Document:

ex1010.htm

THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

 

NONE OF THE SECURITIES TO WHICH THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND PROVINCIAL LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

 

DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT

 

	
  

	
BETWEEN:

 

	
  

	
SWINGPLANE VENTURES, INC. (the “Company”), a company incorporated under the laws of the State of Nevada, with an address for business at 3100 West Ray Rd., 2nd Floor, Chandler, AZ 85226

 

	
  

	
AND:

 

Shan Kwong Hing Holdings Limited (the “Subscriber”), a Hon Kong corporation with an address for business at Unit 706, 7/F, South Seas Center, Tower 2, No. 75 Mody Road, Tsim Sha Tsui, Hong Kong.

 

WHEREAS:

 

A.      The Company is indebted to the Subscriber in the aggregate amount of US$794,150.68 including interest and principal to November 22, 2013 (the “Outstanding Amount”) for the repayment of loans advanced by the Subscriber to the Company to cover the Company’s operations; and

 

B.      The Subscriber has agreed to accept 15,883,013 shares of the Company’s common stock at a price of US$0.05 per share (collectively, the “Shares”), in full and final settlement of the Outstanding Amount pursuant to the terms and conditions set forth in this Agreement.

 

NOW THEREFORE THIS AGREEMENT witnesses that, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

	
  

	
1.

	
Interpretation

 

1.1           In this Agreement, words importing the singular number only shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities of any kind whatsoever.

 

1.2           Any reference to currency is to the currency of the United States of America unless otherwise indicated.

  

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2.

	
Acjnowlegement of Indebtedness

  

2.1           The Company and the Subscriber acknowledge and agree that the Company is indebted to the Subscriber in the amount of the Outstanding Amount.

 

	
  

	
3.

	
Payment of Indebtedness

 

3.1           As full and final payment of the Outstanding Amount, the Company will on the Closing Date (as defined herein) issue to the Subscriber the Shares, as fully paid and non-assessable, and the Subscriber will accept the Shares as full and final payment of the Outstanding Amount.

 

	
  

	
4.

	
Release

 

4.1           The Subscriber hereby agrees that upon delivery of the Shares by the Company in accordance with the provisions of this Agreement, the Outstanding Amount will be fully satisfied and extinguished, and the Subscriber will remise, release and forever discharge the Company and its respective directors, officers, employees, successors, solicitors, agents and assigns from any and all obligations relating to the Outstanding Amount.

 

	
  

	
5.

	
Documents Required from Subscriber

 

5.1           The Subscriber must complete, sign and return to the Company:

 

	
  

	
(a)

	
two (2) executed copies of this Agreement;

 

	
  

	
(b)

	
the questionnaire included at Exhibit 1 hereto (the “Questionnaire”) the purpose of which is to establish the availability of an exemption pursuant to National Instrument 45-106 – Prospectus and Registration Exemptions (“NI 45-106”).

 

5.2           The Subscriber shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, the OTC Bulletin Board, stock exchanges and applicable law.

 

	
  

	
6.

	
Closing

 

6.1           Closing of the offering of the Shares (the “Closing”) shall occur on such date as may be determined by the Company and the Subscriber (the “Closing Date”).

 

	
  

	
7.

	
Acknowledgements of Subscriber

 

7.1           The Subscriber acknowledges and agrees that:

 

	
  

	
(a)

	
none of the Shares have been or will be registered under the Securities Act of 1933 (the “1933 Act”), or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S under the 1933 Act (“Regulation S”), except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject

 

  

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(b)

	
to, the registration requirements of the 1933 Act and in each case only in accordance with applicable securities laws;

 

	
  

	
(c)

	
the Company has not undertaken, and will have no obligation, to register any of the Shares under the 1933 Act or any other applicable securities legislation;

 

	
  

	
(d)

	
the Subscriber has received and carefully read this Agreement;

 

	
  

	
(e)

	
the decision to execute this Agreement and acquire the Shares hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company and such decision is based entirely upon a review of any public information which has been filed by the Company with the Securities and Exchange Commission (“SEC”) in compliance, or intended compliance, with applicable securities legislation;

 

	
  

	
(f)

	
the Subscriber and the Subscriber’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the issuance of the Shares hereunder, and to obtain additional information, to the extent possessed or obtainable by the Company without unreasonable effort or expense;

 

	
  

	
(g)

	
the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at its principal place of business and that all documents, records and books in connection with the issuance of the Shares hereunder have been made available for inspection by the Subscriber and the Subscriber’s attorney and/or advisor(s);

 

	
  

	
(h)

	
the Company is entitled to rely on the representations and warranties and the statements and answers of the Subscriber contained in this Agreement and the Questionnaire and the Subscriber will hold harmless the Company from any loss or damage it or they may suffer as a result of the Subscriber's failure to correctly complete this Agreement or the Questionnaire;

 

	
  

	
(i)

	
the Subscriber will indemnify and hold harmless the Company and, where applicable, its respective directors, officers, employees, agents, advisors and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained herein, in the Questionnaire or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Company in connection therewith;

 

	
  

	
(j)

	
the Shares will be issued pursuant to an exemption from the prospectus requirements of the Securities Act (Quebec) (the “Act”) in accordance with NI 45-106, and as a result certain protections, rights and remedies provided by the Act, including statutory rights of rescission or damages, will not be available to the Subscriber;

 

  

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(k)

	

upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Shares will bear a legend in substantially the following form:

 

THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

 

NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

 

	
  

	
(l)

	
the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:

 

	
  

	
(i)

	
any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of any of the Shares hereunder, and

 

	
  

	
(ii)

	
applicable resale restrictions;

 

	
  

	
(m)

	
none of the Shares are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Subscriber that any of the Shares will become listed on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the common shares of the Company on the OTC Bulletin Board;

 

	
  

	
(n)

	
the resale of any of the Shares in Canada is restricted except pursuant to an exemption from applicable securities legislation;

 

	
  

	
(o)

	
none of the Shares may be offered or sold to a U.S. Person or for the account or benefit of a U.S. Person (other than a distributor) prior to the end of the Distribution Compliance Period (as defined herein);

 

	
  

	
(p)

	
neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Shares or has reviewed any documents in connection with the sale of the Shares hereunder;

 

	
  

	
(q)

	
there is no government or other insurance covering any of the Shares;

 

	
  

	
(r)

	
the issuance and sale of the Shares to the Subscriber will not be completed if it would be unlawful or if, in the discretion of the Company acting reasonably, it is not in the best interests of the Company;

  

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(s)

	
the statutory and regulatory basis for the exemption claimed for the offer and issuance of the Shares, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act; and

 

	
  

	
(t)

	
this Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.

 

	
  

	
8.

	
Representations, Warranties and Covenants of the Subscriber

 

                          8.1           The Subscriber hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the Closing) that:

 

	
  

	
(a)

	
the Subscriber is not a U.S. Person;

 

	
  

	
(b)

	
the Subscriber is not acquiring the Shares for the account or benefit of, directly or indirectly, any U.S. Person;

 

	
  

	
(c)

	
the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Agreement;

 

	
  

	
(d)

	
the sale of the Shares to the Subscriber as contemplated by the delivery of this Agreement, the acceptance of it by the Company and the issuance of the Shares to the Subscriber complies with all applicable laws of the Subscriber’s jurisdiction of residence or domicile;

 

	
  

	
(e)

	
the Subscriber:

 

	
  

	
(i)

	
is knowledgeable of, or has been independently advised as to, the applicable securities laws of the securities regulators having application in the jurisdiction in which the Subscriber is resident (the “International Jurisdiction”) which would apply to the acquisition of the Shares;

 

	
  

	
(ii)

	
the Subscriber is acquiring the Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to acquire the Shares under the applicable securities laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

 

	
  

	
(iii)

	
the applicable securities laws of the authorities in the International Jurisdiction do not require the Company to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Shares; and

 

	
  

	
(iv)

	
the acquisition of the Shares by the Subscriber does not trigger:

 

	
  

	
A.

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such acquisition in the International Jurisdiction; or

 

	
  

	
B.

	any continuous disclosure reporting obligation of the Company in the International Jurisdiction; and

  

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(v)

	
the Subscriber will, if requested by the Company, deliver to the Company a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv) above to the satisfaction of the Company, acting reasonably;

 

	
  

	
(f)

	
the Subscriber is acquiring the Shares as principal for investment purposes only and not with a view to resale or distribution and, in particular, the Subscriber has no intention to distribute, either directly or indirectly, any of the Shares in the United States or to U.S. Persons;

 

	
  

	
(g)

	
the Subscriber is outside the United States when receiving and executing this Agreement;

 

	
  

	
(h)

	
the Subscriber is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the entire investment;

 

	
  

	
(i)

	
the Subscriber has made an independent examination and investigation of an investment in the Shares and the Company and has depended on the advice of its legal and financial advisors and agrees that the Company will not be responsible in any way whatsoever for the Subscriber’s decision to invest in the Shares and the Company;

 

	
  

	
(j)

	
the Subscriber (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Shares for an indefinite period of time;

 

	
  

	
(k)

	
all information contained in the Questionnaire is complete and accurate and may be relied upon by the Company, and the Subscriber will notify the Company immediately of any material change in any such information occurring prior to the closing of the acquisition of the Shares;

 

	
  

	
(l)

	
the Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of the acknowledgements, representations and agreements contained in this Agreement and the Questionnaire and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, it shall promptly notify the Company;

 

	
  

	
(m)

	
the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto;

 

	
  

	
(n)

	
the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;

 

	
  

	
(o)

	
the Subscriber is not an underwriter of, or dealer in, the common shares of the Company, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares;

  

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(p)

	
the Subscriber understands and agrees that none of the Shares have been registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state and provincial securities laws;

 

	
  

	
(q)

	
the Subscriber understands and agrees that offers and sales of any of the Shares prior to the expiration of the applicable period specified by Regulations (such period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the 1933 Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the 1933 Act or an exemption therefrom and in each case only in accordance with applicable state, provincial and foreign securities laws;

 

	
  

	
(r)

	
the Subscriber understands and agrees that the Company will refuse to register any transfer of the Shares not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act;

 

	
  

	
(s)

	
the Subscriber has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Shares and the Company;

 

	
  

	
(t)

	
the Subscriber acknowledges that it has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of any of the Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Shares; provided, however, that the Subscriber may sell or otherwise dispose of any of the Shares pursuant to registration of any of the Shares pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein; and

 

	
  

	
(u)

	
no person has made to the Subscriber any written or oral representations,

 

	
  

	
(i)

	
that any person will resell or repurchase any of the Shares,

 

	
  

	
(ii)

	
as to the future price or value of any of the Shares, or

 

	
  

	
(iii)

	
that any of the Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Shares of the Company on any stock exchange or automated dealer quotation system.

 

8.2           In this Agreement, the term “U.S. Person” shall have the meaning ascribed thereto in Regulation S.

 

	
  

	
9.

	
Acknowledgement and Waiver

 

9.1 The Subscriber has acknowledged that the decision to acquire the Shares was solely made on the basis of publicly available information. The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber might be entitled in connection with the distribution of any of the Shares.

  

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10.

	
Representations and Warranties will be Relied Upon by the Company

 

10.1           The Subscriber acknowledges that the representations and warranties contained herein and are made by it with the intention that such representations and warranties may be relied upon by the Company and its legal counsel in determining the Subscriber’s eligibility to acquire the Shares under applicable securities legislation, or (if applicable) the eligibility of others on whose behalf it is contracting hereunder to acquire the Shares under applicable securities legislation.  The Subscriber further agrees that by accepting delivery of the certificates representing the Shares on the Closing Date, it will be representing and warranting that the representations and warranties contained herein and are true and correct as at the Closing Date with the same force and effect as if they had been made by the Subscriber on the Closing Date and that they will survive the acquisition by the Subscriber of Shares and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of such Shares.

 

	
  

	
11.

	
Resale Restrictions

 

11.1           The Subscriber acknowledges that any resale of the Securities will be subject to resale restrictions contained in the securities legislation applicable to the Subscriber or proposed transferee.  The Subscriber acknowledges that the Shares have not been registered under the 1933 Act of the securities laws of any state of the United States.  The Shares may not be offered or sold in the United States unless registered in accordance with United States federal securities laws and all applicable state and provincial securities laws or exemptions from such registration requirements are available.

 

11.2           The Subscriber acknowledges that restrictions on the transfer, sale or other subsequent disposition of the Shares by the Subscriber may be imposed by securities laws in addition to any restrictions referred to in Section 11.1 above, and, in particular, the Subscriber acknowledges and agrees that none of the Shares may be offered or sold to a U.S. Person or for the account or benefit of a U.S. Person (other than a distributor) prior to the end of the Distribution Compliance Period.

 

11.3           The Subscriber acknowledges that the Securities are subject to resale restrictions in Canada and may not be traded in Canada except as permitted by the applicable provincial securities laws and the rules made thereunder.

 

11.4           If the Subscriber is not a resident of Canada (other than Ontario), the Subscriber represents, warrants and acknowledges that:

 

	
  

	
(a)

	
pursuant to Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over–the-Counter Markets (“MI 51-105”), a subsequent trade in the Shares in or from Canada (other than Ontario) will be a distribution subject to the prospectus and registration requirements of applicable Canadian securities legislation unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the Shares (or ownership

  

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(b)

	
statement issued under a direct registration system or other book entry system) bear the restrictive legend (the “Legend”) specified in MI 51-105;

 

	
  

	
(c)

	
the Subscriber is not a resident of Canada and undertakes not to trade or resell any of the Shares in or from Canada unless the trade or resale is made in accordance with MI 51-105.  The Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of these representations and warranties made in this Section 11.4 and agrees that if such representations and warranties are no longer accurate or have been breached, the Subscriber shall immediately notify the Company;

 

	
  

	
(d)

	
by executing and delivering this Agreement and as a consequence of the representations and warranties made by the Subscriber in this Section 11.4, the Subscriber will have directed the Company not to include the Legend on any certificates representing the Shares to be issued to the Subscriber. As a consequence, the Subscriber will not be able to rely on the resale provisions of MI 51-105, and any subsequent trade in any of the Shares in or from Canada will be a distribution subject to the prospectus and registration requirements of the Canadian securities legislation; and

 

	
  

	
(e)

	
if the Subscriber wishes to trade or resell any of the Shares in or from Canada, the Subscriber agrees and undertakes to return, prior to any such trade or resale, any certificate representing the Shares to the Company’s transfer agent to have the Legend imprinted on such certificate or to instruct the Company’s transfer agent to include the Legend on any ownership statement issued under a direct registration system or other book entry system.

 

	
  

	
12.

	
Legending and Registration of Subject Shares

 

12.1           The Subscriber hereby acknowledges that a legend may be placed on the certificates representing any of the Shares to the effect that the Shares represented by such certificates are subject to a hold period and may not be traded until the expiry of such hold period except as permitted by applicable securities legislation.

 

12.2           The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Agreement.

 

	
  

	
13.

	
Collection of Personal Information

 

13.1           The Subscriber acknowledges and consents to the fact that the Company is collecting the Subscriber’s personal information for the purpose of fulfilling this Agreement and completing this offering.  The Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) may be disclosed by the Company to (a) stock exchanges or securities regulatory authorities, (b) the Company’s registrar and transfer agent, and (c) any of the other parties involved in this offering, including legal counsel, and may be included in record books in connection with this offering.  By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) and to the retention of such personal information for as long as permitted or required by law or business practice.  Notwithstanding that the Subscriber may be acquiring Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the identity of such undisclosed principal as may be required by the Company in order to comply with the foregoing.

  

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14.

	
Costs

 

14.1           The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the acquisition of the Shares shall be borne by the Subscriber.

 

	
  

	
15.

	
Governing Law

 

15.1           This Agreement is governed exclusively by the laws of the State of Nevada and the federal laws applicable therein and the Subscriber hereby exclusively attorns to the jurisdiction of the courts of the State of Nevada.

 

	
  

	
16.

	
Survival

 

16.1           This Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the acquisition of the Shares by the Subscriber pursuant hereto.

 

	
  

	
17.

	
Assignment

 

17.1           This Agreement is not transferable or assignable.

 

	
  

	
18.

	
Execution

 

18.1           The Company shall be entitled to rely on delivery by facsimile machine of an executed copy of this Agreement and acceptance by the Company of such facsimile copy shall be equally effective to create a valid and binding agreement between the Subscriber and the Company in accordance with the terms hereof.

 

	
  

	
19.

	
Severability

 

19.1           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.

 

	
  

	
20.

	
Entire Agreement

 

20.1           Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the sale of the Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else.

 

	
  

	
21.

	
Notices

 

21.1           All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.  Notices to the Subscriber shall be directed to the address on page 9 hereto and notices to the Company shall be directed to the Company’s President at 3100 West Ray Rd., 2nd Floor, Chandler, AZ 85226

 

  

[The remainder of this page has been intentionally left blank. Signature page follows.]

  

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22.

	
Counterparts

 

22.1           This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument. Delivery of an executed counterpart of this Agreement by electronic means, including by facsimile transmission or by electronic delivery in portable document format (“.pdf”), shall be equally effective as delivery of a manually executed counterpart hereof.  The Parties acknowledge and agree that in any legal proceedings between them respecting or in any way relating to this Agreement, each waives the right to raise any defense based on the execution hereof in counterparts or the delivery of such executed counterparts by electronic means.

 

IN WITNESS WHEREOF the Subscriber has duly executed this Agreement as of the date first above mentioned.

 

DELIVERY INSTRUCTIONS

 

1.             Delivery - please deliver the certificates to:

 

2.             The undersigned hereby acknowledges that it will deliver to the Company all such additional completed forms in respect of the Subscriber’s acquisition of the Shares as may be required for filing with the appropriate securities commissions and regulatory authorities.

 

	 	 Shan Kwong Hing Holdings Limited  
(Name of Subscriber – Please type or print)

	 
	 	
 

 

	 
	 	(Signature and, if applicable, Office)	 
	 	
 

Unit 706, 7/F, South Seas Center, Tower 2, No. 75 Mody Road, Tsim Sha Tsui, 

(Address of Subscriber)

Hong Kong 

(City, State or Province, Postal Code of Subscriber)

China 

(Country of Subscriber)

	 

  

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ACCEPTANCE

 

The above-mentioned Agreement in respect of the Shares is hereby accepted by Swingplane Ventures, Inc.

 

DATED at Chandler, AZ effective as of the 22nd day of November, 2013.

 

SWINGPLANE VENTURES, INC.

 

 

Per:                      

Authorized Signatory

  

12Exhibit10.1 (Q1 2014)

Exhibit 10.1

    

December 20, 2013

Michael R. Splinter
3225 Oakmead Village Drive, M/S 1223    
P.O. Box 58039
Santa Clara, CA 95052-8039
Re:    Retention Arrangement: Equity Award Amendments
Dear Mike:
As you know, on September 24, 2013, Applied Materials, Inc. (“Applied” or the “Company”) announced a strategic combination with Tokyo Electron Limited (the “Transaction”).  This Transaction is a large and highly complex undertaking that may take a lengthy period of time to complete.  Your continued contributions as a part of Applied’s deep and talented leadership team are critical to the Company in order to help achieve the successful closing of the Transaction and post-closing planning and integration, while simultaneously leading the continued effective operations of Applied’s business.  Applied desires to recognize your continuing dedication to Applied and to provide further incentive for you to remain with Applied through and beyond the Transaction by providing you with this agreement (the “Agreement”).  We are pleased to offer to you the changes to your equity awards that are described below.  In order to accept these changes to your equity awards, please sign and return this Agreement by the deadline indicated below.  
Please note that certain capitalized terms that are used in this Agreement are defined in the attached Appendix A, which is considered a part of this Agreement. 
1.PRSUs Retirement Amendment.  Previously, you and Applied entered into an Offer Letter which generally provides in relevant part that upon your Retirement,1 all of your Performance Shares that are unvested and outstanding when you retire, will remain outstanding and eligible to become earned and vested based on actual performance, and any continued Employment requirements under those Performance Shares will be considered fully satisfied.  By signing this Agreement, you agree that as of the date of this Agreement and regardless of any contrary provisions in your Offer Letter, Section III.B. of your Offer Letter no longer applies to any of your Performance Shares (although your Offer Letter still shall govern your Time-based Shares, except as expressly modified in Section 3, Section 5 and Section 6(b) herein).  This change is referred to as the “Offer Letter Amendment.”  For purposes of this Agreement, this Offer Letter Amendment will occur before the application of any other amendments to your Performance Shares that are described below.
_________________________________________ 
1 The provisions relating to your Retirement are described in Section III.B. of your Offer Letter.

Michael R. Splinter
December 20, 2013
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2.Performance Shares.  Your Performance Shares are amended so that, subject to the terms and conditions of this Agreement, the following terms apply to them.  
(a)Transaction.  Subject to Section 4 with respect to TSR Shares, if you remain an Employee through either the Pre‐closing Date or Transaction Termination Date (whichever date that actually occurs is referred to as the “Achievement Date”), then as of the Achievement Date, your then‐outstanding and unvested Performance Shares will Target Accelerate.  In addition, provided that the Transaction closes and you remain an Employee through the Pre‐closing Date, then as of the Pre-closing Date, your then‐outstanding and unvested Performance Shares will Time Accelerate.    
(b)Term End Date.  If you remain Employed through March 31, 2015 (the “Term End Date”), then as of the Term End Date, your then‐outstanding and unvested Performance Shares will both Target Accelerate and Time Accelerate.
(c)Involuntary Termination.  If your Employment is terminated by the Company without “Cause,” as determined by Applied’s Board of Directors, in its sole discretion, or you resign your Employment for “Good Reason” (as these terms are defined in your Offer Letter) (referred to as an “Involuntary Termination”), then as of the Termination Date, your then‐outstanding and unvested Performance Shares will both Target Accelerate and Time Accelerate.
3.Time-based Shares.  Your Time-based Shares are amended to provide that, subject to the terms and conditions of this Agreement and provided that the Transaction is completed and you remain an Employee through the Pre‐closing Date, then as of the Pre‐closing Date, your then‐outstanding and unvested Time‐based Shares that are scheduled to vest during calendar year 2014 will accelerate vesting in full.  We refer to this vesting acceleration of your Time-based Shares as the “2014 Acceleration.”  Please note that any Retirement-related acceleration provisions in your Offer Letter applicable to your Time-based Shares remain in effect in accordance with their terms, as modified by Section 5, Section 6 and Section 7 below. 
4.TSR.  With respect to any of your TSR Shares, if the applicable TSR Date occurs: 
(a)    On or before the date on which the TSR Share otherwise would Target Accelerate, then provided the TSR was achieved so that the TSR Share is not forfeited and remains eligible to be earned (upon achievement of other performance goals and/or continued Employment requirements), the TSR Share will remain eligible to Target Accelerate; or 
(b)    After the date on which the TSR Share otherwise would Target Accelerate, then the TSR Share automatically will be forfeited as of the Target Acceleration date (i.e., no Target Acceleration or Time Acceleration will apply to the TSR Share).  

Michael R. Splinter
December 20, 2013
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5.Share Issuance.  Any Shares that vest and become issuable under this Agreement, and any Time-based Shares under your restricted stock awards that vest under your Offer Letter due to your Retirement (and, but for the Offer Letter release agreement requirements, become issuable), will be issued or released, as applicable, to you notwithstanding anything in the Offer Letter to the contrary, (a) as soon as practicable, but (b) in no event later than 60 days following the date on which the Shares vested, and (c) in no event later than immediately prior to the closing of the Transaction, subject to the provisions of Section 7 below.  However, any Time‐based Shares, other than Shares of your restricted stock, that vest and become issuable as a result of the 2014 Acceleration will be issued to you on the date(s) that those Time‐based Shares otherwise are scheduled to vest under the original time‐based vesting schedule described in the applicable award agreement, as modified by the Offer Letter.2, 3  In all cases, the issuance of any Shares to you is subject to any additional delay required under the Section 409A provisions described in Section 10 below.  
6.Release Agreement.  
(a)    Equity Release Requirements. You must sign an Equity Release Agreement in order for you to be entitled to the 2014 Acceleration on the Pre-Closing Date and the Target Acceleration and Time Acceleration of your Performance Shares on the Pre-Closing Date, upon your Involuntary Termination as described in Section 2(c) above or on the Term End Date as described in Section 2(b) above, as applicable (whichever event applies is referred to as the “Release Event” and the date on which the applicable Release Event occurs is referred to as the “Release Event Date”).  If the Release Event occurs, the Equity Release Agreement must become effective and irrevocable within 2 days after the Release Event Date (the applicable deadline date is referred to as the “Release Deadline Date”).  For the avoidance of doubt, if you execute the Equity Release Agreement in connection with a Release Event that occurs while you are an Employee, no provision of the Equity Release Agreement will be deemed to waive any then-existing rights or grounds you may have to resign for Good Reason under this Agreement or your Offer Letter, and the Equity Release Agreement will explicitly provide that such rights are preserved and not waived. 

_________________________________________ 
2 Generally, Section III.B.(e) of your Offer Letter states that if you retire, the Shares that vest and become issuable in connection with your Retirement will be issued to you on the 61st day after your Retirement date.  
3 For example, assume that the Transaction closes on August 1, 2014, and you remain an employee through December 19, 2014.  Any Time‐based Shares otherwise scheduled to vest on December 19, 2014, will vest on the Pre‐closing Date but the Time-based Shares (other than Shares of restricted stock) will be issued to you on December 19, 2014.  As another example, assume that the Transaction closes on August 1, 2014, and you terminate your Employment due to your Retirement on November 15, 2014.  Any Time‐based Shares otherwise scheduled to vest on December 19, 2014, will vest on the Pre‐closing Date but the Time-based Shares (other than Shares of restricted stock) will not be issued to you until May 16, 2015 (which is 6 months and 1 day after your Retirement date), assuming the 6‐month and 1‐day delay requirement described in Section 10 of this Agreement applies.

Michael R. Splinter
December 20, 2013
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(b)    Modification to Offer Letter Release Requirements.  Please note that under your Offer Letter, your equity benefits related to your Retirement also are subject to your signing and not revoking a Release Agreement (as defined in your Offer Letter). This Agreement amends your Offer Letter so that the Release Deadline Date with respect to equity benefits under Section III.B. of your Offer Letter (as modified by this Agreement) is reduced from 60 days to 2 days after your employment termination date.  In addition, in order to receive your Cash Severance under Section III.A. of your Offer Letter, you must sign and not revoke a Cash Severance Release Agreement and the Cash Severance Release Agreement must become effective within 29 days after your employment termination date. You will not receive any of the Cash Severance if the Cash Severance Release Agreement does not become effective by this deadline.
7.    Claw Back.  If you have received 2014 Acceleration, Target Acceleration and/or Time Acceleration under this Agreement or received acceleration of vesting the Offer Letter, and in either case you have not signed the Equity Release Agreement by the Release Deadline Date, then within 10 days after the applicable Release Deadline Date, (i) you must return to Applied any Shares issued or released to you  in connection with such acceleration that you hold, as well as an amount equal to the value of any tax payments related to the Shares made on your behalf; (ii) you must pay to Applied the full amount of any proceeds derived from the Shares issued to you in connection with such acceleration that exceeds the Fair Market Value of the Shares as of the date that the Shares were issued or released to you; and (iii) you automatically will forfeit any Shares that otherwise were issuable or releasable but had not yet been issued or released to you in connection with such acceleration. 
8.    Expected Disqualified Individual Status under Section 4985.  In order for the Time Acceleration under Section 2(a) and/or the 2014 Acceleration under Section 3 above to apply, you must be expected to be a “disqualified individual” 4 under Code Section 4985 so that some or all of your Performance Shares and/or Time-based Shares, as applicable, are expected to be taxed by Code Section 4985.  We have made a determination that you are expected to be a “disqualified individual” 4 of Applied when the Transaction closes and therefore some or all of your Performance Shares and/or Time-based Shares are expected to be taxed by Code Section 4985.
9.Assignment.  Applied may assign this Agreement and its rights and obligations to Applied’s parent entity or any other entity within the controlled group that includes Applied and its parent. 
_________________________________________ 
4 A “disqualified individual” generally includes all individuals of an expatriated corporation (e.g., a corporation that moves its domicile outside of the U.S.) who were Section 16 officers within the six months prior to or six months following the date of expatriation.

Michael R. Splinter
December 20, 2013
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10.Section 409A.  
(a)General.  The payments and benefits under this Agreement are intended to be exempt from or otherwise comply with the requirements of Section 409A (as defined below) so that none of the payments or benefits to be provided under this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms in this Agreement will be interpreted to be so exempt or otherwise comply with Section 409A.  Each payment and benefit under this Agreement is deemed to be a separate payment for Section 409A purposes.  You and Applied agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions that are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.  For purposes of this Agreement, “Section 409A” means Section 409A of the Code, any final regulations and guidance under that statute, and any applicable state law equivalent, as each may be amended or promulgated from time to time.  
(b)Required Delay.  If and only to the extent it is necessary to avoid subjecting you to an additional tax under Section 409A, payment of all or a portion of the termination-related payments or benefits described in this Agreement or otherwise will be delayed until the date that is six months and one day after your Termination Date.  However, in the event that your death occurs after your Termination Date but prior to the six month anniversary of your Termination Date, any payments and/or benefits due to you but delayed under the prior sentence will be payable to you in a lump sum as soon as administratively practicable after the date of your death and any other separation pay and/or benefits will be payable according to the payment schedule applicable to each payment.  
11.Tax Consequences.  Applied makes no representations or warranties with respect to the tax consequences of any payments or benefits provided under this Agreement.  You agree and understand that you are responsible for payment, if any, of local, state, and/or federal taxes on the payments and benefits provided under this Agreement or otherwise and any penalties or assessments related to such taxes (including but not limited to under Section 409A, Code Section 4985, and Code Section 457A). 
12.Severability.  If any provision of this Agreement is held to be void, voidable, unlawful or unenforceable, the remaining portions of this Agreement will remain in full force and effect.
13.Arbitration of Disputes Relating to Agreement.  Any dispute, controversy or claim arising under or in connection with this Agreement, or the breach of this Agreement, will be settled exclusively by arbitration in accordance with the Employment Arbitration Rules of the American Arbitration Association (“AAA”) now in effect, which are available online at http://www.adr.org/employment.  Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction of the matter.  The arbitration 

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December 20, 2013
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will take place in Santa Clara County, California, unless otherwise required by law or ordered by the AAA.  The Arbitrator will have full authority to award interim injunctive relief in addition to any and all other appropriate remedies otherwise available to the Arbitrator. 
14.Governing Law.  Unless otherwise governed by federal law, this Agreement will be governed by and construed in accordance with the laws of the State of California (except for its conflict of laws provisions).
15.Complete Agreement; Modifications.  This Agreement contains the entire agreement of the parties with respect to this subject matter, and supersedes all prior and contemporaneous written and oral agreements, discussions, negotiations, understandings or courses of conduct with respect to this subject matter; provided, however, that except as expressly modified herein, your Offer Letter shall remain in full force and effect.  Each of your Performance Shares and Time‐based Shares remain subject to the terms and conditions of the applicable award agreement and the Applied equity plan under which it was granted, as modified by your Offer Letter, to the extent those terms have not been modified by this Agreement.  This Agreement may not be modified or changed in any manner except by a writing executed by you and a duly authorized executive officer of Applied or by the HRCC Chair.  No party is relying upon any other agreement, representation, statement, omission, understanding or course of conduct which is not expressly set forth in this Agreement.  Headings used in this Agreement are for convenience only and will not be used to interpret its substantive terms.
To accept this Agreement, please date and sign this letter below where indicated and return it to Greg Lawler.  If you do not accept this Agreement by Monday, December 23, 2013, this Agreement will not become effective and the changes to your equity awards under this Agreement will not become effective.
We greatly appreciate your many contributions to Applied and look forward to your continued efforts towards the effective operations of Applied’s business, successful closing of the Transaction and post-closing planning and integration.
Sincerely,
/s/ Willem P. Roelandts
 
Willem P. Roelandts
Chair of the Human Resources and 
Compensation Committee of the
Board of Directors
Applied Materials, Inc.

Michael R. Splinter
December 20, 2013
Page 7

By signing this letter, I acknowledge that I have had the opportunity to review this Agreement carefully with an attorney of my choice; that I have read this Agreement and understand its terms; that I enter into this Agreement knowingly and voluntarily; and that I agree to and accept all of the terms set forth in this Agreement.
Agreed and Accepted:
	
			
	Dated: December 20, 2013
	 
	Michael R. Splinter

	 
	 
	 

	 
	 
	/s/ Michael R. Splinter

APPENDIX A
Certain Definitions
Each of the defined terms below will have the following meaning for purposes of this Agreement. 
(A)Cash Severance.  “Cash Severance” has the meaning assigned to it in your Offer Letter.
(B)Cash Severance Release Agreement.  “Cash Severance Release Agreement” means a release of claims related to age discrimination and older worker benefit protections.
(C)Code.  “Code” means the Internal Revenue Code of 1986, as amended. 
(D)Employee; Employed; Employment.  “Employee,” “Employed” and “Employment” each means your employment with Applied, any parent entity of Applied, or any direct or indirect subsidiary of Applied or its parent entity.
(E)ESIP.  “ESIP” means Applied’s Employee Stock Incentive Plan.
(F)Equity Release Agreement.  “Equity Release Agreement” means a release of claims, non‐solicitation of employees and non‐disparagement agreement in a form supplied by Applied; the Equity Release Agreement shall not include a release of claims related to age discrimination and older worker benefit protections. 
(G)Fair Market Value.  “Fair Market Value” means, with respect to a Share, the closing per share selling price of a Share on the relevant date, or if there were no sales on such date, the average of the closing sale prices on the immediately following and preceding Trading Dates, in either case as reported by the NASDAQ Global Select Market/National Market or such other source selected in the discretion of the Committee (as defined in the ESIP) administering the ESIP. 
(H)HRCC Chair.  “HRCC Chair” means the Chair of the Human Resources and Compensation Committee of Applied’s Board of Directors. 
(I)Offer Letter.  “Offer Letter” means the Offer Letter dated August 14, 2013, entered into between you and Applied. 
(J)Performance Shares.  “Performance Shares” means Shares under your equity awards (including performance restricted stock awards, performance-based performance shares, performance-based performance units and performance restricted stock unit awards) 

granted before September 24, 2013, that as of the date of this Agreement, are outstanding and may become eligible to vest subject to the future achievement of performance goal(s).
(K)Pre-closing Date.  “Pre-closing Date” means the date that is three Trading Days before the Transaction is expected to close.  The Pre‐closing Date as well as the date on which the Transaction is expected to close will be determined solely in the discretion of the HRCC Chair.
(L)Retirement.  “Retirement” is as defined in the ESIP, as amended and restated on March 6, 2012.  
(M)Share.  “Share” means a share of Applied’s common stock.
(N)Target  Accelerate; Target Acceleration.  “Target Accelerate” and “Target Acceleration” each means that all applicable performance goals automatically will be considered achieved at 100% of target levels so that the target number of Shares under your equity award will become eligible to vest.  The Target Acceleration applies to a Performance Share only to the extent that the Performance Share still is subject to any performance goals.  As a result, the Target Acceleration, if any, will apply only once to any Performance Share upon the earliest event to occur that triggers the Target Acceleration.  Once an event occurs that Target Accelerates a Performance Share, the occurrence of any subsequent event that otherwise also would Target Accelerate the same Share will not result in Target Accelerating that Share.  Target Acceleration does not affect any requirements under your Performance Shares that relate to your continued Employment.  For a discussion of the TSR goal, please see Section 4 of this Agreement.
(O)Termination Date.  “Termination Date” means the date of termination of your Employment. 
(P)Time Accelerate; Time Acceleration.  “Time Accelerate” and “Time Acceleration” each means full accelerated vesting by considering any vesting requirements that are based on further continued Employment to be fully satisfied.  Time Acceleration applies only to the extent that the vesting of the Performance Share or Time‐based Share, as applicable, still is subject to your continued Employment.  As a result, the Time Acceleration will apply only once to any Share subject to an equity award that you hold upon the earliest event to occur that triggers the Time Acceleration.  Once an event occurs that Time Accelerates a Share, the occurrence of any subsequent event that otherwise also would Time Accelerate the same Share will not result in Time Accelerating that Share.  Time Acceleration does not affect any requirements under your Performance Shares relating to any performance goals.  In the event that the Target Acceleration occurs on the same day as the Time Acceleration with respect to any of your Performance Shares, the Target Acceleration will be 

considered to have applied to those Performance Shares before the Time Acceleration is applied. 
(Q)Time-based Shares.  “Time‐based Shares” means Shares under your equity awards (including restricted stock awards and performance shares) granted before September 24, 2013, that as of the date of this Agreement, are outstanding and eligible to vest solely based on your continued Employment (or any applicable qualifying termination of employment). 
(R)Trading Day.  “Trading Day” means any day on which Applied’s common stock is traded on the NASDAQ Global Select Market.
(S)Transaction Termination Date.  “Transaction Termination Date” means the date on which the Transaction is terminated without having been completed. 
(T)TSR.  “TSR” means total shareholder return.
(U)TSR Date.  “TSR Date” means the date that the TSR goal applicable to a TSR Share is scheduled to be measured, in accordance with the terms of the applicable equity award agreement and the ESIP. 
(V)TSR Shares.  “TSR Shares” means only that portion of the maximum number of Performance Shares under each Performance Share award that as of the date of this Agreement, are subject in relevant part to the achievement of a TSR goal.

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