UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K

(Mark One)
x            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended June 30, 2013
or

o             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ___________ to ___________
 
Commission file number 033-26828

SOURCE FINANCIAL, INC.
 (Exact name of registrant as specified in its charter).
 
Delaware
 
80-0142655
State or other jurisdiction of
incorporation or organization
 
(I.R.S. Employer
Identification No.)
     
Level6/97 Pacific Highway
North Sydney NSW 2060
Australia
   
(Address of principal executive offices)
 
(Zip Code)
 
 Registrant’s telephone number, including area code: +61 2 8907-2500
Securities registered under Section 12(b) of the Act:

Title of each class:
 
Name of each exchange on which registered:
None
 
None
 
Securities registered under Section 12(g) of the Act:

None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o      No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes x      No o
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x      No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
  o
 
Accelerated filer
  o
 
 
 
 
 
Non-accelerated filer
(Do not check if a smaller reporting company)
  o
 
Smaller reporting company
  x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No x
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter ended December  31, 2012: $1,744,054
 
As of October 15, 2013, the registrant had outstanding 9,961,637 shares of common stock.

Documents Incorporated by Reference: None.

 
 
 
 
TABLE OF CONTENTS
 
     
Page
Part I
     
Item 1.
 
Business.
1
Item 1A.
 
Risk Factors.
11
Item 2.
 
Properties.
22
Item 3.
 
Legal Proceedings.
23
Item 4.
 
Mine Safety Disclosures
23
     
23
Part II
     
Item 5.
 
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
23
Item 6.
 
Selected Financial Data.
24
Item 7.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
25
Item 7A.
 
Quantitative and Qualitative Disclosures About Market Risk.
33
Item 8.
 
Financial Statements and Supplementary Data.
33
Item 9.
 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
36
Item 9A.
 
Controls and Procedures.
37
Item 9B.
 
Other Information
38
       
Part III
     
Item 10.
 
Directors, Executive Officers and Corporate Governance.
38
Item 11.
 
Executive Compensation.
43
Item 12.
 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
46
Item 13.
 
Certain Relationships and Related Transactions, and Director Independence.
47
Item 14.
 
Principal Accounting Fees and Services.
48
       
Part IV
     
Item 15.
 
Exhibits, Financial Statement Schedules.
49
       
SIGNATURES
51
 
 
i 
 
 
FORWARD-LOOKING STATEMENTS
 
This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends,” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described under the caption “Risk Factors” and elsewhere in this prospectus, including the exhibits hereto.
 
Any or all of our forward-looking statements in this Report may turn out to be inaccurate. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activity, performance, or achievements expressed or implied by the forward-looking statements.
 
All forward-looking statements are necessarily only estimates of future results, and actual results may differ materially from expectations. You are, therefore, cautioned not to place undue reliance on such statements which should be read in conjunction with the cautionary statements that are included elsewhere in this report.  In particular, you should consider the numerous risks described in Item. 1A of this Report under the caption “Risk Factors.”.  Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

USE OF CERTAIN DEFINED TERMS

Except where the context otherwise requires and for the purposes of this report only:
 
 
·
“AUD” or AU Dollar” refer to the legal currency of Australia;
 
·
 
the “Company,” “we,” “us,” and “our” refer to the combined businesses of Source Financial, Inc., a Delaware corporation, and its subsidiaries, Moneytech Limited, an Australian company (“Moneytech”) and its subsidiaries,  WikiTechnologies, Inc., a Delaware corporation (WikiTechnologies”), and Moneytech USA, Inc., a Delaware corporation.
 
·
“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
 
·
“SEC” refers to the Securities and Exchange Commission;
 
·
“Securities Act” refers to the Securities Act of 1933, as amended;
 
·
“Series B Shares” refers to the Company’s Series B Preferred Stock; and
 
·
“U.S. dollars,” “dollars”, “USD” and “$” refer to the legal currency of the United States.

All share and per share information in this Annual Report on Form 10-K give effect to a 1-for-100 reverse stock split of our common stock that became effective on March 21, 2013.
 
 
ii 
 
 
PART I
 
Item 1.   Business.
 
Acquisition of Moneytech

On June 30, 2013, we acquired 100% of the outstanding shares of Moneytech Limited, an Australian company (“Moneytech”), pursuant to a Share Exchange Agreement (the “Exchange Agreement”) by and among the Company, Moneytech, Marco Garibaldi (“Garibaldi”), Edward DeFeudis (“DeFeudis”) and Hugh Evans (“Evans”), individually and on behalf of the shareholders of Moneytech (the “Moneytech Shareholders”), in exchange, for 5,300,000 shares of the Company’s common stock (the “Share Exchange”). As a result of the Share Exchange, Moneytech became our wholly-owned subsidiary and the Moneytech Shareholders acquired shares representing approximately 50% of our outstanding shares of common stock on a fully diluted basis.

In connection with our acquisition of Moneytech, we issued 5,000 shares of our Series B Preferred Stock to Hugh Evans, the Chairman and Managing Director of Moneytech. The holder of the Series B Shares has the right, until June 30, 2018, to (A) elect the majority of our Board of Directors and (B) vote on all other matters presented to the holders of common stock (the “Common Shareholders ” ), with each Series B Share having a number of votes equal to 1,000 shares of common stock. After June 30, 2018, the Series B Shares will have no voting rights and we will have the right to purchase the Series B Shares at a per share price equal to one tenth of a cent ($0.001).  Thus, as the holder of the Series B Shares and the holder of approximately 46.80% of our voting shares, Mr. Evans has effective control over the composition of our Board of Directors until June 30, 2018.

In connection with the Share Exchange, Marco Garibaldi, our former Chairman and Chief Technology Officer, deposited in escrow 1,120,000 shares of our common stock  (the “Garibaldi Shares”) and Edward DeFeudis, our former President, Chief Executive Officer and Chief Financial Officer, deposited in escrow 1,120,000 shares of our common stock (the “DeFeudis Shares,” together with the Garibaldi Shares, the “ GD Escrow Shares”), and we deposited in escrow all outstanding shares of the common stock of WikiTechnologies, Inc. (the “WikiTechnologies Escrow Shares,” and together with the GD Escrow Shares, the “Escrow Shares”).

During the term of the Escrow Agreement, the operations of WikiTechnologies will be directed by Messrs. Garibaldi and DeFeudis.  If during the twelve-month period commencing July 1, 2013 (the “Earn-Out Period”),  WikiTechnologies achieves revenues of $4.2 million, a gross profit percentage of 25% and breaks even (the “ Benchmarks ” ), the Garibaldi Shares and DeFeudis Shares will be returned to Messrs. Garibaldi and DeFeudis and the WikiTechnologies Shares will be returned to us.  If the Benchmarks are not met during the Earn-Out Period, at our option, the Garibaldi Shares and DeFeudis Shares will be cancelled and returned to treasury, and the WikiTechnologies Escrow Shares will be delivered to Messrs. DeFeudis and Garibaldi, and we will no longer own WikiTechnologies.  Further, if, at any point during the Earn-Out Period, we sell WikiTechnologies, cause WikiTechnologies to merge with another entity, or dispose of the assets of WikiTechnologies, or take any other action to compromise the ability of WikiTechnologies to meet the Benchmarks, the Benchmarks will be deemed to have been achieved, and the Garibaldi Shares and DeFeudis Shares will be returned to Messrs. Garibaldi and DeFeudis. Under the terms of the Exchange Agreement, we are under no obligation to take affirmative action to further the objectives of WikiTechnologies, except that we have agreed to seek to raise up to $2,000,000 in a private placement and to allocate one-half of the first $800,000 of net proceeds and the next $200,000 of net proceeds to the business of WikiTechnologies.  In addition, the Exchange Agreement provides that at any time during the Earn-Out Period our Board of Directors in its discretion may determine that we will keep WikiTechnologies and cause the Garibaldi Shares and DeFeudis Shares to be delivered to Messrs. Garibaldi and DeFeudis.

As a result of the consummation of the Share Exchange Agreement, the shareholders of Moneytech in combination with Evans, became our controlling stockholders.  Consequently, the Share Exchange has been accounted for as a recapitalization of Moneytech effected by a share exchange in which for accounting and financial reporting purposes Moneytech is considered the acquirer. Consequently, the historical consolidated financial statements of Moneytech are now our historical financial statements, and the assets and liabilities of Source as of June 30, 2013, have been brought forward at their book value and no goodwill has been recognized.

 
1
 
 
The following chart reflects our organizational structure as of the date of this Report.
 
 
 
Our principal executive offices for Australia are located at Level 6/97 Pacific Highway, North Sydney NSW 2060, Australia, and our telephone number is +61 2 8907-2500.  Our Internet address is www.sourcefinancial.com.   Information on, or accessible through, our website is not part of this report.

Overview
 
We provide commercial asset based lending including accounts receivable and trade financing and other financial services to small to medium sized businesses and individuals with a focus on utilizing cutting edge technology to deliver these services. Our services are offered in Australia through Moneytech and its subsidiaries and in the United States through WikiTechnologies .

Moneytech

Moneytech commenced operations in 2003 as an Australian based, technology driven, commercial finance company. Moneytech has a AUD$50 million securitized wholesale debt facility (the “Wholesale Facility,” “Receivables Purchase Agreement” or “RPA”) with the structured finance division of one of the four leading Australian banks . Moneytech uses the Wholesale Facility to offer asset backed, trade finance or accounts receivable finance and working capital solutions to small and medium enterprises (‘SME’s’) throughout Australia. Moneytech has been in operation for over ten years and has operated profitably in five of the last six years.

To distinguish itself from traditional asset backed lenders, and to manage and facilitate the advance of money to its customers, Moneytech has developed, operates and maintains its own real time core money transfer platform called The Moneytech Exchange. The Moneytech Exchange stores and tracks every invoice and payment entered into the system and automatically communicates with the major Australian transactional banks to settle thousands of transactions per day, in real time. The Moneytech Exchange is fully automated, real time and online. Human intervention only occurs to manage exceptions and provide necessary transaction approvals or authorizations. The Moneytech Exchange provides significant benefits over traditional non-technology based systems such as:
 
●
Simple, secure two factor authenticated login to initiate transactions through the web;
●
Automatic processing up to pre-approved limits;
●
Same day settlement for all transactions;
●
Real-time reporting for all parties to each transaction, allowing for easy record keeping, reconciliation and auditing; and
●
Parameters can be assigned to each transaction to vary the cost, settlement timeframe and interest rate, depending on the industry, product, payment terms or any other criteria.

 
2
 
 
Moneytech has invested approximately AUD$10 million developing this technology banking platform and continues to invest in research and development to expand and improve its technology and product suite to maintain and further its competitive position.

Moneytech has delivered year on year revenue growth since its foundation.  In the twelve months ended June 30, 2013 Moneytech funded lines of credit in excess of $270 million, a 67.7% increase from the $161 million in lines of credit provided in the twelve months ended June 30, 2012, and anticipates increased funding and continued growth in new lines of credit in the twelve months ended June 30, 2014. Moneytech has built a portfolio of more than 5,000 high-quality business customers with its existing range of financing solutions and has experienced strong organic growth since inception.
 
With the addition of growth capital, Moneytech will seek to accelerate its growth by expanding its customer base, decreasing its cost of funds and achieving a greater degree of autonomy over its credit policies in the Australian market and in the United States.

Moneytech is an Australian Financial Services License (“AFSL”) holder and BPAY (bill pay) Authorized PIM (“Payment Institution Member”).

WikiTechnologies

WikiTechnolgies has developed and offers on-line financial services through two platforms: WikiPay, a simple, low-cost alternative to other mobile and online payment solutions; and WikiLoan, a low-cost peer-to-peer lending solution.

WikiPay is a proprietary fee-based mobile Peer-to-Peer payment system that allows mobile and online Peer-to-Peer, Business-to-Consumer, Consumer-to-Business and Business-to-Business payments through its website www.wikipay.com and mobile website m.wikipay.com.   WikiPay empowers users to perform real-time payments, scheduled payments, account inquiries for balance and transaction history, bill payment initiation, notifications and alerts, and transaction security verifications.
 
WikiLoan is a proprietary fee-based Peer-to-Peer lending site that introduces borrowers who want to borrow $25,000 or less, to those interested in making such loans and provides tools that enable interested lenders to evaluate the creditworthiness of borrowers based upon criteria which include credit scores, existing debt levels and intended use of funds. The WikiLoan website, www.wikiloan.com , offers loan documentation, promissory notes, repayment schedules, email reminders, online account access and online repayment.
 
Corporate History
 
Source Financial, Inc., formerly known as Wiki Group, Inc., was incorporated on June 24, 1988 under the laws of the State of Delaware under the name Windsor Capital Corp.

In February 2008, we became an Internet person-to-person lending service as a result of our acquisition from Spider Investments, LLC, of all right, title and interest in and to www.swapadebt.com , a person-to-person lending website, in consideration for shares of our common stock. At the time of the acquisition, Edward DeFeudis was our Chairman, President and CEO, and was a principal in and the managing member of Spider. In connection with the acquisition, we also issued shares of our common stock to a company owned by Marco Garibaldi for services rendered and to be rendered by Mr. Garibaldi. As a result of the transaction, Mr. DeFeudis was the beneficial owner of shares representing approximately 49.8% of our then outstanding common stock, and Mr. Garibaldi was the beneficial owner of shares representing approximately 30.3% of our then outstanding common stock.
 
On May 4, 2011, we authorized a 10 for 1 forward split of our common stock and increased the number of our authorized shares of common stock to 750,000,000.  On July 31, 2011, we authorized a 1-for-10 reverse stock split and reduced the number of our authorized shares of common stock to150,000,000.

 
3
 
 
On February 10, 2012, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), we acquired all of the outstanding equity of WikiPay, Inc. , in exchange for shares of our Series A Preferred Stock (the “Series A Preferred Shares”) convertible into sixty percent (60%) of our then outstanding shares of common stock on a fully diluted basis. At the time of the acquisition, Mr. Garibaldi, our then Chief Executive Officer, was the Chief Financial Officer and a director of WikiPay and the owner of 37% of the outstanding shares of WikiPay, and Mr. DeFeudis, our then Chairman, Chief Financial Officer and a director of our company, was the Chief Executive Officer and a director of WikiPay and the owner of approximately 35% of the then outstanding shares of WikiPay.  Of the shares of Series A Preferred Stock issued pursuant to the Merger Agreement, 37% were issued to Mr. Garibaldi and approximately 35% were issued to Mr. DeFeudis.

On February 6, 2012, we increased the number of our authorized shares of common stock to 250,000,000.

On December 7, 2012 we increased the number of our authorized shares of common stock to 500,000,000.
 
On March 21, 2013, we effected a 1-for-100 reverse split of our authorized and issued common stock and changed our corporate name to Source Financial, Inc.

On October 3, 2013, we amended and restated our certificate of incorporation to decrease the number of our authorized shares of common stock and preferred stock to 50,000,000 and 1,000,000, respectively.

Our Services
 
Moneytech Limited
 
Credit Express

Credit Express offers approved businesses, including retailers, resellers, wholesalers and manufacturers (“Buyers” or “Sellers”), commercial lines of credit and provides them access to the Moneytech Exchange. Through the Moneytech Exchange, Moneytech allows pre-approved Buyers and Sellers to automatically access financing up to pre-approved limits when a Buyer purchases inventory from a Seller. Moneytech’s client may be either the Buyer or Seller, depending upon which party requests the financing and only the party which requests the financing needs to be pre-approved.

Each transaction is conducted electronically and is based on predetermined criteria to ensure that the Moneytech receivable is acceptable to the provider of its Wholesale Facility.  By utilizing Credit Express:

 
·
Buyers are able to fund the purchase of inventory with Moneytech delivering the proceeds directly to the Seller’s bank account; or
 
·
Sellers can fund working capital without having to wait for Buyers to pay invoices. After paying the Seller directly for the goods, Moneytech assumes the risk and collects the money from the Buyer, relieving the Seller of collection costs and cash flow challenges.

In recent years, this particular product has become a popular alternative to institutional bank based borrowing.
 
Confirmed Capital

Confirmed Capital is unique in its accounts receivable/asset backed financing capability in that Moneytech funds 100% of the face amount of invoices on the day each transaction is conducted. This is more flexible than other accounts receivable financiers who typically provide a maximum of 80% of the invoice value and release funds periodically. Furthermore, Moneytech has the ability to electronically track transactions against individual invoices, decreasing Moneytech’s risk of loss and increasing its efficiency.

 
4
 
 
For both Credit Express and Confirmed Capital, customers have agreed repayment terms (which may include an interest free period) for repayment of the amount advanced by Moneytech.  In addition to an ownership or security interest in the goods which are the subject of a transaction or an interest in the receivable, Moneytech often secures the credit provided by having its customer grant additional liens on all or a portion of its assets.  Moneytech generates profits by charging an interest on the amounts funded above its own cost of funds and by charging service fees on transactions and account management fees.  To the maximum extent possible Moneytech seeks to pass along to its customers at a mark up, every fee incurred by it under the Wholesale Facility.  Further, to the extent the Wholesale Facility requires that Moneytech deposit funds to secure its lender, it requires its customers to fund such deposits.

mPayments Pty Ltd – Payment Processing, Point of Sale and Payment Aggregation Solutions

The Moneytech Exchange, initially developed to facilitate the movement and tracking of money against debtor and trade finance facilities, affords Moneytech a platform to conduct transactions and disburse funds to multiple beneficiaries in real time.  A logical extension of this capability is to employ Moneytech’s technology to facilitate payment aggregation and money movement where existing transactional banking facilities are not adequate or are cost prohibitive or inefficient.  These activities will be conducted by Moneytech’s subsidiary mPayments Pty Ltd (“mPay”), which Moneytech anticipates will become an additional revenue source as businesses and, potentially individual consumers, seek both efficiencies and a point of difference in making payments.  Moneytech has already been engaged to bring a Point of Sale solutions suite (including Gift Cards and BPAY and Parcel Pickup) to Australian newspaper outlets, with a pilot of 6 stores already operational.  There are approximately 5,000 newspaper outlets in Australia which, in addition to newspapers and magazines, distribute cigarettes, snacks and similar items.

Card Solutions
 
Moneytech is authorized to distribute Visa and ‘eftpos’ (Electronic Funds Transfer at Point of Sale) Gift and Prepaid Cards. To do this, Moneytech has partnered with another Australian bank and Authorized Deposit taking Institution to deliver Gift and Prepaid Card solutions to the market.

In addition, Moneytech recently applied for and secured its own Australian Financial Services License (“AFSL”) allowing it to further develop its financial services business and product suite. Moneytech now has the ability to issue Non Cash Payment Products (which includes gift and prepaid cards, loyalty and rewards programs) in its own right for the benefit of its business partners. As an example, in 2012, Moneytech was engaged by a major computer reseller to manage and distribute a Gift Card cash back rewards program. The customers were offered a Gift Card as an incentive for purchasing certain laptops. This program resulted in the issuance and distribution of over 30,000 Gift Cards in a 6 month period.
 
Moneytech’s mPay and Card Solutions businesses both represent significant growth opportunities without the credit risk associated with Credit Express and Confirmed Capital.  Moneytech will earn a fee on all cards issued or each transmission of funds, representing significant revenue opportunities.  Moreover, the technology necessary for these businesses has been completed.  Commercialization of these products will begin in earnest once Moneytech has obtained the necessary funds.
 
360 Markets Pty Ltd: Foreign Exchange Services
 
Moneytech recently secured its entry into the Foreign Exchange market by investing in 360 Markets Pty. Limited (“360 Markets”). 360 Markets is a foreign exchange business started in 2010 by a senior foreign exchange dealer previously employed by the Commonwealth Bank of Australia, the largest Australian commercial bank.

The significance of the relationship between Moneytech and 360 Markets is exemplified by the number of Moneytech’s existing clients that desire (as part of their business operations funded by Moneytech) to pay overseas suppliers/manufacturers in currency other than Australian Dollars. 360 Markets, as an Authorized Representative of Moneytech, has the capacity to offer Moneytech’s existing clients ’ foreign exchange solutions as well as sourcing a suite of new clients and opportunities.
 
Given the growth in international trade, there are significant synergistic growth opportunities given the parallel relationship between 360 Markets (as an FX provider) and Moneytech (as a financial services provider). 360 Markets will also provide a natural hedge against any funds Moneytech might borrow outside of Australia. Moneytech intends to devote a significant portion of its marketing efforts to developing this branch of its business.
 
 
 
5
 
 
WikiTechnologies

WikiPay

WikiPay is a proprietary fee-based mobile Peer-to-Peer payment system that allows mobile and online Peer-to-Peer, Business-to-Consumer, Consumer-to-Business and Business-to-Business payments through its website www.wikipay.com and mobile website m.wikipay.com.   WikiPay empowers users to perform real-time payments, scheduled payments, account inquiries for balance and transaction history, bill payment initiation, notifications and alerts, and transaction security verifications.

WikiPay is available to users in all 50 United States and enables consumers, banked or unbanked, with a PC or mobile device to send money, anytime, anywhere.

WikiPay is targeted at the under-banked population in the United States, estimated to be 70 million people who currently utilize check cashing and other money transfer alternatives.  WikiPay was created to take advantage of the emerging trends in mobile phone use, text messaging, banking, electronic payment systems and direct marketing.  Mobile phone adoption of payment systems has been swift and widespread and continues to grow and we believe that offering users financing and payment options via mobile phone is the way forward.

On April 19, 2013, we signed a contract with a business developer to integrate the WikiPay product suite into its Point-of-Sale technology which will be distributed to a network of more than 30,000 bodegas throughout the United States.

WikiLoan

WikiLoan is a proprietary fee-based Peer-to-Peer lending site that introduces borrowers who want to borrow up to $25,000 to lenders interested in making such loans, and provides tools that enable interested lenders to evaluate the creditworthiness of borrowers based upon criteria which include credit scores, existing debt levels and intended use of funds. The WikiLoan website, www.wikiloan.com , offers loan documentation, promissory notes, repayment schedules, email reminders, online account access and online repayment.
 
WikiLoan borrowers generally seek loans of from $500 and $25,000, with the average loan likely to be between $5,000 and $7,500.  WikiLoan lenders generally seek returns in the range of 10.0% to 16.0%.

WikiTechnologies provides identity and credit verification of borrowers and allows lenders to select the types of borrowers they wish to consider for loans. The process of credit, background and identity checks, processing of loan applications, tracking of loan payments, and other related functions are handled on an automated for fee basis, which allows WikiTechnologies to operate with low overhead costs and generate significant operating margins on each transaction.

Facilitators of Peer-to-peer loans, such as us, profit from the fees they charge borrowers and lenders to make and service the loan, and not from a particular loan's interest rate. These companies also provide services such as checking a borrowers' credit rating and contracting with third parties to collect on defaulted loans. The Company charges borrowers a $24.95 “Borrower Application Fee”.  Lenders pay an annual “Lender Administration Fee” of $9 per loan of which they are a lender.  Users of the website will also pay a $0.99 “EFT/ACH Transfer Fee” for all ACH transactions.  While these fees constitute the initial revenue model, we believe it is highly likely that the Company will develop additional revenue streams in the future, including but not limited to website advertising, credit card and auto loan origination and/or referral fees.
 
 
6
 
 
Our Markets

Moneytech operates in the commercial financial services market in Australia, targeting small to medium businesses (revenues between $1million and $100 million) for their asset backed lending solutions (including trade and accounts receivable finance) generally seeking loans of up to $5 million.  Any business involved in the provision of products or services to other businesses which requires funds to grow or that is not satisfied with its existing finance provider is a candidate for a Moneytech financial solution.  Businesses sourcing their products overseas for resale to business in Australia are a particularly good fit, as Moneytech is able to assist them with the payment of their overseas supplier, the hedging and conversion into a foreign currency, and the conversion of their receivables into cash.

Moneytech believes that banks and other financial institutions in Australia are continuing to tighten their lending criteria and increasing the minimum size of the loans they are willing to make, creating opportunities for Moneytech to offer its services to an increasing number of potential borrowers.

We developed “WikiPay” to compete worldwide in the $240 billion annual mobile payment industry.  WikiPay’s initial target market includes Internet users in the U.S. We intend to expand WikiPay into the international market, where mobile usage has significantly outpaced online usage. Many consumers in developing countries have few options for banking and communications services and rely entirely on wireless devices and carriers for communication. A growing segment of the U.S. population does not have access to bank-type services and uses alternative services to facilitate transfers and payments.
 
We developed “WikiLoan” to compete worldwide in the Peer-to-Peer Lending industry. Peer-to-peer banking systems eliminate the overhead and inefficiencies of traditional banks. Peer-to-peer lending, also known as person-to-person lending or social lending, is defined as the undertaking of financial transactions, primarily comprised of lending and borrowing, that is executed directly between individuals or “peers” without the intermediation or participation of a traditional financial institution.  For many individual borrowers, some of whom possess little or no collateral or have unfavorable credit scores, peer-to-peer lending offers one of the only opportunities to access needed capital.  Person-to-person lending involves individual borrowers seeking loans from ordinary people looking to invest their money by lending it to other individuals.
 
Sales and Marketing

Moneytech

To date Moneytech has grown its credit line portfolio largely by word of mouth recommendations from its customers to other businesses.  Only recently has Moneytech hired a business development officer (BDO), formerly with Commonwealth Bank of Australia, to actively seek out potential borrowers.  This BDO will work with providers of products and services to small and medium businesses, such as traditional banks, lawyers and accountants to develop a referral network. As financing becomes available we will engage in select media advertising in key metropolitan markets and increase our internet advertising.

The Moneytech Exchange has been developed to the point where Moneytech can offer its customers funds transfer services (mPay)’s, debit and gift cards solutions and foreign exchange services.  Moneytech has begun to offer these services on a limited basis and will seek to increase its marketing of these services as the necessary funds become available.   In determining which product to market, we will analyze the market potential for each of these products to determine which can more readily achieve positive cash flow and allocate our marketing dollars accordingly.

Wiki Technologies

WikiTechnologies seeks to market its products and services to the ultimate consumer through strategic alliances with companies that have user bases both in the United States and abroad. The Company also relies upon merchant aggregators, companies who service large numbers of merchants, such as bodegas, to demonstrate its products to those of their merchant/customers who could benefit from lower costs and better access to their customers to improve customer service, increase cross-selling opportunities, improve speed of collections and, as a result, increase customer retention.
 
 
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In addition to its efforts to form strategic alliances, as funds become available, WikiTechnologies will launch an online advertising campaign with a combination of banner ad placements on popular websites and listings on major search engines.  If sufficient funding becomes available, the marketing effort will expand to include press releases, television interviews, newspaper and magazine articles, and features in online banking and financial information websites.
 
Competition

Moneytech

The commercial finance and financial service industry in Australia has traditionally been dominated by the Big 4 Australian banks— Commonwealth Bank, Westpac Banking Corporation, Australia and New Zealand Banking Group and National Australia Bank. More recently, these banks have been decreasing the loans and other financial services provided to smaller businesses, preferring to service larger customers or act as the lender to companies such as Moneytech which then deal directly with smaller businesses.  Nevertheless, the competition to provide financing to small and medium sized businesses remains intense. Competitive factors vary depending upon the financial services products offered, the nature of the customer and geographic region. Competitive forces may limit our ability to charge our customary fees and raise fees to our customers in the future. Pressure on our margins is intense and we cannot assure you that we will be able to successfully compete with our competitors. We are currently an insignificant competitor in our industry, which includes national, regional and local independent banks and finance companies and other full service financing organizations. Many of these competitors are larger than we are and have access to capital at a lower cost than we do.

WikiTechnologies

WikiPay; WikiLoan

There are numerous money center, regional and independent banks within and without the United States that offer their customers the ability to transfer funds online or through mobile devices.  It should be assumed that it will be very difficult to attract customers of these institutions to make significant, if any, use of WikiPay.

In addition, there are numerous large well-known businesses throughout the world that offer the “unbanked” population the ability to cash checks, pay bills and send money overseas.   These include such well capitalized businesses as Western Union and Moneygram International, Inc.  More recently, various internet based companies have developed various services for the payment of bills and transfer of funds online and through mobile devices, among the more well known providers of such services in the United States are PayPal, a wholly owned subsidiary of eBay, and Obopay.  The products and services offered by these companies have various features intended to provide a competitive edge.  In the case of Paypal and Obopay, each requires the customer to have a credit card, debit card or arrange for a bank debit to fund the account.  In addition, there are numerous companies outside the United States that have developed applications to allow consumers to transfer money through their mobile phones.

WikiPay is currently an insignificant competitor in the funds transfer business.  Many of its competitors are larger enterprises or divisions of significantly larger well known companies having greater financial, marketing, technical and human resources and name recognition than us.

There are numerous companies that offer products and services competitive with WikiLoan.  Included among these are Lending Club, Lending Tree, Prosper Marketplace and Zopa.  In addition, to the extent WikiLoan is viewed as a service which matches potential borrowers and lenders, it competes with word of mouth and other traditional ways in which borrowers have found lenders and investors have found suitable investments.

Most of these companies are larger enterprises or divisions of significantly larger companies having greater financial, marketing, technical and human resources and name recognition than us.

 
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Government Regulation

Australia

To management’s knowledge, receivables and purchase order financing in the style provided by Moneytech in Australia is not a regulated industry in Australia, as Moneytech does not make loans.  Nevertheless, if any of the transactions entered into by us are deemed to be loans or financing transactions instead of a true purchase of accounts receivable, then various local laws and regulations would become applicable to our activities and could limit the fees we are able to charge our customers and may subject us to  penalties.  If laws applicable to lenders were to be applied to our activities, they would:

  •
regulate our credit granting activities, and subject us to various licensing requirements applicable  in various jurisdictions,
  •
require disclosures to customers,
  •
govern our collections policy and our activities to realize upon our security,
  •
set or require modifications to our collection, foreclosure, repossession and claims handling procedures and other trade practices,
  •
prohibit discrimination in the extension of credit, and
  •
regulate the use and reporting of information related to a client’s credit experience and other data collection.
 
This could have a material adverse effect on our business, financial condition, liquidity and results of operations.  See “Risk Factors.”

United States

WikiTechnologies’ payments business is subject to various laws and regulations throughout the world, including those governing funds transmission, electronic funds transfers, money laundering, terrorist financing, sanctions, consumer protection, banking and lending. Some of these regulations impose recordkeeping requirements and require that we report suspicious transaction involving amounts as low as $2,000.  The legal and regulatory requirements that apply to our payments business vary in the markets where we operate. While we strive to comply with applicable laws and regulations, there can be no assurance that we will not be subject to criminal indictment, fines or other enforcement actions in one or more jurisdictions or be required to make changes to our business practices or compliance programs to comply with laws and regulations as they currently exist or may be promulgated in the future.

Wikipay is a Money Service Business, which we operate as an authorized agent of PreCash. Inc.  PreCash, Inc. is a licensed money transmitter headquartered in Houston, Texas.   To date, as an agent of PreCash, we have obtained licenses to operate as a money transmitter in 43 U.S. states and the District of Columbia. As a licensed money transmitter, we are subject to restrictions on our investment of customer funds, reporting requirements, bonding requirements, and are subject to inspection by state regulatory agencies. If we were found to be in violation of money services laws or regulations, we could be subject to fines, have restrictions placed on our operations be forced to cease doing business with residents of certain states, or be required to obtain additional licenses or regulatory approvals that could impose a substantial cost on us or require that we change our business practices. Any change to WikiPay's operations that makes the service less attractive to customers or prohibits its use by residents of a particular jurisdiction could further harm our business.

Although there have been no definitive interpretations to date, WikiPay has taken actions as though its service is subject to the Electronic Fund Transfer Act and Regulation E of the U.S. Federal Reserve Board. Under such regulations, among other things, WikiPay is required to provide advance disclosure of changes to its service, to follow specified error resolution procedures and to reimburse consumers for losses from certain transactions not authorized by the consumer. WikiPay seeks to pass most of these losses on to the relevant merchants, but WikiPay incurs losses if the merchant does not have sufficient funds in its WikiPay account. Additionally, even technical violations of these laws can result in penalties of up to $1,000 for each non-compliant transaction or up to $500,000 per violation in any class action, and we could also be liable for plaintiffs' attorneys' fees.

 
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To management’s knowledge, WikiLoan is not a regulated business; as we only provide loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.  We do not make loans.  Nevertheless, if any of the transactions entered into by us are deemed to be loans or financing transactions by a court of law, then various state laws and regulations would become applicable to us and could limit the fees and other charges we are able to charge our customers and may further subject us to any penalties under such state laws and regulations.  These laws would also:

•
regulate credit granting activities, including establishing licensing requirements, if any, in various jurisdictions,
•
require disclosures to customers,
•
govern secured transactions,
•
set collection, foreclosure, repossession and claims handling procedures and other trade practices,
•
prohibit discrimination in the extension of credit, and
•
regulate the use and reporting of information related to a seller’s credit experience and other data collection.
 
Intellectual Property

Our intellectual property, which includes software and trade secrets, trademarks, copyrights and domain names, software and trade secrets, is key to our success. We have expended significant amounts developing the software which constitutes the Moneytech Exchange, WikiPay and WikiLoan.  We have obtained no significant patents protecting these or our other products but rely upon trade secret laws in Australia and the United States.  We routinely seek to protect our proprietary rights by entering into confidentiality and non-disclosure agreements with our employees, contractors, customers and other parties with whom we conduct business in order to protect our proprietary information.
 
In addition to our software we have developed and use trademarks registered in Australia and the United States, particularly relating to corporate, brand and product names.   Registration of a trademark in Australia, as in the United States, affords the owner nationwide exclusive trademark rights in the registered mark in the country of registration and the ability to prevent others from using the same or similar marks. However, to the extent a common law user has made prior use of the mark in connection with similar goods or services in a particular geographic area, the nationwide rights conferred by federal registration would be subject to that geographic area.   We continue to seek to develop goodwill and brand recognition for our trademarks in Australia and the United States, and we intend to register additional trademarks in foreign countries where our products or services are or may be sold or used in the future.   We cannot assure you, however, that our current trademarks or any trademarks we may use or register in the future will afford us any significant competitive advantage.
 
In recent years, many software companies have filed applications for patents covering their technologies. Many of these patents have yet to be litigated. Other competitors may develop technologies that are similar or superior to our technology and may receive and seek to enforce patents on such technology. We are not aware of any issued or pending patents that may be asserted against us.

Research and Development

To date we have invested approximately AUD$10 million developing the Moneytech Exchange. We continue to invest in research and development to expand and improve our technologies and product suite in order to maintain and further our competitive advantage.
 
 
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Employees

As of October 14, 2013, we had a total of 17 full time employees, 1 part time employee, 8 full-time contractors and 4 part-time program developers based in India.  Of the 17 employees, 13 full time employees and the one part time employee were engaged in our Australian operations and 3 were devoted to WikiTechnologies.  Three of the full time contractors are responsible for ongoing development and upgrades of Moneytech’s systems and the balance of the full time contractors along with the part time programmers are continuing the development of and servicing the systems of WikiTechnologies.
 
None of our employees are parties to a collective bargaining agreement. We consider our relationship with our employees to be satisfactory.

Item 1A.    Risk Factors.
 
Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as all of the other information contained in this Report, including our consolidated financial statements, and the related notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, before investing in our common stock. The occurrence of any of the conditions described in the following risks could materially and adversely affect our business, prospects, financial condition, results of operations, and cash flow. In such case, the trading price of our common stock could decline and you could lose all or part of your investment.
 
Risks Related to Our Business
 
Adverse economic conditions in Australia, the United States and worldwide may negatively impact our results.
 
We are subject to changes in general economic conditions that are beyond our control. During periods of economic slowdown, delinquencies, defaults, and losses, generally increase while collections decrease. These periods may also be accompanied by increased unemployment rates and decreased consumer demand, which negatively impact businesses being lent to, weakening the collectability of the purchase orders we finance, increasing the risk that an event of default from one of our customers will eventuate in a loss. In addition, during an economic slowdown or recession, our servicing costs may increase without a corresponding increase in our finance charge income. Furthermore, our business is significantly affected by monetary and regulatory policies of the Reserve Bank of Australia, the Australian Federal Government and its agencies, the U.S. federal government and the US Federal Reserve. Changes in the policies of the institutions are influenced by macroeconomic conditions and other factors that are beyond our control and could have a material adverse effect on us through interest rate changes, costs of compliance with increased regulation, and other factors.
 
The process we use to estimate losses inherent in our credit exposure requires complex judgments, including analysis of individual industries, forecasts of economic conditions and how those economic conditions might impair the ability of our borrowers to repay their loans. The degree of uncertainty concerning economic conditions may adversely affect the accuracy of our estimates, which may, in turn, impact the reliability of the process and the quality of our assets.

Our business could be negatively impacted if our access to funding is reduced.
 
We have available an AUD$50 million Wholesale Facility with an Australian “Big Four” bank which is renewed annually on an agreed anniversary date.  The next anniversary date is December 31, 2013. We have indicated to the Bank our desire to renew the facility and are awaiting the Bank’s determination. We cannot guarantee that the RPA will be renewed on the current maturity date or thereafter, on reasonable terms, or at all. We require additional capital or the expansion of our borrowing capacity to substantially increase the aggregate amount of credit lines we provide. The availability of additional financing depends, in part, on factors outside of our control, and the availability of bank liquidity in general. We may also experience the occurrence of events of default or breach of financial covenants, which could reduce our access to funding. In the event of a sudden or unexpected shortage of funds in the banking system, we cannot be sure that we will be able to maintain necessary levels of funding without incurring high funding costs, a reduction in the availability of financing or the liquidation of certain assets.
 
 
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Downsizing the scale of our business would have a material adverse effect on our financial position, liquidity, and results of operations.
 
Our business could be negatively impacted if we no longer receive grants from the Australian Government.
 
A significant portion of the amounts paid to develop the Moneytech Exchange represents funds received from the Australian Government pursuant to a research and development grant program.  As we grow, we may no longer be eligible for such grants.  The inability to receive grants in the future commensurate with those received in the past could force us to reduce the amounts spent on research and development and could adversely affect our business and our financial results.
 
Our indebtedness and other obligations are significant and impose restrictions on our business.
 
We have a significant amount of indebtedness and are dependent upon our Wholesale Loan Facility.  Our Facility imposes various constraints on the operation of our business, reduces operational flexibility and creates default risks. Our receivables purchase facility contains a cash reserve requirement which requires us to deposit money in a bank account in accordance with an agreed upon formula. We are required to hold these funds in restricted cash accounts to provide additional collateral for borrowings under the borrowing facilities. Additionally, the receivables purchase facility contains various covenants requiring in certain cases minimum financial ratios, asset quality, and portfolio performance ratios. Generally, these limits are calculated based on the as a whole, however for certain obligors delinquency, net loss and dilution are calculated with respect to the individual obligor.
 
Failure to meet any of these covenants could result in an event of default under the Facility. If an event of default occurs under the Facility, the lender could elect to declare all amounts outstanding to be immediately due and payable, enforce its interest against collateral pledged under the Facility or restrict our ability to obtain additional borrowings under the Facility.
 
If our debt service obligations increase, whether due to the increased cost of existing indebtedness or the incurrence of additional indebtedness, we may be required to dedicate a significant portion of our cash flow from operations to the payment of principal of, and interest on, our indebtedness, which would reduce the funds available for other purposes. Our indebtedness also could limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions.
 
We purchase accounts receivable primarily from and make purchase order advances primarily to small to medium companies, which present a greater risk of loss than purchasing accounts receivable from and purchase order advances to larger companies.

Our portfolio consists primarily of accounts receivable and purchase order advances from small to medium businesses with annual revenues ranging from $5 million to $50 million. Compared to larger, publicly owned firms, these companies generally have more limited access to capital and higher funding costs, may be in a weaker financial position and may need more capital to expand or compete. These financial challenges may make it difficult for our clients to continue as a going concern. Accordingly, advances made to these types of clients entail higher risks than advances made to companies who are able to access traditional credit sources.  In part because of their smaller size, our clients may:

•
experience significant variations in operating results;
•
have narrower product lines and market shares than their larger competitors;
•
be particularly vulnerable to changes in customer preferences and market conditions;
•
be more dependent than larger companies on one or more major customers or suppliers, the loss of which could   materially impair their business, financial condition and prospects;
•
face intense competition, including from companies with greater financial, technical, managerial and marketing resources;
•
depend on the management talents and efforts of a single individual or a small group of persons for their success, the death, disability or resignation of whom could materially harm the client’s financial condition or prospects;   and
•
have less skilled or experienced management personnel than larger companies.

Accordingly, any of these factors could impair a client’s cash flow or result in other events, such as bankruptcy, which could limit our ability to collect on the client’s purchased accounts receivable or purchase order advances, and may lead to losses in our portfolio and a decrease in our revenues, net income and assets.
 
 
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Our financial condition, liquidity, and results of operations depend on the credit performance of the credit facilities we provide to our customers.
 
While our underwriting guidelines were designed to establish that the obligors on the receivables we purchase represent a reasonable credit risk, the receivables we purchase nonetheless are likely to experience higher default rates than a portfolio of obligors comprised of large companies. In the event of a default, the most practical alternative may be to engage in collection action against the obligor or, if permitted under the terms of our agreement, the customer who sold the receivable to us. The realizable value of a receivable may not cover the outstanding account balance and costs of recovery, and if collection of the receivables does not yield sufficient proceeds to repay the receivables in full could result in losses on those receivables.
 
Our allowance for loan losses and impairments may prove to be insufficient to absorb probable losses inherent in our portfolio.
 
We maintain an allowance for bad or doubtful debts that we believe is appropriate to provide for probable losses inherent in our portfolio. The determination of the appropriate level of the allowance for bad or doubtful debts and impairment reserves inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and future trends, all of which are subject to change. Changes in economic conditions affecting clients, new information regarding our clients or their obligors, and other factors, both within and outside of our control, may require an increase in the allowance for loan losses. Furthermore, growth in our funding book generally would lead to an increase in the provision for loan losses. If the net write-offs exceed the allowance for bad and doubtful debt, we will need to make additional provisions to increase the allowance for bad and doubtful debt. There is no accurate method for predicting losses, and we cannot assure you that provision for bad and doubtful debts will be sufficient to cover actual losses. Any increases in the allowance for bad and doubtful debts will result in a decrease in net income and may have a material adverse effect on us.
 
Poor portfolio performance may trigger credit enhancement provisions in our Receivables Purchase Agreement.
 
Our RPA has delinquency, net loss ratio limits, dilution and Day Sales Outstanding limits that, if exceeded, would increase the level of credit enhancement requirements for that facility and redirect all excess cash to our lender. Generally, these limits are calculated based on the aggregate portfolio performance across all clients; however, delinquency, net loss ratios and dilutions are calculated with respect to some individual obligors.
 
If, at any measurement date, a trigger was hit with respect to any financing, provisions of the financing agreements would increase the level of credit enhancement requirements for that financing and redirect all excess cash to the credit provider. During this period, excess cash flow, if any, from the Facility would be used to fund the increased credit enhancement levels rather than being distributed to us. Once an impacted trust reaches the new requirement, we would return to receiving a residual distribution from the trust
 
There is a risk that in the event portfolio performance was not adequate, triggering credit enhancement criteria, and that there was not sufficient cash-flow from our business to satisfy the increase in enhancement required, that our credit provider could cease its support of our business which would have a materially adverse effect on our business,

Competition may adversely impact our results, especially in Australia.
 
The financial services sector in which we operate is highly competitive and could become even more so, particularly in those segments which are perceived as providing higher growth prospects.  Factors contributing to this include industry deregulation, mergers and acquisitions, changes in customers’ needs and preferences, entry of new participants, development of new distribution and service methods and increased diversification of products by competitors.  For example, changes in the financial services sector have made it possible for non-bank financial institutions to offer products and services traditionally provided by banks, such as automatic payment systems, mortgages and credit cards.
 
The effect of competitive market conditions may have a material adverse effect on our financial performance and position, especially in Australia.  For example, increasing competition for customers can lead to a compression in our net interest margin, or increased advertising and related expenses to attract and retain customers.
 
 
13
 
 
The asset backed lending market is served by a variety of entities, including, banks, credit unions, and independent finance companies. Our competitors may provide financing on terms more favorable to customers than we offer. Many of these competitors also have long-standing relationships with potential clients.
 
We anticipate that we will encounter greater competition as we expand our operations.
 
The market for providing loans and other financial services to small to medium size businesses is highly competitive and we expect that competition will increase. Current competitors have significantly greater financial, technical and marketing resources than we do. We expect that more companies will enter this sector of the financial services market. We may not be able to compete successfully against either current or future competitors. Increased competition could result in reduced revenue, lower margins or loss of market share, any of which could significantly harm our business.
 
Changes in interest rates may adversely impact our profitability and risk profile.
 
Our profitability may be directly affected by interest rate levels and fluctuations in interest rates. As interest rates change, our gross interest rate spread on new facilities either increases or decreases because the rates we charge on the facilities we provide is limited by market and competitive conditions, restricting our ability to pass on increased interest costs to the consumer. Additionally, although the majority of our clients are small to medium businesses and are not highly sensitive to interest rate movement, increases in interest rates may reduce the volume of facilities we originate.
 
A security breach or a cyber attack could adversely affect our business.
 
In the normal course of business, we receive, process and retain sensitive and confidential personal and business information and may, subject to applicable law, share that information with third parties. Our facilities and systems, and those of third parties to which we provide information, could be vulnerable to external or internal security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, or other similar events. A security breach or cyber attack of our systems could interrupt or damage our operations or harm our reputation. If third parties or our employees penetrate our network security or otherwise misappropriate our customers’ confidential information or contract information, or if we give third parties or our employees improper access to consumers’ confidential information or contract information, we could be subject to liability. This liability could include investigations, fines, or penalties imposed by regulatory agencies, including the loss of necessary permits or licenses. This liability could also include identity theft or other similar fraud-related claims, claims for other misuses, or losses of personal information, including for unauthorized marketing purposes or claims alleging misrepresentation of our privacy and data security practices.
 
We rely on encryption and authentication technology both licensed from third parties and developed in house to provide the security and authentication necessary to effect secure online transmission of confidential information. Advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the algorithms that we use to protect sensitive data. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. We may be required to expend capital and other resources to protect against such security breaches or cyber attacks or to alleviate problems caused by such breaches or attacks. Our failure to prevent security breaches and cyber attacks, whether due to an external cyber-security incident, a programming error, or other cause, could damage our reputation, expose us to mitigation costs and the risks of private litigation and government enforcement, disrupt our business, or otherwise have a material adverse effect on our sales and results of operations.
 
 
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We depend on the accuracy and completeness of information about our clients and obligors and any misrepresented information could adversely affect our business, results of operations, and financial condition.
 
In deciding whether to purchase particular receivables or to enter into other transactions with our clients and their obligors, we rely on information furnished to us by or on behalf of our clients and counterparties, including financial statements and other financial information. We also rely on representations made by our clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent third parties. If any of this information is intentionally or negligently misrepresented and such misrepresentation is not detected, the value of receivables or purchase order loans may be significantly lower than expected. Whether a misrepresentation is made by our client, another party, or one of our employees, we generally bear the risk of loss associated with the misrepresentation. Any such misrepresented information could adversely affect our business, financial condition, and results of operations.

We are subject to operational risk, which may adversely impact our results.
 
Operational risk refers to risks arising from day-to-day operational activities which may result in direct or indirect loss. These losses may result from both internal and external events.  We are highly dependent on information systems and technology and there is a risk that these, or the services they use or depend on, might fail.  Our daily operations are computer based.   The exposure to systems risks includes: complete or partial failure of information technology systems; inadequacy of internal or third party information technology systems due to, among other things, failure to keep pace with industry developments; and capacity of the existing systems to effectively accommodate planned growth and integrate existing and future acquisitions and alliances.  Any failure in these systems could result in business interruption, the loss of customers, damaged reputation and weakening of our competitive position and could adversely impact our business and have a material adverse effect on our financial condition and loss of operations.
 
We also are exposed to failings by third party providers, including outsourcing, to natural disasters, political, security and social events and to failings in the financial services sector.
 
We may lose the business conducted by WikiTechnologies.
 
The Share Exchange Agreement gives us the right to return the shares of WikiTechnologies being held in escrow, representing all of the outstanding shares of WikiTechnologies, to Mario Garibaldi and Edward DeFeudis, if during the twelve-month period commencing on July 1, 2013, WikiTechnologies fails to achieve revenues of $4.2 million, a gross profit percentage of 25% and break even (the “Financial Benchmarks”). If WikiTechnologies fails to attain the Financial Benchmarks and we decide to return the shares of WikiTechnologies held in escrow to Messrs Garibaldi and DeFeudis, we would no longer own or have an equity interest in WikiTechnologies and our stockholders would not benefit from any success it might achieve after the date on which it is returned to Messrs. Garibaldi and DeFeudis.

We cannot assure you that any business we acquire will benefit from its acquisition by us.

We cannot assure you we will realize any of the perceived benefits to our business from the acquisition of Moneytech. The past performance of Moneytech is not necessarily indicative of future performance. The process of combining the organizations of private companies into a public company such as ours involves certain risks, including exposure to unknown liabilities of the acquired companies, and may cause fundamental changes to their businesses or in their operations. In addition, our operating results may be affected by the additional expenses we incur in integrating Moneytech into our organization and the significant increase in expenses relating to financial statement preparation and compliance with controls and procedures standards established by the Sarbanes-Oxley Act of 2002.

Our inability to successfully manage the growth of our business may have a material adverse effect on our business, results of operations and financial condition.
 
We intend to continue our growth strategy to (i) expand our portfolio by increasing market penetration and market share through new customer acquisitions and (ii) grow our other businesses such as our payments aggregation and processing business, our gift card business and our foreign exchange business. Our ability to execute this growth strategy is subject to significant risks, some of which are beyond our control, including:
 
 
•
the inherent uncertainty regarding general economic conditions;
     
 
•
our ability to obtain adequate financing for our expansion plans;
 
 
15
 
 
 
•
the prevailing laws and regulatory environment of each territory and country in which we operate or seek to operate, and, to the extent applicable, laws and regulations, which are subject to change at any time;
     
 
•
the degree of competition in new markets and its effect on our ability to attract new customers;
     
 
•
our ability to recruit qualified personnel, in particular in areas where we face a great deal of competition; and
 
As part of our growth we expect to experience growth in the number of employees and the scope of our operations. This could result in increased responsibilities for management.

Our future success will be highly dependent upon our ability to manage successfully the expansion of our operations. Our ability to manage and support our growth effectively will be substantially dependent on our ability to implement adequate improvements to financial, inventory, management controls, reporting, and hire sufficient numbers of financial, accounting, administrative, and management personnel. We may not succeed in our efforts to identify, attract and retain experienced accounting and financial personnel.

Our future success also depends on our ability to address potential market opportunities and to manage expenses to match our ability to finance operations. The need to control our expenses will place a significant strain on our management and operational resources. If we are unable to control our expenses effectively, our business, results of operations and financial condition may be adversely affected.

Our growth strategies require significant capital investments and may require us to seek external financing, which may not be available on terms favorable to us.
 
Our business operations and growth strategies require substantial capital investments, the availability of which depends on our ability to generate cash flow from operations, borrow funds on satisfactory terms and raise funds in the capital markets. Our ability to arrange for financing to support our capital expenditures and the cost of such financing are dependent on numerous factors, including general economic and capital markets conditions, interest rates and credit availability from banks or other lenders, many of which are beyond our control. In addition, increases in interest rates or the failure to obtain external financing on terms favorable to us will affect our financing costs and our results of operations. We may not be able to obtain financing in amounts or on terms acceptable to us,
 
Loss of our management and other key personnel, or an inability to attract such management and other key personnel, could negatively impact our business.

The successful implementation of our strategy depends in part on our ability to retain our experienced management team, particularly Hugh Evans, our President and Chief Executive Officer and key employees, and on our ability to attract appropriately qualified new personnel. Hugh Evans has extensive experience in the small business and consumer internet-based finance industry. He has a proven track record of successfully operating our business. The loss of any key member of our management team or other key employees could hinder or delay our ability to implement our growth strategy effectively. Further, if we are unable to attract appropriately qualified new personnel as we expand, we may not be successful in implementing our growth strategy. In either instance, our profitability and financial performance could be adversely affected. Experienced management and other key personnel in the financial services industry are in demand and competition for their talents is intense. Furthermore, we do not maintain key person insurance on any of our management personnel. Failure to attract and retain qualified employees or the loss of any member of our management may result in a loss of organizational focus, poor operating execution or an inability to identify and execute potential strategic initiatives. This could, in turn, materially and adversely affect our business, financial condition and results of operations.

 
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Our senior management lacks experience managing a public company and complying with laws applicable to a U.S. public company.

Our senior management has no experience in complying with laws and regulations applicable to U.S. publicly-traded companies, including the United States federal and state securities laws and regulations and the U.S. Sarbanes–Oxley Act of 2002. For example, we are required to file periodic and other reports and to comply with U.S. securities and other laws, which did not apply to Moneytech prior to the Share Exchange. These obligations can be burdensome and complicated, and failure to comply with such obligations could have a material adverse effect on our company. In addition, we expect that the process of learning about such new obligations as a public company in the United States will require senior management to devote time and resources to such efforts that might otherwise be spent on the operation of our business.
 
The obligations associated with being a public company will require significant resources and management attention, which will increase our costs of operations and may divert focus from our business operations.
 
As a publicly traded company, we are required to file with the SEC periodic reports containing our consolidated financial statements within a specified time following the completion of quarterly and annual periods. As a public company, we incur significant legal, accounting, insurance, and other expenses. Compliance with these reporting requirements and other rules of the SEC will increase our legal and financial compliance costs and make some activities more time consuming and costly. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our strategy, which could prevent us from successfully implementing our strategic initiatives and improving our business, results of operations, and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements. We anticipate that these costs will materially increase our total costs and expenses.
 
We are required to make significant estimates and assumptions in the preparation of our financial statements and our estimates and assumptions may not be accurate.
 
The preparation of our consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires our management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expense during the reporting periods. We use estimates and assumptions in determining the residual values of delinquent receivables. Critical estimates are made by management in determining, among other things, the allowance for loan losses, amounts of impairment, and valuation of income tax assets or tax refunds. If our underlying estimates and assumptions prove to be incorrect, our financial condition and results of operations may be materially different from that reported in our financial statements.
 
Our information technology may not support our future volumes and business strategies.
 
We rely on our proprietary origination and servicing platforms that utilize database-driven software applications. We employ a team of engineers, information technology analysts, and website designers to ensure that our information technology systems remain on the cutting edge. However, due to the rapid changes in technology, there can be no assurance that our information technology systems will continue to be adequate for our business or provide a competitive advantage.
 
Our network and information systems are important to our operating activities and any network and information system shutdowns could disrupt our ability to process applications, originate financing facilities, or service our existing portfolio, which could have a material adverse impact on our operating activities. Shutdowns may be caused by unforeseen catastrophic events, including natural disasters, terrorist attacks, large-scale power outages, software or hardware defects, computer viruses, cyber attacks, external or internal security breaches, acts of vandalism, misplaced or lost data, programming or human errors, difficulties in migrating technology facilities from one location to another, or other similar events. We cannot be certain that our disaster recovery plan will function as intended, or otherwise resolve or compensate for such effects. Failure of our disaster recovery plan, if and when experienced, may have a material adverse effect on our revenue and ability to support and service our customer base.

 
17
 
 
Failure to protect our intellectual property rights may materially and adversely affect our competitive position and operations, and we may be exposed to infringement or misappropriation claims by third parties.

Our success is in part attributable to the technologies, know-how and other intellectual property that we have developed or acquired. We rely upon a combination of trade secrets, confidentiality policies, non-disclosure and other contractual arrangements, and trademark laws to protect our intellectual property rights. There can be no assurance that the steps we have taken to protect our intellectual property rights are adequate to prevent or deter infringement or other misappropriation of our intellectual property. We may not be able to detect unauthorized uses or take appropriate and timely steps to enforce our intellectual property rights. Any significant infringement of our proprietary technologies and processes or our intellectual property rights could weaken our competitive position and have an adverse effect on our operations. To protect our intellectual property rights, we may have to commence legal proceedings or otherwise spend significant amounts of time and money.  We cannot assure you that we will prevail in such proceedings. The occurrence of any unauthorized use of or other infringement to our intellectual property rights, it could result in potential damage to our competitive position.
 
We may be subject to litigation involving claims of patent or trademark infringement or the violation of intellectual property rights of third parties. The defense of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be costly and time-consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any litigation or proceedings to which we become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, pay ongoing royalties, or redesign our products or subject us to injunctions prohibiting the manufacture and sale of our products or the use of our technologies, which could materially and adversely affect our business, financial condition or results of operations. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase or use of our products until resolution of such litigation, which could adversely affect our business.
 
Catastrophic events may negatively affect our business, financial condition, and results of operations.
 
Natural disasters, acts of war, terrorist attacks, and the escalation of military activity in response to these attacks or otherwise may have negative and significant effects, such as imposition of increased security measures, changes in applicable laws, market disruptions, and job losses. These events may have an adverse effect on the economy in general. Moreover, the potential for future terrorist attacks and the national and international responses to these threats could affect our business in ways that cannot be predicted. The effect of any of these events or threats could have a material adverse effect on our business, results of operations and financial condition.
 
Regulatory Risks
 
If our business in Australia were to become subject to more extensive regulation under Australian law, our business, financial condition, liquidity and results of operations would be materially and adversely affected.

To management’s knowledge, factoring receivables and purchase order financing are not regulated industries, as we are deemed not to make loans.  Nevertheless, if any of the transactions entered into by us are deemed to be loans or financing transactions instead of a true purchase of accounts receivable, then various laws and regulations we would become subject to numerous laws and regulations otherwise not applicable to our principal activities in Australia and could limit the fees and other charges we are able to charge our customers and may further subject us to penalties under such regulations.  These laws and regulations would also:

  •
regulate our credit granting activities, and require that we obtain additional licenses,
  •
require additional disclosures to customers,
  •
govern the manner in which we conduct secured transactions,
  •
set collection, foreclosure, repossession and claims handling procedures and other trade practices,
  •
prohibit discrimination in the extension of credit, and
  •
regulate our use and reporting of information related to a seller’s credit experience and other data collection.
 
 
18
 
 
This could have a material adverse effect on our business, financial condition, liquidity and results of operations.

If we are  found to be subject to or in violation of any laws or regulations, including those in Australia, the United States and other jurisdictions governing money transmission, electronic funds transfers, money laundering, terrorist financing, sanctions, consumer protection, banking and lending, it could be subject to liability, licensure and regulatory approval and may be forced to change its business practices .

WikiTechnolgies’ payments business and Moneytech’s planned money transfer business in Australia are subject to the laws and regulations of the United States and Australia, respectively, including those governing money transmission, electronic funds transfers, money laundering, terrorist financing, sanctions, consumer protection, banking and lending. The legal and regulatory requirements that apply to our payments businesses vary in the markets where we operate. While we have programs focused on compliance with applicable laws and regulations, there can be no assurance that we will not be subject to fines or other enforcement actions in one or more jurisdictions or be required to make changes to our business practices or compliance programs to comply in the future.

Wikipay is a Money Service Business, operating as an authorized agent of PreCash. Inc. , a licensed money transmitter headquartered in Houston, Texas.   To date, WikiPay as an agent of PreCash, has obtained licenses to operate as a money transmitter in 43 U.S. states, and the District of Columbia. As a licensed money transmitter, WikiPay is subject to restrictions on its investment of customer funds, reporting requirements, bonding requirements, and inspection by state regulatory agencies. If WikiPay were found to be in violation of money services laws or regulations, WikiPay could be subject to criminal or civil penalties, be forced to alter its business practices or or required to obtain additional licenses or regulatory approvals that could impose a substantial cost on us. Any change to WikiPay's business practices that makes the service less attractive to customers or prohibits its use by residents of a particular jurisdiction could further harm our business.

WikiPay is subject to various anti-money laundering and counter-terrorist financing laws and regulations around the world that prohibit, among other things, its involvement in transferring the proceeds of criminal activities. WikiPay is focused on compliance with these laws and regulations and has programs designed to comply with new and existing legal and regulatory requirements. However, any errors, failures or delays in complying with federal, state or foreign anti-money laundering and counter-terrorist financing laws could result in significant criminal and civil lawsuits, penalties and forfeiture of significant assets or other enforcement actions. In the U.S., WikiPay is subject to regulations that require it to report, within required timeframes, suspicious activities involving transactions of $2,000 or more, and may be required to obtain and keep more detailed records on the senders and recipients in certain transfers of $3,000 or more. New regulations on prepaid access programs, which took full effect in March 2012 require WikiPay to take additional steps to verify the identity of customers who pre-fund a WikiPay balance. U.S. regulators have increased scrutiny of compliance with these obligations. Existing and new regulations may require WikiPay to revise further its compliance program, including the procedures it uses to verify the identity of its customers and to monitor international and domestic transactions.

Although there have been no definitive interpretations to date, WikiPay has taken actions as though its service is subject to the Electronic Fund Transfer Act and Regulation E of the U.S. Federal Reserve Board. Under such regulations, among other things, WikiPay is required to provide advance disclosure of changes to its service, to follow specified error resolution procedures and to reimburse consumers for losses from certain transactions not authorized by the consumer. WikiPay seeks to pass most of these losses on to the relevant merchants, but WikiPay incurs losses if the merchant does not have sufficient funds in its WikiPay account. Additionally, even technical violations of these laws can result in penalties of up to $1,000 for each non-compliant transaction or up to $500,000 per violation in any class action, and we could also be liable for plaintiffs' attorneys' fees.

Given that our Payments business is subject to regulations in the manner described above, any determination that we have not properly complied with laws and regulations or any instances in which we are criminally indicted or found to have violated a criminal statute or regulation could adversely impact our regulatory status and our ability to offer our products and services in one or more jurisdictions, which would harm our business.

 
19
 
 
If WikiTechnologies’ Peer-to-Peer loan platform, WikiLoan, is found to be subject to or in violation of any laws or regulations, including those governing money transmission, electronic funds transfers, money laundering, terrorist financing, sanctions, consumer protection, banking and lending, it could be subject to liability, licensure and regulatory approval and may be forced to change its business practices.

To management’s knowledge, WikiLoan is not a regulated business; as we only provide loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment.  We do not make loans.  Nevertheless, if any of the transactions entered into by us are deemed to be loans or financing transactions by a court of law, then various state laws and regulations would become applicable to us and could limit the fees and other charges we are able to charge our customers and may further subject us to any penalties under such state laws and regulations.  These laws would also:

•
regulate credit granting activities, including establishing licensing requirements, if any, in various jurisdictions,
•
require disclosures to customers,
•
govern secured transactions,
•
set collection, foreclosure, repossession and claims handling procedures and other trade practices,
•
prohibit discrimination in the extension of credit, and
•
regulate the use and reporting of information related to a seller’s credit experience and other data collection.
 
This could have a material adverse effect on our business, financial condition, liquidity and results of operations.
 
The Dodd-Frank Act and the creation of the CFPB in addition to recently issued rules and guidance will likely increase our regulatory compliance burden in the United States and associated costs.
 
The Dodd-Frank Act introduced a substantial number of reforms that continue to reshape the structure of the regulation of the financial services industry. In particular, the Dodd-Frank Act includes, among other things, the creation of the Consumer Financial Protection Bureau (“CFPB”), which is authorized to promulgate and enforce consumer protection regulations relating to financial products and services.

Risks Related to Our Common Stock and our Status as a Public Company
 
There is currently a limited trading market for our common stock and an active, liquid trading market for our common stock may not develop, which could adversely affect the liquidity and price of our common stock.

Our common stock is quoted on the OTCQB quotation service. There is currently a limited trading market for our common stock.   If an active, liquid trading market does not develop, you may have difficulty selling your shares of common stock at an attractive price, or at all. An inactive market may also impair our ability to raise capital by selling our common stock and may impair our ability to acquire other companies, products or technologies by using our common stock as consideration.
 
The market price of our common stock could decline due to the large number of outstanding shares of our common stock eligible for future sale.
 
Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline. Commencing January 1, 2014, all of the 5,300,000 shares of common stock issued in the Share Exchange will be eligible for sale under Rule 144, subject to the volume limitations and other conditions of the Rule, and after July 1, 2014, all of the shares issued in the Share Exchange (other than the 2,001,514 shares beneficially owned by Mr. Evans) will be eligible for sale without the restrictions of the Rule, and Mr. Evans shares will continue to be eligible for sale in accordance with the volume limitations and other conditions of the Rule. These sales could also make it more difficult for us to sell equity or equity-related securities in the future, at a time and price that we deem appropriate.
 
 
20
 
 
Hugh Evans, our President and Chief Executive Officer , has significant influence over us, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of key transactions, including a change of control.

Hugh Evans, our Chief Executive Officer and President, owns approximately 46.80% of our outstanding voting shares, and consequently has control over our business, including matters requiring the approval of our stockholders, such as election of directors, approval of significant corporate transactions and the timing and distribution of dividends, if any. In addition, his ownership of the Series B Shares entitles him to elect a majority of our directors until July 1, 2018, and as a result Mr. Evans will control our policies and operations, including, among other things, the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence of debt by us, and the entering into of extraordinary transactions.
 
Mr. Evans may have interests that do not align with the interests of our other stockholders, including with regard to pursuing acquisitions, divestitures, and other transactions that, in his judgment, could enhance his equity value, even though such transactions might involve risks to our other stockholders. For example, Mr. Evans could cause us to make acquisitions that increase our indebtedness. Mr. Evans will have effective control over our decisions to enter into such corporate transactions regardless of whether others believe that any transaction is in our best interests. Such control may have the effect of delaying, preventing, or deterring a change of control of our company, could deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company, and might ultimately affect the market price of our common stock.

Since our principal assets are located in Australia, and most of our officers and directors are not residents of the United States, it may be difficult or impossible for you to bring an action against us or against these individuals in Australia in the event that you believe that your rights have been infringed under the securities laws or otherwise, or to enforce any judgments rendered against us or our officers and/or directors.
 
Our principal assets are located in Australia, and all   of our officers and a majority of our directors are not residents of the United States. Therefore, it may be difficult to effect service of process on such persons in the United States, and it may be difficult to enforce any judgments rendered by any courts of the United States against us or these officers and directors. Furthermore, it may be difficult or impossible for you to bring an action against us or against these individuals in Australia in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of Australia may render you unable to enforce a judgment against our assets or the assets of our directors or officers that are not residents of the United States. There is doubt as to the enforceability in the Commonwealth of Australia, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon federal or state securities laws of the U.S., especially in the case of enforcement of judgments of U.S. courts where the defendant has not been properly served in Australia. As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against our management, directors or major shareholders compared to shareholders of a corporation doing business entirely within the United States.
 
Certain provisions of our amended and restated certificate of incorporation may have anti-takeover effects, which could limit the price investors might be willing to pay in the future for our common stock. In addition, Delaware law may inhibit takeovers of us and could limit our ability to engage in certain strategic transactions our board of directors believes would be in the best interests of stockholders.
 
Certain provisions of our amended and restated certificate of incorporation and bylaws could discourage unsolicited takeover proposals that stockholders might consider to be in their best interests. Among other things, our amended and restated certificate of incorporation and bylaws may include provisions that:
 
 
•
do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
 
•
limit the ability of our stockholders to nominate candidates for election to our board of directors;
 
•
authorize the issuance of “blank check” preferred stock without any need for action by stockholders; and
 
•
limit the ability of stockholders to call special meetings of stockholders; and
 
 
21
 
 
The foregoing factors, as well as the significant common stock ownership by Hugh Evans, could impede a merger, takeover, or other business combination or discourage a potential investor from making a tender offer for our common stock, which, under certain circumstances, could reduce the market value of our common stock.
 
In addition, Section 203 of the Delaware General Corporation Law (the “DGCL”), generally affects the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations, or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation.

We currently do not intend to pay any dividends on our shares in the immediate future.

We currently do not intend to pay dividends on our shares.  We cannot give any assurance that we will declare dividends of any amounts, at any rate or at all in the future. Future dividends, if any, will be at the discretion of our board of directors, and will depend upon our results of operations, cash flow, financial condition, the terms of any bank loan, line of credit ot funding agreement to which we are party, as well as our capital needs, future prospects and other factors that our directors may deem appropriate.

The market price of our common stock may be volatile, which could cause the value of an investment in our common stock to decline.
 
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:
 
 
•
general market conditions;
 
•
domestic and international economic factors unrelated to our performance;
 
•
actual or anticipated fluctuations in our quarterly operating results;
 
•
changes in or failure to meet publicly disclosed expectations as to our future performance;
 
•
downgrades in securities analysts’ estimates of our financial performance or lack of research and reports by industry analysts;
 
•
changes in market valuations or earnings of similar companies;
 
•
any future sales of our common stock or other securities;
 
•
additions or departures of key personnel;
 
•
fluctuations in foreign exchange rates;
 
•
regulatory developments in Australia affecting us or our competitors; and
 
•
release or expiry of transfer restrictions on our outstanding shares.
 
The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies. These types of broad market fluctuations may adversely affect the trading price of our common stock. In the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business or results of operations. For example, we are currently operating in, and have benefited from, a protracted period of historically low interest rates that will not be sustained indefinitely, and future fluctuations in interest rates could cause an increase in volatility of the market price of our common stock.

Item 2.   Properties.
 
Our corporate Australian headquarters are located at Level6/97 Pacific Highway, North Sydney NSW 2060 Australia, where we lease approximately 270 square meters of office and operations space pursuant to a lease agreement expiring in August 2014, subject to our right to renew for an additional three years.  The annual rent for the premises was initially AUD$125,490 and increases 4% per year.  In addition we occupy an office on Albany Highway, Victoria Park, Western Australia.  The initial term of the lease for this space expires July 31, 2015, at which time we can renew the lease for an additional 2 years.  The rent is AUD $1,375 per month subject to an inflation adjustment on August 1, 2014 and to a reset to market rate if we elect to renew the lease in August 2015.
 
 
22
 
 
WikiTechnologies leases an office at 1093 Broxton Avenue, Suite 210, Los Angeles, CA 90024 on a month to month basis.   We pay rent of $1,957 per month to occupy this location.
 
Management believes the terms of the leases are consistent with market standards and were arrived at through arm’s-length negotiation

Item 3.    Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 4.  Mine Safety Disclosures.
 
Not Applicable.
 
PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is quoted on the OTCQB under the symbol “SRCF.” The OTCQB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (“OTC”) equity securities. An OTCQB equity security generally is any equity that is not listed or traded on a national securities exchange.

Price Range of Common Stock

 
 
 
 
High
 
 
Low
 
Fiscal Year 2012
 
 
 
 
 
 
   First quarter ended September 30, 2011
 
$
35.00
 
 
$
10.00
 
   Second quarter ended December 31, 2011
 
$
23.00
 
 
$
9.00
 
   Third quarter ended March 31, 2012
 
$
18.00
 
 
$
7.00
 
   Fourth quarter ended June 30, 2012
 
$
14.00
 
 
$
2.50
 
 
 
 
 
 
 
 
 
 
Fiscal Year 2013
 
 
 
 
 
 
   First quarter ended September 30, 2012
 
$
8.00
 
 
$
2.00
 
   Second quarter ended December  31, 2012
 
$
4.10
 
 
$
0.53
 
   Third quarter ended March 31, 2013
 
$
6.00
 
 
$
2.10
 
   Fourth quarter ended June 30, 2013
 
$
2.59
 
 
$
0.30
 
 
Approximate Number of Equity Security Holders
 
As of October 1, 2013, there were approximately 300 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

 
23
 
 
Securities Authorized For Issuance Under Equity Compensation Plans.

The following table summarizes shares of our Common Stock to be issued upon exercise of options and warrants, the weighted-average exercise price of outstanding options and warrants and options available for future issuance pursuant to our equity compensation plans as of June 30, 2013:
 
 
Plan Category
 
Number of
Securities to
be Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
 
 
Weighted
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights
 
 
Number of
Securities Remaining
Available for Future
Issuance Under Equity
Compensation Plans
 
Eq   Equity compensation plans approved by security holders (1)
 
 
 
 
 
$
 
 
 
 
2,500,000
 
Equ Equity compensation plans not approved by security holders
 
 
7,000
(2)
 
$
2.50
 
 
 
93,000
 
       Total
 
 
7,000
 
 
$
2.50
 
 
 
2,500,000
 
______________________
 
(1) 
Represents shares issuable upon exercise of options granted pursuant to our 2013 Omnibus Incentive Plan.
(2) 
Represents 7,000 shares issuable upon exercise of options granted to a software developer which can earn up to an additional 93,000 options upon satisfaction of various conditions.

Sales of Unregistered Securities

Except as disclosed in our Form 10-Qs and Form 8-Ks, we did not issue or sell any securities in transactions exempt from the registration requirements of the Securities Act during the fiscal year ended June 30, 2013.
 
Purchases of Our Equity Securities
 
No repurchases of our common stock were made by our company or its affiliates during the fourth quarter of our fiscal year ended June 30, 2013.

Dividends
 
Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, growth, capital requirements, and other factors, which our Board of Directors may deem relevant.

Item 6.       Selected Financial Data.
 
Not applicable because we are a smaller reporting company.

 
24
 
 
Item 7 .       Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and the notes to those statements included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in this Report that could cause actual results to differ materially from those anticipated in these forward-looking statement.

We provide commercial trade financing and other financial services to small to medium sized businesses and individuals with a focus on utilizing cutting edge technology to deliver these services. Our services are offered in Australia through Moneytech and its subsidiaries and in the United States through WikiTechnologies .

On June 30, 2013, we acquired Moneytech in exchange for 5,300,000 shares of our common stock (the “Share Exchange”). As a result of the Share Exchange, Moneytech has become our wholly-owned subsidiary, and the former shareholders of Moneytech own in excess of 50% of our outstanding shares of common stock on a fully diluted basis. In connection with acquisition of Moneytech, we issued 5,000 shares of our Series B Preferred Stock to Hugh Evans, the Chairman and Managing Director of Moneytech. The Series B Shares enable Mr. Evans, until June 30, 2018, to (A) elect the majority of our Board of Directors and (B) vote on all other matters presented to the holders of our common stock (the “Common Shareholders ” ), with each vote per Series B Share equal to 1,000 shares of common stock. After June 30, 2018, the Series B Shares will have no voting rights and may be redeemed by us for a per share price one tenth of a cent ($0.001).
 
The Share Exchange was accounted for as a recapitalization of Moneytech effected by a share exchange, where Moneytech is considered the acquirer for accounting and financial reporting purposes. Our net assets and liabilities as of the date of the consummation of the Share Exchange were brought forward at their book value and no goodwill was recognized.  Consequently, the historical consolidated financial statements of Moneytech are now the historical financial statements of Source Financial, Inc.
 
The following chart reflects our organizational structure as of the date of this Report.
 

Overview
 
Our objective is to become a leading provider of commercial lines of credit and financial services, in particular money transfer services, to small to medium businesses in Australia, and a provider of money transfer services to individuals in the United States.  We seek to differentiate our services by developing and utilizing cutting edge technologies to deliver our services.
 
 
25
 
 
Moneytech provides asset backed lines of credit in Australia using funds made available under its Receivables Purchase Facility with one of the four leading Australian banks. We also provide payment aggregation and processing solutions in Australia. For the immediate future we intend to continue to focus on our asset backed credit solutions business in Australia while seeking to expand our money transfer businesses in Australia and the United States.  We plan to achieve our growth objectives by signing up new customers for our products in existing markets, expanding the services offered to our customers, entering new international markets, and continuing our research and development efforts to launch new technology driven financial products into both the Australian and United States markets.

WikiTechnologies offers on-line financial services through two platforms: WikiPay, a simple, low-cost alternative to existing mobile and online payment solutions; and WikiLoan, a low-cost peer-to-peer lending solution.
 
Net income attributable to our shareholders, and the associated return on equity, are the primary metrics by which we judge the performance of our business. Accordingly, we closely monitor the primary drivers of net income:
 
 
•
Net financing income – We track the split between the fee, interest, finance charge and fee income earned on our assets and the interest, finance charges and fees incurred on our Wholesale Facility, and continually monitor the components of our yield and our cost of funds. In addition, we monitor external rate trends, including the Reserve Bank of Australia cash rate.
     
 
•
Net bad debt losses – Other than our cost of funds interest expense and related fees, the largest driver of business profitability is the minimization of bad debts.  Each asset backed line of credit is priced based on industry and individual customer risk profile.  Increases in delinquencies negatively impact our business performance if they are above the level assumed in our projections. Our profitability is directly connected to whether actual net credit losses are consistent with forecasted losses; therefore, we closely analyze credit performance and seek to limit our exposure when feasible through the purchase of credit insurance.
     
 
•
Costs and expenses – We assess our operational efficiency using our cost-to-income ratio. We perform extensive analysis to determine whether observed fluctuations in cost and expense levels indicate a trend or are the nonrecurring impact of large projects. Our cost and expense analysis also includes a loan- and portfolio-level review of origination and servicing costs to assist us in assessing profitability by pool and vintage.
 
Because portfolio volume and rate of turnover determine the magnitude of the impact of each of the above factors on our earnings, we also closely monitor new business volume and business growth.

 
26
 
 
Results of Operations

Comparison of the fiscal year ended June 30, 2013 (“Fiscal 2013”), to the fiscal year ended June 30, 2012 (“Fiscal 2012”)
 
All amounts, other than percentages, in U.S. dollars
 
   
Year Ended
June 30, 2013
 
Year Ended
June 30, 2012
 
Dollar
Increase(Decrease)
   
Percentage
Increase(Decrease)
 
   
 
   
 
   
 
       
Revenue
  $
6,098,374
    $ 
4,171,622
    $ 
1,926,752
     
46
%
Costs of sales
   
3,700,918
     
2,622,383
     
1,078,535
     
41
%
Gross profit
   
2,397,456
     
1,549,239
     
848,217
     
55
%
                                 
Compensation expenses
   
859,754
     
807,671
     
52,083
     
6
%
Research and development expense
   
472,229
     
199,144
     
273,085
     
137
%
Bad debt expenses
   
393,774
     
78,038
     
315,736
     
405
%
Occupancy expenses
   
276,615
     
254,145
     
22,470
     
9
%
Depreciation expense
   
169,743
     
129,246
     
40,497
     
31
%
General and administration expenses
   
99,251
     
207,629
     
(108,378
)
   
(52
)%
Income (loss) from operations
   
126,090
     
(126,634
)
   
252,724
     
N/A
 
                                 
Other income
   
(441,908
)
   
(384,220
)
   
(57,688
)
   
15
%
                                 
Income before income tax
   
567,998
     
257,586
     
310,412
     
121
%
                                 
Income tax expense
   
579,844
     
0
     
579,844
     
-
 
                                 
Net (loss) income
   
(11,846
)
   
257,586
     
(269,432
)
   
(105
)%

 
 
27
 
 
Balance Sheet Data:
 
   
2013
   
2012
   
2011
 
Cash and cash equivalents
  $ 7,205,827     $ 5,617,025     $     2,854,959  
Trade Receivables
    27,008,840         26,577,290           19,801,075  
Total Assets
    41,219,330         40,227,248       29,896,943  
                         
Wholesale Loan Facility
  $ 25,669,388     $ 24,688,865     $     17,792,207  
                         
Total Liabilities
    33,696,546         32,208,189           23,837,632  
                         
TOTAL EQUITY
  $ 7,522,784     $   8,019,060     $     6,059,310  

Revenues

Consolidated revenues from operations for the year ended June 30, 2013 (“Fiscal 2013”) were approximately $6,098,374, an increase of $1,926,752 or 46% compared with consolidated revenues from operations of $4,171,622 for the year ended June 30, 2012, (“Fiscal 2012”).  The increase in revenues primarily reflects the increase in the volume of the lines of credit we funded which grew from approximately $161 million during Fiscal 2012 to $271 million during Fiscal 2013.

Cost of Sales ; Gross Profit ;

Our cost of sales, which is composed principally of the fees and interest we pay on our RPA and amortization expense of capitalized research and development costs, was $3,700,918 for Fiscal 2013, an increase of $1,078,535 or 41% from our cost of sales of $2,622,382 for Fiscal 2012.  The increase in our cost of sales primarily results from the growth in the volume of credit lines funded as discussed above.  Because we were able to decrease the rates of interest charged to our customers at a slower rate than the decrease in the rate of interest paid by us, we were able to increase our gross margin from $1,549,239 in Fiscal 2012 to $2,397,456 in Fiscal 2013, a rate of increase which exceeded the growth rate in our revenues .

Operating Expenses; Bad Debt Expense; Income from Operations

The other significant factor in determining our overall profitability is our operating expenses, in particular our bad debt expense.  Our bad debt expense for Fiscal 2013 was $393,774, an increase of $315,736 or 405% from bad debt expense of $78,038 for Fiscal 2012.  The increase is primarily due to a return to normally anticipated levels of bad debts in Fiscal 2013 as compared to an unusually low level of bad debts in Fiscal 2012.  We constantly evaluate the credit quality of our customers and expect that the rate of growth in our bad debt expense in Fiscal 2014 will be more in line with the rate of growth in our portfolio than was the case in Fiscal 2013.
 
Our total operating expenses (other than bad debt) increased by 18% from $1,597,835 in Fiscal 2012 to $1,877,592 in Fiscal 2013.  Our ability to control the growth in our operating expenses, other than bad debt, from Fiscal 2012 to Fiscal 2013, while increasing the volume of our business enabled us to generate income from operations in Fiscal 2012 as compared to the loss from operations generated in Fiscal 2012. The biggest increase was from the research and development cost that was not capitalized in Fiscal 2013 for Moneytech Exchange and  mPay.    

 
28
 
 
The design and technical development of the Moneytech Exchange is completed and it is operational for purposes of providing the services we currently offer. Although we will continue to upgrade and add additional functionality to the Moneytech Exchange and will need to add additional personnel as we grow, the rate of growth of these expenses should be less than the rate of growth of our revenue. Further, we anticipate that as we expand our portfolio and increase the number of services we offer, the rate of growth in the lines of credit we service and in our revenues will exceed the rate of growth in our operating expenses.  There are a number of reasons for this, the most significant being that most of the expense involved with any debtor/obligor is incurred when the relationship is established.  In the absence of a default or other triggering event, so long as a debtor/obligor is online, it generates revenue for us with little impact on our operating expenses.  We do anticipate a slight increase in the rate of growth of our operating expenses this year due to, among other factors, the fact that Moneytech’s operational financial statements do not include any of the expenses associated with being a public company nor the expenses to be incurred by WikiTechnologies.

Other Expense (income); Provision for income taxes; net income (loss)

To date, our other expense (income) has consisted of financing costs other than those incurred under the RPA, offset by interest income on the cash reserves we are required to maintain under the RPA and research and development grants received from the government.

In both Fiscal 2012 and 2013, we received research grants from the Australia government, for Fiscal year 2013, we received $526,962 and $302,876 in Fiscal 2012.  The increase was due our increased costs for the development of mPay during fiscal 2013.  Interest income increased from $109,899 to $114,309 due to the increase in cash reserve from Fiscal 2012 to 2013.  Other expenses for Fiscal 2013 was $182,566, all of the cost was related to the exchange agreement.
 
Our net income before tax for Fiscal 2013 was $567,998, a 121% increase from net income of $257,586 for Fiscal 2012.   As a result of $579,844  in taxes incurred in Fiscal 2013, we incurred a net  loss after tax for Fiscal 2013 of $11,846, as compared to net income after tax for Fiscal 2012 of $257,586 .
 
Liquidity and Capital Resources
 
Our ability to offer asset backed credit lines is determined by the amount of our capital and the amount of funds we can borrow.  We require a significant amount of liquidity to offer our asset backed credit lines and our rate of growth and profitability will, for the foreseeable future, largely be determined by our ability to raise equity or borrow funds with which to purchase receivables and the effective cost of such funds.
 
Credit Facility

In 2005 we entered into a Receivables Purchase Agreement (the “Wholesale Facility” or the “RPA”) with one of the “Big Four” Australian Banks which has been renewed annually each year thereafter.  Pursuant to this Agreement we electronically offer eligible receivables to our lender for purchase on a nightly basis.  These offerings are then settled by the lender on a daily basis.  The funds we receive upon settlement are automatically and electronically delivered to our customers.  Our gross profit is represented by the difference between what we charge our customers in interest, finance charges and fees and what we pay to our lender. Our borrowing limit under the RPA is AUD$50 million, subject to interim agreed upon limits determined by various tests and covenants which currently limit our borrowing capacity to AUD $30 million.  As at June 30, 2013 the total amount drawn against the facility was $25,669,388,
 
We pay an interest rate on all borrowed monies under the Receivables Purchase Agreement which is directly linked to the Reserve Bank of Australia cash-rate, a utilization fee charged on monies available to be borrowed but not utilized, an annual line fee and fees for electronically accessing the facility.  The Facility contains a number of covenants relating to our financial performance and performance of our receivables portfolio including but not limited to net profit targets, maximum dilution ratios, concentration limits, maximum delinquency ratios and cash reserve requirements.  As of the date hereof we are in compliance with all covenants imposed by the Receivables Purchase Agreement.
 
 
29
 
 
We, in turn, provide our customers with funds provided by the Receivables Purchase Agreement.  We charge each of our clients interest at a rate above that charged by our lender and seek to have our clients pay a fee corresponding to each of the fees charged to us in respect of their loans.  To the extent that the RPA requires that we deposit monies into an account to partially secure repayment of our loans, we seek to have those funds advanced by our customers as a condition of their credit lines.  The cash reserve we are required to maintain pursuant to the RPA is included under Cash and cash equivalents on our balance sheet.

Insurance

As a condition of the RPA, the receivables due Moneytech from its customers or their counterparties are insured pursuant to a policy issued by Euler Hermes, a Standard & Poor’s rated Trade Credit insurance provider.  Pursuant to this policy, Moneytech would bear the first $500,000 of losses incurred in any calendar year, after which any bad debt losses are borne by Euler Hermes.  This policy is renewed annually.
 
Cash Flow Comparison
 
After adjusting for the cash deemed used in operating activities as a result of the increase in the volume of the credit lines we made available each year, we have produced positive net cash from operating activities every year since July 2009.  Our revenue generating activities have consisted primarily of making credit lines available to our customer and our principal cost of sales have consisted primarily of interest charges and other fees payable under our Wholesale Facility.
 
   
Year Ended June 30,
 
   
2013
   
2012
   
2011
 
   
 
   
 
       
Net cash provided by (used in) operating activities
  $ (2,855,751 )   $ (4,034,980 )   $ (2,613,851 )
New cash provided by (used in) investing activities
  $ (824,747 )   $ (790,967 )   $ (581,107 )
Net cash provided by (used in) financing activities
  $ 6,096,650     $ 7,751,988     $ 3,429,948  
 
Cash used in Operating Activities
 
For Fiscal 2013, we used approximately $2,855,751 of net cash in our operating activities.  This reflects our net loss of $11,846, adjustments for non-cash items providing $697,017.   Adjustments for non-cash items consisted entirely of depreciation and amortization. The increase in trade receivables of $3,555,934 was a result of the increase in the volume of credit lines we provided, an increase in inventories of $120,644 was due to the increase in our product and decreases/increases in deferred tax asset and other items of $579,844 and $444,188, respectively were due to the taxable income and utilization of prepaid and other receivables.  In considering the changes in working capital items it should be noted that the value of these assets was adversely impacted from June 30 2013 to June 30 2013 by a decrease in the exchange rate of AUD relative to US Dollars.
 
For Fiscal 2012, we used approximately $4,034,980 of net cash in our operating activities.  This reflects our net income of $257,586, adjustments for non-cash items providing $594,011 Adjustments for non-cash items consisted entirely of depreciation and amortization. Cash used in working capital items and other activities was primarily impacted by an increase in trade receivables of $7,765,220 reflecting the increase in the volume of credit lines we provided, a decrease in inventories of $3,440 and decreases in other items of $2,875,203.  In considering the changes in working capital items it should be noted that the value of these assets was adversely impacted from June 30 2013 to June 30 2013 by a decrease in the exchange rate of AUD relative to US Dollars.
 
Cash Used in Investing Activities
 
During Fiscal 2013, net cash used in investing activities of $824,747 was primarily impacted by $747,580 in capitalized costs incurred on the development of intangible assets, principally software related to the Moneytech Exchange and mPay, $110,392 invested in our subsidiary  mPayments Pty Ltd. and $32,063 used to purchase property, plant and equipment, partially offset by $65,288 realized upon consummation of the Exchange Agreement.
 
 
30
 
 
During Fiscal 2012, net cash used in investing activities of $790,967 reflects $706,496 in capitalized costs incurred on the development of intangible assets, principally software related spent on the development of the Moneytech Exchange and $84,471 used to purchase property, plant and equipment.
 
Cash Provided by Financing Activities
 
During Fiscal 2013, net cash provided by financing activities of $6,096,650 reflects an increase in our borrowings under the Wholesale Loan Facility of $3.906 million, contributions to our capital reserve account received from our customers $2.360 million, partially offset by payment of loan.
 
During Fiscal 2012, net cash provided by financing activities of $7,751,988 consisted entirely of an increase in the amounts borrowed under the RPA.
 
Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies
 
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition
 
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.

Cost of Sales

Cost of sales includes; programs licensed; operating costs including costs of funds and related product support service centers to drive traffic to our websites, costs incurred to support and maintain products and services, including inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized intangible software costs.
 
 
31
 

Research and Development
 
Research and development expenses include payroll, employee benefits, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are put into service. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products.
 
Equity Investments

The Company uses the equity method of accounting for investments when the percentage of ownership of the investment is between 20% and 50%. The Company includes the proportionate share of the profit or loss as part of the carrying value of the investment.

Exchange (Loss) Gain

During the fiscal years ended June 30, 2013 and 2012, the transactions of Moneytech and its wholly owned subsidiaries were denominated in foreign currency and were recorded in Australian dollar (AUD) at the rates of exchange in effect when the transactions occurred. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled.

Foreign Currency Translation and Comprehensive (Loss) Income

The accounts of Moneytech and its wholly owned subsidiaries were maintained, and its financial statements were expressed, in AUD. Such financial statements were translated into USD with the AUD as the functional currency. All assets and liabilities were translated at the exchange rate at the balance sheet date, stockholder’s equity is translated at the historical rates and income statement items are translated at the average exchange rate for the period. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of operations. The resulting translation adjustments are reported under other comprehensive income as a component of shareholders’ equity.

Allowance for Doubtful Accounts

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.

Inventory

Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of June 30, 2013 and 2012, inventory only consisted of finished goods.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of June 30, or more frequently if events or changes in circumstances indicate that impairment may exist. Effective October 1, 2011, the Company adopted ASU 2011-08, which allows the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. This step serves as the basis for determining whether it is necessary to perform the two-step goodwill impairment test. The two-step test first compares the fair value of the reporting unit to its carrying value. If the fair value exceeds the carrying value, no impairment exists, and the second step is not performed. If the fair value is less than the carrying value, the second step is performed to compute the amount of the impairment by comparing the implied fair value of reporting unit goodwill with the carrying amount of that goodwill.

 
32
 
 
Income Taxes
 
The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. At June 30, 2013 and 2012, the Company had not taken any significant uncertain tax positions on its tax returns for 2012 and prior years or in computing its tax provision for 2013.

Recently Issued Accounting Pronounceme nts

In June 2011, the FASB issued ASU 2011-05, which impacts the presentation of comprehensive income. The guidance requires components of other comprehensive income to be presented with net income to arrive at total comprehensive income. This ASU impacts presentation only and does not impact the underlying components of other comprehensive income or net income. In December 2011, the FASB issued an amendment to ASU 2011-05, which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. All other components of ASU 2011-05 are effective October 1, 2012.

In July 2012, the FASB issued ASU 2012-02, which will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. The standard was adopted on October 1, 2012.
 
We do not believe that the adoption off any recently issued accounting pronouncements, including those set forth above, will have a material effect on our consolidated financial statements.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

Not applicable because we are a smaller reporting company.
 
Item 8.    Financial Statements and Supplementary Data.
 
The financial statements start on page F-1.

 
33
 
 
 
SOURCE FINANCIAL, INC. AND SUBSIDIARIES
 
CONSOLIDATED FINANCIAL STATEMENTS
 
JUNE 30, 2013 AND 2012
 
 
34
 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
35
 
 
 
Board of Directors and Stockholders of
Source Financial, Inc. and Subsidiaries
 
We have audited the accompanying consolidated balance sheets of Source Financial, Inc. and Subsidiaries (the “Company”) as of June 30, 2013 and 2012, and the related consolidated statements of operations and comprehensive (loss) income, stockholders' equity, and cash flows for the years ended June 30, 2013 and 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2013 and 2012, and the consolidated results of its operations and its cash flows for the years ended June 30, 2013 and 2012, in conformity with U.S. generally accepted accounting principles.
 
Lichter, Yu & Associates
Encino, California
October 14, 2013
 
 
F-1
 
 
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2013 AND 2012
 
ASSETS
 
   
2013
   
2012
 
CURRENT ASSETS
 
 
   
 
 
Cash and cash equivalents
  $ 7,205,827     $ 5,617,025  
Trade receivables, net
    27,008,840         26,577,290  
Other receivable
    -         50,795  
Inventories
    220,377         125,783  
Deferred tax asset
    718,767         317,850  
Other current assets
    820,726         1,230,603  
TOTAL CURRENT ASSETS
    35,974,537         33,919,346  
                 
NON-CURRENT ASSETS
               
Intangible assets, net
    3,512,767         3,467,872  
Deferred tax asset
    988,860         2,155,244  
Property, plant and equipment, net
    578,136         684,786  
Other assets
    95,973         -  
Goodwill
    69,057         -  
TOTAL NON-CURRENT ASSETS
    5,244,793         6,307,902  
                 
TOTAL ASSETS
  $ 41,219,330     $ 40,227,248  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                 
CURRENT LIABILITIES
               
Trade and other payables
  $ 5,250,399     $ 6,597,747  
Wholesale loan facility
    25,669,388         24,688,865  
Cash reserve
    2,731,094         703,003  
TOTAL CURRENT LIABILITIES
    33,650,881         31,989,615  
                 
NON-CURRENT LIABILITIES
               
Shareholder loans
    45,665         218,574  
TOTAL NON-CURRENT LIABILITIES
    45,665         218,574  
                 
TOTAL LIABILITIES
    33,696,546         32,208,189  
                 
STOCKHOLDERS' EQUITY
               
Preferred stock, Series A, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding
          -                 -  
Preferred stock, Series B, $0.01 par value, 10,000,000 shares authorized, 5,000 issued and outstanding
    50               50          
Common Stock, $0.10 par value, 500,000,000 and 250,000,000 shares authorized, 9,961,637 and 5,300,000 shares issued and outstanding respectively
    996,164         530,000  
Additional paid-in capital
    14,496,411         14,639,149  
Other accumulated comprehensive loss
    (1,052,144 )       (244,289 )
Accumulated deficit
    (6,917,697 )       (6,905,851 )
TOTAL STOCKHOLERS' EQUITY
    7,522,784         8,019,059  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 41,219,330     $ 40,227,248  
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
F-2
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
 
   
2013
   
2012
 
             
Revenue
  $ 6,098,374     $ 4,171,622  
Cost of revenue
    3,700,918       2,622,383  
Gross profit
    2,397,456       1,549,239  
                 
Operating Expenses
               
                 
Compensation expenses
    859,754       807,671  
Research and development expense
    472,229       199,144  
Bad debt expenses
    393,774       78,038  
Occupancy expenses
    276,615       254,145  
Depreciation expense
    169,743       129,246  
General and administration expenses
    99,251       207,629  
Total operating expenses
    2,271,366       1,675,873  
Income (loss) from operations
    126,090       (126,634 )
                 
Other Expense (Income)                
Interest income
    (114,309 )     (109,899 )
Research and development grant
    (526,962 )     (302,876 )
Other expense (income)
    182,566       -  
Finance costs
    16,797       28,555  
Total Other Income
    (441,908 )     (384,220 )
                 
Income before Provision of income taxes
    567,998       257,586  
                 
Provision for income taxes
    579,844       -  
                 
Net (loss) income
    (11,846 )     257,586  
                 
Other comprehensive loss
               
       Foreign currency translation
    (807,855 )     (253,443 )
                 
Comprehensive (loss) income
  $ (819,701 )   $ 4,142  
                 
Net (loss) income per share
               
Basic
  $ (0.002 )   $ 0.05  
Diluted
  $ (0.002 )   $ 0.05  
                 
Weighted average number of shares used in computing basic and diluted net (loss) income per share:
               
                 
Basic
    5,312,772       5,300,000  
Diluted
    5,312,772       5,300,000  
 
The accompanying notes are an integral part of these consolidated financial statements

 
F-3
 
 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012

   
Common Stock
   
Preferred Stock
   
Additional
   
Other
Accumulated
Comprehensive
   
Total
Accumulated
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Paid in Capital
   
Loss
   
Deficit
   
Equity
 
Balance June 30, 2011
    5,300,000     $ 530,000       5,000     $ 50     $ 14,639,149     $ -     $ (7,163,437 )   $ 8,005,762  
                                                                 
Foreign currency translation adjustments
    -       -       -       -       -       (244,289 )     -     $ (244,289 )
                                                                 
Net income for the year ended June 30, 2012
    -       -       -       -       -       -       257,586     $ 257,586  
                                                                 
Balance June 30, 2012
    5,300,000     $ 530,000       5,000     $ 50     $ 14,639,149     $ (244,289 )   $ (6,905,851 )   $ 8,019,059  
                                                                 
Issue of share capital at merger
    4,661,637       466,164       -       -       (142,738 )     -       -       323,426  
                                                                 
Foreign currency translation adjustments
    -       -       -       -               (807,855 )     -       (807,855 )
                                                                 
Net loss for the year ended June 30, 2013
    -                                               (11,846 )     (11,846 )
                                                                 
Balance June 30, 2013
    9,961,637       996,164       5,000       50       14,496,411       (1,052,144 )     (6,917,697 )     7,522,784  
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
F-4
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
 
   
2013
   
2012
 
             
Net (loss) income
  $ (11,846 )   $ 257,586  
Adjustments to reconcile net (loss) income to net cash used in operating activities:
               
                 
Depreciation and amortization
    697,017       594,011  
                 
(Increase) / decrease in assets:
               
Trade receivables, net
    (3,555,934 )     (7,765,220 )
Inventories
    (120,644 )     3,440  
Deferred tax asset
    579,844       -  
Other assets
    324,906       (862,462 )
Increase/ (decrease) in current liabilities:
               
Trade payables
    (769,094 )     3,737,665  
Net cash used in operating activities
    (2,855,751 )     (4,034,980 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchase of property, plant and equipment
    (32,063 )     (84,471 )
Cash acquired in acquisition
    65,288       -  
Investment in subsidiary
    (110,392 )     -  
Development of intangible assets
    (747,580 )     (706,496 )
Net cash used in investing activities
    (824,747 )     (790,967 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Wholesale loan facility, net
    3,906,061       7,751,988  
Capital Reserve
    2,360,184       -  
Repayment of shareholder loans
    (169,595 )     -  
Net cash provided by financing activities
    6,096,650       7,751,988  
                 
Effect of exchange rate changes on cash and cash equivalents
    (827,350 )     (163,975 )
                 
Net increase in cash and cash equivalents
    1,588,802       2,762,066  
                 
Cash and cash equivalents at the beginning of the period
    5,617,025       2,854,959  
                 
Cash and cash equivalents at the end of the period
  $ 7,205,827     $ 5,617,025  
                 
SUPPLEMENTAL DISCLOSURES:
               
Cash paid during the year for:
               
Income tax payments
  $ -     $ -  
                 
Interest payments
  $ 1,905,471     $ 1,711,920  
                 
Assets acquired in merger transaction
  $ 323,425     $ -  
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
F-5
 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
 
Note 1 – BASIS OF PRESENTATION AND ORGANIZATION
 
Basis of Presentation
Source Financial, Inc., formerly known as The Wiki Group, Inc., (the”Company” or “Source”) was incorporated under the laws of the State of Delaware on June 24, 1988 as Windsor Capital Corp. Between March 2001 and January 2008 the Company amended and restated its Articles of Incorporation and changed its corporate name to Energy Control Technology, Inc., 5Fifty5.com, Inc., Swap-A-Debt, Inc., WikiLoan, Inc. and finally Wiki Group, Inc. on March 12, 2012.
 
Moneytech Limited (“Moneytech”) was incorporated under the laws of Australia on September 9, 2003, and (through its wholly owned subsidiaries Moneytech Finance Pty Ltd, mPayments Pty Ltd., Moneytech POS Pty Ltd. and Moneytech Services Pty Ltd.) offers working capital, trade and debtor finance solutions, to small and medium sized businesses in Australia.
 
On June 30, 2013, Source acquired Moneytech and it’s wholly owned subsidiaries, Moneytech Finance Pty. Ltd., mPayments Pty. Ltd., Moneytech POS Pty. Ltd. and Moneytech Services Pty. Ltd. Under the terms of the Exchange Agreement, all stockholders of Moneytech received a total of 5,300,000 shares of voting common stock of Source in exchange for all outstanding shares of Moneytech. In addition, pursuant to a separate agreement, the President of Moneytech received 5,000 shares of Preferred Series B Stock. Under accounting principles generally accepted in the United States, the share exchange is considered to be a capital transaction in substance, rather than a business combination. That is, the share exchange is equivalent to the issuance of stock by Moneytech for the net monetary assets of Source accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the share exchange will be identical to that resulting from a reverse acquisition, except no goodwill will be recorded. Under share reverse takeover accounting, the post reverse acquisition comparative historical financial statements of the legal acquirer, Source are those of the legal acquiree, Moneytech, which is considered to be the accounting acquirer. Share and per share amounts stated have been retroactively adjusted to reflect the merger.
 
Organization
Moneytech delivers its product offerings through ‘The Moneytech Exchange’, which is a real-time core banking platform, developed in-house and which continues to be upgraded with the support of the Australian Federal Government’s Research and Development program.
 
The Moneytech Exchange serves as the backbone of the business in Australia by providing internet banking style access to Moneytech’s customers and back-office systems to Moneytech staff.
 
The Company offers a range of innovative financial products and services to businesses and consumers in Australia and the United States through its principal operating subsidiaries, Moneytech and WikiTechnologies, Inc. The Company recently formed a new corporation in the United States, Moneytech USA, Inc.
 
When used in these notes, the terms "Company," "we," "our," or "us" mean Source Financial, Inc. and its subsidiaries.
 
Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the
 
United States (“US GAAP”).
 
Principles of Consolidation
The consolidated financial statements include the accounts of Source and its wholly owned subsidiaries Moneytech, Moneytech Finance Pty Ltd, mPayments Pty Ltd., Moneytech POS Pty Ltd., Moneytech Services Pty Ltd, Moneytech USA and Wikitechnologies, Inc., collectively referred to as the Company. Moneytech USA was formed and Wikitechnologies, Inc. was acquired on June 30, 2013. All material intercompany accounts, transactions and profits were eliminated in consolidation.
 
 
F-6
 

Reclassifications
Certain prior year amounts were reclassified to conform to the presentation in the current year. The reclassifications did not have an effect on the results of operations or the cash flow.
 
Equity Investments
 
The Company uses the equity method of accounting for investments when the percentage of ownership of the investment is between 20% and 50%. The Company includes the proportionate share of the profit or loss as part of the carrying value of the investment.
 
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, accounts payable, sales returns and recoverability of long-term assets.
 
Exchange (Loss) Gain
During the fiscal years ended June 30, 2013 and 2012, the transactions of Moneytech and its wholly owned subsidiaries were denominated in foreign currency and were recorded in Australian dollar (AUD) at the rates of exchange in effect when the transactions occurred. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled.
 
Foreign Currency Translation and Comprehensive (Loss) Income
The accounts of Moneytech and its wholly owned subsidiaries were maintained, and its financial statements were expressed, in AUD. Such financial statements were translated into USD with the AUD as the functional currency. All assets and liabilities were translated at the exchange rate at the balance sheet date, stockholder’s equity is translated at the historical rates and income statement items are translated at the average exchange rate for the period. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of operations. The resulting translation adjustments are reported under other comprehensive income as a component of shareholders’ equity.
 
Reportable Segment
 
The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business.
 
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.
 
Cost of Revenue
 
Cost of revenue includes; programs licensed; operating costs including costs of funds and related product support service centers to drive traffic to our websites, costs incurred to support and maintain products and services, including inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized intangible software costs. Capitalized intangible software costs are amortized over the estimated lives of the products.
 
Research and Development
Research and development expenses include payroll, employee benefits, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are put into service. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products. Certain research and development costs are available for reimbursement by the Australian government. Research and development expense is included as an operating expense and research and development grant income is reported as other income.
 
 
F-7
 
 
Income Taxes
The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
 
The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.
 
At June 30, 2013 and 2012, the Company had not taken any significant uncertain tax positions on its tax returns for 2012 and prior years or in computing its tax provision for 2013.
 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company has a diversified customer base, most of which are in Australia. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.
 
Risks and Uncertainties
The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets.
 
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
 
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
 
Cash and Equivalents
Cash and equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At June 30, 2013, the Company had $7,205,827 in cash, of which $7,137,539 was on deposit in Australia and not covered by insurance. At June 30, 2012, the Company had $5,617,025 in cash in Australia which was not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
 
 
F-8
 
 
Allowance for Doubtful Accounts
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.
 
Inventory
Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of June 30, 2013 and 2012, inventory only consisted of finished goods.
 
Property, Plant & Equipment
Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows:
 
Computer software
3 to 10 years
Computer hardware
5 to 15 years
Furniture and equipment
3 to 5 years
 
As of June 30, 2013 and 2012, Property, Plant & Equipment consisted of the following:
 
   
2013
   
2012
 
Office equipment
  $ 35,949     $ 26,970  
Furnitures and fixtures
    249,770       229,713  
Computers and software
    1,282,317       1,349,340  
Accumulated Depreciation
    (989,900 )     (921,237 )
    $ 578,136     $ 684,786  
 
As of June 30, 2013 and 2012, depreciation expense consisted of the following:
 
   
2013
   
2012
 
Depreciation, operating
  $ 169,743     $ 129,246  
Depreciation, cost of revenue
    13,824       18,891  
Total depreciation expense
  $ 183,567     $ 148,137  
 
Fair Value of Financial Instruments
 
For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
 
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
 
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
 
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
 
 
F-9
 
 
As of June 30, 2013, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.
 
Earnings Per Share (EPS)
 
Basic EPS is computed by dividing income available to common shareholders and equivalents by the weighted average number of common shares and equivalents outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).
 
The following table sets for the computation of basic and diluted earnings per share for period ended June 30, 2013and 2012:
 
   
June 30,
 
   
2013
   
2012
 
Net (loss) income
  $ (11,846 )   $ 257,586  
Weighted average shares outstanding - basic
    5,312,772       5,300,000  
Effect of dilutive securities:
               
Options issued
    -       -  
Weighted average shares outstanding - diluted
    5,312,772       5,300,000  
Net (loss) income per share - basic
  $ (0.002 )   $ 0.05  
Net (loss) income per share - diluted
  $ (0.002 )   $ 0.05  
 
The options to purchase up to 7,000 shares of common stock were anti-dilutive during fiscal year ended June 30, 2013.
 
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually as of June 30, or more frequently if events or changes in circumstances indicate that impairment may exist.
 
Effective October 1, 2011, the Company adopted ASU 2011-08, which allows the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. This step serves as the basis for determining whether it is necessary to perform the two-step goodwill impairment test. The two-step test first compares the fair value of the reporting unit to its carrying value. If the fair value exceeds the carrying value, no impairment exists, and the second step is not performed. If the fair value is less than the carrying value, the second step is performed to compute the amount of the impairment by comparing the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. The adoption did not have a material impact on the consolidated financial statements.
 
The Company evaluated its goodwill for impairment on June 30, 2013, and concluded there was no impairment as of that date.
 
 
F-10
 
 
Intangible Assets
The Company records identifiable intangible assets at fair value on the date of acquisition and evaluates the useful life of each asset. Finite-lived intangible assets primarily consist of software development capitalized. Finite-lived intangible assets are amortized on a straight-line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable. These intangibles have useful lives ranging from 1 to 10 years. No events or changes in circumstances indicate that impairment existed as of June 30, 2013.
 
Stock-Based Compensation
The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123” (codified in FASB ASC Topic 718 and 505). The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. Non-employees stock based compensation is accounted for according to ASC 718.
 
Recently Issued Accounting Pronouncements
In December 2010, the FASB issued ASU 2010-29, which provides requirements over pro forma revenue and earnings disclosures related to business combinations. The ASU requires disclosure of revenue and earnings of the combined business as if the combination occurred at the start of the prior annual reporting period only. The Company adopted ASU 2010-29 effective October 1, 2011. The adoption did not have a material impact on the consolidated financial statements.
 
In June 2011, the FASB issued ASU 2011-05, which impacts the presentation of comprehensive income. The guidance requires components of other comprehensive income to be presented with net income to arrive at total comprehensive income. This ASU impacts presentation only and does not impact the underlying components of other comprehensive income or net income. In December 2011, the FASB issued an amendment to ASU 2011-05, which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. All other components of ASU 2011-05 are effective October 1, 2012. Adoption is not expected to have a material impact on the consolidated financial statements.
 
In July 2012, the FASB issued ASU 2012-02, which will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. The standard was adopted on October 1, 2012, and did not have a material impact on the consolidated financial statements.
 
Note 2 – SHARE EXCHANGE AGREEMENT
 
On June 30, 2013, Source consummated the transactions contemplated by the Exchange Agreement. Accordingly Source acquired all of the issued and outstanding shares of stock of Moneytech in exchange for the issuance in the aggregate of 5,300,000 shares of common stock which shares represented in excess of 50% of the issued and outstanding capital stock of Source after the consummation of the Exchange Agreement and the transactions contemplated thereby. Pursuant to a separate agreement, the President of Moneytech received 5,000 shares of Preferred Series B Stock of Source. The Series B Preferred shares have certain control provisions (see note 15)
 
In connection with the exchange agreement, on June 30, 2013, Source, Marco Garibaldi (“Garibaldi”), Edward Defeudis (“DeFeudis”), and Eaton & Van Winkle LLP (the”Agent”) entered into an Escrow Agreement. As a condition to the exchange agreement, Garibaldi has agreed to deposit in escrow with the Agent 1,120,000 shares of Source Common Stock (the “Garibaldi Shares”), DeFeudis has agreed to deposit in escrow with the Agent 1,120,000 shares of Source Common Stock (the “DeFeudis Shares”) and Source has agreed to deposit in escrow with the Agent 1,000 shares of the common stock of Wiki Sub, representing all of the outstanding shares of Wiki Sub (the “Wiki Sub Shares,” and together with the Garibaldi Shares and the DeFeudis Shares, the “Escrow Shares”), on the terms and subject to the conditions set forth in the Escrow Agreement.
 
 
F-11
 
 
During the term of the Escrow Agreement, the operations of WikiTechnologies will be directed by Messrs. Garibaldi and DeFeudis. If during the twelve-month period commencing July 1, 2013, (the “Earn-Out Period”), WikiTechnologies achieves revenues of $4.2 million, a gross profit percentage of 25% and breaks even (the “ Benchmarks ” ), the Garibaldi Shares and DeFeudis Shares will be returned to Messrs. Garibaldi and DeFeudis and the WikiTechnologies Shares will be returned to us. If the Benchmarks are not met during the Earn-Out Period, at our option, the Garibaldi Shares and DeFeudis Shares will be cancelled and returned to treasury, and the WikiTechnologies Escrow Shares will be delivered to Messrs. DeFeudis and Garibaldi, and we will no longer own WikiTechnologies. Further, if, at any point during the Earn-Out Period, the Company sells WikiTechnologies, merges WikiTechnologies with another entity, disposes of the assets of WikiTechnologies, or takes any other action to compromise the ability of WikiTechnologies to meet the Benchmarks, the Benchmarks will be deemed to have been achieved, and the Garibaldi Shares and DeFeudis Shares will be returned to Messrs. Garibaldi and DeFeudis. Under the terms of the Exchange Agreement, we are under no obligation to take affirmative action(s) to further the objectives of WikiTechnologies, except that we have agreed to seek to raise up to $2,000,000 in a private placement and to allocate one-half of the first $800,000 of net proceeds and the next $200,000 of net proceeds to the business of WikiTechnologies. In addition, the Exchange Agreement provides that at any time during the Earn-Out Period our Board of Directors in its discretion may determine that we will keep WikiTechnologies and cause the Garibaldi Shares and DeFeudis Shares to be delivered to Messrs. Garibaldi and DeFeudis.
 
As a result of the exchange agreement, the reorganization was treated as an acquisition by the accounting acquiree that is being accounted for as a recapitalization and as a reverse merger by the legal acquirer for accounting purposes. Pursuant to the recapitalization, all capital stock shares and amounts and per share data have been retroactively restated. Accordingly, the financial statements include the following:
 
(1)   The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the legal acquirer at historical cost.
 
(2)   The statements of operations include the operations of the accounting acquirer for the period presented and the operations of the legal acquirer from the date of the merger.
 
Note 3 – TRADE RECEIVABLES, NET
 
As of June 30, 2013 and 2012, trade receivables consist of the following:
 
    2013      2012  
Trade receivables
  $ 27,740,315     $ 27,328,853  
Allowance for bad debt
    (731,475 )     (751,563 )
Total trade receivables, net
  $ 27,008,840     $ 26,577,290  
 
Note 4 – DEFERRED TAX ASSETS
 
As of June 30, 2013 and 2012, the Company had deferred tax assets of $1,707,627 and $2,473,094 respectively. The Company had approximately $6,232,409 as of June 30, 2013 and $8,114,625 as of June 30, 2012 in net operating loss (“NOL”) carry forward available to offset future taxable income in Australia. The NOLs can be carried forward without expiration in Australia.
 
The deferred tax asset as of June 30, 2013 and 2012 consists of the tax benefit of the NOL carry forward. Management believes that all NOLs will be utilized in the near future and therefore no allowance was provided. Accordingly, the company as of June 30, 2013 and 2012 has deferred tax asset of:
 
    2013     2012  
Current deferred tax assets
  $ 718,767     $ 317,850  
Non current deferred tax assets
    988,860       2,155,244  
Deferred tax assets
  $ 1,707,627     $ 2,473,094  
 
 
F-12
 
 
Note 5 – OTHER ASSETS
 
Other assets consist of the following as of June 30, 2013 and 2012:
 
Other current assets
 
2013
   
2012
 
Research and development grant receivable
  $ 401,852     $ 602,834  
Insurance claim receivable
    269,556       528,280  
Prepayment
    66,922       30,551  
Other assets
    82,396       68,938  
    $ 820,726     $ 1,230,603  
 
Other non current assets
  2013     2012  
Deferred payment processing cost
  $ 50,000     $ -  
Prepaid gift card establishment fees
    45,973       -  
    $ 95,973     $ -  
 
Note 6 – INTANGIBLE ASSETS
 
Intangible assets consist of the following as of June 30, 2013 and 2012:
 
   
2013
   
2012
 
Moneytech software
  $ 4,574,761     $ 5,101,997  
mPayments software
    664,880       -  
Domain name
    198,353       -  
Accumulated amortization
    (1,925,227 )     (1,634,125 )
    $ 3,512,767     $ 3,467,872  
 
The intangible assets are amortized over 10-12 years. Amortization expense of $487,200 and $467,765 were included in cost of revenues for the years ended June 30, 2013 and 2012, respectively.
 
Amortization for the Company’s intangible assets over the next five fiscal years from June 30, 2013 is estimated to be:
 
June 30, 2014
  $ 456,650  
June 30, 2015
    456,650  
June 30, 2016
    456,650  
June 30, 2017
    456,650  
June 30, 2018
    456,650  
Thereafter
    1,229,517  
Total
  $ 3,512,767  
 
 
F-13
 
 
Note 7 – GOODWILL
 
On November 9, 2012, Moneytech purchased Moneytech Pos Pty. Ltd. (“MPOS”). The goodwill was acquired with the acquisition of MPOS.
 
As of June 30, 2013, the Goodwill comprised of the following:
 
   
2013
 
Acquisition cost of Moneytech POS Pty Ltd.
  $ 98,180  
Fixed assets received
    (54,695 )
Liability assumed
    25,572  
Acquisition cost assigned to goodwill
  $ 69,057  
 
The Company performed an impairment test relating to goodwill arising from its acquisitions and concluded that there was no impairment as to the carrying value of goodwill as of June 30, 2013.
 
Note 8 – TRADE AND OTHER PAYABLES
 
As of June 30, 2013 and 2012, trade and other payables consist of the following:
 
   
2013
   
2012
 
Trade payables
  $ 4,848,656     $ 6,337,545  
Employee benefits
    122,097       55,959  
Other liabilities
    279,646       204,243  
Total payables
  $ 5,250,399     $ 6,597,747  

Note 9 –CURRENT LIABILITIES
 
   
2013
   
2012
 
Wholesale loan facility
  $ 25,669,388     $ 24,688,865  
Cash reserve
    2,731,094       703,003  
    $ 28,400,482     $ 25,391,868  
 
Wholesale Loan Facility
The Company has a secured line of credit with a bank in Sydney Australia for up to AUD $50,000,000.  As of June 30, 2013 and 2013, the Company has used approximately AUD $30,000,000  AUD $25,000,000, respectively. The line of credit is secured mainly by trade receivables. Interest is charged at the banks reserve rate plus an agreed upon margin from the bank. The agreement is currently set to expire on December 31, 2013 and can be renewed annually in September. The Company has requested the renewal and is awaiting final bank approval. Interest expense charged to cost of revenue related to the loan for the year ended June 30, 2013 and 2012 was approximately USD $1,905,471 and USD $1,711,920, respectively .
 
Cash Reserve
The Company is required to maintain certain cash reserves with its senior debt provider in accordance with the Receivables Purchase Agreement (RPA) between the parties. The Required Cash Reserve amount may be provided by the Company or its customers and is held in a ‘Cash Reserve Account’ with its senior debt provider in accordance with the RPA’s terms and conditions. The Required Cash Reserve balance is adjusted based on the RPA and the total facility limit provided to the Company by the senior lender .
 
 
F-14
 
 
Note 10 – NON-CURRENT LIABILITY
 
   
2013
   
2012
 
Shareholders loans
    45,665       218,574  
    $ 45,665     $ 218,574  
 
Shareholders Loan
The Company had an accrued interest amount payable to a shareholder in the amount of AUD$165,153 as of June 30, 2012. The loan was paid during the fiscal year ended June 30, 2013. There was no interest charged on the balance.
 
The company has a loan payable in the amount of AUD $50,000 to a shareholder. The loan is due and payable on September 30, 2014. Interest of 8% is only payable if Moneytech has positive retained earnings at the time of repayment.
 
Note 11 – RELATED PARTY TRANSACTIONS
 
In the years ended June 30, 2013 and 2012, the Company paid a company controlled by the President of Moneytech for consulting services in the amount of $209,500 and $201,299 respectively.
 
Note 12 – INCOME TAX
 
As of June 30, 2013, Moneytech had approximately $6,232,409 in net operating loss (“NOL”) carry forward available to offset future taxable income in Australia. The NOLs can be carried forward without expiration in Australia. The deferred tax asset as of June 30, 2013 and 2012 consists of the tax benefit of the NOL carry forward. Management believes that all NOLs will be utilized in the near future and therefore no allowance was made.
 
As of June 30, 2013, Source had NOL’s of approximately $13 million dollars to offset future taxable income in the US. Federal NOLs can generally be carried forward 20 years. However, under Internal Revenue Code section 382 due to the change in ownership there are certain limitations placed on the NOL carryover and Source may only use approximately $161,500 per year of the available NOL. The deferred tax assets of the US entities at June 30, 2013 were fully reserved. Management believes it is more likely than not that these assets will not be realized in the near future.
 
The following is a reconciliation of the provision for income taxes at the US federal income tax rate to the income taxes reflected in the Statements of Operations and Comprehensive (Loss) Income for the fiscal year ended June 30, 2013 and 2012, respectively:
 
June 30, 2013
 
U.S
   
State
   
International
   
Total
 
Current
  $ -     $ -     $ -     $ -  
Deferred
    -       -       579,844       579,844  
Total           $ -     $ $ 579,844     $ 579,844  
Total payables
                               
 
June 30, 2012
 
U.S
   
State
   
International
   
Total
 
Current
  $ -     $ -     $ -     $ -  
Deferred
    -       -       -       -  
Total   $ -     $ -     $ -     $ -  
 
Reconciliation of the difference between the statutory U.S. Federal income tax rate and the effective rate is as follows:
 
   
June 30,
2013
   
June 30,
2012
 
US statutory rates
    34 %     34 %
Tax rate difference
    (4 ) %     (4 ) %
Research and development capitalized
    61 %     - %
Other expenses (benefits)
    11 %     (30 )%
Tax expenses at actual rate
    102 %     - %
 
 
F-15
 
 
Note 13 - GEORGRAPHIC SEGMENT INFORMATION
 
As a result of the reverse merger on June 30, 2013 the Company operates in two regions: Australia and United States of America.
 
All inter-company transactions are eliminated in consolidation. For the twelve months ended June 30, 2013 and 2012, geographic segment information is as follows:
 
    Twelve Months Ended June 30, 2013     Twelve Months Ended June 30, 2012  
   
Australia
   
USA
   
Elimination
   
Consolidated
   
Australia
   
USA
   
Elimination
   
Consolidated
 
Net Sales   $ 6,098,374     $ -     $ -     $ 6,098,374     $ 4,171,622     $ -     $ -     $ 4,171,622  
Cost of Sales     3,700,918       -       -       3,700,918       2,622,383       -       -       2,622,383  
Total Expenses
    2,271,366       -       -       2,271,366       1,675,873       -       -       1,675,873  
Other Income
    -441,908       -       -       -441,908       -384,220       -       -       -384,220  
Net Income (Loss)
    -11,846       -       -       -11,846       257,586       -       -       257,586  
Assets
    40,892,905       326,425       -       41,219,330       40,227,248       -       -       40,227,248  
Debt
    33,693,546       3,000       -       33,696,546       32,208,189       -       -       32,208,189  
 
Note 14 – EQUITY INVESTMENT
 
On January 16, 2013 the Company entered into an agreement whereby it received a 37.5% equity interest in 360 Market Pty. Limited (“360”) in exchange for allowing 360 to utilize certain license rights. The investment is accounted for by the equity method. For the period from inception to June 30, 2013, 360 incurred a loss and the Company therefore did not recognize any income or return from the investment.
 
Note 15 –STOCKHOLDERS’ EQUITY
 
Preferred Stock
 
The Company has 10,000,000 shares Preferred Stock authorized at a par value of $0.01 and there were no shares issued and outstanding as of June 30, 2012 and 5,000 shares of Class B, Preferred Stock issued and outstanding as of June 30, 2013.
 
Under the terms of the Class B Certificate of Designation, the holder(s) of the Series B have the right, until June 30, 2018, to (A) elect the majority of the Company’s Board of Directors and (B) vote on all other matters to come before the holders of common stock (the “Common Shareholders ” ) with each vote per Series B Preferred Share equal to 1,000 shares of common stock.
 
After June 30, 2018, the Class B Preferred Shares shall have no voting rights and shall be redeemable by the Company for the sum of one tenth of a cent ($0.001) per Class B Preferred Share. The Class B Preferred Shares will not have any conversion rights and shall not be entitled to receive any dividends, distributions, or other economic or financial interest in the Company, and in the event of a liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, the holders of Class B Preferred
 
Common Stock
 
The Company has 500,000,000 and 250,000,000 shares of Common Stock authorized at a par value of $0.10 as of June 30, 2013 and 2012, respectively. There were 9,961,637 and 5,300,000 shares issued and outstanding as of June 30, 2013 and 2012, respectively. Each Common Stock holder will have one (1) vote.
 
Dividend Policy
 
The Company has not yet adopted a policy regarding the payment of dividends and no dividends have been declared.
 
 
F-16
 
 
Note 16 –STOCK OPTIONS
 
On April 19, 2013, the Company entered into an agreement with a software developer. Upon achievement of certain milestones, the contractor can receive up to 100,000 Performance Based Stock Options at an exercise price of $2.50 per share. The option vest and become exercisable immediately upon grant with a 3 year life.
 
As of June 30, 2013, 7,000 of the Performance Based Stock Options have been earned.
 
   
Number of Shares
 
Outstanding at June 30, 2012
    -  
Exercisable at June 30, 2012
    -  
Granted
    7,000  
Exercised
    -  
Expired
    -  
Outstanding at June 30, 2013
    7,000  
Exercisable at June 30, 2013
    7,000  
 
Options outstanding at June 30, 2013 are as follow:
 
               
Weighted
 
Total
           
Average
Weighted
 
Weighted
           
Remaining
Average
 
Average
   
Total Options
 
Life
 
Exercise
Options
 
Exercise
Exercise Price
 
Outstanding
 
(Years)
 
Price
Exercisable
 
Price
$
2.50
 
7,000
 
3
  $
2.50
7,000
  $
2.50
 
Note 17 –COMMITMENTS
 
The Company leases two offices under a renewable operating leases expiring on August 31, 2014 and July 31, 2015. The aggregate monthly rent is approximately $11,189. For the years ended June 30, 2013 and 2012, the rental expense was $157,522 and $110,278.
 
Future minimum rental payments required under operating leases as of June 30, 2013 are as follows:
 
June 30,
     
2014
  $ 134,264  
2015
    34,935  
2016
    1,256  
    $ 170,455  
 
The Company has entered into three employment agreements with certain members of manag ement of the Company. Two agreements terminate as of May 29 , 2015 and the other one continue s until terminated.  Future minimum salaries required under the employment agreement as of June 30, 2013 are as follows:
 
June 30,
     
2014
 
$
490,000
 
2015
   
470,000
 
2016
   
250,000
 
2017
   
250,000
 
2018
   
250,000
 
 
 
 $
1,710,000
 
 
Note 18 –SUBSEQUENT EVENTS
 
Management has evaluated events subsequent through October 14, 2013 for transactions and other events that may require adjustment of and/or disclosure in the Company’s financial statements and these included:
 
·  
The shareholders and board of directors voted to reduce the authorized common stock to 50,000,000 common shares and 1,000,000 preferred shares.
·  
The Company granted options to purchase 75,000 shares of common stock to three board members pursuant to the 2013 Omnibus Incentive Plan.
·  
The Company issued 350,000 restricted shares of common stock for consulting fees.
·  
The Company granted options to purchase 25,000 shares of common stock to an employee.
 
 
F-17
 
 
Item 9.   Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

(a) Dismissal of Principal Accountant
 
1.   On July 30, 2013, we advised PS Stephenson & Co., P.C. that it had been dismissed as our independent registered public accounting firm.
 
2.   The dismissal of PS Stephenson & Co., P.C. was approved by our Board of Directors.

3.   PS Stephenson & Co., P.C. audited our financial statements as at and for the years ended January 31, 2012 and January 31, 2013.  The opinions issued by PS Stephenson & Co., P.C on our financial statements for the years ended January 31, 2012 and January 31, 2013, both contained “going concern” qualifications.  In both opinions, PS Stephenson & Co., P.C noted that we had minimal revenues, lacked substantial assets and had no significant cash flows, which raised substantial doubt as to our ability to continue as a going concern and that the financial statements did not contain any adjustments to the recoverability and classification of recorded asset amounts or the amount of liabilities that might be necessary should we be unable to continue as a going concern.

4.   During our fiscal years ended January 31, 2012 and January 31, 2013, and through August 5, 2013,the date we filed a Current Report on Form 8-K reporting the dismissal of PS Stephenson & Co., P.C.(the “Form 8-K”): (i) there were no disagreements between PS Stephenson & Co., P.C and us on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of PS Stephenson & Co, P.C. would have caused PS Stephenson & Co.,  P.C. to make reference to the subject matter of the disagreement in its report on our financial statements for such years or during the interim period through the date of the Form 8-K, and (ii) there were no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
 
5.   We provided PS Stephenson & Co., P.C. with a copy of the disclosures in the Form 8-K prior to the filing of the Form 8-K and requested that PS Stephenson & Co., P.C. furnish us with a letter addressed to the Securities and Exchange Commission stating whether or not PS Stephenson & Co., P.C. agreed with our statements in Item 4.01(a) of the Form 8-K. A copy of the letter furnished by PS Stephenson & Co., P.C. in response to that request was filed as an exhibit to the Form 8-K.
 
(b) Engagement of Principal Accountant

1.   On July 30, 2013, we signed a letter to engage Lichter, Yu and Associates as our registered independent public accountants for the fiscal year ending June 30, 2013.  The decision to engage Lichter, Yu & Associates was approved by our Board of Directors.
 
2.   Lichter, Yu and Associates has been the registered independent public accountants for Moneytech and during Moneytech’s two most recent fiscal years ended June 30, 2011 and June 30, 2012 Lichter, Yu & Associates audited the consolidated financial statements of Moneytech and its subsidiaries and issued an audit report on the consolidated financial statements of Moneytech as at and for the years ended June 30, 2013 and June 30, 2012.
 
3.   During our two most recent fiscal years ended January 31, 2013 and January 31, 2012, and through the date of the Form 8-K, we did not consult with Lichter, Yu and Associates on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on our  financial statements, and Lichter, Yu and Associates did not provide either a written report or oral advice to us that Lichter, Yu and Associates concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of  Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

 
36
 
 
Item 9A.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
 
On June 30, 2013, we acquired Moneytech Limited, a closely-held privately owned Australian company whose operations are conducted in Australia, in a transaction treated as a reverse acquisition. At such time we adopted the system of disclosure controls and procedures of Moneytech as ours.
 
At June 30, 2013, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried out under the supervision and with the participation of Hugh Evans, then serving as our Chief Executive Officer and Chief Financial Officer. Based on his evaluation of our disclosure controls and procedures, he concluded that at June 30, 2013, such disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.
 
Our management has conducted an evaluation, under the supervision and with the participation of Hugh Evans, then serving as our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal control over financial reporting as of June 30, 2013. This evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework.  Based upon such assessment, Hugh Evans, then serving as our Chief Executive Officer and Chief Financial Officer, concluded that our internal controls over financial reporting were effective as of June 30, 2013.

This Report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 
37
 
 
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The rules of the Securities and Exchange Commission do not require an attestation of the Management’s report by our registered public accounting firm in this annual report.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting that occurred during the fourth quarter of our fiscal year ended June 30, 2013 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. Given the limitations of our accounting personnel, we need to take additional steps to insure that our financial statements are in accordance with US GAAP.

Item 9b.  Other Information

None.
 
PART III
 
Item 10.   Directors, Executive Officers and Corporate Governance.
 
Directors and Executive Officers
 
Name
 
Age
 
Position
 
 
     
Hugh Evans
 
48
 
President, Chief Executive Officer, Chief financial Officer and a Director
Klaus Selinger
 
60
 
Chairman of the Board and a Director
John Wolfgang
 
66
 
Director
Richard Allely
 
59
 
Director
Edward DeFeudis
 
40
 
President, WikiTechnologies and a Director
 
Hugh Evans has served as   Chief Executive Officer, President, Chief Financial Officer and a Director of the Company since June 30, 2013.  Mr. Evans founded Moneytech in 2003, and has served as its Chairman and Managing Director since its inception.  Mr. Evans has a commercial background in high growth businesses, mergers and acquisitions, and divestments, with a strong financial, sales and technology focus.

 
38
 
 
Mr. Evans was the founder and CEO of Agate Technology, which he developed and built to become a leading niche storage distribution company in both Australia and New Zealand.  Mr. Evans served as Chief Executive Officer of Agate Technology from 1991 to 1999.  Agate Technology was acquired by the South African conglomerate Siltek in 1999. Mr. Evans also has been responsible for the organization and sale of three other technology businesses.  The prior experience of Mr. Evans as an executive officer and director of Moneytech Limited prior to the consummation of the Share Exchange qualifies him to serve as a director of our company.

Klaus Selinger has served as a   Director since June 30, 2013 and Chairman of the Board since July , 2013. He   has a background in Financial Markets and Financial Systems, and has assisted in the development of complex financial solutions, including off-balance sheet finance structures, venture capital raising and equity finance. Since 2009, Mr. Selinger has been a principal of Dequity Partners, a financial services firm based in Sydney, Australia.  Mr. Selinger was the Chief Executive Officer of Jacobsen Entertainment Ltd, an Australian entertainment industry firm, formerly listed on the Sydney Australia Stock Exchange, from 2002 to 2003, and Chief Executive Officer of Bioenergy Corporation Ltd, a PNG incorporated biofuel firm formerly listed on the Sydney Australia Stock Exchange, from 1989 to 1991. He is a certified practicing accountant in Australia and in that capacity served as a member of Charles J. Berg & Partners from 1972 to 1982, Mann Judd and Rowlands from 1984 to 1990.Mr. Selinger received a Bachelor of Business degree in Accounting from the University of Technology, Sydney, Australia.  Mr. Selinger’s varied management experience with a number of listed companies qualifies him to serve as a director of our Company.

John Wolfgang has served as a   Director since June 30, 2013. He has spent 45 years at the accounting firm of UHY LLP or its predecessor and is currently and audit partner in the firm.  Until December 31, 2012 Mr. Wolfgang served on the management committee of UHY LLP which sets policy for the audit practice of the firm. Mr. Wolfgang has extensive experience in and has overseen the audits of listed public entities operating globally and has experience in advising businesses with multi-national presence on complex tax and accounting issues. Mr Wolfgang has served on the Board of Directors of Urbach Hacker Young International Ltd (“UHYI”) for the past 26 years. Mr. Wolfgang was Chairman of the UHYI Board for 5 years until October, 2012. UHYI is the 23rd largest global accounting and consulting networks with presence in 87 countries worldwide. Mr. Wolfgang will serve as Chairman of the Audit Committee.  Mr. Wolfgang is qualified to serve as a director by virtue of his experience in auditing public companies and serving on the boards of numerous private and public coompanies.
 
Richard Allely has served as a   Director since June 30, 2013. He has held senior management roles with leading Australian & International companies, including Tenix Pty Limited (formerly Transfield Pty Limited), John Fairfax Holdings Limited, Boral Limited and James Hardie Industries Limited. For more than ten years prior to October 2012, Mr. Allely was the Managing Director and CEO of PMP Limited, the largest printing and distribution company in Australia and New Zealand listed on the ASX. Mr. Allely is currently a Non-Executive Director and Audit Committee Chairman for the PGA of Australia, and was recently appointed to the Advisory Board for Renoir Consulting Group. Mr. Allely has held a number of non-executive roles in the past including Chairman of Australian Property Monitors Pty Ltd and Independent member with the WorkCover Authority of NSW. He is a FCPA (Fellow Australian Society of CPA),  FCSA (Fellow Chartered  Institute of Company Secretaries Australia), and FAICD (Fellow Australian Institute of Company Directors). Mr. Allely’s varied management experience with a number of listed companies qualifies him to serve as a director of our Company.

Edward C. DeFeudis has been   a Director of the Company since August 2005. He was President and Chief Financial Officer of the Company from August 2005 to June 30, 2013. He has been President of WikiTechnologies since March 2013. He is the Manager of Spider Investments, LLC, as well as the President of Lion Equity Holding Corp., which has provided investment banking consulting business services, since 1999.  From March 2004 to February 2006, he served as President and Chief Executive Officer of Ringo, Inc. Mr. DeFeudis also served as Financial Advisor for several financial institutions such as Paragon Capital, Merrill Lynch, Oppenheimer Securities, and Euro-Atlantic Securities from 1996 to 1999. Mr. DeFeudis graduated from University of New Hampshire in 1995 with a BA degree in Political Science. The prior experience of Mr. DeFeudis as an executive officer and director of Source Financial prior to the consummation of the Share Exchange qualifies him to serve as a director of our company.
 
Each of our Directors is elected annually and serves until his successor is duly elected and qualified or until his earlier death, resignation or removal.  Our officers are elected annually and serve at the discretion of our Board of Directors.

 
39
 
 
Board Committees
 
We maintain the following committees of the Board of Directors: the Audit Committee, the Compensation Committee and the Nominating Committee. Each committee is comprised entirely of directors who are “independent” within the meaning of New York Stock Exchange Rule 303A.02. Each committee acts pursuant to a separate written charter, and each such charter has been adopted and approved by the Board of Directors. Copies of the committee charters are available on our website at sourcefinancial.com under the heading “Investor Relations.”
 
Audit Committee . Messrs. Wolfgang, Selinger and Allely are members of the Audit Committee. Mr. Wolfgang serves as Chairman of the Audit Committee and also qualifies as an "audit committee financial expert," as that term is defined in Item 407(d)(5)(ii) of Regulation S-K. The Board has determined that each member of our Audit Committee meets the financial literacy requirements under the Sarbanes-Oxley Act and SEC rules and the independence requirements under New York Stock Exchange Rule 303A.02. We did not have an Audit Committee prior to the acquisition of Moneytech on June 30, 2013.
 
Our Audit Committee is responsible for preparing reports, statements and charters required by the federal securities laws, as well as:
 
·
overseeing and monitoring the integrity of our consolidated financial statements, our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters, and our internal accounting and financial controls;
·
preparing the report that SEC rules require be included in our annual proxy statement;
·
overseeing and monitoring our independent registered public accounting firm's qualifications, independence and performance;
·
providing the Board with the results of its monitoring and its recommendations; and
·
providing to the Board additional information and materials as it deems necessary to make the Board aware of significant financial matters that require the attention of the Board.
 
Compensation Committee . Our Compensation Committee is composed of Messrs. Selinger (Chairman), Wolfgang and Allely. The Compensation Committee is responsible for:
 
·
establishing the Company’s general compensation policy, in consultation with the Company’s senior management, and overseeing the development and implementation of compensation programs.
   
·
reviewing and approving corporate goals and objectives relevant to the compensation of the CEO, and evaluating the performance of the CEO at least annually in light of those goals and objectives and communicating the results of such evaluation to the CEO and the Board, and has the sole authority to determine the CEO’s compensation level based on this evaluation, subject to ratification by the independent directors on the Board. In determining the incentive component of CEO compensation, the Committee will consider, among other factors, the Company’s performance and relative stockholder return, the value of similar incentive awards to CEOs at comparable companies, the awards given to the CEO in past years, and such other factors as the Committee may determine to be appropriate.
   
·
reviewing and approving the compensation of all other executive officers of the Company, such other managers as may be directed by the Board, and the directors of the Company.
   
·
overseeing the Board’s benefit and equity compensation plans, overseeing the activities of the individuals and committees responsible for administering these plans, and discharging any responsibilities imposed on the Committee by any of these plans.
   
  ·
approving issuances under, or any material amendments to, any stock option or other similar plan pursuant to which a person not previously an employee or director of the Company, as an inducement material to the individual’s entering into employment with the Company, will acquire stock or options.
   
  ·
in consultation with management, overseeing regulatory compliance with respect to compensation matters, including overseeing the Company’s policies on structuring compensation programs to preserve related tax objectives.
   
  ·
reviewing and approving any severance or similar termination payments proposed to be made to any current or former officer of the Company.
   
·
preparing an annual report on executive compensation for inclusion in our proxy statement for the election of directors, if required under the applicable SEC rules.
 
 
40
 
 
Since we did not have a Compensation Committee prior to our acquisition of Moneytech on June 30, 2013, our Board of Directors performed all of the responsibilities associated with the Company’s compensation policy during the fiscal year ended June 30, 2013.

Nominating Committee . Our Nominating Committee is composed of Messrs Wolfgang, Selinger and Allely.  The purpose of the Nominating Committee is to seek and nominate qualified candidates for election or appointment to our Board of Directors. The Nominating Committee will seek candidates for election and appointment that possess the integrity, leadership skills and competency required to direct and oversee the Company’s management in the best interests of its stockholders, customers, employees, communities it serves and other affected parties.
 
A candidate must be willing to regularly attend Committee and Board of Directors meetings, to develop a strong understanding of the Company, its businesses and its requirements, to contribute his or her time and knowledge to the Company and to be prepared to exercise his or her duties with skill and care.  In addition, each candidate should have an understanding of all corporate governance concepts and the legal duties of a director of a public company.
 
Stockholders may contact the Nominating Committee Chairman, the Chairman of the Board or the Corporate Secretary in writing when proposing a nominee. This correspondence should include a detailed description of the proposed nominee’s qualifications and a method to contact that nominee if the Nominating Committee so chooses.
 
Stockholder Communications
 
Any stockholder who desires to contact any of our Directors can write to Source Financial, Inc.,  Level6/97 Pacific Highway , North Sydney NSW 2060 , Australia, Attention: Stockholder Relations. Your letter should indicate that you are a Source Financial, Inc. stockholder. Depending on the subject matter, our stockholder relations personnel will:
 
 
•
forward the communication to the Director(s) to whom it is addressed;

 
•
forward the communication to the appropriate management personnel;

 
•
attempt to handle the inquiry directly, for example where it is a request for information about the Company, or it is a stock-related matter; or

 
•
not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
 
Director Compensation

Employee directors do not receive any compensation for their services as directors. We did not have any non-employee directors during the fiscal year ended June 30, 2013. Chris Taylor received $8,720 for serving as a non-employee director of Moneytech during the year ended June 30, 2013.
 
Commencing July 1, 2013, non-employee directors receive an annual retainer of $50,000, and the Chairman of the Audit Committee receives an additional $10,000 per annum. Non-employee directors also are eligible to receive option grants from our company. The compensation committee will assist the directors in reviewing and approving the compensation structure for our directors. In addition, non-employee directors are entitled to be reimbursed for their actual travel expenses for each Board of Directors meeting attended.
 
 
41
 
 
On July 19, 2013, we granted options to purchase 75,000 shares of common stock pursuant to the 2013 Omnibus Incentive Plan to each of Messrs. Klaus Selinger, John Wolfgang and Richard Allely, our non-employee directors.  The Options shall continue in force through June 30, 2020 (the "Expiration Date"), unless sooner terminated as provided herein and in the Plan. Subject to the provisions of the Plan, the right to exercise the Options shall vest as to 2,083 shares on September 30, 2013, and as to an additional 2,083 shares on the last day of each calendar month thereafter through and including August 31, 2016, except that the right to exercise the Options shall vest as to an additional 2,095 shares on the last day of August 31, 2016, and the exercise price per share of the Options vesting as of any date shall be $2.00.

Risk Oversight
 
Enterprise risks are identified and prioritized by management and each prioritized risk is assigned to the full board for oversight. These risks include, without limitation, the following:
 
Risks and exposures associated with strategic, financial and execution risks and other current matters that may present material risk to our operations, plans, prospects or reputation.
 
Risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, investment guidelines and credit and liquidity matters.
 
Risks and exposures relating to corporate governance; and management and director succession planning.
 
Risks and exposures associated with leadership assessment, and compensation programs and arrangements, including incentive plans.
 
Board Leadership Structure
 
The Chairman of the Board presides at all meetings of the Board. The Chairman is appointed on an annual basis by at least a majority vote of the remaining directors. Currently, the offices of Chairman of the Board and Chief Executive Officer are separated, with Klaus Selinger as Chairman of the Board and Hugh Evans as our Chief Executive Officer.

Code of Ethics
 
The rules of the Securities and Exchange Commission requires us to either adopt a code of ethics that applies to our Chief Executive Officer and Chief Financial Officer or explain why we have not adopted such a code of ethics. For purposes of item 406 of Regulation S-K, the term “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:

·
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·
Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;
·
Compliance with applicable governmental law, rules and regulations;
·
The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
·
Accountability for adherence to the code.

 
42
 
 
As of the date of this Form 10-K, we have not adopted a code of ethics; however, we anticipate that our Audit Committee will adopt a code of ethics at its next meeting.
 
Item 11.    Executive Compensation.
 
The following summary compensation table sets forth the total compensation earned by, paid to, or accrued for the year ended January 31, 2013, for each individual who served as our Chief Executive Officer during the year ended January 31, 2013, the most recently completed fiscal year of the Company prior to the acquisition of Moneytech on June 30, 2013.  None of the executive officers of the Company earned or was paid in excess of $100,000, for services rendered in all capacities to the Company during the year ended January 31, 2013.

Summary Compensation Table
 
Name and Principal  Position
 
Year
 
Salary
($)
   
Bonus
($)
   
Stock
awards
($)
   
Option
awards
($)
   
Non Equity
Incentive  
Plan
Information
($)
   
Nonqualified  
deferred
compensation
earnings
($)
   
All other
compensation
($)
   
Total
($)
 
Marco Garibaldi
 
2013
  $ 85,000  (1)     0        0       0       0       0       0     $ 85,000  
Chairman, CTO  
2012
  $ 0           0       0       0       0       0       30,000 (2)   $ 30,000  
                                                                     
Edward  DeFeudis
 
2013
  $ 85,000 (3)     0       0       0       0       0       0     $ 85,000  
President, CEO, CFO
 
2012
  $ 0           0       0       0       0       0       30,000 (4)   $ 30,000  
                                                                     
Denita Willough
 
2013
  $ 10,083 (6)     0          0     $ 70,940       0       0       0       0  
Former CEO(5)
 
2012
    0           0       0       0       0       0       0       0  
________________________
 
(1) In lieu of cash payment, Mr. Garibaldi was issued 10,000,000 shares of the Company’s common stock.
(2) Including $20,000 paid to Mr. Garibaldi as consulting fees through Godfather Entertainment, Inc. and $10,000 paid as consulting fees through Situation X, LLC.
(3) In lieu of cash payment, Mr. DeFeudis was issued 10,000,000 shares of the Company’s common stock.
(4) Including $30,000 paid to Mr. DeFeudis as consulting fees through Lion Equity Holding Corp.
(5) On August 31, 2012, Denita Willoughby resigned as the Chief Executive Officer of the Company and a member of the Company’s Board of Directors.
(6) In lieu of cash payment, Denita. Willough was issued 504,163 shares of the Company’s common stock.
 
 
43
 
 
Moneytech:
 
The following summary compensation table sets forth the total compensation earned by, paid to, or accrued for the year ended June 30, 2013, for each individual who served as Chief Executive Officer of Moneytech during the year ended June 30, 2013, the most recently completed fiscal year of the Company.  Except for Hugh Evans, none of the executive officers of Moneytech earned or was paid in excess of $100,000, for services rendered in all capacities to the Company during the year ended June 30, 2013.
 
Name and Principal  Position
 
Year
 
Salary
($)
 
Bonus
($)
 
Stock
awards
($)
 
Option
awards
($)
 
Non Equity
Incentive  
Plan
Information
($)
 
Nonqualified  
deferred
compensation
earnings
($)
 
All other
compensation
($)
 
Total
($)
Hugh Evans
 
2013
   
125,000
  250,000                    
11,250 
  386,250 
Managing Director
 
2012
   
125,000
 
250,000
                   
11,250 
  386,250 
 
Option Exercises and Fiscal Year-End Option Value Table

None of the named executive officers exercised any stock options during the year ended June 30, 2013, or held any outstanding stock options as of June 30, 2013.
 
Long-Term Incentive Plans and Awards
 
On May 9, 2013, we issued 1,000,000 shares of common stock to each of Edward DeFeudis, our then President and CEO, and Mario Garibaldi, our then Chairman, pursuant to substantially identical Restricted Stock Agreements. The shares are subject to a right of first refusal in favor of the Company whereby should either of Mr. DeFeudis or Mr. Garibaldi desire to sell all or any portion of his 1,000,000 shares, he would have to offer to sell them to the Company at a price equal to the price offered by a third party (or at which the shares can be sold over the counter) minus $2.00 (the "First Refusal Discount Amount"). For example, if a third party were to offer to purchase 100,000 shares from either of Mr. DeFeudis or Mr. Garibaldi at a price of $3.00 per share, he would have to offer such shares to the Company at a price of $1.00 per share. Likewise, if Mr. DeFeudis or Mr. Garibaldi desires to sell any of his 1,000,000 in the public market at a time when the shares are trading for $3.00 per share, he will first have to offer to sell them to our company for $1.00 per share.
 
2013 Omnibus Incentive Plan

On April 8, 2013, we approved and adopted an Omnibus Incentive Plan, which reserved 2,500,000 shares of common stock.  This plan was implemented to recognize and provide additional incentive to our directors, employees, consultants, advisors and affiliates to establish and sustain our growth and financial success.

On July 19, 2013, we granted options to purchase 75,000 shares of common stock pursuant to the 2013 Omnibus Incentive Plan to each of Messrs. Klaus Selinger, John Wolfgang and Richard Allely, our non-employee directors, at an exercise price of $2.00 per share. The options vest as to 2,083 shares on September 30,, 2013, and as to an additional 2,083 shares on the last day of each calendar month thereafter through and including August 31, 2016, except that the right to exercise the Options shall vest as to an additional 2,095 shares on the last day of August 31, 2016.  The options will vest immediately upon the occurrence of a Change in Control, as defined in the 2013 Omnibus Incentive Plan. The options expire on June 30, 2020.
 
Employment Agreements

Hugh Evans has served as Managing Director of Moneytech since March 1, 2004 pursuant to an Employment Agreement. The Employment Agreement provides for a salary of $250,000 per annum, plus commissions, including a guaranteed annual contribution equal to 9% of his salary to his superannuation fund. The Employment Agreement may be terminated by Moneytech or Mr. Evans upon four weeks prior written notice and Moneytech may terminate Mr. Evans employment immediately for cause (as defined in the Employment Agreement).

 
44
 
 
The Employment Agreement includes restrictive covenants which prohibit Mr. Evans personally or on behalf of any person, firm or company (other than the Moneytech Group):

 (a) for a period of twelve months from the termination of his employment with Moneytech from (i) soliciting clients or customers of Moneytech and its subsidiaries (the “Moneytech Group”) within Australia or New Zealand for any business conducted by Moneytech Group, or (ii) soliciting, interfering with or endeavoring to entice away from Moneytech Group any person, firm or company who at any time during the term of his employment was a customer or client of Moneytech Group; and

(b) for a period of six months from the termination of his employment with Moneytech from (i) approaching, enticing, endeavoring to entice away from the Moneytech Group any person, firm or company which during the six months before such termination was a director, employee, consultant, agent, representative, associate or advisor to any company within the Moneytech Group, or (ii) accepting any employment, which would require Mr. Evans to reveal any confidential information of the Moneytech Group without Moneytech Group’s prior written consent.
 
Edward DeFeudis is employed by WikiTechnologies as its Chief Executive Officer, President and Chief Financial Officer until May 29, 2015. The agreement provides for an annual base salary of $120,000, subject to increases of $30,000 for each $1,000,000 of cumulative revenues achieved by WikiTechnologies during the period commencing May 29, 2013; provided that payment of his base salary is deferred until WikiTechnologies receives an aggregate of $600,000 in financing, subject to the discretion of the Board of Directors of WikiTechnologies to accelerate payment. If Mr. DeFeudis’ employment is terminated other than for “cause” (as defined), his resignation, or death, he shall be entitled to receive payment of base salary for a period of six months after the date of termination, less in the case of a termination for disability, any long-term disability benefits he receives under a welfare benefit plan maintained by WikiTechnologies.
 
If his employment is terminated for cause or upon his resignation, the agreement prohibits Mr. DeFeudis, during the following twelve months, from engaging in a business which competes with the business of WikiTechnologies in any country where it has significant business operations, or soliciting for employment by anyone other than WikiTechnologies any individual known by him (after reasonable inquiry to be employed at the time by WikiTechnologies or any of its affiliated companies.

Marco Garibaldi is employed by WikiTechnologies as its Chief Executive Officer, President and Chief Financial Officer until May 29, 2015. The agreement provides for an annual base salary of $120,000, subject to increases of $30,000 for each $1,000,000 of cumulative revenues achieved by WikiTechnologies during the period commencing May 29, 2013; provided that payment of his base salary is deferred until WikiTechnologies receives an aggregate of $600,000 in financing, subject to the discretion of the Board of Directors of WikiTechnologies to accelerate payment. If Mr. DeFeudis’ employment is terminated other than for “cause” (as defined), his resignation, or death, he shall be entitled to receive payment of base salary for a period of six months after the date of termination, less in the case of a termination for disability, any long-term disability benefits he receives under a welfare benefit plan maintained by WikiTechnologies.

If his employment is terminated for cause or upon his resignation, the agreement prohibits Mr. DeFeudis, during the following twelve months, from engaging in a business which competes with the business of WikiTechnologies in any country where it has significant business operations, or soliciting for employment by anyone other than WikiTechnologies any individual known by him (after reasonable inquiry to be employed at the time by WikiTechnologies or any of its affiliated companies.

 
45
 
 
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Change in Control

As a result of the issuance of 5,300,000 shares of common stock to the former shareholders of Moneytech, including the shares issued to Hugh Evans, the Chairman and Managing Director of Moneytech, and the issuance to Mr. Evans of 5,000 shares of Series B Preferred Stock, there has been a change in control of our company. Under the terms of the Series B Certificate of Designation, Mr. Evans, as the holder of the Series B Shares has the right, until June 30, 2018, to (A) elect the majority of our Board of Directors and (B) vote on all other matters presented to holders of our common stock (the “Common Shareholders ” ), with each vote per Series B Share equal to 1,000 shares of common stock. After June 30, 2018, the Series B Preferred Shares will have no voting rights and we may redeem the Series B Shares for a per share price of one tenth of a cent ($0.001.  The Series B Shares do not have any conversion rights and are not be entitled to receive any dividends, distributions, or other economic or financial interest in our company, and in the event of a liquidation, dissolution, or winding up of our company, whether voluntary or involuntary, the holders of Series B Shares are entitled to receive out of the assets of the company, whether such assets are capital or surplus of any nature, the sum of one tenth of a cent ($0.001) per Series B Share, after payment to the holders of the common stock and the holders of any other series or class of the equity securities of our company ranking senior to the common stock.

Security Ownership
 
The following table sets forth information about the beneficial ownership of our common stock as of October 1, 2013 by:
 
 
•
each person known to us to be the beneficial owner of more than 5% of our common stock and our series B preferred stock, our only voting securities;
  
•
each named executive officer;
  
•
each of our directors; and
  
•
all of our executive officers and directors as a group.
 
Unless otherwise noted below, the address of each beneficial owner listed on the table is c/o Source Financial, Inc., Level6/97 Pacific Highway , North Sydney NSW 2060 , Australia. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws, where applicable.
 
In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of October 1, 2013. We, however, did not deem these shares outstanding for the purpose of computing the percentage ownership of any other person.

Applicable percentage voting power is based on 9,961,637 shares of common stock and 5,000 shares of Series B Preferred Stock outstanding on October 1, 2013.  Holders of the Company’s Series B Shares are entitled to elect a majority of our Board of Directors through June 30, 2018 and vote together with holders of common stock as a single class on all matters presented to holders of our common stock , with each vote per Series B Share equal to 1,000 shares of common stock.
 
 
46
 
 
Shares Beneficially Owned
 
   
Common Stock
   
Series B
Preferred Stock
   
% Total
Voting
 
   
Shares
   
%
   
Shares
   
%
   
Power (1)
 
Name of Beneficial Owner
       
 
   
 
   
 
   
 
 
Directors and Named Executive Officers
       
 
   
 
   
 
   
 
 
Hugh Evans
    2,001,514 (2)       20.09 %       5,000 (1)       100 %       46.80 %
Edward DeFeudis
    1,493,725 (3)     14.99         0         —    
9.98
%
Klaus Selinger
    0         —         0         —         —  
Richard Wolfgang
    0         —         0         —         —  
Richard Allely
    0         —         0         —         —  
Marco Garibaldi, Chairman of WikiTechnologies
    1,461,000 (4)       14.67          0         —    
9.76
%
                                         
All directors and executive officers as a group (5 persons)
   
4,956,239
(2)(3)(4)     49.75 %       5,000         100 %  
66.55
%
           
 
%                        
Holders of More than 5%
         
 
%                        
Christopher John Taylor and Jane Joanne Taylor ATF 
The Taylor Family Superannuation Fund No.2
    709,770         7.13 %     -       -       4.69 %
 
 
(1)
Percentage total voting power represents voting power with respect to all shares of our common stock and Series B preferred stock, as a single class. Except as provided in the certificate of designation creating the Series B preferred stock or as may be required by law, the holder of Series B Shares and holders of common stock vote together as a single class on all matters upon which holders of common stock are entitled to vote with holders of Series B Shares entitled to 1,000 votes per share of Series B Shares through June 30, 2018 and each holder of common stock entitled to one vote per share of common stock. The holder(s) of Series B Shares are entitled to elect a majority of the members of our Board of Directors through June 30, 2018.
     
 
(2)
Represents shares of common stock registered in the name of BIX Holdings Pty Ltd ATF The Atherstone Trust & The Evans Family Superannuation Trust, a family trust of which Mr. Evans is the trustee.
     
 
(3)
Includes 97,090 shares held by Spider Investment, LLC.   Mr. DeFeudis has control and dispositive power over the shares owned by Spider Investment, LLC and is the beneficial owner of Spider Investment, LLC.  Includes 1,120,000 shares deposited in escrow over which he retains voting power. See Item 1. “Business – Acquisition of Moneytech” for a description of the terms of the escrow agreement.
     
 
(4)
Includes 65,000 shares held by Situation X, LLC. Marco Garibaldi has control and dispositive power over the shares owned by Situation X, LLC and he is the beneficial owner of Situation X, LLC.  Includes 1,120,000 shares deposited in escrow over which he retains voting power. See Item 1. “Business – Acquisition of Moneytech” for a description of the terms of the escrow agreement.
 
Item 13.    Certain Relationships and Related Transactions, and Director Independence.
 
Transaction With Related Persons.
 
The following is a summary of material provisions of various transactions we have entered into with our executive officers, directors (including nominees), 5% or greater stockholders and any of their immediate family members or entities affiliated with them since February 1, 2011. We believe the terms and conditions set forth in such agreements are reasonable and customary for transactions of this type.
 
 
47
 
 
During the years ended June 30, 2013, 2012 and 2011, Moneytech paid a company controlled by Hugh Evans, the Chairman and Managing Director of Moneytech, and now the President and Chief Executive Officer of the Company, $201,299 and $163,219, respectively, for consulting services.
 
On May 9, 2013, we issued 1,000,000 shares of common stock to each of Edward DeFeudis, our then President and CEO, and Mario Garibaldi, our then Chairman, pursuant to substantially identical Restricted Stock Agreements. The shares are subject to a right of first refusal in favor of the Company whereby should either of Mr. DeFeudis or Mr. Garibaldi desire to sell all or any portion of his 1,000,000 shares, he would have to offer to sell them to the Company at a price equal to the price offered by a third party (or at which the shares can be sold over the counter) minus $2.00 (the "First Refusal Discount Amount"). For example, if a third party were to offer to purchase 100,000 shares from either of Mr. DeFeudis or Mr. Garibaldi at a price of $3.00 per share, he would have to offer such shares to the Company at a price of $1.00 per share. Likewise, if Mr. DeFeudis or Mr. Garibaldi desires to sell any of his 1,000,000 in the public market at a time when the shares are trading for $3.00 per share, he will first have to offer to sell them to our company for $1.00 per share.
 
Approval of Related-Party Transactions
 
Transactions by us with related parties are subject to a formal written policy, as well as regulatory requirements and restrictions. In connection with this offering, we intend to revise our written policy to ensure compliance with all applicable requirements of the SEC concerning related-party transactions.
 
Under the new policy, our directors and director nominees, executive officers and holders of more than 5% of our common stock, including their immediate family members, will not be permitted to enter into a related party transaction with us, as described below, without the consent of our Audit Committee. Any request for us to enter into a transaction in which the amount involved exceeds $120,000 and any such party has a direct or indirect material interest, subject to certain exceptions will be required to be presented to our Audit Committee for review, consideration and approval. Management will be required to report to our Audit Committee any such related party transaction and such related party transaction will be reviewed and approved or disapproved by the disinterested members of our Audit Committee.

On October 4, 2012, Edward DeFeudis, our then President, Chief Executive Officer, Chief Financial Officer and Director, loaned the Company $5,000 for general working capital purposed.  The loan was non-interest bearing and due on demand.  The loan has been repaid.

Director Independence
 
Our Board of Directors has determined that Klaus Selinger, John Wolfgang and Richard Allely are "independent directors" within the meaning of New York Stock Exchange Rule 303A.02.
 
Item 14. Principal Accounting Fees and Services.

The following is a summary of the fees billed to us by PS Stephenson & Co., P.C. and Lichter Yu and Associates for professional services rendered for the fiscal years ended January 31, 2013 and June 30, 2013:
 
 
 
Fiscal Year Ended
 
 
 
January 31, 2013
 
 
June 30, 2013
 
Audit Fees
 
$
10,000
 
 
$
55,000
 
Audit Related Fees
 
 
0
 
 
 
-
 
Tax Fees
 
 
1,000
 
 
 
-
 
All Other Fees
 
 
0
 
 
 
-
 
 
 
$
11,000
 
 
$
55,000
 
 
 
48
 
 
Audit Fees. Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements.
 
Audit Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees".
 
Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.
 
All Other Fees. Consists of fees for product and services other than the services reported above.
 
Board of Directors' Pre-Approval Policies
 
Our Board of Directors' policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit related services, tax services, and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.
 
Our Board of Directors has reviewed and discussed with Lichter, Yu and Associates., our audited consolidated financial statements contained in this Annual Report on Form 10-K for the fiscal years ended June 30, 2013 and 2012. The Board of Directors also has discussed with Lichter, Yu and Associates the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of our consolidated financial statements.
 
Our Board of Directors has received and reviewed the written disclosures and the letter from Lichter, Yu and Associates required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and has discussed with Lichter, Yu and Associates its independence from our company.
 
Our Board of Directors has considered whether the provision of services other than audit services is compatible with maintaining auditor independence. Based on the review and discussions referred to above, the Board of Directors determined that the audited consolidated financial statements be included in our Annual Report on Form 10-K for our fiscal year ended June 30, 2013 for filing with the SEC.
 
PART IV

Item 15.  Exhibits, Financial Statement Schedules.
 
(a) The following documents are filed as part of this report:
 
(1)
Financial Statements

The audited consolidated balance sheet of the Company and its subsidiaries as of June 30, 2013 and June 30, 2012, the related condensed statements of operations, changes in stockholders’ equity and cash flows for the years then ended, the footnotes thereto, and the report of Lichter, Yu and Associates , independent auditors, are filed herewith.
 
(2)
Financial Statement Schedules

None.

 
49
 
 
Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.
 
(3)
Exhibits:
 
Exhibit
Number
  
Description
     
2.1
 
Agreement and Plan of Merger dated February 10, 2012 (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on February 14, 2012).
     
2.2
 
Share Exchange Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 5, 2013).
     
3.1
  
Amended and Restated Certificate of Incorporation.
     
3.2   By-laws (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 (Registration No. 333-153798) declared effective on March 13, 2009).
     
10.1
  
Employment Agreement between Moneytech and Hugh Evans.
     
10.2
 
Employment Agreement between WikiTechnologies and Edward DeFeudis.
     
10.3
 
Employment Agreement between WikiTechnologies and Marco Garibaldi.
     
10.4
  
Receivables Purchase Agreement, as amended.
     
10.5
  
Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 9, 2013).
     
10.6
 
Restricted Stock Option Agreement effective May 9, 2013 with Edward DeFeudis (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 5, 2013).
     
10.7
 
Restricted Stock Option Agreement effective May 9, 2013 with Marco Garibaldi (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed on August 5, 2013).
     
10.8
  
Stock Option Agreement dated July 19, 2013 with Klaus Selinger.
     
10.9
  
Stock Option Agreement dated July 19, 2013 with John Wolfgang.
     
10.10
  
Stock Option Agreement dated July 19, 2013 with Richard Allely.
     
10.11
  
Lease dated September 13, 2011 for Suites 101A and 101B, Level 6, 97-103 Pacific Highway, North Sydney, Australia.
     
10.12
 
Lease dated July 25, 2013 for Suite 8, 842 Albany Highway, Victoria Park, Australia.
     
10.13
 
Escrow Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 5, 2013).
     
10.14
 
Letter Agreement dated May 28, 2013 with Hugh Evans concerning Series B Preferred Stock (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on June 5, 2013).
     
10.15
  
Service Agreement dated April 19, 2013 by and among Source, WikiTechnologies and 24 Seven Technologies, Inc.
     
10.16  
Consulting Agreement   between Source and Market Street Investor Relations LLC, dated July 9, 2013
     
16.1
 
Letter from P.S. Stephenson & Co., P.C. (incorporated by reference to Exhibit 16.1 to Current Report on Form 8-K/A filed on September 27, 2013).
     
21.1
  
Subsidiaries
     
31.1
 
Certification of Principal Executive and Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the  Securities Exchange Act of 1934, as amended
     
32.1
 
Certification pursuant to  18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act of 2002 )
     
101.INS
 
XBRL Instance Document
 
 
 
101.SCH
 
XBRL Taxonomy Schema
 
 
 
101.CAL
 
XBRL Taxonomy Calculation Linkbase
 
 
 
101.DEF
 
XBRL Taxonomy Definition Linkbase
 
 
 
101.LAB
 
XBRL Taxonomy Label Linkbase
 
 
 
101.PRE
 
XBRL Taxonomy Presentation Linkbase
 
 
 
50
 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
SOURCE FINANCIAL, INC.
   
Dated: October 15, 2013
By:
/s/ Hugh Evans
   
Hugh Evans
   
Chief Executive Officer, President and Chief Financial Officer (Principal Executive and Financial Officer)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities on October 15, 2013.
 
Signature
 
Title
     
/s/ Hugh Evans
 
Chief Executive Officer, President, Chief Financial Officer and Director
Hugh Evans
 
(Principal Executive and Financial Officer)
     
/s/ Klaus Selinger
 
Chairman of the Board
Klaus Selinger
   
     
/s/ John Wolfgang
 
Director
John Wolfgang
   
     
/s/ Richard Allely
 
Director
Richard Allely
   
     
/s/ Edward DeFeudis
 
Director
Edward DeFeudis
   
 
 
51
Exhibit 3.1
 
Amended and Restated

Certificate of Incorporation

of

Source Financial, Inc.

The undersigned, Hugh Evans, hereby certifies that:
 
1.  
The name of this corporation is Source Financial, Inc. (the “ Corporation ”).
 
2.  
The Certificate of Incorporation of the Corporation (the “ Certificate of Incorporation ”) was filed on June 24, 1988 under the name Windsor Capital Corp.
 
3.  
The Amended and Restated Certificate of Incorporation of the Corporation (the “ Amended and Restated Certificate ”) as set forth herein has been duly adopted in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (the “ DGCL ”) by the directors and stockholders of the Corporation.
 
4.  
The Certificate of Incorporation of the Corporation be amended and restated in its entirety as follows:
 
FIRST:                      The name of the Corporation is Source Financial, Inc.
 
SECOND:                 The address of the Corporation's registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware, 19808. The name of its registered agent at such address is Corporation Service Corporation.
 
THIRD:                     The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
 
FOURTH:                 The Corporation shall have the authority to issue up to 1,000,000 shares of preferred stock, par value $0.01 per share (the “ Preferred Stock ”) and up to 50,000,000 shares of common stock, par value $0.001 per share (the “ Common Stock ”).
 
(A)            Series B Preferred Stock .  The Corporation is authorized to issue up to 5,000 shares of Series B Preferred Stock, $0.01 par value per share, which shall have the following preferences, powers, designations and other special rights;
 
1.  
Voting .  Holders of the Series B Preferred Stock voting as a separate class shall have the right to elect a majority of the members of the Corporation’s Board of Directors until June 30, 2018, and until June 30, 2018, shall vote together with the holders of the Common Stock of the Corporation as a single class on all other matters submitted to a vote of stockholders, with each share of Series B Preferred Stock entitled to 1,000 votes, and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation. The holders of the series B Preferred Stock shall not be entitled to any voting rights after June 30, 2018.  The holders of the Series B Preferred Stock shall be permitted to vote their shares pursuant to written consent in the manner provided to holders of shares of Common Stock in accordance with the General Corporation Law of the State of Delaware and the Certificate of Incorporation and Bylaws of the Corporation.
 
 
 
 
 
2.  
Dividends .  The holders of Series B Preferred Stock shall not be entitled to dividends in respect of shares of Series B Preferred Stock.

3.  
Liquidation Preference.   Upon the liquidation, dissolution and winding up of the Corporation, whether voluntary or involuntary, the holders of the Series B Preferred Stock then outstanding shall be entitled to receive out of the assets of the Corporation the sum of one tenth of a cent ($0.001) per share of Series B Preferred Stock, after payment to the holders of the Corporation’s Common Stock and the holders of any other series or class of the equity securities of the Corporation ranking senior to the Corporation’s Common Stock.

4.  
Redemption.   The shares of series B Preferred Stock shall be redeemable at the option of the Corporation at any time after June 30, 2018 upon not less than 30 days written notice to the holders of the Series B Preferred Stock at a redemption price of one tenth of a cent ($0.001) per share.

5.  
Vote to Change the Terms of or Issue Series B Preferred Stock .  The affirmative vote at a meeting duly called for such purpose, or the written consent without a meeting, of the holders of not less than fifty-one percent (51%) of the then outstanding shares of Series B Preferred Stock shall be required for (i) any change to  the Corporation’s Certificate of Incorporation that would amend, alter, change or repeal any of the preferences, limitations or relative rights of the Series B Preferred Stock, or (ii) any issuance of additional shares of Series B Preferred Stock.
 
6.  
Record Owner .  The Corporation may deem the person in whose name shares of Series B Preferred Stock shall be registered upon the registry books of the Corporation to be, and may treat him as, the absolute owner of the Series B Preferred Stock for all purposes, and the Corporation shall not be affected by any notice to the contrary.  

(B)            Blank Check Preferred Stock .  The board of directors is hereby expressly authorized to provide, out of the unissued shares of preferred stock, for one or more series of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
 
 
 
 
 
(C)            Common Stock.
 
1. Dividends. Subject to the rights, if any, of the holders of Preferred Stock with respect to the payment of dividends and the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts for the benefit of such holders, and subject to any other conditions that may be fixed in or pursuant to the terms of any series of Preferred Stock authorized pursuant to paragraph (B) of this Article, the holders of Common Stock shall be entitled to receive such dividends, if any, as may be declared from time to time by the board of directors on the Common Stock out of assets which are legally available therefor. Any such dividends shall be divided among the holders of the Common Stock on a pro rata basis.
 
2. Liquidation. In the event of any liquidation of the Corporation, after payment or provision for payment of the debts and liabilities of the Corporation and after distribution to the holders of Preferred Stock, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution to stockholders. Any such assets shall be divided among the holders of Common Stock on a pro rata basis.
 
3. Voting. Except as may otherwise be required by law and subject to the rights of the holders of Preferred Stock, each holder of Common Stock shall have one vote for each share of Common Stock held by such holder on each matter submitted to a vote of the stockholders.
 
(D) General.
 
1. Subject to the foregoing provisions of this Amended and Restated Certificate of Incorporation, the Corporation may issue shares of Preferred Stock and Common Stock from time to time for such consideration (not less than the par value thereof) as may be fixed by the board of directors, which is expressly authorized to fix the same in its absolute discretion. Shares so issued for which the consideration shall have been paid or delivered to the Corporation shall be deemed fully paid stock and shall not be liable to any further call or assessment thereon, and the holders of such shares shall not be liable for any further payments in respect of such shares.
 
2. Subject to the provisions of this Amended and Restated Certificate of Incorporation, the Corporation shall have authority to create and issue rights and options entitling their holders to purchase shares of the capital stock of the Corporation of any class or series or other securities of the Corporation, and such rights and options shall be evidenced by instrument approved by the board of directors. The board of directors shall be empowered to set the exercise price, duration, times for exercise and other terms of such rights or options.
 
 
 
 
 
3. No stockholder of the Corporation shall by reason of his or her holding shares of any class of capital stock of the Corporation have any preemptive or preferential right to acquire or subscribe for any additional, unissued or treasury shares (whether now or hereafter acquired) of any class of capital stock of the Corporation now or hereafter to be authorized, or any notes, debentures, bonds or other securities convertible into or carrying any right, option or warrant to subscribe for or acquire shares of any class of capital stock of the Corporation now or hereafter to be authorized, whether or not the issuance of any such shares or such notes, debentures, bonds or other securities would adversely affect the dividends or voting or other rights of that stockholder.
 
4. Cumulative voting of shares of any capital stock having voting rights shall not be permitted.
 
FIFTH:                      The board of directors shall have the power to adopt, amend and repeal the by-laws of the Corporation.  The stockholders entitled to vote in the election of directors may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.
 
SIXTH:                      Meetings of stockholders shall be held at such place, within or without the State of Delaware, as may be designated by or in the manner provided in the by-laws of the Corporation or, if not so designated, as determined by the board of directors.  Elections of directors need not be by written ballot except and to the extent required by the by-laws of the Corporation.
 
SEVENTH:                The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
 
EIGHTH:                   A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the General Corporation Law as currently in effect or as the same may hereafter be amended. If the General Corporation Law is hereafter amended to eliminate or limit further the liability of a director, then, in addition to the elimination and limitation of liability provided by the preceding sentence, the liability of each director shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any amendment, modification or repeal of this Article shall be prospective only and shall not adversely affect any right or protection of a director of the Corporation that exists at the time of such amendment, modification or repeal
 
NINTH:                      (A)            The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the General Corporation Law, each director or officer of the Corporation who was or is, or is threatened to be made, a party to or otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding "), by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or a trustee, custodian, administrator, committeeman or fiduciary of any employee benefit plan, or a person serving another corporation, partnership, joint venture, trust, other enterprise or nonprofit entity in any of the foregoing capacities at the request of the Corporation (an “ Authorized Representative ”), against all expenses (including attorneys’ fees and disbursements), judgments, fines (including excise and taxes) and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding, whether the basis of such person’s involvement in the Proceeding is an alleged act or omission in such person’s capacity as an Authorized Representative or in another capacity while serving in such capacity or both.  The Corporation shall be required to indemnify an incumbent or former director or officer in connection with a Proceeding initiated by such person only if and to the extent that such Proceeding was authorized by the board of directors of the Corporation or is a civil suit by such person to enforce rights to indemnification or advancement of expenses.
 
 
 
 
 
(B)           The Corporation shall promptly pay all expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by a director or officer of the Corporation in defending or appearing (otherwise than as a plaintiff) in any Proceeding described in paragraph (A) of this Article in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on behalf of such person to repay all amounts so advanced if it shall ultimately be determined by a final, unappealable judicial decision that such person is not entitled to be indemnified for such expenses under this Article or otherwise.
 
(C)           The Corporation shall have the power to, and may, indemnify any person who is or was an Authorized Representative (other than an officer or director who are covered by (A) above)   against loss, liability and expense in connection with a Proceeding, and may pay expenses incurred by such person in connection with such Proceeding in advance of the final disposition of the Proceeding, to the fullest extent permitted by law.
 
(D)           The rights to indemnification and advancement of expenses provided by or granted pursuant to this Article shall be presumed to have been relied upon by directors and officers of the Corporation in serving or continuing to serve the Corporation, shall continue as to a person who ceases to be an Authorized Representative, shall inure to the benefit of the heirs, executors and administrators of such person, and shall be enforceable as contract rights.  Such rights shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any statute, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office or position.  The Corporation may enter into contracts to provide any Authorized Representative with specific rights to indemnification and advancement of expenses, which contracts may confer rights and protections to the maximum extent permitted by law.  The Corporation may purchase and maintain insurance, borrow money, create trust funds, pledge, mortgage, or create security interests in the assets of the Corporation, obtain letters of credit, or use other means from time to time to ensure payment of such amounts as may be necessary to perform the Corporation’s obligations provided for in this Article or in any such contract.  The by-laws of the Corporation may contain additional provisions implementing and supplementing the provisions of this Article.
 
(E)           Any amendment, modification or repeal of this Article shall not adversely affect any right or protection of a director or officer of the Corporation with respect to any act or omission occurring prior to the time of such amendment, modification or repeal.
 
 
 
 
 
TENTH:                      Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under §291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under §279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs.  If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.
 
*****************
 
 
 
 

 
The foregoing Amended and Restated Certificate of Incorporation has been duly adopted by the Corporation’s Board of Directors and stockholders in accordance with the applicable provisions of Sections 228, 242 and 245 of the Delaware General Corporation Law.
 
 
Date:  September 18, 2013    
     
 
/s/ Hugh Evans  
  Hugh Evans  
  Chief Executive Officer and Chairman  
     
 
Exhibit 10.1
 
 
1 March 2004

Mr. Hugh Evans
9 Eaglehawk Place
West Pennant Hills NSW 2125

EMPLOYMENT OFFER: Managing Director

Dear Hugh

We are delighted to offer you a position with Moneytech Limited, (“the Company”), in the position of Managing Director. The Company may also, from time to time, change your duties in consultation with you.

The terms and conditions of employment are outlined hereunder:

1.
TERM

Your employment will commence on Monday 1 st March 2004. Please note that the terms and conditions of this contract are effective from your commencement date and will continue in force until the contract is terminated in accordance with the termination clause of this contract.

2.
DUTIES

It is expected that you shall:

 
1.
Perform the duties prescribed, as per your key accountabilities/responsibilities outlined in your position description (attachment to this contract); and

 
2.
Perform the duties from time to time assigned to you by the Company and in all respects comply with the directions and lawful regulations given or made by the Company;

 
3.
Use your best efforts to promote the Company’s best interests and welfare;

 
4.
During working hours, devote all of your working time and attention to your employment with the Company;

 
5.
Serve the Company honestly and faithfully.
 
3.
REMUNERATION

Base Salary

You will be on a salary of $250,000 per annum plus commissions including the superannuation guarantee of 9.00%.

 
 
 
 
 
Your base salary will be payable MONTHLY on or about the 15 th day of each month and paid two (2) weeks in arrears and two (2) weeks in advance.  Your salary, net of tax, will be deposited into your nominated bank account.

Salary reviews occur annually.  Adjustment will be made on the basis of the Company’s financial performance, market salary comparisons and your Manager’s assessment of your work performance.

Superannuation

The Company will make superannuation contributions to a complying Superannuation Fund in accordance with requirements under the Superannuation Guarantee (Administration) Act 1992.
You have the right to choose which superannuation fund will receive your superannuation guarantee contributions. The current contribution is nine percent (9.00%) of your “ordinary time earnings.”  If you decide to choose your own super fund, you will be required to complete the ATO Standard Choice Form.  If you do not complete the ATO Standard Choice Form, your compulsory super contribution will be invested with the Company’s default fund Care Super.

It is company policy to pay superannuation at the rate specified in the Superannuation Guarantee Legislation.

Performance Bonus

You may be elligible for a Performance bonus.  This is dependent on you meeting and/or exceeding your performance measures (to be agreed with your manager upon commencement), and the Company meeting and/or exceeding its financial targets for the year.  Performance bonuses are at the Company’s sole discretion.

All payments are subject to Pay As You Go (PAYG) taxation.

4.
PROBATIONARY EMPLOYMENT

You will be on probation for a maximum period of six (6) months from your commencement date (“Probationary Period”).  During this Probationary Period, either party may terminate this contract by providing two (2) week’s notice to the other party.  The Company, at its sole discretion, may give you two (2) weeks’ notice or remuneration of two (2) weeks salary in lieu of notice.

On or before the expiry date, your manager will assess your suitability for permanent employment based on your performance against your performance criteria (position description and other work instructions issued to you during the course of your employment).  At that time your manager will either confirm your permanent employment status or terminate this contract.

5.
HOURS OF SERVICE

You are required to work a minimum of 40 hours per week, with your normal hours of work being Monday to Friday from 8.00am to 5:00pm (or as otherwise directed), with a one hour lunch break.

In order to perform the job effectively, however, you may be required to work additional hours as appropriate.  The salary package specified in this contract is deemed to cover payment for the overall performance of the job, and overtime will not be payable.

 
Page 2 of 13
 
 
 
6.
EXPENSES

You will be reimbursed all work related expenses which are reasonably and necessarily incurred in the course of performing your duties, having first gained prior approval from your Manager.

Reimbursement will be in line with corporate guidelines and will be reimbursed in Australian dollars.

7.
ATTACHED DOCUMENTATION

Additional terms and conditions of employment are set out in the attached document headed “Terms and Conditions of Employment” .  Also attached is your position description and Salary Package Summary.

Please read all of the enclosed documents before accepting this offer.

We are pleased you have chosen to join our team, and we are confident your contributions will be important to the continued growth and success of the Company.

Please advise if you need any further information in advance of starting with us.

Finally, we would like to take the opportunity to welcome you on board.

Yours sincerely,
Moneytech Ltd
 
/s/ Hugh Evans      
Hugh Evans
     
Managing Director
     
 
If the above terms and conditions are acceptable to you including those set out in the enclosed documents please signify your acceptance of employment by signing two copies of this contract and returning them to Human Resources, Moneytech Limited
 
A signed copy for your personal records will be returned to you prior to your commencement date.
 
 
Page 3 of 13
 
 
 
ACCEPTANCE
 
ACKNOWLEDGMENT OF ACCEPTANCE OF OFFER OF EMPLOYMENT
 
I, Hugh Evans declare that:

1
I have read and understood the attached terms and conditions of employment; and

2
I will abide by these conditions of employment.
 
Signed
 
/s/ Hugh Evans    
Name: Hugh Evans    
Date:
1 st March, 2004    
 
 
Page 4 of 13
 
 
 
TERMS AND CONDITIONS OF EMPLOYMENT

OPERATIVE PROVISIONS:

1
Definitions
1.1
In this agreement, the following words or expressions have the meanings indicated unless the contrary intention appears.

“Moneytech Group” refers to Moneytech Limited ABN 77 106 249 852 and its subsidiaries.

 
“Company” refers to Moneytech Limited ABN 77 106 249 852 .a Moneytech Group subsidiary directly employing the Employee.

 
“Confidential Information” means all financial, accounting, marketing and technical information, customer and supplier list, files, forms, specifications, processes, statements, formulae, trade secrets, drawings and data (and copies and extracts made of or from those things), ideas, concepts, know-how and technology relating to the operations and dealings of Moneytech Group, but not limited to:

 
(a)
the organisation, finance, customers, markets, suppliers, intellectual property and know-how of Moneytech Group and
 
(b)
the personal and business activities of  Moneytech Group.

 
“Executive Officer” has the same meaning as set out in the Corporations Law.
 
“Employee” shall mean the person whose name appears on the Employment Offer.
 
 
“Effective Date” means the date on which the Employee commences his or her employment with Moneytech Group or one of its subsidiaries.

 
“Intellectual Property Rights” means all intellectual property rights of Moneytech Group including without limitation:

 
(a)
copyright, patents, registered designs, rights in circuit layouts, trademarks and the right to have confidential information kept confidential; and
 
(b)
any application or right to apply for registration of any of those rights.

2.
Position
2.1
The Employee shall be employed in the position set out in the letter of offer of employment and will be expected to serve Moneytech Group in the position to which the Employee is presently appointed or in such other position as may from time to time be assigned to the Employee by the Company.

2.2
The Employee’s employment will commence on the Effective Date, as outlined in the letter of offer of employment.

2.3
If the Employee’s position changes during the course of his/her employment for any reason, it is agreed that all terms and conditions of this employment contract will remain in full force and effect.

3.
Employee’s Duties & Obligations
3.1
The Employee’s duties are set out in the Employment Offer and such other duties as   the Company may notify the Employee from time to time.

 
Page 5 of 13
 
 
 
3.2
The Employee must:
 
(a)
perform to the best of the Employee’s abilities and knowledge the duties assigned by the Company from time to time, whether during or outside Business Hours and at such place or places as the Company may require;
 
(b)
Serve the Company faithfully and diligently to the best of the Employee’s ability;
 
(c)
use all reasonable efforts to promote the interests of the Company;
 
(d)
act in the Company’s best interests;
 
(e)
comply with all laws applicable to the Employee’s position;
 
(f)
report to the person or persons nominated by the Company from time to time;
 
(g)
liaise with the directors and other employees of the Company in ensuring that any customers and / or clients of the Company are provided with an efficient and courteous service; and
 
(h)
observe and conform to all the rules, policies, practices and customs of the business conducted by the Company in conducting and carrying out your duties and to conduct yourself in a manner becoming of a person in your position.

Without limiting the Employee’s duties to the Company, the Employee must not act in conflict with the Company’s best interests.

4.
Lawful Directions
 
The Employee shall be immediately responsible to and shall carry out such lawful directions as are given from time to time by the person nominated by the Company to be the manager of the Employee.

5.
Hours of Service
 
The usual hours of work for this position are from 8.30am to 5.30pm with one (1) hour lunch break, Monday to Friday.  In order to perform the job effectively, however, the employee may be required to work additional hours as appropriate.  The salary package specified in this contract is deemed to cover payment for the overall performance of the job, and overtime will not be payable.
 
 
6.
Remuneration
6.1
The Company shall remunerate the Employee in accordance with the Salary Package Summary upon the Employee’s attainment of set targets & objectives.

6.2
The Company shall review the Employee’s salary annually and may adjust that salary in accordance with the Company’s’ policy of annual review in its absolute discretion.

6.3
To the extent permissible by law, the Employee acknowledges that the totality of the remuneration payable under this agreement is intended to satisfy all entitlements applying to the Employee under any provisions of any industrial award, industrial agreement or statute which is binding on the Company with respect to the employment of the Employee, save for annual leave and long service leave entitlements.

6.4
If any industrial award or agreement applies to the Employee’s employment the parties agree that the relevant award or agreement applies to the Employee’s employment as a matter of law and does not form any part of these conditions.

7.
Duration
 
The Employee’s engagement shall continue until determined by notice in writing in accordance with the provisions of this Agreement.

8.            Superannuation
 
The Company shall make contributions with respect to the Employee for occupational superannuation as is governed by the percentage rate applicable to the relevant Employee as set forth in the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992 (Cth) or such other act or acts as replaces, repeals or supersedes these Acts.

 
Page 6 of 13
 
 

9.
Annual Leave, Long Service Leave and Public Holidays
9.1
The Employee shall be entitled to paid annual leave each year in accordance with the Australia Fair Pay and Conditions Standard set out in the Workplace Relations Act 1996 , as amended from time to time (the “Standard”).
 
9.2
Without limiting the operation of the Standard, full time employees will be entitled to the equivalent of twenty (20) working days annual leave per year.
 
9.3
The Employee will follow Company policy in relation to obtaining prior approval to take annual and long service leave.

9.4
The Employee will ensure that he or she does not allow any more than six (6) weeks annual leave to accumulate.  The Company has the right to reasonably direct that the Employee take annual leave as it falls due.

9.5
 
9.6
The Employee shall be entitled to long service leave in accordance with the provisions of the long service leave legislation applicable in the state in which they work.
 
Public Holidays shall also be in accordance with the law of the State.  Other days may be substituted for public holidays with the mutual agreement of both parties to this contract.
 
10.
Personal/Carers Leave
10.1
The Employee shall be entitled to personal leave in accordance with the Standard.  Without limiting the operation of the Standard, full time employees shall be entitled to full pay for a period of up to ten (10) days in any twelve (12) consecutive calendar months for Personal/Carers leave, which shall include:
 
 
      ·
leave taken by an employee due to personal illness or injury (sick leave); or
     
 
      ·
leave taken by an employee to provide care or support for a member of the employee’s immediate family or household who requires care or support due to personal illness or injury, or an unexpected emergency (carer’s leave); or
     
 
      ·
upon the death of a member of the employee’s immediate family or household; or in order to spend time with a seriously ill, injured or dying person who is a member of the employee’s immediate family or household (compassionate leave)
 
10.2
The unused proportion of the Employee’s sick leave entitlements referred to in clause 10.1 shall accrue from year to year throughout the Employee’s employment to a maximum of one hundred (100) days.  Any leave accrued in excess of one hundred (100) days is forfeited by the Employee.

10.3
The Employee acknowledges that he or she is not entitled to any payment for unused leave under this clause from the Company if this agreement is terminated, except for any amount required to be paid under applicable law.

10.4.1
The Employee shall, if required by the Company, produce a medical certificate from a legally qualified medical practitioner, or shall provide such additional information or documentation (verified on oath if necessary) as the Company may require from time to time in connection with the payment of sick leave.

10.4.2
The Employee will follow Company policy in relation to taking sick leave.
 
 
Page 7 of 13
 
 
 
11.
Inventions
11.1
Any discovery or invention or secret process or improvement in procedure made or discovered by the Employee during the currency of this Agreement in connection with or in any way affecting or relating to the business of Moneytech Group or capable of being used or adapted for use therein or in connection therewith shall be disclosed to the Company or Moneytech Group (as the case may be) and shall belong to and be the absolute property of the Moneytech Group. .

11.2
The Employee shall, if and when required to do so, (whether during or after the termination of this agreement) at the Company’s expense apply or join in applying for letters patent or other similar protection in Australia or in any other part of the world for any such discovery, invention, process or improvement as aforesaid and shall execute all instruments and do all things necessary to vest the letters patent or other similar protection when obtained and all right and title to an interest in the same in Moneytech Group or its nominee absolutely and as sole beneficial owner or in such other person as the Company may require.

12.
Confidential Information and Conflict of Interest
12.1
The Employee will not at any time either during the continuance of his or her employment or after the termination of his or her employment for any reason divulge any of the Confidential Information of Moneytech Group to any other company, person or persons without the previous consent in writing of Company , nor use or attempt to use any information which he or she may acquire in the course of his or her employment in any manner which may injure or cause or be calculated to injure or cause loss to the  Moneytech Group.

12.2
The Employee must immediately notify the Moneytech Group of any suspected or actual unauthorised, copying or disclosure of Confidential Information.

12.3.1
The Employee must provide assistance reasonably requested by the Company in relation to any proceedings the Company may take against any person for unauthorised use, copying or disclosure of Confidential Information.

12.3.2
Personal Service/Conflict of Interest:   Your employment requires that you fully devote yourself to your work, and do not take on, or subcontract your services to another party.  You may not sit on any Boards, or be a Director of any Public Company without prior approval.  You should not have any outside interests which could compromise the Moneytech Group in any way, or would impair or impact on your work performance.

13.
Restrictive Covenants after Resignation or Termination of Employment
13.1
The Employee expressly agrees as follows:
 
(a)
not at any time during the period of twelve months after the resignation or termination of his or her employment attempt personally or by letters, advertising or otherwise to obtain customers or clients of Moneytech Group within Australia or New Zealand for any person, firm or company other than Moneytech Group on any business of same kind as Moneytech Group; and

 
(b)
not at any time during the period of twelve months after the resignation or termination of his or her employment for any reason and either on his or her own account or for any other person or for any other firm or company to solicit, interfere with or endeavor to entice away from Moneytech Group any person, firm or company who at any time during the continuance of his or her employment shall have been a customer or client of Moneytech Group.

13.2
The Employee agrees for a period of six (6) months from the termination of their employment with the Company, they shall not:

 
(a)
approach or entice or endeavor to entice away from the Moneytech Group any person, firm or company which was at the time during the six (6) months before the termination of the Employees’ employment, a director, employee, consultant, agent, representative, associate or advisor to any company in the Moneytech Group;

 
(b)
Accept any employment, which would require the Employee to reveal any confidential information of the Moneytech Group without Moneytech Group’s prior written consent.

 
Page 8 of 13
 
 
 
14.          Company Policies and Regulations
14.1
Notwithstanding anything contained in these Conditions to the contrary, the employment of the Employee shall otherwise be subject to the terms and conditions contained in Moneytech’s Policies and Procedures.  Company policies and procedures apply to all of Moneytech’s Group companies in full and without exception.

14.2
All vendor incentives are the property of the Company and will be allocated to employees as the Managing Director or General Manager sees as appropriate with the overall business requirements.  Any incentives or gifts offered by Vendors must not under any circumstances be accepted until the relevant General Manager has given their approval.  Acceptance of any incentives or gifts without such prior approval will be treated seriously.  The staff member concerned will be personally liable for the consequential FBT plus any penalties levied by the ATO which the Company may incur.

14.3
The Employee agrees to comply with any and all Company instructions and regulations and understands they will be personally liable to the Company for any loss caused by their illegal or dishonest conduct.  While on Company premises, the Employee will comply with Company rules and regulations.  Access to Company premises for the purpose of performing services may require the Employee wear personal identification (badge and/or other credentials) that the Company may issue.  Upon termination, the Employee will return all such credentials, or provide written confirmation of the loss or destruction of the credentials.

15.          Termination
15.1
Following the expiration of the Probationary Period, the Employee’s employment may be terminated at any time:
 
(a)
by the Employee giving to the Company four (4) weeks’ notice or by forfeiting an amount equal to the Employee’s total remuneration for the appropriate period of notice; or
 
(b)
by the Company giving to the Employee four (4) weeks’ notice together with any additional entitlement that the Employee is entitled to at law or by the Company paying an amount equal to the Employee’s total remuneration in lieu of the appropriate period of notice.

15.2
The Employee’s employment may be terminated by the Company at any time without notice if the Employee:
 
(a)
commits any serious or persistent breach of any of the provisions of this Agreement;
 
(b)
is guilty of any grave misconduct or willful neglect in the discharge of his or her duties;
 
(c)
becomes of unsound mind;
 
(d)
is convicted of any criminal offence other than an offence which in the reasonable opinion of the Company does not affect his or her position as an Employee of the Company;
 
(e)
becomes permanently incapacitated by reason of accident or illness and is unable to perform his duties under this Agreement and, for the purposes of this clause, incapacity in excess of twenty six (26) weeks in any period of twelve (12) months shall be deemed to be permanent incapacity.
 
(f)
if pornographic material is found on the Employees’ Company computer and or if the Employee is distributing pornographic material or visiting internet sites to access this material.  This applies at all times, not only during official work hours.

15.3
Termination under this clause does not affect any accrued rights or remedies of either party.
 
 
Page 9 of 13
 
 
 
16.
After termination of Employment
16.1
If the Employee’s employment is terminated for any reason;
 
(a)
The Company may set off any amounts the Employee owes the Company against any amounts the Company owes the Employee at the date of termination except for amounts the Company is not entitled by law to set off;
 
(b)
upon the termination of his or her employment, the Employee must return all Company property (including property leased by the Company) including all written or machine readable material, software, computers, credit cards, keys and vehicles;
 
(c)
the Employee’s obligations in relation to Confidential Information continue after termination except in respect of information that is part of the Employee’s general skill and knowledge; and
 
(d)
the Employee must not record any Confidential Information in any form after termination.
 
17.
Compliance with Laws
 
The Employee will:
 
(a)
at all times, comply with all laws and regulations directly or indirectly affecting their employment and the conduct of the same;
 
(b)
ensure they remain aware of any changes in laws that may affect their conduct.  In particular, they will ensure compliance with the Australian Consumer Law.;
 
(c)
not engage in any deceptive or misleading conduct, representations or statements;
 
(d)
not remain silent or fail to correct any statements that would tend to mislead or create false impressions or expectations.  If in doubt, the Employee should seek the advice of their immediate manager and/or Legal Counsel (where necessary); and
 
(e)
refer all threats of litigation or legal action, whether implied or express, to their immediate manager.

18.
Relationship of Parties
 
The parties hereby specifically agree that it is intended that this Agreement shall create the relationship of employer and employee between them and they hereby acknowledge and agree that it is not their intention to create any other relationship and, in particular, the relationship of principal and contractor or the relationship of partners.

19.
Severability
 
Part or all of any clause of this agreement that is illegal or unenforceable will be severed from this agreement and the remaining provisions of this agreement continue in force.

20.
Notices
 
All notices required or able to be sent by either party to this Agreement may be sent either by personal delivery or by pre-paid registered mail to the last known address of the other party.  Notices sent by registered mail are deemed to be received three days after sending.

21.
Modification
 
This Agreement may not be modified, amended, added to or otherwise varied except by a document in writing signed by each of the parties.

22.
Merger of Contractual Rights
 
The rights and obligations of the parties in respect of agreements, indemnities, covenants and warranties contained herein shall be continuing agreements, covenants, indemnities, and warranties, and accordingly shall not be merged or extinguished by or upon completion or termination.
 
 
Page 10 of 13
 
 
 
23.
Waiver
 
The Failure of either party at any time to insist on performance of any provision of this agreement is not a waiver of its rights at any later time to insist on performance of that or any other provision of this agreement.

24.
Governing Law
 
This agreement shall be governed by and interpreted in accordance with the laws of New South Wales and both parties submit to the exclusive jurisdiction of the courts of that State. .

25.          Location
The base location of this position is indicated in the Employment Offer, however, please note that the Company reserves the right to transfer its employees to other Moneytech subsidiaries, locations and regions.  The employee will be provided a minimum of two (2) weeks notice of any such transfer.
 
If the Employee’s location changes during the course of his/her employment for any reason, it is agreed that all terms and conditions of this employment contract will remain in force.

26.          Relocation of Employees
All Company employees who are relocated at the Company’s request will be provided with relocation assistance.  Newly hired employees or Company employees who are relocated at their own request, will generally not be reimbursed for expenses incurred. All relocation costs must have prior approval.

27.          Redundancy
In the event of the Employees’ position becoming redundant and surplus to requirement, the Company will pay to the Employee any entitlements as are stipulated by current law at the date of termination of employment.

28.          Corporate Credit Card
The Employee may be entitled to a company sponsored Corporate Credit Card.  This card is company sponsored and, if appropriate, will be issued to the Employee for use in procuring travel related services, business expenses or business entertainment.

Services and expenses such as airline tickets, rental cars, hotel accommodations, meals, and other incidental expenses, are expected to be paid for with the Corporate Card.  All expenses on individual Corporate Credit Cards are billed directly to the employee, subject to reimbursement by the Company through individual travel expense claims.

Please note, the Company does not accept joint liability on the card.  Liability for the charges will rest with the Employee, subject to reimbursement under Company approved expense claims.  The Employee will be required to lodge an expense claim, which will need the Employees’ manager’s approval, to be reimbursed business expenses.

29.          Dealing with the Media
The Employee must not, without prior consent of the Company, communicate with or disclose to any representative of the media, any information of any nature whatsoever relating to the Company, its client or customers or this Agreement.  This Clause 29 survives termination of the Agreement.

 
Page 11 of 13
 
 
 
30.           Equal Opportunity and Anti-Discrimination
The Company is committed to a policy of Equal Employment Opportunity.  This means that people will be treated equally at work in all situations.

Accordingly, any forms of discrimination including, but not limited to gender, marital status, race, religion, creed, age, sexual preference etc will not be tolerated under any circumstances by the Company.  Any employee who engages in any form of discrimination will be very seriously disciplined or dismissed.

Furthermore, the Company takes very seriously any effort at retribution for, or victimisation of, a person who has made a complaint.  Any employee, who does so, will be very seriously disciplined or dismissed.

It is a condition of employment that the Employee comply with all relevant state and federal anti-discrimination laws and the Employee must comply with the Company’s internal procedures for dealing with discrimination or sexual harassment complaints and accept any direction of the Company in respect of sexual harassment or other forms of sexual or other discrimination.

31.          Smoking
The Moneytech Group workplace is a smoke free environment.  Smoking in any Company or client office is prohibited.

32.          Performance Review
The Employee must participate in the Company’s Performance Review and Development Program. The Program is conducted annually and includes a documented assessment of the Employees’ performance against job-related performance criteria, a feedback and development interview with your supervisor and completion of any employee development plan which may set out actions designed to improve job performance, such as access to training and performance counseling programs.

Subject to Clause 15.2, if an assessment provides evidence that the Employees’ job performance is not to the Company’s reasonable satisfaction, the Employees’ superior will provide the Employee with a written statement of the performance deficiencies.  The Employee will then have an opportunity to provide his or her supervisor with a written statement explaining any mitigating circumstances related to the performance deficiency.  Should the Company still regard job performance as unsatisfactory the Employee will be placed on a Performance Improvement Plan to address the issues.  If the Employee does not successfully meet the objectives of the plan, their employment will be terminated.

33.          Completeness
The terms and conditions set out in this contract replace any previous agreements and understandings.
 
 
Page 12 of 13
 
 
 
 
SIGNED AS AN AGREEMENT this      day of September 2003
 
Signed for and on behalf of Moneytech Limited.

  /s/ Hugh Evans  
Hugh Evans
 
Signature of Authorised Officer
 
Name of Authorised Officer
       
  /s/ Sonja Sandral   Sonja Sandral
 
Signature of Witness
 
Name of Witness
 
 
SIGNED by Hugh Evans
 
  /s/ Hugh Evans    
 
Signed
   
       
  /s/ Sonja Sandral   Sonja Sandral
 
Signature of Witness
 
Name of Witness
 
 
Page 13 of 13
Exhibit 10.2
 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (“Agreement”) is dated and effective as of June 30, 2013, by and between WIKITECHNOLOGIES, INC., a Delaware corporation (the “Company”), and Edward DeFeudis (the “Executive”).
 
WHEREAS, the Company recognizes that the Executive’s talents and abilities are unique and desires to secure the services of the Executive on the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
 
1.              Employment. The Company hereby agrees to employ the Executive as the Chief Executive Officer, Chief Financial Officer and President of the Company, and the Executive hereby accepts such employment, on the terms and conditions set forth below.
 
2.              Term. The Executive’s employment by the Company hereunder (the “Employment Period”) shall begin on June , 2013 (the “Effective Date”) and end on June , 2015.
 
3.              Position and Duties. During the Employment Period, the Executive shall serve as the Chief Executive Officer, Chief Financial Officer and President of the Company, with such duties, authority and responsibilities as are normally associated with and appropriate for such positions, including, without limitation, assisting in raising capital for the Company, developing infrastructure for the growth and maturity of the Company and developing plans and objectives to grow and enhance the Company’s revenue by and through the execution of contracts for the Company’s services and products. The Executive shall devote substantially all of his working time, attention and energies during normal business hours (other than absences due to illness or vacation) to the performance of his duties for the Company. Notwithstanding the above, the Executive shall be permitted, to the extent such activities do not substantially interfere with his performance of his duties and responsibilities hereunder or violate Section 9(a) or (b) of this Agreement, to (i) manage his personal, financial and legal affairs, (ii) serve on civic or charitable boards or committees (it being expressly understood and agreed that the Executive’s continuing to serve on any such board and/or committees on which he is serving, or with which he is otherwise associated, as of the Effective Date, shall be deemed not to interfere with his performance of his duties and responsibilities under this Agreement), (iii) serve on boards of other companies and (iv) make personal appearances and lectures, and the Executive shall be entitled to receive and retain all remuneration received by him from the items listed in clauses (i) through (iv) of this paragraph.
 
4.              Place of Performance. During the Employment Period, the Company shall maintain executive offices for the Executive in the County of Los Angeles, California and the Executive shall not be required to relocate to any other location.
 
 
1
 
 
5.              Compensation and Related Matters.
 
(a)            Base Salary. During the Employment Period, the Company shall pay the Executive a base salary at the rate of not less than $120,000 per year (“Base Salary”). The Base Salary will increase by $30,000 each time the Company reaches certain thresholds as presented in the following table:
 
Cumulative Revenue
Base Salary
< $1,000,000
$120,000
$   1,000,000
$150,000
$   2,000,000
$180,000
$   3,000,000
$210,000
$   4,000,000
$240,000

The Executive’s Base Salary shall be paid in approximately equal installments in accordance with the Company’s customary payroll practices. Until the Company has received an aggregate of $600,000 in financing (the “Financing”) during the Employment Period, the Executive shall defer all payments until the Company has completed a Financing. Alternatively, the Company’s board of directors can authorize payment in cash to the Executive prior to the completion of a Financing. If the Company increases the Executive’s Base Salary, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement.
 
(b)              Business, Travel and Entertainment Expenses. The Company shall promptly reimburse the Executive for all business; travel and entertainment expenses as shall be approved by the Chief Financial Officer of the Company and that are consistent with the Executive’s titles and the practices in effect immediately prior to the Effective Date.
 
(c)                Vacation. The Executive shall be entitled to four (4) weeks of vacation per year. Vacation not taken during the applicable fiscal year (but not in excess of four (4) weeks) shall be carried over to the next following fiscal year. If at any time or times during the term of this Agreement, Executive’s accrued vacation time reaches four (4) weeks, no additional vacation time shall accrue until one or more vacation days have been taken by Executive, after which vacation time shall again begin to accrue, subject, however, to the maximum of four (4) weeks accrued vacation time. Executive shall also be entitled to such holidays with full pay as the Company affords its executive employees.
 
(d)              Welfare, Pension and Incentive Benefit Plans. During the Employment Period, the Executive (and his eligible spouse and dependents) shall be entitled to participate in all the welfare benefit plans and programs which may be maintained by the Company and approved by the Board from time to time for the benefit of its senior executives including, without limitation, all medical, hospitalization, dental, disability, accidental death and dismemberment and travel accident insurance plans and programs. In addition, during the Employment Period, the Executive shall be eligible to participate in all pension, retirement, savings and other employee benefit plans and programs which may be maintained from time to time by the Company and approved by the Board for the benefit of its senior executives, other than any annual cash incentive plan.
 
 
2
 
 
6.            Termination. The Executive’s employment hereunder may be terminated during the Employment Period under the following circumstances:
 
(a)              Death. The Executive’s employment hereunder shall terminate upon his death.
 
(b)              Disability. If, as a result of the Executive’s incapacity due to physical or mental illness as determined by a physician selected by the Executive, and reasonably acceptable to the Company, (i) the Executive shall have been substantially unable to perform his duties hereunder for two consecutive months, or for an aggregate of 60 days during any period of twelve consecutive months and (ii) within thirty days after written Notice of Termination is given to the Executive after such two- or twelve- month period, the Executive shall not have returned to the substantial performance of his duties on a full-time basis, the Company shall have the right to terminate the Executive’s employment hereunder for “Disability”.
 
(c)              Cause. The Company shall have the right to terminate the Executive’s employment for “Cause.” For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment only upon the Executive’s:
 
 (i)             conviction of a felony or willful gross misconduct; or
 
 (ii)            willful and continued failure to perform his duties hereunder (other than such failure resulting from the Executive’s incapacity due to physical or mental illness or after the issuance of a Notice of Termination by the Executive for Good Reason) within ten business days after the Company delivers to him a written demand for performance that specifically identifies the actions to be performed.
 
For purposes of this Section 6(c), no act or failure to act by the Executive shall be considered “willful” if such act is done by the Executive in the good faith belief that such act is or was to be beneficial to the Company or one or more of its businesses, or such failure to act is due to the Executive’s good faith belief that such action would be materially harmful to the Company or one of its businesses. Cause shall not exist unless and until the Company has delivered to the Executive a copy of a resolution duly adopted by a majority of the Board (excluding the Executive for purposes of determining such majority) at a meeting of the Board called and held for such purpose after reasonable (but in no event less than fifteen days’) notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board, finding that in the good faith opinion of the Board that “Cause” exists, and specifying the particulars thereof in detail.
 
 
3
 
 
(d)             Good Reason. The Executive may terminate his employment for “Good Reason” after giving the Company detailed written notice thereof, if the Company shall have failed to cure the event or circumstance constituting “Good Reason” within thirty business days after receiving such notice. Good Reason shall mean the occurrence of any of the following without the written consent of the Executive or his approval in his capacity as a member of the Board:
 
 (i)             the assignment to the Executive of duties inconsistent with this Agreement or a change in his titles or authority;
 
 (ii)            any failure by the Company to comply with Section 5 hereof in any material way after Executive provides written notice to the Board, as hereinafter described, and the failure by the Company to cure any such alleged material non-compliance within thirty (30) days after receipt of the written notice;
 
 (iii)           the requirement of the Executive to relocate to locations other than those provided in Section 4 hereof; or
 
 (iv)           any material breach of this Agreement by the Company after Executive provides written notice to the Board, as hereinafter described, and the failure by the Company to cure any such alleged material breach within thirty (30) days after receipt of the written notice.
 
The Executive’s right to terminate his employment hereunder for Good Reason shall not be affected by his incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.
 
(e)             Without Good Reason. The Executive shall have the right to terminate his employment hereunder without Good Reason by providing the Company with a Notice of Termination.
 
7.              Termination Procedure.
 
(a)               Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than pursuant to Section 6(a) shall be communicated by written Notice of Termination to the other party. For purposes of this Agreement, a “Notice of Termination” shall mean a notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under that provision.
 
(b)               Date of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 6(b), thirty (30) days after the date of receipt of the Notice of Termination (provided that the Executive does not return to the substantial performance of his duties on a full-time basis during such thirty (30) day period), and (iii) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days after the giving of such notice) set forth in such Notice of Termination.
 
 
4
 
 
8.            Compensation Upon Termination or During Disability. In the event the Executive is disabled or his employment terminates during the Employment Period, the Company shall provide the Executive with the payments and benefits set forth below. The Executive acknowledges and agrees that the payments set forth in this Section 8 constitute liquidated damages for termination of his employment during the Employment Period.
 
(a)     Termination By Executive for Good Reason. If the Executive’s employment is terminated by the Executive for Good Reason:
 
 (i)            the Company shall pay to the Executive, on or before the Date of Termination, a lump sum payment equal to six months of the Executives then-current annual Base Salary, if any, and all accrued vacation pay through the Date of Termination;
 
 (ii)           the Company shall, consistent with past practice, reimburse the Executive pursuant to Section 5(c) for business expenses incurred but not paid prior to such termination of employment;
 
 (iii)          the Executive shall be entitled to any other rights, compensation and/or benefits as may be due to the Executive in accordance with the terms and provisions of any agreements, plans or programs of the Company (other than any severance-based plan or program).
 
 (iv)          there shall be no further obligations hereunder.
 
The payments and benefits provided for as clause (i) and (ii) above are hereinafter referred to as the “Accrued Obligations”.
 
(b)     Cause or By Executive Without Good Reason. If the Company terminates the Executive’s employment for Cause or by the Executive other than for Good Reason, then the Company shall provide the Executive with his then-current monthly Base Salary through and including the Date of Termination and shall have no further obligation to the Executive hereunder.
 
(c)     Disability. During any period that the Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental illness (“Disability Period”), the Executive shall continue to receive his annual Base Salary for a one year period, if any, set forth in Section 5(a) until his employment is terminated pursuant to Section 6(b). In the event the Executive’s employment is terminated for Disability pursuant to Section 6(b), the Company shall provide the Executive with the excess, if any, of his then-current Base Salary for a period of six months, less any amounts of any long-term disability benefits that he receives under any Company welfare benefit plans and programs, payable in accordance with the normal payroll practices of the Company, for the remaining six month period and shall have no further obligations to the Executive hereunder.
 
 
5
 
 
(d)             Death. If the Executive’s employment is terminated by his death, the Company shall provide to the Executive’s beneficiary, legal representatives or estate, as the case may be, the Executive’s then-current Base Salary through and including the date of Executive’s death and shall have no further obligations hereunder.
 
9.            Confidential Information; Non-Competition; Nonsolicitation.
 
(a)              Confidential Information. Except as may be required or appropriate in connection with the Executive carrying out his duties under this Agreement, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or any legal process, or as is necessary in connection with any adversarial proceeding against the Company (in which case the Executive shall cooperate with the Company in obtaining a protective order at the Company’s expense against disclosure by a court of competent jurisdiction), communicate, to anyone other than the Company and those designated by the Company or on behalf of the Company in the furtherance of its business or to perform his duties hereunder, any trade secrets, confidential information, knowledge or data relating to the Company and its businesses and investments, obtained by the Executive during the Executive’s employment by the Company that is not generally available public knowledge (other than by acts by the Executive in violation of this Agreement).
 
(b)              Noncompetition. During the Employment Period and until the 12-month anniversary of the Executive’s Date of Termination if the Company terminates the Executive’s employment for Cause or the Executive terminates employment without Good Reason, the Executive shall not engage in or become associated with any Competitive Activity. For purposes of this Section 9(b), a “Competitive Activity” shall mean any business or other endeavor that engages in any country in which the Company has significant business operations as of the Date of Termination to a significant degree in a business that directly competes with all or any substantial part of the Company’s business (the “Business”); provided, that, a Competitive Activity shall not include (i) any speaking engagement to the extent such speaking engagement does not promote or endorse a product or service of the Business, or (ii) the writing of any book or article relating to subjects other than the Business (e.g., nonfiction relating to the Executive’s career or general business advice). The Executive shall be considered to have become “associated with a Competitive Activity” if he becomes involved as an owner, employee, officer, director, manager, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Executive’s personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity and his involvement relates to a significant extent to the Competitive Activity of such entity; provided, however, that the Executive shall not be prohibited from (a) owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company or (b) serving as a director of a corporation or other entity the primary business of which is not a Competitive Activity. If, at any time, the provisions of this Section 9(b) shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 9(b) shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Executive agrees that this Section 9(b) as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.
 
 
6
 
 
(c)               Nonsolicitation. During the Employment Period, and for 12 months after the Executive’s Date of Termination if the Executive’s employment is terminated by the Company for Cause or the Executive terminates employment without Good Reason, the Executive will not, directly or indirectly, solicit for employment by other than the Company any person (other than any personal secretary or assistant hired to work directly for the Executive) employed by the Company or its affiliated companies, nor will the Executive, directly or indirectly, solicit for employment by other than the Company any person known by the Executive (after reasonable inquiry) to be employed at the time by the Company or its affiliated companies.
 
(d)              Injunctive Relief. In the event of a breach or threatened breach of this Section 9, the Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, the Executive acknowledging that damages would be inadequate and insufficient.
 
10.          Indemnification.
 
(a)             General. The Company agrees that if the Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that the Executive is or was a trustee, director or officer of the Company, or any affiliates or is or was serving at the request of the Company, or any of its affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if the Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.
 
 
7
 
 
(b)               Expenses. As used in this Agreement, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.
 
(c)               Enforcement. If a claim or request under this Section 10 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, the Executive may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, the Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Delaware law.
 
(d)               Partial Indemnification. If the Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Executive for the portion of such Expenses to which the Executive is entitled.
 
(e)                Advances of Expenses. Expenses incurred by the Executive in connection with any Proceeding shall be paid by the Company in advance upon request of the Executive that the Company pay such Expenses, but only in the event that the Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which the Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.
 
(f)                Notice of Claim. The Executive shall give to the Company notice of any claim made against his for which indemnification will or could be sought under this Agreement. In addition, the Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive's power and at such times and places as are convenient for the Executive.
 
(g)               Defense of Claim. With respect to any Proceeding as to which the Executive notifies the Company of the commencement thereof:
 
  (i)             The Company will be entitled to participate therein at its own expense;
 
  (ii)            Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. The Executive also shall have the right to employ his own counsel in such action, suit or proceeding if he reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.
 
 
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  (iii)           The Company shall not be liable to indemnify the Executive under this Agreement for any amounts paid in settlement of any action or claim affected without its written consent. The Company shall not settle any action or claim in any manner, which would impose any penalty that would not be paid directly, or indirectly by the Company or limitation on the Executive without the Executive’s written consent. Neither the Company nor the Executive will unreasonably withhold or delay their consent to any proposed settlement.
 
(h)             Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 10 shall not be exclusive of any other right which the Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.
 
11.            Legal Fees and Expenses. If any contest or dispute shall arise between the Company and the Executive regarding any provision of this Agreement, the Company shall reimburse the Executive for all legal fees and expenses reasonably incurred by the Executive in connection with such contest or dispute, but only if the Executive prevails to a substantial extent with respect to the Executive’s claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.
 
12.            Successors; Binding Agreement.
 
(a)              Company’s Successors. No rights or obligations of the Company under this Agreement may be assigned or transferred, except that the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall include any successor to its business and/or assets (by merger, purchase or otherwise) which executes and delivers the agreement provided for in this Section 12 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
 
 
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(b)              Executive’s Successors. No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than his rights to payments or benefits hereunder, which may be transferred only by will or the laws of descent and distribution. Upon the Executive’s death, this Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s beneficiary or beneficiaries, personal or legal representatives, or estate, to the extent any such person succeeds to the Executive’s interests under this Agreement. If the Executive should die following his Date of Termination while any amounts would still be payable to him hereunder if he had continued to live, all such amounts unless otherwise provided herein shall be paid in accordance with the terms of this Agreement to such person or persons so appointed in writing by the Executive, or otherwise to his legal representatives or estate.
 
13.             Notice. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
 
If to the Executive:
 
At his residence address most recently filed with the Company.
 
If to the Company:
 
WikiTechnologies, Inc.
1093 Broxton Avenue, Suite 210
Los Angeles, CA 920024
Attention: Chairman of the Board
 
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
 
14.             Miscellaneous. No provisions of this Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by the Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The respective rights and obligations of the parties hereunder of this Agreement shall survive the Executive’s termination of employment and the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations. Except or otherwise provided in Section 10 hereof, the validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles.
 
 
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15.             Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
 
16.             Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
 
17.             Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and canceled.
 
18.             Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
 
19.             Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Agreement and shall not affect its interpretation.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
 
  WIKITECHNOLOGIES, INC.  
       
  By:    /s/ Marco Garibaldi  
   
Marco Garibaldi
 
   
Title: Chairman of the Board
 
       
  EXECUTIVE  
  /s/ Edward C. DeFeudis  
  Edward C. DeFeudis  
 
 
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Exhibit 10.3

EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (“Agreement”) is dated and effective as of June 30, 2013, by and between WIKITECHNOLOGIES, INC., a Delaware corporation (the “Company”), and Marco Garibaldi (the “Executive”).

WHEREAS, the Company recognizes that the Executive’s talents and abilities are unique and desires to secure the services of the Executive on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:

1.          Employment . The Company hereby agrees to employ the Executive as the Chairman of the Board and Chief Technology Officer of the Company, and the Executive hereby accepts such employment, on the terms and conditions set forth below.

2.          Term .  The  Executive’s  employment  by  the  Company  hereunder  (the “Employment Period”) shall begin on June , 2013 (the “Effective Date”) and end on June __ , 2015.

3.          Position   and   Duties . During the Employment Period, the Executive shall serve as the Chairman of the Board and Chief Technology Officer of the Company, with such duties, authority and responsibilities as are normally associated with and appropriate for such positions.  The Executive shall devote substantially all of his working time, attention and energies during normal business hours (other than absences due to illness or vacation) to the performance of his duties for the Company. Notwithstanding the above, the Executive shall be permitted, to the extent such activities do not substantially interfere with his performance of his duties and responsibilities hereunder or violate Section 9(a) or (b) of this Agreement, to (i) manage his personal, financial and legal affairs, (ii) serve on civic or charitable boards or committees (it being expressly understood and agreed that the Executive’s continuing to serve on any such board and/or committees on which he is serving, or with which he is otherwise associated, as of the Effective Date, shall be deemed not to interfere with his performance of his duties and responsibilities under this Agreement), (iii) serve on boards of other companies and (iv) make personal appearances and lectures, and the Executive shall be entitled to receive and retain all remuneration received by him from the items listed in clauses (i) through (iv) of this paragraph.

4.          Place   of   Performance . During the Employment Period, the Company shall maintain executive offices for the Executive in the County of Los Angeles, California and the Executive shall not be required to relocate to any other location.

 
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5.          Compensation   and   Related   Matters .

(a)        Base   Salary . During the Employment Period, the Company shall pay the Executive a base salary at the rate of not less than $120,000 per year (“Base Salary”). The Base Salary will increase by $30,000 each time the Company reaches certain thresholds as presented in the following table:

Cumulative Revenue
 
Base Salary
 
< $1,000,000
  $ 120,000  
$   1,000,000
  $ 150,000  
$   2,000,000
  $ 180,000  
$   3,000,000
  $ 210,000  
$   4,000,000
  $ 240,000  

The Executive’s Base Salary shall be paid in approximately equal installments in accordance with the Company’s customary payroll practices. Until the Company has received an aggregate of $600,000 in financing (the “Financing”) during the Employment Period, the Executive shall defer all payments until the Company has completed a Financing. Alternatively, the Company’s board of directors can authorize payment in cash to the Executive prior to the completion of a Financing. If the Company increases the Executive’s Base Salary, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement.

(b)        Business,   Travel   and   Entertainment   Expenses . The Company shall promptly reimburse the Executive for all business; travel and entertainment expenses as shall be approved by the Chief Financial Officer of the Company and that are consistent with the Executive’s titles and the practices in effect immediately prior to the Effective Date.

(c)       Vacation . The Executive shall be entitled to four (4) weeks of vacation per year. Vacation not taken during the applicable fiscal year (but not in excess of four (4) weeks) shall be carried over to the next following fiscal year. If at any time or times during the term of this Agreement, Executive’s accrued vacation time reaches four (4) weeks, no additional vacation time shall accrue until one or more vacation days have been taken by Executive, after which vacation time shall again begin to accrue, subject, however, to the maximum of four (4) weeks accrued vacation time.  Executive shall also be  entitled  to  such  holidays  with  full  pay  as  the  Company  affords  its  executive employees.

(d)        Welfare,     Pension     and     Incentive   Benefit     Plans .   During   the Employment Period, the Executive (and his eligible spouse and dependents) shall be entitled to participate in all the welfare benefit plans and programs which may be maintained by the Company and approved by the Board from time to time for the benefit of its senior executives including, without limitation, all medical, hospitalization, dental, disability, accidental death and dismemberment and travel accident insurance plans and programs. In addition, during the Employment Period, the Executive shall be eligible to participate in all pension, retirement, savings and other employee benefit plans and programs which may be maintained from time to time by the Company and approved by the Board for the benefit of its senior executives, other than any annual cash incentive plan.

 
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6.         Termination . The Executive’s employment hereunder may be terminated during the Employment Period under the following circumstances:

(a)        Death .  The  Executive’s  employment  hereunder  shall  terminate upon his death.

(b)        Disability .  If,  as  a  result  of  the  Executive’s incapacity due  to physical or mental illness as determined by a physician selected by the Executive, and reasonably acceptable to the Company, (i) the Executive shall have been substantially unable to perform his duties hereunder for two consecutive months, or for an aggregate of 60 days during any period of twelve consecutive months and (ii) within thirty days after written Notice of Termination is given to the Executive after such two- or twelve- month period, the Executive shall not have returned to the substantial performance of his duties on a full-time basis, the Company shall have the right to terminate the Executive’s employment hereunder for “Disability”.

(c)        Cause .  The  Company  shall  have  the  right  to  terminate  the Executive’s employment for “Cause.” For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment only upon the Executive’s:

(i)     conviction of a felony or willful gross misconduct; or

(ii)    willful   and   continued   failure   to   perform   his   duties hereunder (other than such failure resulting from the Executive’s incapacity due to physical  or  mental illness  or  after  the  issuance of  a  Notice  of  Termination by  the Executive for Good Reason) within ten business days after the Company delivers to him a written demand for performance that specifically identifies the actions to be performed.

For purposes of this Section 6(c), no act or failure to act by the Executive shall be considered “willful” if such act is done by the Executive in the good faith belief that such act is or was to be beneficial to the Company or one or more of its businesses, or such failure to act is due to the Executive’s good faith belief that such action would be materially harmful to the Company or one of its businesses. Cause shall not exist unless and until the Company has delivered to the Executive a copy of a resolution duly adopted by a majority of the Board (excluding the Executive for purposes of determining such majority) at a meeting of the Board called and held for such purpose after reasonable (but in no event less than fifteen days’) notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board, finding that in the good faith opinion of the Board that “Cause” exists, and specifying the particulars thereof in detail.

 
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(d)       Good   Reason . The Executive may terminate his employment for “Good Reason” after giving the Company detailed written notice thereof, if the Company shall have failed to cure the event or circumstance constituting “Good Reason” within thirty business days after receiving such notice. Good Reason shall mean the occurrence of any of the following without the written consent of the Executive or his approval in his capacity as a member of the Board:

(i)     the assignment to the Executive of duties inconsistent with this Agreement or a change in his titles or authority;

(ii)    any  failure  by  the  Company  to  comply  with  Section  5 hereof in any material way after Executive provides written notice to the Board, as hereinafter described, and the failure by the Company to cure any such alleged material non-compliance within thirty (30) days after receipt of the written notice;

(iii)   the requirement of the Executive to relocate to locations other than those provided in Section 4 hereof; or

(iv)   any material breach of this Agreement by the Company after Executive provides written notice to the Board, as hereinafter described, and the failure by the Company to cure any such alleged material breach within thirty (30) days after receipt of the written notice.

The Executive’s right to terminate his employment hereunder for Good Reason shall not be affected by his incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

(e)        Without   Good   Reason .  The  Executive  shall  have  the  right  to terminate his employment hereunder without Good Reason by providing the Company with a Notice of Termination.

7.          Termination   Procedure .

(a)       Notice   of   Termination . Any termination of the Executive’s employment by the Company or by the Executive during the Employment Period (other than pursuant to Section 6(a) shall be communicated by written Notice of Termination to the other party. For purposes of this Agreement, a “Notice of Termination” shall mean a notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under that provision.

(b)       Date   of   Termination . “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 6(b), thirty (30) days after the date of receipt of the Notice of Termination (provided that the Executive does not return to the substantial performance of his duties on a full-time basis during such thirty (30) day period), and (iii) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days after the giving of such notice) set forth in such Notice of Termination.

 
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8.          Compensation Upon   Termination or   During   Disability . In the event the Executive is disabled or his employment terminates during the Employment Period, the Company shall provide the Executive with the payments and benefits set forth below. The Executive acknowledges and agrees that the payments set forth in this Section 8 constitute liquidated damages for termination of his employment during the Employment Period.

(a)       Termination By   Executive for   Good   Reason . If the Executive’s employment is terminated by the Executive for Good Reason:

(i)      the Company shall pay to the Executive, on or before the Date of Termination, a lump sum payment equal to six months of the Executives then- current annual Base Salary, if any, and all accrued vacation pay through the Date of Termination;

(ii)     the Company shall, consistent with past practice, reimburse the Executive pursuant to Section 5(c) for business expenses incurred but not paid prior to such termination of employment;

(iii)    the Executive shall be entitled to any other rights, compensation and/or benefits as may be due to the Executive in accordance with the terms and provisions of any agreements, plans or programs of the Company (other than any severance-based plan or program).

(iv)    there shall be no further obligations hereunder.

The payments and benefits provided for as clause (i) and (ii) above are hereinafter referred to as the “Accrued Obligations”.

(b)       Cause   or   By   Executive Without   Good   Reason . If the Company terminates the Executive’s employment for Cause or by the Executive other than for Good Reason, then the Company shall provide the Executive with his then-current monthly Base Salary through and including the Date of Termination and shall have no further obligation to the Executive hereunder.

(c)        Disability . During any period that the Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental illness (“Disability Period”), the Executive shall continue to receive his annual Base Salary for a one year period, if any, set forth in Section 5(a) until his employment is terminated pursuant to Section 6(b). In the event the Executive’s employment is terminated for Disability pursuant to Section 6(b), the Company shall provide the Executive with the excess, if any, of his then-current Base Salary for a period of six months, less any amounts of any long-term disability benefits that he receives under any Company welfare benefit plans and programs, payable in accordance with the normal payroll practices of the Company, for the remaining six month period and shall have no further obligations to the Executive hereunder.
 
 
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(d)        Death . If the Executive’s employment is terminated by his death, the Company shall provide to the Executive’s beneficiary, legal representatives or estate, as the case may be, the Executive’s then-current Base Salary through and including the date of Executive’s death and shall have no further obligations hereunder.

9.           Confidential   Information;   Non-Competition;   Nonsolicitation .

(a)      Confidential Information . Except as may be required or appropriate in connection with the Executive carrying out his duties under this Agreement, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or any legal process, or as is necessary in connection with any adversarial proceeding against the Company (in which case the Executive shall cooperate with the Company in obtaining a protective order at the Company’s expense against disclosure by a court of competent jurisdiction), communicate, to anyone other than the Company and those designated by the Company or on behalf of the Company in the furtherance of its business or to perform his duties hereunder, any trade secrets, confidential information, knowledge or data relating to the Company and its businesses and investments, obtained by the Executive during the Executive’s employment by the Company that is not generally available public knowledge (other than by acts by the Executive in violation of this Agreement).
 
(b)     Noncompetition . During the Employment Period and until the 12- month anniversary of the Executive’s Date of Termination if the Company terminates the Executive’s employment for Cause or the Executive terminates employment without Good Reason, the Executive shall not engage in or become associated with any Competitive Activity. For purposes of this Section 9(b), a “Competitive Activity” shall mean any business or other endeavor that engages in any country in which the Company has significant business operations as of the Date of Termination to a significant degree in a business that directly competes with all or any substantial part of the Company’s business (the “Business”); provided, that, a Competitive Activity shall not include (i) any speaking engagement to the extent such speaking engagement does not promote or endorse a product or service of the Business, or (ii) the writing of any book or article relating to subjects other than the Business (e.g., nonfiction relating to the Executive’s career or general business advice). The Executive shall be considered to have become “associated with a Competitive Activity” if he becomes involved as an owner, employee, officer, director, manager, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Executive’s personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity and his involvement relates to a significant extent to the Competitive Activity of such entity; provided, however, that the Executive shall not be prohibited from (a) owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company or (b) serving as a director of a corporation or other entity the primary business of which is not a Competitive Activity. If, at any time, the provisions of this Section 9(b) shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 9(b) shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Executive agrees that this Section 9(b) as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.

 
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(c)        Nonsolicitation .  During  the  Employment  Period,  and  for  12 months after the Executive’s Date of Termination if the Executive’s employment is terminated by the Company for Cause or the Executive terminates employment without Good Reason, the Executive will not, directly or indirectly, solicit for employment by other than the Company any person (other than any personal secretary or assistant hired to work directly for the Executive) employed by the Company or its affiliated companies, nor will the Executive, directly or indirectly, solicit for employment by other than the Company any person known by the Executive (after reasonable inquiry) to be employed at the time by the Company or its affiliated companies.

(d)        Injunctive Relief . In the event of a breach or threatened breach of this Section 9, the Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, the Executive acknowledging that damages would be inadequate and insufficient.

10.         Indemnification .

(a)        General . The Company agrees that if the Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that the Executive is or was a trustee, director or officer of the Company, or any affiliates or is or was serving at the request of the Company, or any of its affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if the Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

 
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(b)        Expenses . As used in this Agreement, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

(c)        Enforcement . If a claim or request under this Section 10 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, the Executive may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, the Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Delaware law.

(d)       Partial   Indemnification . If the Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Executive for the portion of such Expenses to which the Executive is entitled.

(e)       Advances   of   Expenses . Expenses incurred by the Executive in connection with any Proceeding shall be paid by the Company in advance upon request of the Executive that the Company pay such Expenses, but only in the event that the Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which the Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

(f)         Notice   of   Claim . The Executive shall give to the Company notice of any claim made against his for which indemnification will or could be sought under this Agreement. In addition, the Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive's power and at such times and places as are convenient for the Executive.

(g)       Defense   of   Claim . With respect to any Proceeding as to which the Executive notifies the Company of the commencement thereof:
 
(i)         The Company will be entitled to participate therein at its own expense;

(ii)       Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. The Executive also shall have the right to employ his own counsel in such action, suit or proceeding if he reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

 
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(iii)     The  Company  shall  not  be   liable  to   indemnify  the Executive under this Agreement for any amounts paid in settlement of any action or claim affected without its written consent. The Company shall not settle any action or claim in any manner, which would impose any penalty that would not be paid directly, or indirectly by the Company or limitation on the Executive without the Executive’s written consent. Neither the Company nor the Executive will unreasonably withhold or delay their consent to any proposed settlement.

(h)        Non-exclusivity . The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 10 shall not be exclusive of any other right which the Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

11.        Legal Fees and Expenses . If any contest or dispute shall arise between the Company and the Executive regarding any provision of this Agreement, the Company shall reimburse the Executive for all legal fees and expenses reasonably incurred by the Executive in connection with such contest or dispute, but only if the Executive prevails to a substantial extent with respect to the Executive’s claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

12.         Successors;   Binding   Agreement .

(a)        Company’s   Successors . No rights or obligations of the Company under this Agreement may be assigned or transferred, except that the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall include any successor to its business and/or assets (by merger, purchase or otherwise) which executes and delivers the agreement provided for in this Section 12 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b)        Executive’s Successors . No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than his rights to payments or benefits hereunder, which may be transferred only by will or the laws of descent and distribution. Upon the Executive’s death, this Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s beneficiary or beneficiaries, personal or legal representatives, or estate, to the extent any such person succeeds to the Executive’s interests under this Agreement. If the Executive should die following his Date of Termination while any amounts would still be payable to him hereunder if he had continued to live, all such amounts unless otherwise provided herein shall be paid in accordance with the terms of this Agreement to such person or persons so appointed in writing by the Executive, or otherwise to his legal representatives or estate.

 
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13.        Notice . For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

At his residence address most recently filed with the Company.
 
If to the Company:
 
WikiTechnologies, Inc.
1093 Broxton Avenue, Suite 210
Los Angeles, CA 920024
Attention: Chief Executive Officer

or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
 
14.        Miscellaneous . No provisions of this Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by the Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, which are not set forth expressly in this Agreement. The respective rights and obligations of the parties hereunder of this Agreement shall survive the Executive’s termination of employment and the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations. Except or otherwise provided in Section 10 hereof, the validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles.
 
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15.        Validity . The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

16.        Counterparts .  This   Agreement  may   be   executed   in   one   or   more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

17.        Entire   Agreement . This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and canceled.

18.        Withholding . All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.

19.        Section   Headings . The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Agreement and shall not affect its interpretation.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

 
WIKITECHNOLOGIES, INC.
 
       
 
By:
/s/ Edward C. DeFeudis  
       
 
Edward C. DeFeudis
 
 
Title: Chief Executive Officer
 
       
 
EXECUTIVE
 
     
  /s/ Marco Garibaldi  
 
Marco Garibaldi
 
 
 
11

Exhibit 10.4
 
Receivables Purchase Agreement
 
Moneytech Limited
 
Moneytech Finance Pty Limited
 
Moneytech Services Pty Limited
 
Westpac Banking Corporation
 
Moneytech DealerCard Program
 
2 Chifley Square
Sydney  NSW  2000
Australia
Tel   61 2 9230 4000
Fax   61 2 9230 5333
www.aar.com.au
 
© Copyright Allens Arthur Robinson 2013
 
 
 
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Table of Contents

1.
Interpretation
7
 
1.1
Definitions
7
 
1.2
Interpretation
31
 
1.3
Agency
32
 
1.4
No application of certain provisions RPA commitment
32
 
2.1
Sale notices
33
 
2.2
Limit
35
 
2.3
Further Instalments
35
 
2.4
Security Interest
36
 
2.5
Registration on PPSR
36
 
2.6
PPSA Provisions
36
 
2.7
Change of Purchase Limit; Concentration Limit and extension of Concentration Term
37
 
2.8
Voluntary termination of RPA Commitment or reduction of Purchase Limit
37
 
2.9
Extension
37
 
2.10
Seller obligations upon RPA Termination
38
 
2.11
Purchase Limit availability
38
3.
Collection
38
 
3.1
Collection of Receivables
38
 
3.2
Deemed Collections
39
 
3.3
Return of Distribution
41
 
3.4
Interpretation
41
4.
Settlement Procedures
41
 
4.1
Settlement Procedures for all Collections
41
 
4.2
Discharge
42
 
4.3
Adjustments to Reserves
42
 
4.4
Payments and Computations, etc.
43
 
4.5
Additional payments
43
 
4.6
Reimbursement
44
 
4.7
Treatment of Collections
44
 
4.8
Settlement arrangements
44
5.
Fees
45
 
5.1
Establishment Fee
45
 
5.2
Commitment Fee
45
 
5.3
Unused Limit Fee
45
 
5.4
Termination Payment
45
 
5.5
Changes in law
45
 
5.6
Right to Terminate
45
 
5.7
Program Costs
46
 
5.8
Prepayment Amount
46
 
5.9
Authorisation
46
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
6.
Conditions precedent
46
 
6.1
Conditions precedent to first Sale Notice
46
 
6.2
Further conditions precedent
47
 
6.3
Additional conditions precedent in respect of NZ Approved Originators
48
7.
Representations and Warranties
48
 
7.1
Representations and warranties by Seller and Servicer
48
 
7.2
Representations and warranties by Westpac
53
 
7.3
General representations and warranties
54
 
7.4
Reliance on representations and warranties
54
 
7.5
Repetition of representations and warranties
54
8.
Undertakings
54
 
8.1
Seller and Servicer undertakings
54
9.
Administration, Servicing and collection
60
 
9.1
Appointment
60
 
9.2
Duties of the Servicer
61
 
9.3
Replacement of the Servicer
61
 
9.4
Remuneration of Successor Servicer
62
 
9.5
Rights of Westpac
62
 
9.6
Responsibilities of the Seller
63
 
9.7
Further action evidencing purchase
63
 
9.8
Application of Collections
64
 
9.9
Stand-by Servicer
64
10.
Early Amortisation Events; servicer transfer events; termination; Review Events
64
 
10.1
Early Amortisation Events
64
 
10.2
Remedies for Early Amortisation Events
66
 
10.3
Awareness of Early Amortisation Events
66
 
10.4
Review Event
66
 
10.5
Consequences of Review Events
66
 
10.6
Event of Default
67
 
10.7
Remedies for Events of Default
67
 
10.8
Collection Account Letter
67
11.
Indemnification
67
 
11.1
General indemnity
67
12.
Power of attorney
69
 
12.1
Seller Appointment
69
 
12.2
Australian Approved Originator Appointments
70
 
12.3
NZ Approved Originator Appointments
70
13.
Assignment of Receivables
71
 
13.1
Restrictions on assignments
71
 
13.2
Rights of Assignee
71
14.
Interest on overdue amounts
71
 
14.1
Accrual
71
 
4.2
Payment
72
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
15.
Miscellaneous
72
 
15.1
Notices
72
 
15.2
Severability clause
72
 
15.3
Amendments
72
 
15.4
Governing Law and jurisdiction
73
 
15.5
Survival of representations and indemnities
73
 
15.6
Set-off
73
 
15.7
Costs and expenses
73
 
15.8
Waivers; remedies cumulative
74
 
15.9
Force Majeure
74
16.
Confidentiality
75
 
16.1
Confidentiality
75
 
16.2
Counterparts
76
17.
GST
77
 
17.1
Interpretation
77
 
17.2
Consideration is GST exclusive
77
 
17.3
Gross up of consideration
77
 
17.4
Reimbursements (net down)
77
18.
Privacy
77
19.
Code of Banking Practice (2003)
77
20.
Electronic Presentment & Payment
77
 
20.1
Access to the Presentment & Payment System
77
Annexure A – Part 1
80
 
Sale Notice from the Seller
80
Annexure A – Part 2
84
 
Sale Notice from an Australian Approved Originator to the Seller
84
Annexure A – Part 3
88
 
Sale Notice from a NZ Approved Originator to the Seller
88
 
Sale Notice
 
88
Annexure B
95
 
Verification Certificate (Clause 6.1(a))
95
Annexure C
 
97
 
Determination Date Statement
97
Annexure D
 
98
 
Instalment Notice
98
Annexure E
 
100
 
Form of Director's Certificate
100
Annexure F
 
104
 
Form of Australian Power of Attorney for each Australian Approved Originator
104
Annexure F
 
107
 
Form of NZ Power of Attorney for each NZ Approved Originator
107
 
 
Page 4
 

Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure G
 
111
 
Credit and Collections Policies
111
Annexure H
 
112
 
Presentment and Payment Platform
112
1.
Description of the Platfor
112
2.
Definitions
112
3.
Service information
112
 
3.1
Provisions of Access to Platform
112
4.
Westpac Obligations
113
 
4.1
Access
113
 
4.2
Preparation
113
5.
Obligations of the Seller
113
 
5.1
Seller's Hardware and Software
113
 
5.2
Data security
113
 
5.3
Internet connection
113
6.
Use of the Platform
114
 
6.1
Use
114
7.
Training
114
 
7.1
Training in use of the Platform
114
8.
Operation of the Platform
115
 
8.1
Access
115
 
8.2
No third party use
115
9.
Transactions
115
 
9.1
No responsibility for Transactions
115
10.
Proprietary rights
115
 
10.1
Seller no proprietary rights
115
11.
Use of Data
116
 
11.1
Collection and privacy
116
12.
New Releases
116
 
12.1
New Release
116
13.
Maintenance Services
117
 
13.1
Maintenance that Westpac will provide
117
 
13.2
Seller's obligations for maintenance
117
 
13.3
Maintenance exclusions
117
 
13.4
Chargeable items
118
 
13.5
Support
118
 
13.6
Service Levels
118
 
13.7
Planned Outages
118
14.
Suspension of Access
118
 
14.1
Westpac's right to suspend Access
118
 
14.2
No objection by the Seller
119
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
15.
Exclusion of Warranties and Liability
119
1.
Westpac Support Centre - Hours of Operations
121
2.
General service provisions
121
3.
Seller's Hardware and Software
122
4.
Purpose
122
5.
Method of contact
122
6.
Service Levels
122
7.
Priority Levels and Resolutions Targets
123
Annexure I
 
124
 
Form of Insurance Policy
124
 
 
Page 6
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Date
 
   
Parties
 
1.
Moneytech Limited (ABN 77 106 249 852) incorporated under the laws of Australia and registered in New South Wales of 964 Pacific Highway, Pymble, NSW 2073 (the Indemnifier ).
   
2.
Moneytech Finance Pty Ltd (ABN 75 112 110 906) incorporated under the laws of Australia and registered in New South Wales of 964 Pacific Highway, Pymble, NSW 2073 (the Seller ).
   
3.
Moneytech Services Pty Ltd (ABN 81 112 110 933) incorporated under the laws of Australia and registered in New South Wales of 964 Pacific Highway, Pymble, NSW 2073 (the Servicer ).
   
4.
Westpac Banking Corporation (ABN 33 007 457 141) incorporated under the laws of Australia of Level 4, 255 Elizabeth Street, Sydney ( Westpac ).
   
Recitals
 
A
The Seller has, and expects to have, Receivables which the Seller may wish to sell.  Some of the Receivables may have been acquired by the Seller from Approved Originators.
   
B
The parties have entered into this agreement to set out the terms which will apply if the Seller makes an offer to Westpac to sell, and Westpac agrees to purchase, such Receivables from the Seller from time to time during the term of a Future Agreement.
   
C
        The parties have agreed to include in this agreement certain provisions that will not apply until all the parties  subsequently agree in writing to activate those provisions.  Those provisions include:
   
    (a)  
the ability to offer for sale NZ Receivables;
       
    (b)  
the requirements for a Concentration Reserve, a Credit Reserve, a Dilution Reserve, an FX Reserve, a Loss Horizon Ratio, a Loss Ratio, a Required Reserve and the definitions that relate only to those provisions.
 
It is agreed as follows:
 
1.
Interpretation
 
1.1
Definitions
 
The following definitions apply unless the context requires otherwise.
 
Accounts means statements of financial position, statements of financial performance and statements of cash flows together with any statements, reports (including any directors' and auditors' reports) and notes attached to or intended to be read with any of them.
 
 
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Receivables Purchase Agreement
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Accounts Receivable Trial Balance means the Seller's accounts receivable trial balance as at a specified date, in either Computer File or hard copy computer printout form, summarising debit and credit entries and the Original Balances for Receivables as at the relevant date, containing a list of Obligors and the Original Balances of the Receivables as at the close of business on that date in the form agreed between the Seller and Westpac.
 
Accrued Interest Cost means, for any Remittance Date, an amount equal to the sum of the product of the following amounts calculated for each day during the Yield Period ending immediately before that Remittance Date:
 
(a)           the aggregate of Westpac's Investment and any Accrued Interim Cost;
 
(b)           the Bank Bill Rate for that Yield Period; and
 
(c)           1/365.
 
Accrued Interim Cost means, for any Remittance Date, the aggregate of any Accrued Interest Cost and Retention Amount that was not paid on the preceding Remittance Dates as a result of there being insufficient Collections.
 
Adjusted Dilution Ratio means, on any date, the ratio (expressed as a decimal) calculated as of the most recent Determination Date by dividing the sum of the Dilution Ratios at each of the 12 consecutive Determination Dates (or such lesser number of Determination Dates as have elapsed since the first Purchase Date) ending with such Determination Date by 12 (or such lesser number).
 
Amount Due , on any Collection Date, in relation to an Obligor under a Receivable, means the amount determined by the Platform Provider to be due by that Obligor under that Receivable on that Collection Date in accordance with the Program.
 
Approved Originator means an Australian Approved Originator or a NZ Approved Originator.
 
Approved Originator Sale Notice means, in respect of:
 
 
(a)
a n Australian Approved Originator, a notice substantially in the form of Annexure A Part 2 (or such other form as the Seller and that Australian Approved Originator may agree); and
 
 
(b)
an NZ Approved Originator, a notice substantially in the form of Annexure A Part 3 (or such other form as the Seller and that NZ Approved Originator may agree),
 
under which that Australian Approved Originator or NZ Approved Originator (as the case may be) offers to sell Receivables originated by it to the Seller.
 
APRA means the Australian Prudential Regulation Authority.
 
Associate in relation to an entity means:
 
(a)            a Related Corporation of that entity;
 
(b)           an entity, or the trustee or manager of a trust, which has a Controlling Interest in that entity, or a Related Corporation of that entity;
 
(c)           a Related Corporation of an entity included in paragraph (b) or (e);
 
(d)           a director of that entity or an entity included in paragraph (a) or (c);
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(e)
a corporation, or the trustee or manager of a trust, in which one or more entity or person mentioned in paragraph (a), (b), (c), (d), (f) or (g) alone or together has a Controlling Interest;
 
 
(f)
the trustee of a discretionary trust of which an entity or person included in paragraph (a), (b), (c), (d) (e) or (g) is a beneficiary (whether or not through one or more other discretionary trusts); or
 
 
(g)
an entity of which a director of that entity or a Related Corporation of that entity is also a director.
 
For the purposes of this definition:
 
 
(i)
where a person is a beneficiary of a discretionary trust, that person shall be taken to own, and control, all the assets of that trust;
 
 
(ii)
director has the meaning given in the Corporations Act; and
 
 
(iii)
a person has a Controlling Interest in a corporation or trust if:
 
 
(A)
the corporation or its directors, or the trustee or manager of the trust or its directors, are accustomed, or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person or of that person in concert with others; or
 
 
(B)
the person has a relevant interest (as defined in the Corporations Act) in aggregate in more than 20% of the issued or voting shares, units or other interests in the corporation or trust (in number, voting power or value), or would have that relevant interest if any rights were exercised to subscribe for, or acquire or convert into, shares, units or other interests which are issued or unissued.  The definition of relevant interest applies as if units or other interests were shares.
 
ASX   means the Australian Stock Exchange Limited (ABN 98 008 624 691).
 
Australian Approved Originator means:
 
(a)           Moneytech Limited; and
 
(b)     any other wholly-owned Australian incorporated subsidiary of the Seller that originates Receivables in its ordinary course of business.
 
Australian Collection Account means the account in the name of the Servicer with BSB number [*], account number [*] at Westpac Banking Corporation or such other account approved by Westpac.
 
Australian Receivable means a Receivable originated by the Seller or an Australian Approved Originator in Australia.
 
Authorisation means:
 
 
(a)
any consent, authorisation, registration, filing, lodgement, agreement, notarisation, certificate, permission, licence, approval, authority or exemption from, by or with a Governmental Agency; or
 
 
(b)
in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Authorised Officer means:
 
 
(a)
in respect of the Seller or the Servicer, any director or secretary, or any person from time to time nominated as an Authorised Officer by the Seller or the Servicer, as the case may be, by a notice to the relevant party accompanied by certified copies of signatures of all new persons so appointed; and
 
 
(b)
in respect of Westpac, any person whose title or acting title includes the word Director , Manager or Associate or cognate expressions, or any secretary or director.
 
Authorised User means a person notified by the Seller to Westpac in writing, and accepted by Westpac as such, from time to time, and who is authorised by the Seller to access and use the Platform.
 
Bank Bill Rate for a period means:
 
 
(a)
the average bid rate displayed at or about 10.15am (Sydney time) on the first day of that period on the Reuters screen BBSWAV page for a term equal or closest to (within 5 days) that period; or
 
 
(b)
if for any reason that rate is not displayed for a term equal or closest to (within 5 days) that period, then the Bank Bill Rate will be the rate calculated by Westpac at or about 10.15am (Sydney time) on the first day of the period to be Westpac's estimate in good faith of the rate calculated on a linear interpolation or extrapolation basis using the two rates displayed at or about 10.15am (Sydney time) on the first day of that period on the Reuters screen BBSWAV page having a term closest to that period; or
 
 
(c)
if the basis on which that rate is displayed is changed and in the reasonable opinion of Westpac, it ceases to reflect the cost of funding of Westpac to the same extent as at the date of this agreement solely due to the change, then the Bank Bill Rate will be the rate calculated by Westpac in good faith as Westpac's cost of funds for a term equal or closest to (within 5 days) the period in consultation with the Seller to be the average of the buying rates quoted to Westpac on the first day of the period by 3 large Australian banks selected by Westpac (as relevant); or
 
 
(d)
if the Bank Bill Rate cannot be determined under paragraphs (a), (b) or (c), the rate will be the rate determined by Westpac in good faith to be Westpac's cost of funds for a term equal or closest to (within 5 days) the period in consultation with the Seller, or
 
 
(e)
if an Early Amortisation Event is subsisting, the rate will be the rate determined by Westpac as the aggregate of:
 
 
(i)
the rate determined under paragraphs (a), (b), (c) or (d) (as the case may be); and
 
 
(ii)
2%.
 
Bill has the same meaning as in the Bills of Exchange Act 1909 (Cwlth).
 
Business Day means any day other than a Saturday or Sunday or a day when banks are authorised or required by law to close in Sydney.
 
Business Hours means from 9.00am to 5.00pm on a Business Day.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Carrier has the meaning given to it in the Telecommunications Act 1997 (Cth).
 
Cash Reserve means at any time the credit balance of the Cash Reserve Bank Account at that time.
 
Cash Reserve Requirement   means on any Determination Date the aggregate of:
 
 
(a)
the Aggregate Deductible as defined in the Insurance Policy, subject to that amount being not less than $1 million;
 
 
(b)
the Outstanding Balance of Purchased Receivables that have been Overdue Receivables for more than 30 days; and
 
 
(c)
the Delinquency Reserve Requirement.
 
Cash Reserve Bank Account means [*].
 
Change of Control means a change in "control" as defined in the Corporations Act.
 
Charge means a charge given by the Seller, the Indemnifier, the Servicer and each Approved Originator to Westpac to secure their obligations to Westpac under the Transaction Documents.
 
Chargee means any person, other than Westpac, to whom the Seller or any Approved Originator has granted a Security Interest.
 
Charge-Off Receivable means a Purchased Receivable:
 
 
(a)
as to which an Insolvency Event has occurred and is subsisting with respect to the relevant Obligor; or
 
 
(b)
which the Seller, or if the Seller is not the Servicer, the Servicer, has taken all reasonable steps to collect and enforce, and has concluded in accordance with its usual practice is not reasonably recoverable, and has been written off in accordance with the Credit and Collection Policy.
 
Collection Account means either the Australian Collection Account and the NZ Collection Account.
 
Collection Account Letter means each letter (in a form approved by Westpac, acting reasonably) from the Seller and the Servicer or an Approved Originator to Westpac in its various capacities dated on or about the date of this agreement, in relation to the operation of the relevant Collection Account.
 
Collection Date means, in relation to a Receivable, the date on which the relevant Obligor is required to make a payment of an Amount Due in relation to that Receivable.
 
Collection Period means, in respect of a Remittance Date:
 
 
(a)
the calendar month (or part thereof) ending on (and including) the last day of the calendar month immediately before that Remittance Date; or
 
 
(b)
if an Early Amortisation Event has occurred and is subsisting, a period selected by Westpac, notice of which is given to the Servicer.
 
Collections means, with respect to any Purchased Receivable, all funds which on or after the date specified in the Computer File provided by the Seller to Westpac for the purposes of identifying such Purchased Receivable for sale either are:
 
 
(a)
received by the Seller or the Servicer from or on behalf of the related Obligors in payment of any amounts owed in respect of such Purchased Receivable or applied to such amounts owed by such Obligors (including, without limitation, by set off, counterclaim, netting or any similar right or defence);
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(b)
deemed to be received by the Seller or Servicer under clause 3.2 in respect of that Purchased Receivable, or are paid to Westpac under clause 11 in respect of that Purchased Receivable (other than in respect of any penalty, fine, Tax or obligation of any Indemnified Party to any other person); or
 
 
(c)
paid under the Insurance Policy in respect of that Purchased Receivable.
 
Collections will be allocated by the Servicer and Platform Provider into either Finance Charge Collections or Principal Collections.
 
Commitment Termination Date means the earlier to occur of:
 
 
(a)
the Scheduled Commitment Termination Date;
 
 
(b)
the date of termination of the RPA Commitment under clause 10.2; and
 
 
(c)
if the RPA Commitment is terminated in whole, the date of termination of the RPA Commitment nominated by the Seller under clause 2.8;
 
 
(d)
the date five months before the scheduled termination of the Insurance Policy.
 
Computer File means a computer file or email confirmation that contains a summary or list of Receivables (including all Eligible Receivables (if any) that have been originated since the initial Purchase Date to the extent they have not been included in a Computer File that has previously been given by the Seller to Westpac).
 
Concentration Limit means:
 
 
(a)
the amount that Westpac specifies (from time to time) in respect of an Obligor that Westpac specifies as a Concentration Obligor from time to time; and
 
 
(b)
in respect of any other Obligor at any time, or for any Obligor referred to in paragraph (a) once it is no longer a Concentration Obligor, $250,000 at that time.
 
Concentration Obligor means any company that Westpac (acting reasonably) specifies as a Concentration Obligor from time to time.
 
Concentration Reserve means the Outstanding Balance of the Purchased Receivables (including those offered for sale under a Sale Notice on a Purchase Date) for each Obligor that exceeds the Concentration Limit for that Obligor (or would exceed the Concentration Limit for that Obligor if the Sale Notice is accepted).
 
Concentration Term means the period of one year from the date the first Sale Notice (if any) is accepted by Westpac, as extended under clause 2.7.
 
Consumer Credit Legislation means any legislation relating to consumer credit including:
 
 
(a)
the Credit Act of any Australian state or territory;
 
 
(b)
the Consumer Credit (Queensland) Act 1994;
 
 
(c)
the Credit Contracts Act 1981 (NZ); and
 
 
(d)
any other equivalent legislation of any Australian state or territory or New Zealand;
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Contract means a contract (which need not be in writing) between the Seller or an Approved Originator and any person under which one of the following applies:
 
 
(a)
the Seller or the relevant Approved Originator sells goods to that person, and that person is given a certain period of time in which to pay the relevant purchase price; or
 
 
(b)
the Seller or the relevant Approved Originator provides loans, financial accommodation or credit to that person, and that person is given a certain period of time in which to repay the relevant loan, financial accommodation or credit.
 
Corporations Act means the Corporations Act 2001 (Cth).
 
Credit and Collection Policy means those policies and procedures of the Seller and each Approved Originator relating to the operation of its business, including, without limitation, the policies and procedures:
 
 
(a)
for determining the creditworthiness of customers and the extension of credit to customers;
 
 
(b)
relating to the maintenance of accounts and collection of Receivables; and
 
 
(c)
relating to the writing off of bad debts,
 
in the form attached as Annexure G (as amended from time to time, provided that in the case of any material amendment, the prior approval of Westpac has been obtained, such approval not to be unreasonably withheld).
 
Credit Reserve means, at any date, the amount calculated as follows.
 
CR = CRP x PR
 
where
 
CR means the Credit Reserve at that date
 
CRP means the Credit Reserve Percentage at that date.
 
PR means the Outstanding Balance of all performing Purchased Receivables which are referable to Non-Concentration Obligors calculated as follows:
 
 
(a)
the Outstanding Balance of all Purchased Receivables less;
 
 
(b)
the aggregate of:
 
 
(i)
the Outstanding Balance of all Overdue Receivables;
 
 
(ii)
the Outstanding Balance of all Receivables Ineligible for Funding:
 
 
 (iii)
the Outstanding Balance of all Charge-Off Receivables; and
                     
 
 (iv)
the Outstanding Balance of all Purchased Receivables which are referable to Concentration Obligors.
                  
Credit Reserve Percentage means, on any date, the percentage rate calculated as the greater of:
 
 
(a)
the Loss Ratio as at that date multiplied by the Loss Horizon Ratio as at that date multiplied by the Rating Multiple at that date; and
 
 
(b)
10%.
 
Current Receivable means any Purchased Receivable other than an Overdue Receivable, Receivable Ineligible for Funding or Charge-Off Receivable.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Default Ratio means, as at the last day of any calendar month, a percentage calculated as follows:
 
DR =
 
where
 
DR means the Default Ratio at that date.
 
COR means the Outstanding Balance of all Purchased Receivables which have become Charge-Off Receivables during that month.
 
CR means the Outstanding Balance of all Current Receivables originated within the six-month period immediately preceding that month.
 
Defect means any defect, error or malfunction in the operation of the Platform that results in the Platform not operating in accordance with its published specifications.
 
Delinquency Reserve means at any time, the amount in the Cash Reserve Bank Account at that time that represents the Delinquency Reserve.
 
Delinquency Reserve Requirement means $750,000.
 
Delinquent Obligor means an Obligor that has not paid any scheduled minimum monthly Amount Due for payment under the applicable Contract within 30 days of the due date for payment.
 
Determination Date means the last day of each calendar month.
 
Determination Date Statement means the statement prepared by the Servicer with respect to each Determination Date pursuant to clause 6.2(b)(i) substantially in the form of the example set out as Annexure C or in such other form as Westpac and the Seller may agree from time to time.
 
Dilution means the amount of any reduction in the Original Balance of a Purchased Receivable other than due to payment by an Obligor in relation to that Receivable in accordance with the terms of the related Contract or upon the Receivable becoming a Charge-Off Receivable.
 
Dilution Horizon means a period of 30 days.
 
Dilution Horizon Ratio means, on any date, the ratio (expressed as a decimal) calculated as of the most recent Determination Date by dividing the aggregate sales (in Dollars) of the Seller and its Related Corporations during the Dilution Horizon ending on such Determination Date by the aggregate Outstanding Balance of all Purchased Receivables less the Outstanding Balance of all Overdue Receivables of the previous Collection Period.
 
Dilution Receivable Amount means, in respect of any Collection Period, the aggregate amount of Dilutions made in respect of Purchased Receivables during that Collection Period.
 
Dilution Ratio means, on any date, the ratio (expressed as a decimal) calculated as of the most recent Determination Date by dividing the aggregate of all Dilutions for the Collection Period immediately preceding such Determination Date (the Latest Collection Period ) by the aggregate Dollar amount of sales of the Approved Originators during the Collection Period immediately preceding the Latest Collection Period.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Dilution Reserve means, on any date, the amount calculated in accordance with the following formula:
 
DR = (DRP x PR) + (DRP x PRCO) +PMSI
 
where:
 
DR means the Dilution Reserve as at that date.
 
DRP   means the Dilution Reserve Percentage in respect of Concentration Obligors or Non-Concentration Obligors (as the case may be) as at that date.
 
PR   means the Outstanding Balance of all performing Purchased Receivables which are referable to Non-Concentration Obligors, calculated as follows:
 
(a)     the Outstanding Balance of all Purchased Receivables, less
 
(b)     the aggregate of:
 
 
(i)
the Outstanding Balance of all Overdue Receivables;
 
 
(ii)
the Outstanding Balance of all Receivables Ineligible for Funding;
 
 
(iii)
the Outstanding Balance of all Charge-Off Receivables; and
 
 
(iv)
the Outstanding Balance of all Purchased Receivables which are referable to Concentration Obligors.
 
PRCO means the Outstanding Balance of all Purchased Receivables which are referable to Concentration Obligors.
 
PMSI means the average value of trade credits due (as determined by the Servicer from time to time acting reasonably and notified to Westpac) to suppliers to the NZ Approved Originators which benefit from a Supplier's Security Interest.
 
Dilution Reserve Percentage means, on any date:
 
 
(a)
in respect of Non-Concentration Obligors, the product of:
 
 
(i)
the sum of:
 
 
(A)
the Rating Multiple times the Adjusted Dilution Ratio; and
 
 
(B)
the Dilution Volatility Component; and
 
 
(ii)
the Dilution Horizon Ratio,
 
 
expressed as a percentage; and
 
 
(b)
in respect of Concentration Obligors:
 
 
(i)
5.0%; or
 
 
(ii)
the percentage notified to the Seller by Westpac in respect of any Concentration Obligors.
 
Dilution Volatility Component means, on any date, the amount (expressed as a decimal) computed as of the most recent Determination Date equal to the product of:
 
 
(a)
the difference between:
 
 
(i)
the highest three month rolling average Dilution Ratio occurring during the immediately preceding 12 months ending on such Determination Date; and
 
 
(ii)
the Adjusted Dilution Ratio as of such Determination Date, provided that if such difference is negative it shall be deemed to be zero; and
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(b)
a fraction, the numerator of which is equal to the amount calculated pursuant to clause (a)(i) of this definition and the denominator of which is equal to the amount calculated pursuant to clause (a)(ii) of this definition.
 
Discount means, on any date, the amount specified as the Discount in the most recently delivered Sale Notice or Determination Date Statement.  The Discount shall be an amount agreed between the Seller and Westpac to be an amount that relates to all Receivables (including those offered for sale under a Sale Notice on a Purchase Date).  It shall be determined using the following formula.
 
D = (SR + (2 x RR) + PM) x ( 2  x DSO ) x PB
                                                     365
 
where
 
D means the Discount at that date
 
SR means the Servicer Rate as at that date
 
RR means the Bank Bill Rate for a period equal to the Settlement Period following that date
 
 
PM means the Program Margin expressed as a percentage per annum
 
DSO means the number which is the greater of the DSO and the Yield Period, as at that date
 
 
PB means the Purchase Base for the Settlement Period immediately following that date.
 
Documentation means program material supplied by Westpac in relation to the Platform which may include, operating instructions, input information, format specifications (including the Solution Description) or instructional documentation such as guides, manuals or education materials, but excluding maintenance diagnostics.
 
Dollars means the lawful currency of the Commonwealth of Australia from time to time.
 
DSO means, at any date, day sales outstanding, being that number of days calculated using the following formula.
 
DSO = TR      x 365
                                            TC
 
where
 
DSO means DSO at that date
 
 
TR means the then unpaid amount payable (whether actually or contingently) under all  Current Receivables and all Purchased Receivables past due as at:
 
(a)            that date, if that date is the end of a calendar month; or
 
 
(b)
otherwise, the last day of the calendar month immediately preceding that date
 
 
TC means the unpaid amount payable (whether actually or contingently) under all Current Receivables for the 12 full calendar months preceding that date (if that date is the last day of a calendar month, including that calendar month).
 
Early Amortisation Event means each of the events referred to in clause 10.1 except that, so far as any such event relates to the Servicer, it will only be an Early Amortisation Event if the Servicer is the Seller or an Associate of the Seller at the time the relevant event occurs.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Event of Default means each of the events referred to in clause 10.6.
 
Eligible Insurer means an insurance company regulated by APRA, which is either:
           
 
(a)
rated at least A- by S&P; or
 
 
(b)
a wholly owned subsidiary of an insurer rated at least A- by S&P and approved by Westpac.
 
Eligible Receivable means, on the date of any determination under this agreement which involves, or requires a calculation of, an Eligible Receivable a Receivable:
 
 
(a)
in relation to which:
 
 
(i)
the Seller was the first and only creditor of the Obligor under the relevant Contract and where that Contract was entered into by the Seller in the ordinary course of its business; or
 
 
(ii)
an Approved Originator was the first creditor of the Obligor under the relevant Contract, the Contract was entered into by the Approved Originator in the ordinary course of its business, the Approved Originator has assigned its interest in the Contract to the Seller, and that Approved Originator and the Seller have been the only creditors of the Obligor under that Contract;
 
 
(b)
the Obligor of which is not an Associate or employee of the Seller or any Approved Originator;
 
 
(c)
which is not a Charge-Off Receivable;
 
 
(d)
with regard to which the warranty of the Seller in each of clause 7.1(r) and 7.1(s) is true and correct, as if such representation and warranty was provided on such day by reference to the facts and circumstances then existing;
 
 
(e)
the sale of an equitable interest in which does not contravene or conflict with any law;
 
 
(f)
which is:
 
 
(i)
in the case of an Australian Receivable, a Receivable denominated and payable only in Dollars in Australia; or
 
 
(ii)
in the case of a NZ Receivable, a Receivable in respect of which the Obligor is located in New Zealand or has its place of business, or its principal place of business (if the Obligor has more than one place of business) in New Zealand, and the Receivable is denominated and payable only in NZ Dollars in New Zealand;
 
 
(g)
is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of that Receivable enforceable against that Obligor in accordance with its terms and is not subject to any dispute, offset, counterclaim or defence whatsoever (except the discharge in insolvency or bankruptcy of such Obligor);
 
 
(h)
which, together with the Contract, does not contravene any laws, rules or regulations and with respect to which no party to the Contract is in violation of any law, rule or regulation if that violation would impair the collectability of such Receivable;
 
 
(i)
which satisfies all applicable requirements of the relevant Credit and Collection Policy and the Insurance Policy;
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(j)
as to which at the time the relevant Contract was entered into and as at the proposed date of sale the Seller had not received any notice of an Insolvency Event in respect of the relevant Obligor;
 
 
(k)
which is not subject to any Consumer Credit Legislation;
 
 
(l)
where each of the relevant Contracts is governed by the laws of an Australian jurisdiction or, in the case of a Receivable originated by an NZ Approved Originator, the laws of New Zealand;
 
 
(m)
where the relevant Contract, if required to be stamped, has been stamped with all applicable duty;
 
 
(n)
where the amount of any payment which the Obligor is required to make in respect of the Receivable may not pursuant to any contractual right of set off be reduced by, or by any income derived by the Obligor on, any moneys deposited by it with any person (including, without limitation, the Seller) or an Approved Originator;
 
 
(o)
which is specifically identifiable and able to be segregated and marked for purposes of enforcement if an Early Amortisation Event occurs;
 
 
(p)
which is fully assignable and is not subject to dispute, offset or counterclaim at the time it is offered for sale;
 
 
(q)
where the Obligor has provided the bank with which the Collection Account is held with authority to initiate and collect the minimum Amount Due on each  Collection Date; and
 
 
(r)
which is covered by an Insurance Policy where Westpac holds a Certificate of Currency in respect of the relevant Insurance Policy which provides the Seller and Westpac with protection against loss due to non-payment in respect of the Purchased Receivables due to the insolvency of the Obligor.
 
Exchange Rate on any date, in relation to a NZ Receivable or NZ Dollars, means the forward exchange rate quoted to the Seller by Westpac at that time as its market rate for converting NZ Dollars to Dollars, or vice versa (as the case may be) for payment on the next Remittance Date.
 
Expiry Time means, in relation to a Sale Notice, 4.00pm on the third Business Day after the day on which Westpac receives that Sale Notice.
 
Fee Letter means the letter to Hugh Evans of Moneytech Pty Limited dated [*] from Ian Makovec of Westpac, as amended in writing thereafter by mutual agreement between the Seller and Westpac.
 
Finance Charge Collections means, on any Remittance Date, the sum of:
 
 
(a)
any Collections received during the relevant Collection Period that are not Principal Collections; and
 
 
(b)
amounts received from, or on behalf of, Obligors in respect of Receivables that became Charge-Off Receivables received during the relevant Collection Period.
 
Financial Indebtedness means any indebtedness, present or future, actual or contingent in respect of moneys borrowed or raised or any financial accommodation whatever.  It includes indebtedness under or in respect of a negotiable or other financial instrument, Guarantee, interest, gold or currency exchange, hedge or arrangement of any kind, redeemable share, share the subject of a Guarantee, discounting arrangement, finance or capital lease, hire purchase, deferred purchase price (for more than 90 days) of an asset or service or an obligation to deliver goods or other property or provide services paid for in advance by a financier or in relation to another financing transaction.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Financial Undertaking Breach means, circumstances where the Seller fails to meet its financial undertakings set out in clause 8.1(cc).
 
Further Instalment means, if an offer in or pursuant to a Sale Notice is accepted, an amount requested by the Seller under clause 2.3, or, as the context requires, withdrawn by the Seller pursuant to that request.
 
Further Sale Notice means, a further sale notice in substantially the form agreed between the Seller and Westpac from time to time.
 
Future Agreement means an agreement formed between the Seller and Westpac if Westpac accepts the offer made in a Sale Notice.
 
FX Reserve means, on any date, the amount specified as the FX Reserve in the most recently delivered Sale Notice or Determination Date Statement.  The FX Reserve is an amount determined on the basis of the following formula:
 
FXR = ( NZR ) x10%
             ERx1.1
 
where:
 
FXR means the FX Reserve at that date.
 
NZR means the NZ Dollar equivalent of the Outstanding Balance of all NZ Receivables at that date.
 
ER means the Exchange Rate to convert NZ Dollars to Dollars as advised by Westpac.
 
Governmental Agency means any government or any governmental, semi-governmental or judicial entity or authority.  It also includes any self-regulatory organisation established under statute or any stock exchange.
 
Group means the Seller and its Subsidiaries.
 
GST Legislation means the A New Tax System (Goods and Services Tax) Act 1999 or similar legislation and any related regulations.
 
Guarantee means any guarantee, indemnity, letter of credit, legally binding letter of comfort or suretyship, or any other obligation or irrevocable offer (whatever called and of whatever nature):
 
 
(a)
to pay or to purchase;
 
 
(b)
to provide funds (whether by the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets, rights or services, or otherwise) for the payment or discharge of;
 
 
(c)
to indemnify against the consequences of default in the payment of; or
 
 
(d)
to be responsible otherwise for,
 
an obligation or indebtedness of another person, a dividend, distribution, capital or premium on shares, stock or other interests, or the insolvency or financial condition of another person.
 
Indemnified Amounts means any and all damages, losses, claims, liabilities and related costs and reasonable expenses including legal costs on a full indemnity basis.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Indemnified Party means:
 
(a)           Westpac;
 
(b)           any of Westpac's respective successors, transferees, participants and assigns; or
 
 
(c)
any officer, director, shareholder, controlling person, employee or agent of any of the above.
 
Information   has the meaning given in clause 16.
 
Input Tax Credit has the meaning given to the term under the GST Legislation.
 
Insolvency Event means in respect of a person:
 
 
(a)
(i)
an administrator of the person is appointed;
 
 
 
(ii)
any step is taken to appoint or with a view to appointing a statutory manager (including the making of any recommendation in that regard by the Securities Commission under the Corporations (Investigations and Management) Act 1989 or the Reserve Bank of New Zealand Act 1989);
 
 
 
(iii)
except for the purpose of a solvent reconstruction or amalgamation previously approved by Westpac (such approval not to be unreasonably withheld)
 
 
(A)
an application or an order is made, proceedings are commenced, a resolution is passed or proposed in a notice of meeting or an application to a court or other steps are taken for:
 
 
(1)
the winding up, dissolution or administration of the person; or
 
 
(2)
the person entering into an arrangement, compromise or composition with or assignment for the benefit of its creditors or a class of them;
 
other than frivolous or vexatious applications, proceedings, notices and steps or applications; or
 
 
(B)
the person ceases, suspends or threatens to cease or suspend the conduct of all or substantially all of its business or disposes of or threatens to dispose of all or a substantial part of its assets; or
 
 
(iv)
the person is, or under applicable legislation is taken to be, insolvent (other than as the result of a failure to pay a debt or claim the subject of a good faith dispute) or stops or suspends or threatens to stop or suspend payment of all or a class of its debts;
 
 
(b)
(i)
a receiver, receiver and manager, administrative receiver or similar officer is appointed to;
 
 
(ii)
a Security Interest is enforced in respect of an amount in excess of A$500,000 over; or
 
 
(iii)
a distress, attachment or other execution is levied, or enforced or applied for in respect of an amount in excess of A$500,000 over,
 
    all or any of the assets and undertaking of the person unless the relevant action is terminated within 7 days;
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(c)
in the case of a party to this agreement, without the prior consent of the other parties to this agreement, the person:
 
 
(i)
reduces its capital (including a purchase of its shares but excluding a redemption of redeemable shares);
 
 
(ii)
passes a resolution to reduce its capital or to authorise it to purchase its shares or passes a resolution under chapter 2J of the Corporations Act or an equivalent provision, or calls a meeting to consider such a resolution; or
 
 
(iii)
applies to a court to call any such meeting or to sanction any such resolution or reduction; or
 
 
(d)
anything analogous to anything referred to in paragraphs (a) to (c) inclusive, or having substantially similar effect, occurs with respect to the person under any overseas law or any law which commences or is amended after the date of this agreement.
 
Instalment means:
 
 
(a)
at any time in relation to an amount specified in a Sale Notice or an Instalment Notice as an Instalment, that amount; and
 
 
(b)
otherwise, an amount actually paid by Westpac upon its acceptance of an offer in a Sale Notice, or pursuant to an Instalment Notice.
 
Instalment Notice means a notice in the form of Annexure D given under clause 2.3(a).
 
Insurance Policy means the trade credit insurance policy issued by American House Assurance Company, Australia Branch to the Seller in relation to the Receivables, a copy of which is annexed as Annexure I.
 
Intellectual Property means all industrial and intellectual property rights of any kind including, but not limited to, copyright, trade mark, design, patent, semi-conductor or circuit layout rights, trade, business, domain or company names, Moral Rights or other proprietary rights, or any rights prior to registration of such rights anywhere in the world.
 
Loss Horizon Ratio means, as at the last day of any calendar month, a percentage calculated as follows.
 
LHR =  CR
                                            AR
 
where
 
LHR means the Loss Horizon Ratio at that date
 
 
CR means the aggregate of Sales (as used in the definition of, and in calculating, DSO) for that month and the previous five months.
 
 
AR means the Net Pool Balance less the aggregate of:
 
 
(a)
the Outstanding Balance of all Overdue Receivables;
 
 
(b)
the Outstanding Balance of all Receivables Ineligible for Funding; and
 
 
(c)
the Outstanding Balance of all Charge-Off Receivables.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Loss Ratio means, at any date, the highest 3 month rolling average Default Ratio for any month during the 12 full calendar months preceding that date (and, where that date is the last day of the month, including that month), expressed as a percentage.
 
Mandate Letter means the letter from Westpac to the Seller dated [*].
 
Material Adverse Effect   means, with respect to any event or circumstance, a material adverse effect on:
 
 
(a)
the ability of the Servicer or the Seller to perform its obligations under any Transaction Document or the Program;
 
 
(b)
the validity, enforceability or collectability of this agreement, a Future Agreement, 10% or more of the Purchased Receivables or any Contract relating to 10% or more of the Purchased Receivables; or
 
 
(c)
the status, existence, perfection or priority of Westpac's interest in 10% or more of the Purchased Receivables.
 
Moneytech Group means the Indemnifier and all of its related body corporates.
 
Moral Rights means each right defined as a moral right in Part IX of the Copyright Act 1968 and any similar rights capable of protection under the laws of any foreign jurisdiction.
 
Net Pool Balance means, at any time, an amount equal to the aggregate of the Outstanding Balance of all Purchased Receivables at that time.
 
Nominated Account means the account in the name of and maintained by the Seller at Westpac, as advised by the Seller to Westpac, and approved by Westpac, from time to time.
 
Non-Concentration Receivables means, at any time:
 
(a)           the Outstanding Balance of the Purchased Receivables at that time; less
 
(b)           the aggregate of:
 
(i)             the Outstanding Balance of all Overdue Receivables at that time;
 
(ii)            the Outstanding Balance all Receivables Ineligible for Funding at that time;
 
(iii)           the Outstanding Balance of all Charge-Off Receivables at that time; and
 
(iv)             the Outstanding Balance of all Purchased Receivables which are referable to Concentration Obligors at that time.
 
NZ Approved Originator means any wholly-owned New Zealand incorporated subsidiary of the Seller that originates Receivables.
 
NZ Collection Account means the account in the name of the Servicer, notified by Westpac to the Servicer and the Seller as the NZ Collection Account or such other account approved by Westpac.
 
NZ Dollars means the lawful currency of New Zealand from time to time.
 
NZ Originator Power of Attorney means a power of attorney entered into by a NZ Approved Originator substantially in the form set out in Annexure F.
 
NZ Receivable means a Receivable originated by an NZ Approved Originator excluding any right to payment of interest, finance or late payment charges payable by the relevant Obligor in respect of that Receivable.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Obligor means a person obligated to make payments in respect of a Receivable, being customer of the Seller or an Approved Originator who is a member of the Program.
 
Offered Receivables means any Receivables, Related Agreements and Collections which are offered for sale by the Seller to Westpac in accordance with this document and pursuant to a Sale Notice including those Receivables and Collections that are identified in a Computer File subsequently given by the Seller to Westpac pursuant to the agreement formed upon the acceptance of the offer in that Sale Notice.
 
Original Balance means, at the time a Receivable is offered for sale, the then unpaid amount payable (whether actually or contingently) under that Receivable.
 
Originator Guarantee means a Guarantee by the Approved Originators of the obligations of the Seller and the Servicer under this agreement.
 
Outstanding Balance means, at any time, in relation to:
 
 
(a)
any Purchased Receivable, the amount then owing and unpaid (whether or not then due and payable) under that Purchased Receivable;
 
 
(b)
any NZ Receivable, the amount then owing and unpaid (whether or not then due and payable) under the Receivable converted into Dollars at the applicable Exchange Rate at that time;
 
 
(c)
any Overdue Receivable, the scheduled minimum monthly Amount Due for payment which is past due by more than 30 days; and
 
 
(d)
any Receivable Ineligible for Funding, the amount recorded in the Accounts Receivable Trial Balance in respect of that Receivable Ineligible for Funding.
 
Overdue Receivable means a Purchased Receivable (other than any Receivable Ineligible for Funding or Charge-Off Receivable) owing by a Delinquent Obligor in relation to which any scheduled minimum monthly Amount Due for payment is past due by more than 30 days.
 
Permitted Security Interest means any Security Interest created in favour of the Seller or Westpac by virtue of either:
 
 
(a)
the transfer of NZ Receivables by the NZ Approved Originator to the Seller; or
 
 
(b)
the transfer of NZ Receivables by the Seller to Westpac,
 
being a deemed security interest pursuant to section 17(1)(b) of the PPSA and (if applicable) a security interest, aspects of which are governed by the PPSA.
 
Personal Information means any personal information in relation to an Obligor as that term is defined in the Privacy Act 1988 that is provided to Westpac.
 
Planned Outage means a period of time, other than an interruption, which is less than one hour in duration, during which time access to the Platform will be unavailable to permit Westpac to carry out routine maintenance or up-grading or other similar processes relevant to networks.
 
Platform means the electronic web based system known as "the bill presentment and payment platform" owned by or licensed to Westpac for the administration of the sale of Receivables and Purchased Receivables.
 
Platform Provider means Westpac.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Potential Early Amortisation Event   means any event which, with the giving of notice or lapse of time, or both, would become an Early Amortisation Event.
 
PPSA means the Personal Property Securities Act 1999 (New Zealand).
 
PPSR means the Personal Property Securities Register established by the PPSA.
 
Prepayment Amount means the sum of:
 
 
(a)
the aggregate of the amount reasonably determined by Westpac in respect of each day during the Prepayment Period, as being the Program Margin (calculated as an effective daily rate) multiplied by Westpac's Investment on that day; and
 
 
(b)
the projected amount of any Unused Limit Fee Amount, in respect of each day during the Prepayment Period, which will be payable by the Seller to Westpac on the basis that Westpac’s Investment is $0 for the period commencing on the expected date Westpac’s Investment becomes $0 and ending on the date which is the anniversary of this agreement immediately following the Commitment Termination Date or as agreed between the Seller and Westpac in the Fee Letter.  It excludes the amount of any Program Margin which has not yet accrued.
 
Prepayment Period means the period from (and including) the day that the Seller notifies Westpac that it wishes to terminate the RPA Commitment in whole or in part prior to the Commitment Termination Date to (and including) the revised Commitment Termination Date.
 
Presentment and Payment Website   means the electronic commerce portal on the World Wide Web, which is hosted by or on behalf of Westpac using Qvalent’s presentment and payment software.
 
Principal Collections means on any Remittance Date such Collections that equate to the amount of principal (determined by the Seller in accordance with the Credit and Collection Policy) received during the preceding Collection Period.
 
Program means the Moneytech DealerCard Program established by the Indemnifier.
 
Program Change means any change in, any making of, or any change in the interpretation or application of, or compliance with any change in, any law, official directive or request.  A Program Change includes:
 
 
(a)
any law, official directive or request with respect to taxation (but not including changes in respect of Taxes upon or measured by net income or capital gain) or reserve, liquidity, capital adequacy, special deposit or similar requirements;  and
 
 
(b)
any official directive or request of the Reserve Bank of Australia, the Reserve Bank of New Zealand, APRA or any other Governmental Agency which does not have the force of law where it is the practice of responsible persons in the position of Westpac  to comply with it.
 
Program Costs means, for any Remittance Date, the amount which Westpac certifies in good faith is necessary to compensate it for the relevant Collection Period for:
 
 
(a)
any cost attributable to goods and services or similar tax that it incurs an obligation to pay in respect of any payment under any Related Agreement, reduced by any Input Tax Credit or Reduced Input Tax Credit to which it is entitled in respect of that payment; or
 
 
(b)
any of the following as a result of a Program Change:
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(i)
any reduction, direct or indirect, in the amount of any payment made or payable by or for the account of it or received by any of them in connection with this agreement or any Future Agreement;
 
 
(ii)
any reduction, direct or indirect, in the effective return of it in connection with this agreement or any Future Agreement (other than any reduction as a result of an increase in amounts payable by it to another person as a result (direct or indirect) of any change of the rate of GST); or
 
 
(iii)
any imposition, direct or indirect, of any cost on it as a result of its, or their, participation in the transactions contemplated by any Transaction Document including, without limitation, its funding any purchase of a Receivables (other than any cost arising (directly or indirectly) as a result of any change in the rate of GST),
 
which reduction or cost occurs, is incurred or first calculated in or in respect of that Collection Period.  If the increased cost or reduction is indirect, the Program Cost is the proportion which Westpac reasonably determines to be fairly attributable to the purchase of Receivables under this agreement.
 
The Program Costs include any increased cost or reduction which arises because Westpac is restricted in its capacity to enter into other transactions, or is required to make a payment, or forgoes or earns reduced interest or other return on any capital or any sum calculated by reference in any way to the amount of any amount paid or payable or received or receivable under any Transaction Document or allocates capital to any such sum.
 
Program Margin means the percentage per annum referred to in the Fee Letter, as amended thereafter by mutual agreement between the Seller and Westpac.
 
Program Member means a member of the Program.
 
Purchase means the purchase made under a Future Agreement upon acceptance of the offer in a Sale Notice given in accordance with this agreement (if the offer in that Sale Notice is accepted).
 
Purchase Base at any time means the sum of the Outstanding Balance of all Purchased Receivables as at the immediately preceding Determination Date, less the aggregate amount of:
 
(a)           the Required Reserve as at that Determination Date;
 
(b)           the Outstanding Balance of all Overdue Receivables as at that Determination Date;
 
 
(c)
the Outstanding Balance of all Receivables Ineligible for Funding as at that Determination Date; and
 
 
(d)
the Outstanding Balance of all Charge-Off Receivables as at that Determination Date,
 
provided that for so long as the Seller maintains the Cash Reserve Bank Account with Westpac, the Purchase Base will be increased by the amount of the Cash Reserve.
 
Purchase Date means the Business Day on which Receivables are purchased by Westpac on the terms of a Sale Notice.
 
Purchase Limit means, subject to clause 2.11, $50,000,000, as reduced under clause 2.8, or as otherwise agreed by the Seller and Westpac.
 
 
Page 25
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Purchased Interest means on any date, the percentage calculated as follows.
 
P1 = WI    x  100
                         PB          1
 
Where
 
 
PI
means the Purchased Interest as at that date, which in no event will be more than 100%
 
 
WI
means Westpac’s Investment as at that date
 
 
PB
means the Purchase Base as at that date
 
Purchased Receivable means any Receivables, Related Agreements and Collections which are offered for sale by the Seller in a Sale Notice accepted by Westpac, including those Receivables and Related Agreements that are identified in a Computer File or ledger subsequently given by the Seller to Westpac pursuant to the Future Agreement formed upon the acceptance of the offer in that Sale Notice.
 
Qvalent means Qvalent Australasia Pty Limited (ABN 71 088 314 827).
 
Rating Multiple means 2.25 , or such other multiple as is agreed between Westpac and the Seller .
 
Receivable   means any right, title, benefit and interest (present or future) in, to, under or derived from a Contract, including the purchase price payable under that Contract and any amount paid or payable to the Seller or the Approved Originator pursuant to the Insurance Policy in respect of that Contract, but excluding, in the case of any Contract originated by an NZ Approved Originator, any right to payment of interest, finance or late payment charges payable under that Contract.
 
Receivables Ineligible for Funding means any Receivables or other items which are noted in the Accounts Receivable Trail Balance as being Receivables Ineligible for Funding (other than any Overdue Receivable or Charge-Off Receivable).
 
Reduced Input Tax Credit means an Input Tax Credit for a reduced credit acquisition (as defined in the GST Legislation).
 
Related Agreement means any Guarantee, mortgage, charge, encumbrance, lien, trade credit insurance policy or other agreement or arrangement of whatever character from time to time supporting or securing payment of each Receivable whether pursuant to any Contract related to such Receivable or otherwise and, in respect of a Receivable, includes the rights of the Seller under the Approved Originator Sale Notice for the relevant Approved Originator in relation to that Receivable or otherwise, but does not include:
 
 
 (a)
a Guarantee facility deed or chattel mortgage given by an Obligor where that deed or mortgage is expressed to secure obligations of the Obligor in addition to a Receivable; or
 
 
(b)
any Guarantee, mortgage, charge, encumbrance, lien or other agreement or arrangement where the relevant Obligor is resident in Queensland, or the property the subject thereof is situated in Queensland, or where a transfer of it by means of a Future Agreement would be subject to ad valorem stamp duty.
 
Related Corporation has the meaning given to Related Body Corporate in the Corporations Act.
 
Remittance Date means:
 
 
(a)
the 15 th day of each month or as otherwise agreed between Westpac and the Seller; or
 
 
(b)
if an Early Amortisation Event has occurred and is subsisting, such other date or dates selected by  Westpac, notice of which is given to the Servicer.
 
 
Page 26
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Required Reserve means on any date $0, unless and until the parties agree that it is to be the amount equal to the aggregate of:
 
(a)           the Discount;
 
(b)           the Credit Reserve;
 
(c)           the Dilution Reserve;
 
(d)           the Concentration Reserve; and
 
(e)           the FX Reserve,
 
calculated with reference to the data notified to Westpac in the Sale Notice or the most recent Determination Date Statement, provided that Westpac may agree, by written notice to the Seller within 30 days of a request received by Westpac from the Seller, that for so long as the Seller maintains the Cash Reserve Bank Account with Westpac, the Required Reserve be an amount equal to 20% of the Non-Concentration Receivables at that time.
 
Reserve means the Credit Reserve, the Dilution Reserve, the Discount Reserve, the Concentration Reserve, or the FX Reserve as they relate to the Required Reserve.
 
Retention Amount means, for any Remittance Date, the sum of each amount calculated for each day during the relevant Collection Period on the basis of the following formula:
 
 
(a)
Westpac’s Investment made on that day during the relevant Collection Period multiplied by the Program Margin (calculated as an effective daily rate), plus
 
 
(b)
the Unused Limit Fee Amount.
 
Review Event means each event referred to in clause 10.4.
 
RPA Commitment means Westpac's obligations to purchase Receivables under any Future Agreement.
 
Sale Notice means a notice substantially in the form of Annexure A or in such other form as Westpac and the Seller may agree but otherwise complying with clause 2.1.
 
Scheduled Commitment Termination Date means, subject to clause 2.9, the second anniversary of the date of this agreement.
 
Security Interest includes any mortgage, pledge, lien or charge or any security or preferential interest or arrangement of any kind or any other right of, or arrangement with, any creditor to have its claims satisfied in priority to other creditors with, or from the proceeds of, any asset in favour of any person other than the Seller, and in the case of any NZ Receivable, includes any security interest (as defined and construed in accordance with the PPSA).
 
It includes retention of title other than in the ordinary course of day-to-day trading and a deposit of money by way of security but it excludes a charge or lien arising in favour of a Governmental Agency by operation of statute unless there is default in payment of moneys secured by that charge or lien.
 
Seller’s hardware means all hardware and equipment used by the Seller to access the Platform.
 
 
Page 27
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Seller’s Interest means at any time the difference between 100% and the Purchased Interest at that time.
 
Seller’s software means all software used by the Seller to access the Platform other than that supplied by Westpac.
 
Service Levels means the levels of service described in Attachment B to Annexure H.
 
Servicer means the person designated as the Servicer under each Future Agreement from time to time in accordance with clause 9.1.
 
Servicer Amount means, on any date, an amount calculated as follows:
 
SA = SR x WI x D
 
where
 
SA means the Servicer Amount on that date
 
SR means the Servicer Rate at that date
 
WI means Westpac's Investment as at that date
 
D means the number of days from the commencement of the Yield Period in which that date falls to that date
 
Servicer Fee means (if at any time the Servicer is not the Seller), on any date, the amount of any fee due and payable to the Servicer with respect to its servicing role as at that date.
 
Servicer Rate means, at any date, the estimated  percentage rate representing the cost of employing a  Successor Servicer at that date, being:
 
 
(a)
at the date of this agreement, 1%; and
 
 
(b)
at any later date, any other percentage agreed by Westpac and the Seller to represent that cost.
 
Servicer Transfer Event means any of the events specified in clause 10.1 so far as they relate to the Servicer.
 
 
Settlement Period means, in relation to any Offered Receivables, the period specified as such in the Sale Notice (or agreed by Westpac and the Seller from time to time) for those Offered Receivables, being the period which would commence on the date of the Purchase of the relevant Offered Receivables and which equals the DSO calculated on that date in respect of those Offered Receivables.
 
However, any Settlement Period which would otherwise end on a day that is not a Business Day will end on the next succeeding Business Day.
 
S&P Standard & Poor's Ratings Group.
 
Solution Description means the document described as such between the Seller and Westpac dated [*] 2005 .
 
Subsidiary has the meaning in the Corporations Act.
 
Successor Notice means a notice from Westpac to the Seller appointing a new Servicer for the purpose of each Future Agreement in accordance with clause 9.3.
 
Successor Servicer means a new Servicer appointed under clause 9.3.
 
 
Page 28
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Supplier's Security Interest means any Security Interest in favour of a supplier to a NZ Approved Originator in respect of which any Receivable constitutes proceeds of any goods so originally supplied to that NZ Approved Originator by that supplier, and includes any such Security Interest subsequently transferred by that supplier to another person.
 
Swap Agreement means the ISDA Master Agreement, Schedule and confirmation with Westpac relating to exchange of NZ Dollars and Dollars under the transactions contemplated under this agreement to enable it to hedge its exposure to NZ Dollars for expected receipts in NZ Dollars.
 
Tangible Net Worth means that amount (calculated by reference to the consolidated balance sheet of the Moneytech Group) as being the total assets of the Moneytech Group less the total liabilities of the Moneytech Group less the goodwill and intangible assets of the Moneytech Group as recorded in that balance sheet.  For the purposes of this definition, redeemable preference shares and convertible notes will not be treated as liabilities.
 
Tax includes any tax (including under the GST Legislation), levy, impost, deduction, charge, rate, duty, compulsory loan or withholding which is levied or imposed by a Governmental Agency, and any related interest, penalty, charge, fee or other amount but excludes income tax.
 
Transaction Document means:
 
 
(a)
this agreement;
 
 
(b)
any Future Agreement;
 
 
(c)
the [Originator Guarantee];
 
 
(d)
the [Collection Account Letter];
 
 
(e)
the Mandate Letter;
 
 
(f)
each power of attorney referred to in clause 12;
 
 
(g)
any Approved Originator Sale Notice from an Approved Originator to the Seller or any Sale Notice;
 
 
(h)
any Swap Agreement;
 
 
(i)
the Insurance Policy;
 
 
(j)
the Endorsement of the Insurance Policy to Westpac;
 
 
(k)
the Charge;
 
 
(l)
any other document entered into by the Seller or the Servicer (for so long as the Servicer is the Seller or an Associate of the Seller) and an Indemnified Party arising out of or related to this agreement, any Future Agreement, or the ownership or funding of any Receivables or in respect of any Receivable or Contract;
 
 
(m)
a document or agreement entered into or provided by the Seller or the Servicer (for so long as the Servicer is the Seller or an Associate of the Seller) under or in connection with, or for the purpose of amending or novating any of the above; or
 
 
(n)
any other document or agreement entered into by Westpac and any successor Servicer appointed under clause 9.3 in relation to any of the above.
 
Unused Limit Fee means the percentage per annum referred to in the Fee Letter, as amended from time to time by mutual agreement between the Seller and Westpac.
 
 
Page 29
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Unused Limit Fee Amount means:
 
 
(a)
if the Purchaser's Investment is less than $30,000,000, the product of:
 
 
(i)
the difference between the available Purchase Limit and the Purchaser's Investment;
 
 
(ii)
the Unused Limit Fee; and
 
 
(iii)
1/365; and
         
(b)           otherwise, nil.
 
Westpac's Investment means:
 
 
(a)
subject to paragraphs (b) and (c), at any time an amount equal to the sum of all payments of Instalments and Further Instalments less all reductions in Westpac's Investment under clause 4.1(c)(vi).
 
 
(b)
Westpac's Investment shall not be reduced by any distribution of Collections:
 
 
(i)
until that distribution is received by Westpac in immediately available funds or (to avoid double counting where Collections are applied towards meeting an Instalment) has been applied in accordance with clause 4.8 in satisfaction of the Instalment; or
 
 
(ii)
if at any time that distribution is rescinded or must otherwise be returned for any reason.
 
 
(c)
On any Purchase Date, Westpac's Investment shall include (without double counting) any Instalment to be made by Westpac under a Sale Notice offered to and accepted by Westpac with respect to that Purchase Date.
 
Westpac Support Centre means the support centre for the Platform as notified to the Seller by Westpac from time to time.
 
Yield Period means with respect to the Receivables (or any part):
 
 
(a)
the period which commences on the date of the Purchase of a Receivable and ending on (but excluding) the Remittance Date set out in the relevant Sale Notice (or such other period as agreed by Westpac); and
 
 
(b)
after the initial period, each period which commences on the Remittance Date immediately preceding Yield Period and ending on (but excluding) the next Remittance Date (or such other period as agreed by Westpac);
 
however,
 
 
(c)
any Yield Period which would otherwise end on a day that is not a Business Day will end on the next succeeding Business Day; and
 
 
(d)
any Yield Period which commences before the Commitment Termination Date and would otherwise end after the Commitment Termination Date, shall end on the Commitment Termination Date and each subsequent Yield Period for such Receivables (or part) will be of a duration selected by Westpac,
 
provided that no Yield Period will exceed 100 days.
 
 
Page 30
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
1.2
Interpretation
 
In this agreement the following rules apply unless the context requires otherwise.
 
 
(a)
The singular includes the plural and the converse.
 
 
(b)
A gender includes all genders.
 
 
(c)
Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.
 
 
(d)
Headings are for convenience only and do not affect interpretation.
 
 
(e)
A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of the foregoing.
 
 
(f)
a reference to a clause, paragraph, annexure or attachment is to a clause or paragraph of, or annexure or attachment to (an annexure to), this agreement, and a reference to this agreement includes any annexure or attachment (to an annexure);
 
 
(g)
A reference to a party to this agreement or another agreement or document includes the party's successors and permitted substitutes or assigns .
 
 
(h)
A reference to an agreement or document is to the agreement or document as amended, novated, supplemented or replaced from time to time, except to the extent prohibited by this agreement.
 
 
(i)
A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.
 
 
(j)
A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form.
 
 
(k)
A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing.
 
 
(l)
A reference to an asset includes any real or personal, present or future, tangible or intangible property or asset and any right, interest, revenue or benefit in, under or derived from the property or asset.
 
 
(m)
A reference to liquidation includes appointment of an administrator under Part 5.3A of the Corporations Act, compromise, arrangement, merger, amalgamation, reconstruction, winding up, dissolution, assignment for the benefit of creditors, scheme, composition or arrangement with creditors, insolvency, bankruptcy or a similar procedure or, where applicable, changes in the constitution of any partnership or person or death.
 
 
(n)
A reference to time is a reference to Sydney time.
 
 
(o)
Mentioning anything after include , includes or including does not limit what else might be included.
 
 
(p)
In clauses 2.4-2.7 and 7.2, the expressions 'account receivable', 'chattel paper', 'financing statement', 'new value', 'personal property', 'possession', 'proceeds', 'purchase money security interest', 'secured party', 'security interest' and 'transfer' have the respective meanings given to them under, or in the context of, the PPSA.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
1.3
Agency
 
Anything that the Seller is required to do under or in relation to the Transaction Documents may be done by Indemnifier as agent for the Seller.  However, for the purposes of this Agreement, and in particular the indemnities in clause 11, it shall be taken to have been done by the Seller.  A failure by the Indemnifier to do anything the Seller is required to do in accordance with the relevant Transaction Document shall not absolve the Seller from the obligation to do that thing.
 
1.4
No application of certain provisions
 
Notwithstanding any provision in this document to the contrary, unless and until the parties agree in writing that this clause 1.4 does not apply:
 
 
(a)
the provisions relating to:
 
 
(i)
the ability to offer NZ Receivables for sale;
 
 
(ii)
the requirements for a Concentration Reserve, a Credit Reserve, a Dilution Reserve, an FX Reserve, a Loss Horizon Ratio, a Loss Ratio, a Required Reserve and the definitions that relate only to those provisions,
 
do not apply;
 
 
(b)
clauses 2.1(c)(v), 2.1(c)(vi), 2.3(b), 3.2(e), 4.3, 7.1(z)(ii), 6.2(a)(iii)(B) and 10.1(j) have no application; and
 
 
(c)
the provisions in this document are to be interpreted by ignoring the following concepts:
 
 
(i)
Adjusted Dilution Ratio;
 
 
(ii)
Credit Reserve;
 
 
(iii)
Credit Reserve Percentage;
 
 
(iv)
Current Receivables;
 
 
(v)
Default Ratio;
 
 
(vi)
Dilution;
 
 
(vii)
Dilution Horizon Ratio;
 
 
(viii)
Dilution Receivable Amount;
 
 
(ix)
Dilution Ratio;
 
 
(x)
Dilution Reserve;
 
 
(xi)
Dilution Reserve Percentage;
 
 
(xii)
Dilution Volatility Component;
 
 
(xiii)
Discount;
 
 
(xiv)
DSO;
 
 
(xv)
FX Reserve;
 
 
(xvi)
Loss Horizon Ratio;
 
 
(xvii)
Loss Ratio;
 
 
(xviii)
Net Pool Balance;
 
 
(xix)
Non-Concentration Receivables;
 
 
(xx)
Rating Multiple;
 
 
(xxi)
Required Reserve;
 
 
(xxii)
Reserve.
 
 
Page 32
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
2.
RPA commitment
2.1
Sale notices
 
 
(a)
The parties agree that the proposed Westpac's Investment, the proposed Required Reserve, the proposed Instalment and the proposed Concentration Limit will be as follows, or as otherwise amended or altered pursuant to the provisions of this agreement or as agreed in writing between the parties from time to time pursuant to the provisions of this agreement:
 
 
(i)
Westpac's Investment: the aggregate of the Outstanding Balance of the Purchased Receivables at the relevant time.
 
 
(ii)
Required Reserve: 0% of the aggregate of the Outstanding Balance of the Purchased Receivables.
 
 
(iii)
Instalment: the aggregate of the Outstanding Balance of the Purchased Receivables on any date until a Review Event occurs.
 
 
(iv)
Concentration Limit: Zero.
 
 
(b)
Subject to clauses 2.1(d) and 6, the Seller may offer to sell Receivables, Related Agreements and Collections from time to time to Westpac by delivering a Sale Notice to Westpac during the period from the date of this agreement to (but excluding) the third Business Day immediately preceding the Commitment Termination Date.  A Sale Notice, and each subsequent Computer File issued in respect of the Sale Notice, must relate to all Eligible Receivables at the relevant date.
 
 
(c)
Any Sale Notice given under this agreement shall (unless otherwise agreed by the parties in writing) be delivered to Westpac not later than 11:00 a.m. on the third Business Day before the date of the proposed Purchase (which must also be a Business Day).  Each Sale Notice shall annex to it an Accounts Receivable Trial Balance and shall (unless otherwise agreed by Westpac):
 
 
(i)
specify the proposed Purchase Date, Remittance Date, Settlement Period and  Yield Period;
 
 
(ii)
specify the then Outstanding Balance of the Receivables offered for purchase that will apply if that Sale Notice is accepted;
 
 
(iii)
specify the proposed Instalment which would be payable by Westpac in respect of the Receivables so offered for purchase if Westpac were to accept the Seller's offer as contained in the Sale Notice;
 
 
(iv)
specify Westpac's Investment that will apply if that Sale Notice is accepted;
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(v)
specify the Credit Reserve, the Credit Reserve Percentage, the Dilution Reserve, the Dilution Reserve Percentage and the Concentration Reserve that will apply to all Receivables if that Sale Notice is accepted;
 
 
(vi)
specify the Discount that will apply to all Receivables if that Sale Notice is accepted;
 
 
(vii)
specify the Net Pool Balance and Purchased Interest that will apply if that Sale Notice is accepted; and
 
 
(viii)
specify such other information as required in clause 4 of any Sale Notice.
 
 
(d)
An offer in a Sale Notice is irrevocable during the period up to and including the Expiry Time of that Sale Notice.
 
 
(e)
The Seller is not obliged to offer for sale to Westpac any Receivables, Related Agreements and Collections and Westpac is not obliged to accept any offer for sale of any Receivables, Related Agreements and Collections made by the Seller.  Westpac will however act reasonably in considering whether to accept a Sale Notice.
 
 
(f)
Westpac may accept the offer contained in a Sale Notice at any time prior to the Expiry Time by, and only by, the payment by Westpac to the Seller (or as it directs) of the Instalment in the manner described in clause 2.1(h), or in accordance with clause 4.8(b).  Upon receipt of a Sale Notice, if Westpac decides not to accept that Sale Notice, it will notify the Seller orally of that decision within 24 hours of receipt of that Sale Notice.
 
 
(g)
Notwithstanding satisfaction of all relevant conditions precedent or any negotiations undertaken between the Seller and Westpac prior to Westpac accepting the offer contained in a Sale Notice, Westpac is not obliged to accept the offer contained in a Sale Notice and no contract for the sale or purchase of any Receivables, Related Agreements or Collections detailed in a Sale Notice will arise unless and until Westpac accepts the offer contained in the Sale Notice in accordance with this clause.  Westpac will however act reasonably in considering whether to accept a Sale Notice.  The offer contained in a Sale Notice may only be accepted in relation to all the Receivables detailed in the Sale Notice.
 
 
(h)
If Westpac wishes to accept a Sale Notice in the manner specified in clause 2.1(f), it will (unless another method of payment is agreed between the Seller and Westpac) make payment of the Instalment (being a non-refundable payment representing part of the purchase price for the Receivables) as specified in the Sale Notice on the Purchase Date in Dollars in immediately available funds to such bank account in Australia as the Seller may specify in writing.  If pursuant to clause 4.1, there are funds payable to Westpac, then subject to clause 4.8, they shall be available for application to the Instalment and Westpac will remit to the Seller's account only that portion of the Instalment to be paid by Westpac on the Purchase Date that exceeds the amount payable to Westpac pursuant to clause 4.1 for application to the Instalment.  The balance (if any) of the funds available for application to the Instalment shall be applied in accordance with clause 4.
 
 
(i)
If the offer contained in a Sale Notice is accepted, Westpac shall be taken to have undertaken to the Seller to pay to the Seller as further consideration for the purchase of the Offered Receivables:
 
 
(i)
an amount equal to the Collections allocated under clause 4.1(b)(iii) in respect of the Offered Receivables; and
 
 
(ii)
an amount equal to any Collections remaining after application under clause 4.1(c)(vii) in respect of the Offered Receivables.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(j)
Nothing in clauses 2.1(k) or 4.2 or any other provision of any Transaction Document confers on the Seller any right or interest in any Receivable, Related Agreement or Collections (other than in each case as trustee), each party acknowledging that no Security Interest arises from a Purchase (other than a Permitted Security Interest, if any) and that each Purchase constitutes an equitable assignment that is absolute and not by way of security (other than a Permitted Security Interest).
 
 
(k)
Subject to this agreement, the purchase price for each Receivables shall be an amount equal to its Outstanding Balances at the opening of business on the date specified in the Computer File provided by the Seller to Westpac for the purposes of identifying such Receivable for sale.  The purchase price shall be satisfied by the payment of the Instalments, the Further Instalments, and the Seller's Interest in Collections in accordance with clause 4. The Seller's Interest is a means by which the parties determine the share of Collections to which the Seller is entitled as part of the deferred purchase price.  It does not constitute an equitable interest in the Purchased Receivables.
 
2.2
Limit
 
Under no circumstances shall Westpac make a Purchase or pay an Instalment or Further Instalment to the extent that, after giving effect to the Purchase or paying the Instalment or Further Instalment, Westpac’s Investment would exceed the lesser of:
 
 
(a)
the Purchase Limit; and
 
 
(b)
the Purchase Base.
 
2.3
Further Instalments
 
 
(a)
The Seller shall be entitled to request payments from Westpac (either from the relevant Collection Accounts or other applicable accounts) not more than once a week in an amount (a Further Instalmen t ) not exceeding the amount equal to the Purchase Base less Westpac’s Investment on that day. Any request by the Seller for a Further Instalment shall be in the form of an Instalment Notice.
 
 
(b)
The Reserves shall not be recalculated between Remittance Dates for the purposes of determining the entitlement of the Seller to Further Instalments.
 
 
(c)
The Seller may only request a Further Instalment if:
 
 
(i)
the conditions precedent in clause 6.2 are satisfied; and
 
 
(ii)
it has given to Westpac a Further Sale Notice and satisfied Westpac (acting reasonably) it is entitled to request the Further Instalment.
 
 
(d)
Subject to clause 2.3(c):
 
 
(i)
NZ Collections can be paid to the NZ Approved Originator on account for the Seller, up to the amount of the Outstanding Balance of NZ Receivables that have been originated since the immediately preceding Instalment or Further Instalment was paid; and
 
 
(ii)
Collections in Dollars can be paid to the Australian Approved Originator or the Seller, up to the amount of the Outstanding Balance of Australian Receivables that have been originated since the immediately preceding Instalment or Further Instalment was paid.
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
2.4
Security Interest
 
In respect of any NZ Receivable that is transferred to Westpac under and in accordance with a Future Agreement, the parties agree and acknowledge that:
 
 
(a)
the transfer is a deemed security interest under the PPSA, governed by the PPSA, which arises by virtue of the transfer to Westpac of that NZ Receivable by the Seller under and in accordance with a Sale Notice;
 
 
(b)
the purchase arrangements contemplated by each Sale Notice are intended to operate so that the Seller and Westpac will at all times be able to prove that, in respect of each relevant NZ Receivable that is an account receivable, the sale in equity of that NZ Receivable constitutes a transfer for which new value was provided by Westpac for and in respect of the acquisition of that NZ Receivable;
 
 
(c)
the security interest referred to in clause 2.4(a) will have been perfected by the registration of a financing statement on the PPSR against the Seller in respect of all of the Seller's present and after acquired accounts receivable and chattel paper;
 
 
(d)
nothing in clauses 2.4 to 2.6, or anything else in or contemplated by the Transaction Documents, is intended to create or imply that the sale of any Receivable under a Future Agreement is anything other than an absolute assignment of the Seller's rights and interest in those Receivables to Westpac.  In particular, it is not a secured or unsecured loan.
 
2.5
Registration on PPSR
 
The Seller agrees and acknowledges that, in relation to NZ Receivables to be transferred from the Seller to Westpac, Westpac will arrange for financing statements in relation to those NZ Receivables under the PPSA to be registered:
 
 
(a)
describing the collateral to which it relates as "All of the debtor's present and after acquired accounts receivable and chattel paper;
 
 
(b)
describing the proceeds of that collateral as "All present and after acquired personal property being proceeds of the collateral described in this financing statement"; and
 
 
(c)
with the secured party group being the Seller and Westpac and the debtor group being the relevant NZ Approved Originator and the Seller.
 
2.6
PPSA Provisions
 
 
(a)
( Part 9 Provisions )  The parties to this agreement acknowledge that it is their intention that the provisions contained in Part 9 of the PPSA do not apply to the NZ Receivables transferred to Westpac pursuant to a Future Agreement.  However, if at law this is not the case and in respect of any other security interest created by this agreement:
 
 
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Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(i)
any power to sell any of the NZ Receivables, whether conferred by this agreement or otherwise, may be exercised without the need to give the Seller any notice of the kind that is referred to in section 114 of the PPSA and, if any of the NZ Receivables are sold at any time, Westpac is not required to give the statement referred to in section 116 of the PPSA; and
 
 
(ii)
the Seller acknowledges that it is not entitled by section 117 of the PPSA to any surplus amounts which may result from any sale at any time.
 
 
(b)
( Verification Statement )  The Seller waives the right to receive a copy of the verification statement confirming registration of a financing statement or financing change statement relating to the security interest under this agreement.
 
2.7
Change of Purchase Limit; Concentration Limit and extension of Concentration Term
 
 
(a)
Purchase Limit or Concentration Limit
 
If the Seller wants  a change to either the Purchase Limit  or a Concentration Limit it shall give a written request to Westpac.  Westpac shall respond to that request within 30 days.  If Westpac in its discretion agrees to a change to either limit it shall prepare the necessary documents.  No change shall be effective until the documents are signed and any condition satisfied.
 
                (b)
(i)
If the Seller wants an extension of the Concentration Term on the first or any subsequent anniversary of this agreement it shall give a written request to Westpac at least 60 days before the relevant anniversary.  If Westpac agrees, it shall give a written notice of acceptance to the Seller before the then current Concentration Term.
 
 
(ii)
The Concentration Term shall be extended by Westpac for a further period if it is satisfied with the proposed fees and margins.
 
2.8
Voluntary termination of RPA Commitment or reduction of Purchase Limit
 
Subject to clause 5.8, the Seller may, upon at least 60 days' notice to Westpac, terminate the RPA Commitment in whole or reduce in part the unused portion of the Purchase Limit, however:
 
 
(a)
each partial reduction shall be in an amount equal to $5,000,000 or an integral multiple of $5,000,000; and
 
 
(b)
unless the RPA Commitment is terminated in whole, after giving effect to such reduction, the remaining Purchase Limit, in accordance with this agreement, will not be less than $10,000,000.
 
2.9
Extension
 
Not less than 60 days prior to the Scheduled Commitment Termination Date, the Seller may request Westpac to agree to extend the term of this agreement by another calender years.  If that request is made by the Seller, and accepted by Westpac not less than 30 days prior to the Scheduled Commitment Termination Date, this agreement will be deemed to be amended such that the revised Scheduled Commitment Termination Date is the date falling one calender year after the date that would otherwise have been the Scheduled Commitment Termination Date.
 
 
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2.10
Seller obligations upon RPA Termination
 
Subject to clause 3.3, and provided that all amounts actually or contingently owed to Westpac by the Seller and the Servicer (in the case of the Servicer, whilst the Servicer is the Seller or an Associate of the Seller) under the Transaction Documents have been paid in full and all outstanding obligations of the Seller and the Servicer (in the case of the Servicer, whilst the Servicer is the Seller or an Associate of the Seller) under the Transaction Documents have been fulfilled, the Seller and the Servicer (in the case of the Servicer, whilst the Servicer is the Seller or an Associate of the Seller) shall have no further obligations under the Transaction Documents following the termination of the RPA Commitment in whole and any remaining interest of Westpac in the Purchased Receivables is extinguished.
 
2.11
Purchase Limit availability
 
 
(a)
The Purchase Limit on the first Closing Date shall be $10,000,000.
 
 
(b)
In order for the Purchase Limit to be increased:
 
 
(i)
first to $25,000,000 at the end of the 6 month review period commencing on the Closing Date (the First 6 Months ); and
 
 
(ii)
then to $50,000,000 at the end of the 6 month review period commencing on the expiration of the First 6 Months,
 
the Seller must first demonstrate the following to the satisfaction of Westpac;
 
 
(iii)
the number of Delinquent Obligors with Receivables with Amounts Due that are greater than 30 days past due is less than 4% of the number of Obligors in the Program during the applicable six month review period, or as otherwise agreed; and
 
 
(iv)
it has satisfied its obligations under the Transaction Documentation as confirmed by an auditor appointed by Westpac,
 
at which point Westpac will provide confirmation to the Seller of the increased Purchase Limit.
 
3.
Collection
 
3.1
Collection of Receivables
 
 
(a)
Subject to clause 9.2(b), on each day the Servicer receives payment from an Obligor on account of Purchased Receivables included in the Purchase Base on that day, the Servicer shall receive those payments on behalf of Westpac and shall deposit each payment into the relevant Collection Account in accordance with the terms of the relevant Collection Account Letter;
 
 
(b)
Subject to clause 9.2(b), the Servicer undertakes:
 
 
(i)
that on each day an Approved Originator receives a payment from an Obligor on account of Purchased Receivables included in the Purchase Base on that day and such a payment represents a Collection, it receive those payments on behalf of Westpac; and
 
 
(ii)
that each such Collection will be deposited into the relevant Collection Account in accordance with the terms of the relevant Collection Account Letter.
 
 
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(c)
Pursuant to the Collection Account Letter, on each Business Day and subject to an Early Amortisation Event not subsisting, amounts standing to the credit of the Collection Account may be remitted to, and applied by, the Seller or the relevant Approved Originator at the Seller's or the relevant Approved Originator's discretion.  The Servicer or the relevant Approved Originator (as the case may be) will account to Westpac for all remittances from the Collection Account during the Collection Period on the relevant Remittance Date immediately following a Collection Period (other than to the extent that the remittances relate to a Relevant Receivable (as defined in clause [*] of the Collection Account Letter).
 
3.2
Deemed Collections
 
 
(a)
Subject to paragraph (e), for the purposes of this agreement:
 
 
(i)
if on any day the Outstanding Balance of any Purchased Receivable is:
 
 
(A)
reduced or adjusted by the Seller or Servicer as a result of any defective, rejected, repossessed or returned goods or services or any cash discount or other adjustment made by the Seller;
 
 
(B)
reduced or cancelled by the Seller or Servicer or by operation of law as a result of a set off or by agreement in respect of any claim by the Obligor or any other person against the Seller, an Approved Originator or any other person (whether such claim arises out of the same or another transaction); or
 
 
(C)
not paid because of any change by the Seller or Servicer in the due date for payment of any such Receivable otherwise than with the prior consent of Westpac,
 
the Seller will be deemed to have received on such day a Collection of such Receivable in the amount reflected in the books and records of the Seller or the Servicer as the amount of such reduction, adjustment or cancellation, or in relation to paragraph (C), the Outstanding Balance of the Purchased Receivables;
 
 
(ii)
without limiting the generality or effect of any other provision of this agreement if:
 
 
(A)
a Purchased Receivable is not paid when due;
 
 
(B)
the Servicer takes all reasonable steps in accordance with the Credit and Collection Policy to collect the Purchased Receivable; and
 
 
(C)
the Purchased Receivable is not collected in full solely by reason of any facts or circumstances the occurrence of which constitutes a breach of any of the Seller’s or the Servicer’s (if the Servicer is the Seller or an Associate of the Seller) representations, warranties or obligations under this agreement,
 
the Seller will be deemed to have collected an amount equal to the Purchased Receivable (or any uncollected part) at the time that breach is first known to the Seller; or
 
 
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(iii)
if:
 
 
(A)
a Purchased Receivable, together with the Contract or any Related Agreement, is in contravention of any relevant law and as a consequence the Purchased Receivable becomes unenforceable, the Seller will be deemed to have collected an amount equal to the Purchased Receivable (or any uncollected part) at the time that contravention or violation is first known to the Seller;
 
 
(B)
(except as otherwise disclosed to Westpac in writing by the Seller prior to the date of the relevant Sale Notice) any of the representations or warranties contained in clause 7.1 prove to have been incorrect in relation to a Purchased Receivable when made at the time the Receivables are purchased by Westpac, the Seller will be deemed to have received a Collection of such Purchased Receivable equal to its Original Balance less any Collections with respect to that Purchased Receivable previously accounted for and applied pursuant to clause 4, at the time the relevant circumstances are first detected by the Seller; or
 
 
(C)
in respect of any Purchased Receivables, the Seller records in any account or ledger maintained by it in respect of the relevant Obligor a payment of that Purchased Receivable (whether by way of crediting that account or ledger or otherwise),
 
then the Seller shall be deemed to have received a Collection equal to that amount at the time the contravention, violation or circumstances (as the case may be) are first detected by the Seller, or at the time such recording is made (unless the Seller has subsequently reversed that record of payment).
 
 
(b)
If the Seller is not acting as the Servicer, it will promptly pay to the Servicer (to be held by the Servicer in accordance with clause 9.2) the amount of any deemed Collection pursuant to clause 3.2(a)(i) – [iii] (inclusive).
 
 
(c)
Any deemed Collection under clause 3.2 will be accounted for and applied in accordance with clause 4 on the Remittance Date immediately following the date on which that deemed Collection is deemed to have occurred.
 
 
(d)
Any Purchased Receivable for which there is a deemed Collection under this clause 3.2 is deemed not to be an Overdue Receivable, a Receivable Ineligible for Funding or Charge-Off Receivable to the extent of such deemed Collection.
 
 
(e)
To the extent that the Seller is required to pay an amount under this clause 3.2 as a direct consequence of a Dilution (the Dilution Deemed Collection ), the Seller is only required to pay that part of the Dilution Deemed Collection which, when aggregated with all previous Dilutions, exceeds the sum of each amount equal to the Dilution Reserve calculated on each Purchase Date (assuming for the purpose of such calculation that the Receivables as at each Purchase Date comprise only the Pool of Receivables referred to in the Sale Notice or Further Notice (as the case may be) given on that Purchase Date).
 
 
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3.3
Return of Distribution
 
No amount payable in respect of a Purchase or pursuant to the Transaction Documents shall be considered paid, and no Westpac’s Investment shall be reduced by any distribution of Collections pursuant to the Transaction Documents, if at any time such payment or distribution is rescinded by any law relating to preferential payments in the event of a bankruptcy or insolvency or must otherwise be returned.
 
3.4
Interpretation
 
All references in this agreement to the Seller accounting to Westpac for Collections made in respect of Purchased Receivables shall mean, in relation to deemed Collections where no money may have been actually received by the Servicer from, or for the account of, the relevant Obligor, the payment by the Seller to the Servicer (to be held by the Servicer in accordance with clause 9.2) no later than the time for application of deemed Collections specified in clause 3.2(b) of an amount or amounts equal to the relevant deemed Collections.
 
4.
Settlement Procedures
 
4.1
Settlement Procedures for all Collections
 
 
(a)
On:
 
 
(i)
each Remittance Date; or
 
 
(ii)
if an Early Amortisation Event is subsisting, more frequently as Westpac (acting reasonably, having regard to the implications for the Seller and the Servicer) may from time to time require,
 
the Seller and the Servicer shall account to Westpac for Collections in respect of Purchased Receivables during the relevant Collection Period.  Collections in NZ Dollars shall be paid into the NZ Collection Account in NZ Dollars.  To the extent that Collections have been withdrawn from the Collection Account during the relevant Collection Period, the Seller undertakes to pay to Westpac on the Remittance Date, the amounts set out in clauses 4.1(c)(i) to clause 4.1(c)(vi) on the relevant Remittance Date that follows the Collection Period.
 
 
(b)
Collections shall be allocated rateably on each Remittance Date in the following proportions:
 
 
(i)
to Westpac, the Finance Charge Collections, for application in accordance with clause 4.1(c);
 
 
(ii)
to Westpac, the Purchased Interest of Principal Collections, at the opening of business on the relevant Remittance Date, for application in accordance with clause 4.1(c); and
 
 
(iii)
to the Seller, the Seller’s Interest of Principal Collections.
 
Westpac undertakes to the Seller to, at Westpac’s election:
 
 
(iv)
pay the Seller the amount required under clause 2.1(i)(i); or
 
 
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(v)
if Westpac does not pay that amount, allow the Servicer to retain (if the Servicer is the Seller or any Associate of the Seller) or to require the Servicer to pay to the Seller (if the Servicer is not the Seller or an Associate of the Seller) Collections equal to the amount allocated under clause 4.1(b)(iii), in satisfaction of Westpac’s liability to the Seller under clause 2.1(i)(i).
 
 
(c)
Westpac shall apply amounts received under paragraph (b)(i) and (b)(ii) in the following order:
 
 
(i)
first, if the Seller is not the Servicer and the Servicer Fee is payable, to the Servicer in an amount equal to the Servicer Fee;
 
 
(ii)
second, to Westpac in an amount equal to the relevant Retention Amount ;
 
 
(iii)
third, to Westpac in an amount equal to the Accrued Interest Cost (where Westpac has provided notice in writing to the Seller of the Accrued Interest Cost on or prior to the relevant Remittance Date, and otherwise, zero);
 
 
(iv)
fourth, to Westpac to pay any other costs, expenses, damages, claims or fees it incurs in servicing the Purchased Receivables (including the costs and fees of any replacement Servicer) which have been incurred under clauses 9.4 and 9.5;
 
 
(v)
fifth, to the Cash Reserve Bank Account in an amount so that the Cash Reserve is not less than the Cash Reserve Requirement;
 
 
(vi)
sixth:
 
 
(A)
if an Event of Default or Early Amortisation Event is subsisting, to Westpac to reduce Westpac's Investment; and otherwise
 
 
(B)
subject to reinvestment under clause 2.1(h) at the request of the Seller, to Westpac to reduce Westpac's Investment;
 
 
(vii)
seventh to the Seller as further payment of the purchase price.
 
4.2
Discharge
 
When the Servicer has received sufficient funds on behalf of Westpac to reduce Westpac's Investment to zero, and no other amounts are then due and payable to Westpac by the Seller, or (if the Servicer is the Seller or an Associate of the Seller) the Servicer, under any Transaction Document, Westpac undertakes to the Seller to:
 
 
(a)
pay the Seller the amount required under clause 2.1(i)(ii); or
 
 
(b)
if Westpac does not pay that amount, allow the Servicer to retain (if the Servicer is the Seller or an Associate of the Seller) or to require the Servicer to pay to the Seller (if the Servicer is not the Seller or an Associate of the Seller) any Collections remaining after application under clause 4.1(c)(vi), in satisfaction of Westpac’s liability to the Seller under clause 2.1(i)(ii).
 
4.3
Adjustments to Reserves
 
 
(a)
On each Purchase Date Westpac shall, without limiting or prejudicing its rights under this agreement, apply any amount standing to the credit of the Cash Reserve in or towards satisfaction of Receivable that has been an Overdue Receivable for more than 30 days and, in this event the Cash Reserve shall be reduced by the amount so applied.
 
 
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(b)
Upon the application of the Cash Reserve in or towards satisfaction of a Receivable under clause 4.3(a), Westpac agrees that its interest in that Receivable is extinguished.
 
 
(c)
On each Purchase Date Westpac shall, without limiting or prejudicing its rights under this agreement, apply any amount standing to the credit of the Credit Reserve in or towards satisfaction of Charge-Off Receivables and, in this event the Credit Reserve shall be reduced by the amount so applied.
 
 
(d)
The Seller acknowledges that Westpac is not required to release or reduce the Credit Reserve determined in relation to the Receivables referred to in a Sale Notice (the First Sale Notice ), except as referred to in clause 4.2.  Accordingly, the Credit Reserve referred to in the Sale Notice that is given next after the First Sale Notice will not be less than the greater of:
 
 
(i)
the Credit Reserve in the First Sale Notice less the aggregate Charge-Off Receivables applied to reduce that Credit Reserve; and
 
 
(ii)
the Credit Reserve that would otherwise be calculated for that Sale Notice under this agreement.
 
 
(e)
Upon the application of the Credit Reserve in or towards satisfaction of Charge-Off Receivables, Westpac may, at the request of the Seller, agree that its interests in those Charge-Off Receivables be extinguished.
 
4.4
Payments and Computations, etc.
 
 
(a)
The Seller and the Servicer shall make all payments to Westpac under a Transaction Document:
 
 
(i)
without set off or counterclaim and without deduction, except any compulsory deduction with respect to Taxation;  and
 
 
(ii)
by paying or depositing it in accordance with the terms of the relevant Transaction Document no later than 11.00 am (or such other time as the parties agree in writing) on the day when due in same day funds to such bank account in Australia, or in such other manner as Westpac may specify from time to time.
 
 
(b)
All computations of interest and any fees under each Transaction Document shall be made on the basis of a year of 365 days for the actual number of days (including the first day but excluding the last day) elapsed.
 
 
(c)
If any payment is due on a day which is not a Business Day, the due date will be the next Business Day in the same calendar month or, if none, the preceding Business Day.
 
4.5
Additional payments
 
Whenever the Seller or the Servicer is obliged to make a deduction in respect of Tax from any payment to Westpac under any Transaction Document:
 
 
(a)
it shall promptly pay the amount deducted to the appropriate Governmental Agency;
 
 
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(b)
within 30 days of the end of the month in which the deduction is made, it shall deliver to Westpac official receipts (or, if no official receipt issues at such time, promptly after issue of an official receipt) or other documentation acceptable to the relevant Indemnified Party evidencing payment of that amount; and
 
 
(c)
unless the Tax is a tax on overall net income, it shall pay Westpac on the due date of the payment any additional amounts necessary (as determined by Westpac) to ensure that Westpac receives when due a net amount (after payment of any Taxes (other than any tax on net income) in respect of those additional amounts) in the relevant currency equal to the full amount which it would have received had a deduction not been made.  It shall indemnify Westpac on demand against the Tax and any amounts recoverable from Westpac in respect of the Tax.
 
Each of the Seller and the Servicer waives any statutory right to recover from Westpac any amount paid under this clause.
 
The obligations of the Seller and the Servicer under this clause survive the repayment of Westpac's Investment and the termination of this agreement.
 
4.6
Reimbursement
 
 
(a)
Whenever:
 
 
(i)
the Seller or the Servicer pays any additional amount under clause 4.5 in respect of deducted Tax; and
 
 
(ii)
Westpac (acting reasonably) decides that it has received any clearly identifiable relief for the deducted Tax in computing its income Tax,
 
Westpac will promptly pay to the Seller or the Servicer (as the case may be) the amount of any consequent reduction in its income Tax, but only to the extent that it determines that a payment to the Seller or the Servicer (as the case may be) can be made without prejudice to the retention of the relief.
 
 
(b)
Nothing in paragraph (a) interferes with the right of Westpac to arrange its tax affairs in any manner it thinks fit.  In particular, Westpac need not claim any relief in respect of deducted Tax in priority to any other relief available to it.  Nor need it disclose to the Seller or the Servicer any information regarding its tax affairs or tax computations.
 
4.7
Treatment of Collections
 
So long as the Seller shall hold any Collections required to be paid to the Servicer or Westpac, it shall hold such Collections on behalf of, and for the account of, Westpac and shall clearly mark such records as agreed between Westpac and the Seller in writing to reflect such account.  However, unless and until the Seller or the Servicer receives a notice under clause 9.2(b), the Seller may commingle Collections with its other property without being in breach of its fiduciary obligations in respect of such Collections.
 
4.8
Settlement arrangements
 
 
(a)
Collections that would otherwise be payable to Westpac may be applied as payment for all or part of any Instalment for Receivables offered for sale under a Sale Notice that is payable by Westpac on the day the Collections are payable to Westpac, unless Westpac gives a notice to the Seller that Collections are not to be so applied.
 
 
(b)
If as a result of the application of paragraph (a) above, no cash consideration would be payable by Westpac to the Seller on the acceptance of the relevant Sale Notice, Westpac may accept the offer in that Sale Notice by paying $1 to the Seller by the Expiry Time.
 
 
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5.
Fees
 
5.1
Establishment Fee
 
The Seller shall to the extent it has not already done so pay to Westpac a one-off establishment fee.  The establishment fee shall be as set out in the Fee Letter and any unpaid arranger fee shall be payable on the date of this agreement.
 
If the facility is increased or varied at the request of the Seller, Westpac reserves the right to charge a further establishment or other fee in an amount determined by it (acting reasonably).
 
5.2
Commitment Fee
 
The Seller shall pay to Westpac a commitment fee in accordance with the Fee Letter.
 
5.3
Unused Limit Fee
 
The Seller shall pay to Westpac an unused limit fee in accordance with the Fee Letter.
 
5.4
Termination Payment
 
If the Seller wishes to terminate the Program before the Scheduled Termination Date, it can do so by payment of Westpac’s Investment and the Termination Payment.  The Termination Payment reflects the Commitment Fee expected to be paid to the Purchaser from the date the Program is terminated to the Scheduled Termination Date, if the Program had not been utilised and remained on foot.  The Termination Payment is set out in the Fee Letter.
 
5.5
Changes in law
 
When there is a change in law that will result in Program Costs, Westpac shall use reasonable efforts to mitigate the effect of such change in law, failing which Westpac and the Seller shall negotiate in good faith to avoid or reduce the effect of such change.  Subject to clause 5.6, if that also fails the Seller shall from time to time pay to Westpac upon demand such amounts as necessary to compensate Westpac for such Program Costs on and from the date that they are incurred or suffered.  If the Seller requires these costs to be verified by an independent accounting firm, they shall only be payable to the extent they are so verified.
 
The Seller's obligations under this clause survive the termination of this agreement and any Future Agreement.
 
5.6
Right to Terminate
 
The Seller may terminate the Program without any penalties applying if Program Costs are incurred and all reasonable endeavours to restructure the Program and this agreement have been exhausted which result in a cost to the Seller which is worse than can be achieved elsewhere in the market for the Program.
 
 
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5.7
Program Costs
 
Westpac agrees to notify the Seller promptly upon becoming aware of Program Costs.
 
5.8
Prepayment Amount
 
Subject to clause 5.6, if the RPA Commitment is terminated by the Seller under clause 2.8, then on the Commitment Termination Date, the Seller will pay the Prepayment Amount to Westpac.
 
5.9
Authorisation
 
The Seller authorises Westpac to debit the Nominated Account on the final day of each calendar month, or more frequently at Westpac's discretion, for each amount payable by the Seller to Westpac under this Agreement.
 
6.
Conditions precedent
 
6.1
Conditions precedent to first Sale Notice
 
The right of the Seller to give the first Sale Notice shall be subject to Westpac having received in form and substance satisfactory to it on or before the date such Sale Notice is given:
 
 
(a)
( verification certificate )  a certificate in relation to each of the Seller and the Servicer given by a director of the Seller and the Servicer respectively substantially in the form of Annexure B with the attachments referred to and dated on the date such Sale Notice is given;
 
 
(b)
( documents )  duly executed counterparts of each Transaction Document together with a cheque for all relevant stamp duty payable in connection with these documents;
 
 
(c)
(C redit and Collection Policy )  a copy of the Credit and Collection Policy of each Originator initialled by the Seller;
 
 
(d)
( Westpac's lawyers' opinions )  an opinion of Australian legal advisers to Westpac;
 
 
(e)
( Deed of release ) evidence satisfactory to Westpac (acting reasonably) that each Chargee has released any claim it may have to any Purchased Receivables originated by the Seller and each Approved Originator and Collections derived from such Purchased Receivables, except in relation to:
 
 
(i)
the Seller's Interest; or
 
 
(ii)
a Supplier's Security Interest;
 
 
(f)
( Power of Attorney ):
 
each Australian Approved Originator has provided to Westpac a power of attorney in a form consistent with clause 12.2; and
 
 
(g)
( Sale to Seller ) evidence that the relevant Approved Originators have equitably assigned to the Seller the Receivables originated by them.
 
 
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(h)
( Pro form settlement statements )  a pro form settlement statement in respect of the proposed initial Purchase;
 
 
(i)
( Accountant's report )  a report from the Seller's auditor on the Seller's records and systems relating to the Receivables;
 
 
(j)
( Cash Reserve )  evidence that the amount in the Cash Reserve is not less than the Cash Reserve Requirement; and
 
 
(k)
( Financial confirmations ):
 
 
(i)
confirmation from Moneytech Limited's legal counsel that the holders of the convertible notes issued by Moneytech Pty Limited have no rights to accelerate the repayment of the convertible notes; and
 
 
(ii)
confirmation from each preference shareholder of Moneytech Limited ( PSH ) to Moneytech Limited that either:
 
 
(A)
the PSH expects to rollover their preference shares for a further period which extends beyond the Scheduled Commitment Termination Date;
 
 
(B)
the PSH will use the proceeds of all its maturing preference shares to subscribe for convertible notes issued by Moneytech Limited; or
 
 
(C)
the PSH will redeem its preference shares for cash and Moneytech has arranged for its convertible notes to be issued to that PSH in an amount equal to the redemption amount.
 
6.2
Further conditions precedent
 
The rights of the Seller to give a Further Sale Notice or withdraw a Further Instalment and the obligations of Westpac to pay an Instalment shall be subject to the further conditions precedent that:
 
 
(a)
on the date of giving the Further Sale Notice or the date of payment of the Instalment or withdrawal of the Further Instalment the following statements shall be true (and the Seller shall, by virtue of giving the Sale Notice, or receiving the Instalment or Further Instalment, be deemed to have certified that):
 
 
(i)
( representations true ):
 
 
(A)
the representations and warranties in clause 7.1 in respect of the Seller and, where the Servicer is the Seller or an Associate of the Seller, the Servicer are, to the best of the Seller's and Servicer's knowledge and belief, true as of such day as though they had been made at that date in respect of the facts and circumstances then subsisting; or
 
 
(B)
the representations and warranties in clause 7.1 in respect of the Servicer, where the Servicer is not the Seller or an Associate of the Seller, are to the best of the Servicer’s knowledge and belief true as of such day as though they had been made at that date in respect of the facts and circumstances then subsisting;
 
 
(ii)
( no default )  no event has occurred and is subsisting or would result from such increase, addition, removal or remittance, that constitutes an Early Amortisation Event or Potential Early Amortisation Event;
 
 
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(iii)
( limits )  after making the Instalment:
 
 
(A)
clause 2.2 will not be breached; and
 
 
(B)
the Net Pool Balance shall equal or exceed the sum of Westpac's Investment and the Required Reserves; and
 
 
(iv)
( Insurance Policy ) the Insurance Policy is current; and
 
 
(b)
on or before the date of that Further Sale Notice or the payment of the Instalment, Westpac has received in form and substance to the satisfaction of it:
 
 
(i)
( Determination Date Statement ) a Determination Date Statement as of the most recent Determination Date; and
 
 
(ii)
( release )  to the extent necessary, the release from any Security Interest of the Receivables other than:
 
 
(A)
a Permitted Security Interest (if any); or
 
 
(B)
a Supplier's Security Interest.
 
6.3
Additional conditions precedent in respect of NZ Approved Originators
 
Notwithstanding the prior provisions of this clause 6, the right of the Seller to give the first Sale Notice in respect of any NZ Receivables is subject to satisfaction of such conditions precedent as Westpac may in its discretion specify (including without limitation any amendment to the provisions of this agreement and the delivery of a Directors Certificate in the form of Annexure D).
 
7.
Representations and Warranties
 
7.1
Representations and warranties by Seller and Servicer
 
Each of the Seller and the Servicer makes the following representations and warranties:
 
 
(a)
( Status ) It is a corporation validly existing under the laws of the place of its incorporation specified in this agreement.
 
 
(b)
( Power ) It has the power to enter into and perform its obligations under the Transaction Documents to which it is expressed to be a party, to carry out the transactions contemplated by those documents, and to carry on its business substantially as now conducted or contemplated.
 
 
(c)
( Corporate authorisations ) It has taken all necessary corporate action to authorise the entry into and performance of the Transaction Documents to which it is expressed to be a party and to carry out the transactions contemplated by those documents.
 
 
(d)
( Documents binding ) Each Transaction Document to which it is expressed to be a party is its valid and binding and enforceable obligation in accordance with its terms, subject to any necessary stamping and registration and subject to laws affecting creditors' rights and to general principles of equity.
 
 
(e)
( Transactions permitted ) The execution and performance by it of the Transaction Documents to which it is expressed to be a party and each transaction contemplated under those documents did not and will not (as applicable) violate in any respect a provision of:
 
 
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(i)
a law or treaty or a judgment, ruling, order or decree of a Governmental Agency binding on it;
 
 
(ii)
any constitution or other constituent documents of it; or
 
 
(iii)
any other document or agreement which is binding on it where such breach is reasonably likely to have a Material Adverse Effect,
 
and, except as provided or permitted by the Transaction Documents, did not and will not (as applicable):
 
 
(iv)
create or impose a Security Interest on any of the Receivables contemplated in any Future Agreement other than a Permitted Security Interest (if any); or
 
 
(v)
allow a person to accelerate or cancel an obligation with respect to any material Financial Indebtedness provided to the Seller or Servicer (for so long as the Servicer is the Seller or an Associate of the Seller) or constitute an event of default, cancellation event, prepayment event or similar event (whatever called) under an agreement relating to such Financial Indebtedness, whether immediately or after notice or lapse of time or both.
 
 
(f)
( Accounts ):
 
 
(i)
The most recent consolidated Accounts of the Group give a true and fair view of the matters with which they deal.
 
 
(ii)
There has been no subsequent change in the Group's state of affairs since that date which is reasonably likely to have a Material Adverse Effect or materially adversely affect the collectability of the Purchased Receivables.
 
 
(iii)
Those consolidated accounts comply:
 
 
(A)
with current accounting practices applied in the applicable jurisdictions, except to the extent disclosed in them; and
 
 
(B)
with all applicable laws.
 
 
(g)
( No litigation ) Other than as disclosed in writing to Westpac prior to the date of this agreement, no litigation, arbitration, Tax claim, dispute or administrative or other proceeding is current or pending or, to its knowledge, threatened, which is reasonably likely to have a Material Adverse Effect.
 
 
(h)
( No default )
 
 
(i)
It is not and none of the Approved Originators are in default under a document or agreement (including an Authorisation) binding on it or its assets which relates to Financial Indebtedness and which may have a Material Adverse Effect.
 
 
(ii)
Nothing has occurred which constitutes an Early Amortisation Event, cancellation event, prepayment event or similar event (whatever called) under any Future Agreement or any other material agreements, whether immediately or after notice or lapse of time or both where in any such case the default would have a Material Adverse Effect.
 
 
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(i)
( Authorisations )  Each Authorisation which is required in relation to:
 
 
(i)
the execution, delivery and performance by it of the Transaction Documents to which it is expressed to be a party and the transactions contemplated by those documents;
 
 
(ii)
the validity and enforceability of the Transaction Documents to which it is expressed to be a party; and
 
 
(iii)
the perfection of the interest of Westpac in the Purchased Receivables (not including such Authorisations, (if any) pertaining solely to acts of Westpac),
 
has been obtained or effected.  Each is in full force and effect.  It is not in breach of any of them where such breach has or is reasonably likely to have a Material Adverse Effect.  It has paid all applicable fees for each of them.
 
 
(j)
( Filings ) It has filed all necessary returns and holds all appropriate licences and possesses the necessary skill, judgement and ability to carry out its obligations under the Transaction Documents.
 
 
(k)
( No misrepresentation ) All information provided by it to Westpac is true in all material respects at the date of this agreement or, if later, when provided.  Neither that information nor its conduct and the conduct of anyone on its behalf in relation to the transactions contemplated by Transaction Documents, was or is misleading, by omission or otherwise, in any material respect.
 
 
(l)
( Agreements disclosed ) Each document or agreement which is material to the Transaction Documents or Contract in relation to a Purchased Receivable or which has the effect of varying a Transaction Document or Contract in relation to a Purchased Receivable, has been disclosed to Westpac in writing.
 
 
(m)
( Copies of documents ) All copies of documents (including its latest audited accounts and all Authorisations) given by it or on its behalf to Westpac are true and complete copies.
 
 
(n)
( Law ) It and each Approved Originator has complied in all material respects with all laws binding on it where breach has or is reasonably likely to have a Material Adverse Effect.
 
 
(o)
( Trust ) It does not hold any assets as the trustee of any trust, other than under a Future Agreement.
 
 
(p)
( Solvency ) It, and each Approved Originator, is not insolvent.
 
 
(q)
( Taxes ) It, and each Approved Originator, has paid all Taxes payable by it when due other than, Taxes for which it has set aside sufficient reserves and which are being contested in good faith.
 
 
(r)
( Valid Sale ) Each Purchase will constitute a valid sale, by way of equitable assignment of the Offered Receivables to Westpac, enforceable against creditors of, and purchasers from, the Seller (subject to the rule in Dearle v Hall ) but subject to the rights of any creditor of or to an NZ Approved Originator or the Seller to the extent of each relevant Supplier's Security Interest (if any).
 
 
(s)
( Quality of Title ):
 
 
(i)
Each Offered Receivable which was originated by the Seller is owned by the Seller and each Offered Receivable which was originated by an Approved Originator is beneficially owned by the Seller, free and clear of any Security Interest (other than any Supplier's Security Interest or any Security Interest arising solely as the result of any action taken by Westpac including, for the avoidance of doubt, a Permitted Security Interest (if any)).
 
 
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(ii)
If Westpac makes a Purchase it shall have acquired and shall continue (subject to any action taken by Westpac not contemplated by this agreement) to have maintained an equitable interest in each Purchased Receivable and in respect of each Collection related to that Purchased Receivable (in each case subject to the rule in Dearle v Hall ), free and clear of any Security Interest (other than any Supplier's Security Interest or any Security Interest arising solely as the result of any action taken by Westpac, including, for the avoidance of doubt, a Permitted Security Interest (if any)).
 
 
(iii)
Each Obligor is a Program Member, and satisfies the eligibility criteria of the Program to be and remain a Program Member.
 
 
(t)
( Accurate Reports ) To the best of its knowledge and belief (after reasonable investigation) no Determination Date Statement (if prepared by the Seller, or to the extent information contained in that Determination Date Statement was supplied by the Seller), information, exhibit, financial statement, document, book, record or report furnished or to be furnished by the Seller or the Servicer to Westpac in connection with a Transaction Document is inaccurate in any material respect as of the date it is dated or (except as otherwise disclosed to Westpac at that time) as of the date so furnished, or contains any material misstatement of fact or omission or omits to state a material fact or any fact necessary to make the statements contained therein not materially misleading as of the date it is dated or (except as otherwise disclosed to Westpac at that time) as of the date so furnished.
 
 
(u)
( Eligible Receivables ) Each Receivable was an Eligible Receivable on the date it was offered for sale and on the date it was Purchased, and on the date the first Instalment was paid in relation to that Receivable.
 
 
(v)
( Servicing Programs ) Any and all systems, computer programs, hardware and software used by the Seller, or any agent or subcontractor of the Seller, in the servicing of the Receivables are owned leased or licensed by it, or, as the case may be, by the relevant agent or subcontractor.
 
 
(w)
( No Security Interests ) The Seller, or the relevant Approved Originator, created or acquired title to the Receivables in good faith, without notice of any adverse claim other than any relevant Supplier's Security Interest.
 
 
(x)
( No Fraudulent Conveyance ) No circumstances exist by reason of which any transfer of any Offered Receivables or Receivables from the Approved Originators to the Seller or from the Seller to Westpac would be held by a court of competent jurisdiction to constitute under value transfers or otherwise as preferential, fraudulent or uncommercial transactions.
 
 
(y)
( Not Assets of the Seller ) It intends that no Purchased Receivable will be considered by it to be an asset beneficially owned by the Seller or an Approved Originator in the event of any receivership or liquidation proceedings against it under applicable law.
 
 
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(z)
( No Obligor Default ) To the best of the knowledge and belief of the Seller (after due enquiry from the Approved Originators):
 
 
(i)
no Obligor is in default with respect to its obligations under any Receivable at the date of this agreement; and
 
 
(ii)
no moneys are at the date of this agreement due but unpaid with respect to any Receivable to the extent that that default or non payment would have a material impact on the value of the aggregate Credit Reserve to Westpac.
 
 
(aa)
( Entire documents ) Each Contract in relation to a Receivable contains all of the terms of the arrangements between the Seller, or the relevant Approved Originator, and the Obligor in respect of matters covered by those documents and there are no other documents or agreements which have the effect of varying or discharging any of those documents.  Those documents constitute all the documents necessary to enforce the provisions of, and the security created by, the Contract.
 
 
(bb)
( Credit and Collection Policy ) It and the relevant Approved Originator has complied with and will comply in all material respects with the Credit and Collection Policy in respect of Offered Receivables and Purchased Receivables.
 
 
(cc)
( Approved Originator ) Each Approved Originator:
 
 
(i)
is a Related Corporation of the Seller, who originates the invoices in its ordinary course of business;
 
 
(ii)
has offered for sale its beneficial interest in all Receivables it has originated to the Seller for the purposes of the offer that may be made by the a Seller under a Sale Notice; and
 
 
(iii)
has provided Westpac with a power of attorney to effect the legal sale of the Purchased Receivables in a form consistent with clause 12.
 
 
(dd)
( Power of attorney ) Each:
 
 
(i)
Australian Approved Originator has provided Westpac with a power of attorney to effect the legal sale of the Purchased Receivables in a form consistent with clause 12; and
 
 
(ii)
NZ Approved Originator has provided the Seller with a power of attorney to effect the legal sale of the Purchased Receivables in the form attached as Annexure F.
 
 
(ee)
( Knowledge ) It is not aware of any facts which may have or would be reasonably likely to have a Material Adverse Effect on its ability to perform its obligations under the Transaction Documents or a Contract in relation to a Purchased Receivable.
 
 
(ff)
( Change in Collection Account ) It will notify Westpac of any proposed change in a Collection Account and request Westpac to approve any such proposed change.
 
 
(gg)
( Location of documents )  The material documents relating to the Receivables are located at the registered office of the Seller.
 
 
(hh)
( Insurance Policy )  An insurance policy is in force in respect of each Contract in a form and substance satisfactory to Westpac (acting reasonably).
 
 
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(ii)
( Security disclosure ) it will disclose to Westpac any actual, threatened or potential breach of security relevant to the Platform of which it is aware;
 
 
(jj)
( Annexure H compliance ) it will ensure that it will comply at all times with these terms and conditions of use contained in Annexure H; and
 
 
(kk)
( Platform disclosure ) it will not misuse, or permit any other persons to misuse, the Platform.
 
7.2
Representations and warranties by Westpac
 
Westpac makes the following representations and warranties:
 
 
(a)
( Status ) It is a corporation validly existing under the laws of the place of its incorporation specified in this agreement.
 
 
(b)
( Power ) It has the power to enter into and perform its obligations under the Transaction Documents to which it is expressed to be a party, to carry out the transactions contemplated by those documents, and to carry on its business substantially as now conducted or contemplated.
 
 
(c)
( Corporate authorisations ) It has taken all necessary corporate action to authorise the entry into and performance of the Transaction Documents to which it is expressed to be a party and to carry out the transactions contemplated by those documents.
 
 
(d)
( Documents binding ) Each Transaction Document to which it is expressed to be a party is its valid and binding and enforceable obligation in accordance with its terms, subject to any necessary stamping and registration and subject to laws affecting creditors' rights and to general principles of equity.
 
 
(e)
( Transactions permitted ) The execution and performance by it of the Transaction Documents to which it is expressed to be a party and each transaction contemplated under those documents did not and will not (as applicable) violate in any respect a provision of:
 
 
(i)
a law or treaty or a judgment, ruling, order or decree of a Governmental Agency binding on it;
 
 
(ii)
any constitution or other constituent documents of it; or
 
 
(iii)
any other document or agreement which is binding on it where such breach is reasonably likely to have a Material Adverse Effect.
 
 
(f)
( Authorisations )  Each Authorisation which is required in relation to:
 
 
(i)
the execution, delivery and performance by it of the Transaction Documents to which it is expressed to be a party and the transactions contemplated by those documents; and
 
 
(ii)
the validity and enforceability of the Transaction Documents to which it is expressed to be a party,
 
has been obtained or effected.  Each is in full force and effect.
 
 
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7.3
General representations and warranties
 
The Seller represents and warrants in relation to the NZ Receivables that the Credit and Collection Policy of the NZ Approved Originator, together with each Contract in respect of those NZ Receivables, contains all the contractual arrangements between the NZ Approved Originator and the relevant Obligor concerning the goods sold in accordance with the Credit and Collection Policy and the subject of the relevant Contract between the NZ Approved Originator and the relevant Obligor.
 
7.4
Reliance on representations and warranties
 
Each of the Seller and the Servicer acknowledges that Westpac has entered into this agreement, and may accept an offer in any Sale Notice in accordance with clause 2.1 and, if an offer is accepted, will make each Instalment and Further Instalment in reliance on the representations and warranties in clauses 7.1 and 7.3.  Westpac acknowledges that the Seller and the Servicer has entered into this agreement in reliance on the representations in clause 7.2.
 
7.5
Repetition of representations and warranties
 
The representations and warranties made in clauses 7.1 , 7.2 and 7.3 will be deemed to be repeated with reference to the facts and circumstances then subsisting on each day on which Westpac's Investment is greater than $0.
 
8.
Undertakings
 
8.1
Seller and Servicer undertakings
 
Each of the Seller and the Servicer undertakes to each Indemnified Party as follows unless Westpac otherwise consents.
 
 
(a)
( Corporate reporting and information )  It will provide Westpac with:
 
 
(i)
( annual accounts ) as soon as practicable after the close of each of its financial years copies of the Group's consolidated Accounts in respect of that financial year;
 
 
(ii)
( half-yearly reports ) as soon as practicable after each half-year of its financial year, copies of the Group's consolidated management Accounts in respect of that half-year and for the financial year to date.
 
 
(iii)
( monthly Determination Date Statement reporting ) a Determination Date Statement for the preceding month as at the Determination Date for that preceding month and an Accounts Receivable Trial Balance for the preceding month on a date in each month agreed between the Seller and Westpac;
 
 
(iv)
( Governmental Agency ) promptly, any notice, order or material correspondence from or with a Governmental Agency relating to the Receivables which is reasonably likely to have a Material Adverse Effect;
 
 
(v)
( Security Interests )  promptly, notice in reasonable detail of any Security Interest (other than a Permitted Security Interest) asserted against any of the Purchased Receivables;
 
 
(vi)
( Certificate of Currency of Insurance Policy and renewal ) promptly, a copy of each renewal of the Insurance Policy for the benefit of the Seller and Westpac.
 
 
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(vii)
( other information ) as soon as practicable, but in any event within 5 Business Days (subject to the Seller reasonably complying with any confidentiality obligations by which it is bound and for so long as it is bound, including those imposed by the rules of the ASX), any other information, documents, records or reports relating to the Purchased Receivables or the conditions or operations, financial or otherwise, of the Seller as Westpac may from time to time reasonably request in order to protect its interests under any Transaction Document, to allow Westpac to facilitate its tasks in respect of:
 
 
(A)
Collections from Obligors; or
 
 
(B)
co-ordination of the preparation of statements to be sent to each Obligor; and
 
 
(viii)
( Program Members ) the list of Program Members at that time, promptly upon request.
 
 
(b)
( Transaction Documents ) It will promptly provide to Westpac, details of any proposed material variation of the Transaction Documents or of any actual or proposed termination of the Transaction Documents.
 
 
(c)
( Accounting principles ) It will ensure that each balance sheet and account provided under paragraph (a):
 
 
(i)
comply with current accounting principles in Australia applied except to the extent disclosed in them and with all applicable laws; and
 
 
(ii)
gives a true and fair view of the matters with which they deal.
 
 
(d)
( Authorisations )  It will ensure that each Authorisation required for:
 
 
(i)
the execution, delivery and performance by it of the Transaction Documents to which it is expressed to be a party and the transactions contemplated by those documents;
 
 
(ii)
the validity and enforceability of those documents; and
 
 
(iii)
the carrying on by it and each of the Approved Originators of a material part of its and their business substantially as now conducted or contemplated where failure to do so is reasonably likely to have a Material Adverse Effect,
 
 
is obtained and promptly renewed and maintained in full force and effect.  It will pay all applicable fees for them.  It will provide copies of the Authorisations referable to sub-paragraphs (i) and (ii) promptly to Westpac when they are obtained or renewed and in the case of an Authorisation referable to sub-paragraph (iii) after request from Westpac promptly when they are obtained or renewed.
 
 
(e)
( Notice to Westpac ) It will notify Westpac as soon as it becomes aware of:
 
 
(i)
any Early Amortisation Event or Potential Early Amortisation Event or Event of Default;
 
 
(ii)
the provider of the Insurance Policy not being an Eligible Insurer;
 
 
(iii)
any proposal by a Governmental Agency to acquire compulsorily the whole or a substantial part of its or any of the Approved Originator's assets or business;
 
 
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(iv)
any substantial dispute between it or any of the Approved Originators and a Governmental Agency;
 
 
(v)
any change in its Authorised Officers, giving specimen signatures of any new Authorised Officer appointed, and, where reasonably requested by Westpac, evidence satisfactory to Westpac (acting reasonably) of the authority of any Authorised Officer;
 
 
(vi)
any impending change in the regulation of the business of the Seller by any Governmental Agency of which it is aware and where that change would reasonably be expected to have a Material Adverse Effect or is reasonably likely to impair the ability of the Seller, the Servicer or Westpac to recover any amount under a Purchased Receivable;
 
 
(vii)
any notice or other document which materially affects the collectability of any Purchased Receivable or aggregate Purchased Receivables due by an Obligor with an unpaid balance in excess of $100,000, and will promptly provide a copy of each such document to Westpac; and
 
 
(viii)
any other occurrence that could have a Material Adverse Effect.
 
 
(f)
( Disposal of assets ) It will not sell or otherwise dispose of, part with possession of, or create an interest in:
 
 
(i)
any Purchased Receivable or related Contract;
 
 
(ii)
any Collection Account to which any Collections of any Purchased Receivables are deposited; or
 
 
(iii)
either:
 
 
(A)
all of its assets; or
 
 
(B)
a part of its assets, where to do so has or is reasonably likely to have a Material Adverse Effect,
 
 
or agree or attempt to do so (whether in one or more related or unrelated transactions) except as contemplated by any Transaction Document, provided that nothing in this clause 8.1(f) does, or will, apply to any security interest in or to any of the above to the extent that that security interest arises in or to any of the above by virtue of it or their comprising or including a Supplier's Security Interest.
 
 
(g)
( Negative pledge )  It will not create or allow to exist a Security Interest over any Receivable other than the Charge or a Permitted Security Interest or lien arising by operation of law in the ordinary course of day-to-day trading and not securing Financial Indebtedness where it duly pays (or contests in good faith and has made provisions for the amount demanded) the indebtedness secured by that lien.
 
 
(h)
( Corporate existence ) It will do everything necessary to maintain its corporate existence in good standing.  It will not transfer its jurisdiction of incorporation or enter any merger or consolidation.
 
 
(i)
( Compliance with law ) It will comply fully in all material respects with all laws binding on it where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
 
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(j)
( Partnership and joint ventures )  It will not enter after the date of this agreement into a partnership or joint venture with another person.
 
 
(k)
( Pay Taxes ) It will pay all Taxes payable by it when due, but:
 
 
(i)
it need not pay Taxes for which it has set aside sufficient reserves and which are being contested in good faith, except where failure to pay those Taxes is reasonably likely to have a Material Adverse Effect; and
 
 
(ii)
to the extent liable, it will pay those Taxes on the final determination or settlement of the contest.
 
 
(l)
( Compliance and enforcement of Transaction Documents ) It will:
 
 
(i)
comply fully with its obligations under the Transaction Documents or a Contract in respect of a Purchased Receivable;
 
 
(ii)
enforce each Transaction Document or a Contract in respect of a Purchased Receivable to which it is a party and exercise its rights, authorities and discretions under those documents prudently and vigorously in order to avoid a Material Adverse Effect; and
 
 
(iii)
use its best endeavours to keep Transaction Documents or a Contract in respect of a Purchased Receivables valid and enforceable,
 
where a failure to take such action would be reasonably likely to have a Material Adverse Effect.
 
 
(m)
( Variation of Transaction Documents )  It will not do any thing which has the effect of:
 
 
(i)
amending or varying, or consenting to any amendment or variation of;
 
 
(ii)
avoiding, releasing, surrendering, terminating, rescinding, discharging (other than by performance) or accept the repudiation of;
 
 
(iii)
expressly or implicitly waiving, or extending or grating any time or indulgence in respect of, any provision of or obligation under; or
 
 
(iv)
do or permit anything which would enable or give grounds to another party to do anything referred to in sub-paragraphs (i), (ii) or (iii) in relation to,
 
a Transaction Document or a Contract in respect of a Purchased Receivable where such action would be likely to have a Material Adverse Effect.
 
 
(n)
( Commercial dealings )  It will not deal in any way with any person who is not an Approved Originator except at arm's length in the ordinary course of business for valuable commercial consideration provided that, to the extent this undertaking relates to the conduct of its Subsidiary (which is not itself an Approved Originator), it shall only apply to material dealings of that Subsidiary.
 
 
(o)
( Change of business or Credit and Collection Policy )
 
 
(i)
It will not cease or materially change its business carried on in connection with any Purchased Receivable or make any material change in the Credit and Collection Policy, or its policy in respect of writing off amounts owing under Purchased Receivables, that would adversely impact the recoverability or adversely affect the collectability of the Purchased Receivables without the consent of Westpac (acting reasonably).
 
 
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(ii)
It will not take action whether by acquisition or otherwise which alone or in aggregate would materially alter the nature of its business taken as a whole that would adversely impact the recoverability or adversely affect the collectability of the Purchased Receivables without the consent of Westpac (acting reasonably).
 
 
(iii)
It will not dissolve, liquidate, consolidate with or merge with, or otherwise acquire all or any substantial portion of the ownership interest, assets, or properties of any corporation, partnership, limited liability company or other entity if to do so has or is reasonably likely to have a Material Adverse Effect without the prior written consent of Westpac (acting reasonably).
 
 
(p)
( Take proceedings )  It will take or defend all legal proceedings which are necessary or which Westpac reasonably requires to protect or recover any right, title or interest in, to, under or derived from the Purchased Receivables.
 
 
(q)
( Nothing prejudicial )  It will not do or omit to do anything which would be reasonably likely to render the rights of Westpac in the Purchased Receivables liable to forfeiture, cancellation, avoidance or loss or would be reasonably likely otherwise to prejudicially affect the rights of Westpac in the Purchased Receivables or the value of the Purchased Receivables.
 
 
(r)
( Notices ) It will promptly deliver to Westpac copies of all notices and other documents received by it in its capacity as a party to the Purchased Receivables or the Insurance Policy or relating in any way to the Purchased Receivables which adversely affect the collectability of any of the Receivables.
 
 
(s)
( Records )  It will, at its own cost and expense retain:
 
 
(i)
the ledger and documentation relating to it as a master record of the Receivables; and
 
 
(ii)
copies of all documents relating to each Purchased Receivable as custodian for Westpac.
 
 
(t)
( Amending Receivables ):
 
 
(i)
It will not:
 
 
(A)
release, discharge, rescind or cancel;
 
 
(B)
grant any waiver or modify;
 
 
(C)
extend any term or provision of,
 
any Purchased Receivable or any Contract in respect of a Purchased Receivable without the prior written consent of Westpac (which must not be unreasonably withheld or delayed), except in the ordinary course of business and consistent with the provisions of the Credit and Collection Policy.
 
 
(ii)
It will not consent to the creation of any Security Interest over any Purchased Receivable without the prior written consent of Westpac other than a Permitted Security Interest.
 
 
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(u)
( Administrative procedures ) It will maintain administrative and operating procedures (including an ability to recreate records evidencing the Purchased Receivables in the event of the destruction of the originals) and keep and maintain all documents, books, records and other information reasonably necessary or customary for the collection of all Receivables (including records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Purchased Receivable).
 
 
(v)
( Inspection )  At any other time and from time to time during Business Hours, it will permit Westpac, or its agents or representatives, upon two Business Day's notice:
 
 
(i)
to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of the Seller relating to the Receivables including, without limitation, the related Contracts and other agreements; and
 
 
(ii)
to visit the offices and properties of the Seller for the purpose of examining such materials described in paragraph (i) above, and to discuss matters relating to the Purchased Receivables or the Seller's or the Servicer's performance under each Future Agreement with any of the officers or employees of the Seller or the Servicer having knowledge of such matters.
 
 
(w)
( Performance and Compliance with Receivables and Contracts ) At its expense, it will timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under or in connection with the Purchased Receivables and the related Contracts and other agreements related to such Purchased Receivables and shall comply in all material respects with all of the provisions of the Credit and Collection Policy.
 
 
(x)
( Collections ) If an Early Amortisation Event is subsisting and on demand by Westpac it will immediately instruct all Obligors to cause all Collections of Purchased Receivables to be deposited directly into the relevant Collection Account or to the extent that the Seller or Servicer receives any Collections it shall deposit them in the relevant Collection Account within 1 Business Day of receipt.
 
Otherwise, it shall ensure that its records and accounts are such that it will always be possible to determine what Collections it has received, and, subject to clause 3.1, it shall hold the Collections to which Westpac is or may become entitled on behalf of and for the account of Westpac.
 
 
(y)
( Change in Payment Instructions to Obligors ) It will not make any change in its instructions to Obligors regarding payments to be made to the account referred to in paragraph (x), unless Westpac has approved such change.
 
 
(z)
( Audits ):
 
On 14 days written notice from Westpac, it shall permit Westpac and its officers and agents and representatives (at Westpac’s expense) to audit its records and systems in such reasonable detail that Westpac may establish whether or not the Seller is complying with its obligations under any Transaction Document. It will provide timely access to all information reasonably requested in connection with such inspection.
 
 
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(aa)
( Incorrect or misleading information ) It will notify Westpac as soon as reasonably practicable if it becomes aware that any information provided to Westpac or any representation made to Westpac has become incorrect or misleading in any material respect.
 
 
(bb)
( Purchased Interest ) The Purchased Interest will not be greater than 100%.
 
 
(cc)
( Financial Undertaking ) Unless Westpac otherwise gives its consent, it will ensure that at all times that the Tangible Net Worth (treating all redeemable preference shares and convertible notes as equity) of the Moneytech Group will not be less than A$2 million on each 30 June and 31 December.
 
 
(dd)
( Cash Reserve ) It will ensure that at all times the Cash Reserve is not less than the Cash Reserve Requirement.
 
 
(ee)
( Reconciliation)   For so long as the Platform is online and operating properly, it will ensure that a daily reconciliation of the [Accounts Receivable Trial Balance] and the Presentment and Payment Website is completed in relation to all Receivables and the payment schedule of minimum Amounts Due.
 
 
(ff)
( Insurance Policy )  It will ensure that the Insurance Policy always has a term that expires at least 5 months after the Scheduled Commitment Termination Date.
 
 
(gg)
( Concentration )  It will ensure that, at all times, the number of Obligors with credit limits as set out below, as a percentage of the number of Obligors in the Program, do not exceed the limits below:
 
  (i) Up to $50,000     Unlimited
 
  (ii) between $50,001 and $100,000          15%
 
  (iii) between $100,001 and $250,000           2%
 
  (iv) above $250,000   0 %
 
9.
Administration, Servicing and collection
 
9.1
Appointment
 
 
(a)
Subject to clause 9.3, the Seller appoints the Servicer as its agent to enforce its rights and interests in and under the Purchased Receivables and the Contracts with all powers expressly delegated to it by this agreement together with all other powers reasonably incidental to those powers.  The Servicer accepts such appointment, and agrees to service the Purchased Receivables in an efficient and business like manner and in accordance with sound business practices.
 
 
(b)
The Servicer may subcontract with any other person for servicing, administering or collecting the Purchased Receivables, provided that in the case where such subcontracting may materially affect the collectability of any Receivable the Servicer shall first obtain the prior consent of Westpac which shall not to be unreasonably withheld or delayed. The Servicer shall remain liable for the performance of those duties and obligations.
 
 
(c)
The Servicer's appointment under this agreement will terminate on the date after the Commitment Termination Date when Westpac's Investment is zero and all other amounts owed by the Seller to Westpac under the Transaction Documents have been fully and finally paid and all amounts payable to the Seller under clause 2.1(i) have been fully and finally paid or when the Servicer is replaced under clause 9.3.
 
 
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9.2
Duties of the Servicer
 
 
(a)
( Collection of Receivables ) The Servicer shall take or cause to be taken all such actions to service, administer and collect each Purchased Receivable from time to time in accordance with the Credit and Collection Policy, applicable laws, rules and regulations and otherwise, with reasonable care and diligence.  The Servicer will obtain the prior consent of Westpac prior to making any material amendment to the Credit and Collection Procedures.
 
 
(b)
( Deposit Collections ) If an Early Amortisation Event is subsisting, upon the request of Westpac, the Servicer shall on each day Collections are made or deemed to be made ensure that these are paid into a bank account specified by Westpac from time to time.
 
 
(c)
( Hold Collections ) The Servicer shall hold all Collections to which Westpac is or may become entitled which are unbanked cheques for the benefit of Westpac, and for Westpac’s account.
 
 
(d)
( Servicer's Records ) The Servicer shall ensure its records and accounts are such that it will always be able to determine what Collections it has received and in respect of which Purchased Receivables.
 
 
(e)
( Documents and Records )  If the Servicer is the Seller or an Associate of the Seller, Westpac authorises the Servicer to, without limiting its obligations under this clause 9.2(e) to Westpac, use and make copies of all such documents, computer tapes, disks and Related Agreements in the ordinary course of the Servicer’s and its Associate’s businesses and for all other purposes necessary for or ancillary to the performance of its obligations under this agreement.  This clause 9.2(e) survives termination of this agreement.
 
 
(f)
( Servicing expenses )  The Servicer (for so long as the Servicer is the Seller) will pay all legal expenses incurred by the Servicer relating to the enforcement and recovery of Overdue Receivables.
 
9.3
Replacement of the Servicer
 
 
(a)
If a Servicer Transfer Event is subsisting, Westpac may remove the Servicer from office by giving the Servicer a Successor Notice.
 
 
(b)
Upon removal of a Servicer, Westpac has the right to appoint a successor Servicer who accepts the appointment.
 
 
(c)
Subject to the appointment of a successor Servicer acceptable to Westpac (acting reasonably), the Servicer may resign at any time by giving not less than 1 month’s notice to Westpac.
 
 
(d)
On its appointment, the Successor Servicer will have all the rights, powers and obligations under this agreement of the retiring Servicer.  The retiring Servicer will be discharged from its rights, powers and obligations under this agreement.
 
 
(e)
The retiring Servicer shall execute and deliver all documents and agreements which Westpac reasonably believes are necessary or desirable to effect the appointment of the Successor Servicer.
 
 
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9.4
Remuneration of Successor Servicer
 
The Seller agrees to pay or reimburse Westpac for all its reasonable costs and expenses incurred in connection with the performance of the Servicer's duties by a Successor Servicer as specified in any Transaction Document, including, at any time, an amount equal to the Servicer Fee at that time less the Servicer Amount at that time (if positive).
 
9.5
Rights of Westpac
 
 
(a)
( Notice to Obligors )  If a Servicer Transfer Event is subsisting, Westpac may notify any Obligor of a Purchased Receivable of its ownership of that Purchased Receivable.
 
 
(b)
( Collection Accounts )  If an Early Amortisation Event is subsisting, Westpac shall notify the Seller and the Servicer to take the action required under clause 8.1(y).
 
 
(c)
( Rights on Servicer Transfer Event )  At any time following the occurrence of a Servicer Transfer Event and the appointment of a Successor Servicer (other than the Seller) pursuant to clause 9.3:
 
 
(i)
Westpac may direct the Obligors of Purchased Receivables, or any of them, to pay all amounts payable under any Purchased Receivable directly to Westpac or its designee;
 
 
(ii)
the Seller shall, at Westpac's request and at the Seller's expense, give notice of Westpac's ownership of the Receivables to each Obligor and direct that payments be made directly to Westpac or its designee;
 
 
(iii)
each of the Seller and the outgoing Servicer shall, at Westpac's request:
 
 
(A)
assemble all Contracts and copies of the other documents, instruments and other records (including computer programs, tapes and disks) held by the Seller or the Servicer (as the case may be) which evidence the Purchased Receivables, or which are otherwise necessary or desirable to collect such Purchased Receivables, and shall make the same available to Westpac at a place in Sydney selected by Westpac or its designee (not being a place where, in consequence of the presence in that place of any such document, instrument or record, the Seller would have any increased liability to Taxes, significant fees, costs, charges, expenses or other outgoings beyond the liability it would have had if it had retained such document, instrument or record in the jurisdiction in which it was previously held); and
 
 
(B)
segregate all cash, cheques and other instruments received by it from time to time constituting Collections of Purchased Receivables in a manner acceptable to Westpac and shall, promptly upon receipt, remit all such cash, cheques and instruments, duly endorsed or with duly executed instruments of transfer, to Westpac or its designee; and
 
 
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(iv)
the Seller authorises Westpac to take any and all steps in the Seller's name and on behalf of the Seller which are necessary or desirable, in the determination of Westpac, to collect all amounts due under any and all Purchased Receivables, including, without limitation, endorsing the Seller's name on cheques and other instruments representing Collections and enforcing such Purchased Receivables and the related Contract.
 
9.6
Responsibilities of the Seller
 
The following provisions apply despite any other term of any Transaction Document:
 
 
(i)
The Seller shall perform all of its obligations under the Contracts related to the Purchased Receivables and other agreements to the same extent as if the Purchased Receivables had not been sold and the exercise by Westpac of its rights shall not relieve the Seller from such obligations.
 
 
(ii)
Westpac shall not have any obligation or liability with respect to any Receivables, Contracts related to those Receivables or other agreements (other than to the extent of any fraud, misconduct or negligence on the part of Westpac), nor shall Westpac be obligated to perform any of the obligations of the Seller under those agreements.
 
 
(iii)
Where an Early Amortisation Event is subsisting, the Seller for valuable consideration grants to the Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest (being the absolute beneficial ownership of the Purchased Receivable and Related Agreements that Westpac will acquire upon its acceptance of the relevant Sale Notices, which interest the Servicer services on behalf of Westpac), to take in the name of the Seller all steps which are necessary or advisable to endorse or negotiate or otherwise realise any right of any kind held or transmitted by the Seller or transmitted or received by Westpac (whether or not from the Seller) that relates directly to any Purchased Receivable.
 
9.7
Further action evidencing purchase
 
The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that Westpac may reasonably request in order to perfect, protect or more fully evidence the Purchase under a Future Agreement, or to enable Westpac to exercise or enforce any of its rights under a Future Agreement.  Without limitation, the Seller will upon the request of Westpac execute such instruments or notices, as may be necessary or appropriate to indicate Westpac's title in the Purchased Receivables.  This clause does not require the Seller to:
 
 
(a)
give notice to the Obligor requiring the payment of Purchased Receivables to Westpac;
 
 
(b)
give notice of any assignment to Obligors unless an Early Amortisation Event is subsisting; or
 
 
(c)
execute any stampable instrument.
 
 
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9.8
Application of Collections
 
 
(a)
Any payment by an Obligor in respect of any indebtedness owed by it to the Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless Westpac instructs otherwise, be applied as a Collection of any Purchased Receivable of such Obligor to the extent of any amounts then due and payable under such Receivable before such payment is applied to any other indebtedness of such Obligor.
 
 
(b)
The Seller’s obligation under clause 9.8(a) is purely personal, and does not create any Security Interest.
 
9.9
Stand-by Servicer
 
 
(a)
If Westpac becomes entitled to replace or remove a Servicer as servicer then Westpac may act as the Servicer itself.
 
 
(b)
The Seller must use its best endeavours to procure that Westpac is provided with the systems, data and documentation referred to in clause 9.5(c)(iii)(A) above as soon as is practicable after a request is made.
 
 
(c)
Westpac may appoint a third party to fulfil any of the roles to be fulfilled by the Successor Servicer.

 
10.
Early Amortisation Events; servicer transfer events; termination; Review Events
 
10.1
Early Amortisation Events
 
The occurrence and continuation of any one of the following events shall be an Early Amortisation Event (whether or not it is in the control of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller)):
 
 
(a)
( payments ) the failure on the part of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) to make any payments within 1 Business Day of becoming due under any Transaction Document, or 2 Business Days where the delay is the result of a failure by the banking system to remit funds within 1 Business Day;
 
 
(b)
( covenants ) the failure on the part of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) to observe or perform any other term, undertaking, covenant, condition or agreement provided for in this agreement or any Transaction Document and the continuation of such failure for 14 Business Days after an officer of the Seller or the Servicer (as the case may be) who has a working knowledge of this agreement becomes aware of that failure;
 
 
(c)
( representations and warranties ) any representation or warranty made or deemed to be made by the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) under or in connection with any Transaction Document or other information, report or statement delivered under any Transaction Document is not true when made or repeated, and:
 
 
(i)
in the case of the representations or warranties made under clause 7.1(ii) or (jj), the breach has a Material Adverse Effect; and
 
 
(ii)
in any other case, if in reasonable opinion of Westpac that failure can be remedied, the Seller or the Servicer does not remedy the failure within 14 days of receiving notice from Westpac requiring remedy or the Seller or the Servicer (if the Servicer as the Seller or an Associate of the Seller) first becoming aware of the relevant circumstances (whichever is first);
 
 
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(d)
( Insolvency Event ) the occurrence of an Insolvency Event with respect to the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) or an Approved Originator;
 
 
(e)
( Cross default of Financial Indebtedness ) the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) fails to pay any Financial Indebtedness in excess of $500,000 or any interest or premium on or any instalment of such Financial Indebtedness, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Financial Indebtedness other than a failure to pay contested in good faith;
 
 
(f)
( material adverse effect ) any event or circumstance occurs which materially adversely affects:
 
 
(i)
the collectability of the Purchased Receivables;
 
 
(ii)
the ability of the Servicer to collect the Purchased Receivables or the Seller or the Servicer (if the Servicer is the Seller or Associate of the Seller) to perform its obligations under any Transaction Document; or
 
 
(iii)
the business, assets or financial condition of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller),
 
 
(g)
( change in policy ) a material change occurs to the Credit and Collection Policy (other than any change reasonably required in the ordinary course of business) without the prior consent of Westpac;
 
 
(h)
( regulatory requirements ) the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) fails to observe or comply with any law or official directive or request (including one with respect to reserve, liquidity, capital adequacy, special deposit or similar requirements) where that failure is reasonably likely to, wholly or partially render illegal, prevent or restrict the performance or effectiveness of the Transaction Documents or where that failure is reasonably likely to have a Material Adverse Effect and does not remedy that failure within 14 days of the Seller or the Servicer (as the case may be) becoming aware of that failure;
 
 
(i)
( dealing in shares ) the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) deals with its share capital other than in accordance with its rules and the Corporations Act;
 
 
(j)
( Charge-Off Receivables ) the Outstanding Balance of Purchased Receivables that are Charge-Off Receivables multiplied by the Purchased Interest at that time is at any time more than the Credit Reserve at that time;
 
 
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(k)
( Material Adverse Effect ) any other event or series of events, whether related or not (including a material adverse change in the business, assets or financial condition of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) or the value of the Purchased Receivables occurs) which, in the reasonable opinion of Westpac, is reasonably likely to have a Material Adverse Effect;
 
 
(l)
( limit ) either:
 
 
(i)
at any time, Westpac's Investment exceeds the Purchase Base; or
 
 
(ii)
at any time, the Net Pool Balance at any time is less than the sum of Westpac's Investment and the Required Reserves (each as at that time);
 
 
(m)
( Change of Control ) A Change of Control occurs without Westpac's prior written consent; or
 
 
(n)
( Sufficient credit enhancement )   on any Determination Date, the Cash Reserve is less than the Cash Reserve Requirement or the Reserves are less then the Required Reserves.
 
10.2
Remedies for Early Amortisation Events
 
 
(a)
( Commitment Termination Date ) If an Early Amortisation Event has occurred and is subsisting, Westpac may, by notice to the Seller, declare the Commitment Termination Date to have occurred and shall terminate the RPA Commitment.
 
 
(b)
( Perfection ) If an Early Amortisation Event has occurred and is subsisting, Westpac may give notice of any Purchase of any Receivables under any Future Agreement to the relevant Obligors.
 
 
(c)
( Additional remedies ) Upon any termination of the RPA Commitment under this clause 10.2, each party shall, in addition to all other rights and remedies under any Transaction Document or otherwise, have all other rights and remedies provided under applicable laws, which rights shall be cumulative.  Without limitation, the occurrence of an Early Amortisation Event shall not deny to Westpac any remedy in addition to termination of the RPA Commitment to which Westpac may be otherwise appropriately entitled, whether at law or in equity.
 
10.3
Awareness of Early Amortisation Events
 
Westpac will be taken not to be aware of an Early Amortisation Event unless:
 
 
(a)
it receives notice in writing from another party stating that an Early Amortisation Event has occurred and describing it; or
 
 
(b)
its officers who have responsibility for the transaction become actually aware of it.
 
10.4
Review Event
 
A Review Event (whether or not it is in control of the Seller) will occur if a Financial Undertaking Breach occurs.
 
10.5
Consequences of Review Events
 
At any time after a Review Event, Westpac and the Seller shall negotiate in good faith in order to attempt to agree amendments to the Transaction Documents acceptable to each of them including without limitation, the Seller providing overcollateralisation in an amount equal to the Required Reserve at that time in lieu of Westpac having recourse to the Seller pursuant to the provisions of clause 11.1(g).  If no such agreement is achieved within 30 days of Westpac becoming actually aware of the occurrence of the Review Event, Westpac may:
 
 
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(a)
by 30 days notice to the Seller declare the Commitment Termination Date to have occurred and terminate the RPA Commitment; and
 
 
(b)
give notice of any Purchase of any Receivables under any Future Agreement to the relevant Obligors.
 
10.6
Event of Default
 
The occurrence and continuation of any one of the following events shall be an Event of Default (whether or not it is in the control of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller)):
 
 
(a)
( payments ) the failure on the part of the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) to make any payments within 1 Business Day of becoming due under any Transaction Document, or 2 Business Days where the delay is the result of a failure by the banking system to remit funds within 1 Business Day;
 
 
(b)
( Insolvency Event ) the occurrence of an Insolvency Event with respect to the Seller or the Servicer (if the Servicer is the Seller or an Associate of the Seller) or an Approved Originator; or
 
 
(c)
( cross default ) Financial Indebtedness of an amount exceeding $1,000,000 of the Seller, the Servicer, an Approved Originator or an Associate of the Seller becomes due and payable or capable of being declared due and payable before its stated maturity or expiry.
 
10.7
Remedies for Events of Default
 
If an Event of Default has occurred and is subsisting, Westpac may in its absolute discretion declare the Commitment Termination Date to have occurred and enforce all its rights pursuant to this agreement.
 
10.8
Collection Account Letter
 
In the event an Early Amortisation Event occurs and is subsisting with respect to the Seller or the Servicer, or such an event is likely to occur (in the sole opinion of Westpac), Westpac may forward any Collection Account Letter to the Collection Bank noted in the Collection Account Letter empowering Westpac to control payments from the Collection Account.
 
11.
Indemnification
 
11.1
General indemnity
 
Without limiting any other rights which any such person may have under any Transaction Document or under applicable law, each of the Indemnifier and the Seller agrees severally to indemnify each Indemnified Party, on demand, from and against any and all Indemnified Amounts that each Indemnified Party may sustain or incur as a direct consequence of:
 
 
(a)
the breach of any representation or warranty made by the Seller or the Servicer (or any of their officers) under or in connection with any Transaction Document, any Determination Date Statement or any other information or report delivered by the Seller, an Approved Originator or the Servicer under any Transaction Document, which breach renders such representation or warranty false or incorrect when made or deemed made;
 
 
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(b)
the failure by Seller or an Approved Originator to comply with any applicable law, rule or regulation with respect to any Purchased Receivable or the related Contract, or the non-conformity of any Purchased Receivable or the related Contract with any such applicable law, rule or regulation;
 
 
(c)
the failure by the Seller or an Approved Originator to vest and maintain vested in Westpac the beneficial interest in respect of the Purchased Receivables in, or purporting to be in respect of, the Purchased Receivables, free and clear of any Security Interest, other than a Security Interest arising solely as a result of an act of Westpac  (including, for the avoidance of doubt, a Permitted Security Interest), whether existing at the time of any Purchase or at any time after that;
 
 
(d)
any dispute, claim, offset (including the setting off of deposits against any amount owing and unpaid under any Obligor's Receivable), adjustment, non-cash reduction of any Purchased Receivable or defence of the Obligor to the payment of any Purchased Receivables (including a defence based on such Purchased Receivables or the related Contracts not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms, but excluding any recourse in respect of Overdue Receivables), or any exercise or enforcement by a supplier or any other person of a Supplier's Security Interest whether or not that Supplier's Security Interest is known to Westpac at any time, or other claim resulting from services related to such Purchased Receivable or the furnishing or failure to furnish such services;
 
 
(e)
any failure of the Seller or the Servicer or otherwise, to perform its duties or obligations in accordance with the provisions of clause 8 or clause 9;
 
 
(f)
any cost attributable to goods and services or similar tax that an Indemnified Party may be required to pay in respect of any payment by that Indemnified Party under any Related Agreement, reduced by any Input Tax Credit or Reduced Input Tax Credit to which the Indemnified party is entitled in respect of that payment;
 
 
(g)
Westpac agreeing to any request from the Seller to increase the Purchase Base, as described in the definition thereof;
 
 
(h)
the connection and interfacing of Seller’s hardware or Seller’s software to the Platform;
 
 
(i)
the Seller's (and the term 'Seller' for the purposes of this sub clause (i) will be deemed to include a third party on behalf of the Seller) combination, operation or use of the Platform with equipment, data, software or other materials not supplied by Westpac;
 
 
(j)
unauthorised use of or access to the Platform to the extent that such unauthorised use or access is the direct result of:
 
 
(i)
the fraud, wilful default or negligence of the Seller; or
 
 
(ii)
the Seller's breach of this Agreement;
 
 
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(k)
any continued use of the Platform by the Seller after Westpac has advised the Seller to cease using it for any valid reason, for example, where Westpac reasonably believes that continued use would cause technical incapacity to, or undermine the stability of, the Platform; or
 
 
(l)
any third party claim against Westpac in relation to the Platform to the extent that such claim:
 
 
(i)
arises from the provision of the Platform to, or use of the Platform by, the Seller; or
 
 
(ii)
is the direct result of the fraud, wilful default or negligence of the Seller or the Seller's breach of this Agreement,
 
provided that neither the Indemnifier or the Seller indemnifies an Indemnified Party from and against any Indemnified Amounts:
 
 
(A)
to the extent caused by the fraud, wilful default, negligence or breach of an obligation under a Transaction Document of that Indemnified Party except to the extent that any such breach was caused or contributed to by the Indemnifier or the Seller; or
 
 
(B)
in the case of a successor, transferee or participant of an original party to this agreement, to the extent that the Indemnified Amount exceeds the Indemnified Amount which would have been suffered or incurred by the original party to this agreement had there been no succession, transfer or participation;
 
and provided that the Indemnifier and the Seller will in no circumstances be liable to an Indemnified Party for any special or consequential damages, losses, claims, liabilities or costs.
 
12.
Power of attorney
 
12.1
Seller Appointment
 
 
(a)
For valuable consideration and coupled with an interest, being Westpac’s absolute beneficial ownership of the Purchased Receivables, Related Agreements and Collections, the Seller irrevocably appoints each Authorised Officer of Westpac severally its attorney to do anything which:
 
 
(i)
the Seller and, if the Seller is the Servicer, the Servicer is obliged, authorised or empowered to do under or in relation to any Transaction Document or any Contract in respect of Purchased Receivables (including enforcing any Purchased Receivable);
 
 
(ii)
Westpac is authorised or empowered to do under any Transaction Document or any Contract in respect of Purchased Receivables or any law, but only at the times that Westpac would have been able to do it;
 
 
(iii)
is required to transfer the interest of the Seller in a Purchased Receivable to Westpac, including executing a legal transfer of such Purchased Receivable and giving notice of the assignment to the relevant Obligor; or
 
 
(iv)
it considers necessary to exercise the powers given to the attorney under this clause (including signing transfers, releases, instruments and other documents).
 
 
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(b)
An Attorney may only act under this power if an Early Amortisation Event is subsisting.
 
 
(c)
Without limitation, the Attorney may at any time delegate his powers (including delegation).
 
 
(d)
No Attorney appointed under this agreement may act inconsistently with this agreement.
 
12.2
Australian Approved Originator Appointments
 
 
(a)
The Seller shall procure that each Australian Approved Originator irrevocably appoints each Authorised Officer of the Seller and each Authorised Officer of Westpac severally its attorney to do anything which:
 
 
(i)
that Australian Approved Originator is obliged, authorised or empowered to do under or in relation to any Approved Originator Sale Notice relating to that Approved Originator, or any Contract (including enforcing any Purchased Receivable);
 
 
(ii)
the Seller and Westpac are authorised or empowered to do under any Originator Sale Notice relating to that Approved Originator, any Contract or any law but only at the times that the Seller and Westpac would have been able to do it;
 
 
(iii)
is required to transfer the interest of the Australian Approved Originator in a Purchased Receivable to the Seller and the Seller to Westpac, including executing a legal transfer of such Purchased Receivable and giving notice of the assignment to the relevant Obligor; or
 
 
(iv)
it considers necessary to exercise the powers given to the attorney under this clause (including signing transfers, releases, instruments and other documents).
 
 
(b)
An attorney may only act under this power if an Early Amortisation Event is subsisting.
 
 
(c)
Without limitation, the attorney may at any time delegate his powers (including delegation), or appoint a sub-attorney.
 
 
(d)
No attorney appointed under this agreement may act inconsistently with this agreement.
 
12.3
NZ Approved Originator Appointments
 
 
(a)
The Seller shall procure that each NZ Approved Originator irrevocably appoints the Seller and each Authorised Officer of the Seller severally its attorney to do anything which:
 
 
(i)
that NZ Approved Originator is obliged, authorised or empowered to do under or in relation to any Approved Originator Sale Notice relating to that NZ Approved Originator, or any Contract (including enforcing any Purchased Receivable);
 
 
(ii)
the Seller is authorised or empowered to do under any Originator Sale Notice relating to that Approved Originator, any Contract or any law but only at the times that the Seller would have been able to do it;
 
 
(iii)
is required to transfer the interest of the NZ Approved Originator in a Purchased Receivable to the NZ Approved Originator and the NZ Approved Originator to Westpac, including executing a legal transfer of such Purchased Receivable and giving notice of the assignment to the relevant Obligor;
 
 
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(iv)
it considers necessary to protect and/or perfect its security interest and its right, title and interest in any Purchased Receivable; or
 
 
(v)
it considers necessary to exercise the powers given to the attorney under this clause (including signing transfers, releases, instruments and other documents).
 
 
(b)
An attorney may only act under this power if an Early Amortisation Event is subsisting.
 
 
(c)
Without limitation, the attorney may at any time delegate his powers (including delegation), or appoint a sub-attorney.
 
 
(d)
No attorney appointed under this agreement may act inconsistently with this agreement.
 
 
(e)
The Seller irrevocably appoints each Authorised Officer of Westpac (each a Sub-Attorney) jointly and severally its sub-attorney to do anything which the Seller is obliged, authorised or empowered to do at any time under or in relation to any NZ Originator Power of Attorney.
 
 
(f)
The Seller covenants that:
 
 
(i)
it will not exercise any NZ Originator Power of Attorney without Westpac's  consent;
 
 
(ii)
it will not revoke the sub-attorney granted under the clause 12.3(e); and
 
 
(iii)
it will ratify anything done by a Sub-Attorney under this agreement and any NZ Originator Power of Attorney.
 
13.
Assignment of Receivables
 
13.1
Restrictions on assignments
 
 
(a)
( Restriction )  The Seller may not assign its rights under any Transaction Document without the prior written consent of Westpac.
 
 
(b)
( Westpac )  Prior to the occurrence of an Early Amortisation Event, Westpac may not assign any Purchased Receivable to any person without the prior written consent of the Seller.
 
13.2
Rights of Assignee
 
Upon assignment by Westpac of any Purchased Receivable in accordance with this clause 13, the assignee receiving such assignment shall have all of the rights and, if applicable, the obligations of Westpac under any Transaction Document with respect to that Receivable.
 
14.
Interest on overdue amounts
 
14.1
Accrual
 
Interest accrues on each unpaid amount which is due and payable by the Seller or the Servicer under or in respect of any Transaction Document (including interest payable under this clause):
 
 
(a)
on a daily basis up to the date of actual payment from (and including) the due date or, in the case of an amount payable by way of reimbursement or indemnity, the date of disbursement or loss, if earlier;
 
 
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(b)
both before and after judgment (as a separate and independent obligation); and
 
 
(c)
at a rate equal to the aggregate of the Program Margin and 2.00% per annum.
 
This clause does not apply to the extent that the Collections on any Remittance Date are not sufficient to pay Westpac's Accrued Interest Cost and Retention Amount on that Remittance Date.
 
14.2
Payment
 
The relevant Seller or the Servicer (as the case may be) shall pay interest accrued under this clause on demand and on the last Business Day of each calendar month.
 
15.
Miscellaneous
 
15.1
Notices
 
Unless otherwise provided in this agreement, all notices, requests, demands, consents, approvals, agreements or other communications to or by a party to this agreement:
 
 
(a)
must be in writing;
 
 
(b)
must be signed by an Authorised Officer of the sender; and
 
 
(c)
will be taken to be duly given or made:
 
 
(i)
(in the case of delivery in person or by post or facsimile transmission) when delivered, received or left at the address of the recipient shown in this agreement or to any other address which it may have notified the sender; or
 
 
(ii)
(in the case of a telex) on receipt by the sender of the answerback code of the recipient at the end of transmission,
 
but if delivery or receipt is on a day on which business is not generally carried on in the place to which the communication is sent or is later than 4 pm (local time), it will be taken to have been duly given or made at the commencement of business on the next day on which business is generally carried on in that place.
 
15.2
Severability clause
 
Any provisions of any Transaction Document which are prohibited or unenforceable in any jurisdiction is ineffective to the extent of the prohibition or unenforceability.  That does not invalidate the remaining provisions of that Transaction Document nor affect the validity or enforceability of that provision in any other jurisdiction.
 
15.3
Amendments
 
This agreement and the rights and obligations of the parties under this agreement may only be changed by an instrument in writing signed by each party to this agreement.
 
15.4
Governing Law and jurisdiction
 
Each Transaction Document is governed by the laws of New South Wales.  Each party submits to the non-exclusive jurisdiction of courts exercising jurisdiction there.
 
 
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15.5
Survival of representations and indemnities
 
 
(a)
All representations and warranties in a Transaction Document survive the execution and delivery of the Transaction Documents.
 
 
(b)
Unless otherwise stated each indemnity reimbursement or similar obligation in any Transaction Document:
 
 
(i)
is a continuing obligation;
 
 
(ii)
is a separate and independent obligation;
 
 
(iii)
is payable on demand; and
 
 
(iv)
survives termination or discharge of this agreement and each Future Agreement.
 
15.6
Set-off
 
 
(a)
( Seller )  Subject to any mandatory laws to the contrary which cannot be contracted out of and except as permitted by clauses 2.1(h) and 4.8, the Seller irrevocably and unconditionally waives all right of set-off that it may have under contract, applicable law or otherwise with respect to any funds or monies of Westpac at any time held by or in the possession of the Seller.
 
 
(b)
( Application )  The Seller irrevocably authorises Westpac to apply following an Early Amortisation Event any credit balance in any of its accounts with any branch of such person towards satisfaction of any sum then due and payable by it to such person under and in relation to any Transaction Document.
 
 
(c)
( Indemnity )  If, notwithstanding clause 15.6(a), for any reason the Seller exercises, or is entitled to exercise, a right of set-off with respect to any funds or monies of Westpac, the Seller shall indemnify Westpac on demand and shall pay Westpac any moneys which it sets-off on demand.
 
15.7
Costs and expenses
 
 
(a)
( Costs and expenses )  On demand the Seller shall reimburse Westpac for the reasonable expenses of Westpac in relation to:
 
 
(i)
the preparation, execution and completion of the Transaction Documents or any subsequent consent, approval, waiver or amendment (it being acknowledged that the parties have agreed in writing the expenses insofar as they relate to the preparation, execution and completion of the Transaction Documents);
 
 
(ii)
any actual or contemplated enforcement of any Transaction Document, the actual or contemplated exercise, preservation or consideration of any rights (other than any right of assignment conferred by clause 13), powers or remedies under any Transaction Document or in relation to the Purchased Receivables; and
 
 
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(iii)
any inquiry by a Governmental Agency concerning the Seller or the Servicer or a transaction or activity the subject of any Transaction Document,
 
including expenses reasonably incurred in retaining consultants to evaluate matters of material concern to Westpac and administrative costs including time of its executives (whose time and costs are charged at reasonable rates), including in each case reasonable legal costs and expenses (including in house lawyers charged at their usual rates to the extent reasonable) on a full indemnity basis.
 
 
(b)
( Stamp duty )
 
 
(i)
In addition, the Seller shall, subject to this clause 15.7(b), pay all stamp, transaction, registration and similar Taxes (including fines and penalties) which may be payable or determined to be payable in relation to the execution, delivery, performance or enforcement of any Transaction Document or any payment or receipt or any other transaction contemplated by any Transaction Document.
 
 
(ii)
Those Taxes include any Taxes payable by return and Taxes passed on to Westpac by a bank or financial institution but, for the avoidance of doubt, do not include GST.
 
 
(iii)
On demand the Seller shall indemnify Westpac against any liability resulting from delay or omission to pay those Taxes except to the extent the liability results from failure by Westpac to pay any Tax after having been put in funds to do so by the Seller.
 
 
(iv)
The Seller is not obliged to pay any stamp, transaction, registration or similar Taxes (including fines and penalties) which may be payable or determined to be payable in relation to any assignment by Westpac pursuant to clause 13 of this agreement.
 
15.8
Waivers; remedies cumulative
 
 
(a)
No failure on the part of Westpac to exercise and no delay in exercising any right, power or remedy under any Transaction Document operates as a waiver.  Nor does any single or partial exercise of any right, power or remedy preclude any other or further exercise of that or any other right, power or remedy.
 
 
(b)
The rights, powers and remedies provided to Westpac in the Transaction Documents are in addition to, and do not exclude or limit, any right, power or remedy provided by law.
 
15.9
Force Majeure
 
The parties to this agreement will not be liable for any loss or damage (whether direct or indirect), nor be in default under this agreement, for failure or delay to observe or perform any provision of this agreement for any reason or cause of whatever nature which could not with reasonable diligence be controlled or prevented by the parties including, without limitation, acts of God, acts of nature, acts of government or their agencies, fire, flood, storm, riots, power shortages or power failures, strikes, lockouts, labour disputes, sudden and unexpected system failure or disruption by war, sabotage or inability to obtain sufficient labour, raw materials, fuel or utilities, provided that the preceding provisions of this clause shall in no way excuse a failure by the Seller to make any payment required in accordance with the provisions of this agreement.
 
 
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16.
Confidentiality
 
16.1
Confidentiality
 
 
(a)
Each party to this agreement acknowledges that all parties regard the structure of the transactions contemplated by the Transaction Documents to be proprietary, and each such party severally agrees that:
 
 
(i)
subject to paragraph (ii), it will not disclose without the prior consent of the other parties (other than to the directors, employees, auditors, advisers, counsel, affiliates or Related Corporations (collectively, representatives ) of such party, each of whom shall be informed by such party of the confidential nature of the information and of the terms of this clause 16):
 
 
(A)
any information regarding, or copies of, any Transaction Document or any transaction contemplated by any Transaction Document; or
 
 
(B)
any information supplied by a party in connection with the Transaction Documents; or
 
 
(C)
any information regarding a party which information is furnished by a party to such other party and which is designated by a party to such party in writing or otherwise as confidential or not otherwise   available to the general public,
 
(the information referred to in paragraphs (A), (B) and (C) is collectively referred to as the Information );  and
 
 
(ii)
such party may disclose any such Information:
 
 
(A)
to any other party to this agreement for the purposes contemplated by this agreement;
 
 
(B)
as may be required by any Governmental Agency;
 
 
(C)
in order to comply with any law, order, regulation, regulatory request or ruling applicable to such party (including, without limitation, any request or requirement of the Australian Stock Exchange); or
 
 
(D)
subject to clause 16.1(c), in the event such party is legally compelled (by interrogatories, requests for information or copies, subpoena, civil investigative demand or similar process) to disclose any such Information;
 
 
(iii)
it will use the Information solely for the purposes of evaluating, administering and enforcing the transactions contemplated by Transaction Documents and making any necessary business judgments with respect thereto; and
 
 
(iv)
it will, upon demand, return (and cause each of its representatives to return) to the relevant party all documents or other written material received from it in connection with paragraph (a)(i)(A) above and all copies thereof made by such party which contain the Information.
 
 
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(b)
Notwithstanding any provision in this agreement to the contrary, the Seller and the Servicer agree that Westpac may refer to the Seller or Servicer's name in connection with the issuance of any tombstone advertisement that refers to the securitisation contemplated by this agreement.
 
 
(c)
This clause 16 shall be inoperative as to such portions of the Information which are or become generally available to the public or such party on a non-confidential basis from a source other than Westpac, the Seller or Servicer (as the case may be) or were known to such party on a non-confidential basis prior to its disclosure by Westpac, the Seller or Servicer (as the case may be).
 
 
(d)
In the event that any party or anyone to whom such party or its representatives transmits the Information is requested or becomes legally compelled (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Information, such party will:
 
 
(i)
provide Westpac, the Seller or Servicer (as the case may be) with prompt written notice so that Westpac, the Seller or Servicer (as the case may be) may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this clause 16;
 
 
(ii)
unless Westpac, the Seller or Servicer (as the case may be) waives compliance by such party with the provisions of this clause 16, make a timely objection to the request or confirmation to provide such Information on the basis that such Information is confidential and subject to the agreements contained in this clause 16, provided that such party is not required to make such an objection if:
 
 
(A)
the objection has no reasonable prospect of success; or
 
 
(B)
that party is not indemnified to its satisfaction in respect of those costs by Westpac; and
 
 
(iii)
comply with any protective order or other appropriate remedy.
 
In the event that such protective order or other remedy is not obtained, or Westpac waives compliance with the provisions of this clause 16, such party will furnish only that portion of the Information which it is legally required to furnish and will exercise such party's best efforts to obtain reliable assurance that confidential treatment will be accorded the Information.
 
 
(e)
This clause 16 shall survive termination of this agreement and the Transaction Documents.
 
16.2
Counterparts
 
This agreement may be executed in any number of counterparts.  All counterparts together will be taken to constitute one instrument.
 
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17.
GST
 
17.1
Interpretation
 
Words or expressions used in this clause 17 which are not defined in clause 1.1 of this agreement have the same meaning as in the   GST Legislation.
 
17.2
Consideration is GST exclusive
 
Any consideration to be paid or provided to the Seller for a supply made by the Seller under or in connection with this agreement does not include an amount in respect of GST.
 
17.3
Gross up of consideration
 
If GST is payable by the Seller (or, if the Seller is in a GST group, the representative member of that GST group) in respect of any taxable supply made by the Seller under or in connection with this agreement:
 
 
(a)
the consideration payable or to be provided for that taxable supply under this agreement but for the application of this clause is increased by, and the recipient of the supply ( Recipient ) must also pay to the Seller, an amount ( GST Amount ) equal to the GST payable in respect of that taxable supply; and
 
 
(b)
the GST Amount must be paid to the Seller by the Recipient without set off, deduction or requirement for demand provided that the Seller has provided the Recipient with a valid tax invoice in respect of the relevant taxable supply.
 
17.4
Reimbursements (net down)
 
If a payment to a party under this agreement (except for any Instalment) is a reimbursement or indemnification, calculated by reference to a loss, cost or expense incurred by that party, then the payment will be reduced by the amount of any Input Tax Credit or Reduced Input Tax Credit to which that party (or, if that party is in a GST group, the representative member of that GST group) is entitled for that loss, cost or expense.
 
18.
Privacy
 
The Seller must, where reasonably practicable, make all disclosures Westpac would be required to make under the Privacy Act 1988 in order to use the Personal Information to perform Westpac's obligations under the Transaction Documents, the Purchased Receivables, the Contracts and the Related Agreements.
 
19.
Code of Banking Practice (2003)
 
The Code of Banking Practice (2003) does not apply to this agreement or any banking service provided under it.
 
20.
Electronic Presentment & Payment
 
20.1
Access to the Presentment & Payment System
 
Subject to the provisions of this agreement, Westpac will provide the Seller with access to the Platform from (and including) the date of the first Sale Notice to (and including) the Commitment Termination Date in accordance with the provisions set out in Annexure H.
 
 
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EXECUTED as an agreement
 
Each attorney executing this agreement states that he or she has no notice of revocation or suspension of his or her power of attorney.
 
SELLER and SERVICER
 
Signed for Moneytech Limited in the presence of:
   
     
/s/ Sonja Sandral   /s/ Hugh Evans
Witness Signature
 
Director Signature
     
Sonja Sandral   Hugh Evans
Print Name
 
Print Name
     
Witness Signature
 
Director/Secretary Signature
     
Print Name
 
Print Name
 
Signed for Moneytech Finance Pty Limited in the presence of:
   
     
/s/ Sonja Sandral   /s/ Hugh Evans
Witness Signature
 
Director Signature
     
Sonja Sandral    Hugh Evans
Print Name
 
Print Name
     
Witness Signature
 
Director/Secretary Signature
     
Print Name
 
Print Name
 
 
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Signed for Moneytech Services Pty Limited in the presence of:
   
     
     
/s/ Sonja Sandral   /s/ Hugh Evans
Witness Signature
 
Director Signature
     
Sonja Sandral   Hugh Evans
Print Name
 
Print Name
     
Witness Signature
 
Director/Secretary Signature
     
Print Name
 
Print Name
 
WESTPAC
 
Signed for Westpac Banking Corporation by its attorney under power of attorney in the presence of:
   
     
     
     
Witness Signature
 
Attorney Signature
     
Print Name
 
Print Name
 
 
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Annexure A – Part 1
 
Sale Notice from the Seller
 
TO:
Westpac Banking Corporation
 
 
Level 4
 
 
255 Elizabeth Street
 
 
SYDNEY  NSW  2000
 
 
Fax: 02 9284 9366
 
 
Attention:   [*]
 
FROM:
Moneytech Finance Pty Ltd
 
 
[*]
 
Dear Sirs
 
RECEIVABLES PURCHASE AGREEMENT
 
We refer to the receivables purchase agreement (the Receivables Purchase Agreement ) between Moneytech Pty Limited (the Indemnifier) , Moneytech Finance Pty Ltd (the Seller) ,   Moneytech Servicing Pty Ltd (the Servicer) and Westpac Banking Corporation ( Westpac ) dated [*] as amended.
 
1.
Definitions and Interpretation
 
1.1
Definitions
 
Terms defined in the Receivables Purchase Agreement shall have the same meaning in this Notice unless the context otherwise requires except that:
 
Expiry Time means 11.00am on the third Business Day after the day on which Westpac receives this Notice;
 
 
Offered Receivables means all of the Seller's right, title, benefit and interest (present and future) in, to, under or derived from:
 
(a)           all the Receivables, which are
 
 
(i)
described in the attached [ Computer File ] ;
 
 
(ii)
originated by Seller or an Approved Originator (and in that case, acquired by the Seller) between the date the offer in this Sale Notice is accepted and the date another Sale Notice is given by the Seller to Westpac; and
 
 
(iii)
the Receivables notified to Westpac by the Seller from time to time by [ Computer File ] ;
 
 
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(b)
any Receivable arising under any Contract under which a Receivable referred to in paragraph (a) is provided;
 
(c)           any Related Agreement that relates to those Receivables; and
 
(d)           the Collections under or derived from all those Receivables.
 
A reference to any Clause is a reference to that clause in this Notice.
 
1.2
Interpretation
 
The provisions of the Receivables Purchase Agreement will apply to any contract formed if the offer contained in this Notice is accepted.
 
2.
Offer
 
Subject to the terms and conditions of this Notice, the Seller, as beneficial owner, offers to sell and assign the Offered Receivables to Westpac.
 
3.
Acceptance
 
 
(a)
The offer in clause 2 is irrevocable during the period up to and including the Expiry Time.
 
 
(b)
Westpac  may accept the offer contained in this Sale Notice at any time prior to the Expiry Time by, and only by, the payment by Westpac to the Seller (or as it directs) of the Instalment in immediately available funds to the following bank account: [*] , or in accordance with clause 4.8(b).
 
 
(c)
Notwithstanding:
 
 
(i)
satisfaction of all relevant conditions precedent; or
 
 
(ii)
any negotiations undertaken between the Seller and Westpac prior to Westpac accepting the offer contained in this Sale Notice,
 
 
Westpac is not obliged to accept the offer contained in this Sale Notice and no contract for the sale or purchase of any Offered Receivables detailed in this Sale Notice will arise unless and until Westpac accepts the offer contained in the Sale Notice in accordance with this clause.
 
 
(d)
The offer contained in this Sale Notice may only be accepted in relation to all the Offered Receivables offered under this Sale Notice.
 
4.
Required Information
 
The following information is provided in relation to the Offered Receivables in the attached [ Computer File ][ computer printout ][ Annexure ] :
 
 
(a)
Offered Receivables:  the Outstanding Balance of those Offered Receivables to be sold under this Sale Notice upon acceptance will be [ $ *] .
 
 
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(b)
Instalment:  the Instalment, notified by the Seller is [*] .
 
 
(c)
Westpac's Investment:  Westpac's Investment is [*] .
 
 
(d)
Purchase Date:  the Purchase Date will be [*] or such other time as agreed between the parties.
 
 
(e)
Purchase Base: [*]
 
 
(f)
Required Reserve: [*]
 
 
(g)
the next Collection Date: [*]
 
 
(h)
the Receivables Ineligible for Purchase
 
5.
Consideration
 
If Westpac accepts the offer of the sale of the Offered Receivables then Westpac shall pay the Instalment as consideration for the purchase of the Offered Receivables, and agrees to pay the balance of the purchase price in the manner contemplated in the Receivables Purchase Agreement.
 
6.
Acknowledgment
 
The Seller acknowledges, agrees and confirms to Westpac that:
 
 
(a)
( Receivables Purchase Agreement binding on it )  the Receivables Purchase Agreement is a valid and binding obligation of the Seller enforceable in accordance with its terms subject to any necessary stamping and registration and subject to laws affecting creditors' rights and to general principles of equity;
 
 
(b)
( repeat representations )  the Seller repeats the representations and warranties made by it in Clause 7.1 of the Receivables Purchase Agreement in so far as they apply to the Offered Receivables;
 
 
(c)
( description of Receivables )
 
 
(i)
the description of the Offered Receivables in the attached [*] is true and correct in every respect;
 
 
(ii)
each Offered Receivable constitutes an Eligible Receivable;
 
 
(d)
( no default )  no Early Amortisation Event is subsisting as at the date of this Notice nor, if the offer is accepted, will there be any Early Amortisation Event subsisting at the date the offer is accepted or the date the Instalment is paid nor will any Early Amortisation Event result from the offer evidenced by this Notice or the transfer of the Offered Receivables;
 
 
(e)
( limits )  the Purchase Limit will not be breached if Westpac agrees to purchase the Offered Receivables; and
 
 
(f)
( Authorisations )  all necessary Authorisations for the offer evidenced by this Notice and the transfer of the Offered Receivables have been taken, or as the case may be, obtained.
 
The Seller will be deemed to acknowledge, agree and confirm the above statements on each date on which a Computer File is delivered by the Seller to Westpac, by reference to the facts and circumstances then existing and in relation to the Receivables referred to in that Computer File.
 
 
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7.
Governing Law
 
This Sale Notice is governed by the laws of New South Wales.
 
IN WITNESS the Seller has executed this Notice.

   
Authorised Officer of Moneytech Finance Pty Ltd
 
   
Se ller
 
   
Print name
 
 
 
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Annexure A – Part 2
 
Sale Notice from an Australian Approved Originator to the Seller
 
TO:
Moneytech Finance Pty Ltd
 
 
[*] (the " Seller ")
 
FROM:
[*] (the " Originator ")
 
 
Dear Sirs
 
RECEIVABLES PURCHASE AGREEMENT
 
We refer to the Receivables Purchase Agreement (the Receivables Purchase Agreement ) between the Moneytech Pty Limited (the Indemnifier) , Moneytech Finance Pty Ltd (the Seller) ,   Moneytech Servicing Pty Ltd (the Servicer) and Westpac Banking Corporation ( Westpac ) dated [*] as amended.
 
1.
Definitions and Interpretation
 
1.1
Definitions
 
Terms defined in the Receivables Purchase Agreement shall have the same meaning in this Notice unless the context otherwise requires except that:
 
Expiry Time means 11.00 am on the third Business Day after the day on which the Seller receives this Notice;
 
 
Offered Receivables means all of the Originator's right, title, benefit and interest (present and future) in, to, under or derived from:
 
(a)           all the Receivables, which are
           
 
(i)
described in the attached [ Computer File ] ;
 
 
(ii)
originated by the Originator between the date the offer in this Sale Notice is accepted and the date another Sale Notice is given by the Originator to the Seller; and
 
 
(iii)
the Receivables notified to the Seller by the Originator from time to time by [ Computer File ] ;
 
 
(b)
any Receivable arising under any Contract under which a Receivable referred to in paragraph (a) is provided;
 
(c)           any Related Agreement that relates to those Receivables; and
 
(d)           the Collections under or derived from all those Receivables.
 
A reference to any Clause is a reference to that clause in this Notice.
 
 
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1.2
Interpretation
 
The provisions of the Receivables Purchase Agreement will apply to any contract formed if the offer contained in this Notice is accepted.
 
2.
Offer
 
Subject to the terms and conditions of this Notice, the Originator, as beneficial owner, offers to sell and assign the Offered Receivables to the Seller.
 
3.
Acceptance
 
 
(a)
The offer in clause 2 is irrevocable during the period up to and including the Expiry Time.
 
 
(b)
The Seller may accept the offer contained in this Sale Notice at any time prior to the Expiry Time by, and only by, the payment by the Seller to the Originator (or as it directs) of the Instalment in immediately available funds to the following bank account: [*] .
 
 
(c)
Notwithstanding:
 
 
(i)
satisfaction of all relevant conditions precedent; or
 
 
(ii)
any negotiations undertaken between the Seller and the Originator prior to the Seller accepting the offer contained in this Sale Notice,
 
 
the Seller is not obliged to accept the offer contained in this Sale Notice and no contract for the sale or purchase of any Receivables detailed in this Sale Notice will arise unless and until the Seller accepts the offer contained in the Sale Notice in accordance with this clause.
 
 
(d)
The offer contained in this Sale Notice may only be accepted in relation to all the Offered Receivables offered under this Sale Notice.
 
4.
Required Information
 
The following information is provided in relation to the Offered Receivables in the attached [ Computer File ][ computer printout ][ Annexure ] :
 
 
(a)
Offered Receivables:  the Outstanding Balance of those Offered Receivables to be sold under this Sale Notice upon acceptance will be [ $ *] .
 
 
(b)
Instalment:  the Instalment, notified by the Seller is [*] .
 
 
(c)
Westpac's Investment:  Westpac's Investment is [*] .
 
 
(d)
Purchase Date:  the Purchase Date will be [*] or such other time as agreed between the parties.
 
 
(e)
Purchase Base: [*]
 
 
(f)
Required Reserve: [*]

 
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5.
Consideration
 
If the Seller accepts the offer of the sale of the Offered Receivables then the Seller shall pay the Instalment as consideration for the purchase of the Offered Receivables, and agrees to pay the balance of the purchase price in the manner contemplated in the Receivables Purchase Agreement.
 
6.
Acknowledgment
 
The Originator acknowledges, agrees and confirms to the Seller that:
 
 
(a)
( representations )  the Originator makes the representations and warranties in Clause 7.1 of the Receivables Purchase Agreement in so far as they apply to the Offered Receivables;
 
 
(b)
( description of Receivables )
 
 
(i)
the description of the Offered Receivables in the attached [*] is true and correct in every respect;
 
 
(ii)
each Offered Receivable constitutes an Eligible Receivable and was selected from those Receivables which satisfied the criteria to be Eligible Receivables in accordance with clause 2.1of the Receivables Purchase Agreement;
 
 
(c)
( no default )  no Early Amortisation Event is subsisting as at the date of this Notice nor, if the offer is accepted, will there be any Early Amortisation Event subsisting at the date the offer is accepted or the date the Instalment is paid nor will any Early Amortisation Event result from the offer evidenced by this Notice or the transfer of the Offered Receivables;
 
 
(d)
( Authorisations )  all necessary Authorisations for the offer evidenced by this Notice and the transfer of the Offered Receivables have been taken, or as the case may be, obtained.
 
The Originator will be deemed to acknowledge, agree and confirm the above statements on each date on which a Computer File is delivered by the Originator to the Seller, by reference to the facts and circumstances then existing and in relation to the Receivables referred to in that Computer File.
 
7.
Governing Law
 
This Sale Notice is governed by the laws of New South Wales.
 
 
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IN WITNESS the Originator has executed this Notice.

   
Authorised Officer of [*]
 
Originator
 
 
   
Print name
 
 
 
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Annexure A – Part 3
 
Sale Notice from a NZ Approved Originator to the Seller
 
Sale Notice
 
TO:
Moneytech Finance Pty Ltd (ABN [*]) ( the Seller )
 
 
[ Insert address ]
 
 
Attention:   [ * ]
 
FROM:
[*] ( Originator )
 
 
[*]
 
 
Attention:   [ * ]
 
 
Dear Sirs
 
Sale of Receivables
 
1.
Definitions
 
Terms defined in the Receivables Purchase Agreement between Moneytech Pty Limited (the Indemnifier) , Moneytech Finance Pty Ltd (the Seller) ,   Moneytech Servicing Pty Ltd (the Servicer) and Westpac Banking Corporation ( Westpac ) dated [*] as amended (the Receivables Purchase Agreement ) shall have the same meaning in this Sale Notice unless the context otherwise requires except that:
 
Collections means all funds which, after the date on which the offer in this Sale Notice is accepted, are received by the Seller, Servicer or the Originator from or on behalf of the related Obligors in payment of any amounts owed in respect of such Receivable or applied to such amounts owed by such Obligors (including any amounts paid under the Insurance Policy and including, without limitation, by set off, counterclaim, netting or any similar right or defence).
 
Contract means a contract (which need not be in writing) between the Originator and any person under which the Originator sells goods to that person, and that person is given a certain period of time in which to pay the relevant purchase price.
 
Credit and Collection Policy means those policies and procedures of the Originator relating to the operation of its business, including, without limitation, the policies and procedures:
 
 
(a)
for determining the creditworthiness of customers and the extension of credit to customers;
 
(b)           relating to the maintenance of accounts and collection of Receivables; and
 
(c)           relating to the writing off of bad debts,
 
in the form of the documents initialled by the Seller, Westpac and the Originator by way of identification (as amended from time to time and in the case of any material amendment with the prior approval of the Seller and Westpac such approval not to be unreasonably withheld or delayed).
 
 
Page 88
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Expiry Time means 11:00 am on the Business Day after the day on which the Seller receives this Notice, or the list or notice given by the Originator under clause 4(b);
 
Obligor means, in relation to a Receivable, the person who is, or was at inception, obligated to pay that Receivable.
 
Offered Receivables means all of the Originator’s right, title, benefit and interest (present and future) in, to, under or derived from:
 
 
(a)
all the Receivables which are:
 
 
(i)
described in the attached [ Computer File ] ;
 
 
(ii)
originated by the Originator between the date the offer in this Sale Notice is accepted and the date another Sale Notice is given by the Originator to the Seller; and
 
 
(iii)
the Receivables notified to the Seller by the Originator from time to time by [ Computer File ] ;
 
 
(b)
any Receivable arising under any Contract under which a Receivable referred to in paragraph (a) is provided;
 
 
(c)
any Related Agreement that relates to those Receivables; and
 
 
(d)
the Collections under or derived from those Receivables.
 
Permitted Security Interest means any security interest in favour of the Seller and Westpac as a secured party group in respect of any Receivable.
 
Receivables means any right, title, benefit and interest (present or future) in, to, under or derived from a Contract, including the purchase price payable under that Contract.
 
Related Agreement means any guarantee, mortgage, charge, encumbrance, lien or other Agreement or arrangement of whatever character from time to time supporting or securing payment of each Offered Receivable whether pursuant to any Contract related to such Receivable or otherwise.
 
Westpac means Westpac Banking Corporation (ABN 33 007 457 141).
 
1.1
Interpretation
 
In this Sale Notice, the expressions “account receivable”, “chattel paper”, “financing statement”, “new value”, “personal property”, “possession”, “proceeds”, “purchase money security interest”, “secured party”, “security interest” and “transfer” have the respective meanings given to them under, or in the context of, the PPSA.
 
A reference to any Clause is a reference to that clause in this Sale Notice.
 
2.
Offer
 
Subject to the terms and conditions of this Notice, the Originator as legal and beneficial owner, offers to sell and assign the Offered Receivables to the Seller.

 
Page 89
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
3.
Acceptance
 
 
(a)
The offer in Clause 2 is irrevocable during the period up to and including the Expiry Time.
 
 
(b)
The Seller may accept the offer contained in this Sale Notice at any time prior to the Expiry Time by, and only by, the payment by the Seller to the Originator (or as it directs) of [ here insert amount ] in immediately available funds to the following bank account:
 
 
Bank:
[ Westpac Banking Corporation ]
 
 
Account Name: 
[                    ]
 
 
Account Number:   
[                   ]
 
 
Amount to Pay:
[                ]
          
 
(c)
Notwithstanding:
 
 
(i)
satisfaction of all relevant conditions precedent; or
 
 
(ii)
any negotiations undertaken between the Originator and the Seller prior to the Seller accepting the offer contained in this Sale Notice,
 
the Seller is not obliged to accept the offer contained in this Sale Notice and no contract for the sale or purchase of any Offered Receivables will arise unless and until the Seller accepts the offer contained in this Sale Notice in accordance with this Clause.
 
 
(d)
The offer contained in this Sale Notice may only be accepted in relation to all the Offered Receivables.
 
4.
Purchase Price
 
 
(a)
The amount referred to in clause 3(b) is an amount equal to the aggregate of the net present value of each Offered Receivable less the agreed discount to reflect [the time value of money], as agreed between the Originator, the Seller and Westpac. For the avoidance of doubt, the Seller shall not be entitled to pay the amount referred to in clause 3(b) in instalments, and must pay the entire amount in one payment.
 
 
(b)
From time to time the Originator may give the Seller either:
 
 
(i)
a list of all Receivables originated since the date of this Sale Notice, or since the last time the Originator gave the Seller a list under this clause and specify the face value of those Receivables; or
 
 
(ii)
a notice specifying the purchase price of all Receivables originated since the date of this Sale Notice, or since the last time Originator gave the Seller a list under this clause or a notice under clause 4(b)(i) and specify the face value of those Receivables.
 
 
(c)
If the Seller accepts the offer in clause 2 of this Sale Notice it will be taken to have agreed to purchase all the Receivables referred to in clause 4(b) of this Sale Notice at the face value specified in the list or notice given by the Originator under clause 4(b).  Accordingly it will pay the amount so specified on the date [ specified by the Originator. ] .
 
 
(d)
The Originator and the Seller may agree from time to time to exclude any Receivable from the agreement formed by acceptance of this offer in this Sale Notice.

 
Page 90
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
5.
Consideration
 
If the Seller accepts the offer of the sale of the Offered Receivables then the Seller shall pay the amount specified in clause 3(b) as consideration for the purchase of the Offered Receivables.
 
6.
Representations, Warranties and Undertakings
 
 
(a)
The Originator represents and warrants in relation to the Receivables that the Credit and Collection Policy of the Originator, together with the Contract, contains all the contractual arrangements between the Originator and the relevant Obligor concerning the goods sold in accordance with that Credit and Collection Policy and the subject of the relevant Contract between the Originator and the relevant Obligor.
 
 
(b)
The Originator represents and warrants (which representations and warranties will be deemed to be repeated upon delivery of each list or notice as referred to in clause 4(b) to the Seller) that:
 
 
(i)
in relation to a Receivable, the purchase of that Receivable by the Seller constitutes a transfer of that Receivable under and in accordance with this Sale Notice, and, for the purposes, and in the context of the PPSA, will constitute a deemed security interest in favour of the Seller as secured party;
 
 
(ii)
in relation to a Receivable, the purchase of that Receivable by the Seller will constitute a valid sale, by way of equitable assignment of that Receivable to the Seller, enforceable against creditors of, and purchasers from the Originator but subject to the rights of any creditors of or to an Originator to the extent of each relevant Supplier's Security Interest;
 
 
(iii)
each Offered Receivable is owned by the Originator free and clear of any security interest (other than any Supplier's Security Interest or any security interest arising solely as the result of any action taken by or for the benefit of the Seller or Westpac including, for the avoidance of doubt, a Permitted Security Interest (if any)); and
 
 
(iv)
if the Seller accepts the offer contained in this Sale Notice, the Seller shall have acquired an equitable interest in each Offered Receivable free and clear of any security interest (other than any Supplier's Security Interest or any security interest arising solely as the result of any action taken by or for the benefit of the Seller or Westpac including, for the avoidance of doubt, a Permitted Security Interest (if any)).
 
 
(c)
The Originator will not:
 
 
(i)
change its name without first notifying Westpac of its new name not less than 21 days before the change takes effect; or
 
 
(ii)
relocate its principal pace of business outside New Zealand or change its place of incorporation.

 
Page 91
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
7.
New Value
 
So far as the Originator   and the Seller   are concerned, the purchase arrangements contemplated by this Sale Notice are intended to operate so that the Seller will at all times be able to prove that, in respect of each relevant Receivable that is an account receivable, the sale in equity of that Receivable constitutes a transfer for which new value was provided by the Seller   for and in respect of the acquisition of that Receivable.
 
8.
Security
 
 
(a)
In respect of any Receivable that is transferred the Seller under and in accordance with this Sale Notice, the transfer is a deemed security interest under the PPSA, governed by the PPSA, which arises by virtue of the transfer to the Seller of that Receivable by the Originator under and in accordance with this Sale Notice.
 
 
(b)
The parties to this Sale Notice agree and acknowledge that the security interest  referred to in clause 8(a) will have been perfected by the registration by the Seller of a financing statement on the PPSR against the Originator in respect of all of the Originator’s present and after acquired accounts receivable and chattel paper.
 
 
(c)
the Seller will register a financing statement under the PPSA:
 
 
(i)
describing the collateral to which it relates as “All of the debtor’s present and after acquired accounts receivable and chattel paper”;
 
 
(ii)
describing the proceeds of that collateral as “All present and after acquired personal property being proceeds of the collateral described in this financing statement”; and
 
 
(iii)
with the secured party group being the Seller and Westpac and the debtor group being the Originator and the Seller.
 
9.
PPSA Provisions
 
 
(a)
The parties to this Sale Notice acknowledge that it is their intention that the provisions contained in Part 9 of the PPSA do not apply to the Receivables transferred to the Seller pursuant to this Sale Notice.  However, if at law this is not the case and in respect of any other security interest created by this Sale Notice:
 
 
(i)
any power to sell any of the Receivables, whether conferred by this Sale Notice or otherwise, may be exercised without the need to give the Originator any notice of the kind that is referred to in section 114 of the PPSA and, if any of the Receivables are sold at any time, the Seller is not required to give the Originator the statement referred to in section 116 of the PPSA; and
 
 
(ii)
the Originator acknowledges that it is not entitled by section 117 of the PPSA to any surplus amounts which may result from any sale at any time.
 
 
(b)
The Originator waives the right to receive a copy of the verification statement confirming registration of a financing statement or financing change statement relating to the security interest under this Sale Notice.

 
Page 92
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
10.
Acknowledgment
 
The Originator acknowledges, agrees and confirms to the Seller that:
 
 
(a)
( Due Power ) It has the power to enter into and perform its obligations under the Sale Notice to which it is expressed to be a party to, to carry out the transactions contemplated by the Sale Notice and to carry on its business as now conducted or contemplated;
 
 
(b)
( Receivables ) the description of the Offered Receivables in the attached list or as specified in the list or notice given by the Originator under clause 4(b) is true and correct in every respect;
 
 
(c)
( Authorisations ) all necessary Authorisations for the offer evidenced by this Sale Notice and the transfer of the Offered Receivables have been taken, or as the case may be, obtained.
 
11.
Limited Recourse
 
 
(a)
The purchase by the Seller of any Receivable pursuant to this Sale Notice constitutes an equitable assignment by the Originator of that Receivable that is absolute and not by way of security.  Other than as specified in this clause 11, the Seller shall have no right of recourse to the Originator in the event of non-payment or delayed or late payment by any Obligor (for whatever reason) in respect of any Receivable which has been purchased by the Seller from the Originator.
 
 
(b)
The Originator agrees that in the event of non-payment by any Obligor (for whatever reason) in respect of any Receivable wh ich has been purchased by the Seller from the Originator, it shall indemnify the Seller on demand for any such non - payment provided that the Originator shall on behalf of the Seller pursue such rights as are available under the relevant Contract and under applicable law against the Obligor in respect of that non-payment and provided further that, if subsequently such payment is recovered ( recovery ) by the Originator from that Obligor, then
 
 
(i)
in the case where a payment has been made by the Originator pursuant to the indemnity above, the Seller shall refund to the Originator in respect of each such indemnity payment, each such recovery; or
 
 
(ii)
in the case where payment has not been made by the Originator pursuant to the indemnity above, the Originator shall hold each recovery on trust for the Seller.
 
12.
Counterparts
 
This Sale Notice may be executed in any number of counterparts.  All counterparts together will be taken to constitute one instrument.
 
13.
Governing Law
 
This Sale Notice is governed by the laws of New Zealand.
 
 
Page 93
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
EXECUTED as an agreement.

MONEYTECH LIMITED by its attorney in the presence of:
     
   
Signature of attorney
     
Signature of witness
 
Name of attorney
     
Occupation
   
     
City/town of residence
   
 
[NZ APPROVED ORIGINATOR] by its attorney in the presence of:
     
   
Signature of attorney
     
Signature of witness
 
Name of attorney
     
Occupation
   
     
City/town of residence
   
 
 
Page 94
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure B
 
Verification Certificate (Clause 6.1(a))
 
To:   Westpac Banking Corporation
 
RECEIVABLES PURCHASE AGREEMENT
 
I [ name ] am a [ director ] of [*] [to be prepared for the Seller and the Servicer] (the Company).
 
I refer to the Receivables Purchase Agreement (the Agreement ) dated [*] 2004 between Moneytech Pty Limited and Westpac Banking Corporation.
 
Definitions in the Agreement apply in this Certificate except where the context otherwise requires.
 
I CERTIFY as follows.
 
2.
Attached to this Certificate are complete and up to date copies of:
 
 
(a)
the constitution of [*] and certificate of incorporation (marked A ); and
 
 
(b)
power of attorney granted by [*] for the execution of each Transaction Document to which it is expressed to be a party (marked B ).  That power of attorney has not been revoked or suspended by [*] and remains in full force and effect.
 
3.
The following are signatures of the Authorised Officers of [*] and the persons who have been authorised to sign each Transaction Document to which it is expressed to be a party and to give notices and communications under or in connection with the Transaction Documents.
 
Authorised Officers
Name
Position
Signature
·
*
 
·
*
 
·
*
 
 
 
Page 95
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Signatories

Name
Position
Signature
·
*
 
·
*
 
·
*
 
 
4.
Attached to this Certificate are complete and up to date copies of the constitution and certificate of incorporation of:
 
 
(a)
[*] (marked C );
 
 
(b)
[*] (marked D ); and
 
 
(c)
[*] (marked E ),
 
each an Approved Originator.

Signed:
   
 
Director
 
     
     
 
Print Name
 
DATED
   
 
 
Page 96
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure C
 
Determination Date Statement
 
Please see attached.
 
 
Page 97
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure D
 
Instalment Notice  
 
To:           Westpac Banking Corporation
 
Level 8
 
255 Elizabeth Street
 
Sydney NSW 2000
 
Fax: 02 9284 9366
 
Attention: [*]
 
RECEIVABLES PURCHASE AGREEMENT
 
I [*] am an [ authorised officer ] of Moneytech Limited (the Selle r) of [*] .
 
I refer to the Receivables Purchase Agreement (the Agreement ) between the Seller and Westpac Banking Corporation dated [*] .
 
Under Clause 2.3(a) of the Receivables Purchase Agreement:
 
 
(1)
we request payment of the following Instalment  $ [             ] on [             ] ;
 
[ NOTE:  Date is to be a Business Day and amount is to comply with the limits in Clause 2.2. ]
 
 
(2)
the requested duration of the initial Yield Period for this Instalment is [*] ;
 
 
(3)
we represent and warrant that:
 
 
(a)
[ (except as disclosed in paragraph (e) ] the representations and warranties in Clause 7.1 of the Receivables Purchase Agreement are true as of the date of this notice in respect of the facts and circumstances then subsisting;
 
 
(b)
no event has occurred and is subsisting or would result from the payment of the requested Instalment that constitutes an Early Amortisation Event;
 
 
(c)
after giving effect to the requested Instalment Westpac's Investment will not exceed the Purchase Limit or Purchase Base;
 
 
(d)
the Commitment Termination Date has not occurred; and
 
 
(e)
details of the exceptions to paragraph (a) are as follows:   [[*] , and we [ have taken/proposed ] the following remedial action [*] ; ]
 
[ NOTE:  Inclusion of a statement under paragraph (e) shall not prejudice the conditions precedent in the Receivables Purchase Agreement. ]
 
 
Page 98
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Definitions in the Receivables Purchase Agreement apply when used in this notice.
 
Please confirm your agreement to this by making payment to the following bank account or into a bank account as otherwise directed by the Seller:
 
Bank: 
[*]
 
BSB #:  
[*]
 
Account  Name:  
[*]
 
Account  #: 
[*]
 
Signed on behalf of the Seller:
 
 
Authorised Officer
 
Moneytech Limited
 
   
 
Print Name
   
DATED
 
   
   
   

 
Page 99
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure E
 
Form of Director's Certificate
 
TO:                           Westpac Banking Corporation
 
AND TO:                  [     ]
 
I, [*] , a director of [insert name of NZ Approved Originator] (the Originator ), certify as follows:
 
1.
Board Resolutions
 
1.1
The board of directors of the Originator (the Board ) has passed all necessary resolutions to:
 
 
(a)
approve the transactions (the Transactions ) contemplated by the documents listed in the Annexure (the Documents ), and the Documents themselves;
 
 
(b)
authorise signing of the Documents by or on behalf of the Originator in the manner in which they have actually been signed; and
 
 
(c)
authorise the persons specified in paragraph 10 to give any notices and other communications, and take any other action required, under or in connection with the Documents on behalf of the Originator.
 
1.2
The resolutions were duly passed {
 
OPTION I : #< in writing signed by [ a majority/all] of the directors of the Originator. >#
 
OPTION 2 : #< at a meeting of the Board which was properly convened and in respect of which all quorum requirements were duly observed. >#}
 
1.3
The resolutions remain in full force and effect.
 
2.            Directors' Self Interested Transactions  
 
2.1
{OPTION I : #< To the best of my knowledge and belief after making due enquiry [ of each other director (as that term is defined in section 126 of the Companies Act 1993 ("Act")) of the Originator ] , none of the directors (as so defined) of the Originator has an interest (as that term is defined in section 139 of the Act) in the Transactions.>#
 
OPTION 2: #<After making due enquiry' it has been determined that one or more of the Originator's directors (as that term is defined in section 126 of the Companies Act 1993 ("Act")) is, or may be, interested (as that term is defined in section 139 of the Act) in the   Transactions and such interests have been entered in the interests register accordingly. The Transactions have been disclosed to all shareholders of the Originator.
 
All of the Originator's entitled persons have agreed in writing (pursuant to section 107(3) of the Act) to the Originator's entry into and performance of the Documents and the Transactions (so that nothing in sections 140 and 141 of the Act will apply to the Transactions). >#}
 
2.2
In approving the Documents and the Transactions, the Board, after taking into account all relevant factors, is of the view that the Originator is receiving or will receive fair value under them.

 
Page 100
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
3.             Corporate Benefit  
 
In approving the Documents and the Transactions, the Board, after taking into account all relevant factors, is of the view
 
{OPTION 1: #<that the Originator's entry into and performance of the Document [ s ] and the Transactions is in the best interests of the Originator.>#
 
OPTION 2: #<(pursuant to an express provision in the constitution of the Originator) that the Originator's entry into and performance of the Document [ s ] and the Transactions is in the best interests of the Originator's holding Westpac [ and as the Originator is not a wholly owned subsidiary of the Originator's holding Westpac the prior agreement to the Originator's entry into and performance of the Document{s) and the Transactions has been obtained from all of the Originator's shareholders, other than that holding company ] .>#}
 
4.            Shareholder Resolutions  
 
{OPTION 1: #<It has been determined that the Transactions are a "Major Transaction" for the purposes of section 129 of the Act. Accordingly [all of] the shareholders of the Originator have by special resolution:
 
(a)           approved the Document [ s ] and the Transactions; and
 
(b)           confirmed, approved and ratified the resolutions of the Board referred to above.
 
OPTION 2: #<It has been determined that the Transactions do not constitute a "Major Transaction" for the purpose of section 129 of the Act.>#}
 
5.             Due Execution  
Each of the Documents has been properly signed by the Originator .
 
6.            Solvency  
 
6.1
I am not aware of any liquidation proceedings which have been commenced against the Originator by any person, or which are intended or anticipated by the Originator.
 
6.2
Having taken into account all relevant factors the Board is of the view that the value of the consideration or benefit received, or to be received, by the Originator under the Transactions is not less than the value of the consideration provided, or to be provided, by the Originator.

 
Page 101
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
7.             Financial Assistance  
 
The Transactions do not include or involve any provision by the Originator (directly or indirectly) of financial assistance in connection with the acquisition of a share issued or to be issued by the Originator or its holding company.
 
8.             Constitution  
 
The copy of the constitution of the Originator held on its records as maintained at the office of the Registrar of Companies at [place] as at the date of this certificate is complete and includes all alterations to date.
 
9.             Authorisations  
 
{OPTION 1: #<All consents and other authorisations required by the Originator in connection with the entry into, execution and performance of the Documents and the Transactions have been obtained on an unconditional and unqualified basis and remain in full force and effect.>#
 
OPTION 2: #< No consents or other authorisations are required by the Originator in connection with the entry into, execution and performance of the Documents or the Transactions.>#}
 
10.           Authorised Signatories  
 
The following are the true signatures of the persons who have been authorised ([any one of them acting alone]/[any two of them acting together]) to give any notices and other communications, and to take any other action required, under or in connection with the Documents on behalf of the Originator.

Name
 
Position
 
Signature
         
         
         
 
 
Page 102
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Signed on behalf of the Originator:
 
 
Director
   
   
 
Print Name
   
DATED
 
   
   
 
ANNEXURE OF DOCUMENTS
 
1.
Sale Notice between the Originator and Moneytech Limited.
 
2.
NZ Seller Power of Attorney given by the Originator to Moneytech Limited.
 
3.
Guarantee given by the Originator to Westpac Banking Corporation.
 
 
Page 103
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure F
 
Form of Australian Power of Attorney for each Australian Approved Originator

Date
 
   
Parties
Deed Poll by:
   
 
[*] (ABN [*], ( the   Principal ).
 
IT IS DECLARED as follows:
 
1.
Interpretation
 
Terms defined in:
 
 
(a)
the Receivables Purchase Agreement between Moneytech Limited, Moneytech Finance Pty Limited, Moneytech Services Pty Limited, and Westpac Banking Corporation ( Westpac ) dated [*] 2005 (the RPA ); and
 
 
(b)
the Sale Notice between the Principal and Moneytech Finance Pty Limited dated on or around the date of this Deed, as amended (the Sale Notice ),
 
have the same meaning when used in this deed.
 
In the event of any conflict between the provisions of the RPA and the Sale Notice, the Sale Notice shall prevail.
 
2.             Appointment  
 
The Principal irrevocably appoints each Authorised Officer of Westpac (each an Attorney ) severally as the Principal’s attorney.
 
3.            Powers  
 
 
(a)
Each Attorney may do anything in the Principal’s name or in its own name as the act of the Principal which:
 
 
(i)
the Principal is obliged, authorised or empowered to do under or in relation to any Sale Notice relating to the Principal, or any Contract (including enforcing any Purchased Receivable);
 
 
Page 104
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
 
(ii)
Westpac is authorised or empowered to do under any Sale Notice relating to the Principal, any Contract or any law but only at the times that Westpac would have been able to do it;
 
 
(iii)
is required to transfer the interest of the Principal in a Receivable to the Seller or Westpac, including executing a legal transfer of such Receivable and giving notice of the assignment to the relevant Obligor;
 
 
(iv)
it considers necessary to protect and/or perfect its security interest and its right, title and interest in any Receivable; and
 
 
(v)
it considers necessary to exercise the powers given to the Attorney under this clause (including signing transfers, releases, instruments and other documents).
 
 
(b)
An Attorney may only act under this power if an Early Amortisation Event is subsisting.
 
(c)           Without limitation, each Attorney may at any time appoint sub-attorneys.
 
 
(d)
No Attorney appointed under this Deed may act inconsistently with this deed and the RPA.
 
3.             Ratification  
 
The Principal shall ratify anything done by an Attorney under this deed.
 
4.             Delegation  
 
This deed applies to a sub-attorney.  An Attorney may execute any document on behalf of the Principal even if it contains a power of attorney or other delegation.
 
5.             Conflict of Interest  
 
An Attorney may execute a document or do anything (and that document or thing will be valid) even if the Attorney is in any way:
 
(a)           interested in the document or thing; or
 
(b)           connected with a person who is in any way interested in the document or thing.
 
6.             Indemnity  
 
The Principal shall indemnify each Attorney against any loss, cost, charge, liability or expense the Attorney may sustain or incur as a direct or indirect consequence of the exercise of any power under this deed.
 
7.             Revocation  
 
This power of attorney is irrevocable until all moneys owing in respect of the Receivables have been paid in full.
 
 
Page 105
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
8.             Personal Liability and No Warranty  
 
An Attorney’s exercise of any power under this deed does not involve on the part of the Attorney, any partner of the Attorney or any entity of which the Attorney is an employee:
 
(a)           any personal liability in connection with that exercise or its consequences; or
 
 
(b)
an express or implied warranty as to the validity of this deed or the Attorney’s authority to exercise the power.
 
9.             Governing Law  
 
This deed is governed by the laws of New South Wales.
 
EXECUTED as a deed.
 
Signed Sealed and Delivered by [*]
   
     
     
Director Signature
 
Director Signature
     
     
Print Name
 
Print Name
 
 
Page 106
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Annexure F
 
Form of NZ Power of Attorney for each NZ Approved Originator
 
NZ Originator Power of Attorney
 
 
Page 107
 
 
Receivables Purchase Agreement
Allens Arthur Robinson
 
 
 
Date
 
   
Parties
Deed Poll by:
   
 
[NZ Originator] Limited (the Principal ).
 
IT IS DECLARED as follows.
 
1.
Interpretation
 
Terms defined in:
 
 
(a)
the Receivables Purchase Agreement between Moneytech Pty Limited ( the Seller ) and Westpac Banking Corporation ( Westpac ) dated on or around the date of this deed, as amended (the RPA ); and
 
 
(b)
the Sale Notice between the Principal and the Seller dated on or around the date of this deed, as amended (the Sale Notice );
 
have the same meaning when used in this deed.
 
In the event of any conflict between the provisions of the RPA and the Sale Notice, the Sale Notice shall prevail.
 
2.
Appointment
 
The Principal irrevocably appoints each Authorised Officer of the Seller (each an Attorney )   severally as the Principal's attorney.
 
3.
Powers
 
 
(a)
Each Attorney may do anything in the Principal's name or in its own name as the act of the Principal which:
 
 
(i)
the Principal is obliged, authorised or empowered to do under or in relation to the Sale Notice, and any Contract (including enforcing any Receivable);
 
 
(ii)
the Seller is authorised or empowered to do under the Sale Notice, any Contract or any law but only at the times that the Seller would have been able to do it;
 
 
(iii)
is required to transfer the interest of  the Principal in a Receivable to the Seller, including executing a legal transfer of such Receivable and giving notice of the assignment to the relevant Obligor;
 
 
(iv)
it considers necessary to protect and/or perfect its security interest and its right, title and interest in any Receivable; and
 
 
(v)
it considers necessary to exercise the powers given to the Attorney under this clause (including signing transfers, releases, instruments and other documents).
 
 
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(b)
An Attorney may only act under this power if an Early Amortisation Event is subsisting.
 
 
(c)
Without limitation, each Attorney may at any time appoint sub-attorneys.
 
 
(d)
No Attorney appointed under this deed may act inconsistently with this deed.
 
4.
Ratification
 
The Principal shall ratify anything done by an Attorney under this deed.
 
5.
Delegation
 
This deed applies to a sub-attorney. An Attorney may execute any document on behalf of the Principal even if it contains a power of attorney or other delegation.
 
6.
Conflict of Interest
 
An Attorney may execute a document or do anything (and that document or thing will be valid) even if the Attorney is in any way:
 
 
(a)
interested in the document or thing; or
 
 
(b)
connected with a person who is in any way interested in the document or thing.
 
7.
Indemnity
 
The Principal shall indemnify each Attorney against any loss, cost, charge, liability or expense the Attorney may sustain or incur as a direct or indirect consequence of the exercise of any power under this deed.
 
8.
Revocation
 
This power of attorney is irrevocable until all moneys owing in respect of the Receivables have been paid in full or until the Principal does not owe any money to the Seller under the Sale Notice.
 
9.
Personal Liability and No Warranty
 
An Attorney's exercise of any power under this deed does not involve on the part of the Attorney, any partner of the Attorney or any entity of which the Attorney is an employee:
 
 
(a)
any personal liability in connection with that exercise or its consequences; or
 
 
(b)
an express or implied warranty as to the validity of this deed or the Attorney's authority to exercise the power.
 
10.
Governing Law
 
This deed is governed by the laws of New Zealand.
 
 
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EXECUTED as a deed.

Signed by [NZ Originator] Limited :
   
     
     
Director Signature
 
Director Signature
     
     
Print Name
 
Print Name
 
 
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Annexure G
 
Credit and Collections Policies
 
Page 111
 
 
Annexure H
 
Presentment and Payment Platform  
 
These are the terms for Westpac's provision, and the Seller's use, of the Platform referred to in clause 20 of the Agreement.
 
1.
Description of the Platform
 
The Platform enables the Seller and Servicer to process payment instructions in relation to Authorised Users of Moneytech Limited.
 
2.
Definitions
 
Terms defined in the Agreement have the same meaning when used here unless stated otherwise or otherwise defined in this annexure.
 
Account means the bank account for acceptance of credit and debit entries under this Platform and for related purposes.
 
Clause means a clause of this Annexure.
 
Payment means any amount remitted from an Authorised User to the Seller or from Westpac to an Authorised User.
 
Transaction means the making of a Payment in relation to an electronically delivered invoice via the Platform through the Presentment and Payment Website.
 
3.
Service information
 
3.1
Provisions of Access to Platform
 
The Seller acknowledges that:
 
 
(a)
Seller's access to the Platform is provided on the terms and conditions contained in this Annexure and the Documentation;
 
 
(b)
Westpac provides access to the Platform partly through Qvalent and other third party service providers, including Carriers;
 
 
(c)
the Platform is hosted on behalf of Westpac by a third party; and
 
 
(d)
accordingly, as Westpac is reliant on third parties to provide access to the Platform there may be circumstances where the Platform is unavailable due to circumstances outside of Westpac's control.

 
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4.
Westpac Obligations
 
4.1
Access
 
The Seller acknowledges that:
 
 
(a)
Subject to the Seller complying with its obligations under this agreement, Westpac will provide the Seller with access to the Platform on the terms of this annexure and the Documentation.
 
 
(b)
The Platform will:
 
 
(i)
receive payment instructions from the Authorised Users;
 
 
(ii)
process purchase and funding requests from the Seller; and
 
 
(iii)
report data to Westpac, the Seller and Servicer,
 
pursuant to the Solution Description.
 
 
(c)
Westpac will provide support services comprising the training services described in clause 7, the Maintenance Service described in clause 4, and access to the Westpac Support Centre and support personnel described in clause 4.
 
4.2
Preparation
 
Westpac will provide the Seller with the information reasonably necessary to carry out the preparations required to obtain access to the Platform.
 
4.3
Performance of the Platform
 
 
(a)
By executing this agreement, the Seller and Servicer confirm to Westpac that the Platform operates as set out in the Solution Documentation on the date of this Agreement.
 
 
(b)
Westpac will use its best endeavours to ensure that the Platform performs as set out in the Solution Description and this Agreement.

 
5.
Obligations of the Seller
 
5.1
Seller's hardware and software
 
The Seller is responsible for procuring the Seller's hardware and the Seller's software and ensuring that such items meet the minimum system requirements in Attachment A to this annexure.
 
5.2
Data security
 
The Seller is wholly responsible for the security and back up of its data on the Platform.
 
5.3
Internet connection
 
The Seller is responsible for providing its own access to the Internet and procuring sufficient bandwidth to and from the Seller’s location to enable access to the Platform.
 
 
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6.
Use of the Platform
 
6.1
Use
 
 
(a)
The Seller may only use the Platform:
 
 
(i)
through its Authorised Users;
 
 
(ii)
to carry out the functions specified in the Documentation;
 
 
(iii)
for its own business purposes; and
 
 
(iv)
otherwise in accordance with Westpac's directions (from time to time) and the Documentation.
 
 
(b)
The Seller must not:
 
 
(i)
decompile, disassemble, reverse engineer, modify, enhance or alter the whole or any part of the Platform or the Documentation, except to the extent that the Seller is legally authorised to do so by the Copyright Act 1968 (Cth); or
 
 
(ii)
copy, or allow a third party to copy,
 
the Platform  except to the extent reasonably necessary for backup purposes.
 
 
(c)
Prior to enabling an Authorised User to access the Platform, the Seller must make the Authorised User aware of the terms and conditions which apply to such access.
 
7.
Training
 
7.1
Training in use of the Platform
 
 
(a)
At the request of the Seller, Westpac (itself or via a third party) will provide training in the use of the Platform to the Authorised Users employed by Moneytech Limited as follows:
 
 
(i)
during one training session which will take place as soon as reasonably practicable after access to the Platform is provided; and
 
 
(ii)
if the Seller requires any additional training, such training will be provided at the Seller’s cost and on Westpac's then current terms and charges.
 
 
(b)
The Seller must bear all travelling, accommodation and other expenses incurred by Westpac personnel in providing the Training.
 
 
(c)
The Seller must ensure that only:
 
 
(i)
Authorised Users of Moneytech Limited who have received the training referred to in this clause 7 of this annexure; and
 
 
(ii)
other Authorised Users who confirm to Moneytech that they agree to the terms of use of the Platform,
 
are granted access to the Platform.
 
 
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8.
Operation of the Platform
 
8.1
Access
 
 
(a)
The Seller must not, and must use its best endeavours to ensure that the Authorised Users are unable to, access the Platform by any means other than through the Seller’s hardware.
 
 
(b)
The Seller must:
 
 
(i)
do everything reasonably necessary to prevent any unauthorised operation, modification or use of the Platform; and
 
 
(ii)
do everything reasonably necessary to protect the Platform from misuse.
 
 
(c)
Westpac may charge the Seller for:
 
 
(i)
any work done that relates to the Seller’s hardware or Seller’s software in which Westpac performs work requested by the Seller in connection with the installation or connection of the Seller’s hardware or the Seller’s software;
 
 
(ii)
any work required in relation to the operation of the Seller’s hardware or Seller’s software when connected to the Platform; and
 
 
(iii)
any other information including any analysis or reports requested by the Seller.
 
except where the requirement for work or information arises from a fault in the operation of the Platform.
 
8.2
No third party use without approval
 
The Seller must not allow any third party to access or use the Platform without Westpac's prior written approval.  So long as an Obligor is approved by Moneytech Limited to hold a DealerCard, Westpac approves that Obligor as an Authorised User.
 
9.
Transactions
 
9.1
No responsibility for Transactions
 
 
(a)
Westpac takes no responsibility for Payments by Obligors or the obligation to make those payments.
 
 
(b)
The Seller is responsible for ensuring that the Contract details are accurate.

 
10.
Proprietary rights
 
10.1
Seller no proprietary rights
 
 
(a)
All rights, title and interests (including all Intellectual Property Rights) in and to the Platform, any software developed by Westpac for the Seller, the Documentation and any enhancements or modifications to any of them, are owned by Westpac (or, where appropriate, its licensors), and nothing in this agreement assigns or transfers any rights of Westpac or its licensors to the Seller.
 
 
(b)
The Seller must not:
 
 
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(i)
remove, deface or obscure any identification or copyright notices on the Platform; or
 
 
(ii)
copy the Documentation,
 
without the express written consent of Westpac.
 
 
(c)
The Seller must not change any screen available on the Presentment and Payment Website (including any information displayed on such screen).
 
 
(d)
Westpac acknowledges that the Documentation represents, as a whole, a unique selling and marketing proposition developed by Moneytech Limited and will not replicate that selling and marketing proposition other than for the benefit of Moneytech Limited.
 
11.
Use of Data
 
11.1
Collection and privacy
 
 
(a)
The Seller acknowledges and agrees that Westpac may collect information about the Seller, including Personal Information, and Transaction information. The Seller agrees that Westpac may use this information for planning, product development and research purposes.  Westpac will not disclose this information to any third party without the Seller’s consent except as otherwise permitted under this agreement or as required by law.  Where relevant, Westpac will comply with the requirements of the Privacy Act 1988 (Cth) when collecting, using and disclosing any Personal Information belonging to the Seller.
 
 
(b)
The Seller agrees to inform Obligors that Westpac may collect Personal Information about the Obligors during their use of the Platform.
 
 
(c)
The Seller agrees that Westpac may use information about the Transactions for administration and internal reporting and may use such information alone or with other data to create and disseminate trend analyses, statistical reports and similar information ( Reports ), provided that such Reports do not disclose the identity of the Seller or the Obligors.
 
 
(d)
Westpac’s privacy policy is available for review on the Westpac web-site at www.westpac.com.au .
 
 
(e)
The Platform is hosted on third party hardware. The Seller’s information may become known to the host, and the host is obligated to keep Seller’s information confidential.  Westpac will ensure that the Platform host complies with its confidentiality obligations as they apply to the Seller, the Servicer, Moneytech Limited and any Obligor.
 
12.
New Releases
 
12.1
New Release
 
 
(a)
Westpac may provide the Seller with an enhancement or modification to the Platform ( New Release ).  The Seller must, as soon as practicable after it receives the New Release, install the New Release.
 
 
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(b)
Westpac will provide the Documentation reasonably necessary for the Seller to use a New Release.
 
 
(c)
Westpac will not charge the Seller for New Releases of the Platform which it generally makes available to other customers. Westpac may charge the Seller for supplying or installing other new releases or related services requested by the Seller, if Westpac agrees to provide such new releases or related services.
 
 
(d)
New Releases and other software upgrades provided by Westpac may require hardware upgrades for satisfactory performance. The Seller is responsible for the cost of any such hardware upgrades.
 
13.
Maintenance Services
 
13.1
Maintenance that Westpac will provide
 
Subject to clause 13.6 of this annexure, Westpac will provide maintenance services for the Platform through the Westpac Support Centre and in accordance with the Service Levels ( Maintenance Services ).
 
13.2
Seller's obligations for maintenance
 
 
(a)
The Seller must notify the Westpac Support Centre promptly (and in any event within 2 business days of discovery) of any Defects in the operation of the Platform which materially affect the Seller’s use of the Platform.
 
 
(b)
The Seller must maintain records of all Defects and make those records available to Westpac on request.
 
 
(c)
The Seller must not perform or allow any third party to perform maintenance or repair work, alterations or modifications of any nature whatsoever to the Platform.
 
 
(d)
Westpac may charge the Seller for Maintenance Services required because of any:
 
 
(i)
neglect or fault of the Seller or any third party authorised by the Seller to use or access the Platform; or
 
 
(ii)
defect or malfunction in any Seller’s hardware or Seller’s software.
 
13.3
Maintenance exclusions
 
The Seller agrees that Maintenance Services do not include:
 
 
(a)
any service other than those provided at Westpac’s own locations;
 
 
(b)
consumables;
 
 
(c)
maintenance of any attachments or associated equipment (whether or not supplied by Westpac) which do not form part of Westpac’s own hardware;
 
 
(d)
any maintenance services for Seller’s hardware and Seller’s software; or
 
 
(e)
any maintenance services provided outside Business Hours, at the Seller's request.
 
 
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13.4
Chargeable items
 
Westpac may charge the Seller its then current rate of charges for:
 
 
(a)
goods and services not included in the Maintenance Services but which Westpac agrees to supply to the Seller; and
 
 
(b)
any other maintenance services for which Westpac is entitled to charge the Seller pursuant to this Annexure.
 
13.5
Support
 
Westpac will provide, in accordance with clause 13.6 of this annexure:
 
 
(a)
a telephone help desk (via the Westpac Support Centre) staffed by personnel of Westpac capable of providing technical and functional assistance in the use of the Platform; and
 
 
(b)
assistance from support personnel capable of providing assistance in the use of the Platform.
 
13.6
Service Levels
 
 
(a)
The service processes and Service Levels are set out in Attachment B to the Annexure.
 
 
(b)
Notwithstanding any other provision in this Annexure, the Seller agrees that a failure by Westpac to meet or observe the Priority Levels and Resolution Targets (set out in Attachment B of this Annexure) does not constitute a breach of the terms set out in this annexure or the agreement.
 
13.7
Planned Outages
 
So far as possible, Planned Outages will occur:
 
 
(a)
outside Business Hours;
 
 
(b)
for the shortest possible time on each occasion; and
 
 
(c)
at a time that will minimise any inconvenience to Seller.
 
14.
Suspension of Access
 
14.1
Westpac's right to suspend Access
 
 
(a)
Westpac may, at any time without notice to the Seller, suspend for an indefinite period or cancel the Seller’s access to the Platform:
 
 
(i)
if the Seller breaches or Westpac reasonably believes that the Seller is in breach of its obligations under this agreement;
 
 
(ii)
if the Seller’s connection to the Platform will cause technical incapacity to the Platform and that such incapacity would continue unless access or use is suspended; and
 
 
(iii)
otherwise, for any other reason (although it will use reasonable endeavours to provide notice where practicable), if for example, Westpac needs to carry out urgent repairs to its network, or where it is obliged to comply with an order, instruction or request of any Governmental Agency.
 
 
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14.2
No objection by the Seller
 
Westpac will use all reasonable endeavours to act promptly to restore access when it is reasonably satisfied that the cause of the suspension has been removed.
 
15.
Exclusion of Warranties and Liability
 
 
(a)
Access to the Platform is provided on an 'as is' basis and without any representation or warranty to the Seller that the Platform will perform free of errors or defects, or as to the availability or performance of the Platform.
 
 
(b)
The Seller acknowledges that the Seller has no claim against Westpac if the Seller’s software or Seller's hardware fails to function satisfactorily or to be compatible with the Platform.
 
 
(c)
Where legislation implies in this agreement any condition or warranty, and that legislation avoids or prohibits provisions in a contract excluding or modifying the application of or exercise of or liability under such condition or warranty, the condition or warranty will be deemed to be included into this agreement. However the liability of Westpac for any breach of such condition or warranty will be limited, at the option of Westpac, to one or more of the following:
 
 
(i)
if the breach relates to goods:
 
 
(A)
the replacement of the goods or the supply of equivalent goods;
 
 
(B)
the repair of such goods;
 
 
(C)
the payment of the cost of replacing the goods or acquiring equivalent goods; or
 
 
(D)
the payment of the costs of having the goods repaired; and
 
 
(ii)
if the breach relates to services:
 
 
(A)
the supplying of the services again; or
 
 
(B)
the payment of the cost of having the services supplied again.
 
 
(d)
Subject to clause 15(c) of this annexure and to the extent permitted by law, Westpac excludes any and all liability (howsoever arising or caused, including due to Westpac's wilful, reckless, negligent acts or omissions or breach of contract) to the Seller for any loss arising directly or indirectly from the Seller's use of the Platform and the Services.
 
 
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ATTACHMENT A
 
to
 
PRESENTMENT AND PAYMENT PLATFORM
 
HARDWARE (minimum requirement) – IBM P630 1 Gig CPU, 1 Gig RAM
 
MODEM/CONNECTIVITY (minimum requirement) – Internet Connection using SSL Certs
 
SOFTWARE (minimum requirement) – Java J2E 1.3 AIX 5.1
 
 
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ATTACHMENT B
 
to
 
PRESENTMENT AND PAYMENT PLATFORM
 
SERVICE LEVELS
 
1.
Westpac Support Centre - Hours of Operations
 
 
(a)
Subject to paragraphs (b) and (c) below, support will be available between the hours of 7.00am and 7.00pm Australian Eastern Standard Time ( AEST ) Monday to Friday.
 
 
(b)
Public holiday support will be available for days that are not national Australian holidays.  That is, support will be available on:
 
 
(i)
Queen’s Birthday public holiday (June); and
 
 
(ii)
NSW Labour Day (October).
 
 
(c)
Public holidays where support is not available are:
 
 
(i)
Australia Day (26 th January);
 
 
(ii)
ANZAC Day (25 th April);
 
 
(iii)
Good Friday;
 
 
(iv)
Easter Monday;
 
 
(v)
Christmas Day (25 th December);
 
 
(vi)
Boxing Day (26 th December); and
 
 
(vii)
New Years Day (1 January).
 
2.
General service provisions
 
Westpac will:
 
 
(a)
co-ordinate and resolve any difficulties the Seller may have in accessing the Presentment and Payment Website.
 
 
(b)
ensure that all identified problems reported to the Westpac Support Centre by the Seller are immediately logged and escalated and forwarded to the appropriate personnel as referred to in this Service Level Standard; and
 
Westpac does not support software sourced from third parties unless it is an integral part of the Presentment and Payment Platform.  To avoid doubt, the Presentment and Payment Platform does not constitute third party software.
 
 
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3.
Seller's hardware and software
 
The Seller will be responsible for all service issues associated with Seller’s hardware and the Seller’s software, Westpac will charge the Seller for time spent in servicing the Seller’s hardware and the Seller’s software.  The Seller is responsible for ensuring the Seller’s personnel are aware of the appropriate contact numbers for servicing of Seller’s hardware and Seller’s software.
 
4.
Purpose
 
The Westpac Support Centre has been set up in Sydney, Australia to provide application and technical support for authorised customers using the Platform.
 
The Westpac Support Centre will not support the following:
 
 
(a)
Seller’s hardware or connectivity;
 
 
(b)
Seller’s software, including Internet browser functionality; or
 
 
(c)
third party back office functionality.
 
5.
Method of contact
 
Sellers will be able to log support issues via the Internet using a web support tool or by phoning the Westpac Support Centre.  Westpac recommends all Priority P1 issues are logged via the phone and all other priority calls should be logged via the web support tool.
 
Via email
 
A customer should complete the ‘Web Form’ form and will be given a reference number that should be referred to when further information on the call is required.
 
Via telephone
 
All Priority P1 calls should be referred immediately to the Westpac Support Centre (see Paragraph 7 - "Priority Levels and Resolution Targets" for details).  Sellers can call Qvalent Customer Care 1300 301 444 (which is available Monday to Friday 7:00 am to 6:00 pm AEST on a Business Day) to speak to a Support Specialist.
 
Via web interface
 
A customer will be able to complete the web form as an alternate to using the phone or sending an email. It is recommended that this form be completed for all faults and enquiries other than Priority P1.
 
6.
Service Levels
 
Westpac will ensure that all calls will be responded to in accordance with the Priority Levels and Resolution Targets table. The Service Levels are provided on the basis that the events described are not caused by Seller’s hardware or Seller’s software or any software not supported by Westpac.
 
 
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7.
Priority Levels and Resolutions Targets
 
The priority of a problem determines the targeted initial response times by Westpac..  Westpac will determine the priority of each case.  All response times are during the Business Hours of operations (see Method of Contact). It may not be possible to resolve a problem during the stated resolution times.  For example, this happens when additional information is needed or different expertise is required to resolve the problem. In these instances, the Support Specialist will update the Seller periodically in accordance with the following table, and Westpac will work to resolve the problem during Business Hours of operation.

Priority
 
Import
 
Definitions
 
  Response
 
Resolution
 
Update
                     
       
System is down or fails to function.   No work around is possible.
           
P1
 
  Critical
 
A Seller has complete loss of service and work cannot reasonably continue.  Or a Seller experiences data loss or corruption.
 
Or a Seller is unable to use an essential part of the application.
 
1 hours
 
1 day
 
2 hours
                     
       
Selected features are missing or fail to perform.
           
P2
 
Major
 
A problem affects the functionality of the system but can be circumvented so that the system can be used.
 
4 hours
 
2 days
 
8 hours
                     
P3
 
Average
 
Selected features perform slowly or incorrectly.  A Seller can circumvent the problem and use the system with only slight inconvenience.
 
8 hours
 
3 days
 
12 hours
                     
       
General questions on functionality or training or cosmetic defects.
           
P4
 
Minor
 
A Seller notes a condition that does not affect functionality of the system or impede the use of the system in a slow way.
 
8 hours
 
4 days
 
1 day
                     
       
If a Seller believes there is a problem with currently functionality it should be investigated as a possible application “bug”.
           
P5
 
Bug
 
If a Seller believes an enhancement could be made to existing or new functionality.
 
8 hours
 
Will be advised after investigation
 
5 days
 
 
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Annexure I
 
Form of Insurance Policy
 
 
Page 124
Exhibit 10.8
 
SOURCE FINANCIAL, INC

STOCK OPTION AGREEMENT

THIS AGREEMENT, made as of July 19, 2013, by Source Financial, Inc., a Delaware corporation (hereinafter called the "Company"), with Klaus Selinger (hereinafter called the "Holder").

R E C I T A L S:

The Company has adopted a 2013 Omnibus Incentive Plan (the "Plan").  Said Plan, as it may hereafter be amended and continued, is incorporated herein by reference and made part of this Agreement.  Terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.

The Board, which in the absence of a Committee, is charged with the administration of the Plan pursuant to Section 3 of the Plan, has determined that it would be to the advantage and interest of the Company to grant the option provided for herein to the Holder as an inducement to remain in the service of the Company or one of its subsidiaries, and as an incentive for increased efforts during such service.

NOW, THEREFORE, pursuant to the Plan, the Company hereby grants to the Holder as of the date hereof an option (the “Option”) to purchase all or any part of seventy-five (75,000) shares of Common Stock of the Company, par value $.001 per share, upon the following terms and conditions:

1.           (a)           The Option shall continue in force through June 30, 2020 (the "Expiration Date"), unless sooner terminated as provided herein and in the Plan. Subject to the provisions of the Plan, the right to exercise the Options shall vest as to 2,083 shares on September 30, 2013, and as to an additional 2,083 shares on the last day of each calendar month thereafter through and including August 31, 2016, except that the right to exercise the Options shall vest as to 2,095 shares on August 31, 2016, and the exercise price per share of the Options vesting as of any date shall be $2.00.

(b)           Except as provided hereinbelow, the Option may not be exercised unless the Holder is then an employee (including officers and directors who are employees), non-employee director, consultant, advisor, agent or independent representative of the Company or any subsidiary of the Company or any combination thereof and unless the Holder has remained in the continuous employ or service thereof from the date of grant.
 
 
1
 
 
(c)           No installment under this option shall qualify for favorable tax treatment as an Incentive Stock Option if (and to the extent) the aggregate Fair Market Value of the Common Stock for which such installment first becomes exercisable hereunder would, when added to the aggregate value of the Common Stock or other securities for which this option or any other Incentive Stock Options granted to Holder prior to the date hereof (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollars ($100,000) limitation be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Qualified Stock Option.

2.           In the event that the employment or service of the Holder shall be terminated prior to the Expiration Date (otherwise than by reason of death or disability), the Option may, subject to the provisions of the Plan, be exercised (to the extent that the Holder was entitled to do so at the termination of this employment or service) at any time within three months after such termination, but not after the Expiration Date, provided, however, that if such termination shall have been for cause or voluntarily by the Holder and without the consent of the Company or any subsidiary corporation thereof, as the case may be (which consent shall be presumed in the case of normal retirement), or if the Holder accepts employment with a competitor of the Company, the Option and all rights of the Holder hereunder, to the extent not theretofore exercised, shall forthwith terminate immediately upon such termination or employment of the Holder with a competitor. Nothing in this Agreement shall confer upon the Holder any right to continue in the employ or service of the Company or any subsidiary of the Company or affect the right of the Company or any subsidiary to terminate his employment or service at any time.

3.           If the Holder shall (a) die while he is employed by or serving the Company or a subsidiary thereof or within three months after the termination of such position (other than termination for cause, or voluntarily on his part and without the Consent of the Company or subsidiary corporation thereof, as the case may be, which consent shall be presumed in the case of normal retirement or voluntarily by the Holder), or (b) become permanently and totally disabled within the meaning of Section 22 (e) (3) of the Internal Revenue Code of 1986, as amended (the "Code"), while employed by or serving any such company, and if the Option was otherwise exercisable, immediately prior to the occurrence of such event, then such Option may be exercised as set forth herein by the Holder or by the person or persons to whom the Holder’s rights under the Option pass by will or applicable law, or if no such person has such right, by his executors or administrators, at any time within one year after the date of death of the original Holder, or one year after the date of permanent or total disability, but in either case, not later than the Expiration Date.

4.           (a)           The Holder may exercise the Option with respect to all or any part of the shares then purchasable hereunder by giving the Company written notice in the form annexed, as provided in paragraph 9 hereof, of such exercise. Such notice shall specify the number of shares as to which the Option is being exercised and shall be accompanied by payment in full in cash of an amount equal to the exercise price of such shares multiplied by the number of shares as to which the Option is being exercised; provided that, if permitted by the Board, the purchase price may be paid, in whole or in part, by surrender or delivery to the Company of securities of the Company having a fair market value on the date of the exercise equal to the portion of the purchase price being so paid. In such event fair market value should be determined pursuant to the Plan.

 
2
 
 
(b)           The Holder shall, upon notification of the amount due, pay promptly any amount necessary to satisfy applicable federal, state or local tax requirements. In the event such amount is not paid promptly, the Company shall have the right to apply from the purchase price paid any taxes required by law to be withheld by the Company with respect to such payment and the number of shares to be issued by the Company will be reduced accordingly.

5.           Notwithstanding the vesting schedule provided for in Paragraph 1 hereof, in the event of a Change of Control, as such term is defined in the Plan, the right to exercise this Option shall be deemed to have vested in its entirety immediately prior to the happening of the event giving rise to the Change in Control.

6.           Notwithstanding any other provision of the Plan, in the event of a change in the outstanding shares of the Company by reason of a stock dividend, split-up, split-down, reverse split, recapitalization, merger, consolidation, combination or exchange of shares, spin-off, reorganization, liquidation or the like, then the aggregate number of shares and price per unit subject to the Option shall be appropriately adjusted by the Board, whose determination shall be conclusive.  For the avoidance of doubt, if as a consequence of a change in the outstanding shares of the Company, upon the exercise of this Option the Holder is entitled to receive an amount in cash which, on a per Option basis is less than the exercise price then in effect, this Agreement shall be deemed to have terminated as of the date of such change.

7.           This Option shall be nontransferable and shall not be assignable, alienable, saleable or otherwise transferable by the Holder other than by will or the laws of descent and distribution except pursuant to a domestic relations order entered by a court of competent jurisdiction.  During the life of the Holder, this Option shall be exercisable only by him. Notwithstanding the foregoing, to the extent the Option is deemed a Non-Qualified Stock Option, the Holder shall be permitted to transfer such Option to family members or family trusts established by the Holder.  Except as otherwise provided for herein, in the event that the Holder terminates employment with the Company to assume a position with a governmental, charitable, educational or similar non-profit institution, the Holder may nominate a third party, including but not limited to a “blind” trust, to act on behalf of and for the benefit of the Holder with respect to the Option.  In addition, the Holder may designate a beneficiary or beneficiaries to exercise the rights of the Holder and receive any distributions upon the death of the Holder.

8.           Neither the Holder nor in the event of his death, any person entitled to exercise his rights, shall have any of the rights of a stockholder with respect to the shares subject to the Option until shares have been registered in the name of the Holder or his estate, as the case may be.

9.           Any notice to the Company provided for in this Agreement shall be addressed to the Company, Attention, its President, and any notice to the Holder shall be addressed to him at his address now on file with the Company, or to such other address as either may last have designated to the other by notice as provided herein. Any notice so addressed shall be deemed to be given on the second business day after mailing, by registered or certified mail, at a post office or branch post office within the United States.

 
3
 
 
10.           In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this Option, the determination by the Board, or if one had been appointed, the Committee (as constituted at the time of such determination) of the rights of the Holder shall be conclusive, final and binding upon the Holder and upon any other person who shall assert any right pursuant to this Option.

SOURCE FINANCIAL, INC.  
ACCEPTED AND AGREED
     
 
By: /s/ Hugh Evans   /s/  Klaus Selinger
 
Hugh Evans
 
Klaus Selinger
 
President and CEO
   

 
4
 
 
FORM OF NOTICE OF EXERCISE

TO:
SOURCE FINANCIAL, INC

The undersigned hereby exercises his option to purchase __________ shares of Common Stock of Source Financial, Inc. (the “Company”) as provided in the Stock Option Agreement dated as of July 19, 2013 at $__________ per share, a total of $__________ and makes payment therefor as follows:

(1)           To the extent of $__________ of the purchase price, the undersigned hereby surrenders to the Company certificates for shares of its Common Stock which, valued at $__________ per share, the fair market value thereof, equals such portion of the purchase price.

(2)           To the extent of the balance of the purchase price, the undersigned has enclosed a check payable to the order of the Company for $__________.

A stock certificate or certificate for the shares should be delivered in person or mailed to the undersigned at the address shown below.

The undersigned hereby represents and warrants that it is his present intention to acquire and hold the aforesaid shares of Common Stock of the Company for his own account for investment, and not with a view to the distribution of any thereof, and agrees that he will make no sale, thereof, except in compliance with the applicable provisions of the Securities Act of 1933, as amended.

 
Signature:
 
 
Address:
 
     
     

Dated:                                                        
 
 5


Exhibit 10.9

SOURCE FINANCIAL, INC

STOCK OPTION AGREEMENT

THIS AGREEMENT, made as of July 19, 2013, by Source Financial, Inc., a Delaware corporation (hereinafter called the "Company"), with John Wolfgang (hereinafter called the "Holder").

R E C I T A L S:

The Company has adopted a 2013 Omnibus Incentive Plan (the "Plan"). Said Plan, as it may hereafter be amended and continued, is incorporated herein by reference and made part of this Agreement. Terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.

The Board, which in the absence of a Committee, is charged with the administration of the Plan pursuant to Section 3 of the Plan, has determined that it would be to the advantage and interest of the Company to grant the option provided for herein to the Holder as an inducement to remain in the service of the Company or one of its subsidiaries, and as an incentive for increased efforts during such service.

NOW, THEREFORE, pursuant to the Plan, the Company hereby grants to the Holder as of the date hereof an option (the “Option”) to purchase all or any part of seventy-five (75,000) shares of Common Stock of the Company, par value $.001 per share, upon the following terms and conditions:

1.           (a)           The Option shall continue in force through June 30, 2020 (the "Expiration Date"), unless sooner terminated as provided herein and in the Plan. Subject to the provisions of the Plan, the right to exercise the Options shall vest as to 2,083 shares on September 30, 2013, and as to an additional 2,083 shares on the last day of each calendar month thereafter through and including August 31, 2016, except that the right to exercise the Options shall vest as to 2,095 shares on August 31, 2016, and the exercise price per share of the Options vesting as of any date shall be $2.00.

(b)           Except as provided hereinbelow, the Option may not be exercised unless the Holder is then an employee (including officers and directors who are employees), non-employee director, consultant, advisor, agent or independent representative of the Company or any subsidiary of the Company or any combination thereof and unless the Holder has remained in the continuous employ or service thereof from the date of grant.
 
 
1
 
 
(c)           No installment under this option shall qualify for favorable tax treatment as an Incentive Stock Option if (and to the extent) the aggregate Fair Market Value of the Common Stock for which such installment first becomes exercisable hereunder would, when added to the aggregate value of the Common Stock or other securities for which this option or any other Incentive Stock Options granted to Holder prior to the date hereof (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollars ($100,000) limitation be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Qualified Stock Option.

2.           In the event that the employment or service of the Holder shall be terminated prior to the Expiration Date (otherwise than by reason of death or disability), the Option may, subject to the provisions of the Plan, be exercised (to the extent that the Holder was entitled to do so at the termination of this employment or service) at any time within three months after such termination, but not after the Expiration Date, provided, however, that if such termination shall have been for cause or voluntarily by the Holder and without the consent of the Company or any subsidiary corporation thereof, as the case may be (which consent shall be presumed in the case of normal retirement), or if the Holder accepts employment with a competitor of the Company, the Option and all rights of the Holder hereunder, to the extent not theretofore exercised, shall forthwith terminate immediately upon such termination or employment of the Holder with a competitor. Nothing in this Agreement shall confer upon the Holder any right to continue in the employ or service of the Company or any subsidiary of the Company or affect the right of the Company or any subsidiary to terminate his employment or service at any time.

3.           If the Holder shall (a) die while he is employed by or serving the Company or a subsidiary thereof or within three months after the termination of such position (other than termination for cause, or voluntarily on his part and without the Consent of the Company or subsidiary corporation thereof, as the case may be, which consent shall be presumed in the case of normal retirement or voluntarily by the Holder), or (b) become permanently and totally disabled within the meaning of Section 22 (e) (3) of the Internal Revenue Code of 1986, as amended (the "Code"), while employed by or serving any such company, and if the Option was otherwise exercisable, immediately prior to the occurrence of such event, then such Option may be exercised as set forth herein by the Holder or by the person or persons to whom the Holder’s rights under the Option pass by will or applicable law, or if no such person has such right, by his executors or administrators, at any time within one year after the date of death of the original Holder, or one year after the date of permanent or total disability, but in either case, not later than the Expiration Date.

4.           (a)           The Holder may exercise the Option with respect to all or any part of the shares then purchasable hereunder by giving the Company written notice in the form annexed, as provided in paragraph 9 hereof, of such exercise. Such notice shall specify the number of shares as to which the Option is being exercised and shall be accompanied by payment in full in cash of an amount equal to the exercise price of such shares multiplied by the number of shares as to which the Option is being exercised; provided that, if permitted by the Board, the purchase price may be paid, in whole or in part, by surrender or delivery to the Company of securities of the Company having a fair market value on the date of the exercise equal to the portion of the purchase price being so paid. In such event fair market value should be determined pursuant to the Plan.

 
2
 
 
(b)           The Holder shall, upon notification of the amount due, pay promptly any amount necessary to satisfy applicable federal, state or local tax requirements. In the event such amount is not paid promptly, the Company shall have the right to apply from the purchase price paid any taxes required by law to be withheld by the Company with respect to such payment and the number of shares to be issued by the Company will be reduced accordingly.

5.           Notwithstanding the vesting schedule provided for in Paragraph 1 hereof, in the event of a Change of Control, as such term is defined in the Plan, the right to exercise this Option shall be deemed to have vested in its entirety immediately prior to the happening of the event giving rise to the Change in Control.

6.           Notwithstanding any other provision of the Plan, in the event of a change in the outstanding shares of the Company by reason of a stock dividend, split-up, split-down, reverse split, recapitalization, merger, consolidation, combination or exchange of shares, spin-off, reorganization, liquidation or the like, then the aggregate number of shares and price per unit subject to the Option shall be appropriately adjusted by the Board, whose determination shall be conclusive. For the avoidance of doubt, if as a consequence of a change in the outstanding shares of the Company, upon the exercise of this Option the Holder is entitled to receive an amount in cash which, on a per Option basis is less than the exercise price then in effect, this Agreement shall be deemed to have terminated as of the date of such change.

7.           This Option shall be nontransferable and shall not be assignable, alienable, saleable or otherwise transferable by the Holder other than by will or the laws of descent and distribution except pursuant to a domestic relations order entered by a court of competent jurisdiction. During the life of the Holder, this Option shall be exercisable only by him. Notwithstanding the foregoing, to the extent the Option is deemed a Non-Qualified Stock Option, the Holder shall be permitted to transfer such Option to family members or family trusts established by the Holder. Except as otherwise provided for herein, in the event that the Holder terminates employment with the Company to assume a position with a governmental, charitable, educational or similar non-profit institution, the Holder may nominate a third party, including but not limited to a “blind” trust, to act on behalf of and for the benefit of the Holder with respect to the Option. In addition, the Holder may designate a beneficiary or beneficiaries to exercise the rights of the Holder and receive any distributions upon the death of the Holder.

8.           Neither the Holder nor in the event of his death, any person entitled to exercise his rights, shall have any of the rights of a stockholder with respect to the shares subject to the Option until shares have been registered in the name of the Holder or his estate, as the case may be.

9.           Any notice to the Company provided for in this Agreement shall be addressed to the Company, Attention, its President, and any notice to the Holder shall be addressed to him at his address now on file with the Company, or to such other address as either may last have designated to the other by notice as provided herein. Any notice so addressed shall be deemed to be given on the second business day after mailing, by registered or certified mail, at a post office or branch post office within the United States.

 
3
 
 
10.           In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this Option, the determination by the Board, or if one had been appointed, the Committee (as constituted at the time of such determination) of the rights of the Holder shall be conclusive, final and binding upon the Holder and upon any other person who shall assert any right pursuant to this Option.
 
SOURCE FINANCIAL, INC.  
ACCEPTED AND AGREED
     
 
By: /s/ Hugh Evans   /s/ John Wolfgang
 
Hugh Evans
 
John Wolfgang
 
President and CEO
   
 
 
4
 

FORM OF NOTICE OF EXERCISE

TO:
SOURCE FINANCIAL, INC

The undersigned hereby exercises his option to purchase __________ shares of Common Stock of Source Financial, Inc. (the “Company”) as provided in the Stock Option Agreement dated as of July 19, 2013 at $__________ per share, a total of $__________ and makes payment therefor as follows:

(1)           To the extent of $__________ of the purchase price, the undersigned hereby surrenders to the Company certificates for shares of its Common Stock which, valued at $__________ per share, the fair market value thereof, equals such portion of the purchase price.

(2)           To the extent of the balance of the purchase price, the undersigned has enclosed a check payable to the order of the Company for $__________.

A stock certificate or certificate for the shares should be delivered in person or mailed to the undersigned at the address shown below.

The undersigned hereby represents and warrants that it is his present intention to acquire and hold the aforesaid shares of Common Stock of the Company for his own account for investment, and not with a view to the distribution of any thereof, and agrees that he will make no sale, thereof, except in compliance with the applicable provisions of the Securities Act of 1933, as amended.
 
 
Signature:
 
 
Address:
 
     
     

Dated:                                                        
 
 5
Exhibit 10.10

SOURCE FINANCIAL, INC

STOCK OPTION AGREEMENT

THIS AGREEMENT, made as of July 19, 2013, by Source Financial, Inc., a Delaware corporation (hereinafter called the "Company"), with Richard Allely (hereinafter called the "Holder").

R E C I T A L S:

The Company has adopted a 2013 Omnibus Incentive Plan (the "Plan").  Said Plan, as it may hereafter be amended and continued, is incorporated herein by reference and made part of this Agreement.  Terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.

The Board, which in the absence of a Committee, is charged with the administration of the Plan pursuant to Section 3 of the Plan, has determined that it would be to the advantage and interest of the Company to grant the option provided for herein to the Holder as an inducement to remain in the service of the Company or one of its subsidiaries, and as an incentive for increased efforts during such service.

NOW, THEREFORE, pursuant to the Plan, the Company hereby grants to the Holder as of the date hereof an option (the “Option”) to purchase all or any part of seventy-five (75,000) shares of Common Stock of the Company, par value $.001 per share, upon the following terms and conditions:
 
1.           (a)           The Option shall continue in force through June 30, 2020 (the "Expiration Date"), unless sooner terminated as provided herein and in the Plan. Subject to the provisions of the Plan, the right to exercise the Options shall vest as to 2,083 shares on September 30, 2013, and as to an additional 2,083 shares on the last day of each calendar month thereafter through and including August 31, 2016, except that the right to exercise the Options shall vest as to 2,095 shares on August 31, 2016, and the exercise price per share of the Options vesting as of any date shall be $2.00.

(b)           Except as provided hereinbelow, the Option may not be exercised unless the Holder is then an employee (including officers and directors who are employees), non-employee director, consultant, advisor, agent or independent representative of the Company or any subsidiary of the Company or any combination thereof and unless the Holder has remained in the continuous employ or service thereof from the date of grant.
 
 
1
 
 
(c)           No installment under this option shall qualify for favorable tax treatment as an Incentive Stock Option if (and to the extent) the aggregate Fair Market Value of the Common Stock for which such installment first becomes exercisable hereunder would, when added to the aggregate value of the Common Stock or other securities for which this option or any other Incentive Stock Options granted to Holder prior to the date hereof (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollars ($100,000) limitation be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Qualified Stock Option.

2.           In the event that the employment or service of the Holder shall be terminated prior to the Expiration Date (otherwise than by reason of death or disability), the Option may, subject to the provisions of the Plan, be exercised (to the extent that the Holder was entitled to do so at the termination of this employment or service) at any time within three months after such termination, but not after the Expiration Date, provided, however, that if such termination shall have been for cause or voluntarily by the Holder and without the consent of the Company or any subsidiary corporation thereof, as the case may be (which consent shall be presumed in the case of normal retirement), or if the Holder accepts employment with a competitor of the Company, the Option and all rights of the Holder hereunder, to the extent not theretofore exercised, shall forthwith terminate immediately upon such termination or employment of the Holder with a competitor. Nothing in this Agreement shall confer upon the Holder any right to continue in the employ or service of the Company or any subsidiary of the Company or affect the right of the Company or any subsidiary to terminate his employment or service at any time.

3.           If the Holder shall (a) die while he is employed by or serving the Company or a subsidiary thereof or within three months after the termination of such position (other than termination for cause, or voluntarily on his part and without the Consent of the Company or subsidiary corporation thereof, as the case may be, which consent shall be presumed in the case of normal retirement or voluntarily by the Holder), or (b) become permanently and totally disabled within the meaning of Section 22 (e) (3) of the Internal Revenue Code of 1986, as amended (the "Code"), while employed by or serving any such company, and if the Option was otherwise exercisable, immediately prior to the occurrence of such event, then such Option may be exercised as set forth herein by the Holder or by the person or persons to whom the Holder’s rights under the Option pass by will or applicable law, or if no such person has such right, by his executors or administrators, at any time within one year after the date of death of the original Holder, or one year after the date of permanent or total disability, but in either case, not later than the Expiration Date.

4.           (a)           The Holder may exercise the Option with respect to all or any part of the shares then purchasable hereunder by giving the Company written notice in the form annexed, as provided in paragraph 9 hereof, of such exercise. Such notice shall specify the number of shares as to which the Option is being exercised and shall be accompanied by payment in full in cash of an amount equal to the exercise price of such shares multiplied by the number of shares as to which the Option is being exercised; provided that, if permitted by the Board, the purchase price may be paid, in whole or in part, by surrender or delivery to the Company of securities of the Company having a fair market value on the date of the exercise equal to the portion of the purchase price being so paid. In such event fair market value should be determined pursuant to the Plan.

 
2
 
 
(b)           The Holder shall, upon notification of the amount due, pay promptly any amount necessary to satisfy applicable federal, state or local tax requirements. In the event such amount is not paid promptly, the Company shall have the right to apply from the purchase price paid any taxes required by law to be withheld by the Company with respect to such payment and the number of shares to be issued by the Company will be reduced accordingly.

5.           Notwithstanding the vesting schedule provided for in Paragraph 1 hereof, in the event of a Change of Control, as such term is defined in the Plan, the right to exercise this Option shall be deemed to have vested in its entirety immediately prior to the happening of the event giving rise to the Change in Control.

6.           Notwithstanding any other provision of the Plan, in the event of a change in the outstanding shares of the Company by reason of a stock dividend, split-up, split-down, reverse split, recapitalization, merger, consolidation, combination or exchange of shares, spin-off, reorganization, liquidation or the like, then the aggregate number of shares and price per unit subject to the Option shall be appropriately adjusted by the Board, whose determination shall be conclusive.  For the avoidance of doubt, if as a consequence of a change in the outstanding shares of the Company, upon the exercise of this Option the Holder is entitled to receive an amount in cash which, on a per Option basis is less than the exercise price then in effect, this Agreement shall be deemed to have terminated as of the date of such change.

7.           This Option shall be nontransferable and shall not be assignable, alienable, saleable or otherwise transferable by the Holder other than by will or the laws of descent and distribution except pursuant to a domestic relations order entered by a court of competent jurisdiction.  During the life of the Holder, this Option shall be exercisable only by him. Notwithstanding the foregoing, to the extent the Option is deemed a Non-Qualified Stock Option, the Holder shall be permitted to transfer such Option to family members or family trusts established by the Holder.  Except as otherwise provided for herein, in the event that the Holder terminates employment with the Company to assume a position with a governmental, charitable, educational or similar non-profit institution, the Holder may nominate a third party, including but not limited to a “blind” trust, to act on behalf of and for the benefit of the Holder with respect to the Option.  In addition, the Holder may designate a beneficiary or beneficiaries to exercise the rights of the Holder and receive any distributions upon the death of the Holder.

8.           Neither the Holder nor in the event of his death, any person entitled to exercise his rights, shall have any of the rights of a stockholder with respect to the shares subject to the Option until shares have been registered in the name of the Holder or his estate, as the case may be.

9.           Any notice to the Company provided for in this Agreement shall be addressed to the Company, Attention, its President, and any notice to the Holder shall be addressed to him at his address now on file with the Company, or to such other address as either may last have designated to the other by notice as provided herein. Any notice so addressed shall be deemed to be given on the second business day after mailing, by registered or certified mail, at a post office or branch post office within the United States.

 
3
 
 
10.           In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this Option, the determination by the Board, or if one had been appointed, the Committee (as constituted at the time of such determination) of the rights of the Holder shall be conclusive, final and binding upon the Holder and upon any other person who shall assert any right pursuant to this Option.
 
SOURCE FINANCIAL, INC.  
ACCEPTED AND AGREED
     
 
By: /s/ Hugh Evans   /s/ Richard Allely
 
Hugh Evans
 
Richard Allely
 
President and CEO
   
 
 
4
 

FORM OF NOTICE OF EXERCISE

TO:
SOURCE FINANCIAL, INC

The undersigned hereby exercises his option to purchase __________ shares of Common Stock of Source Financial, Inc. (the “Company”) as provided in the Stock Option Agreement dated as of July 19, 2013 at $__________ per share, a total of $__________ and makes payment therefor as follows:

(1)           To the extent of $__________ of the purchase price, the undersigned hereby surrenders to the Company certificates for shares of its Common Stock which, valued at $__________ per share, the fair market value thereof, equals such portion of the purchase price.

(2)           To the extent of the balance of the purchase price, the undersigned has enclosed a check payable to the order of the Company for $__________.

A stock certificate or certificate for the shares should be delivered in person or mailed to the undersigned at the address shown below.

The undersigned hereby represents and warrants that it is his present intention to acquire and hold the aforesaid shares of Common Stock of the Company for his own account for investment, and not with a view to the distribution of any thereof, and agrees that he will make no sale, thereof, except in compliance with the applicable provisions of the Securities Act of 1933, as amended.
 
 
Signature:
 
 
Address:
 
     
     

Dated:                                                        
 
 5

 
Exhibit 10.12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 10.15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 10.16
 
CONSULTING AGREEMENT
 
         THIS CONSULTING AGREEMENT (the “Agreement”) is between Source Financial Inc. located at 1093 Broxton Avenue Suite#210 Los Angeles, CA 90024 (hereinafter referred to as “COMPANY”); and Market Street Investor Relations LLC, located in Woodlands, TX (hereinafter referred to as the “Consultant”) on this 23rd  day of July  2013.
 
         WHEREAS, the Consultant is in the business of assisting public companies in financial advisory, strategic business planning, and investor and public relations services designed to make the investing public knowledgeable about the benefits of stock ownership in the Company; and
 
WHEREAS, the Consultant may, during the period of time covered by this Agreement, present to the Company one or more plans of public and investor relations to utilize other business entities to achieve the Company’s goals of making the investing public knowledgeable about the benefits of stock ownership in the Company; and
 
WHEREAS, the Company recognizes that the Consultant is not in the business of stock brokerage, investment advice, activities which require registration under either the Securities Act of 1933 (hereinafter “the Act”) or the Securities and Exchange Act of 1934 (hereinafter “the Exchange Act”), underwriting, banking, is not an insurance Company, nor does it offer services to the Company which may require regulation under federal or state securities laws; and
 
WHEREAS, the Company trades on the Over the Counter Bulletin Board under the symbol SRCF and the closing bid on July 23rd 2013 was $2.02; and
 
WHEREAS, the Company will have 50,000,000. shares of common stock authorized, $0.0001 par value per share, of which 10,600,000 shares on a fully diluted basis  are issued and outstanding; and
 
WHEREAS, the Company’s transfer agent is Standard Registrar and Transfer Co., Inc.
 
12528 South 1840 E. Draper, UT, 84020 ; and  
 
WHEREAS, the parties agree, after having a complete understanding of the services desired and the services to be provided, that the Company desires to retain Consultant to provide such assistance through its services for the Company, and the Consultant is willing to provide such services to the Company;
 
 
 
 
 
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
 
1.            Duties and Involvement .
 
The Company hereby engages Consultant to provide one or more plans, and for coordination in executing the agreed-upon plan, for using various investor and public relations services as agreed by both parties.  The plan may include, but not by way of limitation, the following services: consulting with the Company’s management concerning marketing surveys, investor accreditation, availability to expand investor base, investor support, strategic business planning, broker relations, conducting due diligence meetings, attendance at conventions and trade shows, assistance in the preparation and dissemination of press releases and stockholder communications, consulting of mergers with companies, review and assistance in updating a business plan, review and advise on the capital structure for the Company, propose legal counsel, assist in the development of an acquisition profile and structure, recommend financing alternatives and sources, and consult on corporate finance and/or investment banking issues.  In addition, these services may include preparation of a corporate profile and fact sheets, personal consultant services, financial analyst and newsletter writer campaigns, conferences, seminars and national tour, including, but not by way of limitation, due diligence meetings, investor conferences and institutional conferences, printed media advertising design, newsletter preparation, broker solicitation campaigns, electronic public relations campaigns, direct mail campaigns, placement in investment publications and press releases.  Consultant may subcontract electronic public relations campaigns and other dissemination of information about the Company as needed, to increase exposure to the investment community. Stan Abiassi, shall function as the principal contact and relationship manager pursuant to this Agreement.  This Agreement is limited to the United States. No information shall be disseminated by the Consultant or its subcontractors without the Company’s written approval.
 
2.             Relationship Among the Parties .
 
Consultant acknowledges that it is not an officer, director or agent of the Company, it is not, and will not, be responsible for any management decisions on behalf of the Company, and may not commit the Company to any action.  The Company represents the Consultant does not, through stock ownership or otherwise, have the power either (i) to control the Company, or to exercise any dominating influences over its management.
 
Consultant understands and acknowledges that this Agreement shall not create or imply any agency relationship among the parties, and Consultant will not commit the Company in any manner except when a commitment has been specifically authorized in writing by the Company.  The Company and the Consultant agree that the relationship among the parties shall be that of independent contractor.
 
3.             Effective Date, Term and Termination .
        
Company and Consultant anticipate that Consultant will commence significant duties pursuant to Section 1 of this Agreement on July 23rd, 2013.Formal approval of this Agreement by Company’s Board of Directors was obtained on July 19, 2013.  Upon execution of this Agreement by the Company, Company and Consultant agree that this Agreement will be effective from July 23rd, 2013 therefore, once executed, this Agreement shall be deemed to have commenced on July 23rd, 2013, (the “Effective Date”) and shall continue until January 23rd, 2014 (the “Expiration Date”), unless earlier terminated (the “Initial Term”).  This Agreement may be terminated prior to the Expiration Date of the Initial Term or of any Renewal Term (as defined in Section 4 below) at the election of Company at any time upon written notice to Consultant, provided that such early termination shall not affect the amount of compensation paid by Company to Consultant, and Consultant shall not be required to return or refund any of the compensation previously paid, absent a material breach of this Agreement by Consultant.
 
 
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4.            Option to Renew and Extend .
 
In the event that there has been no material capital change in the amount of stock of the Company, no change in control of the Company, and the Company is not insolvent or in bankruptcy, then Company may renew this Agreement for up to two additional term(s) of six months or less (each, a “Renewal Term”) on the same terms and conditions set forth in this Agreement by providing written notice to Consultant at any time prior to the initial Expiration Date. The Effective date of a Renewal Term shall be the Expiration Date of the prior term, and the Expiration Date of the Renewal Term shall be the date six months after the Effective Date of the Renewal Term, or if Company has indicated a term of less than six months in its written notice of renewal, on the last day of such period.
 
5.            Compensation and Payment of Expenses .
 
(a)                      As the amount of compensation payable with respect to services to be delivered from the Effective Date to the Expiration Date of the Initial Term or any Renewal Term, Company shall transfer and pay to Consultant three hundred and fifty thousand shares (350,000) shares of restricted common stock. It is acknowledged that 179,000,000 of these shares have already been allocated by the Company but have not as yet been issued.   These shares shall constitute the total and complete consideration for the services to be provided by the Consultant to the Company during the Initial Term. These shares shall be non-refundable as the Consultant is forced to block off significant amounts of time and refuse other potential clients upon execution of this Agreement. The Shares will be issued and they shall contain a Rule 144 restriction (if necessary pursuant to Rule 144) and shall be delivered to the Consultant within ten (10) business days after the date of execution of this Agreement, or the Effective Date for any extension or renewal term.  If the Company decides to terminate this Agreement prior to the Expiration Date for any reason whatsoever, it is agreed and understood that Consultant will not be requested or demanded by the Company to return any of the shares of common stock paid to it hereunder.  Further, if and in the event the Company is acquired in whole or in part, during the term of this Agreement, it is agreed and understood Consultant will not be requested or demanded by the Company to return any of the restricted shares of common stock paid to it hereunder.  It is further agreed that if at any time during the term of this Agreement, the Company or substantially all of the Company’s assets are merged with or acquired by another entity, or some other change occurs in the legal entity that constitutes the Company, the Consultant shall retain and will not be requested by the Company to return any of the shares. Consultant must pay on a schedule and will have binding agreements in place for the marketing piece discussed above.
 
MARKET STREET MAKES NO REPRESENTATION THAT:
 
(A) THE PUBLICATION AND DISTRIBUTION OF THE COMPANY’S MATERIAL WILL RESULT IN ANY ENHANCEMENT TO THE COMPANY,
(B) THE PRICE OF THE COMPANY’S PUBLICLY TRADED SECURITIES WILL INCREASE,
(C) ANY PERSON WILL BECOME A SHAREHOLDER IN THE COMPANY AS A RESULT OF THE DISTRIBUTION,
(D) ANY PERSON WILL LEND MONEY TO OR INVEST IN THE COMPANY OR (E) THE CONSULTANT WILL MAKE A BE.
 
(b)                      With each transfer of shares of common stock to be issued pursuant to this Agreement, the Company shall cause to be issued a certificate representing the common stock and, if required by applicable law, a written opinion of counsel for the Company stating that said shares are validly issued, fully paid and non-assessable and that the issuance and eventual transfer of them has been duly authorized by the Company.  The Company warrants that all shares issued to Consultant pursuant to this Agreement shall have been validly issued, fully paid and non-assessable and that the issuance and any transfer of them to Consultant shall have been duly authorized by the Company’s board of directors.
 
 
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(c)                      The Company agrees to take any and all action(s) necessary to clear the subject securities of restriction upon presentation of any Rule 144(d) application by Consultant or its broker, including, but not limited to: (1) authorizing the Company’s transfer agent to remove the restrictive legend on the subject securities; (2) expediting either the acquisition of a legal opinion from Company’s counsel authorizing the removal of the restrictive legend, or accepting a third party legal opinion acknowledging same; and (3) cooperating and communicating with Consultant and its broker in order to use Company’s best efforts to clear the subject securities of restriction as soon as possible after presentation of a Rule 144(d) application by Consultant (or its broker) to either the Company and/or the Company’s transfer agent.  Further, the Company agrees to not unreasonably withhold or delay approval of any application filed by Consultant under Rule 144(d) of the Act to clear the subject securities of restriction.

                      i.   
Consultant and the Company acknowledge and agree that Consultant will suffer irreparable harm and anticipated and actual damages in the event that the Company unreasonably withholds or delays any Rule 144(d) application by Consultant to either the Company or the Company’s transfer agent.  The Company agrees that money damages could not compensate Consultant for its irreparable harm.

                     ii.  
Consultant and the Company therefore agree that the Company shall have a period of five (5) business days from the date Consultant’s Rule 144(d) application is tendered to either the Company or its transfer agent by either Consultant and/or its broker, to take any and all necessary action to clear the subject securities of restriction, consistent with the covenants in Section (c) above.  The Company and Consultant agree that this five (5) day period is reasonable and consistent with industry standards concerning the handling and processing of restricted securities under Rule 144 by publicly traded companies.  The Company also acknowledges that Consultant’s ability to clear the subject securities of restriction is a material part of this Agreement and is a reasonable and material expectation of Consultant in entering into this Agreement.  Should events occur that require further expense of time beyond this five (5) day time period, the Company and Consultant shall reasonably agree in a writing signed by each to an extension for a specific amount of time.  In no event shall an extension be agreed to unless the Company comports with its obligations, as set out above, and communicates with Consultant bona fide and reasonable attempts at meeting Company’s obligations to clear the subject restricted securities, as described herein.  Any written extension herein may be executed in counterparts by the principals of the Company and Consultant, and facsimile signatures may be tendered in lieu of originals.  It is agreed that the separate signature of each principal on any agreement to extend time shall be deemed a complete original.
 
 
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(d)                      Should the Company fail to successfully take any and all actions necessary to clear the subject securities of restriction within the five (5) day time period after Consultant or its broker’s presentation of a Rule 144(d) application, or seek to extend time as provided for above in sub-section (d)(ii), and in light of the irreparable harm that Consultant will suffer in the event of any intentional and/or unintentional delay in Consultant’s Rule 144(d) application, Company herein irrevocably consents and agrees that Consultant shall be entitled to injunctive relief in order to immediately enforce Consultant’s right to removal of the restrictive legend on the Company’s securities.  Company further agrees that Consultant shall be entitled to immediately seek the injunctive relief contemplated and described herein in the state or federal court located in Harris County, Houston, Texas, notwithstanding the agreement to arbitrate as set forth in Section 15(l) hereof.

         6.           Consultant’s Representations.

6.A Purchase Entirely for Own Account. This Agreement is made in reliance upon Consultant's representation to Company, which by Consultant's execution of this Agreement, Consultant hereby confirms, that the Company's Common Stock are being acquired for investment purposes for the Consultant's own account and not with a view for resale or distribution of any part thereof except in accordance with applicable federal and state securities laws.

6.B   Receipt of information . Consultant has received all information set forth and referenced to in Company’s press releases and business plan. Furthermore, Consultant has received all information necessary for it to make an informed investment decision.

6.C   Investment Experience . Consultant represents that it is experienced in evaluating and investing in restricted securities and in companies similar to Company and acknowledges that it can fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment. Consultant further represents that it has not been organized solely for the purchase of the Company’s Common Stock.
 
 
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6.D   Accredited Investor . Consultant represents that it is an "accredited investor" as that term is defined in SEC rule 501(a) of Regulation D, 17 C.F.R.501(a).

6.E   Restricted Securities . Consultant understands that the Company's Common Stock issued hereunder may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Company's Common Stock, or an available exemption from registration under the Securities Act, the Common Stock must be held indefinitely. In particular, Consultant is aware that the Common Stock may not be sold under Rule 144 unless of all of the conditions of that rule have been met.

6.F.   Legends . To the extent applicable, each certificate or other document evidencing the Company's Common Stock shall be endorsed with a restrictive legend.

6.G.   Review for Accuracy.   Consultant agrees to review all materials sent out or published by Consultant for accuracy and to use its best reasonable efforts to assure that all materials that are distributed or published by Consultant or through Consultant’s efforts are accurate, truthful and devoid of any misleading statements.

6.H Comport to Law .  Consultant agrees to comport its rendering of services, pursuant to this agreement, to applicable United States law and regulations.

7 .             Services Not Exclusive .
 
Consultant shall devote such of its time and effort necessary to the discharge of its duties hereunder.  The Company acknowledges that Consultant is engaged in other business activities, and that it will continue such activities during the term of this Agreement.  Consultant shall not be restricted from engaging in other business activities during the term of this Agreement.
 
8.            Disclosure of Relationship.
 
The Consultant agrees that it will disclose in a manner consistent with applicable laws, rules and regulations that it is providing the services set forth above in this Agreement and in exchange for the Common Stock of the Company. Specifically the Consultant agrees to abide by Section 17(b) of the 1933 Act which provides that it is unlawful for any person: "to publish, give publicity to, or to circulate any notice, circular, or advertisement, newspaper article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter or dealer, without fully disclosing receipt, whether past or prospective, of such compensation and the amount thereof."

 
 
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9.             Confidentiality .
 
Consultant acknowledges that it may have access to confidential information regarding the Company and its business.  Consultant agrees that it will not, during or subsequent to the term of this Agreement, divulge, furnish or make accessible to any person (other than with the written permission of the Company) any knowledge or information or plans of the Company with respect to the Company or its business, including, but not by way of limitation, the products of the Company, whether in the concept or development stage, or being marketed by the Company on the effective date of this Agreement or during the term hereof.
 
10.         Covenant Not to Compete.
 
               During the term of this Agreement, Consultant warrants, represents and agrees that it will not directly participate in the information developed for and by the Company, and will not compete directly with the Company in the Company’s primary industry or related fields.
 
11.          Indemnification .
 
                       Company agrees to indemnify and hold harmless the Consultant and its respective agents and employees, against any losses, claims, damages or liabilities, joint or several, to which either party, or any such other person, may become subject, insofar as such losses, claims, damages or liabilities (or actions, suits or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement, any preliminary prospectus, the prospectus, or any amendment or supplement thereto; or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; and will reimburse the Consultant, or any such other person, for any legal or other expenses reasonably incurred by the Consultant, or any such other person, in connection with investigation or defending any such loss, claim, damage, liability, or action, suit or proceeding.
 
12 .          Investment Representation.
 
(a)                      The Company represents and warrants that it has provided Consultant with access to all information available to the Company concerning its condition, financial and otherwise, its management, its business and its prospects.  The Company represents that it has provided to Consultant with all copies of the Company’s financials, merger documents, press releases for the prior twelve (12) months, if any, (the “Disclosure Documents”) made under the rules and regulations promulgated under the Act, as amended, or the Exchange Act, as amended including but not limited to its 15(c)2-11 filing and all other documents relating to its trading on the Over the Counter Electronic Pink Sheets.  Consultant acknowledges that the acquisition of the securities to be issued to Consultant involves a high degree of risk.  Consultant represents that it and its advisors have been afforded the opportunity to discuss the Company with its management.  The Company represents that it has and will continue to provide Consultant with any information or documentation necessary to verify the accuracy of the information contained in the Disclosure Documents, and will promptly notify Consultant upon the filing of any registration statement or other periodic reporting documents filed pursuant to the Act or the Exchange Act.  This information will include DTC sheets, which shall be provided to Consultant no less than every two (2) weeks.  The Company hereby represents that it does not currently have any of its securities in registration. In addition, the Consultant shall be entitled to directly receive Shareholder Lists, Shareholder Transfer Requests and any other corporate information held by the Company’s transfer agent upon its written request.
 
 
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(b)                      Consultant represents that neither it nor it’s officers, directors, or employees are not currently subject to any disciplinary action by either the National Association of Securities Dealers or the Securities and Exchange Commission by virtue of any violation of their rules and regulations and that to the best of its knowledge, neither is its affiliates nor subcontractors subject to any such disciplinary action.

(c)                       If required by the United States law or regulation, Consultant will take necessary steps to prepare and file any necessary forms to comply with the transfer of the Shares from Company to Consultant, including, if required, form 13(d).

         13.        Registration of Securities and Liquidated Damages and Injunctive Relief.

The Company hereby acknowledges that time is of the essence with respect to possible sale of the shares of Common Stock. Subject to the restrictions of Rule 144,in the event that Consultant is permitted to sell the Shares under the provisions of Rule 144 and other applicable law, if Company does not cause its counsel to provide a favorable opinion permitting transfer of the Shares within five (5) days after written demand made at least six months after the issuance date, fail to comply with the terms and conditions regarding restriction on “free-trading” issuances pursuant to Paragraph 5(f) herein or at any time during the term of this agreement plus one year fail to timely file its required quarterly and annual reports or otherwise publish current public information as defined in Rule 144, or fails to restrict the transfer set forth in paragraph 5(h) the Company agrees that damages shall be in an amount representing the average trading price of the Company’s Common Stock during the six month term of this agreement times the number of shares of Common Stock. For example if the average trading price of the Company’s stock is ten cents ($0.10) for the term of this Agreement than the liquidated damages shall be $35,000. Furthermore, the parties agree that the Consultant shall be entitled to affirmative injunctive relief to lift the restrictive legends from the shares and/or issue shares without restrictive legend and injunctive relief restricting any officer or director of the Company from selling their shares. Furthermore, if any portion of this contract conflicts with the provisions of Rule 144, whereby the shares would not be eligible for resale that portion shall be struck at the Consultant’s request.

Consultant represents that the common stock will be a suitable investment for Consultant, taking into consideration the restrictions on transferability affecting the common stock.
 
 
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14.          Restriction on Internet Trading.

That certain OTC Companies have recently encountered restrictions on the trading of their stock on E*Trade, Ameritrade and Scottrade (“Internet Brokerage Firms”). After increases in the companies share volume (whether based upon news or IR efforts), the Internet Brokerage Firms have restricted trading in these companies whereby when a potential shareholder attempts to buy shares online the Internet Brokerage Firms refuses to take the order online and a message stating that internet trading is not allowed in these securities appears.

The Consultant will contact these firms prior to any IR efforts, however to date the Internet Brokerage Firms have restricted trading on an arbitrary basis. If any of the Internet Brokerage Firms restrict internet trading the Consultant will temporarily cease all IR efforts and the Company will take any and all necessary steps to ensure that the internet trading restrictions are lifted. The parties acknowledge that the internet trading restrictions are a current risk to any IR efforts and that if the Internet Brokerage Firms restrict buying of the companies shares it will have an adverse effect on the IR efforts and share price. Both parties assume that risk and the Company acknowledges that the Consultant’s fees will be fully due and owing without regard to the effects of said restrictions.

15.         Miscellaneous Provisions
 
                (a)           Time .  Time is of the essence of this Agreement.
 
(b)          Presumption .  This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party.
 
(c)          Computation of Time .  In computing any period of time pursuant to this Agreement, the day of the act, event or default from which the designated period of time begins to run shall be included, unless it is a Saturday, Sunday or a legal holiday, in which event the period shall begin to run on the next day which is not a Saturday, Sunday or a legal holiday, in which event the period shall run until the end of the next day thereafter which is not a Saturday, Sunday or legal holiday.
 
(d)          Titles and Captions .  All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement.
 
(e)          Pronouns and Plurals .  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Person or Persons may require.
 
(f)           Further Action .  The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.
 
(g)           Good Faith, Cooperation and Due Diligence .  The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement.  All promises and covenants are mutual and dependent.
 
 
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          (h)        If any provision of this Agreement, or the application of such provision to any person or circumstance, becomes or is found to be illegal, shall be held invalid, or unenforceable for any reason , such clause or provision must first be modified to the extent necessary to make this Agreement legal and enforceable and then if necessary, second, severed from the remainder of the Agreement to allow the remainder of the Agreement to remain in full force and effect.
 
 (i)          Assignment .  This Agreement may not be assigned by either party hereto without the written consent of the other, but shall be binding upon the successors of the parties.
 
 (k)         Notices .  All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified.  Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier (such as Federal Express or similar express delivery service), addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten (10) days’ written notice, to the other party.
 
Notices shall be addressed to:
 
Market Street Investor Relations 2820 South Log Run Circle, Woodlands Texas 77380
 
Or Council: Thomas Pritchard at Brewer and Prichard PC 3 Riverway Ste. 1800 Houston Texas 77056
 
(l)            Agreement to Arbitrate .  If a dispute should arise for any damages, all claims, disputes, controversies, differences or other matters in question arising out of this Agreement (with the exception of the injunctive relief described in Section 5(d) which is an optional remedy that Consultant may pursue in federal or state court in Harris County, Texas), such matter shall be settled finally, completely and conclusively by arbitration in Houston, Harris County, Texas, in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”), by one or more arbitrators chosen in accordance with the Rules.  Arbitration shall be initiated by written demand by the party seeking arbitration.  This agreement to arbitrate shall be specifically enforceable only in the District Court of Harris County, Texas.  A decision of the arbitrator or arbitrators shall be final, conclusive and binding on the parties, and judgment may be entered thereon in the District Court of Harris County, Texas, to enforce such decision and the benefits thereof.  Upon appointment, the arbitrators shall then proceed to decide the arbitration subjects in accordance with the Rules.  If counsel is required to seek the enforcement of this agreement or this particular section, counsel shall be entitled to recover its (his) reasonable and necessary attorneys’ fees and costs from the opposing party.
 
(m)         Entire Agreement .  This Agreement contains the entire understanding and agreement among the parties.  There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto.  This Agreement may be amended only in writing signed by all parties.
 
 
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(n)          Waiver .  A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.
 
(o)          Counterparts .  This Agreement may be executed in duplicate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.  In the event that the document is signed by one party and faxed to another, the parties agree that a faxed signature shall be binding upon the parties to this agreement as though the signature was an original.
 
(p)          Successors .  The provisions of this Agreement shall be binding upon all parties, their successors and assigns; provided that this Agreement may not be assigned by either Company or Consultant without the express written consent of the other.
 
(q)           Counsel .  The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so.

 
THIS PORTION OF THE PAGE HAS BEEN INTENTIONALLY BEEN LEFT BLANK
 
 
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement to be effective as of the day and year provided herein.
 
 
CONSULTANT:
 
Market Street Investor Relations, LLC.
   
 
By:
/s/ Stan Abiassi
 
   
Stan Abiassi/ Member
 
       
  Date:
8/14/2013
 
 
 
 
COMPANY:
 
Source Financial
   
 
By:
/s/ Hugh Evens  
   
Hugh Evens ,
 
   
President and CEO
 
       
  Date:
July 23, 2013
 
 
 
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Exhibit 21.1
 
SUBSIDIARIES

Name
 
Jurisdiction of Incorporation/Organization
  Percent Ownership 
         
Moneytech Limited
 
Australia
  100%
Moneytech Finance Pty Ltd.
 
Australia
  100%
mPayments Pty Ltd.
 
Australia
  100%
Moneytech POS Pty Ltd.
 
Australia
  100%
Moneytech Services Pty Ltd.
 
Australia
  100%
Moneytech USA, Inc.
 
Delaware
  100%
WikiTechnologies, Inc.
 
Delaware
  100%
360 Markets Pty Ltd.   Australia   37.5%
 
 
Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Hugh Evans, certify that:

1.
I have reviewed this annual report on Form 10-K of Source Financial, 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.
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

 
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be    designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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.
I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

 
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

6.
I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant efficiencies and material weaknesses.
 
Date: October 15, 2013

/s/ Hugh Evans
Hugh Evans
Chief Executive Officer and Chief Financial Officer (principal executive and financial officer)
 
 
Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SEC. 1350
(SECTION 906 OF SARBANES-OXLEY ACT OF 2002)

In connection with the Annual Report of Source Financial, Inc. (the "Company") on Form 10-K for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Hugh Evans, Chief Executive Officer and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(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.

Dated: October 15, 2013

/s/ Hugh Evans
Hugh Evans
Chief Executive Officer and Chief Financial Officer (principal executive and financial officer)