Document:

bfdi_ex104.htm

EXHIBIT 10.4

 

	Subordination Agreement	

 

THIS SUBORDINATION AGREEMENT (this “Agreement”) is entered into as of the ____ day of June, 2012, by and among PNC BANK, NATIONAL ASSOCIATION (the “Bank”), BREKFORD CORP. (the “Borrower”), and SCOTT RUTHERFORD (the “Creditor”).

 

RECITALS

The Bank has established or is establishing certain credit facilities with the Borrower, as evidenced by certain documents, instruments and agreements all between the Bank and the Borrower (collectively, the “Loan Documents”).

The Creditor has extended or is extending to the Borrower certain loans, advances and extensions of credit, as evidenced by a certain note or notes (collectively, the “Creditor Documents”).

The Bank and the Creditor hereby desire to set forth the respective rights and obligations each has as against the other with respect to the Borrower.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.        Definitions.

“Obligations” means all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Bank or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of any kind or nature, present or future (including any interest accruing thereon after maturity or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not: (i) evidenced by any note, guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, (v) under any interest or currency swap, future, option or other interest rate protection or similar agreement, (vi) under or by reason of any foreign currency transaction, forward, option or other similar transaction providing for the purchase of one currency in exchange for the sale of another currency, or in any other manner, or (vii) arising out of overdrafts on deposit or other accounts or electronic funds transfers (whether by wire transfer or through automated clearing houses or otherwise) or out of the return unpaid of, or other failure of the Bank to receive final payment for, any check, item, instrument, payment order or other deposit or credit to, deposit or other account, or out of the Bank's non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements; and any amendments, extensions, renewals or increases and all costs and expenses of the Bank incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including reasonable attorneys' fees and expenses.

“Collateral” means any collateral now or in the future securing the Obligations, including but not limited to claims against any guarantors of the Obligations and any collateral securing such guarantees.

“Subordinated Debt” means any loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Creditor of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document, whether or not for the payment of money, whether arising by reason of an extension of credit, loan or guarantee or in any other manner, whether direct or indirect, absolute or contingent, joint or several, due or to become due, now existing or hereafter arising (including any such obligations purchased or otherwise acquired by Creditor), whether consisting of principal, interest, expense payments, management and consulting fees, liquidation costs, attorneys' fees and costs or otherwise, and all whether arising or created pursuant to the Creditor Documents or otherwise.

 

2.       Subordination.

(a)  Subject to Section 3 hereof, the Creditor hereby irrevocably subordinates and postpones the payment and the time of payment of all the Subordinated Debt and all claims and demands arising therefrom to the Obligations and directs that the Obligations be paid in full before the Subordinated Debt.

(b)        Creditor shall:  (i) make notations on the books of the Creditor beside all accounts or on such other statements evidencing or recording any Subordinated Debt to the effect that such Subordinated Debt is subject to the provisions of this Agreement, (ii) furnish the Bank, upon Bank’s request from time to time, a statement of the account between the Creditor and the Borrower representing the Subordinated Debt and copies of each of the Creditor Documents, and (iii) give the Bank, upon its request, full and free access to the Creditor's books pertaining only to such accounts with the right to make copies thereof.  Each and every Creditor Document shall bear a legend as set forth in paragraph 13(c) hereof.

3.        Payments to Creditor.  Notwithstanding any other provision of this Agreement, the Borrower shall be entitled to pay and the Creditor shall be entitled to receive, so long as no Event of Default has occurred under the Loan Documents or would result from such payment, only all scheduled payments of interest (at the current rate set forth in the Creditor Documents) under the Subordinated Debt, and only when due.  No payments of principal on the Subordinated Debt or default interest thereon or costs and expenses shall be permitted or made without the Bank's prior written consent.  After the occurrence of an Event of Default under the Loan Documents and receipt by the Creditor of written notice thereof from the Bank to the Creditor, the Borrower shall not make, and the Creditor shall not receive, any direct or indirect payments of principal, interest, fees or expenses under the Subordinated Debt.

4.        Security.  The Borrower shall not grant and the Creditor shall not take any lien on or security interest in any of the Borrower's property, now owned or hereafter acquired or created, without the prior written consent of the Bank.

5.       Standby Limitation.  Notwithstanding any breach or default by the Borrower under the Creditor Documents, the Creditor shall not at any time or in any manner: (a) foreclose upon, take possession of, or attempt to realize on any Collateral, or proceed in any way to enforce any claims it has or may have against the Borrower under the Subordinated Debt or otherwise, or (b) contest, protest or object to any action taken by Bank under the Loan Documents or otherwise, unless and until the Obligations have been fully and indefeasibly paid and satisfied in full.

6.        Bankruptcy/Probate of Borrower.  In the event a petition or action for relief shall be filed by or against the Borrower under any federal bankruptcy statute in effect from time to time, or under any other law relating to bankruptcy, insolvency, reorgani­zation, receivership, general assignment for the benefit of creditors, moratorium, creditor composition, arrangement or other relief for debtors, the Bank's claim (secured or unsecured) against the assets or estate of the Borrower for repayment of the Obligations shall be indefeasibly paid in full before any payment is made to the Creditor on the Subordinated Debt, whether such payment is in cash, securities or any other form of property or rights.  The Bank may, in its discretion, file a proof of claim for or collect the Creditor's claim first for the benefit of the Bank to the extent of the unpaid Obligations and then for the benefit of the Creditor (but without creating any duty or liability to the Creditor other than to remit to the Creditor distributions, if any, actually received in such proceedings after the Obligations have been paid and satisfied in full) directly from the receiver, trustee, custodian, liquidator or representative of the Borrower's estate in such proceeding.  The Borrower and the Creditor shall furnish all assignments, powers or other documents requested by the Bank to facilitate such direct collection by the Bank.

 

7.       Receipt of Payments by Creditor.  Should the Creditor directly or indirectly receive any payment or distribution not permitted by the provisions of this Agreement or any Collateral or proceeds thereof, prior to the full and indefeasible payment and satisfaction of the Obligations and the termination of all financing arrangements between the Bank and the Borrower, the Creditor will deliver the same to the Bank in the form received (except for the endorsement or assignment of the Creditor where necessary), for application to the Obligations in such order and manner as the Bank may elect.  Until so delivered, the Creditor shall hold the same, in trust, for the Bank as property of the Bank, and shall not commingle such property of the Bank with any other property held by the Creditor.  In the event the Creditor fails to make any such endorsement or assignment, the Bank, or any of its officers or employees on behalf of the Bank, is hereby irrevocably authorized in its own name or in the name of the Creditor to make such endorsement or assignment and is hereby irrevocably appointed as the Creditor's attorney-in-fact for those purposes.

  

1

  

8.        Bank’s Rights.

(a)        The Creditor hereby consents that at any time and from time to time, without further consent of or notice to the Creditor and without in any manner affecting, impairing, lessening or releasing any of the provisions of this Agreement, the Bank may, in its sole discretion:  (i) renew, compromise, extend, expand, postpone, waive, accelerate, terminate, change the payment terms of, or otherwise modify the Obligations or amend, renew, replace or terminate the Loan Documents or any and all other agreements now or hereafter related to the Obligations; (ii) extend credit to the Borrower in whatever amount on a secured or unsecured basis or take other support for the Obligations and exchange, enforce, waive, sell, transfer, collect, adjust or release any such security or other support or any part thereof; (iii) apply any and all payments or proceeds of such security or other support and in any order or manner as the Bank, in its discretion, may determine; and (iv) release or substitute any party liable on the Obligations, any guarantor of the Obligations, or any other party providing support for the Obligations.

(b)        This Agreement will not be affected, impaired or released by any delay or failure of the Bank to exercise any of its rights and remedies against the Borrower or any guarantor or under any of the Obligations or against any Collateral, by any failure of the Bank to take steps to perfect or maintain its lien on, or to preserve any rights to, any Collateral by any irregularity, unenforceability or invalidity of any of the Obligations or any part thereof or any security or guarantee therefor, or by any other event or circumstance which otherwise might constitute a defense available to, or a discharge of, the Borrower or a subordinated creditor.  The Creditor hereby waives demand, presentment for performance, protest, notice of dishonor and of protest with respect to the Subordinated Debt and the Collateral, notice of acceptance of this Agreement, notice of the making of any of the Obligations and notice of default under any of the Obligations.

(c)        Nothing in this Agreement will obligate the Bank to grant credit to, or continue financing arrangements with, the Borrower.

 9.      Continuing Agreement.  This is a continuing agreement and will remain in full force and effect until all of the Obligations and all of the Creditor's obligations and undertakings to the Bank have been fully performed and indefeasibly satisfied and until all the Loan Documents have been terminated.  This Agreement will continue to be effective or will be automatically reinstated, as the case may be, if at any time payment of all or any part of the Obligations is rescinded or must otherwise be returned by the Bank upon insolvency, bankruptcy, or reorganization of the Borrower or otherwise, all as though such payment had not been made.

10.     No Challenge to Liens.  The Creditor agrees that it will not make any assertion, claim or argument in any action, suit or proceeding of any nature whatsoever in any way challenging the priority, validity or effectiveness of the liens and security interests granted to the Bank.

 

11.    Disposition or Release of Collateral.

(a)        If at any time or from time to time the Collateral, or any portion thereof, is in any manner sold or otherwise transferred, the Creditor's consent to such disposition shall be automatically and irrevocably given if the Bank, in its sole discretion and for any reason, consents to such disposition, and in any event the Creditor shall not be entitled to receive any proceeds (cash or non-cash) of such disposition unless and until the Obligations have been indefeasibly paid in full.

(b)        If, at any time and for any reason, the Bank releases its lien on the Collateral, or any portion thereof, the Creditor shall likewise release its lien on the property so released from the Bank's lien, if the Creditor has obtained such a lien.

12.     Order of Proceedings.  Nothing in this Agreement is intended to compel the Bank or the Creditor at any time to declare the Borrower in default or compel the Bank to proceed against or refrain from proceeding against any Collateral in any order or manner.  All rights and remedies of the Bank with respect to the Collateral, the Borrower, and any other obligors concerning the Obligations are cumulative and not alternative.

13.     Replacement Financing; Assignment of Subordinated Debt.

(a)        The provisions hereof shall inure to the benefit of any financial institution obtained by the Borrower or the Bank to provide replacement working capital or other financing for the Borrower in place of the Bank, regardless of whether any such replacement lender provides its own financing or succeeds to the Bank's financing by assignment.  If requested by such replacement lender, the Creditor shall execute with such replacement lender a subordination agreement substantially similar to this Agreement.

(b)        The Creditor also agrees that as a prior condition of any assignment of any of its interests under any of the Creditor Documents, the Creditor shall require the assignee to acknowledge this Agreement and agree, in writing, to be bound by the terms and conditions hereof.

(c)        Each and every Creditor Document shall bear the following legend, or a similar legend acceptable to Bank, in boldface type:

	 	
This Note is subject to the terms of a Subordination Agreement in favor of PNC Bank, National Association.  Notwithstanding any contrary statement contained in the within instrument, no payment on account of any obligation arising from or in connection with the within instrument or any related agreement (whether of principal, interest or otherwise) shall be made, paid, received or accepted except in accordance with the terms of said Subordination Agreement.

14.     Financing of Fiduciary.  In the event of a bankruptcy, reorganization, other insolvency or court proceeding for the Borrower commences, the Bank shall have the option (in its sole and absolute discretion) to continue to provide financing (on terms acceptable to the Bank) of the trustee, other fiduciary, or of the Borrower as a debtor-in-possession, if the Bank deems such financing to be in its best interests. The subordination and lien priority provisions of this Agreement shall continue to apply to all advances made during the pendency of such court proceedings, so that the Bank shall have a prior lien on all Collateral, created before or during such court proceeding, to secure all Obligations, whether created before or during such court proceeding.  The Creditor hereby waives any right it may have to object to financing by the Bank during the pendency of such court proceeding and the Creditor's consent to such financing shall not be required regardless of whether the court supervising such proceeding approves, grants or allows adequate protection to the Creditor.

15.     Investigation of Parties.  The Creditor has entered into the Creditor Documents with the Borrower and the Bank has entered into the Loan Documents with the Borrower and the Creditor and the Bank have entered into this Agreement each upon its own independent investigation, and each makes no warranty or representation as to each other with respect to the financial condition of the Borrower, or its ability to repay its loans to the Creditor or the Bank in the future.  Nothing in this Agreement shall be deemed to constitute this Agreement as a security or create a joint venture or partnership between the Creditor and the Bank for any purpose.

 

16.     Improper Action by Creditor.  If the Creditor, the Borrower or both, contrary to this Agreement, make, attempt to or threaten to allow the Creditor to exercise its remedies against the Borrower under the Creditor Documents, or make any payment or take any action contrary to this Agreement, the Bank may restrain or enjoin the Creditor and the Borrower from so doing, it being expressly understood and agreed by the Creditor and the Borrower that:  (i) the Bank's damages from their actions may at that time be difficult to ascertain and may be irreparable, and (ii) the Creditor and the Borrower waive any defense or claim that the Bank or the Borrower cannot demonstrate damages or can be made whole by the awarding of damages.

17.     Indemnification of Bank.  The Creditor agrees to indemnify and to hold the Bank, its officers, directors, agents and employees harmless for any and all losses, damages, liabilities, expenses and obligations, including attorneys' fees and expenses, as they arise, relating to actions of the Creditor taken contrary to this Agreement.

 

18.     Notices.  All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be effective upon receipt.  Notices may be given in any manner to which the parties may separately agree, including electronic mail.  Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices.  Regardless of the manner in which provided, Notices may be sent to a party's address set forth below or to such other address as any party may give to the other in writing for such purpose in accordance with this section:

  

2

  

To the Bank:                                         PNC Bank, National Association

Two Hopkins Plaza, 20th Floor

Baltimore, Maryland  21201

Attention: Stephen D. Palmer

Facsimile No.: 410-750-7186

To the Creditor:                                   Scott Rutherford

____________________________________

____________________________________

____________________________________

Facsimile No.:_________________________

To the Borrower:                                 Brekford Corp.

7020 Dorsey Road, Suite C

Hanover, Maryland  21076

Attention: Chandra Brechin

Facsimile No.:443-557-0201

   19.     Preservation of Rights.  No delay or omission on the Bank's part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank's action or inaction impair any such right or power.  The Bank's rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity.  Nothing in this Agreement is intended to modify, alter, reduce or impair any rights which the Bank or the Creditor may have against the Borrower under the Loan Documents or the Creditor Documents, respectively, or under any other agreement between them, or either of them, and the Borrower.

20.     Illegality.  If any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, it shall not affect the validity, legality and enforceability of the remaining provisions of this Agreement.

 

21.    Changes in Writing.  No modification, amendment or waiver of, or consent to any departure by the Borrower or the Creditor from, any provision of this Agreement, will be effective unless made in a writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on the Borrower in any case will entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance.

22.     Entire Agreement.  This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

23.     Counterparts.  This Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart.  Any party so executing this Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

24.     Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the Borrower, the Creditor and the Bank and their respective heirs, executors, administrators, successors and assigns; provided, however, that neither the Borrower nor the Creditor may assign this Agreement in whole or in part without the Bank's prior written consent and the Bank at any time may assign this Agreement in whole or in part.  No claims or rights are intended to be created hereunder for the benefit of the Borrower or any alleged third party beneficiary hereof.

25.     Interpretation.  In this Agreement, unless the parties otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word "or" shall be deemed to include "and/or", the words "including", "includes" and "include" shall be deemed to be followed by the words "without limitation"; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Agreement; and references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement.  Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  If this Agreement is executed by more than one party as Borrower or by more than one party as Creditor, the obligations of such persons or entities hereunder will be joint and several.

26.     Governing Law and Jurisdiction.  This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank's office indicated above is located.  This Agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State where the Bank’S office indicated above is located, excluding its conflict of laws rules.  Each of the Borrower and the Creditor hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank's office indicated above is located; provided that nothing contained in this Agreement will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower or the Creditor individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction.  The parties hereto agree that the venue provided above is the most convenient forum for each of the parties.  Each of the Borrower and the Creditor waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

27.     WAIVER OF JURY TRIAL.  EACH OF THE BORROWER, THE CREDITOR AND THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE BORROWER, THE CREDITOR AND THE BANK ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

  

3

  

WITNESS the due execution hereof as a document under seal, as of the date first written above.

 

	WITNESS/ATTEST:	 	BORROWER:
	 	 	 
	 	 	BREKFORD CORP.
	 	 	 
	 	 	By:	/s/ C.B. Brechin
	 	 	 	 (SEAL)
	Print Name:	 	 	 	C.B. Brechin
	Title:	 	 	 	Chief Executive Officer
	(Include title only if an officer of entity signing to the right)	 	 
	 	 	 
	 	 	By:	 /s/ Scott Rutherford
	 	 	 	 (SEAL)
	 	 	 	Scott Rutherford
	 	 	 	President
	 	 	 	 
	 	 	 	 
	WITNESS/ATTEST: 	 	CREDITOR:
	 	 	 	 
	 	 	 	 /s/ Scott Rutherford
	 	 	 	 (SEAL)
	Print Name:	 	 	 	SCOTT RUTHERFORD,  individually
	 	 	 	 
	 	 	BANK:
	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION
	 	 	 
	 	 	By:	 /s/ Stephen D. Palmer
	 	 	 	Stephen D. Palmer
	 	 	 	Senior Vice President

 

 

4ex10.11

  
 Exhibit 10.11
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of July 1, 2012, by and between VARCA VENTURES, INC., a Nevada corporation ("Varca"), and MICHAEL THOMPSON (hereinafter, the "Executive").  
 R E C I T A L S:
 WHEREAS, Varca desires to employ the Executive as the Chief Operating Officer of both Varca and Wildcat Mining Corporation, Varca's wholly-owned subsidiary ("Wildcat," and together with Varca referred hereinafter as the "Company"), and
 WHEREAS, the Executive desires to be the Chief operating Officer of the Company provided that he can continue to consult and otherwise perform services for others individually and as a principal of Reardon Steel, LLC; and
 WHEREAS, the Board of Directors of Varca (the "Board") recognizes that the Executive has the knowledge and experience to contribute to the growth and success of the Company, and desires to assure the Company of the Executive's employment and to compensate him therefor; and
 WHEREAS, the Board has determined that this Agreement will encourage the Executive's attention and dedication to the Company; and
 WHEREAS, the Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth.
 NOW, THEREFORE, for the reasons set forth hereinabove, and in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:
 1.
 Employment.
 1.1
 Employment and Term.  The Company shall employ the Executive and the Executive shall serve the Company on the terms and conditions set forth herein.   It is the parties’ intention that Executive shall not be employed on a full time bases but instead shall be expected to average approximately thirty (30) hours per week over the Term of Employment.  
 1.2
 Duties of Executive.  During the Term of Employment under, and consistent with the terms of, this Agreement, the Executive shall serve as the Chief Operating Officer of the Company, shall faithfully and diligently perform all services as may be assigned to him by the Board in writing (provided that, such services shall not materially differ from the services currently provided by the Executive), and shall exercise such power and authority as may from time to time be delegated to him by the Board.  The Executive shall render such services to the best of his ability, and use his reasonable best efforts to promote the interests of the Company.  Notwithstanding any other provisions of this Agreement, Executive shall not be obligated to work solely for Company but instead shall be free at all times to maintain and pursue other employment or consulting on his own behalf or as a principal of Reardon Steel, LLC and shall only be obligated to devote an average of thirty (30) hours per week over the Term of Employment.  Further, it shall not be a breach or violation of this Agreement for the Executive to: (a) serve on corporate, civic or charitable boards or committees; (b) deliver lectures, fulfill speaking
 

 1
 

 
 engagements or teach at educational institutions; or (c) manage personal investments, or d) perform consulting services for others individually or as a principal of Reardon Steel, LLC so long as such activities do not  materially interfere with or significantly detract from the performance of the Executive's responsibilities to the Company in accordance with this Agreement. 
 2.
 Term.
 2.1
 Initial Term.  The initial Term of Employment (as defined below) under this Agreement, and the employment of the Executive hereunder, shall commence on July 1, 2012 (the "Commencement Date") and shall expire on February 1, 2013, unless sooner terminated in accordance with Section 5 hereof (the "Initial Term").  
 2.2
 Renewal Terms.  At the end of the Initial Term, the Board and Executive shall confer and shall mutually determine whether to renew this Agreement on the same or similar terms.  Unless affirmatively renewed by mutual agreement of the Board and Executive this Agreement and the Term of Employment shall expire and the parties shall have no further obligation toward each other hereunder except as expressly stated herein.
 2.3
 Term of Employment and Expiration Date.  The period during which the Executive shall be employed by the Company pursuant to the terms of this Agreement is sometimes referred to in this Agreement as the "Term of Employment," and the date on which the Term of Employment shall expire is sometimes referred to in this Agreement as the "Expiration Date."  
 3.
 Compensation.  The Executive shall receive a base salary at the monthly rate of $10,000 (the "Base Salary") during the Term of Employment.  The Base Salary will be payable in twice monthly installments of $5,000 each on the 1st and 15th of each month, subject to applicable withholding and other taxes.   The Base Salary may be reviewed at any time by the Board for merit increases and may, by action and in the discretion of the Board, be increased at any time or from time to time, but may not be decreased. 
 4.
 Expense Reimbursement and Other Benefits.
 4.1
 Reimbursement of Expenses. Upon the submission of proper substantiation by the Executive in accordance with  such uniform rules and guidelines as the Company may from time to time adopt and publish for use by all of its management personnel with respect to the reimbursement of expenses of executive personnel, the Company shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive during the Term of Employment in the course of and pursuant to the business of the Company.  The Executive shall account to the Company in writing for all expenses for which reimbursement is sought and shall supply to the Company copies of all relevant invoices, receipts or other evidence supporting such reimbursement requests as may be reasonably requested by the Company.
 4.2
 Equity Awards.  During the Term of Employment, the Executive shall be eligible to be granted equity awards under (and therefore subject to all terms and conditions of) the Company's Incentive Compensation Plan or such other plans or programs as the Company may from time to time adopt, and subject to all rules of regulation of the Securities and Exchange Commission applicable thereto. Upon signing, the Executive will be awarded at no cost to himself 250,000 incentive stock options having the lowest allowable exercise price and the longest allowable exercise term. 
 

 2
 

 
 
 4.3
 Other Benefits.  The Executive shall receive such additional benefits, if any, as the Board of the Company shall from time to time determine. 
 5.
 Termination.  
 5.1
 Termination for Cause.  The Company shall at all times have the right, upon written notice to the Executive, to terminate the Term of Employment, for Cause as defined below.  For purposes of this Agreement, the term "Cause" shall mean: (a) an action or omission of the Executive which constitutes a willful and material breach of, or willful and material failure or refusal  to perform his duties under, this Agreement which is not cured within 30 days after receipt by the Executive of written notice of same; (b) fraud, embezzlement, misappropriation of funds or breach of trust in connection with his services hereunder; (c) a conviction of any crime which involves dishonesty or a breach of trust; or (d) gross negligence in connection with the performance of the Executive's duties hereunder, which is not cured within 30 days after receipt by the Executive of written notice of same.  Any termination for Cause shall be made by notice in writing to the Executive, which notice shall set forth in reasonable detail all acts or omissions upon which the Company is relying for such termination, and providing the Executive with an opportunity to cure (if curable) within a reasonable period of time. No termination of the Executive’s employment for Cause shall be permitted unless the Termination Date occurs during the 120-day period immediately following the date that the events or actions constituting Cause first become known to the Board.  Upon any termination pursuant to this Section 5.1, the Company shall: (i)  pay to the Executive any unpaid Base Salary through the date of termination; and (ii) have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1).
 5.2
 Termination Without Cause.  The Company shall have the right to terminate the Term of Employment at any time without cause by written notice to the Executive not less than 30 days prior to the effective date of such termination.  Upon any termination pursuant to this Section 5.2 the Company shall: 
 (a)
 Pay to the Executive any unpaid Base Salary through the date of termination specified in such notice. 
 (b)
 Pay to the Executive a severance payment equal to three times the total unpaid salary specified in this Agreement, or thirty thousand dollars ($30,000.00), whichever is greater.
 (c)
 Upon any termination effected and compensated pursuant to this Section 5.2, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1).
 5.3
 Termination by Executive.  
 (a)
 The Executive shall at all times have the right, by written notice not less than 30 days prior to the termination date, to terminate the Term of Employment.  
 (b)
 Upon termination of the Term of Employment pursuant to this Section 5.3 by the Executive without Good Reason, the Company shall pay to the Executive the same amounts in the same manner that would have been payable or provided by the Company to the Executive under Section 5.1 of this Agreement if the Term of Employment had been terminated by the Company with Cause.
 

 3
 

 
 
 (c)
 Upon termination of the Term of Employment pursuant to this Section 5.3 by the Executive for Good Reason (as defined below), the Company shall pay to the Executive the same amounts that would have been payable or provided by the Company to the Executive under Section 5.2 of this Agreement if the Term of Employment had been terminated by the Company without Cause including payment of any required severance payment.  
 (d)
 For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any material failure by the Company to comply with any of the provisions of Articles 3 or 4 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location other than the location or office of the Executive on the Commencement Date, except for travel reasonably required in the performance of the Executive's responsibilities; and (iv) any purported termination by the Company of the Executive's employment otherwise than for Cause pursuant to Section 5.1 prior to the Expiration Date. 
 5.4
 Resignation.
 Upon any termination of employment pursuant to this Article 5, the Executive shall be deemed to have resigned as an officer of the Company, and if he was then serving as a director of the Company, as a director of the Company, and if required by the Board, the Executive shall upon such termination execute a resignation letter to the applicable Board.
 5.5
 Survival.  The provisions of this Article 5 together with any obligation of the Company to pay any amount to Executive under any other provision hereof shall survive the termination of the Term of Employment or expiration of the term of this Agreement. 
 6.
 Restrictive Covenants.
 6.1
 Confidential Information.  Executive hereby acknowledges and agrees that in the course of his Term of Employment he will acquire knowledge and will have access to documents, whether in written, typed or other form, regarding the business operations of Company.  Specifically, the following types of information are deemed confidential ("Confidential Information") and shall not be disclosed or used by Executive except as required and authorized in furtherance of Company's business:  specific prospective customers of the Company; specific existing customers of the Company; other individuals and businesses with whom Company does business; proprietary information; trade secrets;  operational, sales, promotional, and marketing methods and techniques; computer programs, including source codes and/or object codes; and/or any other proprietary, competition sensitive, or technical information or secrets developed with or without the help of Executive.   Information which the Executive provides to the Company and information which Executive possesses from sources other than the Company shall not be deemed to be confidential and Executive shall not be limited in any way from possessing or using such information after termination of this Agreement.  Any obligation hereunder to keep Confidential Information confidential shall terminate on the second anniversary of the termination of this Agreement or sooner if the information becomes otherwise available outside the Company through no action or inaction of the Executive. 
 

 4
 

 
 
 6.2
 Books and Records.  All books, records, and accounts relating in any manner to the customers or clients of the Company, whether prepared by the Executive or otherwise coming into the Executive's possession, shall be the exclusive property of the Company and shall be returned immediately to the Company on termination of the Executive's employment hereunder or on the Company's request at any time.
 7.
 Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Colorado, without regard to principles of conflict of laws.
 8.
 Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter.  This Agreement may not be modified in any way unless by a written instrument signed by both Varca and the Executive.
 9.
 Notices.  All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested or sent by confirmed facsimile transmission addressed as set forth herein.  Notices personally delivered, sent by facsimile, e-mail or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three (3) days after deposit in the U.S. mail.  Notice shall be sent: (i) if to the Company, addressed to Wildcat Mining Corporation, Attention: Torii K. Goar, Secretary, 1630 Ringling Blvd, Sarasota, FL 34236; and (ii) if to the Executive, to his address 18050 Road G, Cortez, CO 81321, or to such other address that is requested by notice to the other in accordance with this provision.
 10.
 Right to Consult with Counsel; No Drafting Party.  The Executive acknowledges having read and considered all of the provisions of this Agreement carefully, and having had the opportunity to consult with counsel of his own choosing, and, given this, the Executive agrees that the obligations created hereby are not unreasonable.  The Executive acknowledges that he has had an opportunity to negotiate any and all of these provisions and no rule of construction shall be used that would interpret any provision in favor of or against a party on the basis of who drafted the Agreement.
 11.
 Damages; Attorneys Fees.  Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement.  In the event that either party hereto seeks to collect any damages resulting from, or the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable costs and attorneys' fees of the other.  The parties hereto irrevocably agree to submit to voluntary mediation for any dispute involving this Agreement or Executive’s services to Company before either institutes suit thereon unless immediate injunctive relief is being sought in order to prevent irreparable harm to the party seeking injunctive relief.
 12.
 Section Headings.  The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 13.
 No Third Party Beneficiary.  Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, the parties
 

 5
 

 
 hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.
 14.
 Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument and agreement.
 

 IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date first above written.
 VARCA VENTURES, INC. 
 By:    /s/ Roger Tichenor
 Name:    Roger Tichenor
 Title:   Chief Operating Officer
 

 EXECUTIVE:
 By:     /s/ Michael Thompson
 Name: Michael Thompson
 

 

 

 

 

 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}]]