EXHIBIT 2.1
BUSINESS PURCHASE AGREEMENT
INFACT PTY LIMITED
AS TRUSTEE OF THE INFACT UNIT TRUST
ACN 006 294 953
and
TIER TECHNOLOGIES (AUSTRALIA) PTY LIMITED
ACN 076 287 039
XXXXXXXX
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HOLLINGDALE &
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PAGE
XXX XXXXXX XXXXXX XXXXX XXXXXX XXX XXXXX XXXXX 0000 XXXXXXXXX
TELEPHONE (00) 0000 0000 INT + (00 0) 0000 0000 FACSIMILE (00) 0000 0000 DX 000 XXXXXX
REFERENCE: PJC:JPC:30B
SYDNEY MELBOURNE PERTH CANBERRA BRISBANE SINGAPORE HANOI HO CHI MINH CITY
CORRESPONDENT OFFICE IN JAKARTA
Liability is limited by the Solicitors Scheme under the Professional Standards Act 1994 (NSW)
Business Purchase Agreement
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TABLE OF CONTENTS
Clause Page
1 DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Interpretation 8
1.3 Business Day 9
1.4 Accounting Standards 9
2 SALE AND PURCHASE 10
2.1 Sale of Business Assets 10
2.2 Control and Management of the Business 10
2.3 Continuing Operations of Business 10
3 PURCHASE PRICE 11
3.1 Purchase Price 11
3.2 Apportionment 11
3.3 Payment at Settlement 12
3.4 Escrow of Tier Shares 12
3.5 Escrow Cash 12
3.6 Release of Tier Shares and Escrow Cash on First Anniversary 12
3.7 Release of Tier Shares and Escrow Cash on Second Anniversary 14
3.8 First Performance Target - Additional Purchase Price 16
3.9 Second Performance Target - Additional Purchase Price 17
3.10 Extension of payment 18
4 SETTLEMENT STATEMENT 19
4.1 Settlement Statement 19
5 PAYMENTS IN ADVANCE OR ARREARS 19
5.1 Advance payments 19
5.2 Arrears payments 20
6 RECEIVABLES 20
6.1 Collection by Buyer 20
6.2 Accounting for Receivables 20
6.3 Written account and payment 21
6.4 Buyer to provide information 21
6.5 Seller's responsibility 21
6.6 Seller to Account to Buyer 21
7 CONTRACTS AND ASSETS LEASES 21
7.1 Transfer of Contracts and Assets Leases 21
7.2 Position pending transfer of Contracts 21
Clause Page
7.3 Right of use or occupation pending transfer of Assets Leases and Sydney Lease 22
7.4 Claims by third parties 22
7.5 Failure to transfer Contract, Assets Lease or Sydney Lease 23
8 EMPLOYEES AND CONTRACTORS 23
8.1 Offer of employment by Buyer 23
8.2 Key Employee Contracts 23
8.3 Termination by Seller 24
8.4 Non-transferring Employees 24
8.5 Allowances 24
8.6 Indemnity 24
8.7 Novation of Contractors 24
8.8 Engagement of Contractors by Buyer 24
8.9 The Seller to Pay Out Contractors 25
8.10 Contractors and Employees Value 25
9 SUPERANNUATION 25
9.1 Seller to Make Payments 25
10 PERIOD BEFORE SETTLEMENT 25
10.1 Carrying on of the Business - by the Seller 25
10.2 Further Performance by Seller 26
10.3 Access 27
11 PURCHASE DATE AND SETTLEMENT 27
11.1 Date for Settlement 27
11.2 Delivery of documents at Settlement Date 27
11.3 Delivery of Tangible Assets 28
11.4 Delivery of Business Records and documents of title 28
11.5 Delivery of Employment and Contractor Documents 28
11.6 Buyer's obligations at Settlement 28
12 TITLE AND RISK 29
12.1 Title 29
12.2 Risk 29
13 CHANGE OF NAMES 29
13.1 Change of company name 29
13.2 Use of Business Names 29
14 CONTINUING COOPERATION 29
14.1 Carrying on of Business 29
14.2 Trade connections 29
14.3 Customer enquiries 29
Clause Page
14.4 Documents to be available after the Purchase Date 30
14.5 Preparation of financial statements 30
15 AFTER SALES SERVICE 30
15.1 Supply of after-sales service 30
16 COMPETITION 31
16.1 Undertakings 31
16.2 Separate undertakings 31
16.3 Value of the Business 32
16.4 Legal advice 32
16.5 Injunction 32
16.6 Survival of obligations 32
17 WARRANTIES AND GENERAL INDEMNITIES 32
17.1 Giving of Warranties 32
17.2 Buyer's investigation 32
17.3 Independent Warranties 33
17.4 Indemnity 33
17.5 Minimum Claim under Warranties 33
18 RESCISSION AND DAMAGES 33
18.1 Right of Buyer to rescind 33
18.2 Interest on moneys in Default 34
18.3 Time of the Essence 34
18.4 Right of Seller to rescind for default in settlement 34
19 PROPERTY LEASE 34
20 DUTIES, COSTS AND EXPENSES 34
20.1 Duties 34
20.2 Costs and expenses 35
20.3 Costs of performance 35
21 DISPUTE RESOLUTION 35
22 GENERAL 35
22.1 Notices 35
22.2 Governing law and jurisdiction 36
22.3 Waivers 36
22.4 Variation 37
22.5 Cumulative rights 37
22.6 Non-merger and survival of Warranties 37
22.7 Continuing indemnities and survival of indemnities 37
22.8 Further assurances 37
Clause Page
22.9 Specific performance 37
22.10 Entire agreement 38
22.11 Third party rights 38
SCHEDULE 1 - WARRANTIES
SCHEDULE 2 - CLIENT CONTRACTS
SCHEDULE 3 - MATERIAL CONTRACTS
SCHEDULE 4 - EMPLOYEES
SCHEDULE 5 - CONTRACTORS
SCHEDULE 6 - PROPERTY
SCHEDULE 7 - INTELLECTUAL PROPERTY RIGHTS
SCHEDULE 8 - TANGIBLE ASSETS
SCHEDULE 9 - SETTLEMENT STATEMENT
SCHEDULE 10 - SUPERANNUATION
SCHEDULE 11 - ASSETS LEASES
SCHEDULE 12 - RECEIVABLES
SCHEDULE 13 - SOFTWARE PRODUCTS BUSINESS
ANNEXURE A - CLIENT CONTRACTS
ANNEXURE B - CONTRACTOR CONTRACTS
ANNEXURE C - EMPLOYEE CONTRACTS
ANNEXURE D - ACCOUNTS
ANNEXURE E - ASSETS LEASES
ANNEXURE F - CLIENT NOVATION AGREEMENTS
ANNEXURE G - CONTRACTOR NOVATION AGREEMENTS
ANNEXURE H - OFFER OF EMPLOYMENT BY BUYER
ANNEXURE I - PROPERTY LEASE
ANNEXURE J - BUSINESS NAMES ASSIGNMENT AND LICENCE
ANNEXURE K - KEY EMPLOYEE CONTRACTS
ANNEXURE L - ESCROW AGREEMENT
ANNEXURE M - TIER SHARES AGREEMENT
ANNEXURE N - ASSIGNMENT OF TRADE MARKS
ANNEXURE O - ASSIGNMENT OF COPYRIGHT
ANNEXURE P - SYDNEY LEASE
ANNEXURE Q - BUSINESS PLAN
ANNEXURE R - TIER SHARES COMPUTATION
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THIS BUSINESS PURCHASE AGREEMENT
is made as at 1 August 1998 between the following parties:
1. INFACT PTY LIMITED
AS TRUSTEE FOR THE INFACT UNIT TRUST
ACN 006 294 953
of 0xx Xxxxx, 000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, 0000
(SELLER)
2. TIER TECHNOLOGIES (AUSTRALIA) PTY LIMITED
ACN 076 287 039
of 00 Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx Xxxxx, 0000
(BUYER)
RECITALS
A. The Seller is the owner of the Business.
B. The Seller agrees to sell and the Buyer agrees to buy the
Business on the terms and conditions set out in this agreement.
C. The parties acknowledge that the Seller's past operations are
broader than the Business which is being sold pursuant to this
agreement and that the Seller will continue to carry on limited
operations of its Software Products Business in accordance with
the terms of this agreement.
D. The parties have agreed that the Buyer shall engage the Key
Employees to manage and conduct the Business on the terms set out
in this agreement; that the Business shall continue to be
conducted for a period of 2 years by the Buyer under the business
name of, "Infact a Division of the Buyer", or words to that
effect; and that the Business will be accounted for as a separate
profit centre.
THE PARTIES AGREE
in consideration of, among other things, the mutual promises contained
in this agreement:
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1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
ACCOUNTS means the balance sheet in respect of the Business and the
profit and loss account in respect of the Business for the years
ending 30 June 1996, 1997 and 1998 and attached to this agreement as
annexure D;
ACCOUNTS DATE means 30 June 1998;
ACCOUNTING STANDARDS means the accounting standards and practices
determined under clause 1.4;
ASSETS LEASES means the assets leases listed in schedule 11 and
attached as annexure E;
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Business Purchase Agreement
AUTHORISATION includes:
(a) any consent, registration, filing, agreement, notarisation,
certificate, licence, approval, permit, authority or exemption
from, by or with a Governmental Agency; and
(b) any consent or authorisation regarded as given by a Governmental
Agency due to the expiration of the period specified by a statute
within which the Governmental Agency should have acted if it
wished to proscribe or limit anything already lodged, registered
or notified under that statute;
BUSINESS means the business of Infact Pty Limited (other than the
Software Products Business carried on by the Seller primarily in
Victoria and New South Wales;
BUSINESS ASSETS means all the assets situated in Victoria and New
South Wales used in or forming part of the Business and includes, but
is not limited to:
(a) the Client Contracts;
(b) the Tangible Assets;
(c) the Business Records;
(d) the Contracts;
(e) the Goodwill;
(f) the Assets Leases; and
(g) the Intellectual Property Rights;
BUSINESS DAY means a day on which banks are open for business in
Sydney;
BUSINESS NAMES means all the business names of the Seller, including
those described in schedule 7;
BUSINESS NAMES ASSIGNMENT AND LICENCE means the agreement dated on or
about the date of this agreement and forming annexure J;
BUSINESS PLAN means the business plan forming Annexure Q;
BUSINESS RECORDS means in relation to the Business:
(a) correspondence with Clients in relation to the Client Contracts;
(b) customer lists;
(c) supplier lists;
(d) records of Transferring Employees and of the amounts referred to
in clause 8.5 and clause 9;
(e) records of all Contractors;
(f) records of Contracts and Assets Leases;
(g) records of Receivables;
(h) computer programmes, data bases and software;
(i) originals or copies of ledgers, journals and books of account;
(j) information on the marketing of any services provided in the
Business;
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Business Purchase Agreement
(k) results of research carried out and other know-how; and
(l) all other documents and records in respect of the Business or the
Business Assets;
CLIENT CONTRACTS means all the contracts in relation to the Business
between the Seller and the Clients, including those described in
schedule 2 and forming annexure A;
CLIENT NOVATION AGREEMENTS means agreements in the form of annexure F;
CLIENTS means all the clients of the Seller in relation to the
Business, including those described in schedule 2;
CONTINUING BUSINESS means the business arising from the acquisition of
the Business carried on by the Buyer in Australia after the Purchase
Date which involves the provision of project information technology
consulting services of the same or substantially similar type to those
provided in the Business (except for the provision of project
information technology consulting services by the Buyer's pre-existing
business as at the Purchase Date). Without limitation, the Continuing
Business will include all project information technology consulting
services provided in Australia to the Infact Clients. If the Buyer
acquires any other business in Australia which offers project
information technology consulting services, then that business will be
excluded from this definition of Continuing Business;
CONTRACTOR CONTRACTS means all the contracts between the Seller and
the Contractors in relation to the Business, including those forming
annexure B;
CONTRACTOR NOVATION AGREEMENTS means the agreements in the form of
annexure G;
CONTRACTORS means all the independent contractors of the Seller in
relation to the Business, including those described in schedule 5;
CONTRACTS means the agreements in respect of the Business to which the
Seller is a party and which are, in whole or in part, executory as at
the Purchase Date but excludes:
(a) the Client Contracts, Contractor Contracts and the contracts of
employment with Employees;
(b) the Assets Leases; and
(c) any agreements to the extent they relate to Excluded Assets or
Liabilities which are not otherwise assumed by the Buyer under
this agreement;
COPYRIGHT means all the copyright of the Seller in relation to the
Business, including those described in schedule 7;
DISCLOSURE LETTER means the letter from the Seller to the Buyer dated
on or about the date of this agreement and delivered to the Buyer
before the signing of this agreement and which contains disclosures in
respect of the Warranties;
DOLLARS, A$ and $ means the lawful currency of the Commonwealth of
Australia;
DUTY means any stamp, transaction or registration duty or similar
charge imposed by any Governmental Agency and includes, but is not
limited to, any interest, fine, penalty, charge or other amount
imposed in respect of the above;
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Business Purchase Agreement
EMPLOYEE AND CONTRACTOR RELEASE means the release described in clauses
8.3 and 8.8;
EMPLOYEES means all the employees of the Seller in relation to the
Business, including those listed in schedule 4 and any persons who
become employees of the Seller between the date of this agreement and
the Settlement Date;
ENCUMBER shall mean to create or suffer to exist an Encumbrance;
ENCUMBRANCE means an interest or power:
(a) reserved in or over an interest in any asset including, but not
limited to, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a xxxx of sale, mortgage, charge, lien, pledge, trust or
power,
by way of security for the payment of a debt, any other monetary
obligation or the performance of any other obligation, and includes,
but is not limited to, any agreement to grant or create any of the
above;
ESCROW AGENT means Xxxxxxxx Hatchman & Xxxx Nominees Pty Limited ACN
001 874 808 of Xxxxx 00, 000 Xxxx Xxxxxx, XXX 0000;
ESCROW AGREEMENT means the agreement so styled and forming annexure L;
ESCROW CASH means the cash referred to in clause 3.1((a))((3)) held
pursuant to the Escrow Agreement;
EXCLUDED ASSETS means the following assets of the Seller used in or
forming part of the Business:
(a) cash, including, but not limited to, funds held with any bank or
financial institution to the credit of the Seller and cash on
hand as at the Purchase Date;
(b) the Receivables for work performed prior to the Purchase Date;
and
(c) any other debts owed to the Seller existing prior to the Purchase
Date;
EXCLUDED RECORDS means those Business Records which the Seller is
required by law to retain;
FIRST PERFORMANCE BONUS means the performance bonus referred to in
clause 3.8((a));
FIRST PERFORMANCE TARGET means the performance target referred to in
clause 3.8((a));
GOODWILL means the goodwill in respect of the Business and includes
the exclusive right for the Buyer to represent itself as carrying on
the Business as the successor of the Seller;
GOVERNMENTAL AGENCY means any government or governmental, semi-
governmental, administrative, fiscal or judicial body, department,
commission, authority, tribunal, agency or entity in any part of the
world;
IMMEDIATELY AVAILABLE FUNDS means cash or bank cheque;
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Business Purchase Agreement
INFACT CLIENTS means each of the clients of the Seller as at the
Purchase Date and any person who was a client of the Seller at any
time during the 2 years preceding the Purchase Date;
INFACT UNIT TRUST means the unit trust created by the Infact Unit
Trust Deed;
INFACT UNIT TRUST DEED means the Deed of Trust dated 26 June 1984 (as
varied) between the seller as trustee and Xxxx Xxxxxxxx Xxxxxxx;
INITIAL PURCHASE PRICE means the amount specified in clause
3.1((a))((1));
INDEPENDENT ACCOUNTANT means a chartered accountant, independent of
the Seller and the Buyer, agreed by them or in default of agreement
within 14 days, nominated by the President for the time being of the
Institute of Chartered Accountants (NSW Branch);
INTELLECTUAL PROPERTY RIGHTS means the rights and interests of the
Seller:
(a) in respect of confidential information, trade secrets, know-how,
scientific, technical and product information used in or forming
part of the Business;
(b) in any copyright, patent, design or trademark used in or forming
part of the Business; and
(c) to protect the reputation of the services provided under the
brand names or the Business Names and against passing off by
others,
and includes, but is not limited to, the Trade Marks and the
Copyrights listed in schedule 7;
KEY EMPLOYEE CONTRACTS means the Contracts for the employment by the
Buyer of the Key Employees and forming annexure K;
KEY EMPLOYEES means Xxxx van de Wiel and Xxxx Xxxxxx;
LIABILITIES means all liabilities of the Seller or any other person in
respect of the Business as at the Purchase Date and includes, but is
not limited to:
(a) a liability of the Seller to an employee or a trade creditor of
the Business;
(b) a liability of the Seller in respect of a breach of warranty or
other term of a Client Contract or any other contract concerning
the Business;
(c) a liability of the Seller to a Related Corporation of the Seller;
(d) a liability of the Seller in respect of a loan, bank overdraft,
trade xxxx facility, other financial accommodation, guarantee or
indemnity;
(e) a judgment debt, fine, criminal or civil penalty, liability for
damages or compensation or to account for profits or to make
restitution;
(f) a Tax or a Duty;
(g) a fee, charge or expense for legal, accounting or other
professional services for which the Seller is liable,
irrespective of whether the liability:
(h) is actual, prospective, contingent or otherwise;
(i) is at any time ascertained or unascertained;
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Business Purchase Agreement
(j) is owing or incurred by or on account of the Seller alone or
severally or jointly with any other person; or
(k) comprises any combination of the above;
MATERIAL CONTRACT means a Contract which:
(a) is material to the proper and efficient operation of the
Business;
(b) imposes on the Seller, or when assigned or novated under this
agreement will impose on the Buyer, an obligation in respect of
the Business or the Business Assets:
(1) to pay more than $10,000;
(2) which continues for more than 6 months;
(3) which restricts the places or manner in which the Business
may be carried on; or
(4) is onerous in the context of the Business; or
(c) upon ceasing to be executory is more likely than not to result in
a loss to the Seller, or when assigned or novated under this
agreement, the Buyer;
including those set out in schedule 3;
MONTH means calendar month;
NET PROFIT means net profit before income tax of the Continuing
Business calculated in accordance with the Accounting Standards and
before giving effect to:
(a) transition costs other than normal and customary expenses in
excess of $10,000 incurred at the direction of the Buyer; and
(b) any costs associated with direct Buyer overheads;
OFFICER means, in relation to a body corporate, a director or
secretary of that body corporate;
PROPERTIES means the properties leased under the Property Lease and
the Sydney Lease described in schedule 6;
PROPERTY LEASE means the property lease (including the sublicence of
part of the property by the Buyer to the Seller for the purposes of
conducting the Software Products Business) dated on or about the date
of this agreement between the Seller and the Buyer and forming
annexure I;
PURCHASE DATE means 1 August 1998;
PURCHASE PRICE means the purchase price payable for the Business
Assets calculated under part 3;
RECEIVABLES means the trade debts acquired in the ordinary course of
ordinary business of the Business owed to the Seller at the Purchase
Date as set out in schedule 12 and as specified in the Settlement
Statement;
RELATED CORPORATION means a "related body corporate" as that
expression is defined in the Corporations Law and includes a body
corporate which is at any time after the date of this agreement a
"related body corporate" but ceases to be a
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"related body corporate" because of an amendment, consolidation or
replacement of the Corporations Law;
RELEASE NOTICE means the notice set out in schedule 1 of the Escrow
Agreement;
REVENUE means revenue (net of discounts) earned for services (net of
any associated licence fees) provided whether or not paid, invoiced or
in respect of which payment or invoicing is the subject of any
contingency but to be adjusted if unpaid after 180 days from the date
of invoice;
SECOND PERFORMANCE BONUS means the performance bonus referred to in
clause 3.9((a));
SECOND PERFORMANCE TARGET means the performance target referred to in
clause 3.9((a));
SETTLEMENT means completion of the sale and purchase of the Business
Assets;
SETTLEMENT DATE means the date set under clause 11.1 or such other
date as the parties may agree;
SETTLEMENT STATEMENT means the statement to be prepared as at the
Settlement Date under clause 4.1 and in the form of schedule 9;
SOFTWARE PRODUCTS BUSINESS means the employees set out in schedule 13
and associated contracts and tangible assets;
SUBSIDIARY has the same meaning as in the Corporations Law;
SYDNEY LEASE means the property lease forming annexure P;
TANGIBLE ASSETS means the all assets used in the Business, including
those described in schedule 8;
TAX means any tax, levy, charge, impost, duty, fee, deduction,
compulsory loan or withholding which is assessed, levied, imposed or
collected by any Governmental Agency and includes, but is not limited
to, any interest, fine, penalty, charge, fee or other amount imposed
in respect of the above;
TIER SHARE CERTIFICATES means the share certificates issued in the
name of "Infact Pty Limited as trustee of the Infact Unit Trust" in
relation to the Tier Shares and referred to in clauses 3.4((a)) and
3.4((b));
TIER SHARES means the number of the Class B common stock in Tier
Technologies calculated by dividing $1,500,000 by the average closing
price for the 5 trading days immediately preceding the date of this
agreement (converted to Australian dollars using the average exchange
rate quoted by the Commonwealth Bank of Australia for buying US
dollars as at the end of trading for the 5 trading days immediately
preceding the date of this agreement) of Class B common stock in Tier
Technologies as determined by Annexure R;
TIER SHARES AGREEMENT means the agreement dated on or about the date
of this agreement between the Buyer, Tier Technologies and the Seller
under which, amongst other things, the Seller acknowledges certain
restrictions on the Tier Shares imposed under the United States
Securities Act and forming annexure M;
TIER TECHNOLOGIES means Tier Technologies, Inc. a company duly
incorporated in the State of California with principal office at 0000
Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000;
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TRADE MARKS means all the trade marks of the Business, including those
described in schedule 7;
TRANSFERRING CONTRACTOR means a Contractor who duly executes a
Contractor Novation Agreement under clause 8.7;
TRANSFERRING EMPLOYEE means an Employee who accepts the Buyer's offer
of employment under clause 8.1; and
WARRANTIES means the representations and warranties set out in
schedule 1.
1.2 INTERPRETATION
(a) In this agreement, headings and boldings are for convenience only
and do not affect the interpretation of this agreement and,
unless the context otherwise requires:
(1) words importing the singular include the plural and vice
versa;
(2) words importing a gender include any gender;
(3) other parts of speech and grammatical forms of a word or
phrase defined in this agreement have a corresponding
meaning;
(4) an expression importing a natural person includes any
company, partnership, joint venture, association,
corporation or other body corporate and any Governmental
Agency;
(5) a reference to any thing (including, but not limited to, any
right) includes a part of that thing;
(6) a reference to a part, clause, party, annexure or schedule
is a reference to a part and clause of, and a party,
annexure and schedule to, this agreement and a reference to
this agreement includes any annexure and schedule;
(7) a reference to a statute, regulation, proclamation,
ordinance or by-law includes all statutes, regulations,
proclamations, ordinances or by-laws amending, consolidating
or replacing it, and a reference to a statute includes all
regulations, proclamations, ordinances and by-laws issued
under that statute;
(8) a reference to a document includes all amendments or
supplements to, or replacements or novations of, that
document;
(9) a reference to a party to a document includes that party's
successors and permitted assigns;
(10) a covenant or agreement on the part of two or more persons
binds them jointly and severally;
(11) a reference to an agreement other than this agreement
includes an undertaking, deed, agreement or legally
enforceable arrangement or understanding, whether or not in
writing;
(12) a reference to an asset includes all property of any nature,
including, but not limited to, a business, and all rights,
revenues and benefits;
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(13) a reference to a document includes any agreement in writing,
or any certificate, notice, instrument or other document of
any kind; and
(14) a reference to liquidation includes official management,
appointment of an administrator, compromise, arrangement,
merger, amalgamation, reconstruction, winding-up,
dissolution, assignment for the benefit of creditors,
scheme, composition or arrangement with creditors,
insolvency, bankruptcy, or any similar procedure or, where
applicable, changes in the constitution of any partnership
or person, or death.
(b) This agreement shall be construed in accordance with the
acknowledgment and intent of the parties as set out in the
recitals.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a Business
Day, that thing must be done on or by the preceding Business Day.
1.4 ACCOUNTING STANDARDS
(a) In respect of any accounting practice relevant to this agreement,
unless otherwise expressly required otherwise the following
accounting standards apply:
(1) the accounting standards required under the Corporations
Law;
(2) if no accounting standard applies under the Corporations Law
in relation to an accounting practice, the standards
acceptable to the Australian Accounting Research Foundation,
including:
(A) the Australian Accounting Concepts;
(B) the Australian Accounting Standards; and
(C) the Approved Accounting Standards; and
(3) if no accounting standard applies under clause 1.4((a))((1))
or 1.4((a))((2)), the accounting practice agreed between the
parties and, failing agreement, the accounting practice
determined under clause 1.4((b)).
(b) If the parties do not agree under clause 1.4((a))((3)), the
matter must be referred as soon as practicable to the President
of the Institute of Chartered Accountants in Australia or his
nominee for determination of the appropriate accounting practice.
Any party may make the referral under this clause 1.4((b)).
(c) A determination under clause 1.4((b)) is final and binding on the
parties.
(d) The parties must bear equally the costs of the referral and
determination under clause 1.4((b)).
(e) In making a determination under clause 1.4((b)), the President of
the Institute of Chartered Accountants or his nominee acts as an
expert, not as an arbitrator.
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2 SALE AND PURCHASE
2.1 SALE OF BUSINESS ASSETS
With effect on the Purchase Date:
(a) the Seller must sell and the Buyer must buy the Business Assets,
(b) the Seller must release the Transferring Employees and the
Transferring Contractors; and
(c) the Seller and the Buyer must enter into the Property Lease and
the Property Sublease,
for the Purchase Price free of Encumbrances and other third party
rights.
2.2 CONTROL AND MANAGEMENT OF THE BUSINESS
The Seller and the Buyer acknowledge and agree that with effect on and
from the Purchase Date subject to the terms of this agreement:
(a) the Buyer shall assume ultimate control and management of the
Business;
(b) the Buyer shall employ the Key Employees subject to the terms of
the Key Employee Contracts.
2.3 CONTINUING OPERATIONS OF BUSINESS
(a) The Buyer will continue the Business under the name of Infact as
division of Buyer for a period of 2 years. All letterhead and
other documentation used in the Business must clearly indicate
that Infact is a name under which the Buyer is carrying on
business.
(b) The accounting for the Business shall be integrated with the
Buyer's accounting but as a separate profit centre so as to
enable Net Profits and Revenues of the Continuing Business to be
readily calculated during the initial two year period for the
purposes of this agreement.
(c) The Buyer will conduct the Business reasonably for a term of two
years. Without limiting the generality of the foregoing Tier
will:
* engage the Key Employees in terms of the Key Employment
Contracts, to manage the business on a day to day basis with
substantial management discretions including management of
human resources issues, selection of client base,
negotiation of client contracts and committing the Business
in accordance with authorities which are consistent with the
responsibilities Buyer has given to similarly situated
managers;
* take no action which would unreasonably inhibit the capacity
of the Key Employees to maximise Revenue and Net Profit to
the Business;
* ensure as a minimum that the funding necessary to support
the budgeted Revenue and Net Profit Performance Targets will
be provided.
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(d) For the purpose of enabling the Seller to complete the orderly
disposal of the Software Products Business, the parties
acknowledge that the Seller will continue to operate the Software
Products Business for a period not to exceed 30 months from the
Purchase Date.
(e) The Business Plan is a general non-binding statement of intent
which is intended to set forth the general goals of the parties.
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3 PURCHASE PRICE
3.1 PURCHASE PRICE
(a) The Purchase Price is the total value of the Business Assets
which is the total of the following amounts:
(1) $4,800,000 cash which must be paid on Settlement Date or
deposited into an interest bearing account pursuant to
clause 3.10;
(2) $1,500,000 which must be used by the Seller to subscribe for
the Tier Shares pursuant to clause 3.4;
(3) $1,200,000 which must be deposited into an interest bearing
account pursuant to clause 3.5;
(4) $450,000 payable in twelve equal quarterly payments without
interest over the first three years from the Purchase Date;
and
(5) any contingent amount payable as follows:
(A) subject to attainment of the First Performance Target -
the First Performance Bonus; and
(B) subject to attainment of the Second Performance Target
- the Second Performance Bonus.
(b) The Purchase Price shall be apportioned among the Business Assets
under clause 3.2 and clause 4 and as set out in the Settlement
Statement.
(c) The Purchase Price is payable under clauses 3,3, 3.4, 3.5, 3.6,
3.7, 3.8 and 3.9.
3.2 APPORTIONMENT
(a) The Business Assets shall be valued and the Initial Purchase
Price apportioned by the parties on or by the Settlement Date
pursuant to the Settlement Statement.
(b) If the Buyer pays the amount described in clauses 3.6, 3.7, 3.8
and 3.9 the additional amounts paid shall be apportioned among
the Business Assets rateably in proportion to the amounts
ascribed to the Business Assets in the Settlement Statement other
than Tangible Assets which shall remain as agreed pursuant to
clause 3.2((c)).
(c) The Buyer and the Seller agree that the values assigned to all
depreciated and depreciable Tangible Assets shall be at the
written down value shown in the Accounts.
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Business Purchase Agreement
3.3 PAYMENT AT SETTLEMENT
Subject to section 18 and satisfaction of the Seller's performance of
its obligations under clauses 11.2, 11.3, 11.4 and 11.5, at Settlement
the Buyer must pay:
(a) to the Seller on account of the Purchase Price:
(1) $4,800,000 in Immediately Available Funds on the Settlement
Date or to be deposited into an interest bearing account
pursuant to clause 3.10; and
(2) $1,500,000 by cheque drawn on the Buyer; and
(b) to the Escrow Agent:
(1) $1,200,000 being the Escrow Cash in Immediately Available
Funds.
3.4 ESCROW OF TIER SHARES
(a) The parties agree that the Seller must duly endorse the cheque
referred to in clause 3.3((a))((2)) in favour of Tier
Technologies to subscribe for the Tier Shares at Settlement on
the Settlement Date. The Buyer agrees to procure that Tier
Technologies shall in exchange issue the Tier Shares for delivery
to the Escrow Agent within 7 days of the Settlement Date.
(b) The Tier Shares will be held in escrow by the Escrow Agent in
accordance with the Escrow Agreement from the Settlement Date.
(c) With the exception of the restrictions referred to in the Tier
Shares Agreement, the Warranties and the Escrow Agreement, the
Tier Shares must be issued as fully paid shares of Class B common
stock in Tier Technologies in accordance with all relevant legal
requirements free from any Encumbrance. The Tier Shares will not
be registered under the laws of the United States of America and
are subject to various restrictions against resale or transfer.
(d) The Seller has no legal or beneficial interest in the Tier
Shares, notwithstanding that the Tier Share Certificates are
issued in its name, unless and until and to the extent that they
are released in accordance with clauses 3.6 and 3.7.
3.5 ESCROW CASH
(a) The Escrow Agent will deposit the Escrow Cash into an interest
bearing account in accordance with the Escrow Agreement.
(b) The Escrow Cash will be held by the Escrow Agent in accordance
with the Escrow Agreement from the Settlement Date.
(c) The Seller has no legal or beneficial interest in the Escrow Cash
unless and until and to the extent that it is paid in accordance
with clauses 3.6 and 3.7.
3.6 RELEASE OF TIER SHARES AND ESCROW CASH ON FIRST ANNIVERSARY
(a) Subject to clause 3.6((b)), within 180 days after the end of the
first anniversary of the Purchase Date, the following Tier Share
Certificates (with the worth of the Tier Shares being calculated
on the basis set out in
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Business Purchase Agreement
the definition of "Tier Shares") and Escrow Cash will be released
from escrow under the Escrow Agreement to the Seller:
(1) if the Net Profit of the Continuing Business is greater than
or equal to $800,000 and the Revenue of the Continuing
Business is between $5,120,000 and $5,439,999 - $135,000
worth of Tier Shares (TIER SHARE CERTIFICATE A);
(2) if the Net Profit of the Continuing Business is greater than
or equal to $850,000 and the Revenue of the Continuing
Business is between $5,440,000 and $5,759,999 - $337,500
worth of Tier Shares (TIER SHARE CERTIFICATES A AND B);
(3) if the Net Profit of the Continuing Business is greater than
or equal to $900,000 and the Revenue of the Continuing
Business is between $5,760,000 and $6,079,999 - $675,000
worth of Tier Shares (TIER SHARE CERTIFICATES A, B AND C);
(4) if the Net Profit of the Continuing Business is greater than
or equal to $950,000 and the Revenue of the Continuing
Business is between $6,080,000 and $6,399,999 - $750,000
worth of Tier Shares (TIER SHARE CERTIFICATES A, B, C AND D)
and $262,500 of Escrow Cash; or
(5) if the Net Profit of the Continuing Business is greater than
or equal to $1,000,000 and the Revenue of the Continuing
Business is greater than or equal to $6,400,000 - $750,000
worth of Tier Shares (TIER SHARE CERTIFICATES A, B, C, D AND
E) and $600,000 of Escrow Cash,
in respect of the year ended on the day prior to the first anniversary
of the Purchase Date.
(b) Release of the Tier Shares and Escrow Cash in accordance with
clause 3.6((a)), is subject to Xxxx Xxxxxx, one of the Key
Employees, remaining employed by the Buyer in the Continuing
Business for a period of 18 months from the Purchase Date, unless
his Key Employee Contract is terminated by the Buyer for reasons
other than cause as described in clause 14.2(a) of that Key
Employee Contract.
(c) As soon as possible after the end of that year, the Buyer must:
(1) calculate the Net Profit and the Revenue of the Continuing
Business for that year in accordance with the Accounting
Standards; and
(2) notify the Seller in writing of such calculation including
particulars of the Net Profit and Revenue included in such
calculation. The Seller or its agent shall have the right on
reasonable notice to inspect (and copy - at its cost and
subject to entering into any agreement reasonably required
by the Buyer to preserve the confidential nature of such
information) all relevant records of the Buyer for the
purpose of satisfying itself as to the accuracy or otherwise
of the Buyer's calculation.
(d) The Seller may, at any time within 30 days of receipt of notice
under clause 3.6((c))((2)), dispute the Buyer's calculation of
the Net Profit and/or
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Business Purchase Agreement
Revenue of the Continuing Business for that year. In such case,
the Seller must notify the Buyer of the dispute and set out in
reasonable detail the basis upon which it claims to be in
dispute, including the amount which it believes it is entitled
pursuant to clause 3.6((a)). In the event that the Seller
disputes such calculation, the matter must be referred by the
Buyer and the Seller to an Independent Accountant with an
instruction that the Independent Accountant select which of the
Buyer's or the Seller's calculations is the more reasonable. The
parties must co-operate fully with the Independent Accountant and
make available to the Independent Accountant all relevant
information and documents. The Independent Accountant will act as
an expert and not an arbitrator and the decision of the
Independent Accountant will be final and binding. The cost of the
Independent Accountant shall be borne by which of the Buyer or
the Seller was the person whose calculation was not determined
the more reasonable by the Independent Accountant.
(e) Upon final resolution by the parties of the Net Profit and
Revenue calculations, the Buyer and Seller shall execute a
Release Notice in accordance with the Escrow Agreement.
(f) The Tier Shares not released in accordance with this clause 3.6
will be returned to Tier Technologies to be cancelled and the
Escrow Cash not released in accordance with this clause 3.6 will
be returned to the Buyer.
3.7 RELEASE OF TIER SHARES AND ESCROW CASH ON SECOND ANNIVERSARY
(a) Subject to clause 3.7((b)), within 60 days after the end of the
second anniversary of the Purchase Date, the following Tier Share
Certificates (with the worth of the Tier Shares being calculated
on the basis set out in the definition of "Tier Shares") and
Escrow Cash will be released from Escrow under the Escrow
Agreement to the Seller:
(1) if the Net Profit of the Continuing Business is greater than
or equal to $1,200,000 and the Revenue of the Continuing
Business is between $6,400,000 and $6,799,999 - $135,000
worth of Tier Shares (TIER SHARE CERTIFICATE F);
(2) if the Net Profit of the Continuing Business is greater than
or equal to $1,275,000 and the Revenue of the Continuing
Business is between $6,800,000 and $7,199,999 - $337,500
worth of Tier Shares (TIER SHARE CERTIFICATES F AND G);
(3) if the Net Profit of the Continuing Business is greater than
or equal to $1,350,000 and the Revenue of the Continuing
Business is between $7,200,000 and $7,599,999 - $675,000
worth of Tier Shares (TIER SHARE CERTIFICATES F, G AND H);
(4) if the Net Profit of the Continuing Business is greater than
or equal to $1,425,000 and the Revenue of the Continuing
Business is between $7,600,000 and $7,999,999 - $750,000
worth of Tier Shares (TIER SHARE CERTIFICATES F, G, H AND I)
and $262,500 of Escrow Cash; or
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Business Purchase Agreement
(5) if the Net Profit of the Continuing Business is greater than
or equal to $1,500,000 and the Revenue of the Continuing
Business is greater than or equal to $8,000,000 - $750,000
worth of Tier Shares (TIER SHARE CERTIFICATES F, G, H, I AND
J) and $600,000 of Escrow Cash,
in respect of the year ended on the second anniversary of the
Purchase Date.
(b) Release of the Tier Shares and Escrow Cash in accordance with
clause 3.7((a)) is subject to Xxxx Xxxxxx, one of the Key
Employees remaining employed by the Buyer in the Continuing
Business for a period of 18 months from the Purchase Date, unless
his Key Employee Contract is terminated by the Buyer for reasons
other than cause as described in 14.2(a) of that Key Employee
Contract.
(c) As soon as possible after the end of that year, the Buyer must:
(1) calculate the Net Profit and the Revenue of the Continuing
Business for that year in accordance with the Accounting
Standards; and
(2) notify the Seller in writing of such calculation including
particulars of the Net Profit and Revenue included in such
calculation. The Seller or its agent shall have the right on
reasonable notice to inspect (and copy - at its cost and
subject to entering into any agreement reasonably required
by the Buyer to preserve the confidential nature of such
information) all relevant records of the Buyer for the
purpose of satisfying itself as to the accuracy or otherwise
of the Buyer's calculation.
(d) The Seller may, at any time within 30 days of receipt of notice
under clause 3.7((c))((2)), dispute the Buyer's calculation of
the Net Profit and/or Revenue of the Continuing Business for that
year. In such case, the Seller must notify the Buyer of the
dispute and set out in reasonable detail the basis upon which it
claims to be in dispute, including the amount which it believes
it is entitled pursuant to clause 3.7((a)). In the event that the
Seller disputes such calculation, the matter must be referred by
the Buyer and the Seller to an Independent Accountant with an
instruction that the Independent Accountant select which of the
Buyer's or the Seller's calculations is the more reasonable. The
parties must co-operate fully with the Independent Accountant and
make available to the Independent Accountant all relevant
information and documents. The Independent Accountant will act as
an expert and not an arbitrator and the decision of the
Independent Accountant will be final and binding. The cost of the
Independent Accountant shall be borne by which of the Buyer or
the Seller was the person whose calculation was not determined
the more reasonable by the Independent Accountant.
(e) Upon final resolution by the parties of the Net Profit and
Revenue calculations, the Buyer and Seller shall execute a
Release Notice in accordance with the Escrow Agreement.
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Business Purchase Agreement
(f) The Tier Shares not released in accordance with this clause 3.7
will be returned to Tier Technologies to be cancelled and the
Escrow Cash not released in accordance with this clause 3.7 will
be returned to the Buyer.
3.8 FIRST PERFORMANCE TARGET - ADDITIONAL PURCHASE PRICE
(a) The performance bonus payable in respect of the year ended on the
day prior to the first anniversary of the Purchase Date will be
as follows:
(1) if the Net Profit of the Continuing Business is greater than
or equal to $1,275,000 and the Revenue of the Continuing
Business is between $6,800,000 and $7,199,999 - $50,000;
(2) if the Net Profit of the Continuing Business is greater than
or equal to $1,350,000 and the Revenue of the Continuing
Business is between $7,200,000 and $7,599,999 - $125,000;
(3) if the Net Profit of the Continuing Business is greater than
or equal to $1,425,000 and the Revenue of the Continuing
Business is between $7,600,000 and $7,999,999 - $250,000;
(4) if the Net Profit of the Continuing Business is greater than
or equal to $1,500,000 and the Revenue of the Continuing
Business is between $8,000,000 and $8,999,999 - $350,000;
(5) if the Net Profit of the Continuing Business is greater than
or equal to $1,750,000 and the Revenue of the Continuing
Business is between $9,000,000 and $9,999,999 - $450,000; or
(6) if the Net Profit of the Continuing Business is greater than
or equal to $2,000,000 and the Revenue of the Continuing
Business is greater than or equal to $10,000,000 - $500,000.
(b) Subject to clause 3.8((c)), if the First Performance Target is
achieved, the Buyer must, within 180 days after the end of that
year, pay the First Performance Bonus to the Seller in
Immediately Available Funds.
(c) Payment of the First Performance Bonus is subject to Xxxx Xxxxxx,
one of the Key Employees remaining employed by the Buyer in the
Continuing Business for a period of 18 months from the Purchase
Date, unless his Key Employee Contract is terminated by the Buyer
for reasons other than cause as described in clause 14.2(a) of
that Key Employee Contract.
(d) As soon as possible after the end of that year, the Buyer must:
(1) calculate the Net Profit and the Revenue of the Continuing
Business for that year in accordance with the Accounting
Standards; and
(2) notify the Seller in writing of such calculation including
particulars of the Net Profit and Revenue included in such
calculation. The Seller or its agent shall have the right on
reasonable notice to inspect (and copy - at its cost and
subject to entering into any agreement reasonably required
by the Buyer to preserve the confidential nature of such
information) all relevant records of the Buyer for the
purpose of satisfying itself as to the accuracy or otherwise
of the Buyer's calculation.
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Business Purchase Agreement
(e) The Seller may, at any time within 30 days of receipt of notice
under clause 3.8((d))((2)), dispute the Buyer's calculation of
the Net Profit and/or Revenue of the Continuing Business for that
year. In such case, the Seller must notify the Buyer of the
dispute and set out in reasonable detail the basis upon which it
claims to be in dispute, including the amount which it believes
it is entitled pursuant to clause 3.8((b)). In the event that
the Seller disputes such calculation, the matter must be referred
by the Buyer and the Seller to an Independent Accountant with an
instruction that the Independent Accountant select which of the
Buyer's or the Seller's calculations is the more reasonable. The
parties must co-operate fully with the Independent Accountant and
make available to the Independent Accountant all relevant
information and documents. The Independent Accountant will act as
an expert and not an arbitrator and the decision of the
Independent Accountant will be final and binding. The cost of the
Independent Accountant shall be borne by which of the Buyer or
the Seller was the person whose calculation was not determined
the more reasonable by the Independent Accountant.
3.9 SECOND PERFORMANCE TARGET - ADDITIONAL PURCHASE PRICE
(a) The performance bonus payable in respect of the year ended on the
day prior to the second anniversary of the Purchase Date will be
as follows:
(1) if the Net Profit of the Continuing Business is greater than
or equal to $1,700,000 and the Revenue of the Continuing
Business is between $8,500,000 and $8,999,999 - $50,000;
(2) if the Net Profit of the Continuing Business is greater than
or equal to $1,800,000 and the Revenue of the Continuing
Business is between $9,000,000 and $9,499,999 - $125,000;
(3) if the Net Profit of the Continuing Business is greater than
or equal to $1,900,000 and the Revenue of the Continuing
Business is between $9,500,000 and $9,999,999 - $250,000;
(4) if the Net Profit of the Continuing Business is greater than
or equal to $2,000,000 and the Revenue of the Continuing
Business is between $10,000,000 and $10,999,999 - $350,000;
(5) if the Net Profit of the Continuing Business is greater than
or equal to $2,250,000 and the Revenue of the Continuing
Business is between $11,000,000 and $11,999,999 - $450,000;
or
(6) if the Net Profit of the Continuing Business is greater than
$2,500,000 and the Revenue of the Continuing Business is
greater than $12,000,000 - $500,000.
(b) Subject to clause 3.9((c)), if the Second Performance Target is
achieved, the Buyer must, within 60 days after the end of that
year, pay the Second Performance Bonus to the Seller in
Immediately Available Funds.
(c) Payment of the Second Performance Bonus is subject to Xxxx
Xxxxxx, one of the Key Employees remaining employed by the Buyer
for a period of 18 months after the Purchase Date, unless his Key
Employee Contract is
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Business Purchase Agreement
terminated by the Buyer for reasons other than cause as described
in clause 14.2(a) of that Key Employee Contract.
(d) As soon as possible after the end of that year, the Buyer must:
(1) calculate the Net Profit and the Revenue of the Continuing
Business for that year in accordance with the Accounting
Standards; and
(2) notify the Seller in writing of such calculation including
particulars of the Net Profit and Revenue included in such
calculation. The Seller or its agent shall have the right on
reasonable notice to inspect (and copy - at its cost and
subject to entering into any agreement reasonably required
by the Buyer to preserve the confidential nature of such
information) all relevant records of the Buyer for the
purpose of satisfying itself as to the accuracy or otherwise
of the Buyer's calculation.
(e) The Seller may, at any time within 30 days of receipt of notice
under clause 3.9((d))((2)), dispute the Buyer's calculation of
the Net Profit and/or Revenue of the Continuing Business for that
year. In such case, the Seller must notify the Buyer of the
dispute and set out in reasonable detail the basis upon which it
claims to be in dispute, including the amount which it believes
it is entitled pursuant to clause 3.9((b)). In the event that the
Seller disputes such calculation, the matter must be referred by
the Buyer and the Seller to an Independent Accountant with an
instruction that the Independent Accountant select which of the
Buyer's or the Seller's calculations is the more reasonable. The
parties must co-operate fully with the Independent Accountant and
make available to the Independent Accountant all relevant
information and documents. The Independent Accountant will act as
an expert and not an arbitrator and the decision of the
Independent Accountant will be final and binding. The cost of the
Independent Accountant shall be borne by which of the Buyer or
the Seller was the person whose calculation was not determined
the more reasonable by the Independent Accountant.
3.10 EXTENSION OF PAYMENT
(a) If at the Settlement Date the Seller has not delivered novations
of all Contractors, Clients and Employee agreements then the
Buyer may postpone effective settlement until 7 August 1998 or
such earlier date as the Seller shall deliver such novations.
(b) If the Buyer elects to postpone effective settlement under clause
3.10((a)) then the Buyer shall pay the Initial Purchase Price to
the Escrow Agent to be held in an interest bearing deposit.
(c) If by 7 August 1998 the Seller has not delivered all such
novations then the Buyer may at its option determine not to
proceed with the purchase in which case the whole of the moneys
or shares held in any escrow shall be repaid to the Buyer and
this agreement shall be deemed to be null and void ab-initio.
(d) If the Buyer waives the delivery of any novations and proceeds
with the purchase whether on or before 7 August 1998 then the
Seller shall be
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Business Purchase Agreement
entitled to be paid all of the moneys held in the initial
purchase price escrow including interest accrued thereon.
(e) The Seller shall maintain all its existing operating systems and
controls for the conduct of the Business in the usual course
until the Initial Purchase Price has been paid in accordance with
clause 3.10((d)).
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4 SETTLEMENT STATEMENT
4.1 SETTLEMENT STATEMENT
(a) The Seller must prepare a draft of the Settlement Statement
promptly and at least 5 Business Days before the Settlement Date.
(b) The Settlement Statement must set out, as at the Purchase Date:
(1) the value of the Business Assets; and
(2) the Receivables.
(c) Subject to clause 3.2, the Buyer and the Seller must allocate the
Initial Purchase Price among the Business Assets as soon as
possible and no later than 5 Business Days after receipt of the
first draft by the Buyer. If the Buyer and Seller do not agree on
the value of an item with the period described, the value shall
be determined by an Independent Accountant agreed by the Buyer
and the Seller. The cost of such accountant shall be borne
equally.
(d) The Settlement Statement will be final and binding on the
parties.
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5 PAYMENTS IN ADVANCE OR ARREARS
5.1 ADVANCE PAYMENTS
On the Settlement Date:
(a) the Buyer must account to the Seller for:
(1) any payments in advance made by the Seller for goods or
services to be supplied to the Business in the ordinary
course of ordinary business after the Purchase Date to the
benefit of the Buyer; and
(2) any other payments in advance made by the Seller in respect
of the Business in the ordinary course of ordinary business,
the benefit of which is received by the Business after the
Purchase Date; and
(b) the Seller must account to the Buyer for any payments in advance
received by the Seller for goods or services to be supplied in
respect of the Business after the Purchase Date.
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Business Purchase Agreement
5.2 ARREARS PAYMENTS
If the Buyer makes:
(a) any payment in arrears for goods or services supplied to the
Business before the Purchase Date; and
(b) any other payment in arrears in respect of the Business where the
benefit was received by the Business before the Purchase Date,
(c) the Seller must reimburse the Buyer within 2 Business Days after
the Seller receives evidence of payment.
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6 RECEIVABLES
6.1 COLLECTION BY BUYER
(a) The Seller is entitled to the Receivables but, subject to clause
6.5, must not attempt to collect them.
(b) The Buyer must use its best endeavours to expedite collection on
behalf of the Seller of those Receivables specified in the
Settlement Statement.
(c) Nothing in clause 6.1((b)) requires the Buyer to institute
proceedings to recover any Receivable or to expedite collection
of any receivable not specified in the Settlement Statement.
6.2 ACCOUNTING FOR RECEIVABLES
The Buyer must account to the Seller for payment of the Receivables as
follows:
(a) any amount received by the Buyer in payment of, or which is
readily reconcilable with, specific Receivables or debts to the
Buyer must be treated as a payment of those Receivables or debts
to the Buyer (as the case may be); and
(b) any amount received by the Buyer in payment of amounts which may
include Receivables where:
(1) the debtor owes separate debts to the Buyer; and
(2) where the amount paid is not identified by the debtor as a
payment of, or is not readily reconcilable with, specific
Receivables or specific debts to the Buyer,
must be applied as follows and in the following order:
(3) first, those debts of the Seller which have been outstanding
the longest;
(4) second, those debts of the Buyer which have been outstanding
the longest.
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Business Purchase Agreement
6.3 WRITTEN ACCOUNT AND PAYMENT
(a) On the first day of the month after the month in which the
Settlement Date falls and after that on the first day of each
month the Buyer must provide to the Seller a written account of
the collection of the Receivables.
(b) Immediately upon receipt by the Buyer of any Receivables payable
to the Seller, the Buyer must pay the amount received to the
Seller.
6.4 BUYER TO PROVIDE INFORMATION
The Buyer must provide to the Seller any information in relation to
the collection of the Receivables which the Seller reasonably
requests.
6.5 SELLER'S RESPONSIBILITY
The Seller is solely responsible for the collection of any Receivable
not collected within 3 months after the Purchase Date.
6.6 SELLER TO ACCOUNT TO BUYER
Any moneys which the Seller receives from a Client in relation to
services carried out by the Buyer after the Purchase Date (or from any
other person for any other reason) must be immediately paid to the
Buyer.
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7 CONTRACTS AND ASSETS LEASES
7.1 TRANSFER OF CONTRACTS AND ASSETS LEASES
(a) On the Purchase Date, the Seller must transfer the Contracts, the
Assets Leases, at the Buyer's option either by assignment or by
novation in a form reasonably acceptable to the Buyer.
(b) If the consent of a third party is required for an assignment or
novation under clause 7.1((a)), then the Seller must obtain that
consent (at no cost to the Buyer).
(c) If the method of transfer selected by the Buyer under clause
7.1((a)) is not possible, then the Seller must effect the
transfer by the method not selected.
7.2 POSITION PENDING TRANSFER OF CONTRACTS
From the Purchase Date until each Contract is transferred but subject
to clause 7.5:
(a) the Buyer must:
(1) to the extent it lawfully can, perform at its expense all
the obligations of the Seller under each Contract; and
(2) indemnify the Seller against all losses, costs, payments,
liabilities, charges, outgoings and expenses incurred after
the Buyer has taken over performance of the Contract and as
a result of any act or default of the Buyer in discharging
the Seller's obligations under Contract; and
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Business Purchase Agreement
(b) the Seller must within 2 Business Days after receipt pay to the
Buyer any amount or account to the Buyer for any other benefit it
receives in respect of each Contract.
7.3 RIGHT OF USE OR OCCUPATION PENDING TRANSFER OF ASSETS LEASES AND
SYDNEY LEASE
(a) If an Assets Lease has not been transferred to the Buyer by the
Purchase Date the Seller must:
(1) allow the Buyer to use the property the subject of that
Assets Lease as licensee from the Purchase Date until the
transfer is completed;
(2) take any action necessary to ensure that the Assets Lease is
transferred in accordance with this agreement as soon as
reasonably practicable after the Purchase Date;
(3) indemnify the Buyer in respect of any claim, action, damage,
loss, liability, cost, charge, expense, outgoing or payment
which the Buyer pays, suffers, incurs or is liable for, by
reason of any matter or thing in respect of any of the
following:
(A) any breach of the Assets Lease including, but not
limited to, any breach arising from the Buyer being
permitted to use or occupy the property before any
necessary consents have been obtained or formalised; or
(B) any relocation or disruption to the Buyer's business or
any other consequence suffered because the Buyer has
had to relinquish or vacate the property as a result of
any action on the part of the lessor.
(b) Clause 7.3((a))((3)) does not apply if the breach is due to any
act or default of the Buyer in relation to obligations which it
can lawfully perform under the Assets Lease.
(c) Subject to clause 7.3((a))((3)), the Buyer must:
(1) to the extent it lawfully can, perform at its expense all
the obligations of the Seller under the Assets Lease; and
(2) indemnify the Seller against all losses, costs, payments,
liabilities, charges, outgoings and expenses incurred after
the Buyer has taken over performance of the Assets Lease and
as a result of any act or default of the Buyer in
discharging the Seller's obligations under the Assets Lease.
7.4 CLAIMS BY THIRD PARTIES
If any person is required to make a payment under a Contract or Assets
Lease the benefit of which accrues to the Buyer under this agreement
and that person claims or exercises any right of set-off or
counterclaim in respect of anything done or not done by the Seller
before the later of:
(a) the Purchase Date; or
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Business Purchase Agreement
(b) the assignment or novation of that Contract or Assets Lease in
accordance with this agreement,
then the Seller must immediately on demand pay as the Buyer directs
the difference between the payment which would have been received had
the right of set-off or counterclaim not been exercised and the
payment actually received.
7.5 FAILURE TO TRANSFER CONTRACT, ASSETS LEASE OR SYDNEY LEASE
(a) If within 20 Business Days after the Settlement Date a Contract
or Assets Lease has not been transferred to the Buyer in
accordance with this agreement or on other terms and conditions
acceptable to the Buyer, the Buyer may at its sole discretion
require the Seller either to terminate that Contract or Assets
Lease or to exclude it from this agreement.
(b) The Seller indemnifies the Buyer against any claim, action,
damage, loss, liability, cost, charge, expense, outgoing or
payment which the Buyer pays, suffers, incurs or is liable for in
respect of the termination or exclusion from this agreement of
any Contract or Assets Lease in the circumstances specified in
clause 7.5((a)).
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8 EMPLOYEES AND CONTRACTORS
8.1 OFFER OF EMPLOYMENT BY BUYER
(a) During the period which is not more than seven days prior to the
Settlement Date, the Buyer must offer in writing in terms of
annexure H to employ the Employees with effect from the Purchase
Date, on terms and conditions of employment as favourable as
those disclosed to the Buyer as their current terms and
conditions as set out in annexure C.
(b) The Buyer must state in its offer of employment and in any
contract arising from acceptance of that offer that the offer is
to be effective as at the Purchase Date.
(c) The offer shall be conveyed by the Seller to the Employees and
the Seller shall use its best endeavours to procure by the
Settlement Date acceptance by the Employees of the Buyer's offers
of employment.
(d) If an Employee advises the Seller that he accepts the Buyer's
offer of employment, the Seller must immediately advise the Buyer
of the acceptance.
8.2 KEY EMPLOYEE CONTRACTS
(a) The Seller shall procure that the Key Employees duly execute the
Key Employee Contracts prior to the Settlement Date but with
effect from the Purchase Date.
(b) The Seller shall notify and deliver the duly executed Key
Employee Contracts to the Buyer as soon as practicable after such
execution occurs.
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8.3 TERMINATION BY SELLER
(a) On the Settlement Date the Seller must:
(1) release the Transferring Employees from employment with the
Seller, that release to take effect as at the Purchase Date;
and
(2) pay the Transferring Employees any entitlement to wages,
salaries, remuneration, compensation or benefits arising out
of their employment, due to or accrued by them at the
Purchase Date.
(b) Clause 8.3((a))((2)) does not apply to annual leave, leave
loading or long service leave but does apply to sick leave.
8.4 NON-TRANSFERRING EMPLOYEES
The Seller is solely responsible for the wages, salaries, annual
leave, leave loading, long service leave, sick leave and any other
remuneration, compensation or benefits (including any entitlement to
severance or redundancy payments) of those Employees who do not accept
the Buyer's offer of employment, arising out of their employment or
the termination of their employment, whether under any agreement,
statute, industrial award or in any other way.
8.5 ALLOWANCES
At the Settlement Date, the Seller must pay to the Buyer by bank
cheque an amount equal to the monetary value of:
(a) the annual leave and leave loading accrued by the Transferring
Employees as at the Purchase Date; and
(b) 64% of (being the after tax amount) the long service leave for
periods of service accrued by, or vested in, the Transferring
Employees as at the Purchase Date.
8.6 INDEMNITY
The Buyer indemnifies the Seller against any liability to a
Transferring Employee for annual leave, leave loading or long service
leave for which the Seller has made a payment to the Buyer under
clause 8.5.
8.7 NOVATION OF CONTRACTORS
On or as soon as practicable after the date of this agreement, but
before the Settlement Date, the Buyer must offer in writing to the
Contractors in terms of annexure G to engage the Contractors with
effect from the Purchase Date, on terms and conditions of contract as
favourable as those disclosed to the Buyer as the current terms and
conditions as set out in annexure B.
8.8 ENGAGEMENT OF CONTRACTORS BY BUYER
(a) On the Settlement Date, the Buyer and the Seller agree that with
effect as at the Purchase Date:
(1) the Seller shall release the Transferring Contracts from
engagement with the Seller; and
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(2) the Buyer shall engage the Transferring Contractors pursuant
to the Contractor Novation Agreements, which shall be duly
executed by the Seller upon or as soon as practicable after
due execution by the Contractor.
(b) The Seller must notify the Buyer immediately when a Contractor
executes a Contractor Novation Agreement.
8.9 THE SELLER TO PAY OUT CONTRACTORS
No later than 5 Business Days after the end of the month in which the
Settlement Date occurs, the Seller must pay each Transferring
Contractor all moneys due or accrued to the Contractor pursuant to the
Contractor Contract as at the Purchase Date.
8.10 CONTRACTORS AND EMPLOYEES VALUE
The Seller and the Buyer acknowledge and agree that the acquisition of
substantially all of the Employees and substantially all of the
Contractors by the Buyer is fundamental to the success of the
acquisition of the Business from the Seller. The sale of the Business
and the release by the Seller of the Transferring Employees and the
Transferring Contractors pursuant to this agreement provides the Buyer
with valuable rights to employ and engage the Transferring Employees
and Transferring Contractors.
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9 SUPERANNUATION
9.1 SELLER TO MAKE PAYMENTS
Contemporaneous with the payment to Employees described in clauses 8.3
and 8.4, the Seller must pay to the fund of each Employee described in
schedule 10, their superannuation entitlement to the Purchase Date.
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10 PERIOD BEFORE SETTLEMENT
10.1 CARRYING ON OF THE BUSINESS - BY THE SELLER
(a) The Seller hereby warrants to the Buyer that for each of the
three Months of August, September and October 1998 the Net Profit
of the Business will not be less than $10,000 per Month.
(b) For the purposes of determining the Net Profit from the Business
referred to in clause 10.1((a)), the Seller and the Buyer agree
that they shall calculate such Net Profit using the same
Accounting Standards and application as used by the Buyer during
each of the 12 Months immediately preceding the Purchase Date.
(c) If the Seller and the Buyer can not agree on the calculation of
Net Profit referred to in this clause 10.1, the matter must be
referred by the Buyer and the Seller to an Independent
Accountant, including the amount of the Net Profit which each
party believes is correct, with an instruction that the
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Business Purchase Agreement
Independent Accountant select which of the Buyer's or the
Seller's calculations is the more reasonable. The parties must
co-operate fully with the Independent Accountant and make
available to the Independent Accountant all relevant information
and documents. The Independent Accountant will act as an expert
and not an arbitrator and the decision of the Independent
Accountant will be final and binding. The cost of the Independent
Accountant shall be borne by which of the Buyer or the Seller was
the person whose calculation was not determined the more
reasonable by the Independent Accountant.
(d) If the Net Profit of the Business exceeds $75,000 in any of the
months of August, September and October then the Buyer must,
within 30 days after the end of that Month, pay the excess over
$75,000 to the Seller in Immediately Available Funds which amount
shall be treated as an increase in the goodwill of the Business.
(e) The only derogation to the warranty in clause 10.1(a) which may
be claimed by the Seller shall be if such profit is not achieved
due to any act or omission of the Buyer which is not in the
ordinary course of the Business as carried on by the Seller
during the 12 Months immediately preceding the Purchase Date.
(f) The parties acknowledge that to the extent that the Buyer shall
make payments to the Seller, they shall be independent of any
other bonus entitlements of the Seller under the terms of the
agreement.
(g) Before the Settlement Date the Seller must not:
(1) dispose of any Business Asset other than in the ordinary
course of ordinary business;
(2) acquire any Business Asset other than in the ordinary course
of ordinary business; or
(3) enter into a Material Contract;
(h) Before the Settlement Date other than in the ordinary course of
business, the Seller must not employ any new person, terminate
any Employee, change any term of employment or provide any bonus
to any Employee.
(i) Before the Settlement Date the Seller must not do, or omit to do,
or allow to happen, anything which would make any Warranty false,
misleading or incorrect when made or regarded as made under this
agreement (except to the extent disclosed in the Disclosure
Letter).
(j) An obligation contained in clause 10.1 or a limitation contained
in clause 10.1((f)) does not apply if the Buyer has given its
prior written consent to the Seller in respect of a failure to
comply with that obligation or limitation.
10.2 FURTHER PERFORMANCE BY SELLER
Subject to this agreement, from the Purchase Date and until such time
as the Buyer receives a Client Novation Agreement duly executed by a
Client, the Seller agrees that it shall continue to perform under the
direction and control of the Buyer:
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Business Purchase Agreement
(a) all terms and conditions of the relevant Client Contract in order
to preserve the maximum economic benefit thereunder to the Buyer;
and
(b) assign all rights and benefits under the relevant Client Contact
to the Buyer.
The Buyer agrees to provide the Seller with such Transferring
Employees and Transferring Contractors as the Seller shall reasonably
require to perform such terms and conditions. All expenses incurred in
such performance and all revenues and profit derived therefrom shall
be for the account of the Buyer.
10.3 ACCESS
Before the Settlement Date the Seller must:
(a) allow the Buyer, and any person authorised by the Buyer,
reasonable access during normal business hours to inspect the
Business Assets and the Business Records and the Property; and
(b) promptly provide the Buyer with all explanations and information
it requests in respect of the Business, the Business Assets, the
Property, the Employees and the Contractors.
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11 PURCHASE DATE AND SETTLEMENT
11.1 DATE FOR SETTLEMENT
Settlement must take place at the office of Messrs Xxxxxxxx
Hollingdale & Page, Xxxxx 00, XXX Xxxxxx, Xxxxxx Xxxxx, Xxxxxx at noon
on 31 July 1998, subject to clauses 18 and 3.10.
11.2 DELIVERY OF DOCUMENTS AT SETTLEMENT DATE
On the Settlement Date, the Seller must give to the Buyer the
following documents executed by the Seller:
(a) such Client Novation Agreements as have been duly executed by
Clients;
(b) the Property Lease;
(c) assignments or novations of the Assets Leases in a form and
substance acceptable to the Buyer;
(d) assignment of the Trade Marks, in the form of annexure N;
(e) assignment of the Copyright in the form of annexure O;
(f) the Business Names Assignment and Licence and any completed forms
necessary for the Buyer to continue to have the use and benefit
of the business name Infact and for the Seller to have the use
and benefit of the business name "Infact Products" in accordance
with the terms of the Business Names Assignment and Licence;
(g) resolutions of directors and unitholders of the Infact Unit Trust
dated on or before the Purchase Date approving the sale of the
Business to the Buyer;
(h) completed forms necessary for the Seller and any Related Body
Corporate of the Seller to change their name in accordance with
clause 13.1; and
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Business Purchase Agreement
(i) any other document reasonably required by the Buyer to transfer
the Business Assets to the Buyer and to complete the sale under
this agreement.
11.3 DELIVERY OF TANGIBLE ASSETS
The Seller must deliver the Tangible Assets to the Buyer on the
Settlement Date.
11.4 DELIVERY OF BUSINESS RECORDS AND DOCUMENTS OF TITLE
On the Settlement Date, the Seller must give to the Buyer:
(a) executed and, where applicable, stamped and registered originals
of the Assets Leases and the Sydney Lease;
(b) registration certificates and other documents of title for the
Trade Marks;
(c) full and complete Business Records (other than Excluded Records);
(d) a copy of the Excluded Records;
(e) the Accounts; and
(f) any other document reasonably required by the Buyer to evidence
the title of the Seller to the Business Assets.
11.5 DELIVERY OF EMPLOYMENT AND CONTRACTOR DOCUMENTS
On the Settlement Date, the Seller must give to the Buyer the
following documents which have not already been delivered:
(a) all accepted offers of employment referred to in clause 8.1 duly
executed by the Transferring Employees;
(b) the 2 Key Employee Contracts duly executed by the Key Employees;
(c) all Contractor Novation Agreements duly executed by the
Transferring Contractors; and
(d) any other document reasonably required by the Buyer to evidence
the terms and conditions of the employment of the Employees and
the Key Employees or the engagement of the Contractors.
11.6 BUYER'S OBLIGATIONS AT SETTLEMENT
Subject to the Seller's performance of its obligations under clauses
11.2, 11.3, 11.4 and 11.5 and subject to clauses 18 and 3.10 at
Settlement the Buyer must:
(a) deliver to the Seller counterparts, executed by the Buyer, of
those documents listed in clauses 11.2, 11.4 and 11.5 that are to
be executed by the Buyer; and
(b) comply with its obligations under clauses 3.3, 3.4 and 3.5.
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Business Purchase Agreement
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12 TITLE AND RISK
12.1 TITLE
Title to the Business Assets passes to the Buyer on the Purchase Date.
12.2 RISK
Risk in the Business Assets passes to the Buyer on the Purchase Date.
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13 CHANGE OF NAMES
13.1 CHANGE OF COMPANY NAME
On Settlement or at any time thereafter, the Seller must change its
name and the name of any Related Body Corporate to a name that does
not include the word "Infact" or any similar words resembling, or
likely to be mistaken for or confused with, the word "Infact".
13.2 USE OF BUSINESS NAMES
The Seller shall be permitted to continue to conduct the Software
Products Business under the business name "Infact Products" for a term
not exceeding 30 months from the Purchase Date under the terms of the
Business Names Assignment and Licence.
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14 CONTINUING COOPERATION
14.1 CARRYING ON OF BUSINESS
For 6 months after the Purchase Date, the Seller must (at the cost of
the Seller) use its best endeavours to make available to the Buyer the
information necessary to acquaint the Buyer with the manner in which
the Business was conducted in the 3 calendar years preceding the
Purchase Date.
14.2 TRADE CONNECTIONS
For 12 months after the Purchase Date, the Seller must (at the cost of
the Seller) use its best endeavours to introduce representatives of
the Buyer to suppliers and customers of the Business and to encourage
them to maintain their level of trade with the Business.
14.3 CUSTOMER ENQUIRIES
After the Purchase Date the Seller must:
(a) promptly and at its own cost refer to the Buyer any enquiry made
to it in respect of the Business; and
(b) not refer any enquiry referred to in clause 14.3((a)) to any
person other than the Buyer.
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Business Purchase Agreement
14.4 DOCUMENTS TO BE AVAILABLE AFTER THE PURCHASE DATE
As soon as possible after the Purchase Date the Seller must notify the
Buyer of:
(a) any assignments, novations or consents to the assignment or
novation of the Client Contracts, Contractor Contracts and the
Assets Leases obtained by the Seller, when they become available
to the Seller;
(b) access to invoice originals and detailed debtors' statements in
respect of the Receivables reasonably necessary for the Buyer to
collect them and account under clause 6; and
(c) all other documents in respect of the Business which the Buyer
requests and will reasonably need in order to carry on the
Business or to comply with its obligations under this agreement.
14.5 PREPARATION OF FINANCIAL STATEMENTS
In addition to providing the Accounts delivered on the Settlement
Date, Seller shall make available to the Buyer or its accountants the
information necessary to facilitate the audit of such Accounts and
shall provide reasonable assistance for this purpose.
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15 AFTER SALES SERVICE
15.1 SUPPLY OF AFTER-SALES SERVICE
(a) After the Purchase Date, the Buyer may, but is not obliged to:
(1) remedy any defect in the services supplied by the Seller in
the Business before the Purchase Date;
(2) supply after-sales service which the Seller undertook to
perform in respect of services supplied by the Seller in the
Business before the Purchase Date; and
(3) perform the obligations which the Seller undertook to
perform under any guarantee or warranty given in respect of
services supplied by the Seller in the Business before the
Purchase Date.
(b) If the Buyer chooses to remedy any defect or supply any service
or perform any obligation referred to in clause 15.1((a))
provided:
(1) the Buyer has first consulted with the Seller regarding the
matter including the Buyer's proposed action in the matter;
(2) the Buyer only provides such remedy, supply or performance
which the Seller undertook to perform to the customer; and
(3) the proposed remedy, supply or performance is to commence
within 12 months after the Purchase Date,
the Seller must (unless the Buyer has been paid by the customer for
such remedy, supply or performance) pay the Buyer for the cost of
remedying the defect or supplying the service or performing the
obligation within 10 Business Days after a demand by the Buyer for
payment.
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Business Purchase Agreement
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16 COMPETITION
16.1 UNDERTAKINGS
The Seller must not do, and must ensure that none of its Related
Corporations does, any of the following without first obtaining the
written consent of the Buyer:
(a) directly or indirectly carry on (whether alone or in partnership
or joint venture with anyone else) or otherwise be concerned with
or interested in (whether as trustee, principal, agent,
shareholder, unit holder or in any other capacity) any business
similar to or competitive with the Business:
(1) in Australia for 3 years after the Purchase Date;
(2) in Australia for 2 years after the Purchase Date;
(3) in Australia for 1 year after the Purchase Date;
(b) solicit or persuade any person or corporation which is a customer
or client of the Buyer, or who was in the 12 month period before
the Purchase Date a customer or client of or in respect of the
Business, to cease doing business with the Buyer as purchaser of
the Business or reduce the amount of business which the customer
or client would normally do in respect of the Business:
(1) for 3 years after the Purchase Date;
(2) for 2 years after the Purchase Date;
(3) for 1 year after the Purchase Date;
(c) accept from a customer or client referred to in clause 16.1((b))
any business of the kind ordinarily forming part of the Business:
(1) for 3 years after the Purchase Date;
(2) for 2 years after the Purchase Date;
(3) for 1 year after the Purchase Date;
(d) at any time use or disclose to any third party any trade secrets,
product information or confidential information of the Business
which is not generally known or available in the market place or
which but for a breach of this clause 16.1((d)) would not be
generally known or available in the market place; or
(e) at any time induce or attempt to induce any person who is at the
Purchase Date or who later becomes an employee of the Buyer in
the Business to terminate his or her employment with the Buyer.
16.2 SEPARATE UNDERTAKINGS
If any part of an undertaking in clause 16.1 is unenforceable, it may
be severed without affecting the remaining enforceability of that or
the other undertakings.
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Business Purchase Agreement
16.3 VALUE OF THE BUSINESS
The Seller agrees that:
(a) any failure to comply with clause 16.1 would diminish the value
of the Business Assets; and
(b) the restrictive undertakings in clause 16.1 are reasonable and
necessary for the protection of the Business Assets and must be
given full effect.
16.4 LEGAL ADVICE
The Seller acknowledges that in relation to this agreement and in
particular this clause 16 they have received legal advice.
16.5 INJUNCTION
The Seller acknowledges that monetary damages alone would not be
adequate compensation to the Buyer for the Seller's breach of clause
16.1 and that the Buyer is entitled to seek an injunction from a court
of competent jurisdiction if:
(a) the Seller fails to comply or threatens to fail to comply with
clause 16.1; or
(b) the Buyer has reason to believe the Seller will not comply with
clause 16.1.
16.6 SURVIVAL OF OBLIGATIONS
The Seller's obligations under this clause 16 survive the Settlement
of this agreement.
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17 WARRANTIES AND GENERAL INDEMNITIES
17.1 GIVING OF WARRANTIES
(a) Subject only to clear and specific qualifications made in the
Disclosure Letter, the Seller gives the Warranties in favour of
the Buyer:
(1) as at the date of this agreement;
(2) as at the Purchase Date;
(3) for each day up to Settlement; and
(4) as at Settlement.
(b) In entering this agreement, the Buyer has relied on the
Warranties given by the Seller.
17.2 BUYER'S INVESTIGATION
Any investigation (whether before or after the date of this agreement)
made by or for the Buyer in respect of the Business or a Business
Asset or the Employees or Contractors does not affect either:
(a) the Warranties; or
(b) the rights, powers, authorities or discretions of the Buyer if a
Warranty is not true or correct or is misleading.
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Business Purchase Agreement
17.3 INDEPENDENT WARRANTIES
Each Warranty is to be construed independently and is not limited by
reference to any other Warranty.
17.4 INDEMNITY
The Seller indemnifies the Buyer in respect of any claim, action,
damage, loss, liability, cost, charge, expense, outgoing or payment
which the Buyer pays, suffers, incurs or is liable for, by reason of
any matter or thing in respect of any of the following:
(a) any matter or thing in respect of the Business being other than
as represented or warranted in this agreement; and
(b) any breach by the Seller of this agreement.
17.5 MINIMUM CLAIM UNDER WARRANTIES
The Buyer shall not be entitled to claim any compensation for any
breach of Warranty unless the amount claimed for a breach of a
Warranty exceeds $10,000.
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18 RESCISSION AND DAMAGES
18.1 RIGHT OF BUYER TO RESCIND
(a) If at any time up to Settlement or effective settlement under
clause 3.10:
(1) the Seller materially breaches this agreement; or
(2) any Warranty is or becomes false, misleading or incorrect
when made or regarded as made under this agreement and the
damage reasonably foreseeable from such fact may exceed
$10,000; or
(3) a material adverse change occurs affecting the Business, the
Business Assets or the financial or trading position or
prospects of the Business; or
(4) any investigation made by or for the Buyer in respect of the
Business discloses information which is likely to materially
affect the value of the Business to the Buyer,
then the Buyer may, by giving written notice to the Seller before or
at Settlement, elect to:
(5) complete this agreement but without prejudice to any rights
and remedies it may have as a result of any matter described
in 18.1((a))((1)) and ((2)); or
(6) delay for a period of one month Settlement to determine
whether any of the matters referred to in clauses
18.1((a))((1)), ((2)) or ((3)) are remedied or cured within
that period (in which case the Settlement Date shall be
deemed to mean the expiry of that one month period); or
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Business Purchase Agreement
(7) terminate this agreement and the Business, the Business
Assets, the Employees and Contractors and all other
incidents of the property, people and things acquired by the
Buyer pursuant to this agreement shall revert to the Seller
as an offset against the Buyer's payment and any other
obligations on Settlement. Any such reversion shall be a
complete discharge of all liabilities between the parties
arising from this agreement, as if the acquisition on the
Purchase Date had never taken place.
(b) In the event that Settlement has not taken place by 30 August
1998 the Seller or the Buyer may make the election described in
clause 18.1((a))((7)).
18.2 INTEREST ON MONEYS IN DEFAULT
If either party defaults in the payment of any moneys due under this
agreement then interest at the rate for the time being fixed under
Section 2 of the Penalty Interest Rates Xxx 0000 computed upon the
money overdue during the period of default shall be paid without
prejudice to any other rights of the non-defaulting party.
18.3 TIME OF THE ESSENCE
Time shall be of the essence under this agreement.
18.4 RIGHT OF SELLER TO RESCIND FOR DEFAULT IN SETTLEMENT
If the Buyer defaults in the payment of the Initial Purchase Price due
to causes beyond its reasonable control and the default is not
remedied within 3 Business Days, this agreement shall be at an end.
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19 PROPERTY LEASE
The Buyer will on or before Settlement lease the Property from the
Seller upon the terms and conditions of the Property Lease.
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20 DUTIES, COSTS AND EXPENSES
20.1 DUTIES
The Buyer must pay any Duty in respect of the execution, delivery and
performance of:
(a) this agreement; and
(b) any agreement or document entered into or signed under this
agreement,
except that the Seller must pay any Duty in respect of the transfer
described in clause 18.1((a))((7)).
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Business Purchase Agreement
20.2 COSTS AND EXPENSES
Subject to clause 20.1, each party must pay its own costs and expenses
in respect of the negotiation, preparation, execution, delivery,
stamping and registration of this agreement and any other agreement or
document described in clause 20.1((b)).
20.3 COSTS OF PERFORMANCE
Any action to be taken by the Buyer or the Seller in performing its
obligations under this agreement must be taken at its own cost and
expense unless otherwise provided in this agreement.
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21 DISPUTE RESOLUTION
(a) A party claiming that a dispute has arisen, must give written
notice to the other party specifying the nature of the dispute.
(b) On receipt of the notice specified in (a) the parties to the
dispute must within seven (7) days of receipt of said notice seek
to resolve the dispute.
(c) If the dispute is not resolved within 7 days or within such
further period as the parties agree then the dispute is to be
referred for mediation to the Australian Commercial Disputes
Centre (ACDC).
(d) The mediation shall be conducted in accordance with ACDC
Mediation Guidelines which set out the procedures to be adopted,
the process of selection of the mediator and the costs involved
and which terms are hereby deemed incorporated.
(e) Only, in the event that the dispute has not settled within 28
days (or such other period as agreed to in writing between the
parties hereto) after commencement of bona fide mediation
proceedings (which shall be deemed to have commenced only upon
the appointment of a mediator), the dispute may be submitted to
litigation in a court of competent jurisdiction.
(f) This clause shall not merge upon Settlement.
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22 GENERAL
22.1 NOTICES
(a) Any notice or other communication including, but not limited to,
any request, demand, consent or approval, to or by a party to
this agreement:
(1) must be in legible writing and in English addressed as shown
below:
(A) if to the Seller
Address: 0xx Xxxxx, 000 Xxxxxxxx Xxxx
Xxxxxxxxx XXX 0000
Attention: Xxxx van xx Xxxx/Xxxx Xxxxxx
Facsimile: 03 9621 1951
(B) if to the Buyer:
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Business Purchase Agreement
Address: 00 Xxxxxx Xxxxxx
Xxxxx Xxxxxx, XXX 0000
Attention: Managing Director
Facsimile: 02 9510 0061
with a copy to: Tier Technologies, Inc
Address: 0000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxxx
Xxxxxxxxxx, XXX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000 0000;
(2) where the sender is a company, must be signed by an Officer
or under the common seal of the sender;
(3) is regarded as being given by the sender and received by the
addressee:
(A) if by delivery in person, when delivered to the
addressee;
(B) if by post, 3 Business Days from and including the date
of postage; or
(C) if by facsimile transmission, whether or not legibly
received, when transmitted to the addressee,
but if the delivery or receipt is on a day which is not a
Business Day or is after 4.00 pm (addressee's time) it is
regarded as received at 9.00 am on the following Business
Day; and
(b) A facsimile transmission is regarded as legible unless the
addressee telephones the sender within 2 hours after the
transmission is received or regarded as received under clause
22.1((a))((3)) and informs the sender that it is not legible.
(c) In this clause 22.1, a reference to an addressee includes a
reference to an addressee's Officers, agents or employees.
22.2 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of New South Wales.
(b) Each party irrevocably submits to the exclusive jurisdiction of
the courts of New South Wales.
22.3 WAIVERS
(a) Waiver of any right, power, authority, discretion or remedy
arising upon a breach of or default under this agreement must be
in writing and signed by the party granting the waiver.
(b) A failure or delay in exercise, or partial exercise, of a right,
power, authority, discretion or remedy arising from a breach of
or default under this agreement, does not result in a waiver of
that right, power, authority, discretion or remedy.
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Business Purchase Agreement
(c) A party is not entitled to rely on a delay in the exercise or
non-exercise of a right, power, authority, discretion or remedy
arising from a breach of this agreement or default under this
agreement as constituting a waiver of that right, power,
authority, discretion or remedy.
(d) A party may not rely on any conduct of another party as a defence
to exercise of a right, power, authority, discretion or remedy by
that other party.
(e) This clause may not itself be waived except in writing.
22.4 VARIATION
A variation of any term of this agreement must be in writing and
signed by the parties.
22.5 CUMULATIVE RIGHTS
The rights, powers, authorities, discretions and remedies of a party
under this agreement do not exclude any other right, power, authority,
discretion or remedy.
22.6 NON-MERGER AND SURVIVAL OF WARRANTIES
(a) Neither the Warranties nor any other provision of this agreement
merges on Settlement.
(b) The Warranties survive Settlement of this agreement.
22.7 CONTINUING INDEMNITIES AND SURVIVAL OF INDEMNITIES
(a) Each indemnity of the Seller contained in this agreement is a
continuing obligation of the Seller despite:
(1) any settlement of account; or
(2) the occurrence of any other thing,
and remains in full force and effect until all money owing,
contingently or otherwise, under any indemnity has been paid in full.
(b) Each indemnity of the Seller contained in this agreement:
(1) is an additional, separate and independent obligation of the
Seller and no one indemnity limits the generality of any
other indemnity; and
(2) survives the termination of this agreement.
22.8 FURTHER ASSURANCES
Each party must do all things necessary to give full effect to this
agreement and the transactions contemplated by this agreement.
22.9 SPECIFIC PERFORMANCE
The Seller acknowledges that monetary damages alone would not be
adequate compensation to the Buyer for the Seller's breach of its
obligations under this
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Business Purchase Agreement
agreement and that accordingly specific performance of those
obligations is an appropriate remedy.
22.10 ENTIRE AGREEMENT
(a) This agreement supersedes all previous agreements in respect of
its subject matter and embodies the entire agreement between the
parties.
(b) The Buyer acknowledges that no representations or warranties in
connection with the sale of the Business or the Business Assets
have been made by the Seller or anyone on behalf of the Seller
other than the Warranties.
22.11 THIRD PARTY RIGHTS
No person (including, but not limited to, an Employee or Contractor)
other than the Buyer, the Seller has or is intended to have any right,
power or remedy or derives or is intended to derive any benefit under
this agreement.
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Business Purchase Agreement
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EXECUTED AS AN AGREEMENT:
SIGNED FOR
INFACT PTY LIMITED
AS TRUSTEE OF THE INFACT UNIT TRUST
by its representative
in the presence of:
/s/ CHESSELL /s/ M. VAN XX XXXX
------------------------------------- -------------------------------------
Witness Representative
CHESSELL M. VAN XX XXXX
------------------------------------- -------------------------------------
Name (please print) Name (please print)
SIGNED FOR
TIER TECHNOLOGIES (AUSTRALIA) PTY LIMITED
by its representative
in the presence of:
/s/ XXXXXX X. XXXX /s/ XXXXX X. XXXXXXX
------------------------------------- -------------------------------------
Secretary/Director Director
XXXXXX XXXX XXXXX XXXXXXX
------------------------------------- -------------------------------------
Name (please print) Name (please print)
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