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Newsletter, February 2023

A snapshot of some of our recent matters is set out below.  If you would like assistance with similar matters or other business-related transactions or contracts, please contact Rod Stumbles here or at +613 8692 7255.  See our website here.

Business Sale
A couple had run a successful business for many years and wanted to sell the business assets and retire.  They had identified a purchaser who they believed shared their passion for the industry and their values in relation to the treatment of customers, suppliers and staff.  For a few months the purchaser had been given access to business records and allowed to observe the operation of the business, and the purchaser felt comfortable to move forward.

We provided advice to the vendor on how to structure the transaction and related legal requirements, prepared an Asset Sale Agreement, assisted during negotiations, drafted amendments and assisted with completion.   


Joint Venture Buy-in 


We assisted a client with the purchase of an interest in a joint venture with a public listed company.  The purchase price was around $1.5 million.  The services we provided involved reviewing joint venture documentation, providing structuring advice and (as part of that) liaising with the client’s accountant in relation to taxation, valuations and financial matters, providing assistance and advice during negotiations, and drafting and reviewing proposed wording changes.  The documentation consisted of a Letter of Intent, a Share Sale Agreement, a Shareholders Agreement, a Consultancy Agreement, a Deed of Variation (to an existing Services Agreement), a Loan Deed, a Trust Deed and a Bank Release.  As usual in these types of transactions, provisions relating to exit were the subject of much discussion (especially exit price, the definitions of “good leaver” and “bad leaver” and restraint provisions). 


Management Buy-in 


A CEO was offered shareholding and directorships in all of their employer’s group entities.  The share price was in excess of $10M, the payment of which involved a loan backed by security over the shares.  The documentation consisted of a Proposal, Heads of Agreement, and a Shareholders Agreement.  Having been CEO for quite some time and having an in-depth knowledge of the business, the client did not require us to undertake due diligence.  On our recommendation the client obtained expert valuations, financial and tax advice. 


Management Buy-out 


We provided assistance and advice to a CEO in connection with the purchase by the CEO of part of the business they were employed in.  We reviewed and advised on the sale agreement and gave advice in relation to the new business structure which was to take transfer of the division.  Again, the CEO believed they had sufficient knowledge of the business as to obviate the need for due diligence.  And again we recommended the client obtain expert valuations, financial and tax advice. 


Shareholders Agreement 


The client is a group of companies which has its head office overseas.  The client wanted to invite another overseas entity to take up 50% of the shares in its Australian entity, and draft Heads of Agreement had been prepared.  We prepared a Shareholders Agreement and Share Subscription Agreement.  


The arrangement was subject to approval being obtained from the Foreign Investment Review Board of Australia.  


The client’s overseas entity sold goods to its Australian entity on credit, and the question of the payment of the outstanding balance was dealt with in the Shareholders Agreement.  The agreement stipulated that part of the share subscription monies would be applied towards the repayment of our client’s inter-group debt.  It also regulated the payment of the remaining balance of the inter-group debt and limited the inter-group debt levels going forward.  (A decision to exceed the agreed credit limit required unanimous shareholder consent, as did a number of other fundamental matters).  


To deal with the perennial question of exit in joint venture-type arrangements, the agreement gave our client the ability to buy back the shares on giving 6 months’ notice at will (without having to give reasons).  It also contained important non-compete (restraint) provisions. 


Employee Share Plan 


A client had identified a high-performing executive and wanted to make them an attractive offer of employment that included equity in our client’s business.  The client also wanted the ability to offer equity to other employees in the future.  We drafted Employee Share Plan Rules, a Shareholders Agreement, and a Letter of Offer under the Employee Share Plan. 


Non-compete Clause 


A client was considering making a move to a competitor and taking up equity there.  We provided advice to the client regarding the enforceability of non-compete (restraint) provisions in their contract of employment. 


Virtual Control Room Licence and Support & Maintenance Agreement  


We reviewed and advised on a Virtual Control Room Licence and Support & Maintenance Agreement.  


Response to Tender 


We assisted a client with a tender by reviewing a Master Services Agreement and related documents to identify potential major commercial risks presented by those documents especially regarding: Liquidated Damages, Intellectual Property Rights in New Material, a Cap on liability, and Termination for Convenience.   After the review we discussed the identified risks with the client and took instructions as to which risks the client wished to address in the Commercial Departures Table, and how they wished to address them.  We then assisted the client to complete the Commercial Departures Table. 


Character Merchandising / Misleading and Deceptive Conduct 


Our instructions were as follows.  Although our client’s employment with a certain company had ended about 12 months earlier, our client continued to be listed on the company’s About Us Webpage as a current staff member.  Our client had a good reputation and was well known in the relevant industry, and the listing added to the company’s reputation and goodwill, attracted customers to the company, and misled and/or deceived the public, including potential customers, by giving them the mistaken impression that our client was still employed at the company and that the company offers customers the benefit of our client’s expertise.  The listing caused our client loss and damage, including lost business opportunities, and was likely to continue to cause our client such loss and damage.    


We sent a Cease and Desist Letter to the company on our client’s behalf and the company complied and took down the listing.  


Stolen Passwords 


An ex-employee retained, after leaving our client’s employment, exclusive control of our client’s accounting software and email account, and refused to provide our client with the passwords.  We provided our client with legal and strategic advice, and practical suggestions on how to deal with the situation.  The matter was successfully resolved. 


Agreement for Lease 


We reviewed and provided advice on draft Heads of Agreement for Lease relating to large premises. 


Lease Negotiations 


We assisted a client with negotiations relating to a proposed Lease of premises next door to their current business (to allow an extension of their business). 


Company Secretarial 


We lodged documents with ASIC to record a change of (managing) director and company secretary, prepared related documents including Resolutions, Notice of Resignation, Consent to Act as Director, ASIC returns etc, and provided related advice. 


NDA / Confidentiality Agreement 


We advised on amendments to a client’s standard NDA / Confidentiality Agreement, proposed by a prospective customer.  


Terms and Conditions 


For a couple of clients with online businesses, we drafted Terms and Conditions of Sale, Terms and Conditions of Website Usage, and Privacy Policy and gave advice on a suggested order process (including process covering subsequent amendments to orders). 


Deed of Acknowledgement of Debt 


A customer of a business owed the business owners a significant sum of money.  The owners wanted the customer to sign a document acknowledging that they owed the debt and agreeing to a pay instalments and interest.  We prepared a Deed of Acknowledgement of Debt and gave the owners advice in connection with negotiations.  


Subscription Package 


As a client was giving us work on a fairly regular basis, we entered into a subscription package with them where they paid a monthly subscription amount and in return received the following benefits:


Counsel on Call: The ability for the CEO or CFO to call me once per new matter without additional charge for a general preliminary discussion during business hours of up to 30 minutes per call, limited to one call per business day.

Counsel at Discount: A 20% discount on fees.


Counsel at Meetings: The ability to engage me to attend Management or Board meetings for a general discussion once a fortnight at the client’s premises during business hours for up to 90 minutes per meeting for a reduced fixed fee (which represents 90 minutes at 50% of the usual rate).

Counsel for a Day: The ability to engage me to attend at the client’s premises for a day (8 hours) during business hours at a reduced fixed fee (which represents 8 hours at 60% of the usual rate). 


If you are interested to discuss this type of arrangement (or know someone who might be), we can be contacted here.  




Similar to Subscription Packages are secondments.  We are keen to investigate the possibility of having Rod work on a client’s team at their premises for a couple of days a week.  If you are interested to discuss (or know someone who might be), please contact us here.



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If you would like to discuss any aspect of this article with us, or share your own experiences, please contact Rod Stumbles at +613 8692 7255 or here.





This article provides general information only and is not intended to constitute legal advice.  No lawyer-client, solicitor-client or attorney-client relationship has been created between us.  You must not rely on the contents of this article, whether as an alternative to legal advice from a lawyer or other professional legal services provider or otherwise.  You should not take, discontinue or refrain from taking any action because your understanding of the contents of this article, including without limitation delay seeking legal advice or disregard legal advice.  If you have any specific questions about any matter, you should engage us or other lawyers or other professional legal services providers to provide you with the necessary advice.  Keep in mind that you may be facing important deadlines so you should not delay in engaging someone to provide you with the advice.

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