Document:

Exhibit 10.38

                              AGREEMENT OF SUBLEASE

         AGREEMENT OF SUBLEASE (this "Sublease"), made as of the 1st day of
March, 2010, by and between LION GABLES REALTY LIMITED PARTNERSHIP, a Delaware
limited partnership ("Sublandlord"), and BKF CAPITAL GROUP, INC., a Delaware
corporation ("Subtenant").
                                R E C I T A L S :

         A. WHEREAS, pursuant to that certain Lease dated January 7, 2008, as
amended by First Amendment to Lease dated February 12, 2009 (collectively, the
"Lease") between Crocker Mizner Park IV, Ltd., a Florida limited partnership
("Landlord"), as landlord, and Sublandlord, as tenant, Landlord leased to
Sublandlord approximately 22,151 rentable square feet of space on the fourth
(4th) floor (the "Demised Premises"), as more particularly described in the
Lease (a copy of which Lease is attached hereto as Exhibit "A" and by this
reference made a part hereof), and located at the building (the "Building")
having a street address of 225 Northeast Mizner Boulevard, Boca Raton, Florida
33432 and commonly known as Mizner Park Office Tower; and

         B. WHEREAS, Sublandlord desires to sublease to Subtenant a portion of
the Demised Premises as indicated on Exhibit "B" attached hereto consisting of
approximately 2,418 rentable square feet of space (the "Premises") and Subtenant
desires to sublease the Premises from Sublandlord on the terms and conditions
contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is mutually agreed as follows:

         1. Subleasing of Premises. Sublandlord hereby subleases to Subtenant,
and Subtenant hereby subleases from Sublandlord, the Premises, upon and subject
to the terms and conditions hereinafter set forth. In addition to the Premises,
to the extent not being used by Sublandlord, during the Term Subtenant shall
have the non-exclusive right to use Sublandlord's conference rooms and break
room located from time to time in the Demised Premises, subject to the following
terms and conditions: (i) Subtenant shall provide Sublandlord with prior written
notice of its desire to use any conference room, such notice to be provided not
less than 1 business day and not more than 5 business days in advance; (ii)
Subtenant shall not be allowed to use more than one (1) conference room at any
time and shall not be allowed to use any conference rooms for more than four (4)
hours in any day, unless otherwise permitted by Sublandlord; (iii) Subtenant
shall be responsible for any food and beverage served or provided during
Subtenant's use of the conference rooms; (iv) Subtenant shall be responsible for
cleaning the conference rooms and the break room following Subtenant's use
thereof and, if required by Sublandlord, shall pay to Sublandlord a reasonable
cleaning fee with respect to same; and (v) Subtenant shall be responsible for
the cost of any telephone, internet or teleconference services (as well as any
overtime charges for heating, ventilation and air conditioning services charged
by Landlord) incurred by Subtenant while using any conference rooms.

<PAGE>

         2. Term.

         2.1 The term (the "Term") of this Sublease shall commence on the
"Commencement Date" (as hereinafter defined) and shall terminate on the last day
of the 60th full calendar month following the Commencement Date (the "Expiration
Date"), or on such earlier date upon which the Term shall expire or be canceled
or terminated pursuant to any of the conditions or covenants of this Sublease or
the Lease, or pursuant to law. In that regard, in the event that Sublandlord
elects to terminate the Lease pursuant to Section 4.4 of the Lease, then the
Term shall terminate on the "Early Termination Date" (as defined in Section 4.4
of the Lease) and such date shall be deemed the "Expiration Date" hereunder, any
provision herein to the contrary notwithstanding. If notice of termination is
delivered to Landlord by Sublandlord pursuant to Section 4.4 of the Lease,
simultaneously Sublandlord shall deliver a copy of such notice to Subtenant.
Subtenant shall not have any option to extend the term of this Sublease. As used
herein the "Commencement Date" shall mean the earliest of (a) the date on which
Tenant occupies any portion of the Premises and begins conducting business
therein, or (b) the date on which the "Work" (as defined in Exhibit "C" hereto)
in the Premises is Substantially Completed (as defined in Exhibit "C" hereto).
The parties estimate that the Commencement Date will occur on or about March 1,
2010. For purposes of this Sublease, the Premises shall be deemed to contain
2,418 rentable square feet and shall not be subject to remeasurement or
challenge by either party hereto. Sublandlord shall deliver the Premises to
Subtenant upon the Commencement Date (as hereinafter defined) with the fixture,
furnishings and equipment described on Exhibit "D" attached hereto (the "FF&E"),
recognizing that Subtenant shall be responsible for the maintenance, repair and
replacement of the FF&E during the Term and shall return same to Sublandord upon
the expiration or earlier termination of the Sublease in the same condition as
delivered to Subtenant, ordinary wear and tear excepted.

         2.2 Promptly following the Commencement Date, Sublandlord and Subtenant
shall execute an agreement confirming the Commencement Date.

         2.3 Provided Subtenant is not in default of any term, covenant or
condition of this Sublease beyond any applicable notice and cure periods,
Subtenant shall have the right to terminate this Sublease effective 11:59 p.m.
on the last day of the 36th full calendar month following the Commencement Date
(the "Sublease Early Termination Date"). Subtenant shall exercise the right
granted herein by delivering written notice to Sublandlord of its intention to
terminate at least six (6) months prior to the Sublease Early Termination Date,
time being of the essence. Failure by Subtenant to deliver such written notice
within the time period stipulated herein shall constitute a waiver of
Subtenant's right of termination. If Subtenant elects to terminate this Sublease
as provided herein, Subtenant shall pay to Sublandlord an early termination fee,
using a 10% interest rate, in an amount equal to the unamortized costs of the
Work, which sum shall be calculated on a straight-line basis over the Term of
the Sublease. Upon receipt of Subtenant's notice exercising its right to
terminate, Sublandlord will notify Subtenant of the exact amount of termination
fee due and will provide Subtenant with reasonably acceptable backup
documentation establishing the accuracy of Sublandlord's calculation of the
termination fee. Subtenant shall have thirty (30) days from the date of such
notice and backup materials to pay the specified termination fee. If such
termination fee is not paid to Sublandlord within said fifteen day period,
Subtenant's notice exercising its right to terminate the Sublease shall be
deemed void and inoperative. If this Sublease is terminated as provided herein,
the parties agree to execute an instrument which confirms and effects a release
and surrender of all right, title and interest in and to the Premises pursuant
to the terms of this Sublease and otherwise.

         3. Base Rent and Additional Rent.

         3.1 Subtenant shall pay to Sublandlord, commencing the Commencement
Date, the following amounts as rent (the "Base Rent") during the Term:

              Annual Base Rent              Monthly Installment
              ----------------              -------------------
                   $60,450                       $5,037.50

<PAGE>

         3.2 Base Rent shall be due and payable without demand, deduction or
offset commencing on the Commencement Date and on the first day of each calendar
month in advance during the Term. The installment of Base Rent for the first
full calendar month of the Term following the Commencement Date shall be due and
payable upon the execution of this Sublease. If the Commencement Date shall
occur on a date other than the first day of any calendar month, the Base Rent
payable hereunder for such month shall be prorated on a per-diem basis and shall
be paid prior to the first day of the first full month following the
Commencement Date. Each installment of Base Rent shall be accompanied by an
additional amount equal to all applicable state and local sales or use tax
payable thereon.

         3.3 In addition to the Base Rent herein reserved, Subtenant agrees to
pay to Sublandlord, as additional rent, within five (5) days following written
notice from Sublandlord to Subtenant that same are due and owing, all other
payments for which Sublandlord shall become responsible to Landlord under the
Lease with respect to Subtenant's use or occupancy of the Premises or by reason
of any act or omission of Subtenant, including, without limitation, any payments
accruing as a result of (i) any increases in insurance premiums as provided in
the Lease, resulting from any act or omission of Subtenant, (ii) any additional
rent payable on account of Subtenant's use of extra heating, ventilation or air
conditioning and/or (iii) any additional rent payable on account of any services
provided to Subtenant; provided, however, and notwithstanding any provision
contained in this Sublease to the contrary, Subtenant shall not be obligated to
pay or reimburse to Sublandlord any portion of "Tenant's Share of Operating
Costs" (as defined in the Lease) it being understood and agreed that the Base
Rent payable hereunder by Subtenant to Sublandlord is inclusive of any
contribution of Subtenant for such amounts.

         3.4 If Subtenant shall fail to pay when due any installment of Base
Rent, additional rent or other costs, charges and sums payable by Subtenant
hereunder (such additional rent or other costs, charges and sums, together with
Base Rent, hereinafter collectively referred to as the "Rental"), Subtenant
shall pay to Sublandlord, in addition to such installment of Base Rent or
Rental, as the case may be, a late charge equal to five percent (5%) of the
amount of such payment.

         3.5 All Base Rent and other Rental shall constitute rent under this
Sublease, and shall be payable to Sublandlord at its address as set forth in
Paragraph 12 hereof, unless Sublandlord shall otherwise so direct in writing.

         3.6 Subtenant shall promptly pay the Rental as and when the same shall
become due and payable without set-off, offset or deduction of any kind
whatsoever, except as expressly set forth herein, and, in the event of
Subtenant's failure to pay the same when due (subject to grace periods provided
herein), Sublandlord shall have all of the rights and remedies provided for
herein or at law or in equity, in the case of non-payment of rent.

<PAGE>

         4. Use. Subtenant shall use and occupy the Premises for general
office purposes in accordance with applicable zoning regulations and for no
other purpose and otherwise in accordance with the terms and conditions of the
Lease. So long as the following entities are owned and controlled by or under
common ownership and control with Subtenant, Subtenant shall be permitted to
allow such entities to maintain a business address at the Premises: (i) Catalyst
Financial, LLC; (ii) Ridgefield Acquisition Corp.; and (iii) 4net Software, Inc.
(such entities are collectively referred to herein as the "Permitted
Affiliates"). Such Permitted Affiliates shall have no interest whatsoever in the
Premises and shall not be entitled to any of the rights or benefits of Subtenant
under this Sublease, any provision contained in this Sublease to the contrary
notwithstanding. Subtenant shall protect, defend, indemnify and hold harmless
Sublandlord for and against, any and all losses, damages, penalties,
liabilities, costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, which may be sustained or incurred by
Sublandlord by reason of any use of the Premises by the Permitted Affiliates.

         5. Covenants with Respect to the Lease.

         5.1 Subtenant shall not do anything that would constitute a default
under the Lease or omit to do anything that Subtenant is obligated to do under
the terms of this Sublease so as to cause there to be a default under the Lease.

         5.2 The time limits set forth in the Lease for the giving of notices,
making demands, performance of any act, condition or covenant, or the exercise
of any right, remedy or option, are changed for the purpose of this Sublease, by
lengthening or shortening the same in each instance, as appropriate, so that
notices may be given, demands made, or any act, condition or covenant performed,
or any right, remedy or option hereunder exercised, by Sublandlord or Subtenant,
as the case may be (and each party covenants that it will do so) within three
(3) days prior to the expiration of the time limit, taking into account the
maximum grace period, if any, relating thereto contained in the Lease. Each
party shall promptly deliver to the other party copies of all notices, requests
or demands which relate to the Premises or the use or occupancy thereof after
receipt of same from Landlord or upon service of same upon Landlord

         6. Subordination to and Incorporation of the Lease.

         6.1 Subtenant hereby acknowledges that it has read and is familiar with
the provisions of the Lease and agrees that this Sublease is in all respects
subject and subordinate to the terms and conditions of the Lease and to all
matters to which the Lease is subject and subordinate. In addition, this
Sublease shall also be subject to and subtenant accepts, and this Sublease also
subject to, any amendments, modifications or supplements to the Lease hereafter
made, provided that sublandlord shall not enter into any amendment, modification
or supplement that would prevent or materially adversely affect the use by
Subtenant of the Premises in accordance with the terms hereof, increase the
obligations of the Subtenant or decrease its rights hereunder, shorten the Term
hereof (excluding any early termination rights of Sublandlord as provided in the
Lease), or increase the Rental required to be paid by subtenant hereunder.
Subtenant shall protect, defend, indemnify and hold harmless Sublandlord for and
against, any and all losses, damages, penalties, liabilities, costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, which may be sustained or incurred by Sublandlord by reason of
Subtenant's failure to keep, observe or perform any of the terms, provisions,

<PAGE>

covenants, conditions and obligations on Sublandlord's part to be kept, observed
and/or performed under the Lease to the extent same shall have been incorporated
herein, and/or otherwise arising out of or with respect to Subtenant's use and
occupancy of the Premises from and after the Commencement Date and which are not
due solely to the gross negligence or intentional misconduct of Sublandlord. The
provisions of this Subparagraph 6.1 shall survive the expiration or earlier
termination of the Lease and/or this Sublease.

         6.2 Sublandlord represents that (a) a true and complete copy of the
Lease is attached hereto as Exhibit "A", (b) the Lease is in full force and
effect, (c) to Sublandlord's actual knowledge, Sublandlord is not in default in
the payment of rent or additional rent under the Lease or any other provision of
the Lease and (d) Sublandlord has not received any notice of default under the
Lease, except for any defaults which Sublandlord has cured and the Landlord is
no longer claiming to exist. Sublandlord shall not voluntarily terminate the
Lease except pursuant to a right of termination arising out of casualty or
condemnation or as otherwise expressly set forth in the Lease (including,
without limitation, the right of Sublandlord to terminate the Lease pursuant to
Section 4.4 of the Lease, which right Sublandlord expressly reserves).

         6.3 Except as otherwise expressly provided in, or otherwise
inconsistent with, this Sublease, or to the extent not applicable to the
Premises, the terms, provisions, covenants, stipulations, conditions, rights,
obligations, remedies and agreements contained in the Lease are incorporated in
this Sublease by reference, and are made a part hereof as if herein set forth at
length, Sublandlord being substituted for the "Landlord" under the Lease,
Subtenant being substituted for the "Tenant" under the Lease, and Premises being
substituted for "Demised Premises" under the Lease, except that the following
provisions of the Lease are hereby modified, or deemed deleted therefrom or
which deleted provision(s) shall have no force and effect as between Sublandlord
and Subtenant:

                  (a) Notwithstanding anything to the contrary set forth in
         Lease, the term of this Sublease and Base Rent payable under this
         Sublease and the amount of the Security required of Subtenant shall be
         as set forth in Pargraphs 2, 3 and 17 of this Sublease.

                  (b) All amounts payable hereunder by Subtenant shall be
         payable directly to Sublandlord.

                  (c) The provisions of Sections 5, 7, 14, 15, 17, 18, 32 and
         34.22 of the Lease, and those provisions of Section 34.18 of the Lease
         which refer to the use of any reserved covered parking spaces
         (Subtenant having no right to use the same), shall not apply to this
         Sublease.

<PAGE>

         7. Landlord's Performance Under Lease; Services, Repairs and
Alterations.

         7.1 Notwithstanding anything to the contrary contained in this Sublease
or in the Lease, Sublandlord shall not be required to provide any of the
services that Landlord has agreed to provide pursuant to the Lease (or required
by law), or furnish the electricity to the Premises that Landlord has agreed to
furnish pursuant to the Lease, if any (or required by law), or make any of the
repairs or restorations that Landlord has agreed to make pursuant to the Lease
(or required by law), or comply with any laws or requirements of any
governmental authorities, or take any other action that Landlord has agreed to
provide, furnish, make, comply with, or take, or cause to be provided,
furnished, made, complied with or taken under the Lease, but Sublandlord agrees
to use commercially reasonable efforts, at Subtenant's sole cost and expense, to
obtain the same from Landlord (provided, however, that Sublandlord shall not be
obligated to use such efforts or take any action which might give rise to a
default under the Lease), and Subtenant shall rely upon, and look solely to,
Landlord for the provision, furnishing or making thereof or compliance
therewith. Subtenant shall not have any claim against Sublandlord by reason of
the Landlord's failure or refusal to comply with the provisions of the Lease,
unless such failure or refusal is a result of Sublandlord's act or failure to
act as required hereinabove.

         7.2 Subtenant shall not make or allow to be made any alterations,
changes, additions or improvements (collectively, "Alterations") to the Premises
or any part thereof without the prior written consent of Landlord and
Sublandlord. If Landlord and Sublandlord shall consent to any Alterations to the
Premises, such Alterations shall be subject to any terms, covenants, conditions
and agreements which Landlord or Sublandlord may prescribe from time to time,
which shall include a requirement that, prior to the commencement of any
Alterations to the Premises, Subtenant deliver to Landlord and Sublandlord
written acknowledgments from all materialmen, contractors, artisans, mechanics,
laborers and any other persons furnishing any labor, services, materials,
supplies or equipment to Subtenant with respect to the Premises that they will
look exclusively to Subtenant for payment of any sums due in connection
therewith and that Landlord and Sublandlord shall have no liability for such
costs. All Alterations to the Premises made or requested by Subtenant shall be
at Subtenant's sole cost and expense. Upon the expiration or sooner termination
of the Term, Subtenant shall deliver the Premises to Sublandlord in the same
condition it was in on the Commencement Date, reasonable wear and tear excepted.
Any Alterations to the Premises, excepting movable furniture and trade fixtures
belonging to Tenant, shall become the property of Landlord and shall be
surrendered with the Premises, unless Landlord or Sublandlord shall direct
Subtenant to remove any such Alterations. In such event, Subtenant shall on or
before the Expiration Date remove same at its sole risk cost and expense and
restore or repair in a good and workmanlike manner any damage to the Premises
occasioned by such removal and restore the Premises to the condition existing
prior to such Alterations, normal wear and tear accepted. In the event Subtenant
fails to restore or repair the Premises or to remove its personal property and
trade fixtures, Sublandlord shall have the right, but not the obligation, to
enter the Premises and perform such restoration, repair or removal at Tenant's
expense and to charge Tenant as additional rent for the cost of such work.

<PAGE>

         8. Termination of Lease. In the event of a default under the Lease
which results in the termination of the Lease, Subtenant shall, at the option of
Landlord, attorn to and recognize Landlord as landlord hereunder and shall,
promptly upon Landlord's request, execute and deliver all instruments necessary
or appropriate to confirm such attornment and recognition. Subtenant hereby
waives all rights under any present or future law to elect, by reason of the
termination of Lease, to terminate this Sublease or surrender possession of the
Premises. Sublandlord shall not be liable to Subtenant by reason of such
termination of the Lease or by reason of any termination of the Lease by either
Landlord or Sublandlord pursuant any other provision of the Lease, except to the
extent such termination is the result of a default of Sublandlord under this
Sublease.

         9. Sublease, Not Assignment. Notwithstanding anything contained herein,
this Sublease shall be deemed to be a sublease of the Premises and not an
assignment, in whole or in part, of Sublandlord's interest in the Lease.

         10. Damage, Destruction, Fire and Other Casualty; Condemnation.
Notwithstanding any contrary provision of this Sublease or the provisions of the
Lease herein incorporated by reference, Subtenant shall not have the right to
terminate this Sublease as to all or any part of the Premises, or be entitled to
an abatement of Base Rent or any other item of Rental, by reason of a casualty
or condemnation affecting the Premises unless Sublandlord is entitled to
terminate the Lease or is entitled to a corresponding abatement with respect to
its corresponding obligation under the Lease. If Sublandlord is entitled to
terminate the Lease for all or any portion of the Premises by reason of casualty
or condemnation, Subtenant may terminate this Sublease as to any corresponding
part of the Premises by written notice to Sublandlord given at least five (5)
business days prior to the date(s) Sublandlord is required to give notice to
Landlord of such termination under the terms of the Lease. Notwithstanding
anything contained in the Lease to the contrary, as between Sublandlord and
Subtenant only, all insurance proceeds or condemnation awards received by
Sublandlord under the Lease shall be deemed property of Sublandlord.

         11. No Waivers. Failure by the Sublandlord or Subtenant in any instance
to insist upon the strict performance of any one or more of the obligations of
Subtenant or Sublandlord as the case may be under this Sublease, or to exercise
any election herein contained, shall in no manner be or be deemed to be a waiver
by Sublandlord or Subtenant of any of the other's defaults or breaches hereunder
or of any of Sublandlord's or Subtenant's rights and remedies by reason of such
defaults or breaches, or a waiver or relinquishment for the future of the
requirement of strict performance of any and all of Subtenant's or Sublandlord's
as the case may be obligations hereunder. Further, no payment by Subtenant or
receipt by Sublandlord of a lesser amount than the correct amount or manner of
payment of Rental due hereunder shall be deemed to be other than a payment on
account, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed to effect or evidence an accord and
satisfaction, and Sublandlord may accept any checks or payments as made without
prejudice to Sublandlord's right to recover the balance or pursue any other
remedy in this Sublease or otherwise provided at law or equity.

<PAGE>

         12. Notices. Any notice, statement, demand, consent, approval, advice
or other communication required or permitted to be given, rendered or made by
either party to the other, pursuant to this Sublease or pursuant to any
applicable law or requirement of public authority (collectively, "Notices")
shall be in writing and shall be deemed to have been properly given, rendered or
made only if sent by personal delivery, receipted by the party to whom
addressed, or registered or certified mail, return receipt requested, posted in
a United States post office station in the continental United States, or by
nationally recognized overnight courier service, addressed (i) to Subtenant at
its address set forth below or at the Premises, and (ii) to Sublandlord, at its
addresses set forth below. All such Notices shall be deemed to have been given,
rendered or made when delivered and receipted by the party to whom addressed, in
the case of personal delivery, or three (3) days after the day so mailed or the
next business day if national courier service utilized. Either party may, by
notice as aforesaid actually received, designate a different address or
addresses for communications intended for it. Following the Commencement Date,
Subtenant's notice address shall be at the Premises.

                            Sublandlord's addresses:
                     Lion Gables Realty Limited Partnership
                    225 Northeast Mizner Boulevard, Suite 400
                            Boca Raton, Florida 33432
                          Attention: Cristina Sullivan
                              Senior Vice President

                              Subtenant's address:
                             BKF Capital Group, Inc.
                             1 North Federal Highway
                            Boca Raton, Florida 33432
                     Attention: Steven N. Bronson, President

         13. Broker. Each party hereto covenants, warrants and represents to the
other party that it has had no dealings, conversations or negotiations with any
broker other than Jones Lang LaSalle (the "Broker"), and Lancore Realty, Inc.
(the "Outside Broker"), concerning the execution and delivery of this Sublease.
Each party hereto agrees to defend, indemnify and hold harmless the other party
against and from any claims for any brokerage commissions and all costs,
expenses and liabilities in connection therewith, including, without limitation,
reasonable attorneys' fees and disbursements, arising out of its respective
representations and warranties contained in this Paragraph 13 being untrue.
Sublandlord shall pay any brokerage commissions due to the Broker pursuant to a
separate agreement between Sublandlord and the Broker. Sublandlord shall pay any
brokerage commissions due to the Outside Broker pursuant to a separate agreement
between Sublandlord and the Outside Broker. The provisions of this Pargraph 13
shall survive the expiration or earlier termination of this Sublease.

         14. Condition of the Premises. Subtenant represents that it has made or
caused to be made a thorough examination of the Premises and is familiar with
the condition of every part thereof. Subtenant agrees to accept the Premises in
its "as is" condition on the date hereof, reasonable wear and tear between the
date hereof and the Commencement Date excepted. Sublandlord has not made and
does not make any representations or warranties as to the physical condition of
the Premises, the use to which the Premises may be put, or any other matter or
thing affecting or relating to the Premises, except as specifically set forth in
this Sublease. Sublandlord shall have no obligation whatsoever to alter,
improve, decorate or otherwise prepare the Premises for Subtenant's occupancy.

<PAGE>

         15. Consent of Landlord to This Sublease. Sublandlord and Subtenant
each hereby acknowledge and agree that this Sublease is subject to and
conditioned upon Sublandlord obtaining the written consent (the "Consent") of
Landlord as provided in the Lease. Promptly following the execution and delivery
hereof, Sublandlord shall submit this Sublease to Landlord. Subtenant hereby
agrees that it shall cooperate in good faith with Sublandlord and shall comply
with any reasonable requests made by Sublandlord or Landlord in the procurement
of the Consent. In no event shall Sublandlord or Subtenant be obligated to make
any payment to Landlord in order to obtain the Consent or the consent to any
provision hereof, other than as expressly set forth in the Lease. This Sublease
shall terminate if the Consent of Landlord as provided under this Pargraph 15 is
not obtained by _____________, 2010 (the "Outside Date"). In the event of such
termination any sums paid upon execution hereof shall be promptly returned and
neither party shall have any further obligation to the other. Notwithstanding
the foregoing, the Outside Date may be extended upon written mutual consent of
the parties hereto. The written form of the consent by Landlord as provided for
herein shall be in form reasonably acceptable to the Subtenant.

         16. Assignment, Subletting and Mortgaging.

         16.1 Subtenant shall not assign, sell, transfer (whether by operation
or law or otherwise), pledge, mortgage or otherwise encumber this Sublease or
any portion of its interest in the Premises, nor sublet all or any portion of
the Premises or permit any other person or entity to use or occupy all or any
portion of the Premises, without the prior written consent of Sublandlord and
Landlord. The granting or withholding of such consent may be exercised by
Sublandlord in its sole discretion.

         16.2 For the purposes of this Paragraph 16, an assignment or subletting
shall be deemed to have occurred upon: (i) the subletting or assignment to a
subsidiary or affiliate of Subtenant or occupancy by Subtenant's subsidiaries or
affiliates; (ii) the sale or transfer, whether pursuant to a single transaction
or in a series of related or unrelated transactions, including without
limitation by consolidation, merger or reorganization, of a majority of the
voting stock of Subtenant or any beneficial interest therein, if Subtenant is a
corporation, or any sale or other transfer, whether pursuant to one or more
successive transactions, of a majority of the general partnership interests in
Subtenant or any beneficial interest therein, if Subtenant is a partnership; and
(iii) the sale or other transfer, whether pursuant to one or more successive
transactions, of more than fifty (50%) percent, by value, of the assets of
Subtenant used in conducting its business in the Premises.

         16.3 If this Sublease be assigned, or if the Premises or any part
thereof be sublet (whether or not Sublandlord and Landlord shall have consented
thereto), Sublandlord, after default by Subtenant in its obligations hereunder,
may collect rent from the assignee or subtenant and apply the net amount
collected to the Rental herein reserved. No such assignment or subletting shall
be deemed a waiver of the covenant set forth in this Paragraph 16, or the
acceptance of the assignee or subtenant as a tenant, or a release of Subtenant
from the further performance and observance by Subtenant of the covenants,
obligations and agreements on the part of Subtenant to be performed or observed
herein. The consent by Sublandlord or Landlord to an assignment, sale, pledge,
transfer, mortgage or subletting shall not in any way be construed to relieve
Subtenant from obtaining the express consent in writing, to the extent required
by this Sublease or the Lease, of Sublandlord and Landlord to any further
assignment, sale, pledge, transfer, mortgage or subletting.

<PAGE>

         17. Security.

         17.1 Subtenant has deposited with Sublandlord the sum of $10,729.88
(which is an amount equal to two months of Base Rent, plus sales tax of 6.5%)
(the "Security") for the faithful performance and observance by Subtenant of the
terms, provisions and conditions of this Sublease, including, but not limited
to, the payment of Base Rent and all other items of Rental and the surrender of
the Premises to Sublandlord as herein provided.

         17.2 If Subtenant defaults in respect of any of the material or
monetary terms, provisions and conditions of this Sublease, Sublandlord may
apply or retain the whole or any part of the Security so deposited, as the case
may be, to the extent required for the payment of any Base Rent or any other
item of Rental as to which Subtenant is in default or for any sum which
Sublandlord may expend or be required to expend by reason of Subtenant's default
in respect of any of the terms, covenants and conditions of this Sublease,
including, but not limited to, any damages or deficiency in the reletting of the
Premises, whether such damages or deficiency accrue or accrues before or after
summary proceedings or other re-entry by Sublandlord. If Sublandlord applies or
retains any part of the Security so deposited, Subtenant, upon demand, shall
deposit with Sublandlord the amount so applied or retained so that Sublandlord
shall have the full deposit on hand at all times during the Term. If Subtenant
shall fully and faithfully comply with all of the terms, provisions, covenants
and conditions of this Sublease, the Security, together with accrued interest
thereon, shall be promptly returned to Subtenant after the Expiration Date and
after delivery of possession of the Premises to Sublandlord in the condition
required to be delivered to Landlord under the Lease, except as otherwise
provided herein. Subtenant shall not assign or encumber or attempt to assign or
encumber the monies deposited herein as security and neither Sublandlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

         18. Right of First Offer19. . During the Term, in the event the space
designated on Exhibit "E" (the "Offer Space") should become available for
occupancy (i.e., the sublease for same that is now in effect is terminated or
the space is otherwise vacated) and Sublandlord desires to sublease same, then
Sublandlord shall, prior to offering the same to any third party, first offer to
lease to Subtenant the Offer Space in "AS-IS" condition, for a term co-terminus
with this Sublease and on substantially the same terms as set forth in this
Sublease, such offer to be provided in writing (the "Offer Notice"). Subtenant
shall notify Sublandlord in writing whether Subtenant elects to lease the entire
Offer Space on the terms set forth in the Offer Notice, within ten days after
Sublandlord delivers to Subtenant the Offer Notice. If Subtenant timely elects
to lease the Offer Space, then Sublandlord and Subtenant shall promptly execute
an amendment to this Lease, incorporating the Offer Space as part of the
Premises. If Subtenant fails or is unable to timely exercise its right
hereunder, then such right shall lapse, time being of the essence with respect
to the exercise thereof (it being understood that Subtenant's right hereunder is
a one-time right only), and Sublandlord may lease all or a portion of the Offer
Space to third parties on such terms as Sublandlord may elect. Subtenant may not
exercise its rights under this Pargraph 18 if Subtenant is in default under the
Sublease or Subtenant is not then occupying the Premises. In no event shall
Sublandlord be obligated to pay a commission with respect to any space leased by
Subtenant under this Paragraph 18, and Subtenant and Sublandlord shall each
indemnify the other against all costs, expenses, attorneys' fees, and other
liability for commissions or other compensation claimed by any broker or agent
claiming the same by, through, or under the indemnifying party. Subtenant's
rights under this Paragraph 18 shall terminate if (a) this Sublease or
Subtenant's right to possession of the Premises is terminated, or (b) Subtenant
assigns any of its interest in this Lease or sublets any portion of the
Premises.

         19. Miscellaneous.

         19.1 Signage. Subject to availability and to Landlord's approval of
same and to the provisions of the Lease, Subtenant, at Subtenant's sole cost,
shall have the right to place its name and that of Catalyst Financial, LLC in
the Building lobby directory and shall further have the right to install signage

<PAGE>

identifying its business and that of Catalyst Financial, LLC on the front door
of the Premises, the design of such signage being further subject to
Sublandlord's prior written approval, not to be unreasonably withheld.

         19.2 Entire Agreement; Successors. This Sublease contains the entire
agreement between the parties concerning the sublet of the Premises and sets
forth all of the covenants, promises, conditions, and understandings between
Sublandlord and Subtenant concerning the Premises. There are no oral agreements
or understandings between parties hereto affecting this Sublease and this
Sublease supersedes and cancels any and all previous negotiations, arrangements,
agreements and understandings, if any, between the parties hereto with respect
to the subject matter hereof, and none shall be used to interpret or construe
this Sublease. Any agreement hereafter made shall be ineffective to change,
modify or discharge this Sublease in whole or in part unless such agreement is
in writing and signed by the parties hereto. The covenants, agreements and
rights contained in this Sublease shall bind and inure to the benefit of
Sublandlord and Subtenant and their respective permitted successors and assigns.

         19.3 Severability. In the event that any provision of this Sublease
shall be held to be invalid or unenforceable in any respect, the validity,
legality or enforceability of the remaining provisions of this Sublease shall be
unaffected thereby.

         19.4 Headings; Capitalized Terms. The paragraph headings appearing
herein are for purpose of convenience only and are not deemed to be a part of
this Sublease. Capitalized terms used herein shall have the same meanings as are
ascribed to them in the Lease, unless otherwise expressly defined herein.

         19.5 Insurance. All insurance policies required to be obtained by
Subtenant under this Sublease or the Lease shall name Landlord and Sublandlord
as additional insureds as their interests may appear.

         19.6 Governing Law. This Sublease shall be governed by, and construed
in accordance with, the laws of the state in which the Premises are located,
without regard to the law of that State concerning choice of law.

         19.7 Sublease Supersedes. In the event of a conflict or inconsistency
between the provisions of this Sublease and the Lease, the provisions of this
Sublease shall supersede and control. However, nothing contained herein shall
affect the Landlord's rights under the Lease.

         19.8 Further Assurances. The parties hereto agree that each of them,
upon the request of the other party, shall execute and deliver, in recordable
form if necessary, such further documents, instruments or agreements and shall
take such further action as may be necessary or appropriate to effectuate the
purpose of this Sublease.

<PAGE>

         19.9 Counterparts. This Sublease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

         19.10 Radon. Pursuant to the provisions of the Florida Statutes (F.S.
404.056(3)), Subtenant is hereby advised and notified that radon is a naturally
occurring radioactive gas that, when it has accumulated in buildings in
sufficient quantities, may present health risks to persons who are exposed to it
over time. Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from the county public health unit.

         19.11 Covenant of Quiet Enjoyment. Provided Subtenant pays the Rental
and keeps and performs all of the covenants and obligations of Subtenant
hereunder, Sublandlord covenants that Subtenant may peaceably and quietly enjoy
the Subleased Premises without disturbance by Sublandlord or any person claiming
by, through or under Sublandlord, subject never the less to the terms and
conditions of this Sublease and to the Lease and any other leases and mortgages
to which this Sublease is subordinate.

         19.12 Sublandlord's Liability. Notwithstanding any provision in this
Sublease to the contrary, the liability of Sublandlord to Subtenant (or any
person or entity claiming by, through or under Subtenant) for any default by
Sublandlord under the terms of this Sublease or any matter relating to or
arising out of the occupancy or use of the Premises and/or other areas of the
Building for which Sublandlord could be liable shall be limited to Subtenant's
actual direct, but not consequential, damages therefor and Sublandlord's
partners, shareholders, members, officers, directors, managers or
representatives shall not be personally liable for any claims by Subtenant in
connection with same.

         19.13 Jury Trial Waiver. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY, UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT EACH
MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
ARISING IN TORT OR CONTRACT) BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SUBLEASE OR ANY OTHER DOCUMENT
EXECUTED AND DELIVERED BY EITHER PARTY IN CONNECTION HEREWITH OR ANY COURSE OF
DEALING OR CONDUCT OF THE PARTIES, STATEMENTS (WHETHER ORAL OR WRITTEN ) OR
ACTIONS OF ANY PERSON. THIS WAIVER IS A MATERIAL INDUCEMENT TO SUBLANDLORD TO
ENTER INTO THIS SUBLEASE.

                        [signatures follow on next page]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement of Sublease as of the day and year first above written.

Witnesses:                            SUBLANDLORD:

                                      LION GABLES REALTY LIMITED PARTNERSHIP

--------------------------------      By:  Gables, GP, Inc., its general partner
Signature

--------------------------------
Print Name

--------------------------------      By:  --------------------------------
Signature

--------------------------------      Its: --------------------------------
Print Name

                                      SUBTENANT:

--------------------------------      BKF CAPITAL GROUP, INC.
Signature

--------------------------------
Print Name

--------------------------------      By:  --------------------------------
Signature

--------------------------------      Its: --------------------------------
Print Nameform10q013110ex10-1.htm

    
      

      

    

    

    

     

    SALARY
DEFERRAL AGREEMENT

     

    THIS
AGREEMENT is made effective
July 25, 2009, by and between Big Cat Energy Corporation, a
Nevada corporation
(the “Company” or “Big Cat”), and Timothy Barritt, Raymond Murphy and
Richard G. Stifel (individually and/or collectively the “Officers”).

     

    RECITALS:

     

    
      	
              A.  

            	
              The
      Officers presently serve in various capacities with Big Cat as compensated
      officers and employees of the Company and each of the Officers present
      receives an annual salary of
$125,000.

            

    

     

    
      	
              B.  

            	
              Each
      Officer makes a valuable contribution to the business and management of
      the Company and the Company desires to retain the services of the
      Officers, however due to present cash flow constraints, the Company is
      unable to continue to pay the full salaries of the
    Officers.

            

    

     

    
      	
              C.  

            	
              In
      consideration of the promises made herein, each of the Officers have
      agreed to continue his employment with the Company and to accept a
      deferral of a portion of his salary on the terms and conditions provided
      herein.

            

    

     

    Now, Therefore, in
consideration of the mutual promises and consideration herein described, the
parties agree as follows:

     

    

    
      	
              1.  

            	
              Deferral.    Commencing
      July 25, 2009 payment of a portion of the $125,000 salary of each of the
      Officers in an amount equal to $2,083.33 for July and $3,333.33 per month
      beginning August 1, 2009 shall be deferred for an indefinite
      period.    The remaining portion of the salary,
      effective August 1, 2009, ($7,083.33 per month) shall continue to be paid
      to each Officer on the same basis as in the
  past.

            

    

     
 

    
      	
              2.  

            	
              Due Date of Deferred
      Amounts.   All amounts deferred under this agreement
      shall be immediately due and payable by Big Cat to an Officer (or their
      executors or heirs) upon the earliest to occur of the
      following:   (a) the resignation, removal, death,
      disability, or retirement of the Officer;  or (b) a notice sent
      to the Company not earlier than 12 months from the date of this Agreement,
      from the Officer to the effect that he is terminating the deferral
      arrangement and establishing a payment date for payment of all deferred
      amounts to the Officer, which date shall be not less than three months
      after the date of notice.

            

    

    

    
      	
              3.  

            	
              Termination of
      Deferral as to Ongoing Salary
      Payments.     An Officer may terminate the
      deferral arrangement as to his ongoing salary payments at any time
      commencing 12 months after the date of this agreement by a notice to the
      Board of Directors advising the Board of his election to again require the
      full payment of his salary without deferral beginning at his next pay
      day.

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              4.  

            	
              Security
      Agreement.  Payment of all amounts deferred hereunder and
      all amounts of any other unpaid salary owing to Officers, shall be secured
      by a Security Agreement of even date herewith, a copy of which is attached
      hereto as Exhibit A.

            

    

    

    
      	
              5.  

            	
              Rights of
      Termination.   Nothing herein create a term certain
      of employment of an Officer nor shall it abrogate such common law and/or
      statutory rights of the Company to terminate the employment of the
      Officers as permitted by law.   However at the time of any
      such termination all deferred amounts shall become due and payable and the
      Security Agreement between the parties shall remain in full force and
      effect.

            

    

    

    OFFICER:                                                                      BIG
CAT ENERGY CORPORATION:

    

    

    

    __/s/______________________________                                                                      By:
___/s/_________________________________

    Timothy
Barritt                                                                              
        Richard Stockdale

                  Its: Vice
President

       

    OFFICER:

    

    

    

    __/s/______________________________

    Raymond
Murphy

    

    

    OFFICER:

    

    

    

    __/s/______________________________

    Richard
G. Stifel

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      SECURITY
AGREEMENT

      

      THIS SECURITY AGREEMENT (the “Security
Agreement”) is made and entered into as of July 25, 2009, by and between Big Cat
Energy Corporation (“Debtor”), and Timothy Barritt, Raymond Murphy and Richard
G. Stifel, individuals having a business address of 121 W. Merino Street, PO Box 500,
Upton, WY 82730 (collectively the “Secured Party”).

      

      The Debtor, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
in order to secure the performance of those contractual obligations of the
Debtor to the Secured Party pursuant to and as set forth in the Salary Deferral
Agreement dated August 1, 2009 (the “Agreement”), does hereby grant and pledge
to the Secured Party a security interest in all of Debtor’s right, title and
interest, whether presently existing or hereafter acquired, in the following
(collectively, the “Collateral”):

      

      1-  Trademark:   ARID

      

      Mark
Drawing Code:   (4)  Standard Character
Mark

      Serial
Number             77220414

      Filing
Date                  July
2, 2007

      

      2-  Patent
applications - See Exhibit A incorporated herein by reference

      

      The
Debtor represents and warrants that the security interest granted in the
Collateral pursuant to the foregoing, upon the filing of the appropriate
financing statements relating thereto, shall be a first priority security
interest in the Collateral.  This security interest is granted in
conjunction with the Agreement.  The rights and remedies of Secured
Party with respect to the security interest granted hereby are in addition to
those set forth in the Agreement, and those that are now or hereafter available
to Secured Party as a matter of law or equity.  Each right, power and
remedy of Secured Party provided for herein, or now or hereafter existing at law
or in equity, shall be cumulative and concurrent and shall be in addition to
every right, power or remedy provided for herein and the exercise by Secured
Party of any one or more of the rights, powers or remedies provided for in this
Security Agreement or now or hereafter existing at law or in equity, shall not
preclude the simultaneous or later exercise by any person, including Secured
Party, of any or all other rights, powers or remedies.

      

      The
enforcement of this Security Agreement in the event of default, and the rights
of the parties hereunder, shall be governed in all particulars by Article 9 of
the Uniform Commercial Code, as adopted by the State of Wyoming, as amended from
time to time, and by any applicable federal law.

      

      If any
action relating to this Security Agreement is brought by either party hereto
against the other party, the prevailing party shall be entitled to recover
reasonable attorneys’ fees, costs and disbursements.  To the extent
that any provision of this Security Agreement conflicts with any provision of
the Agreement, the provision giving Secured Party greater rights or remedies
shall govern, it being understood that the purpose of this Security Agreement is
to add to, and not detract from, the rights granted to Secured Party under
the  Agreement.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      This
Security Agreement shall be governed by the laws of the State of Wyoming,
without regard for choice of law provisions.  The rights of the
Secured Party hereunder shall inure to the benefit of its successors and
assigns.  This Security Agreement may be executed in
counterparts.

      

      DEBTOR:

      

      BIG CAT
ENERGY
CORPORATION                                                                                     SECURED
PARTY:

      

      

      

      By:           __/s/___________________                                                                ___/s/____________________

      Its:                                                                                             Timothy
Barritt

      

      

      

                 ___/s/_____________________

                 Raymond
Murphy

      

      

      

                 ___/s/_____________________

    

                                          Richard G. Stifel

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECURITY
AGREEMENT

       

      THIS
SECURITY AGREEMENT is made effective
as of  July 27,  2009, by and between Big Cat Energy Corporation, a
Nevada corporation
(the “Company” or “Big Cat”), and Timothy Barritt, Raymond Murphy and
Richard G. Stifel (individually and/or collectively the “Secured Party”).

       

      RECITALS:

       

      A.           Secured
Party and Big Cat have agreed to a deferred salary agreement of even date (the
“Salary Deferral Agreement”) pursuant to which Secured Party has agreed to make
certain salary deferrals to the Company.

       

      B.           It
is a condition precedent to Secured Party’s acceptance of the Salary Deferral
Agreement that Big Cat shall simultaneously have entered into this Security
Agreement (“Agreement”)
granting Secured Party a continuing security interest in the collateral
described in this Agreement.

       

      Now, Therefore, in
consideration of the covenants and conditions herein contained, the parties
agree as follows:

       

      SECTION
1.                      DEFINITIONS.

       

      As used
herein, the following terms shall have the meanings set forth
below:

       

      “Collateral” shall mean an
assignment and security interest granted to Secured Party covering all of the
Patents, trademarks and intellectual property of the Company relating to the
ARID system and technology (such patents/trademarks/intellectual may be more
specifically described on Exhibit A attached hereto and incorporated herein by
reference) and Collateral shall also mean
the ARID tool inventory held by the Company.

       

      

       

      “Lien or Encumbrance” and “Liens and Encumbrances”
mean, respectively, each and all of the following: (i) any lease or other right
to use; (ii) any assignment as security, conditional sale or other title
retention agreement or arrangement, grant in trust, lien (statutory or other),
mortgage, deed of trust, pledge, security interest, hypothecation, preference,
priority, or other security agreement or preferential arrangement, charge, or
encumbrance of any kind or nature whatsoever and any other interest or right
securing the payment of money or the performance of any other liability or
obligation, whether voluntarily or involuntarily created and whether arising by
agreement, document, or instrument, under any law, ordinance, regulation, or
rule (federal, state, or local), or otherwise; (iii) any option, right of first
refusal, other right to acquire, or other interest or right, and (iv) any
financing lease having substantially the same economic effect as

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      any of
the foregoing, and the filing of any financing statement under the UCC or
comparable law of any jurisdiction to evidence any of the
foregoing.

       

      

       

       “Obligations” means any and
all unpaid salaries, accrued and/or deferred salaries, indebtedness, liabilities
and/or obligations of Big Cat to Secured Party relating to or arising under the
Salary Deferral Agreement, and any and all extensions and renewals thereof in
whole or in part, and or any supplement hereto or thereto, whether now existing
or hereafter arising, whether direct or indirect, absolute or contingent, joint
or several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured, original, renewed or extended, and whether arising
directly or acquired from others (including, without limitation, participations
or interests in such obligations to others) and including, without limitation,
Secured Party’s  interest, and attorneys fees and costs chargeable to
Big Cat in connection with all of the foregoing.

       

      “UCC” means the Uniform
Commercial Code in effect in the state or jurisdiction where any applicable
portion of the Collateral is located, as the same may be amended and modified
from time to time.

       

      
        	
                SECTION
      2.

              	
                GRANT
      OF SECURITY INTEREST.

              

      

       

      For value
received, and as security for the prompt performance, observance and payment in
full of all Obligations, Big Cat hereby assigns to Secured Party the right to
collect and hold payment of all proceeds received by the Company in the future
from any commercial use of the Collateral not to exceed the total amounts owing
under the Salary Deferral Agreement, and also hereby grants to Secured Party, a
continuing security interest in, lien upon and right of setoff against the
Collateral.

       

      
        	
                SECTION
      3.

              	
                BIG
      CAT’S REPRESENTATIONS, WARRANTIES AND GENERAL
  COVENANTS.

              

      

       

      3.1           Big
Cat represents, warrants and agrees as follows (which shall survive the
execution and delivery of this Agreement and the truth and accuracy of which,
and compliance with, being a  condition of the Secured Party’s
continuing service as a director, officer and/or employee of Big
Cat,  pursuant to the Salary Deferral Agreement):

       

      (a)           Big
Cat is and shall be, with respect to the Collateral, the owner of such
Collateral free from any Lien or Encumbrance except those granted herein, in
Secured Party’s favor.  Big Cat will defend its title to the
Collateral against the claims of all persons. There are no Form UCC-1 financing
statements now filed or recorded covering any of the Collateral or in which Big
Cat is named or has signed as debtor as to the Collateral, except financing
statements related to this Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           Big
Cat will not directly or indirectly sell, lease, transfer, abandon or otherwise
dispose of all or any substantial portion of Big Cat’s property or assets,
without prior written notice to Secured Party.  Provided, however that
Big Cat may sell or lease items of its its inventory of the ARID tool for
adequate consideration in the ordinary course of business and all sales of such
inventory when fully paid shall be free and clear of the liens and encumbrances
created hereunder.

       

      (c)           Big
Cat shall promptly notify Secured Party in writing of the details of any loss,
damage, investigation, action, suit, proceeding or claim relating to the
Collateral or which would result in any material adverse change in Big Cat’s
business, properties, assets, goodwill or condition, financial or
otherwise.

       

      (d)           At
Secured Party’s option, upon the occurrence of an Event of Default hereunder,
Secured Party shall apply any insurance monies received at any time to the cost
of repairs to or replacement for the Collateral and/or to payment of any of the
Obligations, whether or not due, in any order and in such manner as Secured
Party, in Secured Party’s sole discretion, may determine.

       

       (e)           
Big Cat shall not waste or destroy the Collateral or any part thereof or any
document or record evidencing the same.  In addition, Big Cat shall
not misuse, cancel or in any way use or dispose of any of the Collateral
unlawfully or contrary to the provisions of this Agreement.

       

      (f)           Big
Cat shall, at Big Cat’s own expense, protect the Collateral and maintain it at
all times for the benefit of Secured Party.  Big Cat shall use the
Collateral for lawful purposes only and in conformity with applicable laws,
ordinances and regulations.

       

      (g)           The
Collateral is and shall be used in Big Cat’s business and not for personal,
family, or household use.

       

      (h)           The
security interest granted in the Collateral is in good faith believed to be (i)
legal, valid, binding, and enforceable, (ii) once filed, a perfected security
interest in the Collateral, and (iii) a first priority security
interest.

       

      3.2           Except
as otherwise provided in this Agreement, Big Cat will not permit the Collateral
to be removed from Big Cat’s possession, will not permit the Collateral to be
attached or other process to be levied thereon nor create nor permit to be
created any lien or encumbrance or adverse claim of any character whatsoever in
Collateral, whether justified or unjustified, and will not sell, transfer,
assign or attempt to assign Big Cat’s right, title or interest in the Collateral
or this Agreement in contravention of the security interests granted
herewith.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      3.3           Big
Cat shall duly execute and deliver, or shall cause to be duly executed and
delivered, such further agreements, instruments and documents, including,
without limitation, additional security agreements, collateral assignments, Form
UCC-1 financing statements or amendments or continuations thereof, consents to
the exercise by Secured Party of all Secured Party’s rights and remedies
hereunder, under any supplement hereto or applicable law with respect to the
Collateral, and do or cause to be done such further acts as may be necessary or
proper in Secured Party’s opinion to evidence, perfect, maintain and enforce
Secured Party’s security interest and the priority thereof in the Collateral and
to otherwise effectuate the provisions or purposes of this Agreement or any
supplement hereto. Where authorized by law, Big Cat hereby authorizes Secured
Party to execute and file one or more Form UCC-1 financing statements signed
only by Secured Party.  Big Cat hereby authorizes Secured Party, upon
the occurrence of an Event of Default hereunder, at Secured Party’s option to
send written notice to any and all customers of Big Cat or other parties who may
be obligated to pay Big Cat any consideration for the commercial use of the ARID
system, technology or inventory or other Collateral, to advise such parties that
Secured Party claims a security interest in such proceeds .

       

      3.4           
Big Cat assumes all responsibility and liability arising from or relating to Big
Cat’ use, sale or other disposition of the Collateral.

       

      SECTION
4.                      SECURED
PARTY’S RIGHT TO PROTECT COLLATERAL.

       

      Secured
Party may, in the Event of Default by Big Cat, pay taxes, assessments, liens,
fees, charges or encumbrances, or spend any amounts necessary to maintain the
Collateral in Big Cat’s exclusive possession and in good condition and repair,
and all amounts expended by Secured Party shall, with interest thereon at the
Default Interest Rate, constitute an Obligation of Big Cat to Secured Party
secured by the Collateral and by the terms of this Agreement and shall be
immediately due and payable, but no such act or expenditure by Secured Party
shall relieve Big Cat from the consequences of such default.

       

      SECTION
5.                      EVENTS
OF DEFAULT.

       

      Any one
of the following shall constitute an “Event of Default”:

       

      (a)           Big
Cat fails to pay any monetary amount, including any or all salary or deferred
salary of Secured Party, when due, and fails to cure such default within ten
(10) days after written notice from Secured Party.

       

      (b)           Big
Cat fails to perform an obligation not involving the payment of money, or to
comply with any other term or condition applicable to Big Cat under this
Agreement or  the Salary Deferral Agreement, and fails to cure such
default within thirty (30) days after written notice from Secured
Party.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Big
Cat (i) fails to pay when due any monetary obligation, whether such obligation
be direct or contingent, to any person in excess of Twenty Five Thousand and
No/100 Dollars ($25,000), (ii) makes a general assignment for the benefit of
creditors, or (iii) applies for, consents to, or acquiesces in, the appointment
of a trustee, receiver, or other custodian for Big Cat or the property of Big
Cat or any part thereof, or in the absence of such application, consent, or
acquiescence, a trustee, receiver, or other custodian is appointed for Big Cat
or the property of Big Cat or any part thereof.

       

      (d)           Commencement
of any case under the Bankruptcy Code, Title 11 of the United States Code, or
commencement of any other bankruptcy arrangement, reorganization, receivership,
custodianship, or similar proceeding under any federal, state, or foreign law by
or against any of the Big Cat.

       

      (e)           All
or any part of the Collateral is attached, levied upon, or otherwise seized by
legal process, and such attachment, levy, or seizure is not quashed, stayed, or
released within twenty (20) days of the date thereof.

       

      (f)           The
occurrence of any Event of Default under the Salary Deferral Agreement or this
Agreement.

       

      (g)           Big
Cat abandons any material portion of the Collateral; or

       

      (h)           Any
material portion of the Collateral is lost, stolen, suffers substantial damage
or destruction, or declines materially in value.

       

      

       

      SECTION
6.                      RIGHTS
AND REMEDIES.

       

      6.1           Upon
the happening of any Event of Default, and after any applicable cure period,
Secured Party shall have (in addition to any other rights Secured Party may have
under this Agreement, any supplement hereto or otherwise) the rights, options,
duties and remedies of a secured party, and Big Cat shall have the rights and
duties of a debtor, under the UCC; and without limitation thereto, Secured Party
shall have the following specific rights:

       

      (a)           To
declare any or all of the Obligations to be immediately due and payable,
whereupon such Obligations shall be immediately due and payable;

       

       (b)           As
a matter of right and without notice to Big Cat or anyone claiming under Big
Cat, Secured Party shall be entitled to orders of replevin by a court of any or
all Collateral from time to time;

       

      (e)           At
its option, Secured Party may send written notice to any and all customers of
Big Cat or other parties who may be obligated to pay Big Cat any

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      consideration
for the commercial use of the Patents, to advise such parties that Secured Party
claims a security interest in such proceeds and demand that they pay any such
amounts owing Big Cat directly to Secured Party.

       

      (f)           At
its sole option, to take possession of and/or retain the Collateral in
satisfaction of the obligations secured hereunder by sending written notice of
such election to Big Cat; but, unless such written notice is sent by Secured
Party as aforesaid, possession or retention of said Collateral shall not be in
satisfaction of any obligation hereunder;

       

      (g)           To
apply the proceeds realized from disposition of the Collateral according to
law;

       

      (h)           To
exercise any and all other rights and remedies of a secured party.

       

      6.2           The
enumeration of the foregoing rights and remedies is not intended to be
exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies Secured Party may have under the UCC
or other applicable law. Secured Party shall have the right, in Secured Party’s
sole discretion, to determine which rights and remedies, and in which order any
of the same, are to be exercised, and in which order, and the exercise of any
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative.

       

      6.5           No
act, failure or delay by Secured Party shall constitute a waiver of any of
Secured Party’s rights and remedies. No single or partial waiver by Secured
Party of any provision of this Agreement or any supplement hereto, or breach or
default thereunder, or of any right or remedy which Secured Party may have shall
operate as a waiver of any other provision, breach, default, right or remedy or
of the same provision, breach, default, right or remedy on a future
occasion.

       

      6.6           Big
Cat waives presentment, notice of dishonor, protest and notice of protest of all
instruments included in or evidencing any of the Obligations or the Collateral
and any and all notices or demands whatsoever (except as expressly provided
herein). Secured Party may in its discretion, proceed directly against Big Cat
to enforce payment of the Obligations and shall not be required to proceed
solely against the Collateral.

       

      SECTION
7.                      SETOFF.

       

      Upon the
occurrence of an Event of Default, or, if in the commercially reasonable
judgment of Secured Party, Secured Party deems itself insecure, any indebtedness
owing from Secured Party to Big Cat may be set off and applied by Secured Party
on any indebtedness or liability, secured or unsecured, of Big Cat to Secured
Party at any time and from time to time, and without demand upon or notice to
anyone.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
8.                      APPLICATION
OF PROCEEDS.

       

        All
Collateral and all proceeds of Collateral received by Secured Party, before or
after an Event of Default, will be applied by Secured Party to the Obligations,
whether or not due, subject to any requirements of law. Any Collateral and any
balance of such proceeds remaining after payment of the Obligations in full will
be paid to Big Cat, its successors or assigns, or as the law or a court of
competent jurisdiction may direct. Any proceeds of Collateral in the form of a
check shall be credited against the Obligations only upon clearance or payment
thereof.

       

      SECTION
10.                                LOAN
DOCUMENTS.

       

      This
Agreement is subject to certain terms and provisions in the Salary Deferral
Agreement, to which reference is made for a statement of such terms and
provisions.

       

      SECTION
11.                                CHOICE
OF LAW/SEVERABILITY.

       

      This
Agreement and all transactions hereunder shall be deemed to be consummated in
the State of Wyoming and shall be governed by, and interpreted in accordance
with the laws of that State. If any part or provision of this Agreement is
invalid or in contravention of any applicable law or regulation, such part or
provision shall be severable without affecting the validity of any other part or
provision of this Agreement.

       

      SECTION
12.                                GENERAL.

       

      12.1           Time
is of the essence of this Agreement. The acceptance by Secured Party of partial
payments shall not in any manner modify the terms of this Agreement, and such
acceptance shall not be construed as a waiver of any subsequent defaults on Big
Cat’ part nor shall it waive the "time is of the essence”
provision.

       

      12.2           Waiver
of any default shall not constitute waiver of any subsequent
default.

       

      12.3      Reserved

       

      12.4           This
instrument is intended to provide a security interest to more than one Secured
Party under the Salary Deferral Agreement and the obligations of Big Cat shall
be joint and several as to all such Secured Parties. All words used herein shall
be construed to be of such gender and number as the circumstances require and
all references herein to Big Cat shall include all other persons primarily or
secondarily liable.

       

      12.5           Secured
Parties or any Secured Party may file a Financing Statement with respect to this
Agreement and any true and correct photographic or other reproductive copy of
this Agreement may be filed or recorded as a Financing Statement.

       

      12.6           This
Agreement and all obligations of Big Cat hereunder shall be binding upon the
successors and assigns of Big Cat and Secured Party, and shall, together with
the rights and

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      remedies
of Big Cat and Secured Party hereunder, inure to the benefit of Big Cat and
Secured Party, respectively and each party’s respective successors and
assigns.

       

      12.7    THIS
AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES REGARDING THE
SUBJECT MATTER HEREOF AND MAY NOT BE ALTERED OR AMENDED EXCEPT BY A WRITING
SIGNED BY ALL PARTIES.

       

      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.

       

      SECURED
PARTY:                                                                                     BIG
CAT ENERGY CORPORATION:

       

      /s/
Timothy
Barritt_______________                                                  By:
_/s/  Richard Stockdale___________

       

      Timothy
Barritt                                                                             Richard
Stockdale

       

            Its: Vice President

       

      

       

      SECURED
PARTY:

       

      /s/  Raymond
Murphy_____________

       

      Raymond
Murphy

       

      

       

      

       

      SECURED
PARTY:

       

      /s/  Richard
G. Stifel_______________

       

      Richard
G. Stifel

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