This looks like a red flag to me. Not registering the puppies is NOT going to avoid them being bred. A CONTRACT stipulating that they not be bred is how breeders do that. Since you're signing a contract, there's no reason your pup shouldn't be registered. A puppy with imperfections, if they are out of 2 registered adults, should be registered. If you get a dog that's not registered, I would be highly suspicious.
What are the imperfections?
I think it sounds fine. Herding dogs need a lot of physical and mental stimulation, but it sounds like you know that. If you and your daughter make the commitment to follow through with that, every day, I see no problem at all. You sound like a very conscientious dog owner.
As I said, I'm concerned about her decision not to register the three "imperfect" puppies. And I would definitely educate myself on the health risks of the Aussie and ask the breeder about various testing on the breeding adults. I don't know what the Aussie's health problems are, but you should talk to someone (not the breeder) who DOES know - to find out what tests to ask about. I know there's the possibility of eye problems in the breed in addition to hip dysplasia. You don't want to take on the burden of a dog with health issues, and genetic testing of the adults is the best way to stack the odds in your favor.
Here's a place to start.
Aussie Health Tests