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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): October 14, 1998
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SENTO CORPORATION
formerly
SENTO TECHNICAL INNOVATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
UTAH 000-06425 87-0284979
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(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification No.)
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808 EAST UTAH VALLEY DRIVE
AMERICAN FORK, UT 84003
formerly of:
311 North State Street
Orem, Utah 84057
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(Address of principal executive offices, including zip code)
(801) 492-2000
formerly
(801) 226-6222
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(Registrant's telephone number, including area code)
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TABLE OF CONTENTS
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS............................. 1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS................................ 2
Financial statements of business acquired........................ 2
Pro forma financial information.................................. 2
Exhibits ....................................................... 2
SIGNATURE ................................................................. 3
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 14, 1998, the Registrant and Sento Australia Pty, Ltd., a
wholly-owned subsidiary of the Registrant based near Sydney, Australia ("Sento
Australia"), acquired substantially all of the assets, and assumed certain
liabilities, of Functional Software Pty., Ltd. ("Functional"), a software
developer based near Perth, Western Australia (the "Functional Acquisition").
The principal Functional assets acquired by the Registrant consist of COSMOS, a
system management framework technology for UNIX and Windows NT computer systems
("COSMOS").
In connection with the acquisition of Functional, the Registrant and
Sento Australia undertook the following actions (unless otherwise indicated all
actions were effective as of September 30, 1998 and all dollar amounts refer to
U.S. dollars):
(a) The Registrant and Functional entered into an Intellectual
Property Business Assets Agreement (the "IP Agreement"),
pursuant to which the Registrant paid $262,037 in cash and
issued 129,657 shares of its Common Stock to Functional to
acquire the intellectual property assets of Functional,
including COSMOS and related software, documentation and
intellectual property rights. The IP Agreement further
provides for the payment of up to $479,000 each year over
the next two years ending on the anniversaries of the
closing date of the Functional Acquisition (for a
potential total cash component of the acquisition cost of
$1,220,037) if during such years the gross annual revenues
of the business formerly operated by Functional exceed
certain targets indicated in the IP Agreement.
(b) Sento Australia and Functional entered into a Business
Assets Agreement (the "Business Agreement"), pursuant to
which Sento Australia paid $187,488 for the tangible
assets and the goodwill of Functional.
(c) Sento Australia and each of Functional, Alan T. Main,
Michael P. Selig and Howard Haythornthwaite entered into a
Deed of Restraint of Trade (the "Deeds of Restraint of
Trade") whereby each of Functional, Alan T. Main, Michael
P. Selig and Howard Haythornthwaite covenanted to refrain
from engaging in any business or activity that is
competitive with the Registrant's business for a period of
three years from the closing date of the Functional
Acquisition.
(d) Sento Australia and each of Alan T. Main and Michael P.
Selig entered into an Employment Agreement, pursuant to
which Messrs. Main and Selig will be employed by Sento
Australian for two years following the closing date of the
Functional Acquisition (subject to automatic renewal for
successive one-year periods) in the respective capacities
of Director of the Professional Services Division and
Director of Architecture. Each of Messrs. Main and Selig
will be paid a salary of approximately $64,000 per year
and will be eligible to receive an annual bonus of
$32,000.
(e) Sento Australia, the Registrant, Functional, and Messrs.
Main and Selig entered into a Deed of Guarantee, pursuant
to which Messrs. Main and Selig guaranteed the performance
of Functional's obligations under the IP Agreement, the
Business Agreement and each of the Deeds of Restraint of
Trade.
(f) The Registrant and Northpoint Software Ventures Pte
Limited entered into a Consultancy Agreement, pursuant to
which the Registrant paid to Northpoint a non-refundable
consultancy fee in the amount of $43,200 in cash and
issued to Northpoint 11,521 shares of its Common Stock
and Northpoint agreed to provide consultancy services as
requested by the Registrant for a maximum of ten hours per
month for the twelve months following the closing date of
the Functional Acquisition.
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Copies of each of the agreements described above and of a press
release announcing the consummation of the Functional Acquisition are attached
to this Report as Exhibits 1 through 7 and 8, respectively.
The amounts paid by the Registrant and Sento Australia in connection
with the Functional Acquisition were determined through negotiations between the
Registrant and Sento Australia and the other parties to the Functional
Acquisition, based upon the business, assets, liabilities, operations and
prospects of Functional. The cash consideration paid by the Registrant in
completing the Functional Acquisition was funded through the Registrant's
working capital without additional borrowing.
The principal Functional assets acquired by the Registrant and Sento
Australia will be used in the continuing business operations of the Registrant
and Sento Australia in Australia and Asia.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial statements of businesses acquired
The Registrant will file the financial statements of Functional
required to be filed herewith by amendment to this Current Report.
Pro form financial information
The Registrant will file the pro forma financial information required
to be filed herewith by amendment to this Current Report.
Exhibits.
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Reg. S-B Exhibit
Exhibit No. Exhibit No.
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2.1 -- Intellectual Property Business Assets Agreement, dated
October 14, 1998, between Functional Software Pty, Ltd.
and Sento Corporation 1
2.2 -- Business Assets Agreement, dated October 14, 1998,
between Functional Software Pty, Ltd. and Sento Australia
Pty, Ltd. 2
2.3 -- Deed of Guarantee, dated October 14, 1998, between
Functional Software Pty, Ltd., and Sento Australia Pty,
Ltd. and Sento Corporation and Michael P. Selig and Alan
T. Main 3
2.4 -- Form of Deed of Restraint of Trade, dated October 14,
1998 between Sento Australia Pty, Ltd., and each of
Functional Software Pty, Ltd., Alan T. Main, Michael P.
Selig and Howard Haythornthwaite 4
2.5 -- Employment Agreement, dated October 14, 1998, between
Sento Australia Pty, Ltd. and Alan T. Main 5
2.6 -- Employment Agreement, dated October 14, 1998, between
Sento Australia Pty, Ltd. and Michael P. Selig 6
2.7 -- Consultancy Agreement, dated October 14, 1998, between
Sento Corporation and Northpoint Software Ventures Pte
Limited 7
99.1 -- Press Release dated October 19, 1998 8
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SENTO CORPORATION
/s/ KIETH E. SORENSON
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Name: Kieth E. Sorenson
Title: Chief Executive Officer, President
and Chairman of the Board
Date: October 29, 1998
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EXHIBIT 2.1
BETWEEN
FUNCTIONAL SOFTWARE PTY LIMITED
of the one part
AND
SENTO CORPORATION
of the other part
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INTELLECTUAL PROPERTY BUSINESS ASSETS AGREEMENT
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Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
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Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
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2
THIS DEED dated September 30, 1998
BETWEEN: FUNCTIONAL SOFTWARE PTY LIMITED (A.C.N. 009 421 194) of 24 Augusta
Street, Willeton in the State of Western Australia (hereinafter called
"the Vendor") of the one part
AND: SENTO CORPORATION of 808 East Utah Valley Drive, American Fork, Utah,
United States ("the Purchaser") of the other part
WHEREAS:
A. The Vendor is the proprietor of a software house business known as
"Functional Software" whose principal place of business is located at
Suite 7, Delwyn Court, 643 Newcastle Street, Leederville in the State
of Western Australia.
B. The Purchaser has agreed to purchase and the Vendor has agreed to sell
the Intellectual Property Assets of the Business of the Vendor on the
terms and conditions contained in this agreement.
DEFINITIONS
1.1 In this Deed the following expressions have the following meanings:
(a) "Agreement" or "this Agreement" means this deed;
(b) "Agreements for Services" means the agreements of even date between
Sento Australia and Michael Peter Selig and Allan Thomas Main for
the provision of personal services to the Purchaser.
(c) "Authority" means any Government or semi-Government body;
(d) "Business" means all of the computer software business trading under
the name of "Functional Software" including without limitation the
Business Assets and the Intellectual Property Business Assets;
(e) (e) "Business Assets" means all of the computer software
business owned by the Vendor including without limitation:-
(i) the goodwill of the Business;
(ii) all plant, fittings, chattels and fixtures and other
property used by the Vendor in connection with the
Business including the property listed in Schedule One
and the Vendor's interest in the Amended Contracts;
(iii) all good and saleable stock in trade of the Business;
(iv) the Vendor's interest in the Distribution Agreements;
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(v) the Vendor's interest in the Licence Agreements;
(vi) the Vendor's consultancy business;
(vii) all client lists, suppliers lists, data bases, records
information and other intellectual property of the Vendor
used in connection with the Business;
but shall exclude:-
(A) the Intellectual Property Business Assets;
(B) the Vendor's property listed in Schedule Seven;
(C) The Vendor's cash on hand;
(D) The Freeware;
(E) The consultancy agreement between the Vendor and
Wycombe Pty Limited (A.C.N. 009 297 983);
(f) "Business Assets Agreement" means the agreement of even date between
Sento Australia and the Vendor for the sale to Sento Australia by
the Vendor of the Business Assets;
(g) "Business day" means any day which is not Saturday, Sunday or a
public holiday;
(h) "Claim" means, as against a person, any claim, notice, demand,
action, proceeding, litigation, investigation, requisition,
judgement, damage, loss, cost, expense or liability incurred or
suffered by or brought or made or recovered against the person
howsoever arising;
(i) "Completion Date" means the date of completion of this agreement
which it is anticipated will be the same day as the making of this
agreement;
(j) "Consultant" means NorthPoint Software Ventures PTE Limited;
(k) "Consultancy Agreement" means the Agreement between the Company and
NorthPoint Software Ventures PTE Limited;
(l) "Disclosure Statement" means the statement from the Vendor dated the
date of this Agreement delivered to the Purchaser and which contains
disclosures about the warranties in this Agreement and the Other
Transaction Documents and about other matters pertaining to the
Business Assets and the Intellectual Property Business Assets and
which statement is contained in Schedule Three;
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(m) "Distribution Agreements" means those agreements entered into by the
Vendor for the distribution of the Intellectual Property Business
Assets more fully particularised in the Business Assets Agreement;
(n) "Freeware" means the includes software and components of software
which is available at no cost or nominal cost specified in the
Disclosure Statement;
(o) "Gross Annual Revenue of the Business" means the total revenue of
Sento Australia for a twelve month period after completion of this
agreement and shall include the revenue of the Business Assets and
the Intellectual Property Business Assets but shall exclude any
amount received by Sento Australia on account of any Tax or on
account of the sale of assets;
(p) "Guarantee" means the Deed of even date between the Vendor, the
Purchaser, Sento Australia and Michael Peter Selig and Alan Thomas
Main whereby Selig and Main guarantee the obligations of the Vendor.
(q) "Improvements" means any modification, adaption or enhancement to
the Intellectual Property Business Assets including research and
development in progress or any part thereof prior to the date of
this Agreement including, but not limited to, derivatives or
adaptations;
(r) "Intellectual Property" includes:-
(i) Any patent, trademark, copyright, registered design or
other design right or right under the laws of any
jurisdiction throughout the world to apply for the grant
of registration of a patent, trademark, copyright or other
design right;
(ii) any rights throughout the world in respect of an
invention, discovery, trade secret, know how, concept,
idea, information or formula;
(s) "Intellectual Property Business Assets" means the software specified
in Schedule Two and includes the Improvements and the Materials but
excludes the Freeware;
(t) "Licence Agreements" means those agreements entered into by the
Vendor for the licence to end users and Support and Maintenance of
the Intellectual Property Business Assets more fully particularised
in the Business Assets Agreement;
(u) "Materials" means the documentation, user manuals and technical
specifications relating to the software specified in Schedule 2;
(v) "Non-Compete Deeds" means the four Deeds between the Vendor, the
Purchaser, Sento Australia, Michael Peter Selig, Alan Thomas Main
and
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Howard Haythornthwaite, whereby the Vendor, Main, Selig and
Howard Haythornthwaite agree not to compete against the Purchaser;
(w) "Other Transaction Documents" means the Agreements for Services, the
Business Assets Agreement, the Consultancy Agreement, the Guarantee
and the Non-Compete Deeds;
(x) "Sento Australia" means Sento Australia Pty Limited (A.C.N. 074 678
774) of Level 6, 51 Rawson Street, Epping in the State of New South
Wales;
(y) "Stock" means unregistered shares of the common stock of the
Purchaser;
(z) "Tax" means any federal, national, state, territorial, local or
foreign income, gross receipts, payroll, employment, excise,
severance, stamp, occupation, environmental or customs duties,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales,
use, transfer, registration, valued added, fringe benefits or other
tax or assessment of any nature whatsoever, including without
limitation any customs duty, municipal rates, stamp duties and all
other charges and levies which may be imposed by an Authority
(including any interest penalties and additions thereto) and may
arise in connection therewith;
(aa) "Total Consideration" means the aggregate sum actually paid by the
Purchaser and Sento Australia to the Vendor or any other party to
the Other Transaction Documents whether on the making of this
Agreement or after the making of this Agreement in consideration of
the purchase of the Intellectual Property Business Assets, the
Business Assets, the Consultancy Agreement and the Non Compete
Deeds, but excludes any amount payable under the Agreements for
Services.
INTERPRETATION
1.2 (a) Words expressed in the singular include the plural and vice versa.
(b) Words expressed in one gender include the other genders, as is
appropriate in the context.
(c) A reference to "person" includes a corporation.
(d) This Agreement is governed and construed in accordance with the law
of Western Australia.
(e) If any provision contained in this Agreement is or becomes legally
ineffective, under the general law or by force of legislation, the
ineffective provision shall be severed from this Agreement which
otherwise continues to be valid and operative.
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(f) Two or more parties to this Agreement who represent the same
interest, as Vendor or Purchaser, assume the liability to comply
with their obligations under this Agreement jointly, and in addition
each of them assumes those obligations severally.
(g) If under the provisions of this Agreement or under any notice or
demand anything is required to be done on a day which is not a
Business day, the day or the last day for compliance is deemed to be
the immediately following Business day.
(h) Headings are for guidance only and shall not form part of this
Agreement.
(i) Reference to "$" or "Dollars" is reference to Australian dollars.
2. SALE OF INTELLECTUAL PROPERTY BUSINESS ASSETS
2.1 The Purchaser agrees to buy and the Vendor agrees to sell the
Intellectual Property Business Assets in accordance with the terms and
conditions of this Agreement.
2.2 The Intellectual Property Business Assets are sold free from
encumbrances, charges and liens but are subject to the matters referred
to in the Disclosure Statement.
2.3 Title to the Intellectual Property Business Assets shall pass from the
Vendor to the Purchaser on the completion of this Agreement and the
Vendor shall on completion deliver to the Purchaser such documents
transferring the Vendor's interest in the Intellectual Property Business
Assets as the Purchaser shall reasonably require including, without
limitation, a Deed of Assignment in the form set out in Schedule Four.
3. PAYMENT OF CONSIDERATION
3.1 On completion of this Agreement the Purchaser shall pay to the Vendor in
consideration of the sale of the Intellectual Property Business Assets:-
(a) As to an amount of $409,430.00 in cash or by unendorsed bank
cheque; and
(b) as to an amount of $759,642.00, by the issue or transfer to the
Vendor of the Stock valued in accordance with clause 3.2.
3.2 For the purposes of determining the value of the Stock pursuant to
clause 3.1, the value shall be the closing selling price of the Stock in
the United States on the NASDAQ Stock Market on the day being the date
of this Agreement (or if no sales are made on that day - the next day on
which a sale is made) less 10%. The conversion rate to be applied from
US dollars to Australian dollars shall be
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the average of the purchase price and the selling price of US dollars
as quoted by National Australia Bank Limited on the date of completion
of this agreement.
4. FURTHER PAYMENTS AFTER COMPLETION
4.1 In addition to the consideration payable by the Purchaser to the Vendor
pursuant to clause 3 a further amount may be payable in accordance with
this clause 4.
4.2 During the twelve month period commencing on the first day of the month
immediately following completion of this agreement (called in this
clause 4 "Year 1"):-
(a) If the Gross Annual Revenue of the Business is less than
$3,000,000.00 then no amount shall be payable by the Purchaser to
the Vendor pursuant to this clause 4.2.
(b) If the Gross Annual Revenue of the Business exceeds $3,000,000.00
then for every dollar of Gross Annual Revenue of the Business in
excess of that amount the Vendor shall be paid $0.249596 provided
that no additional amounts shall be payable by the Purchaser to
the Vendor for the Gross Annual Revenue of the Business to the
extent that it exceeds $6,000,000.00 except as provided in clause
4.4 and the parties acknowledge that it is their intention that
the maximum payment by the Purchaser to the Vendor under this
clause 4.2(b) shall be $748,788.00.
4.3 During the twelve month period commencing immediately after the end of
Year 1 (called in this clause 4 "Year 2"):-
(a) If the Gross Annual Revenue of the Business is less than
$4,500,000.00 then no amount shall be payable by the Purchaser to
the Vendor pursuant to this clause 4.3.
(b) If the Gross Annual Revenue of the Business exceeds $4,500,000.00
then for every dollar of Gross Annual Revenue of the Business in
excess of that amount the Vendor shall be paid $0.187197 provided
that no additional amounts shall be payable by the Purchaser to
the Vendor for the Gross Annual Revenue of the Business to the
extent that it exceeds $8,500,000.00 and the parties acknowledge
that it is their intention that the maximum payment by the
Purchaser to the Vendor under this clause 4.3 shall be
$748,788.00.
4.4. For the purpose only of calculating the Gross Annual Revenue of the
Business for Year 2 and calculating the amount payable by the Purchaser
to the Vendor pursuant to clause 4.3, the parties agree that if the
Gross Annual Revenue of the Business in Year 1 exceeds $6,000,000.00
then the amount of such excess shall be added to the Gross Annual
Revenue of the Business for Year 2 provided that nothing in this clause
4.4 will impose on the Purchaser any liability to pay to
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the Vendor an amount in excess of the maximum payment referred to in
clause 4.3 in the sum of $748,788.00.
4.5 In the event that the Purchaser is required to pay any amount to the
Vendor pursuant to clause 4.2 then all of such payment shall be made by
Stock in lieu of cash and for the purposes of determining the value of
the Stock, the value will be the lower of:-
(a) The average of the selling price of the Stock in the United
States on the NASDAQ Stock Market for the preceding twelve months
immediately prior to the last day of Year 1 less 10%; or
(b) the lowest selling price of the Stock in the United States on the
NASDAQ Stock Market on the last day of Year 1 (or if no sales are
made on that day - the next day on which a sale is made) less
10%.
The conversion rate to be applied from U.S. Dollars to Australian
Dollars shall be the average of the purchase price and the selling price
of U.S. Dollars as quoted by National Australia Bank Limited for the day
being the last day of Year 1. The Vendor shall not, in the thirty days
before the end of Year 1, sell any of its stock or seek to influence or
cause any other person to sell that person's stock. The Purchaser agrees
it will not itself directly or indirectly manipulate the price of the
Stock with the intention of affecting the valuation of Stock pursuant to
the terms of this Agreement or seek to influence or cause any other
person to manipulate the price of the Stock with the intention of
affecting the valuation of Stock pursuant to the terms of this
Agreement.
4.6 In the event the Purchaser is required to pay any amount to the Vendor
pursuant to clause 4.3, then in respect of that payment, the Purchaser
shall pay cash.
4.7 Within thirty days of the end of Year 1 and within thirty days of the
end of Year 2, the Purchaser shall serve on the Vendor a written
statement setting out the Gross Annual Revenue of the Business for the
relevant year and the amount payable to the Vendor pursuant to clause
4.2 or 4.3. The Statement served upon the Vendor by the Purchaser shall
be prima facie evidence of the matters set out therein. The Purchaser
shall immediately provide to the Vendor all information reasonably
requested by the Vendor to verify the statement.
4.8 Subject to clause 4.13, the transfer of Stock to the Vendor pursuant to
clause 4.2 shall be effected within thirty days from the end of Year 1
and the payment of cash pursuant to clause 4.3 shall be made within
thirty days from the end of Year 2.
4.9 The Purchaser shall throughout Year 1 and Year 2 do such acts as shall
be reasonably practicable under the circumstances to ensure that
sufficient records and accounts of Sento Australia are maintained to
enable the Purchaser to determine the Gross Annual Revenue of the
Business for the particular year.
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4.10 Notwithstanding clause 4.9, nothing shall prevent the Purchaser or Sento
Australia from acquiring during Year 1 or Year 2 any new business and
merging such new business with the then existing business of Sento
Australia provided that in the case of such acquisition for the purpose
of determining the Gross Annual Revenue of the Business the Purchaser,
acting reasonably, shall determine the revenue of such new business and
exclude that revenue from the calculation of the Gross Annual Revenue of
the Business for the particular year or part thereof, as the case may
be.
4.11 Once in each six month period, the Vendor may appoint independent
auditors who shall, upon giving reasonable notice to the Purchaser,
inspect, take copies of and arrange for the audit of the records and
accounts maintained by Sento Australia pursuant to clause 4.9. Such
audit shall be undertaken for the sole purpose of verifying the
Purchaser's determination of the Gross Annual Revenue of the Business.
The audit shall be undertaken at the Vendor's cost on the premises of
Sento Australia and the Vendor shall ensure that the auditors cause as
little disturbance to the Purchaser's business as is reasonably
practicable under the circumstances.
4.12 Subject to clause 4.14, if during Year 1 or Year 2, Sento Australia
enters any transaction with the Purchaser or any Associate (as defined
in the Corporations Law) of the Purchaser where the income payable to
Sento Australia in respect of that transaction is less than Sento
Australia would normally receive in an arm's length transaction, then
for the purpose of determining the Gross Annual Revenue of the Business
the Purchaser shall add to the Gross Annual Revenue of the Business for
that particular twelve month period an amount being the difference
between the amount Sento Australia would normally receive as income in
an arm's length transaction and the amount Sento Australia actually
received in respect of the transaction.
4.13 In the event of a bona fide dispute between the parties as to the Gross
Annual Revenue of the Business for any particular twelve month period
(including any dispute arising out of any adjustment made pursuant to
clause 4.10 or 4.12), then such dispute will be referred for
determination to a third party acting as an expert as is agreed by the
parties and, failing agreement by the parties within a period of seven
days, by an Accountant of at least ten years' standing who has
experience in the computer industry appointed by the President of the
Australian Institute of Chartered Accountants who shall act as an expert
in determining the Gross Annual Revenue of the Business for the
particular twelve month period. The determination of the expert shall be
final and binding on the parties. The costs of the expert shall be paid
for by the parties in equal shares. In the event of such dispute the
Purchaser shall pay any amount due to the Vendor pursuant to clause 4.2
or 4.3 within twenty one days after the determination of the Gross
Annual Revenue of the Business by the expert.
4.14 For the purposes of determining the Gross Annual Revenue of the Business
as between the Purchaser and Sento Australia, there shall be deemed to
exist between the Purchaser as Licensor and Sento Australia as Licensee
an exclusive
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licence to distribute, market, maintain and support the Intellectual
Property Business Assets for a period of two years after the date of
this Agreement for a consideration of $1.00.
5. POSSESSION AND ADJUSTMENTS
5.1 The Vendor shall on completion of this Agreement give possession of the
Intellectual Property Business Assets to the Purchaser and deliver to
the Purchaser the Materials.
5.2 The Vendor shall not between the date of this Agreement and completion
thereof dispose or part with possession of any of the Intellectual
Property Business Assets without the prior written consent of the
Purchaser.
6. COMPLETION
6.1 Completion of this agreement shall take place immediately upon entering
this Agreement or on such other date as may be mutually agreed in
writing.
6.2 A party entitled to serve a notice to complete may serve a notice
requiring completion of this agreement on a day being not less than
fourteen (14) days after the date of service of the notice. The notice
is to be deemed both at law and in equity sufficient notice to make time
of the essence of this contract notwithstanding that the party serving
the notice has not made any previous request or demand for completion.
6.3 Completion of this agreement shall take place in Perth, Western
Australia.
7. RISK
Until the completion of this Agreement the Intellectual Property
Business Assets shall be at the risk of the Vendor.
8. NET-WEST
8.1 The parties acknowledge Net-West owns the intellectual property in
Enterprise Backup Client.
8.2 The Vendor warrants that it has entered an enforceable agreement with
Net-West for the transfer of the intellectual property rights in
Enterprise Backup Client dated 6 February, 1998, the terms of which are
attached to the Disclosure Statement.
8.3 The Vendor shall at its cost complete the Net-West agreement in
accordance with the terms of that agreement.
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8.4 On completion of the Net-West agreement the Vendor shall obtain an
assignment in favour of the Purchaser for the intellectual property
rights in Enterprise Backup Client.
8.5 The Vendor as at the date of this agreement has no knowledge of any
Claim by or against Net-West in respect of its ownership of Enterprise
Backup Client or the agreement of 6 February, 1998 between Net-West and
the Vendor.
9. INTERDEPENDENT AGREEMENTS
9.1 Completion of this Agreement is conditional upon the simultaneous
completion of the Other Transaction Documents.
10. CAPACITY OF PURCHASER
10.1 The Purchaser warrants:-
(a) It has the unrestricted right, power, authority and capacity to
enter into and complete this Agreement and to perform its
obligations under this Agreement;
(b) it is a proprietary limited company duly organised, validly
existing and in good standing under the Corporations Law and has
full power and authority to carry on its business now being
conducted, to own and operate its properties and assets and to
perform its obligations under this Agreement; and
(c) the entering into or completion of this Agreement will not, as at
the date of completion, conflict or violate with any provisions
of its Memorandum and Articles of Association.
11. CAPACITY OF VENDOR
11.1 Despite any other provision of this Agreement, every warranty, condition
and obligation of the Vendor is subject to the Disclosure Statement.
11.2 The Vendor warrants:-
(a) It has the unrestricted right, power, authority and capacity to
enter into and complete this Agreement and to perform its
obligations under this Agreement;
(b) it is a proprietary limited company duly organised, validly
existing and in good standing under the Corporations Law and has
full power and authority to carry on its business now being
conducted, to own and operate its properties and assets and to
perform its obligations under this Agreement; and
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12
(c) the entering into or completion of this Agreement will not, as at
the date of completion, conflict or violate with any provisions
of its Memorandum and Articles of Association.
(d) The Vendor has not made any assignment for the benefit of its
creditors, nor to the best of the knowledge of the Vendor have
any proceedings been commenced for the winding up of the Vendor
nor, to the best knowledge of the Vendor, do any facts or
circumstances exist which would give rise to a person commencing
proceedings against the Vendor to wind the Vendor up.
(e) Except as specifically disclosed in this Agreement, the
Disclosure Statement or in the Other Transaction Documents to the
best of the knowledge of the Vendor the Vendor is not a party to
or subject to any proceedings of a Court or Arbitrator involving,
affecting or relating to the ownership or actual use of the
Intellectual Property Business Assets and to the best of the
knowledge of the Vendor there are no proceedings pending or
threatened against, involving, effecting or relating to the
Vendor or the Intellectual Property Business Assets and, to the
best knowledge of the Vendor, there exists no facts to serve as a
basis for the institution of any proceedings or any claim which
would adversely affect the Intellectual Property Business Assets.
(f) There is no agreement, arrangement or activity whether by
commission or omission in which the Vendor has been knowingly
concerned which infringes or has been or which is required to be
authorised under Part IV of the Trade Practices Act, 1974 or any
anti-trust legislation in relation to the Business.
(g) Except as specifically disclosed in this Agreement, the
Disclosure Statement or in the Other Transaction Documents, the
Vendor is the beneficial owner of the Intellectual Property
Business Assets and none of the Intellectual Property Business
Assets are subject to any trust.
12. AGENT
12.1 The Vendor warrants that no person acting as agent or broker or
investment banker has acted directly or indirectly on behalf of the
Vendor in connection with the sale of the Business and to the best of
the knowledge of the Vendor no person will be entitled to any fee in the
nature of commission in respect of the sale of the Business.
13. DISCLOSURE TO PURCHASER
13.1 Prior to the entering of this Agreement the books of account and other
business records of the Vendor regarding the Intellectual Property
Business Assets have all been made available to the Purchaser and to the
best of the knowledge of the Vendor such books and records are
materially complete and correct records of the Intellectual Property
Business Assets.
<PAGE> 13
13
13.2 Prior to the date of this Agreement, to the best of the knowledge of the
Vendor the Vendor has made available to the Purchaser true, correct and
complete copies of all material contracts, agreements, leases and
commitments relating to or affecting the Intellectual Property Business
Assets.
13.3 To the best knowledge of the Vendor no representations or warranties of
the Vendor contained in this Agreement or in any of the books and
records and other documents of the Vendor produced to the Purchaser
contain any untrue statement of material fact, nor has the Vendor
omitted to disclose any material fact to the Vendor in relation to the
operation and nature of the Intellectual Property Business Assets. There
is no fact known to the Vendor which has specific application to the
Vendor or the Intellectual Property Business Assets (other than general
economic or industry conditions) and which would materially and
adversely affect the Intellectual Property Business Assets or the
ability of the Vendor to carry out its obligations under this Agreement
other than as set out in the Disclosure Statement.
14. MATERIAL CHANGE PRIOR TO COMPLETION
14.1 The Vendor warrants to the Purchaser:-
(a) that the representations and warranties made in this Agreement
are true and correct and complete as at the date of this
Agreement and will be true, correct and complete as at the date
of completion of this Agreement;
(b) there is no dispute or any other occurrence, event or condition
known to the Vendor (other than general economic or industry
conditions) as at the date of this Agreement which could
reasonably be anticipated to give rise to any legal or
administrative action or to a material adverse change affecting
the Intellectual Property Business Assets or the Vendor's ability
to carry out its obligations under this Agreement.
15. SPECIFIC WARRANTIES OF VENDOR
15.1 Except as otherwise expressly disclosed in this Agreement or in the
Disclosure Statement or in the Other Transaction Documents the Vendor
warrants to the Purchaser that the following representations and
warranties are true, correct and complete as at the date of this
Agreement and will be true, correct and complete as at the date of
completion of this Agreement:-
(a) There is no asset, right, interest, property or agreement of any
nature whatsoever in connection with the Business which is not
owned by the Vendor;
(b) none of the Intellectual Property Business Assets are subject
to any encumbrance;
<PAGE> 14
14
(c) as far as the Vendor is aware none of the Intellectual Property
Business Assets are subject to any Claim.
15.2 Except as otherwise expressly disclosed in this Agreement or in the
Disclosure Statement or in the Other Transaction Documents, the entering
of this Agreement by the Vendor will not conflict with or be a breach of
or a default under the terms of any contract, agreement, pledge or
instrument.
15.3 Except as otherwise expressly disclosed in this Agreement or in the
Disclosure Statement or in the Other Transaction Documents, there are no
other contracts or agreements conferring rights in or in respect of the
Intellectual Property Business Assets other than the matters disclosed
in the Disclosure Statement.
15.4 The Vendor warrants that none of the Intellectual Property Business
Assets infringe any copyright of any third party.
15.5 Despite any other provision of this Agreement, every warranty, condition
and obligation of the Vendor is subject to the Disclosure Statement.
16. VENDOR'S INDEMNITY AND LIMITATION ON LIABILITY
16.1 The Vendor agrees to indemnify the Purchaser from and against any Claim
against the Purchaser, before or after completion of this Agreement, to
the extent that the Claim arises directly from the breach of any
warranty, representation or obligation on the part of the Vendor under
this Agreement.
16.2 Despite any other provision of either this Agreement or any Other
Transaction Document, the Vendor will only be liable to the Purchaser
for a breach of any warranty, representation or obligation on the part
of the Vendor under this Agreement or any Other Transaction Document or
liable in tort (including but not limited to negligence), under statute
or on any other basis in connection with this Agreement or any Other
Transaction Document if the Vendor receives written notice of the
Purchaser's claim against the Vendor within three years of the date of
completion of this Agreement.
16.3 Despite any other provision of this Agreement or any Other Transaction
Document, the Vendor's liability for a breach of any warranty,
representation or obligation on the part of the Vendor under this
Agreement or any Other Transaction Document and liability in tort
(including but not limited to negligence), under statute and on any
other basis in connection with this Agreement or any Other Transaction
Document, other than fraud, shall be limited in the aggregate for all
Claims to a maximum aggregate amount equivalent to the Total
Consideration.
16.4 For the purpose of determining the Total Consideration any Stock
transferred to the Vendor or any other party to the Other Transaction
Documents shall have ascribed to it the same value as was ascribed to in
accordance with this
<PAGE> 15
15
Agreement or the Consultancy Agreement at the time the Vendor or any
other party to the Other Transaction Documents became entitled to
receive the Stock.
17. ONSALE OF SOFTWARE
17.1 The Vendor acknowledges that at any time after completion of this
Agreement, the Purchaser may sell the Intellectual Property Business
Assets.
17.2 If any of the following events should occur in the first twenty five
months after the date of this Agreement:-
(a) The Purchaser enters into and completes a sale of the
Intellectual Property Business Assets;
(b) There is a change in effective control of Sento Australia for
purposes other than internal reconstruction; or
(c) The Purchaser adopts a deliberate policy not to actively market
and promote the Intellectual Property Business Assets
then
(d) The Purchaser shall pay to the Vendor $1,497,576.00 and shall pay
to the Consultant $121,423.00, subject to paragraph (g).
(e) Such amount shall be paid within thirty days from the happening
of the first event referred to in clause 17.2(a), (b) or (c) to
occur.
(f) Subject to paragraph (g), payment shall be made:
(i) As to an amount of $809,500.00 by cash or by unendorsed
bank cheque;
(ii) as to an amount of $8,094.99, by the issue or transfer to
the Vendor of Stock, the value of the Stock to be
determined in accordance with the procedure for valuing
Stock set out in clause 4.5 provided that the date of the
happening of the event referred to in clause 17.2(a)-(c)
shall be substituted for the last day of Year 1 referred
to in clause 4.5.
(g) The Purchaser's liability pursuant to paragraphs (d) and (f)
shall be reduced by the amount of any payments made pursuant to
clauses 4.2 and 4.3 of this Agreement and clause 3.2 and clause
3.3 of the Consultancy Agreement and it is agreed that:-
(i) Any payment by the Purchaser pursuant to clause 4.2 of
this Agreement and clause 3.2 of the Consultancy Agreement
shall be applied to reduce the amount payable under clause
17.2(f)(ii) and
<PAGE> 16
16
any Stock transferred pursuant to clause 4.2 and
clause 3.2 shall have attributed to it the same
value as was attributed to it at the time the Vendor or
the Consultant became entitled to receive the Stock.
(ii) Any payment by the Purchaser pursuant to clause 4.3 of
this Agreement and clause 3.3 of the Consultancy Agreement
shall be applied to reduce the amount payable under clause
17.2(f)(i).
17.3 In the event the Purchaser completes a sale of the Intellectual Property
Business Assets during the period being twelve months after the date of
this Agreement, then in addition to the other amounts payable to the
Vendor hereunder, the Purchaser shall pay to the Vendor an amount equal
to 5% of the difference value (as defined).
17.4 In the event the Purchaser completes a sale of the Intellectual Property
Business Assets during the period commencing on the day after the day
being twelve months after the date of this Agreement and ending twenty
four months after the date of this Agreement, then in addition to the
other amounts payable by the Purchaser hereunder, the Purchaser shall
pay to the Vendor an amount equal to 4% of the difference value (as
defined).
17.5 In the event the Purchaser completes a sale of the Intellectual Property
Business Assets during the period commencing on the day after the day
being twenty four months after the date of this Agreement and ending
thirty six months after the date of this Agreement, then in addition to
the other amounts payable to the Vendor hereunder, the Purchaser shall
pay to the Vendor an amount equal to 3% of the difference value (as
defined).
17.6 In clauses 17.3, 17.4 and 17.5 "difference value" means the sum which
equals the consideration actually received by the Purchaser in respect
of such sale less the Total Consideration.
17.7 Any amount payable by the Purchaser to the Vendor pursuant to clause
17.3, 17.4 or 17.5 shall be paid on completion of the agreement for sale
or on receipt by the Purchaser of the consideration for such sale,
whichever is the later.
17.8 In the event the Purchaser completes a sale of the Intellectual Property
Business Assets as contemplated by clauses 17.3, 17.4 or 17.5 then the
Vendor shall enter into a Deed with the purchaser of the Intellectual
Property Business Assets (and shall cause the guarantors under the
Guarantee to enter such Deed) on such terms and conditions and giving
such representations and warranties as the Purchaser shall, acting
reasonably, require and the parties agree without limiting the
generality of the foregoing it shall be reasonable to ask the Vendor to
give the same representations and warranties as contained in this
Agreement.
17.9 For the purpose of determining the Total Consideration any Stock
transferred to the Vendor or any other party to the Other Transaction
Documents shall have
<PAGE> 17
17
ascribed to it the same value as was ascribed to in accordance with
this Agreement or the Consultancy Agreement at the time the Vendor or
any other party to the Other Transaction Documents became entitled to
receive the Stock.
18. SERVICE OF NOTICES
18.1 Any notice, document or demand (called "notice") under this Agreement
may be served in accordance with this clause.
18.2 The notice shall be in writing, signed by the party giving it or by that
party's solicitor.
18.3 The notice shall be served on the other party or on that party's
solicitor.
18.4 Particulars for the service of notices are:
Vendor-- Suite 7, Delwyn Court
643 Newcastle Street
LEEDERVILLE WA 6007
Vendor's solicitor-- Gilbert & Tobin
Address: 50 Carrington Street
SYDNEY NSW 2000
Telephone: (02) 9367 3000
Facsimile: (02) 9367 3111
DX: 10348 SYDNEY STOCK EXCHANGE
Purchaser-- Sento Corporation
Address: Level 6
51 Rawson Street
EPPING NSW 2121
Purchaser's Solicitor Michael Osborne and Associates
Address: Level 21, 1 O'Connell Street
SYDNEY NSW 2000
Telephone: (02) 9241 1211
Facsimile: (02) 9221 8364
DX: 1113 SYDNEY
<PAGE> 18
18
18.5 Either party may advise the other party of an additional or an altered
address for the service of notices, which is within the State of New
South Wales or Western Australia and is not a post office box or poste
restante.
18.6 Notice may be served:
(a) by delivering it to the party or to the party's solicitor at the
address shown in clause 18.4 or notified under clause 18.5 (called
"the party's address") and leaving it with the party, the solicitor
or some other person accepting the notice on behalf of either of
them;
(b) by sending it by pre-paid post, correctly addressed, to the party's
address;
(c) by transmitting it on a Business day by facsimile to the party's
solicitor's facsimile receiving facility indicated in clause 18.4;
18.7 A notice is considered to have been served:
(a) at the time of delivery;
(b) on the third Business day after the day on which it is posted, the
first Business day being the day of posting;
(c) on the Business day on which the notice is received by the
recipient's facsimile receiving facility.
19. COSTS AND STAMP DUTY
Each party shall pay their own costs in respect of this Agreement and
the Purchaser shall pay stamp duty on the Agreement.
20. ESCROW
20.1 Within thirty (30) days after the Completion Date:-
(a) The parties and an independent escrow agent approved by the
Vendor ("Escrow Agent") must enter into an escrow agreement on
terms satisfactory to the Vendor and the Purchaser ("Escrow
Agreement" for the purpose of enabling the materials in paragraph
(b) to be held in escrow by the Escrow Agent; and
(b) the Purchaser must place into escrow with the Escrow Agent one
soft copy of:-
(i) the object and source code of the Intellectual Property
Business Assets; and
<PAGE> 19
19
(ii) without limiting subparagraph (i), the full source code
control system referred to in Schedule 2.
20.2 The Escrow Agreement must provide that the materials deposited with the
Escrow Agent shall be immediately released to the Vendor upon:-
(a) The failure of the Purchaser to perform any material obligation
under this Agreement or any Other Transaction Document;
(b) the Purchaser being the subject of a resolution for its winding
up or being insolvent, being deemed to be insolvent or stating
that it is insolvent.
20.3 Upon release of any material in the circumstances in clause 20.2, the
Vendor shall receive an irrevocable, royalty-free, perpetual and
exclusive licence to use that material.
<PAGE> 20
20
SCHEDULE ONE
EXCLUDED ASSETS
Vendor to describe its interests in the following Businesses:-
(a) The Vendor's preference shares and any other security or investment in
RAMA Technologies Pty Limited (A.C.N. 078 448 165) [but not the Vendor's
interest in the Distribution Agreement with RAMA dated 30 June, 1998];
(b) The Vendor's shareholding in Functional Software Asia Pacific PTE
Limited.
<PAGE> 21
21
SCHEDULE TWO
INTELLECTUAL PROPERTY BUSINESS ASSETS
Core Technology:-
o COSMOS Framework 3.2.1 for Unix
o COSMOS Framework 3.2.2 for NT4 (requires Interix 2.2 or higher)
o PC GUI Server 3.2.2
Application Software:-
o COS/Manager 2.7 (obsolete)
o COSadmin 4.1
o COSbackup 3.2
o COSbackup 3.2.1
o COSduty 3.0
o COSreport 2.0
o COSsecure 2.1
o COSsentinel 1.1
o COSstacker 1.1
o COSstacker 2.1 (pre-release)
o COStask 3.1 (pre-release)
o EBC 1.93 (owned by Net-West, until paid out)
o EBC 2.1 (pre-release, portions based on Net-West Software)
o ORABACK 1.1
Internal FS-developed applications:-
o COSdistrib 1.1 (for distributors to release COSMOS S/W to
customers)
o COSrelease 1.1 (releasing COSMOS S/W from FS to distributors)
o COSdealer 1.1 (tape/CD Rom manufacturing)
o COSliq 1.1 (create COSMOS S/W licences)
o Call logging software (used by our helpdesk)
o Contracts and client database
o DR (Development Request) System
o Change Log System (used by our developers to
track changes)
Documentation:-
o COS/Manager 2.7 (obsolete)
- User Guide
- Release notes
<PAGE> 22
22
o COSMOS Framework 3.2.1
- User Guide
- Release notes
o COSadmin 4.1
- User guide
- Release notes
o COSbackup 3.2
- User guide
- Release notes
o COSduty 3.0
- User guide
- Release notes
o COSreport 2.0
- User guide
o COSsecure 2.1
- User guide
- Release notes
o COStask 2.0 (beta)
- User guide
o COSsentinel 1.1
- User guide
o ORABACK 1.1
- User guide
- Release notes
o Miscellaneous
Where it exists, also included is:
- All obsolete versions of the above software
<PAGE> 23
23
- the full Source Code Control System (SCCS) files for the
software
- "Makefiles" to build and port the software
- Internal technical and porting notes
- Distributions of the above software for various platforms
- All R & D source code, and work in progress
<PAGE> 24
24
SCHEDULE THREE
DISCLOSURE STATEMENT
<PAGE> 25
25
DISCLOSURE STATEMENT
From: Functional Software Pty Limited (ACB 009 421 194)
24 Augusta Street
WILLETON, WESTERN AUSTRALIA
To: Sento Australia Pty Limited (ACN 074 678 774)
Level 6, 51 Rawson Street
EPPING, NEW SOUTH WALES
Sento Corporation
[ ] UTAH, UNITED STATES OF AMERICA
Date: [ ] September 1998
This Disclosure Statement is provided pursuant to the Intellectual Property
Business Assets Agreement of even date between Functional Software Pty Limited
(Vendor), Sento Australia Pty Limited (Sento) and Sento Corporation (Sento US)
(IP Assets Agreement) and pursuant to the Business Assets Agreement of even
date between the Vendor, Sento and Sento US (Business Assets Agreement).
Terms used in this Disclosure Statement which are defined in the IP Assets
Agreement or in the Business Assets Agreement have the meaning given in those
agreements. The Dictionary in Attachment A sets out additional definitions.
The Vendor discloses:
1. The entire content of the Assumed Contracts and the Distribution
Agreements are disclosed, including without limitation, Open Systems Management
Limited's Joint Ownership of the Software and Materials and of all Intellectual
Property in the Software and Materials (as the terms "Joint Ownership",
"Software", "Materials" and "Intellectual Property Rights" are defined in the
Deed of Joint Ownership between the Vendor and Open Systems Management Limited
dated 14 October 1997).
2. The proprietary rights of Net-West in the software described as
"Enterprise Backup Client software" in the Contract Between Net-West and
Functional Software for the Transfer of Ownership of Intellectual Property
Rights for Enterprise Backup Client dated 6 February 1998, attached hereto as
Attachment A.
<PAGE> 26
26
3. The Vendor is not the proprietor or beneficial owner of Intellectual
Property Rights in the Freeware listed in Attachment B which is comprised
within the Intellectual Property Business Assets.
4. Use of Freeware which may constitute part of the Intellectual Property
Business Assets may be subject to the terms and conditions of applicable
licenses.
5. Use of and rights in respect of the Intellectual Property Business Assets
may be subject to the matters pertaining to third party proprietary
software referred to in Attachment C.
6. Property in connection with the Business referred to in Attachment D is
not owned by the Vendor.
7. Licenses granted in the ordinary course of business of the Business are
contracts or agreements conferring rights in or in respect of the
Intellectual Property Business Assets.
Signed by:
- ------------------------------------------------
Functional Software Pty Limited (ACN 009 421 194)
<PAGE> 27
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SCHEDULE FOUR
DEED OF ASSIGNMENT
THIS DEED dated , 1998
BETWEEN: FUNCTIONAL SOFTWARE PTY LIMITED (A.C.N. 009 421 194) of 24 Augusta
Street, Willeton in the State of Western Australia (hereinafter called
"the Vendor") of the one part
AND: SENTO CORPORATION of 808 East Utah Valley Drive, American Fork, Utah,
United States ("the Purchaser") of the other part
WHEREAS:-
A. This Deed of Assignment is made pursuant to a Deed for the sale of
Intellectual Property Business Assets Agreement between the parties
dated ("the Intellectual Property Business Assets Agreement").
B. Pursuant to clause 2 of the Intellectual Property Business Agreement,
the Vendor has agreed to assign to the Purchaser, all its right, title
and interests in certain software and the Materials.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. The terms defined in the Intellectual Property Business Agreement shall
have the same meaning in this Deed.
2. Pursuant to the Deed and in consideration of the sum of $ , the Vendor
hereby assigns to the Purchaser all its right, title and interest in the
Intellectual Property Business Assets including, without limitation, all
source and object codes related thereto.
3. This Deed is governed by the Laws of Western Australia.
<PAGE> 28
28
EXECUTED AS A DEED
THE COMMON SEAL of
FUNCTIONAL SOFTWARE
PTY LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: ...................................
Director
..................................
Director/Secretary
EXECUTED BY SENTO CORPORATION
<PAGE> 29
29
EXECUTED AS A DEED
THE COMMON SEAL of
FUNCTIONAL SOFTWARE
PTY LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: ...................................
Director
..................................
Director/Secretary
EXECUTED BY SENTO CORPORATION
<PAGE> 1
EXHIBIT 2.2
BETWEEN
FUNCTIONAL SOFTWARE PTY LIMITED
of the one part
AND
SENTO AUSTRALIA PTY LIMITED
of the other part
- -------------------------------------------------------------------------------
BUSINESS ASSETS AGREEMENT
- -------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS DEED dated September 30, 1998
BETWEEN: FUNCTIONAL SOFTWARE PTY LIMITED (A.C.N. 009 421 194) of 24 Augusta
Street, Willeton in the State of Western Australia (hereinafter
called "the Vendor") of the one part
AND: SENTO AUSTRALIA PTY LIMITED (A.C.N. 074 678 774) (formerly known as
Australian Software Innovations Services Pty Limited) of Level 6, 51
Rawson Street, Epping in the State of New South Wales ("the
Purchaser") of the other part
WHEREAS:
A. The Vendor is the proprietor of a software house business known as
"Functional Software" whose principal place of business is located at
Suite 7, Delwyn Court, 643 Newcastle Street, Leederville in the State of
Western Australia.
B. The Purchaser has agreed to purchase and the Vendor has agreed to sell
certain assets of the business of the Vendor on the terms and conditions
contained in this agreement.
DEFINITIONS
1.1 In this Deed the following expressions have the following meanings:
(a) "Agreement" or "this Agreement" means this deed;
(b) "Agreements for Services" means the agreements of even date
between the Purchaser and Michael Peter Selig and Alan Thomas
Main for the provision of personal services to the Purchaser;
(c) "Assumed Contracts" means the contracts set out in Schedule Five;
(d) "Authority" means any Government or semi-Government body;
(e) "Business" means all of the computer software business trading
under the name of "Functional Software" including without
limitation the Business Assets and the Intellectual Property
Business Assets;
(f) "Business Assets" means all of the computer software business
owned by the Vendor including without limitation:-
(i) the goodwill of the Business;
(ii) all plant, fittings, chattels and fixtures and other
property used by the Vendor in connection with the
Business including the property listed in Schedule One
and the Vendor's interest in the Amended Contracts;
<PAGE> 3
3
(iii) all good and saleable stock in trade of the Business;
(iv) the Vendor's interest in the Distribution Agreements;
(v) the Vendor's interest in the Licence Agreements;
(vi) the Vendor's consultancy business;
(vii) all client lists, suppliers lists, data bases, records
information and other intellectual property of the Vendor
used in connection with the Business;
but shall exclude:-
(A) the Intellectual Property Business Assets;
(B) the Vendor's property listed in Schedule Seven;
(C) The Vendor's cash on hand;
(D) The Freeware;
(E) The consultancy agreement between the Vendor and
Wycombe Pty Limited (A.C.N. 009 297 983);
(g) "Business day" means any day which is not Saturday, Sunday or a
public holiday;
(h) "Claim" means, as against a person, any claim, notice, demand,
action, proceeding, litigation, investigation, requisition,
judgement, damage, loss, cost, expense or liability incurred or
suffered by or brought or made or recovered against the person
howsoever arising;
(i) "Communication Services" means any mode of communication used in
connection with the Business to communicate with clients and
includes without limitation the telephone, E-mail, facsimile and
web sites listed in Schedule Two.
(j) "Completion Date" means the date of completion of this agreement
which it is anticipated will be the same day as the making of
this agreement;
(k) "Consultant" means NorthPoint Software Ventures PTE Limited;
(l) "Consultancy Agreement" means the Agreement between the
Consultant and Sento US;
<PAGE> 4
4
(m) "Consultancy Fees" means fees payable by the customers of the
Vendor for software implementation, customisation, configuration
and project management;
(n) "Disclosure Statement" means the statement in Schedule Three of
the Intellectual Property Business Assets Agreement;
(o) "Distribution Agreements" means those agreements entered into by
the Vendor for the distribution of the Intellectual Property
Business Assets and for the distribution of other software
particularised in Schedule Three;
(p) "Freeware" means software and components of software which are
available at no cost or nominal cost specified in the Disclosure
Statement;
(q) "Guarantee" means the Deed of even date between the Vendor, the
Purchaser and Michael Peter Selig and Alan Thomas Main whereby
Selig and Main guarantee the obligations of the Vendor;
(r) "Intellectual Property Business Assets" has the same meaning as
that term in the Intellectual Property Assets Agreement;
(s) "Intellectual Property Business Assets Agreement" means the
agreement of even date between Sento US and the Vendor for the
sale to Sento US by the Vendor of the Intellectual Property
Business Assets;
(t) "Lease" means the lease of office premises at Suite 7, Delwyn
Court, 643 Newcastle Street, Leederville dated 19 June, 1998
between Alfredo Antonio Misiani and Hendrika Misiani as Lessor
and the Vendor as Lessee;
(u) "Licence Agreements" means those agreements entered into by the
Vendor for the licence to end users and support and maintenance
of the Intellectual Property Business Assets;
(v) "Maintenance and Support" means software maintenance and support
services;
(w) "Non-Compete Deeds" means the four Deeds between the Vendor, the
Purchaser, Sento US, Michael Peter Selig, Alan Thomas Main and
Howard Haythornthwaite, whereby the Vendor, Main, Selig and
Haythornthwaite agree not to compete against the Purchaser;
(x) "Other Transaction Documents" means the Agreements for Services,
the Intellectual Property Business Assets Agreement, the
Consultancy Agreement, the Guarantee, and the Non-Compete Deeds;
(y) "Purchase Order" means an order in writing placed with the
Business or a distributor for the procurement of a licence of an
Intellectual Property Asset and/or Maintenance and Support fees
or Consulting Services;
<PAGE> 5
5
(z) "Sento US" means Sento Corporation, a Utah Corporation;
(aa) "Stock" means unregistered shares of the common stock of SentoUS,
a Utah Corporation;
(bb) "Total Consideration" means the aggregate sum actually paid by
the Purchaser and Sento US to the Vendor or any other party to
the Other Transaction Documents whether on the making of this
Agreement or after the making of this Agreement in consideration
of the purchase of the Intellectual Property Business Assets, the
Business Assets, the Consultancy Agreement and the Non Compete
Deeds, but excludes any amount payable under the Agreements for
Services.
INTERPRETATION
1.2 (a) Words expressed in the singular include the plural and vice
versa.
(b) Words expressed in one gender include the other genders, as is
appropriate in the context.
(c) A reference to "person" includes a corporation.
(d) This Agreement is governed and construed in accordance with the
law of Western Australia.
(e) If any provision contained in this Agreement is or becomes
legally ineffective, under the general law or by force of
legislation, the ineffective provision shall be severed from this
Agreement which otherwise continues to be valid and operative.
(f) Two or more parties to this Agreement who represent the same
interest, as Vendor or Purchaser, assume the liability to comply
with their obligations under this Agreement jointly, and in
addition each of them assumes those obligations severally.
(g) If under the provisions of this Agreement or under any notice or
demand anything is required to be done on a day which is not a
Business day, the day or the last day for compliance is deemed to
be the immediately following Business day.
(h) Headings are for guidance only and shall not form part of this
Agreement.
(i) Reference to "$" or "Dollars" is reference to Australian dollars.
<PAGE> 6
6
2. SALE OF BUSINESS ASSETS
2.1 The Purchaser agrees to buy and the Vendor agrees to sell the Business
Assets in accordance with the terms and conditions of this Agreement.
2.2 The Business Assets are sold free from encumbrances, charges and liens
but are subject to the matters referred to in the Disclosure Statement.
2.3 Title to the Business Assets shall pass from the Vendor to the Purchaser
on the completion of this Agreement.
3. CONSIDERATION
3.1 On completion of this agreement, the Purchaser shall pay to the Vendor
in consideration of the sale of the Business Assets $292,950.00.
3.2 The parties agree the Consideration shall be apportioned on the Business
Assets as follows:-
(a) Goodwill - $172,950.00
(b) Plant, fixtures and fittings - $120,000.00
4. POSSESSION AND ADJUSTMENTS
4.1 The Vendor shall give possession of the Business Assets to the Purchaser
on completion of this Agreement.
4.2 The Vendor warrants that those items of plant, fittings and chattels
comprising the Business Assets are in a complete state of severance
except as otherwise indicated in the Schedule One.
4.3 The Vendor will remain in possession of the Business and will manage the
same as a going concern in a proper manner until completion of this
Agreement and shall sign and execute all documents and do all things
reasonably required for putting the Purchaser in possession and
enjoyment of the Business Assets and for performing this Agreement.
4.4 The Vendor agrees that pending completion the stock in trade of the
Business shall not be offered for sale or licence at prices less than
the prevailing prices or rates for such goods or otherwise than in the
normal course of business without the prior consent of the Purchaser.
The Vendor shall not between the date of this Agreement and completion
thereof dispose or part with possession of any of the Business Assets
without the prior written consent of the Purchaser.
4.5 The Vendor shall pay or bear all charges and amounts due for rent, gas,
electricity, telephone and other outgoings in respect of the Business up
to the date of completion on and from which date the Purchaser shall pay
or bear the
<PAGE> 7
7
same to the extent they relate to the Business Assets and
any necessary apportionment shall be made on completion.
4.6 The income of the Business shall be apportioned in accordance with
clauses 4.6 - 4.15
4.7 In respect of the licence fees payable in respect of the Licence
Agreements, OSM Agreements or the use of the Intellectual Property
Business Assets, if the Purchase Order is received before the date of
this Agreement, then any fees payable thereunder are the property of the
Vendor and if the Purchase Order is received after the date of this
Agreement, any fees payable thereunder are the property of the Purchaser
and otherwise there shall be no apportionment between the parties.
4.8 In respect of all Maintenance and Support fees received or payable
(including under the OSM Agreements) if such Maintenance and Support
Fees relate to a period commencing on or after 1 October, such
Maintenance and Support Fees shall be the property of the Purchaser.
4.9 In respect of Maintenance and Support Fees (but excluding Maintenance
and Support Fees payable under the OSM Agreements) which relate to a
period commencing before 1 October, 1998 and which have been both billed
and paid to the Vendor before 1 October, 1998, such maintenance and
support fees shall be the property of the Vendor and there will be no
apportionment between the parties.
4.10 In respect of Maintenance and Support Fees (but excluding Maintenance
and Support Fees payable under the OSM Agreements) which:-
(a) Relate to a period commencing before 1 October, 1998; and
(b) are unpaid
then a pro rata apportionment shall be made for the period for which the
Maintenance and Support Fees are payable over time as necessary and all
of the payment relating to the period up to and including 30 September,
1998 and half the amount relating to the period after 30 September, 1998
shall be paid to the Vendor and half the amount relating to the period
after 30 September, 1998 shall be paid to the Purchaser provided that no
amount shall be due to the Purchaser or the Vendor pursuant to this
clause 4.10 until the Maintenance and Support Fees have been paid.
4.11 In respect of Maintenance and Support Fees payable pursuant to the OSM
Agreements which:-
(a) are payable by OSM for the quarter ending 30 September, 1998; and
(b) Relate to a period commencing before 1 October, 1998;
<PAGE> 8
8
then a pro rata apportionment shall be made for the period for which the
Maintenance and Support Fees are payable over time as necessary and all
of the payment relating to the period up to and including 30 September,
1998 and half the amount relating to the period after 30 September, 1998
shall be paid to the Vendor and half the amount relating to the period
after 30 September, 1998 shall be paid to the Purchaser provided that no
amount shall be due to the Purchaser or the Vendor pursuant to this
clause 4.11 until the Maintenance and Support Fees have been paid by
OSM.
4.12 In respect of any Consultancy Fees payable to the Vendor, where the
Purchase Order is received before the date of this Agreement and work
has commenced before the date of this Agreement, but the work has not
been completed by the date of this Agreement, then the Consultancy Fees
are to be apportioned between the Vendor and Purchaser and the Vendor
shall receive that proportion of the particular Consultancy Fee being
the proportion that the value of work undertaken before the date of this
Agreement bears to the total value of the work for the particular
Consultancy Fee and the value of work shall be determined by the number
of hours recorded as expended on the particular matter at a chargeout
rate of the persons undertaking the work at the rate which normally
applies as at the date of completion of this Agreement. No amount shall
be due to the Vendor or the Purchaser pursuant to this clause 4.12 until
the Consultancy Fees have been paid.
4.13 The Purchaser shall promptly account to the Vendor for any income
received from the Business after the date of this Agreement which is the
property of the Vendor and the Vendor shall promptly account to the
Purchaser for any income received from the Business after the date of
this Agreement which is the property of the Purchaser. The Purchaser
shall:-
(a) Use its best endeavours to collect all fees due to the Business
(but shall not be required to commence recovery action);
(b) conduct the Business in a proper and businesslike manner,
including providing consultancy services and maintenance in
accordance with its contractual obligations.
4.14 The Purchaser acknowledges that the licence fees which are to be billed
and paid as particularised in Schedule Eight will, notwithstanding any
other term of this Agreement, remain the property of the Vendor. The
Purchaser agrees it will at the request of the Vendor issue accounts for
the Licence fees in respect of those matters set out in Schedule Eight
and will, on receipt of such funds, promptly account to the Vendor for
the monies so received.
4.15 In this clause 4 "OSM Agreements" means the Distribution Agreement
between the Vendor as Owner and Open Systems Management Inc. dated 14
October, 1997 and the Distribution Agreement between the Vendor as Owner
and Open Systems Management Limited dated 14 October, 1997.
<PAGE> 9
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5. COMPLETION
5.1 Completion of this agreement shall take place immediately upon entering
this Agreement or on such other date as may be mutually agreed.
5.2 A party entitled to serve a notice to complete may serve a notice
requiring completion of this agreement on a day being not less than
fourteen (14) days after the date of service of the notice. The notice
is to be deemed both at law and in equity sufficient notice to make time
of the essence of this contract notwithstanding that the party serving
the notice has not made any previous request or demand for completion.
5.3 Completion of this agreement shall take place in Perth, Western
Australia.
6. STATE OF REPAIR AND RISK
6.1 The Business Assets shall be delivered to the Purchaser on the
Completion Date in the same state of repair as at the date of this
Agreement, fair wear and tear excepted, and where applicable in proper
working order unless specifically disclosed in this Agreement.
6.2 Until the Completion Date, the chattels and other assets comprising the
Business Assets shall be at the risk of the Vendor.
6.3 Until the Completion Date, the Vendor shall maintain the goodwill of the
Business and carry it on in a proper and business-like manner.
7. COMMUNICATION SERVICES
7.1 On completion, the Vendor will do such acts and sign such documents as
shall be necessary to enable the Purchaser to apply for and obtain the
Communication Services from completion.
7.2 The Vendor shall ensure that as at the date of completion all costs and
expenses incurred in respect of the Communication Services have been
paid. Any costs and expenses relating to a period beyond the Completion
Date shall be paid by the Purchaser, and if already paid by the Vendor
the parties shall make any necessary adjustment.
8. OTHER SERVICES
8.1 All other existing services to the Business shall, subject to the
consent of the suppliers, be made available for the Purchaser on
completion. The Vendor will do such acts and sign such documents to
enable the Purchaser to apply for and obtain the benefit of all or any
of such services provided the Vendor shall be at liberty to have any
deposits paid for such services refunded to it. Nothing in this
<PAGE> 10
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clause shall obligate the Purchaser to take over any existing service
other than those services the subject of the Assumed Contracts.
9. TRANSFER OF BUSINESS NAMES AND TRADEMARK
9.1 The Vendor warrants that:-
(a) it has not registered any business names in connection with the
Business other than the name "Cosmos Open Systems Management";
(b) the Vendor is not aware of any claim against it by the registered
proprietor of any business name;
(c) it will on completion assign its interest in the business name
"Cosmos Open Systems Management" to the Purchaser and deliver to
the Purchaser a Notice of Assignment in the approved Form.
9.2 The Vendor warrants that:-
(a) It is the registered proprietor of or the applicant for the
trademarks as set out in Schedule Four;
(b) these are the only trademarks that have been registered or
applied for in connection with the Business;
(c) such trademarks that have been registered have been correctly
registered and such registration is current; and
(d) the Vendor is not aware of any Claim in respect of its
registration or use of the trademarks.
9.3 On or as soon as practicable after completion the Vendor will sign and
deliver to the Purchaser all necessary forms to effect an assignment of
its interest in the registered trademarks to the Vendor provided that
the Purchaser shall be liable for all costs and expenses necessary for
or incidental to giving effect to such assignment.
10. CHANGE OF NAME
10.1 The Vendor shall on or after completion upon the written request of the
Purchaser do such acts and sign such documents so as to cause the name
of the Vendor to be changed to a name that does not include the words
"Functional Software" or the acronym "FS" or any similar name.
10.2 The Vendor shall on or after completion sign such documents and do such
acts as the Purchaser shall require to consent to:-
<PAGE> 11
11
(a) the Purchaser or a company controlled by the Purchaser changing
its name to "Functional Software" or a name similar to Functional
Software on or after the completion date; and/or
(b) the Purchaser or its nominee registering as a business name the
name "Functional Software" or a name similar to Functional
Software on or after the completion date.
10.3 If within six months from the date of this Agreement Functional
Computing pty Limited has not been wound up the Vendor shall cause that
Company to change its name to a name that does not include the word
"Functional" or the acronym "FS" or any similar name.
10.4 If within six months from the date of this Agreement Functional Software
Asia Pacific PTE Limited and Functional Software (S) PTE Limited have
not been wound up then the Vendor shall cause such companies to change
their names to a name that does not include the words "Functional
Software" or the acronym "FS" or any similar name.
11. PURCHASER'S ASSUMPTION OF VENDOR'S LIABILITY
11.1 The Purchaser shall not be bound by any contract or agreement in respect
of the Business other than the Assumed Contracts, the Distribution
Agreements and the Licence Agreements, the Agreements for Services and
the Lease.
11.2 The Purchaser will not assume any debt, Claim, liability, tax, judgment
or obligation whatsoever of the Vendor except for those obligations
under the Assumed Contracts, the Distribution Agreements and the Licence
Agreements and the Lease.
11.3 The Vendor shall sign such documents and do such acts as shall be
necessary to ensure that the Purchaser takes over the burden and benefit
of the Assumed Contracts, the Distribution Agreements and the Licence
Agreements as and from the Completion Date.
11.4 The Purchaser shall on and from completion indemnify and keep
indemnified the Vendor in respect of all debts and liabilities arising
after completion under the Assumed Contracts, the Distribution
Agreements, the Lease and the Licence Agreements and will keep
indemnified the Vendor against all claims and proceedings in respect
thereof, unless such debt or liability arises from a breach by the
Vendor of this Agreement or a breach of any of the terms of the Other
Transaction Documents.
11.5 The Vendor warrants that as at the date of completion all costs and
expenses incurred and all obligations to be undertaken up to the
Completion Date in respect of the Assumed Contracts, the Distribution
Agreements and the Licence Agreements have been paid or undertaken.
<PAGE> 12
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11.6 Any cost or expense in respect of an Assumed Contract relating to a
period beyond the completion date shall be apportioned as necessary.
11.7 With the exception of the Assumed Contracts and the Distribution
Agreements, the Vendor shall discharge all debts and liabilities which
have been incurred by and in connection with the Business Assets
(including hiring or hire purchase agreements) and which shall not have
been discharged at the time of completion of this Agreement and will
keep indemnified the Purchaser against all claims and proceedings in
respect thereof.
11.8 The Vendor warrants that it has done such acts and obtained such
consents as are required under the Distribution Agreements or any other
agreement to assign to the Purchaser the Vendor's interest under the
Distribution Agreements.
11.9 Subject to the terms of this Agreement and the Other Transaction
Documents, the Purchaser will indemnify the Vendor and keep the Vendor
indemnified against all Claims and proceedings in connection with the
Business Assets or in respect of the Purchaser's obligations arising
after the date of this Agreement under the Licence Agreements, the
Distribution Agreements and the Assumed Contracts.
12. INTERDEPENDENT AGREEMENTS
12.1 Completion of this Agreement is conditional upon the simultaneous
completion of the Other Transaction Documents.
13. RESTRAINT OF TRADE
13.1 On completion, the Vendor shall cause to be delivered to the Purchaser
the duly executed Non Compete Deeds.
14. EMPLOYEES
14.1 The Vendor warrants that its employees in connection with the Business
are accurately set out in the Schedule Six and that their length of
service and current terms of employment are accurately disclosed in the
Schedule.
14.2 The Vendor shall terminate the employment of each of their employees
with effect from the Completion Date and on completion (in accordance
with the requirements of the relevant legislation, award or agreement)
pay to each of such employees the respective amounts due to them as at
that date for wages, and subject to clause 14.5, holiday pay and long
service leave.
14.3 The Purchaser shall offer to re-employ all the employees of the Vendor
as at the Completion Date.
14.4 The Purchaser shall notify the Vendor in writing prior to completion the
names of employees that have agreed to be re-employed by the Purchaser.
<PAGE> 13
13
14.5 In respect of any employee whom the Purchaser proposes to re-employ in
accordance with clause 14.4, the Vendor shall on completion pay or allow
to the Purchaser an amount equal to 64% of the monetary value of the
annual leave and long service leave accrued by that employee as at the
Completion Date. There shall be no such payment or allowance in respect
of any such employees who refuse to be employed by the Purchaser. The
parties agree there shall be no adjustment between them for the monetary
value of the annual leave and long service leave accrued by the
employees as at the Completion Date
14.6 The Purchaser shall indemnify the Vendor against any claim by an
employee against the Vendor in respect of the long service leave or
holiday pay or its monetary value.
15. BUSINESS PREMISES
15.1 The Vendor shall on or as soon as practicable after completion obtain
the consent of the lessor under the Lease to a transfer of the Lease
from the Vendor to the Purchaser. The Purchaser shall pay the Lessor's
costs of and incidental to such consent and transfer. The Vendor
warrants that on completion there will not be any breach of the Lease by
the Vendor, that it will have received no notice from the lessor under
the Lease which has not been complied with and that the Lease will be
valid and subsisting.
15.2 In respect of the business premises at Suite 1802b, Level 28, Tower A,
821 Pacific Highway, Chatswood the Vendor shall maintain its lease of
those premises until completion. The Purchaser shall not be obligated to
take an assignment of the premises or continue in occupation of the
premises after completion.
15.3 In respect of the business premises at Level 3, 313 Burwood Road,
Hawthorn the Vendor:-
(a) Warrants it occupies the premises as a monthly tenant and is not
in breach of the lease under which it occupies the premises;
(b) shall maintain its Lease of those premises until completion and
shall use its reasonable endeavours and do such acts and sign
such documents as shall be necessary to allow the Purchaser or
its nominee to commence in occupation of the premises as a month
to month tenant.
16. AGREEMENTS FOR SERVICES
16.1 The Vendor shall cause Michael Peter Selig and Alan Thomas Main to enter
and perform the Agreements for Services.
<PAGE> 14
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17. NOTICES
17.1 The Vendor warrants it is not aware of any notice affecting or relating
to the Business issued by any competent Authority on or before the date
of this Agreement.
17.2 Prior to completion, the Vendor will comply with any statutory
requirement existing at the date of this Agreement in relation to the
Business.
18. CAPACITY OF PURCHASER
18.1 The Purchaser warrants:-
(a) It has the unrestricted right, power, authority and capacity to
enter into and complete this Agreement and to perform its
obligations under this Agreement;
(b) it is a proprietary limited company duly organised, validly
existing and in good standing under the Corporations Law and has
full power and authority to carry on its business now being
conducted, to own and operate its properties and assets and to
perform its obligations under this Agreement; and
(c) the entering into or completion of this Agreement will not, as at
the date of completion, conflict or violate with any provisions
of its Memorandum and Articles of Association.
19. CAPACITY OF VENDOR
19.1 The Vendor warrants:-
(a) It has the unrestricted right, power, authority and capacity to
enter into and complete this Agreement and to perform its
obligations under this Agreement;
(b) it is a proprietary limited company duly organised, validly
existing and in good standing under the Corporations Law and has
full power and authority to carry on its business now being
conducted, to own and operate its properties and assets and to
perform its obligations under this Agreement; and
(c) the entering into or completion of this Agreement will not, as at
the date of completion, conflict or violate with any provisions
of its Memorandum and Articles of Association.
(d) Except as specifically disclosed in this Agreement or any Other
Transaction Document or in the Disclosure Statement, to the best
of the knowledge of the Vendor, the Vendor is not a party to or
subject to any
<PAGE> 15
15
proceedings of a Court or Arbitrator involving,
affecting or relating to the ownership or actual use of the
Business and there are no proceedings pending or threatened
against, involving, effecting or relating to the Vendor or the
Business and, to the best knowledge of the Vendor, there exists
no facts to serve as a basis for the institution of any
proceedings or any Claim which would adversely affect the
Business.
(e) The Vendor has lodged, or will prior to completion lodge, all tax
returns required by law to be lodged on or before completion
whether in Australia or any other jurisdiction and all such
returns have been fully and accurately completed and a full and
true disclosure of all material facts has been made to the
appropriate revenue authority. The Vendor warrants that there is
no unresolved dispute with any authority in relation to the
assessment or payment of taxation. The Vendor further warrants
that all taxes which have been assessed or imposed which are due
and payable prior to completion will have been paid prior to
completion.
(f) There is no agreement, arrangement or activity whether by
commission or omission in which the Vendor has been knowingly
concerned which infringes or has been or which is required to be
authorised under Part (IV) of the Trade Practices Act, 1974 or
any anti-trust legislation in relation to the Business.
(g) Except as specifically disclosed in this Agreement or any Other
Transaction Document or in the Disclosure Statement the Vendor is
the beneficial owner of the Business Assets and none of the
Business Assets are subject to any trust.
20. AGENT
20.1 The Vendor warrants that no person acting as agent or broker or
investment banker has acted directly or indirectly on behalf of the
Vendor in connection with the sale of the Business and to the best
knowledge of the Vendor no person will be entitled to any fee in the
nature of commission in respect of the sale of the Business.
21. DISCLOSURE TO PURCHASER
21.1 Prior to the entering of this Agreement the books of account and other
material business records of the Vendor regarding the Business Assets
have all been made available to the Purchaser and to the best knowledge
of the Vendor such books and records are materially complete and correct
records of the Business.
21.2 Prior to the date of this Agreement, to the best knowledge of the
Vendor, the Vendor has made available to the Purchaser true, correct and
complete copies of all material contracts, agreements, leases and
commitments relating to or affecting the Business.
<PAGE> 16
16
21.3 To the best knowledge of the Vendor, no representations or warranties of
the Vendor contained in this Agreement or in any of the books and
records and other documents of the Vendor produced to the Purchaser
contain any untrue statement of material fact, nor has the Vendor
omitted to disclose any material fact to the Vendor in relation to the
operation and nature of the Business. There is no fact known to the
Vendor which has specific application to the Vendor or the Business
(other than general economic or industry conditions) and which would
materially and adversely affect the Business or the ability of the
Vendor to carry out its obligations under this Agreement other than as
set out in the Disclosure Statement.
22. MATERIAL CHANGE PRIOR TO COMPLETION
22.1 The Vendor warrants to the Purchaser:-
(a) that the representations and warranties made in this Agreement
are true, correct and complete as at the date of this Agreement
and will be true, correct and complete as at the date of
completion of this Agreement;
(b) there is no dispute or any other occurrence, event or condition
known to the Vendor (other than general economic or industry
conditions) as at the date of this Agreement which could
reasonably be anticipated to give rise to any legal or
administrative action or to a material adverse change affecting
the Business Assets or the Business or the Vendor's ability to
carry out its obligations under this Agreement.
23. SPECIFIC WARRANTIES OF VENDOR
23.1 Except as otherwise expressly disclosed in this Agreement or in the
Disclosure Statement, the Vendor warrants to the Purchaser that the
following representations and warranties are true, correct and complete
as at the date of this Agreement and will be true, correct and complete
as at the Completion Date of this Agreement:-
(a) There is no asset, right, interest, property or agreement of any
nature whatsoever in connection with the Business which is not
owned by the Vendor;
(b) none of the Business Assets are subject to any encumbrance;
(c) as far as the Vendor is aware, none of the Business Assets are
subject to any Claim;
(d) all wages, tax and other obligations due and payable by the
Vendor to its Employees have been paid or met;
(e) as far as the Vendor is aware, no Employee or former employee has
any Claim against the Vendor;
<PAGE> 17
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23.2 Except as otherwise disclosed in this Agreement or in the Disclosure
Statement, the entering of this Agreement by the Vendor will not
conflict with or be a breach of or a default under the terms of any
contract, agreement, pledge or instrument including, without limitation,
the Assumed Contracts and the Distribution Agreements.
23.3 In respect of the Assumed Contracts a complete and accurate copy,
including all amendments, have been delivered to the Purchaser.
23.4 In respect of the Distribution Agreements, a complete and accurate copy
including all amendments, of the Distribution Agreements have been
delivered to the Purchaser.
23.5 Except as otherwise disclosed in this Agreement or in the Disclosure
Statement, there are no other contracts or agreements affecting the
Business Assets other the Assumed Contracts and the Distribution
Agreements.
23.6 The Vendor warrants that none of the Business Assets infringe any
copyright of any third party.
23.7 To the best of the Vendor's knowledge, the Vendor warrants that all the
Licence Agreements and all licence agreements granted pursuant to the
Distribution Agreements have been entered into in the ordinary course of
business and that none of the Licence Agreements and all licence
agreements granted pursuant to the Distribution Agreements other than
the Licence Agreements specified in Schedule Nine require the release or
holding in escrow of any of the source codes of the software comprising
the Intellectual Property Business Assets or contain any terms and
conditions which are materially different to the terms and conditions
ordinarily offered by the Vendor for the licence of its Software.
23.8 Despite any other provision of this Agreement, every warranty, condition
and obligation on the Vendor is subject to the Disclosure Statement.
24. VENDOR'S INDEMNITY AND LIMITATION ON LIABILITY
24.1 The Vendor agrees to indemnify the Purchaser from and against any Claim
against the Purchaser, before or after completion of this Agreement, to
the extent that the Claim arises directly from the breach of any
warranty, representation or obligation on the part of the Vendor under
this Agreement.
24.2 Despite any other provision of either this Agreement or any Other
Transaction Document, the Vendor will only be liable to the Purchaser
for a breach of any warranty, representation or obligation on the part
of the Vendor under this Agreement or any Other Transaction Document or
liable in tort (including but not limited to negligence), under statute
or on any other basis in connection with this Agreement or any Other
Transaction Document if the Vendor receives written
<PAGE> 18
18
notice of the Purchaser's claim against the Vendor within three years
of the date of completion of this Agreement.
24.3 Despite any other provision of this Agreement or any Other Transaction
Document, the Vendor's liability for a breach of any warranty,
representation or obligation on the part of the Vendor under this
Agreement or any Other Transaction Document and liability in tort
(including but not limited to negligence), under statute and on any
other basis in connection with this Agreement or any Other Transaction
Document, other than fraud, shall be limited in the aggregate for all
Claims to a maximum aggregate amount equivalent to the Total
Consideration.
24.4 For the purpose of determining the Total Consideration any Stock
transferred to the Vendor or any other party to the Other Transaction
Documents shall have ascribed to it the same value as was ascribed to in
accordance with this Agreement or the Consultancy Agreement at the time
the Vendor or any other party to the Other Transaction Documents became
entitled to receive the Stock.
25. SERVICE OF NOTICES
25.1 Any notice, document or demand (called "notice") under this Agreement
may be served in accordance with this clause.
25.2 The notice shall be in writing, signed by the party giving it or by that
party's solicitor.
25.3 The notice shall be served on the other party or on that party's
solicitor.
25.4 Particulars for the service of notices are:
Vendor-- Suite 7, Delwyn Court
643 Newcastle Street
LEEDERVILLE WA 6007
Vendor's solicitor-- Gilbert & Tobin
Address: 50 Carrington Street
SYDNEY NSW 2000
Telephone: (02) 9367 3000
Facsimile: (02) 9367 3111
DX: 10348 SYDNEY STOCK EXCHANGE
Purchaser-- Sento Australia Pty Limited
<PAGE> 19
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Address: Level 6
51 Rawson Street
EPPING NSW 2121
Purchaser's Solicitor Michael Osborne and Associates
Address: Level 21, 1 O'Connell Street
SYDNEY NSW 2000
Telephone: (02) 9241 1211
Facsimile: (02) 9221 8364
DX: 1113 SYDNEY
25.5 Either party may advise the other party of an additional or an altered
address for the service of notices, which is within the State of New
South Wales or Western Australia and is not a post office box or poste
restante.
25.6 A notice may be served:
(a) by delivering it to the party or to the party's solicitor at the
address shown in clause 25.4 or notified under clause 25.5
(called "the party's address") and leaving it with the party, the
solicitor or some other person accepting the notice on behalf of
either of them;
(b) by sending it by pre-paid post, correctly addressed, to the
party's address;
(c) by transmitting it on a Business day by facsimile to the party's
solicitor's facsimile receiving facility indicated in clause
25.4;
25.7 A notice is considered to have been served:
(a) at the time of delivery;
(b) on the third Business day after the day on which it is posted,
the first Business day being the day of posting;
(c) on the Business day on which the notice is received by the
recipient's facsimile receiving facility.
26. COSTS AND STAMP DUTY
Each party shall pay their own costs in respect of this Agreement and
the Purchaser shall pay stamp duty on the Agreement.
<PAGE> 20
20
EXECUTED AS A DEED
THE COMMON SEAL of
FUNCTIONAL SOFTWARE
PTY LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: ............................
Director
..................................
Director/Secretary
THE COMMON SEAL of
SENTO AUSTRALIA PTY
LIMITED was hereunto affixed
in accordance with its Articles
of Association in the presence of: ............................
Director
..................................
Director/Secretary
<PAGE> 1
EXHIBIT 2.3
BETWEEN
FUNCTIONAL SOFTWARE PTY LIMITED
of the first part
AND
SENTO AUSTRALIA PTY LIMITED AND SENTO CORPORATION
of the second part
AND
MICHAEL PETER SELIG AND ALAN THOMAS MAIN
of the third part
- -------------------------------------------------------------------------------
DEED OF GUARANTEE
- -------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS DEED dated September 30, 1998
BETWEEN: FUNCTIONAL SOFTWARE PTY LIMITED (A.C.N. 009 421 194) of Suite 7,
Delwyn Court, 643 Newcastle Street, Leederville in the State of
Western Australia (hereinafter called "the Company") of the first
part
AND: SENTO AUSTRALIA PTY LIMITED (A.C.N. 074 678 774) formerly known
as Australian Software Innovations (Services) Pty Limited of
Level 6, 51 Rawson Street, Epping in the State of New South Wales
and SENTO CORPORATION of 808 East Utah Valley Drive, American
Fork, Utah, United States ("the Purchaser") of the second part
AND: MICHAEL PETER SELIG of 7a Chaleyer Street, Willoughby in the
State of New South Wales and ALAN THOMAS MAIN of 4 Geordie Rise,
Sorrento in the State of Western Australia ("the Guarantors") of
the third part.
WHEREAS:
A. The Company is the proprietor of a software house business whose
principal place of business is located as Suite 7, Delwyn Court,
643 Newcastle Street, Leederville in the State of Western
Australia ("the Business").
B. The Company has agreed to sell the Business to the Purchaser on
certain terms and conditions and enter various other agreements
with the Purchaser.
C. The Guarantors have agreed to guarantee the obligations of the
Company on the terms contained in this Deed.
NOW THIS DEED WITNESSES:
In this Deed the following expressions have the following meanings:-
(a) "Consultant" means NorthPoint Software Ventures PTE Limited.
(b) "Consultancy Agreement" means the Agreement between the
Consultant and Sento Corporation in relation to the provision of
consultancy services.
(c) "Documents" means:-
(i) The Intellectual Property Business Assets Agreement
between the Company as vendor and Sento Corporation as
purchaser in respect of the Intellectual Property Business
Assets of the Business.
(ii) The Business Assets Agreement between the Company as
vendor and Sento Australia Pty Limited as purchaser in
respect of the Business Assets of the Business.
<PAGE> 3
3
(iii) The four Deeds of Restraint of Trade between the Company,
the Purchaser, the Guarantor and Howard Haythornthwaite.
(d) "Obligations" means all of the obligations, whether financial or
otherwise, and whether arising before or after the date of
completion of any of the agreements comprising the Documents, of
the Company under the Documents to the Purchaser.
(e) "Total Consideration" means the aggregate sum actually paid by
the Purchaser to the Vendor and the Consultant and any other
party to the Documents whether on the making of this Agreement or
after the making of this Agreement in consideration of the
purchase of the Intellectual Property Business Assets, the
Business Assets, the covenants of Restraint of Trade and the
Consultancy Agreement.
2. In consideration of the Purchaser agreeing to enter the Documents with
the Company at the request of the Guarantors the Guarantors enter into
this guarantee (called "Guarantee") in favour of the Purchaser on the
terms specified in this Deed.
3. The Guarantors agree to guarantee all of the Company's Obligations.
4. This Guarantee extends to claims by the Purchaser
(a) for damages for breaches of the Obligations.;
(b) for repudiation of the Documents or any of them;
(c) for the Purchaser's reasonable legal and other expenses of
seeking to enforce the Obligations against the Company and the
Guarantor,
(d) for loss or damage consequent on disclaimer of the Documents on
the Company's insolvency, as if the Documents had not been
disclaimed.
5. Where the Guarantors comprise more than one party:-
(a) the term "Guarantors" in this Deed refers to each of the
Guarantors and to all of them;
(b) their obligations as Guarantors are joint and several;
(c) the Purchaser may enforce this Guarantee against all or any of
them;
(d) any notice or demand may be served on all of them by serving any
one of them;
(e) this Guarantee remains binding on the other Guarantors, even if
<PAGE> 4
4
(i) any one of the Guarantors fails to execute the Documents or
to enter into this Guarantee;
(ii) this Guarantee is not binding on any one of the Guarantors.
6. The Purchaser is entitled to require the Guarantors to pay to the
Purchaser any outstanding amounts owing under the Documents or to
compensate the Purchaser for any loss or damage without the Purchaser
having instituted any proceedings against the Company in respect of such
claims or breaches.
7. This Guarantee is not discharged and the Purchaser's rights against the
Guarantors are not affected by any of the following:
(a) the granting of any indulgence or extension of time by the
Purchaser to the Company or to the Guarantors;
(b) the Purchaser's neglect or failure to enforce any covenants under
the Documents against the Company or waiver of any breaches or
defaults under the Documents;
(c) the entry into any arrangement, composition or compromise
relating to the Documents between the Purchaser and the Company
or any other person;
(d) the variation of any provision of the Documents between the
Purchaser and the Company without the Guarantors' consent but
only if they are minor and are not prejudicial to the Guarantors;
(e) the death or bankruptcy or winding up of the Company or any one
of the Guarantors;
(f) the Company's liability under the Documents, being or becoming
invalid, illegal, or unenforceable, including through any act,
omission or legislation;
(g) the disclaimer of the Documents following the Company's
insolvency.
8. (a) Until the Purchaser's claims against the Company and against the
Guarantors have been fully satisfied, the Guarantors will hold on
trust for the Purchaser any money received by the Guarantors
under any arrangement, composition, assignment, liquidation or
bankruptcy of the Company.
9. (a) The Guarantors agree to indemnify and keep indemnified the
Purchaser in respect of all losses, damages or costs incurred or
suffered by the Purchaser through the Company's breach or
repudiation of any of the Obligations.
(b) This indemnity:-
(i) Is in addition to and distinct from the Guarantors' liability
under the Guarantee;
<PAGE> 5
5
(ii) enures in favour of the Purchaser's successors and assigns;
(iii) imposes on each of the Guarantors, if more than one, joint
and several liability;
(iv) continues throughout the period of continuance of this
Guarantee;
(v) extends to losses or damages incurred or suffered by the
Purchaser through inability to enforce the Obligations or
the Guarantee by reason of either of them being or becoming
wholly or partly unenforceable;
(vi) extends to the making of payments or the performance or
obligations under the Documents which are subsequently or
prospectively rendered void, illegal or are avoided as a
consequence of the bankruptcy or winding-up of the Company
or the disclaimer of the Documents, as if none of those
events shall have occurred.
10. Notwithstanding any other term of this Deed, the parties agree that in
the absence of fraud on the part of the Company or the Guarantors then:
(a) The Guarantors will only be liable to the Purchaser under this
Deed if the Guarantors receive written notice of the Purchaser's
claim against the Guarantors within three years from the date of
this Deed; and
(b) the maximum aggregate liability of the Guarantors shall not
exceed the Total Consideration and for the purpose of determining
the amount of the Total Consideration any stock transferred to
the Vendor or the Agent shall have ascribed to it the same value
as ascribed to it under the agreement by which the Stock was
transferred at the time the Vendor or the Agent became entitled
to receive the stock.
<PAGE> 6
6
EXECUTED AS A DEED
THE COMMON SEAL of
FUNCTIONAL SOFTWARE
PTY LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: ............................
Director
..................................
Director/Secretary
THE COMMON SEAL of
SENTO AUSTRALIA PTY LIMITED
was hereunto affixed in
accordance with its Articles of Association
in the presence of: ............................
Director
..................................
Director/Secretary
SIGNED SEALED AND DELIVERED
by the said MICHAEL PETER SELIG
in the presence of: ............................
..................................
Witness
SIGNED SEALED AND DELIVERED
by the said ALAN THOMAS MAIN in the
presence of: ............................
..................................
Witness
EXECUTED BY SENTO CORPORATION
<PAGE> 1
EXHIBIT 2.4
BETWEEN
SENTO AUSTRALIA PTY LIMITED AND SENTO CORPORATION
of the one part
AND
- --------------------------------------------------------------------------------
DEED OF RESTRAINT OF TRADE
- --------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS DEED dated September 30, 1998
BETWEEN: SENTO AUSTRALIA PTY LIMITED (A.C.N. 074 678 774) formerly known
as AUSTRALIAN SOFTWARE INNOVATIONS (SERVICES) PTY LIMITED of
Level 6, 51 Rawson Street, Epping in the State of New South Wales
and SENTO CORPORATION of 808 East Utah Valley Drive, American
Fork, Utah, United States (hereinafter called "the Purchaser") of
the one part
AND:
WHEREAS:
A. The Vendor is the proprietor of a software house business known
as "Functional Software" whose principal place of business is at
Suite 7, Delwyn Court, 643 Newcastle Street, Leederville in the
State of Western Australia.
B. The Purchaser has entered certain agreements to purchase the
Vendor's business on the terms and conditions contained in those
agreements.
C. As part of the consideration for entering the agreements to
purchase the Vendor's business, the Purchaser requires the Vendor
to enter this Deed.
NOW THIS DEED WITNESSES:
1. RESTRAINT OF TRADE
1.1 In this Deed the following expressions have the following meanings:-
(a) "Agreements for Services" means the Agreements of even date
between the Purchaser and Michael Peter Selig and Alan Thomas
Main for the provision of personal services to the Purchaser.
(b) "Business" means:-
(i) The commercial exploitation including, without limitation,
the licensing, promotion, marketing, maintenance and
service of the Intellectual Property Business Assets; and
(ii) the distribution of software pursuant to the Distribution
Agreements.
(c) "Competing Products" means any product which competes with the
Business.
<PAGE> 3
3
(d) "Distribution Agreements" means the agreements set out in
Schedule 1.
(e) "Intellectual Property Business Assets" means the software
specified in Schedule 2.
(f) "Intellectual Property Business Assets Agreement" means the
Agreement of even date between the Vendor and Sento Corporation
for the sale of the Intellectual Property Business Assets.
(g) "Other Covenantors" means Michael Peter Selig, Alan Thomas Main
and Howard Haythornthwaite.
1.2 INTERPRETATION
(a) Words expressed in the singular include the plural and vice
versa.
(b) Words expressed in one gender include the other genders, as is
appropriate in the context.
(c) A reference to "person" includes a corporation.
(d) This Agreement is governed and construed in accordance with the
law of Western Australia.
(e) If any provision contained in this Agreement is or becomes
legally ineffective, under the general law or by force of
legislation, the ineffective provision shall be severed from this
Agreement which otherwise continues to be valid and operative.
(f) Headings are for guidance only and shall not form part of this
Agreement.
(g) Reference to "$" or "Dollars" is reference to Australian dollars.
2. NON COMPETE COVENANT
2.1 In consideration of the payment of $1.00 by Sento Corporation to the
Covenantor, the Covenantor covenants with the Purchaser that it will not
carry on or be engaged, concerned or interested directly or indirectly in
the capacity specified in clause 2.2 in any business which commercially
exploits Competing Products within the area specified in clause 2.3 for
the period specified in clause 2.4.
2.2 As:-
(a) Sole trader;
(b) Partners;
<PAGE> 4
4
(c) Director or Shareholder;
(d) Manager;
(e) Employee;
(f) Agent;
(g) Consultant; or
(h) In any other capacity.
2.3 Area:-
(a) Worldwide.
(b) Australia.
(c) Bangladesh.
(d) Cambodia.
(e) Hong Kong.
(f) India.
(g) Indonesia.
(h) Japan.
(i) Korea
(j) Laos.
(k) Macau.
(l) Malaysia.
(m) Mauritius.
(n) Myanmar.
(o) New Zealand.
(p) Pacific Islands.
(q) Pakistan.
<PAGE> 5
5
(r) People's Republic of China.
(s) Philippines.
(t) Singapore.
(u) Sri Lanka
(v) Taiwan.
(w) Thailand.
(x) Vietnam.
2.4 During the following period commencing from the date of this Deed:-
(a) Thirty six months;
(b) twenty four months;
(c) eighteen months;
(d) twelve months.
(e) six months.
3. SEPARATE AND SEVERAL RESTRAINTS
3.1 The Vendor severally and separately enters into a covenant with the
Purchaser under clause 2.1 which results from combining separately each of
the capacities referred to in clause 2.2 with each geographical area
referred to in clause 2.3 and with each period referred to in clause 2.4.
3.2 Each of the covenants referred to in clause 3.1 constitutes an independent
and separate restraint imposed on the Vendor under this Deed.
3.3 If any of the covenants in clause 3.1 is found to be unenforceable that
does not affect the validity and enforceability of the other covenants
imposed under clause 3.1 which remain binding on the Vendor.
4. VENDOR'S ACKNOWLEDGMENT
The Vendor acknowledges and agrees that each of the restraints is
reasonable as regards the nature of the conduct restrained and the
duration and scope of the restraint and that the restraints are reasonable
and necessary for the future protection of the Purchaser when acquiring
the Business and its goodwill.
<PAGE> 6
6
5. VENDOR'S FURTHER COVENANT
5.1 As a separate obligation the Vendor agrees for the period of twelve months
after the date of this Deed, not to engage in any conduct derogating from
the Purchaser's right to obtain the full benefit of the goodwill of the
Business.
6. LIMITATION ON RESTRAINT
6.1 The Purchaser agrees that despite any other term of this Deed the
restraints imposed by this Deed do not prohibit:-
(a) The Covenantor from holding or acquiring stock in Sento Corporation;
(b) the Vendor holding or acquiring the shares of any other Company
listed on any stock exchange which conducts a business similar to
the Business but only if:-
(i) The total shareholding of the Vendor when aggregated with the
Other Covenantors does not exceed 5% of the total number of
issued shares of that Company; and
(ii) the Vendor is not a director or employee or consultant to that
Company if it would contravene any of the restraints contained
in this Deed.
(c) The Vendor maintaining the shareholdings specified in Schedule 3 but
only whilst those Companies are not engaged, concerned or interested
directly or indirectly in any Business which commercially exploits
Competing Products.
7. DEED CONDITIONAL
The Purchaser's right to enforce this Deed shall be conditional upon the
Purchaser performing its obligations in respect of the Intellectual
Property Business Assets Agreement and the Agreements for Services.
8. SUCCESSION AND ASSIGNMENT
The benefit of each of the restraints contained in this Deed enures in
favour of the Purchaser and the Purchaser's successors and assigns being
the successive legal owners of the Intellectual Property Business Assets
and the benefit of those restraints may be assigned to those persons.
9. COSTS AND STAMP DUTY
Each party shall pay their own costs in respect of this Deed and the
Purchaser shall pay stamp duty on this Deed.
<PAGE> 7
7
SCHEDULE 1
DISTRIBUTION AGREEMENTS
1. Source Code Licence Agreement between Functional Software Pty Limited and
RAMA Technologies Pty Limited (A.C.N. 078 448 165) dated 30 June, 1998.
2. Functional Software Pty Limited as Owner and Open Systems Management
Limited as Distributor dated 14 October, 1997.
3. Functional Software Pty Limited as Owner and Open Systems Management Inc.
as Distributor dated 14 October, 1997.
4. Open Systems Management Limited as Owner and Functional Software Pty
Limited as Distributor dated 14 October, 1997.
5. Functional Software Asia Pacific PTE Ltd and Systems Management Services
SDN BHD dated March, 1998.
6. Functional Software Asia Pacific PTE Ltd and Uniguide Systems Corporation
as Distributor dated May, 1998.
7. Functional Software Pty Limited and Gearton Pty Limited as Dealer dated 1
July, 1998.
<PAGE> 8
8
SCHEDULE 2
INTELLECTUAL PROPERTY BUSINESS ASSETS
Core Technology:-
o COSMOS Framework 3.2.1 for Unix
o COSMOS Framework 3.2.2 for NT4 (requires Interix 2.2 or higher)
o PC GUI Server 3.2.2
Application Software:-
o COS/Manager 2.7 (obsolete)
o COSadmin 4.1
o COSbackup 3.2
o COSbackup 3.2.1
o COSduty 3.0
o COSreport 2.0
o COSsecure 2.1
o COSsentinel 1.1
o COSstacker 1.1
o COSstacker 2.1 (pre-release)
o COStask 3.1 (pre-release)
o EBC 1.93 (owned by Net-West, until paid out) EBC 2.1
o (pre-release, portions based on Net-West Software) ORABACK 1.1
Internal FS-developed applications:-
o COSdistrib 1.1 (for distributors to release COSMOS S/W to
o customers) COSrelease 1.1 (releasing COSMOS S/W from FS to
o distributors) COSdealer 1.1 (tape/CD Rom manufacturing) COSliq
o 1.1 (create COSMOS S/W licences) Call logging software (used by
o our helpdesk) Contracts and client database DR (Development
o Request) System Change Log System (used by our developers to
o track changes)
Documentation:-
o COS/Manager 2.7 (obsolete)
- User Guide
- Release notes
o COSMOS Framework 3.2.1
<PAGE> 9
9
- User Guide
- Release notes
o COSadmin 4.1
- User guide
- Release notes
o COSbackup 3.2
- User guide
- Release notes
o COSduty 3.0
- User guide
- Release notes
o COSreport 2.0
- User guide
o COSsecure 2.1
- User guide
- Release notes
o COStask 2.0 (beta)
- User guide
o COSsentinel 1.1
- User guide
o ORABACK 1.1
- User guide
- Release notes
o Miscellaneous
o Where it exists, also included is:
- All obsolete versions of the above software
- the full Source Code Control System (SCCS) files for the software
- "Makefiles" to build and port the software
<PAGE> 10
10
- Internal technical and porting notes
- Distributions of the above software for various platforms
All R & D source code, and work in progress
<PAGE> 11
11
SCHEDULE 3
Systems Management Services SDN BHD
Functional Software (S) PTE Limited
Functional Software Asia Pacific PTE Limited
<PAGE> 12
12
EXECUTED AS A DEED
THE COMMON SEAL of
SENTO AUSTRALIA PTY
LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: -----------------------------
Director
- ----------------------------------
Director/Secretary
was hereunto affixed
in accordance with its Articles
of Association in the presence of: -----------------------------
Director
- ----------------------------------
Director/Secretary
EXECUTED BY SENTO CORPORATION
<PAGE> 1
EXHIBIT 2.5
BETWEEN
SENTO AUSTRALIA PTY LIMITED
of the one part
AND
ALAN THOMAS MAIN
of the other part
- --------------------------------------------------------------------------------
EMPLOYMENT AGREEMENT
- --------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS AGREEMENT dated September 30, 1998
BETWEEN: SENTO AUSTRALIA PTY LIMITED (A.C.N. 074 678 774) of Level 6, 51
Rawson Street, Epping in the State of New South Wales
(hereinafter called the "Company") of the one part
AND: ALAN THOMAS MAIN of 4 Geordie Rise, Sorrento in the State of
Western Australia (hereinafter called the "Employee").
WHEREAS:
A. The Company conducts the business of developing, licensing and
distributing software products.
B. The Company is the wholly owned subsidiary of Sento Corporation.
C. The Company and Sento Corporation have recently acquired the
copyright in certain software products and rights to distribute
other software from Functional Software Pty Limited ("FS").
D. The Employee provided certain services to FS in connection with
FS's business.
E. As a result of the acquisition of the business of FS by the
Company and Sento Corporation, the Company has requested the
Employee and the Employee has agreed to provide services to the
Company.
F. The Employee is to provide the services as an employee on the
following terms and conditions.
NOW THIS AGREEMENT WITNESSES:
1. SERVICES TO BE PROVIDED BY THE EMPLOYEE
1.1 The Employee shall:-
(a) Act as Director of the Professional Services Division and shall
be responsible for the provision of consultancy services by the
Company to its customers;
(b) undertake such other duties as shall be given to the Employee by
the Company from time to time.
1.2 The Employee agrees he will well and faithfully serve the Company and
use his best endeavours to promote the Company's interests and welfare.
<PAGE> 3
3
1.3 The Employee shall devote his time and attention to the business of the
Company on a full time basis to the exclusion of any other work and will
at all times act in the Company's best interests.
1.4 The Employee acknowledges that the principal location for performing his
services will be Sydney, Australia.
1.5 The Employee shall:-
(a) Refrain from acting, or being seen to act, in conflict with the
Company's best interests.
(b) Use his best efforts to protect and promote the Company's
reputation.
(c) Ensure at all times that the Company's records are kept at the
Company's principal place of business or removed only to the
extent and for the time necessary for the Employee to comply with
this Agreement.
1.6 The Employee must not do anything that:-
(a) Results in the Employee competing with the Company.
(b) Otherwise adversely affects the Company.
(c) Hinders the Employee's performance of his duties owed to the
Company.
2. TERM OF THIS AGREEMENT
2.1 Subject to clauses 2.3 and 2.4 this Agreement shall commence on the date
of this agreement and terminate after the expiration of 2 years.
2.2 If prior to 3 months before the expiration of 2 years from the date of
this agreement no written notice has been given by the Company to the
Employee or by the Employee to the Company the term of this Agreement
shall be extended by another 12 months and thereafter for successive 12
month periods unless at least 3 months before each 12 month period
either party has given written notice to the other that it wishes the
engagement under this agreement to terminate at the end of that 12 month
period.
2.3 This Agreement shall be determined:-
(a) On the death of the Employee.
(b) Upon the Company giving three months notice in writing
determining this agreement in the event the Employee becomes
incapacitated by illness or injury of any kind which effectively
prevents him from performing his obligations under this Agreement
for three consecutive months.
<PAGE> 4
4
2.4 Despite any other term of this Agreement, the Company may at any time
after the commencement of this Agreement give to the Employee not less
than 6 months written notice that it wishes the engagement to terminate
and the Employee acknowledges that 6 months' shall be reasonable in the
circumstances.
3. SALARY AND OTHER REMUNERATION
3.1 In consideration of the services provided by the Employee to the
Company, the Company agrees to pay the Employee a total salary package
of $100,000.00 per annum and in addition the Company shall pay the
minimum superannuation contribution it is required to make on behalf of
the Employee by Law.
3.2 The fee shall be paid fortnightly, one week in advance and one week in
arrears.
3.3 The salary shall be reviewed on the expiration of 2 years from the date
of this Agreement.
3.4 On provision of all documentary evidence reasonably required by the
Company, the Company will reimburse the Employee for all reasonable
travel, accommodation and general expenses incurred by the Employee in
performance of his duties under this Agreement.
4. BONUS
4.1 Subject to the terms of this clause, the Employee will be eligible to be
paid a bonus which in any year shall not exceed $50,000.00.
4.2 Once every quarter, the performance of the Employee shall be reviewed to
determine whether the bonus is to be paid. The decision to pay the bonus
shall be determined by the following criteria:-
[LEE IS TO PROVIDE ME WITH DETAILS AS TO THE TARGETS FOR MAIN]
4.3 In the event a bonus is payable the Company may in its discretion pay up
to 40% of the bonus by transfer to the Employee of unregistered stock in
Sento Corporation, a Utah Corporation and for the purposes of
determining the value of the Stock payable to the Employee pursuant to
this clause, the value shall be the closing selling price of the Stock
in the United States on the NASDAQ exchange on the day being the date on
which the Company determines the bonus shall be payable (or if no sales
are made on that day - the next day on which a sale is made) less 10%.
The conversion rate to be applied from US dollars to Australian dollars
shall be the average of the purchase price and the selling price of US
dollars as quoted by National Australia Bank Limited on the date the
Company determines the bonus shall be paid.
4.4 The bonus shall be paid seven days from the date of determination by the
Company.
<PAGE> 5
5
5. HOLIDAYS AND SICK LEAVE
5. The Employee shall be entitled to ten paid days sick leave in each year.
Sick leave entitlements shall not accrue from year to year.
5.2 The Employee shall be entitled to twenty paid working days holiday in
each year, without loading. Holidays shall accrue from year to year.
6. CONFIDENTIAL INFORMATION AND CONFIDENTIALITY
6.1 In this clause 6:-
"Confidential Documents" means documents, disks, memory, notebooks,
tapes or any other medium, whether or not eye-readable, on which
Confidential Information may from time to time be referred to, written,
held or recorded.
"Confidential Information" means all information which may be imparted
in confidence or be of a confidential nature relating to the business or
prospective business, plans or internal affairs of the Company of any
Group Company and in particular all know-how, marketing information,
trade secrets, unpublished information relating to the Company's or any
Group Company's intellectual property and any other commercial,
financial or technical information relating to the business of the
Company or any Group Company or to any customer or supplier, officer or
employee of the Company or Group Company or to any member or person
interested in the share capital of the Company or any Group Company.
"Group Company" means Sento Corporation or any corporation related to
the Company.
6.2 The Employee shall not during the continuance of this Agreement, other
than in the proper course of his duties and for the benefit of the
Company, nor at any time thereafter:-
(a) Use, disclose or communicate to any person any Confidential
Information which they shall have come to know or have received
or obtained at any time (whether before on or after the date of
this Agreement) by reason of or in connection with the Employee's
services with the Company; or
(b) copy or reproduce in any form or by or on any media or divide or
allow others access to or to copy or reproduce Confidential
Documents.
6.3 The Employee acknowledges that all Confidential Documents at any time in
his control or possession are and shall at all times remain the absolute
property of the Company or a Group Company and the Employee undertakes,
both during and after the term of this Agreement:-
<PAGE> 6
6
(a) To exercise due care and diligence to avoid and use all
reasonable endeavours to prevent any unauthorised publication,
disclosure, copying, reproduction or use of the Confidential
Information and the Confidential Documents;
(b) at the direction of the Company, to deliver up copies of all
documents (whether or not lawfully made or obtained) and to
delete Confidential Information from any document comprising a
re-usable medium; and
(c) to do such things and sign such documents at the expense of the
Company as shall be necessary to give effect to this clause
and/or to provide evidence that it has been complied with.
6.4 The restrictions in clause 6.2:-
(a) Will not restrict the Employee from disclosing (but only to a
proper recipient) any Confidential Information which he is
required to disclose by law or any order of the Court or any
relevant regulatory body, provided that the Employee shall have
given prior written notice to the Company of the requirement and
of the information to be disclosed and allowed the Company an
opportunity to comment on the requirement before making the
disclosure; and
(b) will not apply to Confidential Information which is or which
comes into the public domain otherwise than as a result of an
unauthorised disclosure by the Employee or any other person who
owes the Company an obligation of confidentiality in relation to
the information disclosed.
6.5 The Employee agrees that the restrictions set out in this clause 6 are
without prejudice to any other duties of confidentiality owed to the
Company and the Group Company whether express or implied and are to
survive the termination or expiry of this Agreement (howsoever arising).
7. WAIVER
No waiver by either party of any performance of the other party required
by this Agreement or any default under the terms of this Agreement shall
constitute or imply, whether by passage of time or otherwise, any
further waiver of a future performance or default.
8. PROPER LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New South Wales.
<PAGE> 7
7
9. NOTICES
All notices, requests and other communications to be given by either
party to the other pursuant to the provisions of this Agreement shall be
in writing and shall be deemed to have been duly given if sent by
pre-paid letter, by telex or by facsimile to the address, telex or
facsimile number herein or notified in writing by either party to the
other from time to time. Pre-paid mail shall be deemed to have been
received two (2) working days after posting. Telex and facsimile
messages shall be deemed to have been received on the receipt by the
sender of the confirmation received code if between the hours of 9.00 am
and 6.00 pm Mondays to Fridays excluding Public and Bank Holidays but if
the confirmation code is received by the sender outside such times, such
facsimile or telex shall be deemed to have been received at 9.00 am on
the next working day.
10. SEVERABILITY
In the event that any of the provisions of this Agreement shall be held
by a Court or other tribunal of competent jurisdiction to be invalid or
unenforceable, the remaining portions of this Agreement shall remain in
full force and effect and shall be construed so as to best effectuate
the intentions of the parties in executing it.
11. ENTIRE AGREEMENT
11.1 This Agreement constitutes the entire agreement between the parties
concerning the subject-matter hereof, and supersedes all prior
agreements, both oral and written, representations, statements,
negotiations and undertakings;
11.2 this agreement may not be varied unless such variation is reduced to
writing, dated and executed by both parties hereto.
12. INTERPRETATION
In the interpretation of this Agreement, the Recitals, and the Schedules
unless there is something in the subject matter or context inconsistent
therewith:-
(a) words importing the singular include the plural and vice versa and
words importing any gender shall include the others;
(b) words importing persons shall be deemed to include all bodies and
associations, corporate or unincorporated and governmental and
statutory authorities;
(c) expressions referring to writing shall, unless the contrary
intention appears be construed as including references to
printing, lithography, photography and other modes of representing
or reproducing words in a visible form;
(d) a reference to a statute or statutory provision shall be deemed to
include any statute or statutory provision which amends, extends,
consolidates or replaces
<PAGE> 8
8
the same or which has been amended, extended, consolidated or
replaced by the same and any orders, regulations, instruments or
other subordinate legislation made thereunder;
(e) all titles and paragraph headings contained in this Agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement;
(f) all references to clauses, recitals and schedules are to clauses
of and recitals and schedules to this Agreement;
(g) all references to dollars and expressions preceded by the symbol
"$" shall be to Australian currency and all references to cost,
value and price shall be to cost, value and price expressed in
Australian currency;
(h) "month" means calendar month and "year" has a corresponding
meaning;
(i) "company" and "Company" include that company's subsidiaries.
(j) "$" of "dollars" means Australian currency.
EXECUTED AS AN AGREEMENT
THE COMMON SEAL of
SENTO AUSTRALIA PTY
LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: -----------------------------
Director
- ----------------------------------
Director/Secretary
SIGNED, SEALED AND DELIVERED
by the said ALAN THOMAS MAIN
in the presence of: -----------------------------
- ----------------------------------
Witness
<PAGE> 1
EXHIBIT 2.6
BETWEEN
SENTO AUSTRALIA PTY LIMITED
of the one part
AND
MICHAEL PETER SELIG
of the other part
- --------------------------------------------------------------------------------
EMPLOYMENT AGREEMENT
- --------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS AGREEMENT dated September 30, 1998
BETWEEN: SENTO AUSTRALIA PTY LIMITED (A.C.N. 074 678 774) of Level 6, 51
Rawson Street, Epping in the State of New South Wales
(hereinafter called the "Company") of the one part
AND: MICHAEL PETER SELIG of 7a Chaleyr Street, Willoughby in the State
of New South Wales (hereinafter called the "Employee").
WHEREAS:
A. The Company conducts the business of developing, licensing and
distributing software products.
B. The Company is the wholly owned subsidiary of Sento Corporation.
C. The Company and Sento Corporation have recently acquired the
copyright in certain software products and rights to distribute
other software from Functional Software Pty Limited ("FS").
D. The Employee provided certain services to FS in connection with
FS's business.
E. As a result of the acquisition of the business of FS by the
Company and Sento Corporation, the Company has requested the
Employee and the Employee has agreed to provide services to the
Company.
F. The Employee is to provide the services as an employee on the
following terms and conditions.
NOW THIS AGREEMENT WITNESSES:
1.1 SERVICES TO BE PROVIDED BY THE EMPLOYEE
1.1 The Employee shall:-
(a) Act as the Company's Director of Architecture responsible for the
design, research, development and implementation of software and
shall oversee the technical direction of the Company;
(b) oversee the manning of the help desk; and
(c) undertake such other duties as shall be given to the Employee by
the Company from time to time.
1.2 The Employee agrees he will well and faithfully serve the Company and
use his best endeavours to promote the Company's interests and welfare.
<PAGE> 3
3
1.3 The Employee shall devote his time and attention to the business of the
Company on a full time basis to the exclusion of any other work and will
at all times act in the Company's best interests.
1.4 The Employee acknowledges that the principal location for performing his
services will be Sydney, Australia.
1.5 The Employee shall:-
(a) Refrain from acting, or being seen to act, in conflict with the
Company's best interests.
(b) Use his best efforts to protect and promote the Company's
reputation.
(c) Ensure at all times that the Company's records are kept at the
Company's principal place of business or removed only to the
extent and for the time necessary for the Employee to comply with
this Agreement.
1.6 The Employee must not do anything that:-
(a) Results in the Employee competing with the Company.
(b) Otherwise adversely affects the Company.
(c) Hinders the Employee's performance of his duties owed to the
Company.
2. TERM OF THIS AGREEMENT
2.1 Subject to clauses 2.3 and 2.4 this Agreement shall commence on the date
of this agreement and terminate after the expiration of 2 years.
2.2 If prior to 3 months before the expiration of 2 years from the date of
this agreement no written notice has been given by the Company to the
Employee or by the Employee to the Company the term of this Agreement
shall be extended by another 12 months and thereafter for successive 12
month periods unless at least 3 months before each 12 month period
either party has given written notice to the other that it wishes the
engagement under this agreement to terminate at the end of that 12 month
period.
2.3 This Agreement shall be determined:-
(a) On the death of the Employee.
(b) Upon the Company giving three months notice in writing
determining this agreement in the event the Employee becomes
incapacitated by illness or injury of any kind which effectively
prevents him from performing his obligations under this Agreement
for three consecutive months.
<PAGE> 4
4
2.4 Despite any other term of this Agreement, the Company may at any time
after the commencement of this Agreement give to the Employee not less
than 6 months written notice that it wishes the engagement to terminate
and the Employee acknowledges that 6 months' shall be reasonable in the
circumstances.
3. SALARY AND OTHER REMUNERATION
3.1 In consideration of the services provided by the Employee to the
Company, the Company agrees to pay the Employee a total salary package
of $100,000.00 per annum and in addition the Company shall pay the
minimum superannuation contribution it is required to make on behalf of
the Employee by Law.
3.2 The fee shall be paid fortnightly, one week in advance and one week in
arrears.
3.3 The salary shall be reviewed on the expiration of 2 years from the date
of this Agreement.
3.4 On provision of all documentary evidence reasonably required by the
Company, the Company will reimburse the Employee for all reasonable
travel, accommodation and general expenses incurred by the Employee in
performance of his duties under this Agreement.
4. BONUS
4.1 Subject to the terms of this clause, the Employee will be eligible to be
paid a bonus which in any year shall not exceed $50,000.00.
4.2 Once every quarter, the performance of the Employee shall be reviewed to
determine whether the bonus is to be paid. The decision to pay the bonus
shall be in the Company's absolute discretion.
4.3 In the event the Company determines to pay the bonus, it may in its
discretion pay up to 40% of the bonus by transfer to the Employee of
unregistered stock in Sento Corporation, a Utah Corporation and for the
purposes of determining the value of the Stock payable to the Employee
pursuant to this clause, the value shall be the closing selling price of
the Stock in the United States on the NASDAQ exchange on the day being
the date on which the Company determines the bonus shall be payable (or
if no sales are made on that day - the next day on which a sale is made)
less 10%. The conversion rate to be applied from US dollars to
Australian dollars shall be the average of the purchase price and the
selling price of US dollars as quoted by National Australia Bank Limited
on the date the Company determines the bonus shall be paid.
4.4 The bonus shall be paid seven days from the date of determination by the
Company.
<PAGE> 5
5
5. HOLIDAYS AND SICK LEAVE
5.1 The Employee shall be entitled to ten paid days sick leave in each year.
Sick leave entitlements shall not accrue from year to year.
5.2 The Employee shall be entitled to twenty paid working days holiday in
each year, without loading. Holidays shall accrue from year to year.
6. CONFIDENTIAL INFORMATION AND CONFIDENTIALITY
6.1 In this clause 6:-
"Confidential Documents" means documents, disks, memory, notebooks,
tapes or any other medium, whether or not eye-readable, on which
Confidential Information may from time to time be referred to, written,
held or recorded.
"Confidential Information" means all information which may be imparted
in confidence or be of a confidential nature relating to the business or
prospective business, plans or internal affairs of the Company of any
Group Company and in particular all know-how, marketing information,
trade secrets, unpublished information relating to the Company's or any
Group Company's intellectual property and any other commercial,
financial or technical information relating to the business of the
Company or any Group Company or to any customer or supplier, officer or
employee of the Company or Group Company or to any member or person
interested in the share capital of the Company or any Group Company.
"Group Company" means Sento Corporation or any corporation related to
the Company.
6.2 The Employee shall not during the continuance of this Agreement, other
than in the proper course of his duties and for the benefit of the
Company, nor at any time thereafter:-
(a) Use, disclose or communicate to any person any Confidential
Information which they shall have come to know or have received
or obtained at any time (whether before on or after the date of
this Agreement) by reason of or in connection with the Employee's
services with the Company; or
(b) copy or reproduce in any form or by or on any media or divide or
allow others access to or to copy or reproduce Confidential
Documents.
6.3 The Employee acknowledges that all Confidential Documents at any time in
his control or possession are and shall at all times remain the absolute
property of the Company or a Group Company and the Employee undertakes,
both during and after the term of this Agreement:-
<PAGE> 6
6
(a) To exercise due care and diligence to avoid and use all
reasonable endeavours to prevent any unauthorised publication,
disclosure, copying, reproduction or use of the Confidential
Information and the Confidential Documents;
(b) at the direction of the Company, to deliver up copies of all
documents (whether or not lawfully made or obtained) and to
delete Confidential Information from any document comprising a
re-usable medium; and
(c) to do such things and sign such documents at the expense of the
Company as shall be necessary to give effect to this clause
and/or to provide evidence that it has been complied with.
6.4 The restrictions in clause 6.2:-
(a) Will not restrict the Employee from disclosing (but only to a
proper recipient) any Confidential Information which he is
required to disclose by law or any order of the Court or any
relevant regulatory body, provided that the Employee shall have
given prior written notice to the Company of the requirement and
of the information to be disclosed and allowed the Company an
opportunity to comment on the requirement before making the
disclosure; and
(b) will not apply to Confidential Information which is or which
comes into the public domain otherwise than as a result of an
unauthorised disclosure by the Employee or any other person who
owes the Company an obligation of confidentiality in relation to
the information disclosed.
6.5 The Employee agrees that the restrictions set out in this clause 6 are
without prejudice to any other duties of confidentiality owed to the
Company and the Group Company whether express or implied and are to
survive the termination or expiry of this Agreement (howsoever arising).
7. WAIVER
No waiver by either party of any performance of the other party required
by this Agreement or any default under the terms of this Agreement shall
constitute or imply, whether by passage of time or otherwise, any
further waiver of a future performance or default.
8. PROPER LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New South Wales.
<PAGE> 7
7
9. NOTICES
All notices, requests and other communications to be given by either
party to the other pursuant to the provisions of this Agreement shall be
in writing and shall be deemed to have been duly given if sent by
pre-paid letter, by telex or by facsimile to the address, telex or
facsimile number herein or notified in writing by either party to the
other from time to time. Pre-paid mail shall be deemed to have been
received two (2) working days after posting. Telex and facsimile
messages shall be deemed to have been received on the receipt by the
sender of the confirmation received code if between the hours of 9.00 am
and 6.00 pm Mondays to Fridays excluding Public and Bank Holidays but if
the confirmation code is received by the sender outside such times, such
facsimile or telex shall be deemed to have been received at 9.00 am on
the next working day.
10. SEVERABILITY
In the event that any of the provisions of this Agreement shall be held
by a Court or other tribunal of competent jurisdiction to be invalid or
unenforceable, the remaining portions of this Agreement shall remain in
full force and effect and shall be construed so as to best effectuate
the intentions of the parties in executing it.
11. ENTIRE AGREEMENT
11.1 This Agreement constitutes the entire agreement between the parties
concerning the subject-matter hereof, and supersedes all prior
agreements, both oral and written, representations, statements,
negotiations and undertakings;
11.2 this agreement may not be varied unless such variation is reduced to
writing, dated and executed by both parties hereto.
12. INTERPRETATION
In the interpretation of this Agreement, the Recitals, and the Schedules
unless there is something in the subject matter or context inconsistent
therewith:-
(a) words importing the singular include the plural and vice versa and
words importing any gender shall include the others;
(b) words importing persons shall be deemed to include all bodies and
associations, corporate or unincorporated and governmental and
statutory authorities;
(c) expressions referring to writing shall, unless the contrary
intention appears be construed as including references to
printing, lithography, photography and other modes of representing
or reproducing words in a visible form;
(d) a reference to a statute or statutory provision shall be deemed to
include any statute or statutory provision which amends, extends,
consolidates or replaces
<PAGE> 8
8
the same or which has been amended, extended, consolidated or
replaced by the same and any orders, regulations, instruments or
other subordinate legislation made thereunder;
(e) all titles and paragraph headings contained in this Agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement;
(f) all references to clauses, recitals and schedules are to clauses
of and recitals and schedules to this Agreement;
(g) all references to dollars and expressions preceded by the symbol
"$" shall be to Australian currency and all references to cost,
value and price shall be to cost, value and price expressed in
Australian currency;
(h) "month" means calendar month and "year" has a corresponding
meaning;
(i) "company" and "Company" include that company's subsidiaries.
(j) "$" of "dollars" means Australian currency.
EXECUTED AS AN AGREEMENT
THE COMMON SEAL of
SENTO AUSTRALIA PTY
LIMITED was hereunto
affixed in accordance with its Articles
of Association in the presence of: -----------------------------
Director
- ----------------------------------
Director/Secretary
SIGNED, SEALED AND DELIVERED
by the said MICHAEL PETER SELIG
in the presence of: -----------------------------
- ----------------------------------
Witness
<PAGE> 1
EXHIBIT 2.7
BETWEEN
SENTO CORPORATION
of the one part
AND
NORTHPOINT SOFTWARE VENTURES PTE LIMITED
of the other part
- --------------------------------------------------------------------------------
CONSULTANCY AGREEMENT
- --------------------------------------------------------------------------------
Michael Osborne
and Associates
LAWYERS
Level 21, 1 O'Connell Street
Sydney NSW 2000
- --------------------------------------------------------------------------------
Telephone: 02 9241 1211 Facsimile: 02 9221 8364 DX: 1113 SYDNEY
Email: [email protected] Ref: 985122
<PAGE> 2
2
THIS DEED dated September 30, 1998
BETWEEN: SENTO CORPORATION of 808 East Utah Valley Drive, American Fork,
Utah, United States ("the Purchaser") of the one part
AND: NORTHPOINT SOFTWARE VENTURES PTE LIMITED of 50 Draycott Park, The
Draycott, No 09-01 Singapore, 259396 ("the Consultant") of the
other part.
WHEREAS:
A. The Vendor is the proprietor of a software house business known
as "Functional Software" whose principal place of business is
located at Suite 7, Delwyn Court, 643 Newcastle Street,
Leederville in the State of Western Australia.
B. The Purchaser has agreed to purchase and the Vendor has agreed to
sell certain assets of the business of the Vendor on the terms
and conditions contained in the Transaction Documents.
C. The Consultant is a director of the Vendor.
D. The Purchaser has requested the Consultant to provide consultancy
services for the period of one year after the date of this
Agreement.
E. The Consultant has agreed to provide the Consultancy Services on
the terms and conditions contained in this Deed.
DEFINITIONS
1.1 In this Deed the following expressions have the following meanings:
(a) "Agreement" or "this Agreement" means this deed;
(b) "Agreements for Services" means the Agreements of even date
between Sento Australia and Michael Peter Selig and Alan Thomas
Main for the provision of personal services to the Sento
Australia;
(c) "Business Assets Agreement" means the Agreement between the Vendor
and Sento Australia for the sale to the Purchaser by the Vendor of
the Business Assets.
(d) "Business day" means any day which is not Saturday, Sunday or a
public holiday;
(e) "Completion Date" means the date of completion of this agreement
which it is anticipated will be the same day as the making of this
agreement;
(f) "Gross Annual Revenue of the Business" has the same meaning as in
the Intellectual Property Business Assets Agreement;
<PAGE> 3
3
(g) "Guarantee" means the Deed of even date between the Vendor, the
Purchaser, Sento Australia and Michael Peter Selig and Alan Thomas
Main whereby Selig and Main guarantee certain obligations of the
Vendor;
(h) "Intellectual Property Business Assets Agreement" means the
agreement between the Vendor and the Purchaser for the sale to the
Purchaser by the Vendor of the Intellectual Property Business
Assets;
(i) "Non-Compete Deeds" means the four Deeds between the Vendor, the
Purchaser, Sento Australia, Michael Peter Selig, Alan Thomas Main
and Howard Haythornthwaite, whereby the Vendor, Main, Selig and
Haythornthwaite agree not to compete against the Purchaser and
Sento Australia;
(j) "Transaction Documents" means the Agreements for Services, the
Intellectual Property Business Assets Agreement, the Business
Assets Agreement, the Guarantee and the Non-Compete Deeds;
(k) "Sento Australia" means Sento Australia Pty Limited (A.C.N. 074
678 774) of Level 6, 51 Rawson Street, Epping in the State of New
South Wales;
(l) "Stock" means unregistered shares of the Common Stock of the
Purchaser;
(m) "Vendor" means Functional Software Pty Limited (A.C.N. 009 421
194).
INTERPRETATION
1.2 (a) Words expressed in the singular include the plural and vice versa.
(b) Words expressed in one gender include the other genders, as is
appropriate in the context.
(c) A reference to "person" includes a corporation.
(d) This Agreement is governed and construed in accordance with the
law of Western Australia.
(e) If any provision contained in this Agreement is or becomes legally
ineffective, under the general law or by force of legislation, the
ineffective provision shall be severed from this Agreement which
otherwise continues to be valid and operative.
(f) Two or more parties to this Agreement who represent the same
interest assume the liability to comply with their obligations
under this Agreement jointly, and in addition each of them assumes
those obligations severally.
<PAGE> 4
4
(g) If under the provisions of this Agreement or under any notice or
demand anything is required to be done on a day which is not a
Business day, the day or the last day for compliance is deemed to
be the immediately following Business day.
(h) Headings are for guidance only and shall not form part of this
Agreement.
(i) Reference to "$" or "Dollars" is reference to Australian dollars.
2. PROVISION OF CONSULTANCY AND CONSIDERATION
2.1 The Consultant shall provide such consultancy services as the Purchaser
shall from time to time require for the period of twelve months after
the date of this Agreement.
2.2 The Consultant shall make itself available to provide the consultancy
services up to a maximum of ten hours per month.
2.3 On the Completion Date, the Purchaser shall pay to the Consultant a
non-refundable consultancy fee as follows:-
(a) $67,500.00 by cash or unendorsed Bank cheque;
(b) $67,500.00 in Stock.
2.4 For the purposes of determining the value of the Stock pursuant to
clause 2.3, the value shall be the closing selling price of the Stock in
the United States on the NASDAQ Stock Market on the day being the date
of this Agreement (or if no sales are made on that day - the next day on
which a sale is made) less 10%. The conversion rate to be applied from
US dollars to Australian dollars shall be the average of the purchase
price and the selling price of US dollars as quoted by National
Australia Bank Limited on the date of completion of this agreement.
2.5 Payment of the consultancy fee referred to in this clause 2 shall be
conditional on all parties to the Transaction Documents entering into
the Transaction Documents.
3. FURTHER CONSIDERATION
3.1 In the event that after the date of this Agreement, further payments of
consideration are made by the Purchaser to the Vendor pursuant to clause
4 of the Intellectual Property Business Assets Agreement then an
additional amount shall be payable by the Purchaser to the Consultant in
accordance with the terms of this clause 3.
3.2 During the twelve month period commencing on the first day of the month
immediately following completion of the Intellectual Property Business
Assets Agreement (called in this clause 3 "Year 1"):-
<PAGE> 5
5
(a) If the Gross Annual Revenue of the Business is less than
$3,000,000.00 then no amount shall be payable by the Purchaser to
the Consultant pursuant to this clause 3.2.
(b) If the Gross Annual Revenue of the Business exceeds $3,000,000.00
then for every dollar of Gross Annual Revenue of the Business in
excess of that amount the Consultant shall be paid $0.020237
provided that no additional amounts shall be payable by the
Purchaser to the Consultant for the Gross Annual Revenue of the
Business to the extent that it exceeds $6,000,000.00 except as
provided in clause 3.4 and the parties acknowledge that it is
their intention that the maximum payment by the Purchaser to the
Consultant under this clause 3.2(b) shall be $60,711.00.
3.3 During the twelve month period commencing immediately after the end of
Year 1 (called in this clause "Year 2"):-
(a) If the Gross Annual Revenue of the Business is less than
$4,500,000.00 then no amount shall be payable by the Purchaser to
the Vendor pursuant to this clause 3.3.
(b) If the Gross Annual Revenue of the Business exceeds $4,500,000.00
then for every dollar of Gross Annual Revenue of the Business in
excess of that amount the Consultant shall be paid $0.015178
provided that no additional amounts shall be payable by the
Purchaser to the Consultant for the Gross Annual Revenue of the
Business to the extent that it exceeds $8,500,000.00 and the
parties acknowledge that it is their intention that the maximum
payment by the Purchaser to the Consultant under this clause shall
be $60,712.00.
3.4. For the purpose only of calculating the Gross Annual Revenue of the
Business for Year 2 and calculating the amount payable by the Purchaser
to the Consultant pursuant to clause 3.3, the parties agree that if the
Gross Annual Revenue of the Business in Year 1 exceeds $6,000,000.00
then the amount of such excess shall be added to the Gross Annual
Revenue of the Business for Year 2 provided that nothing in this clause
3.4 will impose on the Purchaser any liability to pay to the Consultant
an amount in excess of the maximum payment referred to in clause 3.3 in
the sum of $60,711.00.
3.5 In the event that the Purchaser is required to pay any amount to the
Consultant pursuant to clause 3.2 then all of such payment shall be made
by Stock in lieu of cash and for the purposes of determining the value
of the Stock, the Stock will be the lower of:-
(a) The average of the selling price of the Stock in the United States
on the NASDAQ Stock Market for the preceding twelve months
immediately prior to the last day of Year 1 less 10%; or
<PAGE> 6
6
(b) the lowest selling price of the Stock in the United States on the
NASDAQ Exchange on the last day of Year 1 (or if no sales are made
on that day the next day on which a sale is made) less 10%.
The conversion rate to be applied from U.S. Dollars to Australian
Dollars shall be the average of the purchase price and the selling price
of U.S. Dollars as quoted by National Australia Bank Limited for the day
being the last day of Year 1. The Consultant shall not, in the thirty
days before the end of Year 1, sell any of its stock or seek to
influence or cause any other person to sell that person's stock.
3.6 In the event the Purchaser is required to pay any amount to the
Consultant pursuant to clause 3.3, then in respect of that payment, the
Purchaser shall pay cash.
3.7 The Consultant agrees that the Consultant will not be able to dispute
the Gross Annual Revenue of the Business for Year 1 or Year 2, which
figure shall be that amount as is determined by the Purchaser and the
Vendor pursuant to the Intellectual Property Business Assets Agreement
(whether by agreement or pursuant to the dispute resolution mechanism
contained in clause 4.13 of the Intellectual Property Business Assets
Agreement) and which figure shall, as between the Consultant and the
Purchaser, for the purposes of this Agreement be final and binding on
both parties.
3.8 The transfer of Stock to the Consultant pursuant to clause 3.2 or the
payment of cash pursuant to clause 3.3 shall be effected:-
(a) For Year 1, on the same day as the Stock is due to be transferred
to the Vendor pursuant to clause 4.8 of the Intellectual Property
Business Assets Agreement;
(b) for Year 2, on the same day as the cash due is to be paid to the
Vendor pursuant to clause 4.8 of the Intellectual Property
Business Assets Agreement.
4. PAYMENTS CONDITIONAL
4.1 Any payment to the Consultant pursuant to clause 3 is conditional upon
the parties to the Transaction Documents (excepting the Purchaser and
Sento Australia) performing their obligations pursuant to the
Transaction Documents.
<PAGE> 7
7
EXECUTED AS A DEED
THE COMMON SEAL of
SENTO AUSTRALIA PTY
LIMITED was hereunto affixed
in accordance with its Articles
of Association in the presence of: -----------------------------
Director
- ----------------------------------
Director/Secretary
SIGNED BY NORTHPOINT SOFTWARE VENTURES
PTE LIMITED
<PAGE> 1
Exhibit 99.1
MONDAY OCTOBER 19, 5:00 AM EASTERN TIME
COMPANY PRESS RELEASE
SOURCE: Sento Corporation
SENTO ACQUIRES AUSTRALIAN SOFTWARE
DEVELOPER, FUNCTIONAL SOFTWARE, PTY., LTD.
ACQUISITION OF AUSTRALIAN-BASED SYSTEMS MANAGEMENT SOFTWARE DEVELOPER
STRENGTHENS SENTO'S POSITION IN SOUTHEAST ASIA
AMERICAN FORK, Utah, Oct. 19/PRNewswire/ -- Sento Corporation (Nasdaq:
SNTO-news), announced today that it has completed its previously announced
acquisition of Functional Software, Pty., Ltd., headquartered in Perth, Western
Australia. Functional Software is the developer of COSMOS, a leading system
management framework technology for UNIX and Windows NT computer systems.
Functional Software's installed customer base includes sites in Australia, New
Zealand, Malaysia, South Korea, Sweden, France, the Netherlands, the United
States, Argentina, the United Kingdom, and Germany.
The acquisition of Functional Software has an initial value of US$1 million,
paid in a combination of cash $519,176 and 141,177 shares of Sento Common
Stock. The agreement also contains an "earn-out" provision, which provides
additional payments upon Functional Software reaching specific revenue targets
for each of the next two years. The earn-out provision provides for up to an
additional US$1.2 million to be paid, one half in stock and one half in cash.
Both Operating Directors/Owners of Functional Software will remain with the
company. Functional Software's corporate operations will be relocated and
consolidated with Sento's wholly-owned subsidiary, Sento Australia Pty., Ltd.,
Located in Sydney.
"This acquisition represents a significant addition to our operations in
Australia and Southeast Asia," said Kieth Sorenson, Sento's President and CEO.
"Functional Software brings new products, services, and support to our
worldwide customer base, and significantly strengthens our presence in the
Pacific Rim. In addition, Functional Software's IT consulting services and
technology solutions complement Sento Australia's strategic direction within
the UNIX, Windows NT, systems management, and Internetworking marketplace."
"We are very pleased to welcome Functional Software to Sento," said Eng Lee,
Managing Director of Sento Australia. "We have enjoyed a positive working
relationship for a number of years, and I believe that combining our technical
solutions and our mutual commitment to customer service will prove very
beneficial both for our customers and for Sento."
About Sento
Founded in 1986, Sento Corporation provides a wide range of outsourcing
solutions for organizations of
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all sizes using Windows NT, UNIX, and Internet/Intranet-based client-server
computing environments. These services include classroom and computer-based
training, outsourced technical product support and helpdesk services, and
network management, systems integration, and financial systems consulting. For
more information, call toll-free 800-868-8448, or visit Sento's home page at
www.sento.com.
About Functional Software
Functional Software was formed in Australia in 1989. Its flagship product,
COSMOS, provides broad system management services that assist with the
implementation and management of major UNIX and Windows NT-based projects. For
more information, visit Functional Software's website at www.fs.com.au and
Sento Australia's website at www.sento.com.au.
This press release contains certain forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended) that involve
substantial risks and uncertainties. When used in this release, the words
"anticipate" and "expect" and similar expressions as they relate to the Company
or its management are intended to identify such forward-looking statements. The
Company's actual results, performance, or achievements could differ materially
from the results, performance, or achievements expressed in, or implied by,
these forward-looking statements. Risks, uncertainties, and other factors that
could cause or contribute to such differences include, but are not limited to,
difficulties in attracting and retaining highly skilled employees; the
Company's ability to manage rapid growth and expansion into new geographic
areas and service lines; the Company's ability to manage the risks associated
with client projects and risks related to recently completed and potential
future acquisitions; the Company's ability to develop IT solutions that keep
pace with continuing changes in technology, evolving industry standards, and
changing client preferences; and risks related to Year 2000 failures in
client's information systems. These and other risks, uncertainties, and other
factors are more fully described in the Company's Annual Report on Form 10-KSB.
SOURCE: Sento Corporation
