EXHIBIT 99.1
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Joint Venture and
Shareholders' Agreement
xxxxxxx.xxx, Inc,
GlobalNet Asia Pacific Pty Ltd
Entrade Asia Pacific Pty Ltd
CONTENTS
ARTICLE 1. INTERPRETATION 2
1.1 Certain Definitions 2
1.2 Interpretation 5
1.3 Business Days 6
ARTICLE 2. ESTABLISHMENT, PURPOSE, TERRITORY AND
METHODOLOGY OF EAP 6
2.1 Establishment of Joint Venture 6
2.2 Name of Company and Intellectual
Property 6
2.3 Purpose 6
2.4 Territory 7
2.5 Acquisition of Rights 7
2.6 Methodology 7
2.7 Use of Servicemarks 8
ARTICLE 3. CONFIDENTIALITY AND NON-COMPETITION 8
3.1 Confidentiality 8
3.2 Equitable Relief; Enforceability 9
3.3 Termination of this Agreement and
Confidentiality 9
3.4 Non-Derogation of Master License
Agreement 9
3.5 Non-Competition 9
ARTICLE 4. TRANSACTIONS BETWEEN EAP AND XXXXXXX.XXX OR
GAP 10
ARTICLE 5. CONDITIONS PRECEDENT TO CLOSING 10
5.1 Condition Precedent to the Obligations of
the Parties 10
5.2 Non-fulfilment of Conditions 11
5.3 Waiver 11
5.4 Obligation to satisfy Conditions
Precedent 11
ARTICLE 6. FORMATION AND CAPITALISATION OF EAP 11
6.1 Formation of EAP 11
6.2 Capitalisation of EAP 11
6.3 Name of EAP 12
6.4 Place of Business 12
ARTICLE 7. CONTRIBUTIONS, OWNERSHIP, BUDGET
AND OTHER FINANCIAL TERMS 12
7.1 Ongoing Contributions 12
7.2 Initial Budget 13
7.3 Initial Performance Review 13
7.4 License Agreement 13
7.5 Costs of GAP and xxxxxxx.xxx 13
7.6 Distribution from EAP 13
ARTICLE 8. MANAGEMENT OF EAP 14
8.1 Board of Directors 14
8.2 Board of Directors 17
8.3 Budgets 17
8.4 Management Reports 17
8.5 Borrowing from Shareholders 18
8.6 Repayment of loans from Shareholders 18
8.7 Shareholder Guarantees 18
8.8 Indemnities 18
8.9 Procuring Resignations 19
8.10 Management 19
8.11 Officers' Indemnity, Insurance and
Access 19
8.12 Board Papers 20
ARTICLE 9. RESTRICTIONS ON SHARE TRANSFER AND
SUBSCRIPTION OF NEW SHARES 21
9.1 Subscription to New Securities 21
9.2 Restrictions on Share Transfer 21
9.3 Accession 23
9.4 Notice on Share Certificates 23
9.5 Dilution 23
9.6 Election by Non-Reducing Shareholder 24
9.7 Issue of Shares to Increasing Party 24
9.8 Authorisation 24
9A SALE OF SHARES IN EAP - PIGGYBACK OPTION 24
9A.1 Definitions 24
9A.2 Piggyback Option 25
9A.3 Piggyback Option Period 25
9A.4 Piggyback Notice 25
9A.5 Piggyback Notice Irrevocable 25
9A.6 Piggyback Price 25
9A.7 Reasonable Steps 25
9A.8 Prohibition on Sale 26
9A.9 Completion of Sale 26
9B SALE OF SHARES IN EAP AFTER 1 MAY 2005 26
9B.1 Disposal of Shares After 1 May 2005 26
9B.2 Exit Transfer Notice 26
9B.3 Offer Accepted - Transfer to
Exit Offerees 27
9B.4 Offer Rejected - Transfer to
Exit Third Party 28
9B.5 Come Along Option 28
9B.6 Come Along Option Period 28
9B.7 Come Along Notice 28
9B.8 Come Along Notice Irrevocable 28
9B.9 Come Along Price 28
9B.10 Obligation to Sell 28
9B.11 Completion of Sale 28
9B.12 Default by Called Shareholders 29
ARTICLE 10. INSURANCE 29
ARTICLE 11. TERMINATION AND WITHDRAWAL 29
11.1 Term 29
11.2 Termination 29
11.3 Withdrawal 30
11.4 Sections to survive termination
or withdrawal 30
11.5 Agreement ceasing to apply 30
11.6 EAP to be wound up 30
ARTICLE 12. REPRESENTATIONS AND WARRANTIES 30
ARTICLE 13. DISPUTE RESOLUTION 31
13.1 Arbitration 31
13.2 Governing Law 31
ARTICLE 14. MISCELLANEOUS PROVISIONS 31
14.1 Additional Actions and Documents 31
14.2 Notices 31
14.3 Severability 33
14.4 Survival 33
14.5 Waivers 33
14.6 Exercise of Rights 33
14.7 Binding Effect 34
14.8 Limitation on Benefits of this Agreement 34
14.9 No Partnership/Agency 34
14.10 Amendment Procedure 34
14.11 Entire Agreement 34
14.12 Pronouns 34
14.13 Execution in Counterparts 34
14.14 Certificate and Constitution 35
14.15 Announcements 35
14.16 Expenses 35
ARTICLE 15. RIGHTS ATTACHING TO A AND B CLASS SHARES 35
15.1 A Class Share 35
15.2 B Class Share 35
15.3 Rights in Constitution 36
EXHIBIT A
EXHIBIT B
JOINT VENTURE AND SHAREHOLDERS' AGREEMENT
DATE April 2000
PARTIES
xxxxxxx.xxx, Inc., a United States of America corporation
organized and existing under and by virtue of the laws of the State
of Delaware and having its principal offices at 000 Xxxxxxxxxx Xxxx,
Xxxxx 000, Xx. Xxxxxx, Xxx Xxxxxx 00000 ("xxxxxxx.xxx")
GlobalNet Asia Pacific Pty Ltd, ACN 090 616 685, (formerly
known as Gondwana Globalnet Pty Ltd) a corporation organized and
existing under and by virtue of the laws of Western Australia and
having its principal offices at Xxxxxx Xxxxx, Xxxxxx Xxxxxx, 000
Xxxxxxxx Xxxxxxx, Xxxxx, Xxxxxxx Xxxxxxxxx ("GAP")
Entrade Asia Pacific Pty Ltd ACN 092 146 426 a corporation
organised and existing under and by virtue of the laws of Western
Australia and having its principal offices at Xxxxxx Xxxxx, Xxxxxx
Xxxxxx, 000 Xxxxxxxx Xxxxxxx, Xxxxx, Xxxxxxx Xxxxxxxxx ("EAP").
RECITALS
A. WHEREAS, xxxxxxx.xxx:
(a) has developed and owns all rights in and to certain
computer software known as the xxxxxxx.xxx transaction software
(version 4.0), an on-line business to business e-commerce software
system using the xxxxxxx.xxx transactional technology and featuring
general e-commerce, procurement, spot market, bidding, asset
management, redeployment and disposition services and will develop
and own from time to time updates and upgrades thereto (the
"xxxxxxx.xxx Software");
(b) has developed and owns certain trade-related marketing,
sales and financial modelling methodologies and other commercial
marketing programs (the "xxxxxxx.xxx Programs"); and
(c) has developed and obtained certain applications and
services provided by xxxxxxx.xxx itself or the provision of which is
procured by xxxxxxx.xxx, including fulfilment and on-line
transactional services to support procurement, sales, asset and
inventory management and disposition services (the "xxxxxxx.xxx
Applications and Services").
B. WHEREAS, GAP will provide management services to EAP
concerning the use of the Internet and e-commerce for the marketing
and sale of products, the purchasing of products and the
acquisition, disposition, and management of equipment, inventory,
and other assets.
C. WHEREAS, xxxxxxx.xxx and GAP have agreed to form a joint
venture using EAP as the joint venture vehicle for the purpose set
forth herein in Article 2, until terminated in accordance with
Article 12.
D. WHEREAS, EAP has entered into the Master License
Agreement, which is effective on and from the Closing Date, and is
subject to satisfaction of the conditions precedent in Section 5.1
of this Agreement.
E. WHEREAS, Gondwana and EAP have entered into the Loan
Agreement in respect of the Loan.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations set forth herein, and each intending to be
legally bound hereby, the Parties hereto agree as follows:
ARTICLE 1. INTERPRETATION
1.1 Certain Definitions
The following terms, as used in this Agreement, shall have the
following meanings:
"Agreement" shall mean this Joint Venture and Shareholders'
Agreement.
"Affiliate" shall mean, with respect to any Party, any person
that, alone or together with any other Person, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Party; provided,
however, that EAP shall not be considered to be the Affiliate of
xxxxxxx.xxx or GAP. For the purpose of this definition, "control"
(including the terms "controlled by" and "under common control
with"), as used with respect to any Party, shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of such Party, whether
through the ownership of voting securities, by contract, agency or
otherwise.
"A Class Share" means A class share in the capital of EAP to be
issued on and subject to the terms and conditions set out in Section
15.1.
"Board of Directors" shall mean the Board of Directors of EAP.
"Board Papers" means all existing and future documents
(including board papers, submissions, minutes, memoranda, board
committee papers and documents referred to in any of those
documents):
(a) provided by or on behalf of EAP to any Director of EAP in
that capacity; and
(b) if a Director is appointed a director of a wholly owned
subsidiary of EAP, provided by or on behalf of EAP or that
subsidiary to the Director or any other director of that subsidiary
in that capacity.
"B Class Share" means B class share in the capital of EAP to be
issued on and subject to the terms and conditions set out in Section
15.2.
"Business" means the business of EAP which is to undertake the
Purpose.
"Business Day" means:
(a) for determining when a notice, consent or other
communication is given, a day that is not a Saturday, Sunday or
public holiday in the place to which the notice, consent or other
communication is sent; and
(b) for any other purpose, a day (other than a Saturday,
Sunday or public holiday) on which banks are open for general
banking business in both New York and Perth.
"Budget" means, collectively and individually, the Initial
Budget, the Capital and Development Budget and the Operating Budget.
"Capital and Development Budget" means a budget for the
purchase of fixed assets, the start-up costs of the Business and/or
any future expansion costs (such as those associated with opening a
new branch or regional office) in excess of $50,000.
"Certificate" means the Certificate of Registration of EAP
issued by the Australian Securities and Investments Commission.
"Change of Control" shall have the meaning set forth in
Section 9.2(g).
"Claim" means a liability, claim, suit, action or demand in
relation to Officer's Liability whether actual or contingent and
whether fixed or unascertained.
"Closing Date" means seven days after the End Date, or such
other date as is agreed in writing by the Parties.
"Constitution" shall mean the Constitution of EAP in the form
set out in Exhibit "B".
"Director" shall have the meaning set forth in Section 8.1(a)
hereto.
"D&O Policy" means an insurance policy against Officer's
Liability.
"Disclosing Party" shall have the meaning given set forth in
Section 3.1 hereto.
"EAP" shall have the meaning set forth in the opening paragraph
of this Agreement.
"End Date" means the date which is 70 days after the date of
execution of this Agreement.
"xxxxxxx.xxx" shall have the meaning set forth in the opening
paragraph of this Agreement.
"xxxxxxx.xxx Applications and Services" shall have the meaning
set forth in the recitals hereto.
"xxxxxxx.xxx Programs" shall have the meaning set forth in the
recitals hereto.
"xxxxxxx.xxx Software" shall have the meaning set forth in the
recitals hereto.
"Equity Proportion" means the proportion (expressed as a
percentage) which the number of Shares held by a Shareholder bears
to the total number of issued Shares from time to time.
"GAP" shall have the meaning set forth in the opening paragraph
of this Agreement.
"Gondwana" means Gondwana Resources NL ACN 008 915 311, the
parent company of GAP.
"Government Agency" means:
(a) a government or government department or other body;
(b) a governmental, semi-governmental or judicial person; or
(c) a person (whether autonomous or not) who is charged with
the administration of a law.
"Increasing Party" shall have the meaning set forth in section
9.6.
"Information" shall have the meaning set forth in Section 3.1
hereto.
"Initial Budget" shall have the meaning set forth in Section
7.2 hereto.
"Initial Vertical Markets" shall have the meaning set forth in
Section 2.3(b) hereto.
"Intellectual Property" means business names, copyrights,
patents, trademarks, service marks, trade names, designs,
proprietary information, and trade secrets and similar industrial,
commercial and intellectual property.
"License Fee" means the license fee to be paid by EAP pursuant
to the terms of the Master License Agreement.
"Loan" means the loan the subject of the Loan Agreement.
"Loan Agreement" means the loan agreement dated on or about the
date of this Agreement between Gondwana and EAP on and subject to
which Gondwana may advance to EAP a loan of US$7,000,000 in
aggregate.
"Master License" shall mean the master software license granted
pursuant to the Master License Agreement.
"Master License Agreement" shall mean the software license
agreement entered into between xxxxxxx.xxx and EAP in substantially
the form of Exhibit "A" attached hereto and made a part hereof.
"Non-Reducing Shareholder" shall have the meaning set forth in
section 9.5.
"Notice" shall have the meaning set forth in section 9.5.
"Officer's Liability" means liability incurred as an officer of
EAP or any of its subsidiaries, including liability incurred as a
result of appointment or nomination of EAP or any of its
subsidiaries as a trustee or as an officer of another corporation.
"Operating Budget" means a budget in respect of the recurring
costs of operating the Business and any non-recurring items not
covered in a Capital and Development Budget.
"Parties" means xxxxxxx.xxx, GAP and EAP, and "Party" means any
one of them.
"Person" shall mean any individual, corporation, association,
partnership, limited liability company, joint venture, trust,
estate, or other entity or organization.
"Purpose" shall have the meaning set forth in Section 2.3
hereto.
"Reducing Shareholder" shall have the meaning set forth in
section 9.5.
"Remaining Shareholder" shall have the meaning set forth in
section 9.2(a).
"Re-offer Period" shall have the meaning set forth in section
9.2(b)(iii).
"Selling Shareholder" shall have the meaning set forth in
section 9.2(a).
"Shareholder" and "Shareholders" means the holder or holders of
at least 1 Share in EAP, and with effect from the Closing Date means
GAP and xxxxxxx.xxx.
"Share" means a fully paid ordinary share in EAP.
"Technology and Services" shall have the meaning set forth in
Section 2.3(a) hereto.
"Term" shall have the meaning set forth in Section 11.1 hereto.
"Territory" shall have the meaning set forth in Section 2.4
hereto.
"Transaction Documents" means this Agreement, the Constitution
and the Master License Agreement.
1.2 Interpretation
All terms defined in this Agreement shall have their defined
meanings when used in any certificate, report or other document or
instrument made or delivered pursuant hereto. All exhibits shall be
considered integral parts of this Agreement. Defined terms in the
singular shall include the plural and vice versa. Headings in this
Agreement are used for convenience of reference only and do not
limit or affect the interpretation of the provisions hereof.
References to articles, sections and exhibits are to Articles of,
Sections of and Exhibits to this Agreement. No representation,
undertaking or promise shall be taken to have been given or be
implied from anything said or written in negotiations among the
Parties prior to the execution of this Agreement, except as set out
herein.
Unless otherwise specifically set forth herein, any reference
to "$" or "dollars" shall be deemed to refer to United States
dollars.
1.3 Business Days
If the day on or by which a person must do something under this
Agreement is not a Business Day:
(a) if the act involves a payment that is due, the person must
make such payment on or by the next Business Day; and
(b) in any other case, the person must do it on or by the
previous Business Day.
ARTICLE 2. ESTABLISHMENT, PURPOSE, TERRITORY AND METHODOLOGY
OF EAP
2.1 Establishment of Joint Venture
The Shareholders agree that EAP shall carry on the Business
under the terms of the Transaction Documents.
2.2 Name of Company and Intellectual Property
(a) Subject to the provisions of Section 6.2 hereof, the name
"Entrade Asia Pacific" is the property of EAP.
(b) All Intellectual Property owned and developed by EAP
remains the property of EAP and Shareholders must not use it without
the written consent of EAP and each other Shareholder; provided,
however, that ownership of the Licensed Product and the Licensed
Marks (as such terms are defined in the Master License Agreement)
shall be governed by the terms of the Master License Agreement and
except as provided in Section 2.2(a) hereof nothing contained
herein shall be deemed to modify or affect any provision of the
Master License Agreement, the parties specifically agreeing that,
(i) nothing contained herein shall create a license, whether express
or implied, for either EAP or GAP to use any Intellectual Property
of Entrade, and (ii) in the event of any inconsistency between this
Agreement and the Master License Agreement, the terms of the Master
License Agreement shall control.
2.3 Purpose
The purpose of EAP shall be:
(a) to develop business to business market maker companies
through associations, joint venture and/or strategic alliances (the
"Entrade Model");
(b) to market and sub-license within the Territory:
(i) the xxxxxxx.xxx Software;
(ii) the xxxxxxx.xxx Programs; and
(iii) the xxxxxxx.xxx Applications and Services
(together, the "Technology and Services");
(c) to establish three business to business internet
communities (the "Initial Vertical Markets"), for the following
industries:
(i) the agricultural industry;
(ii) the mining industry; and
(iii) the energy industry, including oil and gas
exploration and production,
together with such other vertical markets as the Parties
may mutually agree upon from time to time;
(d) to generate revenue from multiple sources and using
various means including, but not limited to, those set forth in
Section 2.3(a), (b) and (c) and Section 2.6 hereto;
(e) to enter into any lawful transaction and engage in any
lawful activities in furtherance of the foregoing and as may be
necessary, incidental or convenient to carry out the business of EAP
as contemplated by this Agreement,
(collectively the "Purpose").
2.4 Territory
EAP shall have the right to carry on its business in the
following jurisdictions: Australia, New Zealand, Republic of the
Philippines, Singapore, Malaysia, Indonesia, China, South Korea,
Macao, Taiwan, Myanmar, Sri Lanka, Thailand, Cambodia, Laos,
Vietnam, Papua New Guinea and Hong Kong (the "Territory").
2.5 Acquisition of Rights
Pursuant to a deed of acquisition and release dated on or about
the date of this Agreement, EAP will acquire from xxxxxxx.xxx
certain rights in relation to the exploitation of the Technology and
the Services which would otherwise have been granted to Karexx
Corporation, Inc., in consideration for GAP procuring that Gondwana
issue to, or at the direction of xxxxxxx.xxx 275,000 ordinary shares
in Gondwana (credited as fully paid) on the Closing Date.
2.6 Methodology
EAP will generate revenue from multiple sources and using
various means including, but not limited to, the following
activities: franchising of the Technology and Services, the
purchase and sale of the inventory or assets of users of the
Technology and Services and vertical markets and other customers of
EAP, asset control services, marketing efforts, technology
licensing/sub-licensing, entering into
joint ventures and other strategic alliances, advertising fees,
auction services, and transaction fees and utilizing the fulfilment
channels operated by EAP or xxxxxxx.xxx within the Initial Vertical
Markets, and any other vertical markets.
2.7 Use of Servicemarks
Any and all web sites established by EAP using the xxxxxxx.xxx
Software directly or through any sub-licenses will bear
xxxxxxx.xxx's "Powered by Entrade" service xxxx, or such other
service marks incorporating the name "entrade" as are approved by
xxxxxxx.xxx in writing from time to time, on the home page or
initial entry page and every HTML page and ASP page on such web
site. The Master License Agreement includes a licence to use
xxxxxxx.xxx logos for applicable marketing and public relation
activities.
ARTICLE 3. CONFIDENTIALITY AND NON-COMPETITION
3.1 Confidentiality
The Parties acknowledge and agree that, in order to maximize
the potential for success of EAP, the exchange of confidential and
proprietary information with respect to each other's business has
been and shall remain essential. Each Party shall at all times
during the Term, and thereafter for a period of two (2) years, in
accordance with Section 3.3, use its best efforts and take all
appropriate steps to safeguard the secrecy and confidentiality of
the other Parties' (in this capacity, each a "Disclosing Party")
marketing plans, customer information, specialized information, data
bases, financial information, technology, software, know-how and
other confidential information regarding the other Parties and their
activities (the "Information"). Each Party agrees as follows:
(a) Only those employees and professional advisers of the
Shareholders and EAP, or their Affiliates, who need to know the
Information of any other Party in order to carry out the Purpose
shall have access to such Information, and such access shall be
limited only to so much of such Information as is necessary for the
particular employee or professional adviser to perform his function.
(b) No Party shall disclose, or allow any of its employees,
professional advisers or Affiliates to disclose, any of the
Information of any other Party to any third party (other than an
employee or professional adviser of a Party or its Affiliates, which
disclosure is governed by Section 3.1(a)) without the approval of
the Disclosing Party, it being understood that such approval shall
not be given unless and until the third party shall have agreed to
execute an agreement of confidentiality, in a form reasonably
satisfactory to the Disclosing Party, obligating the third party not
to reveal the Information except on the terms provided therein.
(c) A Party shall not, and shall not allow its employees,
professional advisers or Affiliates to, make use of any of the
Information except in furtherance of the business of EAP, or except
pursuant to a written agreement between the Parties.
(d) This Section 3.1 shall not apply to any Information which
is or becomes generally available to the public under circumstances
which do not involve a breach of the terms of Sections 3.1(a), (b)
or (c).
(e) Notwithstanding the foregoing provisions, each Party shall
have the unqualified right to:
(i) use and disclose any Information which it maintains,
develops or generates independently of the other Parties, and which
does not relate to the activities of the other Parties; and
(ii) disclose any information required to be disclosed by
law, regulation, administrative or judicial order, or the rules of
any stock exchange on which a Party or its Affiliates are listed.
3.2 Equitable Relief; Enforceability
Each Party acknowledges that the other Parties may be severely
damaged by any breach or violation of the provisions of Section 3.1
hereof, and that such damages may not be adequately compensated by
money damages. Accordingly, each Party shall independently be
entitled to apply to a court for equitable relief, including
temporary and permanent injunctions, against any actual or
threatened breach of the covenants set forth in this Article 3 by
any Party, its assignees or Affiliates, without having to
demonstrate special or unique damages, in addition to all other
rights and remedies which may otherwise be available to it in law or
at equity.
3.3 Termination of this Agreement and Confidentiality
The Parties agree that if this Agreement is terminated or
otherwise expires, or a Party otherwise ceases to be bound by this
Agreement, the Parties shall continue to be fully bound by the
provisions of Article 3 hereto for a period of two years following
the expiration or termination of this Agreement, or the date on
which the Agreement otherwise ceases to bind that Party (as the case
may be).
3.4 Non-Derogation of Master License Agreement
The provisions of this Article 3 shall not be interpreted to
derogate any provisions of the Master License Agreement with respect
to confidentiality.
3.5 Non-Competition
(a) Restriction: Subject only to clauses 3.5(b) and 3.5(c),
for a period of 2 years following the Closing Date, xxxxxxx.xxx
shall not do anything which would or might reasonably be expected to
result in xxxxxxx.xxx or any other entity competing (whether
directly or indirectly) in any material respect with that aspect of
EAP's business described in Section 2.3(b) in the Territory.
(b) 1st Anniversary Review: If, as at the 1st anniversary of
the Closing Date, xxxxxxx.xxx is not satisfied (acting reasonably
and in good faith) with EAP's efforts to market the Technology and
the Services within any particular country in the Territory
("Relevant Country"), then xxxxxxx.xxx shall be entitled
to serve written notice on EAP stating that it is not satisfied with
those efforts. If, within 30 days after the service of that notice
on EAP, EAP has not satisfied xxxxxxx.xxx with EAP's marketing plans
in respect of the Relevant Country for the forthcoming year the
restriction referred to in clause 3.5(a) will cease to apply in
respect of the Relevant Country.
(c) No Limit on Certain Rights: Nothing in this Agreement
will limit xxxxxxx.xxx's rights to grant licenses to corporations
which are based outside the Territory, but which have operations
within the Territory.
ARTICLE 4. TRANSACTIONS BETWEEN EAP AND XXXXXXX.XXX OR GAP
The Parties agree that EAP shall be operated as an independent
business and that any transaction between or among EAP on the one
hand and xxxxxxx.xxx or GAP or any of their Affiliates, on the other
hand, shall be on an arms-length basis except as otherwise provided
in the Transaction Documents.
ARTICLE 5. CONDITIONS PRECEDENT TO CLOSING
5.1 Condition Precedent to the Obligations of the Parties
(a) It shall be condition precedent to the obligations of the
Parties to consummate the transactions contemplated by this
Agreement that:
(i) no Government Agency shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, order,
decree or injunction that is in effect on the Closing Date and has
the effect of making the joint venture establishing EAP illegal or
otherwise prohibiting consummation of the transactions contemplated
hereby; and
(ii) the shareholders of Gondwana have approved GAP's
participation in EAP on or before the End Date.
(b) It shall be condition precedent to the obligations of EAP
and xxxxxxx.xxx to consummate the transactions contemplated by this
Agreement that each of the representations and warranties of GAP
contained in this Agreement shall be true and correct in all
material respects when made and on and as of the Closing Date as if
made on and as of such date (other than representations and
warranties that address matters only as of a certain date, which
shall be true and correct as of such certain date), except as
contemplated or permitted by this Agreement, and xxxxxxx.xxx shall
have received a certificate executed by a director and a company
secretary of GAP to such effect; and
(c) It shall be condition precedent to the obligations of EAP
and GAP to consummate the transactions contemplated by
this Agreement that each of the representations and warranties of
xxxxxxx.xxx contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date
as if made on and as of such date (other than
representations and warranties that address matters only as of a
certain date, which shall be true and correct as of such certain
date), except as contemplated or permitted by this Agreement, and
GAP shall have received a certificate of the President and Chief
Financial Officer of xxxxxxx.xxx to such effect.
5.2 Non-fulfilment of Conditions
If (a) any of the condition precedent in Section 5.1(a)(ii) is
not fulfilled (or has not been waived under Section 5.3) on or
before the End Date, or (b) the Loan is not advanced to EAP for
whatever reason; or (c) the portion of the License Fee payable on
the Closing Date is not paid on or before 5pm (Perth time) on the
Closing Date for whatever reason, then this Agreement, other than
Articles 1 (Definitions and Interpretation), 3 (Confidentiality), 5
(Conditions Precedent), 12 (Representations and Warranties), 14.3 -
14.17 (Miscellaneous Provisions), automatically terminates on the
End Date or on the Closing Date (as applicable). For the avoidance
of doubt, if this Agreement is terminated pursuant to this Section
5.2, no person shall have any liability to any other person arising
out of or in connection with this Agreement or the Loan Agreement,
except in accordance with Sections 1, 3, 12 and 14.3 - 14.17.
5.3 Waiver
A condition referred to in Section 5.1 is waived if:
(a) in relation to Section 5.1(a), xxxxxxx.xxx and GAP agree
in writing to waiver the condition.
(b) in relation to Section 5.1(c), GAP gives written notice
of waiver of the condition to xxxxxxx.xxx; and
(c) in relation to Section 5.1(b), xxxxxxx.xxx gives written
notice of waiver of the condition to GAP.
5.4 Obligation to satisfy Conditions Precedent
Each Party must use all reasonable endeavours to ensure that
the condition referred to in Section 5.1(a)(ii) is fulfilled on or
before the End Date.
ARTICLE 6. FORMATION AND CAPITALISATION OF EAP
6.1 Formation of EAP
As of the date of this Agreement, GAP is the legal and
beneficial owner of 1 Share in EAP, being the whole of the issued
capital of EAP.
6.2 Capitalisation of EAP
Provided that this Agreement has not terminated under Section
5.2, on the Closing Date:
(a) xxxxxxx.xxx will subscribe A$1.00 for 1 Share and EAP will
allot and issue that Share to xxxxxxx.xxx;
(b) xxxxxxx.xxx will subscribe A$1.00 for 1 A Class Share and
EAP will allot and issue that A Class Share to xxxxxxx.xxx; and
(c) GAP will subscribe A$1.00 for 1 B Class Share and EAP will
allot and issue that B Class Share to GAP.
6.3 Name of EAP
The name under which EAP shall conduct its business shall be
"Entrade Asia Pacific Pty Ltd" or such other name as may be agreed
to by the Parties or the Board of Directors and approved by the
Australian Securities and Investments Commission, if such approval
is required by law. Use of the name "Entrade" in EAP's corporate
name shall be governed by the terms and conditions of the Master
License Agreement.
6.4 Place of Business
The location of:
(a) the registered office and the principal place of business
of EAP shall be Perth, Australia, or as otherwise determined by the
Board of Directors; and
(b) EAP's regional marketing offices will initially be
established in Sydney, Australia, and Manila, the Republic of the
Philippines, and may subsequently be established in such other
locations as the Board of Directors may determine from time to time.
The Board of Directors may change the registered office and the
principal place of business, or the location of the other offices
and divisions of EAP to such other place or places as the Board of
Directors may from time to time determine, in its sole and absolute
discretion, provided that the Board of Directors shall give written
notice of the change to the Shareholders within thirty (30) days
after the effective date of the change. The Board of Directors may,
in its sole and absolute discretion, establish and maintain such
other offices, including regional offices throughout the Territory
and additional places of business of EAP, as it deems appropriate.
ARTICLE 7. CONTRIBUTIONS, OWNERSHIP, BUDGET AND OTHER FINANCIAL
TERMS
7.1 Ongoing Contributions
Except as contemplated by Section 9.5, each Shareholder will
contribute to the funding of EAP based upon the Initial Budget and
the subsequent Budgets of EAP adopted by the Board. The initial
contributions and all subsequent contributions shall be made in
proportion to the Shareholders' Equity Proportion at the time the
contribution is to be made (initially 50:50), unless otherwise
mutually agreed to in writing by the Parties. All contributions
shall be by way of subscription for new fully paid Shares (at a
fixed
subscription price of A$1.00 per Share) unless otherwise
mutually agreed to in writing by the Shareholders.
7.2 Initial Budget
Prior to the End Date, or such later date as is agreed in
writing by xxxxxxx.xxx and GAP, GAP will prepare the initial Capital
and Development Budget and the initial Operating Budget for EAP
(collectively, the "Initial Budget") which shall be subject to the
approval of xxxxxxx.xxx, which approval shall not be unreasonably
withheld or delayed. Upon such approval, the Initial Budget will be
deemed to have been adopted by the Board of Directors.
7.3 Initial Performance Review
The Shareholders will mutually agree upon certain performance
criteria and benchmarks to be used for an initial twelve (12) month
review and analysis of EAP's operations in order for the
Shareholders to determine the ongoing viability and operation of EAP
and their respective levels of additional capital contributions.
7.4 License Agreement
(a) On or about the date of this Agreement, xxxxxxx.xxx and
EAP entered into, or will enter into and deliver the Master License
Agreement.
(b) Termination of the Master License Agreement shall be
governed solely by the terms and conditions thereof, and, unless
such terms otherwise provide, shall not be affected by termination
of this Agreement.
7.5 Costs of GAP and xxxxxxx.xxx
Either Shareholder may invoice EAP for the cost of services
provided by or for it for the benefit of EAP (other than costs
incurred prior to the date of this Agreement) unless the provisions
of those services, and the payment (or non payment) for those
services, are otherwise provided for in this Agreement, the Master
License Agreement or any other agreement between the Parties.
Except as otherwise provided in this Agreement, the provision of
payment for such services is subject to the approval of the members
of the Board of Directors appointed by the Shareholder who did not
provide such services.
7.6 Distribution from EAP
Subject to the prior approval by the Board of Directors and
only after repayment of all Shareholder loans advanced in accordance
with Section 8.5, 100% of the net earnings of EAP (after necessary
allowances for the Budgets, future capital expenditures and
commitments, the purpose, extent and amount being subject to the
prior approval of the Board of Directors or any committee of the
Board of Directors established pursuant to the Constitution) shall
be distributed each year.
ARTICLE 8. MANAGEMENT OF EAP
8.1 Board of Directors
(a) Composition of Board Directors; Appointment and Removal
The Board of Directors shall at all times be comprised of
four (4) (or such other greater even number as may be required by
law or agreed in writing between the Shareholders) Directors (each,
a "Director"), half of the Directors to be nominated by xxxxxxx.xxx
and the other half of the Directors to be nominated by GAP, provided
that such nominees must be eligible to act as Directors under any
applicable law. Each Shareholder agrees to vote for the election of
the respective nominees of the other Shareholder. Each such
Director shall serve until such time as he or she resigns, retires,
dies or is removed. Any Director may be removed with or without
cause by the Shareholder who appointed such Director. Upon the
resignation, retirement, death or removal of any Director, the
Shareholder who appointed such Director shall designate the
replacement Director.
(b) Chairman
As long as GAP maintains at least 50% of the equity in
EAP, GAP shall be entitled to nominate the Chairman of the Board of
Directors. If GAP no longer maintains at least 50% of the equity in
EAP and xxxxxxx.xxx owns more equity than EAP, then xxxxxxx.xxx
shall be entitled to nominate the Chairman of the Board of
Directors. Except for matters requiring unanimous approval of the
Board of Directors, the Chairman of the Board of Directors shall be
entitled to cast a second vote (the "casting vote")in addition to
his deliberative vote.
(c) Compensation
Directors shall not be compensated for their services,
provided that EAP shall pay for reasonable travel costs incurred by
the Directors while travelling on business for and on behalf of EAP
and such other costs agreed upon by a majority of the Board of
Directors.
(d) Meetings and Actions
The provisions applicable to the Board of Directors with
respect to meetings and actions shall be as set forth in the
Constitution.
(e) Committees of the Board of Directors
The Board of Directors may designate such committees as
permitted by the Constitution.
(f) Power and Authority of the Board of Directors
The following activities of EAP cannot be undertaken
without an affirmative unanimous vote of the Board of Directors in
a board meeting, or by way of unanimous agreement in writing of the
Directors (in addition to any other requirements of the law of
Western Australia):
(i) Amendment to EAP's Constitution or any alteration to
the rights attaching to the shares of EAP;
(ii) the transfer of the whole or any substantial part
(in excess of 25%) of the assets of EAP or the business carried on
by EAP in any transaction or series of transactions within any
twelve-month period;
(iii) the cessation of the business, the winding up or
voluntary dissolution of EAP or any subsidiary;
(iv) the alteration of the share structure of EAP (except as
contemplated by the terms herein in respect of the issue of new
shares to a Shareholder making its contribution in accordance with
EAP's Budget or contributing more than its share of EAP's Budget)
or any subsidiary, the buy-back of any EAP securities, the variation
of the rights attached to any EAP securities, the increase or
decrease of the capital stock of EAP, the issuance or distribution
of EAP's capital, or the declaration or payment of any dividend;
(v) the adoption of any Capital and Development Budget;
(vi) the alteration, amendment or departure from any agreed
upon Capital and Development Budget in an amount, either alone or in
the aggregate with any other alterations, amendments or departures,
of more than $50,000;
(vii) obtaining loans from Shareholders or third parties,
and the terms of such loans (not including, for the avoidance of
doubt, the Loan);
(viii) the establishment or alteration of the cash compensation
or other benefits provided to EAP's senior management;
(ix) the acquisition of all or substantially all of any other
entity, whether by acquisition of stock or assets;
(x) the merger of EAP with any other entity;
(xi) capital expenditure on any one item in excess of US$50,000
in any transaction or series of transactions;
(xii) the appointment of the principal partner/reseller in
each country within the Territory;
(xiii) any variation to the terms of the Loan including,
without limitation, any alteration contemplated by clause 4.2 of the
Loan Agreement; or
(xiv) any variation to the amount of fees payable by EAP
to xxxxxxx.xxx.
(g) Quarterly board meetings
A meeting of the Board of Directors must be held in each
quarter unless all the Shareholders otherwise agree in writing. The
company secretary of EAP shall provide notices of the date, time,
place, and teleconference call-in number for such meeting. One or
more Directors may participate in any meeting of the Board of
Directors by means of a conference telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear one another. Participation in a meeting by
such means shall constitute presence in person at the meeting.
(h) Quorum
The quorum for a Board of Directors meeting is one
Director appointed by each Shareholder, and a quorum must be present
for the whole of a meeting. In the event that within 45 minutes
after the time appointed in compliance with the provisions of this
Agreement and the Constitution for the holding of a meeting of the
Board of Directors, the number of Directors present is insufficient
to constitute a quorum:
(i) the meeting will automatically be adjourned to be
held at the same time and the same place on the date 1 week after
the date appointed for the meeting;
(ii) where a director's presence was not prevented
because of the failure of communications facilities or
transportation services, at the adjourned meeting any two Directors
(appointed by any shareholder) will constitute a quorum; and
(iii) where a director's presence was prevented
because of the failure of communications facilities or
transportation services, then, at the adjourned meeting, one
Director appointed by each Shareholder will constitute a quorum.
(i) Majority decisions
Except as provided in Section 8.1(f), decisions of the
Board of Directors must be by a majority vote of the Directors
present at a meeting. If deadlock exists among the Directors
present at such meeting, the Chairman of the Board of Directors will
have the casting vote. Any action required or permitted to be
taken at a meeting of the Board of Directors may be taken without a
meeting if, prior to such action, a consent thereto signed by all of
the Directors is filed with the Secretary of EAP.
(j) Shareholders to ensure Board of Directors performance
Subject to any legal obligations relating to the discharge
of duties owed by Directors to EAP, each Shareholder will take all
steps within its power to ensure that EAP and the Board of Directors
take all actions that this Agreement and the Master License
Agreement contemplate that they will take.
(k) Appointment of Alternate Directors
Any Director appointed under Section 8.1(a) may appoint
an alternate director in his place in writing and otherwise in
accordance with the Constitution.
8.2 Board of Directors
Subject to clause 8.10, management of EAP is vested in the
Board of Directors.
8.3 Budgets
(a) EAP must conduct the Business in accordance with the
Budgets.
(b) The Initial Budget will be prepared and adopted in
accordance with Section 7.
(c) If EAP considers that any Capital and Development Budget
is required in respect of any financial year of EAP's operation
which is not covered by the Initial Budget, EAP must prepare that
Capital and Development Budget and submit it for approval by the
Board of Directors not later than one (1) month prior to the
commencement of the relevant financial year.
(d) In respect of each financial year of EAP's operation
(other than the first year), EAP must prepare an Operating Budget
and submit it for approval by the Board of Directors not later than
one (1) month prior to the commencement of the relevant financial
year.
8.4 Management reports
The Shareholders must ensure that EAP provides Directors with
enough management and financial information and reports to allow
them to know and understand the financial affairs of EAP and to
control the efficient operation of EAP and comply with the reporting
requirements of each Shareholder, including, but not limited to, the
following:
(a) as soon as practicable after the end of each fiscal
quarter (and in any event within 40 days), a profit and loss
account, balance sheet and statement of cash flows for EAP as at the
end of that quarter and for the financial year to date;
(b) an explanation for any significant variances in the
documents referred to in 8.4(a) from those contained in the Budgets;
(c) details of any factors likely to or having the potential
to affect the projections contained in the Budgets for the remainder
of the financial year;
(d) if EAP considers that further capital expenditure is
required during any financial year that either alone or in the
aggregate is more than $50,000 in excess of the capital expenditure
provided in the Capital and Development Budget for such year, EAP
shall submit a proposal therefor for approval by the unanimous vote
of the Board of Directors pursuant to Section 8.1(f)(vi); and
(e) all other matters necessary or appropriate for the
Directors to be fully and properly informed about the management,
operation and activities of EAP and the Business.
8.5 Borrowing from Shareholders
If EAP resolves to borrow money from the Shareholders (not
including, for the avoidance of doubt, the Loan), each Shareholder
must enter into an identical agreement on the terms resolved by EAP
which:
(a) provides that each Shareholder will lend to EAP its Equity
Proportion of the total amount EAP has resolved to borrow;
(b) provides that the loan is unsecured; and
(c) provides that the loan is non-assignable.
8.6 Repayment of loans from Shareholders
If EAP resolves to repay money borrowed from Shareholders (not
including, for the avoidance of doubt, the Loan), it must repay each
Shareholder who has made any such loan at the same time its Equity
Proportion of the amount repaid.
8.7 Shareholder Guarantees
If EAP resolves to borrow money from parties other than
Shareholders on terms requiring the Shareholders to give guarantees
or collateral securities and the Shareholders consent to giving such
guarantees or collateral securities, the liability of each
Shareholder must be limited to its Equity Proportion of the amount
borrowed.
8.8 Indemnities
(a) If a liability of EAP is recovered from a Shareholder when
that Shareholder is acting in good faith as a duly designated agent
of EAP, each other Shareholder shall indemnify that Shareholder in
an amount equal to such liability times each such other
Shareholder's Equity Proportion; it being understood that neither
Shareholder is empowered to incur any obligations on behalf of EAP
except as otherwise contemplated by this Agreement.
(b) Each Shareholder's liability under the indemnity given in
section 8.8(a) is limited to its Equity Proportion of both the
amount recovered and reasonable costs associated with the recovery.
8.9 Procuring Resignations
If a Shareholder ceases to be a shareholder in EAP, it must
immediately ensure that each director of EAP appointed by it
resigns.
8.10 Management
GAP shall be responsible for managing the day to day operations
of EAP, including, without limitation, arranging for the hiring of
EAP's senior management, business development, marketing and
accounting personnel. Subject to the provisions of Section
8.1(f)(viii), the salaries and other compensation provided to such
personnel shall be determined by GAP.
8.11 Officers' Indemnity, Insurance and Access
(a) Indemnity
Subject to the law of Western Australia, EAP must, to the
extent the person is not otherwise indemnified, indemnify every
Director of EAP and its wholly owned subsidiaries and may indemnify
its auditor (if any) against a liability:
(i) incurred as a director or auditor of EAP to a person
other than EAP or an Affiliate of EAP (including a liability
incurred as a result of appointment or nomination by EAP or a
subsidiary as a trustee or as an officer of another corporation)
unless the liability arises out of conduct involving a lack of good
faith; and
(ii) for costs and expenses incurred in defending civil
or criminal proceedings in which judgment is given in favour of that
person or in which that person is acquitted, or in connection with
an application in relation to those proceedings in which the court
grants relief to that person under the law.
(b) Former directors
The indemnity in favour of directors under section 8.11(a)
is a continuing indemnity. It applies in respect of all acts done
by a person while a director of EAP or a wholly owned subsidiary of
EAP even though the person is not a director at the time the claim
is made.
(c) D&O Policy
Subject to the law of Western Australia and this
Agreement, EAP must insure each Director under a D&O Policy issued
by a reputable and solvent underwriter of policies of that kind, to
the extent that acquisition of such a policy is commercially
reasonable,:
(i) during the Director's term of office as; and
(ii) for 7 years after the Director ceases to be,
a director of EAP or any of its wholly owned subsidiaries.
(d) Terms of policy
As far as practical, having regard to the cost of coverage
and its availability, EAP must ensure that the D&O Policy has an
indemnity limit not lower than and is otherwise on terms which,
taken as a whole, are not materially less favourable to each
Director than US$10,000,000.
(e) Company to pay premiums
EAP must pay the premiums in respect of the D&O Policy
except to the extent that the Australian Corporations Law may from
time to time limit a company's ability to indemnify, and pay
insurance premiums in relation to, officers and auditors, or as
otherwise prohibited by law.
(f) Contribution to premium by Director
If EAP is prohibited by law from paying a portion of the
premium in respect of the D&O Policy, EAP (i) must notify each
director, officer, and shareholder of EAP of such prohibition, and
(ii) must offer each Director the opportunity to, and each Director
may (at the Director's option), contribute that portion of the
premium.
8.12 Board Papers
(a) Retention of documents
EAP must maintain a complete file of all Board Papers.
(b) Secure disposal
EAP may confidentially dispose of a document which has
been a Board Paper for more than seven years or such longer period
as may be required by law if it has no reasonable grounds to believe
the document may be relevant to any present or contemplated legal
proceedings, valid inquiry by a Government Agency or audit.
(c) Access
Subject to clause 8.12(d), EAP must, at no cost to the
Directors, allow any Director to inspect and if necessary copy Board
Papers held by it:
(i) during the Director's period of office as a director
of EAP; and
(ii) at any time after a Director ceases to hold that
office,
for any proper purpose concerning the exercise of powers
and discharge of duties as a director of EAP or for the purpose of
defending any Claim in relation to acts or omissions as a director
of EAP bought against the Director.
(d) Legal professional privilege
If EAP reasonably believes EAP (but not a Director) is
entitled to legal professional privilege in respect of a particular
Board Paper, EAP must make that Board Paper available to that
Director under section 8.12(c) only if there is a reasonable
prospect that the Director will be:
(i) a party to a legal proceeding; or
(ii) the subject of a valid investigation by a Government
Agency,
which relates to an act or omission of that Director as
a director of EAP and the Board Paper sought relates to such
Director's defense.
ARTICLE 9. RESTRICTIONS ON SHARE TRANSFER AND SUBSCRIPTION OF
NEW SHARES
9.1 Subscription to New Securities
EAP must not issue any shares, options or rights over or
securities convertible into shares in the Company, except in respect
of the issue of new shares to a Party making its contribution in
accordance with the EAP's Operating Budget or contributing more than
its share of EAP's Operating Budget in accordance with this
Agreement, or with the prior unanimous consent of the Shareholders.
9.2 Restrictions on Share Transfer
Each Shareholder shall retain the right to sell any of its
shares in EAP, provided that the sale, assignment or other transfer
or disposal of its shares in EAP (or any right or interest in any of
the same), whether voluntarily or involuntarily or by operation of
law, including the execution of judgment, foreclosure, bankruptcy or
insolvency, shall be made in accordance with the following
procedure:
(a) If a Shareholder (the "Selling Shareholder") should desire
to sell, assign or otherwise transfer or dispose of all or part of
its shares (or any right or interest in any of the same) ("Transfer
Shares"), it shall first offer such Transfer Shares to the remaining
Shareholders (the "Remaining Shareholders"), in proportion to their
shareholdings, specifying their respective allotments, prices, terms
and conditions.
(b) The Selling Shareholder shall offer the Transfer Shares
for sale, assignment, transfer or other disposal in the following
manner:
(i) The Selling Shareholder shall file a written offer,
addressed to the Remaining Shareholders, with the company secretary
of EAP who shall forthwith transmit such offer by personal service
or internationally recognized air courier service to the Remaining
Shareholders. If within ten (10) days of such filing, the company
secretary fails or is unable to transmit the offer, the Selling
Shareholder may transmit such offer directly to the Remaining
Shareholders by personal service or internationally recognized air
courier service.
(ii) The Remaining Shareholders shall have sixty (60)
days from their respective receipt of the written offer (the
"Offering Period") within which to irrevocably elect to accept such
offer (in whole, but not part only) by giving notice to the Selling
Shareholder and the Corporate Secretary of EAP. In the event not
all of the Remaining Shareholders accept the offer, those
Shareholders who shall have accepted the offer (the "Accepting
Shareholders") must be given notice of the unaccepted allotments by
the Company Secretary, and the Accepting Shareholders shall have a
period of thirty (30) days from the expiration of their respective
Offering Period (the "Re-Offering Period") within which to
irrevocably elect to purchase the unaccepted allotments, in
proportion to the shareholdings of the Accepting Shareholders prior
to the Re-Offering Period.
(c) Should all of the Transfer Shares so offered or reoffered
not be taken as provided under subparagraphs (a) and (b) above, the
Selling Shareholder shall be free at any time within a period of
sixty (60) days after the date of the lapse of the offers under
subparagraph (b) above to sell, assign or otherwise transfer all
(but not part) of the Transfer Shares (notwithstanding that
Accepting Shareholders have accepted offers in respect of some but
not all of the Transfer Shares) to a third party under the same
terms and conditions under which such shares were offered to the
Remaining Shareholders, provided:
(i) such third party is not a competitor of any
Remaining Shareholders;
(ii) such third party is not of demonstrably poor
financial capacity and reputation;
(iii) such third party first agrees to enter into and
be bound by this Agreement; and
(iv) should such sale, assignment, transfer or other
disposal to such third party be made under terms and conditions more
favourable than those offered to the Remaining Shareholders, it
shall be null and void.
(d) The foregoing restrictions, except for condition (ii) of
subparagraph (c) above, shall not apply to any sale, assignment,
transfer or other disposal by a Shareholder to its Affiliate, on the
condition that:
(i) the Affiliate must transfer those shares back to the
Shareholder if the Affiliate ceases to be an Affiliate of that
Shareholder; and
(ii) the Shareholder guarantees to the other parties (on
terms and conditions reasonably satisfactory to the other parties)
the performance of the obligations of the Affiliate.
(e) In this Article 9, a reference to "shares" and "Transfer
Shares" includes a reference to options and rights over and
securities convertible into shares.
(f) Upon the happening of a Change in Control of GAP, GAP must
give notice to the Remaining Shareholders under section 9.2(a)
offering to sell all of its Shares within 30 days after the
occurrence of the Change in Control.
(g) For the purposes of section 9.2(f), a Change in Control
of GAP occurs if any person or entity other than Gondwana or an
Affiliate of Gondwana acquires more than 50% of the voting shares of
GAP, or acquires control of the majority of the board of directors
of GAP.
9.3 Accession
Without limiting any other provisions of this Agreement, the
Parties agree that any person not already a Party to this Agreement
who acquires Shares from time to time (whether by transfer of Shares
or an allotment of Shares) will be required, as a condition of that
acquisition, to enter into a deed or other document or instrument
pursuant to which it agrees to be bound by this Agreement as if it
was originally a Party to it, and the Parties agree that if a new
party has acquired Shares in accordance with the terms of this
Agreement then after such a deed or other document or instrument is
duly executed the parties will each be bound to each new party under
the terms of this Agreement, in so far as it is a Shareholder, as if
it was originally a party to this Agreement.
9.4 Notice on Share certificates
EAP must ensure that all Share certificates issued contain a
notice to the effect that the Shares evidenced by the Share
certificate are subject to restrictions on transfer.
9.5 Dilution
If:
(a) within 20 days after the adoption or deemed adoption of
a Budget by the Board of Directors, either Shareholder elects by
written notice to EAP not to contribute in proportion to its Equity
Proportion to the Budget; or
(b) within 30 days after the due date for payment by a
Shareholder in accordance with a Budget adopted or deemed
to have been adopted by the Board of Directors, a Shareholder fails
to pay its Equity Proportion,
(in either case, a "Reducing Shareholder"), the company
secretary of EAP must give written notice (the "Notice") to the
other Shareholder ("Non-Reducing Shareholder") of the election or
failure to pay, and the amount which is not being, or has not been
contributed, within 10 days of receipt of a notice under Section
9.5(a), or non-payment under Section 9.5(b). The Notice must set
out the provisions of this Agreement in respect of Dilution and must
be copied to all Shareholders.
9.6 Election by Non-Reducing Shareholder
If after ten days from the receipt of the Notice the Reducing
Shareholder has still failed to contribute the amount specified in
the Notice, the Non-Reducing Shareholder may, but is not required
to, elect to contribute an amount not exceeding the amount specified
in the Notice, by written notice to EAP within 30 days of the
Notice, in which case the Equity Proportion of that Shareholder
("Increasing Party") will be increased in accordance with this
Article 9.
9.7 Issue of Shares to Increasing Party
EAP must issue to the Increasing Party that number of
Shares which is equivalent to the additional contribution made by
the Increasing Party in excess of its Equity Proportion, with the
intent that the Equity Proportion of a Shareholder is at all times
as near as possible equivalent to that proportion (expressed as a
percentage) which the total amount of share capital provided by that
Shareholder to EAP bears to the total amount of share capital
provided by all Shareholders.
9.8 Authorisation
The Reducing Party and EAP must sign and execute all documents
and do all things as may be reasonably requested by the Increasing
Party to issue Shares to the Increasing Party in accordance with
this Article 9.
9A SALE OF SHARES IN EAP - PIGGYBACK OPTION
9A.1 Definitions
In this Section, terms defined in Section 9 have the meanings
given to them in that Section.
9A.2 Piggyback Option
If a Selling Shareholder has complied in all respects with
Section 9.2 and the Remaining Shareholders do not purchase all of
the Transfer Shares, provided that the Selling Shareholder has
obtained a bona fide offer from a third party to purchase the
Transfer Shares (a "Buyer"):
then:
(a) the Selling Shareholder must, within seven days after the
period for acceptance under Section 9.2(b)(ii) has expired, give
notice to each Remaining Shareholder, which notice shall set forth
the identity of the Buyer and the terms and conditions of the
proposed purchase; and
(b) each other Shareholder has the option (a "Piggyback
Option") to require the Selling Shareholder to cause the Buyer to
purchase that percentage of the Shares then owned by the Remaining
Shareholders that equals the percentage of Shares of the Selling
Shareholders represented by the Transfer Shares.
9A.3 Piggyback Option Period
A Shareholder may only exercise a Piggyback Option within seven
days after receipt of a notice under paragraph (a) of clause 9A.2.
9A.4 Piggyback Notice
A Shareholder may only exercise a Piggyback Option by giving
notice to that effect (the "Piggyback Notice") to the Selling
Shareholder specifying the Shares the Selling Shareholder is
required to cause the Buyer to purchase (the "Put Shares").
9A.5 Piggyback Notice Irrevocable
A Piggyback Notice, once given, is irrevocable but both the
notice and all obligations under the notice will lapse if for any
reason the Selling Shareholder does not transfer the Transfer Shares
to the Buyer in accordance with Section 9 and this Section 9A.
9A.6 Piggyback Price
The purchase price per Share for the Put Shares (the "Piggyback
Price") is an amount equal to the sale price per Share of the Shares
sold by the Selling Shareholder to the Buyer, and the other terms
and conditions of sale of the Put Shares must be no less favourable
to the holder of the Put Shares and no more favourable to the Buyer
than the terms and conditions of sale of the Transfer Shares.
9A.7 Reasonable Steps
Upon the exercise of a Piggyback Option by a Shareholder in
accordance with this clause, the Selling Shareholder must take all
reasonable steps to cause the Put Shares to be purchased by the
Buyer at the price and on the terms specified in the Transfer
Notice.
9A.8 Prohibition on Sale
If the Selling Shareholder is unable to cause the Buyer to buy
all of the Put Shares at the Piggyback Price and otherwise in
accordance with this Article 9A, and to complete that purchase in
accordance with Section 9A.9, then the Selling Shareholder is not
entitled to sell or otherwise transfer any of the Transfer Shares to
any third party.
9A.9 Completion of Sale
Unless otherwise agreed between the Selling Shareholder and the
Shareholders exercising a Piggyback Option, completion of the
purchase by a Buyer of the Transfer Shares and the Put Shares will
take place at the registered office for the time being of EAP and at
the time and on the date that is specified for that purpose by the
Selling Shareholder to the Shareholders exercising a Piggyback
Option provided that:
(a) the date nominated must not be less than 14 days after the
date of the Piggyback Notice; and
(b) the time and date so specified must be the same time as
the time and date for the completion of the sale of the Transfer
Shares to be sold by the Selling Shareholder.
9B SALE OF SHARES IN EAP AFTER 1 MAY 2005
9B.1 Disposal of Shares After 1 May 2005
This Section 9B will apply after 1 May 2005 and any Shareholder
who then owns at least forty percent (40%) of the shares of EAP (on
a fully diluted basis) may dispose of their Shares in accordance
with this Section and can compel the other Shareholders to dispose
of all of their Shares.
9B.2 Exit Transfer Notice
If this Section 9B applies and a Shareholder ("Exitor")
proposes to sell, assign, transfer or otherwise dispose of its
Shares (the "Exit Transfer Shares"), the Exitor must give a notice
(the "Exit Transfer Notice") to EAP and to each of the other
Shareholders that it desires to do so. The Exit Transfer Notice:
(c) must be in respect of all of the Exitor's Shares;
(d) must specify the sum which the Exitor fixes as the price
per Share for the Shares comprised in the Exit Transfer Notice (the
"Exit Price") and the terms and conditions applicable to such
disposal (which, for the avoidance of doubt, may not be inconsistent
with any provisions of this Agreement) (the "Terms");
(e) is not revocable, except with the written consent of each
of the other Shareholders;
(f) constitutes an offer to each of the other Shareholders
("Exit Offerees") to sell all (but not some only) of their Shares;
(g) must require the Exit Offerees to give a non-binding
indication in writing, within 14 days after its receipt by the Exit
Offeree of:
(i) whether it intends to accept the offer;
(ii) how many Shares in excess of its proportion it
intends to acquire; and
(h) must state that the offer is open for acceptance for 30
days and that if the Exitor does not receive written acceptances
from an Exit Offeree or Exit Offerees in respect of all (and not
some only) of the Exit Transfer Shares within 30 days after receipt
by the Exit Offerees of the Exit Transfer Notice, the offer
constituted by the Exit Transfer Notice will be deemed to have
been
rejected by all Exit Offerees.
9B.3 Offer Accepted - Transfer to Exit Offerees
If the Exitor receives acceptances in respect of all of the
Exit Transfer Shares in accordance with Section 9B.2, the Exitor
must transfer to the relevant Exit Offerees and the relevant Exit
Offerees must purchase the Shares that are the subject of the Exit
Transfer Notice. In the case of competition between Exit Offerees
for Exit Transfer Shares in excess of their proportional
entitlements, the number of excess Exit Transfer Shares to be
transferred to them will be calculated in proportion to the number
of Shares held by them respectively at the date of service of the
Exit Transfer Notice.
9B.4 Offer Rejected - Transfer to Exit Third Party
After rejection or deemed rejection by the Exit Offerees of an
offer constituted by an Exit Transfer Notice, the Exitor will be
entitled during the first six months after such rejection or deemed
rejection to sell all (but not some only) of such Shares to any
third party willing to purchase them (the "Exit Third Party"),
provided that the Exitor will not be entitled to sell such Shares at
a price per Share lower than the Exit Price or on terms and
conditions less favourable to the Exitor or more favourable to the
Exit Third Party than the Terms, unless it has first given notice to
the other Shareholders stating the lower price, or the more or less
favourable terms and conditions (as the case may be), in which case
the provisions of Section 9B.2 will apply as if such notice were a
Exit Transfer Notice and such lower price were the Exit Price or
such more or less favourable Terms.
9B.5 Come Along Option
If, in respect of all (but not some only) of the Shares of
which the Exitor is registered as holder (the "Total Transfer
Shares"):
(i) the Exitor has given an Exit Transfer Notice and has in
all respects complied with Section 9B.2; and
(j) the offer constituted by the Exit Transfer Notice has been
rejected or deemed rejected,
then the Exitor has the option (the "Come Along Option") to
require the other Shareholders (not including the Exitor) (the
"Called Shareholders") to transfer to the Exit Third Party all of
the shares held by the Called Shareholders (the "Called Shares").
9B.6 Come Along Option Period
The Exitor may exercise the Come Along Option at any time after
the expiry of the period for acceptance under Section 9B.2(f) up to
and including the date which is five months after the expiry of the
period for acceptance under Section 9B.2(f) (the "Come Along Option
Period").
9B.7 Come Along Notice
The Exitor may exercise the Come Along Option only by giving
notice to that effect (the "Come Along Notice") to the Called
Shareholders specifying that the relevant Called Shares are required
to be transferred under Section 9B.5 and by contemporaneously giving
a copy of the Come Along Notice to EAP.
9B.8 Come Along Notice Irrevocable
A Come Along Notice, once given, is irrevocable but both the
notice and all obligations under the notice will lapse if for any
reason the Exitor does not transfer the Total Transfer Shares to the
Exit Third Party in accordance with this Section 9B.
9B.9 Come Along Price
The purchase price for each of the Called Shares (the "Come
Along Price") is an amount equal to the sale price of each of the
Shares being sold by the Exitor to the Exit Third Party.
9B.10 Obligation to Sell
If the Come Along Option is exercised in accordance with this
clause, each of the Called Shareholders must sell its Called Shares
for the Come Along Price and otherwise in accordance with this
clause.
9B.11 Completion of Sale
Unless otherwise agreed in writing between the Exitor and the
Called Shareholders, completion of the sale of the Called Shares
will take place at the registered office for the time being of EAP
and at the time and on the date specified for that purpose by the
Exitor to the Called Shareholders provided that:
(k) the date nominated must not be less than 14 days after the
date of the Come Along Notice; and
(l) the time and date so specified by the Exitor must be the
same as the time and date for completion of the sale of the Total
Transfer Shares to be sold by the Exitor.
9B.12 Default by Called Shareholders
If either of the Called Shareholders does not, as provided by
Sections 9B.10 and 9B.11, sell, and complete the sale of, its Called
Shares under those clauses, the Exitor is hereby irrevocably
authorised as agent and attorney of the Called Shareholder to sell
and transfer, and do all things necessary to complete the sale and
transfer of, the Called Shareholder's Called Shares (including,
without limitation, executing a transfer of the relevant Called
Shares in the name of and on behalf of the relevant Called
Shareholder and giving good receipt for the proceeds of sale of such
Called Shares).
ARTICLE 10. INSURANCE
EAP shall maintain at all times after its formation and until
the termination of this Agreement an amount of coverage consistent
with good business practices in Western Australia for comprehensive
general liability insurance, including products and completed
operations and contractual liability coverage, naming xxxxxxx.xxx
and GAP and their respective Affiliates as additional insureds.
Each policy of insurance purchased by EAP pursuant to the preceding
sentence shall:
(a) be placed with a reputable insurance company acceptable
to the Board of Directors;
(b) either have a self-insurance retention or a deductible in
amounts consistent with good business practices in Western Australia
as such amount may be modified by the Board of Directors; and
(c) contain other terms acceptable to the Board of Directors.
ARTICLE 11. TERMINATION AND WITHDRAWAL
11.1 Term
This Agreement and the joint venture establishing EAP shall
commence on the Closing Date and terminate in accordance with the
terms of this Agreement (the "Term").
11.2 Termination
This Agreement will be terminated on the occurrence of the
first of the following events:
(a) at any time by the unanimous written consent of the
Shareholders;
(b) on the date when EAP is wound up; and
(c) on the date when a single shareholder becomes the
beneficial owner of all of the Shares.
Upon termination or expiration of this Agreement, this
Agreement will be at an end as to its future operation except for
enforcement of any right or claim which arises on, or has arisen
before, termination or survive under Section 11.4.
11.3 Withdrawal
A Shareholder ("Withdrawing Shareholder") may, at any time, by
written notice ("Withdrawal Notice") to the other Shareholder (the
"Continuing Shareholder"), elect to withdraw from EAP. Within ten
Business Days after service of a Withdrawal Notice, the Withdrawing
Shareholder must transfer to the Continuing Shareholder and the
Continuing Shareholder must accept a transfer of all of the
Withdrawing Shareholder's Shares for a total consideration of US$10
(ten dollars).
11.4 Sections to survive termination or withdrawal
Despite any other provision of this Agreement, unless the
Shareholders otherwise agree unanimously in writing, Articles 1, 3,
and 12 and Sections 14.3 - 14.17 shall survive termination of, or
withdrawal from this Agreement.
11.5 Agreement ceasing to apply
In the event that a Shareholder transfers or otherwise disposes
of its Shares in accordance with this Agreement, it ceases to be
bound by the terms of this Agreement, except for any rights or
obligations arising prior to the transfer or disposal of that
Shareholders' Shares, any then outstanding guarantee referred to in
Section 8.7, and those provisions of this Agreement referred to in
Section 11.4.
11.6 EAP to be wound up
Upon termination of this Agreement pursuant to the terms of
this Article 11 other than a termination arising from the withdrawal
of a Shareholder contemplated in Section 11.3, each Shareholder must
cause EAP to be wound up, its assets realised, and the proceeds
distributed to the Shareholders according to their Equity
Proportions at the date of winding up of EAP, subject however to the
rights of the holders of the A Class Shares and the B Class Shares.
ARTICLE 12. REPRESENTATIONS AND WARRANTIES
12.1 xxxxxxx.xxx represents and warrants as follows:
(a) that it is a corporation duly organized and existing in
good standing under the laws of the State of Delaware, United States
of America; and
(b) each of the warranties and representations given by
xxxxxxx.xxx under the terms of the Master License Agreement apply to
this Agreement, as if repeated in full.
12.2 GAP represents and warrants that it is a corporation duly
organized and existing in good standing under the laws of the
Western Australia.
ARTICLE 13. DISPUTE RESOLUTION
13.1 Arbitration
The Parties consent and agree:
(a) to submit all disputes arising under this Agreement to
arbitration as the exclusive mechanism for dispute resolution; and
(b) that any dispute arising under this Agreement shall be
resolved pursuant to the Rules of Conciliation and Arbitration
established from time to time by the International Chamber of
Commerce and that the site of any such arbitration, unless the
Parties otherwise agree, shall be in Geneva, Switzerland.
Notwithstanding the foregoing, any dispute arising under
Article 3 hereof may be brought in any court of competent
jurisdiction.
13.2 Governing Law
This Agreement shall be governed by, and construed in
accordance with, the laws of Western Australia, without regard to
any applicable conflicts of law.
ARTICLE 14. MISCELLANEOUS PROVISIONS
14.1 Additional Actions and Documents
Each of the Parties hereby agrees to take or cause to be taken
such further actions, to execute, acknowledge, deliver and file or
cause to be executed, acknowledged, delivered and filed such further
documents and instruments, and to use best efforts to obtain such
consents, as may be necessary or as may be reasonably requested to
fully effectuate the purposes, terms and conditions of this
Agreement, whether before, at or after the closing of the
transactions contemplated by this Agreement.
14.2 Notices
(a) How to give a notice
A notice, consent or other communication under this
document is only effective if it is:
(i) in writing, signed by or on behalf of the person
giving it;
(ii) addressed to the person to whom it is to be given;
and
(iii) either:
(A) delivered or sent by pre-paid mail (by
internationally recognized air courier service, if the addressee is
overseas) to that person's address; or
(B) sent by fax to that person's fax number and the
machine from which it is sent produces a report that states that it
was sent in full.
(b) When a notice is given
A notice, consent or other communication that complies
with this section is regarded as given and received:
(i) if it is delivered or sent by fax:
(A) by 5.00 pm (local time in the place of receipt)
on a Business Day - on that day; or
(B) after 5.00 pm (local time in the place of
receipt) on a Business Day, or on a day that is not a Business Day -
on the next Business Day; and
(ii) if it is sent by mail:
(A) within the same country from which it is sent -
3 Business Days after posting; or
(B) to a place outside the country from which it is
sent - 7 Business Days after posting.
(c) Address for notices
A person's address and fax number are those set out below,
or as the person designates by notice in writing to the other
Parties:
EAP
Address: Ground Floor
Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx 0000
Fax number: (000) 0000 0000
Attention: Company Secretary
GAP
Address: Ground Floor
Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx 0000
Fax number: (000) 0000 0000
Attention: Chairman
xxxxxxx.xxx
Address: 000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx Xxxxxx,
Xxx Xxxxxx 00000
Fax number: (000) 000-0000
Attention: Xxxx Xxxxx
with a copy to:
Entrade Inc
Address: 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Fax number: (000) 000-0000
Attention: General Counsel
14.3 Severability
The invalidity of any one or more provisions hereof or of any
other agreement or instrument given pursuant to or in connection
with this Agreement shall not affect the remaining portions of this
Agreement or any such other agreement or instrument or any part
thereof, all of which are included subject to the condition that
they are held valid in law; and in the event that one or more of the
provisions contained herein or therein should be invalid, or should
operate to render this Agreement or any such other agreement or
instrument invalid, this Agreement and such other agreements and
instruments shall be construed as if such invalid provisions had not
been inserted.
14.4 Survival
It is the express intention and agreement of the Parties that
all covenants, agreements, statements, representations, warranties
and indemnities made in this Agreement shall survive the execution
and delivery of this Agreement.
14.5 Waivers
Neither the waiver by a Party of a breach of or a default under
any of the provisions of this Agreement, nor the failure of a Party,
on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, remedy or privilege hereunder,
shall thereafter be construed as a waiver of any subsequent breach
or default of a similar nature, or as a waiver of any such provi-
sions, rights, remedies or privileges hereunder.
14.6 Exercise of Rights
No failure or delay on the part of a Party in exercising any
right, power or privilege hereunder and no course of dealing between
the Parties shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and not exclusive of any other
rights or remedies which a Party would otherwise have at law or in
equity or otherwise.
14.7 Binding Effect
Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective heirs, devisees, executors,
administrators, legal representatives, successors and assigns.
14.8 Limitation on Benefits of this Agreement
It is the explicit intention of the Parties that no person or
entity other than the Parties is or shall be entitled to bring any
action to enforce any provision of this Agreement against any Party,
and that the covenants, undertakings and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the Parties (or their respective successors and
assigns as permitted hereunder).
14.9 No Partnership/Agency
Nothing contained in or implied in this Agreement shall
constitute or be deemed to constitute a partnership between the
Parties hereto and none of the Parties shall have any authority to
bind or commit any other Party. The Agreement shall also not be
deemed to constitute any Party as an agent of the other or EAP, nor
shall it constitute EAP as an agent of any of the other Parties
hereto.
14.10 Amendment Procedure
This Agreement may only be modified or amended by the unanimous
written consent of the Parties.
14.11 Entire Agreement
The Transaction Documents (including the Exhibits hereto and
thereto) contain the entire agreement between the Parties with
respect to the transactions contemplated herein, and supersedes all
prior oral or written agreements, commitments or understandings with
respect to the matters provided for herein and therein.
14.12 Pronouns
All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
14.13 Execution in Counterparts
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary
that the signatures of, or on behalf of, each Party, or that the
signatures of all persons required to bind any Party, appear on each
counterpart; but it shall be sufficient that the signature of, or on
behalf of, each Party, or that the signatures of the persons
required to bind any Party, appear on one or more of the
counterparts. All counterparts shall collectively constitute a
single agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than a number of
counterparts containing the respective signatures of, or on behalf
of, all of the Parties hereto.
14.14 Certificate and Constitution
If there shall be any difference between the terms of this
Agreement and the Constitution, then the terms of this Agreement
shall take precedence in all dealings and proceedings between the
Parties, and the Parties shall take all actions necessary to procure
the immediate amendment of the Constitution as appropriate to comply
and be consistent with the terms of this Agreement and any relevant
law. The Parties will procure that a provision reflecting this
section 14.14 will be inserted in the Constitution of EAP prior to
the Closing Date.
14.15 Announcements
Except as required by law or applicable stock exchange
regulation, no Party hereto shall make any announcement, press
release or other public statement relating in any manner to this
Agreement, the terms hereof or the relationship of the Parties
hereto without first obtaining the consent of the other Parties to
the disclosure proposed to be made. The other Parties hereto shall
not unreasonably withhold their consent to any request made by a
Party pursuant to this Section 14.15. The Parties shall use their
best efforts to consult and coordinate with each other before making
any announcement, press release or other public statement as
required by law or applicable stock exchange regulation relating to
the transactions contemplated by the Transaction Documents.
14.16 Expenses
(a) Subject to paragraph (b), each Party must pay its own
expenses incurred in negotiating, executing and registering this
Agreement.
(b) The Shareholders must pay in equal shares the amount of
any duty that is payable on or in relation to this Agreement.
ARTICLE 15. RIGHTS ATTACHING TO A AND B CLASS SHARES
15.1 A Class Share
The only right that the A Class Share confers upon its holder
is the right in a winding up to payment in cash of an amount of
US$7,000,000 in priority to any other class of shares in EAP. For
the avoidance of doubt, the A Class Share does not:
(a) carry any right to vote, nor to receive notice of or
attend general meetings of EAP;
(b) confer any right to participate in the profits or assets
of EAP, whether on a winding up or otherwise, except to the extent
specified above and then only on a winding up.
15.2 B Class Share
The only right that the B Class Share confers upon its holder
is the right in a winding up to payment in cash of an amount of
US$1.00 after payment in full of an amount of US$7,000,000 on the A
Class Share but in priority to any other class of shares in EAP.
For the avoidance of doubt, the B Class Share does not:
(a) carry any right to vote, nor to receive notice of or
attend general meetings of EAP;
(b) confer any right to participate in the profits or assets
of EAP, whether on a winding up or otherwise, except to the extent
specified above and then only on a winding up.
15.3 Rights in Constitution
The Parties agree that they will take all necessary steps to
ensure that the rights attaching to the A Class Share and the B
Class Share respectively set out in Sections 15.1 and 15.2 will be
incorporated in the constitution of EAP prior to the date of issue
of those Shares. If GAP considers it necessary or appropriate,
xxxxxxx.xxx consents to GAP altering the Constitution only for the
purpose of including such rights.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement or have caused this Agreement to be duly executed on their
behalf as of the day and year first set forth above.
xxxxxxx.xxx, Inc.
By: /s/ Xxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxxxxx
Title: Executive Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Assistant Secretary
GlobalNet Asia Pacific Pty. Ltd, ACN 090 616 685
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Director
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Director
Entrade Asia Pacific Pty. Ltd, ACN 092 146 426
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Director
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Director
EXHIBIT A
Software License Agreement
--------------------------
This Master Software License Agreement is made effective as of
this 5th day of April, 2000, by and between Entrade Asia Pacific Pty
Ltd ACN 092 146 426, a corporation incorporated in Western
Australia, with its principal offices at Ground Floor, Durack
Centre, 000 Xxxxxxxx Xxxxxxx, Xxxxx, Xxxxxxx Xxxxxxxxx, 0000
("Licensee") and xxxxxxx.xxx, Inc., a Delaware corporation, with its
principal offices at 000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxxx, Xxx
Xxxxxx 00000 ("Licensor"). Hereinafter Licensee and Licensor are
referred to from time to time collectively as the "Parties" and
individually as a "Party."
WHEREAS, the Licensor has developed and owns all rights in and to
the Licensed Product (as hereinafter defined), and has represented
that it has expertise in the establishment and hosting of web sites
which host the Entrade Transaction Software.
WHEREAS, the Licensee has been incorporated to facilitate on-line
business to business e-commerce and related activities, and in
particular to hold a license to market and distribute the Licensed
Product to third parties in the Territories (as defined below).
WHEREAS, the Licensor possesses the copyrights and certain
confidential and proprietary know-how and technology relating to,
the Licensed Product.
WHEREAS, the Licensee desires to license the Licensed Product in
order to use the Licensed Product for specific applications
involving on-line business to business activities, all on the terms
and subject to the conditions set forth herein including for the
purpose of marketing and distributing the Licensed Product to third
parties in the Territories.
WHEREAS, the Licensee wishes to acquire and the Licensor has agreed
to provide certain additional services described in this Agreement
in respect of the Licensed Product on request.
NOW THEREFORE, in consideration of the covenants, agreements and
consideration hereinafter contained (the receipt, adequacy and
sufficiency of which are hereby acknowledged by the Parties by their
execution hereof), the Parties hereby covenant and agree as follows:
ARTICLE 1. INTERPRETATION
1.1 Definitions. In this Agreement, and the Schedules and Exhibits
(if any) annexed hereto, the following expressions shall have the
respective meanings indicated below:
Acceptance Procedure means the procedure for conducting
acceptance tests of Deliverables specified in Exhibit B.
Additional Services means hosting, maintenance and support,
development of web sites, creation of Custom Applications, systems
integration, training or other services requested to be performed by
Licensor relating to the Licensed Product.
Affiliate means, with respect to a Party to this Agreement, any
entity in which, directly or indirectly, a Party owns equity
securities or any entity that directly or indirectly owns equity
securities in a Party in the amount of greater than twenty-five
percent of the equity.
Agreement means this Master Software License Agreement and the
Schedules and Exhibits (if any) annexed hereto.
Closing Date means the Closing Date defined in the
Shareholders' Agreement.
Code means the computer programming code associated with the
Software and the Improvements. Except as otherwise specified, Code
shall include both Object Code and Source Code.
Conditions mean the conditions precedent listed in Section 5.1
of the Shareholders' Agreement.
Confidential Information shall have the meaning set forth in
Section 4.1.
Custom Application shall mean a modification, customization,
enhancement, or alteration of the Licensed Product pursuant to a
Statement of Work.
Deliverable means software, documents or other materials
identified in a Statement of Work as "deliverable."
Delivery (or to Deliver) occurs when a Party physically or
electronically receives from the other Party (or, in the case of a
permitted Sublicensee, from the Licensee) the material that is being
delivered.
Documentation means any and all written materials, including
but not limited to user manuals, and machine-readable text subject
to display and printout that relate to and/or describe the Software
or the Code.
Entrade Transaction Software means the Licensor's transaction
software (version 4.0), as described in Exhibit D, an on-line
business to business e-commerce system using the Licensor's
transactional technology and featuring general e-commerce,
procurement, spot market, bidding, asset management, redeployment
and disposition applications.
Escrow Agreement means an escrow agreement for the deposit of
Source Code with an escrow agent and detailing the terms and
conditions relating to the escrow arrangement.
GAP means GlobalNet Asia Pacific Ltd ACN 090 616 685.
Improvement means any and all Updates and Upgrades, but not
Custom Applications, of the Licensed Product, the Code and any
related Know-How and technology as made generally commercially
available to other customers or partners of the Licensor.
IP Claim shall have the meaning set forth in Section 3.5.
Know-How means any and all inventions (whether patentable or
not), concepts, techniques, devices, data and other information
(including, but not limited to computer source code, flow charts,
opinions, drawings, blueprints and engineering and test
specifications) associated with the Software and/or the Code,
excluding know-how specifically allocated to Licensee in a Statement
of Work.
Licensed Marks shall have the meaning set forth in Section 2.8.
Licensor Marks shall have the meaning set forth in Section 2.9.
Licensed Trademark shall have the meaning set forth in Section
2.8.
Licensed Name shall have the meaning set forth in Section 2.8.
Licensed Product means the Software, the Documentation, the
Improvements and any copies of the Software, Documentation or
Improvements and any related Know-How and technology.
License means the license of the Licensed Product pursuant to
this Agreement.
License Fee shall have the meaning set forth in Section 2.10.
Modifiable Source Code shall have the meaning set forth in
Section 2.5.2.
Object Code means the computer programming code associated with
the Software and the Improvements that is intended to be directly
executable by a computer after suitable processing but without the
intervening steps of compilation or assembly.
Production Web Sites means the web sites, for Sublicensees,
that Licensor may develop pursuant to a request from Sublicensee or
Licensee.
Shareholders' Agreement means the Joint Venture and
Shareholders' Agreement dated on or about the date of this Agreement
among the Licensor, the Licensee and GAP.
Software means the Object Code version of the Entrade
Transaction Software, and any Custom Applications derived therefrom.
Source Code means the computer programming code associated with
the Software and the Improvements, other than the Object Code, and
related documentation, comments and procedural code, such as job
control language, which may be printed out or displayed in human
readable form.
Specifications means the specifications for the Entrade
Transaction Software in Exhibit D and such specifications for the
Additional Services and Custom Applications, and such other
documentation that the Parties agree, in writing, shall constitute
Specifications.
Statement of Work shall have the meaning set forth in Section
3.2.
Sublicense Agreement shall have the meaning set forth in
Section 2.7.1.
Sublicensee shall have the meaning set forth in Section 2.1.
Term shall have the meaning set forth in Section 5.1.
Territories means Australia, New Zealand, the Republic of
Philippines, Singapore, Malaysia, Indonesia, China, Hong Kong,
Macao, Taiwan, South Korea, Myanmar, Sri Lanka, Thailand, Cambodia,
Laos, Vietnam and Papua New Guinea.
Transaction Documents means this Agreement, the Shareholders'
Agreement and the constitution of the Licensee.
Update means each minor enhancement, addition, or substitution
to the Software, including bug fixes and corrections.
Upgrade means each modification, addition and substitution to
the Software that represents a substantial change, improvement or
addition to the utility, efficiency, or functional capability of the
Software, that is not solely an Update and that is made generally
commercially available.
1.2 Entire Agreement; Modification; Waiver. The Transaction
Documents constitute the entire agreement between the Parties
pertaining to the subject matter hereof and supersede all prior
agreements, understandings, representations, proposals and/or other
communications in respect of the licensing of the Licensed Product,
whether oral or written. No supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by each
of the Parties. Subject to section 7.11, the terms of this
Agreement shall prevail over any conflicting or additional terms,
including any terms contained in purchase orders or oral
communications between the Parties, but without limiting the Parties
ability to amend this Agreement by agreement in writing specifically
identified as an amendment hereto, as provided for in this section
1.2.
1.3 Governing Law; Jurisdiction. This Agreement shall be
interpreted, construed and enforced in all respects in accordance
with the law of the State of Illinois. Each Party irrevocably
consents to the exclusive jurisdiction of any state or federal court
for or within the State of Illinois over any action or proceeding
arising out of or related to this Agreement, and waives any
objection to venue or inconvenience of the forum in any such court.
1.4 Number and Gender. Words imparting the singular include the
plural and vice versa. Words imparting gender include the male,
female and the gender neutral.
1.5 Headings; Severability. The headings used in this Agreement
are for convenience only and are not to be construed to have legal
significance. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, such provision
shall be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable
law, and the remainder of this Agreement shall remain in full force
and effect.
1.6 Currency. Unless otherwise indicated, all dollar amounts
referred to in this Agreement are in United States Dollars.
ARTICLE 2. GRANT OF LICENSE
2.1 Grant of License
(a) Subject to the terms and conditions of this Agreement, the
Licensor hereby grants to the Licensee, and the Licensee hereby
accepts from the Licensor, a perpetual license during the Term to
use the Licensed Product, market and distribute the Licensed
Product, and to modify the Modifiable Source Code (defined in
Section 2.5.2), for the limited purposes of this Agreement and
subject to the restrictions set forth in Section 2.5, all within the
Territories.
(b) Subject to the terms and conditions of this Agreement, the
Licensor hereby grants to the Licensee, and the Licensee hereby
accepts from the Licensor, a perpetual, exclusive license during the
Term to grant sub-licenses of the Licensed Product to third parties
(each a "Sub-Licensee") within the Territories. Notwithstanding the
foregoing, the exclusive license right granted to the Licensee in
this Section is subject to the following terms and conditions:
(i) Licensor has the right to grant licenses of the
Licensed Product to third parties for the purpose of creating
business to business internet communities (being vertical portals)
within the Territories;
(ii) Licensee's exclusive right to sub-license in a
"Relevant Country" (as that term is defined in the Shareholders'
Agreement) shall terminate if Licensor exercises its rights in
accordance with Section 3.5(b) of the Shareholders' Agreement to
terminate the restriction set forth in Section 3.5(a) of the
Shareholders' Agreement, and thereupon the right to sub-license in
such Relevant Country shall become a non-exclusive right to sub-
license within that Relevant Country; and
(iii) Licensee's exclusive right to sub-license shall
terminate on the second anniversary of the Closing Date and such
right shall become a non-exclusive right to sub-license within the
Territories.
2.2 Delivery.
2.2.1 Delivery. Licensor shall Deliver, or procure the
Delivery of:
(c) deliverables identified in a Statement of Work in
accordance with that Statement of Work;
(d) one copy of the Entrade Transaction Software to be
installed on one (1) of Licensee's portable computers on or before
21 days (45 days for a branded version) from the Closing Date or
Licensor's receipt of Licensee's compatible computer, whichever is
later, for Licensee to use solely for demonstration purposes.
2.2.2 Acceptance Procedure. The Deliverables shall be
subject to the Acceptance Procedure as described in Exhibit B. The
Licensed Product shall be deemed accepted upon acceptance of the
first two Custom Applications by the Licensee.
2.3 Improvements. The Licensor shall promptly notify the Licensee
of, and provide to the Licensee for use by the Licensee and for
distribution to sublicensees any and all available Improvements
developed by or on behalf of Licensor. The Licensee shall and shall
ensure that all Sublicensees shall be under an obligation to
implement any Improvements within thirty (30) days of Delivery of
such Improvements to the Licensee or Sublicensee. Improvements
shall be made available by Licensor to the Licensee for distribution
to Sublicensees at no additional cost to the Licensee.
Notwithstanding the foregoing, the Licensee shall impose a standard
charge on Sublicensees for Improvements that constitute Upgrades.
2.4 Source Code. The Parties agree that:
(i) the Licensor will at all times keep possession of all
Source Code; and
(ii) the Licensee shall have no right, title, or interest in
such Source Code.
Notwithstanding Sections 2.4(i) and (ii), the Parties shall
enter into an Escrow Agreement within ninety (90) days of the
Closing Date pursuant to which the Licensee shall be a beneficiary.
The Escrow Agreement shall be a multi-party Escrow Agreement.
Licensee shall pay the costs of the source code escrow for the
Licensee under this Agreement. Licensor shall deposit with the
escrow agent updated copies of the Source Code relating to the
Entrade Transaction Software within seven (7) days of Delivery of
the Portal Web Sites and within forty-five (45) days of Acceptance
of an Upgrade by Licensee.
2.5 Restrictions on Use.
2.5.1 Copies. The Licensee may make any reasonable number
of copies it determines appropriate of the Software, the
Improvements and the Documentation solely for
(i) the Licensee's own operational use on any number of
its central processing units;
(ii) for back up, security or archival purposes; and
(iii) for distribution to Sublicensees in accordance
with this Agreement.
Any copies of any of the materials created in accordance with
this Section 2.5.1 shall include the Licensor's copyright and other
proprietary notices. Except as set forth in Section 2.5.2, the
Licensee may not modify, decompile, reverse engineer or otherwise
attempt to derive the Source Code. The Licensee shall not modify the
Licensed Product except as set forth in Section 2.5.2.
2.5.2 Modifiable Source Code. In addition to the rights
granted in the license in Section 2.1, Licensee has the right to
modify only the following elements of the Source Code: (i) HTML; and
(ii) ASP Code that does not make any calls to ADO ("Modifiable
Source Code"). All such modifications must be approved by Licensor,
in writing, prior to being put into production, which approval shall
not be unreasonably withheld. Licensee may make copies of the
Modifiable Source Code for the limited purpose of enabling Licensee
or its agent to make modifications, but Licensee shall not otherwise
copy, distribute or make such Source Code available to any third
parties without Licensor's prior written consent.
2.5.3 Modifications to certain documentation. Subject to
the terms and conditions of this Agreement, Licensee shall have the
right to modify operator and user manuals, training materials,
guides, and other materials that Licensor makes generally
commercially available to its customer base for such customers to
use, market, operate, install, troubleshoot, maintain and provide
training regarding the Licensed Product. Licensee shall Deliver to
Licensor copies of all modified documentation within seven (7) days
of commercial use of same.
2.6 Assignment. Except as provided in this Section 2.6 and in
Section 2.7, neither Party shall assign, sublicense or otherwise
transfer (voluntarily, by operation of law or otherwise) this
Agreement or any right, interest or benefit under this Agreement,
without the prior written consent of the other Party; provided,
however, that the Licensee may assign:
(a) this Agreement to any entity that acquires all or
substantially all (being more than 90%) of the voting shares of the
Licensee at the time of such assignment with the prior written
consent of the Licensor, which consent will not be unreasonably
withheld; and/or
(b) any right or benefit of or arising under this
Agreement, or grant a sublicense of any of its rights under this
Agreement (at no cost) to:
(i) any wholly owned subsidiary corporation of the
Licensee; or
(ii) any corporation or joint venture owned by the
Licensor and Gondwana Resources NL ACN 008 915 311; or
(iii) to any entity established to comply with any
law in any jurisdiction in which Licensee conducts business that
requires Licensee to conduct such business through an entity
established in that jurisdiction, but only if the relative direct
and indirect ownership interests of the shareholders of the
Licensee in such entity are identical to their relative shares in
the Licensee,
(provided that such corporation, joint venture, or entity
first enters into a deed agreeing to be bound by the relevant
provisions of this Agreement).
Any attempted assignment, sublicense or transfer by a Party in
derogation hereof shall be null and void. Subject to the foregoing,
this Agreement shall be fully binding upon, inure to the benefit of
and be enforceable by the Parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, the Licensee
shall not assign this Agreement to any entity that competes with the
Licensor in the Licensor's software development activities.
2.7 Sublicensing.
2.7.1 Except as set forth in Section 2.6 or in this Section
2.7, this Agreement is not intended to confer, and shall not be
deemed to confer, (a) on any person or entity other than the
Licensee, any license to use the Licensed Product, or (b) subject to
clause 2.1, 2.4 and 2.5.2 on Licensee or any Sublicensee any right
to have access to the Source Code. The Licensee shall have the right
to grant sublicenses of the Licensed Product to Sublicensees for use
in the Territories on terms substantially in the form attached as
Exhibit C. ("Sublicense Agreement"). With respect to each
Sublicense Agreement that the Licensee enters into, the Licensee
shall pay to the Licensor a one-time royalty of 5% of the sublicense
fee received by the Licensee, due (i) upon the earlier of receipt by
the Licensee of payment of fees by the Sublicensee or Delivery of
the Licensed Products to the Sublicensee pursuant to a Sublicense
Agreement, or (ii) where Sublicensee has the right, pursuant to a
Sublicense Agreement, to perform an acceptance test regarding the
Licensed Product, upon the earlier of receipt by the Licensee of the
payment of fees by the Sublicensee or acceptance of the Licensed
Product by the Sublicensee pursuant to a Sublicense Agreement.
Licensee shall use its commercially reasonable efforts to encourage
Sublicensees to accept the Licensed Product without requesting
significant modification thereof.
2.7.2 The Licensee will immediately notify the Licensor of
the execution of any Sublicense Agreements, providing copies
thereof, and of the Delivery of any copy of the Licensed Product,
identifying the entity to whom the Licensed Product was Delivered.
The Licensee will also immediately notify the Licensor of the
termination of any Sublicense Agreements.
2.7.3 Prior to Delivery of the Licensed Product to a
Sublicensee, the Licensee shall execute a Sublicense Agreement with
such Sublicensee. The Licensee shall require the Sublicensees to
enter into a Sublicense Agreement substantially similar to the
Sublicense Agreement attached hereto as Exhibit C; however, Licensee
shall have the right, in its sole discretion, to determine the price
for such Sublicense Agreement. Licensor shall have the right to
approve the Sublicensee. Such approval must occur in writing prior
to Delivery of the Licensed Products to Sublicensee and must not be
unreasonably withheld or delayed. The Licensee shall have the sole
responsibility for Delivering the Licensed Product to Sublicensees
2.8 Licensed Name and Trademark License. Licensor hereby:
(a) grants the Licensee a royalty-free, worldwide, non-
exclusive, non-transferable right and license to use, transmit,
and display the name "Entrade" in its corporate name (the "Licensed
Name"); and
(b) grants the Licensee and each Sublicensee a royalty-
free, worldwide, non-exclusive, non-transferable right and
license to use, transmit, display or otherwise distribute the
trademarks set forth in Exhibit A (the "Licensed Trademarks") in
connection with the Licensed Products,
subject to Licensor's approval and quality control measures, in
a manner which shall conform to the terms and conditions of use of
the Licensed Name and the Licensed Trademarks (collectively, the
"Licensed Marks") as may be specified by Licensor from time to time
and solely for the purposes expressly provided for hereunder.
Notwithstanding the foregoing, the license granted in this
Section 2.8 to Sublicensees is limited to the provision of services
using the Licensed Product. The Licensor reserves the right to
change the Licensed Marks at any time, in its sole discretion, upon
sixty days' advanced written notice to the Licensee, if such change
in the Licensed Marks is in conjunction with a general change in the
use of the Licensed Marks by the Licensor.
Subject to the provisions of this Section 2.8 and Section 2.9
hereof, any and all web sites established by the Licensee using the
Licensed Product directly or through any sub-licenses will bear the
Licensor's "Powered by Entrade" service xxxx, or such other service
marks incorporating the name "entrade" as are approved by the
Licensee in writing from time to time, on the home page and
transactional pages of each such web site.
2.9 Limitations. The Licensee's and any Sublicensee's use of the
Licensed Marks shall inure to the sole benefit of the Licensor. The
nature and quality of services of the Licensee and any Sublicensee
provided in connection with any website, goods, or services on which
the Licensed Marks are used shall be subject to the review and
approval of the Licensor, in its sole discretion. At the Licensor's
request, the Licensee shall provide examples of all forms of use of
the Licensed Marks. The Licensor may terminate the Licensee's right
to use the Licensed Marks at any time on written notice to the
Licensee if the Licensor, in its sole discretion, believes that
Licensee's use of the Licensed Marks is not in material compliance
with this Agreement or that the nature and/or quality of services
provided by the Licensee would, or would be reasonably likely to,
have a material adverse effect on the reputation or standing of the
Licensor.
The termination of the Licensee's right to use the Licensed
Marks shall automatically terminate the right of all Sublicensees to
use the Licensed Marks, and the provisions of any sublicense shall
so provide.
The Licensee must terminate any Sublicensee's right to use the
Licensed Marks on written notice from the Licensor to the Licensee
if the Licensor, in its sole discretion, believes that Sublicensee's
use of the Licensed Marks is not in material compliance with the use
of the Licensed Marks under this Agreement or that the nature and/or
quality of services provided by that Sublicensee would, or would be
reasonably likely to, have a material adverse effect on the
reputation or standing of the Licensor.
The Licensor shall have and retain sole ownership of the
trademarks, service marks (including without limitation the Licensed
Marks), trade names, and logos owned or licensed by the Licensor
(the "Licensor Marks"), including the goodwill pertaining thereto.
The Licensee acknowledges and agrees that it has no rights in
Licensor Marks, except in relation to the use of the Licensed Marks
as provided for in Section 2.8, and that it has paid no
consideration for the use of the Licensor Marks. Except for the
Licensed Marks, the Licensee shall not make use of any of the
Licensor Marks, without Licensor's written permission. The Licensee
shall not intentionally, during the term of this Agreement or at any
time after the cancellation or expiration thereof:
(i) take any action that would convey or grant an
interest in any of the Licensor Marks (except as provided for in
Section 2.8);
(ii) contest or take any action to contest the
validity, distinctiveness and ownership of the Licensor Marks;
(iii) attempt to register any Licensor Marks without
the prior written consent of Licensor;
(iv) use or attempt to register any trademark,
service xxxx, trade name, or logo in any country in the world that
is confusingly similar to any Licensor Marks; or
(v) assert or claim any interest in any Licensor Marks.
Upon termination of this Agreement, or upon receiving notice of
termination of its right to use the Licensed Marks, the Licensee
shall immediately cease use of the Licensed Marks.
2.10 License Fee. Subject to Section 5.6, the Licensee shall pay a
one-time license fee of seven million dollars ($7,000,000) U.S.
gross ("License Fee") to the Licensor. The initial two million
dollars($2,000,000) of the License Fee shall be due upon the Closing
Date, and the remainder of the License Fee shall be due upon
acceptance of the Licensed Product.
2.11 GST. Subject to this Section 2.11, any amount expressed in
this Agreement which is relevant in determining a payment to be made
by one of the Parties to the other Party is expressed exclusive of
GST as defined in the A New Tax System (Goods and Services Tax) Xxx
0000. If any amount payable by either Party to the other Party
under this Agreement is in or towards payment for a taxable supply
under the A New Tax System (Goods and Services Tax) Xxx 0000 then
the amount payable shall be increased to an amount calculated by
multiplying the original monetary amount payable referable to that
taxable supply by the formula, 1 plus the rate at which GST is
imposed under the applicable GST Imposition Act referred to in the
definition of GST in the (Goods and Services Tax) Xxx 0000. It is
the intention of the Parties that no Party should be financially
disadvantaged or advantaged (as between the Parties) under this
Agreement as a result of the GST. Pursuant to this intention, it is
agreed that should the GST financially disadvantage or advantage any
Party in relation to supplies where the consideration is other than
for a monetary payment, the Parties agree to renegotiate in good
faith and to make any amendments as may be necessary to ensure that
the Parties are in the same financial position as they would have
been in the absence of the GST. For these purposes any timing
differences will be ignored.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
3.1 Ownership of Intellectual Property. Licensee acknowledges that
(unless otherwise stated and agreed in a Statement of Work in
respect of the Licensed Product) the Licensed Product and the
Licensed Marks are the sole and exclusive property of Licensor and
the Licensed Product and the Licensed Marks are protected under
copyright, trademark and other proprietary laws of the United States
and other jurisdictions. The Licensee acknowledges that the
Licensed Product includes valuable trade secrets and confidential
information of the Licensor, and that the Licensee acquires no
right, title or interest therein, except the limited rights to use
and sublicense the Licensed Product and the Licensed Marks as set
forth in this Agreement.
3.2 Additional Services. Licensee may request, on its behalf or on
behalf of a Sublicensee, that Licensor provide Additional Services.
Upon request from the Licensee (for itself or on behalf of a
Sublicensee), to provide Additional Services, the Licensor shall
promptly develop and deliver to the Licensee a Statement of Work,
which shall include a timeline, charges, allocation of intellectual
property rights, deliverables (including Custom Applications) and
other relevant information for all applicable work associated with
such Additional Services (including, without limitation, analysis,
preparation of specifications, design, development, coding, testing,
implementation and training)("Statement of Work"). The Licensor
shall have no obligation to perform Additional Services until
acceptance of such Statement of Work by the Licensee (for itself or
on behalf of a Sublicensee) in writing. In consideration of the
performance of Additional Services, the Licensee shall make payments
to the Licensor in accordance with the Statement of Work. Where
Additional Services are provided on behalf of Sublicensees, the
Licensor will invoice the Licensee for all charges with respect
thereto. Any modifications or other changes made to the Licensed
Product as part of the performance of Additional Services shall be
deemed to be Licensed Product for the purposes of this Agreement.
3.3 Licensor Representations and Warranties. The Licensor
represents and warrants to the Licensee that:
(i) the Licensor has the right to enter into this
Agreement and grant the rights granted hereunder and there are no
outstanding agreements or understandings of any kind binding upon
the Licensor that are inconsistent with this Agreement or the rights
granted hereunder;
(ii) it is the owner of the Licensed Product and the
Licensed Xxxx and has the right to grant the rights hereunder;
(iii) the Licensed Product does not and will not
contain any backdoor, concealed access, software locks or any
similar devices which, upon the occurrence of a certain event, the
passage of a certain amount of time, or the taking of any action (or
the failure to take action) by or on behalf of the Licensor, will
cause the Software, Improvements or a Custom Application to be
destroyed, erased, damaged or otherwise made inoperable;
(iv) neither the Licensed Product nor the Licensed Xxxx
infringe upon or violate the copyrights, patents, trade secrets,
trademarks or other proprietary rights of any third party; and
(v) for a period of twelve months from Delivery, the
Entrade Transaction Software will conform to the Specifications in
all material respects; provided, however, that, if the Entrade
Transaction Software does not so conform, the Licensor's sole
obligation will be to ensure that the Entrade Transaction Software
does conform to the Specifications;
(vi) the Additional Services will be performed in a
workmanlike manner; and
(vii) any tapes, diskettes or other media which is
Delivered pursuant to this Agreement will be free of defects in
materials and workmanship under normal use; provided, however, that,
if such tapes, diskettes or other media are not so free, the
Licensor's sole obligation will be to ensure that the Licensee
receives tapes, diskettes or other media, as the case may be, which
are free of defects in materials and workmanship under normal use.
3.4 Licensee Representations and Warranties. The Licensee
represents to the Licensor that:
(i) the Licensee has the right to enter into this
Agreement and fulfill its duties and obligations hereunder;
(ii) there are no outstanding agreements of any kind
binding upon the Licensee that are inconsistent with the Transaction
Documents;
(iii) the Licensee's performance under this Agreement
shall conform to all applicable laws, government rules and
regulations, and the Licensee shall not use or sublicense the
Licensed Product in violation of such laws, government rules and
regulations; and
(iv) the Licensee shall not misrepresent the
functionality, performance or capabilities of the Licensed Product
and shall comply with Licensor's policies and procedures regarding
use, implementation, modification, maintenance and support of the
Licensed Product which policies have been communicated to Licensee.
3.5 Indemnification by Licensor. The Licensor agrees to defend,
indemnify and hold the Licensee and its officers, directors, agents
and employees harmless from and against any and all claims, demands,
liabilities, actions, judgments, and expenses, including reasonable
attorneys' fees, arising out of or related to:
(a) any claim that the Licensed Product directly
infringes any U.S. patent issued as of the date of this Agreement or
any copyright, trade secret or trademark, or other proprietary
rights of any third party ("IP Claim"); provided that:
(i) the Licensee notifies the Licensor promptly in
writing of any such claim,
(ii) the Licensor has the sole control of the
defense and all related settlement negotiations, and
(iii) the Licensee provides the Licensor with
all reasonably necessary assistance, information and authority to
perform the foregoing at the Licensor's expense;
and
(b) any material breach or alleged material breach of any
of the Licensor's representations and warranties or covenants
hereunder,
provided, however, that this Section 3.5 shall not apply to the
extent that the alleged infringement arises out of or relates to the
Licensee's or Sublicensee's unauthorized combination, operation or
use of Licensed Product with software that does not originate from
the Licensor, modifications to the Software or Custom Application
not developed by or on behalf of the Licensor and not authorized by
the Licensor, or if the alleged infringement arises out of the use
of technology, business methods, trade secrets, know-how, or
copyrighted material provided by Licensee to Licensor and used or
incorporated by Licensor in a Custom Application in accordance with
Licensee's instructions (a "Non-Indemnified IP Claim"), even if the
Licensor has been made aware of such combination, operation or use
or of such modifications. For the avoidance of doubt, an IP Claim
does not include a Non-Indemnified IP Claim.
3.6 Indemnification by Licensee. The Licensee agrees to defend,
indemnify and hold the Licensor and its officers, directors, agents
and employees harmless from and against any and all claims, demands,
liabilities, actions, judgments, and expenses, including reasonable
attorneys' fees, arising out of or related to:
(a) any material breach or alleged material breach of any
of the Licensee's representations and warranties or covenants (which
includes non-payment) hereunder;
(b) Non-Indemnified IP Claims;
provided that
(i) Licensor notifies Licensee promptly in writing
of any such claim,
(ii) Licensee has the sole control of the
defense and all related settlement negotiations, and
(iii) Licensor provides Licensee with all
reasonably necessary assistance, information and authority to
perform the foregoing at Licensee's expense.
3.7 Infringement. In the event that the Licensed Product is held
or is likely to be held to constitute an infringement of any
copyright, patent, trade secret or trademark, or other proprietary
rights of any third party, the Licensor, at its sole expense, shall
use reasonable and prompt efforts to:
(i) procure for the Licensee and each Sublicensee the
right to continue to use the Licensed Product;
(ii) modify the Licensed Product so that it is non-
infringing and of at least equivalent performance and
functionality; or
(iii) provide functionally equivalent replacement
products.
Licensor may exercise its sole discretion in selecting among
the foregoing options (i), (ii) or (iii).
ARTICLE 4. CONFIDENTIALITY
4.1 It is understood that, during the course of the Parties'
performance under this Agreement, each Party might obtain access to
the other Party's information that is confidential, including, in
the case of the Licensor, but not limited to, the Licensed Product,
the Object Code, the Documentation, the Improvements, the Know-How,
and all material information concerning each Party's business
operations, including, but not limited to, product plans, designs,
costs, prices and names, finances, marketing plans, business
opportunities, personnel, research, development or Know-How (the
"Confidential Information").
4.2 Each Party agrees to use Confidential Information of the other
Party solely in conjunction with its performance under this
Agreement, and not to disclose or otherwise use such information in
any fashion. Each Party, however, will not be required to keep
confidential such Confidential Information that
(i) becomes generally available without fault on its
part;
(ii) can be demonstrated to be rightfully in that
Party's possession without restriction prior to its receipt from the
other Party;
(iii) is disclosed by third parties without similar
restrictions;
(iv) is rightfully obtained by that Party from third
parties without restriction; or
(v) is otherwise required to be disclosed by law,
judicial process or the rules of any stock exchange on which a Party
or any of its Affiliates is listed (however upon receipt of a demand
for production of Confidential Information governed by this Section
4.2, the Party which receives the demand shall use reasonable
efforts to notify the other Party of such demand in sufficient time
to allow the other Party to move to prevent such disclosure).
4.3 Unless required by law or to assert its rights under this
Agreement, and except for disclosure on a "need to know basis" to
its own employees, and its legal, investment, financial and other
professional advisers on a confidential basis, each Party agrees not
to disclose the terms of this Agreement or matters related thereto
without the prior written consent of the other Party. Each Party
shall inform any employees or professional advisors to whom that
Party provides Confidential Information of the requirements of
Article 4 of this Agreement and shall procure that those employees
or professional advisors abide by Article 4 of this Agreement. Each
Party shall prevent disclosure and misuse of Confidential
Information by taking at least the same precautions with respect to
the Confidential Information as it takes with respect to its own
Confidential Information, which steps shall be no less stringent
than reasonable steps.
4.4 This Article 4 shall survive for a period of three (3) years
beyond any expiration or termination of this Agreement.
ARTICLE 5. TERM AND TERMINATION
5.1 Term. Subject to satisfaction of the Conditions and payment of
the License Fee, the term of the License shall begin on the Closing
Date and shall continue until terminated as hereinafter provided
("Term").
5.2 Termination for Cause. Each Party will have the right to
immediately terminate this Agreement if the other Party is in
default of any material obligation herein, and such breach is
incapable of being cured, or if such breach is capable of cure, such
breach is not cured within thirty (30) days after receipt of written
notice of such default from the non-defaulting Party or within such
additional cure period as the non-defaulting Party may authorize.
5.3 Termination of Shareholders' Agreement. In the event the
Shareholders' Agreement terminates pursuant to Section 11.2(a)
(other than for the purposes of amalgamation or reconstruction) or
11.2(b) of the Shareholders' Agreement , this Agreement shall
terminate automatically on the date the Shareholders' Agreement
terminates.
5.4 Termination for Insolvency. Each Party shall have the right to
immediately terminate this Agreement upon written notice in the
event that the other Party:
(a) voluntarily or involuntarily becomes the subject of
a petition in bankruptcy or of any proceeding relating to
insolvency, receivership, liquidation, composition or assignment for
the benefit of creditors and that petition or proceeding is not
withdrawn or discharged within thirty (30) days thereafter;
(b) admits in writing its inability to pay its debts as
they become due; or
(c) ceases to conduct business in the normal course and
has not re-commenced business in the normal course within thirty
(30) days thereafter.
5.5 Consequences of Termination/Expiration. Upon the termination
or expiration of this Agreement,
(i) the Licensee shall promptly return all Confidential
Information of the Licensor, and other information, documents,
manuals and other materials stored in any form or media (including
but not limited to electronic copies) belonging to or received from
the Licensor, except as may be otherwise provided in this Agreement,
(ii) the Licensor shall promptly return all Confidential
Information of the Licensee, and other information, documents,
manuals and other materials stored in any form or media (including
but not limited to electronic copies) belonging to or received from
the Licensee, except as may be otherwise provided in this Agreement,
(iii) the Licensee shall return to the Licensor or
delete all copies in its power, possession, custody or control of
the Licensed Product, Improvements and Custom Applications, and
(iv) each Sublicensee shall be deemed to be directly
licensed by the Licensor as from the effective date of such
termination or expiration, and any Sublicense Agreement between the
Licensee and any of its Sublicensees shall contain a provision so
providing.
5.6 Conditions Precedent. If the Conditions are not satisfied or
waived in accordance with the terms of the Shareholders' Agreement,
or the portion of the License Fee payable on the Closing Date is not
paid on or before 5pm (Perth time) on the Closing Date, this
Agreement automatically terminates with effect from the Closing
Date, and, except for Article 4, is of no further effect. For the
avoidance of doubt, if the Agreement is terminated pursuant to this
Section 5.6, neither Party shall have any liability to the other
Party, except in accordance with Article 4.
ARTICLE 6.DISCLAIMER OF WARRANTIES/LIMITATION OF LIABILITY
6.1 DISCLAIMER OF WARRANTIES. OTHER THAN AS SET FORTH IN ARTICLE
3, LICENSOR AND LICENSEE MAKE NO, AND EACH PARTY ACKNOWLEDGES THAT
EACH PARTY HAS NOT MADE ANY, AND HEREBY SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABLE QUALITY
OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE LICENSED PRODUCT
WILL BE ERROR-FREE. THE LICENSED PRODUCT IS PROVIDED "AS IS."
6.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY NATURE, EVEN IF
THE PARTIES SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THE FOREGOING SHALL APPLY REGARDLESS OF THE NEGLIGENCE OR
OTHER FAULT OF ANY PARTY AND REGARDLESS OF WHETHER SUCH LIABILITY
SOUNDS IN CONTRACT, NEGLIGENCE, TORT, STRICT LIABILITY OR ANY OTHER
THEORY OF LIABILITY.
6.3 LIMITATION ON DAMAGES. OTHER THAN IN RELATION TO IP CLAIMS, IN
NO EVENT SHALL THE MAXIMUM AMOUNT OF DAMAGES PAYABLE BY LICENSOR OR
LICENSEE FOR ANY BREACH OF THIS AGREEMENT OR ANY DAMAGE OR INJURY
RESULTING FROM THE LICENSED PRODUCT EXCEED, IN THE AGGREGATE
$7,000,000; PROVIDED, HOWEVER, THAT ANY SUMS THAT THE LICENSEE IS
REQUIRED TO PAY TO THE LICENSOR PURSUANT TO ARTICLE 2 SHALL NOT BE
INCLUDED WITHIN SUCH LIMIT. THE LIMITATION IN THIS SECTION 6.3 IS
AN AGGREGATE LIMITATION WHICH IS TO BE APPLIED TO ALL DAMAGES,
CLAIMS AND INDEMNITIES (OTHER THAN IN RELATION TO IP CLAIMS) ARISING
OUT OF THIS AGREEMENT, THE WEB SITE DEVELOPMENT AND HOSTING
AGREEMENT EFFECTIVE ON THE CLOSING DATE, AND THE MAINTENANCE AND
SUPPORT AGREEMENT EFFECTIVE ON THE CLOSING DATE, AMOUNTS RELATING TO
ALL SUCH DAMAGES, CLAIMS AND INDEMNITIES SHALL BE AGGREGATED IN
DETERMINING WHETHER THE $7,000,000 LIMIT IS REACHED.
ARTICLE 7. OTHER PROVISIONS
7.1 Binding Effect. This Agreement is binding upon and shall inure
to the benefit of the Parties and their respective permitted
successors and assigns.
7.2 Survival. All representations, warranties, indemnifications,
and obligations that expressly or by their nature survive
termination of this Agreement shall survive any termination of this
Agreement and shall continue in full force and effect subsequent to
and notwithstanding such termination.
7.3 Notices.
7.3.1 Requirements for notice.
A notice, consent or other communication under this
document is only effective if it is:
(e) in writing, signed by or on behalf of the Party giving it;
(f) addressed to the Party to whom it is to be given;
and
(g) either:
(i) delivered or sent by pre-paid mail (by airmail,
if the addressee is overseas) to that Party's address; or
(ii) sent by fax to that Party's fax number and the
machine from which it is sent produces a report that states that it
was sent in full.
7.3.2 When a notice is effective.
A notice, consent or other communication that complies
with this section is regarded as given and received:
(a) if it is delivered or sent by fax:
(i) by 5.00 pm (local time in the place of receipt)
on a Business Day - on that day; or
(ii) after 5.00 pm (local time in the place of
receipt) on a Business Day, or on a day that is not a Business Day -
on the next Business Day; and
(b) if it is sent by mail:
(iii) within the same country from which it is sent - 3
Business Days after posting; or
(iv) to a place outside the country from which it is
sent - 7 Business Days after posting.
7.3.3 A Party's address and fax number are those set out
below, or as the Party notifies the sender:
If to the Licensee:
Address: Ground Floor, Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx, 0000
Fax number: (000) 0000 0000
Attention: Chairman
with a copy to:
GlobalNet Asia Pacific Ltd
Address: Ground Floor, Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx, 0000
Fax number: (000) 0000 0000
Attention: Chairman
If to the Licensor:
xxxxxxx.xxx, Inc.
Address: 000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xx. Xxxxxx, Xxx Xxxxxx 00000
Fax number: (000) 000-0000
Attention: Xxxx Xxxxx
with a copy to:
Entrade Inc.
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax number: (000) 000-0000
Attention: General Counsel
7.4 Counterparts. This Agreement may be executed in counterparts
and shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of
the Parties.
7.5 Independent Contractors. The Parties to this Agreement are
independent contractors and shall not be considered or deemed to be
agents, employees, joint venturers or partners of the other except
as otherwise expressly agreed to in a writing signed by the Parties.
Neither Party shall have authority to contract for or bind the other
in any manner and shall not represent itself as an agent of the
other or as otherwise authorized to act for or on behalf of the
other.
7.6 Export Controls. The Licensee agrees to comply fully with all
relevant export laws and regulations of the United States,
including, but not limited to, the U.S. Export Administration
Regulations (collectively "U.S. Export Controls") with regard to the
Licensed Product. Without limiting the generality of the foregoing,
the Licensee expressly agrees that it shall not, and shall cause its
representatives to agree not to, export, directly or indirectly, re-
export, divert, or transfer the Licensed Product or any direct
product thereof to any destination, company or person restricted or
prohibited by U.S. Export Controls.
7.7 Force Majeure. Neither Party will be liable for delay or
default in the performance of its obligations under this Agreement
if such delay or default is caused by conditions beyond its
reasonable control, including, but not limited to, fire, flood,
accident, earthquakes, telecommunications line failures, storm, acts
of war, riot, government interference, strikes and/or walk-outs. In
the event of a force majeure event which lasts longer than thirty
(30) days, the Party not experiencing the force majeure event may
terminate this Agreement upon prior written notice to the other
Party. In the event that any force majeure event permanently
precludes the Licensor from performing its obligations under this
Agreement within the first three years after execution hereof, the
Licensor shall repay to the Licensee a sum equal to the License Fee
multiplied by a fraction, the numerator of which is 36 minus the
number of complete calendar months (determined on the basis of the
monthly anniversary of the Closing Date) that have elapsed since the
Closing Date and the denominator of which is 36.
7.8 Expenses. Each Party must pay its own expenses incurred in
negotiating, executing and registering this document, except that
the Licensee must pay the Licensor on demand the amount of any duty
that is payable on or in relation to this Agreement.
7.9 Severability. If any provision of this Agreement is found
invalid or unenforceable by a court of competent jurisdiction, such
provision shall be deemed to be severed herefrom, without affecting
the remaining portions of this Agreement, which shall remain in full
force and effect; provided, however, that the severing of any such
provision will not materially change the substance of this
Agreement.
7.10 No Third Party Beneficiary. This Agreement does not
contemplate, and the Licensor and Licensee do not intend, the
creation of any third party beneficiary rights in and to this
Agreement, and no third parties shall have any rights hereunder.
7.11 Order of Precedence of Documents. If there shall be any
inconsistencies between this Master Software License Agreement, on
the one hand, and any of the following agreements between the
Parties: the Web Site Hosting Agreement, the Maintenance and
Support Services Agreement, and any Statement of Work (collectively,
"the Supporting Documents"), then the Master Software License
Agreement shall prevail to the extent of such inconsistency, unless
specifically agreed otherwise in writing by the Parties. The
interpretation of the Supporting Documents and the End User Software
Sublicense Agreement (Exhibit C), shall be by reference to and in
accordance with the context and intent of the Master Software
License Agreement.
IN WITNESS whereof the Parties have duly executed this
Agreement as of the date first written above.
Entrade Asia Pacific Pty Ltd, xxxxxxx.xxx, Inc.
ACN 092 146 426
By: By:
------------------------------ ----------------------
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Name: Name:
------------------------------ ----------------------
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Title: Title:
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EXHIBIT A
LICENSED MARKS (SECTION 2.8)
----------------------------
< display of licensed marks for: xxxxxxx.xxx; Entrade, Inc.;
powered by xxxxxxx.xxx; powered by Entrade Inc. >
EXHIBIT B
ACCEPTANCE PROCEDURE
1.1 Acceptance Criteria
Each Deliverable (as defined in the Master Software License
Agreement dated April 3, 2000) shall be subject to acceptance
testing by Licensee to verify that the Deliverable satisfies the
acceptance criteria mutually agreed to by Licensor and Licensee for
said Deliverable as set forth in the Statement of Work. The
acceptance criteria for each Deliverable, which shall be included in
the Statement of Work, shall be jointly developed and mutually
agreed to in writing by Licensor and Licensee before work commences
therefore, when possible, but in no event later than thirty (30)
days in advance of the date identified for completion of the
Deliverable. Verification of acceptability of: (i) a software
Deliverable shall be based on material conformance to the
specifications and (ii) requirements definition or functional or
technical specification Deliverables, services, and other non-
hardware and non-software Deliverables shall be based on either
those stated in the Master Software License Agreement or, if none,
on material conformance to the specifications. If the Statement of
Work fails to set forth acceptance criteria for a Deliverable,
acceptability of such Deliverable shall be based solely on material
conformance of the Deliverable with the Statement of Work.
1.2 Acceptance Testing
(a) Acceptance testing for any Deliverable shall commence
within three (3) working days of the date on which Licensor Delivers
to Licensee, the Deliverable that has been satisfactorily completed,
in Licensor's opinion, and is ready for acceptance testing by
Licensee. Acceptance testing shall continue for the period of time
specified in the acceptance criteria or, if no such time period has
been agreed upon by the parties, for a period of fifteen (15)
consecutive days (the "Acceptance Period"). Licensee shall provide
all personnel and expenses for acceptance testing.
(b) In the event that any Deliverable does not materially
conform to the acceptance criteria within the Acceptance Period
described above, Licensee shall by the end of the Acceptance Period
promptly give Licensor written notice thereof. Licensee shall
provide Licensor written notice, in reasonable detail, of all
alleged material non-conformance with acceptance criteria and shall
cooperate with Licensor in identifying in what respects the
Deliverable has failed to conform to the criteria. Licensor shall,
at no cost to Licensee, promptly commence efforts to correct the
material deficiencies identified, and Licensor shall use its best
efforts to correct such material deficiencies within fifteen (15)
calendar days of the end of the Acceptance Period. Licensor shall
amend the Documentation and/or Specifications to reflect such
correction and provide such amended Documentation and/or
Specifications to the Licensee.
(c) Upon completion of the corrective action by Licensor,
Licensor and Licensee will repeat the acceptance test procedure
cycle in accordance with the procedures and time frames set forth in
Sections 1.2 (a) and (b) above until the Deliverable has
successfully conformed to the acceptance criteria.
(d) Nonconformities of the Deliverable resulting from out-of-
scope items or consisting of items that cannot be
reproduced shall not be reasons for rejecting the Deliverable.
Where the parties cannot agree whether a nonconformance qualifies as
one or more of the foregoing exceptions, the classification of such
questionable items will be made by referring to the written project
documentation of functionality, including the Statement of Work and
test plans.
(e) If the Deliverable does not conform to the acceptance
criteria within the greater of
(i) sixty (60) days from the end of the first Acceptance
Period described in 1.2 (a) above or
(ii) fifty percent (50%) of the total period of time
estimated for completing the project set forth in the Statement of
Work after the end of the first Acceptance Period described in 1.2
(a) above;
Licensee may: (i) immediately terminate the Statement of Work
without any further obligation or liability of any kind and Licensor
shall immediately reimburse Licensee any amounts paid thereunder and
return any Deliverables and other materials provided thereunder; or
(ii) require Licensor to continue to attempt to correct the
nonconformity, using commercially reasonable efforts, reserving the
right to terminate as aforesaid at any time.
(f) When the Deliverable has successfully satisfied the
acceptance criteria Licensee shall give Licensor written notice
thereof. Final acceptance of the Deliverable shall be deemed to have
occurred on the earlier to occur of the following: (i) the date on
which Licensee notifies Licensor of its acceptance; or (ii) the end
of an Acceptance Period if Licensee has not provided Licensor with
written notice of any nonconformance. Notwithstanding the
foregoing, Licensee's or Sublicensee's distribution of the
Deliverable or use of the Deliverable in a production mode, wherein
Licensee employs the Deliverable to conduct official and routine
business, shall immediately constitute final acceptance of the
Deliverable.
1.3 Modification of Procedure
The parties may jointly agree in writing in a Statement of Work
to modify the procedure set forth herein based on the circumstances
and needs of particular projects.
EXHIBIT C
SUBLICENSE AGREEMENT
--------------------
This Software Sublicense Agreement is made effective as of this
day of , 2000 (the "Effective Date"), by and
between having a principal place of business at
(hereinafter the "Sublicense") and Entrade Asia
Pacific Pty Ltd, ACN 092 146 426, a corporation incorporated in
Western Australia, with its principal offices at Ground Floor,
Durack Centre, 000 Xxxxxxxx Xxxxxxx, Xxxxx, Xxxxxxx Xxxxxxxxx, 0000
("Sublicensor") . Hereinafter the Sublicensee and the Sublicensor
are referred to from time to time collectively as the "Parties" and
individually as a "Party."
WHEREAS, the Sublicensor has a license to the Licensed Product (as
hereinafter defined) under that certain Master Software License
Agreement dated between the Sublicensor and the Licensor,
xxxxxxx.xxx, Inc., a Delaware corporation, with its principal
offices at 000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxxx, Xxx Xxxxxx
00000 ("Licensor"), including the right to sublicense, and
WHEREAS, the Sublicensor has the right to license the copyright and
certain confidential and proprietary know-how relating to the
Licensed Product, and
WHEREAS, the Sublicensee desires to use the Licensed Product in on-
line and electronic business operations in the Markets within the
Territories,
NOW THEREFORE, in consideration of the covenants, agreements and
consideration hereinafter contained (the receipt, adequacy and
sufficiency of which are hereby acknowledged by the Parties by their
execution hereof), the Parties hereby covenant and agree as follows:
1. ARTICLE 1. INTERPRETATION
1.1 Definitions. In this Agreement, and the Schedules and Exhibits
(if any) annexed hereto, the following expressions shall have the
respective meanings indicated below:
Agreement means this Software Sublicense Agreement and the
Schedules and Exhibits (if any) annexed hereto.
Additional Services means hosting, maintenance and support,
development of web sites, creation of Custom Applications, systems
integration, training or other services requested to be performed by
Sublicensor or Licensor relating to the Licensed Product.
Code means the computer programming code associated with the
Software and the Improvements. Except as otherwise specified, Code
shall include both Object Code and Source Code.
Confidential Information shall have the meaning set forth in
Section 5.1.
Custom Application shall mean a customization, enhancement,
alteration, or modification to the Licensed Product provided upon
request of the Sublicensee.
Delivery (or to Deliver) occurs when a Party physically or
electronically receives from the other Party the material that is
being delivered.
Deliverable means Software (in the Object Code form), documents
or other materials identified in a Statement of Work as
"deliverable."
Documentation means any and all written materials, including
but not limited to user manuals, and machine-readable text subject
to display and printout that relate to and/or describe the Software
or the Code.
Entrade Transaction Software means the Licensor's transaction
software (version 4.0), as described in the Specifications attached
hereto as Exhibit C, an on-line business to business e-commerce
system using the Licensor's transactional technology and featuring
general e-commerce, procurement, spot market, bidding, asset
management, redeployment and disposition applications.
Improvement means any and all Updates and Upgrades, but not
Custom Applications, of the Licensed Product, the Code and any
related Know-How and technology, as made generally commercially
available by Licensor.
IP Claim shall have the meaning set forth in Section 4.4.
Know-How means any and all inventions (whether patentable or
not), improvements, techniques, devices, data and other information
(including, but not limited to computer source code, flow charts,
opinions, drawings, blueprints and engineering and test
specifications) associated with the Software and/or the Code.
Licensed Marks shall have the meaning set forth in Section 2.6.
Licensed Product means the Software, the Documentation, the
Improvements and any copies of the Software, Documentation or
Improvements and any related Know-How and technology.
Markets means __________ [insert the markets] in the
Territories.
Master Software License Agreement means that certain Master
Software License Agreement, dated April 3, 2000 between the
Sublicensor and the Licensor.
Object Code means the computer programming code associated with
the Software and the Improvements that is intended to be directly
executable by a computer after suitable processing but without the
intervening steps of compilation or assembly.
Software means the Object Code version of the Entrade
Transaction Software, and any Custom Applications derived therefrom.
Source Code means the computer programming code associated with
the Software and the Improvements, other than the Object Code, and
related documentation, comments and procedural code, such as job
control language, which may be printed out or displayed in human
readable form.
Specifications means the specifications for the Additional
Services and Custom Applications (if any), and such other
documentation that the Parties agree, in writing, shall constitute
Specifications.
Statement of Work shall have the meaning set forth in Section
2.2.
Sublicense means the license of the Licensed Product to the
Sublicensee pursuant to this Agreement.
Term shall have the meaning set forth in Section 6.1 of this
Agreement.
Territories means ________________ [insert territories
covered].
Update means each minor enhancement, addition, or substitution
to the Software, including bug fixes and corrections.
Upgrade means each modification, addition and substitution of
the Software that represents a substantial change, improvement or
addition to the utility, efficiency, or functional capability of the
Software, that is not solely an Update and that is made generally
commercially available by the Licensor.
1.2 Entire Agreement; Modification; Waiver. This Agreement,
including any exhibits attached hereto, constitute the entire
agreement between the Parties pertaining to the subject matter
hereof and supersede all prior agreements, understandings,
representations, proposals and/or other communications in respect of
the licensing of the Licensed Product, whether oral or written. No
supplement, modification or waiver of this Agreement shall be
binding unless executed in writing
by each of the Parties. The terms of this Agreement shall
prevail over any conflicting or additional terms, including any
terms contained in purchase orders or oral communications between
the Parties, but without limiting the Parties' ability to amend this
Agreement by agreement in writing specifically identified as an
amendment hereto, as provided for in this section 1.2.
Notwithstanding the foregoing in the event of an inconsistency
between the Master Software Licence Agreement and this Agreement,
the terms of the Master Software Licence Agreement shall prevail to
the extent of any inconsistency.
1.3 Governing Law; Jurisdiction, Limitation Period. This Agreement
shall be interpreted, construed and enforced in all respects in
accordance with the Laws of Illinois. Each Party irrevocably
consents to the exclusive jurisdiction of any state or federal court
for or within Chicago, Illinois, USA, over any action or proceeding
arising out of or related to this Agreement, and waives any
objection to venue or inconvenience of the forum in any such court.
All claims by Sublicensee in any way arising out of or in connection
with this Agreement shall be brought within one (1) year of the date
of the occurrence giving rise to such claim.
1.4 Number and Gender. Words imparting the singular include the
plural and vice versa. Words imparting gender include the male,
female and the gender neutral.
1.5 Headings; Severability. The headings used in this Agreement
are for convenience only and are not to be construed to have legal
significance. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, such provision
shall be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable
law, and the remainder of this Agreement shall remain in full force
and effect.
1.6 Currency. Unless otherwise indicated, all dollar amounts
referred to in this Agreement are in United States Dollars.
ARTICLE 2. GRANT OF LICENSE
2.1 Grant of Sublicense. Subject to the terms and conditions of
this Agreement, the Sublicensor hereby grants to the Sublicensee,
and the Sublicensee hereby accepts from the Sublicensor, a non-
exclusive royalty-bearing Sublicense during the Term to use the
Licensed Product for __________ [description of use] in ____________
[the Markets] within the _____________ [Territories].
2.2 Additional Services. Sublicensee may request that Sublicensor
provide Additional Services. Upon request from the Sublicensee to
provide Additional Services, the Sublicensor shall promptly develop
and deliver to the Sublicensee a Statement of Work, which shall
include a timeline, charges, allocation of intellectual property
rights, deliverables (including Custom Applications) and other
relevant information for all applicable work associated with such
Additional Services (including, without limitation, analysis,
preparation of specifications, design, development, coding, testing,
implementation and training) ("Statement of Work"). The Sublicensor
shall have no obligation to perform Additional Services until
acceptance of such Statement of Work by the Sublicensee in writing.
In consideration of the performance of Additional Services, the
Sublicensee shall make payments to the Sublicensor in accordance
with the Statement of Work. Any modifications or other changes made
to the Licensed Product as part of the performance of Additional
Services shall be deemed to be Licensed Product for the purposes of
this Agreement.
2.3 Updates and Technical Support. The license to the Licensed
Product granted pursuant to Section 2.1 above includes access to any
and all Updates (at no additional cost) that are available.
Upgrades shall be made available at prices to be determined by
agreement of the Parties. Upon Delivery or payment for such
Update(s) or Upgrade(s), if any, such Update(s) or Upgrade(s) shall
be deemed "Licensed Product". The Sublicensor shall promptly notify
the Sublicensee of any and all available Updates and Upgrades
developed by or on behalf of the Licensor and made available to the
Sublicensor. An Update or Upgrade shall be deemed available when
the Licensed Product incorporating such Update or Upgrade is in
general commercial use and distribution by Licensor, and not merely
in beta testing. Sublicensee shall implement all Upgrades,
Deliverables delivered pursuant to a Statement of Work and Updates
within thirty (30) days of Delivery. The Parties acknowledge that
the Licensor will at all times retain ownership in and possession of
all Source Code for the Licensed Product, and that the Sublicensee
shall have no right, title, or interest in the Source Code.
2.4 Restriction on Use. In addition to the rights granted in the
license in Section 2.1, the Sublicensee may make one (1) copy of the
Licensed Product for back up, security or archive purposes for each
central processing unit on which the Licensed Product is used. The
Sublicensee may make as many copies of the Licensor's manuals or
similar materials related to the Licensed Product as is reasonably
necessary. Any copies of any of the materials referred to in this
Section 2.4 shall include the Licensor's copyright and other
proprietary notices. The Sublicensee may not modify, decompile,
reverse engineer or otherwise attempt to derive the Source Code.
The Sublicensee shall not modify the Licensed Software.
2.5 Assignment/Sublicense of Sublicense. The Sublicensee shall not
have the right to assign, transfer or convey, directly or
indirectly, by sublicense or otherwise, this Agreement or any of its
rights and/or obligations hereunder without the prior written
consent of the Sublicensor and the Licensor, which consent shall be
solely within their discretion. Any attempted assignment,
sublicense, or transfer by the Sublicensee in derogation hereof
shall be null and void. Subject to the foregoing, this Agreement
shall be fully binding upon, inure to the benefit of and be
enforceable by the Parties hereto and their respective successors
and assigns. Notwithstanding the foregoing, the Sublicensee shall
not assign this Agreement to any entity that competes with the
Licensor or the Sublicensor in the Licensor's or the Sublicensor's
software development activities.
2.6 Trademark. The Sublicensee acknowledges that the Licensor is
the owner of any and all trademarks associated with the Licensed
Product. The Licensor has granted to Sublicensor, pursuant to the
Master Software License Agreement, limited rights to use the
Licensed Trademarks set forth in Exhibit B (the "Licensed Marks").
The Sublicensor grants to Sublicensee a royalty-free, non-exclusive,
non-transferable right and license to use the Licensed Trademark on
the website on which the Licensed Product is used. Sublicensee
shall place the Licensed Marks on its website in accordance with
Exhibit B. All use of the Licensed Marks shall inure to the sole
benefit of the Licensor. The nature and quality of products and
services of the Sublicensee provided in connection with any website,
product or service on which or with which the Licensed Marks are
used shall be subject to the review and approval of the Licensor, in
its sole discretion. The Sublicensor or the Licensor, may terminate
the Sublicensee's right to use the Licensed Marks at any time on
notice to the Sublicensee if the Licensor believes, in its sole
discretion, that the Sublicensee's use of the Licensed Marks are not
in compliance with this Agreement, the terms and conditions of use,
and/or that the nature and/or quality of services of the Sublicensee
with which the Licensed Marks are being used do not meet with the
approval of the Sublicensor or the Licensor. The Licensor shall
have and retain sole ownership of the Licensed Marks including the
goodwill pertaining thereto. The Sublicensee acknowledges and
agrees that it has no rights in the trademarks, service marks, logos
and trade names of the Licensor, other than the limited right to use
the Licensed Marks in accordance with this Agreement. The
Sublicensee shall not, during the term of this Agreement or at any
time after the cancellation or expiration thereof (i) knowingly take
any action that would convey or grant an interest in any Licensed
Xxxx, (ii) contest or knowingly take any action to contest the
validity, distinctiveness, and ownership of the Licensed Xxxx, (iii)
attempt to register any Licensed Xxxx without the prior written
consent of the Licensor, (iv) use or attempt to register any
trademark, service xxxx, trade name, or logo in any country in the
world that is confusingly similar to any Licensed Xxxx, or (v)
assert or claim any interest in any Licensed Xxxx. Upon termination
of this Agreement, or upon receiving notice of termination of its
right to use the Licensed Marks, the Sublicensee shall immediately
cease use of the Licensed Xxxx.
ARTICLE 3. FEES
3.1 License Fee and Other Fees. The Sublicensee agrees to pay to
the Sublicensor a sublicense fee of plus
% on all transactions consummated through the direct or indirect use
of the Licensed Product, in accordance with Exhibit A.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
4.1 Ownership. The Sublicensee acknowledges that the Licensed
Product being provided by the Sublicensor hereunder, and any
Updates, Upgrades, and Custom Applications made by or on behalf of
the Sublicensor or Documentation provided by the Sublicensor with
respect thereto, are the sole and exclusive property of the Licensor
and that the Sublicensee acquires no right, title or interest
therein, except the limited rights to use the Licensed Product as
set forth in this Agreement.
4.2 Sublicensor Representations and Warranties. The Sublicensor
represents and warrants to the Sublicensee that: (i) the Sublicensor
has the right to enter into this Agreement and grant the rights
granted hereunder and there are no outstanding agreements or
understandings of any kind binding upon the Sublicensor that are
inconsistent with this Agreement or the rights granted hereunder;
(ii) the Licensed Product does not and will not contain any
"backdoor" or concealed access or any "software locks" or any
similar devices which, upon the occurrence of a certain event, the
passage of a certain amount of time, or the taking of any action (or
the failure to take action) by or on behalf of the Sublicensor or
the Sublicensee, will cause the Licensed Product to be destroyed,
erased, damaged or otherwise made inoperable; (iii) the Licensed
Software does not and will not contain any viruses at the time of
Delivery; (iv) to the Sublicensor's knowledge, the Licensed Product
does not and will not infringe upon or violate the copyrights,
patents, trade secrets, trademarks, or other intellectual property
rights of any third party.
4.3 Sublicensee Representations and Warranties. The Sublicensee
represents to the Sublicensor that (i) the Sublicensee has the right
to enter into this Agreement and fulfill its duties and obligations
hereunder and there are no outstanding agreements of any kind
binding upon the Sublicensee that are inconsistent with this
Agreement; (ii) the Sublicensee's performance under this Agreement
shall not violate any applicable U.S. or foreign laws, government
rules and regulations, and the Sublicensee shall not knowingly use
or sublicense the Licensed Product in violation of such laws,
government rules and regulations; and (iii) there are no outstanding
agreements of any kind binding upon Sublicensee that are
inconsistent with this Agreement.
4.4 Indemnification by the Sublicensor. The Sublicensor hereby
agrees to indemnify, defend and hold harmless the Sublicensee and
its permitted assigns, and their respective directors, officers,
employees and agents, at the Sublicensor's sole cost and expense,
from and against any and all losses, expenses, claims, actions,
proceedings, damages or liabilities based upon any claim that the
Licensed Product directly infringes any U.S. patent issued as of the
Effective Date or any copyright, trade secret, or trademark ("IP
Claim"). The Sublicensor agrees to pay any and all obligations,
liabilities, costs
and damages of the Sublicensee and its permitted assigns,
including, without limitation, reasonable attorney's fees, which are
attributable to any such claim, action or proceeding if the
Sublicensee or its permitted assigns, promptly notifies the
Sublicensor in writing of any such claim, action or proceeding and
gives the Sublicensor sole control of the defense and all related
settlement negotiation of such claim, action or proceeding and
provides the Sublicensor with reasonably necessary assistance,
information and authority in the defense of any such claim, action
or proceeding. The Sublicensor may, at the Sublicensor's option and
sole expense, either secure for the Sublicensee or its permitted
assigns, as the case may be, the right to continue to use the
Licensed Product and any component part thereof, or replace or
modify same to make them non-infringing, but functionally equivalent
to the Licensed Product, or terminate the Agreement and return all
fees paid by Sublicensee hereunder. This Section shall not apply
if the alleged infringement is due to combination, operation or use
of Licensed Product with other software that does not originate from
the Sublicensor or if the alleged infringement arises out of the use
of technology, business methods, trade secrets, know-how, or
copyrighted material provided by the Sublicensee to the Sublicensor
or Licensor and used or incorporated by the Sublicensor or Licensor
in a Custom Application in accordance with the Sublicensee's
instructions ("Non-Indemnified IP Claims"), even if the Sublicensor
or Licensor has been made aware of the occurrence of the foregoing.
For the avoidance of doubt, an IP Claim does not include a Non-
Indemnified IP Claim.
4.5 Indemnification by the Sublicensee. The Sublicensee hereby
agrees to indemnify, defend and hold harmless the Sublicensor and
its permitted assigns, and their respective directors, officers,
employees and agents, at the Sublicensee's sole cost and expense,
from and against any and all losses, expenses, claims, actions,
proceedings, damages or liabilities, arising out of or relating to
(i) any action or inaction of the Sublicensee, its permitted
assigns, and their respective directors, officers, employees, and
agents, with respect to the Licensed Product or its use; (ii) Non-
Indemnified IP Claims; (iii) claims, excluding IP Claims other than
Non-Indemnified IP Claims, by third parties arising out of or
relating to the use of the Licensed Product; or (iv) any material
breach of or alleged material breach of any of the sublicensee's
representations and warranties or covenants (which includes non-
payment hereunder). The Sublicensee agrees to pay any and all
obligations, liabilities, costs and damages of the Sublicensor and
its permitted assigns, and their respective directors, officers,
employees and agents, including, without limitation, reasonable
attorney's fees, which are attributable to any such claim, action or
proceeding if the Sublicensor or its permitted assigns, or their
respective directors, officers, employees and agents, having actual
knowledge thereof, promptly notifies the Sublicensee in writing of
any such claim, action or proceeding and gives the Sublicensee sole
control of the defense or settlement of such claim, action or
proceeding and provides the Sublicensee with reasonable non-economic
assistance in the defense of any such claim, action or proceeding.
ARTICLE 5. CONFIDENTIALITY
5.1 The Sublicensee acknowledges that the Licensed Product, Code,
Documentation, Upgrades, Custom Applications, and Know-How
("Licensor Confidential Information") are confidential and contain
valuable trade secrets of the Licensor. The Parties also
acknowledge that their respective business plans, customer
information, designs, know-how, specifications and other information
related to their business or prospective business (the "Parties'
Confidential Information"), are also confidential and contain
valuable trade secrets of the Parties. The Parties' Confidential
Information and the Licensor's Confidential Information are
collectively "the Confidential Information". Each Party agrees to
maintain the confidentiality of and not to release, disclose or
divulge any other Party's or Licensor's Confidential Information or
any part thereof to any person without the prior written consent of
the disclosing Party; provided that no Party shall be obligated to
maintain in confidence any information which:
(i) can be demonstrated by the receiving Party's written
records to have been in its possession prior to receipt thereof
from the disclosing Party;
(ii) is or becomes part of the public domain other than through
breach of this Agreement or through the fault of the other Party;
(iii) is necessarily disclosed in any products sold or
shipped by either of the Parties to any third party not subject to
an obligation to maintain such information in confidence;
(iv) is or becomes available to the receiving Party from a
source other than the disclosing Party which source has no
obligation to the disclosing Party in respect thereof;
(v) is made available by the disclosing Party in written form
to a third party on an unrestricted basis; or
(vi) is required by law or judicial process (however, upon
receipt of a demand for production of Confidential Information
pursuant to law or judicial process, the Receiving Party shall use
reasonable efforts to notify the other Party of such demand in
sufficient time to allow the other Party to move to prevent such
disclosure).
Each Party shall instruct its employees who have access to the
Confidential Information to comply with the provisions of this
Article 5 and shall use commercially reasonable efforts to prevent
disclosure and misuse of the Confidential Information by taking at
least the same precautions with respect to the Confidential
Information as it takes with respect to its own confidential
information, which steps shall be no less stringent than reasonable
steps.
ARTICLE 6. TERM AND TERMINATIONS
6.1 Term. The term of this Agreement shall begin on the Effective
Date hereof and shall continue until _____________ [insert term]
unless terminated as hereinafter provided.
6.2 Termination for Cause. Either Party will have the right to
immediately terminate this Agreement if the other Party is in
default of any material obligation herein, and such breach is
incapable of being cured, or if such breach is capable of cure, such
breach is not cured within thirty (30) days after receipt of written
notice of such default from the non-defaulting Party or within such
additional cure period as the non-defaulting Party may authorize.
6.3 Termination for Insolvency. Either Party shall have the right
to immediately terminate this Agreement upon written notice in the
event that the other Party (i) voluntarily or involuntarily becomes
the subject of a petition in bankruptcy or of any proceeding
relating to insolvency, receivership, liquidation, composition or
assignment for the benefit of creditors; (ii) admits in writing its
inability to pay its debts as they become due; or (iii) ceases to
conduct business in the normal course. Upon dissolution of or the
entry of a judgment in regards to any bankruptcy proceeding against
the Sublicensee, all rights to the Licensed Product, Upgrades,
Custom Applications and Documentation and all copies thereof that
are in the Sublicensee's possession will revert back to and be
returned to Licensor.
6.4 Termination of Master Software License Agreement.
Notwithstanding the foregoing, immediately upon the termination of
the Master Software License Agreement, the Sublicensee shall be
deemed to be directly licensed by the Licensor, subject to the terms
and conditions of this Agreement and the covenants, warranties and
representations between the Sublicensee and the Sublicensor shall be
deemed to have been novated such that the covenants, warranties and
representations are as between the Sublicensee and the Licensor.
6.5 Consequences of Termination/Expiration. Upon the termination
or expiration of this Agreement, each Party shall promptly return
all Confidential Information, and other information, documents,
manuals and other materials stored in any form or media (including
but not limited to electronic copies) belonging to or in the
possession of the other Party, except as may be otherwise provided
in this Agreement.
ARTICLE 7. DISCLAIMER OF WARRANTIES/LIMITATION OF LIABILITY
7.1 DISCLAIMER OF WARRANTIES. OTHER THAN AS SET FORTH IN THIS
AGREEMENT, OR IN A SEPARATE WARRANTY RELATING TO CUSTOM APPLICATIONS
(HOWEVER, UNLESS SPECIFICALLY STATED IN SUCH WARRANTY, ALL IMPLIED
WARRANTIES ARE DISCLAIMED AS SET FORTH IN THIS SECTION 7.1),
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OR CONDITIONS
OF ANY KIND CONCERNING THE LICENSED PRODUCT, UPGRADES, CUSTOM
APPLICATIONS AND DOCUMENTATION OR THEIR USE, FUNCTION OR OWNERSHIP.
NEITHER THE SUBLICENSOR NOR LICENSOR SHALL BE LIABLE IN ANY MANNER
FOR ANY REPRESENTATION OR WARRANTY OR CONDITION OF ANY KIND WHETHER
EXPRESS OR IMPLIED OR COLLATERAL OR WHETHER ARISING BY OPERATION OF
LAW OR OTHERWISE INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABLE QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE
LICENSED SOFTWARE, UPGRADES, CUSTOM APPLICATIONS AND DOCUMENTATION
WILL BE ERROR FREE.
7.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL LICENSOR BE LIABLE
TO ANY OTHER PARTY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES OF ANY NATURE, EVEN IF SUCH PARTY
SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE
FOREGOING SHALL APPLY REGARDLESS OF THE NEGLIGENCE OR OTHER FAULT OF
ANY PARTY AND REGARDLESS OF WHETHER SUCH LIABILITY SOUNDS IN
CONTRACT, NEGLIGENCE, TORT, STRICT LIABILITY OR ANY OTHER THEORY OF
LIABILITY.
7.3 LIMITATION ON DAMAGES. IN NO EVENT SHALL THE MAXIMUM AMOUNT
OF DAMAGES PAYABLE BY SUBLICENSOR OR LICENSOR FOR ANY BREACH OF THIS
AGREEMENT OR ANY DAMAGE OR INJURY RESULTING FROM THE LICENSED
PRODUCT EXCEED $_________ [INSERT].
ARTICLE 8 OTHER PROVISIONS
8.1 Binding Effect. This Agreement is binding upon and shall inure
to the benefit of the Parties and their respective permitted
successors and assigns.
8.2 Third Party Beneficiary. The Licensor is an intended third
party beneficiary of this Agreement. Other than Licensor, this
Agreement does not contemplate, and the Sublicensor and Sublicensee
do not intend, the creation of any third party beneficiary rights in
and to this Agreement and no third parties shall have any rights
hereunder. Sublicensee has no rights in, to or under the Master
Software License Agreement and hereby waives any and all claims it
may have against Licensor arising out of this Agreement or the use,
maintenance and support of the Licensed Product.
8.3 Survival. All representations, warranties, indemnifications,
and obligations that expressly or by their nature survive
termination of this Agreement, including without limitation all
representations, warranties, indemnifications, and obligations shall
survive any termination of this Agreement and shall continue in full
force and effect subsequent to and notwithstanding such termination.
8.4 Notices. Any notice required or permitted to be given hereunder
shall, except where specifically provided otherwise, be given in
writing to the person listed below by personal delivery, overnight
delivery service, or telecopier/fax, and the date upon which any
such notice is so personally delivered, or if by overnight delivery
service, or telecopier/fax, the date of receipt at the designated
address or number, shall be deemed to be the date of such notice,
irrespective of the date appearing therein.
Requirements for notice.
(a) A notice, consent or other communication under this
document is only effective if it is:
(i) in writing, signed by or on behalf of the Party
giving it;
(ii) addressed to the Party to whom it is to be
given; and either:
(1) delivered or sent by pre-paid mail
(by airmail, if the addressee is overseas) to that Party's address;
or
(2) sent by fax to that Party's fax
number and the machine from which it is sent produces a report that
states that it was sent in full.
When a notice is effective
A notice, consent or other communication that complies with
this section is regarded as given and received:
if it is delivered or sent by fax:
(i) by 5.00 pm (local time in the place of
receipt) on a Business Day - on that day; or (a)
(ii) after 5.00 pm (local time in the place of
receipt) on a Business Day, or on a day that is not a Business Day -
on the next Business Day; and
if it is sent by mail:
(i) within the same country from which it is
sent - 3 Business Days after posting; or
(ii) to a place outside the country from
which it is sent - 7 Business Days after posting.
A Party's address and fax number are those set out below, or as
the Party notifies the sender:
SUBLICENSOR: Entrade Asia Pacific Pty Ltd
Address: Ground Floor, Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx, 0000
Fax number: (000) 0000 0000
Attention: Chairman
With a copy to: GlobalNet Asia Pacific Pty Ltd
Address: Ground Floor, Durack Centre
000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxxxx, 0000
(A) Fax number: (000) 000-0000
Attention: Chairman
SUBLICENSEE:
With a copy to:
or addressed to such other person or at such other address, telex
number or telecopier/fax number as that Party may have given by
written notice in accordance with this provision.
8.5 Counterparts. This Agreement may be executed in counterparts
and shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of
the Parties.
8.6 Independent Contractor. The Parties to this Agreement are each
an independent contractor as to the other and shall not be
considered or deemed to be an agent, employee, joint venturer or
partner of the other except as otherwise expressly agreed to in a
writing signed by the Parties. Neither Party shall have authority
to contract for or bind the other in any manner and shall not
represent itself as an agent of the other or as otherwise authorized
to act for or on behalf of the other.
8.7 Export Controls. The Sublicensee expressly agrees that it
shall not, and shall cause its agents and representatives to agree
not to, export, directly or indirectly, re-export, divert or
transfer the Licensed Product, Upgrades or Custom Applications or
any direct product thereof to any destination, company or person
restricted or prohibited by U.S. Export Administration Regulations.
8.8 Force Majeure. Neither Party will be liable for the delay or
default in the performance of its obligations under this Agreement
if such delay or default is caused by conditions beyond its
reasonable control, including, but not limited to, fire, flood,
accident, earthquakes, telecommunications line failures, storm, acts
of war, riot, government interferences, strikes and/or walk outs.
In the event of a force majeure event which lasts longer than thirty
(30) days, the Party not experiencing the force majeure event may
terminate this Agreement upon prior written notice to the other
Party.
[The Signature Page immediately follows this page.]
IN WITNESS WHEREOF, the Parties have duly executed this
Agreement as of the date first written above.
Entrade Asia Pacific Pty Ltd Sublicensee
By:_______________________________
By:_____________________________
Name:_____________________________
Name:___________________________
Title:____________________________
Title:__________________________
EXHIBIT D
LICENSED PRODUCT SPECIFICATIONS
-------------------------------
Entrade Transaction Software, Version 4.0
-----------------------------------------
1.2 Disclaimer
Users of the xxxxxxx.xxx transaction software described herein are
responsible for obtaining all licenses for third party software
utilized by the xxxxxxx.xxx transaction software.
Functionality Overview
1.1 Overview
To begin conducting business in Entrade Transaction Software, you
must first register. Upon acceptance of the terms and conditions,
you will need to complete the registration form. Bold print is
required information. On the bottom of the form, you must choose
your login ID and password. This is your identification for the
site.
You are now ready to login and explore the Entrade Transaction
Software. The first screen you see is our transaction center. The
navigation bar across the top of the screen includes the
transaction, communication and administration modules as well as the
help desk and search engine. Glancing at the left side navigation
bar, you will find the catalog directory, order worksheet, request
form and create purchase order buttons. Within the help desk, we
maintain comprehensive information to clarify any questions you may
have including password changes, inventory, sale and purchase
histories and most frequently asked questions.
XXXXX XXXXXX XXXXXXX
LAWYERS
Xxxxx 00
Xxxxxxx Xxxxxx
000 Xx Xxxxxx'x Xxxxxxx
Telephone: (00) 0000 0000
Fax: (00) 0000 0000
The search engine has the capability to do a general search, which
hunts for whole words, pieces of them, etc., automatically across
all categories and fields. There is also an advanced search that
searches specific to mapping fields (manufacturer, model number,
etc) and can be general or category specific.
The transaction module is the heart of the system. Here you will
view inventory and make purchases, place open bids or enter
auctions. Clicking on the catalog directory brings up the entire
category listing. Choose the category of interest to view the
inventory items listed within. Icons next to the item name will
designate if the item is available for fixed sale, bulk sale, open
bid, auction and photo. Click on the inventory item to get a more
detailed explanation of product, view specification file, etc.
Purchasing an item is as easy as scrolling down and clicking on the
purchase type from those available for that particular item. The
open bid function lets a buyer select the quantity and price. It is
submitted as a purchase order and can be approved and processed by
the seller or the seller can make a counter-offer. This bargaining
function is unlimited in the amount of counter-bids it will support.
The seller has the option of choosing as many of the pricing options
or as few as he/she desires when listing an item.
Upon clicking purchase, you will view your order worksheet or
shopping cart showing the item name, cost, etc. You may now
continue shopping or browsing, checkout your order or clear
something from your order worksheet. Once you have chosen "Create
purchase order", your billing and shipping information will appear.
Forms of payment are Purchase Order, Credit Card, or Electronic
Wire Transfer.
The status of your order will appear on the purchase order as well
as in the order worksheet. You can view all outstanding purchases
in the Administration Module under Outstanding Purchases. Once a
purchase has been approved by the seller, it will be visible in your
Purchase history.
An item is available for auction when the auction icon is visible.
To participate in an auction, choose the appropriate product and
complete the information necessary. You can view your bid status
from the administration module. An internal email will be sent each
time you are outbid.
2. User Application
2.1 Site Map
Transaction
-----------
Order Worksheet
Checkout
Make a Request
Advance Search
Catalog Director
Communication
-------------
Inbox
Compose
Folders
Address Book
Administration
--------------
Change Your Password
Update Your Profile
Credit Balance
Account History
Open Purchase Bid
Open Sale Bid
Outstanding Sale
Outstanding Purchase
Sale History
Purchase History
View Your Inventory
Add New Inventory
Update Inventory
Delete Inventory
View All Requests
View Your Requests
Make New Requests
Update Your Requests
Delete Your Requests
Help Desk
---------
Overview
How do I?
Site Map
This section is designed to give you a complete and highly detailed
description of the functionality of the generic Entrade software.
It contains a site map, a summary of all the modules of the
Transaction site and of the Administration site and an information
sheet for each site in the Entrade family. These sheets will detail
the customizations specific to that site. More information may
also be found in the Help section of each individual site.
As you look at the opening page of the Transaction site, you will
see along the top of the page four main headings. These link to the
four individual modules: Transaction, Communication, Administration
and Help.
The Transaction module contains the catalog of inventory and all
online transactions, either sales or trades.
The Communication module is an internal messaging center and is set
up like most email accounts.
The Administration module lets a user update all personal contact
information, contains your on-going and past purchases and sales and
allows a Seller to manage his own inventory. You can also make
requests for items not listed on the site and read other users'
requests for inventory here.
The Help module contains instructions and descriptions of each
function as well as answer to frequently asked questions.
Due to the nature of the site, it is very important that you do not
use the Back, Forward or Refresh buttons on your browser. This can
alter the results of transactions in which you are engaged. Back
buttons are provided on each page to allow this navigation to occur.
There is a status window located to the left of the screen that
informs a user, upon logging in, of any outstanding sales or
purchases and of any new messages received. This is visible from
every module and is updated in real time as transactions occur.
2.2 Transaction Module
The Transaction module of the site contains all of the inventory in
the catalog and is where purchases are made. Requests for items not
listed on the site may also be made from here.
(a) Accessing Inventory
To the top right of the screen there is a comprehensive search
engine. Enter in a word or words describing the item you are
looking for in the search field and the resulting list will contain
all items on the site that contain that word in any of its
descriptive fields. An advanced search can be used by clicking on
"Advanced". This function lets you choose multiple criteria and
specific categories to search by and will result in lists of only
those items meeting all the criteria input. There is a "tips"
section located here to provide assistance in selecting search
criteria. If your search yields no results, you will be instructed
to change your criteria or to Make a Request for the item.
Clicking on Make a Request pulls up a request form. Descriptive
fields are listed including the item name, which is required. You
can input desired quantity and price as well. The more descriptive
you are, the greater the likelihood of a Seller matching your
request. Sellers will be able to read this form and add the item
you are seeking to the site. You will be notified by email when the
item is added to the site. This functionality is also accessible
from the Administration Module.
The other means of accessing inventory is located on the left
navigation bar. You may select individual categories from the
dropdown menu and click "go" or click on Catalog Directory for a
complete list of all main category headings. The category tree is
fully customizable and can be extended into categories and sub-
categories to an unlimited number. Catalog structure is set up by
the Site Administrator only and cannot be accessed by a Buyer or
Seller. The catalog tree is expandable and collapsible for easy
manageability. You can either expand or collapse the entire catalog
or use the plus and minus symbols to manage portions of the tree.
The number of available line items appears between the brackets [ ]
with Main Categories including the number of total available line
items for it and all sub-categories listed beneath it. The second
set of brackets indicates how many of these items are available for
auction.
Clicking on a category name will bring you to an Item List page.
All inventory items cataloged under that heading are contained in
this item list. Items listed under subsequent sub-categories are
reached by clicking on the sub-category name at the top of the page.
You will notice the Bulk Purchase button at the top of the Category
List. This button allows a Buyer to purchase all items in the list
that are available for bulk purchase with the click on a single
button. Not all items will necessarily be available for bulk
purchase. Those that are will be denoted with the Bulk Purchase
icon.
There are five icons that indicate purchasing options for individual
inventory items and will be located to the right of each Item Name
if this option is available for the item. These include Regular
Purchase, Bulk Purchase, Open Bid and Auction. These are shown and
defined at the top of the catalog list. A photo icon of a camera
denotes those items that have photos included in the description.
The item list may be sorted by name, price or quantity. This
function is located to the right of the catalog list and options are
contained in the dropdown menu. Selecting one and clicking on the
Sort by button will reorder the list.
Clicking on the individual item name takes you to the Item
Information page. This page contains a full description of the
item for sale and any photos or documents that may be attached.
The Item Information page is headed by the Item Name and a photo, if
one is included. There is also a link to take the viewer to the
Seller or manufacturer's home page. The "Spec" link will pull up
attachments, such as a comprehensive description page, blue prints,
large text files or any other information that needs to be included.
Item Pricing
Cash Price refers to the cost of a single item purchased with cash,
check credit card, wire transfer, letter of credit, etc.
Credit Price refers to the cost if purchased using internal system
credits. A credit module is included in the software and can be
used to set up budgets, allow trade purchases or other applications.
It has its own account management system. This credit price can
also be customized to use for multiple currencies.
Bulk Cash and Credit refer to the cost per item, generally reduced,
for the purchase of the entire quantity available.
Open Bid lets the Buyer make an offer for a quantity of the item.
The Seller can then choose to accept, decline or make a counter
offer to this bid. In effect, online negotiation.
Auctions are set up for items for a selected time period, where bids
are taken and at the end of the timeframe the highest bid wins.
Auctions will be discussed in greater detail in a later section.
The Main Information includes the Product ID, Seller, Condition,
Manufacturer and Model Number of the item listed. These fields are,
of course, fully customizable. The Main Description field details
the item and can contain up to 6000 characters. Additional
information may be included in an attached specification file as
mentioned earlier or Additional Fields, in unlimited number, may
also be added to the description page to highlight specific
information; color or size for example.
The purchase boxes are located at the bottom of the page. For a
regular Fixed Price transaction, input the quantity desired and
select either cash or credit, if available. A Bulk Purchase already
has the entire quantity included for the Buyer. Again, you need to
select cash or credit. The third purchasing option is Open Bid. A
Buyer inputs the quantity desired and also the price he wants to
pay. Second and third offers can be made at the same time for
different quantities of the same item. A Seller will then be able
to choose among the multiple offers. Notes can be included with all
purchase offers. "Must receive item within a two week period," for
example. Click on Purchase or Place Bid, and the item is
transferred to your Order Worksheet.
Your Order Worksheet holds all the items you wish to purchase until
you are ready to submit a Purchase Order. It is your shopping cart.
From the Order Worksheet, you can update your orders, delete them,
clear your entire worksheet or continue browsing the inventory.
When you are ready to place your order, click on Check Out.
At this point, a Buyer is required to log in to the system.
Registration is easy and requires minimal contact information,
including name, company, address, phone number and email address.
You must also agree to the terms and conditions of use. Select a
user ID and password. By hitting the submit button, the system will
log you in and take you to the page you were last on before the
login screen appeared. If you are already registered you need only
enter your user ID or password. Registration is open to anyone and
allows only buying capabilities. To become a Seller, a user must
sign a listing agreement and the Site Administrator must change his
user role to "Seller". After Registering or Logging In, you are
ready to complete your order.
The Purchase Order page lists all items for purchase again. If
these items belong to multiple vendors the system will break the
purchase order into multiples as necessary. You choose your payment
method from here, either credit card, purchase order, or electronic
transfer. Your Shipping and Billing information is defaulted from
registration, but can be updated from the Purchase Order and made
permanent as such, if desired. Click Submit and the order is sent.
When an order is submitted the Seller is notified by various means.
An email is always sent to the internal communication module, and
also to the Seller's personal email account. He may also be
notified by fax or pager. This is instantaneous so that the Seller
may login to the site as soon as possible to complete the
transaction.
2.3 Communication Module
The Entrade software allows you to send email to other registered
users within the site-specific Communication system. You can receive
system email from other site users on your site email account. All
internal email account addresses are identified as the user ID. You
must be logged in to the site to access the Communication module.
This module functions as most Internet email accounts do with an
inbox, outbox, folders and an address book. The Communication
module can be used to exchange product information or requests
through email and will be used to notify Buyers and Sellers when
transactions occur. An email will be sent to you each time the
status of one of your purchases or sales changes.
The Inbox contains all new messages as well as read messages that
have not been stored or deleted. In order to read a message, click
on the Sender Name or Subject of that email. Messages are
chronologically ordered.
There are several options for each email message after it has been
read. The Reply button will allow you to send this message with
your own notes back to sender. Reply All will return this message to
the original sender and all cc: users along with your additional
message. Forward will send the text of this message to a new user.
You can manage the storage of each message by either using the Move
To button and choosing an individual folder or by Deleting this
message. The Delete button will send a message to the Trash Bin
folder until the Trash Bin is emptied.
To Compose a new message, the addressee must first be identified by
their username. The username is what is entered into the "To:" field
as the address. If you have set up recipients in your Address Book,
you can click on the Address Book link to identify system users,
rather then typing their usernames. Select the recipients by
clicking on each respective To: or CC: box. When the Send To button
is clicked, a new message is ready to be composed and sent to these
recipient names.
A message subject line is required for sending a message and is
followed by the message content. The option exists to save a copy of
this message to your Sent Messages folder by clicking on the Save in
Sent Messages box. Click Send to transmit your message. The Save
button will store this untransmitted message to your Outbox folder.
Cancel will delete this message and bring you back to the Inbox.
Messages can be stored in folders. Standard folders include the
Inbox, Outbox, Sent Messages, Old Messages and Trash Bin. You can
view the contents of any folder by clicking on the folder name. To
create a new folder, choose the Create link on the upper right of
the frame. Name this folder and click Create, and your new folder
is set up. You can rename a previously created folder by choosing
the Edit icon, or permanently delete it by clicking on the Delete
icon. When you delete a folder, all messages within that folder
will be deleted and moved to Trash Bin, where they will remain until
the Trash Bin is emptied. It is important to note that users
should periodically empty their Trash Bin of discarded messages by
clicking on the Trash Bin folder and clicking the Clear button.
The Address Book can store information about system users that you
frequently communicate with. The Address Book can store Individual
names or Group names can be set up. Group names allow you to store
system users under a single alias so that messages may be routed to
common users by entering one address. Click on the Create link in
the upper right corner to add an individual or group to your Address
Book. Entries may be edited by choosing the Edit icon or permanently
deleted by clicking on the Delete icon.
To Compose a message from your Address Book, identify the recipients
by clicking on each respective To: or CC: box. When the Send To
button is clicked, a new message is ready to be composed and sent to
these recipients.
2.4 Administration Module
The Administration module contains your credit account, user
profile, transaction histories, ongoing sales and purchases,
requests and inventory if you are a Seller. As a registered user,
you can modify your password and update your contact information and
manage all your site activity from this module. You must be logged
in to access any of the functions of the Administration module.
(a) Passwords
The first link on the Administration module is Change Your Password.
It is recommended that you change your password on a regular basis.
This can be done at any time by selecting the Password link on the
sidebar and following the instructions. Passwords are encrypted for
security purposes.
(b) Update Profile
To change any contact information entered during the registration
process, select the Update Profile link and modify the information
you wish to update. Note that shipping and billing addresses do not
need to be retyped if they are the same. Simply select the Same as
contact address box to repeat the modifications. Once you are
finished, click on the Update button at the bottom of the screen.
Cancel will delete any modifications you have made.
(c) Credit Account
Upon registration, a credit account was assigned to you. This
credit account refers to system dollars. It can be used for
trading purposes or for establishing budgets. You can view the
balance of this account as well as view the history of all credit
transactions on this account in the Administration module. All new
accounts will have a zero balance until the Site Administrator adds
funds to the user account.
The Credit Balance link pulls up a screen that summarizes your
current account status. Your account ID number is located at the
top of this screen. Beneath this is your Credit Limit. This is the
entire amount of funds available for your transactions. This number
will increase or decrease as transactions are made. Your Available
Balance is the amount of funds in your account that are free for you
to make purchases with. Your Retained Funds is the amount that is
being held pending the approval and closure of Outstanding
Purchases. Retained Funds and Available Balance should total your
Credit Limit.
Any transactions that credit or debit your account balance will be
shown in your Account History list. This record is to track your
existing credit status and determine how the current balance was
derived. It includes Sales and Purchases as well as deposits and
withdrawals made by the Site Administrator.
(d) Open Bids - Purchase and Sale
Open Purchase Bid and Open Sale Bid contain all on-going Open Bid
transactions that you are involved in. To view specifics of a
transaction, click on the Transaction ID number. It is from the
Open Sale Bid that the Seller will approve or counter-offer on any
bids that have been submitted to him. A Seller may accept only one
of multiple bids submitted by a Buyer, or can make multiple counter-
offers. As mentioned earlier, this "Online Negotiation" process is
unlimited in scope. Buyers and Sellers can also include notes with
all offers. To counter- offer or to accept an offer from a Seller,
the Buyer would click on that transaction in his Open Purchase Bid
file. Open Bids may also be modified from here.
Once an Open bid is accepted, it is moved to the On-going Sales or
On-going Purchases file. From here it is treated as a regular
accepted transaction. A Buyer can view the status of on-going
purchases from here by clicking on the individual transaction ID
number.
Sale Status:
Pending: Order has been submitted to the Seller for approval.
Accepted: Seller has agreed to terms of order and will notify
Buyer
of shipping date.
Error: Seller requires more information from the Buyer before
sale can go forward.
On Hold: Sale has been rejected by the Seller and waiting for
cancellation of the order by the Buyer.
Closed: Order has been accepted by the Seller and shipped to
the Buyer.
Rejected: Seller has rejected the order by the Buyer. Buyer
must cancel the order or resubmit the order meeting
Seller's objections.
(e) Outstanding Sales and Purchases
Buyers can review transactions and check order status from here.
Click on the individual transaction ID number to access the
specifics of a transaction. When the status changes, you will also
receive a message in your system email account and to your personal
email account.
The Seller will accept or reject the offer from the Outstanding
Sales file. The Seller selects the transaction from the list and
clicks on the ID number to view and act on the transaction. Once a
sale is accepted, the final step in the transaction process is to
close the sale. The Seller will included all taxes and shipping at
this time and an email will be sent to the Buyer notifying him of
such and including a tracking number for the shipped item if
available. In most cases the Seller will not ship the item until
payment has been received.
(f) Sale and Purchase History
Closed Sales are located in the Sales History and the Purchase
History. All closed transactions appear in this file and are once
again accessed by clicking on the Transaction ID number.
Transactions in the list can be sorted by clicking on the bottom of
the column.
(g) Requests
To post a request for a desired item that you do not find listed in
the catalog, click the Add New Request link and fill in the
appropriate information. Fields are included for Quantity, Price,
Description, Manufacturer and Model Number, among others. All
fields except Item Name are optional, but the more detail that is
given, the more closely matched your request is likely to be. Once
this is done, click the Submit button to post the request on the
site.
To view all inventory requests, click on the View All Requests link.
A list of requests will result and specifics of each request can be
viewed by clicking on the individual Request ID number. To match a
request, recall the Request ID number and go to Update Inventory.
Enter the Request ID number into the Request Item ID field and click
on Update. An email will be sent to the Requestor letting them know
of a possible inventory match. Buyers will be able to go from their
request directly to this item. You may also add new items and link
these to the Request ID.
To view only your own requests click on the View Your Requests link.
Your requests will be listed here in order of date submitted.
You may modify your requests by choosing the Update Your Request
link and clicking on a specific Request ID number. Make your
modifications and submit.
To delete a request you have made previously, choose the Delete Your
Request link and select the appropriate Request ID. The request
information will be shown and you may either click the Delete button
or Cancel this action.
(h) Inventory
Only a registered Seller can manage inventory. To become a Seller,
a registered Buyer needs to contact the Site Administrator. After
signing a listing agreement, the Administrator can update the your
user role from Buyer to Seller. As the Seller, you may add, review,
update and delete your inventory manually. If your inventory
quantity is large, it can be uploaded using the Bulk Upload tool.
For more information on this consult the Inventory Management
section of this manual.
To view your inventory, click on the View Inventory link. You are
provided with multiple ways to search for the item you wish to
review. You can search by ID number, key words, multiple fields or
by category. You can also select to view your complete list of
inventory. Each item's detail may be inspected by clicking on the
ID number from the resultant search list.
To add inventory to the site, click on the Add New Inventory link.
This will bring up the complete catalog tree including all
categories and subcategories available on the site. Click on the
category or subcategory in which you want your item(s) to appear.
If you believe that your inventory should be in a catalog that is
not listed contact the Site Administrator about setting up a new
catalog.
After selecting the appropriate category, a screen appears with the
information required to list your inventory. Note that fields with
an asterisk (*) are required fields. For pricing, you may select
any and all of the options available. You may also make this item
available for auction at any time. Remember that the quantity for
sale needs to be reduced by the amount you make available for
auction.
Enter all the appropriate information for your item. You should
also attach any specification files or photos now. Click on the Add
button at the bottom of the screen.
You can also edit your current inventory. Click on the Update
Inventory link and type in your item ID number or select the item
you wish to update through the search methods and then click Next.
You may modify any of the fields of the selected item, then click on
the Update icon at the bottom of the screen to save these changes.
To delete inventory from your current list, click on the Delete
Inventory link. You will be prompted for the item ID number that
you wish to delete or search for that item using the methods
provided. Click directly on the item ID number of the item you wish
to delete. Next click on the Delete icon at the bottom of the
screen.
2.5 Auction
The Entrade auction technology is fully integrated into the
transaction software. This means that auctions are easily set up
for items already existing in the inventory and that items for
auction can be made available for general purchase if they are not
sold via auction, using the shared database. An item may also be
available for general purchase at the same time a portion of the
quantity is being auctioned. However, the auction technology may be
employed without making any items available for general purchase,
thus creating an wholly auction site.
If a Buyer is only interested in items being auctioned, he can click
on the Upcoming Auction or the Ongoing Auction links provided on the
left of the screen. As an item that is put up for auction is also
included in the entire catalog of inventory, a Buyer can also
perform an advanced search across all catalogs and use only the
purchase criteria of 'auction'. The resulting list will be all of
the items currently being auctioned on the site. Items in the
catalog that are being auction are flagged with the fourth
purchasing icon, a red gavel.
The user then selects the desired item from the list and is directed
to Item Information page, as in a regular transaction which shows
all information about the auction, such as auction start and end
time, starting bid, minimum bid, and whether the Seller has set a
reserve price or not. If a Seller has set a reserve price, a high
bid is not a winning bid until the Seller's reserve price is met.
This screen will also show the list of all winning bids for the
auction, and the form for the user to complete to place a bid.
(a) Placing Bids
To place a bid, select your desired quantity and a price per unit
you are willing to pay. The Allow Partial checkbox is an option
that tells the system that you will accept a lesser quantity if you
are outbid for a portion of this item. For example, you bid for a
quantity of 50 at $5.00 and the next bidder bids for 30 at $6.00.
Your quantity will be reduced to 20 at $5.00. The 'allow partial'
option is checked by default. You also have the option of placing
an Auto Bid amount. This tells the system to increase your bid
automatically up to the amount you allocate if you have been outbid.
Placing your bid takes you to the Auction Bid Information screen
where you review the bid, billing and shipping information. This
screen is the same as the Purchase Order screen for regular
transactions but applies only to the auction bid being submitted at
that time, not those items on your order worksheet that you may have
purchased as cash, bulk, or open bid. After reviewing all the
information on this screen, the user clicks a submit button, and at
this point the bid is placed.
(b) Bid Status
Successful - You have input a high bid. A high bid is not a winning
bid until the Seller's reserve price is met. [Shown as a green
circle icon].
Partially Successful - For partial high bid, the quantity in the
bracket is the actual quantity committed. [Shown as a half colored
green circle icon].
Unsuccessful - Your bid does not exceed the current high bid.
[Shown as a red circle icon].
(c) Outbid
If you are outbid in an auction, you will receive an email
notification both to your personal email account and through the
Communication module. The email tells you the minimum winning bid,
your current bid, and gives you a direct link to the product Auction
page to change the bid.
(d) Ongoing Auctions
You may view your active bids in the Administration Module as a
Buyer or Seller. As a Buyer, the Buyer Ongoing Auction link will
pull up a list of all bids you have placed on current auctions and
details the product name, bid amount, quantity, rank of bid
(successful, unsuccessful, or partially successful), and the time
and date the auction closes. Clicking on the Product ID number will
bring up the full details of the auction. The Buyer Auction History
link will give you a list of all completed auction transactions.
As a Seller, you may also view your auctions in the Administration
Module. The Seller Ongoing Auction link will pull up a list of all
the items you currently have available for auction and detail the
product name, current high bid, and the closing date and time. This
list will also include details of Upcoming Auctions. The Seller
Auction History link will list all your closed auctions and details
the product name, the high bid, the closing date and time, and the
ranking status of the auction (successful, unsuccessful, partially
successful). Clicking on the Product ID number will bring up the
full details of the auction and will also provide a link to orders
generated on successful auctions.
There are also two links provided in brackets that will allow you to
view Ongoing Auctions and Upcoming Auctions that can be sorted by
Name, starting time, closing time, starting bid, or quantity. The
Upcoming Auction link also has an option that can notify you when
the auction has started through an email notification that provides
a direct link to the auction.
(e) Closed Auctions
Once the auction ends, winning bids will be stored in your
Outstanding Purchases as a regular transaction, pending the closing
of the sale by the Seller. Once closed by the Seller, you can view
the history of the bid in the Purchase History of the Administration
module.
(f) Adding Auction Inventory
There are two ways to put a product on the system for auction. You
can either add a new product or modify an existing product.
When you add a new product for auction, you use the Add New
Inventory link in the Administration Module. This links to the
template for a general sale item, that asks you for appropriate
information about the product, such as product name, condition,
price, type of sale, etc. You then specify the item as an auction
type of sale. On the New Product form, you will see an extra
checkbox and a new section of the form for auction information. The
required fields for an auction only product are product name,
quantity type, and the information inside the auction section of the
form. To be able to offer a product for auction, you will have to:
Check the Auction checkbox
There is an option to specify specific user groups or Sellers that
can have access to place bids on your auction items.
Specify the quantity available for auction only. Please note that
auction quantity is separate from regular quantity if available as
cash purchase. Ex . If you have 100 items for sale, and you want
to offer 80 of them for regular sale and 20 for auction, then input
80 in regular quantity, and 20 in Quantity Available for Auction.
You also can specify this auction quantity to be available as a bulk
purchase only. Ex. If you have 50 items for sale, by checking the
bulk auction box potential Buyers can only purchase the entire 50
items.
Specify start date/time for auction. You cannot start an auction at
a past date or time. Auctions can be set on the hour.
Specify end date/time for auction
Starting bid is a required field where you specify the starting
price for the product.
Bid increment is a required field. Specifies the increment at which
bidders will be able to raise their bids.
Reserve price specifies the minimum price at which you agree to sell
the product. This value is not visible to Buyers. They will only be
able to see whether a Seller has set a reserve or not.
Note: Often Sellers specify a very low starting bid. This creates a
danger of not generating enough interest in Sellers to drive the
bids up to a desired price. You may end up selling the product at
very low price. This is when you would want to use the reserve
price field. The Reserve Price is to protect you as a Seller from
letting an auction end with too low of a selling price.
. If you only selected Cash Auction, please enter the values
in Cash amounts.
. If you have selected Credit Auction, please enter the
following values in Credit amounts. The currency conversion rate
should remain at $1 cash = $1 credit.
. If you have selected Cash and Credit Auction, please enter
the following values in cash dollars and the system will convert the
amounts into credit based on the currency conversion rate you
selected below.
. You can choose a non-auction purchase method through Open
Bid if you have auction quantity remaining after the auction has
closed. To make the remaining quantity available for Open Bid
purchase after close of the auction, select the Open Bid method
desired from the drop down box. This will tell the system to
automatically transfer those remaining quantities to the non-auction
purchase method you have selected.
If you have an existing product for sale in your inventory, you may
modify it to offer it for auction. In your Administration module,
go to Update Inventory and find the product you want to offer for
auction. The Update form will also have a section for auction
information. You have to check the Cash Auction checkbox and fill
all the necessary information for an auction. Please remember that
regular quantity and auction quantity are two unrelated fields. If
you have 100 items for sale, and you want to offer 20 for auction,
then you have to decrease quantity of the product to 80, and put 20
in Quantity Available for Auction.
If you've added an auction, but want to change something, you can
make modifications as long as the auction hasn't started yet. If
it's 12pm now, and you set your auction to start at 2pm today, then
you have 2 hours to change any parameters of the auction.
If there is a live auction in progress, you will be able to modify
some parameters. You will be able to add more items to the auction
quantity, but not decrease the amount. You will also be able to
extend the auction timeframe, but only in case where your reserve
price has not yet been met. If you didn't set a reserve price, you
will not be able to extend your auction, or add a reserve price.
You can change the non-auction purchasing method you have selected
for the remaining quantities after the auction has closed.
When auctions end, all successful bids are processed and new orders
are generated as a regular transaction Purchase Order. These are
viewable through the Administration Module in Outstanding Sales or
if the transaction is closed, through Sales History or Seller
Auction History. If you specified a transferring method for
remaining quantities after an auction closes those quantities will
be moved. Otherwise, they are not available for sale but are
maintained as auction inventory.
2.6 Help Content
Advancement of the Entrade Knowledge Base will be an ongoing project
that will provide an interactive and dynamic Help Desk experience to
the user.
3. Administration Application
3.1 Site Map
General
-------
Broadcast
Message Template
System Status
Log out
User
----
Manage User
Online User
Log out
Category/Inventory
------------------
View Category
Add New Category
Update Category
Delete Category
View Inventory
Add New Inventory
Delete Inventory
Update Inventory
Inventory Log
Depleting Mode
Logout
Transaction
-----------
Fee Schema
View Transaction
View Open Bid
Logout
Reports
-------
Inventory Transaction Summary
Order Packing List
Item Summary
Purchase History
Sales History
Transaction Summary
The administration site is located at a different URL from the
general user site. This site has a very simple look and feel.
Administrators are the only user level that can access this site.
The administration site is divided into five modules:
- General
- User Management
- Category and Inventory Management
- Transaction
- Report
3.2 General
The General Module allows the administrator to broadcast an email to
all system users, or all buyers, sellers or administrators. The
messaging tool is similar to the Communication Module of the
transaction site.
The message template contains a description of all the email
messages that are system generated when a purchase has been
accepted, rejected, pending or shipped by the seller. A message is
also generated when a seller or buyer has made an offer or
counteroffer for an auction or open bid item. Each message is
written in 2 formats - html and text content. The html-formatted
message is sent to the Communication Module and the text format
message is sent to the external email of the user.
The system status will display as being open or closed. The system
is only closed for emergency maintenance.
3.3 User Management
Any user can be managed using this module. There is a search
engine provided to locate users. Type in your search criteria and
click "search." You are not required to enter information in all
the fields. You can search by User Name, First Name, Last Name, or
Company Name. Once the user
has been found, the administrator can perform the following tasks by
clicking on the name of the user:
Change the user's password - If a user has forgotten their password,
you can change it here. You can also have the system send an email
notification to the user of this change.
Update the user's profile - From here, you can update the company
name, contact details and the billing and shipping information of
any user.
Change the access level of the user (buyer, seller, administrator) -
You can modify the access level of any user. When a user
initially registers, the default access level is to a buyer. Only
the administrator, using this section, can change a buyer to a
seller or another administrator.
Credit or Debit the user's credit account - One of the purchase
methods available is an internal credit system established for new
users. As a buyer purchases items, the credit system depletes the
amount automatically. As an administrator, you can add (credit) or
subtract (debit) to this amount. To add credit, simply enter the
amount you wish to add. To subtract credit, put a minus sign before
the amount to be debited.
Set user's System Fee - There are different system fees that can be
applied to different sellers: a listing only fee, a flat only fee
or a percentage only fee. You can apply all of these or use any
combination of the three. You also have the option of not applying
any system fees.
Disable the User - prevents a user from logging onto the site.
Delete the User - removes the user from the site.
You also have the ability of viewing all users currently logged onto
the user site by clicking on the online users link at the left side
bar.
3.4 Category and Inventory Management
There are two main functions within this module that allow you as an
Administrator to manage catalogs, categories and inventory items.
This module allows the administrator to view, add, update or delete
any category or sub-category on the site. Any modification made
will immediately be reflected on the user site. When adding or
updating a catalog, the administrator has the ability to add
descriptive fields as well as enable the advance search feature on
these fields. Descriptive fields are set up by category. Different
fields can be added for different categories. For example, one
category can have an additional field for "manufacturer number"
while another category does not require this field.
When adding additional descriptive fields, the following information
must be entered:
1. The field name which can only be populated by alphabetical
characters and cannot contain any spaces. Ex. REFNUMBERS
2. The field alias is the name that will be displayed on the
user site. It can be composed of multiple words. Ex. Reference
Numbers
3. Select Enable or Disable. By selecting enable, this field
will be searchable from the advance search module of the user site.
4. Click Finish when all fields have been filled in.
To set up a new catalog, category or sub-category:
1. Click on the Category/Inventory Module from the
administration site.
2. From the left side bar make your selection to view, add,
delete or update a category
3. Click on next button, and follow the prompts:
- If adding a new category, select a parent category, name
the category, and add any number of additional descriptive fields
required to describe your inventory items. Also identify whether
you want to be able to search on this field by selecting the enable
feature. A future enhancement will allow categories to be made
available to specific sellers.
- If updating a new category, select the category you wish
to update. You can then modify the parent category, modify the
category's general information and modify, add or delete any of the
additional descriptive fields.
- If deleting a category, please note that all inventory
items contained under that category will also be deleted.
When fished, be sure to go back and view the catalog and its
contents for accuracy.
In addition to the above, you also have the option of moving an
entire category to another category or making it a sub-category.
Please note that any inventory items falling under that category
will be moved too.
- From the administrator's site, click on the
Category/Inventory Module.
- Select Update Category on the left side bar.
- Click on the next button.
- Select the category you would like to move and click on
the next button. The category you selected will become highlighted.
- Select the category you wish to move this category to.
Be aware of the root structure of the catalog before selecting where
you would like it to be moved. Click on the next button.
- Modify any category information as necessary, and click
on the next button.
- Update or add additional descriptive fields as necessary,
and then click on the finish button. Your category has now been
moved.
When finished, go back and view catalog for accuracy of its
placement. If changes are required you can update your category or
move it again.
The second functionality of this module is to allow the
administrator to view, add, update or delete any inventory items
listed on the site. To set up a new inventory item follow these
steps:
- From the administrator's site, click on the
Category/Inventory Module
- From the left side bar make your selection to view, add,
delete or update an inventory item
- Click on the next button, and follow the prompts:
. When adding a new inventory item, select a parent
category you wish to add the inventory item to and click the next
button. You will go through a template that asks you for
appropriate information about the product, such as item name,
condition, unit price, type of sale, seller/owner, type of sale,
manufacturer name, and any additional descriptive fields you might
have added when setting up the category.
When adding new inventory items, specify the type of sale from the
following selection along with the unit price. You may select any
combination of sale types:
1. Fixed Cash - refers to a set price using any external
payment option, i.e., Purchase Order, Credit Card or Electronic
Funds Transfer.
2. Fixed Credit - refers to a set price using system's
internal credit account.
3. Bulk Cash or Credit - refers to the option of selling the
entire lot of items at one fixed price, cash or credit.
4. Cash Open Bid - allows the buyer to select the quantity
and price he is willing to pay. This is submitted as a cash price
to the seller who has the option to approve or make a counteroffer
on the bid.
5. Credit Open Bid - allows the buyer to select the quantity
and price he is willing to pay. This is submitted as a credit
price, using the internal credit account, again giving the seller an
option to approve or make a counteroffer on the bid.
6. Auction - Cash, Credit or Bulk - offers this item for
sale to the highest bidder.
You also have the option of adding a picture or specification file
to the inventory item.
To add a picture, go to the upload inventory picture field on the
item information template and click on the browse button which will
bring up your desktop. From there, find the photo file you wish to
upload. The system will automatically format the picture size.
Some inventory items may require additional information such as
blueprints or drawings. To add a specification document, go to the
upload specification field on the item information template and
click on the browse button and find the document, blueprint, or
drawing on your desktop to add to this inventory item.
. When updating a new inventory item, select the category
the inventory item is under and then click on the inventory item you
wish to change. The product information template will come up for
you to make your changes. When finished, hit the update button.
Your changes are now viewable on the user site. There are multiple
ways to search for an inventory item - by inventory item ID #
(system generated), keyword search, or across any descriptive fields
that are enabled.
. If deleting an inventory item, select the category the
inventory item is under and then click on the inventory item you
wish to delete. The item information of that inventory item will be
shown. Click on the delete button at the bottom of the screen if
you are sure you want to delete this item. Once you click on that
button, the item has been deleted. Remember that if you need to
delete all inventory items that fall under that category it is much
easier to delete the entire category.
When finished, go back and view inventory for accuracy. If changes
are required, follow the above instructions for updating inventory.
On the item information template, you can specify the inventory item
as an auction type of sale by checking the item available for
auction checkbox. To be able to offer a product for auction you
will have to:
- Check the Auction checkbox
- Specify the user groups that have access to place bids
on your auctions.
- Specify the quantity available for auction. Please note
that auction quantity is separate from regular inventory quantity.
Ex. If you have 100 items for sale, and you want to offer 80 of
them for regular sale and 20 for auction, then input 80 in regular
quantity, and 20 in quantity available for auction. You also can
specify this auction quantity to be available as a bulk purchase
only. Ex. If you have 50 items for sale, by checking the bulk
auction box potential buyers can only purchase the entire 50 items.
- Specify start date and time for your auction. You cannot
start an auction at a past date or time. Auctions times are set on
the hour.
- Specify end date and time for auction.
- Starting bid - specify the starting price for this
auction. This is a required field.
- Bid increment - specify the increment at which bidders
will be to able to raise their bids. This is a required field.
- Reserve Price - specify the minimum price at which you
agree to sell the product. This is NOT a required field. This value
will not be visible to bidders. They will only be able to see
whether you placed a reserve or not. Note: Often sellers specify
a very low starting bid to entice bidders. This can create a
danger of selling a product at very low price. This is when you
should use the reserve price field. This will protect your
interests as a seller.
Please note: When specifying the starting bid, bid increment, and
reserve price amounts, follow the guidelines below for the currency
conversion rate of cash and credit:
. If you have only selected Cash Auction, please enter the
values in Cash amounts.
. If you have selected Credit Auction, please enter the
following values in Credit amounts. The currency conversion rate
should remain at $1 cash = $1 credit.
. If you have selected Cash and Credit Auction, please enter
the following values in cash dollars and the system will convert the
amounts into credit based on the currency conversion rate you
select.
- Non-auction purchase method - if you have auction quantity
remaining after the auction has closed, you may make this available
for Open Bid purchase after close of the auction. Select the Open
Bid method desired from the drop down box. This will tell the
system to automatically transfer those remaining quantities to the
non-auction purchase method you have selected.
You may update any of your auction details up until the time the
auction starts. By following the above procedures for updating
inventory.
Once your auction has begun, the only changes that can be made are
to add inventory quantity, extend the auction (but only in cases
where your reserve price has not been met) and change the non-
auction purchasing method.
(a) Inventory Log
The Inventory Log functionality allows the administrator to track
changes to inventory. You can select a list by seller for a
specified date span. It will display the inventory item number, the
user name, the action taken - addition, deletion or update -- ,
quantity and the log date. This is a monitoring functionality for
administrators to monitor the quantity levels of inventory by seller
to ensure no inventory items are sold off line.
(b) Depleting Mode
The depleting mode functionality allows the administrator to choose
whether inventory items with a zero quantity appear on the site or
not. By choosing "show," the inventory item remains listed in the
catalog, and by choosing "hide," the inventory item is removed from
the catalog.
3.5 Transaction Management
Administrators use this module to set transaction fee rates for
sellers, view transactions, view auctions and view open bids.
(a) Fee Schema
System fees apply only to sellers. There are no limits to the
quantity of fee schema possible on the site.
Each fee schema can be composed of a combination of three
transaction fees:
A listing fee is applied each day an item is listed on the site.
A percentage transaction fee is applied when a transaction closes.
The fee is a percentage of the final cost of the transaction. The
administrator can set several intervals where the percentage
transaction fee differs from one interval to the other.
For example: $ 1 - $1,000 = 5% transaction fee
$1,001 - $3,000 = 10% transaction fee
$3,001 - $5,000 = 15% transaction fee
A Flat Rate Transaction Fee is applied when a transaction closes.
A predefined amount is charged to the seller for each transaction.
The administrator can set several intervals where the flat rate
transaction fee differs from one interval to the other.
For example : $ 1 - $1,000 = $ 5 transaction fee
$1,001 - $3,000 = $10 transaction fee
$3,001 - $5,000 = $15 transaction fee
(b) View Transaction
The administrator can view a summary of any on-going or closed
transactions. Use the specialized search engine to set search
criteria for the transaction you wish to view. For example, by
order status (closed, accepted, rejected ect.), seller, cash
amount, transaction time span, order amount, or order date. You can
also search by the order ID number which is system generated every
time you place an order.
(c) View Auctions
The administrator can also view a summary of any on-going or closed
auctions by a buyer or seller. This also contains a specialized
search engine to set a search criteria for the auctions you wish to
view.
(d) View Open Bid
The administrator can view a summary of any on-going or closed open
bid transactions accepted or rejected by the buyer or the seller.
This also contains a specialized search engine. For example, by
open bid status, seller, buyer user name, transaction time-span, or
open date. You can also search by the open bid # which is system
generated when an open bid is placed.
3.6 Report Management
Currently, there are six Crystal Reports that can be viewed through
the browser. These reports are dynamically populated. The available
reports are listed below:
Inventory Transaction Summary: Details transactions sorted by
product.
Order Packing List: Details all closed transactions.
Product Summary: A comprehensive list of all products available on
the site per catalog or category
Purchase History: All transactions grouped by buyer.
Sales History: All transactions grouped by seller.
Transaction Summary: All transactions grouped by status (open,
closed, etc)
Please note there is a link to Login or Logoff on the left side bar
of each module depending on whether you are logged in or not.
3.7 System Requirements
CLIENT SIDE
Browser IE 3.X or higher
Netscape 3.X or higher
Client Workstation
Operating Systems Win 95
Win 98
Win NT 4.0 Workstation
Screen Resolution 800X600
Number of display colours - 256
Will operate reasonable at 640X480
Modem Speed 28.8 kbs (target)
SERVER SIDE Windows NT Server 4.0 (SP3)
IIS 4.0 (OP 4)
SQL 7.0, ADO 2.1
Crystal Report 7.0
EXHIBIT B
Constitution
Constitution
of
Entrade Asia Pacific Pty Ltd
ACN 092 146 426
CONTENTS
1. PRELIMINARY 1
1.1 Proprietary company 1
1.2 Replaceable rules 1
1.3 Definitions 1
1.4 Interpretation of this document 2
1.5 Single Director Company 3
2. DIRECTORS 4
2.1 Number of Directors 4
2.2 Appointment of Directors 4
2.3 No share qualification 4
2.4 Cessation of Director's appointment 4
2.5 Removal from office 5
2.6 Too few Directors 5
2.7 Vacation of office by Sole Director 5
3. ALTERNATES 5
3.1 Appointment of Alternate 5
3.2 Notice of Board meetings 5
3.3 Obligations and entitlements
of Alternates 5
3.4 Termination of appointment 6
3.5 Appointments and revocations in writing 6
4. POWERS OF THE BOARD 6
4.1 Powers generally 6
4.2 Exercise of powers 6
5. EXECUTING NEGOTIABLE INSTRUMENTS 7
6. MANAGING DIRECTOR 7
6.1 Appointment and power of Managing
Director 7
6.2 Termination of appointment of
Managing Director 7
7. DELEGATION OF BOARD POWERS 7
7.1 Power to delegate 7
7.2 Power to revoke delegation 7
7.3 Terms of delegation 7
7.4 Proceedings of committees 8
8. DIRECTOR'S DUTIES AND INTERESTS 8
8.1 Compliance with duties under the Law 8
8.2 Director not disqualified from holding
other offices etc 8
8.3 Disclosure of interests 8
8.4 Interest of Director 8
8.5 Director to give information to Company 9
9. DIRECTORS' REMUNERATION 9
9.1 Remuneration of Executive Directors 9
9.2 Remuneration of non-executive Directors 9
9.3 Additional Remuneration for extra
services 9
9.4 Expenses of Directors 9
9.5 Subsidiaries of Listed Corporations 10
10. OFFICERS' INDEMNITY AND INSURANCE 10
10.1 Indemnity 10
10.2 Insurance 10
10.3 Former officers 10
10.4 Deeds 10
11. BOARD MEETINGS 11
11.1 Convening Board meetings 11
11.2 Notice of Board meeting 11
11.3 Use of technology 11
11.4 Chairing Board meetings 11
11.5 Quorum 11
11.6 Majority decisions 11
11.7 Procedural rules 12
11.8 Written resolution 12
11.9 Additional provisions concerning
written resolutions 12
11.10 Valid proceedings 12
11.11 Single Director Company 12
12. MEETINGS OF MEMBERS 13
12.1 Calling meetings of members 13
12.2 Notice of meeting 13
12.3 Short notice 13
12.4 Postponement or cancellation 13
12.5 Fresh notice 13
12.6 Notice to joint holders of shares 13
12.7 Technology 13
12.8 Accidental omission 14
12.9 Class meetings 14
13. PROCEEDINGS AT MEETINGS OF MEMBERS 14
13.1 Member present at meeting 14
13.2 Quorum 14
13.3 Quorum not present 14
13.4 Chairing meetings of members 14
13.5 Attendance by auditor and Directors 15
13.6 Members rights suspended while call
unpaid 15
13.7 Adjournment 15
13.8 Business at adjourned meetings 15
14. PROXIES, ATTORNEYS AND REPRESENTATIVES 15
14.1 Appointment of proxies 15
14.2 Member's attorney 15
14.3 Deposit of proxy forms and
powers of attorney 15
14.4 Corporate representatives 16
14.5 Standing appointments 16
14.6 Suspension of proxy or attorney's
powers if member present 16
14.7 Priority of conflicting appointments
of attorney or representative 16
14.8 More than 2 current proxy appointments 16
14.9 Continuing authority 17
15. ENTITLEMENT TO VOTE 17
15.1 Number of votes 17
15.2 Votes of joint holders 17
15.3 Voting restrictions 17
15.4 Decision on right to vote 18
16. HOW VOTING IS CARRIED OUT 18
16.1 Method of voting 18
16.2 Demand for a poll 18
16.3 When and how polls must be taken 18
17. RESOLUTIONS WITHOUT MEETINGS 19
17.1 Written resolutions 19
17.2 Signature of resolutions 19
18. SECRETARY 19
18.1 Appointment and removal of Secretary 19
18.2 Terms and conditions of office 19
18.3 Cessation of Secretary's Appointment 19
18.4 Removal from office 20
18.5 Secretary to give information to Company 20
19. MINUTES 20
19.1 Minutes must be kept 20
19.2 Minutes as evidence 20
19.3 Inspection of minute books 20
20. COMPANY SEALS 20
20.1 Common seal 20
20.2 Use of seals 21
20.3 Fixing seals to documents 21
21. ACCOUNTS AND AUDIT 21
21.1 Company to keep accounts 21
21.2 Financial reporting 21
21.3 Audit 21
21.4 Inspection of financial records and
books 22
22. SHARES 22
22.1 Issue at discretion of Board 22
22.2 Preference and redeemable
preference shares 22
22.3 Right attaching to A Class Share 22
22.4 Right attaching to B Class Share 22
22.5 Brokerage and commissions 23
22.6 Surrender of shares 23
23. CERTIFICATES 23
23.1 Issue of share certificate 23
23.2 Multiple certificates and joint holders 23
23.3 Lost and worn out certificates 23
24. REGISTER 23
24.1 Joint holders 23
24.2 Nominee holders 24
24.3 Non-beneficial holders 24
25. PARTLY PAID SHARES 24
25.1 Fixed instalments 24
25.2 Pre-payment of calls 24
25.3 Calls made by Board 25
25.4 Classes of shares 25
25.5 Obligation to pay calls 25
25.6 Called Amounts 25
25.7 Proof of call 25
25.8 Forfeiture notice 26
25.9 Forfeiture 26
25.10 Disposal and re-issue of forfeited
shares 26
25.11 Notice of forfeiture 26
25.12 Cancellation of forfeiture 26
25.13 Effect of forfeiture 27
25.14 Application of proceeds 27
26. COMPANY LIENS 27
26.1 Existence of liens 27
26.2 Sale under lien 27
26.3 Indemnity for payments required to be
made by the Company 28
27. DIVIDENDS 28
27.1 Accumulation of reserves 28
27.2 Dividends must be paid out of profits 28
27.3 Payment of dividends 29
27.4 Amount of dividend 29
27.5 Prepayments and payments during
dividend period 29
27.6 Dividends in kind 29
27.7 Method of payment 29
27.8 Joint holders' receipt 30
27.9 Retention of dividends by Company 30
27.10 No interest on dividends 30
28. TRANSFER OF SHARES 30
28.1 Instrument of transfer 30
28.2 Delivery of transfer and certificate 30
28.3 Refusal to register transfer 31
28.4 Transferor remains holder until
transfer registered 31
28.5 Powers of attorney 31
29. TRANSMISSION OF SHARES 31
29.1 Death of joint holder 31
29.2 Death of single holder 31
29.3 Transmission of shares on insolvency
or mental incapacity 31
29.4 Refusal to register holder 32
30. SHARE CAPITAL 32
30.1 Capitalisation of profits 32
30.2 Adjustment of capitalised amounts 32
30.3 Conversion of shares 32
30.4 Reduction of capital 33
30.5 Variation of rights 33
31. WINDING UP 33
31.1 Entitlement of members 33
31.2 Distribution of assets generally 33
31.3 No distribution of liabilities 34
31.4 Distribution not in accordance
with legal rights 34
32. NOTICES 34
32.1 Notices by Company 34
32.2 Overseas members 34
32.3 When notice is given 34
32.4 Business days 35
32.5 Notice to joint holders 35
32.6 Counting days 35
33. UNCLAIMED MONEY 35
34. JOINT VENTURE AND SHAREHOLDERS' AGREEMENT 35
SCHEDULE I
Terms of issue of preference shares 1
CONSTITUTION OF ENTRADE ASIA PACIFIC PTY LTD
ACN 092 146 426
1. PRELIMINARY
1.1 Proprietary company
The Company is a proprietary company and must comply with
section 113.
1.2 Replaceable rules
The replaceable rules referred to in section 141 do not apply
to the Company and are replaced by the rules set out in this
document.
1.3 Definitions
The following definitions apply in this document.
"A Class Share" means the A class share in the Company.
"Alternate" means an alternate Director appointed under
rule 3.1.
"Appointor" in relation to an Alternate, means the Director who
appoints that Alternate.
"B Class Share" means the B class share in the Company.
"Board" means:
(a) if the Company is a Single Director Company, the sole
Director exercising powers under the Law and this document; or
(b) in any other case, the Directors acting collectively under
this document.
"Called Amount" in respect of a share means:
(a) the amount of a call on that share that is due and unpaid;
and
(b) any amount the Board requires a member to pay under
rule 25.6.
"Company" means the company named at the beginning of this
document whatever its name is for the time being.
"Director" means a person who is, for the time being, a
director of the Company including, where appropriate, an Alternate.
"dividend" includes bonus.
"Executive Director" means a Director who is an employee of the
Company or acts in an executive capacity for the Company under a
contract for services and includes a Managing Director.
"Interest Rate" means, in respect of each rule in which that
term is used:
(c) the rate for the time being prescribed by the Board in
respect of that rule; or
(d) if no rate is prescribed, 15% each year.
"Law" means the Corporations Law.
"Listed Corporation" means a corporation that is admitted to
the official list of Australian Stock Exchange Limited.
"Listing Rules" means the official listing rules of Australian
Stock Exchange Limited.
"Managing Director" means a managing director appointed under
rule 6.1.
"member" means a person whose name is entered in the Register
as the holder of a share.
"ordinary resolution" means a resolution of members other than
a special resolution.
"Remuneration" in relation to a Director (other than an
Executive Director):
(e) includes fees, salary, bonuses, fringe benefits and
superannuation contributions provided by the Company; and
(f) excludes a payment as compensation for loss of office or
in connection with retirement from office (which includes
resignation from office and death while in office) and an insurance
premium paid by the Company or indemnity under rule 10.
"Register" means the register of members kept as required by
sections 168 and 169 of the Law.
"Secretary" means, during the term of that appointment, a
person appointed as a secretary of the Company in accordance with
this document.
"Single Director Company" has the meaning given in rule 1.5.
"special resolution" has the meaning given by section 9.
"US$" means the lawful currency of the United States of
America.
"Voting Member" in relation to a general meeting, or meeting of
a class of members, means a member who has the right to be present
and to vote on at least 1 item of business to be considered at that
meeting.
1.4 Interpretation of this document
Headings are for convenience only, and do not affect
interpretation. The following rules also apply in interpreting this
document, except where the context makes it clear that a rule is not
intended to apply.
(a) A reference to:
(i) legislation (including subordinate legislation) is
to that legislation as amended, modified in relation to the Company,
re-enacted or replaced, and includes any subordinate legislation
issued under it;
(ii) a document or agreement, or a provision of a
document or agreement, is to that document, agreement or provision
as amended, supplemented, replaced or novated;
(iii) a person includes any type of entity or body of
persons, whether or not it is incorporated or has a separate legal
identity, and any executor, administrator or successor in law of the
person; and
(iv) anything (including a right, obligation or concept)
includes each part of it.
(b) A singular word includes the plural, and vice versa.
(c) A word which suggests 1 gender includes the other genders.
(d) If a word is defined, another part of speech has a
corresponding meaning.
(e) If an example is given of anything (including a right,
obligation or concept), such as by saying it includes something
else, the example does not limit the scope of that thing.
(f) The word "agreement" includes an undertaking or other
binding arrangement or understanding whether or not in writing.
(g) A reference to something being "written" or "in writing"
includes that thing being represented or reproduced in any mode in
a visible form.
(h) Words (other than "remuneration" and those defined in
rule 1.3) which are defined by the Law have the same meaning in this
document.
(i) A reference to a Chapter, Part, Division, or section is
a reference to a Chapter, Part, Division or section of the Law.
1.5 Single Director Company
The Company is a Single Director Company if:
(a) at the time of its registration as an Australian company,
only 1 person had consented to be a Director; or
(b) the Company has passed an ordinary resolution that it be
a Single Director Company,
and the Company has not, since registration or the passing of
that resolution (as the case requires), passed a resolution that it
cease to be a Single Director Company and, at the relevant time,
there is only 1 Director.
2. DIRECTORS
2.1 Number of Directors
The Company must have at least:
(a) if the Company is a Single Director Company, 1; or
(b) otherwise, 2,
Directors (not counting Alternates) and, until otherwise
decided by ordinary resolution, not more than 6 Directors (not
counting Alternates).
2.2 Appointment of Directors
Subject to the maximum number of Directors for the time being
fixed under rule 2.1 not being exceeded:
(a) the Company by ordinary resolution; or
(b) members holding a majority of the issued shares of the
Company conferring the right to vote, by writing delivered to the
Company; or
(c) the Board (except during a general meeting),
may appoint a person to be a Director either to fill a casual
vacancy or as an addition to the Board.
2.3 No share qualification
A Director need not be a member.
2.4 Cessation of Director's appointment
A person automatically ceases to be a Director if the person:
(a) is not permitted by the Law (or an order made under the
Law) to be a director;
(b) becomes disqualified from managing corporations under Part
2D.6 and is not given permission or leave to manage the Company
under section 206F or 206G;
(c) becomes of unsound mind or physically or mentally
incapable of performing the functions of that office;
(d) fails to attend Board meetings (either personally or by
Alternate) for a continuous period of 6 months without leave of
absence from the Board;
(e) resigns by notice in writing to the Company; or
(f) is removed from office under rule 2.5,
or if the person was appointed to the office for a specified
period and that period expires.
2.5 Removal from office
Whether or not a Director's appointment was expressed to be for
a specified period,
(a) the Company by ordinary resolution; or
(b) members holding a majority of the issued shares of the
Company conferring the right to vote, by writing delivered to the
Company,
may remove a Director from office.
2.6 Too few Directors
If the number of Directors is reduced below the minimum
required by rule 2.1, the continuing Directors may act as the Board
only:
(a) to appoint Directors up to that minimum number;
(b) to convene a meeting of members; and
(c) in emergencies.
2.7 Vacation of office by Sole Director
Sections 201F (2) to (5) apply if a person who is the only
Director and only member dies or ceases to a Director as a result of
mental incapacity or bankruptcy.
3. ALTERNATES
3.1 Appointment of Alternate
A Director (other than an Alternate) may appoint a person who
is (except in the case of a Single Director Company) approved by the
Board (without the vote of the Appointor) to act as Alternate for a
specified period or each time the Appointor is unable to attend a
Board meeting or act as a Director.
3.2 Notice of Board meetings
If the Appointor requests the Company to give the Alternate
notice of Board meetings, the Company must do so. Unless the
Appointor has requested it, the Company need not give notice of
Board meetings to an Alternate.
3.3 Obligations and entitlements of Alternates
An Alternate:
(a) may attend and vote in place of the Appointor at a Board
meeting at which the Appointor is not present;
(b) if also a Director, has a separate right to vote as
Alternate;
(c) if Alternate for more than 1 Appointor, has a separate
right to vote in place of each Appointor;
(d) when acting as Alternate, is an officer of the Company and
subject to all the duties, and entitled to exercise all the powers
and rights, of the Appointor as a Director; and
(e) is entitled to reasonable travelling, accommodation and
other expenses incurred in attending meetings of the Board or of the
Company or while otherwise engaged on the business of the Company on
the same basis as other Directors but is not entitled to any other
remuneration from the Company (but the Appointor may further
remunerate the Alternate).
3.4 Termination of appointment
The Appointor at any time may revoke the appointment of a
person as Alternate whether or not that appointment is for a
specified period. Any appointment of an Alternate immediately
ceases if:
(a) the Appointor ceases to be a Director; or
(b) an event occurs which would cause the Alternate to cease
to be a Director under rule 2.4 if the Alternate were a Director.
3.5 Appointments and revocations in writing
The Appointor must appoint, and revoke the appointment of, any
Alternate in writing. The appointment or revocation is not
effective until a copy is provided to the Company.
4. POWERS OF THE BOARD
4.1 Powers generally
Except as otherwise required by the Law, any other applicable
law, or this document, the Board:
(a) has power to manage the business of the Company; and
(b) may exercise every right, power or capacity of the Company
to the exclusion of the Company in general meeting and the members.
4.2 Exercise of powers
A power of the Board can be exercised only:
(a) by resolution passed at a meeting of the Board or
otherwise in accordance with rule 11; or
(b) in accordance with a delegation of the power under rule 6
or 7.
5. EXECUTING NEGOTIABLE INSTRUMENTS
The Board must decide the manner (including the use of
facsimile signatures if thought appropriate) in which negotiable
instruments can be executed, accepted or endorsed for and on behalf
of the Company. The Company may execute, accept, or endorse
negotiable instruments only in the manner for the time being decided
by the Board.
6. MANAGING DIRECTOR
6.1 Appointment and power of Managing Director
The Board may appoint 1 or more Directors to be a Managing
Director either for a specified term or without specifying a term.
The Board may delegate any of the powers of the Board to a
Managing Director:
(a) on the terms and subject to any restrictions the Board
decides; and
(b) so as to be concurrent with, or to the exclusion of, the
powers of the Board,
and may revoke the delegation at any time.
This rule does not limit rule 7.
6.2 Termination of appointment of Managing Director
The appointment of a Managing Director terminates if:
(a) the Managing Director ceases for any reason to be a
Director; or
(b) the Board removes the Managing Director from the office
of Managing Director (which, subject to any contract between the
Company and the Managing Director, the Board has power to do),
whether or not the appointment was expressed to be for a
specified term.
7. DELEGATION OF BOARD POWERS
7.1 Power to delegate
The Board may delegate any of its powers as permitted by
section 198D.
7.2 Power to revoke delegation
The Board may revoke a delegation previously made whether or
not the delegation is expressed to be for a specified period.
7.3 Terms of delegation
A delegation of powers under rule 7.1 may be made:
(a) for a specified period or without specifying a period; and
(b) on the terms and subject to any restrictions the Board
decides.
A document of delegation may contain the provisions for the
protection and convenience of those who deal with the delegate that
the Board thinks appropriate.
7.4 Proceedings of committees
Subject to the terms on which a power of the Board is delegated
to a committee, the meetings and proceedings of committees are, to
the greatest extent practical, governed by the rules of this
document which regulate the meetings and proceedings of the Board.
8. DIRECTOR'S DUTIES AND INTERESTS
8.1 Compliance with duties under the Law
Each Director must comply with sections 180 to 183.
8.2 Director not disqualified from holding other offices etc
A Director is not disqualified by reason only of being a
Director from:
(a) holding any office or place of profit or employment other
than that of the Company's auditor;
(b) being a member or creditor of any corporation (including
the Company) or partnership other than the auditor; or
(c) entering into any agreement with the Company.
8.3 Disclosure of interests
Each Director must comply with section 191 and any relevant
general law principles in relation to disclosure of the Director's
interests.
8.4 Interest of Director
If a Director has a material personal interest in a matter that
relates to the affairs of the Company and either the Director gives
notice of the interest under section 191 or notice is not required
to be given under section 191:
(a) the Director may be counted in a quorum at a Board meeting
that considers, and may vote on, any matter that relates to the
interest;
(b) the Company may proceed with any transaction that relates
to the interest and the Director may participate in the execution of
any relevant document by or on behalf of the Company;
(c) the Director may retain benefits under the transaction
even though the Director has the interest; and
(d) the Company cannot avoid the transaction merely because
of the existence of the interest.
If notice is required to be given under section 191, paragraph
(c) applies only if it is given before the transaction is entered
into.
8.5 Director to give information to Company
Each Director must comply with sections 205C and 205F.
9. DIRECTORS' REMUNERATION
9.1 Remuneration of Executive Directors
Subject to any contract with the Company (and if the Company is
a subsidiary of a Listed Corporation to the Listing Rules), the
Board may fix the remuneration of each Executive Director. Subject
to rule 9.5, that remuneration may consist of salary, bonuses,
commission on profits or dividends, participation in profits or any
other elements.
9.2 Remuneration of non-executive Directors
The Directors (other than the Executive Directors and those who
are Directors only because they are Alternates) are entitled to be
paid, out of the funds of the Company, an amount of Remuneration
which:
(a) does not in any year exceed in aggregate the amount last
fixed by ordinary resolution; and
(b) is allocated among them:
(i) on an equal basis having regard to the proportion of
the relevant year for which each Director held office; or
(ii) as otherwise decided by the Board; and
(c) is provided in the manner the Board decides, which may
include provision of non cash benefits.
If the Board decides to include non cash benefits in a
Director's Remuneration, the Board must also decide the manner in
which the value of those benefits is to be calculated for the
purposes of this rule.
9.3 Additional Remuneration for extra services
If a Director, at the request of the Board and for the purposes
of the Company, performs extra services or makes special exertions
(including going or living away from the Director's usual
residential address), the Company may remunerate that Director for
doing so. Remuneration under this rule may be either in addition to
or in substitution for any remuneration to which that Director is
entitled under rule 9.1 or 9.2.
9.4 Expenses of Directors
The Company may pay a Director (in addition to any
remuneration) all reasonable expenses (including travelling and
accommodation expenses) incurred by the Director:
(a) in attending meetings of the Company, the Board, or a
committee of the Board;
(b) on the business of the Company; or
(c) in carrying out duties as a Director.
9.5 Subsidiaries of Listed Corporations
If the Company is a subsidiary of a Listed Corporation, it must
not pay Directors remuneration that is calculated as a commission on
or percentage of profits or operating revenue.
10. OFFICERS' INDEMNITY AND INSURANCE
10.1 Indemnity
Subject to and so far as permitted by the Law:
(a) the Company must, to the extent the person is not
otherwise indemnified, indemnify every officer of the Company and
its wholly owned subsidiaries and may indemnify its auditor against
a Liability incurred as such an officer, or auditor to a person
(other than the Company or a related body corporate) including a
Liability incurred as a result of appointment or nomination by the
Company or subsidiary as a trustee or as an officer of another
corporation, unless the Liability arises out of conduct involving a
lack of good faith; and
(b) the Company may make a payment (whether by way of advance,
loan or otherwise) in respect of legal costs incurred by an officer
or employee or auditor in defending an action for a Liability
incurred as such an officer, employee or auditor or in resisting or
responding to actions taken by a government agency or a liquidator.
In this rule, "Liability" means a liability of any kind
(whether actual or contingent and whether fixed or unascertained)
and includes costs, damages and expenses, including costs and
expenses incurred in connection with any investigation or inquiry by
a government agency or a liquidator.
10.2 Insurance
Subject to the Law, the Company may enter into, and pay
premiums on, a contract of insurance in respect of any person.
10.3 Former officers
The indemnity in favour of officers under rule 10.1 is a
continuing indemnity. It applies in respect of all acts done by a
person while an officer of the Company or one of its wholly owned
subsidiaries even though the person is not an officer at the time
the claim is made.
10.4 Deeds
Subject to the Law, without limiting a person's rights under
rule 10, the Company may enter into an agreement with a person who
is or has been an officer of the Company or any of the Company's
subsidiaries, to give effect to the rights of the person under this
rule 10 on any terms and conditions that the Board thinks fit.
11. BOARD MEETINGS
11.1 Convening Board meetings
A Director may at any time, and a Secretary must on request
from a Director, convene a Board meeting.
11.2 Notice of Board meeting
The convenor of each Board meeting:
(a) must give reasonable notice of the meeting (and, if it is
adjourned, of its resumption) individually to each Director and each
Alternate in respect of whom the Appointor has given notice under
rule 3.2 requiring notice of Board meetings to be given to that
Alternate; and
(b) may give that notice orally (including by telephone) or
in writing,
but failure to give notice to, or non-receipt of notice by, a
Director does not result in a Board meeting being invalid.
11.3 Use of technology
A Board meeting may be held using any means of audio or audio-
visual communication by which each Director participating can
hear and be heard by each other Director participating or in any
other way permitted by section 248D. A Board meeting held solely or
partly by technology is treated as held at the place at which the
greatest number of the Directors present at the meeting is located
or, if an equal number of Directors is located in each of 2 or more
places, at the place where the chairman of the meeting is located.
11.4 Chairing Board meetings
The Board may elect a Director to chair its meetings and decide
the period for which that Director holds that office. If there is
no chairman of Directors or the chairman is not present at the time
for which a Board meeting is called or is unwilling to act, the
Directors present must elect a Director present to chair the
meeting.
11.5 Quorum
Unless the Board decides otherwise, the quorum for a Board
meeting is 2 Directors and a quorum must be present for the whole
meeting. An Alternate who is also a Director or a person who is an
Alternate for more than 1 Appointor may only be counted once toward
a quorum. A Director is treated as present at a meeting held by
audio or audio-visual communication if the Director is able to hear
and be heard by all others attending. If a meeting is held in
another way permitted by section 248D, the Board must resolve the
basis on which Directors are treated as present.
11.6 Majority decisions
A resolution of the Board must be passed by a majority of the
votes cast by Directors entitled to vote on the resolution. The
chairman of a Board meeting does not have a second or casting vote.
If an equal number of votes is cast for and against a resolution,
the matter is decided in the negative.
11.7 Procedural rules
The Board may adjourn and, subject to this document, otherwise
regulate its meetings as it decides.
11.8 Written resolution
If all the Directors entitled to receive notice of a Board
meeting and to vote on the resolution sign a document containing a
statement that they are in favour of the resolution set out in the
document, a Board resolution in those terms is passed at the time
when the last Director signs.
11.9 Additional provisions concerning written resolutions
For the purpose of rule 11.8:
(a) 2 or more separate documents in identical terms, each of
which is signed by 1 or more Directors, are treated as 1 document;
(b) signature of a document by an Alternate is not required
if the Appointor of that Alternate has signed the document;
(c) signature of a document by the Appointor of an Alternate
is not required if that Alternate has signed the document in that
capacity; and
(d) a telex, telegram, facsimile or electronic message
containing the text of the document expressed to have been signed by
a Director that is sent to the Company is a document signed by that
Director at the time of its receipt by the Company.
11.10 Valid proceedings
Each resolution passed or thing done by, or with the
participation of, a person acting as a Director or member of a
committee is valid even if it is later discovered that:
(a) there was a defect in the appointment of the person; or
(b) the person was disqualified from continuing in office,
voting on the resolution or doing the thing.
11.11 Single Director Company
If the Company is a Single Director Company:
(a) a written record of a decision to a particular effect made
by the sole Director counts as the passing by the Director of a
resolution to that effect and has effect as minutes of that
resolution and rules 11.1 to 11.10 do not apply; and
(b) the sole Director is competent to exercise all the powers
and discretions for the time being vested in or exercisable by the
Board.
12. MEETINGS OF MEMBERS
12.1 Calling meetings of members
(a) The Board or a Director may at any time; and
(b) the Board must when required by section 249D or by order
made under section 249G,
convene a meeting of members.
12.2 Notice of meeting
Subject to rules 12.3 and 12.6, at least 21 days' written
notice of a meeting of members must be given individually to each
member entitled to vote at the meeting, to each Director and to the
auditor (if any). The notice of meeting must comply with
section 249L and may be given in any manner permitted by
section 249J(3).
12.3 Short notice
Subject to section 249H(4):
(a) if the Company has elected to convene a meeting of members
as the annual general meeting, if all the members entitled to attend
and vote agree; or
(b) otherwise, if members who together have power to cast at
least 95% of the votes that may be cast at the meeting agree,
a resolution may be proposed and passed at a meeting of which
less than 21 days' notice has been given.
12.4 Postponement or cancellation
Subject to section 249D(5), the Board may postpone or cancel a
meeting of members by written notice given individually to each
person entitled to be given notice of the meeting.
12.5 Fresh notice
If a meeting of members is postponed or adjourned for 1 month
or more, the Company must give new notice of the resumed meeting.
12.6 Notice to joint holders of shares
If a share is held jointly, the Company need only give notice
of a meeting of members (or of its cancellation or postponement) to
the joint holder who is named first in the Register.
12.7 Technology
The Company may hold a meeting of members at 2 or more venues
using any technology that gives the members as a whole a reasonable
opportunity to participate.
12.8 Accidental omission
The accidental omission to give notice to, or the non-receipt
of notice by, any of those entitled to it does not invalidate any
resolution passed at a meeting of members.
12.9 Class meetings
Rules 12 to 16 inclusive apply to a separate meeting of a class
of members as far as they are capable of application and modified as
necessary.
13. PROCEEDINGS AT MEETINGS OF MEMBERS
13.1 Member present at meeting
If a member has appointed a proxy or attorney or (in the case
of a member which is a body corporate) a representative to act at a
meeting of members, that member is taken to be present at a meeting
at which the proxy, attorney or representative is present.
13.2 Quorum
Subject to section 249B, the quorum for a meeting of members is
2 Voting Members. Each individual present may only be counted once
toward a quorum. If a member has appointed more than 1 proxy or
representative only 1 of them may be counted toward a quorum.
13.3 Quorum not present
If a quorum is not present within 15 minutes after the time for
which a meeting of members is called:
(a) if called as a result of a request of members under
section 249D, the meeting is dissolved; and
(b) in any other case:
(i) the meeting is adjourned to the day, time and place
that the Board decides and notifies to members, or if no decision is
notified before then, to the same time on the same day in the next
week at the same place; and
(ii) if a quorum is not present at the adjourned meeting,
the meeting is dissolved.
13.4 Chairing meetings of members
If the Board has appointed a Director to chair Board meetings,
that Director may also chair meetings of members. If:
(a) there is no Director who the Board has appointed to chair
Board meetings for the time being; or
(b) the Director appointed to chair Board meetings is not
present at the time for which a meeting of members is called or is
not willing to chair the meeting,
the Voting Members present must elect a member or Director
present to chair the meeting.
13.5 Attendance by auditor and Directors
Every Director and the auditor (if any) has the right to attend
and speak at all meetings of members whether or not a member.
13.6 Members rights suspended while call unpaid
If a call on a share is due and unpaid, the holding of that
share does not entitle a member to be present, speak, or vote at, or
be counted in the quorum for, a meeting of members.
13.7 Adjournment
Subject to rule 12.5, the chairman of a meeting of members at
which a quorum is present:
(a) may, with the consent of the meeting; and
(b) must, if directed by ordinary resolution of the meeting,
adjourn it to another time and place.
13.8 Business at adjourned meetings
The only business that may be transacted at a meeting resumed
after an adjournment is the business left unfinished immediately
before the adjournment.
14. PROXIES, ATTORNEYS AND REPRESENTATIVES
14.1 Appointment of proxies
A member may appoint not more than 2 proxies to attend and act
for the member at a meeting of members. An appointment of proxy
must be made by written notice to the Company that complies with
section 250A(1) or in any other form and mode that is, and is signed
or acknowledged by the member in a manner, satisfactory to the
Board. If a member appoints 2 proxies and the appointment does not
specify the proportion or number of the member's votes each proxy
may exercise, each proxy may exercise half of those votes.
14.2 Member's attorney
A member may appoint an attorney to act, or to appoint a proxy
to act, at a meeting of members. If the appointor is an individual,
the power of attorney must be signed in the presence of at least 1
witness.
14.3 Deposit of proxy forms and powers of attorney
An appointment of a proxy or power of attorney is not effective
for a particular meeting of members unless:
(a) in the case of a proxy, the proxy form and, if it is
executed by an attorney, the relevant power of attorney or a
certified copy of it; and
(b) in the case of an attorney, the power of attorney or a
certified copy of it,
is received by the Company at its registered office or a fax
number at that office (or another address specified for the purpose
in the relevant notice of meeting) at least 48 hours before the time
for which the meeting was called or, if the meeting has been
adjourned, before the resumption of the meeting.
14.4 Corporate representatives
A member that is a body corporate may appoint an individual to
act as its representative at meetings of members as permitted by
section 250D.
14.5 Standing appointments
A member may appoint a proxy, attorney or representative to act
at a particular meeting of members or make a standing appointment
and may revoke any appointment. A proxy, attorney or representative
may, but need not, be a member.
14.6 Suspension of proxy or attorney's powers if member present
A proxy or attorney has no power to act for a member at a
meeting at which the member is present:
(a) in the case of an individual, in person; or
(b) in the case of a body corporate, by representative.
A proxy has no power to act for a member at a meeting at which
the member is present by attorney.
14.7 Priority of conflicting appointments of attorney or
representative
If more than 1 attorney or representative appointed by a member
is present at a meeting of members and the Company has not received
notice of revocation of any of the appointments:
(a) an attorney or representative appointed to act at that
particular meeting may act to the exclusion of an attorney or
representative appointed under a standing appointment; and
(b) subject to rule 14.7(a), an attorney or representative
appointed under a more recent appointment may act to the exclusion
of an attorney or representative appointed earlier in time.
14.8 More than 2 current proxy appointments
An appointment of proxy by a member is revoked (or, in the case
of a standing appointment, suspended for that particular meeting) if
the Company receives a further appointment of proxy from that member
which would result in there being more than 2 proxies of that member
entitled to act at a meeting. The appointment of proxy made first
in time is the first to be treated as revoked or suspended by this
rule.
14.9 Continuing authority
An act done at a meeting of members by a proxy, attorney or
representative is valid even if, before the act is done, the
appointing member:
(a) dies or becomes mentally incapacitated;
(b) becomes bankrupt or an insolvent under administration or
is wound up;
(c) revokes the appointment of the authority under which the
appointment was made by a third party; or
(d) transfers the share to which the appointment relates,
unless the Company has received written notice of the matter
before the start or resumption of the meeting at which the vote is
cast.
15. ENTITLEMENT TO VOTE
15.1 Number of votes
Subject to section 250A(4), rules 13.6, 14, 15.2 and 15.3 and
terms on which shares are issued, a member:
(a) on a show of hands has 1 vote; and
(b) on a poll has 1 vote for every share held.
The chairman of a meeting of members does not have a second or
casting vote. If an equal number of votes is cast for and against
a resolution the matter is decided in the negative.
15.2 Votes of joint holders
If more than 1 of the joint holders of a share (including, for
the purposes of this rule, joint legal personal representatives of
a dead member) are present at a meeting of members and tender a vote
in respect of the share, the Company may only count the vote cast by
the most senior joint holder who tenders a vote. For this purpose,
seniority depends on the order in which the names of the joint
holders are listed in the Register.
15.3 Voting restrictions
If:
(a) the Law requires that some members do not vote on a
resolution, or that votes cast by some members be disregarded, in
order for the resolution to have an intended effect; and
(b) the notice of the meeting at which the resolution is
proposed states that fact,
those members have no right to vote on that resolution and the
Company must not count any votes purported to be cast by those
members. If a proxy purports to vote in a way or in circumstances
that contravene section 250A(4), on a show of hands the vote is
invalid and the Company must not count it and on a poll rule 16.3(c)
applies.
15.4 Decision on right to vote
A Voting Member or Director may challenge a person's right to
vote at a meeting of members. A challenge may only be made at the
meeting. A challenge, or any other doubt as to the validity of a
vote, must be decided by the chairman, whose decision is final.
16. HOW VOTING IS CARRIED OUT
16.1 Method of voting
A resolution put to the vote at a meeting of members must be
decided on a show of hands unless a poll is demanded under rule 16.2
either before or on declaration of the result of the vote on a show
of hands. Unless a poll is demanded, the chairman's declaration of
a decision on a show of hands is final.
16.2 Demand for a poll
A poll may be demanded on any resolution except a resolution
concerning the election of the chairman of a meeting by:
(a) a member entitled to vote on the resolution; or
(b) members entitled to cast at least 5% of the votes that may
be cast on the resolution on a poll (worked out as at the midnight
before the poll is demanded); or
(c) the chairman.
The demand for a poll does not affect the continuation of the
meeting for the transaction of other business and may be withdrawn.
16.3 When and how polls must be taken
If a poll is demanded:
(a) if the resolution is for the adjournment of the meeting,
the poll must be taken immediately and, subject to rule 16.3(c), in
the manner that the chairman of the meeting directs;
(b) in all other cases, the poll must be taken at the time and
place and, subject to rule 16.3(c), in the manner that the chairman
of the meeting directs;
(c) votes which section 250A(4) requires to be cast in a given
way must be treated as cast in that way;
(d) a person voting who has the right to cast 2 or more votes
need not cast all those votes and may cast those votes in different
ways; and
(e) the result of the poll is the resolution of the meeting
at which the poll was demanded.
17. RESOLUTIONS WITHOUT MEETINGS
17.1 Written resolutions
Subject to section 249A(1), the Company may pass a resolution
without a general meeting being called or held if the resolution is
set out in a document:
(a) if the Company has only 1 member, signed in the manner set
out in section 249B; or
(b) if the Company has more than 1 member, signed in the
manner set out in section 249A.
17.2 Signature of resolutions
The Company may treat a document on which a facsimile or
electronic signature appears or which is otherwise acknowledged by
a member in a manner satisfactory to the Board as being signed by
that member.
18. SECRETARY
18.1 Appointment and removal of Secretary
The Board may appoint 1 or more individuals to be a Secretary
either for a specified term or without specifying a term.
18.2 Terms and conditions of office
A Secretary holds office on the terms (including as to
remuneration) that the Board decides. The Board may vary any
decision previously made by it in respect of a Secretary.
18.3 Cessation of Secretary's Appointment
A person automatically ceases to be a Secretary if the person:
(a) is not permitted by the Law (or an order made under the
Law) to be a secretary of a company;
(b) becomes disqualified from managing corporations under Part
2D.6 and is not given permission or leave to manage the Company
under section 206F or 206G;
(c) becomes of unsound mind or physically or mentally
incapable of performing the functions of that office;
(d) resigns by notice in writing to the Company; or
(e) is removed from office under rule 18.4.
18.4 Removal from office
Subject to any contract between the Company and the Secretary,
the Board may remove a Secretary from that office whether or not the
appointment was expressed to be for a specified term.
18.5 Secretary to give information to Company
A Secretary must comply with section 205C.
19. MINUTES
19.1 Minutes must be kept
The Board must cause minutes of:
(a) proceedings and resolutions of meetings of the Company's
members;
(b) the name of Directors present at each Board meeting or
committee meeting;
(c) proceedings and resolutions of Board meetings (including
meetings of a committee to which Board powers are delegated under
rule 7);
(d) resolutions passed by members without a meeting;
(e) resolutions passed by Directors, and declarations made by
a single Director, without a meeting; and
(f) declarations made and notices given under rule 8,
to be kept in accordance with sections 191, 192 and 251A.
19.2 Minutes as evidence
A minute recorded and signed in accordance with section 251A is
evidence of the proceeding, resolution or declaration to which it
relates unless the contrary is proved.
19.3 Inspection of minute books
The company must allow members to inspect, and provide copies
of the minute books for the meetings of members and for resolutions
of members passed without meetings in accordance with section 251B.
20. COMPANY SEALS
20.1 Common seal
The Board:
(a) may decide whether or not the Company has a common seal;
and
(b) is responsible for the safe custody of that seal (if any)
and any duplicate seal it decides to adopt under section 123(2).
20.2 Use of seals
The common seal and duplicate seal (if any) may only be used
with the authority of the Board. The Board must not authorise the
use of a seal that does not comply with section 123.
20.3 Fixing seals to documents
The fixing of the common seal, or any duplicate seal, to a
document must be witnessed:
(a) if the Company is a Single Director Company and the sole
Director is also the sole Secretary, by that person; or
(b) otherwise, by 2 Directors or 1 Director and 1 Secretary;
or
(c) (in either case) by any other signatories or in any other
way (including the use of facsimile signatures) authorised by the
Board.
If the fixing of the seal is witnessed in accordance with
rule 20.3(a), a statement by the witness that the witness is the
sole director and sole company secretary of the Company should
appear next to the signature but the absence of that statement does
not affect the validity of the execution.
21. ACCOUNTS AND AUDIT
21.1 Company to keep accounts
The Board must cause the Company to keep written financial
records that:
(a) correctly record and explain its transactions (including
transactions undertaken as trustee) and financial position and
performance; and
(b) would enable true and fair financial statements to be
prepared and audited, and must allow a Director to inspect those
records at all reasonable times.
21.2 Financial reporting
If required by Part 2M.3, the Board must cause the Company to
prepare a financial report and a Directors' report that comply with
that Part and must report to members in accordance with section 314
no later than the deadline set by section 315.
21.3 Audit
Unless section 301(2) applies, the Board must cause the
Company's financial report (if any) for each financial year to be
audited and obtain an auditor's report. The eligibility,
appointment, removal, remuneration, rights and duties of the auditor
(if any) are regulated by sections 324 to 334 inclusive and 1278,
1280 and 1289.
21.4 Inspection of financial records and books
Subject to rule 19.3 and section 247A, a member who is not a
Director does not have any right to inspect any document of the
Company except as authorised by the Board or by a resolution of
members.
22. SHARES
22.1 Issue at discretion of Board
Subject to section 259C, the Board may, on behalf of the
Company, issue, grant options over or otherwise dispose of unissued
shares to any person on the terms, with the rights, and at the times
that the Board decides.
22.2 Preference and redeemable preference shares
The Company may issue preference shares (including preference
shares that are liable to be redeemed). The rights attached to
preference shares are:
(a) unless other rights have been approved by special
resolution of the Company, the rights set out in the schedule; or
(b) the rights approved by special resolution of the Company
as applicable to those shares.
22.3 Right attaching to A Class Share
The only right that the A Class Share confers upon its holder
is the right in a winding up to payment in cash of an amount of
US$7,000,000 in priority to any other class of shares in the
Company. For the avoidance of doubt, the A Class Share does not:
(a) carry any right to vote, nor to receive notice of or
attend general meetings of the Company;
(b) confer any right to participate in the profits or assets
of the Company, whether on a winding up or otherwise, except to the
extent referred to above and then only on a winding up.
22.4 Right attaching to B Class Share
The only right that the B Class Share confers upon its holder
is the right in a winding up to payment in cash of an amount of
US$1.00 after payment in full of an amount of US$7,000,000 on the A
Class Share but in priority to any other class of shares in the
Company. For the avoidance of doubt, the B Class Share does not:
(a) carry any right to vote, nor to receive notice of or
attend general meetings of the Company; and
(b) confer any right to participate in the profits or assets
of the Company, whether on a winding up or otherwise,
except to the extent referred to above and then only on a winding
up.
22.5 Brokerage and commissions
The Company may pay brokerage or commissions to a person in
respect of that person or another person agreeing to take up shares
in the Company.
22.6 Surrender of shares
The Board may accept a surrender of shares:
(a) to compromise a question as to whether those shares have
been validly issued; or
(b) if surrender is otherwise within the Company's powers.
The Company may sell or re-issue surrendered shares in the same
way as forfeited shares.
23. CERTIFICATES
23.1 Issue of share certificate
The Company must issue a certificate of title to shares that
complies with section 1087 and deliver it to the holder of those
shares in accordance with section 1096.
23.2 Multiple certificates and joint holders
If a member requests the Company to issue several certificates
each for a part of the shares registered in the member's name, the
Company must do so. For this purpose, joint holders of shares are
a single member. The Company may issue only 1 certificate that
relates to each share registered in the names of 2 or more joint
holders and may deliver the certificate to any of those joint
holders.
23.3 Lost and worn out certificates
If a certificate:
(a) is lost or destroyed and the owner of the relevant
securities applies in accordance with section 1089(2), the Company
must; or
(b) is defaced or worn out and is produced to the Company, the
Company may,
issue a new certificate in its place.
24. REGISTER
24.1 Joint holders
If the Register names 2 or more joint holders of a share, the
Company must treat the person named first in the Register in
respect of that share as the sole owner of it for all purposes
(including the giving of notice) except:
(a) delivery of certificates (to which rule 23.2 applies);
(b) right to vote (to which rule 15.2 applies);
(c) power to give directions as to payment of, or a receipt
for, dividends (to which rules 27.7 and 27.8 apply);
(d) liability for instalments or calls (which subject to
section 1091C(8) is joint and several); and
(e) transfer.
24.2 Nominee holders
A registered holder of shares who holds them as trustee for, or
otherwise on behalf of or on account of, a body corporate, must give
the Company written notice of that fact in accordance with
section 1091C(11).
24.3 Non-beneficial holders
Subject to sections 169(6) and 1091C, unless otherwise ordered
by a court of competent jurisdiction or required by statute, the
Company:
(a) may treat the registered holder of any share as the
absolute owner of it; and
(b) need not recognise any equitable or other claim to or
interest in a share by any person except a registered holder.
25. PARTLY PAID SHARES
25.1 Fixed instalments
If a share is issued on terms that some or all of the issue
price is payable by instalments, the registered holder of the share
must pay every instalment to the Company when due. If the
registered holder does not do so, rules 25.6 to 25.14 apply as if
the registered holder had failed to pay a call.
25.2 Pre-payment of calls
The Board may:
(a) accept pre-payment of some or all of the amount unpaid on
a share above the sums actually called as a payment in advance of
calls;
(b) agree:
(i) to payment by the Company of interest at a rate no
higher than the Interest Rate on that part of the advance payment
which for the time being exceeds the aggregate amount of the calls
then made on the shares in respect of which it was paid; or
(ii) that the amount paid in advance will be taken into
account in calculating participation in profit or ascertaining
entitlement to surplus on a winding up or other distributions
attributable to that share; and
(c) unless otherwise agreed between the member and the
Company, repay the sum.
25.3 Calls made by Board
Subject to the terms of issue of a share and to any special
resolution passed under section 254N, the Board may:
(a) make calls on a member for some or all of the money
unpaid on a share held by that member;
(b) make a call payable by instalments; and
(c) revoke or postpone a call,
and must give the relevant member written notice of the call
specifying to whom the call must be paid and the time for payment
(which must be at least 14 days after the notice is given).
25.4 Classes of shares
The Board may issue shares on terms as to the amount of calls
to be paid and the time for payment of those calls which are
different as between the holders of those shares. The Board may
make different calls on different classes of shares.
25.5 Obligation to pay calls
Subject to section 1091C(8), a member subject to a call must
pay the amount of the call to the payee named in the notice of call
no later than the time specified in the notice. Joint holders of a
share are jointly and severally liable for calls.
25.6 Called Amounts
If a call is not paid on or before the day specified for
payment, the Board may require the member liable for the call to
pay:
(a) interest on the amount of the call at the Interest Rate
from that day until payment is made; and
(b) all costs and expenses incurred by the Company because
payment was not made on that day.
25.7 Proof of call
If, on the hearing of an action for recovery of a Called
Amount, it is proved that:
(a) the minute books of the Company record the Board's
resolution making the call;
(b) notice of the call was given under rule 25.3; and
(c) the person sued appears in the Register as a holder of the
share in respect of which the call was made,
proof of those matters is conclusive proof of the debt.
25.8 Forfeiture notice
At any time until a Called Amount is paid, the Board may give
the relevant member a notice which:
(a) requires the member to pay the Called Amount;
(b) specifies a date at least 14 days after the date of the
notice by which and a place at which payment must be made; and
(c) states that if payment is not made at that place on or
before that date, the share to which the call relates is liable to
be forfeited.
25.9 Forfeiture
If the requirements of a notice given under rule 25.8 are not
satisfied, the Board may forfeit the share in respect of which that
notice was given (and all dividends, interest and other money
payable in respect of that share and not actually paid before the
forfeiture) by resolution passed before the Called Amount is paid.
25.10 Disposal and re-issue of forfeited shares
A share forfeited under rule 25.9 immediately becomes the
property of the Company and the Board, on behalf of the Company,
may:
(a) re-issue the share with or without any money paid on it
by any former holder credited as paid; or
(b) sell or otherwise dispose of the share, and execute and
register a transfer of it,
to the person and on the terms it decides. The title of the
new holder is not affected by any irregularity in the forfeiture or
the re-issue, sale or disposal and the sole remedy of any person
previously interested in the share is damages which may be recovered
only from the Company. The new holder is not liable for the Called
Amount.
25.11 Notice of forfeiture
The Company must promptly:
(a) give notice of the forfeiture of a share to the member who
held the share immediately before the resolution for forfeiture was
passed; and
(b) enter the forfeiture and its date in the Register.
A written declaration that a share was forfeited on a specified
date and notice of forfeiture was given in accordance with this
document signed by a Director or Secretary is, in the absence of
proof to the contrary, evidence of those facts and of the Company's
right to dispose of the share.
25.12 Cancellation of forfeiture
The Board may cancel the forfeiture of a share on any terms at
any time before it disposes of that share under rule 25.10.
25.13 Effect of forfeiture
A person who held a share which has been forfeited under
rule 25.9 ceases to be a member in respect of that share but remains
liable to pay the Called Amount until it is paid in full. The Board
may elect not to enforce payment of an amount due to the Company
under this rule.
25.14 Application of proceeds
The Company must:
(a) apply the net proceeds of any re-issue, sale or disposal
of a forfeited share under rule 25.10 (after payment of all costs
and expenses) to satisfy the Called Amount; and
(b) pay any surplus to the person who held the share
immediately before forfeiture.
26. COMPANY LIENS
26.1 Existence of liens
Unless the terms of issue provide otherwise, the Company has a
first and paramount lien on each share for:
(a) all money called or payable at a fixed time in respect of
that share (including money payable under rule 25.6) whether or not
payment is due;
(b) all money owed to the Company by a registered holder; and
(c) amounts for which the Company is indemnified under
rule 26.3.
The lien extends to all dividends payable in respect of the
share and to proceeds of sale of the share.
26.2 Sale under lien
If:
(a) the Company has a lien on a share;
(b) an amount secured by the lien is due and payable;
(c) the Company has given notice to the member registered as
the holder of the share:
(i) requiring payment of the amount which is due and
payable and secured by the lien; and
(ii) specifying a date (at least 14 days after the date
of the notice) by which and a place at which payment of that amount
must be made; and
(d) the requirements of the notice given under paragraph
are not fulfilled,
the Company may sell the share as if it had been forfeited
under rule 25.9 and rules 25.10 and 25.14 apply, to the extent
practical and modified as necessary, as if the amount referred to in
paragraph (b) were the Called Amount in respect of that share.
26.3 Indemnity for payments required to be made by the Company
If the law of any jurisdiction imposes or purports to impose
any immediate, future or possible liability on the Company, or
empowers or purports to empower any person to require the Company to
make any payment, on account of a member or referable to a share
held by that member (whether alone or jointly) or a dividend or
other amount payable in respect of a share held by that member, the
Company:
(a) is fully indemnified by that member from that liability;
(b) may recover as a debt due from the member the amount of
that liability together with interest at the Interest Rate from the
date of payment by the Company to the date of re-payment by the
member; and
(c) may refuse to register a transfer of any share by that
member until the debt has been paid to the Company.
Nothing in this document in any way prejudices or affects any
right or remedy which the Company has (including any right of set-
off) and, as between the Company and the member, any such right or
remedy is enforceable by the Company.
27. DIVIDENDS
27.1 Accumulation of reserves
Before declaring any dividend to members, the Board may:
(a) set aside out of profits of the Company reserves to be
applied, in the Board's discretion, for any purpose it decides and
use any sum so set aside in the business of the Company or invest it
in investments selected by the Board and vary and deal with those
investments as it decides; or
(b) carry forward any amount out of profits which the Board
decides not to distribute without transferring that amount to a
reserve; or
(c) do both.
27.2 Dividends must be paid out of profits
The Company must not pay a dividend except out of profits of
the Company. The Company does not incur a debt merely by
fixing the amount or time for payment of a dividend. A debt arises
only when the time fixed for payment arrives. The decision to pay
a dividend may be revoked by the Board at any time before then. A
resolution of the Board as to the amount of the Company's profits
and the amount of them available for dividend is conclusive.
27.3 Payment of dividends
Subject to the Law, rules 27.2, 27.4 and 27.9, and the terms of
issue of shares, the Board may resolve to pay any dividend it thinks
appropriate and fix the time for payment.
27.4 Amount of dividend
Subject to the terms of issue of shares, the Company may pay a
dividend on 1 class of shares to the exclusion of another class.
Subject to rule 27.5, each share of a class on which the Board
resolves to pay a dividend carries the right to participate in the
dividend in the same proportion that the amount for the time being
paid on the share bears to the total issue price of the share.
27.5 Prepayments and payments during dividend period
For the purposes of rule 27.4:
(a) unless the Board has agreed otherwise under
rule 25.2(b)(ii), an amount paid in advance of calls is not taken
into account as part of the amount for the time being paid on a
share; and
(b) if an amount was paid on a share during the period to
which a dividend relates, the Board may resolve that only the
proportion of that amount which is the same as the proportion which
the period from the date of payment to the end of the period to
which the dividend relates bears to the total period to which the
dividend relates counts as part of the amount for the time being
paid on the share.
27.6 Dividends in kind
The Board may resolve to pay a dividend in cash or satisfy it
by distribution of specific assets (including shares or securities
of any other corporation), the issue of shares or the grant of
options. If the Board satisfies a dividend by distribution of
assets, the Board may:
(a) fix the value of any asset distributed;
(b) make cash payments to members on the basis of the value
fixed so as to adjust the rights of members between themselves; and
(c) vest an asset in trustees.
27.7 Method of payment
The Company may pay any cash dividend, interest or other money
payable in respect of shares by cheque sent, and may distribute
assets by sending the certificates or other evidence of title to
them, through the post directed to:
(a) the address of the member (or in the case of a jointly
held share, the address of the joint holder named first in the
Register); or
(b) to any other address the member (or in the case of a
jointly held share, all the joint holders) directs in writing.
27.8 Joint holders' receipt
Any 1 of the joint holders of a share may give an effective
receipt for any dividend, interest or other money payable in
relation to that share.
27.9 Retention of dividends by Company
The Company may retain the dividend payable on a share:
(a) of which a person seeks to be registered as the holder
under rule 29.2 or 29.3, until that person is registered as the
holder of that share or transfers it; and
(b) on which the Company has a lien, to satisfy the
liabilities in respect of which the lien exists.
27.10 No interest on dividends
No member may claim, and the Company must not pay, interest on
a dividend (either in money or kind).
28. TRANSFER OF SHARES
28.1 Instrument of transfer
Subject to rule 28.2 a member may transfer a share by a written
document which:
(a) shows the jurisdiction of registration of the Company;
(b) relates only to shares of 1 class;
(c) is executed both by the transferor and the transferee; and
(d) is a sufficient instrument of transfer of marketable
securities under section 1101 or in any other form approved by the
Board.
The Company must not register a transfer that does not comply
with this rule.
28.2 Delivery of transfer and certificate
A document of transfer must be:
(a) delivered to the registered office of the Company or the
address of the Register last notified to members by the Company;
(b) accompanied by the certificate for the shares to be
transferred or evidence satisfactory to the Board of its loss or
destruction; and
(c) marked with payment of any stamp duty payable.
Property in and title to a document of transfer that is
delivered to the Company (but not the shares to which it relates)
passes to the Company on delivery.
28.3 Refusal to register transfer
The Board, without giving any reason, may refuse to register a
transfer of shares and, subject to section 259C, must not register
a transfer to a subsidiary of the Company. If the Board refuses to
register a transfer, the Company must give the transferee notice of
the refusal within 2 months after the date on which the transfer was
delivered to it.
28.4 Transferor remains holder until transfer registered
The transferor of a share remains the holder of it until the
transfer is registered and the name of the transferee is entered in
the Register in respect of it.
28.5 Powers of attorney
The Company may assume, as against a member, that a power of
attorney granted by that Member that is lodged with or produced or
exhibited to the Company remains in force, and may rely on it, until
the Company receives express notice in writing at its registered
office of:
(a) the revocation of the power of attorney; or
(b) the death, dissolution or insolvency of the member.
29. TRANSMISSION OF SHARES
29.1 Death of joint holder
The Company must recognise only the surviving joint holders as
being entitled to shares registered jointly in the names of a
deceased member and others. The estate of the deceased joint holder
is not released from any liability in respect of the shares.
29.2 Death of single holder
The Company must not recognise any one except the legal
personal representative of the deceased member as having any title
to shares registered in the sole name of a deceased member. If the
personal representative gives the Board the documents described in
section 1091(4) or 1091(7) or other information that satisfies the
Board of the representative's entitlement to be registered as holder
of the shares:
(a) subject to rules 28.3 and 29.4 the Company must register
the personal representative as the holder of the shares as soon as
practical after receipt of a written and signed notice to the
Company from the representative requiring it to do so; and
(b) whether or not registered as the holder of the shares, the
personal representative:
(i) may, subject to rule 28, transfer the shares to
another person; and
(ii) has the same rights as the deceased member.
29.3 Transmission of shares on insolvency or mental incapacity
Subject to the Bankruptcy Xxx 0000, if a person entitled to
shares because of the insolvency or mental incapacity of a member
gives the Board the information it reasonably requires to establish
the person's entitlement to be registered as holder of the shares:
(a) subject to rules 28.3 and 29.4 the Company must register
that person as the holder of the shares as soon as practical after
receipt of a written and signed notice to the Company from that
person requiring it to do so; and
(b) whether or not registered as the holder of the shares,
that person:
(i) may, subject to rule 28, transfer the shares to
another person; and
(ii) has the same rights as the insolvent or incapable
member.
If section 1091A applies, this rule is supplemental to it.
29.4 Refusal to register holder
The Company has the same right to refuse to register a personal
representative or person entitled to shares on the insolvency or
mental incapacity of a member as it would have if that person was
the transferee named in a transfer signed by a living, solvent,
competent member.
30. SHARE CAPITAL
30.1 Capitalisation of profits
The Company may capitalise profits, reserves or other amounts
available for distribution to members. Subject to the terms of
issue of shares, members are entitled to participate in a capital
distribution in the same proportions in which they are entitled to
participate in dividends.
30.2 Adjustment of capitalised amounts
The Board may settle any difficulty that arises in regard to a
capitalisation of profits as it thinks appropriate and necessary to
adjust the rights of members among themselves including:
(a) fix the value of specific assets;
(b) issue fractional certificates;
(c) make cash payments to members on the basis of the value
fixed or on the basis that fractional entitlements are disregarded
so as to adjust the rights of members between themselves; and
(d) vest cash or specific assets in trustees.
30.3 Conversion of shares
Subject to Part 2H.1 and rules 22.2 and 30.5, the Company may
convert:
(a) shares into a larger or smaller number of shares;
(b) an ordinary share into a preference share; and
(c) a preference share into an ordinary share,
by resolution passed at a meeting of members.
30.4 Reduction of capital
The Company may reduce its share capital:
(a) by reduction of capital in accordance with Division 1 of
Part 2J.1;
(b) by buying back shares in accordance with Division 2 of
Part 2J.1;
(c) in the ways permitted by sections 258E and 258F; or
(d) in any other way for the time being permitted by the Law.
30.5 Variation of rights
If the Company issues different classes of shares, or divides
issued shares into different classes, the rights attached to shares
in any class may (subject to sections 246C and 246D) be varied or
cancelled only:
(a) with the written consent of the holders of 75% of the
issued shares of the affected class; or
(b) by special resolution passed at a separate meeting of the
holders of the issued shares of the affected class.
Subject to the terms of issue of shares, the rights attached to
a class of shares are not treated as varied by the issue of further
shares of that class.
31. WINDING UP
31.1 Entitlement of members
Subject to the terms of issue of shares and this rule 31, the
surplus assets of the Company remaining after payment of its debts
are divisible among the members in proportion to the number of fully
paid shares held by them and, for this purpose, a partly paid share
is counted as a fraction of a fully paid share equal to the
proportion which the amount paid on it bears to the total issue
price of the share.
31.2 Distribution of assets generally
If the Company is wound up, the liquidator may, with the
sanction of a special resolution:
(a) divide the assets of the Company among the members in
kind;
(b) for that purpose fix the value of assets and decide how
the division is to be carried out as between the members and
different classes of members; and
(c) vest assets of the Company in trustees on any trusts for
the benefit of the members the liquidator thinks appropriate.
31.3 No distribution of liabilities
The liquidator cannot compel a member to accept marketable
securities in respect of which there is a liability as part of a
distribution of assets of the Company.
31.4 Distribution not in accordance with legal rights
If the liquidator decides on a division or vesting of assets of
the Company under rule 31.2 which is not in accordance with the
legal rights of the contributories, any contributory who would be
prejudiced by it has a right to dissent and ancillary rights as if
that decision were a special resolution passed under section 507.
32. NOTICES
32.1 Notices by Company
A notice is properly given by the Company to a person if it is:
(a) in writing signed on behalf of the Company (by original
or printed signature);
(b) addressed to the person to whom it is to be given; and
(c) either
(i) delivered personally;
(ii) sent by pre-paid mail (by airmail, if the addressee
is overseas) to that person's address;
(iii) sent by fax to the fax number (if any)
nominated by that person; or
(iv) sent by electronic message to the electronic address
(if any) nominated by that person.
32.2 Overseas members
A member whose registered address is not in Australia may
notify the Company in writing of an address in Australia to which
notices may be sent.
32.3 When notice is given
A notice to a person by the Company is regarded as given and
received:
(a) if it is delivered personally or sent by fax or electronic
message:
(i) by 5.00 pm (local time in the place of receipt) on
a business day - on that day; or
(ii) after 5.00 pm (local time in the place of receipt)
on a business day, or on a day that is not a business day - on the
next business day; and
(b) if it is sent by mail:
(i) within Australia - 3 business days after posting; or
(ii) to a place outside Australia - 7 business days after
posting.
A certificate in writing signed by a Director or Secretary
stating that a notice was sent is conclusive evidence of service.
32.4 Business days
For the purposes of rule 32.3, a business day is a day that is
not a Saturday, Sunday or public holiday in the place to which the
notice is sent.
32.5 Notice to joint holders
Notice to joint holders of shares must be given to the joint
member named first in the Register. Every person who becomes
entitled to a share is bound by every notice in respect of that
share that was properly given to a person registered as the holder
the share before the transfer or transmission of the share was
entered in the Register.
32.6 Counting days
If a specified period must pass after a notice is given before
an action may be taken, neither the day on which the notice is given
nor the day on which the action is to be taken may be counted in
reckoning the period.
33. UNCLAIMED MONEY
The Company must deal with unclaimed dividends and
distributions in accordance with the law relating to unclaimed money
in the Company's jurisdiction of registration.
34. JOINT VENTURE AND SHAREHOLDERS' AGREEMENT
Notwithstanding any other provision of this constitution to the
contrary, this constitution is to be read subject to the provisions
of the Joint Venture and Shareholders' Agreement dated during or
about March 2000 between xxxxxxx.xxx, Inc, GlobalNet Asia Pacific
Pty Ltd ACN 090 616 685 and the Company (the "JVSA") (including,
without limitation, in relation to restrictions on transfers and new
issues of shares). In the event of any conflict or inconsistency
between any provision of the JVSA on the one hand and any provision
of this constitution on the other hand, the provisions of the JVSA
prevail to the extent of such conflict or inconsistency.
SCHEDULE
Terms of issue of preference shares
1. Definitions
The following definitions apply in relation to a preference
share issued under rule 22.2(a).
"Dividend Amount" for any Dividend Period means the amount
calculated as
DA = DR x N
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365
where:
DA = Dividend Amount;
DR = Dividend Rate; and
N = number of days in the relevant Dividend Period.
"Dividend Date" means a date specified in the Issue Resolution
on which a dividend in respect of that preference share is payable.
"Dividend Period" means:
(a) the period that begins on and includes the Issue Date and
ends on and includes the day before the first Dividend Date after
the Issue Date; and
(b) the period that begins on and includes each Dividend Date
and ends on and includes the day before the next Dividend Date; and
(c) the period that begins on and includes the last Dividend
Date and ends on and includes the day before the Redemption Date.
"Dividend Rate" means the rate specified in the Issue
Resolution for the calculation of the amount of dividend to be paid
on that preference share on any Dividend Date.
"franked dividend" has the meaning given to that term by
section 160APA of the Tax Act.
"Issue Date" means the date on which the share is issued.
"Issue Resolution" means the resolution passed under clause 2
of this schedule.
"redeemable preference share" means a preference share which
the Issue Resolution specifies is liable to be redeemed:
(d) at a fixed time or on the happening of a particular event;
(e) at the Company's option; or
(f) at the holder's option.
"Redemption Amount" in relation to a redeemable preference
share means the amount specified in the Issue Resolution to be paid
on redemption of that share.
"Redemption Date" in relation to a redeemable preference share,
means the date on which the Issue Resolution requires the Company to
redeem that share.
"Tax Act" means the Income Tax Assessment Xxx 0000, the Income
Tax Assessment Xxx 0000, or both, as applicable.
2. Issue Resolution
If the Board resolves to issue a preference share, it must pass
an Issue Resolution which specifies:
(g) the Dividend Date;
(h) the Dividend Rate;
(i) whether dividends are cumulative or non-cumulative;
(j) the priority with respect to payment of dividends and
repayment of capital over other classes of shares;
(k) whether the share is a redeemable preference share or not,
and if so:
(i) the Redemption Amount; and
(ii) if the share is redeemable at the end of a fixed
period, the Redemption Date, or otherwise the circumstances (if any)
in which the share is redeemable at the option of the holder or of
the Company, the way in which that option must be exercised and the
way in which the resulting Redemption Date is ascertained,
and may also specify that the dividend must be a franked
dividend or must not be a franked dividend.
3. Franked dividends
If the Issue Resolution specifies that the dividend on
preference shares must be a franked dividend, it may also specify:
(l) the extent to which the dividend must be franked (within
the meaning of the Tax Act); and
(m) the consequences of the dividend not being franked, which
may include an increase of the dividend by the amount of franking
credit which would have been imputed to the holder of the share
under the Tax Act if the dividend had been franked in accordance
with the Issue Resolution.
4. Dividend entitlement
The holder of a preference share is entitled to be paid on each
Dividend Date, in priority to any payment of dividend on any other
class of shares, to a preferential dividend of the Dividend Amount
for the Dividend Period ending on the day before that Dividend Date.
The dividend entitlement is cumulative if the Issue Resolution
states that it is cumulative and otherwise is non-cumulative.
5. Priority on winding up
The holder of a preference share is entitled, on a winding up,
to payment in cash of:
(n) the amount then paid up on it; and
(o) if the Issue Resolution states that dividends are
cumulative, any arrears of dividend,
in priority to any payment to the holders of ordinary shares
and any other class of preference share over which the relevant
Issue Resolutions and rights conferred under rule 22.2(b) give it
priority, but has no right to participate in surplus assets and
profits of the Company or to vote on a winding up.
6. Voting
The holder of a preference share has no right to vote at any
meeting of members except:
(p) if the Issue Resolution states that dividends are
cumulative, during a period during which a dividend on the share is
in arrears; and
(q) if approval of preference shareholders is required under
Part 2J.1:
(i) on a proposal to reduce the Company's share capital;
or
(ii) on a resolution to approve the terms of a buy-back
agreement,
on that proposal or resolution; and
(r) on a proposal that affects rights attached to the share.
7. Notices and financial reports
The Company must give the holder of a preference share notice
of each meeting of members in accordance with rule 12 and send the
holder financial reports in accordance with rule 21.2.
8. Redemption of redeemable preference shares
Subject to the Law, the Company must redeem a redeemable
preference share on the Redemption Date by paying the Redemption
Amount to the holder in cash, by cheque or in any other form that
the holder agrees to in writing. If the Company sends the holder of
a redeemable preference share a cheque for the Redemption Amount,
the share is redeemed on the date on which rule 32.3(b) would treat
the cheque as being received by the holder, whether or not the
holder has presented the cheque. If the holder of a redeemable
preference share does not present a cheque for the Redemption Amount
within a reasonable period after it is sent, the Company must deal
with the Redemption Amount in accordance with rule 33.
9. Equal ranking issues
Subject to the terms of issue of any particular class of
preference share, the issue of further preference shares that rank
equally with any issued preference shares is not taken to affect the
rights of the holders of the existing preference share whether or
not the Dividend Rate for the new preference share is the same as or
different from that applicable to that preference share.
SIGNED by each person who consents to become a member of the
Company with effect from registration as evidence of that person's
agreement to the terms of this constitution.
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signature of person who
consents to be a member signature and address of witness
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