Exhibit 10.2

Independent Contractor Agreement

 

This INDEPENDENT CONTRACTOR Agreement (this “Agreement”) is made and entered
into this 16th day of March, 2020, by and between Broadmark Realty Capital Inc.
(“Company”), a Maryland corporation and Adam Fountain (“Contractor”).

 

WHEREAS, the Company and the Contractor previously entered into that certain
Employment Agreement dated as of August 9, 2019, pursuant to which the
Contractor provided services as the Executive Vice President of the Company (the
“Employment Agreement”);

 

WHEREAS, the Contractor has provided written notice of his intent to resign and
thereby terminate his employment relationship with the Company effective as of
March 31, 2020 (the “Employment Termination Date”); and

 

WHEREAS, following the Employment Termination Date, the Contractor has agreed to
provide the Company part-time transitional services in exchange for compensation
at a set hourly rate and a cash bonus opportunity.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.            Services. Effective as of April 1, 2020, the Company hereby
engages Contractor to provide marketing services to Broadmark Private REIT
Management, LLC (the “Manager”), as manager of the newly launched Broadmark
Private REIT, LLC (the “Private REIT”) as requested by the Company from time to
time (the “Services”). Contractor accepts the engagement, and agrees to deliver
the Services in the most professional, complete, expeditious, and economical
manner consistent with the Company’s interests and to devote the time and effort
necessary to perform the Services in such manner. Contractor agrees to comply
with all applicable Company policies while providing the Services during the
Term. During the Term, Contractor further agrees to maintain his FINRA Series 7
and 63 licenses as an “associated person” of Herald Investment Marketing, LLC
(“HIM”) in accordance with applicable securities laws and regulations and HIM’s
Registered Representative Compliance and Supervisory Procedures Manual, and to
assist the Manager in marketing the Private REIT’s units to those individuals
and institutions that Contractor reasonably believes are qualified purchasers
(as defined in the Investment Company Act of 1940, as amended) who meet the
standards set forth under the Private REIT’s offering documents and applicable
federal laws. During the Term, Company maintains the discretion to limit the
number of hours per week during which Contractor delivers the Services.

 

 

 

2.           Term. The term of the independent contractor relationship as
described in this Agreement (the “Term”) shall begin as of April 1, 2020 and
shall continue until December 31, 2020 unless this Agreement is terminated
earlier by either party providing advanced written notice to the other (a
“Termination Notice”), which Termination Notice shall be delivered at least 30
calendar days before the effective date of termination set forth in the
Termination Notice (the “Termination Date”) or immediately for Cause by the
Company. If either the Company or Contractor delivers a Termination Notice, then
the Company, in its sole discretion, may direct Contractor to cease providing
the Services at any time prior to the Termination Date, provided that the
Company pays Contractor any unpaid fees earned through such time. The term
“Cause” shall mean:

 

A.            Any act of fraud, embezzlement, theft, intentional dishonesty,
misrepresentation, or breach of duty with respect to the Company or any of its
subsidiaries;

 

B.            Contractor’s gross negligence or willful misconduct in the
performance of duties to the Company;

 

C.            Deliberate and continual refusal to perform the Services described
herein;

 

D.           Any breach of a restrictive covenant as set forth in the Separation
and Release Agreement dated March 16, 2020, by and between the Company and
Contractor or any material written policy applicable to independent contractors
of the Company;

 

E.            Conviction of, indictment for or entering of a guilty plea or plea
of no contest or nolo contendere with respect to any felony or any crime
involving an act of moral turpitude or any “disqualifying event” occurs with
respect to Contractor as that term is defined in Rule 506 of SEC Regulation D
such that the Company or the Private REIT would be prohibited from using
Rule 506 as a safe harbor for the offering of its units on a private placement
basis;

 

F.            Any conduct which the Company reasonably believes will cause
irreparable harm to the relationships between the Company and its investors,
business partners, or employees;

 

G.            Any false or misleading statement of a material fact relating to
the Company, the Manager or the Private REIT or other action by the Contractor
that materially increases the expenses of the Company in connection with the
offering of units in the Private REIT or materially delays the acceptance of
subscriptions for interests in the Private REIT in compliance with applicable
laws; or

 

H.           Contractor is no longer licensed as an associated person of HIM or
another SEC-registered broker-dealer and FINRA member acceptable to the Company.

 

3.            Fees.

 

A.            Hourly Fee. The Company will pay the Contractor for Services
provided at the rate of $200 per hour. The Company’s obligation to pay the
Contractor is conditioned on the Contractor’s timely submission of the hours
worked per week, in a manner and form as reasonably acceptable to the Company in
its sole discretion. Payments for Services under this Agreement shall be made no
less frequently than the Company’s regular payroll schedule.

 

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B.            Cash Bonus Opportunity. The Company will pay the Contractor a cash
bonus of two hundred and fifty thousand dollars ($250,000) (the “Bonus”) upon
the earliest occurrence of any of the following events, subject to the
Contractor continuing to perform the Services under this Agreement through the
date of such triggering event:

 

(1)Aggregate assets under management by the Manager or executed and valid
subscription agreements from qualified purchasers received by the Private REIT,
equal or exceed $60 million since inception of the Private REIT (excluding, for
the avoidance of doubt, units purchased by the Company or its subsidiaries);

 

(2)The Company and the Private REIT are not subject to any law, regulation or
legal proceeding that would restrict their ability to offer units or raise
capital through the Private REIT and the Company (i) abandons the proposed
offering of units through the Private REIT; (ii) receives executed, valid
subscriptions from qualified purchasers for at least $60 million of Private REIT
units prior to December 31, 2020 that have not been revoked and elects not to
accept subscriptions of at least $60 million by December 31, 2020; or
(iii) makes a business decision that the Private REIT will not solicit or accept
new contributions of at least $60 million prior to December 31, 2020.

 

(3)The Company terminates the independent contractor relationship with the
Contractor without Cause prior to December 31, 2020.

 

Whether an event constitutes a payment trigger of the Bonus will be determined
by the Company, in its sole discretion. Payment of the Bonus shall be made as
soon as practicable following the applicable triggering event, but no later than
March 15th of the calendar year following the calendar year in which the
triggering event occurs.

 

C.            COBRA Reimbursement. If Contractor is eligible for and timely
elects continuation of health insurance benefits for himself and his eligible
dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), then the Company will reimburse the Contractor for COBRA
premiums for the first nine (9) months of COBRA coverage such that the coverage,
if elected, will terminate upon the earliest occurrence of any of the following
events:

 

(1)December 31, 2020;

 

(2)Contractor becomes employed with another employer and is eligible to receive
health insurance benefits under another employer-provided plan; or

 

(3)The Company terminates the independent contractor relationship with the
Contractor for Cause.

 

Such continued group medical and dental plan coverage is contingent on
Contractor (i) timely electing and remaining eligible for continued coverage
under COBRA and (ii) timely submitting his COBRA premium payments for each
month. Contractor may be subject to federal and state tax on the value of these
reimbursements.

 

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D.            Expense Reimbursement. The Company will be responsible for any
reasonable and necessary out-of-pocket expenses incurred by Contractor during
the Term that are directly related to the provision of the Services in
accordance with the Company’s standard expense reimbursement policies applicable
to independent contractors, provided that (i) the incurrence of such expenses
are approved in advance by the Company and (ii) appropriate documentation for
such expenses is submitted to the Company within thirty (30) days after the
expenses are incurred.

 

E.            Technology. The Contractor may continue to use his
Company-provided email address and cellular telephone for the duration of the
Term. Upon the termination of this Agreement, Contractor may elect to retain his
cellular telephone number.

 

4.            Other Activities. During the Term, the Contractor may be otherwise
engaged, employed or concerned in any other business, trade, profession or other
activity that does not negatively affect Contractor’s ability to provide the
Services in accordance with this Agreement, place the Contractor in a conflict
of interest with the Company, or violate any existing restrictive covenant
entered into with the Company or its affiliates.

 

5.            Independent Contractor Status. During the Term, Contractor at all
times shall be and act solely as an independent contractor, not as an employee
of the Company. Nothing in this Agreement or the relationship between Contractor
and the Company shall operate or be construed as creating the relationship of
employer/employee, agent, partners, joint ventures, or any other relationship
whatsoever between Contractor and the Company other than an independent
contractor relationship. Contractor shall have no authority to, and shall not:
(i) act as an agent of the Company; (ii) contractually bind or obligate the
Company in any way; (iii) hold himself out as an employee of the Company or as
having the authority to contractually bind or obligate the Company; or
(iv) provide any services to or on behalf of the Company other than pursuant to
this Agreement. The parties to this Agreement agree that as of March 31, 2020
the Contractor shall not be eligible to continue enrollment or elect to enroll
in any employee benefit plan or other compensatory program administered by,
contributed to, or sponsored by the Company or any of its affiliates other than
COBRA continuation coverage.

 

6.            Withholding. Contractor agrees that: (i) the Company shall not
make any withholdings for any income, social security, or other taxes from any
monies being paid to Contractor pursuant to this Agreement; (ii) the Company
shall report to the appropriate government authorities on the appropriate
Form 1099 all monies paid to Contractor pursuant to this Agreement;
(iii) Contractor shall have sole and exclusive responsibility for the payment of
any and all federal, state, and local income, social security, and other taxes
arising out of any monies paid to Contractor pursuant to this Agreement; and
(iv) Contractor indemnifies and holds harmless the Company from and against all
claims, damages, liabilities, demands, causes of action, costs, and expenses,
including, but not limited to, reasonable attorneys’ fees incurred by the
Company, and interest and penalties arising out of or in connection with the
payment or nonpayment of any taxes relating to any monies paid to Contractor
pursuant to this Agreement.

 

7.            Indemnification. Contractor shall indemnify, defend, and hold
harmless the Company and all of its direct and indirect stockholders,
subsidiaries, divisions, affiliates, successors, assigns, officers, directors,
employees, insurers, funds, agents, investors, and representatives, and the
heirs, executors, administrators, receivers, successors, and assigns of all of
the foregoing, from and against any and all claims, damages, losses, judgments,
liens, penalties, interest, and expenses, including but not limited to
attorneys’ fees, arising or alleged to arise or resulting from: (i) Contractor’s
performance or failure to perform any obligations under this Agreement; (ii) the
inaccuracy of any representations or warranties of the Contractor contained
herein; (iii) the breach of this Agreement by Contractor; (iv) any act, error,
or omission of Contractor in performing the Services; and (v) the payment or
non-payment of any taxes relating to any monies paid to Contractor pursuant to
this Agreement. The foregoing provisions and all other liabilities of Contractor
hereunder, shall survive the termination of this Agreement for any reason.

 

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8.            Representations and Warranties. Contractor represents and warrants
to the Company that: (i) this Agreement does not violate any other agreement to
which Contractor is a party; (ii) Contractor has had an opportunity to review
the Agreement and consult with legal and other professional counsel and advisors
before executing and delivering it to the Company; (iii) this Agreement
constitutes Contractor’s valid and binding agreement, enforceable in accordance
with its terms; and (iv) Contractor will comply with all federal, state, and
local laws regarding the performance of the Services and with all policies and
procedures set forth in the applicable Company policies.

 

9.            Acknowledgments.

 

B.            A. Contractor acknowledges and agrees that as a result and as part
of Contractor’s engagement with the Company, he has received and will receive
knowledge and expertise in the Business of the Company that is special and
unique. As used in this Agreement, the term “Business” shall mean the business
of originating mortgages, lending money or other financing, in each case, for
the purpose of acquiring, developing or otherwise financing real estate and
related assets or the operation of a real estate investment fund or such other
fund, real estate investment trust or other entity that participates in the
foregoing described real estate-related activities within the United States,
whether through origination activities or in the secondary market (including,
without limitation, through the acquisition of real estate related loans or
interests therein).For purposes of this Agreement, the term “Confidential
Information” means any confidential or proprietary information of the Company,
which is not already or does not become generally available to the public (but
not through any breach of confidentiality by Contractor), whether contained in
documents, electronic media or other forms, including, but not limited to,
information about materials, procedures, inventions, processes, manufacturing,
expertise, customer lists, potential customer lists, customer data, financial
data, vendors, marketing plans, and trade secrets. Confidential Information
shall also include personal information of the Company’s customers, clients,
employees, and vendors (“Personal Information”).

 

C.            Contractor acknowledges and agrees that the restrictive covenants
and other continuing obligations in this Agreement are reasonable and necessary
and that consideration and compensation provided to Contractor pursuant to this
Agreement constitute good and sufficient consideration for Contractor’s
agreements and covenants in Paragraphs 10, 11 and 12.

 

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D.            For purposes of Paragraphs 10 through 13, the term “Company”
includes both the Company and its direct and indirect subsidiaries.

 

10.          Nondisclosure and Nonuse of Confidential Information;
Nondisparagement.

 

A.            Contractor acknowledges and agrees that he will be afforded access
to Confidential Information that could have an adverse effect on the Company and
its Business if it is used in an unauthorized manner and/or disclosed.
Contractor will not, at any time, either during the Term or thereafter, disclose
or use any Confidential Information, or permit any person to use, examine or
make copies of any Confidential Information, except as may be required in his
duties on behalf of the Company. Contractor agrees to take reasonable measures
to protect the secrecy of, and avoid the disclosure and the unauthorized use of,
any Confidential Information.

 

B.            Contractor shall deliver to the Company at the termination of the
Term, or at any time the Company may request, all memoranda, notes, plans,
records, reports, files, electronic data, computer tapes, software and other
documents and data (and copies thereof) that is Confidential Information or
Personal Information or Work Product (each as defined herein) or other
information relating to the Business of the Company which Contractor may then
possess or have under his control. Notwithstanding the foregoing, Contractor
will have the right to retain and remove all personal property and effects which
are owned by Contractor.

 

C.            Contractor agrees that he will not view or access any Personal
Information except as needed in the course of his duties and responsibilities
for the Company.

 

D.            Contractor agrees not to make, or cause any other person to make,
any public statement that criticizes or disparages the Company, executive
officers, employees, directors or products. Nothing set forth herein shall be
interpreted to prohibit Contractor from responding publicly to incorrect public
statements, making truthful statements when required by law, subpoena, court
order, or the like and/or from responding to any inquiry about this Agreement or
its underlying facts and circumstances by any regulatory or investigatory
organization and/or from making any truthful statements in the course of any
litigation.

 

E.            Pursuant to 18 U.S.C. § 1833(b), Contractor will not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret of the Company that (i) is made (A) in confidence
to a federal, state, or local government official, either directly or
indirectly, or to Contractor’s attorney and (B) solely for the purpose of
reporting or investigating a suspected violation of law; or (ii) is made in a
complaint or other document that is filed under seal in a lawsuit or other
proceeding. If Contractor files a lawsuit for retaliation by the Company for
reporting a suspected violation of law, Contractor may disclose the trade secret
to Contractor’s attorney and use the trade secret information in the court
proceeding, if Contractor files any document containing the trade secret under
seal and does not disclose the trade secret except under court order. Nothing in
this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create
liability for disclosures of trade secrets that are expressly allowed by such
section.

 

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11.          Inventions and Patents. Contractor agrees that all inventions,
innovations, improvements, technical information, certifications, systems,
software developments, methods, designs, analyses, drawings, reports, service
marks, trademarks, trade names, logos and all similar or related information
(whether patentable or unpatentable) which relates to the Company’s (or any
predecessor’s) Business, research and development or existing or future products
or services and which are conceived, developed or made by Contractor (whether or
not during usual business hours and whether or not alone or in-conjunction with
any other person) in the course of his engagement with the Company or
relationship with the Company or any predecessor, together with all patent
applications, letters patent, trademark, trade name and service mark
applications or registrations, copyrights and reissues thereof that may be
granted for or upon any of the foregoing (collectively referred to herein as
“Work Product”) belong to the Company. Contractor hereby assigns and agrees to
assign to the Company any rights he may have or acquire in such Work Product,
whether created before, on, after or prior to the effective date of this
Agreement. Contractor agrees that his copyrightable works prepared for the
Company are “supplementary works” or “works for hire,” as defined in Title 17 of
the United States Code, and if any such works are deemed not to be a
supplementary work or work for hire, then Contractor hereby assigns and agrees
to assign his entire right, title and interest in the copyright to such works to
the Company. Contractor will take reasonable steps to promptly disclose such
Work Product to the Company and perform all actions reasonably requested by the
Company (whether during or after the Term) to establish and confirm such
ownership (including the execution and delivery of assignments, consents, powers
of attorney and other instruments) and to provide reasonable assistance to the
Company in connection with the prosecution of any applications for patents,
trademarks, trade names, service marks or reissues thereof or in the prosecution
or defense of interferences relating to any Work Product, to the extent the
assistance of Contractor is reasonably required to prosecute such applications
or reissues thereof or to prosecute or defend such interferences.

 

12.          Non-Competition and Non-Solicitation.

 

A.            Contractor acknowledges that, in the course of his independent
contractor relationship with the Company he will become familiar with the
Company’s and its respective predecessors’ trade secrets and with other
Confidential Information concerning the Company and its respective predecessors
and that his services have been and will be of special, unique and extraordinary
value to the Company. Contractor agrees that, in consideration of his engagement
as contemplated under this Agreement and all compensation and benefits being
provided herein, it is both reasonable and fair as well as necessary for the
protection of the Company’s confidential information, good will in the
marketplace, and other protectable business interests, that he be subject to
certain limitations in his activities in the event of this Agreement’s
termination by either party for any reason.

 

B.            Therefore, in consideration of the foregoing, Contractor agrees
that, for a period of eighteen (18) months following termination of his
independent contractor relationship for any reason, he will not (i) engage in,
sell or provide any products or services which are the same as or similar to or
otherwise competitive with the products and services sold or provided by the
Company; (ii) own, acquire, or control any interest, financial or otherwise, in
any entity or business engaged in selling or providing the same, similar or
otherwise competitive services or products which the Company is selling or
providing in connection with the Business; (iii) call on or solicit which may
interfere with or impair the relationship between the Company and any current or
prospective customer, supplier, distributor, developer, service provider or
other material business relation of the Company in connection with the Business;
and (iv) act or provide services as a consultant or advisor or loan or otherwise
provide financing or financial assistance of any kind, to any third party who is
or is attempting, directly or indirectly, to engage in any of the activities
listed in subsections (i) through (iii) above; provided that nothing in this
Subsection (B) shall prohibit Contractor from owning less than five percent (5%)
of the outstanding shares of any public company as long as Contractor has no
other role with such company.

 

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C.            In addition, in consideration of the foregoing, Contractor agrees
that, for a period of twelve (12) months following any termination of his
independent contractor relationship, Contractor shall not, directly or
indirectly, through another person or entity (i) induce, attempt to induce, or
solicit any employee of the Company to terminate his employment with the
Company, or in any way interfere with the relationship between the Company, on
the one hand, and any employee thereof, on the other hand, (ii) employ, hire,
induce, attempt to induce, or solicit the employment of any former employee of
the Company until one (1) year after such employee’s independent contractor
relationship with the Company has been terminated, (iii) call on, solicit,
service, divert or take away or attempt to call on, solicit, service, divert or
take away any customer, supplier, contractor, designer, licensee or other
business relation of the Company with respect to products or services related to
the Company’s Business as of the date of this Agreement’s termination or induce
any of such parties to cease doing business with the Company, or in any way
interfere with the relationship between any such customer, supplier, contractor,
designer, licensee or business relation, on the one hand, and the Company, on
the other hand, or (iv) make any statement or do any act to impair, prejudice or
destroy the goodwill of the Company, to prejudice or impair the relationship or
dealing between the Company and any of its customers, suppliers, contractors,
designers, licensees, employees or other business relations, or to cause
existing or potential customers of the Company to make use of the services or
purchase the services or products of any competitive business.

 

13.          Enforcement.

 

A.            If Contractor breaches or threatens to commit a breach of any of
the covenants set forth in Paragraphs 10, 11 and 12 above, then the Company
shall have the right to seek to have the covenants in Paragraphs 10, 11 and 12
specifically enforced against Contractor, including temporary restraining orders
and injunctions by any court of competent jurisdiction, in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond or
other security), it being agreed by Contractor that any breach or threatened
breach by Contractor of Paragraphs 10, 11 and 12 would cause irreparable injury
to the Company and that money damages would not provide an adequate remedy to
the Company. The prevailing party is entitled to its attorneys’ fees and costs
incurred in relation to any action addressing Paragraphs 10, 11 and 12 of this
Agreement. In addition, the Company shall not be required to post any bond or
other surety as a condition to the issuance of any temporary restraining order
or injunction, and Contractor irrevocably waives any such requirement of any
statute or applicable law.

 

B.            If, during the enforcement of any or all of the covenants and
provisions set forth in Paragraphs 10, 11 and 12 above, any court of competent
jurisdiction enters a final judgment that declares that the duration, scope, or
area restrictions stated therein are unreasonable under circumstances then
existing, are invalid, or are otherwise unenforceable, then the parties hereto
agree that the maximum enforceable duration, scope, or area reasonable under
such circumstances shall be substituted for the stated duration, scope, or area,
and that the court making the determination of invalidity or unenforceability
shall have the power to revise the scope, duration, or 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 the closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified to cover the maximum duration, scope, or area
permitted by law.

 

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C.            If any of the provisions of Paragraphs 10, 11 and 12 are violated,
then the time limitations set forth in those sections shall be extended for a
period of time equal to the period of time during which such breach occurs, and,
in the event the Company is required to seek relief from such breach before any
court, board or other tribunal, then the time limitation shall be extended for a
period of time equal to the pendency of such proceedings, including all appeals.

 

14.          Miscellaneous.

 

A.            This Agreement shall be governed by and construed in accordance
with the laws of the State of Washington, without giving effect to the conflict
of law principles thereof. Any action or proceeding by either of the parties to
enforce this Agreement shall be brought in any state or federal court located in
the State of Washington. The parties hereby irrevocably submit to the
non-exclusive jurisdiction of these courts and waive the defense of inconvenient
forum to the maintenance of any action or proceeding in such venue.

 

B.            This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes any and all
prior agreements, written and oral, with respect thereto including the
Employment Agreement; provided, however, the parties agree that Sections 5
through 12 of the Employment Agreement survive and Contractor remains subject to
the restrictive covenants set forth therein. No change, amendment, or
modification of any provision of this Agreement shall be valid unless set forth
in a written instrument signed by both parties.

 

C.            This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and together which shall constitute one and
the same instrument.

 

D.            This Agreement may not be assigned by Contractor, and the duties
or obligations of Contractor may not be delegated by Contractor. Any purported
assignment or delegation without such consent shall be void and of no effect.
Subject to the foregoing provisions of this Paragraph 14, all of the covenants,
conditions, and obligations contained in this Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Company or the
Contractor.

 

E.            Each provision of this Agreement shall be considered severable and
if, for any reason, any provision hereof is determined to be invalid and
contrary to, or in conflict with, any existing or future law or regulation of
any court or agency having valid jurisdiction, such invalid provisions shall be
deemed not to be a part of this Agreement, and the remaining provisions shall
continue to be given full force and effect and bind the parties hereto.

 

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F.            Paragraphs 7 and 10 through 14 of this Agreement shall survive the
expiration or termination of this Agreement.

 

G.           The failure of either party to exercise any right or remedy
provided for herein shall not be deemed a waiver of any right or remedy
hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
set forth below.

 

  Company:       BROADMARK REALTY CAPITAL INC.       By: /s/ Jeffrey B. Pyatt  
Name: Jeffrey B. Pyatt   Title: Chief Executive Officer         Contractor:    
  /s/ Adam Fountain   Name: Adam Fountain

 

[Signature Page to Independent Contractor Agreement]