x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Georgia | 58-2567903 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
10 Glenlake Parkway, North Tower, Atlanta, Georgia | 30328 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Yes ¨ No x |
Page | |||
PART I - FINANCIAL INFORMATION | |||
ITEM 1. | |||
ITEM 2. | |||
ITEM 3. | |||
ITEM 4. | |||
PART II - OTHER INFORMATION | |||
ITEM 1. | |||
ITEM 2. | |||
ITEM 6. | |||
Three Months Ended | |||||||
November 30, 2014 | November 30, 2013 | ||||||
Revenues | $ | 697,291 | $ | 634,122 | |||
Operating expenses: | |||||||
Cost of service | 257,796 | 235,170 | |||||
Sales, general and administrative | 315,511 | 294,045 | |||||
Processing system intrusion | — | (7,000 | ) | ||||
573,307 | 522,215 | ||||||
Operating income | 123,984 | 111,907 | |||||
Other income (expense): | |||||||
Interest and other income | 1,282 | 5,288 | |||||
Interest and other expense | (10,350 | ) | (8,025 | ) | |||
(9,068 | ) | (2,737 | ) | ||||
Income before income taxes | 114,916 | 109,170 | |||||
Provision for income taxes | (29,660 | ) | (29,313 | ) | |||
Net income | 85,256 | 79,857 | |||||
Less: Net income attributable to noncontrolling interests, net of income tax | (10,475 | ) | (5,960 | ) | |||
Net income attributable to Global Payments | $ | 74,781 | $ | 73,897 | |||
Earnings per share attributable to Global Payments: | |||||||
Basic | $ | 1.11 | $ | 1.02 | |||
Diluted | $ | 1.10 | $ | 1.02 |
Six Months Ended | |||||||
November 30, 2014 | November 30, 2013 | ||||||
Revenues | $ | 1,402,186 | $ | 1,263,807 | |||
Operating expenses: | |||||||
Cost of service | 517,635 | 465,915 | |||||
Sales, general and administrative | 636,169 | 585,601 | |||||
Processing system intrusion | — | (7,000 | ) | ||||
1,153,804 | 1,044,516 | ||||||
Operating income | 248,382 | 219,291 | |||||
Other income (expense): | |||||||
Interest and other income | 2,474 | 8,626 | |||||
Interest and other expense | (21,360 | ) | (15,904 | ) | |||
(18,886 | ) | (7,278 | ) | ||||
Income before income taxes | 229,496 | 212,013 | |||||
Provision for income taxes | (59,806 | ) | (60,448 | ) | |||
Net income | 169,690 | 151,565 | |||||
Less: Net income attributable to noncontrolling interest, net of income tax | (19,543 | ) | (13,025 | ) | |||
Net income attributable to Global Payments | $ | 150,147 | $ | 138,540 | |||
Earnings per share attributable to Global Payments: | |||||||
Basic | $ | 2.22 | $ | 1.90 | |||
Diluted | $ | 2.20 | $ | 1.88 |
Three Months Ended | |||||||
November 30, 2014 | November 30, 2013 | ||||||
Net income | $ | 85,256 | $ | 79,857 | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | (92,634 | ) | 23,948 | ||||
Income tax benefit (expense) related to foreign currency translation adjustments | 4,774 | (283 | ) | ||||
Unrealized losses on hedging activities | (4,419 | ) | — | ||||
Reclassification of losses on hedging activities to interest expense | 531 | — | |||||
Income tax benefit related to hedging activities | 1,443 | — | |||||
Other comprehensive income (loss), net of tax | (90,305 | ) | 23,665 | ||||
Comprehensive income (loss) | (5,049 | ) | 103,522 | ||||
Less: comprehensive income attributable to noncontrolling interests | (3,546 | ) | (10,015 | ) | |||
Comprehensive income (loss) attributable to Global Payments | $ | (8,595 | ) | $ | 93,507 |
Six Months Ended | |||||||
November 30, 2014 | November 30, 2013 | ||||||
Net income | $ | 169,690 | $ | 151,565 | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | (117,855 | ) | 21,661 | ||||
Income tax benefit related to foreign currency translation adjustments | 7,291 | 2,253 | |||||
Unrealized losses on hedging activities | (4,419 | ) | — | ||||
Reclassification of losses on hedging activities to interest expense | 531 | — | |||||
Income tax benefit related to hedging activities | 1,443 | — | |||||
Other comprehensive income (loss), net of tax | (113,009 | ) | 23,914 | ||||
Comprehensive income | 56,681 | 175,479 | |||||
Less: comprehensive income attributable to noncontrolling interests | (7,484 | ) | (19,642 | ) | |||
Comprehensive income attributable to Global Payments | $ | 49,197 | $ | 155,837 |
November 30, 2014 | May 31, 2014 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 644,469 | $ | 581,872 | |||
Accounts receivable, net of allowances for doubtful accounts of $469 and $401, respectively | 197,053 | 214,574 | |||||
Claims receivable, net | 577 | 809 | |||||
Settlement processing assets | 1,122,321 | 780,917 | |||||
Inventory | 8,002 | 6,636 | |||||
Deferred income taxes | 12,761 | 12,963 | |||||
Prepaid expenses and other current assets | 40,072 | 45,673 | |||||
Total current assets | 2,025,255 | 1,643,444 | |||||
Goodwill | 1,483,615 | 1,337,285 | |||||
Other intangible assets, net | 542,992 | 535,173 | |||||
Property and equipment, net | 362,809 | 369,753 | |||||
Deferred income taxes | 95,161 | 101,928 | |||||
Other | 31,755 | 31,067 | |||||
Total assets | $ | 4,541,587 | $ | 4,018,650 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Lines of credit | $ | 530,721 | $ | 440,128 | |||
Current portion of long-term debt | 46,875 | 17,677 | |||||
Accounts payable and accrued liabilities | 303,008 | 290,106 | |||||
Settlement processing obligations | 781,262 | 451,317 | |||||
Income taxes payable | 14,267 | 12,390 | |||||
Total current liabilities | 1,676,133 | 1,211,618 | |||||
Long-term debt | 1,554,125 | 1,376,002 | |||||
Deferred income taxes | 200,848 | 209,099 | |||||
Other long-term liabilities | 88,245 | 89,132 | |||||
Total liabilities | 3,519,351 | 2,885,851 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, no par value; 5,000,000 shares authorized and none issued | — | — | |||||
Common stock, no par value; 200,000,000 shares authorized; 67,031,081 issued and outstanding at November 30, 2014 and 68,845,643 issued and outstanding at May 31, 2014 | — | — | |||||
Paid-in capital | 144,419 | 183,023 | |||||
Retained earnings | 852,972 | 815,980 | |||||
Accumulated other comprehensive loss | (102,726 | ) | (1,776 | ) | |||
Total Global Payments shareholders’ equity | 894,665 | 997,227 | |||||
Noncontrolling interests | 127,571 | 135,572 | |||||
Total equity | 1,022,236 | 1,132,799 | |||||
Total liabilities and equity | $ | 4,541,587 | $ | 4,018,650 |
Six Months Ended | |||||||
November 30, 2014 | November 30, 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 169,690 | $ | 151,565 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization of property and equipment | 33,055 | 28,439 | |||||
Amortization of acquired intangibles | 36,117 | 28,953 | |||||
Share-based compensation expense | 9,145 | 11,965 | |||||
Provision for operating losses and bad debts | 7,432 | 10,249 | |||||
Deferred income taxes | (982 | ) | 6,073 | ||||
Other, net | (387 | ) | (4,345 | ) | |||
Changes in operating assets and liabilities, net of the effects of acquisitions: | |||||||
Accounts receivable | 17,521 | (6,353 | ) | ||||
Claims receivable | (4,881 | ) | (6,567 | ) | |||
Settlement processing assets and obligations, net | (13,778 | ) | 204,307 | ||||
Inventory | (1,506 | ) | 2,237 | ||||
Prepaid expenses and other assets | 5,409 | 5,761 | |||||
Accounts payable and other accrued liabilities | (31,503 | ) | (21,845 | ) | |||
Income taxes payable | 1,604 | 1,244 | |||||
Net cash provided by operating activities | 226,936 | 411,683 | |||||
Cash flows from investing activities: | |||||||
Business, intangible and other asset acquisitions, net of cash acquired | (223,651 | ) | (2,324 | ) | |||
Capital expenditures | (33,290 | ) | (41,178 | ) | |||
Principal collections on financing receivables | 219 | 1,328 | |||||
Net proceeds from sales of investments and business | 10,528 | 3,102 | |||||
Net cash used in investing activities | (246,194 | ) | (39,072 | ) | |||
Cash flows from financing activities: | |||||||
Net borrowings on short-term lines of credit | 90,593 | 259,047 | |||||
Proceeds from issuance of long-term debt | 1,080,000 | 810,000 | |||||
Principal payments under long-term debt | (872,679 | ) | (779,380 | ) | |||
Repurchase of common stock | (179,724 | ) | (250,183 | ) | |||
Proceeds from stock issued under share-based compensation plans | 17,099 | 27,366 | |||||
Common stock repurchased - share-based compensation plans | (15,705 | ) | (5,260 | ) | |||
Tax benefit from share-based compensation plans | 3,599 | 4,415 | |||||
Distributions to noncontrolling interests | (15,485 | ) | (15,593 | ) | |||
Dividends paid | (2,693 | ) | (2,894 | ) | |||
Net cash provided by financing activities | 105,005 | 47,518 | |||||
Effect of exchange rate changes on cash | (23,150 | ) | (3,766 | ) | |||
Increase in cash and cash equivalents | 62,597 | 416,363 | |||||
Cash and cash equivalents, beginning of the period | 581,872 | 680,470 | |||||
Cash and cash equivalents, end of the period | $ | 644,469 | $ | 1,096,833 |
Number of Shares | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Global Payments Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||
Balance at May 31, 2014 | 68,846 | $ | 183,023 | $ | 815,980 | $ | (1,776 | ) | $ | 997,227 | $ | 135,572 | $ | 1,132,799 | ||||||||||||
Net income | 150,147 | 150,147 | 19,543 | 169,690 | ||||||||||||||||||||||
Other comprehensive loss, net of tax | (100,950 | ) | (100,950 | ) | (12,059 | ) | (113,009 | ) | ||||||||||||||||||
Stock issued under employee stock plans | 941 | 17,099 | 17,099 | 17,099 | ||||||||||||||||||||||
Common stock repurchased - share-based compensation plans | (316 | ) | (6,976 | ) | (6,976 | ) | (6,976 | ) | ||||||||||||||||||
Tax benefit from employee share-based compensation, net | 3,599 | 3,599 | 3,599 | |||||||||||||||||||||||
Share-based compensation expense | 9,145 | 9,145 | 9,145 | |||||||||||||||||||||||
Distributions to noncontrolling interests | (15,485 | ) | (15,485 | ) | ||||||||||||||||||||||
Repurchase of common stock | (2,440 | ) | (61,471 | ) | (110,462 | ) | (171,933 | ) | (171,933 | ) | ||||||||||||||||
Dividends paid ($0.04 per share) | (2,693 | ) | (2,693 | ) | (2,693 | ) | ||||||||||||||||||||
Balance at November 30, 2014 | 67,031 | $ | 144,419 | $ | 852,972 | $ | (102,726 | ) | $ | 894,665 | $ | 127,571 | $ | 1,022,236 |
Number of Shares | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Global Payments Shareholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||
Balance at May 31, 2013 | 75,426 | $ | 202,396 | $ | 958,751 | $ | (15,062 | ) | $ | 1,146,085 | $ | 140,522 | $ | 1,286,607 | |||||||||||
Net income | 138,540 | 138,540 | 13,025 | 151,565 | |||||||||||||||||||||
Other comprehensive income, net of tax | 17,297 | 17,297 | 6,617 | 23,914 | |||||||||||||||||||||
Stock issued under employee stock plans | 1,453 | 27,366 | 27,366 | 27,366 | |||||||||||||||||||||
Common stock repurchased - share-based compensation plans | (345 | ) | (5,405 | ) | (5,405 | ) | (5,405 | ) | |||||||||||||||||
Tax benefit from employee share-based compensation, net | 4,290 | 4,290 | 4,290 | ||||||||||||||||||||||
Share-based compensation expense | 11,965 | 11,965 | 11,965 | ||||||||||||||||||||||
Distributions to noncontrolling interests | (15,593 | ) | (15,593 | ) | |||||||||||||||||||||
Repurchase of common stock | (4,625 | ) | (52,331 | ) | (197,800 | ) | (250,131 | ) | (250,131 | ) | |||||||||||||||
Dividends paid ($0.04 per share) | (2,894 | ) | (2,894 | ) | (2,894 | ) | |||||||||||||||||||
Balance at November 30, 2013 | 71,909 | $ | 188,281 | $ | 896,597 | $ | 2,235 | $ | 1,087,113 | $ | 144,571 | $ | 1,231,684 |
Three Months Ended | Six Months Ended | ||||||||||
November 30, 2014 | November 30, 2013 | November 30, 2014 | November 30, 2013 | ||||||||
(in thousands) | (in thousands) | ||||||||||
Basic weighted average shares outstanding | 67,377 | 72,174 | 67,764 | 72,974 | |||||||
Plus: Dilutive effect of stock options and other share-based awards | 360 | 532 | 415 | 530 | |||||||
Diluted weighted average shares outstanding | 67,737 | 72,706 | 68,179 | 73,504 |
• | Interchange reimbursement - our receivable from merchants for the portion of the discount fee related to reimbursement of the interchange expense. |
• | Receivable from Members - our receivable from the Members for transactions in which merchants have been funded in advance of receipt of card association funding. |
• | Receivable from networks - our receivable from the card networks for transactions processed on behalf of merchants where we are a direct member of that particular network. |
• | Exception items - items such as customer chargeback amounts received from merchants. |
• | Merchant Reserves - reserves held to minimize contingent liabilities associated with losses that may occur under the merchant agreement. |
• | Liability to Members - our liability to the Members for transactions for which funding from the network has been received by the Members but merchants have not yet been funded. |
• | Liability to merchants - our liability to merchants for transactions that have been processed but not yet funded where we are a direct member of that particular network. |
• | Reserve for operating losses - our allowance for charges or losses that we are not able to collect from the merchants due to merchant fraud, insolvency, bankruptcy or any other merchant-related reason. |
November 30, 2014 | May 31, 2014 | ||||||
(in thousands) | |||||||
Settlement processing assets: | |||||||
Interchange reimbursement | $ | 55,821 | $ | 217,806 | |||
Receivable from Members | 391,047 | 206,322 | |||||
Receivable from networks | 717,772 | 430,763 | |||||
Exception items | 2,995 | 5,573 | |||||
Merchant Reserves | (45,314 | ) | (79,547 | ) | |||
$ | 1,122,321 | $ | 780,917 | ||||
Settlement processing obligations: | |||||||
Interchange reimbursement | $ | 178,819 | $ | 54,459 | |||
Liability to Members | (157,205 | ) | (5,490 | ) | |||
Liability to merchants | (680,822 | ) | (407,651 | ) | |||
Exception items | 4,176 | 6,313 | |||||
Merchant Reserves | (124,251 | ) | (96,622 | ) | |||
Reserve for operating losses | (1,387 | ) | (1,725 | ) | |||
Reserves for sales allowances | (592 | ) | (601 | ) | |||
$ | (781,262 | ) | $ | (451,317 | ) |
Cash | $ | 45,826 | |
Goodwill | 205,590 | ||
Customer-related intangible assets | 32,876 | ||
Trade name | 2,901 | ||
Acquired technology | 26,195 | ||
Other assets | 2,486 | ||
Total assets acquired | 315,874 | ||
Liabilities | (49,919 | ) | |
Deferred income taxes | (96 | ) | |
Net assets acquired | $ | 265,859 |
Goodwill | $ | 270,878 | |
Customer-related intangible assets | 147,500 | ||
Contract-based intangible assets | 30,200 | ||
Acquired technology | 10,800 | ||
Property and equipment | 1,680 | ||
Other assets | 3,872 | ||
Total assets acquired | 464,930 | ||
Deferred income taxes | (38,478 | ) | |
Net assets acquired | $ | 426,452 |
Unaudited | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
November 30, 2013 | November 30, 2013 | November 30, 2013 | November 30, 2013 | ||||||||||||
(Actual) | (Pro forma) | (Actual) | (Pro forma) | ||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||
Total revenues | $ | 634,122 | $ | 658,735 | $ | 1,263,807 | $ | 1,311,484 | |||||||
Net income attributable to Global Payments | $ | 73,897 | $ | 72,187 | $ | 138,540 | $ | 134,764 | |||||||
Net income per share attributable to Global Payments, basic | $ | 1.02 | $ | 1.00 | $ | 1.90 | $ | 1.85 | |||||||
Net income per share attributable to Global Payments, diluted | $ | 1.02 | $ | 0.99 | $ | 1.88 | $ | 1.83 |
November 30, 2014 | May 31, 2014 | ||||||
(in thousands) | |||||||
Goodwill | $ | 1,483,615 | $ | 1,337,285 | |||
Other intangible assets: | |||||||
Customer-related intangible assets | $ | 720,562 | $ | 714,704 | |||
Trademarks and trade names | 7,670 | 6,140 | |||||
Acquired technology | 51,037 | 25,700 | |||||
Contract-based intangible assets | 138,377 | 145,967 | |||||
917,646 | 892,511 | ||||||
Less accumulated amortization: | |||||||
Customer-related intangible assets | 329,710 | 317,629 | |||||
Trademarks and trade names | 4,054 | 4,147 | |||||
Acquired technology | 5,821 | 3,531 | |||||
Contract-based intangible assets | 35,069 | 32,031 | |||||
374,654 | 357,338 | ||||||
$ | 542,992 | $ | 535,173 |
North America Merchant Services | International Merchant Services | Total | |||||||||
(in thousands) | |||||||||||
Balance at May 31, 2014 | $ | 786,655 | $ | 550,630 | $ | 1,337,285 | |||||
Accumulated impairment losses | — | — | — | ||||||||
786,655 | 550,630 | 1,337,285 | |||||||||
Goodwill acquired | — | 205,590 | 205,590 | ||||||||
Adjustment(1) | (699 | ) | — | (699 | ) | ||||||
Effect of foreign currency translation | (4,549 | ) | (54,012 | ) | (58,561 | ) | |||||
Balance at November 30, 2014 | $ | 781,407 | $ | 702,208 | $ | 1,483,615 |
November 30, 2014 | May 31, 2014 | ||||||
Lines of credit: | (in thousands) | ||||||
Corporate Credit Facility - long-term | $ | 351,000 | $ | 140,000 | |||
Short-term lines of credit | 530,721 | 440,128 | |||||
Total lines of credit | 881,721 | 580,128 | |||||
Notes payable | — | 3,679 | |||||
Term loan | 1,250,000 | 1,250,000 | |||||
Total debt | $ | 2,131,721 | $ | 1,833,807 | |||
Current portion | $ | 577,596 | $ | 457,805 | |||
Long-term debt | 1,554,125 | 1,376,002 | |||||
Total debt | $ | 2,131,721 | $ | 1,833,807 |
Three Months Ended | Six Months Ended | ||||||||||||||
November 30, 2014 | November 30, 2013 | November 30, 2014 | November 30, 2013 | ||||||||||||
(in millions) | (in millions) | ||||||||||||||
Share-based compensation expense | $ | 5.0 | $ | 7.2 | $ | 9.1 | $ | 12.0 | |||||||
Income tax benefit | $ | 1.7 | $ | 2.0 | $ | 2.8 | $ | 3.3 |
Shares | Weighted Average Grant-Date Fair Value | ||||||
(in thousands) | |||||||
Unvested at May 31, 2014 | 877 | $ | 45 | ||||
Granted | 454 | 72 | |||||
Vested | (316 | ) | 46 | ||||
Forfeited | (78 | ) | 53 | ||||
Unvested at November 30, 2014 | 937 | $ | 57 |
Options | Weight Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
(in thousands) | (in years) | (in millions) | |||||||||||
Outstanding at May 31, 2014 | 766 | $ | 41 | 3.8 | $ | 21.3 | |||||||
Granted | 153 | 72 | |||||||||||
Forfeited | (23 | ) | 56 | ||||||||||
Exercised | (339 | ) | 41 | ||||||||||
Outstanding at November 30, 2014 | 557 | $ | 48 | 5.0 | $ | 21.1 | |||||||
Options vested and exercisable at November 30, 2014 | 419 | $ | 41 | 3.4 | $ | 19.0 |
Risk-free interest rates | 1.57% |
Expected volatility | 23.65% |
Dividend yields | 0.13% |
Expected lives | 5 years |
Three Months Ended | Six Months Ended | ||||||||||||||
November 30, 2014 | November 30, 2013 | November 30, 2014 | November 30, 2013 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Revenues: | |||||||||||||||
United States | $ | 404,784 | $ | 361,793 | $ | 818,825 | $ | 725,626 | |||||||
Canada | 83,992 | 85,240 | 173,957 | 171,912 | |||||||||||
North America merchant services | 488,776 | 447,033 | 992,782 | 897,538 | |||||||||||
Europe | 159,974 | 146,866 | 322,762 | 290,054 | |||||||||||
Asia-Pacific (2) | 48,541 | 40,223 | 86,642 | 76,215 | |||||||||||
International merchant services | 208,515 | 187,089 | 409,404 | 366,269 | |||||||||||
Consolidated revenues | $ | 697,291 | $ | 634,122 | $ | 1,402,186 | $ | 1,263,807 | |||||||
Operating income (loss) for segments: | |||||||||||||||
North America merchant services | $ | 74,246 | $ | 70,437 | $ | 152,183 | $ | 140,136 | |||||||
International merchant services (1) | 76,443 | 62,467 | 150,045 | 124,008 | |||||||||||
Corporate | (26,705 | ) | (20,997 | ) | (53,846 | ) | (44,853 | ) | |||||||
Consolidated operating income | $ | 123,984 | $ | 111,907 | $ | 248,382 | $ | 219,291 | |||||||
Depreciation and amortization: | |||||||||||||||
North America merchant services | $ | 20,441 | $ | 13,612 | $ | 40,918 | $ | 27,066 | |||||||
International merchant services | 12,566 | 13,799 | 25,056 | 27,143 | |||||||||||
Corporate | 1,598 | 1,607 | 3,198 | 3,183 | |||||||||||
Consolidated depreciation and amortization | $ | 34,605 | $ | 29,018 | $ | 69,172 | $ | 57,392 |
Three Months Ended November 30, 2014 | % of Revenue(1) | Three Months Ended November 30, 2013 | % of Revenue(1) | Change | % Change | |||||||||||||||
(dollar amounts in thousands) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
United States | $ | 404,784 | 58.1 | % | $ | 361,793 | 57.1 | % | $ | 42,991 | 11.9 | % | ||||||||
Canada | 83,992 | 12.0 | % | 85,240 | 13.4 | % | (1,248 | ) | (1.5 | )% | ||||||||||
North America merchant services | 488,776 | 70.1 | % | 447,033 | 70.5 | % | 41,743 | 9.3 | % | |||||||||||
Europe | 159,974 | 22.9 | % | 146,866 | 23.2 | % | 13,108 | 8.9 | % | |||||||||||
Asia-Pacific (3) | 48,541 | 7.0 | % | 40,223 | 6.3 | % | 8,318 | 20.7 | % | |||||||||||
International merchant services | 208,515 | 29.9 | % | 187,089 | 29.5 | % | 21,426 | 11.5 | % | |||||||||||
Total revenues | $ | 697,291 | 100 | % | $ | 634,122 | 100 | % | $ | 63,169 | 10.0 | % | ||||||||
Consolidated operating expenses: | ||||||||||||||||||||
Cost of service | $ | 257,796 | 37.0 | % | $ | 235,170 | 37.1 | % | $ | 22,626 | 9.6 | % | ||||||||
Sales, general and administrative | 315,511 | 45.2 | % | 294,045 | 46.4 | % | 21,466 | 7.3 | % | |||||||||||
Processing system intrusion | — | — | % | (7,000 | ) | (1.1 | )% | 7,000 | (100.0 | )% | ||||||||||
Operating income | $ | 123,984 | 17.8 | % | $ | 111,907 | 17.6 | % | $ | 12,077 | 10.8 | % | ||||||||
Operating income (loss) for segments: | ||||||||||||||||||||
North America merchant services | $ | 74,246 | $ | 70,437 | $ | 3,809 | 5.4 | % | ||||||||||||
International merchant services | 76,443 | 62,467 | 13,976 | 22.4 | % | |||||||||||||||
Corporate (2) | (26,705 | ) | (20,997 | ) | (5,708 | ) | 27.2 | % | ||||||||||||
Operating income | $ | 123,984 | $ | 111,907 | $ | 12,077 | 10.8 | % | ||||||||||||
Operating margin for segments: | ||||||||||||||||||||
North America merchant services | 15.2 | % | 15.8 | % | (0.6 | )% | ||||||||||||||
International merchant services | 36.7 | % | 33.4 | % | 3.3 | % |
Six Months Ended November 30, 2014 | % of Revenue(1) | Six Months Ended November 30, 2013 | % of Revenue(1) | Change | % Change | |||||||||||||||
(dollar amounts in thousands) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
United States | $ | 818,825 | 58.4 | % | $ | 725,626 | 57.4 | % | $ | 93,199 | 12.8 | % | ||||||||
Canada | 173,957 | 12.4 | % | 171,912 | 13.6 | % | 2,045 | 1.2 | % | |||||||||||
North America merchant services | 992,782 | 70.8 | % | 897,538 | 71.0 | % | 95,244 | 10.6 | % | |||||||||||
Europe | 322,762 | 23.0 | % | 290,054 | 23.0 | % | 32,708 | 11.3 | % | |||||||||||
Asia-Pacific (3) | 86,642 | 6.2 | % | 76,215 | 6.0 | % | 10,427 | 13.7 | % | |||||||||||
International merchant services | 409,404 | 29.2 | % | 366,269 | 29.0 | % | 43,135 | 11.8 | % | |||||||||||
Total revenues | $ | 1,402,186 | 100 | % | $ | 1,263,807 | 100 | % | $ | 138,379 | 10.9 | % | ||||||||
Consolidated operating expenses: | ||||||||||||||||||||
Cost of service | $ | 517,635 | 36.9 | % | $ | 465,915 | 36.9 | % | $ | 51,720 | 11.1 | % | ||||||||
Sales, general and administrative | 636,169 | 45.4 | % | 585,601 | 46.3 | % | 50,568 | 8.6 | % | |||||||||||
Processing system intrusion | — | — | % | (7,000 | ) | (0.6 | )% | 7,000 | (100.0 | )% | ||||||||||
Operating income | $ | 248,382 | 17.7 | % | $ | 219,291 | 17.4 | % | $ | 29,091 | 13.3 | % | ||||||||
Operating income (loss) for segments: | ||||||||||||||||||||
North America merchant services | $ | 152,183 | $ | 140,136 | $ | 12,047 | 8.6 | % | ||||||||||||
International merchant services | 150,045 | 124,008 | 26,037 | 21.0 | % | |||||||||||||||
Corporate (2) | (53,846 | ) | (44,853 | ) | (8,993 | ) | 20.0 | % | ||||||||||||
Operating income | $ | 248,382 | $ | 219,291 | $ | 29,091 | 13.3 | % | ||||||||||||
Operating margin for segments: | ||||||||||||||||||||
North America merchant services | 15.3 | % | 15.6 | % | (0.3 | )% | ||||||||||||||
International merchant services | 36.6 | % | 33.9 | % | 2.7 | % |
November 30, 2014 | May 31, 2014 | ||||||
Lines of credit: | (in thousands) | ||||||
Corporate credit facility - long-term | $ | 351,000 | $ | 140,000 | |||
Short-term lines of credit | 530,721 | 440,128 | |||||
Total lines of credit | 881,721 | 580,128 | |||||
Notes payable | — | 3,679 | |||||
Term loan | 1,250,000 | 1,250,000 | |||||
Total debt | $ | 2,131,721 | $ | 1,833,807 | |||
Current portion | $ | 577,596 | $ | 457,805 | |||
Long-term debt | 1,554,125 | 1,376,002 | |||||
Total debt | $ | 2,131,721 | $ | 1,833,807 |
Plan category | Total Number of Shares Purchased | Approximate Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
September 1, 2014 - September 30, 2014 | — | $ | — | — | |||||||||
October 1, 2014 - October 31, 2014 | 656,924 | 72.22 | 656,924 | ||||||||||
November 1, 2014 - November 30, 2014 | — | — | — | ||||||||||
Total | 656,924 | $ | — | 656,924 | $ | 197,705,000 |
2.1* | Sale and Purchase Agreement, dated as of September 15, 2014, by and among Global Payments Australia 2 Pty Ltd, Global Payments Inc., as guarantor, shareholders of Ezi Holdings Pty Ltd and certain guarantors of the sellers. | |
31.1* | Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following financial information from the Quarterly Report on Form 10-Q for the quarter ended November 30, 2014, formatted in XBRL (eXtensible Business Reporting Language) and filed electronically herewith: (i) the Unaudited Consolidated Statements of Income; (ii) the Consolidated Balance Sheets; (iii) the Unaudited Consolidated Statements of Cash Flows; (iv) the Unaudited Consolidated Statements of Changes in Equity; and (v) the Notes to Unaudited Consolidated Financial Statements. |
Global Payments Inc. | ||
(Registrant) | ||
Date: January 8, 2015 | /s/ Cameron M. Bready | |
Cameron M. Bready | ||
Chief Financial Officer | ||
Date: January 8, 2015 | /s/ Daniel C. O’Keefe | |
Daniel C. O’Keefe | ||
Chief Accounting Officer |
Exhibit 2.1 |
Agreement | |
Sale and purchase agreement | |
The Sellers The Sellers' Guarantors Global Payments Australia 2 Pty Limited Global Payments Inc. | |
The agreement | 1 | |||
Operative part | 2 | |||
1 | Definitions, interpretation and agreement components | 2 | ||
1.1 Definitions | 2 | |||
1.2 Interpretation provisions | 10 | |||
1.3 Business Day | 11 | |||
1.4 Inclusive expressions | 11 | |||
1.5 Agreement components | 11 | |||
2 | Conditions for Completion | 11 | ||
2.1 Conditions | 11 | |||
2.2 Notice | 11 | |||
2.3 Reasonable endeavours | 11 | |||
2.4 Waiver | 11 | |||
2.5 Cut Off Date | 11 | |||
2.6 No binding agreement for transfer | 12 | |||
2.7 Material Adverse Effect condition | 12 | |||
3 | Sale and purchase | 12 | ||
3.1 Shares | 12 | |||
3.2 Associated Rights | 12 | |||
3.3 Purchase Price | 12 | |||
3.4 Respective Proportions | 12 | |||
3.5 Payment of the Completion Payment | 12 | |||
3.6 Payment of other amounts | 12 | |||
3.7 Waiver of rights | 13 | |||
3.8 Purchase obligations interdependent | 13 | |||
3.9 Title and risk | 13 | |||
4 | Period before Completion | 13 | ||
4.1 Carrying on of business | 13 | |||
4.2 Control Accounts | 14 | |||
4.3 Permitted acts | 14 | |||
4.4 Declaration and payment of Special Dividend | 14 | |||
4.5 Access to Business before Completion | 14 | |||
4.6 D&O insurance | 15 | |||
5 | Termination | 15 | ||
5.1 Termination by the Buyer | 15 | |||
5.2 Termination by the Seller | 15 | |||
5.3 Effect of termination | 15 | |||
5.4 No other right to terminate or rescind | 15 | |||
6 | Completion | 15 | ||
6.1 Time and Place | 15 | |||
6.2 Completion | 15 | |||
6.3 Notice to complete | 16 | |||
6.4 Completion simultaneous | 16 | |||
7 | Completion Working Capital Statement | 16 | ||
7.1 Preparation of Completion Working Capital Statement | 16 | |||
7.2 Purchase Price adjustments following Completion Working Capital Statement | 16 | |||
7.3 Payment of Actual Adjustment Amount | 16 | |||
8 | Escrow Account | 16 | ||
8.1 Establishment of Escrow Account | 16 | |||
8.2 Operation of Escrow Account | 17 | |||
8.3 Payments in respect of Resolved Claims before Escrow Termination Date | 17 | |||
8.4 No Unresolved Claims on Escrow Termination Date | 17 | |||
8.5 Unresolved Claims on Escrow Termination Date | 17 | |||
8.6 Interest | 17 | |||
9 | Restraint | 17 | ||
9.1 Non competition | 17 | |||
9.2 Non solicitation | 18 | |||
9.3 Restraint period | 18 | |||
9.4 Restraint area | 18 | |||
9.5 Separate restrictions | 18 | |||
9.6 Exceptions | 18 | |||
9.7 Assignment | 18 | |||
9.8 Acknowledgement | 18 | |||
9.9 Proceedings | 18 | |||
10 | Warranties and Indemnities | 19 | ||
10.1 Warranties by the Sellers | 19 | |||
10.2 Basis of Sellers’ liability | 19 | |||
10.3 Independent Warranties | 19 | |||
10.4 Reliance | 19 | |||
10.5 Indemnity for breach of Seller Title and Capacity Warranty | 19 | |||
10.6 Tax indemnity | 19 | |||
10.7 Refunds by Buyer | 19 | |||
11 | Qualifications and limitations on Claims | 20 |
11.1 Disclosure | 20 | |||
11.2 Fair Disclosure | 20 | |||
11.3 Awareness | 21 | |||
11.4 Acknowledgements | 21 | |||
11.5 Maximum and minimum amounts | 22 | |||
11.6 Time limits | 22 | |||
11.7 Disposal of Business | 22 | |||
11.8 Recovery under other rights and reimbursement | 23 | |||
11.9 Exclusions | 23 | |||
11.10 General limitations | 23 | |||
11.11 Other limitations | 24 | |||
11.12 Buyer benefits | 24 | |||
11.13 Sole remedy | 25 | |||
11.14 Payments affecting the Purchase Price | 25 | |||
11.15 Independent limitations | 25 | |||
12 | Trustee limitation of liability | 25 | ||
12.1 Capacity | 25 | |||
12.2 Limitation of liability | 25 | |||
12.3 Limitation not to apply | 25 | |||
13 | Procedures for dealing with Claims | 25 | ||
13.1 Notice of Claims | 25 | |||
13.2 Third Party Claims | 26 | |||
13.3 Tax Demands | 27 | |||
14 | Buyer Warranties | 28 | ||
14.1 Buyer Warranties | 28 | |||
14.2 Independent Warranties | 28 | |||
14.3 Reliance | 28 | |||
15 | Period after Completion | 28 | ||
15.1 Appointment of proxy | 28 | |||
15.2 Access to records by Sellers | 28 | |||
15.3 Consents to change in control | 29 | |||
15.4 Pre‑Completion Tax returns | 29 | |||
16 | Confidentiality and announcements | 30 | ||
16.1 Agreed announcement | 30 | |||
16.2 Confidentiality | 31 | |||
16.3 Confidentiality Agreement superseded | 31 | |||
17 | Duties, costs and expenses | 31 | ||
17.1 Duties | 31 | |||
17.2 Costs and expenses | 32 | |||
18 | GST | 32 | ||
18.1 Definitions | 32 | |||
18.2 GST | 32 | |||
18.3 Tax invoices | 32 | |||
18.4 Reimbursements | 32 | |||
19 | Guarantee by Buyer’s Guarantor | 32 | ||
19.1 Guarantee and indemnity | 32 | |||
19.2 Extent of guarantee and indemnity | 32 | |||
19.3 Principal and independent obligation | 33 | |||
19.4 Continuing guarantee and indemnity | 33 | |||
19.5 No withholdings | 33 | |||
19.6 Currency | 33 | |||
19.7 No set off | 33 | |||
19.8 Buyer’s Guarantor’s Liability | 33 | |||
20 | Guarantee by Sellers’ Guarantors | 33 | ||
20.1 Guarantee and indemnity | 33 | |||
20.2 Extent of guarantee and indemnity | 34 | |||
20.3 Principal and independent obligation | 34 | |||
20.4 Continuing guarantee and indemnity | 34 | |||
20.5 No withholdings | 34 | |||
20.6 Currency | 34 | |||
20.7 No set off | 34 | |||
20.8 Buyer’s Guarantor’s Liability | 34 | |||
21 | Sellers’ Representatives | 34 | ||
21.1 Authority | 34 | |||
21.2 Replacement | 35 | |||
22 | Notices | 35 | ||
22.1 Form of Notice | 35 | |||
22.2 How Notice must be given and when Notice is received | 36 | |||
23 | General | 36 | ||
23.1 Governing law and jurisdiction | 36 | |||
23.2 Service of process | 37 | |||
23.3 Invalidity and enforceability | 37 | |||
23.4 Waiver | 37 | |||
23.5 Variation | 37 | |||
23.6 Assignment | 37 | |||
23.7 Further action to be taken at each party’s own expense | 37 | |||
23.8 Relationship of the parties | 37 | |||
23.9 Exercise of rights | 38 | |||
23.10 Remedies cumulative | 38 | |||
23.11 Counterparts | 38 |
23.12 Entire Agreement | 38 | |||
23.13 No reliance | 38 | |||
23.14 Default Interest | 38 | |||
23.15 No withholdings | 38 | |||
23.16 No partnership | 38 | |||
23.17 Effect of Completion | 38 | |||
23.18 No set-off, deduction or counterclaim | 39 | |||
Signing page | 39 |
Between the parties | |
Sellers | Jambach Pty Limited ACN 100 647 283 (in its capacity as trustee of Dutch Investment Trust) of 16 Cox Road, Windsor, Queensland 4030 MSP Management Pty Limited ACN 010 927 410 (in its capacity as trustee of The Welsh Management Trust) of Level 1, Innovation Parkway Birtinya Korobosea Pty Limited ACN 110 252 241 (in its capacity as trustee of Pikinini No 1 Trust) of Level 7, 193 North Quay, Brisbane, Queensland 4000 Marea Mason Holland (in her capacity as trustee of Holland Superannuation Fund) of 8 Kullaroo Street, The Gap, Queensland 4061 Zacstar Pty Limited ACN 101 907 091 (in its capacity as trustee of Zenonos Discretionary Trust) of 6 Broadway Street, Woolloongabba, Queensland 4102 Moramou2 Pty Limited ACN 153 507 629 (in its capacity as trustee of Mora Mou Family Trust) of 6 Broadway Street, Woolloongabba, Queensland 4102 Ritdan Pty Limited ACN 143 141 539 (in its capacity as trustee of Ritdan Finance Trust) of Level 1, 195 Given Terrace, Paddington, Queensland 4064 S Seven D Pty Limited ACN 130 881 971 (in its capacity as trustee of S Seven D Discretionary Trust) of Level 1, 195 Given Terrace, Paddington, Queensland 4064, (together, the Sellers) |
Sellers' Guarantors | As described in Schedule 13 |
Buyer | Global Payments Australia 2 Pty Ltd (ACN 601 396 847) of C/o Hopkins Corporate Solutions Pty Ltd, Unit 3, 25 Darley Street East, Mona Vale NSW 2103. |
Buyer’s Guarantor | Global Payments Inc. of 10 Glenlake Parkway, North Tower, Atlanta GA 30328 USA |
Background | Each of the Sellers owns the Shares set out opposite the name of that Seller in Schedule 1. Each of the Sellers has agreed to sell the Shares set out opposite the name of that Seller in Schedule 1, and the Buyer has agreed to buy the Shares, on the terms and conditions of this agreement. The Buyer’s Guarantor has agreed to guarantee the Buyer’s obligations under this agreement. |
The parties agree | As set out in the Operative part of this agreement, in consideration of, among other things, the mutual promises contained in this agreement. |
1 | Definitions, interpretation and agreement components |
1.1 | Definitions |
Term | Meaning |
Accounting Standards | has the meaning given in Schedule 5. |
Accounts | the audited consolidated balance sheet, cash flow statements and income statements of the Target Group as at the Accounts Date including the notes those financial statements. |
Accounts Date | 30 June 2014. |
ACN | Australian Company Number. |
Actual Adjustment Amount | is equal to the Actual Completion Working Capital minus the Estimated Adjustment Amount expressed as a positive or negative number (as applicable). |
Actual Completion Working Capital | an amount equal to the working capital of the Target Group as set out in the final Completion Working Capital Statement (as adjusted by the Expert’s Report, if applicable) expressed as a positive or negative number (as applicable). |
Affiliate | in relation to a party, means: a shareholder of the party; a director, secretary or officer of the party; or a Related Entity of the party. |
ASIC | the Australian Securities and Investments Commission. |
Authorisation | any approval, licence, consent, authority or permit, including Australian Financial Services Licence no. 315388 held by Ezi Managements Pty Limited ACN 110 689 711. |
Business | the business of electronic transaction processing carried out by the Target Entities. |
Business Day | a day on which banks are open for business in Brisbane, Australia, other than a Saturday, Sunday or public holiday. |
Business Intellectual Property | the Intellectual Property Rights that are used or held for use by a Target Entity or otherwise necessary for the operation of the Business as currently conducted and proposed to be conducted by the Target Entities, including the Intellectual Property Rights listed in Schedule 7 but excluding Business Software used by a Target Entity in the conduct of the Business; any other Intellectual Property Rights owned by a Target Entity but excluding Business Software; and the right to take action against Third Parties for infringement of those Intellectual Property Rights whether occurring before or after the date of this agreement but excluding the Third Party Intellectual Property. |
Business Records | all original and certified copies of the books, records, documents, information, accounts and data (whether machine readable or in printed form) owned by or relating to a Target Entity or the property of a Target Entity and any source material used to prepare them. |
Business Software | the Software that is used or held for use by a Target Entity or otherwise necessary for the operation of the Business as currently conducted and proposed to be conducted by the Target Entities including the Software listed in Schedule 7. |
Buyer Group | the Buyer and each of its Related Entities (other than the Target Entities) and Buyer Group Member means any member of the Buyer Group. |
Buyer Insolvency Event | an Insolvency Event in relation to the Buyer or the Buyer’s Guarantor. |
Buyer Warranties | the warranties in Schedule 3. |
Cash | the aggregate amount, as at the Effective Time, of any money in cleared funds in an account with a bank or other financial institution, or in the form of a security bond for an obligation or other cash equivalents, to which any Target Entity is legally or beneficially entitled, but does not include any money in the Control Accounts. |
Claim | any claim, demand, legal proceedings or cause of action including any claim, demand, legal proceedings or cause of action under common law or under statute in any way relating to this agreement or the Sale and includes a claim, demand, legal proceedings or cause of action arising from a breach of Warranty or under an Indemnity in this agreement. |
Completion | completion of the sale and purchase of the Shares under clause 6. |
Completion Date | if both the condition in clause 2.1(a) is satisfied and the condition in clause 2.1(b)(1) and 2.1(b)(2) is satisfied or waived before 8.00 am on the day that is 3 Business Days before any Friday, that Friday, otherwise the following Friday (or such other date as may be agreed in writing between the Buyer and the Sellers). |
Completion Payment | the Headline Purchase Price, plus the Estimated Adjustment Amount; less the aggregate of: (a) the Escrow Amount; (b) the Special Dividend Payment Amount; (c) the Transaction Costs Amount; and (d) Employee Transaction Bonus Amount. |
Completion Steps | the steps that each party must carry out, which are set out in Schedule 4. |
Completion Working Capital Statement | the working capital statement of the Target Group prepared as at the Effective Time in accordance with Schedule 5 and in the format set out in Schedule 6 together with such information as Schedule 5 or Schedule 6 requires. |
Company | Ezi Holdings Pty Limited ACN 122 581 284. |
Confidentiality Agreement | the confidentiality agreement dated 2 June 2014 between the Company and Global Payments Inc. |
Consolidated Group | a Consolidated Group or a MEC group as those terms are defined in section 995‑1 of the ITAA 1997. |
Contract | any currently enforceable contract, agreement, non-governmental licence, sales and purchase orders, indenture, note, bond, instrument, lease, conditional sales contract, mortgage, license, franchise agreement, concession agreement, security interest, guaranty, binding commitment or other agreement. |
Control Accounts | the following accounts: Account number 034002-333576 operated by Westpac Banking Corporation Limited (for the EDMS (Aust) platform); Account number 020386-0091282-026 operated by Bank of New Zealand (for the EDMS (NZ) platform); Account number 034001-118292 operated by Westpac Banking Corporation Limited (for the Highlander (Aust) platform); Account number 034002-548323 operated by Westpac Banking Corporation Limited (for the BEII (Aust) platform); Account number 036011-253737 operated by Westpac Banking Corporation Limited (for the RegalCroft (Aust) platform); Account number 020386-0091282-025 operated by Bank of New Zealand (for the RegalCroft (NZ) platform); Account number 484799-502194570 operated by Suncorp Group Limited (for the PaymentHub platform); and Account number 082489-895372699 operated by National Australia Bank Limited (for the eMatters platform). |
Control | in respect of an entity, the direct or indirect capacity to control decisions about the financial or operating policies of that entity, and includes the direct or indirect capacity to control the composition of the board or other governing body of that entity. |
Controlled Entity | in relation to an entity, another entity that is Controlled by it. |
Corporations Act | the Corporations Act 2001 (Cth). |
Cut Off Date | 30 November 2014. |
Data Room | the online data room accessed via internet link https://dataroom.ansarada.com/malta%7C10255/523056/TermsOfAccess.asp. |
Demand | a written notice of, or demand for, an amount payable. |
Disclosure Letter | a letter dated the date of this agreement addressed by the Sellers’ Representatives to the Buyer disclosing facts, matters and circumstances that are, or may be, inconsistent with the Warranties, and includes any attachments to that letter. |
Disclosure Materials | all documents and information that were provided to the Buyer by the Sellers or any Seller Group Representative or Advisor in the Data Room and made available to the Buyer, its representatives or advisers, an index of which is attached as Attachment A; all written answers given to written questions submitted by the Buyer, its representatives or advisers as part of the question and answer process via the Data Room referred to above, a copy of which is attached as Attachment B; and the information set out in the Disclosure Letter, as reproduced on a CD or DVD in the form agreed between the Sellers’ Representatives and the Buyer and having been initialled by the Sellers’ Representatives and the Buyer and delivered to the Sellers’ Representatives and the Buyer on execution of this agreement. |
Disputed Matters | has the meaning given in Schedule 5. . |
Disputing Action | in respect of a Tax Demand, any action to cause the Tax Demand to be withdrawn, reduced or postponed or to avoid, resist, object to, defend, appear against or compromise the Tax Demand and any judicial or administrative proceedings arising out of that action. |
Duty | any stamp, transaction or registration duty or similar charge imposed by any Governmental Agency and includes any interest, fine, penalty, charge or other amount imposed in respect of any of them. |
EBITDA | earnings before interest expense, tax, depreciation and amortisation, calculated in a manner that is consistent with the calculation of EBITDA in Attachment D. |
Effective Time | 11.59pm (Brisbane, Australia time) on the day preceding the Completion Date. |
Employee | an employee of a Target Entity as at the date of this agreement who remains employed by a Target Entity immediately before Completion. |
Employee Transaction Bonus | the total outstanding bonus amounts owing by the Target Group to any employee in connection with the Sale and all other related transactions contemplated by this agreement or in connection with any alternative transactions or arrangements (including an initial public offering). |
Employee Transaction Bonus Amount | has the meaning given in clause 3.6. |
Encumbrance | an interest or power: reserved in or over an interest in any asset; or created or otherwise arising in or over any interest in any asset under a security agreement, a bill of sale, mortgage, charge, lien, pledge, trust or power, by way of, or having similar commercial effect to, security for the payment of a debt, any other monetary obligation or the performance of any other obligation, and includes, but is not limited to: any agreement to grant or create any of the above; and a security interest within the meaning of section 12(1) of the PPSA, but does not include a Permitted Encumbrance. |
Escrow Account | an interest‑bearing controlled monies account opened in the name of the Escrow Agent as trustee for the Sellers and the Buyer. |
Escrow Agent | the party, to be agreed between the Buyer and the Sellers, which will provide escrow services in accordance with the terms of the Escrow Agreement. |
Escrow Agreement | an agreement to be entered into between the Escrow Agent, the Buyer and the Sellers on arm's length terms customary for the provision of escrow services as contemplated by this agreement. |
Escrow Amount | 8% of the Headline Purchase Price (the Initial Escrow Amount) or such other amount as remains in the Escrow Account from time to time including any interest credited to the Escrow Account but does not include the Estimated Adjustment Amount. |
Escrow Termination Date | means the date which is 18 months after the Completion Date. |
Estimated Adjustment Amount | is equal to the Estimated Working Capital minus the Target Working Capital. |
Estimated Working Capital | is the estimated amount of working capital forecast at the Completion Date expressed as a positive or negative number (as applicable), as notified by the Sellers to the Buyer no later than five(5) Business Days before the Completion Date. |
Expert | has the meaning given in Schedule 5. . |
Expert’s Report | has the meaning given in Schedule 5. |
Forward-looking Information | any forecast, model, budget estimate, projection, business plan, statement of opinion or statement of intention. |
Fundamental Business Contract | the Westpac Merchant Documents; the Westpac Finance Documents; and the contracts which are material to the operation and profitability of the Target Group (including without limitation documents relating to the Business Intellectual Property and Business Software which are material to the operation and profitability of the Target Group). |
Governmental Agency | any government or governmental, administrative, monetary, fiscal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world. |
Group Title and Capacity Warranties | the Warranties set out in Warranty 2 of Schedule 2. |
Group Warranties | the Warranties other than the Seller Title and Capacity Warranties. |
GST | goods and services tax or similar value added tax levied or imposed in Australia under the GST Law or otherwise on a supply. |
GST Act | the A New Tax System (Goods and Services Tax) Act 1999 (Cth) of Australia. |
GST Law | has the same meaning as in the GST Act. |
Headline Purchase Price | $305 million. |
Immediately Available Funds | cash or telegraphic or other electronic means of transfer of cleared funds into a bank account nominated in advance by the payee. |
Indemnities | the: the Warranty Indemnity; and the Tax Indemnity, and each is an Indemnity. |
Insolvency Event | in relation to an entity: the entity is unable to pay its debts as and when they fall due or has stopped or suspended, or threatened to stop or suspend, payment of all or a class of its debts; the entity goes, or proposes to go, into liquidation; the entity receives notice requiring, or applies for, deregistration; an order is made or an effective resolution is passed for the winding up or dissolution without winding up (otherwise than for the purposes of reconstruction or amalgamation) of the entity; a receiver, receiver and manager, judicial manager, liquidator, administrator or like official is appointed, or threatened or expected to be appointed, over the whole or a substantial part of the undertaking or property of the entity; the holder of an Encumbrance takes possession of the whole or substantial part of the undertaking or property of the entity; a writ of execution is issued against the entity or any of the entity’s assets; the entity proposes or takes any steps to implement a scheme or arrangement or other compromise with its creditors or any class of them; or the entity is declared or taken under applicable law to be insolvent or the entity’s board of directors resolve that it is, or is likely to become insolvent. In relation to a person: a trustee or similar officer is appointed in respect of that person’s assets; an order is made for the bankruptcy of that person or his or her estate or an event occurs that would give a court the right to make such an order; a moratorium of any debts of that person, a personal insolvency agreement or any other assignment, composition or arrangement with that person’s creditors or any similar proceeding or arrangement by which the assets of that person are subjected conditionally or unconditionally to the control of that person’s creditors or a trustee is ordered or applied for; that person is declared or taken under any applicable law to be insolvent or unable to pay his or her debts or that person admits in writing that he or she is insolvent or unable to pay his or her debts; or any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made or issued against or in relation to any asset of that person. |
Intellectual Property Rights | all intellectual property and related rights, regardless of form, throughout the world, whether registered or unregistered, including any: patents, patent disclosures and related improvements; trademarks, service marks, trade dress, logos, product design, product names, product features, trade names, call letters, corporate names and second-level domain names, along with any associated goodwill; copyrights and copyrightable works, including without limitation, audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, maskworks and sound recordings, inventions, circuit layouts, and analogous rights; trade secrets and confidential business information or information that is not readily known or ascertainable through property means, whether tangible or intangible, (including ideas, formulas, compositions, algorithms, inventions and discoveries (whether patentable or unpatentable and whether or not reduced to practice), know-how, research and development information, Software, drawings, specifications, designs, plans, proposals, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information); and registrations and applications to register any of the foregoing, if applicable; all other intellectual property rights as defined in Article 2 of the convention establishing the World Intellectual Property Organisation of 14 July 1967 as amended from time to time, and the rights to sue with respect to past and future infringements of any of the above. |
Interest Rate | the daily 11.00am (Brisbane, Australia time) cash rate quoted on Reuters page BBSY. |
ITAA 1997 | the Income Tax Assessment Act 1997 (Cth) of Australia. |
Key Employees | the key employees of the Target Group, being Charlie Holland, Mark Healy, Michael Dempsey, Rob Baird and Sarah Page. |
Key Leasehold Properties | the properties leased by any Target Entity under the Key Property Leases. |
Key Property Leases | the real estate leases (and licences) listed in Schedule 8. |
Loss | losses, liabilities, damages, costs, charges and expenses and includes Taxes, Duties and Tax Costs. |
Material Adverse Effect | an event, occurrence or change after the date of this agreement that has a material adverse effect on the financial condition, assets, liabilities, results of operation or profitability of the Target Group taken as a whole, other than those events, occurrences or changes that: are or arise as a direct result or consequence of the announcement and/or implementation of the transactions contemplated in this agreement; or are or arise as a result of general changes in economic, political, business, industry or market conditions except in each case, to the extent that that the consequences of such change have a materially greater material adverse effect on the Target Group or the Business (taken as a whole) than other companies carrying on business similar to that carried on by the Target Group, however a failure of the Target Group to meet internal operating projections or forecasts or published revenue or earnings predictions is not, in and of itself, a Material Adverse Effect. |
Material Authorisations | has the meaning given in Warranty 10.4. |
Owned Software | Business Software excluding Third Party Software. |
Other Encumbrances | the Encumbrances listed in Schedule 9 entitled ‘Other Encumbrances’. |
Permitted Encumbrance | a lien or charge arising by operation of law; a retention of title arrangement in connection with the acquisition of goods in the ordinary course of business; bankers’ liens, rights of set-off or other netting arrangements arising in respect of any transactional banking facilities or hedging transactions or where the relevant financial institution has not provided financial accommodation; any lien for: rates, Taxes, Duties or fees of any kind payable to a Governmental Agency; or money payable for work performed by suppliers, mechanics, workmen, repairmen or employees and, in each case, arising in the ordinary course of business, either not yet due or being contested in good faith by appropriate proceedings (where there are sufficient financial resources to pay the relevant amount if a legally binding determination is made that payment is required); any Encumbrance in relation to personal property (as defined in the PPSA and to which that Act applies) that is created or provided for by: a transfer of an Account or Chattel Paper; a PPS Lease; or a Commercial Consignment, that is not a security interest within the meaning of section 12(1) of the PPSA; the interest of the lessor or owner in respect of assets subject to a finance or capital lease, a hire-purchase agreement or a conditional sale agreement; any Encumbrance over the interest in, or assets of, a joint venture by the party to support the obligations of that party in respect of the joint venture; any of the Other Encumbrances; any other Encumbrance created in the ordinary course of business after the execution of this agreement, and, for the avoidance of doubt, does not include any Released Encumbrance. In this definition, Account, Chattel Paper, PPS Lease and Commercial Consignment have the meanings given in the PPSA. |
Person | means any natural person, Governmental Authority, corporation, general or limited partnership, limited liability company, joint venture, trust, association or unincorporated entity of any kind. |
PPS Register | the register established under the PPSA. |
PPSA | the Personal Property Securities Act 2009 (Cth) of Australia. |
Pre Completion Period | has the meaning given in clause 15.4(a)(1). |
Product Disclosure Statement | The product disclosure statement issued by Ezidebit Pty Limited Version 14.4 effective August 2014, a copy of which is at Attachment C. |
Purchase Price | the Completion Payment; plus the Escrow Amount; plus the Actual Adjustment Amount payable under clause 7.2 (if any); and plus or minus (as applicable) any other adjustments to the Purchase Price made under this agreement. |
Related Entity | has the meaning given to that term in section 9 of the Corporations Act. |
Related Seller | the Seller listed against the name of the Seller Guarantor in the table in Schedule 1. |
Released Encumbrances | the Encumbrances listed in Schedule 9 entitled ‘Released Encumbrances’. |
Resolved Claim | any Claim by the Buyer against a Seller under this document which: has been resolved by the Buyer withdrawing the Claim; has been resolved by the Buyer and the Seller agreeing in writing the amount to be paid in settlement of the Claim; has been resolved by a court of competent jurisdiction making a final determination of the Claim and all rights of appeal having been exhausted or lapsed; or clause 11.6 applies to bar the Claim. |
Respective Proportion | in relation to a Seller, the percentage listed against that Seller’s name in Schedule 1 in the column headed ‘Respective Proportion’. |
Retention Agreement | a retention agreement between the Buyer and Charlie Holland, Mark Healy, Rob Baird and Sarah Page. |
Restricted Business | any business which is the same or substantially similar to, or competitive with or likely to be competitive with, the Business as carried on at the Completion Date. |
Restricted Persons | in respect of any Seller, that Seller and each Related Entity of that Seller. |
Sale | the sale and purchase of the Shares in accordance with clause 2. |
Seller Group | each of the Sellers and their Related Entities (other than the Target Entities), and Seller Group Member means any member of the Seller Group. |
Seller Group Representative or Adviser | any representative or adviser of any Seller Group Member or the Sellers’ Representatives and any Related Entities of such representative or adviser (or any current or former executive, officer, employee of or contractor to any of them). |
Seller Insolvency Event | an Insolvency Event in relation to any of the Sellers. |
Seller Title and Capacity Warranties | the Warranties set out in Warranty 1 of Schedule 2. |
Sellers’ Report | has the meaning given in Schedule 5. |
Sellers’ Representatives | Daniel Dempsey and Michael Dempsey, on behalf of all Sellers or such other persons as are appointed as Sellers’ Representatives under clause 21.2. |
Shares | all of the issued share capital in the Company, details of which are set out in Schedule 1. |
Software | any and all: computer programs, libraries and middleware, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; descriptions, flow−charts and other work product used to design, plan, organize and develop any of the above; and all programmer and user documentation, including user manuals and training materials, relating to any of the above. |
Special Dividend | the special dividend declared by the Company on 12 September 2014 in the amount of $8,788,050. |
Special Dividend Payment Amount | has the meaning given in clause 3.6. |
Specified Executive | each of Charlie Holland, Mark Healy, Michael Dempsey, Rob Baird and Sarah Page. |
Straddle Period | has the meaning given in clause 15.4(a)(2). |
Structure Diagram | the structure diagram for the Target Group as provided in Schedule 10. |
Superannuation Guarantee Charge | a charge levied against an employer for failing to make the minimum level of contribution to superannuation funds on behalf of its employees prescribed by the Superannuation Guarantee (Administration) Act 1992 (Cth) of Australia. |
Target Entities | the Company; and each entity directly or indirectly Controlled by the Company, as listed in Schedule 10. |
Target Entity Insolvency Event | an Insolvency Event in relation to any of the Target Entities. |
Target Group | the corporate group comprising each of the Target Entities. |
Target Working Capital | $0 |
Tax | any tax, Duty, levy, charge, impost, fee, deduction, goods and services tax, VAT, compulsory loan or withholding, that is assessed, levied, imposed or collected by any Governmental Agency and includes any interest, fine, penalty, charge, fee or any other amount imposed on, or in respect of any of the above. |
Tax Benefit | a benefit being: the amount of an allowable rebate, credit or refund for a Target Entity; an amount equal to an allowable deduction (including, but not limited to, amortisation and depreciation), relief or other allowance, for any income year for a Target Entity, multiplied by the applicable company tax rate at the time the benefit arises; or an amount that is properly excluded from assessable income, for any income year for a Target Entity, multiplied by the applicable company tax rate in the income year to which the deduction relates. |
Tax Claim | any claim, demand, legal proceedings or cause of action arising from a breach of a Tax Warranty, or under the Tax Indemnity. |
Tax Cost | all costs, and expenses incurred in: managing an inquiry; or conducting any Disputing Action in relation to a Tax Demand. |
Tax Demand | a Demand or assessment from a Governmental Agency requiring the payment of any Tax for which the Seller may be liable under this agreement; any document received from a Governmental Agency administering any Tax assessing, imposing, claiming or indicating an intention to claim any Tax; a notice to a contributing member of a Consolidated Group given under section 721‑15(5) or (5A) of the ITAA 1997; or lodgement of a Tax return or a request for an amendment of a lodged Tax return. |
Tax Indemnity | the indemnity in clause 10.6. |
Tax Invoice | includes any document or record treated by the Commissioner of Taxation as a tax invoice or as a document entitling a recipient to an input tax credit. |
Tax Law | any law relating to Tax. |
Tax Payor | has the meaning given in clause 13.3. |
Tax Relief | any relief, allowance, exemption, exclusion, set‑off, deduction, loss, rebate, refund, right to repayment or credit granted or available in respect of a Tax under any law. |
Tax Warranty | Warranty 14. |
Third Party | any person or entity (including a Governmental Agency) other than a Seller Group Member, a Buyer Group Member or a Target Entity. |
Third Party Claim | any claim, Demand, legal proceedings or cause of action made or brought by a Third Party, other than a Tax Demand. |
Third Party Intellectual Property | the Business Intellectual Property that is owned by a Third Party excluding Third Party Software. |
Third Party Software | 1 all Business Software licensed to a Target Entity by a Third Party under a Contract a copy of which has been provided in the Disclosure Materials and is listed in Schedule 7; 2 all commercial off the shelf software products licensed to a Target Entity by a Third Party; 3 all operating system software and middleware produced by a Third Party licensed to a Target Entity under a clickwrap or click through agreement and used by a Target Entity in accordance with the terms of that agreement. |
Title and Capacity Warranties | the Seller Title and Capacity Warranties and the Group Title and Capacity Warranties. |
Top Customer | the top customers of the Target Group as determined by total revenue and the top 4 CMS/integrated services partners, all of which are identified on Schedule 11, including those franchisees of the customer which have been notified by a Target Entity to Westpac under the terms of the Westpac Aggregator Master Merchant Business Solutions Card Acceptance (MSA) between Westpac Banking Corporation Ltd and Ezidebit Pty Limited dated 6 March 2009 as a ‘sub-merchant’. |
Transaction Costs | the total outstanding fees and other costs and expenses owing by a Target Entity before Completion for the corporate advisory, legal, accounting, financial and Tax services provided to any Target Entity in connection with the Sale and all other related transactions contemplated by this agreement or in connection with any alternative transactions or arrangements (including an initial public offering) |
Transaction Costs Amount | has the meaning given in clause 3.6. |
Trust | a trust constituted by a Trust Deed. |
Trust Deed | each of the trust deeds establishing the following trusts: Dutch Investment Trust; The Welsh Management Trust; Pikinini No 1 Trust; Holland Superannuation Fund; Zenonos Discretionary Trust; Mora Mou Family Trust; Ritdan Finance Trust; and S Seven D Discretionary Trust. |
Ultimate Holding Company | has the meaning in section 9 of the Corporations Act. |
Unresolved Claim | Any Claim by the Buyer against a Seller under and in accordance with this document which is not a Resolved Claim. |
Warranty Indemnity | the indemnity in clause 10.5. |
Warranties | the warranties in Schedule 2. |
Westpac Merchant Documents | Aggregator Master Merchant Business Solutions Card Acceptance between Westpac Banking Corporation Limited and Ezidebit Pty Limited dated 6 March 2009; Westpac Biller Agreement between Westpac Banking Corporation Limited and Ezidebit Pty Limited dated 12 May 2014; and Direct Entry Credit User In house Pack Agreement between Westpac Banking Corporation Limited and Ezidebit Pty Limited dated 26 June 2014. |
Westpac Finance Documents | Business Finance Agreement between Westpac Banking Corporation Limited and Ezidebit Pty Limited dated 26 August 2014; Business Finance Agreement between Westpac Banking Corporation Limited and Ezidebit Pty Limited dated 26 August 2014; Business Finance Agreement between Westpac Banking Corporation Limited and Ezidebit (NZ) Pty Limited dated 26 August 2014; Business Finance Agreement between Westpac Banking Corporation Limited and Ezidebit (NZ) Pty Limited dated 26 August 2014; and Business Finance Agreement between Westpac Banking Corporation Limited and Regalcroft Pty Limited dated 26 August 2014. |
1.2 | Interpretation provisions |
(a) | Headings and words in bold type are for convenience and do not affect the interpretation of this agreement. |
(b) | The singular includes the plural and the plural includes the singular. |
(c) | Words of any gender include all genders. |
(d) | Other parts of speech and grammatical forms of a word or phrase defined in this agreement have a corresponding meaning. |
(e) | An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Governmental Agency as well as an individual. |
(f) | A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement. |
(g) | A reference to any legislation or any industry standards includes all delegated legislation or standard made under it and amendments, consolidations, replacements or re-enactments of any of them. |
(h) | A reference to a document includes all amendments or supplements to, or replacements or novations of, that document. |
(i) | A reference to a party to a document includes that party’s successors and permitted assignees. |
(j) | A reference to an agreement other than this agreement includes a deed and any legally enforceable undertaking, agreement, arrangement or understanding, whether or not in writing. |
(k) | A reference to liquidation or insolvency includes appointment of an administrator, compromise, arrangement, merger, amalgamation, reconstruction, winding up, dissolution, deregistration, assignment for the benefit of creditors, scheme, composition or arrangement with creditors, insolvency, bankruptcy, or any similar procedure or, where applicable, changes in the constitution of any partnership or person, or death. |
(l) | No provision of this agreement will be construed adversely to a party because that party was responsible for the preparation of this agreement or that provision. |
(m) | A reference to a body, other than a party to this agreement (including an institute, association or authority), whether statutory or not: |
(1) | which ceases to exist; or |
(2) | whose powers or functions are transferred to another body, |
(n) | If a period of time is specified and dates from a given day or the day of an act or event, it is to be calculated exclusive of that day. |
(o) | A reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later. |
(p) | If an act prescribed under this agreement to be done by a party on or by a given day is done after 5.00pm on that day, it is taken to be done on the next day. |
(q) | Unless otherwise stated, a reference to time is a reference to Brisbane time. |
(r) | A reference to $ is to the currency of Australia unless denominated otherwise. |
1.3 | Business Day |
1.4 | Inclusive expressions |
1.5 | Agreement components |
2 | Conditions for Completion |
2.1 | Conditions |
a. | Clause 3 does not become binding on the parties and is of no force or effect unless and until the following condition has been satisfied: |
(1) | the Treasurer of the Commonwealth of Australia has either: |
(A) | provided written notice which is unconditional or subject only to conditions reasonably acceptable to the Buyer that there is no objection under the Foreign Acquisitions and Takeovers Act 1975 (Cth) or Australian foreign investment policy to the proposed acquisition by the Buyer of the Shares; or |
(B) | become precluded from exercising any power to make an order under the Foreign Acquisitions and Takeovers Act 1975 (Cth) in relation to the proposed acquisition by the Buyer of the Shares. |
b. | Completion is conditional on the following conditions having been satisfied or waived in accordance with clause 2.4: |
(1) | the Sellers provide to the Buyer written evidence that Westpac Banking Corporation Limited: |
(A) | has been made aware of the transactions contemplated by this agreement and the effect of those transaction on the Westpac Finance Documents; and |
(B) | waives any rights to rely on the transactions contemplated by this agreement as a ‘Default Event’ under any of the Westpac Finance Documents; and |
(2) | the Sellers provide to the Buyer written evidence that Mindbody Australia Pty Ltd ACN 161 549 006 has consented under the terms of the Integrated Services Agreement between it and Ezidebit Pty Ltd ACN 096 902 813 dated 1 June 2013 to the change of control of the Target Entities which will be effected by the transactions contemplated by the this agreement; and |
(3) | no Material Adverse Effect has occurred since 30 June 2014. |
2.2 | Notice |
2.3 | Reasonable endeavours |
(a) | The Buyer must use all reasonable endeavours to ensure that the conditions(s) in clause 2.1(a) is satisfied as expeditiously as possible and in any event on or before the Cut Off Date. |
(b) | Each party must use all reasonable endeavours to ensure that the condition(s) in clause 2.1(b)(1) is satisfied as expeditiously as possible and in any event on or before the Cut Off Date. |
(c) | Each party must cooperate with each other party in approaching the relevant regulatory bodies for the purposes of satisfying the condition in clause 2.1(a). |
(d) | The Seller must provide all information as may be reasonably requested by the Buyer in connection with any notices and applications for approval. |
2.4 | Waiver |
(a) | The condition in clause 2.1(a) may not be waived. |
(b) | The conditions in clause 2.1(b) are for the benefit of the Buyer and may only be waived by the Buyer. |
2.5 | Cut Off Date |
(a) | the conditions in clause 2.1 are not satisfied, or waived in accordance with clause 2.4, by the Cut Off Date; or |
(b) | the conditions in clause 2.1 become incapable of satisfaction or the parties agree that any of the conditions in clause 2.1 cannot be satisfied. |
2.6 | No binding agreement for transfer |
2.7 | Material Adverse Effect condition |
3 | Sale and purchase |
3.1 | Shares |
3.2 | Associated Rights |
(a) | attached to them as at the date of this agreement; and |
(b) | that accrue between the date of this agreement and Completion. |
3.3 | Purchase Price |
(a) | The consideration for the sale of the Shares is the payment by the Buyer of the Purchase Price. |
(b) | The Purchase Price will be paid as follows: |
(1) | the Completion Payment, payable by the Buyer on Completion in accordance with clause 3.4 and clause 6; |
(2) | the Actual Adjustment Amount, payable clause 7.2 (if any), following finalisation of the Completion Working Capital Statement in accordance with clauses 7.2 and 7.3; |
(3) | the Escrow Amount, payable by the Buyer into the Escrow Account in accordance with clause 8; and |
(4) | any other adjustments to the Purchase Price payable in accordance with this agreement. |
3.4 | Respective Proportions |
3.5 | Payment of the Completion Payment |
3.6 | Payment of other amounts |
(a) | the Special Dividend Payment Amount in accordance with payment directions notified to the Buyer 2 Business Days prior to the Completion Date; |
(b) | the amount of Transaction Costs (together the Transaction Costs Amount) in accordance with payment directions notified to the Buyer 2 Business Days prior to the Completion Date. |
3.7 | Waiver of rights |
3.8 | Purchase obligations interdependent |
3.9 | Title and risk |
4 | Period before Completion |
4.1 | Carrying on of business |
(a) | distributes or returns any capital to its members; |
(b) | buys back any of its shares; |
(c) | pays any dividends or makes any other distributions of its profits or effects any recapitalization, reclassification, stock dividend, stock split or like change in its issued securities; |
(d) | authorise for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver: |
(1) | any shares, securities or capital stock of, or other equity or voting interest, in the Company; or |
(2) | any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire either: |
(A) | any shares, securities or capital stock of, or other equity or voting interest in, the Company; or |
(B) | any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares, securities or capital stock of, or other equity or voting interest in, that Target Entity; |
(e) | alters its constitution; |
(f) | sells, assigns, transfers or otherwise disposes of the Business Intellectual Property or any Business Software; |
(g) | varies, terminates or fails to renew any of its contracts that are material to the Business or Material Authorisations, except in the ordinary course of business; |
(h) | enters into any new individual contract or commitment requiring it to pay more than $200,000 per annum for more than 2 years, other than by way of capital expenditure permitted under 4.1(n); |
(i) | acquires any assets whose aggregate value exceeds $1 million, other than assets acquired by way of capital expenditure permitted under 4.1(n); |
(j) | engages any new permanent employee or amends the terms of employment of any permanent employee with a total annual remuneration in excess of $200,000, except in accordance with current personnel practices; |
(k) | grants any severance or termination benefit in excess of $200,000 to any permanent employee, except in accordance with current personnel practices; |
(l) | terminates or encourages the resignation of any Employee, except in accordance with current personnel practices or for good cause; |
(m) | cancels any existing insurance policy in the name of or for the benefit of a Target Entity unless a replacement policy has been put in place; |
(n) | undertakes any capital expenditure other than capital expenditure required in the ordinary and usual course of carrying out its business; |
(o) | makes any loan to, or enters into any other material transaction with, any of its directors, officers, and employees; |
(p) | makes any change in its accounting methods, principles or practices, except as required by concurrent changes in Accounting Standards; |
(q) | cancels any debt owed to or claims held by any Target Entity other than in the ordinary course of business; |
(r) | prepares, files or amends any Tax return inconsistent with past practice or, on any such Tax return, takes any position, makes any election, or adopts any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax returns in prior periods; or |
(s) | enters into any Contract or renews any Contract containing, or otherwise subjecting the Buyer to, any non-competition, non-solicitation, exclusivity or other material restrictions on the business of any Target Entity or the Buyer. |
4.2 | Control Accounts |
4.3 | Permitted acts |
(a) | (Dividends): that is contemplated by and carried out under the terms of clause 4.4; |
(b) | (novation of adviser mandates): to novate to the Sellers (or their agent or representative) the benefit of any advisor mandates relating to the transactions contemplated by this agreement; |
(c) | (emergencies): to reasonably and prudently respond to an emergency or disaster (including a situation giving rise to a risk of personal injury or damage to property); |
(d) | (legal or contractual obligations): that is necessary for any Target Entity to meet its legal or contractual obligations; |
(e) | (ordinary course of business): in the ordinary and usual course of carrying out its business; or |
(f) | (approved actions): that is approved in writing by the Buyer, such approval not to be unreasonably withheld or delayed. |
4.4 | Declaration and payment of Special Dividend |
(a) | The Sellers warrant to the Buyer that as at the date of this agreement the Target Group had sufficient retained earnings and franking credits available to declare the Special Dividend. |
(b) | The Sellers agree that: |
(1) | the amount of the franking credit allocated to the Special Dividend paid by the Company (if any) will be up to the maximum franking credit available; and |
(2) | the Company has not franked the Special Dividend paid by the Company (if any) such that it would cause the Company's franking account to be in deficit immediately after the dividend is paid. |
(c) | The Sellers agree that the declaration and payment of any Special Dividend complies with the requirements of section 254T of the Corporations Act. |
4.5 | Access to Business before Completion |
(a) | Subject to clause 4.5(b), during the period between the date of this agreement up to the earlier of Completion and termination of this agreement, the Sellers must ensure that the Buyer is given reasonable access during normal business hours, to the premises and senior management of the Target Entities for the purpose of ensuring a smooth integration of the Target Entities with the Buyer Group following Completion, provided that such access is at all times in the presence of a representative of the Sellers if required by the Sellers. |
(b) | The Buyer must provide reasonable notice of any request for access pursuant to clause 4.5(a) (being not less than 2 Business Days) and ensure that any persons provided with the access referred to in clause 4.5(a) comply with the reasonable requirements of the Target Entities or any relevant Third Party in respect of the access and do not interfere with the Business or operations of the Target Entities. |
(c) | Nothing in this clause 4.4 gives the Buyer any rights as to the decision making of the Target Entities prior to Completion. |
4.6 | D&O insurance |
5 | Termination |
5.1 | Termination by the Buyer |
(a) | if a Target Entity Insolvency Event occurs; |
(b) | if a Seller Insolvency Event occurs; |
(c) | a holder of an Encumbrance takes possession of the whole or any substantial part of the undertaking and property of any Target Entity; or |
(d) | if the Sellers are in breach of any of clauses 4.1(a) to 4.1(g). |
5.2 | Termination by the Seller |
5.3 | Effect of termination |
(a) | each party is released from its obligations to further perform its obligations under this agreement, except those expressed to survive termination; |
(b) | each party retains the rights it has against the other in respect of any breach of this agreement occurring before termination; |
(c) | the Buyer must return to the Sellers all documents and other materials obtained from the Sellers in accordance with the terms of the Confidentiality Agreement; and |
(d) | the rights and obligations of each party under each of the following clauses and schedules will continue independently from the other obligations of the parties and survive termination of this agreement: |
(1) | clause 1 (Definitions, interpretation and agreement components); |
(2) | clause 5 (Termination); |
(3) | clause 16 (Confidentiality and announcements); |
(4) | clause 17.2(a) (Duties, costs and expenses); |
(5) | clause 18 (GST); and |
(6) | clause 23 (General). |
5.4 | No other right to terminate or rescind |
6 | Completion |
6.1 | Time and Place |
6.2 | Completion |
(a) | On or before Completion, each party must carry out the Completion Steps referable to it in accordance with Schedule 4. |
(b) | Completion is taken to have occurred when each party has performed all its obligations under this clause 6 and Schedule 4. |
6.3 | Notice to complete |
(a) | If a party (Defaulting Party) fails to satisfy its obligations under clause 6.2 and Schedule 4 on the day and at the place and time for Completion determined under clause 6.1, then: |
(1) | the Sellers’ Representatives (where the Defaulting Party is the Buyer); or |
(2) | the Buyer (where the Defaulting Party is one or more of the Sellers), |
(b) | If the Defaulting Party fails to satisfy those obligations within those 5 Business Days the Notifying Party may, without limitation to any other rights it may have, terminate this agreement by giving written notice to the Buyer's or Sellers’ Representatives (as applicable). |
6.4 | Completion simultaneous |
(a) | Subject to clause 6.4(b), the actions to take place as contemplated by this clause 6 and Schedule 4 are interdependent and must take place, as nearly as possible, simultaneously. If one action does not take place, then without prejudice to any rights available to any party as a consequence: |
(1) | there is no obligation on any party to undertake or perform any of the other actions; |
(2) | to the extent that such actions have already been undertaken, the parties must do everything reasonably required to reverse those actions; and |
(3) | the Sellers and the Buyer must each return to the other all documents delivered to them under clause 6.2(a) and Schedule 4 and must each repay to the other all payments received by it under clause 6.2(a) and Schedule 4, without prejudice to any other rights any party may have in respect of that failure. |
(b) | The Buyer may, in its sole discretion, waive any or all of the actions that the Sellers are required to perform under clause 2.1 of Schedule 4 and the Sellers may, in their sole discretion, waive any or all of the actions that the Buyer is required to perform under clause 2.2 of Schedule 4. |
7 | Completion Working Capital Statement |
7.1 | Preparation of Completion Working Capital Statement |
7.2 | Purchase Price adjustments following Completion Working Capital Statement |
(a) | is a positive number, the Buyer must pay the Actual Adjustment Amount to the Sellers in their Respective Proportions, as an adjustment to the Purchase Price in favour of the Sellers; |
(b) | is a negative number, the Sellers must pay the Actual Adjustment Amount to the Buyer in their Respective Proportions, as an adjustment to the Purchase Price in favour of the Buyer; or |
(c) | is equal to zero, no adjustment to the Purchase Price will be made under this clause 7.2. |
7.3 | Payment of Actual Adjustment Amount |
(a) | A party required to make a payment to another party under this clause 7 must make the payment in Immediately Available Funds without counter‑claim, deduction or set‑off within 5 Business Days after the finalisation of the Completion Working Capital Statement or Expert’s Report as applicable. |
(b) | Payment of the Actual Adjustment Amount in accordance with clause 7.2(b) must be made from the Escrow Account, and the parties must instruct the Escrow Agent to make any payment required by clause 7.2(b) from the Escrow Account. |
(c) | If the funds in the Escrow Account are insufficient to meet any obligation for payment of the Actual Adjustment Amount required under clause 7.2(b), the Sellers are not relieved of their obligation to pay the Actual Adjustment Amount as a result of clause 7.3(b), and must pay the difference between the Actual Adjustment Amount and the amount paid under clause 7.3(b) in accordance with clause 7.3(a). |
8 | Escrow Account |
8.1 | Establishment of Escrow Account |
(a) | the Buyer must deliver to the Sellers and the Escrow Agent a counterpart of the Escrow Agreement duly executed by the Buyer; |
(b) | the Sellers must deliver to the Buyer and the Escrow Agent a counterpart of the Escrow Agreement duly executed by each Seller; and |
(c) | the Buyer and the Sellers must procure that the Escrow Agent delivers to the Buyer and the Sellers a counterpart of the Escrow Agreement duly executed by the Escrow Agent and must take all other steps necessary to procure that the Escrow Account is opened. |
8.2 | Operation of Escrow Account |
8.3 | Payments in respect of Resolved Claims before Escrow Termination Date |
8.4 | No Unresolved Claims on Escrow Termination Date |
8.5 | Unresolved Claims on Escrow Termination Date |
(a) | an amount equal to the lower of: |
(1) | the amount of all Unresolved Claims then outstanding; and |
(2) | the Escrow Amount, |
(b) | the balance, if any, of the Escrow Amount must be released to the Sellers on the date that is 5 Business Days after the Escrow Termination Date and for this purpose the amount payable to each Seller is the aggregate amount to be released from the Escrow Account multiplied by the respective Proportion for that Seller; |
(c) | if that Unresolved Claim subsequently becomes a Resolved Claim and a payment becomes due to the Buyer in respect of that Resolved Claim, then: |
(1) | within 5 Business Days after such payment becomes due an amount equal to the lower of that amount and the Escrow Amount must be paid out of the Escrow Account to the Buyer; and |
(2) | after such payment has been made the provisions of clauses 8.5(a) and 8.5(b) will be applied as if references to the Escrow Termination Date were to the date on which that payment was made; and |
(d) | if that Unresolved Claim subsequently becomes a Resolved Claim and no payment is due to the Buyer in respect of that Resolved Claim then the provisions of clauses 8.5(a) and 8.5(b) will immediately be applied as if references to the Escrow Termination Date were to the date on which that Unresolved Claim became a Resolved Claim. |
8.6 | Interest |
9 | Restraint |
9.1 | Non competition |
(a) | carry on any Restricted Business as principal or on its own account or as agent for any other person; |
(b) | have any direct or indirect financial interest in any Restricted Business including as shareholder, member, unit holder, beneficiary, partner, guarantor, lender or financier; or |
(c) | provide services in relation to any Restricted Business including as director, partner, or employee of, or adviser or consultant to, any person referred to in paragraphs (a) or (b). |
9.2 | Non solicitation |
(a) | approach any person who is at Completion or was at any time during the 2 year period before Completion a customer (including any sub-merchants or persons that receive the benefit of the services supplied by the Company) of a Target Entity for the purpose of obtaining that person as a customer for goods or services of the type provided by a Target Entity at Completion; |
(b) | induce or encourage any person who was at any time during the 12 month period before Completion an employee of a Target Entity to leave the employment of that Target Entity; or |
(c) | interfere with the relationship between a Target Entity and any of its customers, employees or suppliers. |
9.3 | Restraint period |
(a) | on the date that is two years after the Completion Date; |
(b) | on the date that is one year after the Completion Date; |
(c) | on the date that is six months after the Completion Date. |
9.4 | Restraint area |
(a) | Australia and New Zealand; or |
(b) | the States of Victoria, New South Wales and Queensland. |
9.5 | Separate restrictions |
(a) | clauses 9.1, 9.3 and 9.4 have effect together as if they consisted of separate restrictions, each resulting from combining an undertaking in clause 9.1 with a period in clause 9.3 and an area in clause 9.4, and each being severable from each other restriction; |
(b) | clauses 9.2 and 9.3 have effect together as if they consisted of separate restrictions, each resulting from combining an undertaking in clause 9.2 with a period in clause 9.3 and each being severable from each other restriction; and |
(c) | if any of those restrictions is invalid or otherwise unenforceable for any reason, the invalidity or unenforceability does not affect the validity or enforceability of any of the other restrictions. |
9.6 | Exceptions |
(a) | holding securities in any listed corporation or unit trust which in aggregate carry not more than 5% of the votes which could be cast at a general meeting of that corporation or a meeting of holders of units in that unit trust; or |
(b) | advertising employment vacancies in any newspaper, website or other publication or through a recruitment agency (except where the recruitment agency targets employees of any Target Entity) and interviewing and negotiating with any person responding to such advertisement. |
9.7 | Assignment |
9.8 | Acknowledgement |
9.9 | Proceedings |
(a) | without limiting the relief that the Buyer is entitled to seek, the Buyer may seek an injunction if a Seller is in breach or threatens to breach, or if the Buyer reasonably believes that a Seller will breach the provisions of this clause 9; and |
(b) | no Seller will make any submission or contention in any proceeding at which the Buyer seeks an injunction in relation to any breach, or any alleged, threatened or apprehended breach, of this |
10 | Warranties and Indemnities |
10.1 | Warranties by the Sellers |
(a) | each of the Sellers severally warrants to the Buyer, in respect of itself and the Shares held by it only, that each of the Seller Title and Capacity Warranties is true and accurate on its terms on the date of this agreement and immediately before Completion; and |
(b) | the Sellers jointly and severally warrant to the Buyer that each of the Group Warranties is true and accurate on: |
(1) | in respect of each Group Warranty that is expressed to be given on a particular date, that date; and |
(2) | in respect of each other Group Warranty, the date of this agreement and immediately before Completion. |
10.2 | Basis of Sellers’ liability |
(a) | each Seller gives each Seller Title and Capacity Warranty in respect of that Seller only and not any other Sellers; |
(b) | no Seller is liable for any Claim arising out of a breach by another Seller of any Seller Title and Capacity Warranty; and |
(c) | the Sellers are jointly and severally liable for any Claim made in relation to the Tax Indemnity up to an amount equal to the Escrow Amount and thereafter only in their Respective Proportions. |
10.3 | Independent Warranties |
10.4 | Reliance |
10.5 | Indemnity for breach of Seller Title and Capacity Warranty |
10.6 | Tax indemnity |
(a) | The Sellers indemnify the Buyer against, and must pay the Buyer the amount of, any: |
(1) | Tax payable by a Target Entity as a result of a Tax Demand to the extent that Tax relates to any period, or part period, up to Completion less any Tax Benefit for the relevant Target Entity that results from the Tax Demand; and |
(2) | Tax Costs incurred by or on behalf of a Target Entity to the extent those Tax Costs arise from or relate to any of the matters for which the Sellers may be liable under clause 10.6(a)(1), less any Tax Benefit for the relevant Target Entity that results from those Tax Costs. |
(b) | the indemnity in clause 10.6(a) is not affected by any of the Warranties set out in Section 14 of Schedule 2 and to the extent that there is any inconsistency between those Warranties and the indemnity in clause 10.6(a), the indemnity prevails. |
10.7 | Refunds by Buyer |
(a) | following payment by the Sellers of an amount under clause 10.6 for a Tax Claim, all or part of the Tax Claim amount is refunded either in cash or by credit to the Buyer, a Buyer Group Member or a Target Entity (including, but not limited to, any amount or credit received following a successful objection or appeal); or |
(b) | the Buyer, a Buyer Group Member or a Target Entity receives a refund (other than the Tax Refund) either in cash or by credit which relates to an act or omission of, or occurrence affecting, a Target Entity before the Completion Date, |
(c) | in the case of 10.7(b), an amount equal to so much of the refund to the extent that it has not been taken into account in clause 10.6: and |
(d) | an amount equal to any interest paid or credited to a Target Entity which is referable to the amount referred to in this clause 10.7. |
11 | Qualifications and limitations on Claims |
11.1 | Disclosure |
(a) | The Buyer acknowledges and agrees that the Sellers have disclosed or are deemed to have disclosed against the Warranties, and the Buyer is aware of and will be treated as having actual knowledge of, all facts, matters and circumstances that: |
(1) | are provided for or described in this agreement; |
(2) | are fairly disclosed in the information contained in the Disclosure Materials; |
(3) | as at 10 Business Days prior to the date of this agreement, are or would be disclosed by a search against the names of the Target Entities of the records available for public inspection maintained by: |
(A) | ASIC at www.asic.gov.au; |
(B) | Companies House (United Kingdom) at www.companieshouse.gov.uk; |
(C) | Companies Office (New Zealand) at http://www.business.govt.nz/companies; |
(D) | the High Court, Federal Court, the Supreme Courts of any Australian State or Territory; |
(E) | Land and Property Information, New South Wales; the Victoria Land Registry, Victoria; the Queensland Land Registry, Queensland; |
(F) | IP Australia on the following databases: |
(i) | for trade marks ("ATMOSS"): http://pericles.ipaustralia.gov.au/atmoss/falcon.application_start; |
(ii) | for patents ("AusPat"): http://www.ipaustralia.gov.au/auspat/index.htm; and |
(iii) | for designs ("ADDS"): http://pericles.ipaustralia.gov.au/adds2/adds.adds_simple_search.paint_simple_search. |
(b) | The Group Warranties are given subject to the disclosures described in clause 11.1(a). The Sellers will have no liability under the Group Warranties to the extent that disclosure is made against the Warranties under this clause 11.1. |
(c) | The Buyer must not make a Claim, and the Sellers will not be in breach of a Group Warranty, if the facts, matters or circumstances giving rise to such Claim are disclosed under clause 11.1(a). |
(d) | This clause 11.1 does not apply to the Seller Title and Capacity Warranties. |
(e) | The Buyer acknowledges and agrees that none of the Seller Group, the Sellers’ Representatives nor any Seller Group Representative or Adviser: |
(1) | accepts any duty of care in relation to the Buyer in respect of any disclosure or the provision of any information; nor |
(2) | to the maximum extent permitted by law, is liable to the Buyer other than under this agreement if, for whatever reason, any disclosure or information is or becomes inaccurate, incomplete or misleading in any way. |
11.2 | Fair Disclosure |
11.3 | Awareness |
11.4 | Acknowledgements |
(a) | For the purpose of and in relation to or in connection with clause 11.10, the Buyer and the Buyer’s Guarantor acknowledge to the Sellers that: |
(1) | at no time has any Seller Group Member or any person on any of their behalf, made or given and no Buyer Group Member has relied on, any representation, warranty, promise or undertaking in respect of the future financial performance or prospects of the Target Entities, except those expressly set out in this agreement (including in the Warranties) and in any event, without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement, the only rights or remedies in relation to any representation, warranty, assurance, covenant, indemnity, undertaking or commitment given or action taken in connection with this agreement are those pursuant to this agreement and no party has any other right or remedy (whether by way of a claim for contribution or otherwise) in tort (including negligence) or for misrepresentation (whether negligent or otherwise, and whether made prior to, or in, this agreement); |
(2) | they have not relied on anything other than the warranties given and the statements made in this agreement (including the Warranties) in agreeing to buy the Shares and, in particular, no representations, warranties, promises, undertakings, statements or conduct have: |
(A) | induced or influenced the Buyer or the Buyer’s Guarantor to enter into, or agree to any terms or conditions of, this agreement; |
(B) | been relied on in any way as being accurate by a Buyer Group Member or the Buyer’s Guarantor; |
(C) | been warranted to a Buyer Group Member as being true; or |
(D) | been taken into account by the Buyer or the Buyer’s Guarantor as being important to its decision to enter into, or agree to any or all of the terms of, this agreement, |
(3) | they have entered into this agreement after satisfactory inspection and investigation of the affairs of the Target Entities, including a review of the Disclosure Materials; |
(4) | they have made, and they rely upon, their own searches, investigations, enquiries and evaluations in respect of the Target Entities and the Business and their own evaluation of the Disclosure Materials; |
(5) | they have had the benefit of independent legal, tax and accounting advice relating to the proposed purchase of the Shares by the Buyer and the terms of this agreement; |
(6) | no Seller Group Member nor any Seller Group Representative or Adviser are under any obligation to provide any Buyer Group Member or its representatives or advisers with any information on the future financial performance or prospects of the Target Entities; |
(7) | none of the Sellers has made any warranty (including in the Warranties) as to the accuracy of any forecast, model, budget estimate, projection, business plan, statement of opinion or statement of intention (Forward-looking Information) provided to the Buyer, the Buyer’s Guarantor or their representatives or advisers before the date of this agreement; |
(8) | they are not entering into this agreement in reliance on, and they may not rely on, any Forward-looking Information or any warranty, representation or other statement made or purporting to be made by or on behalf of any of the Sellers, other than the Warranties; and |
(9) | no Seller Group Member nor any Seller Group Representative or Adviser is liable under any Claim arising out of or relating to any Forward-looking Information. |
(b) | The acknowledgments in clause 11.4(a) are not intended and must not be construed as qualifying the subject matter of the Warranties. |
(c) | The Buyer acknowledges that the Sellers’ have agreed to sell the Shares and enter into this agreement relying on the representations in this clause 11.4 and would not be prepared to sell the Shares on any other basis. |
11.5 | Maximum and minimum amounts |
(a) | The Sellers are not liable under a Claim (other than a Claim under clause 7, arising under a Seller Title and Capacity Warranty or a Tax Claim) unless the amount finally agreed or adjudicated to be payable: |
(1) | in respect of that Claim exceeds $400,000; and |
(2) | either alone or together with the amount finally agreed or adjudicated to be payable in respect of other Claims that satisfy clause 11.5(a)(1) exceeds $2 million, |
(b) | The maximum amount that the Sellers (in aggregate) are required to pay in respect of all Claims (other than a Claim arising under clause 7.3(c), a Seller Title and Capacity Warranty or a Tax Claim) whenever made is limited to the Escrow Amount; |
(c) | The maximum amount that the Sellers (in aggregate) are required to pay in respect of all Claims arising under a Seller Title and Capacity Warranties or a Tax Claim is the Headline Purchase Price; and |
(d) | For the purposes of clause 11.5(a)(1): |
(1) | Claims arising out of separate sets of facts, matters or circumstances will not be treated as one Claim, even if each set of facts, matters or circumstances may be a breach of the same Warranty; and |
(2) | Claims of the same or similar nature arising out of the same or similar facts, matters and circumstances will be treated as one Claim. |
11.6 | Time limits |
(a) | the Buyer does not notify the Sellers’ Representatives of the Claim in accordance with clause 13.1(a) before: |
(1) | 5 years and 6 months after Completion in the case of a Tax Claim; or |
(2) | 18 months after Completion in all other cases; and |
(b) | within 6 months (or such longer period as may be agreed) of the date the Buyer notifies the Sellers’ Representatives of the Claim under clause 13.1(a): |
(1) | the Claim has not been agreed, compromised or settled; or |
(2) | the Buyer has not properly issued and validly served legal proceedings against the Sellers in respect of the Claim. |
11.7 | Disposal of Business |
(a) | the Target Entities have ceased to be Controlled (either directly or indirectly), or the Target Entity in respect of which the Claim arises has ceased to be Controlled (either directly or indirectly), by either the Buyer or the Buyer’s Guarantor (or both); or |
(b) | all or a majority of the Business, or of the assets of the Target Entity in respect of which the Claim arises, has or have ceased to be owned by either the Buyer or the Buyer’s Guarantor (or both), |
(c) | as a result of a control transaction in relation to or a change in control of the Buyer’s Ultimate Holding Company; or |
(d) | a restructure of the Buyer Group which does not result in a change to the Buyer’s Ultimate Holding Company. |
11.8 | Recovery under other rights and reimbursement |
(a) | The Sellers are not liable under a Claim arising from a breach of Warranty or under an Indemnity for any Loss that a Buyer Group Member or a Target Entity has recovered under any means, from another source whether by way of contract, indemnity or otherwise (including under a policy of insurance or from a Governmental Agency) in respect of any fact, matter or circumstance giving rise to that Claim. |
(b) | If, after the Seller has made a payment in respect of a Claim arising from a breach of Warranty, a Buyer Group Member or a Target Entity recovers or is compensated for by any other means, any Loss that gave rise to the Claim, the Buyer must immediately pay to the Seller as an increase in the Purchase Price, the lesser of: |
(1) | the amount of the Loss that was recovered or compensated for; and |
(2) | the amount paid by the Seller in respect of the Claim. |
11.9 | Exclusions |
(a) | The Buyer and the Buyer’s Guarantor acknowledge and agree that to the maximum extent permitted by law, the Buyer and the Buyer’s Guarantor agree not to make and waive any right they may have to make any Claim against any Seller under any provision of Part 7.10 of the Corporations Act, the Competition and Consumer Act 2010 (Cth) (including sections 18, 20, 21, 22 and 29 of Schedule 2 (Australian Consumer Law) of that Act), Part 2 Division 2 of the Australian Securities and Investments Commission Act 2001 (Cth) or any similar provisions in the legislation of any State or Territory or the Commonwealth of Australia. |
(b) | To the maximum extent permitted by law, each of the parties undertake to each other party and to any person who was at the date of this agreement a current or former director, officer or employee of any Seller, of any Seller Group Member or of any Target Entity (each such person an Officer) that neither it nor any of its Affiliates will at any time make any Claim or Demand against any Officer in respect of any matter arising in connection with this agreement or any transaction contemplated by this agreement, including in respect of any breach of Warranty or any Claim under an Indemnity, provided that this clause does not prevent a Claim or Demand which relates solely to conduct of the relevant Officer which amounts to fraud. |
11.10 | General limitations |
(a) | (provisions in Accounts): has been included as (or otherwise taken account of or reflected in) a provision, allowance, reserve or accrual in the Accounts or the Completion Working Capital Statement; |
(b) | (pre Completion actions): arises from an act or omission by or on behalf of a Seller Group Member or a Target Entity before Completion that was done or made: |
(1) | with the written consent of the Buyer; or |
(2) | at the written direction or instruction of the Buyer; |
(c) | (post Completion conduct): arises from, or is increased as a result of, anything done or not done after Completion by or on behalf of a Buyer Group Member or a Target Entity other than: |
(1) | to satisfy an obligation of the Buyer under this agreement; or |
(2) | to satisfy an obligation under any legislation, regulations or judicial or governmental requirement in force as at Completion; |
(d) | (promoted claims): arises from a Third Party Claim that is attributable to anything done or not done after Completion by or on behalf of a Buyer Group Member or a Target Entity that caused the Third Party Claim to be made; |
(e) | (breach of law or contract): could only have been avoided by a Seller Group Member breaching its obligations at law or under this agreement; |
(f) | (change of law or interpretation): arises from: |
(1) | the enactment or amendment of any legislation or regulations; |
(2) | a change in the judicial or administrative interpretation of the law; or |
(3) | a change in the practice or policy of any Governmental Agency, |
(g) | (consequential loss): |
(1) | subject to (2), is punitive damages (whether direct or indirect), special, loss or damage, indirect loss or damage or consequential loss or damage including loss of profits; |
(2) | the following losses are direct Losses (not indirect or consequential losses) in respect of which the Buyer is entitled to recover: |
(A) | loss of profits of the Target Group; |
(B) | diminution in the value of the assets of the Target Group (including goodwill); and |
(C) | diminution in the value of the Business, |
(h) | (change in accounting policy): would not have arisen but for a change after Completion in any accounting policy or practice of a Buyer Group Member or a Target Entity that applied before Completion, except as required to comply with change in the law or the Accounting Standards after Completion; |
(i) | (mitigation): arises from, or to the extent it is increased as a result of, a failure by the Buyer or any of its Related Entities to take reasonable steps to mitigate that Loss; |
(j) | (remediable loss): is remediable, provided it is remedied to the satisfaction of the Buyer, acting reasonably, within 30 Business Days after the Sellers’ Representatives receive written notice of the Claim in accordance with clause 13.1(a); or |
(k) | (compliance) arises from or is increased by the Buyer’s failure to comply in any material respect with clause 13 in respect of a Claim. |
11.11 | Other limitations |
(a) | If: |
(1) | an accrual, allowance, provision or reserve in the Completion Working Capital Statement in respect of a Tax exceeds the actual liability in respect of that Tax and that liability has been finally satisfied; |
(2) | an entitlement to any Tax Relief that is shown as an asset in the Completion Working Capital Statement is understated and the amount of the understatement has been actually received by a Target Entity; or |
(3) | an entitlement to any Tax Relief relating to any period prior to Completion that is not shown as an asset in the Completion Working Capital Statement is received after Completion, |
(b) | The Sellers are not liable under a Claim (including a Tax Claim) for any Loss or amount described below: |
(1) | (inconsistent position): Loss that arises from a Target Entity taking a position (including in any Tax return, Tax statement or accounts) in relation to the application of a Tax Law that is inconsistent with the position taken by that Target Entity before Completion (including any position adopted in relation to the preparation of any Pre Completion Returns), unless the Target Entity is required to adopt an inconsistent position to comply with a Tax Law but excluding any changes in Tax Law after the date of this agreement; or |
(2) | (failure to take action): Loss that arises from a Target Entity’s failure to take any action after Completion required by any applicable Tax Law in relation to any Tax. |
(c) | No Tax Claim may be made in respect of any Duty to which any Target Entity is, or becomes liable to pay, as a consequence of the execution, delivery and performance of this agreement, any agreement or document entered into or signed under any such agreement, including any acquisition statement or similar document required to be executed by any Governmental Agency. |
11.12 | Buyer benefits |
11.13 | Sole remedy |
(a) | It is the intention of the parties that the Buyer Group’s sole remedies in connection with the Sale will be as set out in this agreement. |
(b) | None of the Sellers has any liability to a Buyer Group Member or a Target Entity under a Claim unless the Claim may be made under the terms of this agreement or arises out of a statutory right or other claim that cannot be excluded by contract. |
(c) | The Buyer must not, and must procure that each Target Entity, Buyer Group Members and other Affiliates do not, make a Claim of the kind referred to in clause 11.14(b) that the Buyer would not be entitled to make under this agreement or that is otherwise inconsistent with the Buyer’s entitlement to make a Claim under this agreement and the Buyer acknowledges that to do so would be to seek to circumvent the parties’ intention expressed in clause 11.13. |
11.14 | Payments affecting the Purchase Price |
(a) | Any payment made by any of the Sellers to a Buyer Group Member or a Target Entity in respect of any Claim will be in reduction of the Purchase Price. |
(b) | Any payment (including a reimbursement) made by a Buyer Group Member or a Target Entity to any Seller in respect of any Claim will be an increase in the Purchase Price. |
11.15 | Independent limitations |
12 | Trustee limitation of liability |
12.1 | Capacity |
12.2 | Limitation of liability |
12.3 | Limitation not to apply |
13 | Procedures for dealing with Claims |
13.1 | Notice of Claims |
(a) | (Actual Claims): The Buyer must promptly notify the Sellers’ Representatives if: |
(1) | it decides to make a Claim against any of the Sellers that either alone or together with other Claims against the Sellers exceeds any applicable thresholds set out in clause 11.5(a) (if applicable); or |
(2) | a Third Party Claim or Tax Demand is made that may give rise to a Claim against any Seller or which will or may affect the Completion Working Capital Statement. |
(b) | (Details required): The Buyer must include in each notice given under clause 13.1(a) all relevant details (including the amount) then known to a Buyer Group Member or a Target Entity of: |
(1) | the Claim and if applicable, any other Claims that together with the Claim give rise to any applicable thresholds in clause 11.5(a) being exceeded; |
(2) | if applicable, the Third Party Claim or Tax Demand; and |
(3) | reasonable details of the facts, matters or circumstances giving rise to the Claim. |
(c) | (Extracts): The Buyer must also include in each notice given under clause 13.1(a) or 13.1(b) an extract of: |
(1) | any part of a Demand (including a Tax Demand) that identifies the liability or amount to which the Claim relates or other evidence of the amount of the Demand to which the Claim relates; and |
(2) | if available or relevant, any corresponding part of any adjustment sheet or other explanatory material issued by a Governmental Agency that specifies the basis for the Demand to which the Claim relates or other evidence of that basis, |
(d) | (Demands): The Buyer must provide a copy of any document referred to in clause 13.2 to the Sellers’ Representatives as soon as practicable of receipt of that document by a Buyer Group Member or a Target Entity. |
(e) | (Developments): The Buyer must also, on an on‑going basis, keep the Sellers’ Representatives informed of all developments in relation to the Claim notified under clause 13.1(a) or 13.1(b). |
(f) | (Compliance): If the Buyer does not fully comply with this clause 13 in respect of a Claim, the Sellers are not liable under the Claim to the extent that the non-compliance has increased the amount of the Claim. |
13.2 | Third Party Claims |
(a) | (No admission): The Buyer must not, and must ensure that each Target Entity and Buyer Group Member does not: |
(1) | accept, compromise or pay; |
(2) | agree to arbitrate, compromise or settle; or |
(3) | make any admission or take any action in relation to, |
(b) | (Defence of claim): Following receipt by the Sellers’ Representatives of a notice under clause 13.1(a) in respect of a Claim that arises from a Third Party Claim, the Sellers’ Representatives (on behalf of the Sellers) may, by giving written notice to the Buyer, assume the conduct of the defence of the Third Party Claim other than where the matter that is the subject of the Third Party Claim may (in the opinion of the Buyer acting reasonably) materially damage the reputation of the Buyer or the Target Entities. |
(c) | (Sellers’ assume conduct): If the Sellers’ Representatives advise the Buyer that the Sellers’ wish to assume the conduct of the defence of the Third Party Claim under clause 13.2(b), then: |
(1) | (access) the Buyer must provide, and must procure that each Buyer Group Member and Target Entity provides, the Sellers’ Representatives with all reasonable assistance requested by them in relation to the Third Party Claim, including providing access to witnesses and documentary or other evidence relevant to the Third Party Claim, allowing it and its legal and tax advisers to inspect and take copies of all relevant books, records, files and documents, and providing it with reasonable access to the personnel, premises and chattels of the Buyer Group Members and the Target Entities; and |
(2) | (actions) provided that the Sellers provide the Buyer with an indemnity in relation to all Loss that may result from such action, the Buyer must promptly take, and must procure that each Buyer Group Member and Target Entity promptly takes, all action reasonably requested by the Sellers’ Representatives to avoid, contest, compromise or defend the Third Party Claim other than where the matter that is the subject of the Claim may (in the opinion of the Buyer acting reasonably) materially damage the reputation of the Buyer or the Target or the Target Entities. |
(d) | (Conduct of claim by Sellers): If the Sellers’ assume the conduct of the defence of a Third Party Claim, in conducting any proceedings or actions in respect of that Third Party Claim the Sellers’ Representatives must: |
(1) | act in good faith; |
(2) | liaise with the Buyer in relation to the defence of the Third Party Claim; |
(3) | provide the Buyer with copies of any notice, correspondence or other document relating to the Third Party Claim; and |
(4) | act reasonably in all the circumstances, including having regard to the likelihood of success and the effect of the proceedings or actions on the goodwill or reputation of the business of the Buyer. |
(e) | (Buyer assumes conduct): If the Sellers’ Representatives advise the Buyer that the Sellers do not wish to assume the conduct of the defence of the Third Party Claim or the Buyer assumes the conduct of the claim in accordance with clause 13.2(b) or 13.2(c)(2), then the Buyer must procure that any Buyer Group Member or Target Entity that is conducting any proceedings or actions in respect of that Third Party Claim: |
(1) | acts in good faith; |
(2) | liaises with the Sellers’ Representatives in relation to the defence of the Third Party Claim; |
(3) | provides the Sellers’ Representatives copies of any notice, correspondence or other document relating to the Third Party Claim; and |
(4) | acts reasonably in all the circumstances, including, having regard to the likelihood of success and the effect of the proceedings or actions on the goodwill or reputation of any Seller Group Members or any business of the Seller Group. |
(f) | (Restrictions on access): nothing in clause 13.2(c)(1) requires the Buyer to allow the Sellers to have access to anything that: |
(1) | is the subject of legal professional privilege; or |
(2) | has been prepared for the purpose of, or in contemplation of, the Buyer making a Claim against the Sellers under this agreement. |
13.3 | Tax Demands |
(a) | (Payment if not contesting a Tax Demand): If the Sellers’ Representatives do not advise the Buyer that the Sellers’ Representatives wish to contest the Tax Demand then the amount of the Tax Demand will be paid to the Buyer from the Escrow Account (as a reduction in the Purchase Price) the amount notified by the Buyer by the later of: |
(1) | 2 Business Days before the due date for payment to the Governmental Agency; or |
(2) | 10 Business Days after receipt of the notice given by the Buyer under clause 13.1. |
(b) | (Contesting a Tax Demand): Following receipt of a notice under clause 13.1 in respect of a Claim that arises from or involves a Tax Demand, the Sellers’ Representatives may, by written notice to the Buyer no later than 5 Business Days before the due date for payment of the relevant Tax, advise the Buyer that it wishes to contest the Tax Demand. |
(c) | (Procedure for contesting a Tax Demand): If the Sellers’ Representatives advise the Buyer that it wishes to contest the Tax the subject of the Tax Demand then: |
(1) | (Payment of Tax) the Sellers must pay the Buyer in their Respective proportions, in Immediately Available Funds and as a reduction in the Purchase Price, so much of the Tax as is required by the relevant Governmental Agency to be paid while any action is being taken under this clause 13.3 by the date that is the later of 2 Business Days before the due date for payment to the Governmental Agency and 10 Business Days after receipt of the notice given by the Buyer under clause 13.1; and |
(2) | (Objection to Tax Demand or Disputing Action) at the written request of the Sellers’ Representatives, the Buyer must take, or procure that the person required to pay the Tax (Tax Payor) takes such Disputing Action in a timely manner in relation to the Tax Demand as the Sellers’ Representatives may reasonably require. The Buyer will not be required to take any Disputing Action under this clause 13.3(c)(2) unless the grounds of the objection are considered to have a reasonable chance of success, set out in an opinion from reputable tax practitioner (acceptable to the Buyer) provided to the Buyer as soon as is reasonably practicable. |
(d) | (Conduct of proceedings by the Sellers): If the Sellers’ Representatives contest the Tax the subject of a Tax Demand then the Buyer must follow, and must procure that each Buyer Group Member and Target Entity follows, all reasonable directions of the Sellers’ Representatives relating to the conduct of any Disputing Action referred to in clause 13.3(c) and in this clause 13.3(d), including using professional advisers nominated by the Sellers’ Representatives. In making such directions, the Sellers’ Representatives must: |
(1) | act in good faith; |
(2) | liaise with the Buyer in relation to the conduct of any Disputing Action referred to in clause 13.3(c) and this clause 13.3(d); |
(3) | provide the Buyer with reasonable access to a copy of any notice, correspondence of other document relating to that Disputing Action; |
(4) | act reasonably in all circumstances, including, having regard to the likelihood of success and the effect of the directions in the goodwill or reputation of the Business or any party to this agreement. |
(e) | (Access): The Buyer must provide, and must procure that each Buyer Group Member and Target Entity provides, the Sellers’ Representatives with all reasonable assistance requested by it in relation to the Tax Demand and the Disputing Action contemplated by clause 13.3(c) and clause 13.3(d) including providing, at the Sellers’ cost, access to witnesses and documentary or other evidence relevant to the Tax Demand or the Disputing Action, allowing it and its legal and tax advisers to inspect and take copies of all relevant books, records, files and documents, and providing it with reasonable access to the personnel, premises and chattels of the Buyer Group Members and the Target Entities for the sole purpose of obtaining information in relation to the Tax Demand or Disputing Action. |
14 | Buyer Warranties |
14.1 | Buyer Warranties |
14.2 | Independent Warranties |
14.3 | Reliance |
15 | Period after Completion |
15.1 | Appointment of proxy |
(a) | From Completion until the Shares are registered in the name of the Buyer, each Seller must: |
(1) | appoint the Buyer as its sole proxy in respect of its Shares to attend shareholders’ meetings and exercise the votes attaching to those Shares; |
(2) | not attend and vote at any shareholders’ meetings; and |
(3) | take all other actions in the capacity of a registered holder of the Shares as the Buyer directs. |
(b) | The Buyer indemnifies each of the Sellers against all Loss suffered or incurred by it arising out of the implementation of any action taken in accordance with the proxy referred to in clause 15.1(a). |
15.2 | Access to records by Sellers |
(a) | The Buyer must procure that all Business Records are preserved in respect of the period ending on the Completion Date until the later of: |
(1) | 6 years from the Completion Date; and |
(2) | any date required by an applicable law. |
(b) | After Completion the Buyer must, on reasonable notice from the Sellers’ Representatives: |
(1) | provide the Sellers and their advisers with reasonable access to the Business Records and allow the Sellers to inspect and obtain copies or certified copies of the Business Records; and |
(2) | provide the Sellers and their advisers with reasonable access to the personnel and premises of the Buyer Group Members and the Target Entities, |
(c) | The Sellers must reimburse the Buyer for its reasonable costs in retrieving any Business Records and making personnel and premises available under this clause 15.2. |
(d) | The Buyer is not obliged to waive legal professional privilege. The Sellers must comply with any reasonable steps requested by the Buyer to preserve confidentiality. |
(e) | The Buyer agrees that each of the Sellers may retain copies of any Business Records that they may require to enable them to comply with any applicable law after the Completion Date. |
15.3 | Consents to change in control |
15.4 | Pre‑Completion Tax returns |
(a) | The Sellers and the Buyer agree that the Buyer or its duly authorised agent will prepare or procure the preparation of any Tax return for each Target Entity for any Tax period: |
(1) | ending on or prior to the Completion Date (Pre Completion Period); and |
(2) | that starts prior to Completion and ends after the Completion Date (Straddle Period), |
(b) | The Sellers must provide the Buyer with such reasonable assistance as is required by the Buyer and each Target Entity or its duly authorised agent to prepare any Tax return for any Pre Completion Period or Straddle Period. |
(c) | In preparing a Tax return for a Pre Completion Period or Straddle Period: |
(1) | the Buyer must, no later than 10 Business Days prior to the due date for lodgement for a Business Activity Statement and no later than 30 Business Days prior to the due date for lodgement for any other Tax return, provide the Sellers with a copy of the Tax return and supporting calculations for the Sellers' review and comment; |
(2) | if any Sellers object to any item in a relevant Tax return, the Sellers must notify the Buyer of the objection no later than 5 Business Days prior to the due date for lodgement for a Business Activity Statement and no later than 10 Business Days prior to lodgement for any other Tax return and the parties must attempt in good faith to resolve the dispute; and |
(3) | if the parties cannot resolve the dispute by agreement by the due date for lodgement of the Tax return: |
(A) | the Buyer will (or will cause the relevant Target Entity to) lodge the Tax return as prepared by the due date for lodgement; |
(B) | the Buyer and the Sellers must appoint an independent expert to resolve the dispute under clause 15.4(d); and |
(C) | if required as a result of the independent expert's determination, the Buyer will (or will cause the relevant Target Entity to) make, file, lodge or submit an amended Tax return (or otherwise request an amendment of an assessment or propose an adjustment to a Tax return or Tax assessment) which reflects the resolution of the disputed items. |
(d) | If the Buyer and the Sellers are required to appoint an independent expert under this clause 15.3, then: |
(1) | they must as soon as practicable appoint an independent expert to determine the proper amounts for the items remaining in dispute, being such person as is agreed by the Buyer and the Sellers, or, if they cannot agree on the identity of the expert within 5 Business Days, such person as is nominated by the Institute of Arbitrators and Mediators Australia as an appropriate Tax expert to resolve the dispute, on the request of either the Buyer or the Sellers; |
(2) | the expert must determine the proper amounts for the items in dispute by applying the usual tax accounting practices of the Target Entities as applied in the period prior to Completion; |
(3) | in reaching its determination, the expert may ask for submissions from the parties and may make its own investigations, as the expert sees fit. Copies of all submissions and details of any investigations must be provided to the Buyer and Sellers; |
(4) | the expert’s determination is, in the absence of manifest error, final and binding on the parties and a party must not commence court proceedings or arbitration in relation to the dispute; and |
(5) | the expert’s costs and expenses in connection with the dispute resolution proceedings will be borne by the parties in the manner determined by the expert (and the parties must request that determination) and in the absence of such a determination will be borne by the Sellers and the Buyer equally. |
(e) | The Buyer will (or will cause the relevant Target Entity to): |
(1) | prepare and submit Tax returns, elections, surrenders, disclaimers, notices and consents on behalf of the Target Entity for the Pre Completion Period and the Straddle Period; |
(2) | deal with all Tax matters which affect a Target Entity (including the conduct of negotiations and correspondence and agreements with the relevant Governmental Agency) in respect of the Pre Completion Period and the Straddle Period; and |
(3) | provide the Sellers with a copy of such Tax returns as filed as soon as reasonably practicable, |
(f) | The Buyer will not, and will procure that each Target Entity or its duly authorised agent will not, without the Sellers' prior written consent (not to be unreasonably withheld or delayed), seek or apply for an amended Tax assessment (or otherwise propose an adjustment to a Tax return or Tax assessment) in relation to a period ending on or before Completion. |
(g) | Except in relation to the preparation of Tax returns for the Pre Completion Period and Straddle Period the parties agree that it is not the intention for the Sellers to have the right to determine, control and where appropriate participate in the disclosure (including manner of disclosure) of any material or information to a Governmental Agency and any other dealings with the Governmental Agency in relation to Tax to the extent such disclosure or other dealings is in respect of any event, act, matter or transaction or amount derived (or deemed to be derived) or expenditure incurred before, on, or as a result of, Completion (Pre Completion Tax Event). |
(h) | Without limiting clause 15.4(a), from and after Completion the Buyer agrees that it will, and will procure that each Target Entity and Buyer Group Member will: |
(1) | not disclose any information or material to a Governmental Agency in relation to a Pre Completion Tax Event without providing the Sellers with at least 5 Business Days’ written notice of doing so and taking into account all reasonable comments of the Sellers in relation to the disclosure; |
(2) | not make any admission of liability, or any agreement, compromise or settlement with a Governmental Agency in relation to a Pre Completion Tax Event without providing the Sellers 5 Business Days’ written notice of making the admission and taking into account all reasonable comments of the Sellers in relation to the admission; and |
(3) | promptly provide the Sellers with copies of any correspondence with, or material provided to or by, a Governmental Agency and keep the Sellers informed of any oral discussions with a Governmental Agency in relation to a Pre Completion Tax Event. |
(i) | If the Buyer provides a notice under clause 13.1 in respect of a Claim that arises from or involves a Tax Demand, then at all times from the date of receipt of that notice the provisions of clause 13.3 and not this clause 15.3 will apply to that Tax Demand or the Tax or Pre Completion Tax Event the subject of that Tax Demand. |
16 | Confidentiality and announcements |
16.1 | Agreed announcement |
16.2 | Confidentiality |
(a) | Subject to clause 16.2(b), each party (recipient) must keep secret and confidential, and must not divulge or disclose any information relating to another party or its business (which is disclosed to the recipient by the other party, its representatives or advisers), this agreement or the terms of the Sale other than to the extent that: |
(1) | the information is in the public domain as at the date of this agreement (or subsequently becomes in the public domain other than by breach of any obligation of confidentiality binding on the recipient); |
(2) | the recipient is required to disclose the information by applicable law or the rules of any recognised stock exchange on which its shares or securities or the shares or securities of any of its Related Entities are listed or proposed to be listed, provided that the recipient has to the extent possible having regard to the required timing of the disclosure consulted with the provider of the information as to the form and content of the disclosure; |
(3) | the disclosure is made by the recipient to its financiers or lawyers, accountants, investment bankers, consultants or other professional advisers to the extent necessary to enable the recipient to properly perform its obligations under this agreement or to conduct their business generally, in which case the recipient must ensure that such persons keep the information secret and confidential and do not divulge or disclose the information to any other person except as required by law; |
(4) | the disclosure is necessary for the purposes of clause 13.3(a), provided that the relevant Governmental Agency is made aware of the confidential nature of the information and is instructed to keep the information secret and confidential and does not divulge or disclose the information to any other person; |
(5) | the disclosure is required for use in legal proceedings regarding this agreement or the Sale; or |
(6) | the party to whom the information relates has consented in writing before the disclosure. |
(b) | In the case of any of the Sellers who are a fund or who hold shares on behalf of a partnership, trust fund or any other entity, the relevant Sellers may make further disclosures to the investment committee, manager, adviser, trustee, custodian, nominee, partner (general, limited or otherwise), investor or prospective investor of or in that partnership, trust, fund or other entity, or investors or prospective investors of other funds managed or advised by that Seller or any of its Related Entities, in which case the recipient must ensure that such persons keep the information secret and confidential and do not divulge or disclose the information to any other person. |
(c) | Each recipient must ensure that its directors, officers, employees, agents, representatives, advisers and Related Entities comply in all respects with the recipient’s obligations under this clause 16.2. |
(d) | Nothing in this agreement is to be construed as constituting the consent of a party, with respect to an Encumbrance created by this agreement, to the disclosure of the terms of this agreement for the purpose of section 275(7) of the PPSA. No party who is the grantor of an Encumbrance under this agreement will, after the date of this agreement, consent to the disclosure of the terms of this agreement to an interested person for the purpose of section 275 of the PPSA. |
(e) | To the extent not prohibited by the PPSA, each party that is the grantor of an Encumbrance under this agreement waives its right to receive any notice otherwise required to be given by a secured party under section 157 (verification statements) or any other provision of the PPSA. |
(f) | For the avoidance of doubt, the Seller agrees that the confidential information of the Company is the property of the Company and the Seller will have no right to use the confidential information. |
16.3 | Confidentiality Agreement superseded |
17 | Duties, costs and expenses |
17.1 | Duties |
17.2 | Costs and expenses |
(a) | Unless otherwise provided for in this agreement, each party must pay its own costs and expenses in respect of the negotiation, preparation, execution, delivery and registration of this agreement and any other agreement or document entered into or signed under this agreement. |
(b) | Any action to be taken by the Buyer or the Sellers in performing obligations under this agreement must be taken at their own cost and expense unless otherwise provided in this agreement. |
18 | GST |
18.1 | Definitions |
18.2 | GST |
(a) | Unless expressly stated otherwise, any consideration (monetary or non-monetary) payable or to be provided or amount used in the calculation of a sum payable under or in connection with this agreement has been determined without regard to GST. |
(b) | To the extent that any supply made under or in connection with this agreement is a taxable supply (other than any supply made under another agreement that contains a specific provision dealing with GST), the recipient must pay, in addition to the consideration provided under this agreement for that supply (unless it expressly includes GST) an amount (additional amount) equal to the amount of that consideration (or in the case on non-monetary consideration, its GST exclusive market value) multiplied by the rate at which GST is imposed in respect of the supply. The recipient must pay the additional amount at the same time as the consideration to which it is referable. |
(c) | Whenever an adjustment event occurs in relation to any taxable supply to which clause 18.2(b) applies: |
(1) | the supplier must determine the amount of the GST component of the consideration payable; |
(2) | if the GST component of that consideration differs from the amount previously paid, the amount of the difference must be paid by, refunded to or credited to the recipient, as applicable; and |
(3) | the supplier must issue the recipient with a tax invoice or adjustment note within 21 days of the supplier becoming aware of the adjustment. |
18.3 | Tax invoices |
18.4 | Reimbursements |
19 | Guarantee by Buyer’s Guarantor |
19.1 | Guarantee and indemnity |
(a) | The Buyer’s Guarantor: |
(1) | unconditionally and irrevocably guarantees to the Sellers on demand, the due and punctual performance of the Buyer’s obligations under this agreement; and |
(2) | as a separate and additional liability, indemnifies the Sellers against all Loss, actions, proceedings and judgments of any nature, incurred by, brought, made or recovered against the Sellers arising from any default or delay in the due and punctual performance of the Buyer’s obligations under this agreement. |
19.2 | Extent of guarantee and indemnity |
(a) | the grant to the Buyer, the Buyer’s Guarantor or any other person of any time, waiver or other indulgence, or the discharge or release of the Buyer, the Buyer’s Guarantor or any other person from any liability or obligation; |
(b) | any transaction or arrangement that may take place between the Sellers, the Buyer, the Buyer’s Guarantor or any other person; |
(c) | the Sellers exercising or refraining from exercising their rights under any security or any other rights, powers or remedies against the Buyer, the Buyer’s Guarantor or any other person; |
(d) | any variation, amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) of any terms of this agreement or the obligations of the Buyer under this agreement; |
(e) | the amendment, replacement, extinguishment, unenforceability, failure, loss, release, discharge, abandonment or transfer either in whole or in part and either with or without consideration, of any security now or in the future held by the Sellers from the Buyer, the Buyer’s Guarantor or any other person or by the taking of or failure to take any security; |
(f) | the failure or omission or any delay by the Sellers or the Sellers’ Representatives or the Buyer to give notice to the Buyer’s Guarantor of any default by the Buyer or any other person under this agreement; or |
(g) | any legal limitation, disability, incapacity or other circumstances related to the Buyer, the Buyer’s Guarantor or any other person or any change in the members or status of the Buyer or any other person. |
19.3 | Principal and independent obligation |
19.4 | Continuing guarantee and indemnity |
19.5 | No withholdings |
(a) | The Buyer’s Guarantor must make all payments that become due under this clause 19, free and clear and without deduction of all present and future withholdings (including Taxes, levies, imposts, deductions and charges of Australia or any other jurisdiction). |
(b) | If the Buyer’s Guarantor is compelled by law to deduct any withholding, then in addition to any payment due under this clause 19, it must pay to the Sellers such amount as is necessary to ensure that the net amount received by the Sellers after withholding equals the amount the Sellers would otherwise have been entitled to if not for the withholding. |
19.6 | Currency |
19.7 | No set off |
19.8 | Buyer’s Guarantor’s Liability |
20 | Guarantee by Sellers’ Guarantors |
20.1 | Guarantee and indemnity |
(a) | unconditionally and irrevocably guarantees to the Buyer on demand, the due and punctual performance of its Related Seller’s obligations under the Title and Capacity Warranties; and |
(b) | as a separate and additional liability, indemnifies the Buyer against all Loss suffered by the Buyer arising from any breach by its Related Seller of the Title and Capacity Warranties and Tax Warranties. |
20.2 | Extent of guarantee and indemnity |
(a) | the grant to the Related Seller, the Sellers’ Guarantor or any other person of any time, waiver or other indulgence, or the discharge or release of the Related Seller, the Sellers’ Guarantors or any other person from any liability or obligation; |
(b) | any transaction or arrangement that may take place between the Buyer, the Related Seller, the Sellers’ Guarantor or any other person; |
(c) | the Buyer exercising or refraining from exercising its rights under any security or any other rights, powers or remedies against the Related Seller, the Sellers’ Guarantors or any other person; |
(d) | any variation, amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) of any terms of this agreement or the obligations of the Related Seller under this agreement; |
(e) | the amendment, replacement, extinguishment, unenforceability, failure, loss, release, discharge, abandonment or transfer either in whole or in part and either with or without consideration, of any security now or in the future held by the Buyer from the Related Seller, the Sellers’ Guarantor or any other person or by the taking of or failure to take any security; |
(f) | the failure or omission or any delay by the Buyer or the Buyer’s Representatives or the Related Seller to give notice to the Sellers’ Guarantor of any default by the Related Seller or any other person under this agreement; or |
(g) | any legal limitation, disability, incapacity or other circumstances related to the Related Seller, the Sellers’ Guarantor or any other person or any change in the members or status of the Related Seller or any other person. |
20.3 | Principal and independent obligation |
20.4 | Continuing guarantee and indemnity |
20.5 | No withholdings |
(a) | The Sellers’ Guarantors must make all payments that become due under this clause 19, free and clear and without deduction of all present and future withholdings (including Taxes, levies, imposts, deductions and charges of Australia or any other jurisdiction). |
(b) | If any Sellers’ Guarantor is compelled by law to deduct any withholding, then in addition to any payment due under this clause 19, they must pay to the Buyer such amount as is necessary to ensure that the net amount received by the Buyer after withholding equals the amount the Buyer would otherwise have been entitled to if not for the withholding. |
20.6 | Currency |
20.7 | No set off |
20.8 | Buyer’s Guarantor’s Liability |
21 | Sellers’ Representatives |
21.1 | Authority |
(a) | despite any other provision of this agreement, irrevocably authorises the Sellers’ Representatives (subject only to clause 21.2) to jointly act on its behalf in relation to any act, matter or thing required or permitted by the terms of this agreement to be done by the Sellers or any of them, including: |
(1) | to give and receive payments and documents on behalf of any Seller; |
(2) | to direct payments to be made from or to any of the Sellers’ accounts; |
(3) | to give and receive notices; |
(4) | to give any approval or exercise any discretion; |
(5) | to amend, vary or waive any provision of this agreement or any matter relating to this agreement; |
(6) | to carry out any act or execute any document necessary or desirable in connection with effecting Completion in accordance with clause 6 of this agreement for and on behalf of and as attorney for any of the Sellers; and |
(7) | to carry out any act or execute any document necessary or desirable in relation to any Claim or potential Claim under or in respect of any transaction or matter contemplated by this agreement, including to pursue, settle or compromise any such Claim on such terms as the Sellers’ Representatives may in their absolute discretion determine; |
(b) | acknowledges that the Buyer is entitled to treat any act, matter or thing done by the Sellers’ Representatives as binding on all Sellers and is not required to enquire further in respect of such act, matter or thing; and |
(c) | acknowledges that the Buyer may discharge any obligation under this agreement to give any payment, document, notice or other thing to one or more of the Sellers (including any document served to initiate or as part of legal proceedings against any one or more of the Sellers) by giving it to the Sellers’ Representatives. |
21.2 | Replacement |
22 | Notices |
22.1 | Form of Notice |
(a) | in writing and in English and signed by or on behalf of the sending party; and |
(b) | addressed to that party in accordance with the details set out in the table below (or any alternative details nominated to the sending party by Notice). |
Party | Notice details |
Any or all Sellers and Sellers' Guarantors | Attention: Daniel Dempsey Address: Level 1, 195 Given Terrace, Paddington, Queensland 4064 Email: dpdempsey@mac.com Attention: Michael Dempsey Address: Level 1, 195 Given Terrace, Paddington, Queensland 4064 Email: Michael@thenormanby.com.au and copy to: Attention: Bryan Pointon, DLA Piper Australia Address: No. 1 Martin Place, Sydney, NSW, Australia 2000 Email: bryan.pointon@dlapiper.com |
Buyer | Attention: General Counsel and Corporate Secretary, Global Payments Inc Address: 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328, United States of America Email: david.green@globalplay.com |
Buyer’s Guarantor | Attention: General Counsel and Corporate Secretary, Global Payments Inc Address: 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328, United States of America Email: david.green@globalplay.com |
22.2 | How Notice must be given and when Notice is received |
(a) | A Notice must be given by one of the methods set out in the table below. |
(b) | A Notice is regarded as given and received at the time set out in the table below. |
Method of giving Notice | When Notice is regarded as given and received |
By hand to the nominated address | When delivered to the nominated address |
By pre‑paid post to the nominated address | At 9.00am (addressee’s time) on the second Business Day after the date of posting |
By email to the nominated email address | When the email (including any attachment) comes to the attention of the recipient party or a person acting on its behalf. |
23 | General |
23.1 | Governing law and jurisdiction |
(a) | This agreement and any dispute or claim arising out of or in connection with it or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims) shall be governed by and construed in accordance with Queensland law. |
(b) | Each party irrevocably agrees for the benefit of the Seller that the Courts of Queensland shall have non-exclusive jurisdiction in relation to any dispute or claim arising out of or in connection with this agreement or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims). |
(c) | Each party irrevocably waives any right that it may have to object to an action being brought in those Courts, to claim that the action has been brought in an inconvenient forum, or to claim that those Courts do not have jurisdiction. |
23.2 | Service of process |
(a) | Without preventing any other mode of service, any document in an action (including, any writ of summons or other originating process or any third or other party notice) may be served on any party by being delivered to or left for that party at its address for service of notices under clause 22.1 or this clause 23.2 (as applicable). |
(b) | The Buyer’s Guarantor irrevocably appoint Jones Day of Level 41 Aurora Place, 88 Phillip Street, Sydney, New South Wales, Australia 2000 as its agent for the service of process in Australia in relation to any matter arising out of this agreement. If Jones Day ceases to be able to act as such or have an address in Australia, the Buyer’s Guarantor must appoint a new process agent in Australia and deliver to the Sellers’ Representatives within 20 Business Days a copy of a written acceptance of appointment by the process agent, upon receipt of which the new appointment becomes effective for the purpose of this agreement. The Buyer’s Guarantor must inform the Sellers’ Representatives in writing of any change in the address of its process agent within 20 Business Days of the change. |
23.3 | Invalidity and enforceability |
(a) | If any provision of this agreement that is invalid under the law of any jurisdiction the provision is enforceable in that jurisdiction to the extent that it is not invalid, whether it is in severable terms or not. |
(b) | Clause 23.3(a) does not apply where enforcement of the provision of this agreement in accordance with clause 23.3(a) would materially affect the nature or effect of the parties’ obligations under this agreement. |
23.4 | Waiver |
(a) | No party to this agreement may rely on the words or conduct of any other party as a waiver of any right unless the waiver is in writing signed by the party granting the waiver. |
(b) | In this clause 23.4: |
(1) | conduct includes delay in the exercise of a right; |
(2) | right means any right arising under or in connection with this agreement and includes the right to rely on this clause; and |
(3) | waiver includes an election between rights and remedies, and conduct which might otherwise give rise to an estoppel. |
(c) | A provision of, or a right, discretion or authority created under, this agreement may not be: |
(1) | waived except in writing signed by the party granting the waiver; and |
(2) | varied except in writing signed by the parties. |
(d) | A failure or delay in exercise, or partial exercise, of a power, right, authority, discretion or remedy arising from a breach of, or default under this agreement does not result in a waiver of that right, power, authority, discretion or remedy. |
23.5 | Variation |
23.6 | Assignment |
(a) | Rights arising out of or under this agreement are not assignable by a party without the prior written consent of the other parties. |
(b) | A breach of clause 23.6(a) by a party entitles the other parties to terminate this agreement. |
(c) | Clause 23.6(b) does not affect the construction of any other part of this agreement. |
23.7 | Further action to be taken at each party’s own expense |
23.8 | Relationship of the parties |
(a) | Other than clauses 21.1 and 21.2, nothing in this agreement gives a party authority to bind any other party in any way. |
(b) | Nothing in this agreement imposes any fiduciary duties on a party in relation to any other party. |
23.9 | Exercise of rights |
(a) | Unless expressly required by the terms of this agreement, a party is not required to act reasonably in giving or withholding any consent or approval or exercising any other right, power, authority, discretion or remedy, under or in connection with this agreement. |
(b) | A party may (without any requirement to act reasonably) impose conditions on the grant by it of any consent or approval, or any waiver of any right, power, authority, discretion or remedy, under or in connection with this agreement. Any conditions must be complied with by the party relying on the consent, approval or waiver. |
23.10 | Remedies cumulative |
23.11 | Counterparts |
23.12 | Entire Agreement |
23.13 | No reliance |
23.14 | Default Interest |
(a) | If a party fails to pay any amount payable under this agreement on the due date for payment, that party must in addition to a continuing liability to pay the amount unpaid pay interest on the amount unpaid at the higher of the Interest Rate plus 3% per annum or the rate (if any) fixed or payable under any judgment or other thing into which the liability to pay the amount becomes merged (calculated on a per annum basis). |
(b) | The interest payable under clause 23.14(a): |
(1) | accrues from day to day from and including the due date for payment up to and including the actual date of payment, before and, as an additional and independent obligation, after any judgment or other thing into which the liability to pay the amount becomes merged; and |
(2) | may be capitalised by the person to whom it is payable at monthly intervals on the basis of a 365 day year. |
(c) | The right to require payment of interest under this clause 23.14 is without prejudice to any other rights the non-defaulting party may have against the defaulting party at law or in equity. |
(d) | A failure to pay any amount under this agreement is not remedied until both the amount unpaid and any interest payable under this clause 23.14 have been paid in full. |
23.15 | No withholdings |
23.16 | No partnership |
23.17 | Effect of Completion |
23.18 | No set-off, deduction or counterclaim |
Executed by Jambach Pty Limited ACN 100 647 283 (in its capacity as trustee of the Dutch Investment Trust) acting by the following persons in accordance with section 127 of the Corporations Act 2001 (Cth): | |
/s/ Marea Holland . . . . . . . . . . . . . . . . . Signature of director | /s/ John L. Holland . . . . . . . . . . . . . . . . . Signature of director/company secretary |
Marea Holland . . . . . . . . . . . . . . . . . . . . Name of director (print) | John L. Holland. . . . . . . . . . . . . . . . . . . . Name of director/company secretary (print) |
Executed by MSP Management Pty Limited ACN 010 927 410 (in its capacity as trustee of the Welsh Management Trust) acting by the following person or, if the seal is affixed, witnessed by the following person in accordance with s127 of the Corporations Act 2001: | |
/s/ Megan Welsh . . . . . . .. . . . . . . . . . . . Signature of sole company secretary | /s/ Dr. Peter Welsh. . . . . . . . . . . . . . . . . Signature of sole director |
Megan Welsh. . . . . . . .. . . . . . . . . . . . . . Name (print) | Dr. Peter Welsh . . . . . . . . . . . . . . . . . . . Name of director/company secretary (print) |
Executed by Korobosea Pty Limited ACN 110 252 241 (in its capacity as trustee of the Pikinini No 1 Trust) acting by the following person or, if the seal is affixed, witnessed by the following person in accordance with s127 of the Corporations Act 2001: | |
/s/ Theresia Wilhelm. . . . . . . . . . . . . . . . Signature of sole director and sole company secretary | |
Theresia Wilhelm . . . . . . . . . . . . . . . . . . Name (print) |
Executed by Marea Mason Holland (in her capacity as trustee of the Holland Superannuation Fund): | |
/s/ Alexander Samson. . . . . . . . . . . . . . Signature of witness | /s/ Marea Mason Holland . . . . . . . . . . . . . Signature of Marea Mason Holland |
Alexander Samson . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Zacstar Pty Limited ACN 101 907 091 (in its capacity as trustee of the Zenonos Discretionary Trust) acting by the following person or, if the seal is affixed, witnessed by the following person in accordance with s127 of the Corporations Act 2001: | |
/s/ Louis Zenonos . . . . . . . . . . . . . . . . . . . . Signature of sole director and sole company secretary | |
Louis Zenonos . . . . . . . . . . . . . . . . . . . . Name (print) |
Executed by Moramou2 Pty Limited ACN 153 507 629 (in its capacity as trustee of the Mora Mou Family Trust) acting by the following person or, if the seal is affixed, witnessed by the following person in accordance with s127 of the Corporations Act 2001: | |
/s/ Jacqueline Toumbas. . . . . . . . . . . . . Signature of sole director and sole company secretary | |
Jacqueline Toumbas . . . . . . . . . . . . . . . Name (print) |
Executed by Ritdan Pty Limited ACN 143 141 539 by Bryan Pointon under Power of Attorney dated 11 September 2014: | |
/s/ Bryan Pointon. . . . . . . . . . . . . . . . . . . Signature of Attorney | /s/ James McCarthy . . . . . . . . . . . . . . . . . . Signature of Witness |
Bryan Pointon. . . . . . . . . . . . . . . . . . . . . Name of Attorney (print) | James McCarthy . . . . . . . . . . . . . . . . . . Name of Witness (print) |
Executed by S Seven D Pty Limited ACN 130 881 971 (in its capacity as trustee of the S Seven D Discretionary Trust) acting by the following person or, if the seal is affixed, witnessed by the following person in accordance with s127 of the Corporations Act 2001: | |
/s/ Michael Dempset. . . . . . . . . . . . . . . . Signature of sole director and sole company secretary | |
Michael Dempset . . . . . . . . . . . . . . . . . . Name (print) |
Executed by Peter Welsh: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Peter Welsh . . . . . . . . . . . . . . . . . . . . Signature of Peter Welsh |
Alexander Samson. . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Otto Wilhelm: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Otto Wilhelm. . . . . . . . . . . . . . . . . . . Signature of Otto Wilhelm |
Alexander Samson. . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Marea Mason Holland: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Marea Mason Holland . . . . . . . . . . . . Signature of Marea Mason Holland |
Alexander Samson. . . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Louis Zenonos: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Louis Zenonos. . .. . . . . . . . . . . . . . . . Signature of Louis Zenonos |
Alexander Samson. . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Louis Toumbas: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Louis Toumbas. . . . . . . . . . . . . . . . . . Signature of Louis Toumbas |
Alexander Samson. . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Daniel Dempsey by Bryan Pointon under Power of Attorney dated 11 September 2014: | |
/s/ Bryan Pointon . . . . . . . . . . . . . . . . . . Signature of Attorney | /s/ James McCarthy . . . . . . . . . . . . . . . . . . Signature of Witness |
Bryan Pointon. . . . . . . . . . . . . . . . . . . . . Name of Attorney (print) | James McCarthy. . . . . . . . . . . . . . . . . . . Name of Witness (print) |
Executed by Michael Dempsey: | |
/s/ Alexander Samson. . . . . . . . . . . . . . . Signature of witness | /s/ Michael Dempsey . . . . . . . . . . . . . . . Signature of Michael Dempsey |
Alexander Samson. . . . . . . . . . . . . . . . . Name of witness (print) |
Executed by Global Payments Australia 2 Pty Limited ACN 601 396 847 acting by the following persons or, if the seal is affixed, witnessed by the following persons in accordance with section 127 of the Corporations Act 2001 (Cth): | |
/s/ Morgan M. Schuessler. . . . . . . . . . . . Signature of director | /s/ David L. Green. . . . . . . . . . . . . . . . . Signature of director/company secretary |
Morgan M. Schuessler. . . . . . . . . . . . . . Name of director (print) | David L. Green. . . . . . . . . . . . . . . . . . . Name of director/company secretary (print) |
Executed by Global Payments Inc. by its authorised signatory: | |
/s/ David L. Green . . . . . . . . . . . . . . . . . Signature of authorised signatory | |
David L. Green . . . . . . . . . . . . . . . . . . . . Name of authorised signatory (print) | |
Corporate Secretary. . . . . . . . . . . . . . . . . Office held |
1. | I have reviewed this quarterly report on Form 10-Q of Global Payments Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: /s/ Jeffrey S. Sloan | |
Date: January 8, 2015 | |
Jeffrey S. Sloan | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Global Payments Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: /s/ Cameron M. Bready | |
Date: January 8, 2015 | |
Cameron M. Bready | |
Chief Financial Officer |
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jeffrey S. Sloan | /s/ Cameron M. Bready | ||||
Jeffrey S. Sloan Chief Executive Officer Global Payments Inc. | Cameron M. Bready Chief Financial Officer Global Payments Inc. | ||||
January 8, 2015 | January 8, 2015 |
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Income Tax - Narrative (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Nov. 30, 2014
|
Nov. 30, 2013
|
Nov. 30, 2014
|
Nov. 30, 2013
|
May 31, 2014
|
|
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 25.80% | 26.90% | 26.10% | 28.50% | |
Other noncurrent liabilities | |||||
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefits | 66.6 | 66.6 | $ 67.6 | ||
United Kingdom | Foreign tax authority | |||||
Income Tax Contingency [Line Items] | |||||
Effective income tax rate reconciliation, change in enacted tax rate | 3.00% |
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