NEW ZEALAND GAZETTE, No. 4 — 20 JANUARY 2016

(c) the Promoter’s performance in prior syndications or Offers has been satisfactory;

(d) the fees, charges, commissions, margins over valuation are reasonable and not such that they may bring the industry into disrepute; and

(e) the status of the Promoter has not materially changed in terms of the criteria for the approval of Authorised Syndicator Status since the Promoter was granted Authorised Syndicator Status or the last syndication or Offer by the Promoter.

4.4 If a Disclosure Statement is not approved by the Board, it may be replaced and resubmitted to the Chief Executive or if approved by the Board an addendum to the Disclosure Statement may be utilised to rectify any requisition of the Board made pursuant to clause 4.1(b) of this Code of Practice.

5 ADVERTISING

5.1 Advertisements must not be misleading or factually incorrect or be likely to bring the thoroughbred industry into disrepute and must otherwise comply with the requirements of the "fair dealing" provisions in Part 2 of the Financial Markets Conduct Act 2013 (which prohibit misleading or deceptive conduct, the making of false or misleading representations and the making of unsubstantiated representations) as if Shares were "financial products" within the meaning of that Act.

5.2 A Promoter must notify the Chief Executive of the proposed advertising of an Offer and the intended publications in which Advertisements for the Offer will appear.

5.3 Each Advertisement must comply with clause 3.1 and state clearly that applications for Shares can only be made after an Applicant has received and signed a Disclosure Statement. In addition, each Advertisement must state the name of the Promoter.

5.4 A Promoter may submit an Advertisement to the Board through the Chief Executive for review prior to its publication, broadcast or distribution.

5.5 If an Advertisement is considered or observed by the Board to not comply with this Code of Practice the Board may require the Advertisement to be amended or, if already published or distributed, to be withdrawn from publication or distribution and require the Promoter to notify all Applicants under the Offer of the matters in respect of which the published Advertisement was non-compliant and such other information which the Board considers is required to remedy the deficiency.

5.6 The notice referred to in clause 5.5 must be approved by the Board and no Shares may be Issued under the Offer until the notice has been provided to all Applicants.

6 BANK ACCOUNT / FINANCIAL DEALINGS

6.1 The directors must establish a separate bank account for a Bloodstock Company. All moneys received by the Bloodstock Company must immediately be deposited into that bank account by the Promoter.

6.2 Subject to Clause 6.4, a Promoter must establish a separate bank account or trust bank account for each Bloodstock Syndicate. All moneys received by the Promoter in respect of a Bloodstock Syndicate must immediately be deposited into that bank account by the Promoter.

6.3 All monies received from an Applicant are to be held in trust pending the Issue of Shares to that Applicant or the refund of those monies to that Applicant under clause 4.1(e) or 7.2.

6.4 A Promoter is not required to comply with Clause 6.2 so long as the Bloodstock Syndicate meets the following criteria:

(a) The Participants are each holders of an interest in Bloodstock, whether as an owner or as a lessee;

(b) the Bloodstock Syndicate is a joint venture or co-ownership arrangement and not a partnership, a limited partnership or an unincorporated body of persons which at law has a financial reporting obligation (as a body);

(c) the Participants are each invoiced by the Promoter or the vendor for the initial cost of their respective interest in the Bloodstock and the Participants are each periodically invoiced by the Promoter or the relevant suppliers or service providers for their respective proportion of the on-going costs and expenses incurred in relation to the Bloodstock, and the Participant is required to pay those costs and expenses in accordance with each such invoice;

(d) the Promoter and any Associated Person of the Promoter must, on written request of either a Participant or the Chief Executive, provide supporting invoices or other evidence for costs invoiced in accordance with 6.4(c);

(e) unless the Governing Document provides otherwise, stake winnings, prize money or bonus payments received in excess of current invoicing period costs less any arrears owing are disbursed to individual Participants rather than retained to meet future costs; and

(f) the Offer is fully underwritten by the Promoter.