disruption to the conduct of the Business and the activities and operations of the Group Companies and their employees; and

(b) only consult with officers, employees and auditors of a Group Company where the Vendor has given its prior consent to do so (which consent will not be unreasonably withheld or delayed).

9. Termination

(a) Each party must use all reasonable endeavours within its own capacity to ensure that each Transaction Document is agreed and executed no later than the Sunset Date

(b) Each party will have the right to terminate these heads of agreement, by notice given to the other party in the event that:

(i) the other party does not comply with is obligations under these heads of agreement; or

(ii) any one or more of the Transaction Documents has not been agreed and executed by the Sunset Date.

(c) The Purchaser will have the right to terminate these heads of agreement in the event that:

(i) the Vendor or any Group Company becomes an externally administered body corporate (as defined under the Corporations Act);

(ii) any of the representations or warranties set out in Schedule 3 is or becomes untrue, or is or becomes misleading, in any respect prior to Completion;

(iii) any material asset of any Group Company is destroyed, lost or rendered unusuable (whether or not the asset is insured); or

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 16

(iv) the Purchaser becomes aware of any material matter that is relevant to the Acquisition or to the affairs of any Group Company that is not satisfactory to the Purchaser acting reasonably.

(d) If these heads of agreement are terminated under this clause 9 then no party will have any cause of action under or in relation to this heads of agreement against the other party for any loss or damage unless such cause of action accrued prior to that time or relates to a provision of this heads of agreement which is expressed to survive termination.

10. Confidentiality and announcements

10.1 Terms and subject matter of heads of agreement

Until execution of the Transaction Documents, each party must keep strictly confidential:

(a) the existence, terms and subject matter of these heads of agreement; and

(b) any information (in whatever form) disclosed to that party in the course of the parties' discussions and negotiations (including the due diligence process) in relation to the proposed acquisition of the Shares by the Purchaser,

and subject to clause 10.3, no party will disclose any such information except:

(c) with the written consent of the other party;

(d) if the information disclosed was otherwise publicly available other than where the information is publicly available as a result of a breach of this clause 10.1;

(e) as required by law or any regulatory authority (including the listing rules of any stock exchange);

(f) to its professional advisers and employees on a need to know and continuing confidential basis; or

(g) where disclosure is reasonably necessary for the performance of these heads of agreement (and, in particular, but without limitation, the Purchaser may disclose any such information to any person whom it approaches for any debt or equity finance in order to fund the Acquisition).

10.2 Return of confidential information

Until execution of the Transaction Documents, the Vendor and the Purchaser each agree to return to the other, or at the option of the other, to destroy, any confidential material of that other party, immediately on demand. No party will make any demand unreasonably while the parties are still advancing negotiations.

10.3 Public Announcements

(a) Until execution of the Transaction Documents and subject to paragraph 10.3(b), the Purchaser agrees that it will not make any public announcements in respect of these heads of agreement or their subject matter, unless that announcement has been agreed in advance in writing by the Vendor (which agreement the Vendor may not unreasonably withhold or delay).

(b) The Purchaser may make any disclosures in relation to this heads of agreement or its subject matter as is necessary to its advisers and to comply with any applicable law or requirement of any regulatory body (including, but without limitation, the rules of any stock exchange).

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 17

10.4 Termination

This clause will survive termination (for whatever reason) of these heads of agreement.

11. Further action

Each party must use all reasonable efforts to do all things necessary or desirable to give full effect to these heads of agreement.

12. Dispute resolution

(a) If a dispute arises out of these heads of agreement (Dispute), a party must comply with this clause 12 before starting arbitration or court proceedings (except proceedings for interlocutory relief).

(b) A party claiming a Dispute has arisen must give the other parties to the Dispute notice setting out details of the Dispute (Dispute Notice).

(c) During the 14 days after a Dispute Notice is given (or longer period if the parties to the Dispute agree in writing), each party to the Dispute must use its reasonable efforts to resolve the Dispute. If the parties cannot resolve the Dispute within that period, they must refer the Dispute to a mediator if one of them requests.

(d) If the parties to the Dispute cannot agree on a mediator within seven days after a request under clause 12(c), the chairman of LEADR or the chairman's nominee will appoint a mediator.

(e) The role of a mediator is to assist in negotiating a resolution of the Dispute. A mediator may not make a binding decision on a party to the Dispute except if the party agrees in writing.

(f) Any information or documents disclosed by a party under this clause 12:

(i)must be kept confidential; and

(ii)may only be used to attempt to resolve the Dispute.

(g) Each party to a Dispute must pay its own costs of complying with this clause 12. The parties to the Dispute must equally pay the costs of any mediator.

(h) A party to a Dispute may terminate the dispute resolution process by giving notice to each other after it has complied with clauses 12(a) to 12(c). Clauses 12(f) and 12(g) survive termination of the dispute resolution process.

(i) If a party to a Dispute breaches clauses 12(a) to 12(h), the other parties to the Dispute do not have to comply with those clauses in relation to the Dispute.

13. GST

(a) Unless expressly included, the consideration for any supply under or in connection with these heads of agreement does not include GST.

(b) To the extent that any supply made by a party to another party (Recipient) under or in connection with these heads of agreement is a taxable supply, the Recipient must pay, in addition to the consideration to be provided under these heads of agreement for that supply (unless it expressly includes GST) an amount equal to the amount of that consideration (or its GST exclusive market value) multiplied by the rate at which GST is imposed in respect of the supply.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 18

(c) The amount of GST payable in accordance with clause 13(b) above, will be paid at the same time and in the same manner as the consideration otherwise payable for the supply is provided.

(d) Any reference in this clause 13 to a term defined or used in A New Tax System (Goods and Services Tax) Act 1999 is, unless the context indicates otherwise, a reference to that term as defined or used in that Act.

14. Governing law and jurisdiction

These heads of agreement are governed by the laws of Victoria, Australia and each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Victoria, Australia.

15. Counterparts

These heads of agreement may be executed in any number of counterparts.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 19

Schedule 1 – Transfer Assets

Asset	Brand	Specifications	Description
Inclined Drainer	Miller	ID800	Pneumatically operated gate, 30tph capacity
Rotary Screen [x 2]	A & G		180cm full stainless steel
Presses [x2]	Marzola	PDP100	Screw presses
Centrifuge	Westfalia	SC150	Centrifuge & associated controls
Strainer	Westfalia		Seed strainer for centrifuge (Strainer & stand)
Compressor	Ingersoll Rand	SSR MM50	Air compressor plus controls
Bag Press	Miller		40 tonne bag press
Dosing Pump			Dosing pump (enzyme)
Open Top Tank [x 2]			500 ltrs
Top Agitator Tanks [x 2]			5000ltrs
CIP Tank	Miller		Miller Press CIP Tank
Tube-n-Tube	Teralda		1 x 4" Tube-n-Tube (must chiller)

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 20

Schedule 2 - Merbein Facilities

[This schedule is subject to discussion between David Stevenson and Neil MacKenzie]

1. Merbein Facility

The Merbein Facility is the facility located at [insert]

2. Transitional Services

The transitional services to be provided by Neqtar Australia Pty Ltd (or SdS Beverages) for a period to be agreed between the parties, including the following:

(a) Administration Services such as:

(i) all payroll and related functions are provided on CBA Payroll software. Current payroll procedures to remain the same, with pay being processed on a weekly basis after receipt of timesheets from the Receptionist/Administration Assistant at Neqtar Wines, as per current practice; and

(ii) superannuation services, including payroll tax which is to continue to be processed as per statutory requirements; and

(iii) reporting services to be provided at month end;

(b) Information Technology Services including the continuation of the TSM software during the transition period and other necessary IT related services;

(c) Accounts Payable and Receivable services to be provided by Neqtar Australia Accounts staff on a daily basis on TSM;

(d) Credit Control services to be co-ordinated by the Neqtar Australia Commercial/Administration Manager as per current practice with monthly reports provided as to the state of debtor’s accounts, and any payment plan which may be in place; and

(e) Purchasing Services to be provided by the Purchasing Manager for the purchase of all necessary products as per current practice.

3. Share Services

(a) Shared Facility (Glycol) - Facilities will be shared from SdS location with access for the paste and base plants; and

(b) Shared Facility -Waste Water - Facilities will be shared from SdS location with access for the paste and base plants

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 21

Schedule 3– Warranties

Warranty 1 - Defined terms

Terms defined in the heads of agreement have the same meaning for the purposes of these Warranties. In these Warranties:

Environment means the physical factors of the surrounds of human beings including the land, waters, atmosphere, climate, sound, odours, place, the biological factors of animal and plant and the social factors of aesthetics.

Environmental Law means a law regulating or otherwise relating to the Environment including, without limitation, land use, planning, pollution of the atmosphere, water or land waste, the storage and handling of chemicals, Hazardous Substances, or any other aspect of the protection of the Environment.

Funds means AMP SUPERLEADER, AMP FLEXIBLE L/TIME, AustralianSuper, ASGARD ELEMENTS, AXA RETIREMENT PLAN, ANZ SUPER ADVANTAGE, BENDIGO SUPER PLAN, BIRCH SUPER FUND, BT RETIREMENT SELECT, CBUS SUPERANNUATION, COLONIAL FIRST STATE, Colonial FirstChoice, COMMONWEALTH SELECT, FIRST SUPER – SBS, HOSTPLUS, LUCRF SUPER, MACQUARIE SUPER, MLC MASTERKEY SUPER, MTAA SUPER 504132, PLUM SUPERANNUATION, RACV SUPERANNUATION, REST SUPERANNUATION, STATEWIDE SUPER, TELSTRA SUPER, VICSUPER and WESTPAC LIFE.

Hazardous Substance means any substance which is, or may be hazardous, toxic, dangerous or polluting or which is regulated by any Environmental Law.

Intellectual Property Rights means all intellectual property and proprietary rights (whether registered or unregistered) including:

(a) business names;

(b) trade or service marks;

(c) any right to have information (including Confidential Information) kept confidential; and

(d) patents, patent applications, drawings, discoveries, inventions, improvements, trade secrets, technical data, formulae, computer programs, data bases, know-how, logos, designs, design rights, copyright and similar industrial or intellectual property rights.

Superannuation Commitment means any obligation, liability or duty to make any payment to any person in respect of any superannuation or retirement benefits or pensions that are or may be provided to any present or former Employees of Neqtar Wines or their respective dependants.

Warranty 2 – Vendor and Group Companies

2.1 The Vendor has full authority and all necessary consents to enter into and perform these heads of agreement, the Share Sale Agreement and each of the other Transaction Documents.

2.2 Neither these heads of agreement, nor the sale of the Shares under the Share Sale Agreement, nor the performance of any of the Transaction Documents, will:

(a) impose any encumbrance on the Vendor or any Group Company; or

(b) put the Vendor or any Group Company in breach of any obligation or agreement by which it is bound.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 22

2.3 No:

(a) meeting has been convened, resolution proposed, petition presented or order made for the winding up of the Vendor;

(b) administrator, receiver, receiver and manager, provisional liquidator, liquidator or other officer of the Court has been appointed in relation to the Vendor or any assets of the Vendor; or

(c) mortgagee has taken, attempted or indicated an intention to exercise its rights under any security of which the Vendor is the mortgagor or chargor.

Warranty 3 – The Group Companies

No:

(a) meeting has been convened, resolution proposed, petition presented or order made for the winding up of any Group Company;

(b) administrator, receiver, receiver and manager, provisional liquidator, liquidator or other officer of the Court has been appointed in relation to any Group Company or any asset of any Group Company; or

(c) mortgagee has taken, attempted or indicated an intention to exercise its rights under any security of which any Group Company is the mortgagor or chargor.

Warranty 4 - Share capital

4.1 The share capital of each Group Company as disclosed to the Purchaser (and to be set out in the Share Sale Agreement):

(a) comprises the entire share capital of that Group Company; and

(b) is fully paid.

4.2 The Vendor:

(a) is the sole registered and beneficial owner of all the Shares;

(b) has complete power and right to sell all the Shares to the Purchaser; and

(c) as at Completion, none of the Shares will be subject to any Encumbrance.

4.3 The Company is the sole registered and beneficial owner of all the shares in the capital of Neqtar Wines and, as at Completion, none of those shares will be subject to any Encumbrance.

4.4 The Company does not own any other shares or securities in or of any body corporate and does not carry on any business or have any liabilities. Neqtar Wines does not own any shares or securities in or of any body corporate and does not carry on any business (other than the Business) or have any liabilities (other than those arising from the Business).

4.5 There is no option, right to acquire or encumbrance over or affecting the Shares, or the shares in the capital of Neqtar Wines, or any of them.

4.5 No Group Company has issued any other securities.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 23

Warranty 5 - Accounts

5.1 The unaudited management accounts of each Group Company as at 31 August 2008:

(a) were prepared in accordance with applicable laws and generally accepted accounting principles in Australia; and

(b) give a true and fair view of the financial position and affairs of that Group Company and the Business as at 31 August 2008.

5.2 Since 31 August 2008:

(a) each Group Company has carried on the Business in the ordinary and usual course;

(b) no contracts or commitments differing from those ordinarily made in the conduct of the Business have been entered into or incurred; and

(c) there has been no material adverse change in the assets, liabilities, financial position or the profitability of the Group.

5.3 No person has given a guarantee or indemnity or is otherwise a surety in respect of any Group Company or its Business.

5.4 As at Completion, each Group Company will be the sole legal and beneficial owner of all of its assets. Those assets are in the possession or under the control of the relevant Group Company. There are no other material assets used in the Business or necessary to carry on the Business as a going concern in the same manner as the Business has been conducted prior to Completion.

5.5 As at Completion, the Wine Inventory will contain sufficient wine, of sufficient quality, to satisfy the requirements of the Fosters Contracts. As far as the Vendor is aware, the Wine Inventory is generally of good and merchantable quality and is generally fit for the purpose of the sales contemplated within the Wine Inventory Cost Forecast.

5.5 As at Completion, no Group Company will have any liability for any financial indebtedness and none of the assets of any Group Company will be subject to any Encumbrance that secures any financial indebtedness.

Warranty 6 - Records

As far as the Vendor is aware, the records of each Group Company:

(a) have been fully, properly and accurately kept and completed; and

(b) do not contain material inaccuracies or discrepancies of any kind.

Warranty 7 - Business contracts

7.1 As far as the Vendor is aware, there are no agreements, arrangements or understandings affecting any Group Company or the carrying on of the Business that:

(a) are material to the operation of the Business and have not been disclosed in writing to the Purchaser;

(b) are outside the ordinary and proper course of business of the Business or otherwise contain any unusual, abnormal or onerous provision;

(c) are incapable of being fulfilled or performed on time without undue or unusual expenditure of money or effort; or

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 24

(d) entitle the other party to terminate the agreement, or impose terms less favourable to the Business, by reason of a sale of the Shares or the performance of any of the Transaction Documents.

7.2 With respect to each contract which is material to the Business, the Vendor is not aware:

(a) of any party to the contract being in default; or

(b) of any grounds for rescission or avoidance or repudiation of that contract.

Warranty 8 - Employees

As far as the Vendor is aware, each Group Company has complied in all material respects with all obligations arising under law, equity or statute, award, enterprise agreement or other instrument made or approved under any law with respect to employment of its employees.

Warranty 9 – Superannuation

9.1 No Group Company has any Superannuation Commitments beyond those imposed by law or as disclosed in the Disclosure Letter.

9.2 With respect to each Fund, there are no outstanding or unpaid contributions by any Group Company other than as disclosed in the Disclosure Letter.

Warranty 10 - Litigation

10.1 There is:

(a) no material Claim threatened or pending against any Group Company; or

(b) as far as the Vendor is aware, no material fact, matter or circumstance likely to give rise to any Claim or Liability against any Group Company.

10.2 There are no material unsatisfied or outstanding judgments, orders or awards affecting any Group Company.

10.3 No Group Company is currently involved as a defendant in any material legal proceedings other than as set out in the Disclosure Letter. No Group Company is currently involved as a plaintiff or third party in any material legal proceedings other than as disclosed to the Purchaser in the Disclosure Letter.

10.4 To the knowledge of Vendor, any wine or other products sold by any Group Company was, and any services provided by any Group Company were, when sold or provided, materially complied with or satisfied the requirements of all relevant laws .

Warranty 11- Tax

11.1 In Warranty 11:

Consolidated Group has the meaning given to it Part 3-90 of the 1997 Tax Act

Group Liabilities has the meaning given to it in section 721-10 of the 1997 Tax Act that was not paid or otherwise discharged in full by the time the liability became due and payable.

Head Company has the meaning given to it section 703-15 of the 1997 Tax Act.

Ruling means any ruling, determination, arrangement, clearance, consent or advice issued by, or negotiated with, any Tax Authority in respect of any Tax or Tax Law.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 25

Tax Authority means any government, semi-government, administrative, municipal, statutory, fiscal or judicial body, department, commission, authority, tribunal, agency, entity or person responsible for the collection of any Tax or administration of any Tax Law.

Tax Law means any law in relation to any Tax.

Vendor Consolidated Group means the Consolidated Group of which the Company is part before Completion.

General warranties

11.2 Each Group Company or the Head Company has complied with all obligations imposed on the Group Company or the Head Company in respect of the activities of the Group Company by any Tax Law.

11.3 Each Group Company has paid, or the Accounts fully provide for, all Tax which the Group Company is or may become liable to pay in respect of the period up to and including the Accounts Date (including any period that ended prior to the Consolidation Date).

11.4 Each Group Company is not and will not become liable to pay any Group Liabilities which the Head Company is or will become liable to pay in respect of the period from the Consolidation Date up to and including the Completion Date, or in respect of the activities of any other member of the Vendor Consolidated Group.

11.5 Each Group Companyor the Head Company has filed, lodged or submitted all Tax returns and information regarding Tax and Tax matters in respect of the activities of the Group Company as and when required by Tax Law or requested by any Tax Authority.

11.6 Each Group Company or the Head Company has maintained sufficient and accurate records and all other information required to support all Tax returns and information which has been or may be filed, lodged or submitted to any Tax Authority or is required to be kept under any Tax Law in respect of the activities of the Head Company.

11.7 Each Group Company or the Head Company has complied with all of its obligations under any law requiring the deduction or withholding of Tax from amounts paid by the Group Company or the Head Company in respect of the activities of the Group Company, whether on its own behalf or as agents, and has properly accounted for any Tax so deducted or withheld to any Tax Authority (other than amounts which have yet to become payable);

11.8 Each Group Company has complied with all obligations to register for the purposes of any Tax Law.

11.9 Each Group Company has complied with all obligations imposed under Tax Law in relation to the quotation of tax file numbers by employees of the Group Company, including the guidelines under applicable Privacy Law and have not committed an offence in relation to the collection, recording, use or disclosure of tax file numbers.

11.10 After the Accounts Date, the only Tax liabilities of each Group Company that has have arisen or may arise on or before the Completion Date are, or will be, liabilities arising out of the normal business and trading activities of the Group Company.

11.11 Each Group Company is registered for GST under the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Consolidation

11.12 There are no Group Liabilities.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 26

11.13 There are no Liabilities of a Group Company relating to a Group Liability of the Vendor Consolidated Group that arises under any funding agreement.

11.14 Each Group Company is a member of the Vendor Consolidated Group from 1 July 2006.

11.15 As at the Completion Date, all things necessary to allow the Company to leave the Vendor Consolidated Group clear of any Group Liabilities to the extent permitted by sections 721-30 and 721-35 of the Income Tax Assessment Act 1997 (Cth) have been done and the Head Company has provided written confirmation of this.

11.16 The Head Company has not made any elections or choices in calculating the tax cost setting amount of assets of the Company which may impact on the Purchaser's right to reset the tax cost setting amount of these assets or claim capital allowances or other deductions in relation to those assets.

Warranty 12- Intellectual property

12.1 As far as the Vendor is aware, each Group Company's use of the Intellectual Property Rights does not infringe, breach an obligation of confidence or wrongfully use any confidential information, trade secrets, copyright, letters patent, trade marks, service marks, trade names, designs, business names or other similar industrial, commercial or intellectual property rights of any corporation or person.

12.2 No Claims have been asserted challenging any Group Company's use of the Intellectual Property Rights.

12.3 No Group Company has licensed, assigned, authorised or permitted any person or corporation to use the Intellectual Property Rights.

12.4 The Purchaser has been given a complete and accurate list of:

(a) all material registered and unregistered trade marks; and

(b) all material applications for trade marks,

owned or used by any Group Company.

12.5Each Group Company owns or has valid licences to use all of the software that has been or is used in or for the purposes of its business in the period prior to Completion.

Warranty 13 - Insurance

13.1 Each Group Company's insurances will be current until Completion.

13.2 There are no outstanding material Claims made by any Group Company.

13.3 No Group Company has received any notice from an insurer affecting its insurances.

Warranty 14 - Properties

General

14.1 The particulars of the Properties, as disclosed to the Purchaser (and to be set out in the Share Sale Agreement) are true and complete in all respects.

14.2 The Properties are the only land and buildings used or occupied by the Group Companies.

14.3 The Group Companies have right of quiet enjoyment of each of the Properties.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 27

14.4 No notices have been received by a Group Company and there is no order, declaration, report, recommendation or approved proposal of a public authority or government department which would materially affect the use of any of the Properties.

Freehold Properties

14.5 In relation to those Properties which are owned by any Group Company (Freehold Properties):

(a) a Group Company is the registered holder and beneficial owner of the Freehold Properties;

(b) all rates, taxes and levies (including land tax) applicable to the Freehold Properties have been paid; and

(c) no Group Company has sold, agreed to sell, granted any option to sell, lease or sublease or agreed to lease or sublease any of the Freehold Properties.

Leasehold Properties

14.6 In relation to the Properties which are leased by any Group Company (Leasehold Properties):

(a) there are no subsisting material breaches of the leases of the Leasehold Properties (Property Leases); and

(b) no Group Company has received any notice of any breach of the Property Leases.

14.7 The Property Leases:

(a) are valid and subsisting; and

(b) have not been amended or modified.

Warranty 15 - Environment

The Properties are:

(a) not subject to any order or notice issued under any Environmental Law; and

(b) not the subject of any charge in favour of any relevant environmental protection authority as security for the clean-up or other costs under any relevant Environmental Law.

Warranty 16 - Compliance with statutory requirements

16.1 As far as the Vendor is aware:

(a) the Group holds all statutory licences, consents, approvals and authorisations necessary for carrying on the Business and the use of the Property;

(b) each Group Company has complied with the terms of those licences, consents, approvals and authorisations; and

(c) there are no facts which could prejudice renewal or lead to revocation or variation in any material respect of those licences, consents, approvals and authorisations.

16.2 There are no outstanding notices or orders affecting a Group Company or the Business and the Vendor is not aware of any circumstance which may result in the imposition of any such notice or order.

Warranty 17- Information and Due Diligence Material

17.1 As far as the Vendor is aware, all of the information in the Due Diligence Material is accurate and complete in all material respects and is not misleading in any material respect.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 28

17.2 As far as the Vendor is aware, there have been no material omissions in the Due Diligence Material.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 29

Schedule 4 – Limitations

1. Qualifications

(a) The Warranties are given subject to and qualified by, and the Purchaser is not entitled to claim that any fact, matter or circumstance causes any of the Warranties to be breached if and to the extent, but only to the extent, that the fact, matter or circumstance has been fully and fairly disclosed in the Disclosure Letter.

(b) The Warranties are subject to and qualified by the Due Diligence Material, and the Purchaser is not entitled to claim that any fact, matter or circumstance causes any of the Warranties to be breached if and to the extent, but only to the extent, that the fact, matter or circumstance has been fully and fairly disclosed in the Due Diligence Material.

(c) The Warranties are subject to and qualified by Public Searches and the Purchaser is not entitled to claim that any fact, matter or circumstance causes any of those Warranties to be breached if and to the extent, but only to the extent, that the fact, matter or circumstance has been fully and fairly disclosed to the Purchaser as a result of the usual searches undertaken in relation to the Vendor or any Group Company on public registers maintained by any of IP Australia, the High Court of Australia, the Victoria Registry of the Federal Court, the Supreme Court of Victoria, the Victoria Land Titles Office and ASIC (or, where the Purchaser has not undertaken any of those searches prior to the date of these heads of agreement, which would have been fully and fairly disclosed to the Purchaser had the Purchaser undertaken those searches 5 Business Days prior to the date of these heads of agreement).

(d) Where any Warranty is qualified by the words as far as the Vendor is aware this means as far as the Vendor is aware after having examined and checked the relevant books and records of each Group Company and made all proper and reasonable enquiries of David Stevenson, David Wells, Christopher Howes and Jim Furze.

2. Acknowledgments

(a) Subject to paragraph (b), the Purchaser acknowledges and agrees with the Vendor that:

(i) it has had the opportunity to, and has, conducted due diligence investigations in relation to the Group Companies and the Business before the date of this agreement and has had the opportunity to raise such enquiries as it considered necessary with the Vendor in relation to the Group Companies and the Business;

(ii) the Warranties are the only warranties that the Purchaser requires, and on which the Purchaser has relied, in entering into this agreement;

(iii) for the avoidance of doubt, no warranty or representation, expressed or implied, is given in relation to any information or expression of intention or expectation nor any forecast, budget or projection contained or referred to in the Due Diligence Material; and

(iv) to the extent permitted by law, all other warranties, representations and undertakings (whether express or implied and whether oral or in writing) made or given by any entity which is a Group Company or their respective employees, customers, agents or representatives are expressly excluded.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 30

(b) The Vendor acknowledges that, as at the date of these heads of agreement, the Purchaser had not undertaken any legal due diligence in relation to the Vendor, any Group Company or the Business and the Purchaser’s lawyers have not reviewed any of the Due Diligence Material and the Purchaser has not been provided with a complete and uncensored copy of the Fosters Contract and the Purchaser’s lawyers have not reviewed the Fosters Contract.

3. No reliance

(a) Subject to paragraph 2(b) above, the Purchaser acknowledges, and represents and warrants to the Vendor, that:

(i) at no time has:

(A) the Vendor or any person on its behalf made or given; or

(B) the Purchaser relied on,

any representation, warranty, promise or undertaking in respect of the future financial performance or prospects of the Group or otherwise (including in connection with any financial analysis or modelling conducted by the Purchaser or any of their representatives or advisers) except those expressly set out in this agreement (including in the Warranties);

(ii) no representations, warranties, promises, undertakings, statements or conduct:

(A) have induced or influenced the Purchaser to enter into, or agree to any terms or conditions of, this agreement;

(B) have been relied on in any way as being accurate by the Purchaser;

(C) have been warranted to the Purchaser as being true; or

(D) have been taken into account by the Purchaser as being important to its decision to enter into, or agree to any or all of the terms of, this agreement,

except, in the case of the Purchaser, those expressly set out in this agreement (including in the Warranties);

(iii) it has entered into this agreement after satisfactory inspection and investigation of the affairs of the Group, including a reasonable review of all the Due Diligence Material, the Disclosure Letter and the information referred to in paragraph 1(c); and

(iv) it has made, and it relies upon, its own reasonable searches, enquiries and evaluations in respect of the Business (including in connection with any financial analysis or modelling conducted by the Purchaser or any of their representatives or advisers), except to the extent expressly set out in this agreement (including in the Warranties).

(b) The parties acknowledge that the Vendor is not under any obligation to provide the Purchaser or its advisers with any information (including financial information) on the future performance or prospects of the Group. If the Purchaser has received opinions, estimates, projections, business plans, budget information or forecasts in connection with the Group (including in connection with any financial analysis or modelling conducted by the Purchaser or any of their representatives or advisers), the Purchaser acknowledges and agrees that:

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 31

(i) there are uncertainties inherent in attempting to make these opinions, estimates, projections, business plans, budgets and forecasts and the Purchaser is familiar with these uncertainties;

(ii) the Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all opinions, estimates, projections, business plans, budgets and forecasts furnished to it; and

(iii) the Vendor is not liable under any Claim arising out of or relating to any opinions, estimates, projections, business plans, budgets or forecasts in connection with the Group.

(c) The Vendor acknowledges that the Purchaser’s rights under or in relation to the Warranties are not affected by any enquiry or investigation that the Purchaser has made, or should have made, or could have made, in relation to the Vendor, any Group Company or the Business.

(d) The Vendor will indemnify the Purchaser against any loss, cost or expense that the Purchaser or any Group Company might suffer or incur as a result of, or in connection with, any breach of any Warranty and all taxes which the Purchaser might incur as a result of any payment made by the Vendor under this indemnity.

(e) The Vendor represents and warrants that it has not relied on any warranty or conduct by or on behalf of any Group Company which forms, or will form, the basis of any of the Warranties or any matter in the Due Diligence Material. The Vendor will not make any Claim against any Group Company (or any person for whom any Group Company is liable or responsible) as a result of, or in relation to, any claim made by the Purchaser against the Vendor in relation to any of the Warranties.

(f) As at Completion, the Vendor will deliver to the Purchaser a release by the Vendor and each of its related bodies corporate of all Claims which any of them might have against any Group Company.

(g) Each of the Warranties is a separate warranty that is to be construed independently of the other Warranties and is not limited by reference to any of the other Warranties. The Purchaser has entered into this agreement relying on the Warranties.

4. Financial limits on Claims

The Vendor has no liability for a Claim for a breach of any Warranty until the aggregate of all Claims for breach of the Warranties under this agreement exceeds $100,000 in which event the Purchaser may claim the whole amount. Each individual claim must be equal or greater to $20,000.

5. Time limits on Claims

The Vendor has no liability for breach of any Warranty unless:

(a) in the case of a Claim relating to any Warranty other than Warranty 11, the Purchaser has given written notice of the Claim to the Vendor under paragraph 8 on or before the first anniversary of the Completion Date; and

(b) in the case of a Claim relating to Warranty 11, the Purchaser has given written notice of the Claim to the Vendor under paragraph 8 on or before the seventh anniversary of the Completion Date; and

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 32

(c) in either case, unless the Claim has been settled or legal proceedings in a court of competent jurisdiction in respect of the Claim have been commenced by the Purchaser against the Vendor within 1 year of the Claim being notified by the Purchaser under paragraph 8.

6. Other limits on Claims

The liability of the Vendor in respect of any Claim for breach of any Warranty is reduced or extinguished (as the case may be) to the extent that:

(a) the subject matter of any Claim is provided for in the Accounts or for which allowance was made in the adjustments to the Purchase Price; or

(b) the Claim has arisen as a result of or in consequence of any voluntary act, omission, transaction or arrangement of or on behalf of the Purchaser after Completion; or

(c) the Claim is as a result of or in respect of, or where the Claim arises from, any increase in the rate of Tax liable to be paid or any imposition of Tax not in effect at the date of this agreement; or

(d) the Claim occurs or is increased as a result of legislation not in force or in effect at the date of this agreement; or

(e) the Claim occurs as a result of a change after the date of this agreement in any law or interpretation of law; or

(f) as at the date of this agreement, the Purchaser is actually aware of any fact, matter or thing that it knows constitutes a breach of that Warranty.

7. Maximum aggregate liability for Claims

(a) The maximum aggregate liability of the Vendor (including legal costs and expenses incurred in defending a Claim from a third party), as a result of Claims for breach of any of the Title Warranties is limited to the Purchase Price.

(b) The maximum aggregate liability of the Vendor (including legal costs and expenses incurred in defending a Claim from a third party), as a result of Claims for breach of the Warranties (other than the Title Warranties) is limited to $5,000,000.

(c) For the purposes of this clause, a reference to the Title Warranties is a reference to the warranties that relate to the nature or quality of the right, title, interest or claim of the Vendor or any Group Company in or to any of its assets (including, but without limitation, the Shares, the shares in Neqtar Wines or the tangible assets of each Group Company).

8. Notice of potential Claim

If the Purchaser becomes aware of anything which is or may be reasonably likely to give rise to a Claim under this paragraph 8, it must notify the Vendor in writing, within 20 Business Days after it has first come to the Purchaser's attention (Claim Notice), setting out the Warranty the subject of the Claim and the general nature of the Claim, including reasonable detail. The Purchaser will provide the Vendor with whatever information the Vendor may reasonably require about any Claim that is the subject of a notice give pursuant to this clause.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 33

9. Conduct of third party Claims

(a) The Vendor, subject to this paragraph 9, are in respect of an act, matter or thing notified by the Purchaser under paragraph 8, where that act, matter or thing relates to an actual or threatened Claim from a third party, entitled to elect by written notice given to the Purchaser within 10 Business Days of receipt of a Claim Notice to:

(i) take over the conduct of the Claim; and

(ii) take such actions as the Vendor may decide about it, including the right to negotiate, defend and/or settle the Claim and to recover costs incurred as a consequence of the Claim from any person.

(b) Where the Vendor takes over the conduct and/or defence of any claim under this paragraph 9, the Vendor must:

(i) afford the Purchaser the opportunity to consult with the Vendor on all matters of significance for the goodwill of the Business;

(ii) at reasonable and regular intervals provide the Purchaser with written reports concerning the conduct, negotiation, control, defence and/or outcome or settlement of the Claim; and

(iii) provide the Purchaser at other times and from time to time with whatever information the Purchaser may reasonably require concerning the conduct, negotiation, control, defence and/or outcome or settlement of the Claim.

(c) The Purchaser must, and must procure that the Group must, provide the Vendor with access to (with the right to take copies) and make available to the Vendor all relevant personnel, relevant documents, books and records reasonably required for the purpose of the conduct of any Claim under paragraph 9(a).

10. Rights of the Purchaser

If the Purchaser gives the Vendor a Claim Notice under paragraph 8 then, until the Vendor does elects to take over the control of a Claim under paragraph 9, the Purchaser may take such actions as the Purchaser may decide about it, including the right to negotiate, defend and/or settle the Claim and to recover costs incurred as a consequence of the Claim from any person, if:

(a) the Purchaser at reasonable and regular intervals provides the Vendor with written reports concerning the conduct, negotiation, control, defence and/or settlement of the Claim and must not settle the Claim without the prior approval of the Vendor which must not be unreasonably withheld;

(b) the Purchaser affords the Vendor the opportunity to consult with the Purchaser on matters of significance in relation to the conduct, negotiation and settlement of the Claim; and

(c) the Vendor renders to the Purchaser, at the Purchaser’s expense, all such assistance as the Purchaser may reasonably require in disputing any Claim.

11. Costs indemnity

The Vendor indemnifies the Purchaser and the Group against all Liabilities reasonably incurred by, or awarded against, the Purchaser or the Group arising out of the conduct of the Vendor under paragraph 9 or acts required or requested of the Purchaser or the Group in respect of the same, as and when they fall due, including reasonable legal costs and disbursements of the Purchaser's lawyers and Group's lawyers.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 34

12. Warranty payments

Any payment made in respect of a Claim for breach of a Warranty is deemed to be a reduction in the Purchase Price.

13. Benefits or credits received by the Company or the Purchaser

If any payment in respect of a Claim under the Warranties is made to the Purchaser by or on behalf of the Vendor and after the payment is made the Purchaser or any Group Company receives any benefit or credit in relation to the subject matter of the Claim (including payment under any insurance policy), then the Purchaser:

(a) must immediately notify the Vendor of the benefit or credit; and

(b) pay to the Vendor an amount equal to the amount (net of expenses and Tax) of the benefit or credit received by the Purchaser or a Group Company (as the case may be).

14. Trade Practices Act

To the extent permitted by law, the Purchaser agrees not to make, and waives any right it may have to make, any claim against the Vendor or any Associate of the Vendor under section 52 of the Trade Practices Act 1974 (Cth) or the corresponding provision of any State or Territory enactment.

15. Financial forecasts

The parties acknowledge and agree that the Warranties do not apply to any financial forecasts, projections, opinions of future performance or other statements relating to financial prospects of the Group that have been provided by the Vendor or an Associate of the Vendor. No warranty is given or representation made that any such financial forecast, projection or opinion will be met or achieved. Any such information that has been provided to the Purchaser was provided for information purposes only.

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 35

Signing page

EXECUTED as an agreement

Executed by Neqtar Limited
/s/ David J. Stevenson	¬	/s/ David Wells	¬
Signature of director David J. Stevenson		Signature of director/company secretary (Please delete as applicable) David Wells
Name of director (print)		Name of director/company secretary (print)

Executed by Saint James Company
/s/ Wayne Gronquist	¬	/s/ Wayne Gronquist	¬
Signature of director Wayne Gronquist		Signature of director/company secretary (Please delete as applicable) Wayne Gronquist
Name of director (print)		Name of director/company secretary (print)

Minter Ellison | Ref: THW 30-5726382 Heads of agreement | page 36

EX-10.3

EX-10.5

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED.

THE SAINT JAMES COMPANY

WARRANT TO PURCHASE SHARES OF COMMON STOCK

No. SIC-01 October 20, 2008

THIS CERTIFIES THAT, for value received, Samson Investment Company, a Nevada corporation, (the “Grantee”), or Grantee’s assigns (Grantor and Grantor’s assigns being the “Holder”), is entitled to subscribe for and purchase at any time during the Exercise Period from The Saint James Company, a North Carolina corporation, with an office located at Broadway Plaza, 520 Broadway, Suite 350, Santa Monica, California 90401 (the “Company”), a number of shares of Common Stock equal to the Share Number at a per-share price equal to the Exercise Price in effect at such time. This Warrant is issued pursuant to the Designation, Assignment, and Assumption Agreement dated as of October 20, 2008, by and between the Company and the Grantor.

1.DEFINITIONS. As used herein, the following terms shall have the following respective meanings:

(a)“Aggregate Warrant Price” shall mean the dollar value obtained by multiplying $10.00 by 120,000.

(b)“Common Stock” shall mean the common stock of the Company.

(c)“Exercise Period” shall mean the period commencing on October 20, 2008, and ending on October 20, 2013.

(d)“Exercise Price” shall mean $10.00 per share of Common Stock.

(e)“Exercise Shares” shall mean any Common Stock acquired upon exercise of this Warrant.

(f)“Share Number,” at any time, shall mean (i) the Aggregate Warrant Price minus the aggregate exercise price previously paid upon exercise of this Warrant, divided by (ii) the Exercise Price then in effect.

2.EXERCISE OF WARRANT.

2.1General; Exercise of Warrant.

(a)The rights represented by this Warrant may be exercised as a whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):

(i)An executed Notice of Exercise in the form attached hereto;

(ii)Payment of the Exercise Price either in cash or by check; and

(iii)This Warrant.

(b)Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates (and such designation is in compliance with applicable securities laws and any stockholders, investor rights or similar agreement), shall be issued and delivered to the Holder as promptly as practicable after the rights represented by this Warrant shall have been so exercised.

(c)The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

3.COVENANTS OF THE COMPANY.

3.1Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

3.2No Impairment. Except and to the extent as waived or consented to by the Holder, the Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

3.3Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

4.REPRESENTATIONS OF THE HOLDER.

4.1Acquisition of Warrant for Holder’s Account. The Holder represents and warrants that it is acquiring the Warrant and any shares of capital stock issued or issuable upon exercise or conversion of the Warrant for investment purposes only and not with a view to or for resale in connection with any distribution or public offering thereof within the meaning of the Securities Act. The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, the account of the Holder only.

4.2Accredited Investor. The Holder represents and warrants that, unless not a “U.S. Person” as defined below, the Holder it is an “accredited investor” as such term is defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”). The Holder shall provide the Company with such additional information as the Company may reasonably request with respect to the Holder’s status as an “accredited investor.”

4.3Securities Are Not Registered.

(a)The Holder understands that the Warrant and the Exercise Shares have not been registered under the Securities Act, on the basis that no distribution or public offering of the stock of the Company is to be effected, or registered or qualified under any applicable state securities laws. The Holder realizes that the basis for the exemption may not be present if, notwithstanding its representations, the Holder has a present intention of acquiring the securities for a fixed or determinable period and, in the future, selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the securities. The Holder has no such present intention.

(b)The Holder recognizes that the Warrant and the Exercise Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. The Company has no obligation to register the Warrant or the Exercise Shares of the Company, or to comply with any exemption from such registration.

(c)The Holder is aware that neither the Warrant nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions specified therein are met. For so long as the Warrants are outstanding and for the one-year period thereafter, the Company will use its best efforts to satisfy these conditions.

(d)The Holder is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company. The Holder is experienced in making investments of this type and has such knowledge and background in financial and business matters that the Holder is capable of evaluating the merits and risks of this investment and protecting its own interests. The Holder has had an opportunity to ask questions of, and receive answers from, the Company and its officers and employees regarding the business, financial affairs and other aspects of the Company, and has further had the opportunity to obtain information (to the extent the Company possesses or can acquire such information without unreasonable effort or expense) which the Holder deems necessary to evaluate an investment in the Company and to verify the accuracy of information otherwise provided to the Holder.

4.4Disposition of Warrant and Exercise Shares.

(a)Except for transfers by the Holder to its affiliates in compliance with all applicable securities laws, the Holder further agrees not to make any disposition of all or any part of the Warrant or Exercise Shares in any event unless and until:

(i)The Company shall have received a letter secured by the Holder from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition; or

(ii)There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or

(iii)The Holder shall have shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the effect that such disposition will not require registration of such Warrant or Exercise Shares under the Securities Act or any applicable state securities laws.

(b)The Holder understands and agrees that all certificates evidencing the Exercise Shares to be issued to the Holder may bear the following legend (in addition to any legend required under applicable state securities laws, the Company’s Bylaws, or as provided elsewhere in this Warrant):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED.

5.ADJUSTMENTS AND NOTICES. The Exercise Price and the number of Exercise Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time in accordance with this Section 5.

5.1Subdivision, Stock Dividends or Combinations. In case the Company shall at any time after the commencement of the Exercise Period subdivide the outstanding Common Stock or shall issue a stock dividend with respect to the Common Stock, the Exercise Price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the Company shall at any time after the commencement of the Exercise Period combine the outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such combination shall be proportionately increased, in each case effective at the close of business on the date of such subdivision, dividend, or combination, as the case may be.

5.2Reclassification, Exchange, Substitution, In-Kind Distribution. Upon any reclassification, exchange, substitution or other event after the commencement of the Exercise Period that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant or upon the payment after the commencement of the Exercise Period of a dividend in securities or property other than shares of Common Stock, the Holder shall be entitled

to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received if this Warrant had been exercised or converted immediately before the record date for such reclassification, exchange, substitution, or other event or immediately prior to the record date for such dividend. The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property. The new warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5, including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise or conversion of the new warrant. The provisions of this Section 5.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events and successive dividends.

5.3Consolidation, Merger, Sale and the Like. In case of any (i) merger or consolidation of the Company into or with another corporation where the Company is not the surviving corporation (but including a merger for the purpose of reincorporating in a new domicile) (ii) sale, transfer or lease (but not including a transfer or lease by pledge or mortgage to a bona fide lender) of all or substantially all of the assets of the Company or (iii) sale by the Company’s stockholders of 50% or more of the Company’s outstanding securities in one or more related transactions, the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the Holder hereof a new warrant so that the Holder shall have the right to receive upon exercise or conversion of the unexercised or unconverted portion of this Warrant, at a total purchase price not to exceed that payable upon the exercise or conversion of the unexercised or unconverted portion of this Warrant, and in lieu of shares of Common Stock theretofore issuable upon exercise or conversion of this Warrant, the kind and amount of shares of stock, or other securities, money and other property in lieu of such shares of stock, receivable upon or as a result of such reorganization, merger, or sale by a holder of the number of shares of Common Stock for which this Warrant is exercisable or convertible immediately prior to such event. Such new warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this Section 5.3 shall similarly apply to successive reorganizations, mergers, and sales.

5.4In each case of an adjustment or readjustment of the Exercise Price pursuant to this Section 5, the Company, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Holder at the Holder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in reasonable detail the facts upon which such adjustment or readjustment is based, including a statement of, if applicable, the type and amount, if any, of other property which at the time would be received upon exercise of this Warrant.

6.FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. No payments shall be made by the Company in respect of any fractional shares otherwise issuable pursuant to this Warrant.

7.NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.

8.TRANSFER OF WARRANT. Subject to applicable laws, the restriction on transfer set forth on the first page of this Warrant and in Section 4.4 and the terms of any applicable

stockholders, investor rights, or similar agreements, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder, provided that the transferee shall have signed an investment letter in form and substance satisfactory to the Company and agreed to be bound by the provisions of this Warrant. Notwithstanding anything to the contrary, no partial transfer of this Warrant shall be permitted.

9.LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant is lost, stolen, mutilated, or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

10.NOTICES, ETC. All notices and other communications required or permitted hereunder shall be in writing and shall be sent by express mail or other form of rapid communications, if possible, and if not then such notice or communication shall be mailed by first-class mail, postage prepaid, addressed in each case to the party entitled thereto at the following addresses: (a) if to the Company, to The Saint James Company, Attention: President, at Broadway Plaza, 520 Broadway, Suite 350, Santa Monica, California 90401, and (b) if to the Holder, to such address as originally furnished to the Company by the Holder, or at such other address as one party may furnish to the other in writing. Notice shall be deemed effective on the date dispatched if by personal delivery, two days after mailing if by express mail, or three days after mailing if by first-class mail.

11.AMENDMENT. This Warrant may be amended or otherwise modified only by a writing signed by the Company and the Holder.

12.ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

13.GOVERNING LAW; FORUM. This Warrant and all rights, obligations, and liabilities hereunder shall be governed by the internal laws of the State of North Carolina and any actions related hereto shall be brought in a court of competent jurisdiction located in the County of Wake, State of North Carolina.

[NEXT PAGE IS SIGNATURE PAGE]

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of the date first written above.

THE SAINT JAMES COMPANY,

a North Carolina corporation

By:

Name: Wayne Gronquist

Title: President

ATTEST:

NOTICE OF EXERCISE

TO: THE SAINT JAMES COMPANY

The undersigned, pursuant to the provisions set forth in the attached Warrant (No. SIC-01), hereby irrevocably elects to purchase (check applicable box):

[___]________ shares of the Common Stock covered by such Warrant.

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________ in lawful money of the United States.

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _________________________________________________________ whose address is ___________________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________________________________

The undersigned represents that (i) the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment purposes only and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares; (ii) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned is an “accredited investor” as defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”); (v) the undersigned understands that the shares of Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (vi) the undersigned is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the undersigned has held the shares for the number of years prescribed by Rule 144; and (vii) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or the undersigned has provided the Company with an opinion of counsel satisfactory to the Company, stating that such registration is not required.

_________________________________________________
(Date)   _________________________________________________ (Signature)   _________________________________________________ (Print name)

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply the required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

Name:  ______________________________________________________________

Address:  ____________________________________________________________

(Please Print)

Dated: ________________, 20__

Holder’s

Signature:  ____________________________________________________________

Holder’s

Address:  _____________________________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

EX-99.4

 

The Saint James Company Contact:

Randolf W. Katz

c/o Bryan Cave LLP

3161 Michelson Drive, Suite 1500

Irvine, California 92612

email: rwkatz@bryancave.com

phone: 949-223-7103

THE SAINT JAMES COMPANY ENTERS INTO LETTER OF INTENT FOR
POTENTIAL ACQUISITION OF AUSTRALIAN WINE COMPANY

Irvine, CA (October 27, 2008) – The Saint James Company (OTCBB: STJC), today announced that it has executed a “Heads of Agreement” with Neqtar Wines PTY LTD, an Australian company that produces and supplies wine. The Agreement sets forth certain terms of Saint James’ potential acquisition of Neqtar.

Wayne Gronquist, acting Chief Executive Officer and Chief Financial Officer of Saint James, said: “We are pleased to have entered into the Heads of Agreement with Neqtar.” Mr. Gronquist continued, “The status of these negotiations thus far evidence our dedication to enter the wine industry in a substantial way and we look forward to a prompt closing of the Neqtar acquisition subject to the negotiation of the definitive acquisition agreement, the completion of our due diligence, and the satisfaction of standard closing and financing conditions.”

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release contains statements that are forward-looking, such as statements related to the future anticipated direction of the industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, and potential contracts. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of, the company. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, and domestic and global economic conditions.

CONTACT: The Saint James Company

Randolf W. Katz

c/o Bryan Cave LLP

Tel: 949 223-7103