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EXHIBIT 2.7
BETWEEN
SENTO CORPORATION
of the one part
AND
NORTHPOINT SOFTWARE VENTURES PTE LIMITED
of the other part
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CONSULTANCY AGREEMENT
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Xxxxxxx Xxxxxxx
and Associates
LAWYERS
Xxxxx 00, 0 X'Xxxxxxx Xxxxxx
Xxxxxx XXX 0000
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Telephone: 00 0000 0000 Facsimile: 02 9221 8364 DX: 0000 XXXXXX
Email: xxxxxxxx@xxxxxxx.xxx.xx Ref: 985122
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THIS DEED dated September 30, 1998
BETWEEN: SENTO CORPORATION of 000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxx, Xxxxxx Xxxxxx ("the Purchaser") of the one part
AND: NORTHPOINT SOFTWARE VENTURES PTE LIMITED of 00 Xxxxxxxx Xxxx, Xxx
Xxxxxxxx, Xx 00-00 Xxxxxxxxx, 000000 ("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, Xxxxxx Court, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx 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 Xxxxxxx Xxxxx Xxxxx and Xxxx Xxxxxx
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;
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(g) "Guarantee" means the Deed of even date between the Vendor, the
Purchaser, Sento Australia and Xxxxxxx Xxxxx Xxxxx and Xxxx Xxxxxx
Main whereby Xxxxx 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, Xxxxxxx Xxxxx Xxxxx, Xxxx Xxxxxx Main
and Xxxxxx Xxxxxxxxxxxxxxx, whereby the Vendor, Main, Xxxxx 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 Xxxxx 0, 00 Xxxxxx Xxxxxx, Xxxxxx 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.
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(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"):-
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(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
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(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.
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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
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Director/Secretary
SIGNED BY NORTHPOINT SOFTWARE VENTURES
PTE LIMITED
