DATAWORKS GROUP LIMITED — Governance Information 2017

Nov 13, 2017

Terms and Conditions of Performance Rights

For the purposes of these terms and conditions:

ASX means ASX Limited ABN 98 008 624 691 or the Australian Securities Exchange operated by ASX Limited (as the context requires).

Eligible Participant has the meaning given to that term in the Plan.

Listing Rule means the official listing rules of ASX.

Plan means the IXUP Performance Rights Plan.

Participant has the meaning given to that term in the Plan.

Rule means a rule of the Plan.

1. Entitlement

Each Performance Right ( Performance Right ) will convert into a Share for no consideration upon exercise of the Performance Right by the holder.

2. Vesting Date and Expiry Date

The Performance Rights will be granted in three tranches and will vest on the date on which the relevant vesting conditions set out below are satisfied ( Vesting Date ):

Tranche	Vesting Conditions
Class A Performance Rights	(a) Two years of continuous service as a director or member of the Advisory Board of the Company; and (b) the Company group achieving cumulative Contracted Revenue of $5 million.
Class B Performance Rights	(a) Two years of continuous service as a director or member of the Advisory Board of the Company; and (b) the Company group achieving cumulative Contracted Revenue of $10 million.
Class C Performance Rights	(a) Two years of continuous service as a director or member of the Advisory Board of the Company; and (b) the Company group achieving cumulative Contracted Revenue of $15 million.

" Contracted Revenue " means the total value of future revenues of contracts signed by the Company following official quotation of Shares on the ASX. The value of future contract

revenues is the total amount legally committed by the counterparty over the term of the contract and includes:

• (a) gross licence fees, royalties, implementation fees, development fees and all other payments under the contract from customers, partners, channels, OEMs, or other users of the IXUP technology which are committed by the customer and are not at the election or discretion of the customer. For the avoidance of doubt the value of revenues included are gross and inclusive of all partner commissions, rebates, margin or other such fees payable by the Company;

• (b) gross licence fees, royalties, implementation fees, development fees and all other payments under a partnership/master services agreement on the occurrence of the partner signing a contract with its customer under which revenue will become payable to the Company under the partnership/master services agreement;

• (c) value added or other services, which under the contract were at the election or discretion of the customer, from the time that the customer makes the election or exercises its discretion to include the value add or other service.

The Board of the Company shall determine (in its sole discretion) if the vesting conditions in the table above are satisfied.

1. Expiry Date

The Expiry Date for each Performance Right will be the date which is five years from the date of grant.

1. Lapse Date

A Performance Right will lapse on that date ( Lapse Date ) which is the earliest to occur of:

• (a) the Expiry Date referred to in item 3 above;

• (b) failure to meet a Vesting Condition or any other condition applicable to the Performance Right within the prescribed period (if any) or becomes incapable of satisfaction, as determined by the Board in its absolute discretion, unless the Board exercises its discretion to waive the Vesting Condition in accordance with Rule 12.1(b);

• (c) the Board determines that a Performance Right lapses due to fraud, dishonesty or other improper behavior of the Participant under Rule 5(a);

• (d) a purported transfer of the Performance Right in contravention of Rule 4;

• (e) as determined in accordance with item 5 below; and

• (f) as determined in accordance with item 6 below.

• Ceasing to be an Eligible Participant

• (a) Unless the Board determines otherwise pursuant to item 5(b), where a Participant ceases to be an Eligible Participant:

  • (i) by reason of resignation, termination for poor performance or termination for cause, all Performance Rights held by the Participant, or

on the Participant’s behalf, which have not Vested at the time of cessation of Employment, will lapse or be forfeited (as the case may be); or

• (ii) for any other reason, including (but not limited to):

• (A) his or her death;

• (B) total and permanent disablement;

• (C) redundancy;

• (D) retirement; or

• (E) termination by agreement,

all of a Participant’s Performance Rights will continue to be held by, or on behalf of, the Participant (or by his or her estate as a representative) subject to the Plan and the relevant Vesting Conditions, except that any continuous service condition will be deemed to have been waived.

• (b) The Board, in its discretion, may determine within 4 months of a Participant ceasing to be an Eligible Participant that some or all a Participant’s Performance Rights:

• (i) lapse;

• (ii) vest;

• (iii) are only exercisable for a prescribed period and will otherwise lapse; and/or

• (iv) are no longer subject to some of the restrictions (including any Vesting Condition) that previously applied,

as a result of the Participant ceasing to be an Eligible Participant.

6. Change of Control

Notwithstanding that Performance Rights have not vested, upon the occurrence of a Change of Control the Board will determine that that number of Performance Rights (that have not yet been exercised) that is equal to 10% of the Shares on issue immediately following Vesting under this paragraph (or if the Vesting of all Performance Rights under this paragraph would be less than 10% of the Shares on issue immediately following Vesting, all Performance Rights) will Vest and may be exercised into an equivalent number of Shares, which as far as practicable will be allocated between holders on a pro-rata basis on the basis of their holdings of Performance Rights on the date of exercise.

For the purposes of this item 6:

" Change of Control " means:

• (a) a bona fide Takeover Bid (as defined in the Corporations Act) is declared unconditional and the bidder has acquired a Relevant Interest (as defined in the Corporations Act) in at least 50.1% of the Company’s issued Shares;

• (b) a court approves, under Section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies; or

• (c) in any other case, a person obtains Voting Power (as defined in Section 9 of the Corporations Act) in the Company which the Board (which for the avoidance of doubt will comprise those Directors immediately prior to the person acquiring that Voting Power) determines, acting in good faith and in accordance with their fiduciary duties, is sufficient to control the composition of the Board.

7. Exercise Period

A Performance Right may only be exercised at any time after the date that the Performance Rights have Vested in accordance with the Plan, and on or prior to the Lapse Date.

8. Plan

The Performance Rights are granted in accordance with, and subject to, the Plan.

9.

Notice of Exercise

The Performance Rights may be exercised by notice in writing to the Company ( Notice of Exercise ). Any Notice of Exercise of a Performance Right received by the Company will be deemed to be a notice of exercise of that Performance Right as at the date of receipt.

10. Shares issued on exercise

Shares issued on exercise of the Performance Rights rank equally with the then Shares of the Company.

1. Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Performance Rights within the period required by the ASX Listing Rules.

12. Participation in new issues

There are no participation rights or entitlements inherent in the Performance Rights and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Rights.

13.

Adjustment for bonus issues

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the number of securities which must be issued on the exercise of a Performance Right will be increased by the number of securities which the Performance Rights holder would have received if the Performance Rights holder had exercised the Performance Rights before the record date for the bonus issue; and

1. Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders there will be no adjustment of the number of Shares which must be issued on the exercise of the Performance Rights.

1. Adjustments for reorganisation

If there is any reorganisation of the issued share capital of the Company, the rights of the holder may be varied to comply with the Listing Rules which apply to a reorganisation of capital at the time of the reorganisation.

1. Quotation of Performance Rights

If application is made by the Company to ASX for official quotation of its Shares, the Company will not apply to ASX for quotation of the Performance Rights.

1. Quotation of Shares on exercise

If the Shares of the Company are quoted on the ASX at the time of exercise of the Performance Rights, application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Performance Rights.

1. Performance Rights not transferable

The Performance Rights are not transferable.

1. Deferred Taxation

Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Performance Rights.