Bermuda
|
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7389
|
| |
Not Applicable
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification No.) |
Christopher C. Paci, Esq.
Stephen P. Alicanti, Esq. DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020 (212) 335-4500 |
| |
Joseph C. Theis, Jr., Esq.
Goodwin Procter LLP 100 Northern Avenue Boston, Massachusetts 02210 (617) 570-1000 |
Title of Each Class of
Securities to be Registered |
| |
Amount to be
Registered(1) |
| |
Proposed Maximum
Offering Price per Share(2) |
| |
Proposed Maximum Aggregate Offering
Price(1)(2) |
| |
Amount of
Registration Fee(3) |
Common Shares, par value $0.000111650536 per share
|
| |
|
| |
$
|
| |
$100,000,000
|
| |
$12,980
|
(1)
|
Includes common shares subject to the underwriters’ option to purchase additional shares.
|
(2)
|
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended.
|
(3)
|
Pursuant to Rule 457(p) under the Securities Act, the Registrant is offsetting $9,337.50 against the amount of the registration fee payable with respect to this registration statement. The offsetting amount was originally paid by the Registrant in connection with the registration statement on Form F-1 filed by the Registrant on February 23, 2018 (File No. 333-223184), which was subsequently withdrawn by the Registrant. The Registrant has not sold any securities pursuant to the registration statement No. 333-223184. Accordingly, the amount of $9,337.50 is being offset against the total registration fee of $12,980 due for this registration statement, with the remaining $3,642.50 paid herewith.
|
|
|
| |
Per Share
|
| |
Total
|
|
|
Initial public offering price
|
| |
$
|
| |
$
|
|
|
Underwriting discounts and commissions(1)
|
| |
$
|
| |
$
|
|
|
Proceeds to us, before expenses
|
| |
$
|
| |
$
|
|
|
Proceeds to the selling shareholder, before expenses
|
| |
$
|
| |
$
|
|
(1)
|
We have agreed to reimburse the underwriters for certain FINRA-related expenses. See “Underwriting.”
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Citigroup
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RBC Capital Markets
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Baird
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SunTrust Robinson Humphrey
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Piper Sandler
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•
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services that span the full customer lifecycle, ranging from customer acquisition to customer engagement to managing and measuring the customer experience;
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technology tools that enhance ambassador performance and drive unique client insights;
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•
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multiple channels of engagement, ranging from voice to fast-growing digital channels such as chat and email;
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differentiated global delivery centers, where we have been successful in offering clients lower costs while maintaining high levels of quality; and
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•
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unique, highly engaged culture that is overseen by a highly experienced management team that is flexible and moves at the speed of the client.
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Our CLX Suite of Solutions
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Digital (Digital Marketing)
“Add customers.” |
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Connect (Customer Engagement)
“Engage customers.” |
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CX (Feedback Analytics)
“Grow relationships.” |
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Digital Marketing
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Customer Service
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Multi-Channel Digital Surveys
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Lead Generation
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Billing Support
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Real-Time Issue Resolution
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Online Sales
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Technical Support
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Analytics & Business Intelligence
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Optimization
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Up-Sell/Cross-Sell
Retention / Renewals |
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Text / Sentiment Analytics
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Lead Conversion
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Win-backs
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•
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Customer Engagement (ibex Connect) – The largest portion of our addressable market is the customer care segment within the Business Process Outsourcing (“BPO”) industry, which makes up the largest portion of our revenue. International Data Corporation (“IDC”), a leading information technology research firm, estimates that the worldwide business process outsourcing services revenue in 2020 was $203.3 billion and expected to grow to $231 billion in 2024. Within this market, the customer care segment is the largest horizontal market, with approximately $77 billion of revenues in 2020 and expected to grow at a CAGR of 3.6% to $88.6 billion in revenues by 2024. Within the United States, customer care BPO spend accounted for $45 billion in 2020 and is expected to grow to $51.6 billion by 2024.
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•
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Customer Acquisition (ibex Digital) – Our customer acquisition solution is enabled primarily by digital marketing which is one of the fastest growing segments of the media advertising industry. According to eMarketer, a leading market research company, digital marketing will make up 43% of all advertising spending in 2020. A significant portion of this fast-growing market consists of outsourced customer acquisition specialists, who have primarily adopted a pay-for-performance business model in which advertisers only compensate marketers once a target consumer has taken a particular action, such as filling out an information form or completing a purchase of a product or service. Also according to eMarketer, in 2020 $28 billion is expected to be spent annually on paid search in North America, our primary digital marketing channel. The market is projected to continue to grow in the near term and is rapidly evolving due to increased expectations for BPO vendors to innovate and constantly improve service quality.
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•
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Customer Experience Management and Analytics (ibex CX) – With unprecedented access to technology, data and choices, consumers have elevated expectations about being heard, as well as how companies take action and respond in real time. As consumers gravitate toward digital channels (websites, mobile and social media), enterprises are seeking more technologically advanced solutions to collect data in real time and harness insights yielded by advanced analytics performed on those data to provide customized customer experiences. Markets and Markets, a leading B2B market research firm, estimates that the global customer experience management market will grow at a 13.3% CAGR, from $7.8 billion in 2019 to over $14.5 billion in 2023, with North America representing approximately $2.9 billion of market share in 2019. Similarly, Market Research Future estimates that the global market for customer experience analytics will increase to $12 billion by 2023.
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•
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A Dramatic Prioritization of CX – As brands recognize that digital feedback mechanisms, such as social media, can rapidly impact brand perception in a positive or negative manner, the importance of delivering an exceptional customer experience has become a top priority for companies.
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•
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Consumer Centricity & Customer Lifetime Value (LTV) – Customer expectations and behaviors are changing dramatically. Enabled by immediate feedback channels, consumers expect that enterprises will meet their
|
•
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Outsourcing Across the Operational Value Chain – Enterprises are more frequently relying on outsourced providers to address their needs across the entire customer lifecycle. Many companies, especially in the healthcare, financial services, and utilities space, are beginning to increasingly rely on the expertise of external vendors to deliver cost savings, ensure compliance, drive performance enhancements, and offer technology suites that serve to improve overall CX while allowing the brand to focus on their core products and competencies. Mature companies seek to digitally transform their current operations to meet the demands of the digital economy and diversify their capabilities. Companies in emerging sectors outsource due to their limited experience and/ or resources to manage increasing volumes of customer interactions, and in order to drive new customer demand, scale operations, optimize costs, protect their brand investment, and accelerate profitability.
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•
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Rise of Omni-Channel to Drive Consumer Centricity – Customer expectations and behaviors are changing dramatically with the evolution of technology such as smart phones, tablets and social media. This has accelerated the speed of consumer interaction with the brands. Consumers expect the brands to meet their needs and preferences instantaneously in return for brand loyalty and a greater share of customer spend. To address this trend, brands are focused on providing a seamless experience via integration of all contact channels (chat, email, SMS, voice, etc.) to deliver customer-centric solutions in an omni-channel manner that maximize customer lifetime value.
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•
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Seeking Integrated, End-to-End Partners – We believe clients are increasingly looking to utilize outsourcing partners who can provide unified solutions for a variety of touchpoints along the customer interaction value chain, from digital marketing to customer sales and support to CX and surveys. Vendors with integrated offerings will command a larger share of wallet from their clients, drive a great degree of insight and performance, and become more ‘sticky’ with their clients for longer-lasting relationships.
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•
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Bestshore, Flexible Delivery Model – Clients are increasingly differentiating between providers based on their ability to provide a flexible, turnkey delivery model that can offer a mix of onshore, nearshore, offshore, and remote working capabilities. In light of recent global events, clients have indicated a heightened importance on the ability of providers to shift their delivery rapidly between various location models.
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•
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Data Protection & Security – With the rise of the digital economy has come a rise in both the concern toward, and vulnerability of, consumer data. Both mature and new economy brands are placing a higher degree of focus on the technology that underpins the data security & fraud systems deployed by their partners; having an advanced and secure system architecture along with data center redundancy and advanced security technologies are becoming increasingly important, understanding that any security breach can result in a devastating impact to a client’s brand and a consumer’s loyalty.
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•
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Data and Analytics – Enterprises are increasingly demanding that their providers of customer interaction solutions integrate data analysis & insight into their core service offerings, in order to drive continuous performance and superior outcomes. These business intelligence tools can yield actionable insights across every customer touchpoint enabling clients to address customer issues in real time. We expect that investments in automation, digitization and machine learning will be key drivers in the industry as clients seek to adopt more technology-rich ways of servicing their customers.
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•
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Artificial Intelligence to Enhance Service Delivery – With the increasing applicability of AI in enhancing business processes, the customer care industry is starting to integrate AI into its range of solutions.
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•
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Integrated Technology Solutions for Mature Sectors – Fortune 500 companies that historically utilized traditional live-agent, voice-based services are now integrating new technology-enabled solutions that include multi-channel delivery, self-serve options and automation. Such solutions allow them to achieve greater operational flexibility and innovate their service offerings.
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•
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Solutions Catered to High-Growth Sectors – The challenges that new economy “disruptors” face consist largely of managing high growth within their customer base, while simultaneously maintaining a high-quality customer experience. In contrast to mature business models, new economy companies have generally not focused on developing large-scale insourced customer operations; therefore, they rely on external partners that can deliver customer service, engagement and support while maintaining the quality of their brands. Most of these companies source their customer interaction needs from lower-cost locations outside their home markets.
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•
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Differentiated as a Nimble, Disruptive Provider – We believe that we have a distinct organizational culture that embraces technological disruption and is characterized by innovation, speed and structural nimbleness. Our innovative and entrepreneurial culture is a key differentiator and gives us a competitive advantage in delivering high-quality solutions to clients around the globe. With mature clients, this culture plays to our advantage by showcasing the inflexibility of larger incumbents. With high-growth clients, which we refer to as New Economy clients, we believe that our entrepreneurial approach is in line with their own culture.
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•
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Technology Solutions & Continuous Innovation – ibex Wave X is the hub of our technology development and innovation effort to drive value-added technology development that improves ambassador interactions, client CX, and overall performance benchmarks. Our CLX platform combines our proprietary technology with our service delivery model to provide our clients with customized solutions at a large scale. We are integrating artificial intelligence into each stage of the customer lifecycle, from customer acquisition, to engagement, to surveys & analytics. Our proprietary technology allows us to provide innovative, automated and customizable solutions to our clients more efficiently than if delivered through a purely service-based delivery model.
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•
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Provider of Customizable Sets of Customer Lifecycle Experience Solutions – The customer lifecycle, from acquisition to retention, has become more challenging, complex and competitive for enterprises to manage. We designed a differentiated suite of digital and operational solutions that seamlessly manages interactions throughout all phases of the customer lifecycle, across multiple channels, customized to a client’s specific needs.
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•
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Proven Expertise in Mature Industries – We believe that we have built a deep level of expertise in serving clients in mature industries, including the telecommunications and cable sectors. We believe that we are able to provide value at all stages of the customer lifecycle for these industries, from lowering the cost of customer acquisition to increasing customer lifetime value through improved retention and increased up-sell.
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•
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World-Class Global Delivery with Nearshore & Offshore Diversification – Our global delivery model is built on onshore, nearshore and offshore delivery centers, and includes our ability to also support work-at-home capabilities. We seek to operate state-of-the-art ‘highly-branded’ sites in labor markets that are underpenetrated in order to maintain our competitive advantage, retain our position in those labor markets as an employer of choice and deliver a highly scalable and cost-effective solution to our clients. Our highly-branded centers enable us to create a differentiated connection to our clients’ brands and customers. In addition, with a broad network of 27 contact centers spread across multiple geographies, we provide much needed geographic diversity for our clients. In particular, significant investments made in nearshore sites, such as Jamaica and Nicaragua, enable us to offer untapped talent pools for high quality service, proximity to home (US) operations and competitive price points, and often an existing brand affinity. We estimate a 77% CAGR in nearshore revenue for Jamaica and Nicaragua for the four year period from fiscal year ended June 30, 2016 through the fiscal year ending June 30, 2020 and a 21% CAGR in offshore revenue from fiscal year ended June 30, 2018 through June 30, 2020.
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•
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Innovative and Entrepreneurial Culture – We believe we have established a strong, unique corporate culture that is critical to our ability to recruit, engage, motivate, manage and retain our talented global workforce of over 22,500 employees. A culture which we actively foster through events including, employee galas, VIP events, talent shows, community outreach to engage, reward, and support our ambassadors. At ibex, we ensure our employees are extensions of our clients’ brand identities, delivering passionate and industry-leading results
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•
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Client Satisfaction and Retention – Our ability to build deep and trusted relationships with our clients is core to who we are. Since the end of fiscal year 2018, we have successfully retained all of our top 25 clients, which represented over 95% of our revenue in fiscal year 2018. Additionally, we monitor customer satisfaction in the form of a net promoter score (NPS) which is tracked through our ibex annual Client Satisfaction Survey. Based on ibex’s 2019 Client Satisfaction Survey, we scored a NPS of 68 which indicates strong, mutually-beneficial relationships with our clients built on the value clients place in our services and solutions and level of service we consistently deliver. We believe that our success with client retention is driven by our ability to perform at or above our client expectations and our competitors as well as our investment in building deep relationships with our clients at multiple levels within their businesses.
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•
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Continue Winning Blue Chip Clients – We’ve been able to win marquee blue chip brands that are looking to transform their customer engagement strategy through a more innovative and outcome-oriented focus. For these customers, our value proposition is primarily focused on acting as a partner to drive digital transformation in their existing operations. The imperative of engaging digitally with a new type of consumer is all the more urgent as these companies increasingly face-off against emerging new economy players. ibex has increasingly gained share in these relationships, often displacing existing incumbent vendor(s).
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•
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Continue Winning New Clients with New Economy – Our New Economy initiative combines our Customer Engagement, Customer Acquisition and Customer Experience solutions into an integrated solution set that is focused on the needs of high-growth emerging technology markets. Our success in our New Economy segment can be traced to its inception in 2014, when we began servicing a new client in the emerging technology space. We launched our New Economy initiative in the summer of 2018 to help similar clients attain and support their high-growth objectives. We believe we are among the top tier of providers of outsourced customer interaction solutions that can address the unique needs of such clients. In addition, New Economy customers are generally higher margin as a result of lower customer acquisition costs and a greater portion of non-voice revenue, which is delivered with greater efficiency.
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•
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Grow Strategic Verticals with Specific Domain Strategies – Our ibex Financial, ibex Health, and ibex Utilities sub-brands are structured to accelerate growth using a highly targeted and performance-driven approach. Within ibex Financial, we intend to build on recent wins we have had with payments companies. Within ibex Health, we see significant opportunity to provide revenue cycle management as well as medical coding and billing services. Finally, within ibex Utilities, we see the opportunity to acting as the “utility mover” for our clients’, by facilitating our clients’ customers’ moves in the form of targeted offers and services that could be of interest at the time certain customers are undergoing a physical move or changing utility provider.
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•
|
Expand Service & Lines of Business (LOBs) with Current Clients (“Expand”) – The breadth of our solutions over the full customer lifecycle creates the ability to cross-sell each solution throughout our client base. Our client base has many large, global brands that have multiple lines of business across multiple geographies. Our typical model is to provide a launch in one center with one CLX service such as Customer Engagement. Our goal is then to “expand” with additional CLX services or new geographies where we operate for our clients. We believe that the success of our initial launches has enabled our client teams to broaden our scope of engagement with these clients to include additional solutions within our suite of offerings.
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•
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Pursue Strategic Acquisitions – Our acquisition strategy targets situations in which it is optimal to acquire versus build. It will primarily be focused on adding additional omni-channel capabilities, providing access to new geographies and acquiring technologies that further differentiate our solutions.
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•
|
The COVID-19 pandemic has adversely impacted our business and results of operations. The ultimate impact of COVID-19 on our business, financial condition and results of operations will depend on future developments which are highly uncertain and cannot be predicted at this time, including the scope and duration of the pandemic and actions taken by federal, state and local governmental authorities in the United States, local governmental authorities in our international sites and our clients in response to the pandemic;
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•
|
Frontier, our largest client as of March 31, 2020, has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, which could have a material adverse effect on our business, financial conditions, results of operations and cash flows;
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•
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Our business is dependent on key clients, and the loss of a key client could have an adverse effect on our business and results of operations;
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•
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We enter into multi-year contracts with our clients. Our failure to price these contracts correctly may negatively affect our profitability;
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•
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The terms of our client contracts may limit our profitability or enable our clients to reduce or terminate their use of our solutions;
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•
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The consolidation of our clients or potential clients may adversely affect our business, financial condition, results of operations and prospects;
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•
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If our clients decide to enter into or further expand insourcing activities in the future, or if current trends toward outsourcing services and / or outsourcing activities are reversed, it may materially adversely affect our business, results of operations, financial condition and prospects;
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•
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Natural events, health epidemics (including the outbreak of a novel strain of coronavirus (COVID-19)), wars, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.
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•
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Our business is subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information. Any failure to comply with applicable laws and regulations would harm our business, results of operations and financial condition.
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•
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We have a limited operating history as an integrated company under the IBEX brand, which makes it difficult to evaluate our future prospects and the risks and uncertainties we may encounter;
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•
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Portions of our business have long sales cycles and long implementation cycles, which require significant resources and working capital;
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•
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Our business relies heavily on technology, telephone and computer systems as well as third-party telecommunications providers, which subjects us to various uncertainties;
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•
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Our business is heavily dependent upon our international operations, particularly in Pakistan and the Philippines and increasingly in Jamaica and Nicaragua, and any disruption to those operations would adversely affect us;
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•
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The inelasticity of our labor costs relative to short-term movements in client demand could adversely affect our business, financial condition and results of operations;
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•
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If we are unable to implement and maintain effective internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result; and
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•
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Damage or disruptions to our technology systems and facilities either through events beyond or within our control could have a material adverse effect on our business, financial condition, results of operations and prospects.
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•
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the last day of the fiscal year in which we have more than $1.07 billion in annual revenues;
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•
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the date on which we become a “large accelerated filer” (the fiscal year-end on which at least $700 million of equity securities are held by non-affiliates as of the last day of our then-most recently completed second fiscal quarter);
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•
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the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and
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•
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the last day of the fiscal year ending after the fifth anniversary of the completion of this offering.
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•
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Series A Convertible Preferred Share (“Series A preferred share”) – 1 Series A preferred share is authorized, issued and outstanding, and it is held by our parent company, The Resource Group International Limited.
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•
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Series B Convertible Preferred Shares (“Series B preferred shares”) – The maximum authorized number of Series B preferred shares is 12,512,994.4665, of which 11,083,691.3814 were issued and outstanding and are held by our parent company, The Resource Group International Limited (10,764,317.9358 Series B preferred shares), and Mr. Jeffrey Cox, one of our executive officers (319,373.4456 Series B preferred shares).
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•
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Series C Convertible Preferred (“Series C preferred shares”, and together with the Series A preferred shares and the Series B preferred shares, the “preferred shares”) – The maximum authorized number of Series C preferred shares is 12,639,389.35, of which 111,986.4786 were issued and outstanding and are held by our parent company, The Resource Group International Limited (108,730.4842 Series C preferred shares), and Mr. Cox (3,225.9944 Series C preferred shares).
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•
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Class A Common Shares (“Class A common shares”) – The maximum authorized number of Class A common shares is 79,766,504.249454, of which none are issued and outstanding.
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•
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Class B Common Shares (“Class B common shares”) – The maximum authorized number of Class B common shares is 2,559,323.13, of which 1,851,788 were issued subject to vesting restrictions pursuant to awards made to our directors, executive officers and other senior management personnel.
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•
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The Series A preferred share will convert into one Series C preferred share;
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•
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Each Series B preferred share will convert into Series C preferred shares on a one-for-one basis;
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•
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Each Series C preferred share (including those issued as a result of the conversions of Series A preferred shares and Series B preferred shares into Series C preferred shares) will convert into a number of Class A common shares that will be determined in accordance with a formula that is set forth in the certificate of designations pursuant to which the Series C preferred shares were authorized and issued on December 21, 2018, which number of Class A common shares will vary depending on the initial public offering price per share in this offering and the number of preferred shares outstanding immediately prior to the pricing of this offering;
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•
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Each Class B common share will convert into Class A common shares on a one-for-one basis; and
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•
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Each Class A common share will be redesignated as a common share.
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•
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an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus;
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•
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the automatic conversion, upon the completion of this offering, of one Series A preferred share, 11,083,691.3814 Series B preferred shares, 111,986.4786 Series C preferred shares and 1,137,768 Class B common shares into an aggregate of common shares; and
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•
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no exercise of the underwriters’ option to purchase up to additional common shares.
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•
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714,020 common shares issuable in respect of Class B common shares that have been issued under the 2018 Restricted Share Plan and remain subject to vesting conditions;
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•
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707,535 common shares available for future issuance as of March 31, 2020 under the 2018 Restricted Share Plan (all of which were transferred to the IBEX Limited 2020 Long Term Incentive Plan (the “2020 LTIP”), which was approved and adopted on May 20, 2020, and included in a total of 1,287,326.13 common shares issuable thereunder as of May 20, 2020); and
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•
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up to 1,443,740.49 common shares issuable upon exercise of the warrant that we issued to Amazon.com NV Investment Holdings LLC, or Amazon, on November 13, 2017, as subsequently amended (the “Amazon Warrant”).
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Three months ended June 30,
|
| |
Year ended June 30,
|
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|
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2020
|
| |
2019
|
| |
2020
|
| |
2019
|
|
|
|
| |
estimated and
unaudited |
| |
|
| |
estimated and
unaudited |
| |
|
|
|
|
| |
Low
|
| |
High
|
| |
Low
|
| |
High
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|
|
Statement of operations data
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|
| |
|
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Revenue
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| |
|
| |
|
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|
| |
|
|
|
Net income for the period, continuing expenses
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|
| |
|
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|
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Other Financial Data
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| |
|
| |
|
| |
|
| |
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|
Reconciliation of Adjusted EBITDA from Continuing Operations from Net Income
|
| |
|
| |
|
| |
|
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|
|
|
Net income
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|
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Finance expenses
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Income tax (expense)/benefit
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Depreciation and amortization
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EBITDA from continuing operations
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|
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|
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|
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Non-recurring expenses
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Foreign exchange losses
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| |
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Other income
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| |
|
| |
|
| |
|
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Fair value adjustment
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| |
|
| |
|
| |
|
| |
|
|
|
Share-based payments
|
| |
|
| |
|
| |
|
| |
|
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|
Adjusted EBITDA from continuing operations
|
| |
|
| |
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| |
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| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended June 30,
|
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|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |||
|
|
| |
(in thousands, except share and per share amounts)
|
| |||||||||
|
Statements of Profit or Loss and Other Comprehensive Income Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue
|
| |
$304,255
|
| |
$280,465
|
| |
$368,380
|
| |
$342,200
|
|
|
Payroll and related costs
|
| |
(207,246)
|
| |
(191,494)
|
| |
(254,592)
|
| |
(252,925)
|
|
|
Share-based payments
|
| |
119
|
| |
(4,039)
|
| |
(4,087)
|
| |
(8,386)
|
|
|
Reseller commission and lead expenses
|
| |
(13,604)
|
| |
(23,038)
|
| |
(27,877)
|
| |
(28,059)
|
|
|
Depreciation and amortization
|
| |
(18,460)
|
| |
(15,692)
|
| |
(20,895)
|
| |
(12,182)
|
|
|
Other operating expenses
|
| |
(44,817)
|
| |
(37,120)
|
| |
(54,124)
|
| |
(58,425)
|
|
|
Income/(loss)/income from operations
|
| |
20,247
|
| |
9,082
|
| |
6,805
|
| |
(17,777)
|
|
|
Finance expenses
|
| |
(7,190)
|
| |
(5,458)
|
| |
(7,709)
|
| |
(3,093)
|
|
|
Income/(loss) before taxation
|
| |
13,057
|
| |
3,624
|
| |
(904)
|
| |
(20,870)
|
|
|
Income tax (expense)/ benefit
|
| |
(1,482)
|
| |
(3,496)
|
| |
(3,615)
|
| |
108
|
|
|
Net income/(loss) for the period, continuing operations
|
| |
11,575
|
| |
128
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Net income on discontinued operation, net of tax
|
| |
—
|
| |
11,085
|
| |
15,484
|
| |
4,881
|
|
|
Net income/(loss) for the period
|
| |
$11,575
|
| |
$11,213
|
| |
$10,965
|
| |
$(15,881)
|
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended June 30,
|
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |||
|
|
| |
(in thousands, except share and per share amounts)
|
| |||||||||
|
Loss per share from continuing operations attributable to the ordinary equity ordinary holders of the parent
|
| |
|
| |
|
| |
|
| |
|
|
|
Basic earnings/(loss) per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
Diluted earnings/(loss) per share
|
| |
$—
|
| |
$—
|
| |
$(0.36)
|
| |
$(1.85)
|
|
|
Loss per share attributable to ordinary equity holders of the parent - diluted(1)
|
| |
|
| |
|
| |
|
| |
|
|
|
Basic earnings loss per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
Diluted earnings/(loss) per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$(1.42)
|
|
|
Weighted average number of shares outstanding – basic
|
| |
1,137,768
|
| |
859,556
|
| |
956,835
|
| |
—
|
|
|
Weighted average number of shares outstanding – diluted
|
| |
12,678,194
|
| |
12,338,691
|
| |
12,461,182
|
| |
11,195,649
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Statements of Financial Position Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Cash and cash equivalents
|
| |
15,471
|
| |
13,437
|
| |
8,873
|
| |
13,519
|
|
|
Total assets
|
| |
196,187
|
| |
246,631
|
| |
188,302
|
| |
157,081
|
|
|
Borrowings current
|
| |
32,457
|
| |
41,344
|
| |
41,835
|
| |
51,876
|
|
|
Due to related parties
|
| |
6,106
|
| |
5,899
|
| |
6,169
|
| |
11,546
|
|
|
Borrowings non-current
|
| |
4,865
|
| |
41,695
|
| |
7,184
|
| |
9,880
|
|
|
Total non-current liabilities
|
| |
74,749
|
| |
97,273
|
| |
68,293
|
| |
12,894
|
|
|
Total liabilities
|
| |
176,063
|
| |
210,250
|
| |
179,674
|
| |
129,128
|
|
|
Total equity
|
| |
20,124
|
| |
36,381
|
| |
8,628
|
| |
27,953
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Statements of Cash Flows Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Net cash (outflow)/inflow from operating activities
|
| |
$33,653
|
| |
$(3,820)
|
| |
$2,202
|
| |
$(5,747)
|
|
|
Net cash used in investing activities
|
| |
$(4,195)
|
| |
$(2,795)
|
| |
$(9,084)
|
| |
$(5,439)
|
|
|
Net cash inflow/(outflow) from financing activities
|
| |
$(22,822)
|
| |
$6,789
|
| |
$2,552
|
| |
$3,187
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Other Financial and Operating Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue from Customer Management segment(2)
|
| |
N/A
|
| |
N/A
|
| |
$315,483
|
| |
$285,120
|
|
|
Revenue from Customer Acquisition segment
|
| |
N/A
|
| |
N/A
|
| |
$52,897
|
| |
$57,080
|
|
|
Adjusted EBITDA from continuing operations (unaudited)(3)
|
| |
$40,622
|
| |
$28,909
|
| |
$36,295
|
| |
$4,296
|
|
|
Adjusted EBITDA from continuing operations margin (unaudited)(4)
|
| |
13.4%
|
| |
10.3%
|
| |
9.9%
|
| |
1.3%
|
|
|
Adjusted EBITDA from continuing operations excluding IFRS 15 & 16 (unaudited)(6)
|
| |
N/A
|
| |
N/A
|
| |
$23,650
|
| |
$4,296
|
|
|
Adjusted EBITDA from continuing operations margin excluding IFRS 15 & 16 (unaudited)(6)
|
| |
N/A
|
| |
N/A
|
| |
6.4%
|
| |
1.3%
|
|
|
Net Debt (unaudited)(5)
|
| |
$101,391
|
| |
$128,125
|
| |
$109,380
|
| |
$49,437
|
|
|
Net Debt excluding IFRS 16 (unaudited)(6)
|
| |
$29,222
|
| |
$70,822
|
| |
$42,466
|
| |
$49,437
|
|
|
Net Debt, continuing operations, excluding IFRS 16 (unaudited)(6)
|
| |
$29,222
|
| |
$40,951
|
| |
$42,466
|
| |
$38,657
|
|
(1)
|
See Note 20 to our audited consolidated financial statements and Note 14 to our unaudited condensed consolidated interim financial statements included in this prospectus for additional information regarding the calculation of basic and diluted earnings/(loss) per share attributable to equity holders of the parent and weighted average number of shares outstanding - basic and diluted.
|
(2)
|
Historically, we conducted our business in two reporting segments, Customer Acquisition and Customer Management. Effective July 1, 2019, we began reporting our results on a single segment basis.
|
(3)
|
We define “EBITDA from continuing operations” as net (loss)/income less discontinued operation, net of tax before finance costs, finance costs related to right-of-use of leased assets, depreciation and amortization, depreciation of right-of-use of leased assets, and income tax (credit)/expense.
|
|
We define “Adjusted EBITDA from continuing operations” as EBITDA from continuing operations before the effect of the following items: litigation and settlement expenses, foreign exchange losses, goodwill impairment, other income, share-based payments and certain non-cash and non-recurring charges that we believe are not reflective of our long-term performance.” We use Adjusted EBITDA from continuing operations internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance. We believe that Adjusted EBITDA from continuing operations is a meaningful indicator of the health of our business as it reflects our ability to generate cash that can be used to fund recurring capital expenditures and growth. We also believe that Adjusted EBITDA from continuing operations is widely used by investors, securities analysts and other interested parties as a supplemental measure of performance and liquidity.
|
|
Adjusted EBITDA from continuing operations may not be comparable to other similarly titled measures of other companies and has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Some of these limitations are as follows:
|
•
|
although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, however, Adjusted EBITDA from continuing operations does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA from continuing operations is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted EBITDA from continuing operations or similarly titled measures differently, which reduces its usefulness as a comparative measure.
|
|
Because of these and other limitations, you should consider Adjusted EBITDA from continuing operations along with other IFRS-based financial performance measures, including cash flows from operating activities, investing activities and financing activities, net (loss)/income and our other IFRS financial results.
|
The following table provides a reconciliation of Adjusted EBITDA from continuing operations from our net (loss)/income for the periods presented:
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended June 30,
|
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Reconciliation of Adjusted EBITDA from Continuing Operations from Net (Loss)/Income
|
| |
|
| |
|
| |
|
| |
|
|
|
Net income/(loss) for the period
|
| |
$11,575
|
| |
$11,213
|
| |
$10,965
|
| |
$(15,881)
|
|
|
Net income on discontinued operation, net of tax
|
| |
—
|
| |
(11,085)
|
| |
(15,484)
|
| |
(4,881)
|
|
|
Net loss, from continuing operations
|
| |
$11,575
|
| |
$128
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Finance expenses
|
| |
7,190
|
| |
5,458
|
| |
7,709
|
| |
3,093
|
|
|
Income tax (benefit)/expense
|
| |
1,482
|
| |
3,496
|
| |
3,615
|
| |
(108)
|
|
|
Depreciation and amortization
|
| |
18,460
|
| |
15,692
|
| |
20,895
|
| |
12,182
|
|
|
EBITDA from continuing operations(a)
|
| |
$38,707
|
| |
$24,774
|
| |
$27,700
|
| |
$(5,595)
|
|
|
Non-recurring expenses(b)
|
| |
$ 1,397
|
| |
$—
|
| |
$4,239
|
| |
$4,112
|
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended June 30,
|
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Foreign exchange losses
|
| |
523
|
| |
925
|
| |
1,274
|
| |
1,266
|
|
|
Other income(c)
|
| |
(518)
|
| |
(464)
|
| |
(641)
|
| |
(547)
|
|
|
Fair value adjustment(d)
|
| |
632
|
| |
(365)
|
| |
(364)
|
| |
(3,326)
|
|
|
Share-based payments(e)
|
| |
(119)
|
| |
4,039
|
| |
4,087
|
| |
8,386
|
|
|
Adjusted EBITDA from continuing operations
|
| |
$40,622
|
| |
$28,909
|
| |
$36,295
|
| |
$4,296
|
|
(4)
|
We calculate “Adjusted EBITDA from continuing operations margin” as Adjusted EBITDA divided by revenue.
|
(a)
|
EBITDA from continuing operations includes the impact of the adoption of IFRS 16 in the nine months ended March 31, 2020 and 2019, and fiscal year ended June 30, 2019 (see Note 25.8 to our audited financial statements included elsewhere in this prospectus).
|
(b)
|
For the nine months ended March 31, 2020, we incurred non-recurring expenses of $1.4 million related to COVID-19, net expenses (expenses net of customer reimbursements) of $0.7 million, legal settlement of $0.1 million and listing expenses of $0.6 million. The COVID-19 expenses primarily include the additional hoteling and transportation expenses incurred due to the Pandemic.
|
(c)
|
For the nine months ended March 31, 2020, other income represented deferred income of $0.5 million and for the nine months ended March 31, 2019, other income represented the proceeds from the sale of DGS EDU LLC of $0.2 million and deferred income of $0.3 million.
|
(d)
|
For the nine months ended March 31, 2020 and 2019, we recorded a revaluation associated with the Amazon Warrant (see Note 20 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus).
|
(e)
|
For the nine months ended March 31, 2020, this amount represents share-based payment expenses and, for the nine months ended March 31, 2019, this amount includes the cancellation of the 2017 IBEX Stock Plan (“2017 IBEX Plan”) and the phantom stock plans ($3.3 million) partially offset by the elimination of the liability associated with the phantom stock plans ($1.0 million).
|
(5)
|
The following table provides a reconciliation of Net Debt, Net Debt excluding IFRS Impact, and Net Debt, continuing operations, excluding IFRS 16 from total debt:
|
|
|
| |
Nine Months Ended
March 31, |
| |
Fiscal Year Ended June 30,
|
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Net Debt Reconciliation
|
| |
|
| |
|
| |
|
| |
|
|
|
Borrowings – non current
|
| |
$4,865
|
| |
$41,695
|
| |
$7,184
|
| |
$9,880
|
|
|
Lease liabilities – non current(a)
|
| |
$66,851
|
| |
$48,681
|
| |
58,602
|
| |
—
|
|
|
Borrowings – current
|
| |
$32,457
|
| |
$41,344
|
| |
41,835
|
| |
51,876
|
|
|
Lease liabilities – current(a)
|
| |
$12,689
|
| |
$9,842
|
| |
10,632
|
| |
|
|
|
Convertible loan note – related party
|
| |
—
|
| |
—
|
| |
—
|
| |
1,200
|
|
|
Total Debt
|
| |
$116,862
|
| |
$141,562
|
| |
$118,253
|
| |
$62,956
|
|
|
Less: Cash and cash equivalents
|
| |
15,471
|
| |
13,437
|
| |
8,873
|
| |
13,519
|
|
|
Net Debt
|
| |
$101,391
|
| |
$128,125
|
| |
$109,380
|
| |
$49,437
|
|
|
IFRS 16 Impact(a)
|
| |
72,169
|
| |
57,303
|
| |
66,914
|
| |
—
|
|
|
Net Debt excluding IFRS 16 Impact(a)
|
| |
29,222
|
| |
70,822
|
| |
42,466
|
| |
49,437
|
|
|
Net Debt in discontinued operations
|
| |
—
|
| |
(29,871)
|
| |
—
|
| |
(10,780)
|
|
|
Net Debt, continuing operations, excluding IFRS 16
|
| |
29,222
|
| |
40,951
|
| |
42,466
|
| |
38,657
|
|
(a)
|
Total Debt includes non-current lease liabilities of $58.6 million and current lease liabilities of $10.6 million ($69.2 million in total) as of June 30, 2019. Net debt, excluding IFRS 16, excludes the impact of lease liabilities of $66.9 million which, in 2018, were treated as operating leases. The remaining balance of $2.3 million relates to items previously accounted for as obligations under finance leases.
|
(6)
|
For additional detail on the impact of the adoption of IFRS 15 and IFRS 16 and the treatment of Etelequote Limited as a discontinued operation and their impact on the comparability of our financial position at June 30, 2019 and 2018 and our results of operations for the years then ended, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of Financial Position and Results of Operations.”
|
•
|
cross-sell our full spectrum of CLX solutions;
|
•
|
educate the market on our full spectrum of CLX solutions;
|
•
|
reposition and expand our brand to reflect our full spectrum of CLX solutions; and
|
•
|
manage and execute our full spectrum of CLX solutions as part of an integrated company.
|
•
|
political unrest;
|
•
|
social unrest;
|
•
|
terrorism or war;
|
•
|
health epidemics (including the outbreak of COVID-19);
|
•
|
failure of power grids in certain of the countries in which we operate, which are subject to frequent outages;
|
•
|
currency fluctuations;
|
•
|
changes to the laws of the jurisdictions in which we operate; or
|
•
|
increases in the cost of labor and supplies in the jurisdictions in which we operate.
|
•
|
the quality of the consumer experience on our customer acquisition websites and with our delivery center;
|
•
|
the variety and affordability of the products and services that we offer on behalf of our clients and carrier partners;
|
•
|
system failures or interruptions in the operation of our customer acquisition websites; and
|
•
|
changes in the mix of consumers who are referred to us through our direct marketing partners, online advertising subscriber acquisition channels and other marketing channels.
|
•
|
the continued positive market presence, reputation and growth of the marketing partner;
|
•
|
the effectiveness of the marketing partner in marketing our websites and services;
|
•
|
the interest of the marketing partner’s customers in the products and services that we offer on our customer acquisition websites;
|
•
|
the contractual terms we negotiate with the marketing partner, including the marketing fee we agree to pay a marketing partner;
|
•
|
the percentage of the marketing partner’s customers that purchase products or services through our customer acquisition websites;
|
•
|
the ability of a marketing partner to maintain efficient and uninterrupted operation of its website; and
|
•
|
our ability to work with the marketing partner to implement website changes, launch marketing campaigns and pursue other initiatives necessary to maintain positive consumer experiences and acceptable traffic volumes.
|
•
|
impairing our ability to obtain additional financing in the future (or to obtain such financing on acceptable terms) for working capital, capital expenditures, acquisitions or other important needs;
|
•
|
requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on our indebtedness, which could impair our liquidity and reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other important needs;
|
•
|
increasing the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and
|
•
|
limiting our ability to adjust to rapidly changing conditions in the industry, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or business than our competitors with relatively lower levels of debt.
|
•
|
issue additional equity securities that would dilute our shareholders;
|
•
|
use cash that we may need in the future to operate our business;
|
•
|
incur debt on terms unfavorable to us or that we are unable to repay or that may place burdensome restrictions on our operations or cash flows;
|
•
|
incur large charges or substantial liabilities; or
|
•
|
become subject to adverse tax consequences, or substantial depreciation or amortization, deferred compensation or other acquisition related accounting charges.
|
•
|
the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;
|
•
|
the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and
|
•
|
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.
|
•
|
have a majority of the board of directors consist of independent directors;
|
•
|
require non-management directors to meet on a regular basis without management present;
|
•
|
adopt a code of conduct and promptly disclose any waivers of the code for directors or executive officers that should address certain specified items;
|
•
|
have an independent compensation committee;
|
•
|
have an independent nominating committee;
|
•
|
solicit proxies and provide proxy statements for all shareholder meetings;
|
•
|
review related-party transactions; and
|
•
|
seek shareholder approval for the implementation and modification of certain equity compensation plans and issuances of common shares.
|
•
|
a majority of our common shares must be either directly or indirectly owned of record by non-residents of the United States; or
|
•
|
a majority of our “executive officers” or directors may not be U.S. citizens or residents, more than 50% of our assets cannot be located in the United States, and our business must be administered principally outside the United States.
|
•
|
variations in our operating performance and the performance of our competitors;
|
•
|
actual or anticipated fluctuations in our quarterly or annual operating results;
|
•
|
changes in our revenues or earnings estimates or recommendations by securities analysts;
|
•
|
publication of research reports by securities analysts about us or our competitors in our industry;
|
•
|
failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
•
|
our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;
|
•
|
additions or departures of key personnel;
|
•
|
strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
|
•
|
announcement of technological innovations by us or our competitors;
|
•
|
the passage of legislation, changes in interpretations of laws or other regulatory events or developments affecting us;
|
•
|
speculation in the press or investment community;
|
•
|
changes in accounting principles;
|
•
|
terrorist acts, acts of war or periods of widespread civil unrest;
|
•
|
health pandemics (including COVID-19);
|
•
|
changes in general market and economic conditions;
|
•
|
changes or trends in our industry;
|
•
|
investors’ perception of our prospects; and
|
•
|
adverse resolution of any new or pending litigation against us.
|
•
|
the ability of our board of directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval; and
|
•
|
the ability of major shareholders (i.e., shareholders holding 50% or more; in the absence of such a holder, 25% or more) to appoint directors to the Board.
|
•
|
The developments relating to COVID-19, including the scope and duration of the pandemic and actions taken by federal, state and local governmental authorities in the United States, local governmental authorities in our international sites and our clients in response to the pandemic and the effect on our operations, operating budgets, cash flows and liquidity.
|
•
|
The effect on our business, financial conditions, results of operations and cash flows in connection with the Frontier restructuring and the proceedings under Chapter 11 of the United States Bankruptcy Code.
|
•
|
Our ability to attract new business and retain key clients.
|
•
|
Our ability to enter into multi-year contracts with our clients at appropriate rates.
|
•
|
The potential for our clients or potential clients to consolidate.
|
•
|
Our clients deciding to enter into or further expand their insourcing activities.
|
•
|
Our ability to operate as an integrated company under the IBEX brand.
|
•
|
Our ability to manage portions of our business that have long sales cycles and long implementation cycles that require significant resources and working capital.
|
•
|
Our ability to manage our international operations, particularly in Pakistan and the Philippines and increasingly in Jamaica and Nicaragua.
|
•
|
Our ability to comply with applicable laws and regulations, including those regarding privacy, data protection and information security.
|
•
|
Our ability to manage the inelasticity of our labor costs relative to short-term movements in client demand.
|
•
|
Our ability to realize the anticipated strategic and financial benefits of our relationship with Amazon.
|
•
|
Our ability to recruit, engage, motivate, manage and retain our global workforce.
|
•
|
Our ability to anticipate, develop and implement information technology solutions that keep pace with evolving industry standards and changing client demands.
|
•
|
Our ability to maintain and enhance our reputation and brand.
|
•
|
on an actual basis;
|
•
|
on a pro forma as adjusted basis to give effect to (i) our issuance and sale of our common shares in this offering at an assumed initial offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and (ii) the receipt of $ of the net proceeds therefrom, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
|
|
|
| |
As of March 31, 2020
|
| |||
|
|
| |
Actual
|
| |
Proforma as
Adjusted(1) |
|
|
|
| |
(unaudited)
($ in thousands) |
| |||
|
Cash and cash equivalents
|
| |
$15,471
|
| |
|
|
|
Current loans and financing:
|
| |
|
| |
|
|
|
Lease liabilities
|
| |
12,689
|
| |
|
|
|
Borrowings
|
| |
32,457
|
| |
|
|
|
Total current loans and financing
|
| |
45,146
|
| |
|
|
|
Non-current loans and financing:
|
| |
|
| |
|
|
|
Lease liabilities
|
| |
66,851
|
| |
|
|
|
Borrowings
|
| |
4,865
|
| |
|
|
|
Total non-current loans and financing
|
| |
71,716
|
| |
|
|
|
Total loans and financing
|
| |
116,862
|
| |
|
|
|
Total equity
|
| |
20,124
|
| |
|
|
|
Total capitalization
|
| |
$136,986
|
| |
|
|
(1)
|
Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, total equity and total capitalization by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase or decrease of 1.0 million shares we are offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, total equity and total capitalization by approximately $ million.
|
•
|
714,020 common shares issuable in respect of Class B common shares that have been issued under the 2018 Restricted Share Plan and remain subject to vesting conditions;
|
•
|
707,535 common shares available for future issuance as of March 31, 2020 under the 2018 Restricted Share Plan (all of which were transferred to the 2020 LTIP, which was approved and adopted on May 20, 2020, and included in a total of 1,287,326.13 common shares issuable thereunder as of May 20, 2020); and
|
•
|
up to 1,443,740.49 common shares issuable upon exercise of the Amazon Warrant.
|
|
Assumed initial public offering price per common share
|
| |
$
|
|
|
Historical net tangible book value per common share as of March 31, 2020
|
| |
$4.3
|
|
|
Increase in net tangible book value per share as of March 31, 2020 attributable to the conversion of Series A preferred share, Series B preferred shares, Series C preferred shares and Class B common shares
|
| |
$
|
|
|
Pro forma net tangible book value per common share as of March 31, 2020 before giving effect to this offering
|
| |
$
|
|
|
Increase in pro forma net tangible book value per common share attributable to new investors in this offering
|
| |
$
|
|
|
Pro forma as adjusted net tangible book value per common share as of March 31, 2020 after giving effect to this offering
|
| |
$
|
|
|
Dilution per share to new investors in this offering
|
| |
$
|
|
•
|
714,020 common shares issuable in respect of Class B common shares that have been issued under the 2018 Restricted Share Plan and remain subject to vesting conditions;
|
•
|
707,535 common shares available for future issuance as of March 31, 2020 under the 2018 Restricted Share Plan (all of which were transferred to the 2020 LTIP, which was approved; and adopted on May 20, 2020, and included in a total of 1,287,326.13 common shares issuable thereunder as of May 20, 2020); and
|
•
|
up to 1,443,740.49 common shares issuable upon exercise of the Amazon Warrant.
|
|
|
| |
Nine Months Ended
March 31, |
| |
Fiscal Year Ended
June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |||
|
|
| |
(in thousands, except share and
per share amounts) |
| |||||||||
|
Statements of Profit or Loss and Other Comprehensive Income Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue
|
| |
$ 304,255
|
| |
$280,465
|
| |
$368,380
|
| |
$342,200
|
|
|
Payroll and related costs
|
| |
(207,246)
|
| |
(191,494)
|
| |
(254,592)
|
| |
(252,925)
|
|
|
Share-based payments
|
| |
119
|
| |
(4,039)
|
| |
(4,087)
|
| |
(8,386)
|
|
|
Reseller commission and lead expenses
|
| |
(13,604)
|
| |
(23,038)
|
| |
(27,877)
|
| |
(28,059)
|
|
|
Depreciation and amortization
|
| |
(18,460)
|
| |
(15,692)
|
| |
(20,895)
|
| |
(12,182)
|
|
|
Other operating expenses
|
| |
(44,817)
|
| |
(37,120)
|
| |
(54,124)
|
| |
(58,425)
|
|
|
Income/(loss)/income from operations
|
| |
20,247
|
| |
9,082
|
| |
6,805
|
| |
(17,777)
|
|
|
Finance expenses
|
| |
(7,190)
|
| |
(5,458)
|
| |
(7,709)
|
| |
(3,093)
|
|
|
Income/(loss) before taxation
|
| |
13,057
|
| |
3,624
|
| |
(904)
|
| |
(20,870)
|
|
|
Income tax (expense)/benefit
|
| |
(1,482)
|
| |
(3,496)
|
| |
(3,615)
|
| |
108
|
|
|
Net income/(loss) for the period, continuing operations
|
| |
11,575
|
| |
128
|
| |
(4,519)
|
| |
(20,762)
|
|
|
|
| |
Nine Months Ended
March 31, |
| |
Fiscal Year Ended
June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |||
|
|
| |
(in thousands, except share and
per share amounts) |
| |||||||||
|
Net income on discontinued operation, net of tax
|
| |
—
|
| |
11,085
|
| |
15,484
|
| |
4,881
|
|
|
Net income/(loss) for the period
|
| |
$11,575
|
| |
$11,213
|
| |
$10,965
|
| |
$(15,881)
|
|
|
Loss per share from continuing operations attributable to the ordinary equity ordinary holders of the parent
|
| |
|
| |
|
| |
|
| |
|
|
|
Basic earnings/loss per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
Diluted earnings/(loss) per share
|
| |
$—
|
| |
$—
|
| |
$(0.36)
|
| |
$(1.85)
|
|
|
Loss per share attributable to ordinary equity holders of the parent - diluted(1)
|
| |
|
| |
|
| |
|
| |
|
|
|
Basic earnings/loss per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
Diluted earnings/(loss) per share
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$(1.42)
|
|
|
Weighted average number of shares outstanding – basic
|
| |
1,137,768
|
| |
859,556
|
| |
956,835
|
| |
—
|
|
|
Weighted average number of shares outstanding – diluted
|
| |
12,678,194
|
| |
12,338,691
|
| |
12,461,182
|
| |
11,195,649
|
|
|
Statements of Financial Position Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Cash and cash equivalents
|
| |
15,471
|
| |
13,437
|
| |
8,873
|
| |
13,519
|
|
|
Total assets
|
| |
196,187
|
| |
246,631
|
| |
188,302
|
| |
157,081
|
|
|
Borrowings current
|
| |
32,457
|
| |
41,344
|
| |
41,835
|
| |
51,876
|
|
|
Due to related parties
|
| |
6,106
|
| |
5,899
|
| |
6,169
|
| |
11,546
|
|
|
Borrowings non-current
|
| |
4,865
|
| |
41,695
|
| |
7,184
|
| |
9,880
|
|
|
Total non-current liabilities
|
| |
74,749
|
| |
97,273
|
| |
68,293
|
| |
12,894
|
|
|
Total liabilities
|
| |
176,063
|
| |
210,250
|
| |
179,674
|
| |
(129,128)
|
|
|
Total equity
|
| |
20,124
|
| |
36,381
|
| |
8,628
|
| |
27,953
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Statements of Cash Flows Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Net cash (outflow)/inflow from operating activities
|
| |
$33,653
|
| |
$(3,820)
|
| |
$2,202
|
| |
$(5,747)
|
|
|
Net cash used in investing activities
|
| |
$(4,195)
|
| |
$(2,795)
|
| |
$(9,084)
|
| |
$(5,439)
|
|
|
Net cash inflow/(outflow) from financing activities
|
| |
$(22,822)
|
| |
$6,789
|
| |
$2,552
|
| |
$3,187
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Other Financial and Operating Data:
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue from Customer Management segment(2)
|
| |
N/A
|
| |
N/A
|
| |
$315,483
|
| |
$285,120
|
|
|
Revenue from Customer Acquisition segment
|
| |
N/A
|
| |
N/A
|
| |
$52,897
|
| |
$57,080
|
|
|
Adjusted EBITDA from continuing operations (unaudited)(3)
|
| |
$40,622
|
| |
$28,909
|
| |
$36,295
|
| |
$4,296
|
|
|
Adjusted EBITDA from continuing operations margin (unaudited)(4)
|
| |
13.4%
|
| |
10.3%
|
| |
$9.9%
|
| |
1.3%
|
|
|
Adjusted EBITDA from continuing operations excluding IFRS 15 & 16 (unaudited)(6)
|
| |
N/A
|
| |
N/A
|
| |
$23,650
|
| |
$4,296
|
|
|
Adjusted EBITDA from continuing operations margin excluding IFRS 15 & 16 (unaudited)(6)
|
| |
N/A
|
| |
N/A
|
| |
6.4%
|
| |
1.3%
|
|
|
Net Debt (unaudited)(5)
|
| |
$101,391
|
| |
$128,125
|
| |
$109,380
|
| |
$49,437
|
|
|
Net Debt excluding IFRS 16 (unaudited)(6)
|
| |
$29,222
|
| |
$70,822
|
| |
$42,466
|
| |
$49,437
|
|
|
Net Debt, continuing operations, excluding IFRS 16 (unaudited)(6)
|
| |
$29,222
|
| |
$40,951
|
| |
$42,466
|
| |
$38,657
|
|
(1)
|
See Note 20 to our audited consolidated financial statements and Note 14 to our unaudited condensed
|
(2)
|
Historically, we conducted our business in two reporting segments, Customer Acquisition and Customer Management. Effective July 1, 2019, we began reporting our results on a single segment basis.
|
(3)
|
We define “EBITDA from continuing operations ” as net (loss)/income less discontinued operation, net of tax before finance costs, finance costs related to right-of-use of leased assets, depreciation and amortization, depreciation of right-of-use of leased assets, and income tax (credit)/expense.
|
•
|
although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, however, Adjusted EBITDA from continuing operations does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA from continuing operations is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted EBITDA from continuing operations or similarly titled measures differently, which reduces its usefulness as a comparative measure.
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended
June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Reconciliation of Adjusted EBITDA from Continuing Operations from Net (Loss) / Income
|
| |
|
| |
|
| |
|
| |
|
|
|
Net (loss)/income for the period
|
| |
$ 11,575
|
| |
$11,213
|
| |
$10,965
|
| |
$(15,881)
|
|
|
Net income on discontinued operation, net of tax
|
| |
—
|
| |
(11,085)
|
| |
(15,481)
|
| |
(4,881)
|
|
|
Net loss, from continuing operations
|
| |
$ 11,575
|
| |
$128
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Finance expenses
|
| |
7,190
|
| |
5,458
|
| |
7,709
|
| |
3,093
|
|
|
Income tax (benefit)/expense
|
| |
1,482
|
| |
3,496
|
| |
3,615
|
| |
(108)
|
|
|
Depreciation and amortization
|
| |
18,460
|
| |
15,692
|
| |
20,895
|
| |
12,182
|
|
|
EBITDA from continuing operations(a)
|
| |
$ 38,707
|
| |
$24,774
|
| |
$27,700
|
| |
$(5,595)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Non-recurring expenses(b)
|
| |
$1,397
|
| |
$—
|
| |
$4,239
|
| |
$4,112
|
|
|
Foreign exchange losses
|
| |
523
|
| |
925
|
| |
1,274
|
| |
1,266
|
|
|
Other income(c)
|
| |
(518)
|
| |
(464)
|
| |
(641)
|
| |
(547)
|
|
|
Fair value adjustment(d)
|
| |
632
|
| |
(365)
|
| |
(364)
|
| |
(3,326)
|
|
|
Share-based payments(e)
|
| |
(119)
|
| |
4,039
|
| |
4,087
|
| |
8,386
|
|
|
Adjusted EBITDA from continuing operations
|
| |
$40,622
|
| |
$28,909
|
| |
$36,295
|
| |
$4,296
|
|
(a)
|
EBITDA from continuing operations includes the impact of the adoption of IFRS 16 in the nine months ended March 31, 2020 and 2019, and fiscal year ended June 30, 2019 (see Note 25.8 to our audited financial statements included elsewhere in this prospectus).
|
(b)
|
For the nine months ended March 31, 2020, we incurred non-recurring expenses of $1.4 million related to COVID-19 net expenses (expenses net of customer reimbursements) of $0.7 million, legal settlement of $0.1 million and listing expenses of $0.6 million. The COVID-19 expenses primarily include the additional hoteling and transportation expenses incurred due to the Pandemic.
|
(c)
|
For the nine months ended March 31, 2020, other income represented deferred income of $0.5 million and for the nine months ended March 31, 2019, other income represented the proceeds from the sale of DGS EDU LLC of $0.2 million and deferred income of $0.3 million.
|
(d)
|
For the nine months ended March 31, 2020 and 2019, we recorded a revaluation associated with the Amazon Warrant (see Note 20 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus).
|
(e)
|
For the nine months ended March 31, 2020, this amount represents share-based payment expenses and, for the nine months ended March 31, 2019, this amount includes the cancellation of the 2017 IBEX Stock Plan (“2017 IBEX Plan”) and the phantom stock plans ($3.3 million) partially offset by the elimination of the liability associated with the phantom stock plans ($1.0 million).
|
(4)
|
We calculate “Adjusted EBITDA from continuing operations margins” as Adjusted EBITDA from continuing operations divided by revenue.
|
(5)
|
The following table provides a reconciliation of Net Debt, Net Debt excluding IFRS Impact, and Net Debt, continuing operations, excluding IFRS 16 from total debt:
|
|
|
| |
Nine Months Ended
March 31, |
| |
Fiscal Year Ended
June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Net Debt Reconciliation
|
| |
|
| |
|
| |
|
| |
|
|
|
Borrowings – non current
|
| |
$4,865
|
| |
$41,695
|
| |
$7,184
|
| |
$9,880
|
|
|
Lease liabilities – non current(a)
|
| |
$66,851
|
| |
$48,681
|
| |
58,602
|
| |
—
|
|
|
Borrowings – current
|
| |
$32,457
|
| |
$41,344
|
| |
41,835
|
| |
51,876
|
|
|
Lease liabilities – current(a)
|
| |
$12,689
|
| |
$9,842
|
| |
10,632
|
| |
—
|
|
|
Convertible loan note – related party
|
| |
—
|
| |
—
|
| |
—
|
| |
1,200
|
|
|
Total Debt
|
| |
$ 116,862
|
| |
$ 141,562
|
| |
$118,253
|
| |
$62,956
|
|
|
Less: Cash and cash equivalents
|
| |
$15,471
|
| |
13,437
|
| |
8,873
|
| |
13,519
|
|
|
Net Debt
|
| |
101,391
|
| |
128,125
|
| |
$109,380
|
| |
$49,437
|
|
|
IFRS 16 Impact(a)
|
| |
72,169
|
| |
57,303
|
| |
66,914
|
| |
—
|
|
|
Net Debt excluding IFRS 16 Impact(a)
|
| |
29,222
|
| |
70,822
|
| |
42,466
|
| |
49,437
|
|
|
Net Debt in discontinued operations
|
| |
—
|
| |
(29,871)
|
| |
—
|
| |
(10,780)
|
|
|
Net Debt, continuing operations, excluding IFRS 16
|
| |
29,222
|
| |
40,951
|
| |
42,466
|
| |
38,657
|
|
(a)
|
Total Debt includes non-current lease liabilities of $58.6 million and current lease liabilities of $10.6 million ($69.2 million in total) as of June 30, 2019. Net debt, excluding IFRS 16, excludes the impact of lease liabilities of $66.9 million which, in 2018, were treated as operating leases. The remaining balance of $2.3 million relates to items previously accounted for as obligations under finance leases.
|
(6)
|
For additional detail on the impact of the adoption of IFRS 15 and IFRS 16 and the treatment of Etelequote Limited as a discontinued operation and their impact on the comparability of our financial position at June 30, 2019 and 2018 and our results of operations for the years then ended, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of Financial Position and Results of Operations.”
|
•
|
services that span the full customer lifecycle, ranging from customer acquisition to customer engagement to managing and measuring the customer experience;
|
•
|
technology tools that enhance ambassador performance and drive unique client insights;
|
•
|
multiple channels of engagement, ranging from voice to fast-growing digital channels such as chat and email;
|
•
|
differentiated global delivery centers, where we have been successful in offering clients lower costs while maintaining high levels of quality; and,
|
•
|
unique, highly engaged culture that is overseen by a highly experienced management team that is flexible and moves at the speed of the client.
|
|
Our CLX Suite of Solutions
|
| ||||||
|
Digital (Digital Marketing)
“Add customers.” |
| |
Connect (Customer Engagement) “Engage customers.”
|
| |
CX (Feedback Analytics)
“Grow relationships.” |
|
|
Digital Marketing
|
| |
Customer Service
|
| |
Multi-Channel Digital Surveys
|
|
|
Lead Generation
|
| |
Billing Support
|
| |
Real-Time Issue Resolution
|
|
|
Online Sales
|
| |
Technical Support
|
| |
Analytics & Business Intelligence
|
|
|
Optimization
|
| |
Up-Sell/Cross-Sell
Retention / Renewals |
| |
Text / Sentiment Analytics
|
|
|
Lead Conversion
|
| |
Win-backs
|
| |
|
|
|
|
| |
FY 19
|
| |
Excluding
|
| |
FY 19
|
| |
|
| |||
|
|
| |
As
Reported |
| |
IFRS 15
impact |
| |
IFRS 16
impact |
| |
Excluding
IFRS 15, 16 |
| |
June 30,
2018 |
|
|
|
| |
(unaudited)
|
| ||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||
|
Revenue
|
| |
368,380
|
| |
(1,152)
|
| |
—
|
| |
369,532
|
| |
342,200
|
|
|
Profit margin, continuing operations (%)
|
| |
(1.2)%
|
| |
|
| |
|
| |
(0.8)%
|
| |
(6.1)%
|
|
|
Adjusted EBITDA from continuing operations margin (%)
|
| |
9.9%
|
| |
|
| |
|
| |
6.4%
|
| |
1.3%
|
|
|
Net debt
|
| |
109,380
|
| |
—
|
| |
66,914
|
| |
42,466
|
| |
49,437(a)
|
|
|
|
| |
FY 19
|
| |
Excluding
|
| |
FY 19
|
| |
|
| |||
|
|
| |
As
Reported |
| |
IFRS 15
impact |
| |
IFRS 16
impact |
| |
Excluding
IFRS 15, 16 |
| |
June 30,
2018 |
|
|
|
| |
(unaudited)
|
| ||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||
|
Net (loss)/income for the year
|
| |
$10,965
|
| |
(5,149)
|
| |
3,150
|
| |
8,966
|
| |
$(15,881)
|
|
|
Net income on discontinued operations, net of tax
|
| |
$(15,484)
|
| |
4,305
|
| |
(563)
|
| |
(11,742)
|
| |
(4,881)
|
|
|
Net income / (loss) for the year - continuing operations
|
| |
(4,519)
|
| |
(844)
|
| |
2,587
|
| |
(2,776)
|
| |
(20,762)
|
|
|
Finance expense
|
| |
7,709
|
| |
—
|
| |
(4,021)
|
| |
3,688
|
| |
3,093
|
|
|
Income tax expense / (benefit)
|
| |
3,615
|
| |
(81)
|
| |
—
|
| |
3,534
|
| |
(108)
|
|
|
Depreciation and amortization
|
| |
20,895
|
| |
—
|
| |
(10,286)
|
| |
10,609
|
| |
12,182
|
|
|
EBITDA from continuing operations
|
| |
27,700
|
| |
(925)
|
| |
(11,720)
|
| |
15,055
|
| |
(5,595)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
FY 19
|
| |
Excluding
|
| |
FY 19
|
| |
|
| |||
|
|
| |
As
Reported |
| |
IFRS 15
impact |
| |
IFRS 16
impact |
| |
Excluding
IFRS 15, 16 |
| |
June 30,
2018 |
|
|
|
| |
(unaudited)
|
| ||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||
|
Non-recurring expenses
|
| |
4,239
|
| |
—
|
| |
—
|
| |
4,239
|
| |
4,112
|
|
|
Foreign exchange losses
|
| |
1,274
|
| |
—
|
| |
—
|
| |
1,274
|
| |
1,266
|
|
|
Other income
|
| |
(641)
|
| |
—
|
| |
—
|
| |
(641)
|
| |
(547)
|
|
|
Fair value adjustment
|
| |
(364)
|
| |
—
|
| |
—
|
| |
(364)
|
| |
(3,326)
|
|
|
Share-based payments
|
| |
4,087
|
| |
—
|
| |
—
|
| |
4,087
|
| |
8,386
|
|
|
Adjusted EBITDA from continuing operations
|
| |
36,295
|
| |
(925)
|
| |
(11,720)
|
| |
23,650
|
| |
4,296
|
|
|
Adjusted EBITDA from continuing operations margin (%)
|
| |
9.9%
|
| |
|
| |
|
| |
6.4%
|
| |
1.3%
|
|
|
Net debt
|
| |
109,380
|
| |
—
|
| |
66,914(b)
|
| |
42,466
|
| |
49,437(a)
|
|
|
(a)
|
| |
|
| |
June 30, 2018
|
|
|
|
| |
|
| |
(unaudited)
|
|
|
|
| |
Net Debt excluding IFRS 16
|
| |
$49,437
|
|
|
|
| |
Etelequote Limited - borrowings
|
| |
(14,677)
|
|
|
|
| |
Etelequote Limited - related party loan
|
| |
(1,200)
|
|
|
|
| |
Etelequote Limited - cash
|
| |
5,097
|
|
|
|
| |
Net debt, continuing operations, excluding IFRS 16
|
| |
38,657
|
|
(b)
|
Total Debt includes non-current lease liabilities of $58.6 million and current lease liabilities of $10.6 million ($69.2 million in total) as of June 30, 2019. Net debt, excluding IFRS 16, excludes the impact of lease liabilities of $66.9 million which, in 2018, were treated as operating leases. The remaining balance of $2.3 million relates to items previously accounted for as obligations under finance leases.
|
|
|
| |
Nine Months Ended March 31, 2020
|
| |
Nine Months Ended March 31, 2019
|
| ||||||||||||
|
|
| |
Total Production
Workstations |
| |
In Use
|
| |
Utilization %
|
| |
Total Production
Workstations |
| |
In Use
|
| |
Utilization %
|
|
|
Offshore
|
| |
6,170
|
| |
4,145
|
| |
67%
|
| |
3,975
|
| |
3,379
|
| |
85%
|
|
|
Nearshore
|
| |
3,743
|
| |
2,875
|
| |
77%
|
| |
2,896
|
| |
2,462
|
| |
85%
|
|
|
Onshore
|
| |
3,129
|
| |
2,224
|
| |
71%
|
| |
3,129
|
| |
2,190
|
| |
70%
|
|
|
Rest of World(1)
|
| |
2,430
|
| |
1,913
|
| |
79%
|
| |
2,430
|
| |
2,066
|
| |
85%
|
|
|
Total
|
| |
15,472
|
| |
11,158
|
| |
72%
|
| |
12,430
|
| |
10,096
|
| |
81%
|
|
(1)
|
Rest of world includes workstations in Pakistan, Senegal and the United Kingdom.
|
|
|
| |
Fiscal Year Ended June 30, 2019
|
| |
Fiscal Year Ended June 30, 2018
|
| ||||||||||||
|
|
| |
Total Production
Workstations |
| |
In Use
|
| |
Utilization %
|
| |
Total Production
Workstations |
| |
In Use
|
| |
Utilization %
|
|
|
Offshore
|
| |
4,440
|
| |
3,890
|
| |
88%
|
| |
3,975
|
| |
2,975
|
| |
75%
|
|
|
Nearshore
|
| |
2,900
|
| |
2,600
|
| |
90%
|
| |
2,340
|
| |
1,890
|
| |
81%
|
|
|
Onshore
|
| |
3,129
|
| |
2,179
|
| |
66%
|
| |
3,547
|
| |
2,147
|
| |
61%
|
|
|
Rest of World(1)
|
| |
2,430
|
| |
2,180
|
| |
90%
|
| |
2,430
|
| |
1,980
|
| |
81%
|
|
|
Total
|
| |
12,899
|
| |
10,849
|
| |
84%
|
| |
12,292
|
| |
8,992
|
| |
73%
|
|
(1)
|
Rest of world includes workstations in Pakistan, Senegal and the United Kingdom.
|
•
|
Fair value of the Company’s common shares. As the Company’s common shares are not publicly traded, the Company must estimate the fair value of the common shares, as discussed in “Valuations of Common Shares” below.
|
•
|
Volatility. Since there is no trading history for the Company’s common shares, the expected price volatility for the common shares was estimated using the average historical volatility of the shares of our industry peers as of the grant date of the Company’s RSAs over a period of history commensurate with the expected life of the awards. To the extent that volatility of the share price increases in the future, the estimates of the fair value of the awards to be granted in the future could increase, thereby increasing share-based payment expense in future periods. When making the selection of the industry peers to be used in measuring implied volatility of the RSAs, the Company considered the similarity of their products and business lines, as well as their stage of development, size and financial leverage. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of Company’s own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
•
|
Expected life of the RSAs. The Company calculated the weighted-average expected life of the RSAs to be four years based on management’s best estimates regarding the effect of vesting schedules. RSAs granted may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution.
|
•
|
third-party valuations of the Company’s common shares;
|
•
|
the lack of marketability of the Company’s common shares;
|
•
|
the Company’s historical and projected operating and financial performance;
|
•
|
the Company’s introduction of new services;
|
•
|
the Company’s stage of development;
|
•
|
the global economic outlook and its expected impact on the Company’s business;
|
•
|
the market performance of comparable companies; and
|
•
|
the likelihood of achieving a liquidity event for the common shares underlying the awards, such as an initial public offering or sale of the Company, given prevailing market conditions.
|
•
|
although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future. Adjusted EBITDA from continuing operations does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
Adjusted EBITDA from continuing operations is not intended to be a measure of free cash flow for our discretionary use, as it does not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future;
|
•
|
other companies, including companies in our industry, may calculate Adjusted EBITDA from continuing operations or similarly titled measures differently, which reduces its usefulness as a comparative measure.
|
|
|
| |
Nine Months Ended March 31,
|
| |
Fiscal Year Ended June 30,
|
| ||||||||||||
|
|
| |
2020
|
| |
2019
|
| |
Change %
|
| |
2019
|
| |
2018
|
| |
Change %
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |
|
| ||||||
|
|
| |
($ in millions)
|
| |
|
| |
($ in millions)
|
| |
|
| ||||||
|
Revenue
|
| |
$304.3
|
| |
$280.5
|
| |
8.5
|
| |
$368.4
|
| |
$342.2
|
| |
7.7
|
|
|
Other Operating Income
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Operating Expenses
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Payroll and related costs
|
| |
(207.2)
|
| |
(191.5)
|
| |
8.2
|
| |
(254.6)
|
| |
(252.9)
|
| |
0.7
|
|
|
Share-based payments
|
| |
0.1
|
| |
(4.0)
|
| |
N/M
|
| |
(4.1)
|
| |
(8.4)
|
| |
(51.3)
|
|
|
Reseller commission and lead expenses
|
| |
(13.6)
|
| |
(23.0)
|
| |
(40.9)
|
| |
(27.9)
|
| |
(28.1)
|
| |
(0.6)
|
|
|
Depreciation and amortization
|
| |
(18.5)
|
| |
(15.7)
|
| |
17.6
|
| |
(20.9)
|
| |
(12.2)
|
| |
71.5
|
|
|
Other operating costs
|
| |
(44.8)
|
| |
(37.1)
|
| |
20.7
|
| |
(54.1)
|
| |
(58.4)
|
| |
(7.4)
|
|
|
Total Operating Expenses
|
| |
$(284.0)
|
| |
$(271.4)
|
| |
4.7
|
| |
$(361.6)
|
| |
$(360.0)
|
| |
0.4
|
|
|
Income/(loss) from operations
|
| |
$20.2
|
| |
$9.1
|
| |
N/M
|
| |
$6.8
|
| |
$(17.8)
|
| |
(71.5)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Finance expenses
|
| |
(7.2)
|
| |
(5.5)
|
| |
31.7
|
| |
(7.7)
|
| |
(3.1)
|
| |
N/M
|
|
|
Income/(loss) before taxation
|
| |
$13.1
|
| |
$3.6
|
| |
N/M
|
| |
$(0.9)
|
| |
$(20.9)
|
| |
(95.7)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Income tax (expense)/ benefit
|
| |
(1.5)
|
| |
(3.5)
|
| |
(57.6)
|
| |
(3.6)
|
| |
0.1
|
| |
N/M
|
|
|
Net income/(loss), continuing operations
|
| |
$11.6
|
| |
$0.1
|
| |
N/M
|
| |
$(4.5)
|
| |
$(20.8)
|
| |
(78.2)
|
|
|
Net income on discontinued operation, net of tax
|
| |
—
|
| |
11.1
|
| |
N/M
|
| |
15.5
|
| |
4.9
|
| |
N/M
|
|
|
Net income/(loss)
|
| |
11.6
|
| |
11.2
|
| |
3.2
|
| |
11.0
|
| |
(15.9)
|
| |
N/M
|
|
|
Non-GAAP measures
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Adjusted EBITDA from continuing operations (unaudited)
|
| |
$40.6
|
| |
$28.9
|
| |
|
| |
$36.3
|
| |
$4.3
|
| |
|
|
|
Adjusted EBITDA from continuing operations margin (unaudited)
|
| |
13.4%
|
| |
10.3%
|
| |
|
| |
9.9%
|
| |
1.3%
|
| |
|
|
|
Net Debt (unaudited)
|
| |
$101.4
|
| |
$128.1
|
| |
|
| |
$109.4
|
| |
$49.4
|
| |
|
|
|
|
| |
Fiscal Years Ended June 30,
|
| ||||||
|
|
| |
2019
|
| |
2018
|
| |
Change %
|
|
|
|
| |
($ in millions)
|
| |
|
| |||
|
Revenue
|
| |
|
| |
|
| |
|
|
|
Customer Management
|
| |
$315.5
|
| |
$285.1
|
| |
10.6%
|
|
|
Customer Acquisition
|
| |
52.9
|
| |
57.1
|
| |
(7.3)%
|
|
|
Total Revenues
|
| |
$368.4
|
| |
$342.2
|
| |
7.7%
|
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year Ended June 30,
|
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Reconciliation of Adjusted EBITDA from Continuing Operations from
Net (Loss)/Income |
| |
|
| |
|
| |
|
| |
|
|
|
Net (loss)/income
|
| |
$11,575
|
| |
$11,213
|
| |
$10,965
|
| |
$(15,881)
|
|
|
Net income on discontinued operations, net of tax
|
| |
$—
|
| |
(11,085)
|
| |
$(15,484)
|
| |
(4,881)
|
|
|
Net loss from continuing operations
|
| |
$11,575
|
| |
$128
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Finance expenses
|
| |
7,190
|
| |
5,458
|
| |
7,709
|
| |
3,093
|
|
|
Income tax (benefit) / expense
|
| |
1,482
|
| |
3,496
|
| |
3,615
|
| |
(108)
|
|
|
Depreciation and amortization
|
| |
18,460
|
| |
15,692
|
| |
20,895
|
| |
12,182
|
|
|
EBITDA from continuing operations(a)
|
| |
$38,707
|
| |
$24,774
|
| |
$27,700
|
| |
$(5,595)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Non-recurring expenses(b)
|
| |
$1,397
|
| |
$—
|
| |
$4,239
|
| |
$4,112
|
|
|
Foreign exchange losses
|
| |
523
|
| |
925
|
| |
1,274
|
| |
1,266
|
|
|
Other income(c)
|
| |
(518)
|
| |
(464)
|
| |
(641)
|
| |
(547)
|
|
|
Fair value adjustment(d)
|
| |
632
|
| |
(365)
|
| |
(364)
|
| |
(3,326)
|
|
|
Share-based payments(e)
|
| |
(119)
|
| |
4,039
|
| |
4,087
|
| |
8,386
|
|
|
Adjusted EBITDA from continuing operations
|
| |
$40,622
|
| |
$28,909
|
| |
$36,295
|
| |
$4,296
|
|
(a)
|
EBITDA from continuing operations includes the impact of the adoption of IFRS 16 in the nine months ended March 31, 2020 and 2019, and fiscal year ended June 30, 2019 (see Note 25.8 to our audited financial statements included elsewhere in this prospectus).
|
(b)
|
For the nine months ended March 31, 2020, we incurred non-recurring expenses of $1.4 million related to COVID-19 net expenses (expenses net of customer reimbursements) of $0.7 million, legal settlement of $0.1 million and listing expenses of $0.6 million. The COVID-19 expenses primarily include the additional hoteling and transportation expenses incurred due to the Pandemic.
|
(c)
|
For the nine months ended March 31, 2020, other income represented deferred income of $0.5 million and for the nine months ended March 31, 2019, other income represented the proceeds from the sale of DGS EDU LLC of $0.2 million and deferred income of $0.3 million.
|
(d)
|
For the nine months ended March 31, 2020 and 2019, we recorded a revaluation associated with the Amazon Warrant (see Note 20 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus).
|
(e)
|
For the nine months ended March 31, 2020, this amount represents share-based payment expenses and, for the nine months ended March 31, 2019, this amount includes the cancellation of the 2017 IBEX Stock Plan (“2017 IBEX Plan”) and the phantom stock plans ($3.3 million) partially offset by the elimination of the liability associated with the phantom stock plans ($1.0 million).
|
|
|
| |
Nine Months
Ended March 31, |
| |
Fiscal Year
Ended June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |
|
| |
|
| |||
|
|
| |
($ in millions)
|
| |||||||||
|
Net cash inflow / (outflow) from:
|
| |
|
| |
|
| |
|
| |
|
|
|
Operating activities
|
| |
$33.7
|
| |
$(3.8)
|
| |
$2.2
|
| |
$(5.7)
|
|
|
Investing activities
|
| |
$(4.2)
|
| |
$(2.8)
|
| |
$(9.1)
|
| |
$(5.4)
|
|
|
Financing activities
|
| |
$(22.8)
|
| |
$6.8
|
| |
$2.6
|
| |
$3.2
|
|
|
Effects of exchange rate difference on cash and cash equivalents
|
| |
$(0.0)
|
| |
$(0.3)
|
| |
$(0.3)
|
| |
$0.2
|
|
|
Net increase / (decrease) in cash and cash equivalents
|
| |
$6.6
|
| |
$(0.1)
|
| |
$(4.6)
|
| |
$(7.8)
|
|
|
Cash and cash equivalents, beginning of period
|
| |
$8.9
|
| |
$13.5
|
| |
$13.5
|
| |
$21.3
|
|
|
Cash and cash equivalents, end of period
|
| |
$13.4
|
| |
$15.5
|
| |
$13.5
|
| |
$8.9
|
|
|
|
| |
Nine Months Ended
March 31, |
| |
Fiscal Year Ended
June 30, |
| ||||||
|
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
|
|
| |
(unaudited)
|
| |||||||||
|
|
| |
($ in thousands)
|
| |||||||||
|
Net Debt Reconciliation
|
| |
|
| |
|
| |
|
| |
|
|
|
Borrowings – non-current
|
| |
$4,865
|
| |
$41,695
|
| |
$7,184
|
| |
$9,880
|
|
|
Lease liabilities – non-current
|
| |
$66,851
|
| |
$48,681
|
| |
58,602
|
| |
—
|
|
|
Borrowings – current
|
| |
$32,457
|
| |
$41,344
|
| |
41,835
|
| |
51,876
|
|
|
Lease liabilities – current
|
| |
$12,689
|
| |
$9,842
|
| |
10,632
|
| |
—
|
|
|
Convertible loan note – related party
|
| |
—
|
| |
—
|
| |
—
|
| |
1,200
|
|
|
Total Debt
|
| |
$116,862
|
| |
$141,562
|
| |
$118,253
|
| |
$62,956
|
|
|
Less: Cash and cash equivalents
|
| |
$15,471
|
| |
13,437
|
| |
8,873
|
| |
13,519
|
|
|
Net Debt
|
| |
101,391
|
| |
128,125
|
| |
$109,380
|
| |
$49,437
|
|
|
|
| |
Payments due by period
As of June 30, 2019 |
| ||||||||||||
|
|
| |
Total
|
| |
Less than
one year |
| |
1 - 3 years
|
| |
3 - 5 years
|
| |
5+ years
|
|
|
|
| |
(in thousands)
|
| ||||||||||||
|
Obligations Under Leases(1)
|
| |
$95,616
|
| |
$15,954
|
| |
$27,136
|
| |
$19,326
|
| |
$33,200
|
|
|
Long Term Other Borrowings(2)
|
| |
13,591
|
| |
5,933
|
| |
6,694
|
| |
964
|
| |
—
|
|
|
Line Of Credit(3)
|
| |
36,026
|
| |
36,026
|
| |
—
|
| |
—
|
| |
—
|
|
|
Purchase Obligations(4)
|
| |
1,680
|
| |
—
|
| |
1,680
|
| |
—
|
| |
—
|
|
|
Defined Benefit Obligations(5)
|
| |
356
|
| |
—
|
| |
—
|
| |
—
|
| |
356
|
|
|
|
| |
$147,269
|
| |
$57,913
|
| |
$35,510
|
| |
$20,290
|
| |
$33,556
|
|
(1)
|
The lease arrangements have interest rates ranging from 5.0% to 10.0% for the fiscal year ended June 30, 2019. Subsequent to June 30, 2019, the Company has entered into new obligations under leases for $24.6 million. The total future contractual obligations related to these leases are $31.2 million, which are repayable over a period up to eleven years.
|
(2)
|
Represents indebtedness under the following: (i) Term Loan C under the PNC Credit Facility, which will be amortized in 54 consecutive equal monthly installments which commenced on 1 January 1, 2017 with an interest rate of LIBOR plus a margin of 4% and (ii) other financing arrangements having interest rates from 6% to 10%.
|
(3)
|
Represents indebtedness under the following: (i) the PNC Credit Facility ($33.5 million), which bears interest at an interest rate of LIBOR plus a margin of 1.75% and/or the sum of a margin of -0.5% plus the highest of (a) the PNC commercial lending rate, (b) the sum of the federal prime rate plus 0.5% and (c) daily LIBOR rate plus 1.0%; (ii) the HBC Credit Facility ($2.4 million), which bears interest at a rate equal to the greater of The Wall Street Journal (WSJ) Prime Rate or 5.7%; and (iii) the Seacoast Receivables Financing Agreement ($0.1 million), which bears interest at a rate of LIBOR plus a margin of 7% per annum.
|
(4)
|
Represents obligations under annual telecommunication service agreements with two carriers.
|
(5)
|
Represents liability against unfunded defined benefit plan whereby employees are entitled to one half month’s salary for every year of service upon attainment of retirement age of 60 years with at least five years of completed service.
|
•
|
Transaction foreign currency risk is the exchange risk associated with the time delay between entering into a contract and settling it, for example temporal differences in receivables and payables. Greater time differences exacerbate transaction foreign currency risk, as there is more time for the two exchange rates to fluctuate.
|
•
|
Translation foreign currency risk is the risk that our non-U.S. Dollar assets and liabilities will change in value as a result of exchange rate changes. Monetary assets and liabilities (for example accounts receivable, accounts payable and bank accounts) are valued and translated into U.S. Dollars at the applicable exchange rate prevailing at the applicable date. Any adverse valuation moves due to exchange rate changes at such time are charged directly and could impact our financial position and results of operations. For the purposes of preparing our financial statements, we convert our subsidiaries’ financial statements as follows: statements of financial position are translated into U.S. Dollars from local currencies at the period-end exchange rate, shareholders’ equity is translated at historical exchange rates prevailing on the transaction date and income and cash flow statements are translated at average exchange rates for the period.
|
|
|
| |
Nine Months Ended March 31, 2020
|
| |
Fiscal Year Ended June 30, 2019
|
| ||||||||||||||||||
|
|
| |
Revenue
|
| |
Trade debts gross
|
| |
Revenue
|
| |
Trade debts gross
|
| ||||||||||||
|
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
|
|
Client 1
|
| |
50,942
|
| |
16.8%
|
| |
8,891
|
| |
15.7%
|
| |
74,835
|
| |
20.3%
|
| |
10,770
|
| |
16.3%
|
|
|
Client 2
|
| |
56,562
|
| |
18.6%
|
| |
4,066
|
| |
7.2%
|
| |
67,094
|
| |
18.2%
|
| |
13,716
|
| |
20.8%
|
|
|
Client 3
|
| |
29,330
|
| |
9.6%
|
| |
9,215
|
| |
16.3%
|
| |
44,509
|
| |
12.1%
|
| |
9,042
|
| |
13.7%
|
|
|
Subtotal
|
| |
136,834
|
| |
45.0%
|
| |
22,172
|
| |
39.2%
|
| |
186,438
|
| |
50.6%
|
| |
33,528
|
| |
50.9%
|
|
|
Others
|
| |
167,421
|
| |
55.0%
|
| |
34,389
|
| |
60.8%
|
| |
181,942
|
| |
49.4%
|
| |
32,358
|
| |
49.1%
|
|
|
|
| |
304,255
|
| |
100.0%
|
| |
56,561
|
| |
100.0%
|
| |
368,380
|
| |
100.0%
|
| |
65,886
|
| |
100.0%
|
|
|
|
| |
Nine Months Ended March 31, 2019
|
| |
Fiscal Year Ended June 30, 2018
|
| ||||||||||||||||||
|
|
| |
Revenue
|
| |
Trade debts gross
|
| |
Revenue
|
| |
Trade debts gross
|
| ||||||||||||
|
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
| |
Amount
(US$’000) |
| |
% of total
|
|
|
Client 1
|
| |
58,632
|
| |
20.9%
|
| |
10,739
|
| |
16.4%
|
| |
78,663
|
| |
23.0%
|
| |
10,432
|
| |
20.0%
|
|
|
Client 2
|
| |
51,579
|
| |
18.4%
|
| |
16,298
|
| |
24.9%
|
| |
63,233
|
| |
18.5%
|
| |
11,250
|
| |
21.6%
|
|
|
Client 3
|
| |
35,062
|
| |
12.5%
|
| |
9,617
|
| |
14.7%
|
| |
52,837
|
| |
15.4%
|
| |
6,586
|
| |
12.0%
|
|
|
Subtotal
|
| |
145,273
|
| |
51.8%
|
| |
36,654
|
| |
56.1%
|
| |
194,733
|
| |
56.9%
|
| |
28,268
|
| |
54.3%
|
|
|
Others
|
| |
135,192
|
| |
48.2%
|
| |
28,714
|
| |
43.9%
|
| |
147,467
|
| |
43.1%
|
| |
23,770
|
| |
45.7%
|
|
|
|
| |
280,465
|
| |
100.0%
|
| |
65,368
|
| |
100.0%
|
| |
342,200
|
| |
100.0%
|
| |
52,038
|
| |
100.0%
|
|
•
|
provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002;
|
•
|
provide all of the compensation disclosure that is required of a company that does not qualify as an EGC; and
|
•
|
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements.
|
•
|
services that span the full customer lifecycle, ranging from customer acquisition to customer engagement to managing and measuring the customer experience;
|
•
|
technology tools that enhance ambassador performance and drive unique client insights;
|
•
|
multiple channels of engagement, ranging from voice to fast-growing digital channels such as chat and email;
|
•
|
differentiated global delivery centers, where we have been successful in offering clients lower costs while maintaining high levels of quality; and,
|
•
|
unique, highly engaged culture that is overseen by a highly experienced management team that is flexible and moves at the speed of the client.
|
|
Our CLX Suite of Solutions
|
| ||||||
|
Digital (Digital Marketing)
“Add customers.” |
| |
Connect (Customer Engagement)
“Engage customers.” |
| |
CX (Feedback Analytics)
“Grow relationships.” |
|
|
Digital Marketing
|
| |
Customer Service
|
| |
Multi-Channel Digital Surveys
|
|
|
Lead Generation
|
| |
Billing Support
|
| |
Real-Time Issue Resolution
|
|
|
Online Sales
|
| |
Technical Support
|
| |
Analytics & Business Intelligence
|
|
|
Optimization
|
| |
Up-Sell/Cross-Sell
Retention / Renewals |
| |
Text / Sentiment Analytics
|
|
|
Lead Conversion
|
| |
Win-backs
|
| |
|
|
•
|
Customer Engagement (ibex Connect) – The largest portion of our addressable market is the customer care segment within the Business Process Outsourcing (“BPO”) industry, which makes up the largest portion of our revenue. International Data Corporation (“IDC”), a leading information technology research firm, estimates that the worldwide business process outsourcing services revenue in 2020 was $203.3 billion and expected to grow to $231 billion in 2024. Within this market, the customer care segment is the largest horizontal market, with approximately $77 billion of revenues in 2020 and expected to grow at a CAGR of 3.6% to $88.6 billion in revenues by 2024. Within the United States, customer care BPO spend accounted for $45 billion in 2020 and is expected to grow to $51.6 billion by 2024.
|
•
|
Customer Acquisition (ibex Digital) – Our customer acquisition solution is enabled primarily by digital marketing which is one of the fastest growing segments of the media advertising industry. According to eMarketer, a leading market research company, digital marketing will make up 43% of all advertising spending in 2020. A significant portion of this fast-growing market consists of outsourced customer acquisition specialists, who have primarily adopted a pay-for-performance business model in which advertisers only compensate marketers once a target consumer has taken a particular action, such as filling out an information form or completing a purchase of a product or service. Also according to eMarketer, in 2020 $28 billion is expected to be spent annually on paid search in North America, our primary digital marketing channel. The market is projected to continue to grow in the near term and is rapidly evolving due to increased expectations for BPO vendors to innovate and constantly improve service quality.
|
•
|
Customer Experience Management and Analytics (ibex CX) – With unprecedented access to technology, data and choices, consumers have elevated expectations about being heard, as well as how companies take action and respond in real time. As consumers gravitate toward digital channels (websites, mobile and social media), enterprises are seeking more technologically advanced solutions to collect data in real time and harness insights yielded by advanced analytics performed on those data to provide customized customer experiences.
|
•
|
A Dramatic Prioritization of CX – As brands recognize that digital feedback mechanisms, such as social media, can rapidly impact brand perception in a positive or negative manner, the importance of delivering an exceptional customer experience has become a top priority for companies.
|
•
|
Consumer Centricity & Customer Lifetime Value (LTV) – Customer expectations and behaviors are changing dramatically. Enabled by immediate feedback channels, consumers expect that enterprises will meet their needs and preferences instantaneously in return for brand loyalty and greater share of customer spend. Accordingly, enterprises and brands are more focused on understanding their consumers’ needs and developing business models that hinge on maximizing customer lifetime value. In turn, they are demanding outsourced customer engagement partners that can deliver customer-centric solutions in an omni-channel manner that maximizes customer retention.
|
•
|
Outsourcing Across the Operational Value Chain – Enterprises are more frequently relying on outsourced providers to address their needs across the entire customer lifecycle. Many companies, especially in the healthcare, financial services, and utilities space, are beginning to increasingly rely on the expertise of external vendors to deliver cost savings, ensure compliance, drive performance enhancements, and offer technology suites that serve to improve overall CX while allowing the brand to focus on their core products and competencies. Mature companies seek to digitally transform their current operations to meet the demands of the digital economy and diversify their capabilities. Companies in emerging sectors outsource due to their limited experience and/or resources to manage increasing volumes of customer interactions, and in order to drive new customer demand, scale operations, optimize costs, protect their brand investment, and accelerate profitability.
|
•
|
Rise of Omni-Channel to Drive Consumer Centricity − Customer expectations and behaviors are changing dramatically with the evolution of technology such as smart phones, tablets and social media. This has accelerated the speed of consumer interaction with the brands. Consumers expect the brands to meet their needs and preferences instantaneously in return for brand loyalty and a greater share of customer spend. To address this trend, brands are focused on providing a seamless experience via integration of all contact channels (chat, email, SMS, voice, etc.) to deliver customer-centric solutions in an omni-channel manner that maximize customer lifetime value.
|
•
|
Seeking Integrated End-to-End Partners – We believe clients are increasingly looking to utilize outsourcing partners who can provide unified solutions for a variety of touchpoints along the customer interaction value
|
•
|
Bestshore Flexible Delivery Model – Clients are increasingly differentiating between providers based on their ability to provide a flexible, turnkey delivery model that can offer a mix of onshore, nearshore, offshore, and remote working capabilities. In light of recent global events, clients have indicated a heightened importance on the ability of providers to shift their delivery rapidly between various location models.
|
•
|
Data Protection & Security − With the rise of the digital economy has come a rise in both the concern toward, and vulnerability of, consumer data. Both mature and new economy brands are placing a higher degree of focus on the technology that underpins the data security & fraud systems deployed by their partners; having an advanced and secure system architecture along with data center redundancy and advanced security technologies are becoming increasingly important, understanding that any security breach can result in a devastating impact to a client’s brand and a consumer’s loyalty.
|
•
|
Data and Analytics − Enterprises are increasingly demanding that their providers of customer interaction solutions integrate data analysis & insight into their core service offerings, in order to drive continuous performance and superior outcomes. These business intelligence tools can yield actionable insights across every customer touchpoint enabling clients to address customer issues in real time. We expect that investments in automation, digitization and machine learning will be key drivers in the industry as clients seek to adopt more technology-rich ways of servicing their customers.
|
•
|
Artificial Intelligence to Enhance Service Delivery − With the increasing applicability of AI in enhancing business processes, the customer care industry is starting to integrate AI into its range of solutions.
|
•
|
Integrated Technology Solutions for Mature Sectors – Fortune 500 companies that historically utilized traditional live-agent, voice-based services are now integrating new technology-enabled solutions that include multi-channel delivery, self-serve options and automation. Such solutions allow them to achieve greater operational flexibility and innovate their service offerings.
|
•
|
Solutions Catered to High-Growth Sectors – The challenges that new economy “disruptors” face consist largely of managing high growth within their customer base, while simultaneously maintaining a high-quality customer experience. In contrast to mature business models, new economy companies have generally not focused on developing large-scale insourced customer operations; therefore, they rely on external partners that can deliver customer service, engagement and support while maintaining the quality of their brands. Most of these companies source their customer interaction needs from lower-cost locations outside their home markets.
|
•
|
Lead or Prospect Sourcing – We source leads or prospects for our acquisition solutions either through digital marketing activity, which includes paid search and search engine optimization, or through the purchase of leads from third parties.
|
•
|
Paid Search – We rely on paid search for our internal lead generation, which is also known as search engine marketing. This portion of our digital marketing activity involves the creation and management of a web sales portal bearing the client’s brand, to which we drive consumers through fixed and mobile paid search advertising with providers such as Google, Yahoo! and Bing. Our proprietary technology platform determines the optimal price to pay for keyword-based advertising to ensure cost-effective search engine placement that attracts interested consumers. This platform also bases its bidding on availability of appropriate delivery center ambassadors to convert any leads generated into buyers. We use our SEM-based lead generation primarily to generate customers for our clients in the cable and telecommunications sectors.
|
•
|
Organic Search – We also generate leads for our acquisition solution based on organic search, which is also known as search engine optimization. This portion of our digital marketing activity involves the creation and management of web portals that feature prominently in a consumer’s relevance-based search results in response to a web search. Visitors to these web properties effectively become leads that we subsequently contact in order to convert into a sale.
|
•
|
Purchase of Leads from Third Party Providers – In addition to internally generating leads and prospects of interested consumers, we also purchase leads and prospects from third party providers. Such prospects can be in the form of inbound calls, where we receive a call transferred from a lead provider that generates relevant prospects for its own business and seeks to monetize further that lead by cross-selling it to us. We also receive leads in the form of contact details of interested prospects that indicated interest to a lead provider through an online web property, whom we subsequently seek to convert via an outbound phone call.
|
•
|
Conversion of Leads to Sales – The final step in our Customer Acquisition solutions is our conversion of leads or prospects, whether generated internally or externally, into customers for our clients. We do so primarily through phone interaction with sales ambassadors at our delivery centers. Occasionally, those prospects may become customers of our clients directly through our website without any agent involvement.
|
•
|
Customer Service – This solution is the main interface between our clients and their customers. This solution category is about our clients’ management of their customer relationships, and represents for our clients the most important source of information about their customers’ perceptions and experience. In this service, we provide information about our clients’ products and services to their customers and handle inbound and outbound contacts relating to suggestions, requests and claims about products, billing inquiries, services and processes. A large portion of this solution relates to billing inquiries and general product and service information.
|
•
|
Technical Support – We deploy specialized teams that are available to our clients to provide information, assistance and technical guidance to our clients’ customers on a specific product or service. Our technical support capabilities include helpdesk services, early stage issue resolution, known as Level I support, as well as Level II technical support for more advanced issues.
|
•
|
Sales, Retention & Winback – We combine our traditional BPO solutions with our sales and acquisition-oriented delivery center capability to allow our existing clients to further mine their current customer bases. Such solutions include cross-selling and up-selling our clients’ products and services, maximizing customer retention and winning back customers that have transitioned away from our clients. Each of these functions requires our ambassadors to demonstrate a combination of customer empathy and product knowledge, together with the ability to make a sale on behalf of the client. The clients within this category of solutions are primarily in the telecommunications, cable/broadband and technology industries.
|
•
|
Differentiated as a Nimble, Disruptive Provider – We believe that we have a distinct organizational culture that embraces technological disruption and is characterized by innovation, speed and structural nimbleness. Our innovative and entrepreneurial culture is a key differentiator and gives us a competitive advantage in delivering high-quality solutions to clients around the globe. With mature clients, this culture plays to our advantage by showcasing the inflexibility of larger incumbents. With high-growth clients, which we refer to as New Economy clients, we believe that our entrepreneurial approach is in line with their own culture.
|
•
|
Technology Solutions & Continuous Innovation – ibex Wave X is the hub of our technology development and innovation effort to drive value-added technology development that improves ambassador interactions, client CX, and overall performance benchmarks. Our CLX platform combines our proprietary technology with our service delivery model to provide our clients with customized solutions at a large scale. We are integrating artificial intelligence into each stage of the customer lifecycle, from customer acquisition, to engagement, to surveys & analytics. Our proprietary technology allows us to provide innovative, automated and customizable solutions to our clients more efficiently than if delivered through a purely service-based delivery model.
|
•
|
Provider of Customizable Sets of Customer Lifecycle Experience Solutions – The customer lifecycle, from acquisition to retention has become more challenging, complex and competitive for enterprises to manage. We designed a differentiated suite of digital and operational solutions that seamlessly manages interactions throughout all phases of the customer lifecycle, across multiple channels, customized to a client’s specific needs.
|
•
|
Proven Expertise in Mature Industries – We believe that we have built a deep level of expertise in serving clients in mature industries, including the telecommunications and cable sectors. We believe that we are able to provide value at all stages of the customer lifecycle for these industries, from lowering the cost of customer acquisition to increasing customer lifetime value through improved retention and increased up-sell.
|
•
|
World-Class Global Delivery with Nearshore & Offshore Diversification – Our global delivery model is built on onshore, nearshore and offshore delivery centers, and includes our ability to also support work-at-home capabilities. We seek to operate state-of-the-art ‘highly-branded’ sites in labor markets that are underpenetrated in order to maintain our competitive advantage, retain our position in those labor markets as an employer of choice and deliver a highly scalable and cost-effective solution to our clients. Our highly-branded centers enable us to create a differentiated connection to our clients’ brands and customers. In addition, with a broad network of 27 contact centers spread across multiple geographies, we provide much needed geographic diversity for our clients. In particular, significant investments made in nearshore sites, such as Jamaica and Nicaragua, enable us to offer untapped talent pools for high quality service, proximity to home (US) operations and competitive price points, and often an existing brand affinity. We estimate a 77% CAGR in nearshore revenue for Jamaica and Nicaragua for the four year period from fiscal year ended June 30, 2016 through the fiscal year ending June 30, 2020 and a 21% CAGR in offshore revenue from fiscal year ended June 30, 2018 through June 30, 2020.
|
•
|
Innovative and Entrepreneurial Culture – We believe we have established a strong, unique corporate culture that is critical to our ability to recruit, engage, motivate, manage and retain our talented global workforce of over 22,500 employees. A culture which we actively foster through events including, employee galas, VIP events, talent shows, community outreach to engage, reward, and support our ambassadors. At ibex, we ensure our employees are extensions of our clients’ brand identities, delivering passionate and industry-leading results
|
•
|
Client Satisfaction and Retention – Our ability to build deep and trusted relationships with our clients is core to who we are. Since the end of fiscal year 2018, we have successfully retained all of our top 25 clients, which represented over 95% of our revenue in fiscal year 2018. Additionally, we monitor customer satisfaction in the form of a net promoter score (NPS) which is tracked through our ibex annual Client Satisfaction Survey. Based on ibex’s 2019 Client Satisfaction Survey, we scored a NPS of 68 which indicates strong, mutually-beneficial relationships with our clients built on the value clients place in our services and solutions and level of service we consistently deliver. We believe that our success with client retention is driven by our ability to perform at or above our client expectations and our competitors as well as our investment in building deep relationships with our clients at multiple levels within their businesses.
|
•
|
Continue Winning Blue Chip Clients – We’ve been able to win marquee blue chip brands that are looking to transform their customer engagement strategy through a more innovative and outcome-oriented focus. For these customers, our value proposition is primarily focused on acting as a partner to drive digital transformation in their existing operations. The imperative of engaging digitally with a new type of consumer is all the more urgent as these companies increasingly face-off against emerging new economy players. ibex has increasingly gained share in these relationships, often displacing existing incumbent vendor(s).
|
•
|
Continue Winning New Clients with New Economy – Our New Economy initiative combines our Customer Engagement, Customer Acquisition and Customer Experience solutions into an integrated solution set that is focused on the needs of high-growth emerging technology markets. Our success in our New Economy segment can be traced to its inception in 2014, when we began servicing a new client in the emerging technology space. We launched our New Economy initiative in the summer of 2018 to help similar clients attain and support their high-growth objectives. We believe we are among the top tier of providers of outsourced customer interaction solutions that can address the unique needs of such clients. In addition, New Economy customers are generally higher margin as a result of lower customer acquisition costs and a greater portion of non-voice revenue, which is delivered with greater efficiency.
|
•
|
Grow Strategic Verticals with Specific Domain Strategies – Our ibex Financial, ibex Health, and ibex Utilities sub-brands are structured to accelerate growth using a highly targeted and performance-driven approach. Within ibex Financial, we intend to build on recent wins we have had with payments companies. Within ibex Health, we see significant opportunity to provide revenue cycle management as well as medical coding and billing services. Finally, within ibex Utilities, we see the opportunity to acting as the “utility mover” for our clients’, by facilitating our clients’ customers’ moves in the form of targeted offers and services that could be of interest at the time certain customers are undergoing a physical move or changing utility provider.
|
•
|
Expand Service & Lines of Business (LOBs) with Current Clients (“Expand”) – The breadth of our solutions over the full customer lifecycle creates the ability to cross-sell each solution throughout our client base. Our client base has many large, global brands that have multiple lines of business across multiple geographies. Our typical model is to provide a launch in one center with one CLX service such as Customer Engagement. Our goal is then to “expand” with additional CLX services or new geographies where we operate for our clients. We believe that the success of our initial launches has enabled our client teams to broaden our scope of engagement with these clients to include additional solutions within our suite of offerings.
|
•
|
Pursue strategic acquisitions – Our acquisition strategy targets situations in which it is optimal to acquire versus build. It will primarily be focused on adding additional omni-channel capabilities, providing access to new geographies and acquiring technologies that further differentiate our solutions.
|
•
|
Retaining the customer by partnering with internal departments to deliver on the promised service levels and expected outcomes (“earn the right to grow”);
|
•
|
Managing both the client and our internal operational delivery units to meet commitments;
|
•
|
Knowing the client’s business, strategy, pain points and opportunities to innovate with our CLX technology;
|
•
|
Expanding services across all CLX services to include new lines of business geographies and services, thereby increasing our share of the client’s spend on CLX services as well as creating more value for our client – resulting in industry best client retention;
|
•
|
Building deep client relationships that differentiate us in the market; and
|
•
|
Assisting the sales and marketing organization in securing new business by illustrating differentiated services that we provide to our existing customers.
|
•
|
Intuitive User Experience − Our CLX platform is designed to create an intuitive, interactive and consistent user experience. The goal of our design is to minimize the need for extended product training.
|
•
|
Scalability − Our architecture allows us to deploy our CLX platform at scale capable of managing millions of interactions per month on behalf of our clients, including calls, website views, social media interactions, emails, chat sessions and many other transactions.
|
•
|
Reliability and Resiliency − Our technology solutions and infrastructure are designed as “always on” solutions with redundancies in place to minimize downtime. We work with leading global providers to create a fully redundant architecture between our facilities. Servers and software components are replicated and customer data is backed up and stored in remote data centers. Our three data centers operate continuously with an uptime of 99.9%. Our physical network is maintained by a high-quality infrastructure and networking organization, which consists of 306 people around the world who are dedicated to seamless, uninterrupted service delivery to our clients.
|
•
|
Data Security and Compliance − We maintain a comprehensive security program designed to help safeguard the security and integrity of our customers’ data, which includes both organizational and technical measures such as perimeter security, industry standard intrusion detection systems, security protocols, and authentication of customers and employees prior to accessing our platform, and testing of each released update before deployment.
|
•
|
Configurability − Our core technology applications and products are easily configured to meet client specific needs and solutions.
|
•
|
Extensions − As part of the CLX Platform, we provide standard, pre-built integrations with leading third-party systems. We also enable additional custom integration for our customers and partners through our APIs.
|
•
|
Contact center and diversified BPO, such as 24-7 Intouch, Inc., Alorica, Inc., Atento S.A., Concentrix, SITEL Corporation, Startek, Inc., SYKES Enterprises, Inc., TaskUs, Inc., Teleperformance S.A., TeleTech Holdings, Inc., TELUS International and Webhelp;
|
•
|
Niche contact center services providers and specialists, such as Alta Resources, C3i (an HCL Technologies Company), Global Response, Inktel Contact Center Solutions, Premiere Response LLC and Vipdesk.com Inc., among others;
|
•
|
Customer acquisition companies, including Clear Link Technologies, LLC (acquired by Sykes Enterprises, Incorporated), Qology Direct, LLC and Red Ventures, LLC;
|
•
|
Vendors of customer experience management tools including J.D. Power and Associates, Inc., Maritz Holdings, Inc., Medallia, Inc., Qualtrics, LLC and Vital Insights Inc.
|
|
Function
|
| |
Number of
Employees |
| |
Percent of Total
|
|
|
Production Ambassadors
|
| |
17,985
|
| |
79.8%
|
|
|
Production Support
|
| |
2,849
|
| |
12.7%
|
|
|
Software Engineers
|
| |
288
|
| |
1.3%
|
|
|
Technology, Telephonic and Network Infrastructure
|
| |
306
|
| |
1.4%
|
|
|
Data Scientists and Engineers
|
| |
106
|
| |
0.4%
|
|
|
Sales and Marketing
|
| |
186
|
| |
0.8%
|
|
|
Corporate (management, administration, finance, legal and human resources)
|
| |
817
|
| |
3.6%
|
|
|
|
| |
|
| |
|
|
|
Total
|
| |
22,537
|
| |
100.0%
|
|
|
Function
|
| |
Number of
Centers |
| |
Number of
Workstations |
|
|
United States
|
| |
9
|
| |
3,129
|
|
|
Philippines
|
| |
7
|
| |
6,170
|
|
|
Pakistan
|
| |
4
|
| |
2,211
|
|
|
Jamaica
|
| |
3
|
| |
2,799
|
|
|
Nicaragua
|
| |
2
|
| |
944
|
|
|
Senegal
|
| |
1
|
| |
204
|
|
|
United Kingdom
|
| |
1
|
| |
15
|
|
|
|
| |
|
| |
|
|
|
Total
|
| |
27
|
| |
15,472
|
|
|
Name
|
| |
Age
|
| |
Position
|
|
|
Executive Officers
|
| |
|
| |
|
|
|
Robert Dechant
|
| |
58
|
| |
Chief Executive Officer
|
|
|
Karl Gabel
|
| |
56
|
| |
Chief Financial Officer
|
|
|
Christy O’Connor
|
| |
51
|
| |
General Counsel and Assistant Corporate Secretary
|
|
|
David Afdahl
|
| |
46
|
| |
Chief Operating Officer
|
|
|
Jeffrey Cox
|
| |
51
|
| |
President, IBEX Digital
|
|
|
Bruce Dawson
|
| |
56
|
| |
Chief Sales and Client Services Officer
|
|
|
Julie Casteel
|
| |
58
|
| |
Chief Strategic Accounts Officer
|
|
|
|
| |
|
| |
|
|
|
Non-Employee Directors
|
| |
|
| |
|
|
|
Mohammed Khaishgi
|
| |
52
|
| |
Chairman
|
|
|
Daniella Ballou-Aares
|
| |
45
|
| |
Director
|
|
|
John Jones
|
| |
64
|
| |
Director
|
|
|
Shuja Keen
|
| |
44
|
| |
Director
|
|
|
John Leone
|
| |
47
|
| |
Director
|
|
|
Rebecca Vernon
|
| |
40
|
| |
Director
|
|
•
|
making recommendations to our board regarding the appointment by the shareholders at the general meeting of shareholders of our independent auditors;
|
•
|
overseeing the work of the independent auditors, including resolving disagreements between management and the independent auditors relating to financial reporting;
|
•
|
pre-approving all audit and non-audit services permitted to be performed by the independent auditors;
|
•
|
reviewing the independence and quality control procedures of the independent auditors;
|
•
|
discussing material off-balance sheet transactions, arrangements and obligations with management and the independent auditors;
|
•
|
reviewing and approving all proposed related-party transactions;
|
•
|
discussing the annual audited consolidated and statutory financial statements with management;
|
•
|
annually reviewing and reassessing the adequacy of our audit committee charter;
|
•
|
meeting separately with the independent auditors to discuss critical accounting policies, recommendations on internal controls, the auditor’s engagement letter and independence letter and other material written communications between the independent auditors and the management; and
|
•
|
attending to such other matters as are specifically delegated to our audit committee by our board from time to time.
|
•
|
reviewing and approving the compensation, including equity compensation, change-of-control benefits and severance arrangements, of our chief executive officer, chief financial officer and such other members of our management as it deems appropriate;
|
•
|
overseeing the evaluation of our management;
|
•
|
reviewing periodically and making recommendations to our board with respect to any incentive compensation and equity plans, programs or similar arrangements; and
|
•
|
attending to such other matters as are specifically delegated to our compensation committee by our board from time to time.
|
•
|
recommending to the board of directors persons to be nominated for election or re-election to the board at any meeting of the shareholders;
|
•
|
overseeing the board of directors’ annual review of its own performance and the performance of its committees; and
|
•
|
considering, preparing and recommending to the board a set of corporate governance guidelines.
|
•
|
promote the long-term financial interests and growth of our Company and its subsidiaries by attracting and retaining directors and employees, which include management as well as other personnel;
|
•
|
motivate management by means of growth-related incentives to achieve long-range goals; and
|
•
|
further the alignment of the interests of participants and those of our shareholders, through opportunities for increased stock or share-based ownership in our Company.
|
(a)
|
determine the eligible individuals to whom, and the time or times at which, Awards shall be granted;
|
(b)
|
determine the type of Awards to be granted to any eligible individual;
|
(c)
|
determine the number of shares to be covered by or used for reference purposes for each Award or the value to be transferred pursuant to any Award; and
|
(d)
|
determine the terms, conditions and restrictions applicable to each Award and any shares acquired pursuant thereto, including, without limitation, (i) the purchase price of any shares, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfying any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of shares, (iv) the timing, terms and conditions of the exercisability, vesting or payout of any Award or any shares acquired pursuant thereto, (v) the performance goals applicable to any Award and the extent to which such performance goals have been attained, (vi) the time of the expiration of an Award, (vii) any such modification, amendment or substitution that results in repricing of the Award which may be made without prior stockholder approval, (viii) the effect of a participant's Termination of Service, as defined in the 2020 Long Term Incentive Plan, on any of the foregoing and (ix) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto as the Administrator considers to be appropriate and not inconsistent with the terms of the 2020 Long Term Incentive Plan.
|
•
|
share options and share appreciation rights will become fully exercisable and holders of these awards will be permitted immediately before the change in control to exercise them;
|
•
|
Restricted Shares and share units with time-based vesting (i.e., not subject to achievement of performance goals) will become fully vested immediately before the change in control, and share units will be settled as promptly as is practicable in accordance with applicable law; and
|
•
|
Restricted Shares and share units that vest based on the achievement of performance goals will vest as if the performance goal for the unexpired performance period had been achieved at the target level; and the performance share units will be settled as promptly as is practicable in accordance with applicable law.
|
•
|
each of our directors;
|
•
|
each of our executive officers;
|
•
|
all of our directors and executive officers as a group; and
|
•
|
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common shares, and who are referred to as our major shareholders.
|
|
|
| |
Shares Beneficially
Owned Before this Offering |
| |
Shares to
be Sold Pursuant to this Prospectus |
| |
Shares Beneficially
Owned After this Offering if the underwriters’ option is not exercised |
| |
Shares Beneficially
Owned After this Offering if the underwriters’ option is exercised in full |
| |||||||||
|
Name
|
| |
Number
|
| |
%
|
| |
Number
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
|
|
Principal and Selling Shareholder:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
The Resource Group International Limited(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Executive Officers and Directors:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Mohammed Khaishgi(2)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Karl Gabel(3)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Christy O’Connor(4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Robert Dechant(5)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Jeffrey Cox(6)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Jason Tryfon(7)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Bruce Dawson(8)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
David Afdahl(9)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Julie Casteel(10)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Shuja Keen(11)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Daniella Ballou-Aares(12)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
John Jones(12)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
All executive officers and directors as a group (fourteen persons)(13)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
*
|
Represents beneficial ownership of less than one percent (1%) of outstanding common shares.
|
(1)
|
TRGI is controlled by TRGP. As of March 31, 2020, TRGP beneficially owned 46.33% of TRGI’s outstanding voting securities (45.71% if all outstanding non-voting common shares are converted into voting common shares). The address for TRGI is Crawford House, 50 Cedar Avenue, Hamilton HM11, Bermuda. The address for TRGP is Centre Point Building, Level 18th, off Saheed-e-Millat Expressway, Karachi, Pakistan. This reflects the automatic conversion of one Series A preferred share, 10,290,984.0561 Series B preferred shares and 103,949.3330 Series C preferred shares into common shares upon completion of this offering.
|
(2)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(3)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(4)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(5)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(6)
|
This reflects the automatic conversion of Series B preferred shares and Series preferred C shares upon completion of this offering. The balance includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(7)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(8)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(9)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(10)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(11)
|
Includes common shares and unvested restricted common shares, which are scheduled to vest in equal monthly increments of shares commencing on .
|
(12)
|
Consists of common shares.
|
(13)
|
Includes common shares and unvested restricted common shares.
|
•
|
acquisition of the stock or assets of an unaffiliated entity in a single transaction or a series of related transactions with an enterprise value greater than $2.0 million;
|
•
|
consolidation, merger, amalgamation or other business combination with any entity other than us or a wholly-owned subsidiary of ours, or a “Change in Control” (as defined in our debt instruments);
|
•
|
disposition or transfer, in a single transaction or a series of related transactions, to another party of our or any of our subsidiaries’ assets with a value greater than $2.0 million in the aggregate or for consideration greater than $2.0 million, other than in the ordinary course of business;
|
•
|
entry into any corporate strategic relationship involving the payment, contribution or assignment by us or any of our subsidiaries of money or assets greater than $1.0 million;
|
•
|
creation of any new class of equity securities, issuance of additional shares of any class of equity securities, or any offering of securities (except for awards under stockholder-approved equity plans and issuances to our parent company or any of its subsidiaries);
|
•
|
incurrence, assumption or guarantee of indebtedness by us to any third party;
|
•
|
incurrence, assumption or guarantee of incremental indebtedness (as measured from indebtedness existing on September 15, 2017) by us, in a single transaction or a series of related transactions, in an amount greater than $5.0 million;
|
•
|
transfer of any senior note issued by e-Telequote Insurance, Inc. under a certain Note Purchase Agreement dated June 2017 (the “2017 ETQ Notes”) by any holder thereof or any amendment to the 2017 ETQ Notes or the related note purchase agreement;
|
•
|
repurchase of our equity securities or adoption of any share repurchase plan;
|
•
|
capital expenditures in an aggregate amount greater than $10.0 million in any fiscal year;
|
•
|
listing of any securities on any securities exchange;
|
•
|
appointment and / or removal of independent auditors or any material change in our accounting policies and principles or internal control procedures;
|
•
|
bankruptcy, liquidation, dissolution, winding up or similar event or action;
|
•
|
any change of our principal lines of business, entry into new lines of business, or exit from the current lines of business;
|
•
|
amendment, modification or repeal of any provision of our or our subsidiaries’ organizational documents; and
|
•
|
commencement or settlement of any material litigation.
|
•
|
TRGI and its partners, principals, directors, officers, members, managers, agents, employees and / or other representatives may directly or indirectly engage in the same or similar business activities or lines of business as us or any of our subsidiaries, including those lines of business deemed to be competing with us or any of our subsidiaries;
|
•
|
TRGI, its affiliates and their respective partners, principals, directors, officers, members, managers, agents, employees and / or other representatives may do business with any of our potential or actual customers or suppliers;
|
•
|
TRGI, its affiliates and their respective partners, principals, directors, officers, members, managers, agents, employees and / or other representatives may employ or otherwise engage any of our officers or employees; and
|
•
|
none of TRGI, its affiliates or their respective partners, principals, directors, officers, members, managers, agents, employees and / or other representatives shall have any duty to communicate or offer any business opportunity that may be presented to TRGI or those other persons to us or shall be liable to us or any of our stockholders for breach of any fiduciary or other duty by reason of the fact that TRGI or such persons pursues that business opportunity, directs that business opportunity to another person or fails to present that business opportunity, or information regarding that business opportunity to us unless, in the case of any such person who is a director or officer of ours, that business opportunity is expressly offered to that director or officer in writing solely in his or her capacity as our director or officer.
|
|
|
| |
Price per share
|
| ||||||
|
|
| |
$
|
| |
$
|
| |
$
|
|
|
|
| |
(in thousands, except per share data)
|
| ||||||
|
Common shares issuable for:
|
| |
|
| |
|
| |
|
|
|
Series A preferred share
|
| |
|
| |
|
| |
|
|
|
Series B preferred shares
|
| |
|
| |
|
| |
|
|
|
Series C preferred shares
|
| |
|
| |
|
| |
|
|
|
Class B common shares
|
| |
|
| |
|
| |
|
|
|
Total
|
| |
|
| |
|
| |
|
|
|
Amazon Warrant:
|
| |
|
| |
|
| |
|
|
|
Total(1)
|
| |
|
| |
|
| |
|
|
|
Weighted average exercise price after conversion
|
| |
|
| |
|
| |
|
|
|
Equity ownership percentages following this offering
|
| |
|
| |
|
| |
|
|
|
Existing owners in this offering assuming exercise of vested portion of Amazon Warrant and vested Restricted Shares
|
| |
%
|
| |
%
|
| |
%
|
|
|
New investors in this offering assuming exercise of vested portion of Amazon Warrant and vested Restricted Shares
|
| |
%
|
| |
%
|
| |
%
|
|
|
Total
|
| |
100%
|
| |
100%
|
| |
100%
|
|
|
Net proceeds
|
| |
|
| |
|
| |
|
|
|
Net proceeds from this offering, after underwriting discounts and commissions and estimated offering expenses payable by us
|
| |
|
| |
|
| |
|
|
|
Pro forma as adjusted capitalization as of March 31, 2020
|
| |
|
| |
|
| |
|
|
|
Cash and cash equivalents
|
| |
|
| |
|
| |
|
|
|
Total debt
|
| |
|
| |
|
| |
|
|
|
Stockholders’ equity
|
| |
|
| |
|
| |
|
|
|
Common shares, $0.000111650536 par value per share
|
| |
|
| |
|
| |
|
|
|
Additional paid-in capital
|
| |
|
| |
|
| |
|
|
|
Accumulated deficit
|
| |
|
| |
|
| |
|
|
|
Accumulated other comprehensive income
|
| |
|
| |
|
| |
|
|
|
Total stockholders’ equity
|
| |
|
| |
|
| |
|
|
|
Total capitalization
|
| |
|
| |
|
| |
|
|
|
Dilution as of March 31, 2020
|
| |
|
| |
|
| |
|
|
|
Pro forma as adjusted net tangible book deficit per share after giving effect to this offering
|
| |
|
| |
|
| |
|
|
|
Dilution per share to new investors in this offering
|
| |
|
| |
|
| |
|
|
(1)
|
Assumes net exercise.
|
|
|
| |
Price per share
|
| ||||||
|
|
| |
$
|
| |
$
|
| |
$
|
|
|
|
| |
(in thousands, except per share data)
|
| ||||||
|
Common shares issuable for:
|
| |
|
| |
|
| |
|
|
|
Series A preferred share
|
| |
|
| |
|
| |
|
|
|
Series B preferred shares
|
| |
|
| |
|
| |
|
|
|
Series C preferred shares
|
| |
|
| |
|
| |
|
|
|
Class B common shares
|
| |
|
| |
|
| |
|
|
|
Total
|
| |
|
| |
|
| |
|
|
|
Amazon Warrant:
|
| |
|
| |
|
| |
|
|
|
Total(1)
|
| |
|
| |
|
| |
|
|
|
Weighted average exercise price after conversion
|
| |
|
| |
|
| |
|
|
|
Equity ownership percentages following this offering
|
| |
|
| |
|
| |
|
|
|
Existing owners in this offering assuming exercise of vested portion of Amazon Warrant and vested Restricted Shares
|
| |
%
|
| |
%
|
| |
%
|
|
|
New investors in this offering assuming exercise of vested portion of Amazon Warrant and vested Restricted Shares
|
| |
%
|
| |
%
|
| |
%
|
|
|
Total
|
| |
100%
|
| |
100%
|
| |
100%
|
|
|
Net proceeds
|
| |
|
| |
|
| |
|
|
|
Net proceeds from this offering, after underwriting discounts and commissions and estimated offering expenses payable by us
|
| |
|
| |
|
| |
|
|
|
Pro forma as adjusted capitalization as of March 31, 2020
|
| |
|
| |
|
| |
|
|
|
Cash and cash equivalents
|
| |
|
| |
|
| |
|
|
|
Total debt
|
| |
|
| |
|
| |
|
|
|
Stockholders’ equity
|
| |
|
| |
|
| |
|
|
|
Common shares, $0. 000111650536 par value per share
|
| |
|
| |
|
| |
|
|
|
Additional paid-in capital
|
| |
|
| |
|
| |
|
|
|
Accumulated deficit
|
| |
|
| |
|
| |
|
|
|
Accumulated other comprehensive income
|
| |
|
| |
|
| |
|
|
|
Total stockholders’ equity
|
| |
|
| |
|
| |
|
|
|
Total capitalization
|
| |
|
| |
|
| |
|
|
|
Dilution as of March 31, 2020
|
| |
|
| |
|
| |
|
|
|
Pro forma as adjusted net tangible book deficit per share after giving effect to this offering
|
| |
|
| |
|
| |
|
|
|
Dilution per share to new investors in this offering
|
| |
|
| |
|
| |
|
|
(1)
|
Assumes net exercise.
|
•
|
Series A Convertible Preferred Share (“Series A preferred share”) – 1 Series A preferred share is authorized, issued and outstanding, and it is held by our parent company, The Resource Group International Limited.
|
•
|
Series B Convertible Preferred Shares (“Series B preferred shares”) – The maximum authorized number of Series B preferred shares is 12,512,994.466500, of which 11,083,691.3814 were issued and outstanding and are held by our parent company, The Resource Group International Limited (10,290,984.0561 Series B preferred shares), and Mr. Jeffrey Cox, one of our executive officers (319,373.4456 Series B preferred shares).
|
•
|
Series C Convertible Preferred (“Series C preferred shares”, and together with the Series A preferred shares and the Series B preferred shares, the “preferred shares”) – The maximum authorized number of Series C preferred shares is 12,639,389.35000, of which 111,986.4786 were issued and outstanding and are held by our parent company, The Resource Group International Limited (103,949.3339 Series C preferred shares), and Mr. Cox (3,225.9944 Series C preferred shares).
|
•
|
Class A Common Shares (“Class A common shares”) – The maximum authorized number of Class A shares is 79,766,504.249454, of which none are issued and outstanding.
|
•
|
Class B Common Shares (“Class B common shares”) – The maximum authorized number of Class B common shares is 2,559,323.13, of which 1,851,788 were issued subject to vesting restrictions pursuant to awards made to our directors, executive officers and other senior management personnel under the 2018 RSA Plan.
|
•
|
The Series A preferred share will convert into one Series C preferred share;
|
•
|
Each Series B preferred share will convert into Series C preferred shares on a one-for-one basis;
|
•
|
Each Series C preferred share (including those issued as a result of the conversions of Series A preferred shares and Series B preferred shares into Series C preferred shares) will convert into a number of Class A common shares that will be determined in accordance with a formula that is set forth in the certificate of designations pursuant to which the Series C preferred shares were authorized and issued on December 21, 2018, which number of Class A common shares will vary depending on the initial public offering per share in this offering and the number of preferred shares outstanding immediately prior to the pricing of this offering;
|
•
|
Each Class B common share will convert into Class A common shares on a one-for-one basis; and
|
•
|
Each Class A common share will be redesignated as a common share.
|
Bermuda
|
| |
Delaware
|
||||||||||||
•
|
| |
The voting rights of shareholders are regulated by the company’s bye-laws and, in certain circumstances, by the Companies Act. Our bye- laws specify that one or more shareholders present in person or by proxy representing in excess of 25% of the total shares in the company entitled to vote at such general meeting shall form a quorum.
|
| |
•
|
| |
For stock corporations, the certificate of incorporation or bylaws may specify the number to constitute a quorum, but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.
|
||||||
|
|||||||||||||||
•
|
| |
Our bye-laws provide that once a quorum is present in general meeting it is not broken by the subsequent withdrawal of any shareholders.
|
| |
•
|
| |
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any stockholders.
|
||||||
|
|||||||||||||||
•
|
| |
The bye-laws may provide for cumulative voting, although our bye-laws do not.
|
| |
•
|
| |
The certificate of incorporation may provide for cumulative voting.
|
||||||
|
|||||||||||||||
•
|
| |
The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires the amalgamation or merger agreement to be approved by the company’s board of directors and by its shareholders. The approval of 50% of the shareholders signing a written resolution or voting at a shareholder meeting is required to approve the amalgamation or merger agreement, and the quorum for such meeting must be one or more persons holding or representing more than 25% of the issued shares of the company.
|
| |
•
|
| |
Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by stockholders of each constituent corporation at an annual or special meeting.
|
||||||
|
|||||||||||||||
•
|
| |
Every company may when authorized by a resolution of the board of directors sell, lease or exchange all or substantially all of its property and assets as its board of directors deems in the best interests of the company.
|
| |
•
|
| |
Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when so authorized by a resolution adopted by the holders of a majority of the outstanding stock of a corporation entitled to vote.
|
||||||
|
|||||||||||||||
•
|
| |
Any company which is the wholly-owned subsidiary of a holding company, or one or more companies which are wholly-owned subsidiaries of the same holding company, may amalgamate or merge without the vote or consent of shareholders provided that the approval of the board of directors is obtained and that a director or officer of each such company signs a statutory solvency declaration in respect of the relevant company.
|
| |
•
|
| |
Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent of stockholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called stockholder meeting.
|
||||||
|
|||||||||||||||
•
|
| |
Any mortgage, charge or pledge of a company’s property and assets may be authorized without the consent of shareholders subject to any restrictions under the bye-laws.
|
| |
•
|
| |
Any mortgage or pledge of a corporation’s property and assets may be authorized without the vote or consent of stockholders, except to the extent that the certificate of incorporation otherwise provides.
|
||||||
|
Bermuda
|
| |
Delaware
|
||||||||||||
Directors
|
|||||||||||||||
•
|
| |
The board of directors must consist of at least one director.
|
| |
•
|
| |
The board of directors must consist of at least one member.
|
||||||
|
|||||||||||||||
•
|
| |
The number of directors fixed by our bye-laws is ten and any changes to such number must be approved by the shareholders.
|
| |
•
|
| |
Number of board members shall be fixed by the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by amendment of the certificate of incorporation.
|
||||||
|
|||||||||||||||
•
|
| |
Removal:
|
| |
•
|
| |
Removal:
|
||||||
|
|||||||||||||||
|
| |
•
|
| |
Under our bye-laws, any or all directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at a special meeting convened and held in accordance with the bye-laws for the purpose of such removal.
|
| |
|
| |
•
|
| |
Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides.
|
|
|||||||||||||||
|
| |
•
|
| |
A 25% or more shareholder who is entitled to appoint directors to the board pursuant to our bye-laws is also entitled to remove any directors so appointed by notice in writing to the company.
|
| |
|
| |
•
|
| |
In the case of a classified board, stockholders may effect removal of any or all directors only for cause.
|
|
|||||||||||||||
Duties of directors
|
|||||||||||||||
•
|
| |
The Companies Act authorizes the directors of a company, subject to its bye-laws, to exercise all powers of the company except those that are required by the Companies Act or the company’s bye-laws to be exercised by the shareholders of the company. Our bye-laws provide that our business is to be managed and conducted by our board of directors. At common law, members of a board of directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty includes the following essential elements:
|
| |
•
|
| |
Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its stockholders. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by the stockholders generally.
|
||||||
•
|
| |
a duty to act in good faith in the best interests of the company;
|
| |||||||||||
|
| |
|
| |||||||||||
•
|
| |
a duty not to make a personal profit from opportunities that arise from the office of director;
|
| |||||||||||
|
| |
|
| |||||||||||
|
| |
•
|
| |
a duty to avoid conflicts of interest; and
|
| ||||||||
|
| |
|
| |
|
| ||||||||
|
| |
•
|
| |
a duty to exercise powers for the purpose for which such powers were intended.
|
| ||||||||
|
Bermuda
|
| |
Delaware
|
||||||||||||
|
| |
holders of 90% or more of all the shares to which the offer relates, the offeror may, at any time within two months beginning with the date on which the approval was obtained, by notice compulsorily acquire the shares of any nontendering shareholder on the same terms as the original offer unless the Supreme Court of Bermuda (on application made within a one-month period from the date of the offeror’s notice of its intention to acquire such shares) orders otherwise.
|
| |
|
| |
|
||||||
|
| |
|
| |
|
| |
|
| |||||
•
|
| |
Where the acquiring party or parties hold not less than 95% of the shares or a class of shares of the company, by acquiring, pursuant to a notice given to the remaining shareholders or class of shareholders, the shares of such remaining shareholders or class of shareholders. When this notice is given, the acquiring party is entitled and bound to acquire the shares of the remaining shareholders on the terms set out in the notice, unless a remaining shareholder, within one month of receiving such notice, applies to the Supreme Court of Bermuda for an appraisal of the value of their shares. This provision only applies where the acquiring party offers the same terms to all holders of shares whose shares are being acquired.
|
| |
|
|||||||||
|
| |
|
| |
|
| |
|
| |||||
Dissenter’s rights of appraisal
|
|||||||||||||||
•
|
| |
A dissenting shareholder (that did not vote in favor of the amalgamation or merger) of a Bermuda exempted company and who is not satisfied that he has been offered fair value for his shares may apply to the court to appraise the fair value of his or her shares in an amalgamation or merger.
|
| |
•
|
| |
With limited exceptions, appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation.
|
||||||
|
|||||||||||||||
|
| |
|
| |
•
|
| |
The certificate of incorporation may provide that appraisal rights are available for shares as a result of an amendment to the certificate of incorporation, any merger or consolidation or the sale of all or substantially all of the assets.
|
||||||
Dissolution
|
|||||||||||||||
•
|
| |
Under Bermuda law, a solvent company may be wound up by way of a members’ voluntary liquidation. Prior to the company entering liquidation, a majority of the directors shall each make a statutory declaration, which states that the directors have made a full enquiry into the affairs of the company and have formed the opinion that the company will be able to pay its debts within a period of 12 months of the commencement of the winding up and must file the statutory declaration with the Registrar of Companies in Bermuda. The general meeting will be convened primarily for the purposes of passing a resolution that the company be wound up voluntarily and appointing a liquidator. The winding up of the company is deemed to commence at the time of the passing of the resolution.
|
| |
•
|
| |
Under Delaware law, a corporation may voluntarily dissolve (i) if a majority of the board of directors adopts a resolution to that effect and the holders of a majority of the issued and outstanding shares entitled to vote thereon vote for such dissolution; or (ii) if all stockholders entitled to vote thereon consent in writing to such dissolution.
|
||||||
|
| |
|
| |
|
| |
|
| |
|
| |
|
•
|
none of the restricted shares will be eligible for immediate sale upon the completion of this offering; and
|
•
|
shares will be eligible for sale upon expiration of lock-up arrangements and market standoff provisions described below, beginning 181 days after the date of this prospectus, subject in certain circumstances to the volume, manner of sale and other limitations under Rule 144 and Rule 701.
|
•
|
certain financial institutions;
|
•
|
insurance companies;
|
•
|
dealers or traders in securities, currencies, or notional principal contracts;
|
•
|
tax-exempt entities;
|
•
|
regulated investment companies or real estate investment trusts;
|
•
|
persons that hold the common shares as part of a hedge, straddle, conversion, constructive sale or similar transaction involving more than one position;
|
•
|
an entity classified as a partnership and persons that hold the common shares through partnerships or certain other pass-through entities;
|
•
|
certain holders (whether individuals, corporations or partnerships) that are treated as expatriates for some or all U.S. federal income tax purposes;
|
•
|
persons who acquired the common shares as compensation for the performance of services;
|
•
|
persons holding the common shares in connection with a trade or business conducted outside of the U.S.;
|
•
|
a U.S. holder who holds the common shares through a financial account at a foreign financial institution that does not meet the requirements for avoiding withholding with respect to certain payments under Sections 1471 through 1474 of the Code;
|
•
|
holders that own (or are deemed to own) 10% or more of our shares by vote or value; and
|
•
|
holders that have a “functional currency” other than the U.S. dollar.
|
•
|
an individual who is either a citizen or resident of the U.S.;
|
•
|
a corporation, or other entity that is treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S. or any state of the U.S. or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of such trust or has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person within the meaning of the Code.
|
|
Underwriters
|
| |
Number of shares
|
|
|
Citigroup Global Markets Inc.
|
| |
|
|
|
RBC Capital Markets, LLC
|
| |
|
|
|
Robert W. Baird & Co. Incorporated
|
| |
|
|
|
SunTrust Robinson Humphrey, Inc.
|
| |
|
|
|
Piper Sandler & Co.
|
| |
|
|
|
Total
|
| |
|
|
|
Paid By Us
|
| |
No Exercise
|
| |
Full Exercise
|
|
|
Per Share
|
| |
$
|
| |
$
|
|
|
Total
|
| |
$
|
| |
$
|
|
|
Paid by the Selling Shareholder
|
| |
No Exercise
|
| |
Full Exercise
|
|
|
Per Share
|
| |
$
|
| |
$
|
|
|
Total
|
| |
$
|
| |
$
|
|
•
|
the sale of shares pursuant to the underwriting agreement hereunder;
|
•
|
common shares issued upon the exercise of options granted under existing equity compensation or management incentive plans described in the prospectus;
|
•
|
other customary exceptions, including transfers of common shares or any securities convertible into, exchangeable for, exercisable for, or repayable with common shares (i) by will or intestacy, provided such transferee agrees to the applicable lock-up restrictions, (ii) as a bona fide gift or gifts, provided such transferee agrees to the applicable lock-up restrictions, (iii) to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of a security holder or the immediate family of such security holder, provided such transferee agrees to the applicable lock-up restrictions or (iv) pursuant to an order of a court or regulatory agency.
|
•
|
the information set forth in this prospectus and otherwise available to the representatives;
|
•
|
our prospects and the history and prospects for the industry in which we compete;
|
•
|
an assessment of our management;
|
•
|
prevailing market conditions;
|
•
|
our historical performance;
|
•
|
estimates of our business potential and prospects for future earnings;
|
•
|
consideration of the above factors in relation to market valuation and stages of developments of other companies comparable to ours; and
|
•
|
other factors deemed relevant by the representatives of the underwriters, us and the selling shareholder.
|
|
(in 000’s)
|
| |
|
|
|
SEC registration fee
|
| |
$*
|
|
|
FINRA filing fee
|
| |
*
|
|
|
Exchange listing fee
|
| |
*
|
|
|
Printing expenses
|
| |
*
|
|
|
Legal fees and expenses
|
| |
*
|
|
|
Accounting fees and expenses
|
| |
*
|
|
|
Miscellaneous expenses
|
| |
*
|
|
|
Total expenses
|
| |
$ *
|
|
*
|
To be filed by amendment.
|
|
|
| |
|
| |
Page
|
|
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | |
|
|
| |
Page
|
|
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
|
|
| |
Notes
|
| |
As of March 31,
2020 |
| |
As of June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Assets
|
| |
|
| |
|
| |
|
|
|
Non-current assets
|
| |
|
| |
|
| |
|
|
|
Goodwill
|
| |
|
| |
11,832
|
| |
11,832
|
|
|
Other intangible assets
|
| |
4
|
| |
3,328
|
| |
2,928
|
|
|
Property and equipment
|
| |
5
|
| |
91,067
|
| |
82,309
|
|
|
Investment in joint venture
|
| |
|
| |
332
|
| |
227
|
|
|
Deferred tax asset
|
| |
|
| |
2,055
|
| |
2,517
|
|
|
Warrant asset
|
| |
20
|
| |
3,042
|
| |
3,316
|
|
|
Other assets
|
| |
6
|
| |
4,244
|
| |
3,398
|
|
|
Total non-current assets
|
| |
|
| |
115,900
|
| |
106,527
|
|
|
|
| |
|
| |
|
| |
|
|
|
Current assets
|
| |
|
| |
|
| |
|
|
|
Trade and other receivables
|
| |
7
|
| |
62,832
|
| |
71,134
|
|
|
Due from related parties
|
| |
12
|
| |
1,984
|
| |
1,768
|
|
|
Cash and cash equivalents
|
| |
8
|
| |
15,471
|
| |
8,873
|
|
|
Total current assets
|
| |
|
| |
80,287
|
| |
81,775
|
|
|
Total assets
|
| |
|
| |
196,187
|
| |
188,302
|
|
|
|
| |
|
| |
|
| |
|
|
|
Equity and liabilities
|
| |
|
| |
|
| |
|
|
|
Equity attributable to owners of the parent
|
| |
|
| |
|
| |
|
|
|
Share capital
|
| |
|
| |
12
|
| |
12
|
|
|
Additional paid-in capital
|
| |
|
| |
96,207
|
| |
96,207
|
|
|
Other reserves
|
| |
|
| |
29,627
|
| |
29,585
|
|
|
Accumulated deficit
|
| |
|
| |
(105,722)
|
| |
(117,176)
|
|
|
Total equity
|
| |
|
| |
20,124
|
| |
8,628
|
|
|
|
| |
|
| |
|
| |
|
|
|
Non-current liabilities
|
| |
|
| |
|
| |
|
|
|
Deferred revenue
|
| |
15.3
|
| |
444
|
| |
753
|
|
|
Lease liabilities
|
| |
5.2
|
| |
66,851
|
| |
58,602
|
|
|
Borrowings
|
| |
9
|
| |
4,865
|
| |
7,184
|
|
|
Deferred tax liability
|
| |
|
| |
128
|
| |
147
|
|
|
Other non-current liabilities
|
| |
10
|
| |
2,461
|
| |
1,607
|
|
|
Total non-current liabilities
|
| |
|
| |
74,749
|
| |
68,293
|
|
|
|
| |
|
| |
|
| |
|
|
|
Current liabilities
|
| |
|
| |
|
| |
|
|
|
Trade and other payables
|
| |
11
|
| |
45,333
|
| |
48,357
|
|
|
Lease liabilities
|
| |
5.2
|
| |
12,689
|
| |
10,632
|
|
|
Borrowings
|
| |
9
|
| |
32,457
|
| |
41,835
|
|
|
Deferred revenue
|
| |
15.3
|
| |
4,729
|
| |
4,388
|
|
|
Due to related parties
|
| |
12
|
| |
6,106
|
| |
6,169
|
|
|
Total current liabilities
|
| |
|
| |
101,314
|
| |
111,381
|
|
|
Total liabilities
|
| |
|
| |
176,063
|
| |
179,674
|
|
|
Total equity and liabilities
|
| |
|
| |
196,187
|
| |
188,302
|
|
|
|
| |
Notes
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Revenue
|
| |
15.1
|
| |
304,255
|
| |
280,465
|
|
|
|
| |
|
| |
|
| |
|
|
|
Payroll and related costs
|
| |
|
| |
207,246
|
| |
191,494
|
|
|
Share-based payments
|
| |
19
|
| |
(119)
|
| |
4,039
|
|
|
Reseller commission and lead expenses
|
| |
|
| |
13,604
|
| |
23,038
|
|
|
Depreciation and amortization
|
| |
|
| |
18,460
|
| |
15,692
|
|
|
Other operating costs
|
| |
16
|
| |
44,817
|
| |
37,120
|
|
|
|
| |
|
| |
284,008
|
| |
271,383
|
|
|
Income from operations
|
| |
|
| |
20,247
|
| |
9,082
|
|
|
|
| |
|
| |
|
| |
|
|
|
Finance expenses
|
| |
|
| |
(7,190)
|
| |
(5,458)
|
|
|
Income before taxation
|
| |
|
| |
13,057
|
| |
3,624
|
|
|
|
| |
|
| |
|
| |
|
|
|
Income tax expense
|
| |
17
|
| |
(1,482)
|
| |
(3,496)
|
|
|
Net income for the period, continuing operation
|
| |
|
| |
11,575
|
| |
128
|
|
|
Net income for the period, discontinued operations, net of tax
|
| |
22
|
| |
—
|
| |
11,085
|
|
|
Net income for the period
|
| |
|
| |
11,575
|
| |
11,213
|
|
|
|
| |
|
| |
|
| |
|
|
|
Other comprehensive income
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
|
|
Item that will be subsequently reclassified to profit or loss
|
| |
|
| |
|
| |
|
|
|
Foreign currency translation adjustment
|
| |
|
| |
(37)
|
| |
(252)
|
|
|
|
| |
|
| |
(37)
|
| |
(252)
|
|
|
Total comprehensive income for the period
|
| |
|
| |
11,538
|
| |
10,961
|
|
|
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
(US$)
|
| |||
|
Earnings per share from continuing operations attributable to the ordinary equity holders of the parent
|
| |
|
| |
|
| |
|
|
|
Basic earnings per share
|
| |
14
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
|
|
Diluted earnings per share
|
| |
14
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
|
|
Earnings per share attributable to the ordinary equity holders of the parent
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
|
|
Basic earnings per share
|
| |
14
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
|
|
Diluted earnings per share
|
| |
14
|
| |
—
|
| |
—
|
|
|
|
| |
Attributable to shareholders of the Holding Company
|
| ||||||||||||||||||||||||
|
|
| |
Issued, Subscribed and Paid in Capital
|
| |
Other Reserves
|
| |
|
| |
|
| |||||||||||||||
|
|
| |
Share
Capital |
| |
Senior
Preferred Shares |
| |
Additional
Paid in Capital |
| |
Re-
organization Reserve |
| |
Share
Option Plans |
| |
Foreign
Currency Translation Reserve |
| |
Actuarial
gain on defined benefit plan |
| |
Accumulated
Deficit |
| |
Total Equity
Attributable to the Holding Company |
|
|
|
| |
(US$’000)
|
| ||||||||||||||||||||||||
|
Balance, June 30, 2018 (as previously stated)
|
| |
12
|
| |
20,000
|
| |
96,207
|
| |
21,280
|
| |
16,068
|
| |
(528)
|
| |
975
|
| |
(126,061)
|
| |
27,953
|
|
|
Adjustment on initial adoption of IFRS 15- Revenue from Contracts with Customers
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(2,080)
|
| |
(2,080)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Balance, July 1, 2018 (as restated)
|
| |
12
|
| |
20,000
|
| |
96,207
|
| |
21,280
|
| |
16,068
|
| |
(528)
|
| |
975
|
| |
(128,141)
|
| |
25,873
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Comprehensive income for the period
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net income for the nine months ended March 31, 2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
11,213
|
| |
11,213
|
|
|
Other Comprehensive Income
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(252)
|
| |
—
|
| |
—
|
| |
(252)
|
|
|
Total Comprehensive income / (loss) for the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(252)
|
| |
—
|
| |
11,213
|
| |
10,961
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Transactions with Owners
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Share-based transactions (Note 19)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,518
|
| |
—
|
| |
—
|
| |
—
|
| |
5,518
|
|
|
Redemption of senior preferred shares
|
| |
—
|
| |
(5,971)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(5,971)
|
|
|
|
| |
—
|
| |
(5,971)
|
| |
—
|
| |
—
|
| |
5,518
|
| |
—
|
| |
—
|
| |
—
|
| |
(453)
|
|
|
Balance, March 31, 2019
|
| |
12
|
| |
14,029
|
| |
96,207
|
| |
21,280
|
| |
21,586
|
| |
(780)
|
| |
975
|
| |
(116,928)
|
| |
36,381
|
|
|
Balance, July 1, 2019
|
| |
12
|
| |
—
|
| |
96,207
|
| |
9,744
|
| |
19,601
|
| |
(844)
|
| |
1,084
|
| |
(117,176)
|
| |
8,628
|
|
|
Comprehensive income for the period
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net income for the nine months ended March 31, 2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
11,575
|
| |
11,575
|
|
|
Other Comprehensive Income
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(37)
|
| |
—
|
| |
—
|
| |
(37)
|
|
|
Total Comprehensive income / (loss) for the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(37)
|
| |
—
|
| |
11,575
|
| |
11,538
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Transactions with Owners
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Share-based transactions (Note 19)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
92
|
| |
—
|
| |
—
|
| |
—
|
| |
92
|
|
|
Repurchase of Share-based transaction (Note 22)
|
| |
|
| |
|
| |
—
|
| |
83
|
| |
(96)
|
| |
|
| |
|
| |
|
| |
(13)
|
|
|
Dividend distribution (Note 18)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(121)
|
| |
(121)
|
|
|
|
| |
—
|
| |
—
|
| |
—
|
| |
83
|
| |
(4)
|
| |
—
|
| |
—
|
| |
(121)
|
| |
(42)
|
|
|
Balance, March 31, 2020
|
| |
12
|
| |
—
|
| |
96,207
|
| |
9,827
|
| |
19,597
|
| |
(881)
|
| |
1,084
|
| |
(105,722)
|
| |
20,124
|
|
|
|
| |
Notes
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Income before taxation
|
| |
|
| |
13,057
|
| |
19,514
|
|
|
Adjustments for:
|
| |
|
| |
|
| |
|
|
|
Depreciation and amortization
|
| |
4&5
|
| |
18,460
|
| |
16,307
|
|
|
Amortization of warrant asset
|
| |
20
|
| |
551
|
| |
465
|
|
|
Foreign currency translation loss
|
| |
|
| |
249
|
| |
680
|
|
|
Share warrants
|
| |
20
|
| |
632
|
| |
(365)
|
|
|
Phantom expense
|
| |
19
|
| |
(196)
|
| |
(333)
|
|
|
Share-based payments
|
| |
19
|
| |
77
|
| |
5,232
|
|
|
Allowance of expected credit losses
|
| |
7
|
| |
101
|
| |
159
|
|
|
Share of profit from investment in joint venture
|
| |
|
| |
(414)
|
| |
(312)
|
|
|
Loss / (gain) on disposal of fixed assets
|
| |
|
| |
(73)
|
| |
(41)
|
|
|
Provision for defined benefit scheme
|
| |
|
| |
134
|
| |
—
|
|
|
Impairment of intangibles
|
| |
|
| |
—
|
| |
163
|
|
|
Finance costs
|
| |
|
| |
7,190
|
| |
9,636
|
|
|
Decrease / (increase) in trade and other receivables
|
| |
|
| |
8,154
|
| |
(16,027)
|
|
|
Increase in renewal receivables
|
| |
|
| |
—
|
| |
(25,582)
|
|
|
(Increase) / decrease in prepayments and other assets
|
| |
|
| |
(1,400)
|
| |
(6)
|
|
|
Decrease in trade and other payables and other liabilities
|
| |
|
| |
(4,921)
|
| |
(3,712)
|
|
|
Cash generated from / (used in) operations
|
| |
|
| |
41,601
|
| |
5,778
|
|
|
Interest paid
|
| |
|
| |
(7,190)
|
| |
(9,270)
|
|
|
Income taxes paid
|
| |
|
| |
(758)
|
| |
(328)
|
|
|
Net cash inflow / (outflow) from operating activities
|
| |
|
| |
33,653
|
| |
(3,820)
|
|
|
|
| |
|
| |
|
| |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Purchase of property and equipment
|
| |
|
| |
(4,019)
|
| |
(2,702)
|
|
|
Purchase of other intangible assets
|
| |
|
| |
(485)
|
| |
(544)
|
|
|
Return on investment from joint venture
|
| |
|
| |
309
|
| |
96
|
|
|
Proceed from sale of assets
|
| |
|
| |
—
|
| |
79
|
|
|
Capital repayment from joint venture
|
| |
|
| |
—
|
| |
276
|
|
|
Net cash used in investing activities
|
| |
|
| |
(4,195)
|
| |
(2,795)
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Proceeds from line of credit
|
| |
|
| |
107,525
|
| |
132,159
|
|
|
Repayments of line of credit
|
| |
|
| |
(117,485)
|
| |
(126,502)
|
|
|
Proceeds from borrowings
|
| |
|
| |
1,000
|
| |
34,333
|
|
|
Repayment of borrowings
|
| |
|
| |
(4,806)
|
| |
(3,889)
|
|
|
Repayment of related party loans
|
| |
|
| |
—
|
| |
(1,200)
|
|
|
Principal payments on lease obligations
|
| |
|
| |
(8,935)
|
| |
(7,640)
|
|
|
Repayment of private placement notes
|
| |
|
| |
—
|
| |
(14,500)
|
|
|
Dividend distribution
|
| |
18
|
| |
(121)
|
| |
—
|
|
|
Payment of senior preferred shares
|
| |
|
| |
—
|
| |
(5,972)
|
|
|
Net cash (outflow) / inflow from financing activities
|
| |
|
| |
(22,822)
|
| |
6,789
|
|
|
Effects of exchange rate difference on cash and cash equivalents
|
| |
|
| |
(38)
|
| |
(256)
|
|
|
Net increase / (decrease) in cash and cash equivalents
|
| |
|
| |
6,598
|
| |
(82)
|
|
|
Cash and cash equivalents at beginning of the period
|
| |
|
| |
8,873
|
| |
13,519
|
|
|
Cash and cash equivalents at end of the period
|
| |
|
| |
15,471
|
| |
13,437
|
|
|
Non-cash items
|
| |
|
| |
|
| |
|
|
|
New leases
|
| |
|
| |
24,552
|
| |
66,620
|
|
|
Issuance of warrants
|
| |
|
| |
277
|
| |
—
|
|
THE GROUP AND ITS OPERATIONS
|
2.
|
BASIS OF PREPARATION
|
2.1.
|
Statement of compliance
|
2.2.
|
Basis of measurement
|
3.
|
ACCOUNTING POLICIES
|
•
|
Market value of common shares / fair market value of warrants
|
•
|
On January 23, 2020, the International Accounting Standards Board (IASB or the Board) issued amendments to IAS 1 Presentation of Financial Statements (the amendments) to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. These amendments should be applied for annual periods beginning on or after January 1, 2022, retrospectively in accordance to IAS 8. The Company is assessing the impact of the amendment and expects that the impact would not have a material impact on the financial statements
|
•
|
On May 28, 2020, the IASB published 'Covid-19-Related Rent Concessions (Amendment to IFRS 16)' amending IFRS 16 to:
|
-
|
provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification;
|
-
|
require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were not lease modifications;
|
-
|
require lessees that apply the exemption to disclose that fact; and
|
-
|
Require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures.
|
4.
|
OTHER INTANGIBLE ASSETS
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Balance at beginning of period
|
| |
2,928
|
| |
4,181
|
|
|
Additions
|
| |
1,524
|
| |
622
|
|
|
Disposal
|
| |
(10)
|
| |
(13)
|
|
|
Impairment charge for the period
|
| |
—
|
| |
(163)
|
|
|
Amortization
|
| |
(1,104)
|
| |
(1,727)
|
|
|
Foreign exchange movements
|
| |
(10)
|
| |
28
|
|
|
Balance at end of period
|
| |
3,328
|
| |
2,928
|
|
5.
|
PROPERTY AND EQUIPMENT
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Balance at beginning of period
|
| |
82,309
|
| |
18,899
|
|
|
Adoption of IFRS 16
|
| |
—
|
| |
53,733
|
|
|
Additions
|
| |
29,432
|
| |
41,650
|
|
|
Disposals
|
| |
(3,244)
|
| |
(72)
|
|
|
Disposal of subsidiary
|
| |
—
|
| |
(9,450)
|
|
|
Depreciation
|
| |
(17,356)
|
| |
(20,078)
|
|
|
Foreign exchange movements
|
| |
(74)
|
| |
(2,373)
|
|
|
Balance at end of period
|
| |
91,067
|
| |
82,309
|
|
5.1.
|
Right of use assets
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Balance at beginning of period
|
| |
67,681
|
| |
57,280
|
|
|
Additions
|
| |
24,552
|
| |
33,348
|
|
|
Disposal - net of depreciation
|
| |
(3,235)
|
| |
(8,481)
|
|
|
Foreign exchange movements
|
| |
(170)
|
| |
(1,648)
|
|
|
Depreciation charge for the period
|
| |
(12,016)
|
| |
(12,818)
|
|
|
Balance at end of period
|
| |
76,812
|
| |
67,681
|
|
5.2.
|
Lease liabilities
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Lease liabilities included in statement of financial position
|
| |
79,540
|
| |
69,234
|
|
|
Current
|
| |
12,689
|
| |
10,632
|
|
|
Non Current
|
| |
66,851
|
| |
58,602
|
|
6.
|
OTHER NON-CURRENT ASSETS
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Deposits
|
| |
|
| |
2,847
|
| |
1,930
|
|
|
Prepayments
|
| |
6.1
|
| |
930
|
| |
909
|
|
|
Other
|
| |
|
| |
467
|
| |
559
|
|
|
|
| |
|
| |
4,244
|
| |
3,398
|
|
6.1.
|
These include prepayments for call centre optimization services which are amortized over 120 months.
|
7.
|
TRADE AND OTHER RECEIVABLES
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Trade receivables
|
| |
|
| |
|
| |
|
|
|
Trade receivables - gross
|
| |
|
| |
56,561
|
| |
65,886
|
|
|
Less: allowance for credit losses
|
| |
7.1
|
| |
(2,073)
|
| |
(2,209)
|
|
|
Trade receivables - net
|
| |
|
| |
54,488
|
| |
63,677
|
|
|
Less: receivables attributable to related parties, net
|
| |
|
| |
(680)
|
| |
(652)
|
|
|
Trade receivables - net closing balance
|
| |
|
| |
53,808
|
| |
63,025
|
|
|
|
| |
|
| |
|
| |
|
|
|
Other receivables
|
| |
|
| |
|
| |
|
|
|
Prepayments
|
| |
|
| |
3,003
|
| |
3,149
|
|
|
Advance Tax
|
| |
|
| |
1,821
|
| |
1,457
|
|
|
VAT/Sales Tax receivables
|
| |
|
| |
1,614
|
| |
1,039
|
|
|
Other receivables
|
| |
|
| |
2,030
|
| |
1,091
|
|
|
Deposits
|
| |
|
| |
556
|
| |
1,373
|
|
|
|
| |
|
| |
9,024
|
| |
8,109
|
|
|
|
| |
|
| |
62,832
|
| |
71,134
|
|
7.1.
|
Allowance for credit losses
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
|
| |
2,209
|
| |
2,244
|
|
|
Foreign exchange movements
|
| |
|
| |
(237)
|
| |
(273)
|
|
|
Loss allowance recognised during the year
|
| |
|
| |
101
|
| |
343
|
|
|
Trade receivables written off against allowance
|
| |
|
| |
—
|
| |
(105)
|
|
|
Closing balance
|
| |
7.2
|
| |
2,073
|
| |
2,209
|
|
7.2.
|
Expected credit loss:
|
|
|
| |
March 31, 2020
|
| ||||||||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
|
| |
Not overdue
|
| |
Due: 0 to
30 days |
| |
Due: 31 -
60 days |
| |
Due: 61 to
90 days |
| |
Due: 91 -
180 days |
| |
Due: over
180 days |
| |
Total
|
|
|
Expected credit loss rate
|
| |
—
|
| |
1%
|
| |
27%
|
| |
2%
|
| |
45%
|
| |
99%
|
| |
—
|
|
|
Gross carrying amount
|
| |
51,650
|
| |
2,482
|
| |
256
|
| |
49
|
| |
243
|
| |
1,881
|
| |
56,561
|
|
|
Lifetime expected credit loss
|
| |
—
|
| |
31
|
| |
69
|
| |
1
|
| |
109
|
| |
1,863
|
| |
2,073
|
|
|
|
| |
June 30, 2019
|
| ||||||||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
|
| |
Not overdue
|
| |
Due: 0 to
30 days |
| |
Due: 31 -
60 days |
| |
Due: 61 to
90 days |
| |
Due: 91 -
180 days |
| |
Due: over
180 days |
| |
Total
|
|
|
Expected credit loss rate
|
| |
—
|
| |
4%
|
| |
3%
|
| |
22%
|
| |
51%
|
| |
98%
|
| |
—
|
|
|
Gross carrying amount
|
| |
59,994
|
| |
2,316
|
| |
1,187
|
| |
110
|
| |
387
|
| |
1,892
|
| |
65,886
|
|
|
Lifetime expected credit loss
|
| |
—
|
| |
96
|
| |
39
|
| |
24
|
| |
196
|
| |
1,854
|
| |
2,209
|
|
8.
|
CASH AND CASH EQUIVALENTS
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Balances with banks in:
|
| |
|
| |
|
|
|
− current accounts
|
| |
14,169
|
| |
7,079
|
|
|
− deposit accounts (with a maturity of 3 months or less at inception)
|
| |
1,288
|
| |
1,783
|
|
|
|
| |
15,457
|
| |
8,862
|
|
|
Cash in hand
|
| |
14
|
| |
11
|
|
|
|
| |
15,471
|
| |
8,873
|
|
9.
|
BORROWINGS
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Long-term other borrowings
|
| |
9.1
|
| |
11,256
|
| |
12,993
|
|
|
Line of credit
|
| |
9.2
|
| |
26,066
|
| |
36,026
|
|
|
|
| |
|
| |
37,322
|
| |
49,019
|
|
|
Less: Current portion of;
|
| |
|
| |
|
| |
|
|
|
− long-term other borrowings
|
| |
9.1
|
| |
(6,391)
|
| |
(5,809)
|
|
|
− line of credit
|
| |
9.2
|
| |
(26,066)
|
| |
(36,026)
|
|
|
Less: Current portion of borrowings
|
| |
|
| |
(32,457)
|
| |
(41,835)
|
|
|
Non-current portion of borrowings
|
| |
|
| |
4,865
|
| |
7,184
|
|
9.1.
|
Long-term other borrowings
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Financial Institutions
|
| |
|
| |
|
| |
|
|
|
IBM Credit LLC
|
| |
9.1.1
|
| |
1,220
|
| |
1,924
|
|
|
Hewlett-Packard Financial Services Co.
|
| |
9.1.1
|
| |
1,046
|
| |
—
|
|
|
PNC Bank, N.A.
|
| |
9.1.1
|
| |
—
|
| |
188
|
|
|
IPFS Corporation
|
| |
9.1.2
|
| |
—
|
| |
614
|
|
|
Heritage Bank of Commerce
|
| |
9.1.3
|
| |
2,000
|
| |
1,000
|
|
|
PNC Term loan
|
| |
9.1.4
|
| |
4,445
|
| |
7,111
|
|
|
First Global Bank Limited Demand Loan
|
| |
9.1.5
|
| |
2,545
|
| |
2,156
|
|
|
|
| |
|
| |
11,256
|
| |
12,993
|
|
|
Less: Current portion of long-term other borrowings
|
| |
|
| |
(6,391)
|
| |
(5,809)
|
|
|
Non-current portion of long term other borrowings
|
| |
|
| |
4,865
|
| |
7,184
|
|
9.1.1.
|
The Group has financed the purchase of various property and equipment and software during the period March 31, 2020 and the fiscal year ended June 30, 2019 with IBM, PNC, and HPFS. As of March 31, 2020 and June 30, 2019, the Group has financed $5.7 million and $3.6 million, respectively, of assets at interest rates ranging from 6% to 9% per annum. The Company made the total payments of $1.1 million and $1.6 million for the nine months ended March 31, 2020 and for the year ended June 30, 2019.
|
9.1.2.
|
The Group has financed the insurance policies related to property and worker compensation with the IPFS Corporation with an interest rate of 5.7%. The Company made the total payments of $0.6 million and $0.5 million for the nine months ended March 31, 2020 and for the year ended June 30, 2019.
|
9.1.3
|
In March 2019, HBC Loan Agreement was amended to add a term loan of up to $2.0 million that bears interest at the Prime Rate plus a margin of 2.5%. The term loan is required to be repaid in 36 equal monthly installments (commencing April 2020) and will mature on March 1, 2023. On the term loan maturity date, all amounts owing shall be immediately due and payable. The term loan balance as of March 31, 2020 is $2.0 million (June 30, 2019: $1.0 million).
|
9.1.4
|
The Company made the total payments of $2.7 million and $3.6 million for the nine months ended March 31, 2020 and for the year ended June 30, 2019.
|
9.1.5.
|
In October 2019, IBEX Jamaica entered into a $0.8 million non- revolving demand loan with First Global Bank Limited. The loan bears a fixed interest rate of 7%. The loan is to be paid in 36 equal monthly instalments. The loan is guaranteed by IBEX Global Limited and secured by substantially all the assets of IBEX Jamaica. The debenture under which IBEX Jamaica granted security over its assets contains limitations on liens, the incurrence of debt and the sale of assets plus the assignment of peril insurance for the replacement value over the charged assets.
|
9.2.
|
Line of credit
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Financial Institutions
|
| |
|
| |
|
|
|
PNC Bank, N.A
|
| |
24,317
|
| |
33,521
|
|
|
Seacoast Business Funding
|
| |
324
|
| |
80
|
|
|
Heritage Bank of Commerce
|
| |
1,425
|
| |
2,425
|
|
|
|
| |
26,066
|
| |
36,026
|
|
9.3.
|
Changes in liabilities arising from financing activities:
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Balance of debt, July 1,
|
| |
118,253
|
| |
62,958
|
|
|
Changes from operating cash flows
|
| |
(1,807)
|
| |
458
|
|
|
Changes from financing cash flows
|
| |
(22,701)
|
| |
12,761
|
|
|
New assets
|
| |
23,219
|
| |
66,620
|
|
|
Foreign exchange movement
|
| |
(102)
|
| |
(1,235)
|
|
|
Balance of debt, March 31,
|
| |
116,862
|
| |
141,562
|
|
10.
|
OTHER NON-CURRENT LIABILITIES
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Defined benefit scheme
|
| |
|
| |
527
|
| |
356
|
|
|
Warrant liability
|
| |
20
|
| |
1,660
|
| |
751
|
|
|
Phantom stock plan
|
| |
|
| |
245
|
| |
441
|
|
|
Other
|
| |
|
| |
29
|
| |
59
|
|
|
|
| |
|
| |
2,461
|
| |
1,607
|
|
11.
|
TRADE AND OTHER PAYABLES
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Trade creditors
|
| |
|
| |
8,549
|
| |
9,927
|
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Income tax payables
|
| |
|
| |
2,056
|
| |
1,467
|
|
|
Accrued expenses
|
| |
|
| |
9,959
|
| |
8,105
|
|
|
Accrued compensation
|
| |
|
| |
23,960
|
| |
24,061
|
|
|
Provision
|
| |
11.1
|
| |
—
|
| |
4,426
|
|
|
Others
|
| |
|
| |
809
|
| |
371
|
|
|
|
| |
|
| |
45,333
|
| |
48,357
|
|
11.1.
|
Represents the provision of legal costs associated with the cost of defense during the nine month periods and full year ended March 31, 2020 and June 30, 2019. Please refer to Note 13.1.1.
|
12.
|
RELATED PARTY TRANSACTIONS
|
|
|
| |
March 31, 2020
|
| ||||||||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
| |
Due from
related parties |
| |
Due to
related parties |
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
BPO Solutions, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
3,608
|
|
|
Alert Communications, Inc.
|
| |
Related entity
|
| |
124
|
| |
—
|
| |
494
|
| |
—
|
|
|
TRG Marketing Services, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
19
|
| |
—
|
|
|
Afiniti International Holdings Limited
|
| |
Related entity
|
| |
40
|
| |
39
|
| |
—
|
| |
315
|
|
|
TRG Holdings, LLC
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
1,985
|
|
|
The Resource Group International Limited
|
| |
Parent
|
| |
—
|
| |
—
|
| |
163
|
| |
—
|
|
|
Third Party Lessor
|
| |
Related entity
|
| |
251
|
| |
401
|
| |
140
|
| |
7
|
|
|
3rd Party Client and Internet Services Provider
|
| |
Related entity
|
| |
539
|
| |
53
|
| |
541
|
| |
153
|
|
|
IBEX Holdings Executive Leadership
|
| |
Officers
|
| |
—
|
| |
—
|
| |
307
|
| |
—
|
|
|
TRG (Private) Limited
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
38
|
|
|
Etelequote
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
320
|
| |
—
|
|
|
|
| |
|
| |
954
|
| |
493
|
| |
1,984
|
| |
6,106
|
|
|
|
| |
June 30, 2019
|
| ||||||||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
| |
Due from
related parties |
| |
Due to
related parties |
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
BPO Solutions, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
3,611
|
|
|
Alert Communications, Inc.
|
| |
Related entity
|
| |
150
|
| |
—
|
| |
370
|
| |
—
|
|
|
TRG Marketing Services, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
19
|
| |
—
|
|
|
Afiniti International Holdings Limited
|
| |
Related entity
|
| |
54
|
| |
70
|
| |
—
|
| |
503
|
|
|
TRG Holdings, LLC
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
1,913
|
|
|
The Resource Group International Limited
|
| |
Parent
|
| |
—
|
| |
—
|
| |
162
|
| |
—
|
|
|
|
| |
June 30, 2019
|
| ||||||||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
| |
Due from
related parties |
| |
Due to
related parties |
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
Third Party Lessor
|
| |
Related entity
|
| |
342
|
| |
77
|
| |
201
|
| |
—
|
|
|
3rd Party Client and Internet Services Provider
|
| |
Related entity
|
| |
883
|
| |
73
|
| |
451
|
| |
93
|
|
|
IBEX Holdings Executive Leadership
|
| |
Officers
|
| |
—
|
| |
—
|
| |
307
|
| |
—
|
|
|
TRG (Private) Limited
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
49
|
|
|
Etelequote
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
258
|
| |
—
|
|
|
|
| |
|
| |
1,429
|
| |
220
|
| |
1,768
|
| |
6,169
|
|
|
|
| |
March 31, 2019
|
| ||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
|
|
|
| |
(US$’000)
|
| ||||||
|
BPO Solutions, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
|
|
Alert Communications, Inc.
|
| |
Related entity
|
| |
113
|
| |
—
|
|
|
TRG Marketing Services, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
|
|
Afiniti International Holdings Limited
|
| |
Related entity
|
| |
42
|
| |
54
|
|
|
TRG Holdings, LLC
|
| |
Related entity
|
| |
—
|
| |
—
|
|
|
The Resource Group International Limited
|
| |
Parent
|
| |
—
|
| |
—
|
|
|
Third Party Lessor
|
| |
Related entity
|
| |
288
|
| |
399
|
|
|
3rd Party Client and Internet Services Provider
|
| |
Related entity
|
| |
694
|
| |
48
|
|
|
IBEX Holdings Executive Leadership
|
| |
Officers
|
| |
—
|
| |
—
|
|
|
TRG (Private) Limited
|
| |
Related entity
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
1,137
|
| |
501
|
|
12.1
|
Receivable from executive leadership represents the purchase of the shares through RSA (See Note 19.2).
|
12.2
|
The balance due to TRG Holdings, LLC includes loan principal and interest at March 31, 2020 is $1.5 million ($1.3 million at June 30, 2019) with an interest rate of 15% per annum and shall mature on August 7, 2020. The Loan shall be payable on demand upon the earlier of TRG Holdings, LLC’s demand or an initial public offering of the Company.
|
13.
|
CONTINGENCIES AND COMMITMENTS
|
13.1.
|
Contingencies
|
13.1.1.
|
The significant claims or legal proceedings against subsidiaries of the Group are as follows:
|
•
|
A case was filed in November 2014 in the US District Court of Tennessee as a collective action under the US Fair Labor Standards Act (FLSA) and Tennessee law, alleging that plaintiffs were forced to work without being paid for the “off the clock” time. In December 2014, a similar FLSA collection action case was filed against IBEX Global Solutions in the US District Court for the District of Columbia. In February 2015, the two cases were consolidated in Tennessee (the “Consolidated Action”) and plaintiffs agreed to submit all claims to binding arbitration before the American Arbitration Association. Presently, there are approximately 3,500 individuals who have opted into the FLSA class action claims, and there are pending wage and hour class action claims under various state laws (“Rule 23 Claims”) involving approximately 21,000 potential class action claimants. In April 2019, the parties engaged in a Mediation. On June 14, 2019, the parties entered into a Settlement Agreement, which was approved by the arbitrator on June 19, 2019. Pursuant to the Settlement Agreement, all claimants under both the FLSA and the Rule 23 Claims were required to fill out and send a claim form to the Third-Party Administrator within the claim period ending on October 15, 2019 in order to receive funds under the settlement. Subsequent to June 30, 2019, Ibex funded $3.4 million toward the settlement fund provided under the Settlement Agreement. This amount covered 100% of the possible claims under the FLSA, as well as plaintiffs’ attorney fees, administration costs and service awards. These amounts exclude any amounts for the Rule 23 Claims. Any funds not claimed pursuant to the FLSA portion of the settlement will revert to Ibex. Pursuant to the Settlement Agreement, there is $2.2 million allocated to the settlement of claims for the Rule 23 class members. The exact amount of recovery with respect to the Rule 23 Claims depends upon the claim forms properly and timely returned to the Third-Party Administrator. The claim period closed on October 15, 2019 and as of that date, claim forms properly and timely returned for the Rule 23 Class Members accounted for $1.2 million of the $2.2 million allocated funds for the Rule 23 class. On November 7, 2019, the parties appeared before the Arbitrator and the Arbitrator approved the Final Order. On November 20, 2019, payment was made by the Company to the Qualified Settlement Fund in the amount of $1.2 million for payment in full of all Rule 23 Claims and any Company tax obligations for payments to such individuals, and the matter is effectively closed.
|
•
|
On July 26, 2018, Digital Globe Services, Inc. received an indemnification notice related to AllConnect, Inc. v. Kandela LLC Case No. 2:18-cv-05959SJO (SSx) pending in the U.S. District Court for the Central District of California, Wester Division, relating to patent infringement for certain call center search for services capabilities provided by Digital Globe Services, Inc. under the Dealer Network Agreement entered into in 2014 between Kandela LLC and Digital Globe Services, Inc. via its “BundleDealer.com” portal. On June 03, 2020, AllConnect, Inc. and Kandela LLC entered into a settlement agreement, and Digital Globe Services, Inc. agreed to pay $0.03 million of Kandela LLC’s legal fees and expenses incurred in connection with Kandela LLC’s defense of the matter.
|
13.2.
|
Commitments
|
13.2.1.
|
IBEX Global Solutions Limited has an annual telecommunication service commitment with two of its carriers. The carrier agreement was signed in May 2017 for a three-year term with the minimum annual commitment for $0.6 million and it is expected to be renewed on July 1, 2020. The agreement has a
|
13.2.2.
|
IBEX Global Solutions Limited is also subject to early termination provisions in certain telecommunications contracts, which if enforced by the telecommunications providers, would subject IBEX Global Solutions to the obligation to pay early termination fees. To date, these early termination provisions have not been triggered by IBEX Global Solutions and in most cases would be equal to the unfulfilled terms of the contract.
|
13.2.3.
|
On November 27, 2017, PNC Bank, NA issued an irrevocable standby letter of credit for the amount of $0.4 million in favour of the Group’s subsidiary TRG Customer Solutions, Inc. to the benefit of Digicel (Jamaica) Limited to guarantee the payment of base rent for the property rented by the Group’s subsidiary IBEX Global Jamaica Limited. With effect from March 1, 2018, the amount of the irrevocable standby letter of credit was increased to $0.5 million. The letter of credit was renewed on December 13, 2019 for one year.
|
14.
|
EARNINGS / (LOSS) PER SHARE
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Total - Income attributable to shareholders of the Holding Company
|
| |
11,575
|
| |
11,213
|
|
|
Continuing operations - Income attributable to shareholders of the Holding Company
|
| |
11,575
|
| |
128
|
|
|
Total – Income attributable to ordinary shareholders of the company
|
| |
—
|
| |
—
|
|
|
Continuing operations – Income attributable to ordinary shareholders of the company
|
| |
—
|
| |
—
|
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
|
| |
|
| |
|
|
|
|
| |
(Shares)
|
| |||
|
Weighted average number of ordinary shares - basic
|
| |
1,137,768
|
| |
859,556
|
|
|
|
| |
|
| |
|
|
|
|
| |
(US$)
|
| |||
|
Total - Basic earnings per share
|
| |
—
|
| |
—
|
|
|
Continuing operations - Basic earnings per share
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
|
|
|
| |
(Shares)
|
| |||
|
Weighted average number of ordinary shares - diluted
|
| |
12,678,194
|
| |
12,338,691
|
|
|
|
| |
|
| |
|
|
|
|
| |
(US$)
|
| |||
|
Total - Diluted earnings per share
|
| |
—
|
| |
—
|
|
|
Continuing operations - Diluted earnings per share
|
| |
—
|
| |
—
|
|
15.
|
SEGMENT INFORMATION
|
•
|
Revenue from external customers for operating segment; and
|
•
|
Adjusted EBITDA (from continuing operations)
|
15.1.
|
Information about segments
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
Business Process
Outsourcing |
| |||
|
|
| |
(US$’000)
|
| |||
|
Segment revenue
|
| |
312,371
|
| |
284,867
|
|
|
Less: intra-group revenue
|
| |
(8,116)
|
| |
(4,402)
|
|
|
Revenue from external customers
|
| |
304,255
|
| |
280,465
|
|
|
|
| |
|
| |
|
|
|
Adjusted EBITDA from continuing operations
|
| |
40,622
|
| |
28,909
|
|
15.2.
|
Adjusted EBITDA for operating segments for the period
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Net income for the period - continuing operations
|
| |
11,575
|
| |
128
|
|
|
Finance expense
|
| |
7,190
|
| |
5,458
|
|
|
Income tax expense
|
| |
1,482
|
| |
3,496
|
|
|
Depreciation and amortization
|
| |
18,460
|
| |
15,692
|
|
|
EBITDA from continuing operations
|
| |
38,707
|
| |
24,774
|
|
|
|
| |
|
| |
|
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Non-recurring expenses(a)
|
| |
1,397
|
| |
—
|
|
|
Other income(b)
|
| |
(518)
|
| |
(464)
|
|
|
Fair value adjustment(c)
|
| |
632
|
| |
(365)
|
|
|
Share-based payments (d)
|
| |
(119)
|
| |
4,039
|
|
|
Foreign exchange losses
|
| |
523
|
| |
925
|
|
|
Adjusted EBITDA from continuing operations
|
| |
40,622
|
| |
28,909
|
|
(a)
|
For the nine months ended March 31, 2020, the Group incurred non-recurring expenses of $1.4 million related to COVID-19 net expenses (expenses net of customer reimbursements) of $0.7 million, legal settlement of $0.1 million and listing expenses of $0.6 million. COVID 19 expenses primary includes the additional hoteling and the transportation expenses incurred by the Group due to the Pandemic.
|
(b)
|
For the nine months ended March 31, 2020, other income represented deferred income of $0.5 million and for the nine months ended March 31, 2019, other income represented the proceeds from the sale of DGS EDU LLC of $0.2 million and deferred income of $0.3 million.
|
(c)
|
For the nine months ended March 31, 2020 and March 31, 2019, the Group recorded a revaluation associated with the Amazon warrants (see Note 20 for details).
|
(d)
|
For the nine months ended March 31, 2020, the amount represents the share-based payment expenses and for the nine months, ended March 31, 2019 the amount includes the cancellation of the 2017 IBEX Stock Plan and the Phantom stock plans ($3.3 million) partially offset by the elimination of the liability associated with the Phantom plans ($1.0 million).
|
15.3.
|
Revenue from contracts with customers
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Revenue from continuing operations
|
| |
|
| |
|
|
|
United States of America
|
| |
298,201
|
| |
274,780
|
|
|
Others
|
| |
14,170
|
| |
10,087
|
|
|
Total
|
| |
312,371
|
| |
284,867
|
|
|
|
| |
|
| |
|
|
|
Inter-segment revenue
|
| |
|
| |
|
|
|
United States of America
|
| |
(3,533)
|
| |
(2,396)
|
|
|
Others
|
| |
(4,583)
|
| |
(2,006)
|
|
|
Revenue from external customers
|
| |
304,255
|
| |
280,465
|
|
|
|
| |
|
| |
|
|
|
Revenue from discontinued operations:
|
| |
|
| |
|
|
|
United States of America
|
| |
—
|
| |
47,419
|
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Pattern of Revenue recognition
|
| |
|
| |
|
|
|
− Services transferred at a point in time
|
| |
35,974
|
| |
41,195
|
|
|
− Services transferred over time
|
| |
268,281
|
| |
239,270
|
|
|
|
| |
304,255
|
| |
280,465
|
|
|
|
| |
March 31,
2020 |
| |
June 30,
2020 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
5,141
|
| |
6,365
|
|
|
Revenue recognized during the period
|
| |
(5,090)
|
| |
(3,763)
|
|
|
Revenue deferred during the period
|
| |
5,122
|
| |
2,539
|
|
|
Closing balance
|
| |
5,173
|
| |
5,141
|
|
|
Less: Current portion of deferred revenue
|
| |
(4,729)
|
| |
(4,388)
|
|
|
Non-current portion of deferred revenue
|
| |
444
|
| |
753
|
|
16.
|
OTHER OPERATING COSTS
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Rent and utilities
|
| |
5,379
|
| |
4,812
|
|
|
Communication
|
| |
5,609
|
| |
5,726
|
|
|
Maintenance, repairs and improvements
|
| |
13,721
|
| |
8,158
|
|
|
Traveling and entertainment
|
| |
7,467
|
| |
8,343
|
|
|
Insurance
|
| |
1,045
|
| |
1,370
|
|
|
Legal and professional expenses
|
| |
4,827
|
| |
3,871
|
|
|
Allowance for expected credit losses
|
| |
101
|
| |
159
|
|
|
Others
|
| |
6,668
|
| |
4,681
|
|
|
Other Operating Costs - from continued operations
|
| |
44,817
|
| |
37,120
|
|
|
|
| |
|
| |
|
|
|
Other Operating costs from discontinued operations
|
| |
—
|
| |
2,461
|
|
17.
|
TAX
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Current
|
| |
1,056
|
| |
1,139
|
|
|
Deferred
|
| |
426
|
| |
7,162
|
|
|
|
| |
1,482
|
| |
8,301
|
|
|
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Income tax expense / (benefit) from continued operations
|
| |
1,482
|
| |
3,496
|
|
|
Income tax expense / (benefit) from discontinued operations
|
| |
—
|
| |
4,805
|
|
|
|
| |
1,482
|
| |
8,301
|
|
18.
|
DIVIDEND DISTRIBUTION
|
19.
|
SHARE OPTION PLANS
|
|
|
| |
Note
|
| |
March 31,
2020 |
| |
March 31,
2019 |
|
|
|
| |
|
| |
(US$'000)
|
| |
(US$'000)
|
|
|
2017 Stock Plan
|
| |
|
| |
—
|
| |
4,288
|
|
|
2017 Phantom Plans
|
| |
19.1
|
| |
(196)
|
| |
(525)
|
|
|
2018 Restricted Stock Awards (RSA)
|
| |
19.2
|
| |
77
|
| |
276
|
|
|
|
| |
|
| |
(119)
|
| |
4,039
|
|
19.1.
|
As of March 31, 2020, the unrecognized compensation expense associated with the phantom stock plan was $0.0 million and it will be recognized over the period of 22 months from the end of March 31, 2020.
|
19.2.
|
2018 Restricted Share Award Program
|
•
|
2018 RSA Plan – Non-Executive Management
|
•
|
2018 RSA Plan Non-Performance – Executive Leadership Team
|
•
|
2018 RSA Plan Performance – Executive Leadership Team
|
|
|
| |
March 31, 2020
|
| |
March 31, 2019
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
RSA
(Number) |
| |
Weighted
average exercise price |
| |
RSA
(Number) |
|
|
|
| |
(US$)
|
| |
(US$)
|
| ||||||
|
RSAs outstanding as of beginning of the period
|
| |
0.61
|
| |
928,124
|
| |
—
|
| |
—
|
|
|
RSAs granted during the period
|
| |
—
|
| |
—
|
| |
0.61
|
| |
928,124
|
|
|
RSAs exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
RSAs forfeited / cancelled / expired/ repurchased during the period
|
| |
(0.61)
|
| |
(279,047)
|
| |
—
|
| |
—
|
|
|
RSAs outstanding as of end of the period
|
| |
—
|
| |
649,077
|
| |
—
|
| |
928,124
|
|
|
RSAs exercisable as of end of the period
|
| |
|
| |
452,426
|
| |
|
| |
406,259
|
|
|
|
| |
March 31, 2020
|
| |
March 31, 2019
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
RSA
(Number) |
| |
Weighted
average exercise price |
| |
RSA
(Number) |
|
|
|
| |
(US$)
|
| |
(US$)
|
| ||||||
|
RSAs outstanding as of beginning of the period
|
| |
0.61
|
| |
970,693
|
| |
—
|
| |
—
|
|
|
RSAs granted during the period
|
| |
—
|
| |
—
|
| |
0.61
|
| |
970,693
|
|
|
RSAs exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
RSAs forfeited / cancelled / expired/ repurchased during the period
|
| |
(0.61)
|
| |
(51,974)
|
| |
—
|
| |
—
|
|
|
RSAs outstanding as of end of the period
|
| |
—
|
| |
918,719
|
| |
—
|
| |
970,693
|
|
|
RSAs exercisable as of end of the period
|
| |
|
| |
653,270
|
| |
|
| |
371,082
|
|
•
|
the consummation of a successful initial public offering on or before December 31, 2019: The restricted shares allotted to this criteria are 170,680.
|
•
|
an initial public offering of the Group’s class A common shares, and thereafter, the average price per share traded in such public market equals or exceeds $17.42 per share at any point in time: The restricted shares allotted to this criteria are 103,264.
|
•
|
meeting specific revenue and EBITDA targets during the period from January 1, 2019 to December 31, 2019: The restricted shares allotted to this criteria are 10,000.
|
|
|
| |
March 31, 2020
|
| |
March 31, 2019
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
RSA
(Number) |
| |
Weighted
average exercise price |
| |
RSA
(Number) |
|
|
|
| |
(US$)
|
| |
(US$)
|
| ||||||
|
RSAs outstanding as of beginning of the period
|
| |
0.61
|
| |
474,557
|
| |
—
|
| |
—
|
|
|
RSAs granted during the period
|
| |
—
|
| |
—
|
| |
0.61
|
| |
474,557
|
|
|
RSAs exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
RSAs forfeited / cancelled / expired/ repurchased during the period
|
| |
(0.61)
|
| |
(190,613)
|
| |
—
|
| |
—
|
|
|
RSAs outstanding as of end of the period
|
| |
—
|
| |
283,944
|
| |
—
|
| |
474,557
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
RSAs exercisable as of end of the period
|
| |
|
| |
32,072
|
| |
|
| |
—
|
|
20.
|
WARRANT
|
•
|
If, prior to June 30, 2018, no qualified IPO or qualified valuation event (each as defined in the warrant) occurs, the price was $15.00,
|
•
|
If neither a qualified IPO nor a qualified valuation event has occurred on or prior to June 30, 2018, but a qualified IPO or an M&A event occurs after June 30, 2018 but on or prior to December 31, 2019, the exercise price was the lower of (i) $15.00 and (ii) as applicable: (x) the price established in respect of such IPO; or (y) 85% of the price per warrant share implied by the M&A event.
|
•
|
Level 1 – Instruments valued using quoted prices in active markets are instruments where the fair value can be determined directly from prices which are quoted in active, liquid markets and where the instrument observed in the market is representative
|
•
|
Level 2 – Instruments valued with valuation techniques using observable market data are instruments where the fair value can be determined by reference to similar instruments trading in active markets, or where a technique is used to derive the valuation but where all inputs to that technique are observable.
|
•
|
Level 3 – Instruments valued using valuation techniques using market data which is not directly observable are instruments where the fair value cannot be determined directly by reference to market observable information, and some other pricing technique must be employed. Instruments classified in this category have an element which is unobservable and which has a significant impact on the fair value.
|
21.
|
FAIR VALUE
|
|
|
| |
March 31,
2020 |
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
| |||
|
Financial assets - amortized cost
|
| |
|
| |
|
|
|
Deposits
|
| |
3,403
|
| |
3,303
|
|
|
Trade receivables
|
| |
53,808
|
| |
63,025
|
|
|
Other receivable
|
| |
5,465
|
| |
3,587
|
|
|
Due from related parties
|
| |
1,984
|
| |
1,768
|
|
|
Cash and cash equivalents
|
| |
15,471
|
| |
8,873
|
|
|
|
| |
80,131
|
| |
80,556
|
|
|
|
| |
|
| |
|
|
|
Financial liabilities - amortized cost
|
| |
|
| |
|
|
|
Lease liabilities
|
| |
79,540
|
| |
69,234
|
|
|
Borrowings
|
| |
37,322
|
| |
49,019
|
|
|
Trade and other payables
|
| |
21,373
|
| |
19,870
|
|
|
Due to related parties
|
| |
6,106
|
| |
6,169
|
|
|
|
| |
144,341
|
| |
144,292
|
|
|
Financial liabilities - fair value through profit and loss
|
| |
|
| |
|
|
|
Warrant liabilities (Note 20)
|
| |
1,660
|
| |
751
|
|
22.
|
SALE OF SUBSIDIARY
|
|
|
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
|
|
Revenue
|
| |
47,419
|
|
|
Other operating income
|
| |
2,445
|
|
|
Payroll and related costs
|
| |
15,652
|
|
|
Share-based payments
|
| |
861
|
|
|
Reseller commission and lead expenses
|
| |
10,207
|
|
|
Depreciation and amortization
|
| |
615
|
|
|
Other operating costs
|
| |
2,461
|
|
|
Income from operations
|
| |
20,068
|
|
|
Finance expenses
|
| |
(4,178)
|
|
|
Income before taxation
|
| |
15,890
|
|
|
Income tax expense
|
| |
(4,805)
|
|
|
Net income for the period from discontinued operations, net of tax
|
| |
11,085
|
|
|
|
| |
March 31,
2019 |
|
|
|
| |
(US$’000)
|
|
|
Operating activities
|
| |
(12,391)
|
|
|
Investing activities
|
| |
(646)
|
|
|
Financing activities
|
| |
12,595
|
|
|
Net cash out flow from discontinued operations
|
| |
(442)
|
|
SUBSEQUENT EVENT
|
|
|
| |
Notes
|
| |
As of June 30,
2019 |
| |
As of June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Assets
|
| |
|
| |
|
| |
|
|
|
Non-current assets
|
| |
|
| |
|
| |
|
|
|
Goodwill
|
| |
4
|
| |
11,832
|
| |
11,832
|
|
|
Other intangible assets
|
| |
5
|
| |
2,928
|
| |
4,181
|
|
|
Property and equipment
|
| |
6
|
| |
82,309
|
| |
18,899
|
|
|
Investment in joint venture
|
| |
7
|
| |
227
|
| |
392
|
|
|
Deferred tax asset
|
| |
18
|
| |
2,517
|
| |
5,219
|
|
|
Renewal receivables
|
| |
25.3
|
| |
—
|
| |
27,284
|
|
|
Warrant asset
|
| |
28
|
| |
3,316
|
| |
3,810
|
|
|
Other assets
|
| |
8
|
| |
3,398
|
| |
3,465
|
|
|
Total non-current assets
|
| |
|
| |
106,527
|
| |
75,082
|
|
|
|
| |
|
| |
|
| |
|
|
|
Current assets
|
| |
|
| |
|
| |
|
|
|
Trade and other receivables
|
| |
9
|
| |
71,134
|
| |
56,725
|
|
|
Renewal receivables
|
| |
25.3
|
| |
—
|
| |
8,616
|
|
|
Deferred expenses
|
| |
|
| |
—
|
| |
2,624
|
|
|
Due from related parties
|
| |
23
|
| |
1,768
|
| |
515
|
|
|
Cash and cash equivalents
|
| |
10
|
| |
8,873
|
| |
13,519
|
|
|
Total current assets
|
| |
|
| |
81,775
|
| |
81,999
|
|
|
Total assets
|
| |
|
| |
188,302
|
| |
157,081
|
|
|
|
| |
|
| |
|
| |
|
|
|
Equity and liabilities
|
| |
|
| |
|
| |
|
|
|
Equity attributable to owners of the parent
|
| |
|
| |
|
| |
|
|
|
Share capital
|
| |
12
|
| |
12
|
| |
12
|
|
|
Senior preferred shares
|
| |
12
|
| |
—
|
| |
20,000
|
|
|
Additional paid-in capital
|
| |
12
|
| |
96,207
|
| |
96,207
|
|
|
Other reserves
|
| |
|
| |
29,585
|
| |
37,795
|
|
|
Accumulated deficit
|
| |
|
| |
(117,176)
|
| |
(126,061)
|
|
|
Total equity
|
| |
|
| |
8,628
|
| |
27,953
|
|
|
|
| |
|
| |
|
| |
|
|
|
Non-current liabilities
|
| |
|
| |
|
| |
|
|
|
Deferred revenue
|
| |
11
|
| |
753
|
| |
708
|
|
|
Lease liabilities
|
| |
6.3
|
| |
58,602
|
| |
—
|
|
|
Borrowings
|
| |
13
|
| |
7,184
|
| |
9,880
|
|
|
Deferred tax liability
|
| |
18
|
| |
147
|
| |
—
|
|
|
Other non-current liabilities
|
| |
14
|
| |
1,607
|
| |
2,306
|
|
|
Total non-current liabilities
|
| |
|
| |
68,293
|
| |
12,894
|
|
|
|
| |
|
| |
|
| |
|
|
|
Current liabilities
|
| |
|
| |
|
| |
|
|
|
Trade and other payables
|
| |
15
|
| |
48,357
|
| |
45,955
|
|
|
Lease liabilities
|
| |
6.3
|
| |
10,632
|
| |
—
|
|
|
Borrowings
|
| |
13
|
| |
41,835
|
| |
51,876
|
|
|
Related party loans
|
| |
23
|
| |
—
|
| |
1,200
|
|
|
Deferred revenue
|
| |
11
|
| |
4,388
|
| |
5,657
|
|
|
Due to related parties
|
| |
23
|
| |
6,169
|
| |
11,546
|
|
|
Total current liabilities
|
| |
|
| |
111,381
|
| |
116,234
|
|
|
Total liabilities
|
| |
|
| |
179,674
|
| |
129,128
|
|
|
Total equity and liabilities
|
| |
|
| |
188,302
|
| |
157,081
|
|
|
|
| |
Notes
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Revenue
|
| |
25
|
| |
368,380
|
| |
342,200
|
|
|
|
| |
|
| |
|
| |
|
|
|
Payroll and related costs
|
| |
26
|
| |
254,592
|
| |
252,925
|
|
|
Share-based payments
|
| |
19
|
| |
4,087
|
| |
8,386
|
|
|
Reseller commission and lead expenses
|
| |
|
| |
27,877
|
| |
28,059
|
|
|
Depreciation and amortization
|
| |
|
| |
20,895
|
| |
12,182
|
|
|
Other operating costs
|
| |
27
|
| |
54,124
|
| |
58,425
|
|
|
Income / (loss) from operations
|
| |
|
| |
6,805
|
| |
(17,777)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Finance expenses
|
| |
17
|
| |
(7,709)
|
| |
(3,093)
|
|
|
Loss before taxation
|
| |
|
| |
(904)
|
| |
(20,870)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Income tax (expense) / benefit
|
| |
18
|
| |
(3,615)
|
| |
108
|
|
|
Net loss for the year, continuing operations
|
| |
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Net income on discontinued operation, net of tax
|
| |
30.3
|
| |
15,484
|
| |
4,881
|
|
|
Net income / (loss) for the year
|
| |
|
| |
10,965
|
| |
(15,881)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Other comprehensive income
|
| |
|
| |
|
| |
|
|
|
Item that will not be subsequently reclassified to profit or loss
|
| |
|
| |
|
| |
|
|
|
Actuarial gain on retirement benefits
|
| |
14.1
|
| |
109
|
| |
693
|
|
|
|
| |
|
| |
|
| |
|
|
|
Item that will be subsequently reclassified to profit or loss
|
| |
|
| |
|
| |
|
|
|
Foreign currency translation adjustment
|
| |
|
| |
(316)
|
| |
182
|
|
|
|
| |
|
| |
(207)
|
| |
875
|
|
|
Total comprehensive income / (loss) for the year
|
| |
|
| |
10,758
|
| |
(15,006)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Net Income / (loss) for the year attributable to:
|
| |
|
| |
|
| |
|
|
|
- Shareholders of the Holding Company
|
| |
|
| |
10,965
|
| |
(15,881)
|
|
|
|
| |
|
| |
10,965
|
| |
(15,881)
|
|
|
Other comprehensive income attributable to:
|
| |
|
| |
|
| |
|
|
|
- Shareholders of the Holding Company
|
| |
|
| |
(207)
|
| |
875
|
|
|
|
| |
|
| |
(207)
|
| |
875
|
|
|
Total comprehensive income / (loss) attributable to:
|
| |
|
| |
|
| |
|
|
|
- Shareholders of the Holding Company
|
| |
|
| |
10,758
|
| |
(15,006)
|
|
|
|
| |
|
| |
10,758
|
| |
(15,006)
|
|
|
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
(US$)
|
| |||
|
Loss per share from continuing operations attributable to the ordinary equity holders of the parent
|
| |
|
| |
|
| |
|
|
|
Basic loss per share
|
| |
20
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
|
|
Diluted loss per share
|
| |
20
|
| |
(0.36)
|
| |
(1.85)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Loss per share attributable to the ordinary equity holders of the parent
|
| |
|
| |
|
| |
|
|
|
Basic loss per share
|
| |
20
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
|
|
Diluted loss per share
|
| |
20
|
| |
—
|
| |
(1.42)
|
|
|
|
| |
Attributable to shareholders of the Holding Company
|
| ||||||||||||||||||||||||
|
|
| |
Issued, Subscribed and Paid in Capital
|
| |
Other Reserves
|
| |
|
| ||||||||||||||||||
|
|
| |
Share
Capital |
| |
Senior
Preferred Shares |
| |
Additional
Paid in Capital |
| |
Re-
organization Reserve |
| |
Share
Option Plans |
| |
Foreign
Currency Translation Reserve |
| |
Actuarial
gain on defined benefit plan |
| |
Accumulated
Deficit |
| |
Total Equity
Attributable to the Holding Company |
|
|
|
| |
(US$’000)
|
| ||||||||||||||||||||||||
|
Balance, July 1, 2017
|
| |
12
|
| |
20,000
|
| |
96,207
|
| |
15,849
|
| |
7,132
|
| |
(710)
|
| |
282
|
| |
(110,034)
|
| |
28,738
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Comprehensive income for the year
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Loss for the year ended June 30, 2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(15,881)
|
| |
(15,881)
|
|
|
Other Comprehensive Income
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
182
|
| |
693
|
| |
—
|
| |
875
|
|
|
Total Comprehensive income / (loss) for the year
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
182
|
| |
693
|
| |
(15,881)
|
| |
(15,006)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Transactions with Owners
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Dividend distribution
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(146)
|
| |
(146)
|
|
|
Share-based transactions
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
8,936
|
| |
—
|
| |
—
|
| |
—
|
| |
8,936
|
|
|
Sale of subsidiary
|
| |
—
|
| |
—
|
| |
—
|
| |
5,431
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,431
|
|
|
|
| |
—
|
| |
—
|
| |
—
|
| |
5,431
|
| |
8,936
|
| |
—
|
| |
—
|
| |
(146)
|
| |
14,221
|
|
|
Balance, June 30, 2018 (as previously stated)
|
| |
12
|
| |
20,000
|
| |
96,207
|
| |
21,280
|
| |
16,068
|
| |
(528)
|
| |
975
|
| |
(126,061)
|
| |
27,953
|
|
|
Adjustment on initial adoption of IFRS 15- Revenue from Contracts with Customers (Note 3.9.1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(2,080)
|
| |
(2,080)
|
|
|
Balance, July 1, 2018 (as restated)
|
| |
12
|
| |
20,000
|
| |
96,207
|
| |
21,280
|
| |
16,068
|
| |
(528)
|
| |
975
|
| |
(128,141)
|
| |
25,873
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Comprehensive income for the year
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Profit for the year ended June 30, 2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10,965
|
| |
10,965
|
|
|
Other Comprehensive Income
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(316)
|
| |
109
|
| |
—
|
| |
(207)
|
|
|
Total Comprehensive income / (loss) for the year
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(316)
|
| |
109
|
| |
10,965
|
| |
10,758
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Transactions with Owners
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Redemption of senior preferred shares (Note 12.4.1)
|
| |
—
|
| |
(5,972)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(5,972)
|
|
|
Sale of subsidiary
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net assets of sale of subsidiary (Note 30.3)
|
| |
—
|
| |
(14,028)
|
| |
—
|
| |
(11,536)
|
| |
(2,030)
|
| |
—
|
| |
—
|
| |
—
|
| |
(27,594)
|
|
|
Share-based transactions (Note 19)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,563
|
| |
—
|
| |
—
|
| |
—
|
| |
5,563
|
|
|
Balance, June 30, 2019
|
| |
12
|
| |
—
|
| |
96,207
|
| |
9,744
|
| |
19,601
|
| |
(844)
|
| |
1,084
|
| |
(117,176)
|
| |
8,628
|
|
|
|
| |
Notes
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Income / (loss) before taxation
|
| |
29
|
| |
19,410
|
| |
(15,935)
|
|
|
Adjustments for:
|
| |
|
| |
|
| |
|
|
|
Depreciation and amortization
|
| |
|
| |
21,805
|
| |
12,419
|
|
|
Amortization of warrant asset
|
| |
|
| |
643
|
| |
—
|
|
|
Foreign currency translation loss
|
| |
|
| |
78
|
| |
521
|
|
|
Share warrants
|
| |
22
|
| |
(364)
|
| |
(3,326)
|
|
|
Phantom expense
|
| |
19.4
|
| |
(300)
|
| |
757
|
|
|
Share-based payments
|
| |
19
|
| |
5,262
|
| |
8,936
|
|
|
Allowance of expected credit losses
|
| |
9
|
| |
343
|
| |
1,048
|
|
|
Share of profit from investment in joint venture
|
| |
7
|
| |
(351)
|
| |
(280)
|
|
|
(Gain) / loss on disposal of fixed assets
|
| |
|
| |
(140)
|
| |
43
|
|
|
Provision for defined benefit scheme
|
| |
14.1
|
| |
129
|
| |
310
|
|
|
Impairment on intangibles
|
| |
5
|
| |
163
|
| |
—
|
|
|
Finance costs
|
| |
|
| |
13,383
|
| |
5,335
|
|
|
(Increase) / decrease in trade and other receivables
|
| |
|
| |
(18,019)
|
| |
758
|
|
|
Increase in renewal receivables
|
| |
|
| |
(35,022)
|
| |
(17,022)
|
|
|
Decrease in prepayments and other assets
|
| |
|
| |
(173)
|
| |
1,599
|
|
|
Increase in trade and other payables and other liabilities
|
| |
|
| |
8,997
|
| |
4,406
|
|
|
Cash generated from / (used in) operations
|
| |
|
| |
15,844
|
| |
(431)
|
|
|
Interest paid
|
| |
|
| |
(13,054)
|
| |
(4,451)
|
|
|
Income taxes paid
|
| |
|
| |
(588)
|
| |
(865)
|
|
|
Net cash inflow (outflow) from operating activities
|
| |
|
| |
2,202
|
| |
(5,747)
|
|
|
|
| |
|
| |
|
| |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Purchase of property and equipment
|
| |
6
|
| |
(5,612)
|
| |
(5,194)
|
|
|
Purchase of other intangible assets
|
| |
5
|
| |
(622)
|
| |
(571)
|
|
|
Return on investment from joint venture
|
| |
7
|
| |
96
|
| |
82
|
|
|
Proceed from sale of assets
|
| |
30.2
|
| |
188
|
| |
144
|
|
|
Cash adjustment from sale of subsidiary to parent company
|
| |
30.3
|
| |
(3,554)
|
| |
—
|
|
|
Capital repayment from joint venture
|
| |
7
|
| |
420
|
| |
100
|
|
|
Net cash used in investing activities
|
| |
|
| |
(9,084)
|
| |
(5,439)
|
|
|
|
| |
|
| |
|
| |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
| |
|
| |
|
| |
|
|
|
Proceeds from line of credit
|
| |
|
| |
168,674
|
| |
222,750
|
|
|
Repayments of line of credit
|
| |
|
| |
(162,851)
|
| |
(216,254)
|
|
|
Proceeds from borrowings
|
| |
|
| |
36,617
|
| |
1,360
|
|
|
Repayment of borrowings
|
| |
|
| |
(6,081)
|
| |
(6,230)
|
|
|
Repayment of related party loans
|
| |
23.6
|
| |
(1,200)
|
| |
(1,000)
|
|
|
Principal payments on lease obligations
|
| |
|
| |
(10,535)
|
| |
(3,163)
|
|
|
(Repayment) / proceeds of private placement notes
|
| |
13.2
|
| |
(14,500)
|
| |
5,870
|
|
|
Dividend distribution
|
| |
21
|
| |
(1,600)
|
| |
(146)
|
|
|
Payment of senior preferred shares
|
| |
12.4.1
|
| |
(5,972)
|
| |
—
|
|
|
Net cash inflow from financing activities
|
| |
|
| |
2,552
|
| |
3,187
|
|
|
Effects of exchange rate difference on cash and cash equivalents
|
| |
|
| |
(316)
|
| |
197
|
|
|
Net decrease in cash and cash equivalents
|
| |
|
| |
(4,646)
|
| |
(7,802)
|
|
|
Cash and cash equivalents at beginning of the period
|
| |
|
| |
13,519
|
| |
21,321
|
|
|
Cash and cash equivalents at end of the period
|
| |
|
| |
8,873
|
| |
13,519
|
|
|
|
| |
|
| |
|
| |
|
|
|
Non-cash items
|
| |
|
| |
|
| |
|
|
|
New leases (2018: finance leases)
|
| |
|
| |
89,771
|
| |
1,857
|
|
|
Issuance of warrants
|
| |
28
|
| |
(150)
|
| |
(4,291)
|
|
|
Actuarial gain on defined benefit scheme
|
| |
14.1
|
| |
(109)
|
| |
(693)
|
|
|
Sale of subsidiary
|
| |
30.3
|
| |
27,594
|
| |
—
|
|
THE GROUP AND ITS OPERATIONS
|
|
Description
|
| |
Location
|
| |
Nature of
Business |
| |
Ownership %
|
| |||
|
2019
|
| |
2018
|
| |||||||||
|
Subsidiaries
|
| |
|
| |
|
| |
|
| |
|
|
|
IBEX Global Limited
|
| |
Bermuda
|
| |
Holding Company
|
| |
100%
|
| |
100%
|
|
|
DGS Limited
|
| |
Bermuda
|
| |
Holding Company
|
| |
100%
|
| |
100%
|
|
|
Etelequote Limited (Note 30.3)
|
| |
Bermuda
|
| |
Holding Company
|
| |
—%
|
| |
100%
|
|
|
iSky Inc.
|
| |
Bermuda
|
| |
Holding Company
|
| |
100%
|
| |
100%
|
|
|
iSky Canada Technologies Inc.
|
| |
Canada
|
| |
Market Research
|
| |
100%
|
| |
100%
|
|
2.
|
BASIS OF PREPARATION
|
2.1
|
Statement of compliance
|
2.2
|
Basis of accounting and presentation
|
•
|
To ensure the continuation of the predecessor’s basis in these consolidated financial statements, the assets and liabilities of the Holding Company and its subsidiaries represent the combined values of those assets and liabilities based on the carrying values attributed to the Continuing Business Entities as carried in the books of TRGI. The difference between the consideration transferred and the carrying value of the net assets of the Continuing Business Entities has been taken to equity as a reorganization reserve.
|
•
|
The consolidated statements of profit or loss and other comprehensive loss include the results of each of the Continuing Business Entities and the Holding Company from the earliest date they were under control of the parent.
|
|
|
| |
June 30,
2017 |
| |
June 30,
2016 |
| |
December 31,
2017 (unaudited) |
| |
December 31,
2016 (unaudited) |
|
|
|
| |
US$’000
|
| |||||||||
|
Cash flow from financing activities
|
| |
|
| |
|
| |
|
| |
|
|
|
Proceeds from line of credit
|
| |
176,746
|
| |
177,680
|
| |
116,859
|
| |
75,527
|
|
|
Repayment from line of credit
|
| |
(171,945)
|
| |
(164,410)
|
| |
(115,988)
|
| |
(76,045)
|
|
|
Net proceeds from line of credit as previously reported
|
| |
4,801
|
| |
13,270
|
| |
871
|
| |
(518)
|
|
2.3
|
Basis of measurement
|
2.4
|
Functional and presentation currency
|
2.5
|
Critical accounting estimates and judgements
|
•
|
Impairment of intangibles
|
•
|
Impairment of financial assets
|
•
|
Depreciation and amortization
|
•
|
Market value of common shares / fair market value of warrants
|
•
|
Fair value of the Company’s’ common shares. As the Company’s common shares are not publicly traded, the Company must estimate the fair value of the common shares, as discussed in “Valuations of Common Shares” below.
|
•
|
Volatility. Since there is no trading history for the Company’s common shares, the expected price volatility for the common shares was estimated using the average historical volatility of the shares of our industry peers as of the grant date of the Company’s RSAs over a period of history commensurate with the expected life of the awards. To the extent that volatility of the share price increases in the future, the estimates of the fair value of the awards to be granted in the future could increase, thereby increasing share-based payment expense in future periods. When making the selection of the industry peers to be used in measuring implied volatility of the RSAs, the Company considered the similarity of their products and business lines, as well as their stage of development, size and financial leverage. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
•
|
Expected life of the RSAs. The Company calculated the weighted-average expected life of the RSAs to be four years based on management’s best estimates regarding the effect of vesting schedules. RSAs granted may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution.
|
•
|
third-party valuations of the Company’s common shares;
|
•
|
the lack of marketability of Company’s common shares;
|
•
|
the Company’s historical and projected operating and financial performance;
|
•
|
the Company’s introduction of new services;
|
•
|
the Company’s stage of development;
|
•
|
the global economic outlook and its expected impact on the business;
|
•
|
the market performance of comparable companies; and
|
•
|
the likelihood of achieving a liquidity event for the common shares underlying the awards, such as an initial public offering or sale of the Company, given prevailing market conditions.
|
•
|
Legal provisions:
|
•
|
Going Concern:
|
•
|
Training revenue:
|
•
|
Leases:
|
•
|
Staff retirement plans:
|
•
|
Share-based payments:
|
•
|
Provision for taxation:
|
3.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
3.1
|
Basis of consolidation
|
•
|
power over the investee,
|
•
|
exposure to variable returns from the investee, and
|
•
|
the ability of the investor to use its power to affect those variable returns.
|
•
|
The size of the company’s voting rights relative to both the size and dispersion of other parties who hold voting rights
|
•
|
Substantive potential voting rights held by the Company and by other parties
|
•
|
Other contractual arrangements
|
•
|
Historic patterns in voting attendance
|
•
|
Joint ventures: where the Group has rights to only the net assets of the joint arrangement
|
•
|
Joint operations: where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement.
|
•
|
The structure of the joint arrangement
|
•
|
The legal form of joint arrangements structured through a separate vehicle
|
•
|
The contractual terms of the joint arrangement agreement
|
•
|
Any other facts and circumstances (including any other contractual arrangements).
|
3.2
|
Property and equipment
|
|
Property and equipment
|
| |
Useful
economic life |
| |
Depreciation method
|
|
|
Buildings on freehold land
|
| |
10 years
|
| |
Straight line
|
|
|
Leasehold improvements
|
| |
3 - 5 years or life of
lease if less |
| |
Straight line
|
|
|
Furniture, fixture and office equipment
|
| |
3 - 5 years
|
| |
Straight line
|
|
|
Telecommunications and computer equipment
|
| |
3 years
|
| |
Straight line
|
|
|
Vehicles
|
| |
5 years
|
| |
Straight line
|
|
|
Right of Use Assets
|
| |
expected term
of lease |
| |
Straight line
|
|
•
|
Measure the lease liability at the date of initial application (DOIA) at the present value of the remaining lease payments based on the lessee’s incremental borrowing rate over the remaining lease term. The lease payments would include fixed payments, variable lease payments based on an index or a rate, residual value guarantees, exercise price for purchase options reasonably certain to be exercised, as well as termination penalties for termination options reasonably certain to be exercised.
|
•
|
Measure the right-of-use (ROU) asset at either of the following amounts:
|
○
|
as if IFRS 16 has been applied since the inception of the lease but using the incremental borrowing rate on the DOIA; or
|
○
|
the value of the lease liability (adjusted for any prepaid or accrued lease payments).
|
•
|
Applying single discount rate to a portfolio of leases with reasonably similar characteristics (i.e. similar region, similar class of asset).
|
•
|
Using hindsight in determining the lease term if the contract contains options to extend or terminate the lease.
|
•
|
The lease liability is initially measured at the date of DOIA or commencement date at the present value of the remaining lease payments using the incremental borrowing rate specific to the country, term and currency of the contract. The lease liability is subsequently measured at amortized cost using the effective interest rate method and re-measured (with a corresponding adjustment to the related ROU asset) when there is change in future lease payments in case of renegotiation, change of an index or rate or in case of reassessment of options. Interest on the lease liability is measured on the discount rate.
|
•
|
Weighted average Group’s incremental borrowing rate is 9.8% applied to lease liabilities recognized at the date of initial application.
|
•
|
At inception, the ROU asset comprises the initial lease liability, initial direct costs and the obligation to refurbish the asset, less any incentives granted by the lessors. The ROU asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator for impairment, as indicated in Note 3.4.
|
|
Consolidated Statement of Financial Position - Impact of IFRS 16 at initial adoption
|
| |||
|
|
| |
DR / (CR)
|
|
|
|
| |
(US$’000)
|
|
|
Account
|
| |
Impact of adoption of
IFRS 16 |
|
|
Assets
|
| |
|
|
|
Right-of-use assets - reclassification from prior finance leases at initial adoption
|
| |
3,547
|
|
|
Right-of-use assets - recognized at initial adoption
|
| |
53,733
|
|
|
Liabilities
|
| |
|
|
|
Lease liabilities - reclassification from prior finance leases at initial adoption
|
| |
(2,765)
|
|
|
Lease liabilities - recognized at initial adoption
|
| |
(54,191)
|
|
|
Other liabilities
|
| |
458
|
|
|
|
| |
|
|
|
1Finance expenses & depreciation
|
| |
(782)
|
|
|
|
| |
|
|
|
Equity
|
| |
|
|
|
Accumulated Deficit
|
| |
—
|
|
1
|
Finance expenses and depreciation of $0.8 million represent the amount of finance leases upon adoption of IFRS 16.
|
|
Lease liabilities - Recognized at initial adoption
|
| |||
|
|
| |
(US$’000)
|
|
|
Operating lease commitments at June 30, 2018
|
| |
32,135
|
|
|
Discounted at the date of initial adoption at weighted average rate of 9.8%
|
| |
26,228
|
|
|
Short-term leases not included in lease liabilities
|
| |
(915)
|
|
|
Renewal options not included in commitments
|
| |
28,055
|
|
|
Lease not included in commitments
|
| |
823
|
|
|
Lease liabilities at July 1, 2018 after initial adoption
|
| |
54,191
|
|
3.3
|
Intangible assets
|
3.3.1
|
Goodwill
|
3.3.2
|
Other intangible assets
|
•
|
it is technically feasible to develop the product for it to be sold
|
•
|
adequate resources are available to complete the development
|
•
|
there is an intention to complete and sell the product
|
•
|
the Group is able to sell the product
|
•
|
sale of the product will generate future economic benefits, and
|
•
|
expenditure on the project can be measured reliably
|
|
Intangible Asset
|
| |
Useful
economic life |
| |
Valuation method
|
|
|
Customer lists
|
| |
5 - 6 years
|
| |
Straight line
|
|
|
Software
|
| |
3 - 5 years
|
| |
Straight line
|
|
3.4
|
Impairment of non-financial assets
|
3.5
|
Financial instruments
|
3.5.1
|
Adoption of IFRS 9, Financial Instruments
|
•
|
Trade receivables, Initial Receivables, Renewal Receivables and contract assets – For the various receivable balances which we maintain with our 3rd party customers, the individual subsidiaries perform an analysis on the collectability of the receivable and apply any applicable reserve which is then recorded through consolidated statements of profits and loss and other comprehensive income.
|
•
|
The Company does perform an overall review on the overall health of the clients and deem that there is no significant risk in a similar fashion that an expected credit loss model would produce. This will include a review of any public information available regarding the customer including, but not limited to, Securities and Exchange Commission (SEC) filings, press releases and analysts commentary.
|
3.5.2
|
Financial assets
|
3.5.3
|
Financial liabilities
|
3.6
|
Renewal receivables
|
3.7
|
Trade receivables
|
3.8
|
Cash and cash equivalents
|
3.9
|
Adoption of IFRS 15 Revenue from Contracts with Customers
|
•
|
Step 1: Identify the contract: The Company determines whether a contract exists between the reporting entity and customers that identifies rights, payment terms, has commercial substance and basis for collectability can be determined.
|
•
|
Step 2: Identify the Performance Obligations: The Company reviews the nature of the goods or service to be rendered in the contract and whether these are distinct. The reporting entity should recognize the revenue when it satisfies the performance obligations.
|
•
|
Step 3: Determine the transaction price: The amount of consideration expected to be received is defined which may be fixed or variable. With variable consideration the reporting entity can reasonably estimate the expected consideration. This step includes consideration of the various criteria which need to be identified and analyzed in determining whether revenues are fixed, variable or both.
|
•
|
Step 4: Allocate the transaction price to the performance obligations in the contracts – Where separate performance obligations exist, the reporting entity allocates and assigns the consideration to the respective performance obligations.
|
•
|
Step 5: Revenue Recognition: Recognize revenue to when the entity satisfies the performance obligations.
|
•
|
Full retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.
|
•
|
Cumulative catch-up approach - Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application.
|
3.9.1
|
Impact of the adoption of IFRS 15
|
|
July 1, 2018 Opening Balance Sheet Adjustment
|
| ||||||||||||
|
|
| |
DR / (CR)
|
| |||||||||
|
|
| |
(US$’000)
|
| |||||||||
|
|
| |
|
| |
IFRS 15 Impact
|
| |
|
| |||
|
Account
|
| |
June 30, 2018
Excluding impact of IFRS 15 Adoption |
| |
Customer
Mgmt |
| |
Customer
Acq |
| |
As Reported,
July 1, 2018 |
|
|
Assets
|
| |
|
| |
|
| |
|
| |
|
|
|
Renewal Receivables (ST / LT)
|
| |
35,900
|
| |
—
|
| |
220
|
| |
36,120
|
|
|
Initial Commission Receivable
|
| |
(898)
|
| |
—
|
| |
1,041
|
| |
143
|
|
|
Deferred expenses (ST / LT)
|
| |
2,738
|
| |
(2,738)
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Liabilities
|
| |
|
| |
|
| |
|
| |
|
|
|
Deferred revenue (ST / LT)
|
| |
(6,365)
|
| |
(603)
|
| |
—
|
| |
(6,968)
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Equity
|
| |
|
| |
|
| |
|
| |
|
|
|
Accumulated Deficit
|
| |
126,061
|
| |
3,341
|
| |
(1,261)
|
| |
128,141
|
|
3.10
|
Provisions
|
3.11
|
Profit or loss from discontinued operations
|
3.12
|
Retirement benefits
|
•
|
The fair value of plan assets at the reporting date; less
|
•
|
Plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds that have maturity dates approximating to the terms of the liabilities and are denominated in the same currency as the post-employment benefit obligations; less
|
•
|
The effect of minimum funding requirements agreed with scheme trustees
|
•
|
Actuarial gains and losses
|
•
|
Return on plan assets (interest exclusive)
|
•
|
Any asset ceiling effects (interest exclusive)
|
3.13
|
Share-based payments
|
•
|
The share price.
|
•
|
The strike price.
|
•
|
Volatility determined based on historical prices of our shares.
|
•
|
The duration, which has been estimated as the difference between the valuation date of the warrant plans and final exercise date.
|
•
|
The risk free interest rate.
|
3.14
|
Warrant Shares
|
•
|
The share price.
|
•
|
The strike price.
|
•
|
Volatility determined based on historical prices of our shares.
|
•
|
The duration, which has been estimated as the difference between the valuation date of the warrant plans and final exercise date.
|
•
|
The risk free interest rate.
|
•
|
the Company’s historical and projected operating and financial performance;
|
•
|
the Company’s introduction of new products and services;
|
•
|
the Company’s completion of strategic acquisitions;
|
•
|
the Company’s stage of development;
|
•
|
the global economic outlook and its expected impact on the Company’s business; and
|
•
|
the market performance of comparable companies.
|
3.15
|
Income taxes
|
•
|
The initial recognition of goodwill
|
•
|
The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit, and
|
•
|
Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future
|
•
|
The same taxable group company, or
|
•
|
Different group entities which intend either to settle current tax assets and liabilities on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.
|
3.16
|
Foreign Currency
|
3.17
|
Offsetting of financial assets and financial liabilities
|
3.18
|
Dividend
|
3.19
|
Standards, interpretations and amendments not yet effective
|
•
|
to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and
|
•
|
to recognize in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognized because of the impact of the asset ceiling.
|
•
|
Full retrospective approach – Under this approach, IFRIC 23 will be applied retrospectively to each prior reporting period presented in accordance with IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors.
|
•
|
Retrospectively with cumulative effect of initially applying IFRIC 23 recognized by adjusting equity on initial application, without adjusting comparatives.
|
4.
|
GOODWILL
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Goodwill as of beginning of the year
|
| |
11,832
|
| |
11,832
|
|
|
Goodwill acquired during the year
|
| |
—
|
| |
—
|
|
|
Goodwill impaired during the year
|
| |
—
|
| |
—
|
|
|
Goodwill as of end of the year
|
| |
11,832
|
| |
11,832
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
IBEX (BPO division)
|
| |
11,626
|
| |
11,626
|
|
|
DGS (Customer Acquisition division)
|
| |
206
|
| |
206
|
|
|
|
| |
11,832
|
| |
11,832
|
|
|
|
| |
Average
revenue growth rate |
| |
Average
Gross Margin |
| |
Discount
Rate |
| |
Terminal
Growth Rate |
|
|
|
| |
%
|
| |
%
|
| |
%
|
| |
%
|
|
|
June 30, 2019
|
| |
5.6
|
| |
25.5
|
| |
10.6
|
| |
5
|
|
|
June 30, 2018
|
| |
6.7
|
| |
18.7
|
| |
11.5
|
| |
5
|
|
5.
|
OTHER INTANGIBLE ASSETS
|
|
|
| |
Patents
|
| |
Trademarks
|
| |
Customer
lists |
| |
Software
|
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
Cost
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2018
|
| |
541
|
| |
371
|
| |
2,817
|
| |
18,348
|
| |
22,077
|
|
|
Additions
|
| |
—
|
| |
—
|
| |
—
|
| |
622
|
| |
622
|
|
|
Foreign exchange movements
|
| |
—
|
| |
—
|
| |
—
|
| |
28
|
| |
28
|
|
|
Disposal of subsidiary
|
| |
—
|
| |
—
|
| |
—
|
| |
(534)
|
| |
(534)
|
|
|
At June 30, 2019
|
| |
541
|
| |
371
|
| |
2,817
|
| |
18,464
|
| |
22,193
|
|
|
Accumulated amortization and impairment
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2018
|
| |
196
|
| |
—
|
| |
2,187
|
| |
15,513
|
| |
17,896
|
|
|
Disposal of subsidiary
|
| |
—
|
| |
—
|
| |
—
|
| |
(521)
|
| |
(521)
|
|
|
Impairment charge for the year
|
| |
—
|
| |
—
|
| |
163
|
| |
—
|
| |
163
|
|
|
Amortization charge for the year
|
| |
—
|
| |
—
|
| |
127
|
| |
1,600
|
| |
1,727
|
|
|
At June 30, 2019
|
| |
196
|
| |
—
|
| |
2,477
|
| |
16,592
|
| |
19,265
|
|
|
Net book value
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At June 30, 2019
|
| |
345
|
| |
371
|
| |
340
|
| |
1,872
|
| |
2,928
|
|
|
At June 30, 2018
|
| |
345
|
| |
371
|
| |
630
|
| |
2,835
|
| |
4,181
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Cost
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2017
|
| |
541
|
| |
371
|
| |
2,742
|
| |
17,921
|
| |
21,575
|
|
|
Additions
|
| |
—
|
| |
—
|
| |
75
|
| |
506
|
| |
581
|
|
|
Foreign exchange movements
|
| |
—
|
| |
—
|
| |
—
|
| |
(5)
|
| |
(5)
|
|
|
Disposal
|
| |
—
|
| |
—
|
| |
—
|
| |
(74)
|
| |
(74)
|
|
|
At June 30, 2018
|
| |
541
|
| |
371
|
| |
2,817
|
| |
18,348
|
| |
22,077
|
|
|
Accumulated amortization
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2017
|
| |
196
|
| |
—
|
| |
1,950
|
| |
13,462
|
| |
15,608
|
|
|
Amortization charge for the year
|
| |
—
|
| |
—
|
| |
237
|
| |
2,051
|
| |
2,288
|
|
|
At June 30, 2018
|
| |
196
|
| |
—
|
| |
2,187
|
| |
15,513
|
| |
17,896
|
|
|
Net book value
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At June 30, 2018
|
| |
345
|
| |
371
|
| |
630
|
| |
2,835
|
| |
4,181
|
|
|
At June 30, 2017
|
| |
345
|
| |
371
|
| |
792
|
| |
4,459
|
| |
5,967
|
|
|
Amortization Rate
|
| |
|
| |
|
| |
16.67% to
50.00% |
| |
20.00% to
33.33% |
| |
|
|
|
Estimated remaining useful life
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Customer Lists
|
| |
|
| |
|
| |
5 - 6 Years
|
| |
|
| |
|
|
|
Software
|
| |
|
| |
|
| |
3 - 5 Years
|
| |
|
| |
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Amortization from continued operations
|
| |
1,722
|
| |
2,273
|
|
|
Amortization from discontinued operations
|
| |
5
|
| |
15
|
|
|
Total
|
| |
1,727
|
| |
2,288
|
|
5.1
|
Net book value of software licenses held under finance lease is $0.3 million as of June 30, 2019 (June 30, 2018: $0.2 million).
|
5.2
|
As of June 30, 2019, Software includes, on a net basis, $0.4 million (June 30, 2018: $0.8 million) capitalized for an internally generated software tool titled as “Clearview”. Management has assessed the useful life of Clearview to be five years.
|
5.3
|
Trademarks and patents are capitalized at cost of acquisition and are not amortized but are tested for impairment annually. Trademarks and patents have an indefinite life on the grounds of the proven longevity of the trademarks or patents and the Group’s commitment to maintaining those trademarks or patents.
|
5.4
|
Estimated amortization expense for the next five years is projected to be:
|
|
|
| |
(USD$)
|
|
|
2020
|
| |
1.2 millions
|
|
|
2021
|
| |
0.8 millions
|
|
|
2022
|
| |
0.2 millions
|
|
|
2023
|
| |
—
|
|
|
2024
|
| |
—
|
|
6.
|
PROPERTY AND EQUIPMENT
|
|
|
| |
Buildings
|
| |
Leasehold
Improvements |
| |
Furniture,
fixture and equipment |
| |
Computer
Equipment |
| |
Vehicles
|
| |
Assets under
Construction |
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
Cost
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2018
|
| |
641
|
| |
16,585
|
| |
18,456
|
| |
39,617
|
| |
310
|
| |
33
|
| |
75,642
|
|
|
Adoption of IFRS 16
|
| |
52,910
|
| |
—
|
| |
—
|
| |
623
|
| |
200
|
| |
—
|
| |
53,733
|
|
|
At July 1, 2018 - restated
|
| |
53,551
|
| |
16,585
|
| |
18,456
|
| |
40,240
|
| |
510
|
| |
33
|
| |
129,375
|
|
|
Additions
|
| |
30,925
|
| |
1,101
|
| |
2,453
|
| |
4,034
|
| |
356
|
| |
2,781
|
| |
41,650
|
|
|
Transfer from CWIP
|
| |
—
|
| |
—
|
| |
—
|
| |
33
|
| |
—
|
| |
(33)
|
| |
—
|
|
|
Foreign exchange movements
|
| |
(1,599)
|
| |
(64)
|
| |
(219)
|
| |
(456)
|
| |
(35)
|
| |
—
|
| |
(2,373)
|
|
|
Disposal of subsidiary
|
| |
(8,800)
|
| |
(301)
|
| |
(910)
|
| |
(865)
|
| |
(10)
|
| |
—
|
| |
(10,886)
|
|
|
Disposal
|
| |
—
|
| |
(3)
|
| |
(5)
|
| |
(2)
|
| |
(62)
|
| |
—
|
| |
(72)
|
|
|
At June 30, 2019
|
| |
74,077
|
| |
17,318
|
| |
19,775
|
| |
42,984
|
| |
759
|
| |
2,781
|
| |
157,694
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accumulated depreciation
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2018
|
| |
225
|
| |
10,750
|
| |
12,267
|
| |
33,226
|
| |
275
|
| |
—
|
| |
56,743
|
|
|
Disposal of subsidiary
|
| |
(609)
|
| |
(56)
|
| |
(349)
|
| |
(418)
|
| |
(4)
|
| |
—
|
| |
(1,436)
|
|
|
Charge for the year
|
| |
10,806
|
| |
1,980
|
| |
2,411
|
| |
4,643
|
| |
238
|
| |
—
|
| |
20,078
|
|
|
At June 30, 2019
|
| |
10,422
|
| |
12,674
|
| |
14,329
|
| |
37,451
|
| |
509
|
| |
—
|
| |
75,385
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net book value
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At June 30, 2019
|
| |
63,655
|
| |
4,644
|
| |
5,446
|
| |
5,533
|
| |
250
|
| |
2,781
|
| |
82,309
|
|
|
At June 30, 2018
|
| |
416
|
| |
5,835
|
| |
6,189
|
| |
6,391
|
| |
35
|
| |
33
|
| |
18,899
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Cost
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2017
|
| |
538
|
| |
15,169
|
| |
16,869
|
| |
35,790
|
| |
286
|
| |
773
|
| |
69,425
|
|
|
Additions
|
| |
103
|
| |
1,634
|
| |
1,963
|
| |
3,260
|
| |
66
|
| |
24
|
| |
7,050
|
|
|
Transfer from CWIP
|
| |
—
|
| |
—
|
| |
—
|
| |
764
|
| |
—
|
| |
(764)
|
| |
—
|
|
|
Foreign exchange movements
|
| |
—
|
| |
(209)
|
| |
(319)
|
| |
(189)
|
| |
(3)
|
| |
—
|
| |
(720)
|
|
|
Disposal
|
| |
—
|
| |
(9)
|
| |
(57)
|
| |
(8)
|
| |
(39)
|
| |
—
|
| |
(113)
|
|
|
At June 30, 2018
|
| |
641
|
| |
16,585
|
| |
18,456
|
| |
39,617
|
| |
310
|
| |
33
|
| |
75,642
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accumulated depreciation
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At July 1, 2017
|
| |
140
|
| |
8,636
|
| |
9,447
|
| |
28,144
|
| |
244
|
| |
—
|
| |
46,611
|
|
|
Charge for the year
|
| |
85
|
| |
2,114
|
| |
2,820
|
| |
5,082
|
| |
31
|
| |
—
|
| |
10,132
|
|
|
At June 30, 2018
|
| |
225
|
| |
10,750
|
| |
12,267
|
| |
33,226
|
| |
275
|
| |
—
|
| |
56,743
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net book value
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
At June 30, 2018
|
| |
416
|
| |
5,835
|
| |
6,189
|
| |
6,391
|
| |
35
|
| |
33
|
| |
18,899
|
|
|
At June 30, 2017
|
| |
398
|
| |
6,533
|
| |
7,422
|
| |
7,646
|
| |
42
|
| |
773
|
| |
22,814
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Depreciation rate
|
| |
10.00%
|
| |
20.00% to
33.33% |
| |
20.00% to
33.33% |
| |
33.33%
|
| |
20.00%
|
| |
|
| |
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Depreciation from continued operations
|
| |
19,173
|
| |
9,910
|
|
|
Depreciation from discontinued operations
|
| |
905
|
| |
222
|
|
|
Total
|
| |
20,078
|
| |
10,132
|
|
6.1
|
Net book value of assets held under finance lease is as follows:
|
|
|
| |
Buildings
|
| |
Leasehold
Improvements |
| |
Furniture,
fixture and equipment |
| |
Computer
Equipment |
| |
Vehicles
|
| |
Assets under
Construction |
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
June 30, 2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
June 30, 2018
|
| |
—
|
| |
392
|
| |
2,637
|
| |
1,082
|
| |
17
|
| |
—
|
| |
4,128
|
|
6.2
|
Right of use assets comprise of:
|
|
|
| |
Building
|
| |
Leasehold
Improvements |
| |
Furniture,
fixture and equipment |
| |
Computer
Equipment |
| |
Vehicles
|
| |
Assets under
Construction |
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
Right-of-use assets
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Balance at July 1, 2018
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Reclassification from prior finance leases at initial adoption
|
| |
—
|
| |
367
|
| |
2,800
|
| |
376
|
| |
4
|
| |
—
|
| |
3,547
|
|
|
Recognized at initial adoption
|
| |
52,910
|
| |
—
|
| |
—
|
| |
623
|
| |
200
|
| |
—
|
| |
53,733
|
|
|
Total
|
| |
52,910
|
| |
367
|
| |
2,800
|
| |
999
|
| |
204
|
| |
—
|
| |
57,280
|
|
|
Additions
|
| |
30,925
|
| |
98
|
| |
107
|
| |
506
|
| |
224
|
| |
1,488
|
| |
33,348
|
|
|
Disposal - net of depreciation
|
| |
(8,191)
|
| |
—
|
| |
(225)
|
| |
(65)
|
| |
—
|
| |
—
|
| |
(8,481)
|
|
|
Foreign exchange movements
|
| |
(1,572)
|
| |
12
|
| |
70
|
| |
(131)
|
| |
(27)
|
| |
—
|
| |
(1,648)
|
|
|
Depreciation charge for the year
|
| |
(10,715)
|
| |
(156)
|
| |
(1,432)
|
| |
(396)
|
| |
(119)
|
| |
—
|
| |
(12,818)
|
|
|
Balance at June 30, 2019
|
| |
63,357
|
| |
321
|
| |
1,320
|
| |
913
|
| |
282
|
| |
1,488
|
| |
67,681
|
|
6.3
|
Lease liabilities:
|
|
|
| |
June 30,
2019 |
|
|
|
| |
(US$’000)
|
|
|
Lease liabilities included in statement of financial position as of June 30, 2019
|
| |
69,234
|
|
|
Current
|
| |
10,632
|
|
|
Non Current
|
| |
58,602
|
|
6.4
|
Description of lease activities:
|
6.5
|
Other lease disclosures:
|
6.6
|
Security Interest on property and equipment
|
7.
|
INVESTMENT IN JOINT VENTURE
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
392
|
| |
294
|
|
|
Return on investment during the year
|
| |
(96)
|
| |
(82)
|
|
|
Dividend received during the year
|
| |
(420)
|
| |
(100)
|
|
|
Share of profit for the year
|
| |
351
|
| |
280
|
|
|
Ending balance
|
| |
227
|
| |
392
|
|
|
|
| |
For the Year Ended
|
| |||
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Revenue
|
| |
2,140
|
| |
1558
|
|
|
Profit after tax
|
| |
739
|
| |
589
|
|
|
Other comprehensive income
|
| |
—
|
| |
—
|
|
|
Total comprehensive income / (loss)
|
| |
739
|
| |
589
|
|
8.
|
OTHER ASSETS
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Deposits
|
| |
|
| |
1,930
|
| |
1,873
|
|
|
Prepayments
|
| |
8.1
|
| |
909
|
| |
888
|
|
|
Other
|
| |
|
| |
559
|
| |
704
|
|
|
Other Assets
|
| |
|
| |
3,398
|
| |
3,465
|
|
8.1
|
These include prepayments for call center optimization services which are amortized over 120 months.
|
9.
|
TRADE AND OTHER RECEIVABLES
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Trade receivables
|
| |
|
| |
|
| |
|
|
|
Trade receivables - gross
|
| |
|
| |
65,886
|
| |
52,038
|
|
|
Less: Allowance for credit losses
|
| |
9.1
|
| |
(2,209)
|
| |
(2,244)
|
|
|
Trade receivables - net
|
| |
|
| |
63,677
|
| |
49,794
|
|
|
Less: receivables attributable to related parties, net
|
| |
|
| |
(652)
|
| |
(276)
|
|
|
Trade receivables - net closing balance
|
| |
|
| |
63,025
|
| |
49,518
|
|
|
|
| |
|
| |
|
| |
|
|
|
Other receivables
|
| |
|
| |
|
| |
|
|
|
Prepayments
|
| |
|
| |
3,149
|
| |
3,117
|
|
|
Advance Tax
|
| |
|
| |
1,457
|
| |
2,390
|
|
|
VAT receivables
|
| |
|
| |
1,039
|
| |
334
|
|
|
Other receivables
|
| |
|
| |
1,091
|
| |
781
|
|
|
Deposits
|
| |
|
| |
1,373
|
| |
585
|
|
|
|
| |
|
| |
8,109
|
| |
7,207
|
|
|
|
| |
|
| |
71,134
|
| |
56,725
|
|
9.1
|
Allowance for credit losses
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
2,244
|
| |
3,658
|
|
|
Foreign exchange movements
|
| |
(273)
|
| |
(81)
|
|
|
Loss allowance recognized during the year
|
| |
343
|
| |
1,048
|
|
|
Trade receivables written off against allowance
|
| |
(105)
|
| |
(2,381)
|
|
|
Closing balance
|
| |
2,209
|
| |
2,244
|
|
9.2
|
For discussions associated with the adoption of IFRS 9, see Note 3.5.1 and Note 22.
|
10.
|
CASH AND CASH EQUIVALENTS
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Balances with banks in:
|
| |
|
| |
|
|
|
− current accounts
|
| |
7,079
|
| |
12,384
|
|
|
− deposit accounts (with a maturity of 3 months or less at inception)
|
| |
1,783
|
| |
1,128
|
|
|
|
| |
8,862
|
| |
13,512
|
|
|
Cash in hand
|
| |
11
|
| |
7
|
|
|
|
| |
8,873
|
| |
13,519
|
|
11.
|
DEFERRED REVENUE
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Deferred revenue
|
| |
5,141
|
| |
6,365
|
|
|
Less: current portion of deferred revenue
|
| |
(4,388)
|
| |
(5,657)
|
|
|
|
| |
753
|
| |
708
|
|
12.
|
SHARE CAPITAL AND OTHER RESERVES
|
12.1
|
Authorized share capital
|
•
|
Series A Convertible Preferred (“Series A”) - The maximum number of Series A Convertible Preference Shares shall be one (1) whose holder is The Resource Group International Limited (“TRGI”).
|
•
|
Series B Convertible Preferred (“Series B”) - The maximum number of Series B Convertible Preference Shares shall be 12,512,994.466500, of which 11,083,691.3814 Series B shares are issued and outstanding as of June 30, 2019.
|
•
|
Series C Convertible Preferred (“Series C”, and together with the Series A shares and the Series B Shares, the “Preferred Convertible Shares”) - The maximum number of Series C Convertible Preference Shares shall be 12,639,389.35000 of which 111,986.4786 Series C shares are issued and outstanding as of June 30, 2019.
|
•
|
Class A Common Shares (“Class A”) – The maximum number of Class A shares shall be 79,766,504.249454. There are no Class A shares issued and outstanding as of June 30, 2019.
|
•
|
Class B Common Shares (“Class B”, and together with the Class A shares, the “Common Shares”) - The maximum number Class B shares shall be 2,559,323.13 which are authorized for issuance for the Restricted Share Plan, of which 2,375,374 Class B shares have been issued as of June 30, 2019.
|
•
|
Series A will convert to Series C on a 1:1 basis
|
•
|
Series B will convert to Series C on a 1:1 basis
|
•
|
Series C (including those existing as a result of the above conversions) will then convert to Class A on a pro rata basis based on a specified metric which includes factors such as IPO price and number of preferred shares issued at time of conversion and which will result in each Series C share converting into more than one Class A common share.
|
•
|
Class B will convert to Class A on a 1:1 basis.
|
12.2
|
Issued, subscribed and paid-in share capital – Pre December 2018
|
12.2.1
|
Reverse Share Split
|
(i)
|
each common share, issued and outstanding as of such effective date, was automatically reclassified and changed into 0.895651765436606 common shares, and
|
(ii)
|
each convertible preference share, issued and outstanding as of such effective date, was automatically reclassified and changed into 0.895651765436606 convertible preference shares, in each instance without any further action by our shareholders.
|
|
|
| |
Pre - Split
|
| |
Post - Split
|
|
|
|
| |
March 16, 2018
|
| |||
|
Weighted average number of shares outstanding - basic and diluted
|
| |
12,500,002
|
| |
11,195,649
|
|
|
Common shares outstanding
|
| |
7,750,141
|
| |
6,941,427
|
|
|
Convertible preference shares held by TRGI converting to common shares
|
| |
4,749,861
|
| |
4,254,221
|
|
|
Outstanding employee share options
|
| |
1,985,782
|
| |
1,778,569
|
|
|
Warrants associated with Amazon
|
| |
1,611,944
|
| |
1,443,740
|
|
|
Common shares available for future issuance
|
| |
2,857,498
|
| |
2,559,323
|
|
12.3
|
Other Reserves
|
12.4
|
Senior Preferred Shares
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Capital Fund
|
| |
12.4.1
|
| |
—
|
| |
20,000
|
|
12.4.1
|
At June 30, 2017, in consideration of the cancellation of $20.0 million of the indebtedness under the loan note instrument referred to in Note 23.6, the Group’s subsidiary Etelequote Limited (the Subsidiary) entered into a senior preferred shares subscription agreement (“Agreement”) with a consortium of investors, comprised of 17Capital Fund 3, L.P. and 17Capital Fund 3 Luxembourg S.C.Sp. (“Subscribers”) providing for the purchase by the Subscribers of 1,538,462 non-convertible Senior Preferred Shares.
|
•
|
for redemption date on or before June 06, 2018, $13.00, or
|
•
|
for redemption date after June 06, 2018, the greater of $13.90 and the variable return (as defined in the Agreement).
|
•
|
the variable return provides for an interest rate of 14% until June 2021 and 18% thereafter.
|
13.
|
BORROWINGS
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Obligation under finance leases
|
| |
13.1
|
| |
—
|
| |
2,765
|
|
|
Long-term other borrowings
|
| |
13.3
|
| |
12,993
|
| |
14,289
|
|
|
Line of credit
|
| |
13.4
|
| |
36,026
|
| |
30,202
|
|
|
Private placement notes
|
| |
13.2
|
| |
—
|
| |
14,500
|
|
|
|
| |
|
| |
49,019
|
| |
61,756
|
|
|
Less: Current portion of;
|
| |
|
| |
|
| |
|
|
|
− obligation under finance leases
|
| |
13.1
|
| |
—
|
| |
(1,899)
|
|
|
− long-term other borrowings
|
| |
13.3
|
| |
(5,809)
|
| |
(5,275)
|
|
|
− line of credit
|
| |
13.4
|
| |
(36,026)
|
| |
(30,202)
|
|
|
− private placement notes
|
| |
13.2
|
| |
—
|
| |
(14,500)
|
|
|
Less: Current portion of borrowings
|
| |
|
| |
(41,835)
|
| |
(51,876)
|
|
|
Non-current portion of borrowings
|
| |
|
| |
7,184
|
| |
9,880
|
|
13.1
|
Obligation under finance leases
|
|
|
| |
June 30, 2019
|
| |||
|
|
| |
Minimum lease
payments |
| |
Present value
of payments |
|
|
|
| |
(US$’000)
|
| |||
|
Within one year
|
| |
—
|
| |
—
|
|
|
After one year but not more than five years
|
| |
—
|
| |
—
|
|
|
Total minimum lease payments
|
| |
—
|
| |
—
|
|
|
Less: amounts representing finance charges
|
| |
—
|
| |
—
|
|
|
Present value of minimum lease payments
|
| |
—
|
| |
—
|
|
|
Current portion shown under current liabilities
|
| |
—
|
| |
—
|
|
|
|
| |
—
|
| |
|
|
|
|
| |
June 30, 2018
|
| |||
|
|
| |
Minimum lease
payments |
| |
Present value
of payments |
|
|
|
| |
(US$’000)
|
| |||
|
Within one year
|
| |
2,010
|
| |
1,900
|
|
|
After one year but not more than five years
|
| |
955
|
| |
865
|
|
|
Total minimum lease payments
|
| |
2,965
|
| |
2,765
|
|
|
Less: amounts representing finance charges
|
| |
(200)
|
| |
—
|
|
|
Present value of minimum lease payments
|
| |
2,765
|
| |
2,765
|
|
|
Current portion shown under current liabilities
|
| |
(1,899)
|
| |
(1,899)
|
|
|
|
| |
866
|
| |
866
|
|
13.2
|
In June and July 2017, e-Telequote Insurance, Inc. issued $9.1 million and 1.0 million respectively, aggregate principal amount of 12.0% Senior Secured Notes due June 12, 2018 (the “2017 ETQ Notes”), guaranteed by TRGI, with an option of early settlement by the borrower. In May 2018, the e-Telequote Insurance Inc. renewed the facility and expanded the loan to $15.0 million on the same terms maturing on May 15, 2019. During the year ended June 30, 2019, the loan notes were paid in full.
|
13.3
|
Long-term other borrowings
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Financial Institutions
|
| |
|
| |
|
| |
|
|
|
IBM Credit LLC
|
| |
13.3.1
|
| |
1,924
|
| |
1,020
|
|
|
Newcore
|
| |
|
| |
—
|
| |
165
|
|
|
PNC Bank, N.A.
|
| |
13.4.1
|
| |
188
|
| |
1,077
|
|
|
IPFS Corporation
|
| |
13.3.2
|
| |
614
|
| |
—
|
|
|
Heritage Bank of Commerce
|
| |
13.4.3
|
| |
1,000
|
| |
—
|
|
|
PNC Term loan
|
| |
13.4.1
|
| |
7,111
|
| |
10,667
|
|
|
First Global Bank Limited Demand loan
|
| |
13.3.3
|
| |
2,156
|
| |
1,360
|
|
|
|
| |
|
| |
12,993
|
| |
14,289
|
|
|
Less: Current portion of long-term other borrowings
|
| |
|
| |
(5,809)
|
| |
(5,275)
|
|
|
Non-current portion of long term other borrowings
|
| |
|
| |
7,184
|
| |
9,014
|
|
13.3.1
|
The Group has financed the purchase of various property and equipment and software during the fiscal year 2019 and 2018 with IBM, PNC and FGB. As of June 30, 2019 and 2018, the Group has financed $3.6 million and $1.2 million, respectively, of assets at interest rates ranging from 6% to 9% per annum.
|
13.3.2
|
The Group has financed the insurance policies related to property and worker compensation with the IPFS Corporation with an interest rate of 5.7%.
|
13.3.3
|
In January 2018, the Group’s subsidiary IBEX Global Jamaica Limited entered into a $1.4 million non-revolving demand loan with First Global Bank Limited. The loan bears interest at a fixed rate of 7.0% per annum for the term of the loan, has a maturity date of January 2023, and is required to be repaid in 54 equal monthly installments (commencing six months after the drawdown date). The loan is
|
13.4
|
Line of credit
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Financial Institutions
|
| |
|
| |
|
| |
|
|
|
PNC Bank, N.A.
|
| |
13.4.1
|
| |
33,521
|
| |
27,098
|
|
|
Seacoast Business Funding
|
| |
13.4.2
|
| |
80
|
| |
245
|
|
|
Heritage Bank of Commerce
|
| |
13.4.3
|
| |
2,425
|
| |
2,859
|
|
|
|
| |
|
| |
36,026
|
| |
30,202
|
|
13.4.1
|
In November 2013, the Group’s subsidiary TRG Customer Solutions, Inc. entered into a three-year $35.0 million revolving credit facility (as amended, the “PNC Credit Facility”) with PNC Bank, N.A. (“PNC”). In June 2015, the maximum revolving advance amount under the PNC Credit Facility was increased to $40.0 million, with an additional $10.0 million of incremental availability (subject to PNC’s approval and satisfaction of conditions precedent) and the maturity date was extended to May 2020. In December 2018, the PNC Credit Facility maximum revolving advance amount was increased to $45.0 million. In May 2019, the PNC Credit Facility was amended to include the following: the maximum revolving advance amount was increased to $50.0 million, with an additional $10.0 million of availability (in $5.0 million increments) subject to satisfaction of conditions precedent, and the maturity date was extended to May 2023. Borrowings under the PNC Credit Facility bear interest at LIBOR plus a margin of 1.75% and/or at the PNC Commercial Lending Rate for domestic loans. In this agreement, TRG Customer Solutions, Inc. derived value from the choice of interest rates, depending on the rate selected. This value changes in response to the changes in the various interest rates alternatives. Thus, a derivative is embedded within the loan commitment. The part of the value associated with the loan commitment derivative (the embedded derivative part) is derived from the potential interest rate differential between the alternative rates. The PNC Credit Facility is guaranteed by IBEX Global Limited and secured by substantially all the assets of TRG Customer Solutions, Inc. The line of credit balance as of June 30, 2019 is $33.5 million (June 30, 2018: $27.1 million), as presented in Note 13.4.
|
13.4.2
|
In July 2011, a subsidiary of the Group, iSky, Inc. entered into a purchasing agreement (the “Seacoast Receivables Financing Agreement”) with the predecessor to Seacoast National Bank (“Seacoast”). Pursuant to the Seacoast Receivables Financing Agreement, Seacoast provides payment to iSky, Inc. for up to $1.5 million of accounts receivable owed to iSky, Inc. All payments from Seacoast to iSky, Inc. are subject to a discount of 1.0% for receivables outstanding 30 days or less and an additional 0.5% for each additional 15 days that such receivable is outstanding. The average discount during the fiscal year ended June 30, 2019 was approximately 1.2% (June 30, 2018: 1.3%) of net sales. Under the Seacoast Receivables Financing Agreement, Seacoast may also advance an amount up to 85% of iSky, Inc.’s receivables to iSky, Inc. at a rate of LIBOR plus 7.0%.
|
13.4.3
|
In March 2015, the Group’s subsidiaries, Digital Globe Services, Inc., Telsat Online Inc. and DGS EDU, LLC entered into a one-year $3.0 million loan and security agreement (the “HBC Loan Agreement”) with Heritage Bank of Commerce (“HBC”). In March 2016, the HBC Loan Agreement was amended to increase the credit line capacity to $5.0 million and extend its maturity date until March 31, 2018, subject to collateral review. In June 2017, the HBC Loan Agreement was amended to add an additional subsidiary, 7 Degrees LLC, as a borrower, along with extending the maturity date until March 31, 2019. In August 2018, the HBC Loan Agreement was amended to increase the accrued account advance rate and certain other terms along with extending the maturity date until March 31, 2021. In January 2019, HBC Loan Agreement was amended to exclude DGS EDU, LLC therefrom pursuant to its sale. Refer to Note 30.2. Borrowings under the HBC Loan Agreement bear interest at the Prime Rate plus a margin of 2.50%. The credit line is secured by substantially all the assets of Digital Globe Services, Inc., Telsat Online Inc., and 7 Degrees LLC. The line of credit balance as of June 30, 2019 was $2.4 million (June 30, 2018: $2.9 million), as presented in Note 13.4.
|
13.4.4
|
In June 2015, the Group’s subsidiary, TRG Customer Solutions, Inc., entered into a supplier agreement with Citibank, N.A. (the “Citibank Receivables Financing Agreement”). Pursuant to the Citibank Receivables Financing Agreement, Citibank provides payment to TRG Customer Solutions, Inc. for
|
13.5
|
Changes in liabilities arising from financing activities:
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Balance of debt, July 1,
|
| |
62,958
|
| |
57,948
|
|
|
Changes from operating cash flows
|
| |
458
|
| |
—
|
|
|
Changes from financing cash flows
|
| |
10,124
|
| |
3,333
|
|
|
New leases (2018: finance leases)
|
| |
89,771
|
| |
1,857
|
|
|
Non cash item - disposal of subsidiary
|
| |
(43,431)
|
| |
—
|
|
|
Foreign exchange movement
|
| |
(1,627)
|
| |
(180)
|
|
|
Balance of debt, June 30,
|
| |
118,253
|
| |
62,958
|
|
13.6
|
For discussions associated with the adoption of IFRS 9, see Note 3.5.1.
|
14.
|
OTHER NON-CURRENT LIABILITIES
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Deferred rent - long term
|
| |
|
| |
—
|
| |
146
|
|
|
Defined benefit scheme
|
| |
14.1
|
| |
356
|
| |
314
|
|
|
Warrant liability
|
| |
28
|
| |
751
|
| |
965
|
|
|
Phantom stock plan
|
| |
19.4
|
| |
441
|
| |
838
|
|
|
Other
|
| |
|
| |
59
|
| |
43
|
|
|
|
| |
|
| |
1,607
|
| |
2,306
|
|
14.1
|
Defined benefit scheme
|
•
|
15 days salary based on the latest salary rate,
|
•
|
cash equivalent to 5 days service incentive leave, and,
|
•
|
one - twelfth of the 13th month’s pay.
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
%
|
| |
%
|
|
|
Discount rates
|
| |
5.93%
|
| |
6.90%
|
|
|
Expected rate of salary increase
|
| |
3.00%
|
| |
3.00%
|
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Current service cost
|
| |
|
| |
107
|
| |
274
|
|
|
Interest on obligation
|
| |
|
| |
22
|
| |
36
|
|
|
Total
|
| |
|
| |
129
|
| |
310
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Present value of unfunded defined benefit obligation
|
| |
356
|
| |
314
|
|
|
Net liability arising from defined benefit obligation
|
| |
356
|
| |
314
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Present value of defined benefit obligation at the beginning of the year
|
| |
314
|
| |
727
|
|
|
Foreign exchange movements
|
| |
22
|
| |
(30)
|
|
|
Current service cost
|
| |
107
|
| |
274
|
|
|
Interest cost
|
| |
22
|
| |
36
|
|
|
Actuarial gains
|
| |
(109)
|
| |
(693)
|
|
|
Present value of defined benefit obligation at the end of the year
|
| |
356
|
| |
314
|
|
15.
|
TRADE AND OTHER PAYABLES
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Trade creditors
|
| |
|
| |
9,927
|
| |
13,149
|
|
|
Income tax payables
|
| |
|
| |
1,467
|
| |
1,740
|
|
|
Accrued expenses
|
| |
|
| |
8,105
|
| |
7,272
|
|
|
Accrued compensation
|
| |
15.1
|
| |
24,061
|
| |
20,709
|
|
|
Provision
|
| |
15.2
|
| |
4,426
|
| |
1,682
|
|
|
Others
|
| |
|
| |
371
|
| |
1,403
|
|
|
|
| |
|
| |
48,357
|
| |
45,955
|
|
15.1
|
Accrued compensation includes payroll and related costs as of June 30, 2019.
|
15.2
|
Represents the provision related to the legal settlement during the year ended June 30, 2019 and provision of legal settlement associated with the cost of defense during the year June 30, 2018. Please refer to Note 16.1.1.
|
16.
|
CONTINGENCIES AND COMMITMENTS
|
16.1
|
Contingencies
|
16.1.1
|
The significant claims or legal proceedings against subsidiaries of the Group are as follows:
|
16.2
|
Commitments
|
16.2.1
|
IBEX Global Solutions Limited has an annual telecommunication service commitment with two of its carriers. The carrier agreement was signed in May 2017 for a three-year term with the minimum annual commitment for $0.6 million. The agreement has a provision for an early termination at its one-year anniversary with a sixty day written notice. A second carrier agreement was signed in August 2017 for a three-year term with minimum annual commitment for $1.1 million.
|
16.2.2
|
IBEX Global Solutions Limited is also subject to early termination provisions in certain telecommunications contracts, which if enforced by the telecommunications providers, would subject IBEX Global Solutions to the obligation to pay early termination fees. To date, these early termination provisions have not been triggered by IBEX Global Solutions and in most cases would be equal to the unfulfilled terms of the contract.
|
16.2.3
|
On November 27, 2017, PNC Bank, NA issued an irrevocable standby letter of credit for the amount of $0.4 million in favor of the Group’s subsidiary TRG Customer Solutions, Inc. to the benefit of Digicel (Jamaica) Limited to guarantee the payment of base rent for the property rented by the Group’s subsidiary IBEX Global Jamaica Limited. With effect from March 1, 2018, the amount of irrevocable standby letter of credit was increased to $0.5 million.
|
16.2.4
|
On January 19, 2018, PNC Bank, NA issued an irrevocable standby letter of credit for the amount of $0.3 million in favor of TRG Customer Solutions, Inc. d/b/a IBEX Global Solutions to the benefit of First Global Bank Limited to guarantee the payment of loan received by the Group’s subsidiary IBEX Global Jamaica Limited. This letter of credit expired on July 19, 2018, as allowed by the agreement with First Global Bank.
|
17.
|
FINANCE EXPENSES
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Interest on borrowings
|
| |
2,858
|
| |
1,955
|
|
|
Factoring Fees
|
| |
242
|
| |
280
|
|
|
Finance charges on finance lease assets
|
| |
—
|
| |
492
|
|
|
Finance charges - right of use assets
|
| |
4,394
|
| |
—
|
|
|
Bank charges
|
| |
215
|
| |
366
|
|
|
Total
|
| |
7,709
|
| |
3,093
|
|
|
|
| |
|
| |
|
|
|
Finance expenses from discontinued operations
|
| |
5,674
|
| |
2,243
|
|
18.
|
INCOME TAXES
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Current tax expense for the year
|
| |
815
|
| |
773
|
|
|
Deferred tax expense / (benefit) for the year
|
| |
7,630
|
| |
(827)
|
|
|
Total
|
| |
8,445
|
| |
(54)
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Income tax expense / (benefit) from continued operations
|
| |
3,615
|
| |
(108)
|
|
|
Income tax expense from discontinued operations
|
| |
4,830
|
| |
54
|
|
|
Total
|
| |
8,445
|
| |
(54)
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Deductible temporary differences:
|
| |
|
| |
|
|
|
− Provisions and write-offs against accounts receivable
|
| |
204
|
| |
279
|
|
|
− Unpaid accrued expenses / compensation
|
| |
530
|
| |
3,629
|
|
|
− Deferred revenue and credits
|
| |
31
|
| |
38
|
|
|
− Net operating losses
|
| |
1,998
|
| |
10,504
|
|
|
− Property, plant and equipment
|
| |
508
|
| |
336
|
|
|
− Lease liability (right of use assets)
|
| |
6,768
|
| |
—
|
|
|
− Intangible assets
|
| |
—
|
| |
402
|
|
|
|
| |
10,039
|
| |
15,188
|
|
|
Taxable temporary differences:
|
| |
|
| |
|
|
|
− Deferred revenue
|
| |
—
|
| |
(8,970)
|
|
|
− Property, plant and equipment
|
| |
(49)
|
| |
—
|
|
|
− Right of use assets
|
| |
(6,581)
|
| |
—
|
|
|
− Intangible assets
|
| |
(1,039)
|
| |
(999)
|
|
|
|
| |
(7,669)
|
| |
(9,969)
|
|
|
Net deferred tax assets / (liability)
|
| |
2,370
|
| |
5,219
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening deferred tax assets / (liability)
|
| |
5,219
|
| |
(949)
|
|
|
Deferred tax (expense) / benefits
|
| |
(7,630)
|
| |
827
|
|
|
Foreign exchange and other rate differences
|
| |
(49)
|
| |
—
|
|
|
Sale of subsidiary
|
| |
4,830
|
| |
5,341
|
|
|
Net deferred tax assets / (liability)
|
| |
2,370
|
| |
5,219
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Unused tax losses
|
| |
29,285
|
| |
29,611
|
|
|
Deductible temporary differences
|
| |
2,188
|
| |
4,529
|
|
|
Unused tax losses and deductible differences - unrecognized
|
| |
31,473
|
| |
34,140
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Profit / (Loss) for the year
|
| |
10,965
|
| |
(15,881)
|
|
|
Income tax expense / (benefit)
|
| |
8,445
|
| |
(54)
|
|
|
Net profit / (loss) before income tax
|
| |
19,410
|
| |
(15,935)
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2019 |
| |
June 30,
2018 |
| |
June 30,
2018 |
|
|
|
| |
(%)
|
| |
(US$’000)
|
| |
(%)
|
| |
(US$’000)
|
|
|
Income tax (benefit) using the applicable tax rate
|
| |
21%
|
| |
4,230
|
| |
28%
|
| |
(4,470)
|
|
|
State taxes (net of federal tax effect)
|
| |
5%
|
| |
1,073
|
| |
4%
|
| |
(583)
|
|
|
Effect of tax and exchange rates in foreign jurisdictions
|
| |
5%
|
| |
1,043
|
| |
-19%
|
| |
3,033
|
|
|
Foreign subsidiaries taxed at lower rate or tax exempt
|
| |
-2%
|
| |
(380)
|
| |
-28%
|
| |
4,525
|
|
|
Non-deductible expenses / exempt income
|
| |
2%
|
| |
470
|
| |
1%
|
| |
93
|
|
|
Cancellation of legacy ESOP plan
|
| |
15%
|
| |
3,104
|
| |
—%
|
| |
—
|
|
|
Effect of disposal of subsidiaries
|
| |
-2%
|
| |
(403)
|
| |
-3%
|
| |
505
|
|
|
Prior year provision / other items
|
| |
—%
|
| |
73
|
| |
-1%
|
| |
128
|
|
|
Change in unrecognized temporary differences
|
| |
-4%
|
| |
(765)
|
| |
21%
|
| |
(3,285)
|
|
|
|
| |
41.5%
|
| |
8,445
|
| |
0.3%
|
| |
(54)
|
|
19.
|
SHARE OPTION PLANS
|
19.1
|
Predecessor Stock Plan
|
19.1.1
|
IBEX stock plan 2013
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
—
|
| |
—
|
| |
1.68
|
| |
4,028,746
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
—
|
| |
(1.68)
|
| |
(4,028,746)
|
|
|
Options outstanding as of end of the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
|
| |
—
|
| |
|
| |
—
|
|
19.1.2
|
e-Telequote stock option plan
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
—
|
| |
—
|
| |
0.05
|
| |
39,700,000
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
—
|
| |
(0.05)
|
| |
(39,700,000)
|
|
|
Options outstanding as of end of the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
|
| |
—
|
| |
|
| |
—
|
|
19.1.3
|
DGS Limited stock plan option
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
—
|
| |
—
|
| |
1.50
|
| |
1,131,730
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
—
|
| |
(1.50)
|
| |
(1,131,730)
|
|
|
Options outstanding as of end of the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
|
| |
—
|
| |
|
| |
—
|
|
19.2
|
2017 IBEX Stock Plan
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
6.81
|
| |
1,633,170
|
| |
—
|
| |
—
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
6.81
|
| |
1,778,569
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
(6.81)
|
| |
(1,633,170)
|
| |
(6.81)
|
| |
(145,399)
|
|
|
Options outstanding as of end of the period
|
| |
—
|
| |
—
|
| |
—
|
| |
1,633,170
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
|
| |
—
|
| |
|
| |
628,356
|
|
•
|
the consummation of a successful initial public offering on or before December 31, 2018; and
|
•
|
meeting specific revenue targets during the period from January 1, 2018 to December 31, 2018.
|
19.3
|
IBEX group Phantom stock option plan
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
—
|
| |
—
|
| |
1.79
|
| |
875,625
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
—
|
| |
(1.79)
|
| |
(875,625)
|
|
|
Options outstanding as of end of the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
|
| |
—
|
| |
|
| |
—
|
|
19.4
|
Phantom Stock Plans
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
6.81
|
| |
105,546
|
| |
—
|
| |
—
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
6.81
|
| |
105,546
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
(66,377)
|
| |
—
|
| |
—
|
|
|
Options outstanding as of end of the period
|
| |
6.81
|
| |
39,169
|
| |
6.81
|
| |
105,546
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
6.81
|
| |
33,543
|
| |
6.81
|
| |
63,522
|
|
|
|
| |
2019
|
| |
2018
|
| ||||||
|
|
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
| |
Weighted
average exercise price |
| |
Share
Options (Number) |
|
|
|
| |
(US$)
|
| |
|
| |
(US$)
|
| |
|
|
|
Options outstanding as of beginning of the period
|
| |
6.81
|
| |
77,129
|
| |
—
|
| |
—
|
|
|
Options granted during the period
|
| |
—
|
| |
—
|
| |
6.81
|
| |
77,129
|
|
|
Options exercised during the period
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Options forfeited / cancelled / expired during the period
|
| |
—
|
| |
(61,723)
|
| |
—
|
| |
—
|
|
|
Options outstanding as of end of the period
|
| |
6.81
|
| |
15,406
|
| |
6.81
|
| |
77,129
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Options exercisable as of end of the period
|
| |
6.81
|
| |
8,450
|
| |
6.81
|
| |
8,065
|
|
|
Exercise price
or range US$ |
| |
Number
|
| |
Options outstanding
Weighted average remaining life (years) |
| |
Weighted
average exercise price US$ |
| |
Number
|
| |
Options outstanding
Weighted average remaining life (years) |
| |
Weighted
average exercise price US$ |
|
|
6.81
|
| |
21,032
|
| |
0.81
|
| |
6.81
|
| |
41,994
|
| |
1.83
|
| |
6.81
|
|
19.5
|
2018 Restricted Share Program
|
|
|
| |
2019
|
| |||
|
|
| |
Grant Date
Fair Market Value |
| |
RSA
(Number) |
|
|
|
| |
(US$)
|
| |
|
|
|
RSAs outstanding as of beginning of the period
|
| |
—
|
| |
—
|
|
|
RSAs granted during the period
|
| |
0.61
|
| |
2,373,374
|
|
|
RSAs exercised during the period
|
| |
—
|
| |
—
|
|
|
RSAs forfeited/cancelled/expired during the period
|
| |
—
|
| |
—
|
|
|
RSAs outstanding as of end of the period
|
| |
0.61
|
| |
2,373,374
|
|
|
|
| |
|
| |
|
|
|
RSAs vested as of end of the period
|
| |
0.61
|
| |
956,835
|
|
•
|
the consummation of a successful initial public offering on or before December 31, 2019;
|
•
|
there is an initial public offering of the Group’s class A common shares, and thereafter, the average price per share traded in such public market equals or exceeds $17.42 per share at any point in time; and
|
•
|
meeting specific revenue and EBITDA targets during the period from January 1, 2019 to December 31, 2019.
|
20.
|
EARNINGS PER SHARE
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Total - Profit / (loss) attributable to shareholders of the Holding Company
|
| |
10,965
|
| |
(15,881)
|
|
|
Continuing operations - Loss attributable to shareholders of the Holding Company
|
| |
(4,519)
|
| |
(20,762)
|
|
|
|
| |
|
| |
|
|
|
Total – Profit / (loss) attributable to ordinary shareholders of the company
|
| |
—
|
| |
—
|
|
|
Continuing operations – Profit / (loss) attributable to ordinary shareholders of the company
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
|
|
|
| |
(Shares)
|
| |||
|
Weighted average number of ordinary shares - basic
|
| |
956,835
|
| |
—
|
|
|
|
| |
|
| |
|
|
|
|
| |
(US$)
|
| |||
|
Total - Basic earnings loss per share
|
| |
—
|
| |
—
|
|
|
Continuing operations - Basic loss per share
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
|
|
|
| |
(Shares)
|
| |||
|
Weighted average number of ordinary shares - diluted
|
| |
12,461,182
|
| |
11,195,649
|
|
|
|
| |
|
| |
|
|
|
|
| |
(US$)
|
| |||
|
Total - Diluted earnings per share
|
| |
—
|
| |
(1.42)
|
|
|
Continuing operations - Diluted loss per share
|
| |
(0.36)
|
| |
(1.85)
|
|
21.
|
DIVIDEND DISTRIBUTION
|
22.
|
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Financial assets - amortized cost
|
| |
|
| |
|
|
|
Deposits
|
| |
3,303
|
| |
2,458
|
|
|
Trade receivables
|
| |
63,025
|
| |
49,518
|
|
|
Other receivables
|
| |
3,587
|
| |
3,505
|
|
|
Due from related parties
|
| |
1,768
|
| |
515
|
|
|
Cash and cash equivalents
|
| |
8,873
|
| |
13,519
|
|
|
|
| |
80,556
|
| |
69,515
|
|
|
Financial liabilities - amortized cost
|
| |
|
| |
|
|
|
Lease liabilities
|
| |
69,234
|
| |
—
|
|
|
Borrowings
|
| |
49,019
|
| |
61,756
|
|
|
Trade and other payables
|
| |
19,870
|
| |
23,232
|
|
|
Related Party Loans
|
| |
—
|
| |
1,200
|
|
|
Due to related parties
|
| |
6,169
|
| |
11,546
|
|
|
|
| |
144,292
|
| |
97,734
|
|
|
Financial liabilities – fair value through profit and loss
|
| |
|
| |
|
|
|
Warrant liabilities (Note 28)
|
| |
751
|
| |
965
|
|
|
|
| |
751
|
| |
965
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
965
|
| |
—
|
|
|
Fair Value Adjustment
|
| |
(364)
|
| |
(3,326)
|
|
|
Warrants vested during the year
|
| |
150
|
| |
4,291
|
|
|
Closing balance
|
| |
751
|
| |
965
|
|
•
|
Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities;
|
•
|
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
|
•
|
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
|
|
|
| |
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Financial liabilities – fair value through profit and loss
|
| |
Fair value hierarchy
|
| |
|
| |
|
|
|
Warrant liabilities (Note 28)
|
| |
Level 3
|
| |
751
|
| |
965
|
|
|
|
| |
|
| |
751
|
| |
965
|
|
22.1
|
Market risk
|
22.1.1
|
Interest rate risk
|
22.1.2
|
Foreign currency exchange risk
|
•
|
Transaction foreign currency risk is the exchange risk associated with the time delay between entering into a contract and settling it. Greater time differences exacerbate transaction foreign currency risk, as there is more time for the two exchange rates to fluctuate.
|
•
|
Translation foreign currency risk is the risk that the Group’s non-U.S. Dollar assets and liabilities will change in value as a result of exchange rate changes. Monetary assets and liabilities are valued and translated into U.S. Dollars at the applicable exchange rate prevailing at the applicable date. Any adverse valuation moves due to exchange rate changes at such time are charged directly and could impact our financial position and results of operations. For the purposes of preparing the consolidated financial statements, the Group convert subsidiaries’ financial statements as follows:
|
|
Statements of financial position are translated into U.S. Dollars from local currencies at the period-end exchange rate, shareholders’ equity is translated at historical exchange rates prevailing on the transaction date and income and cash flow statements are translated at average exchange rates for the period.
|
22.2
|
Credit risk
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
AA
|
| |
670
|
| |
880
|
|
|
AA-
|
| |
3,081
|
| |
4,178
|
|
|
A-1+
|
| |
212
|
| |
206
|
|
|
A-1
|
| |
123
|
| |
168
|
|
|
A+
|
| |
847
|
| |
5,241
|
|
|
A
|
| |
265
|
| |
125
|
|
|
A-
|
| |
102
|
| |
2,702
|
|
|
A2
|
| |
—
|
| |
—
|
|
|
A3
|
| |
—
|
| |
—
|
|
|
BBB+
|
| |
2,201
|
| |
—
|
|
|
BBB
|
| |
1,361
|
| |
—
|
|
|
BBB-
|
| |
—
|
| |
19
|
|
|
Non - Rated
|
| |
11
|
| |
—
|
|
|
Total
|
| |
8,873
|
| |
13,519
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Financial assets - amortized cost
|
| |
|
| |
|
|
|
Deposits
|
| |
3,303
|
| |
2,458
|
|
|
Trade receivables
|
| |
63,025
|
| |
49,518
|
|
|
Other receivables
|
| |
3,587
|
| |
3,505
|
|
|
Due from related parties
|
| |
1,768
|
| |
515
|
|
|
Cash and cash equivalents
|
| |
8,873
|
| |
13,519
|
|
|
|
| |
80,556
|
| |
69,515
|
|
|
|
| |
2019
|
| |||||||||
|
|
| |
Revenue
|
| |
Trade debts gross
|
| ||||||
|
|
| |
Amount
(US$ ‘000) |
| |
% of total
|
| |
Amount
(US$ ‘000) |
| |
% of total
|
|
|
Client 1
|
| |
74,835
|
| |
20%
|
| |
10,770
|
| |
16%
|
|
|
Client 2
|
| |
67,094
|
| |
18%
|
| |
13,716
|
| |
21%
|
|
|
Client 3
|
| |
44,509
|
| |
12%
|
| |
9,042
|
| |
14%
|
|
|
Subtotal
|
| |
186,438
|
| |
51%
|
| |
33,528
|
| |
51%
|
|
|
Others
|
| |
181,942
|
| |
49%
|
| |
32,358
|
| |
49%
|
|
|
|
| |
368,380
|
| |
100%
|
| |
65,886
|
| |
100%
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue from discontinued operations
|
| |
64,740
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
2018
|
| |||||||||
|
|
| |
Revenue
|
| |
Trade debts gross
|
| ||||||
|
|
| |
Amount
(US$ ‘000) |
| |
% of total
|
| |
Amount
(US$ ‘000) |
| |
% of total
|
|
|
Client 1
|
| |
78,663
|
| |
23%
|
| |
10,432
|
| |
20%
|
|
|
Client 2
|
| |
63,233
|
| |
18%
|
| |
11,250
|
| |
22%
|
|
|
Client 3
|
| |
52,837
|
| |
15%
|
| |
6,586
|
| |
12%
|
|
|
Subtotal
|
| |
194,733
|
| |
57%
|
| |
28,268
|
| |
54%
|
|
|
Others
|
| |
147,467
|
| |
43%
|
| |
23,770
|
| |
46%
|
|
|
|
| |
342,200
|
| |
100%
|
| |
52,038
|
| |
100%
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
Revenue from discontinued operations
|
| |
34,871
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
June 30, 2019
|
| ||||||||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
|
| |
Not
overdue |
| |
Due: 0 to
30 days |
| |
Due: 31 -
60 days |
| |
Due: 61 to
90 days |
| |
Due: 91 -
180 days |
| |
Due: over
180 days |
| |
Total
|
|
|
Expected credit loss rate
|
| |
—
|
| |
4%
|
| |
3%
|
| |
22%
|
| |
51%
|
| |
98%
|
| |
—
|
|
|
Gross carrying amount
|
| |
59,994
|
| |
2,316
|
| |
1,187
|
| |
110
|
| |
387
|
| |
1,892
|
| |
65,886
|
|
|
Lifetime expected credit loss
|
| |
—
|
| |
96
|
| |
39
|
| |
24
|
| |
196
|
| |
1,854
|
| |
2,209
|
|
|
|
| |
June 30, 2018
|
| ||||||||||||||||||
|
|
| |
(US$’000)
|
| ||||||||||||||||||
|
|
| |
Not
overdue |
| |
Due: 0 to
30 days |
| |
Due: 31 -
60 days |
| |
Due: 61 to
90 days |
| |
Due: 91 -
180 days |
| |
Due: over
180 days |
| |
Total
|
|
|
Expected credit loss rate
|
| |
—
|
| |
11%
|
| |
22%
|
| |
14%
|
| |
30%
|
| |
84%
|
| |
—
|
|
|
Gross carrying amount
|
| |
48,197
|
| |
492
|
| |
784
|
| |
109
|
| |
115
|
| |
2,341
|
| |
52,038
|
|
|
Lifetime expected credit loss
|
| |
—
|
| |
56
|
| |
172
|
| |
15
|
| |
35
|
| |
1,966
|
| |
2,244
|
|
22.3
|
Liquidity risk
|
|
|
| |
June 30, 2019
|
| |||||||||
|
|
| |
Less than
1 year |
| |
1 - 3 years
|
| |
4 - 5 years
|
| |
Total
|
|
|
|
| |
(US$’000)
|
| |||||||||
|
Deposits
|
| |
1,373
|
| |
1,930
|
| |
—
|
| |
3,303
|
|
|
Trade receivables
|
| |
63,025
|
| |
—
|
| |
—
|
| |
63,025
|
|
|
Other receivables
|
| |
3,587
|
| |
—
|
| |
—
|
| |
3,587
|
|
|
Due from related parties
|
| |
1,768
|
| |
—
|
| |
—
|
| |
1,768
|
|
|
Cash and cash equivalents
|
| |
8,873
|
| |
—
|
| |
—
|
| |
8,873
|
|
|
Subtotal
|
| |
78,626
|
| |
1,930
|
| |
—
|
| |
80,556
|
|
|
Lease liability
|
| |
15,954
|
| |
27,136
|
| |
52,526
|
| |
95,616
|
|
|
Long - term other borrowings
|
| |
5,933
|
| |
6,694
|
| |
964
|
| |
13,591
|
|
|
Line of credit
|
| |
36,026
|
| |
—
|
| |
—
|
| |
36,026
|
|
|
Trade and other payables
|
| |
19,870
|
| |
—
|
| |
—
|
| |
19,870
|
|
|
Due to related parties
|
| |
6,169
|
| |
—
|
| |
—
|
| |
6,169
|
|
|
Subtotal
|
| |
83,952
|
| |
33,830
|
| |
53,490
|
| |
171,272
|
|
|
Net liquidity position
|
| |
(5,326)
|
| |
(31,900)
|
| |
(53,490)
|
| |
(90,716)
|
|
|
|
| |
June 30, 2018
|
| |||||||||
|
|
| |
Less than
1 year |
| |
1 - 3 years
|
| |
4 - 5 years
|
| |
Total
|
|
|
|
| |
(US$’000)
|
| |||||||||
|
Deposits
|
| |
585
|
| |
1,873
|
| |
—
|
| |
2,458
|
|
|
Trade receivables
|
| |
49,518
|
| |
—
|
| |
—
|
| |
49,518
|
|
|
Other receivables
|
| |
3,505
|
| |
—
|
| |
—
|
| |
3,505
|
|
|
Due from related parties
|
| |
515
|
| |
—
|
| |
—
|
| |
515
|
|
|
Cash and cash equivalents
|
| |
13,519
|
| |
—
|
| |
—
|
| |
13,519
|
|
|
Subtotal
|
| |
67,642
|
| |
1,873
|
| |
—
|
| |
69,515
|
|
|
Obligation under finance leases
|
| |
2,010
|
| |
955
|
| |
—
|
| |
2,965
|
|
|
Long - term other borrowings
|
| |
5,696
|
| |
5,163
|
| |
4,382
|
| |
15,241
|
|
|
Line of credit
|
| |
30,202
|
| |
—
|
| |
—
|
| |
30,202
|
|
|
Private placement notes
|
| |
16,300
|
| |
—
|
| |
—
|
| |
16,300
|
|
|
Convertible loan note
|
| |
805
|
| |
—
|
| |
—
|
| |
805
|
|
|
Trade and other payables
|
| |
22,969
|
| |
—
|
| |
—
|
| |
22,969
|
|
|
Due to related parties
|
| |
11,546
|
| |
—
|
| |
—
|
| |
11,546
|
|
|
Subtotal
|
| |
89,528
|
| |
6,118
|
| |
4,382
|
| |
100,028
|
|
|
Net liquidity position
|
| |
(21,886)
|
| |
(4,245)
|
| |
(4,382)
|
| |
(30,513)
|
|
23.
|
TRANSACTION WITH RELATED PARTIES
|
|
|
| |
June 30, 2019
|
| ||||||||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
| |
Due from
related parties |
| |
Due to
related parties |
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
BPO Solutions, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
3,611
|
|
|
Alert Communications, Inc.
|
| |
Related entity
|
| |
150
|
| |
—
|
| |
370
|
| |
—
|
|
|
TRG Marketing Services, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
19
|
| |
—
|
|
|
Afiniti International Holdings Limited
|
| |
Related entity
|
| |
54
|
| |
70
|
| |
—
|
| |
503
|
|
|
TRG Holdings, LLC
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
1,913
|
|
|
The Resource Group International Limited
|
| |
Parent
|
| |
—
|
| |
—
|
| |
162
|
| |
—
|
|
|
Third Party Lessor
|
| |
Related entity
|
| |
342
|
| |
77
|
| |
201
|
| |
—
|
|
|
3rd Party Client and Internet Services Provider
|
| |
Related entity
|
| |
883
|
| |
73
|
| |
451
|
| |
93
|
|
|
IBEX Holdings Executive Leadership
|
| |
Officers
|
| |
—
|
| |
—
|
| |
307
|
| |
—
|
|
|
TRG (Private) Limited
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
49
|
|
|
Etelequote
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
258
|
| |
—
|
|
|
|
| |
|
| |
1,429
|
| |
220
|
| |
1,768
|
| |
6,169
|
|
|
|
| |
June 30, 2018
|
| ||||||||||||
|
|
| |
Relationship with
related party |
| |
Service
delivery revenue |
| |
Service
delivery expense |
| |
Due from
related parties |
| |
Due to
related parties |
|
|
|
| |
(US$’000)
|
| ||||||||||||
|
BPO Solutions, Inc.
|
| |
Related entity
|
| |
—
|
| |
1,287
|
| |
—
|
| |
3,600
|
|
|
Alert Communications, Inc.
|
| |
Related entity
|
| |
66
|
| |
—
|
| |
220
|
| |
—
|
|
|
TRG Marketing Services, Inc.
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
19
|
| |
—
|
|
|
Afiniti International Holdings Limited
|
| |
Related entity
|
| |
109
|
| |
68
|
| |
—
|
| |
367
|
|
|
TRG Holdings, LLC
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
232
|
|
|
The Resource Group International Limited
|
| |
Parent
|
| |
—
|
| |
—
|
| |
—
|
| |
7,134
|
|
|
Third Party Lessor
|
| |
Related entity
|
| |
291
|
| |
485
|
| |
178
|
| |
40
|
|
|
3rd Party Client and Internet Services Provider
|
| |
Related entity
|
| |
1,100
|
| |
65
|
| |
98
|
| |
16
|
|
|
TRG (Private) Limited
|
| |
Related entity
|
| |
—
|
| |
—
|
| |
—
|
| |
157
|
|
|
|
| |
|
| |
1,566
|
| |
1,905
|
| |
515
|
| |
11,546
|
|
23.1
|
Service delivery revenue and expenses are incurred by the Group in the ordinary course of business. These transactions were executed on mutually agreed terms. These represent call center and back office support services provided to subsidiaries of the Group.
|
23.2
|
A Senior executive within one of our vendors serves on the Board of our Controlling Shareholder. The Group maintains a lease on office space along with having a client relationship between Virtual World and the aforementioned company.
|
23.3
|
A Senior executive within one of our customers serves as a Board member of our IBEX Senegal subsidiary. The Group maintains both a vendor and a client relationship with this company.
|
23.4
|
The balance due to TRG Holdings, LLC includes loan of $1.3 million to the Holding Company with an interest rate of 15% per annum and shall mature in the year ending June 30, 2020.
|
23.5
|
A Senior executive within one of our vendors serves as a board of our DGS Group. The Group maintains a lease on office space with this Company.
|
23.6
|
RELATED PARTY LOANS
|
•
|
Principal: $0.5 million
|
•
|
Maturity: May, 2019
|
•
|
Interest: 12%
|
23.7
|
Receivable from executive leadership represents the purchase of the shares through RSA (See Note 19.5)
|
24.
|
CAPITAL RISK MANAGEMENT
|
25.
|
SEGMENT INFORMATION
|
•
|
Customer Management - Customer Management segment comprises the Engagement, Expansion and Experience solutions. The suite of customer engagement solutions consist of customer service, technical support and other value added outsourced back office services. This omni-channel offering is delivered through voice, email, chat, SMS, social media and other communication applications. The customer expansion solution is a derivative of the segment’s customer engagement solution, combining traditional BPO solutions with the segment’s sales and acquisition oriented contact center capability to allow existing clients to further mine their existing customer base. The segment’s customer experience solution is comprised of a comprehensive suite of proprietary software tools to measure, monitor and manage the customer experience.
|
•
|
Customer Acquisition - In the Customer Acquisition segment, the segment works with consumer-facing businesses and acquires customers for them. Most of the customer acquisition solutions are based on two steps: (a) generating or purchasing a lead or a prospect, and (b) converting that lead or prospect into a customer, most frequently through a voice-based channel. In this segment, customers are primarily acquired for clients in the telecommunications, cable, technology and insurance industries. The segment’s activity for the insurance industry is conducted through segment’s Medicare Insurance division, which acquires customers for the leading health insurance carriers. The Group disposed of the part of the segment related to the insurance industry on June 26, 2019 as included in Note 30.3.
|
•
|
Third party revenue; and
|
•
|
Adjusted EBITDA
|
25.1
|
Information about segments
|
|
|
| |
June 30, 2019
|
| ||||||
|
|
| |
Customer
management |
| |
Customer
acquisition |
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||
|
Segment revenue
|
| |
321,810
|
| |
53,033
|
| |
374,843
|
|
|
Less: inter-segment revenue
|
| |
(6,327)
|
| |
(136)
|
| |
(6,463)
|
|
|
Revenue from external customers1
|
| |
315,483
|
| |
52,897
|
| |
368,380
|
|
|
Adjusted EBITDA from continuing operations
|
| |
33,487
|
| |
2,808
|
| |
36,295
|
|
1
|
Includes impact of adoption of IFRS 15 for the year ended June 30, 2019. See Note 3.9.1 for details.
|
|
|
| |
June 30, 2018
|
| ||||||
|
|
| |
Customer
management |
| |
Customer
acquisition |
| |
Total
|
|
|
|
| |
(US$’000)
|
| ||||||
|
Segment revenue
|
| |
289,475
|
| |
57,428
|
| |
346,903
|
|
|
Less: inter-segment revenue
|
| |
(4,355)
|
| |
(348)
|
| |
(4,703)
|
|
|
Revenue from external customers
|
| |
285,120
|
| |
57,080
|
| |
342,200
|
|
|
Adjusted EBITDA from continuing operations
|
| |
2,099
|
| |
2,197
|
| |
4,296
|
|
25.2
|
Adjusted EBITDA from continuing operations for the year
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Net income / (loss) for the period - continuing operations
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Finance expense
|
| |
7,709
|
| |
3,093
|
|
|
Income tax expense / (benefit)
|
| |
3,615
|
| |
(108)
|
|
|
Depreciation and amortization
|
| |
20,895
|
| |
12,182
|
|
|
EBITDA from continuing operations(a)
|
| |
27,700
|
| |
(5,595)
|
|
|
|
| |
|
| |
|
|
|
Non-recurring expenses(b)
|
| |
4,239
|
| |
4,112
|
|
|
Other income(c)
|
| |
(641)
|
| |
(547)
|
|
|
Fair value adjustment(d)
|
| |
(364)
|
| |
(3,326)
|
|
|
Share-based payments(e)
|
| |
4,087
|
| |
8,386
|
|
|
Foreign exchange losses
|
| |
1,274
|
| |
1,266
|
|
|
Adjusted EBITDA from continuing operations
|
| |
36,295
|
| |
4,296
|
|
a)
|
EBITDA from continuing operations includes impact of adoption of IFRS 16 in financial year 2019 (see Note 25.8).
|
b)
|
For the fiscal year ended June 30, 2019, the Group incurred non – recurring legal expenses (including legal settlements) of $4.2 million related to IBEX Global Solutions Limited and for the year ended June 30, 2018, the Group incurred non-recurring legal expenses of $0.3 million related to DGS EDU LLC and $1.3 million related to IBEX Global Solutions Limited, severance expenses of $1.1 million related to IBEX Global Solutions Limited and listing expenses of the Holding Company of $1.4 million.
|
c)
|
For the fiscal year ended June 30, 2019, other income represented the proceeds from the sale of DGS EDU LLC of $0.2 million and deferred income of $0.4m related to IBEX Global Solutions Limited and for the year ended June 30, 2018, other income represented proceeds from a legal settlement received by Digital Globe Services, Inc. of $0.2 million and insurance proceeds of $0.3 million received by IBEX Global Solutions Limited against settlement.
|
d)
|
For the year ended June 30, 2019 and 2018, the Group recorded a revaluation associated with the Amazon warrants (see Note 28 for details).
|
e)
|
For the year ended June 30, 2019, the amount includes the cancellation of the 2017 IBEX Stock Plan and the Phantom stock plans ($3.3 million) partially offset by the elimination of the liability associated with the Phantom plans ($1.0 million). For the fiscal year ended June 30, 2018, share-based payments was primarily related to share-based payments expense of $8.4 million pertaining to options to purchase an aggregate of 1,633,170 common shares awarded from December 22, 2017 through and including June 30, 2018, net of forfeitures of 145,399 options.
|
25.3
|
Revenue from contracts with customers
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Revenue from continuing operations:
|
| |
|
| |
|
|
|
United States of America
|
| |
367,541
|
| |
339,054
|
|
|
Others
|
| |
7,302
|
| |
7,849
|
|
|
Total1
|
| |
374,843
|
| |
346,903
|
|
|
Inter-segment revenue
|
| |
(6,463)
|
| |
(4,703)
|
|
|
Revenue from external customers
|
| |
368,380
|
| |
342,200
|
|
|
|
| |
|
| |
|
|
|
Revenue from discontinued operations:
|
| |
|
| |
|
|
|
United States of America
|
| |
64,740
|
| |
34,871
|
|
1
|
Includes impact of adoption of IFRS 15 for the year ended June 30, 2019. See Note 3.9.1 for details.
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Pattern of Revenue recognition
|
| |
|
| |
|
|
|
− Services transferred at a point in time
|
| |
52,897
|
| |
57,080
|
|
|
− Services transferred over time
|
| |
315,483
|
| |
285,120
|
|
|
|
| |
368,380
|
| |
342,200
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
6,365
|
| |
6,496
|
|
|
Revenue recognized during the year
|
| |
(3,763)
|
| |
(4,036)
|
|
|
Revenue deferred during the year
|
| |
2,539
|
| |
3,905
|
|
|
Closing balance
|
| |
5,141
|
| |
6,365
|
|
|
|
| |
FY2020
|
| |
FY2021
|
| |
FY2022
|
| |
Total
|
|
|
|
| |
(US$’000)
|
| |||||||||
|
Deferred Revenue expected to be recognized
|
| |
4,131
|
| |
931
|
| |
79
|
| |
5,141
|
|
|
|
| |
June 26,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Opening balance
|
| |
35,900
|
| |
18,141
|
|
|
Revenue recognized during the year
|
| |
45,916
|
| |
22,391
|
|
|
Cash receipts during the year
|
| |
(9,633)
|
| |
(4,632)
|
|
|
Closing balance
|
| |
72,183
|
| |
35,900
|
|
25.4
|
Income/(loss) by operating segment
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Customer management
|
| |
(5,228)
|
| |
(18,993)
|
|
|
Customer acquisition
|
| |
709
|
| |
(1,769)
|
|
|
Total1
|
| |
(4,519)
|
| |
(20,762)
|
|
|
Income from discontinued operation
|
| |
15,484
|
| |
4,881
|
|
1
|
Includes impact of adoption of IFRS 15 for the year ended June 30, 2019. See Note 3.9.1 for details.
|
25.5
|
Non-current assets by location
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
United States of America
|
| |
38,830
|
| |
52,530
|
|
|
Others
|
| |
65,180
|
| |
17,333
|
|
|
Total1
|
| |
104,010
|
| |
69,863
|
|
1
|
Excludes deferred tax asset.
|
25.6
|
Total assets by segment
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Customer management
|
| |
171,674
|
| |
99,432
|
|
|
Customer acquisition
|
| |
16,628
|
| |
57,649
|
|
|
Total
|
| |
188,302
|
| |
157,081
|
|
25.7
|
Total liabilities by segment
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Customer management
|
| |
165,588
|
| |
89,294
|
|
|
Customer acquisition
|
| |
14,086
|
| |
39,834
|
|
|
Total
|
| |
179,674
|
| |
129,128
|
|
25.8
|
Impact for changes in accounting policy
|
|
|
| | | |
Interest
|
| |
Depreciation
|
| |
Assets
|
| |
Liabilities
|
| |
|
|
| |
(US$’000)
|
| ||||||||||||
|
Customer management
|
| |
11,194
|
| |
3,690
|
| |
9,842
|
| |
60,290
|
| |
62,476
|
|
|
Customer acquisition
|
| |
526
|
| |
331
|
| |
444
|
| |
4,209
|
| |
4,437
|
|
|
Total
|
| |
11,720
|
| |
4,021
|
| |
10,286
|
| |
64,499
|
| |
66,913
|
|
25.9
|
Subsequent Events
|
26.
|
Payroll and related costs
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Salaries and other employee costs
|
| |
216,617
|
| |
213,252
|
|
|
Social security and other taxes
|
| |
37,333
|
| |
38,457
|
|
|
Retirement - contribution plan
|
| |
513
|
| |
906
|
|
|
Pensions - defined benefit scheme
|
| |
129
|
| |
310
|
|
|
Total payroll and related costs
|
| |
254,592
|
| |
252,925
|
|
|
|
| |
|
| |
|
|
|
Payroll and related costs from discontinued operations
|
| |
22,182
|
| |
14,380
|
|
26.1
|
Remuneration of Key Management Personnel
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Salaries and other employee costs
|
| |
566
|
| |
1,684
|
|
|
Share - based payments
|
| |
760
|
| |
3,099
|
|
|
Total remuneration of key management personnel
|
| |
1,326
|
| |
4,783
|
|
27.
|
OTHER OPERATING COSTS
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Rent and utilities
|
| |
|
| |
6,272
|
| |
16,868
|
|
|
Communication
|
| |
|
| |
7,546
|
| |
8,175
|
|
|
Maintenance, repairs and improvements
|
| |
|
| |
11,956
|
| |
9,534
|
|
|
Traveling and entertainment
|
| |
|
| |
10,378
|
| |
9,690
|
|
|
Insurance
|
| |
|
| |
1,731
|
| |
1,556
|
|
|
Legal and professional expenses
|
| |
27.1
|
| |
9,241
|
| |
7,274
|
|
|
Allowance for trade receivables
|
| |
|
| |
237
|
| |
575
|
|
|
Others
|
| |
|
| |
6,763
|
| |
4,753
|
|
|
Other Operating Costs
|
| |
|
| |
54,124
|
| |
58,425
|
|
|
|
| |
|
| |
|
| |
|
|
|
Other Operating costs from discontinued operations
|
| |
|
| |
3,241
|
| |
3,581
|
|
27.1
|
This includes non-recurring legal expenses (including settlements) of $4.2 million for the year ended June 30, 2019 and $1.6 million and listing costs of $1.4 million for the year ended June 30, 2018.
|
28.
|
WARRANT
|
•
|
If, prior to June 30, 2018, no qualified IPO or qualified valuation event (each as defined in the warrant) occurs, the price will be $15.00,
|
•
|
If a neither a qualified IPO not a qualified valuation event has occurred on or prior to June 30, 2018, but a qualified IPO or an M&A event occurs after June 30, 2018 but on or prior to December 31, 2019, the exercise price would be the lower of (i) $15.00 and (ii) as applicable: (x) the price established in respect of such IPO; or (y) 85% of the price per warrant share implied by the M&A event.
|
•
|
Level 1 – Instruments valued using quoted prices in active markets are instruments where the fair value can be determined directly from prices which are quoted in active, liquid markets and where the instrument observed in the market is representative.
|
•
|
Level 2 – Instruments valued with valuation techniques using observable market data are instruments where the fair value can be determined by reference to similar instruments trading in active markets, or where a technique is used to derive the valuation but where all inputs to that technique are observable.
|
•
|
Level 3 – Instruments valued using valuation techniques using market data which is not directly observable are instruments where the fair value cannot be determined directly by reference to market – observable information, and some other pricing technique must be employed. Instruments classified in this category have an element which is unobservable and which has a significant impact on the fair value.
|
29.
|
RECONCILIATION OF PROFIT / LOSS BEFORE TAX
|
|
|
| |
Note
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
|
| |
(US$’000)
|
| |||
|
Net profit / (loss) after tax
|
| |
|
| |
10,965
|
| |
(15,881)
|
|
|
Income tax expense / (benefit) from continued operations
|
| |
18
|
| |
3,615
|
| |
(108)
|
|
|
Income tax expense from discontinued operations
|
| |
30.3
|
| |
4,830
|
| |
54
|
|
|
Total income / (loss) before taxation
|
| |
|
| |
19,410
|
| |
(15,935)
|
|
30.
|
HOLDING COMPANY INDIRECT SUBSIDIARIES
|
|
|
| |
|
| |
|
| |
Ownership %
|
| |||
|
Description
|
| |
Location
|
| |
Nature of Business
|
| |
2019
|
| |
2018
|
|
|
IBEX Global Solutions Limited
|
| |
England
|
| |
Holding company
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Bermuda Limited
|
| |
Bermuda
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
Lovercius Consultants Limited
|
| |
Cyprus
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Europe S.a.r.l.
|
| |
Luxembourg
|
| |
Tech support services
|
| |
100%
|
| |
100%
|
|
|
IBEX Global ROHQ
|
| |
Philippines
|
| |
Regional HQ
|
| |
100%
|
| |
100%
|
|
|
TRG Customer Solutions Inc. (TRG CS) (dba as IBEX Global Solutions)
|
| |
USA
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
TRG Customer Solutions (Canada), Inc.
|
| |
Canada
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
TRG Marketing Solutions Limited
|
| |
England
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
Virtual World (Private) Limited
|
| |
Pakistan
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Philippines, Inc.
|
| |
Philippines
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Solutions (Philippines) Inc.
|
| |
Philippines
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
TRG Customer Solutions (Philippines) Inc.
|
| |
Philippines
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Customer Solutions Senegal S.A. (formerly TRG Senegal SA.)
|
| |
Senegal
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Solutions (Private) Limited
|
| |
Pakistan
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global MENA FZE
|
| |
Dubai
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX I.P. Holdings Ireland Limited
|
| |
Ireland
|
| |
Holding company
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Bermuda Limited
|
| |
Bermuda
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Solutions Nicaragua SA
|
| |
Nicaragua
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global St. Lucia Limited
|
| |
St. Lucia
|
| |
Holding company
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Jamaica Limited
|
| |
Jamaica
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
IBEX Global Solutions France SARL
|
| |
France
|
| |
Call center
|
| |
100%
|
| |
100%
|
|
|
|
| |
|
| |
|
| |
Ownership %
|
| |||
|
Description
|
| |
Nature of Business
|
| |
Location
|
| |
2019
|
| |
2018
|
|
|
Digital Globe Services, Inc.
|
| |
USA
|
| |
Internet marketing for residential cable services
|
| |
100%
|
| |
100%
|
|
|
Telsat Online, Inc.
|
| |
USA
|
| |
Internet marketing for non - cable telco services
|
| |
100%
|
| |
100%
|
|
|
DGS Worldwide Marketing Limited
|
| |
Cyprus
|
| |
Holding company and global marketing
|
| |
100%
|
| |
100%
|
|
|
DGS (Pvt.) Limited
|
| |
Pakistan
|
| |
Call center and support services
|
| |
100%
|
| |
100%
|
|
|
DGS EDU LLC
|
| |
USA
|
| |
Internet marketing for the education industry
|
| |
100%
|
| |
100%
|
|
|
DGS Auto LLC
|
| |
USA
|
| |
Motor vehicle licensing
|
| |
100%
|
| |
100%
|
|
|
7 Degrees LLC
|
| |
USA
|
| |
Digital marketing agency
|
| |
100%
|
| |
100%
|
|
|
|
| |
|
| |
|
| |
Ownership %
|
| |||
|
Description
|
| |
Location
|
| |
Nature of Business
|
| |
2019
|
| |
2018
|
|
|
Lakeball LLC (Note 7)
|
| |
USA
|
| |
Internet Marketing for commercial cable services
|
| |
47.5%
|
| |
47.5%
|
|
30.1
|
TRGI delisted IBEX and DGS from the Alternative Investment Market (“AIM”) London Stock Exchange by making a tender offer and acquiring 9,823,288 shares in Digital Globe Services Limited in November 2016 and 11,439,642 shares in IBEX Global Solutions Limited in December 2016.
|
30.2
|
On February 1, 2019, a subsidiary, Digital Globe Services, Inc.(“DGS Inc.”), agreed with a third party purchaser to sell the assets of DGS EDU, LLC for $0.4 million of which 50% of the proceeds, or $0.2 million, was paid in cash and the remainder was established as a promissory note between the purchaser and DGS Inc.
|
•
|
Maturity Date: February 2020
|
•
|
Interest Rate: 8% compounded monthly
|
•
|
Payment: No less than the greater of:
|
○
|
the accrued but unpaid interest as of the monthly payment date; or
|
○
|
75% of the total receivables actually collected by the purchaser on all accounts arising from DGS Edu, LLC in the month prior to the due date of the monthly payment.
|
30.3
|
On June 26, 2019, the Group transferred 7,813,493 ordinary shares par value $0.0001 per share of Etelequote Limited to its majority shareholder, The Resource Group International Limited. In consideration of the share transfer, TRGI has agreed to waive $47.9 million of the $86.2 million in aggregate preference amount to which the Series C Preference Shares held by it are entitled upon a voluntary or involuntary liquidation, dissolution or winding up, being an amount equal to the purchase price for the share transfer. Such Series C Preference Shares are therefore entitled to receive in preference $38.3 million of any proceeds from a voluntary or involuntary liquidation, dissolution or winding up after Series A holders and Series B holders receive their respective entitlements.
|
|
|
| |
As of
June 26, 2019 |
|
|
|
| |
(US$’000)
|
|
|
Assets
|
| |
|
|
|
Property and equipment and Intangibles
|
| |
9,463
|
|
|
Renewal receivables
|
| |
72,183
|
|
|
Trade and other receivables
|
| |
1,129
|
|
|
Cash and cash equivalents
|
| |
3,554
|
|
|
Total assets
|
| |
86,329
|
|
|
|
| |
|
|
|
Liabilities
|
| |
|
|
|
Borrowings & Financing
|
| |
43,431
|
|
|
Trade and other payables
|
| |
9,977
|
|
|
Related party loans
|
| |
—
|
|
|
Other Liabilities
|
| |
5,327
|
|
|
Total liabilities
|
| |
58,735
|
|
|
|
| |
|
|
|
Net Assets
|
| |
27,594
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Revenue
|
| |
64,740
|
| |
34,871
|
|
|
Other operating income
|
| |
2,923
|
| |
1,487
|
|
|
|
| |
|
| |
|
|
|
Payroll and related costs
|
| |
22,182
|
| |
14,380
|
|
|
Share-based payments
|
| |
875
|
| |
1,299
|
|
|
Reseller commission and lead expenses
|
| |
14,467
|
| |
9,683
|
|
|
Depreciation and amortization
|
| |
910
|
| |
237
|
|
|
Other operating costs
|
| |
3,241
|
| |
3,581
|
|
|
Income from operations
|
| |
25,988
|
| |
7,178
|
|
|
|
| |
|
| |
|
|
|
Finance expenses
|
| |
(5,674)
|
| |
(2,243)
|
|
|
Income before taxation
|
| |
20,314
|
| |
4,935
|
|
|
|
| |
|
| |
|
|
|
Income tax expense
|
| |
(4,830)
|
| |
(54)
|
|
|
Net income for the period from discontinued operations net of tax
|
| |
15,484
|
| |
4,881
|
|
|
|
| |
June 30,
2019 |
| |
June 30,
2018 |
|
|
|
| |
(US$’000)
|
| |||
|
Operating activities
|
| |
(13,396)
|
| |
(7,208)
|
|
|
Investing activities
|
| |
(867)
|
| |
(158)
|
|
|
Financing activities
|
| |
12,720
|
| |
4,709
|
|
|
Net cash flow from discontinued operations
|
| |
(1,543)
|
| |
(2,657)
|
|
30.4
|
These consolidated financial statements were authorized for issue by the CEO of IBEX Limited on behalf of the Board of Directors of IBEX Limited, on December 20, 2019.
|
Citigroup
|
| |
RBC Capital Markets
|
| |
Baird
|
|
| |
|
| |
|
SunTrust Robinson
Humphrey |
| |
|
| |
Piper Sandler
|
Item 6.
|
Indemnification of Directors and Officers.
|
Item 7.
|
Recent Sales of Unregistered Securities.
|
•
|
322,599 common shares held by Mr. Jeffrey Cox were converted into 319,373.4456 Series B shares and 3,225.9944 Series C preferred shares.
|
•
|
478,115 common shares held by Mr. Anthony Solazzo were converted into 473,333.8797 Series B shares and 4,781.1503 Series C preferred shares.
|
•
|
6,140,713 common shares and 4,254,221.39 preference shares held by TRGI were converted into 1.0000 Series A share, 10,290,984.0561 Series B shares and 103,949.3339 Series C preferred shares.
|
Item 8.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
The following exhibits are filed as part of this Registration Statement:
|
|
Exhibit
Number |
| |
Description
|
|
|
1.1***
|
| |
Form of Underwriting Agreement.
|
|
| | |
Memorandum of Association.
|
| |
| | |
Bye-laws.
|
| |
|
3.3***
|
| |
Form of Amended and Restated Bye-laws to be effective upon the closing of this offering.
|
|
| | |
Amended and Restated Certificate of Designation, Preferences and Rights of Convertible Preference Shares.
|
| |
| | |
Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares
|
| |
| | |
Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares
|
| |
| | |
Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares
|
| |
|
5.1***
|
| |
Opinion of ASW Law Limited, Bermuda counsel to the Registrant, as to the validity of the common shares being offered.
|
|
|
8.1***
|
| |
Opinion of ASW Law Limited, Bermuda counsel to the Registrant, as to certain Bermuda tax matters.
|
|
|
8.2***
|
| |
Opinion of DLA Piper LLP (US), U.S. counsel to the Registrant, as to certain U.S. tax matters.
|
|
| | |
Registration Rights Agreement, dated as of September 15, 2017, by and between IBEX Limited and The Resource Group International Limited.
|
| |
| | |
Stockholders’ Agreement, dated as of September 15, 2017, by and between IBEX Limited and The Resource Group International, Limited.
|
| |
| | |
Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
First Amendment, dated May 21, 2014, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Second Amendment, dated October 2, 2014, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Third Amendment, dated February 23, 2015, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Fourth Amendment, dated June 19, 2015, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Fifth Amendment, dated June 26, 2015, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Sixth Amendment, dated June 30, 2015, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
|
|
Exhibit
Number |
| |
Description
|
|
| | |
Seventh Amendment, dated November 7, 2016, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Eighth Amendment, dated November 18, 2016, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Ninth Amendment, dated January 22, 2018, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Tenth Amendment, dated December 1, 2018, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Eleventh Amendment, dated April 26, 2019, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Twelfth Amendment, dated May 31, 2019, to the Revolving Credit and Security Agreement, dated November 8, 2013, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, and Heritage Bank of Commerce.
|
| |
| | |
First Amendment, dated March 31, 2016, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, and Heritage Bank of Commerce
|
| |
| | |
Second Amendment, dated June 2, 2017, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, and Heritage Bank of Commerce and 7 Degrees LLC
|
| |
| | |
Third Amendment, dated November 27, 2017, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, and Heritage Bank of Commerce and 7 Degrees LLC
|
| |
| | |
Fourth Amendment, dated August 6, 2018, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, and Heritage Bank of Commerce and 7 Degrees LLC
|
| |
| | |
Fifth Amendment, dated January 31, 2019, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., DGS EDU, LLC, 7 Degrees LLC and Heritage Bank of Commerce
|
| |
| | |
Sixth Amendment, dated March 18, 2019, to Loan and Security Agreement, dated March 31, 2015, by and among Digital Globe Services, Inc., TelsatOnline Inc., 7 Degrees LLC and Heritage Bank of Commerce
|
| |
| | |
Letter Agreement (Interest Rate Swap), dated June 7, 2019, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Letter Agreement (Interest Rate Swap), dated June 7, 2019, by and between TRG Customer Solutions, Inc. and PNC Bank, N.A.
|
| |
| | |
Supplemental Debenture, dated November 11, 2018, issued to First Global Bank Limited
|
| |
| | |
Second Supplemental Debenture, dated January 24, 2019, issued to First Global Bank Limited
|
| |
| | |
Third Supplemental Debenture, dated March 27, 2020, issued to First Global Bank Limited
|
| |
| | |
Share Transfer and Exchange Agreement, dated June 28, 2017, by and among The Resource Group International Limited, Etelequote Plc., Anthony Solazzo and Forward March Limited.
|
| |
| | |
Share Transfer and Exchange, dated June 28, 2017, by and among Forward March Limited, DGS Limited and Jeffrey Cox.
|
| |
| | |
Profit Share Agreement, dated June 30, 2016, by and between Jeffrey Cox and DGS Ltd.
|
| |
| | |
First Amendment, dated November 1, 2017, to the Profit Share Agreement, dated June 30, 2016, by and between Jeffrey Cox and DGS Ltd.
|
| |
| | |
Profit Share Agreement, dated June 30, 2019, by and between Jeffrey Cox and DGS Ltd.
|
| |
| | |
Share Sale and Purchase Agreement, dated June 26, 2019, by and between IBEX Holdings Limited and The Resource Group International Limited
|
| |
| | |
IBEX Holdings Limited Amended 2017 Stock Plan
|
|
|
Exhibit
Number |
| |
Description
|
|
| | |
IBEX Holdings Limited 2018 Restricted Share Plan
|
| |
| | |
Form of Restricted Share Agreement (A)
|
| |
| | |
Form of Restricted Share Agreement (B)
|
| |
| | |
IBEX Holdings Limited UK Sub-Plan of the 2018 Restricted Share Plan
|
| |
| | |
2020 Long Term Incentive Plan, dated as of May 20, 2020
|
| |
| | |
Second Amended and Restated Warrant, dated November 13, 2017, issued to Amazon.com NV Investment Holdings LLC (amended December 28, 2018)
|
| |
| | |
First Amendment to Second Amended and Restated Warrant, dated November 13, 2017, issued to Amazon.com NV Investment Holdings LLC (amended December 17, 2019)
|
| |
| | |
Form of director agreement.
|
| |
| | |
Form of executive employment agreement.
|
| |
| | |
Form of director indemnification agreement.
|
| |
|
21.1***
|
| |
Subsidiaries of IBEX Limited.
|
|
| | |
Consent of BDO LLP, independent registered public accounting firm.
|
| |
|
23.2***
|
| |
Consent of ASW Law Limited (included in Exhibit 5.1).
|
|
|
23.3***
|
| |
Consent of ASW Law Limited (included in Exhibit 8.1).
|
|
|
23.4***
|
| |
Consent of DLA Piper LLP (US) (included in Exhibit 8.2).
|
|
| | |
Powers of Attorney (included in the signature pages hereto).
|
|
*
|
Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.
|
**
|
Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Registration S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request.
|
***
|
To be filed by amendment.
|
Item 9.
|
Undertakings.
|
(a)
|
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
|
(b)
|
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
|
(c)
|
The undersigned registrant hereby undertakes that:
|
(1)
|
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
(2)
|
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
| |
By:
|
| |
/s/ Robert Dechant
|
|
| |
Name:
|
| |
Robert Dechant
|
|
| |
Title:
|
| |
Chief Executive Officer
(Principal Executive Officer) |
Name
|
| |
Position
|
| |
Date
|
|
| |
|
| |
|
/s/ Robert Dechant
|
| |
Chief Executive Officer
(Principal Executive Officer) |
| |
July 10, 2020
|
Robert Dechant
|
| |
|
|||
|
| |
|
| |
|
/s/ Karl Gabel
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| |
July 10, 2020
|
Karl Gabel
|
| |
|
|||
|
| |
|
| |
|
/s/ Mohammed Khaishgi
|
| |
Chairman
|
| |
July 10, 2020
|
Mohammed Khaishgi
|
| |
|
| |
|
|
| |
|
| |
|
/s/ Daniella Ballou-Aares
|
| |
Director
|
| |
July 10, 2020
|
Daniella Ballou-Aares
|
| |
|
| |
|
|
| |
|
| |
|
/s/ John Jones
|
| |
Director
|
| |
July 10, 2020
|
John Jones
|
| |
|
| |
|
|
| |
|
| |
|
/s/ Shuja Keen
|
| |
Director
|
| |
July 10, 2020
|
Shuja Keen
|
| |
|
| |
|
|
| |
|
| |
|
/s/ John Leone
|
| |
Director
|
| |
July 10, 2020
|
John Leone
|
| |
|
| |
|
|
| |
|
| |
|
/s/ Rebecca Vernon
|
| |
Director
|
| |
July 10, 2020
|
Rebecca Vernon
|
| |
|
| |
|
By:
|
| |
/s/ Robert Dechant
|
| |
|
Name:
|
| |
Robert Dechant
|
| |
|
Title:
|
| |
Chief Executive Officer
|
| |
|
1. |
The liability of the members of the Company is limited to the amount (if any) of the time being unpaid on the shares respectively held by them.
|
2. |
The undersigned, namely,
|
Name and Address
|
Bermudian Status
(Yes or No)
|
Nationality
|
Number of Shares
Subscribed
|
|
Compass Administration Services Ltd.
Crawford House
50 Cedar Avenue
Hamilton HM 11
|
Yes
|
Bermuda
|
1
|
3. |
The Company is to be an exempted Company as defined by the Companies Act 1981.
|
4. |
The Company, with the consent of the Minister of Finance, has power to hold land situate in Bermuda not exceeding ___ in all, including the following parcels: -N/A
|
5. |
The authorised share capital of the Company is USD$12,000.00 divided into 120,000,000 shares of par value US$0.0001 each.
|
6. |
the objects for which the Company is formed and incorporated are unrestricted.
|
7. |
The following are provision regarding the powers of a Company:
|
i) |
Has the powers of a natural person;
|
ii) |
Subject to the provisions of Section 42 of the Companies Act 1981, has the power to issue preference shares which at the option of the holders thereof are to be liable to be redeemed;
|
iii) |
Has the power to purchase its own shares in accordance with the provisions of Section 42A of the Companies Act 1981; and
|
iv) |
Has the power to acquire its own shares to be held as treasury shares in accordance with the provisions of Section 428 of the Companies Act 1981.
|
/s/ Laetitia Hupman
|
/s/ Alexandra Schweizer
|
|
Laetitia Hupman
|
(Witness)
|
|
Duly authorised, for and on behalf of
|
||
Compass Administration Services Ltd.
|
||
(Subscriber)
|
|
Duly Authorised
For and on behalf of
IBEX Holdings Limited
Secretary
|
Prepared by
ASW Law Limited
Barristers & Attorneys
Crawford House
50 Cedar Avenue
Hamilton, HM 11 Bermuda
|
|
Schedule “A”
|
(Bye-law 6)
|
Schedule “B”
|
(Bye-law 11)
|
Schedule “C”
|
(Bye-law 12.2)
|
Schedule ‘‘D”
|
(Bye-law 27.1)
|
1.
|
Definitions and Interpretation
|
1.1
|
In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following respective meanings:
|
1.2 |
In these Bye-laws, where not inconsistent with the context:
|
|
(i) |
“may” shall be construed as permissive; and
|
|
(ii) |
“shall” shall be construed as imperative; and
|
|
1.3 |
In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible
form.
|
|
1.4 |
Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.
|
2. |
Power to Issue Shares
|
|
2.1 |
Subject to these Bye-laws and to any resolution of the Members to the contrary, and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to
issue any unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting,
return of capital, or otherwise as the Company may by resolution of the Board prescribe.
|
|
2.2 |
Subject to the provisions of these provisions of these Bye-laws and any limitations prescribed by law, and without prejudice to any special rights previously conferred on the holders of any existing class or series of shares, any class
or series of shares may be issued with such preferred or other special rights as the Board may determine (including such preferred or other special rights or restrictions with respect to dividend, voting, liquidation or other rights of the
shares as may be determined by the Board). The Board may establish from time to time the number of shares to be included in each such class or series, which number may be increased (except as otherwise provided
|
|
2.3 |
Without limiting the foregoing and subject to the Companies Act, the Company may issue preference shares which (i) are liable to be redeemed on the happening of a specified event or events or on a given date or dates and/or (ii) are
liable to be redeemed at the option of the Company and/or the holder. The terms and manner of redemption of any redeemable shares shall be as the Board may by resolution determine before the allotment of such shares and the terms and
manner of redemption of any other redeemable preference shares shall be either (i) as the Company may by resolution determine or (ii) insofar as the Board is so authorised by any resolution, as the Board may by resolution determine, in
either case, before the allotment of such shares.
|
3. |
Power of the Company to Purchase to Shares
|
|
3.1 |
The Company may purchase its own shares for cancellation or to acquire them as Treasury Shares in accordance with the Companies Act on such terms as the Board shall think 1iL No such purchase shall be made if there are reasonable grounds
for believing that the Company is, or after the purchase would be, unable to pay its liabilities as they become due.
|
|
3.2 |
The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Companies Act.
|
|
3.3 |
Shares so purchased by the Company under this Bye-law shall be treated as cancelled and the amount of the Company’s issued capital shall be reduced by the nominal value of those shares accordingly but the purchase of shares under this
Bye-law shall not be taken as reducing the amount of the Company’s authorised share capital.
|
4. |
Rights Attaching to Shares
|
|
4.1 |
Subject to any resolution of the Members to the contrary (and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares),the share capital of the Company shall include:
|
(a) |
a class of shares, to be designated as “Class A Common Shares”, the holders of which shall, subject to the provisions of these Bye-laws:
|
(i) |
be entitled to one vote per share;
|
|
(ii) |
be entitled to such dividends as the Board may from time to time declare;
|
|
(iii) |
in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and
|
|
(iv) |
generally be entitled to enjoy all of the rights attaching to shares
|
|
(b) |
a class of shares, to be designated as “Class B Common Shares”, the holders of which shall, subject to the provisions of these Bye-laws:
|
|
(i) |
not be entitled to vote, except to the extent required by the Companies Act;
|
|
(ii) |
be entitled to such dividends as the Board may from time to time declare;
|
|
(iii) |
in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company;
|
|
(iv) |
in the event of a Qualified IPO (as such term is defined in the Series C Certificate of Designation) be automatically converted into Class A Common Shares immediately before such Qualified IPO on a one-to-one basis;
|
|
(v) |
not be entitled to any financial information or financial statements of the Company, nor the right to attend any general or special meeting of the Members, unless otherwise required by the Companies Act or specifically required by these
Bye- laws; and
|
|
(vi) |
generally be entitled to enjoy all of the rights attaching to shares.
|
|
4.2 |
All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Companies Act, all Treasury Shares shall be excluded from the
calculation of any percentage or fraction of the share capital, or shares, of the Company.
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4.3 |
At the discretion of the Board, whether or not in connection with the issuance and sale of any shares or other securities of the Company, the Company may issue securities, contracts, warrants or other instruments evidencing any shares,
option rights, securities having conversion or option rights, or
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5. |
Calls on Shares
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6. |
Forfeiture of Shares
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|
6.1 |
If any Member fails to pay, on the day appointed for payment thereof, any call in respect of any share allotted to or held by such Member, the Board may, at any time thereafter during such ti.me as the call remains unpaid, direct the
Secretary to forward such Member a notice in writing in the form set out at Schedule ••A”, or as near to such form as circumstances admit
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|
6.2 |
If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and
such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine. Without limiting the generality of the foregoing, the disposal may take place by sale, repurchase, redemption or any other
method of disposal permitted by and consistent with these Bye-laws and the Companies Act.
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6.3 |
A Member whose share or shares have been so forfeited shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture, together with all
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6.4 |
The Board may accept the surrender of any shares which it is in a position to forfeit on such terms and conditions as may be agreed. Subject to those terms and conditions, a surrendered share shall be treated as if it had been forfeited.
|
7. |
Share Certificates
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|
7.1 |
Every Member shall be entitled to a certificate under the common seal of the Company or bearing the signature (or a facsimile thereof) of a Director or the Secretary or a person expressly authorised to sign specifying the number and,
where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, specifying the amount paid on such shares. The Board may by resolution determine, either generally or in a particular case, that
any or all signatures on certificates may be printed thereon or affixed by mechanical means.
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|
7.2 |
The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted.
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7.3 |
If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request indemnity for the lost certificate if it sees
fit.
|
8. |
Fractional Shares
|
9. |
Register of Members
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|
9.1 |
The Board shall cause to be kept in one or more books a Register of Members and shall enter in such Register of Members the particulars required by the Companies Act.
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9.2 |
The Register of Members shall be open to inspection without charge at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of
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10. |
Registered Holder Absolute Owner
|
11. |
Transfer of Registered Shares
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|
11.1 |
An instrument of transfer shall be in writing in the form set out at Schedule “B”, or as_ near to such form as circumstances admit, or in such other form as the Board may accept.
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11.2 |
Such instrument of transfer shall be signed by or on behalf of the transferor and transferee, provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The
transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Members.
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11.3 |
The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the
transferor to make the transfer.
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11.4 |
The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the
executors or administrators of such deceased Member.
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11.5 |
The Board may in its absolute discretion and without assigning any reason therefor refuse to register the transfer of a share. The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions
of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to
the transferor and transferee notice of the refusal.
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12. |
Transmission of Registered Shares
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12.1 |
In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only
persons recognised by the Company as having any title to the deceased Member’s interest in the shares. Nothing herein contained shall
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12.2 |
Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member or otherwise by operation of law may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate
some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form set out at Schedule “C” or as near to such
form as circumstances admit.
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|
12.3 |
On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member. Notwithstanding the foregoing, the
Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case if a transferor of the share by that Member before such Member’s death or bankruptcy, as the case may be.
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|
12.4 |
Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and
the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.
|
13. |
Power to Alter Capital
|
13.l
|
The Company may if authorised by resolution of the Members increase, divide, consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any
manner permitted by the Companies Act.
|
13.2
|
Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.
|
14. |
Variation of Rights Attaching to Shares
|
15. |
Annual General Meetings
|
16. |
Special General Meetings
|
17. |
Requisitioned General Meetings
|
18. |
Notice
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|
18.1 |
At least five days’ notice of an annual general meeting shall be given to each Member entitled to attend and vote at such meeting, stating the date, place and time at which the meeting is to be held, that the election of Directors will
take
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18.2 |
At least five days’ notice of a special general meeting shall be given to each Member entitled to attend and vote at such meeting, stating the date, time, place and the general nature of the business to be considered at the meeting.
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18.3 |
The Board may fix any date as the record date for determining the Members entitled to receive notice of and to vote at any general meeting.
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|
18.4 |
A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and vote thereat in
the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to
attend and vote at such meeting in the case of a special general meeting.
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|
18.5 |
The accidental omission to give notice of a general meeting to, or the non- receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
|
19. |
Giving Notice and Access
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|
19.1 |
A notice may be given by the Company to a Member:
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19.2 |
Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient
notice to all the holders of such shares.
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|
19.3 |
Any notice (save for one delivered in accordance with Bye-law 19.4) shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission and, in providing such service, it shall be
sufficient to prove that the notice was properly addressed and prepaid, if
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|
19.4 |
Where a Member indicates his consent (in a form and manner satisfactory to the Board) to receive information or documents by accessing them on a website rather than by other means, the Board may deliver such information or documents by
notifying the Member of their availability and including therein the address of the website, the place on the website where the information or document may be found, and instructions as to how the information or document may be accessed on
the website.
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|
19.5 |
In the case of information or documents delivered in accordance with Bye-law 19.4, service shall be deemed to have occured when (i) the Member is notified in accordance with that Bye-law; and (ii) the information or document is published
on the website.
|
20. |
Postponement of General Meeting
|
21. |
Telephonic or Electronic Participation in Meetings
|
22. |
Quorum at General Meetings
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|
22.1 |
At any general meeting one or more Members present in person or by proxy and representing in excess of a majority of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of
business.
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|
22.2 |
If within thirty minutes from the time appointed for the meeting a quorum is not present, then, in the case of a meeting convened on a requisition, the meeting shall be deemed cancelled and, in any other case, the meeting shall stand
adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Secretary may determine. Unless the meeting is adjourned to a specific date, time and place announced at the meeting being
adjourned, fresh notice of the resumption of the meeting shall be given to each Member entitled to attend and vote at such meeting in accordance with these Bye-laws.
|
23. |
Chairman to Preside at General Meetings
|
24. |
Voting on Resolutions
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|
24.1 |
Subject to the Companies Act and these Bye-laws, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with these
Bye-laws and in the case of an equality of votes the chairman of such meeting shall be entitled to a casting vote.
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24.2 |
No member shall be entitled to vote at a general meeting unless such Member has paid all the calls on all shares held by such Member.
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|
24.3 |
At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and
subject to these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his hand.
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24.4 |
In the event that a Member participates in a general meeting by telephone or electronic means, the chairman of the meeting shall direct the manner in which such Member may cast his vote on a show of hands.
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24.5 |
At any general meeting if an amendment is proposed to any resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall
not be invalidated by any error in such ruling.
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|
24.6 |
At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that
effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact.
|
25. |
Power to Demand a Vote on a Poll
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|
25.1 |
Notwithstanding the foregoing, a poll may be demanded by any of the following persons:
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|
25.2 |
Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or
for which such person holds a proxy and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Members are present by telephone or electronic means, in such manner as the chairman
of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of
hands. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.
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|
25.3 |
A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time and in such manner during such meeting as
the chairman (or acting chairman) of the meeting may direct. Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll.
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|
25.4 |
Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to
the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone or
electronic means shall cast his vote in such manner as the chairman shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less
than two Members or proxy holders appointed by the chairman for the purpose and the result of the poll shall be declared by the chairman.
|
26. |
Voting by Joint Holders of Shares
|
27. |
Instrument of Proxy
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|
27.1 |
An instrument appointing a proxy shall be in writing in substantially the form set out at Schedule “D” or such other form as the chairman of the meeting shall accept. The instrument of proxy shall be deemed to confer authority to demand
or join in demanding a poll, be heard at the meeting and to vote on any amendment of a written resolution or amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall, unless
it otherwise provides, be valid as well for any adjournment of the meeting to which it relates.
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|
27.2 |
The instrument appointing a proxy must be received by the Company at the Registered Office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company
in relation to the meeting at which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid.
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27.3 |
A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf in respect of different shares.
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|
27.4 |
The decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final.
|
28. |
Representation of Corporate Member
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|
28.1 |
A corporation which is a Member may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on
behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative
or representatives.
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|
28.2 |
Notwithstanding Bye-law 28.1, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.
|
29. |
Adjournment of General Meeting
|
30. |
Written Resolutions
|
|
30.1 |
Subject to these Bye-laws, anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members may, without a meeting may be done by written resolution in accordance with
this Bye-law.
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|
30.2 |
Notice of a written resolution shall be given, and a copy of the resolution shall be circulated to all Members who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of
a notice by, any Member does not invalidate the passing of a resolution.
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|
30.3 |
A written resolution is passed when it is signed by, or in the case of a Member that is a corporation, on behalf of, the Members who at the date that the notice is given represent such majority of votes as would be required if the
resolution was voted on at a meeting of Members at which all Members entitled to attend and vote thereat were present and voting.
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|
30.4 |
A resolution in writing may be signed in any number of counterparts.
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|
30.5 |
A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye- law
to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.
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|
30.6 |
A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Companies Act.
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|
30.7 |
This Bye-law shall not apply to:
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|
30.8 |
For the purposes of this Bye-law, the effective date of the resolution is the date when the resolution is signed by, or in the case of a Member that is a corporation whether or not a company within the meaning of the Companies Act, on
behalf of, the last Member whose signature results in the necessary voting majority being achieved and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law,
a reference to such date.
|
31. |
Directors Attendance at General Meetings
|
32. |
Dividends
|
|
32.1 |
The Board may, subject to these Bye-laws and in accordance with the Companies Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or
partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company.
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|
32.2 |
The Board may fix any date as the record date for determining the Members entitled to receive any dividend.
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|
32.3 |
The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
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|
32.4 |
The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of assets of the Company. No unpaid distribution shall bear interest as against the Company.
|
33. |
Power to Set Aside Profits
|
34. |
Method of Payment
|
|
34.1 |
Any dividend, interest, or other moneys payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Member at such Member’s address in the Register of Members, or to such person and to
such address as the holder may in writing direct.
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|
34.2 |
In the case of joint holders, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members,
or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.
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|
34.3 |
The Board may deduct from the dividends or distributions payable to any Member all moneys due from such Member to the Company on account of calls or otherwise.
|
35. |
Capitalisation
|
|
35.1 |
The Board may capitalise any amount for the time being standing to the credit of any of the Company’s share premium or reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying
such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.
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|
35.2 |
Toe Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend distribution by applying such amounts in paying up in full, partly or nil paid shares of those
Members who would have been entitled to such amounts if they were distributed by way of dividend or distribution.
|
36. |
Election of Directors
|
|
36.1 |
Toe Board shall be elected or appointed in the first place at the statutory meeting of the Company and thereafter, except in the case of a casual vacancy, at the annual general meeting or at any special general meeting called for that
purpose. The Company may in general meeting set a shareholding requirement for Directors but unless so set there shall be no such requirement.
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|
36.2 |
At any general meeting the Members may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.
|
37. |
Number of Directors
|
38. |
Term of Office of Directors
|
39. |
Alternate Directors
|
|
39.1 |
At any general meeting, the Members may elect a person or persons to act as a Director in the alternative to any one or more Directors or may authorise the Board to appoint such Alternate Directors.
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|
39.2 |
Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself by notice deposited with the Secretary. Any person so elected or appointed
shall have all the rights and powers of the Director or Directors for whom such person is appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present.
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|
39.3 |
An Alternate Director shall be entitled to receive notice of all meetings of the Board and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally
present and generally to perform at such meeting all the functions of such Director for whom such Alternate Director was appointed.
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|
39.4 |
An Alternate Director shall cease to be such of the Director for whom he was appointed to act as a Director in the alternative ceases for arty reason to be a Director, but he may be re-appointed by the Board as an alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
|
40. |
Removal of Directors
|
|
40.1 |
Subject to any provision to the contrary in these Bye-laws, the Members entitled to vote for the election of Directors may, at any special general meeting convened and held in accordance with these Bye-laws, remove a Director provided
that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the Intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director
shall be entitled to be heard on the motion for such Director’s removal.
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|
40.2 |
If a Director is removed from the Board under this Bye-law, the Members may fill the vacancy at the meeting at which such Director is removed, in the absence of such election or appointment, the Board may fill the vacancy.
|
41. |
Vacancy in the Office of Director
|
|
41.1 |
The office of Director shall be vacated if the Director:
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|
41.2 |
The Board shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Director and to appoint an Alternate Director to any
Director so appointed.
|
42. |
Remuneration of Directors
|
43. |
Defect in Appointment
|
44. |
Directors to Manage Business
|
45. |
Powers of the Board of Directors
|
46. |
Register of Directors and Officers
|
47. |
Appointment of Officers
|
48. |
Appointment of Secretary
|
49. |
Duties of Offers
|
50. |
Remuneration of Officers
|
51. |
Conflicts of Interest
|
|
51.1 |
Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or
company shall be entitled to remuneration as if such Director were not a Director. Nothing contained in this Bye-law shall authorise a Director or Director’s firm, partner or company to act as Auditor to the Company.
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|
51.2 |
A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest as required by the Companies Act.
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|
51.3 |
Following a declaration being made pursuant to this Bye-law, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such director
is interested and may be counted in the quorum for such meeting.
|
52. |
Indemnification and Exculpation of Directors and Officers
|
|
52.1 |
The Directors, Secretary and other Officers (the term Officer for this Bye-law to include any person appointed to any committee by the Board) for the time being acting in relation to any of the affairs of the Company, any subsidiary
thereof, and the liquidation or trustees (if any) for the time being acting in relation to any of the affairs of the Company or any subsidiary thereof and every one of them, and their heirs, executors and administrators, shall be
indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain
by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and none of them shall be answerable for the acts, receipts, neglects or defaults
of the others of them or for joining in any receipts for the sake of
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|
52.2 |
Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or
the failure of such Director or Officer to take any action in the performance of his duties with or for the Company or any subsidiary thereof, PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud or dishonesty
which may attach to such Director or Officer.
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|
52.3 |
The Company may purchase and maintain insurance for the benefit of any Director or Officer against any liability incurred by him under the Companies Act in his capacity as a Director or Officer or indemnifying such Director or Officer in
respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any
subsidiary thereof.
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|
52.4 |
The Company may advance moneys to a Director or Officer for the costs, charges and expenses incurred by the Director or Officer in defending any civil or criminal proceedings against him, on condition that the Director or Officer shall
repay the advance if any allegation of fraud or dishonesty is proved against him.
|
53. |
Board Meetings
|
54. |
Notice of Board Meetings
|
55. |
Telephonic or electronic Participation in Meetings
|
56. |
Quorum at Board Meetings
|
57. |
Board to Continue in the Event of Vacancy
|
58. |
Chairman to Preside
|
59. |
Written Resolutions
|
60. |
Validity of Prior Acts of the Board
|
61. |
Books of Account
|
|
61.1 |
The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:
|
|
61.2 |
Such records of account shall be kept at the Registered Office, or subject to the Companies Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.
|
62. |
Financial Year End
|
63. |
Annual Audit
|
64. |
Appointment of Auditor
|
|
64.1 |
Subject to the Companies Act and provided that the Members have not waived the requirement to hold an annual general meeting or appoint an Auditor, at the annual general meeting or at a subsequent special general meeting in each year, an
independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company.
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|
64.2 |
The Auditor may be a Member but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.
|
65. |
Remuneration of Auditor
|
66. |
Duties of Auditor
|
|
66.1 |
The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report on such financial statements in accordance with
generally accepted auditing standards.
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|
66.2 |
The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Companies Act. If so,
the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used,
|
67. |
Access to Records
|
68. |
Financial Statements
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69. |
Distribution of Auditor’s Report
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70. |
Vacancy in the Office of Auditor
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71. |
Minutes
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72. |
Place Where Corporate Records Kept
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73. |
Form and Use of Seal
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73.1 |
The Company may adopt a seal in such form as the Board may determine. The Board may adopt one or more duplicate seals for use in or outside Bermuda.
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73.2 |
A seal may, but need not be affixed to any deed, instrument, share certificate or document, and if the seal is to be affixed to such deed, instrument, share certificate or document, it shall be attested by the signature of (i) any
Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose.
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73.3 |
A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents.
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Alteration or amendment of Bye-laws
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Alteration or amendment of Memorandum
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76. |
Discontinuance
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77. |
Registered Office
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78. |
Amalgamation and Merger
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79. |
Conversion
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80. |
Winding-Up
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[Signature of Secretary]
By Order of Board
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Transferor |
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Witness |
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Transferee
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Signed by: |
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In the presence of: |
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Transferor |
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Capitalized terms used but not otherwise defined herein shall have the meanings set forth in Section 9.
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SIGNED
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for and on behalf of
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FORWARD MARCH LIMITED
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Director
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Exhibit 3.5
IBEX HOLDINGS LIMITED
(REGISTRATION #52447)
(THE “COMPANY”)
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A CONVERTIBLE PREFERENCE SHARES
(THIS “CERTIFICATE OF DESIGNATION”)1
The Company HEREBY CERTIFIES that, pursuant to resolutions of the Board of Directors passed on December 21, 2018, the Company created its Series A Convertible Preference Shares, of par value US$0.0001 each, and that the designation, powers, preferences and rights and the qualifications, limitations and restrictions thereof are set forth in this Certificate of Designation, adopted on December 21, 2018:
Section 1. Designation and Number of Series A Convertible Preference Shares. The designation of the preference shares authorized hereby shall be “Series A Convertible Preference Shares” (the “Series A Convertible Preference Shares”). The maximum number of Series A Convertible Preference Shares shall be one (1).
Section 2. Dividends.
2A. General Obligation. When, as and if declared by the Board of Directors, to the extent permitted under the Act, the Company shall pay dividends to the holders of the Series A Convertible Preference Shares, as provided in this Section 2.
2B. Dividend Preference. The Company shall not declare nor pay any dividends or make any distribution upon other class of shares of the Company until and unless the Company has declared and paid aggregate dividends of at least US$9,499,720.06 with respect to each Series A Convertible Preference Share.
2C. Participating Dividends. In the event that the Company declares or pays any dividends (whether payable in cash, securities or other property) upon any other class of shares of the Company, the Company shall also declare and pay to the holders of Series A Convertible Preference Shares, at the same time that it declares and pays such dividends to the holders of any other class of shares of the Company, the dividends which would have been declared and paid with respect to such other class, on the basis (but not requiring) that all Series A Convertible Preference Shares had been converted to Series C Convertible Preference Shares pursuant to Section 5A (and such Series C Convertible Preference Shares had simultaneously been converted to Class A Common Shares pursuant to Section 5A of Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares) immediately prior to the record date for such dividend, or if no record date is fixed, the date as of which the record holders of such other class(es) entitled to such dividends are to be determined.
1 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in Section 9.
Section 3. Liquidation; Change of Control.
3A. Liquidation. On any voluntary or involuntary liquidation, dissolution or winding-up of the Company (a “Liquidation Event”), if, following the completion of the distributions in respect of such Liquidation Event required by Section 3A of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares and Section 3A of the Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares, any assets remain in the Company, such remaining assets shall be distributed pro rata among the holders of Participating Shares in accordance with their respective number of Participating Shares held.
3B. Change of Control. Without limiting Section 3A, upon the occurrence of a transaction that constitutes a Change of Control, if, following the payments in respect of such Change of Control required by Section 3B of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares and Section 3B of the Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares, any transaction proceeds remain available for payment, such remaining transaction proceeds shall be paid shall pro rata among the holders of Participating Shares in accordance with their respective number of Participating Shares held. The Company shall not approve, adopt or enter into any agreement or arrangement relating to a Change of Control (or amend or modify any such agreement or arrangement) if such agreement or arrangement (or the effect of any such amendment or modification thereto) does not allocate the consideration to be paid in connection with such transaction in accordance with the preceding provisions of this Section 3B. In the event the consideration received in a Change of Control transaction is other than cash, its value will be deemed its fair market value, with any securities having a value equal to their Fair Market Value.
3C. Notice of Liquidation Event or Change of Control. Not less than ten (10) days prior to the payment date stated therein, the Company shall mail and send by reputable overnight courier written notice of any Liquidation Event or Change of Control transaction to each record holder of Series A Convertible Preference Shares, setting forth in reasonable detail an estimate of the amount of proceeds to be paid with respect to each Series A Convertible Preference Share, each Series B Convertible Preference Share, each Series C Convertible Preference Share, each Class A Common Share, each Class B Common Share and each other class of shares of the Company (if any) in connection with such Liquidation Event or Change of Control transaction (and the basis and methodology for determining such amounts). Notwithstanding the other provisions of this Certificate of Designation, the notice requirement in the preceding sentence may be shortened or waived, either before or after the action for which notice is required, upon the written consent of the holders of a majority of the voting power of the outstanding Series A Convertible Preference Shares that are entitled to such notice rights.
Section 4. Voting Rights. The holders of Series A Convertible Preference Shares shall be entitled to notice of all meetings of members as and when such notice is provided to the holders of Class A Common Shares using the methods provided in accordance with the Bye-Laws or as otherwise required by applicable law. The holders of Series A Convertible Preference Shares shall be entitled to vote (on an as-converted basis), together with the holders of the Series B Convertible Preference Shares, the holders of Series C Convertible Preference Shares and the holders of Class A Common Shares voting together as a single class, on all matters (including the election of directors) submitted to the shareholders for a vote. The holders of Series A Convertible Preference Shares shall be entitled to the number of votes equal to the number of Series C Convertible Preference Shares into which the Series A Convertible Preference Shares held could be converted pursuant to the terms hereof as of the record date for such vote or, if no record date is specified, as of the date of such vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis shall be rounded to the nearest whole number (with one-half being rounded upward).
Section 5. Conversion.
5A. Voluntary Conversion. Subject to the provisions of this Section 5, at any time and from time to time following the date of issuance of the Series A Convertible Preference Shares, any holder of Series A Convertible Preference Shares may convert all or any portion of such holder’s Series A Convertible Preference Shares (including any fraction of a Series A Convertible Preference Share) held by such holder into a number of Series C Convertible Preference Shares as described in Section 5C(i) below.
5B. Mandatory Conversion. All of the then issued Series A Convertible Preference Shares shall automatically convert into Series C Convertible Preference Shares, in accordance with the provisions of this Section upon (i) the consummation of a Qualified IPO, with such conversion only being effected at the time of and subject to the closing of the sale of securities by the Company pursuant to such Qualified IPO (in which case the Series C Convertible Preference Shares into which such Series A Convertible Preference Shares convert shall simultaneously convert into Class A Common Shares in accordance with the Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares) or (ii) the date specific by the written consent or agreement of the holders of a majority of the then outstanding Series A Convertible Preference Shares.
5C. Conversion Procedure.
(i) Conversion pursuant to Section 5A above shall be effected by notice in writing from the holder of Series A Convertible Preference Shares to the Company (“Conversion Notice”) delivered to the Company in accordance with Section 13 below, accompanied by the certificate or certificates representing the Series A Convertible Preference Shares to be converted (if a certificate has been issued, or a lost certificate affidavit and indemnity in lieu thereof). Each conversion of Series A Convertible Preference Shares pursuant to this Section shall automatically be effected as of the close of business on the date on which the Conversion Notice and any certificate or certificates (or lost certificate affidavit or indemnity) representing the Convertible Preference Shares to be converted have been delivered to the Company.
(ii) Conversion pursuant to Section 5B above shall be automatic, without the need for any further action on behalf of the holders of Series A Convertible Preference Shares, and regardless of whether the certificates representing such shares (if any) are surrendered to the Company or its transfer agent.
(iii) Each Series A Convertible Preference Share converted pursuant to this Section 5 shall be convertible into one Series C Convertible Preference Share If the Series A Convertible Preference Shares or the Series C Convertible Preference Shares undergo any share split, share consolidation or other similar recapitalization, then the provisions of this Section 5C(iii) shall be appropriately adjusted such that a holder of Series A Convertible Preference Shares shall receive upon conversion the same number of Series C Convertible Preference Shares such holder would have received if it had converted its Series A Convertible Preference Shares immediately prior to the such event.
(iv) At the time any such conversion has been effected, the rights of the holder of the Series A Convertible Preference Shares converted (as a holder of such converted Series A Convertible Preference Shares) shall cease and such converted Series A Convertible Preference Shares shall cease to have the rights and restrictions of Series A Convertible Preference Shares provided hereby and shall convert to and become Series C Convertible Preference Shares, and the Person or Persons in whose name or names Series C Convertible Preference Shares are to be registered upon such conversion shall thereby become the holder or holders of record of such Series C Convertible Preference Shares.
(v) As soon as possible after a conversion has been effected (but in any event within five (5) Business Days following such conversion) the Company shall amend its register of members to effect the conversion and shall thereafter deliver to the converting holder:
(a) a notice stating that the Series A Convertible Preference Shares have been converted and that any certificates evidencing Series A Convertible Preference Shares must be surrendered at the office of the Company;
(b) a certificate or certificates representing the number of Series C Convertible Preference Shares issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; and
(c) payment in cash of the amount payable under Section 5C(ix) below with respect to such conversion.
(vi) The issuance of certificates for Series C Convertible Preference Shares upon conversion of Series A Convertible Preference Shares shall be made without charge to the holders of such Series A Convertible Preference Shares for any issuance or stamp tax in respect thereof or other cost incurred by the Company in connection with such conversion into Series C Convertible Preference Shares. Upon conversion of each Series A Convertible Preference Share, the Company shall take all such actions as are necessary in order to ensure that the Series C Convertible Preference Shares resulting from such conversion shall be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof.
(vii) The Company shall not close its books against the transfer of Series A Convertible Preference Shares or Series C Convertible Preference Shares resulting from conversion of Series A Convertible Preference Shares in any manner that interferes with the timely conversion of Series A Convertible Preference Shares. The Company shall assist and cooperate with any holder of Series A Convertible Preference Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Series A Convertible Preference Shares hereunder (including, without limitation, making any filings required to be made by the Company).
(viii) The Company shall at all times reserve and keep available out of its authorized but unissued Series C Convertible Preference Shares, solely for the purpose of issuance upon the conversion of Series A Convertible Preference Shares, such number of Series C Convertible Preference Shares issuable upon the conversion of all outstanding Series C Convertible Preference Shares. All Series C Convertible Preference Shares which are so issuable shall, when issued, be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof. The Company shall take all such actions as may be necessary to ensure that all Series C Convertible Preference Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which the Series C Convertible Preference Shares may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company shall not take any action that would cause the number of authorized but unissued Series C Convertible Preference Shares to be less than the number of such shares required to be reserved hereunder for issuance upon conversion of Series A Convertible Preference Shares.
(ix) No fractional shares shall result from the conversion of any Series A Convertible Preference Shares, and the number of Series C Convertible Preference Shares resulting from such conversion shall be rounded down to the nearest whole share. The number of shares resulting from such conversion shall be determined on the basis of the total number of Series A Convertible Preference Shares the holder is at the time converting into Series C Convertible Preference Shares and the number of Series C Convertible Preference Shares which will result from such aggregate conversion. If the conversion would result in any fractional share, the Company shall, in lieu of such fractional share, pay the holder thereof an amount in cash equal to the fair market value of such fractional share on the date of conversion, as determined in good faith by the Board of Directors.
(x) If there occurs a change in the capitalization of the Company as permitted herein and if the Series C Convertible Preference Shares resulting from conversion of Series A Convertible Preference Shares are convertible into or exchangeable for any other shares or securities of the Company, the Company shall, at the converting holder’s option, upon surrender of the Series A Convertible Preference Shares to be converted by such holder as provided herein together with any notice, statement or payment required to effect such conversion or exchange of Series C Convertible Preference Shares, deliver to such holder or as otherwise specified by such holder a certificate or certificates representing the shares or securities into which the Series C Convertible Preference Shares resulting from conversion are so convertible or exchangeable, registered in such name or names and in such denomination or denominations as such holder has specified.
5D. Notices.
(i) The Company shall give written notice to all holders of Series A Convertible Preference Shares at least ten (10) days prior to the date on which the Company closes its books or takes a record (a) with respect to any dividend or distribution upon any other class of shares of the Company, (b) with respect to any pro rata subscription offer to holders of Series C Convertible Preference Shares or (c) for determining rights to vote with respect to any dissolution or liquidation.
(ii) The Company shall also give written notice to the holders of Series A Convertible Preference Shares at least ten (10) days prior to the date on which any Qualified IPO shall take place.
Section 6. Registration of Transfer. The Company shall keep at its principal office a register of members for the registration of holders of Series A Convertible Preference Shares. Upon the surrender of any certificate representing Series A Convertible Preference Shares at such place, the Company shall, at the request of the record holder of such certificate, execute and deliver (at the Company’s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Series A Convertible Preference Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Series A Convertible Preference Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Series A Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such Series A Convertible Preference Shares represented by the surrendered certificate.
Section 7. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Series A Convertible Preference Shares, and in the case of any such loss, theft or destruction, upon receipt of an indemnity from such holder reasonably satisfactory to the Company, or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Series A Convertible Preference Shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Series A Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate.
Section 8. Representation on the Board of Directors. The holders of the Series A Convertible Preference Shares shall together be entitled by notice in writing to the Company to appoint (and remove) seven (7) Persons to the Board of Directors.
Section 9. Definitions.
“Acceptable Exchange” means (i) any of the New York Stock Exchange, the NASDAQ National Market, the London Stock Exchange, the “AIM” market operated by the London Stock Exchange plc (“AIM”) or the Hong Kong Stock Exchange or (ii) any other recognized stock exchange approved the Board of Directors, acting in good faith, including but not limited to the Stock Exchange of Singapore or the Dubai International Financial Exchange.
“Act” means the Companies Act 1981 (as amended).
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.
“Bye-laws” means the bye-laws of the Company in force from time to time.
“Change of Control” means “ (i) the acquisition by any Person or Group of Persons, other than The Resource Group International Limited or an affiliate thereof, of beneficial ownership (as such term is used in the Securities Exchange Act of 1934) of more than 50% of (x) the then issued Common Shares determined assuming that all shares convertible into Common Shares have been so converted into Common Shares entitling such Person or Group of Persons to elect a majority of the members of the Board of Directors, except through the issuance of equity securities by the Company, or (y) (i) any sale or transfer of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis in any transaction or series of related transactions to any Person or Group of Persons other than The Resource Group International Limited or an affiliate thereof, and (iii) any amalgamation, merger or consolidation to which the Company or a subsidiary of the Company is a party, except for an amalgamation, merger or consolidation in which the holders of the issued capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the members of the Board of Directors immediately prior to such transaction shall, by themselves or by their respective affiliates, continue to own a sufficient quantity of the surviving entity’s issued capital stock or share capital to elect a majority of the members of the surviving entity’s board of directors immediately after such transaction.
“Class A Common Share” means any voting class A common share of the Company.
“Class B Common Share” means any non-voting class B common share of the Company.
“Common Share” means any common share of the Company, including any Class A Common Share and/or Class B Common Share.
“Conversion Notice” has the meaning given in Section 5(C)(i).
“Convertible Preference Shares” means Series A Convertible Preference Shares, Series B Convertible Preference Shares and the Series C Convertible Preference Shares.
“Fair Market Value” of any security means the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed (including any Acceptable Exchange), or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the Nasdaq Stock Market System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the Nasdaq Stock Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of twenty-one (21) days consisting of the day as of which “Fair Market Value” is being determined and the twenty (20) consecutive Business Days prior to such day. If at any time such security is not listed on any securities exchange or quoted in the Nasdaq Stock Market System or the over-the-counter market, the “Fair Market Value” shall be the fair value thereof determined jointly by the Company and the holders of a majority of the Common Shares then issued and outstanding, assuming that all Convertible Preference Shares then issued and outstanding have converted into Common Shares in accordance with their terms. The determination of the appraiser selected pursuant to the preceding sentence shall be final and binding upon the parties, and the Company shall pay the fees and expenses of such appraiser.
“Qualified IPO” shall mean a firm commitment underwritten initial public offering of the Company’s Class A Common Shares resulting in net proceeds to the Company of at least US$20,000,000.
“Participating Shares” means Series A Convertible Preference Shares, Series C Convertible Preference Shares and Common Shares.
“Person” means an individual, a partnership, a company, a limited liability company, a limited liability partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
Section 10. Governing Law. This Certificate of Designations shall be governed and construed in accordance with the Act.
Section 11. Amendment and Waiver. No amendment, modification, waiver or change in the terms hereof through merger, amalgamation, or consolidation of the Company with another company or entity shall be binding or effective with respect to any provision of this Certificate of Designation without the prior written consent of the holders of at least a majority of the Series A Convertible Preference Shares outstanding at the time such action is taken.
Section 12. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be (i) delivered in person, (ii) transmitted by email, (iii) sent by registered or certified mail, postage prepaid with return receipt requested, or (iv) sent by reputable overnight courier service, fees prepaid, to (x) the Company, at its principal executive offices and (y) to any shareholder, at such shareholder’s address or email address as it appears in the records of the Company (unless otherwise indicated in writing by any such shareholder). Notices shall be deemed given upon personal delivery, upon receipt of return receipt in the case of delivery by mail, upon transmission in the case of delivery by email (unless a rejection message from the recipients email is received confirming non-delivery) or one day following deposit with an overnight courier service.
Section 13. The Bye-laws. If there shall be any conflict between the provisions of this Certificate of Designations and the Bye-laws then, for so long as any Convertible Preference Shares are issued and outstanding, the provisions of this Certificate of Designations shall prevail.
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by a director.
SIGNED
for and on behalf of |
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IBEX HOLDINGS LIMITED
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Director
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Exhibit 3.6
IBEX HOLDINGS LIMITED
(REGISTRATION #52447)
(THE “COMPANY”)
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE PREFERENCE SHARES
(THIS “CERTIFICATE OF DESIGNATION” )1
The Company HEREBY CERTIFIES that, pursuant to resolutions of the Board of Directors passed on December 21, 2018, the Company created its Series B Convertible Preference Shares, of par value US$0.0001 each, and that the designation, powers, preferences and rights and the qualifications, limitations and restrictions thereof are set forth in this Certificate of Designation, adopted on December 21, 2018:
Section 1. Designation and Number of Series B Convertible Preference Shares. The designation of the preference shares authorized hereby shall be “Series B Convertible Preference Shares” (the “Series B Convertible Preference Shares”). The maximum number of Series B Convertible Preference Shares shall be 12,512,991.4665.
Section 2. Dividends.
2A. General Obligation. When, as and if declared by the Board of Directors, to the extent permitted under the Act, the Company shall pay dividends to the holders of the Series B Convertible Preference Shares, as provided in this Section 2.
2B. Dividend Preference. The Company shall not declare nor pay any dividends or make any distribution upon any other class of shares of the Company, other than dividends pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares of the Company, until and unless the Aggregate Remaining Series B Preference Amount is $0.
2C. Participating Dividends. The holders of Series B Convertible Preference Shares shall not be entitled to any dividends in excess of the dividends payable pursuant to Section 2B.
Section 3. Liquidation; Change of Control.
3A. Liquidation. On any voluntary or involuntary liquidation, dissolution or winding-up of the Company (a “Liquidation Event”), holders of Series B Convertible Preference Shares shall be entitled to receive in respect of their Series B Convertible Preference Shares prior and in preference to any distribution or payment made in respect of any other class of shares of the Company, proportionately according to the number of Series B Convertible Preference Shares held, an amount equal to the Aggregate Remaining Series B Preference Amount; provided that such payment is to be made initially from any cash proceeds received from or with respect to any Liquidation Event and from all other available cash, and then, to the extent such cash sums are insufficient to satisfy such payment, from any other available assets. If upon any such Liquidation Event, the Company’s assets to be distributed are insufficient to permit payment to the holders of Series B Convertible Preference Shares of the Aggregate Remaining Series B Preference Amount, then the entire assets available to be distributed shall be distributed to the holders of Series B Convertible Preference Shares proportionately according to the number of Series B Convertible Preference Shares held.
1 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in Section 8.
3B. Change of Control. Without limiting Section 3A, upon the occurrence of a transaction that constitutes a Change of Control,_holders of Series B Convertible Preference Shares shall be entitled to receive in respect of their Series B Convertible Preference Shares prior and in preference to any distribution or payment made in respect of any other class of shares of the Company, proportionately according to the number of Series B Convertible Preference Shares held, an amount equal to the Aggregate Remaining Series B Preference Amount. If the transaction proceeds available for payment to the Company’s shareholders in connection with any Change of Control transaction (whether by the Company or the buyer) is insufficient to permit payment to holders of Series B Convertible Preference Shares of the Aggregate Remaining Series B Preference Amount, then the entire transaction proceeds so available for payment shall be paid to the holders of Series B Convertible Preference Shares proportionately according to the number of Series B Convertible Preference Shares held. The Company shall not approve, adopt or enter into any agreement or arrangement relating to a Change of Control (or amend or modify any such agreement or arrangement) if such agreement or arrangement (or the effect of any such amendment or modification thereto) does not allocate the consideration to be paid in connection with such transaction in accordance with the preceding provisions of this Section 3B. In the event the consideration received in a Change of Control transaction is other than cash, its value will be deemed its fair market value, with any securities having a value equal to their Fair Market Value.
3C. Remaining Assets. If, following the completion of the distribution required by Section 3A or the payment of consideration required by Section 3B, as applicable, any assets remain in the Company or any transaction proceeds remain available for payment, the holders of Participating Shares shall receive all of the remaining assets of the Company or the remaining transaction proceeds, as applicable, and the holders of Series B Convertible Preference Shares shall not be entitled to any portion of such remaining assets or remaining transaction proceeds in respect of such Series B Convertible Preference Shares.
3D. Notice of Liquidation Event or Change of Control. Not less than ten (10) days prior to the payment date stated therein, the Company shall mail and send by reputable overnight courier written notice of any Liquidation Event or Change of Control transaction to each record holder of Series B Convertible Preference Shares, setting forth in reasonable detail an estimate of the amount of proceeds to be paid with respect to each Series A Convertible Preference Share, each Series B Convertible Preference Share, each Series C Convertible Preference Share, each Class A Common Share, each Class B Common Share and each other class of shares of the Company (if any) in connection with such Liquidation Event or Change of Control transaction (and the basis and methodology for determining such amounts). Notwithstanding the other provisions of this Certificate of Designation, the notice requirement in the preceding sentence may be shortened or waived, either before or after the action for which notice is required, upon the written consent of the holders of a majority of the voting power of the outstanding Series B Convertible Preference Shares that are entitled to such notice rights.
3E. Deemed Conversion Upon A Liquidation Event or Change of Control. Notwithstanding the above, for purposes of determining the amount each holder of Series B Convertible Preference Shares is entitled to receive in respect of such shares with respect to a Liquidation Event or a Change of Control, each such holder shall be deemed to have converted (regardless of whether such holder actually converted) such holder’s Series B Convertible Preference Shares into Series C Convertible Preference Shares immediately prior to such Liquidation Event or Change of Control if, as a result of an actual such conversion, such holder would receive, in the aggregate, in respect of such holder’s Series B Convertible Preference Shares an amount greater than the amount such holder would receive, in the aggregate, in respect of such holder’s Series B Convertible Preference Shares if such holder did not convert such shares into Series C Convertible Preference Shares.
Section 4. Voting Rights. The holders of Series B Convertible Preference Shares shall be entitled to notice of all meetings of members as and when such notice is provided to the holders of Class A Common Shares using the methods provided in accordance with the Bye-Laws or as otherwise required by applicable law. The holders of Series B Convertible Preference Shares shall be entitled to vote (on an as-converted basis), together with the holders of the Series A Convertible Preference Shares, the holders of Series C Convertible Preference Shares and the holders of Class A Common Shares voting together as a single class, on all matters (including the election of directors) submitted to the shareholders for a vote. The holders of Series B Convertible Preference Shares shall be entitled to the number of votes equal to the number of Series C Convertible Preference Shares into which the Series B Convertible Preference Shares held could be converted pursuant to the terms hereof as of the record date for such vote or, if no record date is specified, as of the date of such vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis shall be rounded to the nearest whole number (with one-half being rounded upward).
Section 5. Conversion.
5A. Mandatory Conversion. All of the then issued Series B Convertible Preference Shares shall automatically convert into Series C Convertible Preference Shares, in accordance with the provisions of this Section upon (i) the consummation of a Qualified IPO, with such conversion only being effected at the time of and subject to the closing of the sale of securities by the Company pursuant to such Qualified IPO (in which case the Series C Convertible Preference Shares into which such Series B Convertible Preference Shares convert shall simultaneously convert into Class A Common Shares in accordance with the Certificate of Designation, Preferences and Rights of Series C Convertible Preference Shares) or (ii) the date specific by the written consent or agreement of the holders of a majority of the then outstanding Series B Convertible Preference Shares.
5B. Conversion Procedure.
(i) Conversion pursuant to Section 5A above shall be automatic, without the need for any further action on behalf of the holders of Series B Convertible Preference Shares, and regardless of whether the certificates representing such shares (if any) are surrendered to the Company or its transfer agent.
(ii) Each Series B Convertible Preference Share converted pursuant to this Section 5 shall be convertible into one Series C Convertible Preference Share. If the Series B Convertible Preference Shares or Series C Convertible Preference Shares undergo any share split, share consolidation or other similar recapitalization, then the provisions of this Section 5B(ii) shall be appropriately adjusted such that a holder of Series B Convertible Preference Shares shall receive upon conversion the same number of Series C Convertible Preference Shares such holder would have received if it had converted its Series B Convertible Preference Shares immediately prior to the such event.
(iii) At the time any such conversion has been effected, the rights of the holder of the Series B Convertible Preference Shares converted (as a holder of such converted Series B Convertible Preference Shares) shall cease and such converted Series B Convertible Preference Shares shall cease to have the rights and restrictions of Series B Convertible Preference Shares provided hereby and shall convert to and become Series C Convertible Preference Shares, and the Person or Persons in whose name or names Series C Convertible Preference Shares are to be registered upon such conversion shall thereby become the holder or holders of record of such Series C Convertible Preference Shares.
(iv) As soon as possible after a conversion has been effected (but in any event within five (5) Business Days following such conversion) the Company shall amend its register of members to effect the conversion and shall thereafter deliver to the converting holder:
(a) a notice stating that the Series B Convertible Preference Shares have been converted and that any certificates evidencing Series B Convertible Preference Shares must be surrendered at the office of the Company;
(b) a certificate or certificates representing the number of Series C Convertible Preference Shares issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; and
(c) payment in cash of the amount payable under Section 5B(viii) below with respect to such conversion.
(v) The issuance of certificates for Series C Convertible Preference Shares upon conversion of Series B Convertible Preference Shares shall be made without charge to the holders of such Series B Convertible Preference Shares for any issuance or stamp tax in respect thereof or other cost incurred by the Company in connection with such conversion into Series C Convertible Preference Shares. Upon conversion of each Series B Convertible Preference Share, the Company shall take all such actions as are necessary in order to ensure that the Series C Convertible Preference Shares resulting from such conversion shall be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof.
(vi) The Company shall not close its books against the transfer of Series B Convertible Preference Shares or Series C Convertible Preference Shares resulting from conversion of Series B Convertible Preference Shares in any manner that interferes with the timely conversion of Series B Convertible Preference Shares. The Company shall assist and cooperate with any holder of Series B Convertible Preference Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Series B Convertible Preference Shares hereunder (including, without limitation, making any filings required to be made by the Company).
(vii) The Company shall at all times reserve and keep available out of its authorized but unissued Series C Convertible Preference Shares, solely for the purpose of issuance upon the conversion of Series B Convertible Preference Shares, such number of Series C Convertible Preference Shares issuable upon the conversion of all outstanding Series B Convertible Preference Shares. All Series C Convertible Preference Shares which are so issuable shall, when issued, be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof. The Company shall take all such actions as may be necessary to ensure that all Series C Convertible Preference Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which the Series C Convertible Preference Shares may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company shall not take any action that would cause the number of authorized but unissued Series C Convertible Preference Shares to be less than the number of such shares required to be reserved hereunder for issuance upon conversion of Series B Convertible Preference Shares.
(viii) No fractional shares shall result from the conversion of any Series B Convertible Preference Shares, and the number of Series C Convertible Preference Shares resulting from such conversion shall be rounded down to the nearest whole share. The number of shares resulting from such conversion shall be determined on the basis of the total number of Series B Convertible Preference Shares the holder is at the time converting into Series C Convertible Preference Shares and the number of Series C Convertible Preference Shares which will result from such aggregate conversion. If the conversion would result in any fractional share, the Company shall, in lieu of such fractional share, pay the holder thereof an amount in cash equal to the fair market value of such fractional share on the date of conversion, as determined in good faith by the Board of Directors.
(ix) If there occurs a change in the capitalization of the Company as permitted herein and if the Series C Convertible Preference Shares resulting from conversion of Series B Convertible Preference Shares are convertible into or exchangeable for any other shares or securities of the Company, the Company shall, at the converting holder’s option, upon surrender of the Series B Convertible Preference Shares to be converted by such holder as provided herein together with any notice, statement or payment required to effect such conversion or exchange of Series C Convertible Preference Shares, deliver to such holder or as otherwise specified by such holder a certificate or certificates representing the shares or securities into which the Series C Convertible Preference Shares resulting from conversion are so convertible or exchangeable, registered in such name or names and in such denomination or denominations as such holder has specified.
5C. Notices.
(i) The Company shall give written notice to all holders of Series B Convertible Preference Shares at least ten (10) days prior to the date on which the Company closes its books or takes a record (a) with respect to any dividend or distribution upon any other class of shares of the Company, other than dividends pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares, (b) with respect to any pro rata subscription offer to holders of Series C Convertible Preference Shares or (c) for determining rights to vote with respect to any dissolution or liquidation.
(ii) The Company shall also give written notice to the holders of Series B Convertible Preference Shares at least ten (10) days prior to the date on which any Qualified IPO shall take place.
Section 6. Registration of Transfer. The Company shall keep at its principal office a register of members for the registration of holders of Series B Convertible Preference Shares. Upon the surrender of any certificate representing Series B Convertible Preference Shares at such place, the Company shall, at the request of the record holder of such certificate, execute and deliver (at the Company’s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Series B Convertible Preference Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Series B Convertible Preference Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Series B Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such Series B Convertible Preference Shares represented by the surrendered certificate.
Section 7. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Series B Convertible Preference Shares, and in the case of any such loss, theft or destruction, upon receipt of an indemnity from such holder reasonably satisfactory to the Company, or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Series B Convertible Preference Shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Series B Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate.
Section 8. Definitions.
“Acceptable Exchange” means (i) any of the New York Stock Exchange, the NASDAQ National Market, the London Stock Exchange, the “AIM” market operated by the London Stock Exchange plc (“AIM”) or the Hong Kong Stock Exchange or (ii) any other recognized stock exchange approved by the Board of Directors, acting in good faith, including but not limited to the Stock Exchange of Singapore or the Dubai International Financial Exchange.
“Act” means the Companies Act 1981 (as amended).
“Aggregate Remaining Series B Preference Amount” means, from time to time, the excess, if any, of (a) $53,500,000 over (b) the sum of (i) aggregate amount of all declared but unpaid dividends on Series B Convertible Preference Shares, plus (ii) the aggregate amount of all dividends previously paid on Series B Convertible Preference Shares, plus (iii) the aggregate amount previously paid pursuant to Section 3A above on Series B Convertible Preference Shares, plus (iv) the aggregate amount previously paid pursuant to Section 3B above on Series B Convertible Preference Shares.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.
“Bye-laws” means the bye-laws of the Company in force from time to time.
“Change of Control” means “ (i) the acquisition by any Person or Group of Persons, other than The Resource Group International Limited or an affiliate thereof, of beneficial ownership (as such term is used in the Securities Exchange Act of 1934) of more than 50% of (x) the then issued Common Shares determined assuming that all shares convertible into Common Shares have been so converted into Common Shares entitling such Person or Group of Persons to elect a majority of the members of the Board of Directors, except through the issuance of equity securities by the Company, or (y) (i) any sale or transfer of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis in any transaction or series of related transactions to any Person or Group of Persons other than The Resource Group International Limited or an affiliate thereof, and (iii) any amalgamation, merger or consolidation to which the Company or a subsidiary of the Company is a party, except for an amalgamation, merger or consolidation in which the holders of the issued capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the members of the Board of Directors immediately prior to such transaction shall, by themselves or by their respective affiliates, continue to own a sufficient quantity of the surviving entity’s issued capital stock or share capital to elect a majority of the members of the surviving entity’s board of directors immediately after such transaction.
“Class A Common Share” means any voting class A common share of the Company.
“Class B Common Share” means any non-voting class B common share of the Company.
“Common Share” means any common share of the Company, including any Class A Common Share and/or Class B Common Share.
“Convertible Preference Shares” means Series A Convertible Preference Shares, Series B Convertible Preference Shares and the Series C Convertible Preference Shares.
“Fair Market Value” of any security means the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed (including any Acceptable Exchange), or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the Nasdaq Stock Market System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the Nasdaq Stock Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of twenty-one (21) days consisting of the day as of which “Fair Market Value” is being determined and the twenty (20) consecutive Business Days prior to such day. If at any time such security is not listed on any securities exchange or quoted in the Nasdaq Stock Market System or the over-the-counter market, the “Fair Market Value” shall be the fair value thereof determined jointly by the Company and the holders of a majority of the Common Shares then issued and outstanding, assuming that all Convertible Preference Shares then issued and outstanding have converted into Common Shares in accordance with their terms. The determination of the appraiser selected pursuant to the preceding sentence shall be final and binding upon the parties, and the Company shall pay the fees and expenses of such appraiser.
“Qualified IPO” shall mean a firm commitment underwritten initial public offering of the Company’s Class A Common Shares resulting in net proceeds to the Company of at least US$20,000,000.
“Participating Shares” means Series A Convertible Preference Shares, Series C Convertible Preference Shares and Common Shares.
“Person” means an individual, a partnership, a company, a limited liability company, a limited liability partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
Section 9. Governing Law. This Certificate of Designations shall be governed and construed in accordance with the Act.
Section 10. Amendment and Waiver. No amendment, modification, waiver or change in the terms hereof through merger, amalgamation, or consolidation of the Company with another company or entity shall be binding or effective with respect to any provision of this Certificate of Designation without the prior written consent of the holders of at least a majority of the Series B Convertible Preference Shares outstanding at the time such action is taken.
Section 11. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be (i) delivered in person, (ii) transmitted by email, (iii) sent by registered or certified mail, postage prepaid with return receipt requested, or (iv) sent by reputable overnight courier service, fees prepaid, to (x) the Company, at its principal executive offices and (y) to any shareholder, at such shareholder’s address or email address as it appears in the records of the Company (unless otherwise indicated in writing by any such shareholder). Notices shall be deemed given upon personal delivery, upon receipt of return receipt in the case of delivery by mail, upon transmission in the case of delivery by email (unless a rejection message from the recipients email is received confirming non-delivery) or one day following deposit with an overnight courier service.
Section 12. The Bye-laws. If there shall be any conflict between the provisions of this Certificate of Designations and the Bye-laws then, for so long as any Convertible Preference Shares are issued and outstanding, the provisions of this Certificate of Designations shall prevail.
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by a director.
SIGNED
for and on behalf of |
|
IBEX HOLDINGS LIMITED | Director |
Exhibit 3.7
IBEX HOLDINGS LIMITED
(REGISTRATION #52447)
(THE “COMPANY”)
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES C CONVERTIBLE PREFERENCE SHARES
(THIS “CERTIFICATE OF DESIGNATION”)1
The Company HEREBY CERTIFIES that, pursuant to resolutions of the Board of Directors passed on December 21, 2018, the Company created its Series C Convertible Preference Shares, of par value US$0.0001 each, and that the designation, powers, preferences and rights and the qualifications, limitations and restrictions thereof are set forth in this Certificate of Designation, adopted on December 21, 2018:
Section 1. Designation and Number of Series C Convertible Preference Shares. The designation of the preference shares authorized hereby shall be “Series C Convertible Preference Shares” (the “Series C Convertible Preference Shares”). The maximum number of Series C Convertible Preference Shares shall be 12,639,389.35.
Section 2. Dividends.
2A. General Obligation. When, as and if declared by the Board of Directors, to the extent permitted under the Act, the Company shall pay dividends to the holders of the Series C Convertible Preference Shares, as provided in this Section 2.
2B. Dividend Preference. The Company shall not declare nor pay any dividends or make any distribution upon any other class of shares of the Company, other than dividends pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares of the Company and pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company (the “Series B Preference Certificate”), until and unless the Aggregate Remaining Series C Preference Amount is $0.
2C. Participating Dividends. In the event that the Company declares or pays any dividends (whether payable in cash, securities or other property) upon any other class of shares of the Company, other than dividends pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares of the Company and pursuant to Section 2B of the Series B Preference Certificate, the Company shall also declare and pay to the holders of Series C Convertible Preference Shares, at the same time that it declares and pays such dividends to the holders of any other class of shares of the Company, the dividends which would have been declared and paid with respect to such other class, on the basis (but not requiring) that all Series C Convertible Preference Shares had been converted to Class A Common Shares pursuant to Section 5A immediately prior to the record date for such dividend, or if no record date is fixed, the date as of which the record holders of such other class(es) entitled to such dividends are to be determined.
1 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in Section 8.
2D. Adjustment for Conversion of Series B Convertible Preference Shares. Notwithstanding Sections 2A, 2B and 2C above, if at the time of dividends are being declared or paid pursuant to Sections 2A, 2B and 2C above, Series B Convertible Preference Shares have converted into Series C Convertible Preference Shares or are deemed converted into Series B Convertible Preference Shares pursuant to the terms of the Series B Convertible Preference Certificate, and prior to such conversion or deemed conversion dividends were paid to holders of Series B Convertible Preference Shares pursuant to Sections 2 or 3 of the Series B Preference Certificate (“Series B Distributions”), the amount of any dividend payable to such holder with respect to such Series C Convertible Preference Shares shall be adjusted such that the amount payable with respect to such shares shall be no greater than such shares would have received had they converted (or been deemed converted) prior to the payment of the Series B Distributions.
Section 3. Liquidation; Change of Control.
3A. Liquidation. On any voluntary or involuntary liquidation, dissolution or winding-up of the Company (a “Liquidation Event”), holders of Series C Convertible Preference Shares shall be entitled to receive in respect of their Series C Convertible Preference Shares, after completion of the distribution required by Section 3A of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company, but prior and in preference to any distribution or payment made in respect of any other class of shares of the Company, proportionately according to the number of Series C Convertible Preference Shares held, the Aggregate Remaining Series C Preference Amount; provided that such payment is to be made initially from any cash proceeds received from or with respect to any Liquidation Event and from all other available cash, and then, to the extent such cash sums are insufficient to satisfy such payment, from any other available assets. If upon any such Liquidation Event, the Company’s assets to be distributed are insufficient to permit payment to the holders of Series C Convertible Preference Shares of the Aggregate Remaining Series C Preference Amount, then the entire assets available to be distributed (after giving effect to the distribution required by Section 3A of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company) shall be distributed to the holders of Series C Convertible Preference Shares proportionately according to the number of Series C Convertible Preference Shares held.
3B. Change of Control. Without limiting Section 3 A, upon the occurrence of a transaction that constitutes a Change of Control, holders of Series C Convertible Preference Shares shall be entitled to receive in respect of their Series C Convertible Preference Shares, after completion of the payment required by Section 3B of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company, but prior and in preference to any distribution or payment made in respect of any other class of shares of the Company, proportionately according to the number of Series C Convertible Preference Shares held, an amount equal to the Aggregate Remaining Series C Preference Amount. If the transaction proceeds available for payment to the Company’s shareholders in connection with any Change of Control transaction (whether by the Company or the buyer) is insufficient to permit payment to holders of Series C Convertible Preference Shares of the Preferences and Rights of Series B Convertible Preference Shares of the Company, then the entire transaction proceeds (after giving effect to the payment required by Section 3 of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company) so available for payment shall be paid to the holders of Series C Convertible Preference Shares proportionately according to the number of Series C Convertible Preference Shares held. The Company shall not approve, adopt or enter into any agreement or arrangement relating to a Change of Control (or amend or modify any such agreement or arrangement) if such agreement or arrangement (or the effect of any such amendment or modification thereto) does not allocate the consideration to be paid in connection with such transaction in accordance with the preceding provisions of this Section 3B. In the event the consideration received in a Change of Control transaction is other than cash, its value will be deemed its fair market value, with any securities having a value equal to their Fair Market Value.
3C. Remaining Assets. If, following the completion of the distributions required by Section 3A of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company and Section 3A above or the payment of consideration required by Section 3B of the Certificate of Designation, Preferences and Rights of Series B Convertible Preference Shares of the Company and Section 3B above, as applicable, any assets remain in the Company or any transaction proceeds remain available for payment, such remaining assets or transaction proceeds shall be distributed or paid pro rata among the holders of Participating Shares in accordance with their respective number of Participating Shares held, determined upon an as-converted to Common Shares basis.
3D. Adjustment for Conversion of Series B Convertible Preference Shares. Notwithstanding Sections 3A, 3B and 3C above, if at the time of distributions are being made pursuant to Sections 3A, 3B and 3C above, Series B Convertible Preference Shares have converted into Series C Convertible Preference Shares or deemed converted into Series B Convertible Preference Shares pursuant to the terms of the Series B Preference Certificate, and prior to such conversion or deemed conversion Series B Distributions were paid, the amount payable to such holder with respect to such Series C Convertible Preference Shares shall be adjusted such that the amount payable with respect to such shares shall be no greater than such shares would have received had they converted (or been deemed converted) prior to the payment of the Series B Distributions.
3E. Notice of Liquidation Event or Change of Control. Not less than ten (10) days prior to the payment date stated therein, the Company shall mail and send by reputable overnight courier written notice of any Liquidation Event or Change of Control transaction to each record holder of Series C Convertible Preference Shares, setting forth in reasonable detail an estimate of the amount of proceeds to be paid with respect to each Series A Convertible Preference Share, each Series B Convertible Preference Share, each Series C Convertible Preference Share, each Class A Common Share, each Class B Common Share and each other class of shares of the Company (if any) in connection with such Liquidation Event or Change of Control transaction (and the basis and methodology for determining such amounts). Notwithstanding the other provisions of this Certificate of Designation, the notice requirement in the preceding sentence may be shortened or waived, either before or after the action for which notice is required, upon the written consent of the holders of a majority of the voting power of the outstanding Series C Convertible Preference Shares that are entitled to such notice rights.
Section 4. Voting Rights. The holders of Series C Convertible Preference Shares shall be entitled to notice of all meetings of members as and when such notice is provided to the holders of Class A Common Shares using the methods provided in accordance with the Bye-Laws or as otherwise required by applicable law. The holders of Series C Convertible Preference Shares shall be entitled to vote (on an as-converted basis), together with the holders of the Series A Convertible Preference Shares, the holders of Series B Convertible Preference Shares and the holders of Class A Common Shares voting together as a single class, on all matters (including the election of directors) submitted to the shareholders for a vote. The holders of Series C Convertible Preference Shares shall be entitled to the number of votes equal to the number of Class A Common Shares into which the Series C Convertible Preference Shares held could be converted pursuant to the terms of Section 5A hereof as of the record date for such vote or, if no record date is specified, as of the date of such vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis shall be rounded to the nearest whole number (with one-half being rounded upward).
Section 5. Conversion.
5A. Voluntary Conversion. Subject to the provisions of this Section 5, at any time and from time to time following the date of issuance of the Series C Convertible Preference Shares, any holder of Series C Convertible Preference Shares may convert all, but not less than all, of such holder’s Series C Convertible Preference Shares (including any fraction of a Series C Convertible Preference Share) held by such holder into a number of Class A Common Shares as described in Section 5C(i) below.
5B. Mandatory Conversion. All of the then issued Series C Convertible Preference Shares shall automatically convert into Series A Convertible Preference Shares, in accordance with the provisions of this Section upon (i) the consummation of a Qualified IPO with such conversion only being effected at the time of and subject to the closing of the sale of securities by the Company pursuant to such Qualified IPO or (ii) the date specific by the written consent or agreement of the holders of a majority of the then outstanding Series C Convertible Preference Shares.
5C. Conversion Procedure.
(i) Conversion pursuant to Section 5A above shall be effected by notice in writing from the holder of Series C Convertible Preference Shares to the Company (“Conversion Notice”) delivered to the Company in accordance with Section 12 below, accompanied by the certificate or certificates representing the Series C Convertible Preference Shares to be converted (if a certificate has been issued, or a lost certificate affidavit and indemnity in lieu thereof). Each conversion of Series C Convertible Preference Shares pursuant to this Section shall automatically be effected as of the close of business on the date on which the Conversion Notice and any certificate or certificates (or lost certificate affidavit or indemnity) representing the Convertible Preference Shares to be converted have been delivered to the Company.
(ii) Conversion pursuant to Section 5B above shall be automatic, without the need for any further action on behalf of the holders of Series C Convertible Preference Shares, and regardless of whether the certificates representing such shares (if any) are surrendered to the Company or its transfer agent.
(iii) Each Series C Convertible Preference Share converted pursuant to this Section 5 shall be convertible into one Class A Common Share; provided that if conversion occurs pursuant to clause (i) of Section 5(B) above, each Series C Convertible Preference Share shall convert into a number of Class A Common Shares calculated as the sum of (A) one plus (B) a fraction (I) the numerator of which is the Applicable Remaining Preference Amount Per Share and (II) the denominator of which the price at which a Class A Common Share (or any such Common Share into which the Class A Common Shares are converted prior to such Qualified IPO) are offered to the public by the underwriters in such Qualified IPO; provided if at the time of a conversion of Series C Convertible Preference Shares, Series B Convertible Preference Shares have converted into Series C Convertible Preference Shares or deemed converted into Series C Preference Shares pursuant to the terms of the Series B Preference Certificate, and prior to such conversion or deemed conversion Series B Distributions were paid, the such fraction shall be adjusted with respect to such Series C Convertible Preference Shares shall be adjusted such that the amount of Class A Common Shares received with respect to such shares shall be no greater than such shares would have received had they converted (or been deemed converted) prior to the payment of the Series B Distribution. If the Series C Convertible Preference Shares or the Class A Common Shares undergo any share split, share consolidation or other similar recapitalization, then the provisions of this Section 5C(iii) shall be appropriately adjusted such that a holder of Series C Convertible Preference Shares shall receive upon conversion the same number of Series Class A Common Shares such holder would have received if it had converted its Series C Convertible Preference Shares immediately prior to the such event.
(iv) At the time any such conversion has been effected, the rights of the holder of the Series C Convertible Preference Shares converted (as a holder of such converted Series C Convertible Preference Shares) shall cease and such converted Series C Convertible Preference Shares shall cease to have the rights and restrictions of Series C Convertible Preference Shares provided hereby and shall convert to and become Class A Common Shares, and the Person or Persons in whose name or names the Class A Common Shares are to be registered upon such conversion shall thereby become the holder or holders of record of such Class A Common Shares.
(v) As soon as possible after a conversion has been effected (but in any event within five (5) Business Days following such conversion) the Company shall amend its register of members to effect the conversion and shall thereafter deliver to the converting holder:
(a) a notice stating that the Series C Convertible Preference Shares have been converted and that any certificates evidencing Series C Convertible Preference Shares must be surrendered at the office of the Company;
(b) a certificate or certificates representing the number of Class A Common Shares issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; and
(c) payment in cash of the amount payable under Section 5C(ix) below with respect to such conversion.
(vi) The issuance of certificates for Class A Common Shares upon conversion of Series C Convertible Preference Shares shall be made without charge to the holders of such Series C Convertible Preference Shares for any issuance or stamp tax in respect thereof or other cost incurred by the Company in connection with such conversion into Class A Common Shares. Upon conversion of each Series C Convertible Preference Share, the Company shall take all such actions as are necessary in order to ensure that the Class A Common Shares resulting from such conversion shall be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof.
(vii) The Company shall not close its books against the transfer of Series C Convertible Preference Shares or Class A Common Shares resulting from conversion of Series C Convertible Preference Shares in any manner that interferes with the timely conversion of Series C Convertible Preference Shares. The Company shall assist and cooperate with any holder of Series C Convertible Preference Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Series C Convertible Preference Shares hereunder (including, without limitation, making any filings required to be made by the Company).
(viii) The Company shall at all times reserve and keep available out of its authorized but unissued Class A Common Shares, solely for the purpose of issuance upon the conversion of Series C Convertible Preference Shares, such number of Class A Common Shares issuable upon the conversion of all outstanding Series C Convertible Preference Shares. All Class A Common Shares which are so issuable shall, when issued, be duly and validly issued, fully paid, and free and clear of all taxes, liens, charges and encumbrances except those created by the holder thereof. The Company shall take all such actions as may be necessary to ensure that all Class A Common Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which the Class A Common Shares may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company shall not take any action that would cause the number of authorized but unissued Class A Common Shares to be less than the number of such shares required to be reserved hereunder for issuance upon conversion of Series C Convertible Preference Shares.
(ix) No fractional shares shall result from the conversion of any Series C Convertible Preference Shares, and the number of Class A Common Shares resulting from such conversion shall be rounded down to the nearest whole share. The number of shares resulting from such conversion shall be determined on the basis of the total number of Series C Convertible Preference Shares the holder is at the time converting into Class A Common Shares and the number of Class A Common Shares which will result from such aggregate conversion. If the conversion would result in any fractional share, the Company shall, in lieu of such fractional share, pay the holder thereof an amount in cash equal to the fair market value of such fractional share on the date of conversion, as determined in good faith by the Board of Directors.
(x) If there occurs a change in the capitalization of the Company as permitted herein and if the Class A Common Shares resulting from conversion of Series C Convertible Preference Shares are convertible into or exchangeable for any other shares or securities of the Company, the Company shall, at the converting holder’s option, upon surrender of the Series C Convertible Preference Shares to be converted by such holder as provided herein together with any notice, statement or payment required to effect such conversion or exchange of Class A Common Shares, deliver to such holder or as otherwise specified by such holder a certificate or certificates representing the shares or securities into which the Class A Common Shares resulting from conversion are so convertible or exchangeable, registered in such name or names and in such denomination or denominations as such holder has specified.
5D. Notices.
(i) The Company shall give written notice to all holders of Series C Convertible Preference Shares at least ten (10) days prior to the date on which the Company closes its books or takes a record (a) with respect to any dividend or distribution upon any other class of shares of the Company, other than dividends pursuant to Section 2B of the Certificate of Designation, Preferences and Rights of Series A Convertible Preference Shares, (b) with respect to any pro rata subscription offer to holders of Class A Common Shares or (c) for determining rights to vote with respect to any dissolution or liquidation.
(ii) The Company shall also give written notice to the holders of Series C Convertible Preference Shares at least ten (10) days prior to the date on which any Qualified IPO shall take place.
Section 6. Registration of Transfer. The Company shall keep at its principal office a register of members for the registration of holders of Series C Convertible Preference Shares. Upon the surrender of any certificate representing Series C Convertible Preference Shares at such place, the Company shall, at the request of the record holder of such certificate, execute and deliver (at the Company’s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Series C Convertible Preference Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Series C Convertible Preference Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Series C Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such Series C Convertible Preference Shares represented by the surrendered certificate.
Section 7. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Series C Convertible Preference Shares, and in the case of any such loss, theft or destruction, upon receipt of an indemnity from such holder reasonably satisfactory to the Company, or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Series C Convertible Preference Shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Series C Convertible Preference Shares represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate.
Section 8. Definitions.
“Acceptable Exchange” means (i) any of the New York Stock Exchange, the NASDAQ National Market, the London Stock Exchange, the “AIM” market operated by the London Stock Exchange plc (“AIM”) or the Hong Kong Stock Exchange or (ii) any other recognized stock exchange approved the Board of Directors, acting in good faith, including but not limited to the Stock Exchange of Singapore or the Dubai International Financial Exchange.
“Act” means the Companies Act 1981 (as amended).
“Aggregate Remaining Series C Preference Amount” means, from time to time, the excess, if any, of (a) $86,200,635.37 over (b) the sum of (i) aggregate amount of all declared but unpaid dividends on Series C Convertible Preference Shares, plus (ii) the aggregate amount of all dividends previously paid on Series C Convertible Preference Shares, plus (iii) the aggregate amount previously paid pursuant to Section 3A, 3B or 3C above on Series C Convertible Preference Shares.
“Amazon Warrant” means Second Amended and Restated Warrant for 1,443,740.48928495 Series C Convertible Preference Shares originally issued on November 13, 2017 and amended and restated on April 30, 2018 and further amended and restated on December [ ], 2018.
“Applicable Remaining Preference Amount Per Share” means with respect to share that was a Series C Convertible Preference Share immediately prior to the consummation of a Qualified IPO an amount equal to the quotient of (i) the Aggregate Remaining Series C Preference Amount divided (ii) the number of Series C Convertible Preference Shares outstanding immediately prior to the consummation of a Qualified IPO, assuming conversion of Class A Convertible Preference Shares and Class B Convertible Preference Shares into Class C Convertible Preference Shares in accordance with their terms and the exercise of the Amazon Warrant in full, assuming vesting in full of the Amazon Warrant.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.
“Bye-laws” means the bye-laws of the Company in force from time to time.
“Change of Control” means “ (i) the acquisition by any Person or Group of Persons, other than The Resource Group International Limited or an affiliate thereof, of beneficial ownership (as such term is used in the Securities Exchange Act of 1934) of more than 50% of (x) the then issued Common Shares determined assuming that all shares convertible into Common Shares have been so converted into Common Shares entitling such Person or Group of Persons to elect a majority of the members of the Board of Directors, except through the issuance of equity securities by the Company, or (y) (i) any sale or transfer of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis in any transaction or series of related transactions to any Person or Group of Persons other than The Resource Group International Limited or an affiliate thereof, and (iii) any amalgamation, merger or consolidation to which the Company or a subsidiary of the Company is a party, except for an amalgamation, merger or consolidation in which the holders of the issued capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the members of the Board of Directors immediately prior to such transaction shall, by themselves or by their respective affiliates, continue to own a sufficient quantity of the surviving entity’s issued capital stock or share capital to elect a majority of the members of the surviving entity’s board of directors immediately after such transaction.
“Class A Common Share” means any voting class A common share of the Company.
“Class B Common Share” means any non-voting class B common share of the Company.
“Common Share” means any common share of the Company, including any Class A Common Share and/or Class B Common Share.
“Conversion Notice” has the meaning given in Section 5(C)(i).
“Convertible Preference Shares” means Series A Convertible Preference Shares, Series B Convertible Preference Shares and the Series C Convertible Preference Shares.
“Fair Market Value” of any security means the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed (including any Acceptable Exchange), or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the Nasdaq Stock Market System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the Nasdaq Stock Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of twenty-one (21) days consisting of the day as of which “Fair Market Value” is being determined and the twenty (20) consecutive Business Days prior to such day. If at any time such security is not listed on any securities exchange or quoted in the Nasdaq Stock Market System or the over-the-counter market, the “Fair Market Value” shall be the fair value thereof determined jointly by the Company and the holders of a majority of the Common Shares then issued and outstanding, assuming that all Convertible Preference Shares then issued and outstanding have converted into Common Shares in accordance with their terms. The determination of the appraiser selected pursuant to the preceding sentence shall be final and binding upon the parties, and the Company shall pay the fees and expenses of such appraiser.
“Qualified IPO” shall mean a firm commitment underwritten initial public offering of the Company’s Class A Common Shares resulting in net proceeds to the Company of at least US$20,000,000.
“Participating Shares” means Series A Convertible Preference Shares, Series C Convertible
Preference Shares and Common Shares.
“Person” means an individual, a partnership, a company, a limited liability company, a limited liability partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
Section 9. Governing Law. This Certificate of Designations shall be governed and construed in accordance with the Act.
Section 10. Amendment and Waiver. No amendment, modification, waiver or change in the terms hereof through merger, amalgamation, or consolidation of the Company with another company or entity shall be binding or effective with respect to any provision of this Certificate of Designation without the prior written consent of the holders of at least a majority of the Series B Convertible Preference Shares outstanding at the time such action is taken.
Section 11. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be (i) delivered in person, (ii) transmitted by email, (iii) sent by registered or certified mail, postage prepaid with return receipt requested, or (iv) sent by reputable overnight courier service, fees prepaid, to (x) the Company, at its principal executive offices and (y) to any shareholder, at such shareholder’s address or email address as it appears in the records of the Company (unless otherwise indicated in writing by any such shareholder). Notices shall be deemed given upon personal delivery, upon receipt of return receipt in the case of delivery by mail, upon transmission in the case of delivery by email (unless a rejection message from the recipients email is received confirming non-delivery) or one day following deposit with an overnight courier service.
Section 12. The Bye-laws. If there shall be any conflict between the provisions of this Certificate of Designations and the Bye-laws then, for so long as any Convertible Preference Shares are issued and outstanding, the provisions of this Certificate of Designations shall prevail.
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by a director.
SIGNED
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Director |
Page
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ARTICLE I
|
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DEFINITIONS
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SECTION 1.01.
|
Defined Terms |
1
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SECTION 1.02.
|
Other Interpretive Provisions |
5
|
ARTICLE II
|
||
REGISTRATION RIGHTS
|
||
SECTION 2.01.
|
Demand Registration |
5
|
SECTION 2.02.
|
Shelf Registration |
8
|
SECTION 2.03.
|
Piggyback Registration |
12
|
SECTION 2.04.
|
Black-out Periods |
13
|
SECTION 2.05.
|
Registration Procedures |
15
|
SECTION 2.06.
|
Underwritten Offerings |
20
|
SECTION 2.07.
|
No Inconsistent Agreements; Additional Rights |
22
|
SECTION 2.08.
|
Registration Expenses |
22
|
SECTION 2.09.
|
Indemnification |
22
|
SECTION 2.10.
|
Rules 144 and 144A and Regulation S |
26
|
SECTION 2.11.
|
Confidentiality |
26
|
ARTICLE III
|
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MISCELLANEOUS
|
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SECTION 3.01.
|
Term |
26
|
SECTION 3.02.
|
Injunctive Relief |
26
|
SECTION 3.03.
|
Attorneys’ Fees |
26
|
SECTION 3.04.
|
Notices |
27
|
SECTION 3.05.
|
Amendment |
27
|
SECTION 3.06.
|
Successors, Assigns and Transferees |
28
|
SECTION 3.07.
|
Joinder of Additional Holders |
28
|
SECTION 3.08.
|
Binding Effect |
28
|
SECTION 3.09.
|
Third Parties |
28
|
SECTION 3.10.
|
Governing Law; Jurisdiction |
29
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|
Page
|
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SECTION 3.11.
|
WAIVER OF JURY TRIAL |
29
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SECTION 3.12.
|
Merger; Binding Effect, etc |
29
|
SECTION 3.13.
|
Severability |
29
|
SECTION 3.14.
|
Counterparts |
29
|
SECTION 3.15.
|
Headings |
29
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FORWARD MARCH LIMITED
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By:
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/s/ Mohammed Khaishgi | ||
Name: Mohammed Khaishgi
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Title: Director
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THE RESOURCE GROUP INTERNATIONAL LIMITED
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By:
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/s/ Zia Chishti | ||
Name: Zia Chishti
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Title: Director
|
FORWARD MARCH LTD.
|
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By:
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/s/Mohammed Khaishgi | ||
Name: Mohammed Khaishgi
|
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Title: Director
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THE RESOURCE GROUP INTERNATIONAL LIMITED
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By:
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/s/Zia Chishti | ||
Name: Zia Chishti
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Title: Director
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Page
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I.
|
DEFINITIONS
|
1
|
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1.1.
|
Accounting Terms
|
1
|
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1.2.
|
General Terms
|
1
|
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1.3.
|
Uniform Commercial Code Terms
|
31
|
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1.4.
|
Certain Matters of Construction
|
31
|
|
II.
|
ADVANCES, PAYMENTS
|
32
|
|
2.1.
|
Revolving Advances
|
32
|
|
2.2.
|
Procedures for Requesting Revolving Advances; Procedures for Selection
|
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of Applicable Interest Rates for All Advances
|
33
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||
2.3.
|
Reserved
|
35
|
|
2.4.
|
Swing Loans
|
35
|
|
2.5.
|
Disbursement of Advance Proceeds
|
36
|
|
2.6.
|
Making and Settlement of Advances
|
37
|
|
2.7.
|
Maximum Advances
|
39
|
|
2.8.
|
Manner and Repayment of Advances
|
39
|
|
2.9.
|
Repayment of Excess Advances
|
40
|
|
2.10.
|
Statement of Account
|
40
|
|
2.11.
|
Letters of Credit
|
40
|
|
2.12.
|
Issuance of Letters of Credit
|
41
|
|
2.13.
|
Requirements For Issuance of Letters of Credit
|
41
|
|
2.14.
|
Disbursements, Reimbursement
|
42
|
|
2.15.
|
Repayment of Participation Advances
|
43
|
|
2.16.
|
Documentation
|
44
|
|
2.17.
|
Determination to Honor Drawing Request
|
44
|
|
2.18.
|
Nature of Participation and Reimbursement Obligations
|
44
|
|
2.19.
|
Liability for Acts and Omissions
|
46
|
|
2.20.
|
Mandatory Prepayments
|
47
|
|
2.21.
|
Use of Proceeds
|
48
|
|
2.22.
|
Defaulting Lender
|
48
|
|
2.23.
|
Payment of Obligations
|
50
|
|
III.
|
INTEREST AND FEES
|
51
|
|
3.1.
|
Interest
|
51
|
|
3.2.
|
Letter of Credit Fees
|
51
|
|
3.3.
|
Closing Fee and Facility Fee
|
53
|
|
3.4.
|
Collateral Monitoring Fee and Collateral Evaluation Fee
|
53
|
|
3.5.
|
Computation of Interest and Fees
|
54
|
|
3.6.
|
Maximum Charges
|
54
|
|
3.7.
|
Increased Costs
|
54
|
|
3.8.
|
Basis For Determining Interest Rate Inadequate or Unfair
|
55
|
|
3.9.
|
Capital Adequacy
|
56
|
|
3.10.
|
Taxes
|
56
|
3.11.
|
Replacement of Lenders
|
58
|
|
IV.
|
COLLATERAL: GENERAL TERMS
|
59
|
|
4.1.
|
Security Interest in the Collateral
|
59
|
|
4.2.
|
Perfection of Security Interest
|
59
|
|
4.3.
|
Preservation of Collateral
|
60
|
|
4.4.
|
Ownership and Location of Collateral
|
60
|
|
4.5.
|
Defense of Agent’s and Lenders’ Interests
|
61
|
|
4.6.
|
Inspection of Premises
|
61
|
|
4.7.
|
Reserved
|
61
|
|
4.8.
|
Receivables; Deposit Accounts and Securities Accounts
|
62
|
|
4.9.
|
Inventory
|
64
|
|
4.10.
|
Maintenance of Equipment
|
64
|
|
4.11.
|
Exculpation of Liability
|
64
|
|
4.12.
|
Financing Statements
|
65
|
|
V.
|
REPRESENTATIONS AND WARRANTIES
|
65
|
|
5.1.
|
Authority
|
65
|
|
5.2.
|
Formation and Qualification
|
65
|
|
5.3.
|
Survival of Representations and Warranties
|
66
|
|
5.4.
|
Tax Returns
|
66
|
|
5.5.
|
Financial Statements
|
66
|
|
5.6.
|
Entity Names
|
67
|
|
5.7.
|
O.S.H.A. Environmental Compliance; Flood Insurance
|
67
|
|
5.8.
|
Solvency; No Litigation, Violation, Indebtedness or Default; ERISA Compliance
|
68
|
|
5.9.
|
Patents, Trademarks, Copyrights and Licenses
|
69
|
|
5.10.
|
Licenses and Permits
|
69
|
|
5.11.
|
Default of Indebtedness
|
69
|
|
5.12.
|
No Default
|
69
|
|
5.13.
|
No Burdensome Restrictions
|
70
|
|
5.14.
|
No Labor Disputes
|
70
|
|
5.15.
|
Margin Regulations
|
70
|
|
5.16.
|
Investment Company Act
|
70
|
|
5.17.
|
Disclosure
|
70
|
|
5.18.
|
Delivery of Royalty Agreements
|
70
|
|
5.19.
|
Reserved
|
70
|
|
5.20.
|
Swaps
|
70
|
|
5.21.
|
Business and Property of Borrowers
|
71
|
|
5.22.
|
Ineligible Securities
|
71
|
|
5.23.
|
Federal Securities Laws
|
71
|
|
5.24.
|
Equity Interests
|
71
|
|
5.25.
|
Commercial Tort Claims
|
71
|
|
5.26.
|
Letter of Credit Rights
|
71
|
|
5.27.
|
Material Contracts
|
71
|
VI.
|
AFFIRMATIVE COVENANTS
|
72
|
|
6.1.
|
Compliance with Laws
|
72
|
|
6.2.
|
Conduct of Business and Maintenance of Existence and Assets
|
72
|
|
6.3.
|
Books and Records
|
72
|
|
6.4.
|
Payment of Taxes
|
72
|
|
6.5.
|
Fixed Charge Coverage Ratio
|
73
|
|
6.6.
|
Insurance
|
73
|
|
6.7.
|
Payment of Indebtedness and Leasehold Obligations
|
74
|
|
6.8.
|
Environmental Matters
|
74
|
|
6.9.
|
Standards of Financial Statements
|
75
|
|
6.10.
|
Federal Securities Laws
|
75
|
|
6.11.
|
Execution of Supplemental Instruments
|
75
|
|
6.12.
|
Reserved
|
75
|
|
6.13.
|
Government Receivables
|
75
|
|
6.14.
|
Keepwell
|
76
|
|
6.15.
|
Post-Closing Covenants
|
76
|
|
VII.
|
NEGATIVE COVENANTS
|
76
|
|
7.1.
|
Merger, Consolidation, Acquisition and Sale of Assets
|
77
|
|
7.2.
|
Creation of Liens
|
77
|
|
7.3.
|
Guarantees
|
77
|
|
7.4.
|
Investments
|
77
|
|
7.5.
|
Loans
|
77
|
|
7.6.
|
Capital Expenditures
|
77
|
|
7.7.
|
Dividends
|
77
|
|
7.8.
|
Indebtedness
|
78
|
|
7.9.
|
Nature of Business
|
78
|
|
7.10.
|
Transactions with Affiliates
|
78
|
|
7.11.
|
Leases
|
78
|
|
7.12.
|
Subsidiaries
|
78
|
|
7.13.
|
Fiscal Year and Accounting Changes
|
78
|
|
7.14.
|
Pledge of Credit
|
78
|
|
7.15.
|
Amendment of Organizational Documents
|
79
|
|
7.16.
|
Compliance with ERISA
|
79
|
|
7.17.
|
Prepayment of Indebtedness; Payment of Amounts due Under Holdings Note
|
79
|
|
7.18.
|
Reserved
|
79
|
|
7.19.
|
Other Agreements
|
80
|
|
7.20.
|
Membership / Partnership Interests
|
80
|
|
7.21.
|
Affiliate Payables
|
80
|
|
VIII.
|
CONDITIONS PRECEDENT
|
80
|
|
8.1.
|
Conditions to Initial Advances
|
80
|
|
8.2.
|
Conditions to Each Advance
|
84
|
IX.
|
INFORMATION AS TO BORROWERS
|
84
|
|
9.1.
|
Disclosure of Material Matters
|
84
|
|
9.2.
|
Schedules
|
84
|
|
9.3.
|
Environmental Reports
|
85
|
|
9.4.
|
Litigation
|
86
|
|
9.5.
|
Material Occurrences
|
86
|
|
9.6.
|
Government Receivables
|
86
|
|
9.7.
|
Annual Financial Statements
|
86
|
|
9.8.
|
Quarterly Financial Statements
|
86
|
|
9.9.
|
Monthly Financial Statements
|
87
|
|
9.10.
|
Other Reports
|
87
|
|
9.11.
|
Additional Information
|
87
|
|
9.12.
|
Projected Operating Budget
|
87
|
|
9.13.
|
Variances From Operating Budget
|
88
|
|
9.14.
|
Notice of Suits, Adverse Events
|
88
|
|
9.15.
|
ERISA Notices and Requests
|
88
|
|
9.16.
|
Additional Documents
|
89
|
|
9.17.
|
Updates to Certain Schedules
|
89
|
|
9.18.
|
Financial Disclosure
|
89
|
|
9.19.
|
Customer Documents
|
89
|
|
X.
|
EVENTS OF DEFAULT
|
89
|
|
10.1.
|
Nonpayment
|
89
|
|
10.2.
|
Breach of Representation
|
89
|
|
10.3.
|
Financial Information
|
90
|
|
10.4.
|
Judicial Actions
|
90
|
|
10.5.
|
Noncompliance
|
90
|
|
10.6.
|
Judgments
|
90
|
|
10.7.
|
Bankruptcy
|
90
|
|
10.8.
|
Reserved
|
90
|
|
10.9.
|
Lien Priority
|
91
|
|
10.10.
|
Affiliate Cross Default |
91
|
|
10.11.
|
Cross Default |
91
|
|
10.12.
|
Breach of Guaranty or Pledge Agreement |
91
|
|
10.13.
|
Change of Control |
91
|
|
10.14.
|
Invalidity |
91
|
|
10.15.
|
Seizures |
91
|
|
10.16.
|
Operations |
92
|
|
10.17.
|
Pension Plans |
92
|
|
10.18.
|
Anti-Terrorism Laws |
92
|
|
XI.
|
LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT
|
92
|
|
11.1.
|
Rights and Remedies
|
92
|
|
11.2.
|
Agent’s Discretion
|
94
|
|
11.3.
|
Setoff
|
94
|
|
11.4.
|
Rights and Remedies not Exclusive
|
94
|
11.5.
|
Allocation of Payments After Event of Default
|
94
|
|
XII.
|
WAIVERS AND JUDICIAL PROCEEDINGS
|
96
|
|
12.1.
|
Waiver of Notice
|
96
|
|
12.2.
|
Delay
|
96
|
|
12.3.
|
Jury Waiver
|
96
|
|
XIII.
|
EFFECTIVE DATE AND TERMINATION
|
96
|
|
13.1.
|
Term
|
96
|
|
13.2.
|
Termination
|
97
|
|
XIV.
|
REGARDING AGENT
|
97
|
|
14.1.
|
Appointment
|
97
|
|
14.2.
|
Nature of Duties
|
98
|
|
14.3.
|
Lack of Reliance on Agent
|
98
|
|
14.4.
|
Resignation of Agent; Successor Agent
|
98
|
|
14.5.
|
Certain Rights of Agent
|
99
|
|
14.6.
|
Reliance
|
99
|
|
14.7.
|
Notice of Default
|
99
|
|
14.8.
|
Indemnification
|
100
|
|
14.9.
|
Agent in its Individual Capacity
|
100
|
|
14.10.
|
Delivery of Documents |
100
|
|
14.11.
|
Borrowers’ Undertaking to Agent |
100
|
|
14.12.
|
No Reliance on Agent’s Customer Identification Program |
100
|
|
14.13.
|
Other Agreements |
101
|
|
XV.
|
BORROWING AGENCY.
|
101
|
|
15.1.
|
Borrowing Agency Provisions
|
101
|
|
15.2.
|
Waiver of Subrogation
|
102
|
|
XVI.
|
MISCELLANEOUS
|
102
|
|
16.1.
|
Governing Law
|
102
|
|
16.2.
|
Entire Understanding
|
103
|
|
16.3.
|
Successors and Assigns; Participations; New Lenders
|
106
|
|
16.4.
|
Application of Payments
|
108
|
|
16.5.
|
Indemnity
|
108
|
|
16.6.
|
Notice
|
109
|
|
16.7.
|
Survival
|
111
|
|
16.8.
|
Severability
|
111
|
|
16.9.
|
Expenses
|
111
|
|
16.10.
|
Injunctive Relief
|
111
|
|
16.11.
|
Consequential Damages
|
111
|
|
16.12.
|
Captions
|
112
|
|
16.13.
|
Counterparts; Facsimile Signatures
|
112
|
|
16.14.
|
Construction
|
112
|
|
16.15.
|
Confidentiality; Sharing Information
|
112
|
|
16.16.
|
Publicity
|
112
|
16.17.
|
Certifications From Banks and Participants; USA PATRIOT Act
|
113
|
|
16.18.
|
Anti-Terrorism Laws
|
113
|
I.
|
DEFINITIONS
|
Bloomberg Page BBAM1
|
|
LIBOR Rate =
|
1.00 – Reserve Percentage
|
II.
|
ADVANCES, PAYMENTS
|
III.
|
INTEREST AND FEES
|
IV.
|
COLLATERAL: GENERAL TERMS
|
V. |
REPRESENTATIONS AND WARRANTIES.
|
VI.
|
AFFIRMATIVE COVENANTS.
|
VII.
|
NEGATIVE COVENANTS.
|
VIII. |
CONDITIONS PRECEDENT.
|
IX. |
INFORMATION AS TO BORROWERS.
|
X. |
EVENTS OF DEFAULT.
|
XI. |
LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
|
XII. |
WAIVERS AND JUDICIAL PROCEEDINGS.
|
XIII. |
EFFECTIVE DATE AND TERMINATION.
|
XIV. |
REGARDING AGENT.
|
XV. |
BORROWING AGENCY.
|
XVI. |
MISCELLANEOUS.
|
(A) |
If to Agent or PNC at:
|
(B) |
If to a Lender other than Agent, as specified on the signature pages hereof
|
(C) |
If to Borrowing Agent or any Borrower:
|
TRG CUSTOMER SOLUTIONS, INC.
|
|||
By:
|
/s/ Stephen M. Kezirian | ||
Name:
|
Stephen M. Kezirian
|
||
Title:
|
Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION,
|
|||
As Lender and as Agent
|
|||
By:
|
/s/ Sawra Ronaldi
|
||
Name:
|
Sawra Ronaldi
|
||
Title:
|
Vice President
|
||
Revolving Commitment Percentage: 100%
|
|||
Revolving Commitment Amount $35,000,000
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC.
|
||
By:
|
/s/ Stephen M. Kezirian
|
|
Name: Stephen M. Kezirian
|
||
Title: Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC.
|
||
By:
|
/s/ Stephen M. Kezirian
|
|
Name: Stephen M. Kezirian
|
||
Title: Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
|||
TRG CUSTOMER SOLUTIONS, INC.
|
|||
By:
|
|||
Name:
|
Stephen M. Kezirian
|
||
Title:
|
Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
|||
TRG CUSTOMER SOLUTIONS, INC.
|
|||
By:
|
/s/ Stephen M. Kezirian | ||
Name:
|
Stephen M. Kezirian
|
||
Title:
|
Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie | |
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
||
By:
|
/s/ Mohammed Khaishgi
|
|
Name: Mohammed Khaishgi
|
||
Title: Interim Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
||
By:
|
/s/ Mohammed Khaishgi
|
|
Name: Mohammed Khaishgi
|
||
Title: Interim Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
||
By:
|
/s/ Robert T. Dechant
|
|
Name: Robert T. Dechant
|
||
Title: Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
BORROWERS:
|
||
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
||
By:
|
/s/ Robert T. Dechant
|
|
Name: Robert T. Dechant
|
||
Title: Chief Executive Officer
|
PNC BANK, NATIONAL ASSOCIATION
|
||
as Lender and as Agent
|
||
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
|||
By:
|
/s/ Robert T. Dechant
|
||
Name
|
Robert T. Dechant
|
||
Title:
|
Chief Executive Officer
|
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions
|
|||
By:
|
/s/ Robert T. Dechant
|
||
Name
|
Robert T. Dechant
|
||
Title:
|
Chief Executive Officer
|
By:
|
/s/ Jacqueline MacKenzie
|
|
Jacqueline MacKenzie, Vice President
|
EXECUTION VERSION
SIXTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT
This Sixth Amendment to Revolving Credit and Security Agreement (this “Amendment”) is made as of this 30th day of June, 2016, by and among TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions (“IBEX”, together with any Person joined to the Loan Agreement as a borrower, collectively the “Borrowers”), the financial institutions which are now or which hereafter become party to the Loan Agreement as lenders (collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”) and as a Lender.
BACKGROUND
A. On November 8, 2013, Borrowers, Lenders and PNC as a Lender and as Agent entered into that certain Revolving Credit and Security Agreement (as same has been or may be amended, restated, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.
B. Borrowers have requested that Agent and Lenders modify certain definitions, terms and conditions in the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
Section 1 Amendments to Loan Agreement. On the Sixth Amendment Effective Date:
(a) New Definitions. The following defined terms shall be added to Section 1.2 of the Loan Agreement in the proper alphabetical order:
“Commitment Percentage” shall mean for any Lender party to this Agreement, the percentage set forth below such Lender’s name with respect to each type of Advance on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or (d) hereof, and for any Lender that becomes a party to this Agreement pursuant to a Commitment Transfer Supplement or a Modified Commitment Transfer Supplement, the percentage set forth in Schedule 1 to such Commitment Transfer Supplement or Modified Commitment Transfer Supplement, as applicable.
“Excess Cash Flow” shall mean, for any fiscal period, in each case for Borrowers on a Consolidated Basis, EBITDA, minus each of the following, to the extent actually paid in cash during such fiscal period, Unfunded Capital Expenditures, distributions (including tax distributions but excluding Permitted Holdings Distributions of $11,500,000 paid through June 30, 2016), dividends and Royalty Payments, taxes and Debt Payments.
“Maximum Term Loan Amount” shall mean $10,000,000.
“Sixth Amendment Date” shall mean June 30 , 2016.
“Term Loan” shall have the meaning set forth in Section 2.3.1 hereof.
“Term Loan Commitment” shall mean, as to any Lender, the obligation of such Lender (if applicable), which obligation is subject to all the terms and conditions of this Agreement and the Other Documents, to make Term Loans in an aggregate principal amount not to exceed the Term Loan Commitment Amount (if any) of such Lender.
“Term Loan Commitment Amount” shall mean, as to any Lender, the term loan commitment amount (if any) set forth below such Lender’s name on the signature page hereof (or, in the case of any Lender that became party to this Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the term loan commitment amount (if any) of such Lender as set forth in the applicable Commitment Transfer Supplement), as the same may be adjusted upon any assignment by or to such Lender pursuant to Section 16.3(c) or (d) hereof.
“Term Loan Commitment Percentage” shall mean, as to any Lender, the Term Loan Commitment Percentage (if any) set forth below such Lender’s name on the signature page hereof (or, in the case of any Lender that became party to this Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the Term Loan Commitment Percentage (if any) of such Lender as set forth in the applicable Commitment Transfer Supplement), as the same may be adjusted upon any assignment by or to such Lender pursuant to Section 16.3(c) or (d) hereof.
“Term Loan” shall have the meaning set forth in Section 2.3.1 hereof.
“Term Loan Rate” shall mean (a) with respect to Term Loans that are Domestic Rate Loans, an interest rate per annum equal to the sum of the Applicable Margin plus the Alternate Base Rate and (b) with respect to Term Loans that are LIBOR Rate Loans, an interest rate per annum equal to the sum of the Applicable Margin plus the LIBOR Rate.
“Term Note” shall mean, collectively, the promissory notes referred to in Section 2.3.1 hereof.
(b) Definitions. The following defined terms contained in Section 1.2 of the Loan Agreement shall be amended and restated in their entirety as follows:
“Advances” shall mean and include the Revolving Advances, Equipment Loans, Letters of Credit, Term Loans and the Swing Loans.
“Applicable Margin” shall mean (a) an amount equal to negative one half of one percent (-0.50%) for (1) Revolving Advances consisting of Domestic Rate Loans, and (ii) Swing Loans, (b) an amount equal to one and three quarters of one percent (1.75%) for Revolving Advances consisting of LIBOR Rate Loans, (c) an amount equal to one half of one percent (0.50%) for Equipment Loans consisting of Domestic Rate Loans, (d) an amount equal to three and one quarter of one percent (3.25%) for Equipment Loans consisting of LIBOR Rate Loans, (e) an amount equal to one and one half of one percent (1.50%) for Term Loans consisting of Domestic Rate Loans, and (f) an amount equal to three and one half of one percent (3.5%) for Term Loans consisting of LIBOR Rate Loans.
“Capital Expenditures Indebtedness” shall mean an amount not to exceed (i) $5,000,000 during Borrowers’ 2016 fiscal year to finance Capital Expenditures, and (ii) $7,500,000 during each fiscal year of Borrowers thereafter to finance Capital Expenditures.
“Debt Payments” shall mean for any period, in each case, all cash actually expended by any Borrower to make: (a) interest payments on any Advances hereunder, plus (b) scheduled principal payments on the Equipment Loans plus (c) scheduled principal payments on the Term Loans plus (d) payments for all fees, commissions and charges set forth herein, plus (e) payments on Capitalized Lease Obligations, plus (f) payments with respect to any other Indebtedness for borrowed money.
“Fixed Charge Coverage Ratio” shall mean, with respect to any fiscal period, the ratio of (a) EBITDA, minus Unfunded Capital Expenditures made by any Borrower during such period, minus distributions (including tax distributions but excluding Permitted Holdings Distributions of $11,500,000 paid through June 30, 2016), dividends and cash Royalty Payments made by any Borrower during such period, minus cash taxes paid by any Borrower during such period to (b) all Debt Payments made by any Borrower during such period.
“Maximum Equipment Loan Amount” shall mean $3,000,000.
“Maximum Loan Amount” shall mean $53,000,000.
“Note” shall mean collectively, the Revolving Credit Note, the Equipment Note, the Term Notes and the Swing Loan Note.
“Permitted Holdings Distributions” shall mean a distribution to Holdings from time to time of an amount not to exceed in the aggregate (1) funds in an amount equal to $11,500,000 provided to a Borrower by Holdings on or prior to the Closing Date, and (2) funds provided after the Closing Date to a Borrower by Holdings as working capital or as a capital contribution and not on account of any services provided by any Borrower, upon satisfaction of the following conditions: (a) Borrowers shall have complied with the covenant in Section 6.15(c) and (b) both before and after giving pro-forma effect to any such distribution (i) no Default or Event of Default shall exist or will exist, (ii) no Springing Covenant Event shall have occurred or would exist, and (iii) Borrowers shall have complied with the covenant in Section 6.5 (Fixed Charge Coverage Ratio). For purposes of calculating the amount that may be distributed at any time hereunder, all distributions will be deemed distributed on account of the amounts permitted under subsection (1) above until such time that the full amount of the funds provided to Borrowers by Holdings prior to the Closing Date has been returned, which as of the Sixth Amendment Effective Date, Borrowers acknowledge have been fully paid and satisfied, and thereafter such amounts shall be deemed distributed on account of subsection (2) above. From and after the Sixth Amendment Effective Date, upon the satisfaction of the conditions set forth in clause (b) above, distributions may be made, together with Permitted Royalty Payments, in an aggregate amount as follows: (x) in fiscal year 2016, in an amount equal to 100% of Excess Cash Flow up to $7,900,000, and (y) in fiscal year 2017, in an amount equal to 100% of Excess Cash Flow up to $7,300,000 plus, to the extent Excess Cash Flow exceeds $7,300,000 in fiscal year 2017, an amount up to fifty percent (50%) of Excess Cash Flow in excess of $7,300,000, subject, however, to Mandatory Prepayments required under Section 2.20(d); provided, however, for purposes of calculating the amount of distributions that may be permitted in (x) and (y) above, at such time as the aggregate principal amount of all Term Loans is less than $6,000,000, the Excess Cash Flow limitation shall not apply, and at such time as there are no outstanding Term Loans, neither the Excess Cash Flow limitation or clause (b)(iii) above shall apply.
“Permitted Royalty Payments” shall mean the payment of Royalty Payments by a Borrower on a quarterly basis upon satisfaction of the following conditions: (a) both before and after giving pro-forma effect to any such payments (i) no Default or Event of Default shall exist, (ii) no Springing Covenant Event shall exist, and (iii) Borrowers shall have complied with the covenant in Section 6.5 (Fixed Charge Coverage Ratio); and (b) the aggregate amount of such payments shall not exceed the lesser of, (i) four percent (4%) of the Borrowers’ gross revenue (determined in accordance with GAAP) for any fiscal period, and (ii) from and after the Sixth Amendment Effective Date, the aggregate amount of distributions and Permitted Royalty Payments permitted in the definition of Permitted Holdings Distributions; provided, however, for purposes of calculating the amount of Permitted Royalty Payments permitted hereunder, at such time as there are no outstanding Term Loans, clause (a)(iii) above shall not apply.
“Revolving Advances” shall mean Advances other than Letters of Credit, Equipment Loans, Term Loans and the Swing Loans.
“Undrawn Availability” at a particular date shall mean an amount equal to (a) the sum of all cash in Depository Accounts plus the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount minus the Maximum Undrawn Amount of all outstanding Letters of Credit, minus (b) the sum of (i) the outstanding amount of Advances (other than the Equipment Loans and Term Loans) plus (ii) fees and expenses incurred in connection with the Transactions for which Borrowers are liable but which have not been paid or charged to Borrowers’ Account.
(c) Term Loans. Section 2.3 of the Loan Agreement shall be amended by adding the following Section 2.3.1 to the end of Section 2.3 as follows:
2.3.1 Term Loans. Subject to the terms and conditions of this Agreement, each Lender, severally and not jointly, shall, from time to time, make available Advances to one or more Borrowers (each, a “Term Loan” and collectively, the “Term Loans”) in an amount equal to such Lender’s Term Loan Commitment Percentage of the applicable Term Loan.
(a) A Term Loan shall be advanced on or within two (2) Business Days after the Sixth Amendment Effective Date in an amount equal to $6,000,000 but in no event greater than such Lender’s Term Loan Commitment (“Term Loan A”).Term Loan A shall be, with respect to principal, payable as follows, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination of this Agreement: (i) thirty six (36) consecutive monthly payments in the amount of $166,666.66 commencing July 1, 2016 and continuing on the first day of each month thereafter with the final installment to include all unpaid principal, accrued and unpaid interest and all unpaid fees, costs and expenses related thereto. Term Loan A shall be evidenced by a secured promissory note (“Term Note A”) in substantially the form attached hereto as Exhibit 2.3.1. Term Loan A may consist of a Domestic Rate Loan or LIBOR Rate Loan, or a combination thereof, as Borrowing Agent may request. In the event that Borrowers desire to obtain or extend a LIBOR Rate Loan or to convert a Domestic Rate Loan to a LIBOR Rate Loan, Borrowing Agent shall comply with the notification requirements set forth in Sections 2.2(b) and (d) and the provisions of Sections 2.2(b) through (g) shall apply.
(b) Subject to the terms and conditions set forth in clause 2.3.1(c) below, a Term Loan shall be advanced in an amount equal to $4,000,000 but in no event greater than such Lender’s Term Loan Commitment (“Term Loan B”). Term Loan B shall be, with respect to principal, payable as follows, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination of this Agreement: (i) thirty six (36) consecutive monthly payments in the amount of $111,111.11 commencing on the first day of the month following the funding of Term Loan B and continuing on the first day of each month thereafter, with the final installment to include all unpaid principal, accrued and unpaid interest and all unpaid fees, costs and expenses related thereto. Term Loan B shall be evidenced by a secured promissory note (“Term Note B”) in substantially the form attached hereto as Exhibit 2.3.1. Term Loan B may consist of a Domestic Rate Loan or LIBOR Rate Loan, or a combination thereof, as Borrowing Agent may request. In the event that Borrowers desire to obtain or extend a LIBOR Rate Loan or to convert a Domestic Rate Loan to a LIBOR Rate Loan, Borrowing Agent shall comply with the notification requirements set forth in Sections 2.2(b) and (d) and the provisions of Sections 2.2(b) through (g) shall apply.
(c) Conditions to making Term Loan B. Term Loan B will be advanced within thirty (30) days after Agent’s receipt of Borrower’s 2016 fiscal year audited financial statements provided: (i) such financial statements indicate that Borrower’s EBITDA was no less than $15,000,000 for such fiscal year, (ii) the Compliance Certificate related to said financial statements indicates that no Default or Event of Default exists, (iii) no Default or Event of Default shall exist on the date Term Loan B is advanced to Borrower or after giving effect thereto, (iv) Borrowers’ Average Undrawn Availability for the thirty (30) day period immediately preceding the funding date of Term Loan B shall have been not less than $7,500,000, and (v) Agent shall have received, for its account, a nonrefundable fee in the amount of $20,000 on the funding date of Term Loan B. If Borrower does not satisfy the foregoing terms, the commitment to advance Term Loan B shall automatically expire and, to the extent the fee described in clause (v) above shall have been paid, such fee shall be returned to Borrowers.
(d) Making and Settlement of Advances. Section 2.6(a) of the Loan Agreement shall be amended and restated in its entirety as follows:
(a) Each borrowing of Revolving Advances shall be advanced according to the applicable Revolving Commitment Percentages of Lenders holding the Revolving Commitments (subject to any contrary terms of Section 2.22). Each borrowing of Swing Loans shall be advanced by Swing Loan Lender alone. Each borrowing of Equipment Loans shall be advanced according to the applicable Equipment Loan Commitment Percentages of Lenders holding the Equipment Loan Commitments. Each borrowing of Term Loans shall be advanced according to the applicable Term Loan Commitment Percentages of Lenders holding the Term Loan Commitments.
(e) Manner and Repayment of Advances. Section 2.8(a) of the Loan Agreement shall be amended and restated in its entirety as follows:
(a) The Revolving Advances and Swing Loans shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided. The Equipment Loans shall be due and payable as provided in Section 2.3 hereof and in the Equipment Note, subject to mandatory prepayments as herein provided. The Term Loans shall be due and payable as provided in Section 2.3.1 hereof and in the Term Notes, subject to mandatory prepayments as herein provided. Notwithstanding the foregoing, all Advances shall be subject to earlier repayment upon (x) acceleration upon the occurrence of an Event of Default under this Agreement or (y) termination of this Agreement. Each payment (including each prepayment) by any Borrower on account of the principal of and interest on the Advances shall be applied (x) first, to the outstanding principal installments of the Term Loans in the inverse order of the maturities thereof; (y) second, to the outstanding principal installments of the Equipment Loans in the inverse order of the maturities thereof, and (z) third, to the remaining Advances (subject to any contrary provisions of Section 2.22) pro rata according to the applicable Revolving Commitment Percentages of Lenders in such order as Agent may determine.
(f) Mandatory Prepayments. Section 2.20 of the Loan Agreement shall be amended by amending Section 2.20(a) and adding a new Section 2.20(d), each as follows:
(1) Section 2.20(a) shall be amended and restated in its entirety as follows:
(a) Subject to Section 7.1 hereof, when any Borrower sells or otherwise disposes of any Collateral other than Inventory in the Ordinary Course of Business, Borrowers shall repay the Advances in an amount equal to the net proceeds of such sale (i.e., gross proceeds less the reasonable direct costs of such sales or other dispositions), such repayments to be made promptly but in no event more than three (3) Business Days following receipt of such net proceeds, and until the date of payment, such proceeds shall be held in trust for Agent. The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof. Such repayments shall be applied to the outstanding Advances (x) first, to the outstanding principal installments of the Term Loans in the inverse order of the maturities thereof, (y) second, to the outstanding principal installments of the Equipment Loans in the inverse order of the maturities thereof, and (z) third, to the remaining Advances (including cash collateralization of all Obligations relating to any outstanding Letters of Credit in accordance with the provisions of Section 3.2(b), provided however that if no Default or Event of Default has occurred and is continuing, such repayments shall be applied to cash collateralize any Obligations related to outstanding Letters of Credit last) in such order as Agent may determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof.
(2) a new Section 2.20(d) shall be added as follows:
(d) Borrowers shall prepay the outstanding amount of the Term Loans in an amount equal to twenty-five percent (25%) of Excess Cash Flow for each fiscal year commencing with the fiscal year ending June 30, 2017, payable upon delivery of the financial statements to Agent referred to in and required by Section 9.7 for such fiscal year, which amounts shall be applied to the Term Loans in inverse order of maturity. In the event that the financial statements are not so delivered, then a calculation based upon estimated amounts shall be made by Agent upon which calculation Borrowers shall make the prepayment required by this Section 2.20(d), subject to adjustment when the financial statements are delivered to Agent as required hereby. The calculation made by Agent shall not be deemed a waiver of any rights Agent or Lenders may have as a result of the failure by Borrowers to deliver such financial statements.
(g) Interest. Section 3.1 of the Loan Agreement shall be amended and restated in its entirety as follows:
3.1 Interest. Interest on Advances shall be payable in arrears on the first day of each month with respect to Domestic Rate Loans and, with respect to LIBOR Rate Loans, at the end of each Interest Period, provided further that all accrued and unpaid interest shall be due and payable at the end of the Term. Interest charges shall be computed on the actual principal amount of Advances outstanding during the month at a rate per annum equal to (i) with respect to Revolving Advances, the applicable Revolving Interest Rate, (ii) with respect to Swing Loans, the Revolving Interest Rate for Domestic Rate Loans, (iii) with respect to Equipment Loans, the applicable Equipment Loan Rate, and (iv) with respect to Term Loans, the applicable Term Loan Rate (as applicable, the “Contract Rate”). Except as expressly provided otherwise in this Agreement, any Obligations other than the Advances that are not paid when due shall accrue interest at the Revolving Interest Rate for Domestic Rate Loans, subject to the provision of the final sentence of this Section 3.1 regarding the Default Rate. Whenever, subsequent to the date of this Agreement, the Alternate Base Rate is increased or decreased, the applicable Contract Rate shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Alternate Base Rate during the time such change or changes remain in effect. The LIBOR Rate shall be adjusted with respect to LIBOR Rate Loans without notice or demand of any kind on the effective date of any change in the Reserve Percentage as of such effective date. Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent or at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7, immediately and automatically upon the occurrence of any such Event of Default without the requirement of any affirmative action by any party), (i) the Obligations other than LIBOR Rate Loans shall bear interest at the applicable Contract Rate for Domestic Rate Loans plus two percent (2%) per annum and (ii) LIBOR Rate Loans shall bear interest at the Revolving Interest Rate for LIBOR Rate Loans plus two percent (2%) per annum (as applicable, the “Default Rate”).
(h) Fixed Charge Coverage Ratio. Section 6.5 of the Loan Agreement shall be amended and restated in its entirety as follows:
6.5 Fixed Charge Coverage Ratio. Upon the occurrence of any Springing Covenant Event and until the occurrence of a Springing Termination Event, cause to be maintained as of the end of each fiscal quarter, a Fixed Charge Coverage Ratio of not less than 1.00 to 1.00, measured on a rolling four (4) quarter basis, except as set forth below. For the avoidance of doubt, upon the occurrence of a Springing Covenant Event, the Fixed Charge Coverage Ratio shall be tested for the immediately preceding fiscal quarter. From and after the Sixth Amendment Effective Date, for purposes of calculating the Fixed Charge Coverage Ratio, the Fixed Charge Coverage Ratio shall be measured on (a) the trailing three (3) months for the period ending September 30, 2016, (b) the trailing six (6) months for the period ending December 31, 2016, (c) the trailing (9) months for the period ending March 31, 2017, (d) the trailing twelve (12) months for the period ending June 30, 2017, and (e) on a rolling four (4) quarter basis thereafter based on the trailing twelve (12) months.
(i) Sale of Assets. Section 7.1(b) of the Loan Agreement shall be amended and restated to read as follows:
(b) Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i) the sale of property or assets in the Ordinary Course of Business, (ii) the disposition or transfer of obsolete or worn-out equipment, or equipment that has become no longer useful in such Borrower’s business, in the Ordinary Course of Business, (iii) the sale of AT&T Receivables pursuant to the Factoring Agreement; provided, however, that Borrowers shall not sell any AT&T Receivables unless all proceeds of any such sales shall be deposited into a Depository Account subject to the AT&T/Citibank Agreement, and (iv) any other sales or dispositions expressly permitted by this Agreement in each case not to exceed assets with a fair market value of more than $250,000 in any fiscal year and to the extent that (x) the proceeds of any such disposition are used to acquire replacement equipment which is subject to Agent’s first priority security interest or (y) the proceeds of which, in excess of $50,000, are remitted to Agent to be applied pursuant to Section 2.20.
(k) Term. Section 13.1 of the Loan Agreement shall be amended and restated in its entirety as follows:
13.1 Term. This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until May 1, 2020 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this Agreement at any time upon sixty (60) days prior written notice to Agent upon payment in full of the Obligations. In the event the Obligations are prepaid in full (whether voluntary or involuntary, including after acceleration thereof) and this Agreement is terminated prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall concurrently pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (x) one half of one percent (0.50%) of the Maximum Loan Amount if the Early Termination Date occurs on or after the Sixth Amendment Date to and including May 1, 2017, (y) one quarter of one percent (0.25%) of the Maximum Loan Amount if the Early Termination Date occurs on or after May 2, 2017 to and including May 1, 2018, and (z) zero percent (0.00%) of the Maximum Loan Amount if the Early Termination Date occurs on or after the date immediately following such date; provided, however, that if the Obligations are prepaid in full in connection with a refinancing provided by a division of PNC, no early termination fee shall be due upon the Early Termination Date.
(l) Successors and Assigns. Sections 16.3(c) and 16.3(d) of the Loan Agreement shall be amended and restated in their entirety as follows:
(c) Any Lender, with the consent of Agent, may sell, assign or transfer all or any part of its rights and obligations under or relating to Revolving Advances and/or Equipment Loans and/or Term Loans under this Agreement and the Other Documents to one or more additional Persons and one or more additional Persons may commit to make Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less than $5,000,000, pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording, provided, however, that each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to each of the Advances under this Agreement in which such Lender has an interest. Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for that purpose. Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Each Borrower hereby consents to the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Borrowers shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(d) Any Lender, with the consent of Agent which shall not be unreasonably withheld or delayed, may directly or indirectly sell, assign or transfer all or any portion of its rights and obligations under or relating to Revolving Advances and/or Equipment Loans and/or Term Loans under this Agreement and the Other Documents to an entity, whether a corporation, partnership, trust, limited liability company or other entity that (i) is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and (ii) is administered, serviced or managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each Participant and Purchasing Lender, each a “Transferee” and collectively the “Transferees”), pursuant to a Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned (“Modified Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for recording. Upon such execution and delivery, from and after the transfer effective date determined pursuant to such Modified Commitment Transfer Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the extent provided in such Modified Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder and (ii) the transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer Supplement, be released from its obligations under this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose. Such Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing CLO. Each Borrower hereby consents to the addition of such Purchasing CLO. Borrowers shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
Section 2 Exhibit 2.3.1. Upon the Sixth Amendment Effective Date, the attached Exhibit 2.3.1 shall be added to the Loan Agreement as an Exhibit.
Section 3 Acknowledgment Regarding Permitted Holdings Distributions.
Borrowers acknowledge and agree that, as of the date first written above, Borrowers have repaid in full the $11,500,000 referenced in clause (1) of the definition of “Permitted Holdings Distributions” and therefore the remaining maximum amount that may be distributed by Borrowers to Holdings pursuant to such clause (1) is Zero ($0.00). In the event that Borrowers effect such distribution in the form of a dividend, any such dividend shall be subject to the limitations set forth in the definition of “Permitted Holdings Distributions” and, pursuant to the definition of “Fixed Charge Coverage Ratio”, shall not be included within the computation of the Fixed Charge Coverage Ratio.
Section 4 Representations, Warranties and Covenants of Borrowers
Each Borrower hereby represents and warrants to and covenants with the Agent and the Lenders that:
(a) such Borrower reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the Other Documents (as described and defined in the Loan Agreement) and confirms that after giving effect to this Amendment all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);
(b) such Borrower reaffirms all of the covenants contained in the Loan Agreement (as amended hereby) (including without limitation, all covenants to pay fees, costs and expenses contained therein), covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders (other than contingent indemnification obligations which survive termination of the Loan Agreement);
(c) no Default or Event of Default has occurred and is continuing under the Loan Agreement or the Other Documents (as described and defined in the Loan Agreement);
(d) such Borrower has the authority and legal right to execute, deliver and carry out the terms of this Amendment and the Note (as defined below), that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officer executing this Amendment and the Notes on its behalf was similarly authorized and empowered, and that this Amendment and the Notes does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any material contract or agreement to which it is a party or by which any of its properties are bound; and
(e) this Amendment, the Notes, and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.
Section 5 Conditions Precedent/Effectiveness Conditions
This Amendment shall be effective upon the date of satisfaction of all of the following conditions precedent (the “Effective Date”):
(a) Agent shall have received this Amendment fully executed by the Borrowers;
(b) Agent shall have received a term note in the amount of $6,000,000 executed by Borrowers in favor of PNC (“Term Note A”);
(c) Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the Board of Directors of each Borrower authorizing the execution, delivery and performance of this Amendment and the Notes, certified by the Secretary of such Borrower, together with a certification as to the incumbency signatures of each person signing such documents on behalf of Borrowers;
(d) Agent shall have received a non-refundable amendment fee in the amount of $30,000 which shall be fully earned as of the Sixth Amendment Effective Date;
(e) Agent shall have received a copy of the AT&T contract maturity extension; and
(f) No Default or Event of Default shall have occurred and be continuing under the Loan Agreement.
Section 6 Post Closing
(a) Agent shall have received the results of updated UCC, tax lien, and judgment searches against each of the Borrowers within thirty (30) days from the Sixth Amendment Effective Date;
(b) (i) Within thirty (30) days from the Sixth Amendment Effective Date, Borrowers shall have entered into a Lender-Provided Interest Rate Hedge in an amount not less than fifty percent (50%) of Term Loan A; and (ii) within thirty (30) days from the date Term Loan B is funded, Borrowers shall have entered into a Lender-Provided Interest Rate Hedge in an amount not less than fifty percent (50%) of Term Loan B.
Section 7 Further Assurances
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.
Section 8 Payment of Expenses
Borrowers shall pay or reimburse Agent and Lenders for their reasonable fees of external counsel and other expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.
Section 9 Reaffirmation of Loan Agreement
Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, are hereby reaffirmed and shall continue in full force and effect as therein written.
Section 10 Miscellaneous
(a) Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(d) Governing Law. The terms and conditions of this Amendment shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by the laws of the State of New York without regard to any conflicts of laws principles.
(e) Counterparts. This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or pdf transmission shall be deemed to be an original signature hereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.
BORROWERS:
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TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global
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By:
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/s/ Robert T. Dechant |
Name: Robert T. Dechant
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Title: Chief Executive Officer
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PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
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By:
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/s/ Patrick Cornell |
Patrick Cornell, Vice President
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Revolving Commitment Percentage: 100%
Equipment Loan Commitment Percentage: 100%
Tenn Loan Commitment Percentage: 100%
Revolving Commitment Amount $40,000,000
Equipment Loan Commitment Amount: $3,000,000
Term Loan Commitment Amount: $10,000,000
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[SIGNATURE PAGE TO SIXTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions
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By: | /s/Robert T. Dechant | |
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Robert T. Dechant
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Chief Executive Officer
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PNC BANK, NATIONAL ASSOCIATION
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as Lender and as Agent
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By:
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/s/ Jacqueline Mackenzie
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Jacqueline Mackenzie
Vice President
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BORROWERS:
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TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions
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By:
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/s/ Robert T. Dechant
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Robert T. Dechant
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Chief Executive Officer
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PNC BANK, NATIONAL ASSOCIATION
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as Lender and as Agent
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By:
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/s/ Jacqueline MacKenzie
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Jacqueline MacKenzie,
Vice President
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Exhibit 10.12
NINTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT
This Ninth Amendment to Revolving Credit, and Security Agreement (this “Amendment”) is made as of this 22 day of January, 2018, by and among TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions (“IBEX”, together with any Person joined to the Loan Agreement as a borrower, collectively the “Borrowers”), the financial institutions which are now or which hereafter become party to the Loan Agreement as lenders (collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”) and as a Lender.
BACKGROUND
A. On November 8, 2013, Borrowers, Lenders and PNC as a Lender and as Agent entered into that certain Revolving Credit and Security Agreement (as same has been or may be amended, restated, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.
B. Borrowers have requested that Agent and Lenders modify certain definitions, terms and conditions in the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
Section 1 Amendments to Loan Agreement. On the Effective Date (as defined below):
(a) Definition. The following defined term contained in Section 1.2 of the Loan Agreement shall be amended and restated in its entirety as follows:
“Undrawn Availability” at a particular date shall mean an amount equal to (a) the sum of all cash in Depository Accounts plus the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount minus the Maximum Undrawn Amount of all outstanding Letters of Credit, minus. (b) the sum of (i) the outstanding amount of Advances (other than the Equipment Loans and Term Loans) plus (ii) fees and expenses incurred in connection with the Transactions for which Borrowers are liable but which have not been paid or charged to Borrowers’ Account, plus (c) for the purpose of determining the occurrence of a Springing Dominion Event pursuant to Section 4.8(h) hereof, the amount by which the Formula Amount exceeds the Maximum Revolving Advance Amount for each day during the months of January 2018 through and including March 2018; provided, however, that such amount shall not exceed $3,000,000 in the aggregate in each such month plus (d) for the purpose of determining the occurrence of a Springing Covenant Event pursuant to Section 6.5 hereof, the amount by which the Formula Amount exceeds the Maximum Revolving Advance Amount for each day during the months of January 2018 through and including March 2018; provided, however; that such amount shall not exceed $2,500,000 in the aggregate in each such month.
Section 2 Representations, Warranties and Covenants of Borrowers
Each Borrower hereby represents and warrants to and covenants with the Agent and the Lenders that:
(a) such Borrower reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the Other Documents (as described and defined in the Loan Agreement) and confirms that after giving effect to this Amendment all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);
(b) such Borrower reaffirms all of the covenants contained in the Loan Agreement (as amended hereby) (including without limitation, all covenants to pay fees, costs and expenses contained therein), covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders (other than contingent indemnification obligations which survive termination of the Loan Agreement);
(c) no Default or Event of Default has occurred and is continuing under the Loan Agreement or the Other Documents (as described and defined in the Loan Agreement);
(d) such Borrower has the authority and legal right to execute, deliver and carry out the terms of this Amendment, that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officer executing this Amendment on its behalf was similarly authorized and empowered, and that this Amendment does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any material contract or agreement to which it is a party or by which any of its properties are bound; and
(e) this Amendment, and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.
Section 3 Conditions Precedent/Effectiveness Conditions
This Amendment shall be effective upon the date of satisfaction of all of the following conditions precedent (the “Effective Date”);
(a) Agent shall have received this Amendment fully executed by the Borrowers;
(b) Agent shall have received a non-refundable amendment fee equal to $30,000 which shall be fully earned as of the date hereof; and
(c) No Default or Event of Default shall have occurred and be continuing under the Loan Agreement.
Section 4 Further Assurances
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.
Section 5 Payment of Expenses
Borrowers shall pay or reimburse Agent and Lenders for their reasonable fees of external counsel and other expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.
Section 6 Reaffirmation of Loan Agreement
Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, are hereby reaffirmed and shall continue in full force and effect as therein written.
Section 7 Miscellaneous
(a) Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(d) Governing Law. The terms and conditions of this Amendment shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by the laws of the State of New York without regard to any conflicts of laws principles.
(e) Counterparts. This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or pdf transmission shall be deemed to be an original signature hereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.
BORROWERS: | ||
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions |
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By: | /s/ Robert T. Dechant | |
Robert T. Dechant
Chief Executive Officer |
[SIGNATURE PAGE TO NINTH
AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION | ||
as Lender and as Agent | ||
By: | /s/ Janeann Fehrle | |
Janeann Fehrle
Senior Vice President |
Revolving Commitment Percentage: 100%
Equipment Loan Commitment Percentage: 100%
Term Loan Commitment Percentage: 100%
Revolving Commitment Amount $40,000,000
Equipment Loan Commitment Amount: $3,000,000
Term Loan Commitment Amount: $16,000,000
[SIGNATURE PAGE TO NINTH
AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
Exhibit 10.13
TENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT
This Tenth Amendment to Revolving Credit and Security Agreement (this “Amendment”) is made as of this 1st day of December, 2018, by and among TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions (“IBEX”, together with any Person joined to the Loan Agreement as a borrower, collectively the “Borrowers”), the financial institutions which are now or which hereafter become party to the Loan Agreement as lenders (collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”) and as a Lender.
BACKGROUND
A. On November 8, 2013, Borrowers, Lenders and PNC as a Lender and as Agent entered into that certain Revolving Credit and Security Agreement (as same has been or may be amended, restated, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.
B. Borrowers have requested that Agent and modify certain definitions, terms and conditions in the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
Section 1 Amendments to Loan Agreement. On the Effective Date (as defined below):
(a) New Definitions. The following defined terms shall be added to Section 1.2 of the Loan Agreement in the proper alphabetical order:
“Hedge Reserve” shall mean a reserve in the amount of any negative mark to market on Borrower’s Hedge Liabilities in excess of $125,000.
“Tenth Amendment” shall mean that certain Tenth Amendment to Revolving Credit and Security Agreement, dated as of the Tenth Amendment Date, by and among Borrowers, Lenders and Agent.
“Tenth Amendment Date” shall mean December 1, 2018.
(b) Definitions. The following defined terms contained in Section 1.2 of the Loan Agreement shall be amended and restated in their entirety as follows:
“Applicable Margin” shall mean:
(a) an amount equal to one quarter of one percent (0.25%) for (i) Revolving Advances consisting of Domestic Rate Loans, and (ii) Swing Loans,
(b) an amount equal to two and one and half of one percent (2.50%) for Revolving Advances consisting of LIBOR Rate Loans,
(c) an amount equal to one and one half of one percent (1.50%) for Equipment Loans consisting of Domestic Rate Loans,
(d) an amount equal to three and one quarter of one percent (3.25%) for Equipment Loans consisting of LIBOR Rate Loans,
(e) an amount equal to two percent (2.0%) for Term Loans consisting of Domestic Rate Loans, and
(f) an amount equal to four percent (4.0%) for Term Loans consisting of LIBOR Rate Loans;
provided, however, upon Borrowers’ maintaining a Fixed Charge Coverage Ratio of at least 1.0 to 1.0 for two consecutive fiscal quarters at any time following the fiscal quarter ending September 30, 2018 calculated for the most recently ended trailing twelve month period and evidenced by delivery of Compliance Certificates, (a) an amount equal to negative one half of one percent (-0.50%) for (i) Revolving Advances consisting of Domestic Rate Loans, and (ii) Swing Loans, (b) an amount equal to one and three-quarters of one percent (1.75%) for Revolving Advances consisting of LIBOR Rate Loans.
“Maximum Loan Amount” shall mean $64,000,000, plus any increase in accordance with Section 2.24.
“Maximum Revolving Advance Amount” shall mean $45,000,000, plus any increases in accordance with Section 2.24.
“Springing Covenant Event” shall mean, the occurrence of (i) Borrowers’ Average Undrawn Availability being less than twelve and one half of one percent (12.5%) of the Maximum Revolving Advance Amount or (ii) Borrowers’ Average Undrawn Availability being less than $5,600,000, in each case at any time.
“Springing Dominion Event” shall mean, the occurrence of Borrowers’ Undrawn Availability being less than twelve and one half of one percent (12.5%) of (x) prior to November 20, 2018, $40,000,000, (y) from November 20, 2018 until immediately prior to the Tenth Amendment Date, $45,000,000 and (z) upon the Tenth Amendment Date and thereafter, the Maximum Revolving Advance Amount, in each case at any time. For the purposes of calculating Undrawn Availability solely as it relates to the Springing Dominion Event, Undrawn Availability shall be calculated as if Maximum Revolving Advance Amount is $45,000,000 from November 20, 2018 until the Tenth Amendment Date.
“Springing Termination Event (Cash Dominion)” shall mean the occurrence of (i) Borrowers’ Undrawn Availability being equal to or greater than twelve and one half of one percent (12.5%) of the Maximum Revolving Advance Amount or (ii) Borrowers’ Undrawn Availability being equal to or greater than $5,600,000, in each case for thirty (30) consecutive days.
“Springing Termination Event (Covenants)” shall mean, the occurrence of (i) Borrowers’ Average Undrawn Availability being equal to or greater than twelve and one half of one percent (12.5%) of the Maximum Revolving Advance Amount or (ii) Borrowers’ Average Undrawn Availability being equal to or greater than $5,600,000, in each case for thirty (30) consecutive days.
(c) Formula Amount. Section 2.1 of the Loan Agreement shall be amended by amending and restating Section 2.1(a)(iv) as follows:
(iv) such reserves including without limitation, the Special Reserve, the Hedge Reserve, as Agent may in its Permitted Discretion deem necessary from time to time.
(d) Term. Section 13.1 of the Loan Agreement shall be amended and restated in its entirety as follows:
13.1 Term. This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until May 1, 2020 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this Agreement at any time upon sixty (60) days prior written notice to Agent upon payment in full of the Obligations. In the event the Obligations are prepaid in full (whether voluntary or involuntary, including after acceleration thereof) and this Agreement is terminated prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall concurrently pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (y) one quarter of one percent (0.25%) of the Maximum Loan Amount if the Early Termination Date occurs on or after May 2, 2018 to and including May 1, 2020, and (z) zero percent (0.00%) of the Maximum Loan Amount if the Early Termination Date occurs on or after the date immediately following such date; provided, however, that if the Obligations are prepaid in full in connection with a refinancing provided by a division of PNC, no early termination fee shall be due upon the Early Termination Date.
Section 2 Representations, Warranties and Covenants of Borrowers
Each Borrower hereby represents and warrants to and covenants with the Agent and the Lenders that:
(a) such Borrower reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the Other Documents (as described and defined in the Loan Agreement) and confirms that after giving effect to this Amendment all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);
(b) such Borrower reaffirms all of the covenants contained in the Loan Agreement (as amended hereby) (including without limitation, all covenants to pay fees, costs and expenses contained therein), covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders (other than contingent indemnification obligations which survive termination of the Loan Agreement);
(c) no Default or Event of Default has occurred and is continuing under the Loan Agreement or the Other Documents (as described and defined in the Loan Agreement);
(d) such Borrower has the authority and legal right to execute, deliver and carry out the terms of this Amendment and the Notes (as defined below), that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officer executing this Amendment and the Notes on its behalf was similarly authorized and empowered, and that this Amendment and the Notes does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any material contract or agreement to which it is a party or by which any of its properties are bound; and
(e) this Amendment, the Notes, and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.
Section 3 Amendment Fee
In consideration of entering into this Amendment, Borrowers agree to pay to Agent, for the ratable benefit of itself and each Lender, an amendment fee in the amount of $50,000.00 (the “Amendment Fee”), which fee shall be fully earned and due and payable in full on the Tenth Amendment Effective Date and shall not be subject to rebate or proration upon termination of the Credit Agreement for any reason.
Section 4 Conditions Precedent/Effectiveness Conditions
This Amendment shall be effective upon the date of satisfaction of all of the following conditions precedent (the “Effective Date”):
(a) Agent shall have received this Amendment fully executed by the Borrowers;
(b) Agent shall have received a second amended and restated Revolving Credit Note executed by Borrowers in favor of PNC in the principal amount of $45,000,000;
(c) Agent shall have received an incumbency certificate for each Borrower identifying all authorized officers with specimen signatures, certified by the Secretary of such Borrower;
(d) Agent shall have received the Amendment Fee; and
(e) No Default or Event of Default shall have occurred and be continuing under the Loan Agreement.
Section 5 Further Assurances
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.
Section 6 Payment of Expenses
Borrowers shall pay or reimburse Agent and Lenders for their reasonable fees of external counsel and other expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.
Section 7 Reaffirmation of Loan Agreement
Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, are hereby reaffirmed and shall continue in full force and effect as therein written.
Section 8 Miscellaneous
(a) Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(d) Governing Law. The terms and conditions of this Amendment shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by the laws of the State of New York without regard to any conflicts of laws principles.
(e) Counterparts. This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or pdf transmission shall be deemed to be an original signature hereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.
BORROWERS:
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions
By: | /s/ Robert T. Dechant | |
Robert T. Dechant | ||
Chief Executive Officer |
[SIGNATURE PAGE TO TENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
By: | /s/Jacqueline MacKenzie | |
Jacqueline MacKenzie | ||
Vice President |
Revolving Commitment Percentage: 100%
Equipment Loan Commitment Percentage: 100%
Term Loan Commitment Percentage: 100%
Revolving Commitment Amount $45,000,000
Equipment Loan Commitment Amount: $3,000,000
Term Loan Commitment Amount: $16,000,000
[SIGNATURE PAGE TO TENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
Exhibit 10.14
ELEVENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT
This Eleventh Amendment to Revolving Credit and Security Agreement (this “Amendment”) is made as of this 26th day of April 2019, by and among TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions (“IBEX”, together with any Person joined to the Loan Agreement as a borrower, collectively the “Borrowers”), the financial institutions which are now or which hereafter become party to the Loan Agreement as lenders (collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”) and as a Lender.
BACKGROUND
A. On November 8, 2013, Borrowers, Lenders and PNC as a Lender and as Agent entered into that certain Revolving Credit and Security Agreement (as same has been or may be amended, restated, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.
B. IBEX Global Solutions PLC (k/n/a IBEX Global Solutions Ltd.), a company created under the laws of England and Wales (“Holdings”), owns 100% of the shares of IBEX. In consideration of the Agent and Lenders extending credit and other accommodations to Borrowers under the Loan Agreement, Holdings executed a certain Guarantee and Indemnity, pursuant to which Holdings guaranteed payment and satisfaction in full of the Obligations.
C. Borrowers have informed Agent and Lenders that (I) IBEX Global Limited, a Bermuda entity, has been formed (“New Guarantor”) and is the owner of 100% of the issued equity interests of Holdings, (II) New Guarantor will purchase substantially all of the assets of Holdings pursuant to a certain asset transfer agreement (including the equity interests of IBEX held by Holdings) (the “Asset Transfer Agreement”) in exchange for a note issued by New Guarantor in the amount of $77,000,000 (the “Intercompany Note”), (III) the proceeds of the Intercompany Note will be distributed by Holdings to New Guarantor and then such note will be cancelled, (IV) New Guarantor will become a guarantor under the Loan Agreement and Other Documents and Holdings shall be released from being a guarantor under the Loan Agreement and Other Documents, and (V) TRGI will purchase all issued equity interests of Holdings for nominal consideration and commence a voluntary dissolution of Holdings (such transactions referred to in clauses (I)-(V) of this section, the “Guarantor Restructuring”).
D. Borrowers have requested that Agent and Lenders (i) consent to the Guarantor Restructuring and (ii) modify certain definitions, terms and conditions in the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
Section 1 | Consent. |
(a) In reliance upon the documentation and information provided to Agent in connection with the transactions contemplated herein, and notwithstanding anything to the contrary contained in the Loan Agreement, upon the effectiveness of this Amendment, Agent and Lenders hereby consent to the Guarantor Restructuring.
(b) This consent shall be effective only as to the items set forth in the preceding paragraph. This consent shall not be deemed to constitute a consent to the breach by Borrowers of any covenants or agreements contained in the Loan Agreement or any Other Document with respect to any other transaction or matter. Borrowers agree that the consent set forth in the preceding paragraph (a) shall be limited to the precise meaning of the words as written therein and shall not be deemed (i) to be a consent to, or any waiver or modification of, any other term or condition of the Loan Agreement or any Other Document, or (ii) to prejudice any right or remedy that Agent or Lenders may now have or may in the future have under or in connection with the Loan Agreement or any Other Document, other than with respect to the matters for which the consent in the preceding paragraph (a) has been provided. Other than as described in this Amendment, the consent described in the preceding paragraph (a) shall not alter, affect, release or prejudice in any way any Obligations under the Loan Agreement or Other Documents. This consent shall not be construed as establishing a course of conduct on the part of Agent or Lenders upon which the Borrowers may rely at any time in the future. Borrowers expressly waive any right to assert any claim to such effect at any time.
Section 2 | Amendments to Loan Agreement. On the Effective Date (as defined below): |
(a) New Definitions. The following defined terms shall be added to Section 1.2 of the Loan Agreement in the proper alphabetical order:
“Eleventh Amendment” shall mean that certain Eleventh Amendment to Revolving Credit and Security Agreement, dated as of the Tenth Amendment Date, by and among Borrowers, Lenders and Agent.
“Eleventh Amendment Date” shall mean April 26, 2019.
(b) Definitions. The following defined terms contained in Section 1.2 of the Loan Agreement shall be amended and restated in their entirety as follows:
“Holdings” shall mean IBEX Global Limited, a Bermuda entity.
“Guarantor” shall mean (i) IBEX Global Solutions PLC until such time as such entity is wound down and dissolved, (ii) Limited and (iii) any other Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and “Guarantors” means, collectively, all such Persons.
Section 3 | Representations, Warranties and Covenants of Borrowers |
Each Borrower hereby represents and warrants to and covenants with the Agent and the Lenders that:
(a) such Borrower reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the Other Documents (as described and defined in the Loan Agreement) and confirms that after giving effect to this Amendment all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);
(b) such Borrower reaffirms all of the covenants contained in the Loan Agreement (as amended hereby) (including without limitation, all covenants to pay fees, costs and expenses contained therein), covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders (other than contingent indemnification obligations which survive termination of the Loan Agreement);
(c) no Default or Event of Default has occurred and is continuing under the Loan Agreement or the Other Documents (as described and defined in the Loan Agreement);
(d) such Borrower has the authority and legal right to execute, deliver and carry out the terms of this Amendment and the Notes (as defined below), that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officer executing this Amendment and the Notes on its behalf was similarly authorized and empowered, and that this Amendment and the Notes does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any material contract or agreement to which it is a party or by which any of its properties are bound; and
(e) this Amendment, the Notes, and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.
Section 4 | Conditions Precedent/Effectiveness Conditions |
This Amendment shall be effective upon the date of satisfaction of all of the following conditions precedent (the “Effective Date”):
(a) Agent shall have received this Amendment fully executed by the Borrowers;
(b) Agent shall have received updated schedule to the Loan Agreement, if any;
(c) Agent shall have received a Guaranty, fully executed by the New Guarantor;
(d) Agent shall have received a Pledge Agreement, fully executed by the New Guarantor;
(e) Agent shall have received a copy of the Asset Transfer Agreement;
(f) Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the board of directors or managers of New Guarantor, authorizing the execution, delivery and performance of this Amendment, the Guaranty, and any related agreements, instruments, or documents to which New Guarantor is a party, certified by the Secretary or an Assistant Secretary of New Guarantor;
(g) Agent shall have received a certificate of the Secretary or an Assistant Secretary of New Guarantor as to the incumbency and signature of the officers of New Guarantor executing this Amendment the Guaranty, and any related agreements, instruments, or documents to which New Guarantor is a party, together with evidence of the incumbency of such Secretary or Assistant Secretary;
(h) Agent shall have received an incumbency certificate for each Borrower identifying all authorized officers with specimen signatures, certified by the Secretary of such Borrower;
(i) Agent shall have received copies of the bylaws and memorandum of association of New Guarantor, together with a certificate of good standing or equivalent certification in the jurisdiction of formation of New Guarantor;
(j) Agent shall have received the results of UCC, tax lien, and judgment searches against New Guarantor;
(k) Agent shall have received an opinion of counsel of New Guarantor;
(l) Agent shall have received updated certificates of insurance naming New Guarantor as an additional insured with respect to liability insurance and lender loss payee with respect to property insurance;
(m) Agent shall have received reasonably satisfactory evidence that the Guarantor Restructuring shall be consummated; and
(n) No Default or Event of Default shall have occurred and be continuing under the Loan Agreement.
Section 5 | Further Assurances |
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.
Section 6 | Payment of Expenses |
Borrowers shall pay or reimburse Agent and Lenders for their reasonable fees of external counsel and other expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.
Section 7 | Reaffirmation of Loan Agreement |
Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, are hereby reaffirmed and shall continue in full force and effect as therein written.
Section 8 | Miscellaneous |
(a) Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(d) Governing Law. The terms and conditions of this Amendment shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by the laws of the State of New York without regard to any conflicts of laws principles.
(e) Counterparts. This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or pdf transmission shall be deemed to be an original signature hereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.
BORROWERS:
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions
By: | /s/ Robert T. Dechant | |
Robert T. Dechant | ||
Chief Executive Officer |
[SIGNATURE PAGE TO ELEVENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
By: | /s/ Jacqueline MacKenzie | |
Jacqueline MacKenzie | ||
Vice President |
Revolving Commitment Percentage: 100%
Equipment Loan Commitment Percentage: 100%
Term Loan Commitment Percentage: 100%
Revolving Commitment Amount $45,000,000
Equipment Loan Commitment Amount: $3,000,000
Term Loan Commitment Amount: $16,000,000
[SIGNATURE PAGE TO ELEVENTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
Exhibit 10.15
TWELFTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT
This Twelfth Amendment to Revolving Credit and Security Agreement (this “Amendment”) is made as of this 31st day of May 2019, by and among TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX Global Solutions (“IBEX”, together with any Person joined to the Loan Agreement as a borrower, collectively the “Borrowers”), the financial institutions which are now or which hereafter become party to the Loan Agreement as lenders (collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”) and as a Lender.
BACKGROUND
A. On November 8, 2013, Borrowers, Lenders and PNC as a Lender and as Agent entered into that certain Revolving Credit and Security Agreement (as same has been or may be amended, restated, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.
B. Borrowers have requested that Agent and Lenders modify certain definitions, terms and conditions in the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
Section 1 | Amendments to Loan Agreement. On the Effective Date (as defined below): |
(a) New Definitions. The following defined terms shall be added to Section 1.2 of the Loan Agreement in the proper alphabetical order:
““2019 Settlement” shall mean that certain Memorandum of Understanding, and subsequent settlement documents entered into by Borrower related to the arbitration known as Andrews v. TRG Customer Solutions Inc. dated May 7, 2019.”
““Foreign Subcontractors” shall mean, collectively, Holdings, TRG Philippines Inc. and IBEX Global Jamaica Limited.”
““Twelfth Amendment” shall mean that certain Twelfth Amendment to Revolving Credit and Security Agreement, dated as of the Twelfth Amendment Date, by and among Borrowers, Lenders and Agent.”
““Twelfth Amendment Date” shall mean May 31, 2019.”
(b) Definitions. The following defined terms contained in Section 1.2 of the Loan Agreement shall be amended and restated in their entirety as follows:
““EBITDA” shall mean for any period with respect to Borrowers on a Consolidated Basis, the sum of (a) net income (or loss) for such period (excluding extraordinary gains and losses), plus (b) all interest expense for such period, plus (c) all charges against income for such period for (1) federal, state and local taxes and (2) expenses on account of the Royalty Agreements, to the extent deducted in determining net income plus (d) depreciation expenses for such period, plus (e) amortization expenses for such period, plus (f) one-time non-recurring expenses or charges incurred in connection with the Closing (which shall include without limitation all such expenses or charges due to Lenders and to CapitalSource Bank in connection with the Closing), to the extent paid within ninety (90) days of the Closing Date plus (g) one-time non-recurring expenses or charges in an amount not to exceed $100,000 incurred in connection with financing sought but not ultimately obtained from Fifth Third Bank, to the extent paid in cash within ninety (90) days of the Closing Date, plus (h) non-cash expenses related to any Borrower’s employee stock option plan, plus (i) losses from any sale of fixed assets, plus (j) one-time non-recurring expenses or charges in an amount not to exceed $4,000,000 in the aggregate paid in connection with the 2019 Settlement, minus (k) gains from any sale of fixed assets.”
““Maximum Loan Amount” shall mean $79,000,000, plus any increase in accordance with Section 2.24.”
““Maximum Revolving Advance Amount” shall mean $60,000,000 less the Special Reserve.”
““Permitted Royalty Payments” shall mean the payment of Royalty Payments by a Borrower on a quarterly basis upon satisfaction of the following conditions: (a) both before and after giving pro-forma effect to any such payments (i) no Default or Event of Default shall exist, (ii) no Springing Covenant Event shall exist, and (iii) Borrowers shall have caused to be maintained as of the end of the most recent fiscal quarter for which Borrowers shall have been required to deliver financial statements to Agent pursuant to Section 9.7 or 9.8, as applicable, a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00, measured on a rolling four (4) quarter basis; and (b) the aggregate amount of such payments shall not exceed the lesser of, (i) four percent (4%) of the Borrowers’ gross revenue (determined in accordance with IFRS) for any fiscal period, and (ii) from and after the Sixth Amendment Effective Date, the aggregate amount of distributions and Permitted Royalty Payments permitted in the definition of Permitted Holdings Distributions; provided, however, for purposes of calculating the amount of Permitted Royalty Payments permitted hereunder, at such time as there are no outstanding Term Loans, clause (a)(iii) above shall not apply.”
““Special Reserve” shall mean a reserve in the amount of $10,000,000, provided, that, upon the delivery of Borrowers’ financial statements to Agent pursuant to Section 9.7, 9.8 or 9.9, as applicable, such amount shall be reduced to (x) $5,000,000, if such financial statements for the two (2) most recently ended consecutive fiscal quarters evidence that Borrowers’ EBITDA for the twelve (12) months then ending is not less than $15,000,000 and (y) $0, if such financial statements for the two (2) most recently ended consecutive fiscal quarters evidence that Borrowers’ EBITDA for the twelve (12) months then ending is not less than $17,000,000, in each case, so long as (I) Borrowers have made a written request to Agent for such reduction within forty-five (45) days of delivery of such financial statements evidencing satisfaction of the applicable hurdle referenced above and (II) the Compliance Certificate accompanying such financial statements certifies that no Default or Event of Default exists.”
““Springing Covenant Event” shall mean, in any fiscal year, the occurrence of Borrowers’ Average Undrawn Availability being less than (a) twelve and one half of one percent (12.5%) of the Maximum Revolving Advance Amount for thirty (30) consecutive days or (b) (i) at any time that the Special Reserve equals $10,000,000, (A) $6,000,000 at any time prior to January 1, 2020 and (B) $6,250,000 at all times thereafter, (ii) at any time that the Special Reserve equals $5,000,000, $6,875,000 and (iii) at any time that the Special Reserve equals $0, $7,500,000, in each case for thirty (30) consecutive days; provided, however, the amount (if any) of Revolving Loan proceeds applied as a mandatory prepayment of the Term Loan pursuant to Section 2.20(d) for such fiscal year shall not be included in the calculation of Average Undrawn Availability solely for purposes of determining if a Springing Covenant Event has occurred.”
““Springing Termination Event (Covenants)” shall mean, in any fiscal year, the occurrence of Borrowers’ Average Undrawn Availability being equal to or greater than (a) twelve and one half of one percent (12.5%) of the Maximum Revolving Advance Amount for thirty (30) consecutive days or (b) (i) at any time that the Special Reserve equals $10,000,000, (A) $6,000,000 at any time prior to January 1, 2020 and (B) $6,250,000 at all times thereafter, (ii) at any time that the Special Reserve equals $5,000,000, $6,875,000 and (iii) at any time that the Special Reserve equals $0, $7,500,000, in each case for thirty (30) consecutive days; provided, however, the amount (if any) of Revolving Loan proceeds applied as a mandatory prepayment of the Term Loan pursuant to Section 2.20(d) for such fiscal year shall not be included in the calculation of Average Undrawn Availability solely for purposes of determining if a Springing Termination Event (Covenants) has occurred.”
(c) Increase in Maximum Revolving Advance Amount. Section 2.24(a)(iv) of the Loan Agreement shall be amended and restated in its entirety as follows:
“(iv) After giving effect to such increase, the Maximum Revolving Advance Amount shall not exceed $70,000,000;”
(d) Collateral Monitoring Fee and Collateral Evaluation Fee. Section 3.4 of the Loan Agreement shall be amended and restated in its entirety as follows:
“3.4 Collateral Monitoring Fee and Collateral Evaluation Fee.
(a) Borrowers shall pay Agent a collateral monitoring fee equal to $1,250 per month commencing on the first day of the month following the Closing Date and on
the first day of each month thereafter during the Term. The collateral monitoring fee shall be deemed earned in full on the date when same is due and payable hereunder and shall not be subject to rebate or proration upon termination of this Agreement
for any reason.
(b) Borrowers shall pay to Agent promptly at the conclusion of any collateral evaluation performed by or for the benefit of Agent - namely any field examination, collateral analysis or other business analysis permitted under Section 4.6, the need for which is to be determined by Agent and which evaluation is undertaken by Agent or for Agent’s benefit - a collateral evaluation fee in an amount equal to $1,000 (or such other amount customarily charged by Agent to its customers) per day for each person employed to perform such evaluation, plus a per examination manager review fee (whether such examination is performed by Agent’s employees or by a third party retained by agent) in the amount of $1,300 (or such other amount customarily charged by Agent to its customers), plus all reasonable costs and disbursements incurred by Agent in the performance of such examination or analysis, and further provided that if third parties are retained to perform such collateral evaluations, either at the request of another Lender or for extenuating reasons determined by Agent in its Permitted Discretion, then such fees charged by such third parties plus all costs and disbursements incurred by such third party, shall be the responsibility of Borrower and shall not be subject to the foregoing limits, provided that all such fees, costs and disbursements shall be reasonable and further provided that such third party collateral evaluations shall not be duplicative of evaluations otherwise performed by Agent hereunder. So long as no Event of Default has occurred and is continuing, the Borrower shall only be required to bear the cost of and reimburse Agent and the Lenders for the costs and expenses of four (4) such collective visits and examinations per fiscal year by Agent and each Lender that wishes to accompany Agent on such visit and examination.”
(e) Foreign Subsidiary Subcontractor Expenses. Section 7.18 of the Loan Agreement shall be amended and restated in its entirety as follows:
“7.18 Foreign Subsidiary Subcontractor Expenses. Increase the transfer pricing percentage payable by any Borrower to any Foreign Subcontractor from the percentages in effect on the Twelfth Amendment Date, unless Borrower shall have notified Agent in writing within at least fifteen (15) days’ of Borrower having notice or knowledge of such increase. The Borrower shall also provide Agent, within at least thirty (30) days’ of the earlier of (x) Borrower providing Agent notice of such increase or (y) the required notification date of such increase referenced above, with financial projections for the twelve (12) month period following the date of such increase. Borrower acknowledges and agrees that if such projections fail to evidence, to Agent’s satisfaction, that after giving effect to such increase, Borrower will be in compliance with the covenant in Section 6.5 (whether or not such covenant is required to be tested at such time under the Agreement) during such twelve (12) month period, an immediate Event of Default shall be deemed to exist under this Agreement.”
(f) Quarterly Financial Statements. Section 9.8 of the Loan Agreement shall be amended and restated in its entirety as follows:
“9.8. Quarterly Financial Statements. Furnish Agent within forty five (45) days after the end of each fiscal quarter, an unaudited balance sheet of Borrowers on a consolidated and consolidating basis and unaudited statements of income and stockholders’ equity and cash flow of Borrowers on a consolidated and consolidating basis reflecting results of operations from the beginning of the fiscal year to the end of such quarter and for such quarter, prepared on a basis consistent with prior practices and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to Borrowers’ business operations and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year.”
(g) Term. Section 13.1 of the Loan Agreement shall be amended and restated in its entirety as follows:
“13.1 Term. This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until May 1, 2023 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this Agreement at any time upon sixty (60) days prior written notice to Agent upon payment in full of the Obligations. In the event the Obligations are prepaid in full (whether voluntary or involuntary, including after acceleration thereof) and this Agreement is terminated prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall concurrently pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (y) one half of one percent (0.50%) of the Maximum Loan Amount if the Early Termination Date occurs on or after the Twelfth Amendment Date to and including May 1, 2022, and (z) one quarter of one percent (0.25%) of the Maximum Loan Amount if the Early Termination Date occurs after May 1, 2022 but prior to May 1, 2023; provided, however, that if the Obligations are prepaid in full in connection with a refinancing provided by a division of PNC, no early termination fee shall be due upon the Early Termination Date.”
Section 2 | Representations, Warranties and Covenants of Borrowers |
Each Borrower hereby represents and warrants to and covenants with the Agent and the Lenders that:
(a) such Borrower reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the Other Documents (as described and defined in the Loan Agreement) and confirms that after giving effect to this Amendment all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);
(b) such Borrower reaffirms all of the covenants contained in the Loan Agreement (as amended hereby) (including without limitation, all covenants to pay fees, costs and expenses contained therein), covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders (other than contingent indemnification obligations which survive termination of the Loan Agreement);
(c) no Default or Event of Default has occurred and is continuing under the Loan Agreement or the Other Documents (as described and defined in the Loan Agreement);
(d) such Borrower has the authority and legal right to execute, deliver and carry out the terms of this Amendment and the Note (as defined below), that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officer executing this Amendment and the Note on its behalf was similarly authorized and empowered, and that this Amendment and the Note does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any material contract or agreement to which it is a party or by which any of its properties are bound; and
(e) this Amendment, the Note, and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.
Section 3 | Amendment Fee. |
Borrowers shall pay to Agent an amendment fee in consideration of entering into this Amendment for the ratable benefit of itself and each Lender in the amount of $75,000 (the “Total Amendment Fee”), which fee shall be fully earned in full on the Effective Date and shall not be subject to rebate or proration upon termination of the Loan Agreement for any reason. The Total Amendment Fee shall be due and payable as follows: (i) $50,000 of the Total Amendment Fee shall be due and payable on the Twelfth Amendment Date (the “Amendment Closing Fee”), (ii) $12,500 of the Total Amendment Fee shall be due and payable on the date the Special Reserve is reduced to $5,000,000 or $0; and (iii) $12,500 of the Total Amendment Fee shall be due and payable on the date the Special Reserve is reduced to $0. For the avoidance of doubt, if on the date the Special Reserve is reduced to $0 and the amount set forth in clause (ii) of the immediately preceding sentence has not been paid, such amount shall be due and payable on such date.
Section 4 | Conditions Precedent/Effectiveness Conditions. |
This Amendment shall be effective upon the date of satisfaction of all of the following conditions precedent (the “Effective Date”):
(a) Agent shall have received this Amendment fully executed by the Borrowers;
(b) Agent shall have received the Third Amended and Restated Revolving Credit Note, in form and substance satisfactory thereto, (the “Note”), fully executed by the Borrowers;
(c) Agent shall have received the Amendment Closing Fee in immediately available funds;
(d) Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the board of directors or managers of each Borrower and Guarantor, authorizing the increase in the Revolving Commitment Amount, the execution, delivery and performance of this Amendment, and any related agreements, instruments, or documents to which such Borrower or Guarantor is a party, certified by the Secretary or an Assistant Secretary of such Borrower or Guarantor;
(e) Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Borrower and Guarantor as to the incumbency and signature of the officers of such Borrower or Guarantor executing this Amendment and any related agreements, instruments, or documents to which it is a party, together with evidence of the incumbency of such Secretary or Assistant Secretary; and
(f) No Default or Event of Default shall have occurred and be continuing under the Loan Agreement.
Section 5 | Further Assurances |
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.
Section 6 | Payment of Expenses |
Borrowers shall pay or reimburse Agent and Lenders for their reasonable fees of external counsel and other expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.
Section 7 | Reaffirmation of Loan Agreement |
Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, are hereby reaffirmed and shall continue in full force and effect as therein written.
Section 8 | Miscellaneous |
(a) Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.
(d) Governing Law. This Amendment and each Other Document (unless and except to the extent expressly provided otherwise in any such Other Document), and all matters relating hereto or thereto or arising herefrom or therefrom (whether arising under contract law, tort law or otherwise) shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by and construed in accordance with the laws of the State of New York. Any judicial proceeding brought by or against any Borrower with respect to any of the Obligations, this Amendment, the Other Documents or any related agreement may be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Amendment, each Borrower accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Amendment. Each Borrower hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified or registered mail (return receipt requested) directed to Borrowing Agent at its address set forth in Section 16.6 of the Loan Agreement and service so made shall be deemed completed five (5) days after the same shall have been so deposited in the mails of the United States of America, or, at Agent’s option, by service upon Borrowing Agent which each Borrower irrevocably appoints as such Borrower’s Agent for the purpose of accepting service within the State of New York. Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of Agent or any Lender to bring proceedings against any Borrower in the courts of any other jurisdiction. Each Borrower waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each Borrower waives the right to remove any judicial proceeding brought against such Borrower in any state court to any federal court. Any judicial proceeding by any Borrower against Agent or any Lender involving, directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Amendment or any related agreement, shall be brought only in a federal or state court located in the County of New York, State of New York.
(e) Counterparts; Facsimile Signatures. This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or electronic transmission (including email transmission of a PDF image) shall be deemed to be an original signature hereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.
BORROWERS:
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX Global Solutions
By: | /s/ Robert T. Dechant | |
Robert T. Dechant | ||
Chief Executive Officer |
[SIGNATURE PAGE TO TWELFTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION
as Lender and as Agent
By: | /s/ Jacqueline MacKenzie | |
Jacqueline MacKenzie | ||
Senior Vice President |
[SIGNATURE PAGE TO TWELFTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY AGREEMENT]
“Borrowers”
|
||
DIGITAL GLOBE SERVICES INC.
|
||
By:
|
/s/ Jeff Cox | |
Name:
|
Jeff Cox
|
|
Title:
|
Chief Executive Officer
|
|
TELSATONLINE INC.
|
||
By:
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/s/ Jeff Cox | |
Name:
|
Jeff Cox
|
|
Title:
|
Chief Executive Officer
|
|
DGS EDU, LLC
|
||
By:
|
Digital Globe Services, Inc.
|
|
Its:
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Sole Member
|
|
By:
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/s/ Jeff Cox | |
Name:
|
Jeff Cox
|
|
Title:
|
Chief Executive Officer
|
“BANK”
|
||
HERITAGE BANK OF COMMERCE
|
||
By:
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/s/ Karla Schrader | |
Name:
|
Karla Schrader | |
Title:
|
VP |
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of March 31, 2016 by and among Heritage Bank of Commerce (“Bank”) and Digital Globe Services Inc., a Delaware corporation (“Digital”), TelSatOnline Inc., a Delaware corporation (“TelSat”), and DGS Edu. LLC, a Delaware limited liability company (“DGS”) (Digital, TelSat and DGS, each, a “Borrower” and together, collectively, “Borrowers”), whose address is 316 Wilcox St., Castle Rock, CO 80104.
Recitals
A. Bank and Borrowers have entered into that certain Loan and Security Agreement dated as of March 31, 2015 (as the same may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”). Bank has extended credit to Borrowers for the purposes permitted in the Loan Agreement.
B. Borrowers have requested that Bank amend the Loan Agreement to (i) increase the amount available to be borrowed under the Revolving Line and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.
C. Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.
Agreement
Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.
2. Amendments to Loan Agreement.
2.1 Section 1 (Definitions). Clause (b) of the definition of “Eligible Accounts” is amended by adding the following to the end thereof:
(excluding from this determination. Accounts with respect to such account debtor excluded from the definition of “Eligible Accounts” pursuant to clauses (m), (n) or (o) below)
2.2 Section 1 (Definitions). The definition of “Eligible Accounts” is amended by deleting the “and” at the end of clause (l), renumbering clause (m) to be clause (p) and inserting the following new clauses (m), (n) and (o) immediately after clause (l):
(m) Accounts not related to any Borrower’s core business activities;
(n) Accounts consisting of any bonuses payable to any Borrower, including any bonuses based on activation levels or similar criteria;
(o) Accounts consisting of any anniversary or similar fees payable to any Borrower, including any residual fees based on contracts or accounts remaining active after a certain period of time; and
2.3 Section 1 (Definitions). The following terms and their respective definitions set forth in Section 1 are amended in their entirety and replaced with the following:
“Revolving Line” means a credit extension of up to Five Million Dollars ($5,000,000).
“Revolving Line Maturity Date” means March 31, 2018.
2.4 Section 1 (Definitions). The following terms and their respective definitions are added to Section 1 of the Loan Agreement in the proper alphabetical order:
“First Amendment Date’’ means March 31, 2016.
2.5 Section 2.5 (Fees). Section 2.5(a) is amended by deleting the “and” at the end of clause (i) and deleting the phrase “(i) and (ii) each of which shall be nonrefundable; and” and substituting in lieu thereof the following:
and (iii) on the First Amendment Date and on each anniversary thereof, an additional facility fee in an amount equal to Thirty Seven Thousand Five Hundred Dollars ($37,500), (i), (ii) and (iii) each of which shall be nonrefundable; and
2.6 Section 6.3 (Financial Statements, Reports, Certificates). Section 6.3(a) is amended by deleting the reference to “a deferred revenue listing, and Inventory report” and substituting in lieu thereof “an Accrued Accounts report”.
2.7 Section 6.4 (Audits). Section 6.4 is amended in its entirety and replaced with the following:
6.4 Audits. Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more often than every six (6) months (or more frequently upon Bank’s request) unless an Event of Default has occurred and is continuing.
2.8 Section 6.8 (Operating, Depository and Investment Accounts). Section 6.8 is amended by deleting the reference to “its primary” and substituting in lieu thereof “all of its”.
2.9 Section 6.9 (Financial Covenants). Section 6.9(a) is amended in its entirety and replaced with the following:
(a) EBITDA. Borrower shall achieve an Adjusted EBITDA of at least $1,000,000 for the six months ending on each of June 30, 2016, September 30, 2016, December 31, 2016 and March 31, 2017.
2.10 Exhibit C (Borrowing Base Certificate). Exhibit C to the Loan Agreement is amended in its entirety and replaced with Exhibit C attached hereto.
2.11 Exhibit D (Compliance Certificate). Exhibit D to the Loan Agreement is amended in its entirety and replaced with Exhibit D attached hereto.
3. Limitation of Amendments.
3.1 The amendments set forth in Section 3, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.
3.2 This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
4. Representations and Warranties. To induce Bank to enter into this Amendment, each Borrower hereby represents and warrants to Bank as follows:
4.1 Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
4.2 Each Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
4.3 The organizational documents of each Borrower most recently delivered to Bank remain true, accurate and complete and have not been amended, supplemented or restated and arc and continue to be in full force and effect;
4.4 The execution and delivery by each Borrower of this Amendment and the performance by each Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary action on the part of each Borrower;
4.5 The execution and delivery by each Borrower of this Amendment and the performance by each Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting any Borrower, (b) any contractual restriction with any Person binding on any Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on any Borrower, or (d) the organizational documents of any Borrower;
4.6 The execution and delivery by each Borrower of this Amendment and the performance by each Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on any Borrower, except as already has been obtained or made; and
4.7 This Amendment has been duly executed and delivered by each Borrower and is the binding obligation of each Borrower, enforceable against each Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
5. Integration. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.
6. Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
7. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) Borrowers’ payment of a facility fee in an amount equal to Thirty Seven Thousand Five Hundred Dollars ($37,500) in accordance with Section 2.5(a) of the Loan Agreement, as amended hereby, (c) Bank’s receipt of the Acknowledgement of Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Annex I, duly executed and delivered by Digital Globe Services, LTD, a Bermuda entity, and (d) payment of Bank’s legal fees and expenses in connection with the negotiation and preparation of this Amendment.
[Signature page follows.]
BANK | BORROWERS |
Heritage Bank of Commerce | Digital Globe Services Inc. | |||
By: | /s/ Karla Schrader | By: | /s/ George Andrew Lear III | |
Name: | Karla Schrader | Name: | George Andrew Lear III |
Title: |
VP
|
Title: | CFO |
TelSatOnline Inc. | |
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III |
Title: | CFO |
DGS Edu, LLC | |
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III |
Title: | CFO |
[Signature Page to First Amendment to Loan and Security Agreement]
SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement is entered into as of June 2, 2017 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”), DIGITAL GLOBE SERVICES INC. (“Digital”), TELSATONLINE, INC. (“TelSat”), DGS EDU, LLC (“DGS”) and 7 DEGREES LLC (“7 Degrees”).
RECITALS
Digital, TelSat, DGS and Bank are parties to that certain Loan and Security Agreement dated as of March 31, 2015 and, as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of March 31, 2016 (collectively, the “Agreement”). The parties desire to add 7 Degrees as a coborrower under the Agreement and to amend the Agreement in accordance with the terms of this Amendment. Capitalized terms used without definition herein shall have the meanings assigned to them in the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. | Addition of Co-Borrower. |
(a) 7 Degrees is hereby added to the Agreement as a “Borrower” thereunder and hereunder, and each reference to “Borrower” or “the Borrower” in the Agreement and any other Loan Document shall mean and refer to each of Digital, TelSat, DGS and 7 Degrees, individually and collectively. Digital, TelSat, DGS and 7 Degrees, collectively, shall also be referred to as the Borrowers.
(b) 7 Degrees assumes, as a joint and several obligor thereunder, all of the Obligations, liabilities and indemnities of a Borrower under the Agreement and all other Loan Documents; and covenants and agrees to be bound by and adhere to all of the terms, covenants, waivers, releases, agreements and conditions of or respecting a Borrower with respect to the Agreement and the other Loan Documents and all of the representations and warranties contained in the Agreement and the other Loan Documents with respect to a Borrower. Without limiting the generality of the foregoing, 7 Degrees grants to Bank a security interest in the Collateral described on Exhibit A attached hereto to secure performance and payment of all Obligations under the Agreement, and authorizes Bank to file financing statements with all appropriate jurisdictions to perfect or protect Bank’s interest or rights under the Agreement and the other Loan Documents.
(c) Notwithstanding anything to the contrary set forth herein or in the Agreement, the Borrowing Base shall not include any Accounts owing to 7 Degrees until Bank approves its inclusion, which approval is subject to, among other things, (i) the completion of an audit of the Accounts and Collateral of 7 Degrees, the results of which shall be satisfactory to Bank, (ii) the establishment of a Bancontrol Account with respect to 7 Degrees’ account debtors in compliance with Section 2.3(d) of the Agreement and (iii) the completion and satisfaction of such other matters as Bank may reasonably request in connection therewith.
2. | Amendment to Agreement. |
(a) The following definition is hereby added to Section 1.1 of the Agreement:
“EBITDA” means Borrowers’ earnings before interest, taxes, depreciation, amortization, and non-cash stock based compensation expenses.
(b) Subsections (i) and (m) of the definition of “Eligible Accounts” set forth in Section 1.1 of the Agreement are amended and restated in their entirety to read as follows:
(i) Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to Borrower exceed thirty percent (30%) of all Accounts (the “Concentration Limit”), to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank and except that the Concentration Limit shall be sixty percent (60%) for Accounts with respect to which the account debtor is Comcast;
(m) (i) all Accounts owing to, or arising out of the business of, DGS; and (ii) Accounts not related to any other Borrower’s core business activities, except for Accounts with respect to which the account debtor is Comcast and Bank has received confirmation of upcoming payment from Comcast in form and substance satisfactory to Bank;
(c) Subsections (a) and (b) of Section 6.3 of the Agreement are amended and restated in their entirety to read as follows:
(a) as soon as available, but in any event within five (5) days after the 15th and the last day of each month, (i) aged listings of accounts receivable and payable, (ii) an Accrued Accounts report, (iii) a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, and a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto;
(b) as soon as available, but in any event, within thirty (30) days after the last day of each month, a Borrower prepared consolidated balance sheet, income statement, and cash flow statement covering Borrowers’ consolidated operations during such month, prepared in accordance with GAAP, consistently applied, in a form acceptable to Bank;
(d) The following is added to the end of Section 6.9(a) of the Agreement.
Borrowers shall achieve an EBITDA of at least $750,000 for the trailing six month period ending on each of June 30, 2017, September 30, 2017, December 31, 2017 and March 31, 2018.
(e) Exhibit C to the Agreement is replaced in its entirety with Exhibit C attached hereto.
(f) Exhibit D to the Agreement is replaced in its entirety with Exhibit D attached hereto
3. Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment and that no Event of Default has occurred and is continuing.
4. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Each Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.
5. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “pdf” signature page were an original hereof. Notwithstanding the foregoing, Borrowers shall deliver all original signed documents no later than ten (10) Business Days following the date of execution.
6. As a condition to the effectiveness of this Amendment. Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by each Borrower;
(b) corporate resolutions and incumbency certificate duly executed by 7 Degrees;
(c) intellectual property security agreement duly executed by 7 Degrees;
(d) payment of an amendment fee equal to $5,000, plus ail Bank Expenses incurred through the date hereof; and
(e) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
DIGITAL GLOBE SERVICES INC. | ||||
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III | |||
Title: | Chief Financial Officer | |||
TELSATONLINE, INC. | ||||
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III | |||
Title: | Chief Financial Officer | |||
DGS, LLC | ||||
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III | |||
Title: | Chief Financial Officer | |||
7 DEGREES, LLC | ||||
By: | /s/ George Andrew Lear III | |||
Name: | George Andrew Lear III | |||
Title: | Chief Financial Officer | |||
HERITAGE BANK OF COMMERCE | ||||
By: | /s/ KARLA SCHRADER | |||
Name: | KARLA SCHRADER | |||
Title: | VP | |||
Exhibit 10.19
THIRD AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement is entered into as of November 27, 2017 and to be effective as of June 12, 2017 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”), DIGITAL GLOBE SERVICES INC. (“Digital”), TELSATONLINE, INC. (“TelSat”), DGS EDU, LLC (“DGS”) and 7 DEGREES LLC (“7 Degrees”).
RECITALS
Digital, TelSat, DGS, and 7 Degrees (individually and collectively referred to herein as “Borrower”) and Bank are parties to that certain Loan and Security Agreement dated as of March 31, 2015 and, as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of March 31, 2016, and that certain Second Amendment to Loan and Security Agreement dated as of June 2, 2017 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment. Capitalized terms used without definition herein shall have the meanings assigned to them in the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Notwithstanding the prohibition in Section 7.2 of the Agreement, and subject to the term and conditions set forth herein, Bank hereby consents to the corporate reorganization that results in DGS Limited, a Bermuda entity, being the sole stockholder of Digital and of Telsat, and IBEX Holdings Limited, a Bermuda entity being the sole shareholder of DGS Limited.
2. The following definition in Section 1.1 of the Agreement is amended and restated in its entirety to read as follows:
“Revolving Maturity Date” means March 31, 2019, provided however, if there is an Event of Default that is continuing or there is any event that, with the passage of time or notice or both would, unless cured or waived, become an Event of Default, on March 31, 2018, then the Revolving Maturity Date shall automatically be March 31, 2018.
3. Section 6.3(c) of the Agreement is amended and restated to read as follows:
(c) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrowers’ fiscal year, audited financial statements of DGS Limited, a Bermuda company (“Parent”), prepared in accordance with IFRS (with a reconciliation to GAAP), consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank, along with the consolidating financial statements of each Borrower and all other Subsidiaries of Parent; provided however that at all times that Borrower or Parent are subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, or any other comparable reporting requirements applicable to a Person following an initial public offering of such Person’s securities, such annual financial statements shall be delivered to Bank within one hundred twenty (120) days after the end of Borrowers’ fiscal year.
4. The following is added to the end of Section 6.9(a) of the Agreement:
If, by March 31, 2018, Borrowers and Bank do not mutually agree upon with respect to financial covenant levels with respect to this Section 6.9(a) of the Agreement for the fiscal year ending June 30, 2019, then the financial covenant shall be as follows: Borrowers shall achieve an EBITDA of at least $750,000 for the trailing six month period ending on each of June 30, 2018, September 30, 2018, December 31, 2018, and March 31, 2019.
5. Section 7.6 of the Agreement is amended and restated in its entirety to read as follows:
7.6 Distributions. Pay any dividends, make intellectual property royalty payments or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that each Borrower may repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase, and the aggregate amount of such repurchase does not exceed $100,000 in any fiscal year.
6. The following is added to the end of Section 7.7 of the Agreement:
Notwithstanding the foregoing, Borrower may make loans to Parent (in lieu of making any royalty payments or dividends or other distributions that may have been previously permitted under this Agreement, which are no longer permitted under this Agreement) as long as: (i) no Event of Default has occurred that is continuing or would exist immediately after giving effect thereto, (ii) Bank has provided its prior written consent to such loan, on a case by case basis, which consent shall not be unreasonably withheld, conditioned, or delayed, with the mutual understanding that such consent will be given if Borrower is considered by the Bank to be in good standing under the Agreement, and (iii) no modifications to the terms of such loans are entered into without Bank’s prior written consent.
7. Pursuant to Section 7.7 of the Agreement, as amended herein, Bank hereby consents to a $400,000 loan to Parent from Borrower at an interest rate of at least 2% per annum and a maturity date of no later than five years from the onset of such loan.
8. Section 7.9 of the Agreement is amended and restated in its entirety to read as follows:
7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent.
9. Exhibit D to the Agreement is replaced in its entirety with Exhibit D attached hereto.
10. Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.
11. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Each Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.
12. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof. Notwithstanding the foregoing, Borrowers shall deliver all original signed documents no later than ten (10) Business Days following the date of execution.
13. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) the original signed Amendment and all other Loan Documents being executed in connection herewith, duly executed by Borrower and Parent;
(b) assumption and affirmation of stock pledge agreement duly executed by Parent;
(c) payment of all Bank Expenses incurred through the date hereof; and
(d) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
|
DIGITAL GLOBE SERVICES INC. | ||||||
By: | /s/ George Andrew Lear III | ||||||
Name: | George Andrew Lear III | ||||||
Title: | CFO |
TELSATONLINE, INC. | |||||||
By: | /s/ George Andrew Lear III | ||||||
Name: | George Andrew Lear III | ||||||
Title: | CFO |
DGS EDU, LLC. | |||||||
By: | /s/ George Andrew Lear III | ||||||
Name: | George Andrew Lear III | ||||||
Title: | CFO |
7 DEGREES, LLC | |||||||
By: | /s/ George Andrew Lear III | ||||||
Name: | George Andrew Lear III | ||||||
Title: | CFO |
HERITAGE BANK OF COMMERCE | |||||||
By: | /s/ Karla Schrader | ||||||
Name: |
Karla Schrader
|
||||||
Title: |
VP
|
Exhibit 10.20
FOURTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Fourth Amendment to Loan and Security Agreement is entered into as of August 6, 2018 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”), DIGITAL GLOBE SERVICES INC. (“Digital”), TELSATONLINE, INC. (“TelSat”), DGS EDU, LLC (“DGS”) and 7 DEGREES LLC (“7 Degrees”), and effective as of June 30, 2018.
RECITALS
Digital, TelSat, DGS, and 7 Degrees (individually and collectively referred to herein as “Borrower”) and Bank are parties to that certain Loan and Security Agreement dated as of March 31, 2015 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of March 31, 2016, that certain Second Amendment to Loan and Security Agreement dated as of June 2, 2017, and that certain Third Amendment to Loan and Security Agreement entered into on November 27, 2017 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment. Capitalized terms used without definition herein shall have the meanings assigned to them in the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. The following definitions in Section 1.1 of the Agreement are added, or amended and restated in their entirety to read as follows:
“Borrowing Base” means, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrowers, (i) eighty percent (80%) of Eligible Accounts, plus (ii) eighty percent (80%) of Accrued Accounts.
“IBEX” means IBEX Holdings Limited, a Bermuda entity being the sole shareholder of Parent.
“Parent” means DGS Limited, a Bermuda company, and sole stockholder of each Borrower.
“Revolving Maturity Date” means March 31, 2021, provided however, if there is an Event of Default that is continuing or there is any event that, with the passage of time or notice or both would, unless cured or waived, become an Event of Default, on March 31 of any year prior to March 31, 2021, then the Revolving Maturity Date shall automatically be March 31 of such year.
2. The fourth sentence in Section 2.3(d) of the Agreement is amended and restated in its entirety to read as follows:
Funds deposited to the Bancontrol Account shall be processed on each Business Day; and within two Business Days after clearance of such deposits, Bank shall credit all amounts paid into the Bancontrol Account to such Borrower’s operating account; provided however that on and after the occurrence of an Event of Default (and for so long as such Event of Default is continuing), Bank may, in its sole discretion, credit any amounts paid into the Bancontrol Account first against any outstanding amounts under the Revolving Facility, and then any remaining balance of such amount shall be credited to a Borrower’s operating account.
3. Section 6.3(a) of the Agreement is amended and restated to read as follows:
(a) as soon as available, but in any event within thirty (30) days after the last day of each month, Borrower’s: (i) aged listings of accounts receivable and payable, (ii) Accrued Accounts report, (iii) Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, and (iv) Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto;
4. Section 6.3(b) of the Agreement is amended and restated in its entirety to read as follows:
(b) as soon as available, but in any event within thirty (30) days after the last day of each month, Parent’s consolidated balance sheet, income statement, and cash flow covering Parent’s consolidated operations during such month, prepared by Parent in accordance with IFRS, consistently applied, in a form reasonably acceptable to Bank;
5. Section 6.3(c) of the Agreement is amended and restated to read as follows:
(c) As soon as available, but in any event no more than one hundred and eighty (180) days after Borrower’s fiscal year end, audited financial statements of IBEX prepared in accordance with IFRS, consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm selected by IBEX and reasonably acceptable to Bank; along with the consolidating financial statements of each Borrower.
6. Section 6.3(d) of the Agreement is amended and restated in its entirety to read as follows:
(d) as soon as available, but in any event no later than thirty (30) days after the beginning of Borrowers’ next fiscal year, Parent’s annual operating projections (including income statements, balance sheets and cash flow statements presented in a quarterly format) for the upcoming fiscal year, in form and substance reasonably satisfactory to Bank,
7. Section 6.9(a) of the Agreement is amended and restated in its entirety to read as follows:
(a) Adjusted EBITDA. Borrower’s trailing twelve months’ Adjusted EBITDA shall be at least $300,000, measured on a quarterly basis as of the last day of each calendar quarter, beginning with quarter ended June 30, 2018.
8. Section 6.9(b) of the Agreement is amended and restated in its entirety to read as follows:
(b) Asset Coverage Ratio. Borrowers shall maintain a minimum ratio of unrestricted cash maintained at Bank plus all Eligible Accounts plus Accrued Accounts to all Obligations owing to Bank (the “Asset Coverage Ratio”), of at least 1.25 to 1.00, measured on a monthly basis as of the last day of each month.
9. The following is added to the end of Section 7.6 of the Agreement:
Notwithstanding the foregoing, Borrowers may make up to $1,500,000 in distributions to Parent (or Parent’s stockholders) during Borrowers’ fiscal year ending June 30, 2019 as long as (i) no Event of Default has occurred that is continuing or would exist after giving effect to such distribution, and (ii) Borrowers provide Bank with at least ten (10) days’ prior written notice of such planned distribution (including the amount being distributed), along with pro forma financial statements evidencing Borrowers’ compliance with all financial covenants under this Agreement before and after giving effect to such distribution.
10. Pursuant to Section 7.7 of the Agreement, Bank hereby consents to a loan to Parent in the amount of $1,500,000 to be made during Borrowers’ fiscal year ending June 30, 2019.
11. Exhibit D to the Agreement is replaced in its entirety with Exhibit D attached hereto.
12. Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.
13. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Each Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.
14. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof. Notwithstanding the foregoing, Borrowers shall deliver all original signed documents promptly following execution.
15. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) corporate certificates duly executed by each Borrower;
(b) affirmation of stock pledge agreement;
(c) the original signed Amendment and all other Loan Documents being executed in connection herewith, duly executed by Borrower (and Parent, as applicable);
(d) payment of all Bank Expenses incurred through the date hereof; and
(e) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
DIGITAL GLOBE SERVICES INC. |
|
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
|
Title: | President |
|
TELSATONLINE, INC. |
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
Title: | President |
DGS EDU, LLC |
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
Title: | President |
7 DEGREES, LLC |
By: | /s/ Michael Darwal |
Name: | Michael Darwal |
Title: | President |
HERITAGE BANK OF COMMERCE |
|
By: | /s/ Karla Schrader |
Name: | Karla Schrader |
Title: |
VP
|
4
Exhibit 10.21
FIFTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Fifth Amendment to Loan and Security Agreement is entered into as of January 31, 2019 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”), DIGITAL GLOBE SERVICES INC. (“Digital”), TELSATONLINE, INC. (“TelSat”), DGS EDU, LLC (“DGS”) and 7 DEGREES LLC (“7 Degrees”).
RECITALS
Digital, TelSat, DGS, and 7 Degrees (individually and collectively referred to herein as “Borrower”) and Bank are parties to that certain Loan and Security Agreement dated as of March 31, 2015 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of March 31, 2016, that certain Second Amendment to Loan and Security Agreement dated as of June 2, 2017, that certain Third Amendment to Loan and Security Agreement entered into on November 27, 2017 and that certain Fourth Amendment to Loan and Security Agreement dated as of August 6, 2018 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment. Capitalized terms used without definition herein shall have the meanings assigned to them in the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. | The following definitions are added to Section 1.1 of the Agreement in alphabetical order: |
“DGS Sale Agreement” means that certain Membership Interest Purchase Agreement by and between J2Media Ventures, LLC, a Wyoming limited liability company, (“Buyer”) and Digital dated as of February 1, 2019.
“DGS Sale Note” means that certain promissory note in the original principal amount of $187,500 issued by Buyer to Digital pursuant to the DGS Sale Agreement.
2. Notwithstanding the prohibitions set forth in Section 7.1 and 7.2 of the Agreement, Bank consents to the sale and disposition of the equity interests of DGS owned by Digital pursuant to the DGS Sale Agreement, and Bank acknowledges and agrees that, effective on the “Closing” as defined in the DGS Sale Agreement, (i) DGS shall no longer be deemed a Borrower under the Agreement and other Loan Documents and (ii) DGS is released from any Obligations under the Loan Documents, and (iii) Bank releases its security interest on the Collateral owned by DGS.
3. Notwithstanding the prohibitions set forth in Section 7.7 of the Agreement, Bank consents to Borrower’s acquisition of the DGS Sale Note, and such Investment shall constitute a “Permitted Investment” under the Agreement.
4. Borrowers acknowledge and agree that all proceeds payable to Digital pursuant to the DGS Sale Agreement and DGS Sale Note constitute Collateral under the Agreement. Parent, TelSat and 7 Degrees acknowledge and agree that the release of DGS from being a Borrower under the Loan Agreement does not in any way obviate, limit or impair the obligations of such Borrower under the Agreement, and each hereby affirm that following the Closing, they remain as joint and several obligors under the Agreement and all other Loan Documents.
5. | Section 9.2(b) of the Agreement is amended and restated in its entirety to read as follows: |
(b) notify all account debtors with respect to the Accounts to pay Bank directly and notify any other debtors of a Borrower to pay any obligations owing to a Borrower by such debtor to Bank directly (including with respect to the DGS Sale Note);
6. Each Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.
8. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof. Notwithstanding the foregoing, Borrowers shall deliver all original signed documents promptly following execution.
9. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) the original signed Amendment duly executed by Borrowers;
(b) copies of the executed DGS Sale Agreement and DGS Sale Note, which shall be substantially similar form as the drafts provided to Bank prior to the date hereof;
(c) payment of an amendment fee in the amount of $1,500 plus all Bank Expenses incurred through the date hereof; and
(d) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
DIGITAL GLOBE SERVICES INC. |
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
|
Title: | President |
TELSATONLINE, INC. |
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
Title: | President |
DGS EDU, LLC |
By: | /s/ Jeffrey Cox |
Name: | Jeffrey Cox |
Title: | President |
7 DEGREES, LLC |
By: | /s/ Michael Darwal |
Name: | Michael Darwal |
Title: | President |
HERITAGE BANK OF COMMERCE |
By: | /s/ Karla Schrader |
Name: | Karla Schrader |
Title: |
VP
|
DIGITAL GLOBE SERVICES INC.
|
||||
By:
|
/s/ Jeffrey Cox
|
|||
Name:
|
Jeffrey Cox
|
|||
Title:
|
President
|
|||
TELSATONLINE, INC.
|
||||
By:
|
/s/ Jeffrey Cox
|
|||
Name:
|
Jeffrey Cox
|
|||
Title:
|
President
|
|||
7 DEGREES, LLC
|
||||
By:
|
/s/ Michael Darwal
|
|||
Name:
|
Michael Darwal
|
|||
Title:
|
President
|
|||
HERITAGE BANK OF COMMERCE
|
||||
By:
|
/s/ Karla Schrader | |||
Name:
|
Karla Schrader | |||
Title:
|
VP
|
|||
Exhibit 10.23
June 7, 2019
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
1700 PENNSYLVANIA AVE NW STE 5
WASHINGTON, DC 20006
Attn: | Karl Gabel |
Phone: | 202-580-6051 |
Email: | Karl.Gabel@ibexglobal.com |
From: | Matthew Gelles |
Phone: | 215-585-1434 |
Reference: | MX_194457 |
USI: | 1030450478MX_194457 |
The purpose of this letter agreement is to confirm the terms and conditions of the Interest Rate Swap transaction (the “Transaction”) entered into between TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS (“COUNTERPARTY”) and PNC Bank, National Association (“PNC”) on the Trade Date specified below.
1. | The definitions and provisions contained in the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc.) and any addenda or revisions thereto, are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern. |
2. | This Confirmation constitutes a “Confirmation” as referred to in, and supplements, forms part of and is subject to, that certain ISDA Master Agreement and related Schedule between COUNTERPARTY and PNC, dated as of August 15, 2016 (as amended, modified, supplemented, renewed or restated from time to time, the “ISDA Master Agreement”). All provisions contained in or incorporated by reference in the ISDA Master Agreement shall supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, and the ISDA Master Agreement shall govern this Confirmation and the Transaction evidenced hereby, except as modified expressly below. In the event of any inconsistency between the provisions of the ISDA Master Agreement and this Confirmation, this Confirmation will govern for purposes of the Transaction. |
3. | Each party represents to the other party that: |
(a) | It is acting for its own account as principal, and it has made its own independent decisions to enter into the ISDA Master Agreement and the Transaction and as to whether the ISDA Master Agreement and the Transaction each is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary to permit it to evaluate the merits and risks of the ISDA Master Agreement and the Transaction. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the ISDA Master Agreement or the Transaction; it being understood that information and explanations related to the terms and conditions of the ISDA Master Agreement or the Transaction shall not be considered investment advice or a recommendation to enter into the ISDA Master Agreement or the Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of the ISDA Master Agreement or the Transaction. |
(b) | It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the ISDA Master Agreement and the Transaction. It is also capable of assuming, and assumes, the risks of the ISDA Master Agreement and the Transaction. |
PNC Bank, National Association : 1030450478MX_194457
Page 1 of 6
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
(c) | The other party is not acting as a fiduciary for or an adviser to it in respect of the ISDA Master Agreement or the Transaction. |
(d) | It has entered into the Transaction in connection with a line of its business and for purposes of hedging and not for the purpose of speculation. |
(e) | It is an “eligible contract participant”, as that term is defined in Section 1a(18) of the Commodity Exchange Act and applicable regulations there under. |
4. | The terms of the Transaction to which this Confirmation relates are as follows: |
Type Of Transaction: | Interest Rate Swap | ||
Notional Amount: | USD 3,555,555.50 and then adjusting in accordance to attached amortization schedule. | ||
Trade Date: | June 7, 2019 | ||
Effective Date: | June 10, 2019 | ||
Termination Date: | June 1, 2021, subject to adjustment in accordance with the Modified Following Business Day Convention. |
Fixed Amounts:
|
|||
Fixed Rate Payer:
|
COUNTERPARTY
|
||
Fixed Rate Calculation | |||
Periods:
|
The initial Calculation Period will be from and including the Effective Date to but excluding July 1, 2019. Thereafter, from and including the first (1st) day of each month to but excluding the first (1st) day of
the following month. With the final Calculation Period being from and including May 1, 2021, to but excluding the Termination Date. Each calculation period subject to adjustment in accordance with the Modified Following Business Day Convention.
|
||
Fixed Rate Payer | |||
Payment Dates:
|
The initial payment will commence on July 1, 2019, and thereafter on the first (1st) day of each month, and ending on the Termination Date, subject to adjustment in accordance with the Modified Following Business
Day Convention.
|
||
Fixed Rate:
|
2.137%
|
||
Fixed Rate Day Count | |||
Fraction:
|
Actual/360
|
||
Business Days:
|
New York and London
|
||
Floating Amounts:
|
|||
Floating Rate Payer:
|
PNC
|
||
Floating Rate Calculation | |||
Periods:
|
The initial Calculation Period will be from and including the Effective Date to but excluding July 1, 2019. Thereafter, from and including the first (1st) day of each month to but excluding the first (1st) day of
the following month. With the final Calculation Period being from and including May 1, 2021, to but excluding the Termination Date. Each calculation period subject to adjustment in accordance with the Modified Following Business Day Convention.
|
PNC Bank, National Association : 1030450478MX_194457
Page 2 of 6
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
Floating Rate Payer
|
|||
Payment Dates:
|
The initial payment will commence on July 1, 2019, and thereafter on the first (1st) day of each month, and ending on the Termination Date, subject to adjustment in accordance with the Modified Following Business
Day Convention.
|
||
Floating Rate for Initial
|
|||
Calculation Period:
|
2.41163%
|
||
Reset Dates:
|
The first day of each Floating Rate Calculation Period, with Period End Dates subject to adjustment in accordance with the Modified Following Business Day Convention.
|
||
Floating Rate Option:
|
USD-LIBOR-BBA-Bloomberg; provided, however, that the reference to “London Banking Days” that appears in the 4th line of the definition of “USD-LIBOR-BBA-Bloomberg” is replaced with “New York and London Banking
Days” (which for purposes of the Transaction means any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in New York, New York and London, England).
Where in no event shall USD-LIBOR-BBA-Bloomberg be below 0.0%.
|
||
Designated Maturity:
|
One (1) Month
|
||
Spread:
|
Inapplicable
|
||
Floating Rate Day Count
|
|||
Fraction:
|
Actual/360
|
||
Business Days:
|
New York and London
|
||
Compounding:
|
Inapplicable
|
||
General Terms:
|
|||
Calculation Agent:
|
As set forth by the ISDA Master Agreement.
|
||
Jury Waiver:
|
EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE ISDA
MASTER AGREEMENT, ANY CREDIT SUPPORT DOCUMENT, THIS CONFIRMATION OR THE TRANSACTION EVIDENCED HEREBY.
|
||
Governing Law:
|
The Transaction shall be governed by and construed in accordance with the laws of the State of New York, without reference to the choice of law doctrine.
|
||
Execution in
|
|||
Counterparts:
|
This Confirmation may be executed in counterparts, each of which shall be an original and both of which when taken together shall constitute the same agreement. Transmission by facsimile, e-mail or other form of
electronic transmission of an executed counterpart of this Confirmation shall be deemed to constitute due and sufficient delivery of such counterpart.
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PNC Bank, National Association : 1030450478MX_194457
Page 3 of 6
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
Electronic Records and
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Signatures:
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It is agreed by the parties that the use of electronic signatures and the keeping of records in electronic form be granted the same legal effect, validity and enforceability as a signature affixed by hand or the use of a paper-based record keeping system (as the case may be) to the extent and as provided for in any applicable law. |
Periodic Interest Rate Swap Payment Method
Pay by Automatic Debit or Credit
I hereby Authorize PNC Bank to deposit or withdraw any amounts owed to me or by me by initiating credit or debit entries to my account at the Financial Institution indicated below. Further, I authorize my Financial Institution to accept and to credit or debit any entries initiated by PNC Bank to my account. In the event that PNC Bank deposits funds erroneously into my account, I authorize PNC Bank to debit my account for an amount not to exceed the original amount of the credit.
Bank Name: | PNC Bank NA | |
ABA: |
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Account #: |
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Checking or Savings: | Checking |
This authorization is to remain in full force and effect until PNC Bank and/or my Financial Institution has received written notice from me of its termination in such time and in such manner as to afford PNC Bank and/or my Financial Institution a reasonable opportunity to act on it.
PNC Contact Information and Counterparty Contact Information for securing Web Portal Access:
Payments: | derivatives.payments@pnc.com | 412-237-0529 |
Audit Confirmation Requests: | brokerconf@pnc.com | 412-237-0544 |
Web Portal Access and Customer Onboarding: | cam.derivatives@pnc.com | 412-237-0537 |
PNC will provide access to a secure website for the individuals listed below. Access to the site will include the ability to view the Interest Payment Advice, as well as two documents required by Dodd Frank as follows: i) Mid-market Mark Report; and ii) Portfolio Reconciliation Report. Unless you notify PNC in writing that you do not agree to receive these Dodd Frank required documents through the website, you agree that the posting of them on the Website is an acceptable and reliable manner of disclosure to you. Logon credentials will be provided after confirmation has been executed and returned to PNC. Please provide additional names as required.
First Name | Last Name | Email address | Telephone | |||
Karl | Gabel | Karl.Gabel@ibexglobal.com | ||||
Please confirm that the foregoing correctly sets forth the terms of our agreement concerning the transaction by signing this Confirmation where indicated below and returning a signed copy to Jeffrey Marraccini either by email (derivatives.operations@pnc.com), or by fax (1-855-568-4533) or by overnight delivery (c/o PNC Investment Operations 249 Fifth Avenue, P1-POPP-11-A, By Pittsburgh, PA 15222, Attn: Jeffrey Marraccini). By signing below, COUNTERPARTY acknowledges that it has consented to receive this Confirmation via electronic mail.
PNC Bank, National Association : 1030450478MX_194457
Page 4 of 6
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
Please retain a signed copy of this Confirmation for your records. Should you have any questions, please call Jeffrey Marraccini at 412-442-3984.
Yours Sincerely, | Accepted and agreed as of the date first above written: | |
PNC BANK, NATIONAL ASSOCIATION |
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX GLOBAL SOLUTIONS |
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/s/ Derek Millan | By: | /s/Robert Dechant |
Derek Millan, AVP | Name: | Robert Dechant |
Pnc Bank, National Association | Title: |
Chief Executive Officer
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PNC Bank, National Association : 1030450478MX_194457
Page 5 of 5
Exhibit 10.24
June 7, 2019
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
1700 PENNSYLVANIA AVE NW STE 5
WASHINGTON, DC 20006
Attn: | Karl Gabel |
Phone: | 202-580-6051 |
Email: | Karl.Gabel@ibexglobal.com |
From: | Matthew Gelles |
Phone: | 215-585-1434 |
Reference: | MX_194456 |
USI: | 1030450478MX_194456 |
The purpose of this letter agreement is to confirm the terms and conditions of the Interest Rate Swap transaction (the “Transaction”) entered into between TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS (“COUNTERPARTY”) and PNC Bank, National Association (“PNC”) on the Trade Date specified below.
1. | The definitions and provisions contained in the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc.) and any addenda or revisions thereto, are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern. |
2. | This Confirmation constitutes a “Confirmation” as referred to in, and supplements, forms part of and is subject to, that certain ISDA Master Agreement and related Schedule between COUNTERPARTY and PNC, dated as of August 15, 2016 (as amended, modified, supplemented, renewed or restated from time to time, the “ISDA Master Agreement”). All provisions contained in or incorporated by reference in the ISDA Master Agreement shall supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, and the ISDA Master Agreement shall govern this Confirmation and the Transaction evidenced hereby, except as modified expressly below. In the event of any inconsistency between the provisions of the ISDA Master Agreement and this Confirmation, this Confirmation will govern for purposes of the Transaction. |
3. | Each party represents to the other party that: |
(a) | It is acting for its own account as principal, and it has made its own independent decisions to enter into the ISDA Master Agreement and the Transaction and as to whether the ISDA Master Agreement and the Transaction each is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary to permit it to evaluate the merits and risks of the ISDA Master Agreement and the Transaction. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the ISDA Master Agreement or the Transaction; it being understood that information and explanations related to the terms and conditions of the ISDA Master Agreement or the Transaction shall not be considered investment advice or a recommendation to enter into the ISDA Master Agreement or the Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of the ISDA Master Agreement or the Transaction. |
(b) | It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the ISDA Master Agreement and the Transaction. It is also capable of assuming, and assumes, the risks of the ISDA Master Agreement and the Transaction. |
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
(c) | The other party is not acting as a fiduciary for or an adviser to it in respect of the ISDA Master Agreement or the Transaction. |
(d) | It has entered into the Transaction in connection with a line of its business and for purposes of hedging and not for the purpose of speculation. |
(e) | It is an “eligible contract participant”, as that term is defined in Section 1a(18) of the Commodity Exchange Act and applicable regulations there under. |
4. | The terms of the Transaction to which this Confirmation relates are as follows: |
Type Of Transaction: | Interest Rate Swap | ||
Notional Amount: | USD 15,000,000.00 | ||
Trade Date: | June 7, 2019 | ||
Effective Date: | June 24, 2019 | ||
Termination Date: | June 24, 2021, subject to adjustment in accordance with the Modified Following Business Day Convention. |
Fixed Amounts: |
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Fixed Rate Payer: | COUNTERPARTY | ||
Fixed Rate Calculation Periods: | The initial Calculation Period will be from and including the Effective Date to but excluding July 24, 2019. Thereafter, from and including the twenty fourth (24th) day of each month to but excluding the twenty fourth (24th) day of the following month. With the final Calculation Period being from and including May 24, 2021, to but excluding the Termination Date. Each calculation period subject to adjustment in accordance with the Modified Following Business Day Convention. | ||
Fixed Rate Payer Payment
Dates:
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The initial payment will commence on July 24, 2019, and thereafter on the twenty fourth (24th) day of each month, and ending on the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention. |
Fixed Rate: | 1.99% | ||
Fixed Rate Day Count Fraction: | Actual/360 | ||
Business Days: | New York and London |
Floating Amounts: |
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Floating Rate Payer: | PNC | ||
Floating Rate Calculation Periods: | The initial Calculation Period will be from and including the Effective Date to but excluding July 24, 2019. Thereafter, from and including the twenty fourth (24th) day of each month to but excluding the twenty fourth (24th) day of the following month. With the final Calculation Period being from and including May 24, 2021, to but excluding the Termination Date. Each calculation period subject to adjustment in accordance with the Modified Following Business Day Convention. |
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS June 7, 2019 |
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Floating Rate Payer | |||
Payment Dates:
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The initial payment will commence on July 24, 2019, and thereafter on the twenty fourth (24th) day of each month, and ending on the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention. | ||
Floating Rate for Initial Calculation
Period:
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TBD | ||
Reset Dates: | The first day of each Floating Rate Calculation Period, with Period End Dates subject to adjustment in accordance with the Modified Following Business Day Convention. | ||
Floating Rate Option: | USD-LIBOR-BBA-Bloomberg; provided, however, that the reference to “London Banking Days” that appears in the 4th line of the definition of “USD-LIBOR-BBA-Bloomberg” is replaced with “New York and London Banking Days” (which for purposes of the Transaction means any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in New York, New York and London, England). Where in no event shall USD-LIBOR-BBA-Bloomberg be below 0.0%. |
Designated Maturity: | One (1) Month | ||
Spread: | Inapplicable | ||
Floating Rate Day Count Fraction: | Actual/360 | ||
Business Days: | New York and London | ||
Compounding: | Inapplicable |
General Terms: |
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Calculation Agent: | As set forth by the ISDA Master Agreement. | ||
Jury Waiver: | EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE ISDA MASTER AGREEMENT, ANY CREDIT SUPPORT DOCUMENT, THIS CONFIRMATION OR THE TRANSACTION EVIDENCED HEREBY. | ||
Governing Law: | The Transaction shall be governed by and construed in accordance with the laws of the State of New York, without reference to the choice of law doctrine. | ||
Execution in Counterparts: | This Confirmation may be executed in counterparts, each of which shall be an original and both of which when taken together shall constitute the same agreement. Transmission by facsimile, e-mail or other form of electronic transmission of an executed counterpart of this Confirmation shall be deemed to constitute due and sufficient delivery of such counterpart. |
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL SOLUTIONS
June 7, 2019
Electronic Records and |
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Signatures: | It is agreed by the parties that the use of electronic signatures and the keeping of records in electronic form be granted the same legal effect, validity and enforceability as a signature affixed by hand or the use of a paper-based record keeping system (as the case may be) to the extent and as provided for in any applicable law. |
Periodic Interest Rate Swap
Payment Method
Pay by Automatic Debit or Credit
I hereby Authorize PNC Bank to deposit or withdraw any amounts owed to me or by me by initiating credit or debit entries to my account at the Financial Institution indicated below. Further, I authorize my Financial
Institution to accept and to credit or debit any entries initiated by PNC Bank to my account. In the event that PNC Bank deposits funds erroneously into my account, I authorize PNC Bank to debit my account for an amount not to exceed the original
amount of the credit.
Bank Name: | PNC Bank NA |
ABA: |
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Account #: |
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Checking or Savings: | Checking |
This authorization is to remain in full force and effect until PNC Bank and/or my Financial Institution has received written notice from me of its termination in such time and in such manner as to afford PNC Bank and/or my Financial Institution a reasonable opportunity to act on it.
PNC Contact Information and Counterparty Contact Information for securing Web Portal Access:
Payments: | derivatives.payments@pnc.com | 412-237-0529 |
Audit Confirmation Requests: | brokerconf@pnc.com | 412-237-0544 |
Web Portal Access and Customer Onboarding: | cam.derivatives@pnc.com | 412-237-0537 |
PNC will provide access to a secure website for the individuals listed below. Access to the site will include the ability to view the Interest Payment Advice, as well as two documents required by Dodd Frank as follows: i) Mid-market Mark Report; and ii) Portfolio Reconciliation Report. Unless you notify PNC in writing that you do not agree to receive these Dodd Frank required documents through the website, you agree that the posting of them on the Website is an acceptable and reliable manner of disclosure to you. Logon credentials will be provided after confirmation has been executed and returned to PNC. Please provide additional names as required.
First Name | Last Name | Email address | Telephone | |||
Karl | Gabel | Karl.Gabel@ibexglobal.com | ||||
Please confirm that the foregoing correctly sets forth the terms of our agreement concerning the transaction by signing this Confirmation where indicated below and returning a signed copy to Jeffrey Marraccini either by email (derivatives.operations@pnc.com), or by fax (1-855-568-4533) or by overnight delivery (c/o PNC Investment Operations 249 Fifth Avenue, P1-POPP-11-A, Pittsburgh, PA 15222, Attn: Jeffrey Marraccini). By signing below, COUNTERPARTY acknowledges that it has consented to receive this Confirmation via electronic mail.
PNC Bank, National Association :
1030450478MX_194456
Page 4 of 5
TRG CUSTOMER SOLUTIONS, INC. d/b/a IBEX GLOBAL
SOLUTIONS
June 7, 2019
Please retain a signed copy of this Confirmation for your records. Should you have any questions, please call Jeffrey Marraccini at 412-442-3984.
Yours Sincerely, | Accepted and agreed as of the date first above written: | |
PNC BANK, NATIONAL ASSOCIATION |
TRG CUSTOMER SOLUTIONS, INC.
d/b/a IBEX GLOBAL SOLUTIONS |
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/s/ Derek Millan | By: | /s/Robert Dechant |
Derek Millan, AVP | Name: | Robert Dechant |
Pnc Bank, National Association | Title: |
Chief Executive Officer |
PNC Bank, National Association :
1030450478MX_194456
Page 5 of 5
Exhibit 10.25
SUPPLEMENTAL DEBENTURE
issued by
IBEX GLOBAL JAMAICA LIMITED
in favour of
FIRST GLOBAL BANK LIMITED
IBEX GLOBAL JAMAICA LIMITED
SUPPLEMENTAL DEBENTURE
Issued pursuant to the Borrower’s constitutive documents and a Resolution of the Borrower passed on the day of 2018
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This Supplemental Debenture is made on the date set out in Item 1 of the First Schedule between the party described in Item 2 of the First Schedule (herein referred to as “the Borrower” or “the Company” which expression shall where the context admits include its successors assigns and transferees) of the ONE PART and the party described in Item 3 of the First Schedule (hereinafter called “ the Debenture Holder” or “the Bank” which expression shall where the context admits includes the Debenture Holder’s successors assigns and transferees) of the OTHER PART AND is supplemental to a First Demand Debenture dated 31st January, 2018, issued by the Borrower in favour of the Bank more particularly described in Item 4 of the First Schedule (hereinafter called “the Original Debenture”).
WHEREAS
A. | The Borrower obtained financing from the Bank in the amount of One Million Three Hundred and Sixty Thousand United States Dollars (US$1,360,000.00) (the “Bank’s Financing”) for the purposes of assisting with the build-out of infrastructure and the acquisition of equipment, work stations and related facilities to expand its call center operations/facilities at Portmore Pines Plaza, St. Catherine. |
B. | The Borrower issued in favour of the Bank a First Demand Debenture (hereinafter the “Original Debenture”) which secures repayment of the obligations with respect to the Bank’s Financing. |
C. | The Original Debenture has been impressed with Stamp Duty to cover an aggregate indebtedness in the amount set forth in item 5 of the First Schedule, interest, commission, fees and charges related thereto (herein the “Original Indebtedness”). |
D. |
The Borrower has requested from the Bank further financing in the amount of One Million Two Hundred Thousand United States Dollars (US$1,200,000.00) to
be used to assist with the build-out of another call-centre located at the Courtleigh Centre on St. Lucia Avenue being part of the expansion of the Company’s Business Process Outsourcing operations.
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E. | The Borrower has entered into that certain Security Confirmation Deed by which the Borrower has confirmed that the security constituted by the Original Debenture shall continue in force and remain and be security for the discharge of the Borrower’s indebtedness/ obligations. |
F. | The Borrower is desirous of increasing the enforceable value of the security as shall be held by the Bank with respect to the indebtedness of the Borrower including an amount equivalent to the Original Indebtedness, the same to secure a further indebtedness by the Borrower in the amount set forth in Item 6 of the First Schedule it being the intent of these presents that until the discharge of the Original Debenture and this Supplemental Debenture; the Original Debenture together with this Supplemental Debenture shall be a continuing security covering the aggregate indebtedness of the Borrower to the Bank to such aggregate as the stamp duty impressed on the Original Debenture and this Supplemental Debenture will extend to cover and that the Original Debenture and this Supplemental Debenture shall avail the Bank in respect of all present and future indebtedness of the Borrower. |
G. | The Borrower has agreed to issue this Supplemental Debenture on the terms and conditions hereinafter appearing. |
Now this DEED WITNESSETH as follows:
Expressions used in this Supplemental Debenture and not otherwise defined shall bear the meanings ascribed to these expressions in the Original Debenture.
1. | The Borrower covenants to pay on demand to the Debenture Holder all sums of money as are now or shall from time to time hereafter become owing to the Debenture Holder by the Borrower under and by virtue of the Commitment Letters dated 16th January 2018 and day of____________,______, the Original Debenture and/or any other Related Documents issued in respect of the Secured Obligations as and when the same shall become due and owing under or by virtue of the said documents. |
2. | AND FOR BETTER SECURING to the Debenture Holder the payment of the Secured Obligations in manner provided for by the Original Debenture (as confirmed by that certain Security Confirmation Deed aforesaid) to such aggregate as the stamp duty impressed on the Original Debenture and this Supplemental Debenture will extend to cover, the Borrower: |
i. | DOTH HEREBY CHARGES to the Debenture Holder as a continuing security for the payment and discharge of the Secured Obligations (including, for the avoidance of doubt, all interest thereon and all liabilities hereby covenanted to be paid and intended to be hereby secured) all the Charged Properties (as described in Item 1 of Second Schedule); |
ii. | DOTH HEREBY ASSIGNS absolutely to the Debenture Holder the rights and benefits described in Item 2 of the Second Schedule) |
3. | All covenants powers provisions conditions and agreements contained in or implied by or made applicable to the Original Debenture and/or the Security Confirmation Deed shall be applicable to this Supplemental Debenture as fully and effectually as if the same had been set out at length herein and specifically made applicable hereto. |
4. | This Supplemental Debenture shall be impressed in the first instance with stamp duty covering an aggregate further indebtedness of the amount set forth in Item 6 of the First Schedule, but the Bank shall be and is hereby empowered at any time or times hereafter without any further license or consent of the Borrower to impress additional stamp duty as is legally required on the Original Debenture and/or hereon covering any sum or sums by which the indebtedness to the Bank may exceed the aggregate indebtedness secured by the Original Debenture (as confirmed by that certain Security Confirmation Deed) and/or this Supplemental Debenture as the stamp duty impressed thereon and hereon will extend to cover it being the intent of these presents that until discharge thereof the Original Debenture (as confirmed by that certain Security Confirmation Deed) and this Supplemental Debenture shall be continuing securities covering indebtedness from the Borrower to the Bank to such aggregate as the stamp duty impressed thereon and hereon will extend to cover and shall avail the Bank in respect of all present and future indebtedness of the Borrower. |
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FIRST SCHEDULE
Item 1 Date of this Supplemental Debenture: | the day of 2018 |
Item 2 The Borrower: | Ibex Global Jamaica Limited |
Item 3 The Debenture Holder: | First Global Bank Jamaica Limited |
Item 4 Original Debenture: | First Demand Debenture over the present and future acquired assets of the Company dated 31st January 2018 issued by the Borrower in favour of First Global Bank Limited. |
Item 5 Original Indebtedness: | One Million Three Hundred and Sixty Thousand United States Dollars (US$1,360,000.00) |
Item 6 Further Indebtedness: | One Million Two Hundred Thousand United States Dollars (US$1,200,000.00) |
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
SECOND SCHEDULE
Item 1: Charged Properties
i. | by way of first fixed charge, all freehold and leasehold property of the Company and all other rights and interest of the Company in realty together with all buildings, fixtures (including trade fixtures), and plant (fixed or unfixed) and all machinery, equipment, computers, furniture and furnishings (together with all accessories, spare parts, additions, renewals and replacements from time to time to any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including stock-in-trade of the Company; |
ii. | by way of first fixed charge, all FUTURE freehold and leasehold property of the Company and all other future rights and interest of the Company in realty together with all buildings, fixtures (including trade fixtures), and future plant (fixed or unfixed) and all future machinery, equipment, computers, furniture and furnishings (together with all accessories, spare parts, additions, renewals and replacement from time to time to, or of any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including stock-in-trade of the Company; |
iii. | by way of first fixed charge, all PRESENT and FUTURE book and other debts and revenues (including, but not limited to, all credit balances and deposits of the Company with the Debenture Holder or any financial institution), rentals, accounts receivables and securities for money now or from time to time due or owing to or purchased or otherwise acquired by the Company and the full benefit of all rights and remedies relating thereto including but not limited to any bills of exchange, promissory notes and other negotiable or non-negotiable instruments, guarantees, indemnities, debentures, mortgages, legal and equitable charges and other security, reservations or proprietary rights, rights of tracing, liens, and all other rights and remedies of whatsoever nature in respect of the same, and all bills of lading, warehouse receipts and other documents of title to the goods; |
iv. | by way of first fixed charge, the Company’s PRESENT and FUTURE goodwill, uncalled or unpaid capital and the Shares now or hereafter belonging to the Company or in which the Company has an interest or may subsequently acquire an interest, whether as legal or beneficial owner or otherwise; |
v. | by way of first fixed charge, all PRESENT and FUTURE rights in Intellectual Property or similar rights now or hereafter belonging to the Company; |
vi. | by way of first fixed charge, all PRESENT and FUTURE contracts or policies of insurance (including life policies) in which the Company now or hereafter may have an interest and all moneys from time to time payable thereunder including any refund or premiums; |
vii. | by way of first fixed charge, all its PRESENT and FUTURE motor vehicles, spare parts and accessories now or hereinafter belonging to the Company or in which the Company may acquire an interest; |
viii. | by way of fixed/general charge all its undertaking and other assets, rights and income (both present and future) not otherwise effectively mortgaged, charged or assigned under subparagraphs (i) to (vii) above or Item 2 below. |
Item 2: Assigned Benefits
i. | the benefit to the Company of all rights and claims to which it is now, or may in the future become, entitled in relation to its Charged Properties including (but without limitation) all its rights and claims against all persons who now are or who at any time have been or may become purchasers, lessees, sub-lessees, licensees or occupiers of the whole or any part or parts of its Charged Properties and all guarantors and sureties for the obligations of any such person; |
ii. | the benefit to the Company of all guarantees, letters of support, warranties and representations given or made by, and any rights or remedies to which the Company is now or may, in the future, be entitled against, all or any suppliers, professional advisers and Contractors in relation to any of its Charged Properties and the manufacturers, suppliers or installers of all plant, machinery, fixtures, fittings or other items now or from time to time belonging to the Company, and any other person now or from time to time under contract with or under a duty to the Company including (without limitation) the right to prosecute in the name of the Company any proceedings against any such person in respect of any act, omission, neglect, default, breach of contract, or breach of duty, whether relating to the design, construction, inspection or supervision of the construction of any of its Charged Properties, or to the quality or fitness for use of such plant, machinery, fixtures, fittings and other items or otherwise, and the benefit of all sums recovered in any proceedings against all or any of such persons. |
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IN WITNESS whereof the Borrower has caused its common seal to be hereunto affixed the day and year first hereinbefore written.
The common seal of IBEX | ) | ||
GLOBAL JAMAICA LIMITED | ) | ||
) | \s\Robert Dechant | ||
was hereunto put and | ) | ||
affixed in the presence of and | ) | \s\Karl Gabel | |
this Instrument signed by | ) | ||
) | |||
and | ) | ||
) | |||
in the presence of | ) | ||
Attorney-at-law/Justice of the Peace for the parish of: |
Exhibit 10.26
SECOND SUPPLEMENTAL DEBENTURE
issued by
IBEX GLOBAL JAMAICA LIMITED
in favour of
FIRST GLOBAL BANK LIMITED
IBEX GLOBAL JAMAICA LIMITED
SECOND SUPPLEMENTAL DEBENTURE
Issued pursuant to the Borrower’s constitutive documents and a Resolution of the Borrower passed on the day of 2019
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This Second Supplemental Debenture is made on the date set out in Item 1 of the First Schedule between the party described in Item 2 of the First Schedule (herein referred to as “the Borrower” or “the Company” which expression shall where the context admits include its successors assigns and transferees) of the ONE PART and the party described in Item 3 of the First Schedule (hereinafter called “ the Debenture Holder” or “the Bank” which expression shall where the context admits includes the Debenture Holder’s successors assigns and transferees) of the OTHER PART AND is supplemental to a First Demand Debenture dated January 31, 2018 and a Supplemental Debenture dated 24th January 2019, (collectively referred to as “the Original Debentures”) issued by the Borrower in favour of the Bank.
WHEREAS
A. | The Borrower has, to date, obtained financing from the Bank for the purposes of assisting with the build-out of infrastructure and the acquisition of equipment, work stations and related facilities to expand its call center operations/facilities at Portmore Pines Plaza, St. Catherine and at the Courtleigh Centre on St. Lucia Avenue. These loan facilities were secured by a First Demand Debenture and a Supplemental Debenture impressed with Stamp Duty to cover the Borrower’s aggregate indebtedness as set forth in item 4 of the First Schedule (herein the “Existing Indebtedness”). |
B. | The Borrower has now requested from the Bank additional financing in the amount of Eight Hundred Thousand United States Dollars (US$800,000.00). |
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C. | The Borrower is desirous of increasing the enforceable value of the security as shall be held by the Bank with respect to the indebtedness of the Borrower including an amount equivalent to the Existing Indebtedness, the same to secure a further indebtedness by the Borrower in the amount set forth in Item 5 of the First Schedule it being the intent of these presents that until the discharge of the Original Debentures, the Original Debentures together with this Second Supplemental Debenture shall be a continuing security covering the aggregate indebtedness of the Borrower to the Bank to such aggregate as the stamp duty impressed on the Original Debentures and this Second Supplemental Debenture will extend to cover and that the Original Debentures and this Second Supplemental Debenture shall avail the Bank in respect of all present and future indebtedness of the Borrower. |
D. | The Borrower has agreed to issue this Second Supplemental Debenture on the terms and conditions hereinafter appearing. |
Now this DEED WITNESSETH as follows:
Expressions used in this Supplemental Debenture and not otherwise defined shall bear the meanings ascribed to these expressions in the Original Debenture.
1. | The Borrower covenants to pay on demand to the Debenture Holder all sums of money as are now or shall from time to time hereafter become owing to the Debenture Holder by the Borrower under and by virtue of the Commitment Letters, the Original Debentures and/or any other Related Documents issued in respect of the Secured Obligations as and when the same shall become due and owing under or by virtue of the said documents. |
2. | AND FOR BETTER SECURING to the Debenture Holder the payment of the Secured Obligations in manner provided for by the Original Debentures to such aggregate as the stamp duty impressed on the Original Debenture and this Second Supplemental Debenture will extend to cover, the Borrower: |
i. | DOTH HEREBY CHARGES to the Debenture Holder as a continuing security for the payment and discharge of the Secured Obligations (including, for the avoidance of doubt, all interest thereon and all liabilities hereby covenanted to be paid and intended to be hereby secured) all the Charged Properties (as described in Item 1 of Second Schedule); |
ii. | DOTH HEREBY ASSIGNS absolutely to the Debenture Holder the rights and benefits described in Item 2 of the Second Schedule). |
3. | All covenants powers provisions conditions and agreements contained in or implied by or made applicable to the First Demand Debenture shall be applicable to this Supplemental Debenture as fully and effectually as if the same had been set out at length herein and specifically made applicable hereto. |
4. | This Second Supplemental Debenture shall be impressed in the first instance with stamp duty covering a further indebtedness of the amount set forth in Item 6 of the First Schedule, but the Bank shall be and is hereby empowered at any time or times hereafter without any further license or consent of the Borrower to impress additional stamp duty as is legally required on the Original Debentures and/or hereon covering any sum or sums by which the indebtedness to the Bank may exceed the aggregate indebtedness secured by the Original Debentures and/or this Second Supplemental Debenture as the stamp duty impressed thereon and hereon will extend to cover it being the intent of these presents that until discharge thereof the Original Debentures and this Second Supplemental Debenture shall be continuing securities covering indebtedness from the Borrower to the Bank to such aggregate as the stamp duty impressed thereon and hereon will extend to cover and shall avail the Bank in respect of all present and future indebtedness of the Borrower. |
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FIRST SCHEDULE
Item 1 | Date of this Second Supplemental Debenture the day of 2019 |
Item 2 The Borrower: | Ibex Global Jamaica Limited |
Item 3 The Debenture Holder: | First Global Bank Limited |
Item 4 Existing Indebtedness: | One Million Three Hundred and Sixty Thousand United States Dollars (US$1,360,000.00); and |
One Million Two Hundred Thousand United States Dollars (US$1,200,000.00) |
Item 5 Further Indebtedness: | Eight Hundred Thousand United States Dollars (US$800,000.00) |
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Item 1: Charged Properties
i. | by way of first fixed charge, all freehold and leasehold property of the Company and all other rights and interest of the Company in realty together with all buildings, fixtures (including trade fixtures), and plant (fixed or unfixed) and all machinery, equipment, computers, furniture and furnishings (together with all accessories, spare parts, additions, renewals and replacements from time to time to any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including stock-in-trade of the Company; |
ii. | by way of first fixed charge, all FUTURE freehold and leasehold property of the Company and all other future rights and interest of the Company in realty together with all buildings, fixtures (including trade fixtures), and future plant (fixed or unfixed) and all future machinery, equipment, computers, furniture and furnishings (together with all accessories, spare parts, additions, renewals and replacement from time to time to, or of any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including stock-in-trade of the Company; |
iii. | by way of first fixed charge, all PRESENT and FUTURE book and other debts and revenues (including, but not limited to, all credit balances and deposits of the Company with the Debenture Holder or any financial institution), rentals, accounts receivables and securities for money now or from time to time due or owing to or purchased or otherwise acquired by the Company and the full benefit of all rights and remedies relating thereto including but not limited to any bills of exchange, promissory notes and other negotiable or non-negotiable instruments, guarantees, indemnities, debentures, mortgages, legal and equitable charges and other security, reservations or proprietary rights, rights of tracing, liens, and all other rights and remedies of whatsoever nature in respect of the same, and all bills of lading, warehouse receipts and other documents of title to the goods; |
iv. | by way of first fixed charge, the Company’s PRESENT and FUTURE goodwill, uncalled or unpaid capital and the Shares now or hereafter belonging to the Company or in which the Company has an interest or may subsequently acquire an interest, whether as legal or beneficial owner or otherwise; |
v. | by way of first fixed charge, all PRESENT and FUTURE rights in Intellectual Property or similar rights now or hereafter belonging to the Company; |
vi. | by way of first fixed charge, all PRESENT and FUTURE contracts or policies of insurance (including life policies) in which the Company now or hereafter may have an interest and all moneys from time to time payable thereunder including any refund or premiums; |
vii. | by way of first fixed charge, all its PRESENT and FUTURE motor vehicles, spare parts and accessories now or hereinafter belonging to the Company or in which the Company may acquire an interest; |
viii. | by way of fixed/general charge all its undertaking and other assets, rights and income (both present and future) not otherwise effectively mortgaged, charged or assigned under subparagraphs (i) to (vii) above or Item 2 below. |
Item 2: Assigned Benefits
i. | the benefit to the Company of all rights and claims to which it is now, or may in the future become, entitled in relation to its Charged Properties including (but without limitation) all its rights and claims against all persons who now are or who at any time have been or may become purchasers, lessees, sub-lessees, licensees or occupiers of the whole or any part or parts of its Charged Properties and all guarantors and sureties for the obligations of any such person; |
ii. | the benefit to the Company of all guarantees, letters of support, warranties and representations given or made by, and any rights or remedies to which the Company is now or may, in the future, be entitled against, all or any suppliers, professional advisers and Contractors in relation to any of its Charged Properties and the manufacturers, suppliers or installers of all plant, machinery, fixtures, fittings or other items now or from time to time belonging to the Company, and any other person now or from time to time under contract with or under a duty to the Company including (without limitation) the right to prosecute in the name of the Company any proceedings against any such person in respect of any act, omission, neglect, default, breach of contract, or breach of duty, whether relating to the design, construction, inspection or supervision of the construction of any of its Charged Properties, or to the quality or fitness for use of such plant, machinery, fixtures, fittings and other items or otherwise, and the benefit of all sums recovered in any proceedings against all or any of such persons. |
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IN WITNESS whereof the Borrower has caused its common seal to be hereunto affixed the day and year first hereinbefore written.
The common seal of IBEX | ) | ||
GLOBAL JAMAICA LIMITED | ) | ||
) | \s\Robert Dechant | ||
was hereunto put and | ) | ||
affixed in the presence of and | ) | \s\Karl Gabel | |
this Instrument signed by | ) | ||
) | |||
and | ) | ||
) | |||
in the presence of | ) | ||
Attorney-at-law/Justice of the Peace for the parish of: |
Issued pursuant to the Borrower’s
constitutive documents and a Resolution of
the Borrower passed on the 27th day of
March 2020
|
A.
|
The Borrower has, to date, obtained financing from the Bank for the purposes of assisting with the build-out of infrastructure and the acquisition of equipment, work stations and related facilities to
expand its call center operations/facilities at Portmore Pines Plaza, St. Catherine and at the Courtleigh Centre on St. Lucia Avenue. These loan facilities were secured by a First Demand Debenture and Supplemental Debentures impressed
with Stamp Duty to cover the Borrower’s aggregate indebtedness as set forth in item 4 of the First Schedule (herein the “Existing Indebtedness”).
|
B. |
The Borrower has now requested from the Bank additional financing in the amount of Two Million Six Hundred and Twenty-One Thousand United States Dollars (US$2,621,000.00).
|
C. |
The Borrower is desirous of increasing the enforceable value of the security as shall be held by the Bank with respect to the indebtedness of the Borrower including an amount equivalent to the Existing
Indebtedness, the same to secure a further indebtedness by the Borrower in the amount set forth in Item 5 of the First Schedule it being the intent of these presents that until the discharge of the Original Debentures, the Original
Debentures together with this Third Supplemental Debenture shall be a continuing security covering the aggregate indebtedness of the Borrower to the Bank to such aggregate as the stamp duty impressed on the Original Debentures and this
Third Supplemental Debenture will extend to cover and that the Original Debentures and this Third Supplemental Debenture shall avail the Bank in respect of all present and future indebtedness of the Borrower.
|
D. |
The Borrower has agreed to issue this Third Supplemental Debenture on the terms and conditions hereinafter appearing.
|
1. |
The Borrower covenants to pay on demand to the Debenture Holder all sums of money as are now or shall from time to time hereafter become owing to the Debenture Holder by the Borrower under and by virtue of
the Commitment Letters, the Original Debentures and/or any other Related Documents issued in respect of the Secured Obligations as and when the same shall become
due and owing under or by virtue of the said documents.
|
2. |
AND FOR BETTER SECURING to the Debenture Holder the payment of the Secured Obligations in manner provided for by the Original Debentures to such aggregate as the stamp duty impressed on the Original Debenture and
this Third Supplemental Debenture will extend to cover, the Borrower:
|
|
1.
|
DOTH HEREBY CHARGES to the Debenture Holder as a continuing security for the payment and discharge of the Secured Obligations (including, for the avoidance of doubt, all interest thereon and all
liabilities hereby covenanted to be paid and intended to be hereby secured) all the Charged Properties (as described in Item 1 of Second Schedule) ;
|
11.
|
DOTH HEREBY ASSIGNS absolutely to the Debenture Holder the rights and benefits described in Item 2 of the Second Schedule.
|
3. |
All covenants powers provisions conditions and agreements contained in or implied by or made applicable to the First Demand Debenture shall be applicable to this Supplemental Debenture as fully and effectually as
if the same had been set out at length herein and specifically made applicable hereto.
|
4. |
This Third Supplemental Debenture shall be impressed in the first instance with stamp duty covering a further indebtedness of the amount set forth in Item 5 of the First Schedule, but the Bank shall be and
is hereby empowered at any time or times hereafter without any further license or consent of the Borrower to impress additional stamp duty as is legally required on the Original Debentures and/or hereon covering any sum or sums by which
the indebtedness to the Bank may exceed the aggregate indebtedness secured by the Original Debentures and/or this
Third Supplemental Debenture as the stamp duty impressed thereon and hereon will extend to cover it being the intent of these presents that until discharge thereof
the Original Debentures and this Third Supplemental Debenture shall be continuing securities covering indebtedness from the Borrower to the Bank to such aggregate as the stamp duty impressed thereon and hereon will extend to cover and
shall avail the Bank in respect of all present and future indebtedness of the Borrower.
|
FIRST SCHEDULE
|
|
Item 1
|
Date of this Third Supplemental Debenture the 27th day of March 2020
|
Item 2 The Borrower:
|
Ibex Global Jamaica Limited
|
Item 3 The Debenture Holder:
|
First Global Bank Limited
|
Item 4 Existing Indebtedness:
|
One Million Three Hundred and Sixty Thousand United States Dollars (US$1,360,000.00); and
|
One Million Two Hundred Thousand United States Dollars (US$1,200,000.00)
|
|
Eight Hundred Thousand United States Dollars (US$800,000.00)
|
|
Item 5 Further Indebtedness:
|
Two Million Six Hundred and Twenty- One Thousand United States Dollars (US$2,621,000.00).
|
|
i. |
by way of first fixed charge, all freehold and leasehold property of the Company and all other rights and interest of the Company
in realty together with all buildings, fixtures (including trade fixtures), and plant (fixed or unfixed) and all machinery, equipment, computers, furniture and furnishings (together with all accessories, spare parts, additions,
renewals and replacements from time to time to any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including stock-in-trade of the Company;
|
ii.
|
by way of first fixed charge, all FUTURE freehold and leasehold property of the Company and all other future rights and interest
of the Company in realty together with all buildings, fixtures (including trade fixtures), and future plant (fixed or unfixed) and all future machinery, equipment, computers, furniture and
furnishings (together with all accessories, spare parts, additions, renewals and replacement from time to time to, or of any of the foregoing) and the full benefit of all warranties and contracts relating to the same, including
stock-in-trade of the Company;
|
iii.
|
by way of first fixed charge, all PRESENT and FUTURE book and other
debts and revenues (including, but not limited to, all credit balances and deposits of the Company with the Debenture Holder or any financial institution), rentals, accounts receivables and securities for money now or from time to time due or owing to or purchased or otherwise acquired by the Company and the full benefit of all rights and remedies relating thereto including but not limited to any bills of exchange, promissory notes and other negotiable or non-negotiable instruments, guarantees,
indemnities, debentures, mortgages, legal and equitable charges and other security, reservations or proprietary rights, rights of tracing, liens, and all other rights and remedies of whatsoever nature in respect of the same, and all
bills of lading, warehouse receipts and other documents of title to the goods;
|
iv.
|
by way of first fixed charge, the Company’s PRESENT and FUTURE goodwill, uncalled or unpaid capital and the Shares now or hereafter
belonging to the Company or in which the Company has an interest or may subsequently acquire an interest, whether as legal or beneficial owner or
otherwise;
|
v.
|
by way of first fixed charge, all PRESENT and FUTURE rights in Intellectual Property or similar rights now or hereafter belonging to the
Company;
|
vi.
|
by way of first fixed charge, all PRESENT and FUTURE contracts or policies of insurance (including life policies) in which the Company now
or hereafter may have an interest and all moneys from time to time payable thereunder including any refund or premiums;
|
vii.
|
by way of first fixed charge, all its PRESENT and FUTURE motor vehicles, spare parts and accessories now or hereinafter belonging to the
Company or in which the Company may acquire an interest;
|
|
viii. |
by way of fixed/general charge all its undertaking and other assets, rights and income (both present and future) not otherwise effectively mortgaged, charged or assigned under subparagraphs (i) to
(vii) above or Item 2 below.
|
|
i. |
the benefit to the Company of all rights and claims to which it is now, or may in the future become, entitled in relation to its Charged Properties including (but without
limitation) all its rights and claims against all persons who now are or who at any time have been or may become purchasers, lessees, sub-lessees, licensees or occupiers of the whole or any part or parts of its Charged Properties and all
guarantors and sureties for the obligations of any such person;
|
|
ii. |
the benefit to the Company of all guarantees, letters of support, warranties and representations given or made
by, and any rights or remedies to which the Company is now or may, in the future, be entitled against, all or any suppliers, professional
advisers and Contractors in relation to any of its Charged Properties and the manufacturers, suppliers or installers of all plant, machinery, fixtures, fittings or other items now or from time to time belonging to the Company, and any other person now or from time to time under contract with or under a duty to the
Company including (without limitation) the right to prosecute in the name of the Company any proceedings
against any such person in respect of any act, omission, neglect, default, breach of contract, or breach of duty, whether relating to the design, construction,
inspection or supervision of the construction of any of its Charged Properties, or to the quality or fitness for use of such plant, machinery, fixtures, fittings
and other items or otherwise, and the benefit of all sums recovered in any proceedings against all or any of such persons.
|
The common seal of IBEX
|
)
|
||
GLOBAL JAMAICA LIMITED
|
)
|
||
)
|
|||
was hereunto put and
|
)
|
/s/ Robert Dechant
|
|
affixed in the presence of and
|
)
|
/s/ Karl Gabel
|
|
this Instrument signed by
|
)
|
||
Robert Dechant, Director
|
)
|
||
and
|
)
|
||
Karl Gabel, Director
|
)
|
||
in the presence of
|
)
|
/s/ Charlotte Kachold
|
|
Attorney-at-law/Justice of the Peace
|
|
for the parish of:
|
Justice of the Peace for the Parish of:
|
(1)
|
THE RESOURCE GROUP INTERNATIONAL LIMITED, an exempted company organised and existing under the laws of Bermuda, with Company Registration No. 50201 and having its
registered address at Crawford House, 50 Cedar Avenue, Hamilton, Bermuda HM 11 (“TRGI”);
|
(2)
|
ETELEQUOTE PLC, a public limited company existing under the laws of England and Wales, with Registration No. 08587657 and having its registered address at 3rd Floor, 1
Ashley Road, Altrincham, Cheshire, WA14 2DT (“ETQ”);
|
(3)
|
ANTHONY SOLAZZO, an individual with an address of 1520 Gulf Blvd #707 Clearwater FL 33767 USA (“Solazzo”); and
|
(4)
|
FORWARD MARCH LIMITED, an exempted company organised and existing under the laws of Bermuda, with Company Registration No. 52347 and having its registered address at
Crawford House, 50 Cedar Avenue, Hamilton, Bermuda HM 11 (“FM”),
|
|
(each a “Party” and collectively, the “Parties”).
|
|
(A)
|
Solazzo is the holder of a total of 3,125,000 A ordinary shares in ETQ with a par value of £0.00032 per share (the “Solazzo ETQ Shares”).
|
|
(B)
|
TRGI is the holder of a total of 3,124,000 preferred ordinary shares, 8 B ordinary shares, and 1,562,500 C ordinary shares, each in ETQ and each with a par value of £0.00032 per share (the “TRGI ETQ Shares”)
|
|
(C)
|
Subject to any prior necessary corporate or regulatory approvals (including any prior no-objection or approval of the BMA), Solazzo would like to effect a transfer to FM, and FM would like to accept all of
the Solazzo ETQ Shares, in exchange for the issue and allotment by FM of 533,818 fully paid and non-assessable common shares in FM with a par value of US$0.0001 per common share to Solazzo (the “FM Shares”)
(the “Solazzo Share Transfer and Exchange”).
|
|
(D)
|
The Parties are accordingly entering into this Agreement to set out the terms and conditions governing the Share Transfer and Exchange.
|
1.
|
DEFINITIONS AND INTERPRETATION
|
|
1.1
|
Definitions
|
“Agreement”
|
means this share transfer and exchange agreement, including its schedules (if any);
|
||
“BMA”
|
means the Bermuda Monetary Authority;
|
||
“Companies Act”
|
means the Companies Act, 1981, as amended, of Bermuda;
|
||
“Completion”
|
means the completion of the Solazzo Share Transfer and Exchange, as well as the TRGI Share Transfer, on or by the Completion Date;
|
||
“Completion Date”
|
means on or by 30 June, 2017 or such other date as may be agreed between the Parties in writing;
|
||
“Dispute”
|
has the meaning given to it in clause 8.9;
|
||
“Encumbrance”
|
means any adverse claim or right or third party right or other right or interest, any equity, any option or right of pre-emption or right to acquire or right to restrict, any mortgage, charge, assignment,
hypothecation, pledge, lien, encumbrance or security interest or arrangement of whatsoever nature, any reservation-of-title or any hire purchase, lease or instalment purchase agreement;
|
||
“FM Shares”
|
has the meaning given to it in Recital (C);
|
||
“Proceedings”
|
has the meaning given to it in clause 8.10(a);
|
||
“Solazzo ETQ Shares”
|
has the meaning given to it in Recital (A);
|
||
“Solazzo Share
|
has the meaning given to in it Recital (C);
|
||
Transfer and
|
|||
Exchange”
|
“TRGI ETQ
|
has the meaning given to it in recital (B); and
|
||
Shares”
|
|||
“TRGI Share
|
has the meaning given to it in clause 4.1.
|
||
Transfer”
|
|
1.2
|
Interpretation
|
|
(a)
|
the section headings and captions to the clauses in this Agreement are inserted for convenience of reference only and shall not be considered a part of or affect the construction or interpretation of this
Agreement;
|
|
(b)
|
a reference to a document is a reference to that document as from time to time supplemented or varied;
|
|
(c)
|
words importing the singular shall include the plural number and vice versa and words importing a gender shall include each gender;
|
|
(d)
|
words and phrases, the definitions of which are contained or referred to in the Companies Act shall be construed as having the meanings thereby attributed to them; and
|
|
(e)
|
any reference to any clause, sub-clause or paragraph, shall be a reference to the clause, sub-clause or paragraph, of this Agreement in which the reference occurs unless it is indicated that reference to some
other provision is intended.
|
2.
|
SOLAZZO SHARE TRANSFER
|
|
2.1
|
Solazzo Share Transfer and Exchange
|
|
|
Subject to any prior necessary corporate or regulatory approvals (including any prior regulatory no-objection or approval of the BMA), Solazzo agrees to effect the transfer of the Solazzo ETQ Shares to FM and
FM agrees to acquire the Solazzo ETQ Shares in exchange for the issue and allotment of the FM Shares, as fully paid and non-assessable shares, by FM to Solazzo, with effect from the Completion and free from any Encumbrances and with the
benefit of all accrued rights and advantages attaching or belonging thereto.
|
3.
|
CONSIDERATION TO SOLAZZO
|
|
3.1
|
Solazzo and FM agree that the issuance of the FM Shares, and the fact of the TRGI Share Transfer occurring, shall be good and sufficient consideration for the transfer of the Solazzo ETQ Shares.
|
4.
|
TRANSFER BY TRGI
|
|
TRGI Share Transfer
|
|
4.1
|
Subject to any prior necessary corporate or regulatory approvals (including any prior regulatory no-objection or approval of the BMA), TRGI agrees to effect the transfer of the TRGI ETQ Shares to FM (the “TRG Share Transfer”).
|
5.
|
COMPLETION
|
|
5.1
|
Timing
|
|
|
Completion shall occur on the Completion Date. If Completion does not occur on or by the Completion Date, this Agreement and all obligations, consents, warranties, and covenants arising out of the Agreement
shall be null and void.
|
6.
|
WARRANTIES AND COVENANTS
|
|
6.1
|
Warranties
|
|
(a)
|
Solazzo warrants and represents to the Parties that:
|
|
(i)
|
he is the legal and beneficial owner of the Solazzo ETQ Shares, and all such Solazzo ETQ Shares are free of all Encumbrances;
|
|
(ii)
|
he has the legal right and full power and authority to execute and deliver, and to exercise his rights and perform his obligations under this Agreement, and further that this Agreement constitutes a valid,
legally binding and enforceable obligation on him in accordance with its terms; and
|
|
(iii)
|
this Agreement constitutes, and the documents, if any, referred to in this Agreement which are to be executed by him, when executed, will constitute, valid and binding agreements enforceable in accordance
with their respective terms.
|
|
(b)
|
Each of TRGI, ETQ and FM respectively warrant and represent to each of the Parties that:
|
|
(i)
|
each is a company duly incorporated and validly existing under the laws of its incorporation or, if applicable, continuation, and has the power to own its assets and carry on its business as it is being
conducted;
|
|
(ii)
|
each has the legal right and full power and authority to execute and deliver, and to exercise their rights and perform their obligations under this Agreement, and further that this Agreement constitutes a
valid, legally binding and enforceable obligation on each of them in accordance with its terms; and
|
|
(iii)
|
this Agreement constitutes, and the documents, if any, referred to in this Agreement which are to be executed by each of them, when executed, will constitute, valid and binding agreements enforceable in
accordance with their respective terms.
|
|
(c)
|
TRGI warrants and represents to Solazzo that it is the beneficial owner of the TRGI ETQ Shares and such TRGI ETQ Shares are free of all Encumbrances.
|
|
(d)
|
FM warrants and represents to Solazzo that upon Completion, FM’s issued share capital will be as follows:
|
|
(A)
|
533,818 common shares issued to Solazzo;
|
|
(B)
|
4,749,861 preferred shares issued to TRGI;
|
|
(C)
|
6,856,139 common shares issued to TRGI; and
|
|
(D)
|
an additional 360,184 common shares shall be issued, or agreed to be issued, to other person(s).
|
|
(e)
|
FM further warrants and represents to Solazzo that, on or by the Completion Date (i) FM’s Byelaws and a Certificate of Designation for the preferred shares shall be in the form as attached hereto as Exhibit A to this Agreement; and (ii) FM’s Stock Option Plan shall be in the form attached hereto as Exhibit B to this Agreement.
|
|
6.2
|
Covenants
|
|
|
Each Party jointly and severally covenants with the other Parties that he or it shall, and shall procure, so far as is within his or its power of procurement, that all necessary third parties shall likewise,
do, execute and perform all such further deeds, documents, assurances, acts and things as either of them, at or after Completion, may reasonably require to give effect to the terms of this Agreement.
|
7.
|
ACKNOWLEDGEMENT
|
|
7.1
|
By signing this Agreement, each of TRGI, ETQ, and FM undertakes:
|
|
(a)
|
to perform any action required to give effect to the provisions of this Agreement;
|
|
(b)
|
that any resolutions required to be taken by its shareholder or directors to effect Completion have been adopted (whether at a meeting or in writing);
|
|
(c)
|
to cancel such certificates as may be returned to it or declared lost as applicable;
|
|
(d)
|
to issue new certificates as applicable to reflect the Share Transfer and Exchange;
|
|
(e)
|
to update its registers (including its register of members) to reflect the positions following the Share Transfer and Exchange; and
|
|
(f)
|
to file all necessary statutory forms and documents with the BMA and all other authorities, if and as required, within the time limits prescribed by applicable law or regulation.
|
8.
|
MISCELLANEOUS PROVISIONS
|
|
8.1
|
Assignment
|
|
|
No Party may assign its rights or obligations under this Agreement without the prior written consent of all the other Parties.
|
|
8.2
|
Parties Bound
|
|
|
This Agreement shall be binding upon and run for the benefit of the Parties, their successors and permitted assigns.
|
|
8.3
|
Relationship of the Parties
|
|
|
In this Agreement, nothing shall be deemed to:
|
|
(a)
|
constitute a partnership between the Parties or any of them; or
|
|
(b)
|
make any Party an agent for any other Party, for any purpose whatsoever.
|
|
8.4
|
Entire Agreement
|
|
|
This Agreement constitutes the entire agreement and understanding between the Parties with respect to its subject matter, and except as expressly provided, supersedes all prior representations, writings,
negotiations or understandings, with respect to that subject matter, if any.
|
|
8.5
|
Waivers
|
|
|
A failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies. No single or
partial exercise of a right or remedy provided by this Agreement or by law prevents further exercise of the right or remedy or the exercise of another right or remedy.
|
|
8.6
|
Variations
|
|
|
No variation of this Agreement shall be effective unless it is made in writing and signed by each of the Parties.
|
|
8.7
|
Counterparts
|
|
|
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute this Agreement.
|
|
8.8
|
Further Assurance
|
|
|
Each Party shall do and execute, or arrange for the doing and executing of, each necessary act, document and thing reasonably within its power to implement this Agreement.
|
|
8.9
|
Governing Law
|
|
|
This Agreement and any dispute arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) (“Dispute”)
shall be governed by and construed in accordance with the laws of Bermuda.
|
|
8.10
|
Jurisdiction
|
|
(a)
|
Each of the Parties to this Agreement irrevocably agrees that the courts of Bermuda are to have exclusive jurisdiction to settle any Dispute and, for such purposes, irrevocably submits to the exclusive
jurisdiction of such courts. Any proceeding, suit or action arising out of or in connection with this Agreement (the “Proceedings”) shall therefore be brought in the courts of Bermuda.
|
|
(b)
|
Each of the Parties to this Agreement irrevocably waives any objection to Proceedings in the courts referred to in clause 8.10(a) on the grounds of venue or on the grounds of forum non conveniens.
|
Signature
|
|
Signed by
|
/s/ Zia Chishti |
|
Signed by
|
/s/ Anthony Solazzo
|
|
Signature of witness:
|
/s/ Pat Costello | |
Name:
|
Pat Costello
|
|
Address:
|
1700 Penn Ave, Suite 560
|
|
Washington DC 20006
|
||
Occupation:
|
Lawyer
|
Signature
|
|
(1)
|
FORWARD MARCH LIMITED, an exempted company organised and existing under the laws of Bermuda, with Company
Registration No. 52347 and having its registered address at Crawford House, 50 Cedar Avenue, Hamilton, Bermuda HM 11 (“FM”),
|
(2)
|
DGS LIMITED an exempted company organised and existing under the laws of Bermuda, with Company Registration No. 52345 and having its registered address
at Crawford House, 50 Cedar Avenue, Hamilton, Bermuda HM 11 (“DGS”);
|
(3)
|
JEFFREY COX, an individual with an address of 2572 Saddleback Ct, Castle Rock, CO, 80104-7542 USA (“JC”); and
|
(A)
|
JC is the holder of a total of 3,871,836 common shares with a par value of US$0.001 per common share in DGS (the “DGS Shares”).
|
(B)
|
Subject to any prior necessary corporate or regulatory approvals (including any prior no-objection or approval of the BMA), JC would like to effect a transfer to FM, and FM would like to accept
all of the DGS Shares, in exchange for the issue and allotment by FM of 360,184 fully paid and non-assessable common shares in FM with a par value of US$0.0001 per common share to JC, or his nominee (the “FM
Shares”) (the “Share Transfer and Exchange”).
|
(C)
|
The Parties are accordingly entering into this Agreement to set out the terms and conditions governing the Share Transfer and Exchange.
|
1. |
DEFINITIONS AND INTERPRETATION
|
1.1 |
Definitions
|
“Agreement” |
means this share transfer and exchange agreement, including its schedules (if any);
|
“BMA”
|
means the Bermuda Monetary Authority;
|
“Companies Act”
|
means the Companies Act, 1981, as amended, of Bermuda;
|
“Completion” |
means the completion of the Share Transfer and Exchange;
|
“Completion Date”
|
means on or by 30 June, 2017 or such other date as may be agreed between the Parties in writing;
|
“DGS Shares”
|
has the meaning given to it in Recital (A);
|
“Dispute”
|
has the meaning given to it in clause 7.9;
|
“Encumbrance”
|
means any adverse claim or right or third party right or other right or interest, any equity, any option or right of pre-emption or right to acquire or right to restrict, any mortgage, charge,
assignment, hypothecation, pledge, lien, encumbrance or security interest or arrangement of whatsoever nature, any reservation-of-title or any hire purchase, lease or instalment purchase agreement;
|
“FM Shares”
|
Has the meaing given to it in Recital (B);
|
“Proceedings”
|
has the meaning given to it in clause 7.10(a);
|
“Share Transfer and Exchange”
|
has the meaning given to in it Recital (B);
|
1.2 |
Interpretation
|
(a) |
the section headings and captions to the clauses in this Agreement are inserted for convenience of reference only and shall not be considered a part of or affect the construction or
interpretation of this Agreement;
|
(b) |
a reference to a document is a reference to that document as from time to time supplemented or varied;
|
(c) |
words importing the singular shall include the plural number and vice versa and words importing a gender shall include each gender;
|
(d) |
words and phrases, the definitions of which are contained or referred to in the Companies Act shall be construed as having the meanings thereby attributed to them; and
|
(e) |
any reference to any clause, sub-clause or paragraph, shall be a reference to the clause, sub-clause or paragraph, of this Agreement in which the reference occurs unless it is indicated that
reference to some other provision is intended.
|
2. |
SHARE TRANSFER AND EXCHANGE
|
2.1 |
Subject to any prior necessary corporate or regulatory approvals (including any prior regulatory no-objection or approval of the BMA), JC agrees to effect the transfer of the DGS Shares to FM
and FM agrees to acquire the DGS Shares in exchange for the issue and allotment of the FM Shares, as fully paid and non-assessable shares, by FM to JC, with effect from the Completion and free from any Encumbrances and with the benefit of all
accrued rights and advantages attaching or belonging thereto.
|
3. |
CONSIDERATION TO JC
|
3.1 |
JC and FM agree that the issuance of the FM Shares shall be good and sufficient consideration for the transfer of the DGS Shares.
|
4. |
COMPLETION
|
4.1 |
Timing
|
5. |
WARRANTIES AND COVENANTS
|
5.1
|
Warranties
|
(a)
|
JC warrants and represents to the Parties that:
|
(i)
|
he is the beneficial and legal owner of the DGS Shares and all such DGS Shares are free of all Encumbrances;
|
(ii)
|
he has the legal right and full power and authority to execute and deliver, and to exercise his rights and perform his obligations under this Agreement, and further that this Agreement
constitutes a valid, legally binding and enforceable obligation on him in accordance with its terms; and
|
(iii)
|
this Agreement constitutes, and the documents, if any, referred to in this Agreement which are to be executed by him, when executed, will constitute, valid and binding agreements enforceable
in accordance with their respective terms.
|
(b)
|
Each of DGS and FM respectively warrant and represent to COX that:
|
(i)
|
each is a company duly incorporated and validly existing under the laws of its incorporation or, if applicable, continuation, and has the power to own its assets and carry on its business as
it is being conducted;
|
(ii)
|
each has the legal right and full power and authority to execute and deliver, and to exercise their rights and perform their obligations under this Agreement, and further that this Agreement
constitutes a valid, legally binding and enforceable obligation on each of them in accordance with its terms; and
|
(iii)
|
this Agreement constitutes, and the documents, if any, referred to in this Agreement which are to be executed by each of them, when executed, will constitute, valid and binding agreements
enforceable in accordance with their respective terms.
|
(c)
|
FM warrants and represents to JC that upon Completion, FM’s issued share capital will be as follows:
|
(A)
|
360,184 common shares issued to JC;
|
(B)
|
4,749,861 preferred shares issued to TRGI;
|
(C)
|
6,856,139 common shares issued to TRGI; and
|
(D)
|
an additional 533,818 common shares shall be issued, or agreed to be issued, to other person(s).
|
(d)
|
FM further warrants and represents to JC that, on or by the Completion Date (i) FM’s Byelaws and a Certificate of Designation for the preferred shares shall be in the form as attached hereto
as Exhibit A to this Agreement; and (ii) FM’s Stock Option Plan shall be in the form attached hereto as Exhibit B to this Agreement.
|
5.2
|
Covenants
|
6. |
ACKNOWLEDGEMENT
|
6.1
|
By signing this Agreement, each of DGS and FM undertakes:
|
(a)
|
to perform any action required to give effect to the provisions of this Agreement;
|
(b)
|
that any resolutions required to be taken by its shareholder or directors to effect Completion have been adopted (whether at a meeting or in writing);
|
(c)
|
to cancel such certificates as may be returned to it or declared lost as applicable;
|
(d)
|
to issue new certificates as applicable to reflect the Share Transfer and Exchange;
|
(e)
|
to update its registers (including its register of members) to reflect the positions following the Share Transfer and Exchange; and
|
(f)
|
to file all necessary statutory forms and documents with the BMA and all other authorities, if and as required, within the time limits prescribed by applicable law or regulation.
|
7. |
MISCELLANEOUS PROVISIONS
|
7.1
|
Assignment
|
7.2
|
Parties Bound
|
7.3
|
Relationship of the Parties
|
(a)
|
constitute a partnership between the Parties or any of them; or
|
(b)
|
make any Party an agent for any other Party, for any purpose whatsoever.
|
7.4
|
Entire Agreement
|
7.5
|
Waivers
|
7.6
|
Variations
|
7.7
|
Counterparts
|
7.8
|
Further Assurance
|
7.9
|
Governing Law
|
7.10
|
Jurisdiction
|
(a)
|
Each of the Parties to this Agreement irrevocably agrees that the courts of Bermuda are to have exclusive jurisdiction to settle any Dispute and, for such purposes, irrevocably
submits to the exclusive jurisdiction of such courts. Any proceeding, suit or action arising out of or in connection with this Agreement (the “Proceedings”) shall therefore be brought in the
courts of Bermuda.
|
(b)
|
Each of the Parties to this Agreement irrevocably waives any objection to Proceedings in the courts referred to in clause 7.10(a) on the grounds of venue or on the grounds of forum non conveniens.
|
For and on behalf of:
|
|||||
THE RESOURCE GROUP INTERNATIONAL LIMITED
|
|||||
/s/ Mohammed Khaishgi |
|||||
Signature
|
|||||
Name: Mohammed Khaishgi
|
|||||
Director/Authorised Signatory
|
|||||
For and on behalf of:
|
|||||
DIGITAL GLOBE SERVICES, LTD.
|
|||||
Signed by
|
/s/ Mohammed Khaishgi | ||||
Signature
|
|||||
Name: Mohammed Khaishgi
|
|||||
Director/Authorised Signatory
|
|||||
For and on behalf of:
|
|||||
Signed by
|
/s/ Jeffrey Cox
|
||||
MR. JEFFREY COX, in the presence of:
|
|||||
Signature of witness:
|
/s/ Pat Costello |
|
|||
Name:
|
Pat Costello
|
||||
Address:
|
1700 Pennsylvania Ave, Suite 560
|
||||
Washington DC 20006
|
|||||
Occupation:
|
Lawyer
|
||||
For and on behalf of:
|
|||||
DGS LIMITED
|
|||||
/s/ Zia Chishti | |||||
Signature
|
|||||
Name: Zia Chishti
|
|||||
Director/Authorised Signatory
|
1. |
Services. During the term of Cox’s employment with Digital Globe Services Inc., a Delaware company (“DGS US”), Cox shall, upon the Company’s
request, serve as an executive officer and/or director of the Company, and render duties to the Company associated with such position(s) (collectively, the “Services”).
|
2. |
Standard of Conduct. In performing any Services, Cox agrees to the following standard of conduct:
|
a. |
Cox shall comply with all written policies of the Company existing as of the Effective Date and as may be later modified or terminated by the Company in the future in its sole discretion (“Company Policies”). All Company Policies will be
made available to Cox upon request.
|
b. |
Cox shall at all times comply with all applicable laws and regulations.
|
3. |
Fees. In exchange for Cox’s provision of Services, Cox shall be entitled to receive a fee equal to 13.93% of any cash dividends actually paid by the Company to FM (the “Fees”). All Fees shall be paid to Cox by the end of the month
immediately following the month in which such Fees have been earned under this Agreement.
|
4. |
Term and Termination. The “Term” of this Agreement shall commence on the date that the Share Exchange is completed and shall continue until the
earlier to occur of: (i) the satisfaction of any dividend preference on preferred shares issued by FM; (ii) the conversion of all preferred shares issued by FM into common shares of FM; (iii) a sale of substantially all the assets of the
Company or its direct or indirect subsidiaries to an unaffiliated third party; (iv) a sale of all of the shares held by FM in any of DGS Ltd., IBEX Global Limited, and Etelequote Limited (the “Other Portfolio Companies”) to an unaffiliated
third party; (v) a sale of substantially all of the assets held by any of the Other Portfolio Companies to an unaffiliated third pary; and (vi) June 30, 2018.
|
5. |
Relationship of the Parties. It is understood by the parties that Cox is an independent contractor with respect to Company, and not an employee of
Company. Company will not, by virtue of this Agreement, provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefit, for the benefit of Cox or any of its employees, agents, or principals. Cox
shall be solely responsible for reporting any Fees received hereunder to the appropriate tax authorities, as well as for the payment of any taxes associated with the payment of such Fees, and shall indemnify and hold harmless the Company
against any claim arising out or related to any of the foregoing tax reporting and payment obligations.
|
6. |
Miscellaneous.
|
a. |
Any notice to be delivered under this Agreement must be sent to the following emails, delivery receipt requested, in order to be deemed a valid written notice under this Agreement. Such notices shall be deemed delivered: (i) as of the
date of the delivery receipt; (ii) or, if no delivery receipt is given within 48 hours of sending the email, the date of the second business day after the date of sending:
|
b. |
No waiver of any provision of this Agreement shall be effective by the Company unless set forth in a writing executed by the Company. Company may assign this agreement upon providing notice thereof to Cox. All remedies set forth in this
Agreement are cumulative to any other remedies a party may have under applicable law. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof. The parties agree that all understandings, oral
agreements, and representations made prior to the full execution of this Agreement are void and/or are superseded by this Agreement. This Agreement cannot be modified, changed, or amended, except in a writing signed by the parties. This
Agreement shall be governed by the laws of the District of Columbia, regardless of conflict of law principles. Contractor hereby consents to the jurisdiction of the federal and state courts of the District of Columbia for any disputes
arising out of this Agreement. The parties agree to resolve disputes arising out of or relating to this Agreement pursuant to the Direct Dialogue Program attached hereto as Exhibit A. This Agreement may be executed in counterparts and
delivered by electronic mail or facsimile.
|
DGS LTD.
|
|
JEFFREY COX
|
|
|
|
/s/ Zia Chishti
|
|
/s/ Jeffrey Cox
|
Zia Chishti
|
|
|
Director
|
|
|
Name:
|
___________________________________________________________________________________________________ |
Address:
|
___________________________________________________________________________________________________ |
Telephone:
|
___________________________________________________________________________________________________ |
DGS Ltd.
|
Jeffrey Cox
|
|
|
||
/s/ Mohammed Khaishgi | /s/ Jeffrey Cox | |
Mohammed Khaishgi
|
||
Director
|
Exhibit 10.32
Profit Share Agreement
This Profit Share Agreement (“Agreement”) is made effective as of June 30, 2019 (“Effective Date”) by and between DGS Ltd. an exempted Bermuda company (”Company”), and Jeffery Cox, an individual with a residential address at 2572 Saddleback Ct., Castle Rock, CO, 80104-7542 USA (“Cox).
WHEREAS, pursuant to a share exchange in 2016 whereby Cox exchanged his shares in Digital Globe Services Limited (“DGS Oldco Shares”) for 3,871,836 common shares of the Company (“DGS Newco Shares”) and further exchanged his DGS Newco Shares in exchange for the issuance of 322,599 common shares of Ibex Holdings Limited, an exempted Bermuda company (“Ibex”) who is the owner of 100% of the issued share capital of the Company; and
WHEREAS, the parties hereto desire to have Cox receive a share of any cash dividends actually paid by the Company to Ibex;
NOW THEREFORE, the parties agree as follows:
1. | Services. During the term of Cox’s employment with Digital Globe Services Inc., a Delaware company (“DGS US”), Cox shall, upon the Company’s request, serve as an executive officer and/or director of the Company, and render duties to the Company associated with such position (s) (collectively, the “Services”). |
2. | Standard of Conduct. In performing any Services, Cox agrees to the following standard of conduct: |
a. | Cox shall comply with all written policies of the Company existing as of the Effective Date and as may be later modified or terminated by the Company in the future in its sole discretion (“Company Policies”). All Company Policies will be made available to Cox upon request. |
b. | Cox shall at all times comply with all applicable laws and regulations. |
3. | Fees. In exchange for Cox’s provision of Services, Cox shall be entitled to receive a fee equal to 16.18% of any cash dividends actually paid by the Company to Ibex (the “Fees”). All Fees shall be paid to Cox by the end of the month immediately following the month in which such Fees have been earned under this Agreement. |
4. | Term and Termination. The “Term” of this Agreement shall commence on July 1, 2019 and shall continue until the earlier to occur of: (i) the satisfaction of any dividend preference on preferred shares issued by Ibex; (ii) the conversion of all preferred shares issued by Ibex into common shares of Ibex; (iii) a sale of substantially all the assets of the Company or its direct or indirect subsidiaries to an unaffiliated third party; (iv) a sale of all of the shares held by Ibex in any of DGS Ltd., and IBEX Global Limited (the “Other Portfolio Companies”) to an unaffiliated third party; (v) a sale of substantially all of the assets held by any of the Other Portfolio Companies to an unaffiliated third party; and (vi) June 30, 2020. |
|
In the event of a termination of this Agreement for any reason, Company shall pay Cox for any Fees that were earned by Contractor up through the termination date in accordance with the terms of Section 4 and shall not be entitled to earn any Fees after the termination date, provided that, if this agreement is terminated pursuant to Section 4 (iv), the Company and Cox shall negotiate in good faith a potential extension of the Term of this Agreement. |
5. | Relationship of the Parties. It is understood by the parties that Cox is an independent contractor with respect to the Company, and not an employee of Company. Company will not, by virtue of this Agreement, provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefit, for the benefit of Cox, or any of its employees, agents, or principals. Cox shall be solely responsible for reporting any Fees received hereunder to the appropriate tax authorities, as well as for the payment of any taxes associated with the payment of such Fees, and shall indemnify and hold harmless the Company against any claim arising out or related to any of the foregoing tax reporting and payment obligations. |
6. | Miscellaneous. |
a. | Any notice to be delivered under this Agreement must be sent to the following emails, delivery receipt requested, in order to be deemed a valid written notice under this Agreement. Such notices shall be deemed delivered: (i) as of the date of the delivery receipt; (ii)or, if no delivery receipt is given within 48 hours of sending the email, the date of the second business day after the date of sending: |
If to Company: christy.oconnor@ibex.co
If to Cox: Jeff.cox@dgsworld.com
Or to such other address as a party may provide in written notice to the other party.
b. | No waiver of any provision of this Agreement shall be effective by the Company unless set forth in a writing executed by the Company. Company may assign this agreement upon providing notice thereof to Cox. All remedies in this Agreement are cumulative to any other remedies a party may have under applicable law. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof. The parties agree that all understandings, oral agreements, and representations made prior to the full execution of this Agreement are void and/or are superseded by this Agreement. This Agreement cannot be modified, changed, or amended, except in writing signed by the parties. This Agreement shall be governed by the laws of the District of Columbia, regardless of conflict of law princsiples. Contractor hereby consents to the jurisdiction of the federal and state courts of the District of Columbia for any disputes arising out of this Agreement. The parties agree to resolve disputes arising out of or relating to this Agreement pursuant to the Direct Dialogue Program attached hereto as Exhibit A. This Agreement may be executed in counterparts and delivered by electronic mail or facsimile. |
IN WITNESS HEREOF, the parties have agreed to enter into this Agreement as of the Effective Date by affixing their signatures as set forth below:
DGS LTD.
|
|
JEFFREY COX
|
|
|
|
/s/ Mohammed Khaishgi
|
|
/s/Jeffrey Cox
|
1. |
IBEX Holdings Limited, an exempted company incorporated and existing under the laws of Bermuda with registration number 52347, having a registered office at Crawford House, 50 Cedar Avenue,
Hamilton HM11, Bermuda (the “Seller”); and
|
2. |
The Resource Group International Limited, an exempted company incorporated and existing under the laws of Bermuda with registration number 50201, having a registered office at Crawford House, 50
Cedar Avenue, Hamilton HM11, Bermuda (the “Buyer”).
|
(A) |
The Buyer is the parent company of the Seller.
|
(B) |
The Seller owns the Sale Shares; and
|
|
(C) |
As part of a group reorganisation, the Seller wishes to sell and the Buyer wishes to purchase the Sale Shares on the terms and conditions set out in this Agreement.
|
1 |
INTERPRETATION
|
1.1 |
In this Agreement the following definitions shall apply:
|
1.2 |
A reference to a “party” is a reference to a party to this Agreement and includes its assignees (if any) and/or the successors in title to substantially the whole of its undertaking and, in the
case of an individual, to his or her estate and personal representatives.
|
1.3 |
Words denoting the singular include the plural and vice versa; words denoting any one gender include all genders; words denoting persons include firms and corporations and vice versa.
|
1.4 |
Headings in this Agreement and in the Schedules are inserted for ease of reference only and do not affect the construction of this Agreement.
|
2 |
AGREEMENT TO SELL THE SALE SHARES
|
3 |
PURCHASE PRICE
|
4 |
CLOSING
|
4.1 |
Date and Place
|
4.2 |
Seller’s Obligations
|
|
(a) |
a duly executed share transfer form for the transfer of the Sale Shares in favour of the Buyer;
|
|
(b) |
a copy of the resolutions of the board of directors of the Seller approving the Seller’s entry into this agreement and related documents;
|
|
(c) |
a copy of the resolutions of the board of directors of the Company approving the transfer of the Sale Shares in favour of the Buyer; and
|
|
(d) |
a copy of the updated register of members of the Company reflecting the transfer of the Sale Shares.
|
4.3 |
Buyer’s Obligations
|
|
(a) |
a duly executed share transfer form for the transfer of the Sale Shares;
|
|
(b) |
the Side Letter, duly executed by the Buyer, Anthony Solazzo and Jeffrey Cox; and
|
|
(c) |
a copy of the resolutions of the board of directors of the Seller approving the Seller’s entry into this agreement and related documents.
|
5 |
REPRESENTATIONS AND WARRANTIES
|
5.1 |
The Seller warrants and represents to the Buyers that:
|
|
(a) |
the Company is an exempted company duly incorporated under the Companies Act 1981, as amended, on 28 February 2017 under registration number 52346 and is validly existing and in good standing under the laws of Bermuda;
|
|
(b) |
the authorized capital of the Company consists of US$12,000 divided into 118,461,538 common shares of par value US$0.0001 each and 1,538,462 senior preferred shares of par value US$0.0001 each, of which the Sale Shares comprise all of
the common shares issued and outstanding and 1,079,137.18 senior preferred shares are issued and outstanding, and the Sale Shares have been duly authorized and validly issued and are fully paid and non-assessable (the term
“non-assessable” for the purposes of this Agreement means that no further sums are required to be paid by the Seller to the Company in connection with the issue of such shares);
|
|
(c) |
the Seller has all requisite power and authority to enter into and perform this Agreement and the other documents to be entered into by it under its terms, including without limitation, the Side Letter and any requisite instrument of
transfer or other transaction document;
|
|
(d) |
this Agreement and the other documents to be entered into by the Seller under its terms constitute (or shall constitute when executed) valid, legal and binding obligations on the Seller enforceable on the terms of this Agreement and
such other documents;
|
|
(e) |
compliance with the terms of this Agreement and the documents referred to in it shall not breach or constitute a default under any of the following:
|
|
(i) |
any agreement or instrument to which any of the Seller is a party or by which it is bound; or
|
|
(ii) |
any order, judgment, decree or other restriction applicable to the Seller;
|
|
(f) |
the Seller is the sole legal and beneficial owner of the Sale Shares; and
|
|
(g) |
the Sale Shares are free from all Encumbrances and there is no agreement or commitment given to create an Encumbrance affecting the Sale Shares.
|
5.2 |
Each of the Warranties is separate and is not limited by reference to any other Warranty or any other provision in this Agreement.
|
5.3 |
The liability of the Seller to the Buyer in respect of any breach of the Warranties shall not in total exceed the Purchase Price.
|
6 |
GENERAL
|
6.1 |
Notice
|
|
(a) |
All notices, requests, demands or other communications provided for herein shall be in writing and shall be addressed to the parties at their respective addresses listed in the recitals to this Agreement or addresses as the relevant
party shall designate as to itself from time to time in a writing delivered in like manner.
|
|
(b) |
Any notice is to be hand-delivered, electronically mailed, or sent overnight by prepaid recognized national courier service, and will be deemed to have been received: (i) if hand delivered, at the time of delivery; (ii) if sent by
electronic mail, at the time of confirmed transmission; and (iii) if sent by prepaid courier, three (3) days after posting.
|
6.2 |
Costs
|
6.3 |
Entire Agreement
|
|
6.3.1 |
Each party acknowledges and agrees with the other that:
|
|
a) |
this Agreement together with any documents referred to in this Agreement (together the “Transaction Documents”) constitute the entire and only agreement between the parties relating to the
subject matter of the Transaction Documents; and
|
|
b) |
it has not been induced to enter into any Transaction Document in reliance upon, nor has it been given, any warranty, representation, statement, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature
whatsoever other than as are expressly set out in the Transaction Documents.
|
|
6.3.2 |
Nothing in this clause 6.2 shall, however, operate to limit or exclude any liability for fraud.
|
6.4 |
Confidentiality
|
6.5 |
Severability
|
6.6 |
Waiver
|
6.7 |
Variation
|
6.8 |
Counterparts
|
6.9 |
Further Assurance
|
6.10 |
Governing Law
|
AMENDED 2017 STOCK PLAN
1. Purposes of the Plan. The purposes of this Amended 2017 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants, and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an Option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Restricted Stock may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) “Administrator” means the Board or a Committee.
(b) “Affiliate” means (i) an entity other than a Subsidiary which, together with the Company, is under common control of a third person or entity and (ii) an entity other than a Subsidiary in which the Company and /or one or more Subsidiaries own a controlling interest.
(c) “Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not limited to, all applicable U.S. federal or state laws, any Stock Exchange rules or regulations, and the applicable laws, rules or regulations of any other country or jurisdiction where Options or Restricted Stock are granted under the Plan or Participants reside or provide services, as such laws, rules, and regulations shall be in effect from time to time.
(d) “Award” means any award of an Option or Restricted Stock under the Plan.
(e) “Board” means the Board of Directors of the Company.
(f) “California Participant” means a Participant whose Award is issued in reliance on Section 25102(o) of the California Corporations Code.
(g) “Cashless Exercise” means a program approved by the Administrator in which payment of the Option exercise price or tax withholding obligations or other required deductions may be satisfied, in whole or in part, with Shares subject to the Option, including by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Company) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of such amount.
(h) “Cause” for termination of a Participant’s Continuous Service Status will exist (unless another definition is provided in an applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement, in which such cause shall be “Cause” hereunder) if the Participant’s Continuous Service Status is terminated for any of the following reasons: (i) any material breach by Participant of any written agreement between Participant and the Company and, where the breach is curable as determined in the Board’s discretion, Participant’s failure to cure such breach within 10 days after receiving written notice thereof; (ii) any failure by Participant to comply with the Company’s written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of Participant’s duties, as determined in the Board’s discretion; (iv) Participant’s repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer, as applicable; (v) Participant’s conviction of, or plea of guilty or nolo contendre to, any felony or crime that results in, or which the Board determines in its reasonable discretion is expected to result in, damage to the business or reputation of the Company; (vi) Participant’s commission of or participation in an act of fraud or intentional misconduct against the Company; (vii) Participant’s intentional damage to the Company’s business, property or reputation; or (viii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of non disclosure as a result of his or her relationship with the Company. For purposes of clarity, a termination without “Cause” does not include any termination that occurs as a result of Participant’s death or Disability. The determination as to whether a Participant’s Continuous Service Status has been terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate. Where written notice is required under this subsection (h), written notice transmitted by email to a Participant’s email account (whether a personal or work email account) shall suffice and be deemed delivered upon the sending of the email.
(i) “Change of Control” means (i) a sale of all or substantially all of the Company’s assets other than to an Excluded Entity (as defined below), (ii) an amalgamation, merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, limited liability company or other entity other than an Excluded Entity, or (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of all of the Company’s then outstanding voting securities.
Notwithstanding the foregoing, a transaction shall not constitute a Change of Control if its purpose is to (A) change the jurisdiction of the Company’s incorporation, (B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Company’s securities immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Company’s Board. An “Excluded Entity” means a corporation or other entity of which the holders of voting capital stock of the Company outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing at least a majority of the votes entitled to be cast by all of such corporation’s or other entity’s voting securities outstanding immediately after such transaction.
(j) “Code” means the Internal Revenue Code of 1986, as amended.
(k) “Committee” means one or more committees or subcommittees of the Board consisting of two (2) or more Directors (or such lesser or greater number of Directors as shall constitute the minimum number permitted by Applicable Laws to establish a committee or sub-committee of the Board) appointed by the Board to administer the Plan in accordance with Section 4 below.
(l) “Common Stock” means the Company’s common shares having a par value of US $0.0001 per share, as adjusted in accordance with Section 11 below.
(m) “Company” means IBEX Holdings Limited (f/k/a Forward March Limited), an exempted Bermuda company.
(n) “Consultant” means any person or entity, including an advisor but not an Employee, that renders, or has rendered, services to the Company, or any Parent, Subsidiary or Affiliate and is compensated for such services, and any Director whether compensated for such services or not.
(o) “Continuous Service Status” means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted or terminated in the case of: (i) Company approved sick leave; (ii) military leave; (iii) any other bona fide leave of absence approved by the Company, provided that, if an Employee is holding an Incentive Stock Option and such leave exceeds 3 months, such Employee’s service as an Employee shall be deemed terminated on the 1st day following such 3-month period and the Incentive Stock Option shall thereafter automatically become a Nonstatutory Stock Option in accordance with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy. Also, Continuous Service Status as an Employee or Consultant shall not be considered interrupted or terminated in the case of a transfer between locations of the Company or between the Company, its Parents, Subsidiaries or Affiliates, or their respective successors, or a change in status from an Employee to a Consultant or from a Consultant to an Employee.
(p) “Director” means a member of the Board.
(q) “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.
(r) “Employee” means any person employed by the Company, or any Parent, Subsidiary or Affiliate, with the status of employment determined pursuant to such factors as are deemed appropriate by the Company in its sole discretion, subject to any requirements of Applicable Laws, including the Code. The payment by the Company of a director’s fee shall not be sufficient to constitute “employment” of such director by the Company or any Parent, Subsidiary or Affiliate.
(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(t) “Fair Market Value” means, as of any date, the per share fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the per share closing price for the Shares as reported in The Wall Street Journal for the applicable date.
(u) “Family Members” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in- law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships) of the Participant, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons (or the Participant) have more than 50% of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests.
(v) “Incentive Stock Option” means an Option intended to, and which does, in fact, qualify as an incentive stock option within the meaning of Section 422 of the Code.
(w) “Involuntary Termination” means (unless another definition is provided in the applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) the termination of a Participant’s Continuous Service Status other than for (i) death, (ii) Disability or (iii) for Cause by the Company or a Parent, Subsidiary, Affiliate or successor thereto, as appropriate.
(x) “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the Financial Industry Regulatory Authority (or any successor thereto).
(y) “Nonstatutory Stock Option” means an Option that is not intended to, or does not, in fact, qualify as an Incentive Stock Option.
(z) “Option” means a stock option granted pursuant to the Plan.
(aa) “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.
(bb) “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options (i) are exchanged for Options with a lower exercise price, Restricted Stock, cash or other property or (ii) are amended to decrease the exercise price as a result of a decline in the Fair Market Value.
(cc) “Optioned Stock” means Shares that are subject to an Option or that were issued pursuant to the exercise of an Option.
(dd) “Optionee” means an Employee or Consultant who receives an Option.
(ee) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of grant of the Award, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.
(ff) “Participant” means any holder of one or more Awards or Shares issued pursuant to an Award.
(gg) “Plan” means this Amended 2017 Stock Plan.
(hh) “Restricted Stock” means Shares acquired pursuant to a right to purchase or receive Common Stock granted pursuant to Section 8 below.
(ii) “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of Restricted Stock granted under the Plan and includes any documents attached to such agreement.
(jj) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.
(kk) “Share” means a share of Common Stock, as adjusted in accordance with Section 11 below.
(ll) “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.
(mm) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of grant of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
(nn) “Ten Percent Holder” means a person who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary measured as of an Award’s date of grant.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 below, the maximum aggregate number of Shares that may be issued under the Plan is 2,857,498 Shares, all of which Shares may be issued under the Plan pursuant to Incentive Stock Options. The Shares issued under the Plan may be authorized, but unissued, or reacquired Shares. If an Award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares which are retained by the Company upon exercise of an Award in order to satisfy the exercise or purchase price for such Award or any withholding taxes due with respect to such Award shall be treated as not issued and shall continue to be available under the Plan and Shares issued under the Plan and later forfeited to the Company due to the failure to vest or repurchased by the Company at the original purchase price paid to the Company for the Shares (including, without limitation, upon forfeiture to or repurchase by the Company in connection with the termination of a Participant’s Continuous Service Status) shall again be available for future grant under the Plan.
4. Administration of the Plan.
(a) General. The Plan shall be administered by the Board, a Committee appointed by the Board, or any combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by Applicable Laws, the Board may authorize one or more officers of the Company to make Awards under the Plan to Employees and Consultants (who are not subject to Section 16 of the Exchange Act) within parameters specified by the Board.
(b) Committee Composition. If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and dissolve a Committee and thereafter directly administer the Plan, all to the extent permitted by Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions.
(c) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its sole discretion:
(i) to determine the Fair Market Value in accordance with Section 2(t) above, provided that such determination shall be applied consistently with respect to Participants under the Plan;
(ii) to select the Employees and Consultants to whom Awards may from time to time be granted;
(iii) to determine the number of Shares to be covered by each Award;
(iv) to approve the form(s) of agreement(s) and other related documents used under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when Awards may vest and/or be exercised (which may be based on performance criteria), the circumstances (if any) when vesting will be accelerated or forfeiture restrictions will be waived, and any restriction or limitation regarding any Award, Optioned Stock, or Restricted Stock;
(vi) to amend any outstanding Award or agreement related to any Optioned Stock or Restricted Stock, including any amendment adjusting vesting (e.g., in connection with a change in the terms or conditions under which such person is providing services to the Company), provided that no amendment shall be made that would materially and adversely affect the rights of any Participant without his or her consent;
(vii) to determine whether and under what circumstances an Option may be settled in cash under Section 7(c)(iii) below instead of Common Stock;
(viii) subject to Applicable Laws, to implement an Option Exchange Program and establish the terms and conditions of such Option Exchange Program without consent of the holders of Capital Stock , provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Participant shall be made without his or her consent;
(ix) to approve addenda pursuant to Section 17 below or to grant Awards to, or to modify the terms of, any outstanding Option Agreement or Restricted Stock Purchase Agreement or any agreement related to any Optioned Stock or Restricted Stock held by Participants who are foreign nationals or employed outside of the United States with such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom which deviate from the terms and conditions set forth in this Plan to the extent necessary or appropriate to accommodate such differences; and
(x) to construe and interpret the terms of the Plan, any Option Agreement or Restricted Stock Purchase Agreement, and any agreement related to any Optioned Stock or Restricted Stock, which constructions, interpretations and decisions shall be final and binding on all Participants.
(d) Indemnification. To the maximum extent permitted by Applicable Laws, each member of the Committee (including officers of the Company, if applicable), or of the Board, as applicable, shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or pursuant to the terms and conditions of any Award except for actions taken in bad faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided that such member shall give the Company an opportunity, at its own expense, to handle and defend any such claim, action, suit or proceeding before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Memorandum of Association or Bye-laws, by contract, as a matter of law, or otherwise including pursuant to the Bermuda Companies Act, or under any other power that the Company may have to indemnify or hold harmless each such person.
5. Eligibility.
(a) Recipients of Grants. Nonstatutory Stock Options and Restricted Stock may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.
(b) Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
(c) ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b) above, to the extent that the aggregate Fair Market Value of Shares with respect to which options designated as incentive stock options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options shall be treated as nonstatutory stock options. For purposes of this Section 5(c), incentive stock options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an incentive stock option shall be determined as of the date of the grant of such option.
(d) No Employment Rights. Neither the Plan nor any Award shall confer upon any Employee or Consultant any right with respect to continuation of an employment or consulting relationship with the Company (any Parent, Subsidiary or Affiliate), nor shall it interfere in any way with such Employee’s or Consultant’s right or the Company’s (Parent’s, Subsidiary’s or Affiliate’s) right to terminate his or her employment or consulting relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption by the Board and shall continue in effect for a term of 10 years unless sooner terminated under Section 13 below.
7. Options.
(a) Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than 10 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be 5 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.
(b) Option Exercise Price and Consideration.
(i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:
(1) In the case of an Incentive Stock Option
a. granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value on the date of grant;
b. granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value on the date of grant;
(2) Except as provided in subsection (3) below, in the case of a Nonstatutory Stock Option the per Share exercise price shall be such price as is determined by the Administrator, provided that, if the per Share exercise price is less than 100% of the Fair Market Value on the date of grant, it shall otherwise comply with all Applicable Laws, including Section 409A of the Code; and
(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.
(ii) Permissible Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option and to the extent required by Applicable Laws, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) to the extent permitted under, and in accordance with, Applicable Laws, delivery of a promissory note with such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate (subject to the provisions of Section 152 of the Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other previously owned Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised; (6) a Cashless Exercise; (7) such other consideration and method of payment permitted under Applicable Laws; or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.
(c) Exercise of Option.
(i) General.
(1) Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the terms of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company, and Parent, Subsidiary or Affiliate, and/or the Optionee, provided that the exercise of any Option shall not be permitted unless the Administrator is satisfied at the relevant time that such exercise would not be a breach of any share dealing or other corporate governance code adopted by the Company from time to time.
(2) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any leave (unless otherwise required by Applicable Laws). Notwithstanding the foregoing, in the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon an Optionee’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Optionee continued to provide services to the Company (or any Parent, Subsidiary or Affiliate, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.
(3) Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.
(4) Procedures for and Results of Exercise. An Option shall be deemed exercised when written notice of such exercise has been received by the Company in accordance with the terms of the Option Agreement by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised and has paid, or made arrangements to satisfy, any applicable taxes, withholding, required deductions or other required payments in accordance with Section 9 below. The exercise of an Option shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(5) Rights as Holder of Capital Stock. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a holder of capital stock (if any) shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the share certificate is issued, except as provided in Section 11 below.
(ii) Termination of Continuous Service Status. The Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. To the extent that an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, the following provisions shall apply:
(1) General Provisions. If the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified below, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to this Section 7).
(2) Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s Continuous Service Status other than under the circumstances set forth in the subsections (3) through (5) below, such Optionee may exercise any outstanding Option at any time within 3 months following such termination to the extent the Optionee is vested in the Optioned Stock on the date of such termination.
(3) Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his or her Disability, such Optionee may exercise any outstanding Option at any time within 12 months following such termination to the extent the Optionee is vested in the Optioned Stock on the date of such termination.
(4) Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of any outstanding Option, or within 3 months following termination of the Optionee’s Continuous Service Status, the Option may be exercised by any beneficiaries designated in accordance with Section 15 below, or if there are no such beneficiaries, by the Optionee’s estate, or by a person who acquired the right to exercise the Option by bequest or inheritance, at any time within 12 months following the date the Optionee’s Continuous Service Status terminated, but only to the extent the Optionee is vested in the Optioned Stock on the date of such termination.
(5) Termination for Cause. In the event of termination of an Optionee’s Continuous Service Status for Cause, any outstanding Option (including any vested portion thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status for Cause. If an Optionee’s Continuous Service Status is suspended pending an investigation of whether the Optionee’s Continuous Service Status will be terminated for Cause, all the Optionee’s rights under any Option, including the right to exercise the Option, shall be suspended during the investigation period. Nothing in this Section 7(c)(ii)(5) shall in any way limit the Company’s right to purchase unvested Shares issued upon exercise of an Option as set forth in the applicable Option Agreement.
(iii) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.
8. Restricted Stock.
(a) Rights to Purchase. When a right to purchase or receive Restricted Stock is granted under the Plan, the Company shall advise the recipient in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, if any (which shall be as determined by the Administrator, subject to Applicable Laws, including any applicable securities laws), and the time within which such person must accept such offer. The permissible consideration for Restricted Stock shall be determined by the Administrator and shall be the same as is set forth in Section 7(b)(ii) above with respect to exercise of Options. Any restrictions on the grant and/or exercise of Options shall also apply to the right to purchase or receive Restricted Stock. The offer to purchase Shares shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.
(b) Repurchase Option.
(i) General. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the Participant’s Continuous Service Status for any reason (including death or Disability) at a purchase price for Shares equal to the original purchase price paid by the purchaser to the Company for such Shares and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine.
(ii) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the lapsing of Company repurchase rights shall be tolled during any leave of absence; provided, however, that in the absence of such determination, such lapsing shall be tolled during any leave (unless otherwise required by Applicable Laws). Notwithstanding the foregoing, in the event of military leave, the lapsing of Company repurchase rights shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would have applied had the Participant continued to provide services to the Company (or any Parent, Subsidiary or Affiliate, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each Participant.
(d) Rights as a Holder of Capital Stock. Once the Restricted Stock is purchased, the Participant shall have the rights equivalent to those of a holder of capital stock, and shall be a record holder when his or her purchase and the issuance of the Shares is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Restricted Stock is purchased, except as provided in Section 11 below.
9. Taxes.
(a) As a condition of the grant, vesting and exercise of an Award, the Participant (or in the case of the Participant’s death or a permitted transferee, the person holding or exercising the Award) shall make such arrangements as the Administrator may require for the satisfaction of any applicable U.S. federal, state, local or foreign tax, withholding, and any other required deductions or payments that may arise in connection with such Award. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied.
(b) The Administrator may, to the extent permitted under Applicable Laws, permit a Participant (or in the case of the Participant’s death or a permitted transferee, the person holding or exercising the Award) to satisfy all or part of his or her tax, withholding, or any other required deductions or payments by Cashless Exercise or by surrendering Shares (either directly or by stock attestation) that he or she previously acquired; provided that, unless specifically permitted by the Company, any such Cashless Exercise must be an approved broker-assisted Cashless Exercise or the Shares withheld in the Cashless Exercise must be limited to avoid financial accounting charges under applicable accounting guidance and any such surrendered Shares must have been previously held for any minimum duration required to avoid financial accounting charges under applicable accounting guidance. Any payment of taxes by surrendering Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions required by rules of the Securities and Exchange Commission.
10. Non-Transferability of Awards.
(a) General. Except as set forth in this Section 10, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary by a Participant will not constitute a transfer. An Option may be exercised, during the lifetime of the holder of the Option, only by such holder or a transferee permitted by this Section 10.
(b) Limited Transferability Rights. Notwithstanding anything else in this Section 10, the Administrator may in its sole discretion provide that any Nonstatutory Stock Options may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to Family Members. Further, beginning with (i) the period when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) promulgated under the Exchange Act, as determined by the Board in its sole discretion, and (ii) ending on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Board in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, (1) a Nonstatutory Stock Option, or prior to exercise, the Shares subject to a Nonstatutory Stock Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively) and (2) an Incentive Stock Option may not be transferred or disposed of by will or the laws of descent or distribution, other than to (i) persons who are Family Members through gifts or domestic relations orders, or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing sentence, the Board, in its sole discretion, may permit transfers of Nonstatutory Stock Options to the Company or in connection with a Change in Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).
11. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.
(a) Changes in Capitalization. To the extent required under Applicable Laws, (i) the numbers and class of Shares or other shares or securities: (x) available for future Awards under Section 3 above and (y) covered by each outstanding Award, (ii) the exercise price per Share of each such outstanding Option, and (iii) any repurchase price per Share applicable to Shares issued pursuant to any Award, may be adjusted by the Administrator in the event of a shares split, reverse shares split, shares dividend, combination, consolidation, reclassification of the Shares or subdivision of the Shares. In the event of any increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, a declaration of an extraordinary dividend with respect to the Shares payable in a form other than Shares in an amount that has a material effect on the Fair Market Value, a recapitalization (including a recapitalization through a large nonrecurring cash dividend), a rights offering, a reorganization, amalgamation, merger, spin-off, split-up, change in corporate structure or a similar occurrence, the Administrator may make appropriate adjustments, in its discretion, in one or more of (i) the numbers and class of Shares or other shares or securities: (x) available for future Awards under Section 3 above and (y) covered by each outstanding Award, (ii) the exercise price per Share of each outstanding Option and (iii) any repurchase price per Share applicable to Shares issued pursuant to any Award, and any such adjustment by the Administrator shall be made in the Administrator’s sole and absolute discretion and shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. If, by reason of a transaction described in this Section 11(a) or an adjustment pursuant to this Section 11(a), a Participant’s Award agreement or agreement related to any Optioned Stock or Restricted Stock covers additional or different shares or securities, then such additional or different classes of shares, and the Award agreement or agreement related to the Optioned Stock or Restricted Stock in respect thereof, shall be subject to all of the terms, conditions and restrictions which were applicable to the Award, Optioned Stock and Restricted Stock prior to such adjustment.
(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.
(c) Corporate Transactions. In the event of (i) a transfer of all or substantially all of the Company’s assets, (ii) a merger, amalgamation, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the Company’s then outstanding capital stock (a “Corporate Transaction”), each outstanding Award (vested or unvested) will be treated as the Administrator determines (subject to the last sentence of this paragraph), which determination may be made without the consent of any Participant and need not treat all outstanding Awards (or portion thereof) in an identical manner. Such determination, without the consent of any Participant, may provide (without limitation) for one or more of the following in the event of a Corporate Transaction: (A) the continuation of such outstanding Awards by the Company (if the Company is the surviving corporation); (B) the assumption of such outstanding Awards by the surviving corporation or its parent; (C) the substitution by the surviving corporation or its parent of new options or equity awards for such Awards; (D) the cancellation of such Awards and a payment to the Participants equal to the excess of (1) the Fair Market Value of the Shares subject to such Awards as of the closing date of such Corporate Transaction over (2) the exercise price or purchase price for the Shares to be issued pursuant to the exercise of such Awards (such payment shall be made in the form of cash, cash equivalents and/or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount; if the exercise price or purchase price per Share of the Shares to be issued pursuant to the exercise of such Awards exceeds the Fair Market Value per Share of such Shares, as of the closing date of the Corporate Transaction, then such Awards may be cancelled without making a payment to the Participants); or (E) the cancellation of any outstanding Options or an outstanding right to purchase Restricted Stock, in either case, for no consideration. Notwithstanding anything stated herein or in any other agreement to the contrary, whether such agreement was entered into before or after the date this Plan is effective, if any Award, or any agreement applicable to any Award, provides for accelerated vesting in connection with any termination of service that occurs on or after a Corporate Transaction, and the successor does not agree to assume the Award, or to substitute an equivalent award or right for the Award, then any acceleration of vesting that would otherwise occur upon such termination of service shall occur immediately prior to, and contingent upon, the consummation of such Corporate Transaction.
12. Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such other date as is determined by the Administrator, provided that the grant of an Award shall not be permitted unless the Administrator is satisfied at the relevant time that such grant would not be a breach of any share dealing or other corporate governance code adopted by the Company from time to time.
13. Amendment and Termination of the Plan. The Board may at any time amend or terminate the Plan, but no amendment or termination shall be made that would materially and adversely affect the rights of any Participant under any outstanding Award, without his or her consent. In addition, to the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain the approval of holders of capital stock with respect to any Plan amendment in such a manner and to such a degree as required.
14. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. As a condition to the exercise of any Option or purchase of any Restricted Stock, the Company may require the person exercising the Option or purchasing the Restricted Stock to represent and warrant at the time of any such exercise or purchase that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is advisable or required by Applicable Laws. Shares issued upon exercise of Options or purchase of Restricted Stock prior to the date, if ever, on which the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such terms and subject to such conditions as is reflected in the applicable Option Agreement or Restricted Stock Purchase Agreement.
15. Beneficiaries. If permitted by the Company, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. Except as otherwise provided in an Award Agreement, if no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate or to any person who has the right to acquire the Award by bequest or inheritance.
16. Approval of Holders of Capital Stock. If required by Applicable Laws, continuance of the Plan shall be subject to approval by the holders of capital stock of the Company within 12 months before or after the date the Plan is adopted or, to the extent required by Applicable Laws, any date the Plan is amended. Such approval shall be obtained in the manner and to the degree required under Applicable Laws.
17. Addenda. The Administrator may approve such addenda to the Plan as it may consider necessary or appropriate for the purpose of granting Awards to Employees or Consultants, which Awards may contain such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which may deviate from the terms and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose.
18. Information to Holders of Options. In the event the Company is relying on the exemption provided by Rule 12h-1(f) under the Exchange Act, the Company shall provide the information described in Rule 701(e)(3), (4) and (5) of the Securities Act of 1933, as amended, to all holders of Options in accordance with the requirements thereunder until such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company may request that holders of Options agree to keep the information to be provided pursuant to this Section confidential. If the holder of Options does not agree to keep the information to be provided pursuant to this Section confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1) of the Exchange Act.
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Exhibit 10.35
2018 RESTRICTED SHARE PLAN
IBEX Holdings Limited
2018 RESTRICTED SHARE PLAN
1. Purpose
The purpose of this 2018 Restricted Share Plan (the “Plan”) of IBEX Holdings Limited, a Bermuda exempted company (the “Company”), is to advance the interests of the Company’s shareholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities that are intended to better align the interests of such persons with those of the Company’s shareholders. Except where the context otherwise requires, the term “Company” shall include the Company and any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).
2. Eligibility
All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company (as such terms consultants and advisors are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), or any successor form) are eligible to be granted Restricted Shares (as defined in Section 5) under the Plan. Each person who is granted Restricted Shares under the Plan is deemed a “Participant.”
3. Administration and Delegation
3.1 Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Restricted Shares and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Restricted Share agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Restricted Share agreement in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Restricted Shares.
3.2 Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.
3.3 Delegation to Officers. Subject to any requirements of applicable law, the Board may delegate to one or more officers of the Company the power to grant Restricted Shares (subject to any limitations under the Plan) to employees or officers of the Company and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of Restricted Shares to be granted by such officers, the maximum number of Restricted Shares that the officers may grant, and the time period in which such Restricted Shares may be granted; and provided further, that no officer shall be authorized to grant Restricted Shares to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1(f) under the Exchange Act).
4. Shares Available for Awards
4.1 Number of Shares; Share Counting.
(a) Authorized Number of Shares. Subject to adjustment under Section 6, Restricted Shares may be granted under the Plan for up to 2,559,323.13 class B common shares, $0.000111650536 par value per Class B common share, of the Company (the “Class B Common Shares”). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
(b) Share Counting. For purposes of counting the number of shares available for the grant of Restricted Shares under the Plan:
(i) if any Restricted Share award expires or is forfeited in whole or in part (including as the result of Class B Common Shares subject to such Restricted Share award being repurchased by the Company pursuant to a contractual repurchase right or being forfeited back to the Company), the unused Class B Common Shares covered by such Restricted Share award shall again be available for the grant of Restricted Shares; and
(ii) Class B Common Shares delivered (by actual delivery or attestation) to the Company by a Participant to (i) purchase Restricted Shares or (ii) satisfy tax withholding obligations with respect to Restricted Shares (including shares retained from the Restricted Share award creating the tax obligation) shall be added back to the number of shares available for the future grant of Restricted Shares.
4.2 Substitute Awards. In connection with a merger, amalgamation, scheme of arrangement, consolidation or similar transaction of an entity with the Company or, the acquisition by the Company of property or stock or shares of an entity, the Board may grant Restricted Shares awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Restricted Share awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Restricted Share awards contained in the Plan. Substitute Restricted Share awards shall not count against the overall share limit set forth in Section 4(a)(1).
5. Restricted Shares
5.1 General. The Board may grant Restricted Share awards entitling recipients to acquire Class B Common Shares (“Restricted Shares”), subject to the right of the Company to repurchase all or part of such Restricted Shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Restricted Share award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Restricted Share award.
5.2 Terms and Conditions for All Restricted Share Awards. The Board shall determine the terms and conditions of a Restricted Share award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.
5.3 Additional Provisions Relating to Restricted Shares.
(a) Dividends. Unless otherwise provided in the applicable Restricted Share award agreement, any dividends (whether paid in cash, shares or property) declared and paid by the Company with respect to Restricted Shares (“Accrued Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Accrued Dividends will be made no later than the end of the calendar year in which the dividends are paid to shareholders of that class of shares or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying Restricted Shares.
(b) Share Certificates. The Company may require that any share certificates issued in respect of Restricted Shares, as well as dividends or distributions paid on such Restricted Shares, shall be deposited in escrow by the Participant, together with a share power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.
6. Adjustments for Changes in Class B Common Shares and Certain Other Events
6.1 Changes in Capitalization. In the event of any share split, reverse share split, share dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Class B Common Shares other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules set forth in Section 4(a), and (iii) the number of shares subject to and the repurchase price per share subject to each outstanding award of Restricted Shares, shall be equitably adjusted by the Company (or substituted Restricted Share awards may be made, if applicable) in the manner determined by the Board.
6.2 Reorganization Events.
(a) Definition. A “Reorganization Event” shall mean: (a) any merger, amalgamation, scheme of arrangement, consolidation or similar transaction of the Company with or into another entity as a result of which all of the Class B Common Shares of the Company are converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Class B Common Shares of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.
(b) Consequences of a Reorganization Event on Restricted Shares. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted Shares shall inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Class B Common Shares were converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Restricted Shares; provided, however, that the Board may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Shares or any other agreement between a Participant and the Company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Shares or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Shares then outstanding shall automatically be deemed terminated or satisfied.
7. General Provisions Applicable to Restricted Share Awards
7.1 Transferability of Restricted Share Awards. Restricted Share awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order; provided, however, that, except with respect to Restricted Share awards subject to Section 409A of the Code, the Board may permit or provide in a Restricted Share award for the gratuitous transfer of the Restricted Share award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Class B Common Shares subject to such Restricted Share award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Restricted Share award, and all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. For the avoidance of doubt, nothing contained in this Section 7(a) shall be deemed to restrict a transfer to the Company.
7.2 Documentation. Each Restricted Share award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Restricted Share award may contain terms and conditions in addition to those set forth in the Plan.
7.3 Board Discretion. Except as otherwise provided by the Plan, each Restricted Share award may be made alone or in addition or in relation to any other Restricted Share award. The terms of each Restricted Share award need not be identical, and the Board need not treat Participants uniformly.
7.4 Termination of Status. The Board shall determine the effect on a Restricted Share award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Restricted Share award.
7.5 Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver share certificates or otherwise recognize ownership of Class B Common Shares under a Restricted Share award. The Company may elect to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on vesting or release from forfeiture of a Restricted Share award or at the same time as payment of the purchase price, unless the Company determines otherwise. If provided for in a Restricted Share award or approved by the Committee, a Participant may satisfy the tax obligations in whole or in part by delivery (either by actual delivery or attestation) of Class B Common Shares, including shares retained from the Restricted Share award creating the tax obligation, valued at their fair market value (valued in the manner determined by (or in a manner approved by) the Company); provided, however, except as otherwise provided by the Committee, that the total tax withholding where shares are being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income), except that, to the extent that the Company is able to retain Class B Common Shares having a fair market value (determined by, or in a manner approved by, the Company) that exceeds the statutory minimum applicable withholding tax without financial accounting implications or the Company is withholding in a jurisdiction that does not have a statutory minimum withholding tax, the Company may retain such number of Class B Common Shares (up to the number of shares having a fair market value equal to the maximum individual statutory rate of tax (determined by, or in a manner approved by, the Company)) as the Company shall determine in its sole discretion to satisfy the tax liability associated with any Restricted Share award. Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
7.6 Amendment of Award. Except as otherwise provided in Section 8(d) with respect to actions requiring shareholder approval, the Board may amend, modify or terminate any outstanding Restricted Share award, including but not limited to, substituting therefor another Restricted Share award or changing the date of realization. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 6.
7.7 Conditions on Delivery of Shares. The Company will not be obligated to deliver any Class B Common Shares pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Restricted Share award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or, regulations, or the terms of the applicable Restricted Share award.
7.8 Acceleration. The Board may at any time provide that any Restricted Share award shall become immediately free from some or all restrictions or conditions.
8. Miscellaneous
8.1 No Right To Employment or Other Status. No person shall have any claim or right to be granted a Restricted Share award by virtue of the adoption of the Plan, and the grant of a Restricted Share award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Restricted Share award.
8.2 No Rights As Shareholder; Clawback Policy. Subject to the provisions of the applicable Restricted Share award, no Participant or Designated Beneficiary shall have any rights as a shareholder with respect to any Class B Common Shares to be issued with respect to a Restricted Share award until becoming the record holder of such shares. In accepting a Restricted Share award under the Plan, a Participant agrees to be bound by any clawback policy the Company has in effect or may adopt in the future.
8.3 Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board (the “Effective Date”). No Restricted Share awards shall be granted under the Plan after the expiration of 10 years from the earlier of (i) the Effective Date or (ii) the date the Plan was approved by the Company’s shareholders, but Restricted Share awards previously granted may extend beyond that date.
8.4 Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that no amendment that would require shareholder approval under the rules of any exchange or marketplace on which the Company’s shares are then listed or traded may be made effective unless and until the Company’s shareholders approve such amendment. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 8(d) shall apply to, and be binding on the holders of, all Restricted Share awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan. No Restricted Share award shall be made that is conditional upon shareholder approval of any amendment to the Plan unless the Restricted Share award provides that (i) it will terminate or be forfeited if shareholder approval of such amendment is not obtained within no more than 12 months from the date of grant and (ii) it may not be exercised or settled (or otherwise result in the issuance of Class B Common Shares) prior to such shareholder approval.
8.5 Authorization of Sub-Plans (including for Grants to non-U.S. Employees). The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.
8.6 Compliance with Section 409A of the Code. If and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Restricted Share award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.
The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.
8.7 Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Memorandum of Association or Bye-laws, by contract, as a matter of law, or otherwise including pursuant to the Bermuda Companies Act, or under any other power that the Company may have to indemnify or hold harmless each such person.
8.8 Governing Law. The provisions of the Plan and all Restricted Share awards made hereunder shall be governed by and interpreted in accordance with the laws of Bermuda, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than Bermuda.
COMPANY:
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IBEX HOLDINGS LIMITED
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By:
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Name:
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Mohammed Khaishgi
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Title:
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Chief Executive Officer
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Address:
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50 Cedar Avenue, Crawford House Hamilton, HM 11, Bermuda
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PARTICIPANT:
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By:
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Name:
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Address:
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SPOUSAL CONSENT:
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By:
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Name:
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Address:
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COMPANY:
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Notices to the Company shall be sent to the address set forth in the salutation hereto, Attn: General Counsel
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HOLDER:
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Notices to Holder shall be sent to the address set forth below Holder’s signature below.
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ESCROW AGENT:
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Notices to the Escrow Agent shall be sent to the address set forth in the salutation hereto.
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Very truly yours,
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COMPANY:
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IBEX HOLDINGS LIMITED
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By:
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Name:
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Mohammed Khaishgi
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Title:
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Christy O’Connor
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In the presence of:
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Witness name: Christy O’Connor
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Address:
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1700 Pennsylvania Avenue, Suite 560 Washington DC, 20006, USA
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HOLDER:
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By:
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Name:
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Address:
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In the presence of:
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Witness name:
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Address:
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ESCROW AGENT:
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Dated:
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Participant
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Spouse of Participant (if applicable)
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COMPANY:
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IBEX HOLDINGS LIMITED
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By:
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Name:
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Mohammed Khaishgi
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Title:
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Chief Executive Officer
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Address:
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50 Cedar Avenue, Crawford House
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Hamilton, HM 11, Bermuda
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PARTICIPANT:
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By:
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Name:
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Address:
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SPOUSAL CONSENT:
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By:
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Name:
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Address:
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COMPANY:
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Notices to the Company shall be sent to the address set forth in the salutation hereto, Attn: General Counsel
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HOLDER:
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Notices to Holder shall be sent to the address set forth below Holder’s signature below.
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ESCROW AGENT:
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Notices to the Escrow Agent shall be sent to the address set forth in the salutation hereto.
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Very truly yours,
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COMPANY:
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IBEX HOLDINGS LIMITED
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By:
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Name:
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Mohammed Khaishgi
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Title:
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Christy O’Connor
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In the presence of:
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Witness name: Christy O’Connor
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Address:
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1700 Pennsylvania Avenue, Suite 560
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Washington DC, 20006, USA
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HOLDER:
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By:
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Name:
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Address:
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In the presence of:
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Witness name:
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Address:
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ESCROW AGENT:
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Dated:
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Participant
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Spouse of Participant (if applicable)
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IBEX HOLDINGS LIMITED
UK SUB-PLAN OF THE 2018 RESTRICTED SHARE PLAN
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1. | Adoption of UK Sub-Plan |
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1.1 | Ibex Holdings Limited, a company incorporated in Bermuda ("Company") has established the 2018 Restricted Share Plan ("2018 Plan") and is now establishing a UK Sub-Plan to the 2018 Plan ("UK Sub-Plan"), the rules of which ("Rules") are set out in this document. The Plan (which is attached to the Rules) shall apply to the UK Sub-Plan subject to the additional restrictions and amendments specified below. |
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1.2 | References in these Rules to Sections are to Sections of the Plan. |
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1.3 | Restricted Shares awarded under the UK Sub-Plan are not intended to qualify for or otherwise provide any beneficial tax treatment to Participants. |
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2. | Purposes of the UK Sub-Plan |
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2.1 | The purpose of the UK Sub-Plan is to award Restricted Shares to Eligible Employees (as defined below) for commercial reasons in order to recruit or retain Eligible Employees and not as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax. |
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2.2 | Restricted Share awards are granted pursuant to an "employees' share scheme" for the purposes of the Financial Services and Markets Act 2000. |
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3. | Definitions |
Defined terms set out in the 2018 Plan apply to the UK Sub-Plan, with the following additions:
(i) "Control" (for the purposes of the definition of "Subsidiary", below) has the meaning contained in section 719 of ITEPA.
(ii) "Eligible Employee" means an individual who is an employee of the Company or any Subsidiary and is resident in the United Kingdom for tax purposes;
(iii) "HMRC" means the United Kingdom HM Revenue & Customs;
(iv) "ITEPA" means the Income Tax (Earnings and Pensions) Act 2003; and
(v) "Subsidiary" means a company (wherever incorporated) which for the time being is under the Control of the Company.
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4. | Eligibility |
Restricted Share awards granted under the UK Sub-Plan may only be granted to Eligible Employees and not to any other person who is not also an Eligible Employee on the date of grant.
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5. | Tax withholding |
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5.1 | In addition to the provisions of Section 7(e), the Participant shall be accountable for any income tax and, subject to the following provisions, national insurance liability which is chargeable on any assessable income deriving from the acquisition, holding or disposal of Restricted Shares. In respect of such assessable income the Participant shall indemnify the Company and (at the direction of the Company) any Subsidiary which is or may be treated as the employer of the Participant in respect of the following (together, the "Tax Liabilities"): |
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(a) | any income tax liability which falls to be paid to HMRC by the Company (or the relevant employing Subsidiary) under the PAYE system as it applies to income tax under ITEPA and the PAYE regulations referred to in it; and |
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(b) | any national insurance liability which falls to be paid to HMRC by the Company (or the relevant employing Subsidiary) under the PAYE system as it applies for national insurance purposes under the Social Security Contributions and Benefits Act 1992 and regulations referred to in it, such national insurance liability being the aggregate of: |
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(i) | all the employee's primary Class 1 national insurance contributions; and |
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(ii) | all the employer's secondary Class 1 national insurance contributions. |
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5.2 | Pursuant to the indemnity referred to in Rule 5.1, the Participant shall make such arrangements as the Company requires to meet the cost of the Tax Liabilities, including at the direction of the Company any of the following: |
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(a) | making a cash payment of an appropriate amount to the relevant company whether by cheque, banker's draft or deduction from salary in time to enable the employing company to remit such amount to HMRC before the 14th day following the end of the month in which the event giving rise to the Tax Liabilities occurred; and/or |
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(b) | appointing the Company as agent and/or attorney for the sale of sufficient Restricted Shares acquired to cover the Tax Liabilities and authorising the payment to the relevant company of the appropriate amount (including all reasonable fees, commissions and expenses incurred by the relevant company in relation to such sale) out of the net proceeds of sale of the Restricted Shares; and/or |
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(c) | (if lawful to do so) entering into an election whereby the employer's liability for secondary Class 1 national insurance contributions is transferred to the Participant on terms set out in the election and approved in advance by HMRC. |
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6. | Notification to HMRC |
The Company shall procure that the relevant Subsidiary employing the Participant at the date of grant of the Restricted Share award shall carry out all necessary filings with HMRC with respect to the acquisition of Restricted Shares by Participants, including submitting an annual return to HMRC within the statutory timeframe for making such submission.
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7. | Section 431(1) election |
Where Shares to be acquired are considered to be "restricted securities" for the purposes of ITEPA (such determination to be at the sole discretion of the Company), it is a condition of the acquisition of Restricted Shares that the Participant, if so directed by the Company, enters into a joint election with the relevant Subsidiary employing the Participant pursuant to section 431(1) of ITEPA.
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8. | Employment rights |
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8.1 | A Participant's terms of employment shall not be affected in any way by his participation in the UK Sub-Plan, which shall not form part of such terms (either expressly or impliedly) nor in any way entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for whatever reason (whether lawful or unlawful) which might otherwise be payable to him, and the Participant's terms of employment shall be deemed to be varied accordingly. |
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8.2 | The UK Sub-Plan is entirely discretionary and may be suspended or terminated by the Board at any time for any reason. Participation in the UK Sub-Plan is entirely discretionary and does not create any contractual or other right to receive future grants of Restricted Share awards or other awards, or benefits in lieu of awards. All determinations with respect to future grants of Restricted Share awards will be at the sole discretion of the Board. |
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8.3 | Rights under the UK Sub-Plan are not pensionable. |
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9. | Data privacy |
By entering into an award agreement, a Participant permits the Company and any Subsidiary to obtain, retain and process information relating to that Participant in accordance with the Company's privacy notice made available to the Participant.
Adopted by the Board of Directors of
Ibex Holdings Limited on
………………………………....... 2018
- 3 -
1.
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History; Existence of the Plan.
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3 | |
2.
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Purposes of the Plan.
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3 | |
3.
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Terminology.
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3 | |
4.
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Administration.
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3 | |
(a)
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Administration of the Plan
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3 | |
(b)
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Powers of the Administrator
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3 | |
(c)
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Delegation of Administrative Authority
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5
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(d)
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Non-Uniform Determinations
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5
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(e)
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Limited Liability; Advisors
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5
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(f)
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Indemnification
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5
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(g)
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Effect of Administrator’s Decision
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5
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5.
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Shares Issuable Pursuant to Awards.
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5
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(a)
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Initial Share Pool
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5
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(b)
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Adjustments to Share Pool
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6
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(c)
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ISO Limit
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6
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(d)
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Source of Shares
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6
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(e)
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Non-Employee Director Award Limit
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6
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6.
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Participation.
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6
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7.
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Awards.
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6
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(a)
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Awards, In General
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6
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(b)
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Share Options
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7 | |
(c)
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Limitation on Reload Options
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7 | |
(d)
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Share Appreciation Rights
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7 | |
(e)
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Repricing
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8
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(f)
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Share Awards
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9 | |
(g)
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Share Units
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9 | |
(h)
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Performance Shares and Performance Units
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10 | |
(i)
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Other Share-Based Awards
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10 | |
(j)
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Awards to Participants Outside the United States
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11
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(k)
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Limitation on Dividend Reinvestment and Dividend Equivalents
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11
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8.
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Withholding of Taxes.
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11
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9.
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Transferability of Awards.
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11
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(a)
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General Nontransferability Absent Administrator Permission
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11
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(b)
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Administrator Discretion to Permit Transfers Other Than For Value
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11
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10.
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Adjustments for Corporate Transactions and Other Events.
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12
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(a)
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Mandatory Adjustments
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12
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(b)
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Discretionary Adjustments
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12
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(c)
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Adjustments to Performance Goals
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12
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(d)
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Statutory Requirements Affecting Adjustments
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12
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(e)
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Dissolution or Liquidation
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13 | |
11.
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Change in Control Provisions.
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13 | |
(a)
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Termination of Awards
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13
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(b)
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Continuation, Assumption or Substitution of Awards
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14 | |
(c)
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Other Permitted Actions
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14 | |
(d)
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Section 409A Savings Clause
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14 | |
12.
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Substitution of Awards in Mergers and Acquisitions.
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14 | |
13.
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Compliance with Securities Laws; Listing and Registration.
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14 | |
14.
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Section 409A Compliance.
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15 | |
15.
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Plan Duration; Amendment and Discontinuance.
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15
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(a)
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Plan Duration
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15
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(b)
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Amendment and Discontinuance of the Plan
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16 | |
(c)
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Amendment of Awards
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16 | |
16.
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General Provisions.
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16 | |
(a)
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Non-Guarantee of Employment or Service
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16 | |
(b)
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No Trust or Fund Created
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16 | |
(c)
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Status of Awards
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16 | |
(d)
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Subsidiary Employees
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16 | |
(e)
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Governing Law and Interpretation
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16 | |
(f)
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Use of English Language
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17 | |
(g)
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Recovery of Amounts Paid
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17 | |
17.
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Glossary
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17 |
1.
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History; Existence of the Plan.
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2.
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Purposes of the Plan.
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3.
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Terminology.
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4.
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Administration.
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5.
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Shares Issuable Pursuant to Awards.
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(i) |
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(ii) |
The Share Pool shall be increased, on the relevant date, by the number of unissued Common Shares underlying or used as a reference measure for any Award or portion of an Award that is cancelled, forfeited, expired, terminated unearned or
settled in cash granted under the Plan or the 2018 Plan, in any such case without the issuance of shares and by the number of Common Shares used as a reference measure for any Award that are not issued upon settlement of such Award either
due to a net settlement or otherwise;
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(iii) |
The Share Pool shall be increased, on the forfeiture date, by the number of Common Shares that are forfeited back to IBEX after issuance due to a failure to meet an Award contingency or condition with respect to any Award or portion of
an Award granted under the Plan or the 2018 Plan;
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(iv) |
The Share Pool shall be increased, on the exercise date, by the number of Common Shares withheld by or surrendered (either actually or through attestation) to IBEX in payment of the exercise price of any Award granted under the Plan or
the 2018 Plan; and
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(v) |
The Share Pool shall be increased, on the relevant date, by the number of Common Shares withheld by or surrendered (either actually or through attestation) to IBEX in payment of the Tax Withholding Obligation that arises in connection
with any Award granted under the Plan or the 2018 Plan.
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6.
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Participation.
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7.
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Awards.
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8.
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Withholding of Taxes.
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9.
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Transferability of Awards.
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10.
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Adjustments for Corporate Transactions and Other Events.
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11.
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Change in Control Provisions.
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12.
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Substitution of Awards in Mergers and Acquisitions.
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13.
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Compliance with Securities Laws; Listing and Registration.
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14.
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Section 409A and Section 457A Compliance.
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15.
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Plan Duration; Amendment and Discontinuance.
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16.
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General Provisions.
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17.
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Glossary.
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No. W-01
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WARRANT TO PURCHASE
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ISSUED: November 13, 2017
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SERIES B AND SERIES C
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Void After: November 13, 2027
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CONVERTIBLE PREFERENCE SHARES
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(a)
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Prior to June 30, 2018, for so long as neither a Qualified IPO nor a Qualified Valuation Event (each as defined below) has occurred, the Exercise Price shall be
$15.00;
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(b)
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If the Company completes a firm commitment underwritten initial public offering of the Class A Common Shares pursuant to an effective registration statement under
the Act for listing on the New York Stock Exchange or The Nasdaq Stock Market (each, a “Recognized Stock
Exchange”) resulting in net proceeds to the Company of not less than $20 million (“Qualified IPO”) on or prior to June 30, 2018, the Exercise Price shall, upon and after such Qualified
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(c) |
If, prior to the completion of a Qualified IPO and on or prior to June 30, 2018, a Qualified Valuation Event has occurred, the Exercise Price shall, upon and after (and for purposes
of) such Qualified Valuation Event, be 85% of the price per Warrant Share implied by such Qualified Valuation Event;
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(d) |
If neither a Qualified IPO nor a Qualified Valuation Event has occurred on or prior to June 30, 2018, the Exercise Price shall, upon and after such date, be $15.00, subject to
adjustment by Section 4.5 (the “Original (d) Exercise Price”),
and, in the event of an IPO whereby one Series C Convertible Preference Share converts into more than one Class A Common Share (with the particular whole or fractional number of Class A Common Shares resulting from the conversion of one
Series C Convertible Preference Share being the “Conversion Factor”),
the Exercise Price established under this clause (d) shall be adjusted to be equal to the Original (d) Exercise Price divided by the Conversion Factor; and
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(e) |
If neither a Qualified IPO nor a Qualified Valuation Event has occurred on or prior to June 30, 2018, but an IPO or an M&A Event occurs after June 30, 2018 but on or prior to
December 31, 2019, the Exercise Price shall, upon and after the date of such IPO or M&A Event, be the lower of (i) the Exercise Price established pursuant to clause (d) above and (ii) the price established in respect of the first
IPO or M&A Event to occur in such period, as either (as applicable) (x) the price per Common A Share offered to the public by the underwriters in such IPO or (y) 85% of the price per Warrant Share implied by such M&A Event
(assuming conversion of all Series B Convertible Preference Shares into Series C Convertible Preference Shares).
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(a) |
consummation of any Reorganization (as defined below); and
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(b)
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consummation of a bona fide equity investment transaction (excluding (i) related party transactions, (ii) transactions of the type contemplated by the definition
of Permitted Transactions (as defined below), and (iii) commercial arrangements with customers or suppliers from which a per Warrant Share price cannot be fairly determined because of the nature of the arrangement, as determined by the
Company and the Holder in good faith after considering whether it is reasonably possible to quantify and take into account the economic contributions to the business of the Company made by such customers or suppliers) entered into by
the Company, any of its direct or indirect subsidiaries or any of its shareholders with one or more bona fide third parties in which an aggregate equity
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1. |
Method of Exercise
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X = (A - B) x C where:
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A
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(a) |
if Warrant Shares are traded on an exchange, the average of the closing price reported for the five business days immediately preceding the date of Net Issuance Exercise, as
published in The Wall Street Journal, provided that if the price for the Warrant Shares at 12:00 p.m. (New York time) on such exchange on the date of the Notice of Net Issuance Exercise is more than 5% above or below such average, such
12:00 p.m. (New York time) price shall be the Fair Market Value;
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(b) |
if Warrant Shares are not traded on an exchange, but are traded in the
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(c) |
if the Net Issuance Exercise is in connection with a Reorganization (as defined below), the value of the consideration (determined in accordance with Section 4.1) to be received
pursuant to such Reorganization by the holder of one Warrant Share; or
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(d) |
if none of clauses (a) through (c) shall apply, the fair market value shall be the price per Warrant Share that the Company could obtain from a willing arm’s-length buyer who is not
a current or former employee or director of the Company or any affiliate of the Company (such price to be exclusive of any control or other similar premium) as determined in good faith by the board of directors of the Company (the “Board”).
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(i) |
*** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall
become fully vested, non-forfeitable and immediately exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “First Vesting Milestone”);
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(ii) |
an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non-forfeitable and immediately exercisable on
the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Second Vesting Milestone”); and
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(iii) |
an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non-forfeitable and immediately
exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Third
Vesting Milestone”);
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(iv) |
an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non-forfeitable and immediately
exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Fourth
Vesting Milestone”);
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(v)
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an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non-forfeitable and immediately exercisable on
the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Fifth Vesting
Milestone”);
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(vi) |
an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date)
shall become fully vested, non-forfeitable and immediately exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Sixth Vesting Milestone”);
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(vii)
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an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non-forfeitable and immediately exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Seventh Vesting Milestone”); |
(viii) |
an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested,
non-forfeitable and immediately exercisable on the date on which Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Eighth Vesting Milestone”);
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(ix)
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an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non- forfeitable and immediately exercisable on the date on which
Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Ninth Vesting Milestone”); and
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(x)
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an additional *** Warrant Shares (as such number of shares has been determined on the Second Amendment Date) shall become fully vested, non- forfeitable and immediately exercisable on the date on which
Amazon Generated Revenue equals US$ *** (such vesting milestone, the “Tenth Vesting Milestone,” and together with the First Vesting Milestone, the Second Vesting Milestone, Third Vesting Milestone, Fourth Vesting Milestone, Fifth Vesting Milestone, Sixth Vesting
Milestone, Seventh Vesting Milestone, Eighth Vesting Milestone, Ninth Vesting Milestone, the “Vesting Milestones” and each of foregoing Vesting Milestones, a “Vesting Milestone”).
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2.
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Delivery of Share Certificates; No Fractional Shares.
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3.
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Representations, Warranties and Covenants
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4.
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Adjustments
Upon Certain Events
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5.
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Registration Rights; Information Rights
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offering pursuant to Section 5.1, in each case which period may be extended upon the request of the managing underwriter(s), to the extent required by any NASDAQ or NYSE rules or consistent with then-prevailing market practice), (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Warrant Shares (or any securities convertible into or exercisable or exchangeable for Warrant Shares) held immediately before the effective date of the registration statement for such offering, or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Warrant Shares, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Warrant Shares or other securities, in cash or otherwise. The foregoing provisions of this Section 5.4 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement and shall be applicable only if all senior officers and directors of the Company and holders of one percent (1%) or more of the outstanding Common Shares (after giving effect to the conversion into Common Shares of all outstanding Convertible Preference Shares) enter into similar agreements. The Holder further agrees to execute such agreements (including lock-up agreements) as may be reasonably requested by the underwriters in connection with the IPO or any subsequent registration in which the Holder has the opportunity to include Registrable Securities in such offering pursuant to Section 5.1 that are consistent with this Section 5.4; provided, that if the Holder enters into any such agreements, the provisions of such agreements shall govern instead of the provisions of this Section 5.4. Any discretionary waiver or termination by the Company or the underwriters of the restrictions of any similar market stand-off agreement to which the Company is a party shall apply pro rata to the Holder, based on the number of shares subject to the Holder’s market stand-off agreement pursuant to this Section 5.4.
6. |
Lost or Damaged Warrant Certificate |
Upon receipt by the Company of a letter from the Holder stating loss, theft, destruction or damage of this Warrant, the Company shall (upon being indemnified to its reasonable satisfaction) execute and
deliver to the Holder, without charge, a new warrant with identical terms as this Warrant. No service charge shall be made by the Company for any such substitution, but all its expenses that may reasonably be incurred, and all stamp, tax and other governmental duties that may be imposed, in relation thereto shall be borne by the Holder.
7. |
Notices of Record Date, etc. |
In the event of any corporate action requiring the Company to establish a record date for its shareholders or notice from the Company required by this Warrant, the Company shall mail to the Holder a written notice specifying (a) the date on which any such event is to occur or such record is to be taken, (b) if securities, rights or warrants are proposed to be issued or granted, the amount and character of any shares or other securities, or rights or warrants, proposed to be issued or granted, the date of such proposed issuance or grant and the persons or class of persons to whom such proposed issuance or grant is to be offered or made, and (c) in reasonable detail, the facts, including the proposed date, concerning any other such event. Such notice shall be delivered to the Holder at least 20 business days prior to the record date specified in the notice.
8. |
Representations and Warranties of the Holder. |
Each party agrees that each of the following representations and warranties are given as of the Original Issue Date, and that no representation or warranty is given as of the Amendment Date or Second Amendment Date:
8.1 Investment Intent; Accredited Investor. By accepting this Warrant, the Holder represents and warrants that it (a) is acquiring this Warrant for its own account and not with a view to, or for sale in connection with, resale or any distribution or public offering thereof within the meaning of the Act or as a nominee or agent, (b) does not as of the date of this Warrant have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to this Warrant or the Warrant Shares, (c) understands that this Warrant and the Warrant Shares subject to this Warrant have not been registered under the Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(a)(2) thereof, and (d) is, and on
the date of exercise of this Warrant for Warrant Shares will be, an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act. The Holder understands that the Warrant Shares may be notated with appropriate legends to reflect that the Warrant Shares are “restricted securities.”
8.2 Sophistication. The Holder represents and warrants that the Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Warrant Shares, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the Warrant Shares and will be able to afford a complete loss of such investment.
8.3 Authority. The Holder represents and warrants that all corporate actions required to be taken, and approvals and consents required to be obtained, by the Holder in connection with the Holder’s execution and delivery of this Warrant have been taken.
9. |
Beneficial Ownership Limitation. |
“Commission” means the U.S. Securities and Exchange Commission.
“Equity Interests” means any and all (a) shares, interests, participations or other equivalents (however designated) of share capital or other voting securities of a corporation, any and all equivalent or analogous ownership (or profit) or voting interests in a Person (other than a corporation), (b) securities convertible into or exchangeable for shares, interests, participations or other equivalents (however designated) of capital stock or voting securities of (or other ownership or profit or voting interests in) such Person, and (c) any and all warrants, rights or options to purchase any of the foregoing, whether voting or nonvoting, and, in each case, whether or not such shares, interests, participations, equivalents, securities, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
“Notice of Exercise” means either a Notice of Cash Exercise or a Notice of Net Issuance Exercise, as applicable.
“Person,” for purposes of this Section 9, has (notwithstanding Section 1.3) the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
“Registered Equity Security” means any class of securities that is an “equity security,” as such term is defined in Rule 13d-l(i) under the Exchange Act.
9.1 The provisions of this Section 9 shall be applicable and effective only at such time when the Warrant Shares, or any shares or other securities into which the shares of Warrant Shares are directly or indirectly convertible or exchangeable, are of a class of Registered Equity Security.
9.2 Notwithstanding anything in this Warrant to the contrary, the Company shall not honor any exercise of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, to the extent that, after giving effect to an attempted exercise set forth on the Notice of Exercise, the Holder (together with the Holder’s affiliates, and any other Person whose beneficial ownership of a Registered Equity Security would be aggregated with the Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act, and the applicable regulations of the Commission, including any “group” of which the Holder is a member (the foregoing, “Attribution Parties”)) would beneficially own a number of shares of a Registered Equity Security in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of a Registered Equity Security beneficially owned by the Holder and its Attribution Parties shall include the number of Warrant Shares issuable under the Notice of Exercise with respect to which such determination is being made but shall exclude the number of shares of such Registered Equity Security which are issuable upon (a) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Attribution Parties, and (b) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including any warrants) beneficially owned by the Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained herein. For
purposes of this Section 9, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission. For purposes of this Section 9, in determining the number of issued and outstanding shares of a Registered Equity Security, the Holder may rely on the number of issued and outstanding shares of such Registered Equity Security as stated in the most recent of the following: (x) the Company’s most recent periodic or annual filing with the Commission, as the case may be, (y) a more recent public announcement by the Company that is filed with the Commission, or (z) a more recent notice by the Company or the Company’s transfer agent to the Holder setting forth the number of shares of such Registered Equity Security then issued and outstanding. Upon the written request of the Holder (which may be by email), the Company shall, within three (3) trading days thereof, confirm in writing to the Holder (which may be via email) the number of shares of any Registered Equity Security then issued and outstanding. In any case, the number of issued and outstanding shares of a Registered Equity Security shall be determined after giving effect to any actual conversion or exercise of securities of the Company, including exercise of this Warrant, by the Holder or its Attribution Parties since the date as of which such number of issued and outstanding shares of such Registered Equity Security was last publicly reported or confirmed to the Holder. The Company shall be entitled to rely on representations made to it by the Holder in any Notice of Exercise regarding its Beneficial Ownership Limitation. The Holder acknowledges that the Holder is solely responsible for any schedules or statements required to be filed by it in accordance with Section 13(d) or Section 16(a) of the Exchange Act.
9.3 The “Beneficial Ownership Limitation” shall initially be 4.999% of the number of shares of any Registered Equity Security issued and outstanding immediately after giving effect to the issuance of Warrant Shares pursuant to such Notice of Exercise (to the extent permitted pursuant to this Section 9); provided, however, that by written notice to the Company, which will not be effective until the 61st day after such notice is delivered by the Holder to
the Company, the Holder may waive or amend the provisions of this Section 9 to change the Beneficial Ownership Limitation to any other number, and the provisions of this Section 9 shall continue to apply. Upon any such waiver or amendment to the Beneficial Ownership Limitation, the Beneficial Ownership Limitation may not be further waived or amended by the Holder without first providing the minimum written notice required by the immediately preceding sentence. Notwithstanding the foregoing, at any time after receiving notice of a Reorganization that is pursuant to any tender offer or exchange offer by the Company or another Person (other than the Holder or any affiliate of the Holder), the Holder may waive or amend the Beneficial Ownership Limitation effective immediately upon written notice to the Company and may reinstitute a Beneficial Ownership Limitation at any time thereafter effective immediately upon written notice to the Company.
9.4 Notwithstanding the provisions of this Section 9, none of the provisions of this Section 9 shall restrict in any way the number of Warrant Shares which the Holder may receive or beneficially own in order to determine the amount of securities or other consideration that the Holder may receive in the event of a Reorganization as contemplated in Section 4 of this Warrant.
10. |
Miscellaneous |
10.1 No Shareholder Rights or Liabilities. Except as explicitly set forth in this Warrant (including Section 7 of this Warrant),
prior to exercise, this Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company (including rights to (a) receive dividends or other distributions, (b) consent to any action of the shareholders of
the Company, (c) receive notice of or vote at any meeting of the shareholders, (d) receive notice of any other proceedings of the Company). Nothing contained in this Warrant shall be construed as imposing any obligation on the Holder to purchase
any securities or any liabilities as a shareholder of the Company, in each case without prejudice to any obligations or liabilities arising as a result of the receipt or holding of Warrant Shares following exercise of this Warrant and without
prejudice to the obligations of the Holder with respect to the consideration payable for exercise of this Warrant pursuant to Section 1.1 or Section 1.2 hereof.
COMPANY: IBEX HOLDINGS LIMITED
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HOLDER: AMAZON.COM NV INVESTMENT HOLDINGS LLC
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/s/ Mohammed Khaishgi | /s/ Josh Steinitz | ||||
Name:
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Mohammed Khaishgi
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Name:
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Josh Steinitz | ||
Title:
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CEO
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Title:
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VP
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COMPANY: IBEX HOLDINGS LIMITED
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/s/ Robert T. Dechant | ||
Name: | Robert T.Dechant | |
Title:
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CEO | |
HOLDER: AMAZON.COM NV INVESTMENT HOLDINGS LLC
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/s/ Josh Steinitz
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Name:
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Josh Steinitz
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Title:
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Director, Business Development
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IBEX Holdings Limited
Crawford House
50 Cedar Avenue
Hamilton HM 11, Bermuda
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Sincerely,
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IBEX Holdings Limited
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Accepted & Agreed:
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By:
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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a. |
Severance. In the event that the Company terminates your
employment for any reason other than death, disability or “Cause”, or you terminate your employment for “Good Reason”, you shall be entitled to the following severance rights, provided that, within 60 days (or such shorter period as the
Company may designate) following termination of your employment, you have released the Company of all known and unknown claims (other than compensation already earned by your or contractually due to you under the terms of this Agreement or
any vested restricted stock agreement, by executing and delivering to the Company a separation agreement and release on a form to be provided to you by the Company at such time (releasing all releasable claims other than to payments under
Section 7 or outstanding vested or vesting equity and including among other things, obligations to cooperate with the Company and reaffirming your obligations under Exhibits A and B hereto):
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i. | For a period of | months from the date of your termination (the “Severance Period”), you shall receive a monthly severance payment equal to the monthly equivalent of your Base Salary (the “Severance Payments”), payable in accordance with the Company’s normal payroll processing. In the event that you are terminated on a day other than the first day of the month, your Severance Payments for the first and last month shall be prorated. You shall immediately inform the Company in writing in the event you become subsequently employed during the Severance Period or if you engage in a consulting agreement with a term of greater than 6 months and compensation greater than $20,000 per month for a third party during the Severance Period. In such an event, the Company’s Severance Payments to you will be reduced to 70% of your employment or contractor compensation during the Severance Period. Payment of the Severance under section 6(a) will commence in the first payroll period beginning after the Release becomes effective against you (provided that if the 60 day period for delivering an effective release ends in the calendar year subsequent to the calendar year in which your employment ended, no payment will be made before the first business day of such subsequent calendar year. |
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ii. |
During the Severance Period, you and your family shall continue to be allowed to participate in the Company’s benefit plans (excluding 401K) as set forth in the
paragraph above at the same cost to you as the cost historically paid by you for such plans during the term of your employment.
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iii. |
Provided that the termination of your employment occurs within six (6) months after a Change of Control of the Company, all of the restricted stock shall become
accelerated in accordance with your Restricted Stock Agreement. As used herein, a Change of Control of the Company shall only be deemed to occur upon (i) a sale of the Company to an unaffiliated party, or a merger of the Company, in each
case where upon the completion of such transaction, an unaffiliated third party owns more than 50% of the issued voting stock of the Company; (ii) a sale of IBEX Limited (“IBEX”) to an unaffiliated party or a merger of IBEX, in each case
where upon completion of such transaction, an unaffiliated party owns more than 50% of the issued voting stock of IBEX.
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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b. |
Cause. Cause shall exist upon (i) a material breach by you of
this Agreement (including but not limited to Exhibit A), or your material violation of a Company Policy or law or regulation pertinent to the Company’s business or reputation; (ii) your failure after receipt of written notice thereof and 3
days to cure such failure, to promptly follow any lawful directive of the Board of Directors; (iii) your engagement in any intentional misconduct or negligence in the performance of your Duties; (iv) your falsification of any reports or
communications issued to any member of the Board of Directors or an employee, officer, agent, or director of IBEX, or any act by you of willful dishonesty, fraud, blackmail, or extortion as determined by the Board of Directors in its
reasonable discretion; (v) your commission of any act in competition with or materially detrimental to the best interests of the Company; or (vi) your conviction of, or a plea of guilty or nolo contender to a felony or other crim involving
moral turpitude.
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c. |
Good Reason. Good Reason shall exist upon (i) a material
diminution in your Base Salary existing as of the date of this Agreement, other than as a result of a similar percentage reduction in the Base Salary of other members of the Company’s senior management; or (ii) the Company removing you from
the office of Executive Vice President, Commercial and Client Operations. Notwithstanding the occurrence of any of the foregoing events or circumstances, a resignation shall not be deemed to constitute Good Reason unless (x) you give the
Company a written notice of the purported Good Reason (no more than 30 days after the initial evidence of such event or circumstance, (y) such event or circumstance has not been corrected within 30 days following the Company’s receipt of such
notice of termination and (z) the resignation becomes effective not more than 180 days following the date of notice.
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d. |
Effect on Officer and Director Positions. If your employment
ends for any reason, you agree that you will cease immediately to hold any and all officer or director positions you then have with the Company or any affiliate (including IBEX), absent a contrary direction from the Board (which may include
either a request to continue such service or a direction to cease serving upon notice). You hereby irrevocably appoint the Company to be your attorney-in-fact to execute any documents and do anything in your name to effect your ceasing to
serve as a director and officer of the Company and any affiliate, should you fail to resign following a request from the Board to do so. A written notification signed by a director or duly authorized officer of the Company that any
instrument, document or act falls within the authority conferred by this subsection will be conclusive evidence that it does so. The Company will prepare any documents, pay any filing fees, and bear any other expenses related to this Section
6(d).
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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5.4.1 |
“Restricted Area” means the United States. Employee hereby agrees and recognizes that the
Company and its affiliates have a nationwide customer base, and thus that the geographic restrictions imposed by Section 5.3 are fair and reasonable.
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5.4.2 |
“Restricted Business” means any venture, enterprise, activity or business engaged in a business, directly or indirectly, similar to the actual or prospective business
of the Company or of any of its affiliates as of the date of the termination of Employee’s employment from the Company, including without limitation, (i) any business who provides business process outsourcing services in or from the
Restricted Area, including outsourcing services related to customer care, sales, or marketing; (ii) any business who provides software services or products relating to the operation of a call center, including but not limited to call center
routing solutions, call center dialing software, and call center agent computer interfaces.
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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i. |
the Company agrees in writing to the issuance of the subpoena or legal process; or
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ii. |
upon written motion from you seeking to issue the subpoena or legal process, in which motion you shall have the burden of persuasion and the burden of proof, the
Arbitrator finds good cause to issue such subpoena or legal process.
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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• |
What is the problem?
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• |
When did you discuss it with your supervisor?
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• |
What response did you receive?
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• |
Why do you disagree with the response?
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• |
What do you think the proper solution should be?
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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• |
Make your request in writing, specifying what has happened thus far, and why you do not feel it has been appropriately addressed; and
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• |
Attach a copy of your answers to the five questions listed in Step 2.
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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EMPLOYMENT
AGREEMENT
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1700 Pennsylvania Ave. NW, Suite 560
Washington, D.C. 20006
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Name:
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Signature:
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Date:
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IBEX HOLDINGS LIMITED
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By:
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Name:
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Title:
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Address:
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INDEMNITEE
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By:
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Name:
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Title:
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Address:
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Name:
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Address:
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