Document:

Exhibit 10.4

 

CIFC CORP.

 

2011 STOCK OPTION AND INCENTIVE PLAN

 

AMENDED AND RESTATED RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This Amended and Restated Restricted Stock Unit Award Agreement (“Agreement”) is entered into on December 31, 2015 (the “Effective Date”), and is between CIFC Corp., a Delaware corporation (the “Company”), and Stephen Vaccaro (the “Participant”).  This Agreement amends and restates in its entirety the Restricted Stock Unit Award Agreement dated as of June 13, 2014 between the Company and the Participant, as amended to date (the “Existing Award Agreement”) pursuant to which the Company initially granted the Participant 75,000 performance-based Restricted Stock Units under the terms of the CIFC Corp. 2011 Stock Option and Incentive Plan, as amended from time to time (the “Plan”).  Any term capitalized but not defined in this Agreement will have the meaning set forth in the Plan.

 

1.             Restricted Stock Unit Award.  In accordance with the terms of the Plan, the Company granted to the Participant the right to receive an aggregate award of 75,000 Restricted Stock Units, with the opportunity to be granted an additional 300,000 Restricted Stock Units, pursuant to the Existing Award Agreement.  Pursuant to an amendment to the Existing Award Agreement, dated as of December 28, 2014, the 75,000 Restricted Stock Units granted to the Participant was reduced to 56,250.  Pursuant to the terms of this Agreement, the Company hereby grants the Participant the additional four tranches of Restricted Stock Units described in Section 2(b) of the Existing Award Agreement, each covering 75,000 Restricted Stock Units.  Tranche 1 shall refer to the 56,250 Restricted Stock Units granted to the Participant pursuant to the Existing Award Agreement, Tranche 2 shall refer to the 75,000 Restricted Stock Units granted to the Participant pursuant to this Agreement that will vest, in part, based on achievement of the 2015 Performance Goals (as defined below), Tranche 3 shall refer to the 75,000 Restricted Stock Units granted to the Participant pursuant to this Agreement that will vest, in part, based on achievement of the 2016 Performance Goals (as defined below), Tranche 4 shall refer to the 75,000 Restricted Stock Units granted to the Participant pursuant to this Agreement that will vest, in part, based on achievement of the 2017 Performance Goals (as defined below) and Tranche 5 shall refer to the 75,000 Restricted Stock Units granted to the Participant pursuant to this Agreement that will vest, in part, based on achievement of the 2018 Performance Goals (as defined below).  Each Restricted Stock Unit represents the right to acquire one share of Common Stock, subject to the terms and conditions herein. Unless the context dictates otherwise, all Restricted Stock Units shall be referred to hereinafter as the “Units.”  From and after the Effective Date, the Units shall be subject to the terms and conditions of this Agreement, not the Existing Award Agreement.

 

 

2.             Vesting.

 

(a)           Except as provided in Section 6, the Units shall become vested and nonforfeitable in installments as follows, subject to the Participant remaining in continuous Service on each Vesting Date:

 

(i)            100% of the Units subject to Tranche 1 (56,250 Units) shall become vested on December 31, 2016.

 

(ii)           100% of the Achieved Tranche 2 Units shall vest on March 31, 2016.

 

(iii)          100% of the Achieved Tranche 3 Units shall vest on March 31, 2017.

 

(iv)          100% of the Achieved Tranche 4 Units shall vest on March 31, 2018.

 

(v)           100% of the Achieved Tranche 5 Units shall vest on March 31, 2019.

 

(b)           For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

(i)            “2015 Performance Goals” means the performance goal(s) established by the Board or Committee upon which the Tranche 2 Units may be earned.

 

(ii)           “2016 Performance Goals” means the performance goal(s) for calendar year 2016 established by the Board or Committee in its sole discretion upon which the Tranche 3 Units may be earned.  The 2016 Performance Goals may be modified by the Board or the Committee in their sole discretion from time to time prior to the expiration of the 2016 calendar year without the consent of the Participant.

 

(iii)          “2017 Performance Goals” means the performance goal(s) for calendar year 2017 established by the Board or Committee in its sole discretion upon which the Tranche 4 Units may be earned.  The 2017 Performance Goals may be modified by the Board or the Committee in their sole discretion from time to time prior to the expiration of the 2017 calendar year without the consent of the Participant.

 

(iv)          “2018 Performance Goals” means the performance goal(s) for calendar year 2018 established by the Board or Committee in its sole discretion upon which the Tranche 5 Units may be earned.  The 2018 Performance Goals may be modified by the Board or

 

 

the Committee in their sole discretion from time to time prior to the expiration of the 2018 calendar year without the consent of the Participant.

 

(v)           “Achieved Tranche 2 Units” means the number of Tranche 2 Units deemed earned based on the achievement of the 2015 Performance Goals, as determined by the Board or Committee in its sole discretion.  Any Tranche 2 Units that do not become Achieved Tranche 2 Units shall be immediately forfeited effective as of January 1, 2016.

 

(vi)          “Achieved Tranche 3 Units” means the number of Tranche 3 Units deemed earned based on the achievement of the 2016 Performance Goals, as determined by the Board or Committee in its sole discretion.  Any Tranche 3 Units that do not become Achieved Tranche 3 Units shall be immediately forfeited effective as of January 1, 2017.

 

(vii)         “Achieved Tranche 4 Units” means the number of Tranche 4 Units deemed earned based on the achievement of the 2017 Performance Goals, as determined by the Board or Committee in its sole discretion.  Any Tranche 4 Units that do not become Achieved Tranche 4 Units shall be immediately forfeited effective as of January 1, 2018.

 

(viii)        “Achieved Tranche 5 Units” means the number of Tranche 5 Units deemed earned based on the achievement of the 2018 Performance Goals, as determined by the Board or Committee in its sole discretion.  Any Tranche 5 Units that do not become Achieved Tranche 5 Units shall be immediately forfeited effective as of January 1, 2019.

 

(ix)          “Qualified Retirement” means the Participant’s voluntary termination of Service after reaching age 65 and completing 10 years of service with the Company, its Subsidiaries or predecessors.

 

(x)           “Service” means the provision of services in the capacity of (i) an employee of the Company or its Subsidiaries, (ii) a non-employee member of the Company’s Board or the board of directors of a Subsidiary, or (iii) a consultant or other independent advisor to the Company or its Subsidiaries.

 

Notwithstanding the foregoing, following the occurrence of a Sale Event, the performance goals with respect to any then outstanding Units that have not been forfeited shall cease to apply, and such Units shall be deemed to be Achieved Tranche 3 Units, Achieved Tranche 4 Units or

 

 

Achieved Tranche 5 Units, as the case may be, and shall become vested based only on continued Service (or the termination thereof, as described in Section 6(e) hereof).

 

3.             Settlement Date.  The date on which any Units become vested and nonforfeitable pursuant to Section 2 or Section 6 shall be referred to herein as a “Settlement Date.” Dividends shall not accrue with respect to the Units unless and until such Units vest and are settled pursuant to this Agreement.

 

4.             Form and Timing of Settlement.

 

(a)           As soon as practicable following each Settlement Date (and in no event later than 30 days after the Settlement Date), the Company shall settle the Units that vested on such Settlement Date by issuing to the Participant the number of shares of Common Stock equal to the aggregate number of Units that vested on such Settlement Date and the Participant shall thereafter have all the rights of a stockholder of the Company with respect to such shares.  No payment will be made hereunder for a fractional Unit, and any fractional Unit subject hereto on a Settlement Date will be forfeited.

 

(b)           The Participant shall, no later than the date as of which the value of any Units or other amounts received hereunder first becomes includable in the gross income of the Participant for Federal income tax purposes, pay to the Company or a Subsidiary thereof, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company or a Subsidiary thereof with respect to such income.  If the Participant elects to satisfy such obligation by withholding shares of Common Stock to be issued pursuant to settlement of a Unit, the Company and its Subsidiaries shall use best efforts to satisfy the minimum required tax withholding obligation by withholding from shares of Common Stock to be issued pursuant to settlement of a Unit a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the minimum withholding amount due.

 

5.             Shares Subject to Holding Period.  Upon settlement of any Units, 50% of the shares of Common Stock acquired by the Participant (net of shares used to satisfy tax withholding obligations) shall be subject to a holding period during which the Participant may not transfer, sell or otherwise dispose of such shares of Common Stock, lasting until the earlier of (i) June 13, 2019 or (ii) 6 months after the Participant’s termination of Service. Notwithstanding the foregoing, if the Participant’s Service terminates upon his or her death, disability or Qualified Retirement, or if the Participant’s Service is terminated as described in Section 6(b) or Section 6(c), then the holding period shall expire upon such termination of Service. Additionally, no Holding Period shall apply following a Sale Event.  The Company reserves the right to enforce the holding period by any reasonable means that it deems advisable.

 

 

6.             Termination of Service.

 

(a)           Termination of Service upon Death or Disability.  Except as otherwise provided in Section 6(e), upon termination of Service due to the Participant’s death or by the Company or a Subsidiary thereof due to the Participant’s disability, (i) the Participant will receive accelerated vesting with respect to any Units earned based on the achievement of performance goals relating to a performance period that has ended as of the date of such termination (to the extent not settled prior to such termination), (ii) the Participant will receive accelerated vesting of any Units relating to the performance period in progress as of the date of such termination as well as the performance period immediately following such termination (if any), assuming achievement of 100% of the applicable performance goals for such performance periods and (iii) the Participant will forfeit any remaining Units.

 

(b)           Termination of Service by the Company Without Cause or Termination of Service by the Participant for Good Reason.  Except as otherwise provided in Section 6(e), upon any termination of Service by the Company or a Subsidiary thereof without Cause (but not due to disability) or by the Participant for Good Reason, (i) the Participant will receive accelerated vesting with respect to any Units earned based on the achievement of performance goals relating to a performance period that has ended as of the date of such termination (to the extent not settled prior to such termination), (ii) if such termination occurs after June 30 of a performance period, the Participant will receive accelerated vesting of any Units relating to such performance period, assuming achievement of 100% of the applicable performance goals and (iii) the Participant will forfeit any remaining Units.

 

(i)            “Cause” means:

 

(A)          the breach by the Participant of any of the restrictive covenant provisions contained in Section 7 of this Agreement;

 

(B)          the Participant’s commission of a felony or violation of any law involving moral turpitude, dishonesty, disloyalty or fraud;

 

(C)          any failure by the Participant to substantially comply with any written rule, regulation, policy or procedure of the Company or its Subsidiaries applicable to the Participant, which noncompliance could reasonably be expected to have a material adverse effect on the business of the Company or any Subsidiary;

 

 

(D)          any failure by the Participant to comply with the Company’s or its Subsidiaries’ policies with respect to insider trading applicable to the Participant;

 

(E)           a willful material misrepresentation at any time by the Participant to any member of the Board or any director or superior executive officer of the Company or its Subsidiaries;

 

(F)           the Participant’s willful failure or refusal to comply with any of his or her material obligations to the Company or any of its Subsidiaries or a reasonable and lawful instruction of the Board or the person to whom the Participant reports; or

 

(G)          commission by the Participant of any act of fraud or gross negligence in the course of his or her Service or any other action by the Participant, in either case that is determined to be materially detrimental to the Company or any of its Subsidiaries (which determination, in the case of gross negligence or such other action, shall be made by the Administrator in its reasonable discretion);

 

provided that, except for any willful or grossly negligent acts or omissions, the commission of any act or omission described in clause (A) or (C) that is capable of being cured shall not constitute Cause hereunder unless and until the Participant, after written notice from the Company to him specifying the circumstances giving rise to Cause under such clause, shall have failed to cure such act or omission to the reasonable satisfaction of the Administrator within 10 business days after such notice; and

 

provided further, that the Participant’s Service shall be deemed to have terminated for Cause if, after the Participant’s Service has terminated, facts and circumstances are discovered that would have justified a termination for Cause.

 

(ii)           “Good Reason” shall mean, without the Participant’s consent, the occurrence of any of the following events:

 

(A)          a material reduction in the Participant’s base salary;

 

(B)          a material adverse change in the Participant’s responsibilities; or

 

(C)          any requirement that the Participant’s primary place of employment be based anywhere more than 50 miles outside the city limits of New York, NY (provided that the same materially increases the Participant’s commute).

 

 

Notwithstanding the foregoing, “Good Reason” shall not exist with respect to the matters set forth in clauses (A), (B) or (C) above unless, after written notice from the Participant to the Administrator within 90 days after the first occurrence of the event alleged to give rise to Good Reason specifying the circumstances giving rise to Good Reason under such clause, the Company shall fail to cure the circumstances giving rise to Good Reason to the reasonable satisfaction of the Participant within 10 business days after such notice and the Participant terminates Service within 30 days after such failure to cure.

 

(c)           Voluntary Termination of Service by the Participant Without Good Reason.  Except as otherwise provided in Section 6(e), upon any termination of Service by the Participant without Good Reason, the Participant will forfeit any unvested Units.

 

(d)           Termination of Service by the Company or a Subsidiary Thereof for Cause.  Upon any termination of Service by the Company or a Subsidiary thereof for Cause, the Participant will forfeit any unvested Units.  In addition, the Company, at its option, will have the right to repurchase shares held by the Participant that were acquired through settlement of any Units at the Fair Market Value of such shares.

 

(e)           Termination of Service in Connection with a Sale Event.

 

(i)            If a Sale Event occurs and the Participant either (A) has his Service terminated by the Company or a Subsidiary thereof without Cause 6 months prior to the effective date of a Sale Event or at any time thereafter, (B) resigns for Good Reason 6 months prior to the effective date of a Sale Event or at any time thereafter or (C) terminates Service for any reason other than for Cause on or after the later of January 2, 2018 and the 18 month anniversary of such Sale Event, the Participant will receive accelerated vesting of the entirety of his or her unvested Units, with the Settlement Date to be the later of the date of such termination or such Sale Event.  Any vesting required under Section 6(b) as the result of a termination of Service without Cause or for Good Reason shall continue to occur upon such termination in accordance with Section 6(b) (this Section 6(e) may provide additional vesting upon such termination or at a later date).

 

(ii)           “Sale Event” shall mean the occurrence of any of the following events, provided that such event satisfies the requirements of Treasury Regulation 1.409A-3(i)(5)(v), (vi) or (vii):

 

(A)          the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity;

 

 

(B)          a merger, reorganization or consolidation pursuant to which the largest holder of the Company’s outstanding voting power immediately prior to such transaction ceases to be the largest owner of outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction;

 

(C)          the sale of all of the Stock of the Company to an unrelated person or entity; or

 

(D)          any other transaction in which the largest owner of the Company’s outstanding voting power prior to such transaction ceases to be the largest owner of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction.

 

Notwithstanding anything contained in this Agreement to the contrary, to the extent permitted by Code Section 409A, upon the occurrence of a Sale Event in which the purchaser or its ultimate parent is a privately held company or a publicly traded company with limited liquidity (as determined by the Board prior to such Sale Event in its sole discretion), if the Units are not terminated and cashed out in accordance with Treasury Regulation 1.409A-3(j) (which decision to so cash out such Units shall be within the sole discretion of the Board), each then-unvested Unit shall be converted into a cash amount equal to the per share of Common Stock amount paid by the acquiror in such Sale Event and shall not thereafter increase or decrease in value.  Upon such conversion, the Company shall, or shall cause the acquiror to, deposit the cash value of such unvested Units in an irrevocable rabbi trust that satisfies the requirements of IRS Revenue Procedure 92-64 with a bank reasonably acceptable to the Participant.  Within 30 days after a Unit becomes vested in accordance with Section 2 or this Section 6, the cash value of such Unit shall be paid to the Participant (less applicable withholdings and deductions).  From and after such Sale Event, the Participant shall cease to have any right to receive Common Stock or other equity securities in respect of the Units.

 

Notwithstanding anything contained in this Agreement or the Plan to the contrary, the settlement of the Units shall not be accelerated other than as provided in this Section 6 (unless such acceleration is done in compliance with a permitted exception under Code Section 409A).

 

7.             Confidentiality; Nondisparagement.

 

(a)           Nondisclosure and Nonuse of Confidential Information.  The Participant shall not disclose or use at any time, either during the Participant’s Service or thereafter, any Confidential Information (as defined below) of which the Participant is or becomes aware, whether or not such information is developed by the Participant, except to the extent that such disclosure or use is directly related to and required by the Participant’s performance of duties assigned to the Participant by the Company or its Subsidiaries. The Participant shall take all appropriate steps to safeguard

 

 

Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. For purposes of this Agreement, the term “Confidential Information” is defined to include all proprietary information or data relating to the business of Company or its Subsidiaries to which the Participant has access and/or learns prior to or during the Participant’s Service, including business and financial information; new product development; formulas, identities of and information concerning clients, vendors and suppliers; development, expansion and business strategies, plans and techniques; computer programs, devices, methods, techniques, processes and inventions; research and development activities; compilations and other materials developed by or on behalf of the Company or its Subsidiaries (whether in written, graphic, audio-visual, electronic or other media, including computer software). Confidential Information also includes information of any third party doing business with the Company or its Subsidiaries that such third party identifies as being confidential or that is subject to a confidentiality agreement with such third party.  Confidential Information shall not include any information that is in the public domain or otherwise publicly available (other than as a result of a wrongful act of the Participant or an agent or other employee of the Company or its Subsidiaries, including a breach of this Section 7(a)).

 

(b)           Non-disparagement.  The Participant agrees not to make any communication to any third party (including, without limitation, any client (including potential clients) or employee of the Company or its Subsidiaries) that would, or is reasonably likely to, disparage, create a negative impression of, or in any way be harmful to the business or business reputation of the Company or its Subsidiaries or their respective successors and assigns, and the then current and former officers, directors, shareholders, partners, members, employees, agents and consultants (or person acting in a similar capacity) of each of the foregoing.

 

(c)           Judicial Modification.  If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 7 is invalid or unenforceable, the parties agree that (i) the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, (ii) the parties shall request that the court exercise that power, and (iii) this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed.

 

(d)           Remedy for Breach.  In addition to the remedies available to the Company under this Agreement upon a breach or threatened breach of

 

 

any of the covenants contained in this Section 7 (including termination of the Participant’s Service for Cause as described in Section 6), the Company shall also have and may seek enforcement of any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise.

 

8.             Unit Transfer: Restriction on Settlement.

 

(a)           Except as provided in subsection (c) below, the Participant may not sell, transfer, pledge, assign or otherwise alienate or hypothecate this Agreement or any of the Units.

 

(b)           Except as provided in subsection (c) below, during the Participant’s lifetime and subject to the terms of this Agreement and the Plan, only the Participant or his or her guardian or legal representative may receive any shares of Common Stock pursuant to settlement of any Units.  The Administrator may, in its discretion, require a guardian or legal representative to supply it with the evidence the Administrator reasonably deems necessary to establish the authority of the guardian or legal representative to receive any shares of Common Stock pursuant to settlement of any Units on behalf of the Participant or transferee, as the case may be.

 

(c)           This Agreement and the Units shall not be assignable or transferable except by will, the laws of descent and distribution or pursuant to a domestic relations order (as defined in Code Section 414(p)(1)(B)) in settlement of marital property rights.  Except to the extent required by law, no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant.

 

9.             Securities Law Requirements.  If at any time the Administrator determines that issuing shares of Stock pursuant to this Agreement would violate applicable securities laws, the Units will not be settled, and the Company will not be required to issue shares of Stock.  The Administrator may declare any provision of this Agreement or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules.  As a condition to settlement of any Unit, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws.

 

10.          Section 409A.  This Agreement is intended to comply with or be exempt from Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance that may be issued after the Effective Date, “Section 409A”) and, to the extent applicable, this Agreement shall be interpreted in accordance with Section 409A.  However, notwithstanding any other provision of the Plan or this Agreement, if at any time the

 

 

Company determines that the Units may be subject to Section 409A, the Company shall have the right in its sole discretion (without any obligation to do so or to indemnify the Participant or any other person for failure to do so) to adopt such amendments to the Plan or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Company determines are necessary or appropriate either for the Units to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.  Notwithstanding the foregoing or anything contained herein to the contrary, no provision of the Plan or this Agreement shall be interpreted or construed to transfer any liability for failure to comply with the requirements of Section 409A from the Participant or any other individual to the Company or any of its affiliates.  Each settlement of a Unit in connection with a Settlement Date shall be treated as a separate payment for purposes of Section 409A.  To the extent that any Units are determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A, then if the Participant is a “specified employee” (within the meaning of Section 409A) at the time of his “separation from service” (within the meaning of Section 409A), then to the extent required by Section 409A, any Units that otherwise would have been settled within 6 months after the date of such separation from service instead shall be settled on the earlier of (i) six (6) months and one (1) day after the Participant’s separation from service and (ii) the date of the Participant’s death.  Further, the settlement of any Units may not be accelerated except to the extent permitted by Section 409A.

 

11.          No Limitation on Rights of the Company.  The grant of the Units does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

12.          Plan and Agreement Not a Contract of Employment or Service.  Neither the Plan nor this Agreement is a contract of employment, and no terms of the Participant’s Service will be affected in any way by the Plan, this Agreement or related instruments, except to the extent specifically expressed therein.  Neither the Plan nor this Agreement will be construed as conferring any legal rights on the Participant to continue to be employed or remain in service with the Company or any of its Subsidiaries, nor will it interfere with the Company’s or any of its Subsidiaries’ right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, this Agreement or the Units.

 

13.          Participant to Have No Rights as a Common Shareholder.  Before the date as of which he or she is recorded on the books of the Company as the holder of any shares of Stock issued pursuant to settlement of a Unit, the Participant will have no rights as a shareholder with respect to those shares of Stock.

 

14.          Legend on Certificates.  The certificates representing the shares of Stock issued pursuant to the settlement of any Unit shall be subject to such stop transfer orders and other restrictions as the Administrator may deem reasonably advisable under the Plan (including, but not limited to, in connection with the enforcement of the holding period described in Section 5 of this Agreement) or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares of Stock are listed, any applicable federal or state laws and the Company’s certificate of incorporation and bylaws, and

 

 

the Administrator may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

15.          Notice.  Any notice or other communication required or permitted under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to CIFC Corp., 250 Park Avenue, 4th Floor, New York, NY 10177.  Notice to the Participant should be sent to the address set forth on the signature page below.

 

16.          Successors.  All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise.

 

17.          Governing Law.  To the extent not preempted by federal law, this Agreement will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction.

 

18.          Conflict.  The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement; provided, however, that if the terms of this Agreement conflict with the terms of the Plan document, this Agreement will control (provided that to the extent possible, this Agreement and the Plan will be construed to not be in conflict).

 

19.          Amendment of the Agreement.  The Company and the Participant may amend this Agreement only by a written instrument signed by both parties.

 

20.          Counterparts.  The parties may execute this Agreement in one or more counterparts, all of which together shall constitute but one Agreement.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of the date first written above.

 

 

	
CIFC Corp.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    
	
/s/ Julian Weldon
    	
 
    	
/s/ Stephen Vaccaro
    
	
By: Julian Weldon
    	
 
    	
Stephen Vaccaro
    
	
Title: General CounselEXHIBIT 10.1

EXHIBIT 10.1

ACCREDITED INVESTOR PRIVATE PLACEMENT

SUBSCRIPTION AGREEMENT

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE LAWS OF ANY STATE, AND ARE BEING ISSUED IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE ACT. 

REQUIREMENTS TO SUBSCRIBE - Subscribers please note that to fulfill this subscription properly you must (a) read this document carefully and acquire independent legal and investment advice as this document constitutes a binding legal document, (b) fill in the amount of securities subscribed for in the section “Amount Subscribed and Method of Payment” at page 2 below,  (c) check off the appropriate exemption in Appendix I and sign Appendix I, (d) complete the signature and information page at page 3, and (e) deliver this subscription agreement and payment, in accordance with the section “Amount Subscribed and Method of Payment” on page 2.

To:

Weyland Tech Inc. (referred to as the “Company”), with an address for notice and delivery for the purposes of this agreement located at 9/F, The Wellington, 198 Wellington Street, Central Hong Kong.

The Company is offering to eligible investors, including the subscriber (hereinafter referred to as the “Subscriber”) entering into this Subscription Agreement (the “Agreement”) with the Company, on an exempt private placement basis and on the terms of this Agreement, shares (the “Shares”) at a subscription price of US$0.__ Per Share. 

The Shares are also herein referred to as the “Securities”.

This offering is not subject to the receipt of a minimum subscription amount and any received subscription monies may be placed into the Company’s accounts and employed by the Company immediately upon receipt and prior to acceptance and issuance of any Shares.  The Company offers, and the Subscriber accepts, the Shares on the terms and conditions as set forth in this Agreement.  This Agreement is made specifically subject to the terms of the attached Schedule “A” and Appendices, which are incorporated herein as terms.

 
 

AMOUNT SUBSCRIBED AND METHOD OF PAYMENT

1.1

Subscription for Shares.  Based upon the terms and representations of this Agreement given by each party to the other, the Subscriber hereby irrevocably subscribes for and agrees to purchase ____________ Shares, at a subscription price of US$0.__ Per Share, for aggregate consideration of $_____________________ (the “Subscription Price”).

1.2

Method of Subscription.  Subscriptions for Shares shall be made by:  

(a) delivering to the Company an originally executed copy of this Agreement (Note – please fill in the above section 1.1, complete and execute the Appendix I, and fully complete the signature and information page at page 3), and 

(b) payment of the Subscription Price in the following manner:

(i)

by wire transfer to the Company by wiring instructions below:

Beneficiary Account Number: 848-761581-838

Beneficiary Account Name: Weyland Tech Limited

Beneficiary Bank: HSBC Hong Kong

Swift Code: HSBCHKHHHKH

Bank Code: 004

Bank Address: 1 Queen’s Road Central, Hong Kong

 
 

IN WITNESS WHEREOF the Parties hereto have hereunto set their respective hands and seals in the presence of their duly authorized signatories effective as at the date first above written.

SUBSCRIPTION BY SUBSCRIBER:

SUBSCRIBER STATEMENT – I, the Subscriber, have sought such independent counsel as I consider necessary and I have read this Agreement carefully and accept, agree and acknowledge the representations and terms thereof in full and without exception and agree that this Agreement constitutes the entire agreement between us and there are no collateral representations or agreements.

Dated at ___________________, on this ___________ day of _______________, 2015.

REMEMBER:  The Subscriber must also carefully read Schedule “A” additional terms of this Agreement and complete and sign Appendix I to declare his exemption qualifying the subscriber as an eligible purchaser.

______________________________

______________________________

Name of Subscriber - please print

By: ___________________________

______________________________

Signature of Subscriber

Subscriber’s Address

_______________________________

Telephone Number

________________________________

Please print name of signing officer whose

signature appears above if different than

the name of the Subscriber printed above

_______________________________

e-mail address

ACCEPTANCE BY THE COMPANY:

Weyland Tech, Inc. hereby accepts the above subscription by the Subscriber on this _____ day of ____________  , 2015.

___________________________________

By: Authorized Signatory

 
 

APPENDIX I

ACCREDITED INVESTOR REPRESENTATIONS

IN THE MATTER OF WEYLAND TECH, INC. 

(the “Company”)

In addition to the covenants, representations and warranties contained in the Private Placement Subscription Agreement, to which this Appendix is attached, the undersigned Subscriber covenants, represents and warrants to the Company as follows:

The Subscriber warrants the Subscriber is an 'Accredited Investor' under the definition(s) below.   The Subscriber therefore has no restriction in law to his right to subscribe for the Shares and acknowledges that the Company is relying upon this in issuing the Securities.  The Subscriber advises the Company that the Subscriber is exempt from investment restriction in the Subscriber’s country of domicile by one or more of the following (check appropriate category):

(   )

earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR

(   )

has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence and any loans secured by the residence (up to the value of the residence)).

The statements made in this Certificate are true.

DATED______________________, 2015.

__________________________________________

Name of Subscriber [Please Print]

__________________________________________

Signature of Subscriber or Authorized Signatory of Subscriber

__________________________________________

Name and Office of Authorized Signatory [Please Print]

__________________________________________

Address of Subscriber

 
 

SCHEDULE “A”

TO THE PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

OF

WEYLAND TECH,  INC.

Article 1

SUBSCRIPTION FOR SECURITIES AND CONDITIONS OF SUBSCRIPTION

1.1 Acceptance of subscription or return of Subscription Price by the Company.  The Company, upon acceptance by its board of directors of all or part of this Subscription Agreement, hereby agrees to issue the Shares as fully paid and non-assessable shares and to refund to the Subscriber any excess subscription monies of the Subscription Price of any non-accepted portion of this Subscription Agreement.  The Subscriber agrees and directs that where the Subscriber has omitted to complete certain sections of this Agreement the Company or its agents may complete such sections from the Company’s knowledge or logic (such as, by way of example only and without limitation, inserting the number of Shares subscribed based upon the funds tendered) or by direction by the Subscriber by phone or otherwise.  

1.2 Use of Funds before and after acceptance.  The subscription monies shall be advanced immediately to the Company’s general fund to reserve the Subscriber’s subscription, shall not be held in trust, may be employed by the Company for its business purposes immediately and prior to acceptance and shall constitute solely a reservation of subscription and advance of funds therefore.  The Subscriber shall not demand return of its subscription unless the Shares have not been issued for a period in excess of six months from the date of this subscription and such demand may be fulfilled by acceptance and delivery of subscribed Shares or return of funds, at the sole discretion of the Company.  The Subscriber acknowledges that the funds to be raised from the Shares are to be employed for the business of the Company in accordance with management’s determination as to the best use of the same for the Company’s business plan.  Notwithstanding any disclosure document or offering memorandum or prospectus provided concurrent with this subscription, the Company reserves the right at any time to alter its business plan in accordance with management’s appreciation of the market for the goods and services of the Company and the best use of the Company’s funds to advance its business, whether present or future. 

1.3 Subscriber’s eligibility for subscription.  The Subscriber acknowledges and warrants (and has made diligent inquiries to so determine or has the sophistication and knowledge to know his status without concern of error), on which the Company relies, that the Subscriber is purchasing the Shares on a private basis and without infraction of or impedance by his domicile laws, and, the Subscriber has completed Appendix I to this Agreement, and the completion of the same, whether signed or not, constitutes a true and accurate statement by the Subscriber.

1.4 Securities issued at different prices and characteristics.  The Subscriber acknowledges that the Company may issue shares at different prices which may occur sequentially, from time to time, or at the same time and prices in the future may be lower than now.  The Company may also issue offerings which have warrants, or other benefits, attached and some offerings which do not.  Not all subscribers will receive common shares, or other share classes, of the Company at the same price and such may be issued at vastly different prices to that of the Subscriber.  For example, the Company will or may issue common shares at nominal prices as “founder’s shares” (which may or will constitute millions of common shares, as determined solely by the Company’s board) or for developmental assets (which cannot be valued and so may be assigned a nominal value on the Company’s books) or for services or to attract expertise or management talent or other circumstances considered advisable by the board of directors of the Company.  Such issuances at different prices are made by the board in 

 
 

its judgment as to typical structuring for a company such as the Company, to provide incentive, reward, and to provide a measure of developmental control, to acquire assets or services which the board considers necessary or advisable for the Company’s development and success, and other such considerations in the board’s judgment.  The Company may or will acquire debt and/or undertake equity financings in the future required or advisable, as determined by the Company’s board, in the course of the Company’s business development.  The Subscriber acknowledges these matters, understands that the Subscriber’s investment is not necessarily the most advantageous investment in the Company and authorizes the board of the Company now and hereafter to use its judgment to make such issuances whether such issuances are at a lesser, equal or greater price than that of the Subscriber and whether such is prior to, concurrent with, or subsequent to the Subscriber’s investment. 

Article 2

INVESTMENT SUBSCRIPTION TERMS, CORPORATE DISCLOSURE AND GENERAL SUBSCRIBER ACKNOWLEDGEMENTS AND WARRANTIES

2.1 Release of liability and indemnity.  The Subscriber agrees that in consideration, in part, of the Company’s within acceptance of this subscription, the Subscriber does hereby release, remise and forever discharge the Company and its subsidiaries, directors, officers, employees, attorneys, agents, executors, administrators, successors and assigns, of and from all manner of action and causes of action, suits, debts, dues, accounts, bonds, covenants, trusts, contracts, claims, damages and demands, whether known or unknown, suspected or unsuspected and whether at law or in equity, which against the Company and/or any of its subsidiaries, directors, officers, employees, attorneys, agents, executors, administrators, successors and assigns, the Subscriber ever had, now has, or which the Subscriber or any of them hereafter can, shall or may have by reason of any matter arising from the within subscription or the use of funds or the operation of the Company (collectively, the “Release”) except only for gross negligence or fraud (and such shall constitute only objective willful act of objective material wrongdoing, and such exception shall only apply against the Company committing such gross negligence or fraud).  The Subscriber shall hold harmless and indemnify the Company from and against, and shall compensate and reimburse the same for, any loss, damage, claim, liability, fee (including reasonable attorneys’ fees), demand, cost or expense (regardless of whether or not such loss, damage, claim, liability, fee, demand, cost or expense relates to a third-party claim) that is directly or indirectly suffered or incurred by the Company, or to which the Company becomes subject, and that arises directly or indirectly from, or relates directly or indirectly to, any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Subscriber contained in this Agreement.  This Release is irrevocable and will not terminate in any circumstances. 

2.2 The Subscriber’s representations, warranties and understandings.  The Subscriber acknowledges, represents and warrants to the Company and understands that: 

(a)

Experience and counsel.  The Subscriber has the requisite knowledge and experience in financial and business matters for properly evaluating the risks of an investment in the Company and has sought all such counsel as the Subscriber has considered advisable. 

(b)

Adequacy of information.  The Subscriber has been given the opportunity to ask questions of, and to receive answers from, the Company concerning the terms and conditions of the offering and the Subscriber has received all information regarding the Company reasonably requested by the Subscriber in order to evaluate an investment in the Company. 

(c)

Independent investigation.  In making a decision to invest in the Company the Subscriber has relied solely upon independent investigations made by the Subscriber, and the particular tax consequences arising from an investment in the Company will depend upon the Subscriber’s individual circumstances and is at his sole risk. 

(d)

Principal.  The Subscriber is purchasing the Shares as principal for the Subscriber’s own account and 

 
 

not for the benefit of any other person, except as otherwise stated herein, and not with a view to the resale or distribution of all or any of the Securities. 

(e)

Decision to purchase.  The decision of the Subscriber to enter into this Agreement and to purchase Shares pursuant hereto has been based only on the representations of this Agreement and any accompanying offering memorandum, if any.  It is not made on other information relating to the Company and not upon any oral representation as to fact or otherwise made by or on behalf of the Company or by any person which contradicts this Agreement or any offering memorandum.  The Subscriber agrees that the Company assumes no responsibility or liability of any nature whatsoever for the accuracy, adequacy or completeness of any business plan information which has been created based upon the Company’s management experience.  In particular, and without limiting the generality of the foregoing, the decision to subscribe for Shares has not been influenced by: 

(i)

newspaper, magazine or other media articles or reports related to the Company or their businesses; 

(ii)

promotional literature or other materials used by the Company for sales or marketing purposes; or 

(iii)

any representations, oral or otherwise, that the Company will become a listed company, that any of the Securities will be repurchased or have any guaranteed future realizable value or that there is any certainty as to the success of the Company or the liquidity or value of any of the securities of the Company. 

(f)

Advertisements.  The Subscriber acknowledges that the Subscriber has not purchased Shares as a result of any general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. 

(g)

Information not received.  The Subscriber has not received, nor has the Subscriber requested, nor does the Subscriber have any need to receive, any offering memorandum or any other document (other than documents the content of which is prescribed by statute or regulation) describing the business and affairs of the Company which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision in respect of the Shares, and the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation, radio or television with respect to the distribution of the Shares. 

(h)

Economic risk.  The Subscriber has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of the Subscriber’s investment in and to any of the Securities, and the Subscriber is able to bear the economic risk of a total loss of the Subscriber’s investment in and to any of the Securities.  The Subscriber understands that an investment in any of the Securities is a speculative investment and that there is no guarantee of success of the plans of the Company’s management.  Such plans are an effort to apply present knowledge and experience to project a future course of action which is hoped will result in financial success employing the Company’s assets and with the present level of management’s skills and of those whom the Company will need to attract (which cannot be assured).  Additionally, all plans are capable of being frustrated by new or unrecognized or unappreciated present or future circumstances which can typically not be predicted, accurately or at all. 

(i)

No Representations as to resale.  No person has made to the Subscriber any written or oral representations: 

(i)

that any person will resell or repurchase any of the Securities; 

(ii)

that any person will refund the purchase of any of the Securities; 

(iii)

as to the future price or value of any of the Securities; or 

(iv)

that any of the Securities will be listed and posted for trading on any stock exchange, over-the-counter or bulletin board market, or that application has been made to list and post any of the Securities for trading on any stock exchange, over-the-counter or bulletin 

 
 

board market. 

(j)

Resale restrictions.  The Subscriber has been independently advised as to the applicable hold period imposed in respect of the Securities by securities legislation in the jurisdiction in which the Subscriber resides and confirms that no representation has been made respecting the applicable hold periods for the Securities (including their component parts) and is aware of the risks and other characteristics of the Securities and of the fact that the Subscriber may not be able to resell the Securities except in accordance with the applicable securities legislation and regulatory policy.  In this regard the Subscriber agrees that if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, the Subscriber will not offer, sell or otherwise transfer any of such Securities, directly or indirectly, in the U.S. or to U.S. residents unless: 

(i)

the sale is to the Company; 

(ii)

the sale is made outside the United States in compliance with the requirements of Rule 904 of Regulation S under the United States Securities Act of 1933 (the “1933 Act”) and in compliance with applicable state securities laws;

(iii)

the sale is made pursuant to an exemption from registration under the 1933 Act provided by Rule 144 thereunder and in compliance with applicable state securities laws; or 

(iv)

with the prior written consent of the Company, the sale is made pursuant to another applicable exemption from registration under the 1933 Act and in compliance with applicable state securities laws. 

(k)

Reports and undertakings.  If required by applicable securities legislation, policy or order or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute and otherwise assist the Company in filing such reports, undertakings and other documents as may be reasonably required with respect to the issue of the Securities. 

(l)

No prospectus filing.  The Subscriber acknowledges that this is an offering made on a private basis without a prospectus and that no federal, state, provincial or other agency has made any finding or determination as to the merits of the investment nor made any recommendation or endorsement of the Securities, and that: 

(i)

the Subscriber may be or is restricted from using most of the civil remedies available under applicable securities legislation;

(ii)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities;

(iii)

the Subscriber may not receive information that would otherwise be required to be provided to the Subscriber under such securities legislation; and

(iv)

in addition to releases contained in this Agreement, the Company is relieved from certain obligations that would otherwise apply under applicable securities legislation. 

(m)

Withdrawal.  This Agreement is given for valuable consideration and, except as permitted by this Agreement, shall not be withdrawn or revoked by the Subscriber once tendered to the Company with the Subscription Price.

(n)

Disclosure of Subscriber information.  By providing personal information to the Company, the Subscriber and each person for whom it is contracting is consenting to the Company’s collection, use and disclosure of that information for the purpose of the subscription of the Shares, the offering and general corporate purposes.  The Subscriber, and each person for whom it acts, consents to disclosure of personal information by the Company to regulators or any other person or entity the Company considers advisable or necessary for their securities, corporate or other purposes. 

(o)

Waiver of pre-emptive rights.  The Subscriber hereby grants, conveys and vests unto the President of the Company, or unto such other nominee or nominees of the President as he may determine from time to time, in the President’s sole and absolute discretion, to the extent permitted by law, the right to act as the Subscriber’s power of attorney solely for the purpose of waiving any prior or pre-emptive rights which the Subscriber may 

 
 

have to further issues of equity or debt by the Company under applicable corporate and securities laws.

(p) 

Age of majority.  The Subscriber, if an individual, has attained the age of majority and is legally competent to execute this Agreement and to take all actions required pursuant hereto.

(q) 

Authorization and formation of subscriber.  The Subscriber, if a corporation, partnership, trust or other form of business entity, is authorized and otherwise duly qualified to purchase and hold the Securities, and such entity has not been formed for the specific purpose of acquiring Securities in this issue and has not acted to acquire Securities in this issue in violation of the provisions of Regulation S or Rule 144 under the securities laws of the United States or in violation of any of the exemptions provided by the securities laws of any other jurisdiction.  If the Subscriber is one of the aforementioned entities it hereby agrees that, upon request of the Company, it will supply the Company with any additional written information that may be requested by the Company.  In addition, the entering into of this Agreement and the transactions contemplated hereby will not result in the violation of any of the terms of and provisions of any law applicable to, or the constating documents, if a corporation, of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber may be bound.

(r) 

Legal obligation.  This Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber.

(s) 

Compliance with applicable laws.  The Subscriber knows of no reason (and is sufficiently knowledgeable to determine the same or has sought legal advice) why the delivery of this Agreement, the acceptance of it by the Company and the issuance of the Securities to the Subscriber will not comply with all laws applicable to the Subscriber and the Subscriber has no reason to believe that the Subscriber’s subscription hereby will cause the Company to become subject to or required to comply with any disclosure, prospectus or reporting requirements or to be subject to any civil or regulatory review or proceeding.  In addition, the Subscriber will comply with all applicable securities laws and will assist the Company in all reasonable manners to comply with all applicable securities laws.

(t) 

Encumbrance or transfer of Securities.  The Subscriber will not sell, assign, gift, pledge or encumber in any manner whatsoever any of the Securities herein subscribed for except in accordance with applicable securities legislation and this Agreement.

2.3 Truth of Subscriber’s representations and warranties.  The Subscriber understands that the Company will rely on the acknowledgments, representations and covenants of the Subscriber contained in this Agreement in determining whether a sale of the Shares to the Subscriber is in compliance with applicable securities laws and in the best interest of the Company.  All of the information set forth in this Agreement with respect to the Subscriber are correct and complete as of the date hereof and if there should be any material change in such information prior to the acceptance of this Agreement by the Company the Subscriber will immediately furnish the revised or corrected information to the Company. 

2.4 Company confidential information.  The Subscriber acknowledges that the Company is engaged in business development including programs of research and development and the marketing of products and services.  The Subscriber also recognizes the importance of protecting the Company’s trade secrets, confidential information and other proprietary information and related rights acquired through such Company’s expenditure of time, effort and money.  Therefore, in consideration of the Company permitting the Subscriber to submit this subscription and have access to the Company’s information and/or Company’s confidential information otherwise coming to the Subscriber, the Subscriber agrees to be bound by the following terms and conditions with respect to the Company: 

(a)  “Confidential Information” includes any of the following: 

(i)

any and all versions of the trade names, trade-mark, business plans, products, software, all Developments (as defined below) and all other matters owned or marketed by the Company; 

 
 

(ii)

information regarding the Company’s business operation, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff and information regarding the financial affairs of the Company; 

(iii)

the names of the Company’s clients and the names of the suppliers to the Company, and the nature of the Company’s relationships with these clients and suppliers; and

(iv)

any other trade secret or confidential or proprietary information in the possession or control of the Company, 

but Confidential Information does not include information which is or becomes generally available to the public without the Subscriber’s fault. 

(b)  “Developments” include all the following related to the products or business of the Company: 

(i)

copyright works, software, documentation, data, designs, scripts, photographs, music, reports, flowcharts, trade-marks, specifications, source codes, product designs or formula and any related works, including any enhancements, modifications, or additions to the products owned, marketed or used by the Company; and 

(ii)

inventions, devices, discoveries, concepts, ideas, algorithms, formulae, know-how, processes, techniques, systems and improvements, whether patentable or not, developed, created, acquired, generated or reduced to practice by the Company or any person by or for the Company, including the Subscriber.  

(c)  At all times the Subscriber shall keep in strictest confidence and trust the Confidential Information.  The Subscriber shall take all necessary precautions against unauthorized disclosure of the Confidential Information, and the Subscriber shall not directly or indirectly disclose, allow access to, transmit or transfer the Confidential Information to a third party, nor shall the Subscriber use, copy or reproduce the Confidential Information except as may be reasonably required for the Subscriber with the permission of the Company that holds such Confidential Information. 

(d)  Upon the request of the Company, the Subscriber shall immediately return to the Company all materials, including all copies in whatever form, containing the Confidential Information of the Company which are in the Subscriber’s possession or under the Subscriber’s control. 

(e)  The Subscriber acknowledges and agrees that he shall not acquire any right, title or interest in or to the Confidential Information.  Should any interest in the Confidential Information come into the possession of the Subscriber by any means, other than specific written transfer by the Company, the Subscriber hereby assigns and transfers, now and in the future, to the Company, and agrees that the Company shall be the exclusive owner of, all of the Subscriber’s right, title and interest to any such throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein.  The Subscriber further agrees to cooperate fully at all times with respect to signing further documents and doing such acts and other things required by the Company to confirm such transfer of ownership of rights.  The Subscriber agrees that the obligations in this Section 2.4 shall continue beyond the issue of Securities and beyond the ownership of Securities or beyond the termination of the Subscriber’s employment, engagement or association with the Company for a period of ten (10) years. 

Article 3

RESTRICTED COMMON SHARES AND RESTRICTED DISPOSITION

3.1 U.S. law application.  If or as the Company is or may become a U.S. company or otherwise a company whose securities are or may be subject to U.S. law, the Subscriber hereby agrees, represents and warrants to the Company as follows: 

(a)  The Subscriber acknowledges that the Securities have not been registered under the 1933 Act and the 

 
 

Company has no obligation or present intention of filing a registration statement under the 1933 Act in respect of the Securities.  The Subscriber agrees to resell the Securities only in accordance with the provisions of applicable securities laws, pursuant to a registration under the 1933 Act, or pursuant to an available exemption from such registration (in particular the provisions of Regulation S or Rule 144, as applicable), and that hedging transactions involving the Securities may not be conducted unless in compliance with the 1933 Act.  The Subscriber understands that any certificate representing the Securities will bear a legend setting forth the foregoing restrictions.  The Subscriber understands that the Securities are restricted securities within the meaning of Rule 144 promulgated under the 1933 Act, that the exemption from registration under Rule 144 will not be available in any event for at least six months from the date of purchase and payment of the Securities by the Subscriber, and other terms and conditions of Rule 144 are complied with, and that any sale of the Securities may be made by the Subscriber only in limited amounts in accordance with such terms and conditions and even then may not be available unless (i) a public trading market then exists for the common stock of the Company that issued such Securities, (ii) adequate information concerning the Company that issued such Securities is then available to the public and (iii) other terms and conditions of Rule 144 are complied with. 

(b)  The Subscriber further acknowledges and understands that, without in any way limiting the acknowledgements and understandings as set forth hereinabove, the Subscriber agrees that the Subscriber shall in no event make any disposition of all or any portion of the Securities which the Subscriber is acquiring hereunder unless and until: 

(i)

there is then in effect a “Registration Statement” under the 1933 Act covering such proposed disposition and such disposition is made in accordance with said Registration Statement; or 

(ii)

(A) the Subscriber shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (B) the Subscriber shall have furnished the Company with an opinion of the Subscriber’s own counsel to the effect that such disposition will not require registration of any such Securities under the 1933 Act and (C) such opinion of the Subscriber’s counsel shall have been concurred in by counsel for the Company and the Company shall have advised the Subscriber of such concurrence. 

3.2 Legending of the Securities.  The Subscriber agrees and understands that the certificates representing the Securities will be stamped with the following legend (or substantially equivalent language) restricting transfer in the following manner: 

“The transfer of the securities represented by this certificate is prohibited except in accordance with the provisions of Regulation S promulgated under the United States Securities Act of 1933, as amended (the “1933 Act”), pursuant to registration under the 1933 Act or pursuant to an available exemption from registration.  In addition, hedging transactions involving such securities may not be conducted unless in compliance with the 1933 Act.” 

3.3 Company permission for transfer.  The Subscriber agrees that unless and until there is a public market for the Company’s Securities and a Registration Statement is in effect for the Subscriber’s Securities received from the Company, the Subscriber may not sell such Securities without prior notice to the Company and until the Company’s counsel is satisfied that the Subscriber may lawfully sell the Securities.  The Subscriber acknowledges that this is an effort by the Company to protect itself but that the Company nor its counsel is in control of the facts of the sale and may themselves make error in law and neither the Company nor its counsel hold out that any permission constitutes advice to the Subscriber that he may in fact sell and all risks of the sale, legal and otherwise, reside solely with the Subscriber. 

 
 

Article 4

GENERAL PROVISIONS

4.1 Address for delivery.  Each notice, demand or other communication required or permitted to be given under this Agreement shall be in writing and shall be sent by delivery (electronic or otherwise) or prepaid registered mail deposited in a post office addressed to the Subscriber or the Company at the address specified in this Agreement.  The date of receipt of such notice, demand or other communication shall be the date of delivery thereof if delivered, or, if given by registered mail as aforesaid, shall be deemed conclusively to be the fifth day after the same shall have been so mailed, except in the case of interruption of postal services for any reason whatsoever, in which case the date of receipt shall be the date on which the notice, demand or other communication is actually received by the addressee.  Each party to this Agreement may, at any time, and from time to time notify the other party in writing of a change of address and the new address to which notice shall be given to it thereafter until further change. 

4.2 Gender and number.  This Agreement is to be read with all changes in gender or number as required by the context and the gender of the Subscriber. 

4.3 Governing law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  Any dispute regarding matters as between the Subscriber and the Company, whether as a subscriber or security holder and whether arising under this Agreement or pursuant to security holder rights pursuant to the constitutional documents of the Company or applicable law, shall be adjudicated exclusively in the Courts of the State of Delaware, unless the Company shall permit otherwise. 

4.4 Survival of Agreement terms.  The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby.  The terms of this Agreement shall bind the Subscriber, and any successor or assignee, from the date of tendering to the Company and both before and after issuance of the Securities, and shall continue to bind until sale or other disposition of all the Securities by the Subscriber but that certain provisions, such as the release, indemnity and confidentiality provisions of this Agreement shall continue to bind for a period of ten (10) years after the sale or other disposition of the Securities. 

4.5 Enforceability.  The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

4.6 Counterparts.  This Agreement may be signed by the parties hereto in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution will be deemed to bear the execution date as set forth in this Agreement.  This Agreement may also be executed and exchanged by facsimile and such facsimile copies shall be valid and enforceable agreements. 

4.7 Entire Agreement.  This Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings.  There are no collateral agreements or understandings hereto and this Agreement, and the documents contemplated herein, constitutes the totality of the parties’ agreement.

4.8 Amendments.  This Agreement may be amended or modified in any respect by written instrument only.  The Company may give notice of an amendment to the terms of this Agreement by delivery to the Subscriber of the intended amendment addendum.  In the event that the Subscriber does not refuse the amendment within fifteen (15) days of delivery of the proposed amendment then this Agreement will be amended to the proposed terms without any further act required by the Subscriber. 

 
 

4.9 Successors and assigns.  The terms and provisions of this Agreement shall be binding upon and enure to the benefit of the Subscriber, the Company and its successors and lawfully permitted assigns.  This Agreement shall not be assignable by any party without the written consent of the other parties hereto.  The benefit and obligations of this Agreement, insofar as they extend to or affect the Subscriber, shall pass with any assignment or transfer of any of the Securities in accordance with the terms of this Agreement, except as otherwise noted in this Agreement. 

4.10 Time of the essence.  Time is of the essence in this Agreement.

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