Document:

ex10_6.htm

Exhibit 10.6

 

	
Rabobank N.A.

	 	  
	Derivative Confirmations	 	 
	
Office Address

	 	
915 Highland Pointe Drive

Suite 350, Roseville, CA 95678

	 	 	 
	
Telephone

	 	
916 878 4601

	
Fax

	 	
916 772 0643

04 June 2012

TO: QAD ORTEGA HILL, LLC

ATTN: JOHN NEALE

100 INNOVATION PLACE

SANTA BARBARA, CA 93108

UNITED STATES

From: RABOBANK NA

Attn: RNA Derivative Confirmations

Fax: 760 344 7365

Re: Swap Our Ref. No. 12N00477-RNA / 981410

AMENDED CONFIRMATION OF A SWAP TRANSACTION

The purpose of this letter agreement is to set forth the terms and conditions of the swap transaction traded between RABOBANK NA, ROSEVILLE (''Rabobank'') and QAD ORTEGA HILL, LLC, SANTA BARBARA (''Counterparty'') on the trade date specified below (the ''Transaction''). This letter agreement constitutes a ''Confirmation'' as referred to in the Agreement specified below.

Notwithstanding anything to the contrary in the Agreement, the definitions and provisions contained in the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. (the ''Definitions'') are incorporated into this Confirmation. To the extent that there is any inconsistency between those Definitions and Provisions and this Confirmation, this Confirmation will govern. For the purposes of the Definitions, all references to a ''Transaction'' in this Confirmation shall also be deemed to be references to a ''Swap Transaction''.

This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of an ISDA Master Agreement, with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of, and be subject to that agreement. All provisions contained in or incorporated by reference in that agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents referring to an ISDA Master Agreement (each a ''Confirmation'') confirming transactions (each a ''Transaction'') entered into between us shall supplement, form part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement as if we had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law and USD as the Termination Currency) on the Trade Date of the first such Transaction between us. In the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for purposes of this Swap Transaction.

Rabobank's recourse in the Transaction referred to in this Confirmation shall not be limited in any way unless specifically agreed to in writing by Rabobank to the contrary.

 

  

1

  

The terms of the particular Swap Transaction to which this Confirmation relates are as follows:

	
General Terms:

	
Trade Date:

	
09 May 2012

	
Effective Date:

	
01 June 2012

	
Termination Date:

	
01 June 2022

	
Notional Amount:

	
As set forth in the attached Notional Schedule

	
Calculation Agent:

	
Rabobank, unless otherwise specified in the Agreement.

	
Broker:

	
None

	
Floating Amounts:

	
Floating Rate Payer:

	
Rabobank

	
Floating Rate Payer Payment Date(s):

	
Commencing on 15 July 2012, and then every 1 month thereafter on the 15th day of the month to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

	
Period End Date(s):

	
No adjustment applies

	
Floating Rate Option:

Designated Maturity:

	
USD-LIBOR-BBA

1 month

	
Floating Rate for initial Calculation Period:

	
0.23875 percent (inclusive of Spread)

	Floating Amount for initial Calculation Period:	USD 4,684.54
	
Spread:

	
None

	
Day Count Fraction:

	
Actual/360

	
Reset Date(s):

	
The first day of each relevant Calculation Period.

	
Compounding:

	
Inapplicable

	
Business Days:

	
New York, London

	
Fixed Amounts:

	  
	
Fixed Rate Payer:

	
Counterparty

	
Fixed Rate Payer Payment Date(s):

	
Commencing on 15 July 2012, and then every 1 month thereafter on the 15th day of the month to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

	
Period End Date(s):

	
No adjustment applies

	
Fixed Rate:

	
2.06000 percent

	
Day Count Fraction:

	
Actual/360

	
Fixed Amount for initial Calculation Period:

	
USD 40,419.53

	
Business Days:

	
New York, London

	
Compounding:

	
Inapplicable

Early Termination:

Upon giving notice to the other party (which notice may be given orally, including by telephone), Rabobank has the right to terminate this Transaction as of the Optional Termination Date, whereupon a Termination Event will be deemed to have occurred in respect of this Transaction only as though the Optional Termination Date were an Early Termination Date and the other party was the sole Affected Party.

Any telephonic notice given under the terms of this provision shall be irrevocable and shall be confirmed in writing on the following Business Day.  Failure to provide written confirmation on such day shall not in any way affect or suspend the effectiveness of the oral notice.

For the purpose of this section, “Optional Termination Date” shall mean 15 June 2012, subject to adjustment according to the Modified Following Business Day Convention.

Other Provisions:

For the purposes of this Transaction, the provisions of Section 6(e)(ii) of the ISDA Form will apply and the following shall constitute an Additional Termination Event:  If the parties fail to negotiate, execute and deliver an agreement in the form of the ISDA Form with agreed Schedule thereto, on or before 30 calendar days after the Trade Date of this Transaction.  For the purposes of this Additional Termination Date, there is one Affected Party and Counterparty shall be the Affected Party and Market Quotation shall apply.

Additional Representations. Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

 

  

2

  

(a) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a re commendation to enter into that Transaction; it being understood that information and explanations relating to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.

(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for an adviser to it in respect of that Transaction.

Account Details:

Account for payments to Rabobank:

	
USD

	
RABOBANK NAT. ASSOCIATION-ROSEVILLE

	  	
ABA: 122238420

	  	
FBO: RABOBANK, N.A. CUSTOMER INTEREST RATE SWAP SETTLEMENT

	  	
A/C: 1900188

	  	
ADDRESS: 90 EAST THOUSAND OAKS BOULEVARD

	  	
THOUSAND OAKS, CALIFORNIA 91360

Account for payments to Counterparty:

	
USD

	
Please provide

	  	  
	
Offices:

	  
	
Rabobank

	
The Office of Rabobank for this Transaction is ROSEVILLE; and

	
Counterparty

	
The Office of  QAD Ortega Hill, LLC, for this Transaction is SANTA BARBARA.

  

3

  

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it by fax to 916 772 0643 to the attention of Derivative Confirmations.

If you have any queries with this Confirmation please do not hesitate to contact us on the telephone number shown on the front page of this Confirmation.

We are very pleased to have executed this Transaction with you.

 

	 	RABOBANK NA, ROSEVILLE
	 	 
	 	 
	 	By: /s/ Brett Hamilton___________
	 	Name: Brett Hamilton
	 	Title:  VP – Regional Credit Officer
	 	 
	 	By:_________________________
	 	Name:
	 	Title:

 

Confirmed as of the date first written above:

QAD ORTEGA HILL, LLC, SANTA BARBARA

By: /s/ John Neale_________________________

Name: John Neale

Title:  Manager

 

By:/s/ Kara Bellamy_________________________

Name: Kara Bellamy

Title:  Manager

 

  

4

  

NOTIONAL AMOUNT SCHEDULE:

The Notional Amount is variable and will be determined in accordance with the following Notional Amount Schedule:

Notional Amount Schedule:

 

	
Period Start Dates

	
Period End Dates

	
Notional Amount

	
01 June 2012

	
15 July 2012

	
USD 16,053,651.44

	
15 July 2012

	
15 August 2012

	
USD 16,023,235.30

	
15 August 2012

	
15 September 2012

	
USD 15,994,628.26

	
15 September 2012

	
15 October 2012

	
USD 15,965,915.04

	
15 October 2012

	
15 November 2012

	
USD 15,935,183.78

	
15 November 2012

	
15 December 2012

	
USD 15,906,249.94

	
15 December 2012

	
15 January 2013

	
USD 15,875,304.39

	
15 January 2013

	
15 February 2013

	
USD 15,846,148.32

	
15 February 2013

	
15 March 2013

	
USD 15,816,884.03

	
15 March 2013

	
15 April 2013

	
USD 15,781,830.24

	
15 April 2013

	
15 May 2013

	
USD 15,752,327.25

	
15 May 2013

	
15 June 2013

	
USD 15,720,828.85

	
15 June 2013

	
15 July 2013

	
USD 15,691,099.46

	
15 July 2013

	
15 August 2013

	
USD 15,659,381.16

	
15 August 2013

	
15 September 2013

	
USD 15,629,423.71

	
15 September 2013

	
15 October 2013

	
USD 15,599,355.07

	
15 October 2013

	
15 November 2013

	
USD 15,567,307.26

	
15 November 2013

	
15 December 2013

	
USD 15,537,008.08

	
15 December 2013

	
15 January 2014

	
USD 15,504,736.34

	
15 January 2014

	
15 February 2014

	
USD 15,474,204.94

	
15 February 2014

	
15 March 2014

	
USD 15,443,560.23

	
15 March 2014

	
15 April 2014

	
USD 15,407,254.97

	
15 April 2014

	
15 May 2014

	
USD 15,376,361.78

	
15 May 2014

	
15 June 2014

	
USD 15,343,513.05

	
15 June 2014

	
15 July 2014

	
USD 15,312,383.29

	
15 July 2014

	
15 August 2014

	
USD 15,279,304.76

	
15 August 2014

	
15 September 2014

	
USD 15,247,936.70

	
15 September 2014

	
15 October 2014

	
USD 15,216,452.22

	
15 October 2014

	
15 November 2014

	
USD 15,183,029.15

	
15 November 2014

	
15 December 2014

	
USD 15,151,303.77

	
15 December 2014

	
15 January 2015

	
USD 15,117,646.70

	
15 January 2015

	
15 February 2015

	
USD 15,085,678.66

	
15 February 2015

	
15 March 2015

	
USD 15,053,591.98

	
15 March 2015

	
15 April 2015

	
USD 15,015,979.46

	
15 April 2015

	
15 May 2015

	
USD 14,983,634.10

	
15 May 2015

	
15 June 2015

	
USD 14,949,374.82

	
15 June 2015

	
15 July 2015

	
USD 14,916,782.26

	
15 July 2015

	
15 August 2015

	
USD 14,882,282.87

	
15 August 2015

	
15 September 2015

	
USD 14,849,441.30

	
15 September 2015

	
15 October 2015

	
USD 14,816,477.85

	
15 October 2015

	
15 November 2015

	
USD 14,781,618.20

	
15 November 2015

	
15 December 2015

	
USD 14,748,403.03

	
15 December 2015

	
15 January 2016

	
USD 14,713,298.87

	
15 January 2016

	
15 February 2016

	
USD 14,679,830.15

	
15 February 2016

	
15 March 2016

	
USD 14,646,237.20

	
15 March 2016

	
15 April 2016

	
USD 14,609,012.62

	
15 April 2016

	
15 May 2016

	
USD 14,575,156.85

	
15 May 2016

	
15 June 2016

	
USD 14,539,430.45

	
15 June 2016

	
15 July 2016

	
USD 14,505,316.43

	
15 July 2016

	
15 August 2016

	
USD 14,469,339.19

	
15 August 2016

	
15 September 2016

	
USD 14,434,965.03

	
15 September 2016

	
15 October 2016

	
USD 14,400,463.29

	
15 October 2016

	
15 November 2016

	
USD 14,364,109.46

	
15 November 2016

	
15 December 2016

	
USD 14,329,344.75

	
15 December 2016

	
15 January 2017

	
USD 14,292,735.48

	
15 January 2017

	
15 February 2017

	
USD 14,257,705.87

	
15 February 2017

	
15 March 2017

	
USD 14,222,546.26

	
15 March 2017

	
15 April 2017

	
USD 14,182,147.90

 

  

5

  

 

	
15 April 2017

	
15 May 2017

	
USD 14,146,707.86

	
15 May 2017

	
15 June 2017

	
USD 14,109,442.62

	
15 June 2017

	
15 July 2017

	
USD 14,073,732.74

	
15 July 2017

	
15 August 2017

	
USD 14,036,205.40

	
15 August 2017

	
15 September 2017

	
USD 14,000,223.71

	
15 September 2017

	
15 October 2017

	
USD 13,964,108.48

	
15 October 2017

	
15 November 2017

	
USD 13,926,187.40

	
15 November 2017

	
15 December 2017

	
USD 13,889,797.40

	
15 December 2017

	
15 January 2018

	
USD 13,851,609.42

	
15 January 2018

	
15 February 2018

	
USD 13,814,942.63

	
15 February 2018

	
15 March 2018

	
USD 13,778,139.75

	
15 March 2018

	
15 April 2018

	
USD 13,736,251.63

	
15 April 2018

	
15 May 2018

	
USD 13,699,156.70

	
15 May 2018

	
15 June 2018

	
USD 13,660,284.00

	
15 June 2018

	
15 July 2018

	
USD 13,622,907.13

	
15 July 2018

	
15 August 2018

	
USD 13,583,760.57

	
15 August 2018

	
15 September 2018

	
USD 13,546,099.68

	
15 September 2018

	
15 October 2018

	
USD 13,508,299.02

	
15 October 2018

	
15 November 2018

	
USD 13,468,740.83

	
15 November 2018

	
15 December 2018

	
USD 13,430,653.06

	
15 December 2018

	
15 January 2019

	
USD 13,390,815.99

	
15 January 2019

	
15 February 2019

	
USD 13,352,439.01

	
15 February 2019

	
15 March 2019

	
USD 13,313,919.60

	
15 March 2019

	
15 April 2019

	
USD 13,270,475.32

	
15 April 2019

	
15 May 2019

	
USD 13,231,651.71

	
15 May 2019

	
15 June 2019

	
USD 13,191,099.89

	
15 June 2019

	
15 July 2019

	
USD 13,151,981.69

	
15 July 2019

	
15 August 2019

	
USD 13,111,143.72

	
15 August 2019

	
15 September 2019

	
USD 13,071,728.77

	
15 September 2019

	
15 October 2019

	
USD 13,032,167.54

	
15 October 2019

	
15 November 2019

	
USD 12,990,899.24

	
15 November 2019

	
15 December 2019

	
USD 12,951,038.01

	
15 December 2019

	
15 January 2020

	
USD 12,909,478.32

	
15 January 2020

	
15 February 2020

	
USD 12,869,314.91

	
15 February 2020

	
15 March 2020

	
USD 12,829,002.44

	
15 March 2020

	
15 April 2020

	
USD 12,785,468.52

	
15 April 2020

	
15 May 2020

	
USD 12,744,844.87

	
15 May 2020

	
15 June 2020

	
USD 12,702,544.60

	
15 June 2020

	
15 July 2020

	
USD 12,661,613.18

	
15 July 2020

	
15 August 2020

	
USD 12,619,013.97

	
15 August 2020

	
15 September 2020

	
USD 12,577,772.54

	
15 September 2020

	
15 October 2020

	
USD 12,536,378.04

	
15 October 2020

	
15 November 2020

	
USD 12,493,329.03

	
15 November 2020

	
15 December 2020

	
USD 12,451,621.13

	
15 December 2020

	
15 January 2021

	
USD 12,408,267.70

	
15 January 2021

	
15 February 2021

	
USD 12,366,244.10

	
15 February 2021

	
15 March 2021

	
USD 12,324,064.54

	
15 March 2021

	
15 April 2021

	
USD 12,277,302.04

	
15 April 2021

	
15 May 2021

	
USD 12,234,792.38

	
15 May 2021

	
15 June 2021

	
USD 12,190,660.18

	
15 June 2021

	
15 July 2021

	
USD 12,147,828.95

	
15 July 2021

	
15 August 2021

	
USD 12,103,384.40

	
15 August 2021

	
15 September 2021

	
USD 12,060,229.27

	
15 September 2021

	
15 October 2021

	
USD 12,016,913.97

	
15 October 2021

	
15 November 2021

	
USD 11,971,999.21

	
15 November 2021

	
15 December 2021

	
USD 11,928,356.46

	
15 December 2021

	
15 January 2022

	
USD 11,883,123.63

	
15 January 2022

	
15 February 2022

	
USD 11,839,151.02

	
15 February 2022

	
15 March 2022

	
USD 11,795,015.22

	
15 March 2022

	
15 April 2022

	
USD 11,746,479.23

	
15 April 2022

	
15 May 2022

	
USD 11,701,999.48

	
15 May 2022

	
01 June 2022

	
USD 11,655,953.65

 

 

6Exhibit 10.1

 

 

 

 

 

Dear Mr. Gilpin:

 

This letter will confirm the terms of
your employment with Kohlberg Capital Corporation (the “Company”), under the terms and conditions that follow.
This letter shall be effective as of June 1, 2012 (the “Effective Date”).

 

1.         
Term, Position and Duties.

 

(a)
        Subject to earlier termination as hereafter provided, your employment shall
continue through December 31, 2013, and will be automatically extended for one year on January 1, 2014 and on each succeeding
January 1 unless previously terminated by nonrenewal in writing by you or an expressly authorized representative of the
Company, in either case, upon not less than thirty (30) days’ written notice prior to the end of the then current year.
The term of this agreement, as from time to time extended is hereafter referred to as “the term of this
agreement” or “the term hereof”. You will be employed by the Company as its Chief Financial Officer. You
will report to the Chief Executive Officer of the Company.

 

(b)         You agree to perform the duties of your
position as Chief Financial Officer of the Company and such other duties as may reasonably be assigned to you from time to
time. You also agree that you will devote your full business time and your best efforts, business judgment, skill and
knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates.

 

(c)         From time to time, you may be
employed by one or more Affiliates of the Company in a similar capacity to your employment with the Company. The terms and
conditions of your employment by such Affiliates will be the same as the terms and conditions of your employment with the
Company, except that your aggregate compensation and benefits will not exceed the amounts set forth in Section 2 of this
agreement. In that regard, that portion of the compensation and benefits that are allocable to your services to an Affiliate
shall be the responsibility of the Affiliate, though we note the Company intends to provide benefits provided to employees
generally on a centralized basis among its Affiliates. To the extent that you are employed by an Affiliate, references in
this agreement to the Company shall mean the Affiliate, where appropriate. To effectuate such employment with any Affiliate,
the Affiliate will provide to you a letter confirming your employment status. The allocation of your working time between
duties for the Company and any of the Affiliates may be adjusted from time to time by the Company as it determines
appropriate. As a condition to your employment with the Company and the Affiliates, it is required that you keep complete and
accurate records of the time you spend performing your duties under this agreement and the nature thereof.

 

    	 

    	 

    
 

 

2.          Compensation
and Benefits. During your employment, as compensation for all services performed by you for the
Company and its Affiliates, the Company will provide you the following pay and benefits: 

 

(a)         Base
Salary. The Company will pay you a base salary at the rate of Three-Hundred and Fifty Thousand
Dollars ($350,000) per year, payable in accordance with the regular payroll practices of the Company and subject to increase from
time to time by the Board of Directors of the Company (the “the Board”) in its discretion.

 

(b)         Bonus
Compensation. During employment, you will be considered for an annual discretionary
bonus, which shall be targeted at Four Hundred Thousand Dollars ($400,000). Bonus awards will be determined by the Board,
based on your performance and that of the Company against goals established annually by the Board after consultation with you
(and consistent with those set forth in the Company’s annual budget and/or strategic plan) and will be paid in the
succeeding calendar year on or before January 31. The Board reserves the right to reduce or eliminate such bonuses based on
the financial circumstances of the Company in addition to your performance against these goals. Notwithstanding the
foregoing, you shall be paid an annual bonus for 2012 of not less than Four Hundred Thousand Dollars ($400,000) on or before
January 31, 2013 (the “Guaranteed Bonus”).

 

(c)         Purchased
Equity. Subject to all policies (including any policies implemented by the Company which restrict
the ability of officers, directors and other Affiliates to invest in the Funds), agreements, plans and conditions that are generally
applicable to such investments, as determined by the Company, you will have the right, but not the obligation, to purchase equity
of Funds on terms equivalent to those received by other investors.

 

(d)        
Participation in Employee Benefit Plans. You will be entitled to participate in all employee
benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative
of benefits otherwise provided you under this agreement. Your participation will be subject to the terms of the applicable plan
documents and generally applicable Company policies. 

 

(e)         Restricted
Stock. Promptly following the Effective Date, subject to the receipt of any required
approvals, a grant of restricted stock of the Company having a value of One Hundred and Fifty Thousand Dollars ($150,000) on
the date of the grant, as determined by the Board (the “RSA”) shall be made to you under the Amended and
Restated 2006 Equity Incentive Plan (the “Equity Plan”). The terms and conditions of the RSA shall be set forth
in the restricted stock agreement (the “RSA Award”). The RSA shall be subject to the terms of the Equity Plan,
the RSA Award, and any applicable shareholder agreements and other restrictions and limitations generally applicable to
common stock of the Company or equity awards held by Company executives or otherwise imposed by law. You shall not be
eligible to receive any stock options, restricted stock or other equity of the Company, however, whether under an equity
incentive plan or otherwise, except as expressly provided hereunder or as otherwise expressly authorized for you individually
by the Board.

 

 

    	 

    	 

    

 

3.         
Confidential Information and Restricted Activities. 

 

(a)         Confidential
Information. During the course of your employment with the Company or its Affiliates, you will learn
of Confidential Information, as defined below, and you may develop Confidential Information on behalf of the Company or its Affiliates.
You agree that you will not use or disclose to any Person (except as required by applicable law or for the proper performance of
your regular duties and responsibilities for the Company) any Confidential Information obtained by you incident to your employment
or any other association with the Company or any of its Affiliates, whether prior or subsequent to effective date of this agreement.
You understand that this restriction shall continue to apply after your employment terminates, regardless of the reason for such
termination. 

 

(b)         Protection
of Documents. All documents, records and files, in any media of whatever kind and
description, relating to the business, present or otherwise, of the Company or any of its Affiliates, and any copies, in
whole or in part, thereof (the “Documents”), whether or not prepared by you shall be the sole and exclusive
property of the Company. You agree to safeguard all Documents and to surrender to the Company, at the time your employment
terminates or at such earlier time or times as the Board or its designee may specify, all Documents then in your possession
or control. 

 

(c)         Non-Competition.
You acknowledge that in your employment with the Company you will have access to Confidential Information which, if disclosed,
would assist in competition against the Company and its Affiliates and that you also will generate goodwill for the Company and
its Affiliates in the course of your employment. Therefore, you agree that the following restrictions on your activities during
and after your employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the
Company and its Affiliates: 

 

(i)         While you are employed by the
Company or its Affiliates and for the greater of (x) the remaining term of this agreement or (y) one (1) year after your
employment (or service with an Affiliate, if later) terminates (in the aggregate, the “Non-Competition Period”),
except as otherwise specifically provided in the last sentence of this Section 3(c)(i) you agree that you will not, without
the prior written consent of the Company, directly or indirectly, own, manage, operate, join, control, finance, or
participate in the ownership, marketing, management, operation, control, fundraising or financing of, or be connected as an
officer, director, employee, partner, principal, agent, representative, consultant, or otherwise use or permit your name to
be used in connection with any business or enterprise engaged in the United States in the business of middle market lending.
Notwithstanding the foregoing, nothing in this Section 3(c)(i) shall prevent you from working (whether as an employee or an
independent contractor) for any business or enterprise that includes multiple lines of business, including lines of business
that are described in this Section 3(c)(i), so long as the line of business for which you are working does not, directly or
indirectly, include or otherwise conduct any of the activities described in this Section 3(c)(i).

 

(ii)         You agree that during the
Non-Competition Period, you will not, directly or through any other Person, (A) hire any employee of the Company or any of
its Affiliates or seek to persuade any employee of the Company or any of its Affiliates to discontinue employment, (B)
solicit or encourage any customer or investor of the Company or any of its Affiliates or independent contractor providing
services to the Company or any of its Affiliates to terminate or diminish its relationship with them, or (C) seek to persuade
any customer or investor of the Company or any of its Affiliates to conduct with anyone else any business or activity that
such customer or investor or prospective customer or investor conducts with the Company or any of its Affiliates.

 

    	 

    	 

    

 

(d)         In signing this agreement, you
give the Company assurance that you have carefully read and considered all the terms and conditions of this agreement,
including the restraints imposed on you under this Section 3. You agree without reservation that these restraints are
necessary for the reasonable and proper protection of the Company and its Affiliates and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and geographic area. You further agree that, were you
to breach any of the covenants contained in this Section 3, the damage to the Company and its Affiliates would be
irreparable. You therefore agree that the Company, in addition to any other remedies available to it, shall be entitled to
preliminary and permanent injunctive relief against any breach or threatened breach by you of any of those covenants, without
having to post bond, and will additionally be entitled to an award of attorney’s fees incurred in connection with
securing any relief hereunder. You and the Company further agree that, in the event that any provision of this Section 3 is
determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time,
too large a geographic area or too great a range of activities, that provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law. You further agree that the Non-Competition Period shall be tolled, and
shall not run, during any period of time in which you are in violation of the terms thereof, in order that the Company and
its Affiliates shall have all of the agreed-upon temporal protection recited herein. No breach of any provision of this
agreement by the Company, or any other claimed breach of contract or violation of law, or change in the nature or scope of
your employment relationship with the Company, shall operate to extinguish your obligation to comply with Section 3 hereof.
It is also agreed that each of the Company’s Affiliates shall have the right to enforce all of your obligations to that
Affiliate under this agreement, including without limitation pursuant to this Section 3.

 

4.          Termination
of Employment. Your employment under this agreement may be terminated prior to the expiration of
the term hereof pursuant to this Section 4. 

 

(a)         The Company may terminate your
employment for Cause upon notice to you setting forth in reasonable detail the nature of the cause. The following shall
constitute Cause for termination: (i) your repeated material failure to perform (other than by reason of disability), or
gross negligence in the performance of, your duties and responsibilities to the Company or any of its Affiliates which
failure is not cured within thirty (30) days after written notice of such failure or negligence is delivered to you; (ii)
your material breach of this agreement or any other agreement between you and the Company or any of its Affiliates which
breach is not cured within thirty (30) days after written notice of such breach is delivered to you; (iii) commission by you
of a felony involving moral turpitude or fraud with respect to the Company or any of its Affiliates; (iv) your being
sanctioned by a federal or state government or agency with violations of federal or state securities laws in any judicial or
administrative process or proceeding, or having been found by any court to have committed any such violation; or (v) your
failure to comply with (A) any material Company policy, including without limitation, the Code of Ethics of the Company or
any of its Affiliates to which you are bound, or (B) any legal or regulatory obligations or requirements, including, without
limitation, failure to provide any certifications as may be required by law which is not cured within thirty (30) days after
written notice of such violation is delivered to you to the extent such violation can be cured. The Company also may
terminate your employment at any time without Cause upon notice to you.

 

    	 

    	 

    

 

(b)         This agreement shall automatically
terminate in the event of your death during employment, and you shall be entitled to the Severance Payments and Health Care
Payments set forth under Section 5(a) below. In the event of your death, any amounts owed to you under this agreement will be
paid to the beneficiary designated in writing by you or, if no beneficiary has been so designated by you, to your estate. In
the event you become disabled during employment and, as a result, are unable to continue to perform substantially all of your
duties and responsibilities under this agreement, the Company will continue to pay you your base salary and to provide you
benefits in accordance with Section 2(a) above, to the extent permitted by plan terms, for up to twelve (12) weeks of
disability during any period of three hundred and sixty-five (365) consecutive calendar days. If you are unable to return to
work after twelve (12) weeks of disability, the Company may terminate your employment, upon written notice to you, and you
shall be entitled to the Severance Payments and Health Care Payments set forth under Section 5(a) below. If any question
shall arise as to whether you are disabled to the extent that you are unable to perform substantially all of your duties and
responsibilities for the Company and its Affiliates, you shall, at the Company’s request, submit to a medical
examination by a physician selected by the Company to whom you or your guardian, if any, has no reasonable objection to
determine whether you are so disabled and such determination shall for the purposes of this agreement be conclusive of
the issue. If such a question arises and you fail to submit to the requested medical examination, the
Company’s determination of the issue shall be binding on you.

 

(c)        
You may terminate your employment hereunder for “Good Reason” by providing written notice to the Company of the
condition giving rise to the Good Reason no later than thirty (30) days following the occurrence of the condition; by giving
the Company thirty (30) days to remedy the condition; and, if the Company fails to remedy the condition, by terminating your
employment within ten (10) days following the expiration of such thirty (30) day period. For purposes of this agreement, the
term “Good Reason” means, without your consent, the occurrence of one or more of the following events: (i)
material diminution in the nature or scope of your responsibilities, duties or authority relating to the Company as
contemplated by this agreement; (ii) failure by the Company to pay any Bonus Compensation set forth in Section 2(b)
above, including the Guaranteed Bonus and any other bonuses specified therein, to the extent such Bonus Compensation has
been approved by the Board and is payable in accordance with the terms thereof; or (iii) your being required to relocate to
a principal place of employment outside of the New York metropolitan area. For purposes of this paragraph 4(c) a change
in reporting relationships resulting from a Change in Control will constitute Good Reason. In addition, a termination of
your employment by you for any reason during the 90-day period immediately following a Change in Control shall be deemed to
be a termination for Good Reason for all purposes of this agreement.

 

    	 

    	 

    

 

 

(d)         You may terminate your employment
hereunder other than for “Good Reason” upon thirty (30) days’ written notice to the Company. The Board may
elect to waive such notice period or any portion thereof; but in that event, the Company shall pay you your base salary for
that portion of the notice period so waived.

 

5.         
Severance Payments and Other Matters Related to Termination.

 

(a)         In the event of termination of your
employment by the Company without Cause, by death or disability, or a termination by you for Good Reason, until the later of
the end of the then current term of this agreement and the end of the Non-Competition Period (but subject to earlier
termination as specified in this Section 5(a)), the Company will continue to pay you your base salary (the “Severance
Payments”) and pay you an amount equal, on an after-tax basis, to the premium cost of your health insurance on the same
terms and conditions as it contributes for active employees provided that you (or your beneficiaries) make a timely election
under the federal law known as “COBRA” and provided further that you are entitled to continue participation in
the Company’s group health plan under applicable law and plan terms (the  “Health Care Payments”).
The Company may, in its sole discretion, elect to cease the Severance Payments and Health Care Payments at any point
after you have received six (6) months of Severance Payments and Health Care Payments (or twelve (12) months if you are
terminated by the Company within ninety (90) days of the completion of a Change in Control) provided that it also releases
you from your remaining obligation under Section 3(c)(i) above. The Company will also pay you on the date of termination any
base salary earned but not paid through the date of termination and pay for any vacation time accrued but not used to that
date. In addition, the Company will pay you any discretionary bonus compensation to which you are entitled in accordance with
Section 2(b) above, prorated to the date of termination, payable at the time such monies are payable to Company executives
generally, together with any Guaranteed Bonus amount that is unpaid as of such date of termination. Furthermore, in the event
of termination of your employment by the Company without Cause or by you for Good Reason after December 31, 2012, but not in
the event of termination of your employment for any other reason, the Company will also pay you an annual bonus equal to
fifty percent (50%) of the Target Bonus for the period during which you receive Severance Payments and Health Care Payments,
prorated to the date when such Severance Payments and Health Care Payments cease, whether pursuant to the first sentence of
this Section 5(a) or due to the Company electing, in its sole discretion, to cease such Severance Payments and Health Care
Payments and release you from your remaining obligations under Section 3(c)(i) above (the “Bonus Payments”). All
such Bonus Payments will be payable on an annual basis, at the time annual bonuses are payable to Company executives
generally. Any obligation of the Company to provide you Severance Payments, Health Care Payments or Bonus Payments under this
Section 5(a) is conditioned, however, upon your signing and not revoking (and the expiration of any period of revocation
associated therewith) a release of claims in the form provided by the Company (the “Employee Release”) by the
deadline specified by the Company (which shall be no later than sixty (60) days following your termination of employment).
All Severance Payments will be in the form of salary continuation, and the Severance Payments and Health Care Payments will
be payable in accordance with the normal payroll practices of the Company, and will begin on the first payroll -date following
the sixtieth (60th) day following your termination of employment. The first of any such payments will include all
Severance Payments and Health Care Payments that otherwise would have been due prior to such first payment date had such
payments commenced immediately upon your termination of employment; any payments made thereafter will continue as otherwise
provided herein.

    	 

    	 

    
 

 

(b)         In the event of termination of your employment
by the Company for Cause or by you other than for Good Reason, the Company will pay you any base salary earned but not paid through
the date of termination and pay for any vacation time accrued but not used to that date in accordance with the normal payroll practices
of the Company. The Company shall have no obligation to you for any bonus compensation, benefits continuation or severance payments.

 

(c)         In the event of termination of your employment
by expiration of the term hereof or non-renewal of this agreement, the Company will pay you (i) any base salary earned but not
paid through the date of termination and pay for any vacation time accrued but not used to that date, in accordance with the normal
payroll practices of the Company, and (ii) any discretionary bonus compensation to which you are entitled in accordance with Section
2(b) above, prorated to the date of termination and payable at the time such bonuses are payable to Company executives generally,
together with any Guaranteed Bonus amount that is unpaid as of such date of termination. The Company shall have no obligation to
you for any severance payments or benefits continuation and you shall have no further obligation under Section 3(c)(i) above.

 

(d)         Except for any rights you may have
under Section 5(a) above or under the federal law known as “COBRA” to continue participation in
the Company’s group health and dental plans at your cost, benefits shall terminate in accordance with the terms of the
applicable benefit plans based on the date of termination of your employment, without regard to any continuation of base
salary or other payment to you following termination.

 

(e)         Provisions of this agreement shall survive
any termination if so provided in this agreement or if necessary or desirable to accomplish the purposes of other surviving provisions,
including without limitation your obligations under Section 3 of this agreement. The obligation of the Company to make payments
to you under this Section 5 is expressly conditioned upon your continued full performance of obligations under Section 3 hereof.
Upon termination by either you or the Company, all rights, duties and obligations of you and the Company to each other shall cease,
except as otherwise expressly provided in this agreement.

 

6.         
Definitions. For purposes of this agreement, the following definitions apply: 

 

“Affiliates” means all persons
and entities directly or indirectly controlling, controlled by or under common control with the Company, where
control may be by management authority, equity interest or otherwise.

 

“Change in Control” means:

 

		(i)	The acquisition by any person, entity or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the
                                                               Exchange Act (excluding, for this purpose, the Company or its Affiliates) of beneficial ownership of 33% or more of either
                                                               the then outstanding shares of the Company’s common stock or the  combined voting power of the Company’s then
                                                               outstanding voting securities entitled to vote generally in the election of directors.

 

 

    	 

    	 

    

 

 

		(ii)	Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, provided that any person who first becomes a director subsequent
to the date hereof whose recommendation, election or nomination for election by the Company’s stockholders was approved by
a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election
of the directors of the Company as described in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
the purposes of this agreement, considered as though such person were a member of the Incumbent Board; or

 

		(iii)	Approval by the stockholders of the Company of a reorganization, share exchange, merger or consolidation
with respect to which, in any such case, the persons who were the stockholders of the Company immediately prior to such reorganization,
share exchange, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled
to vote in the election of directors of the reorganized, merged or consolidated company; or

 

		(iv)	Liquidation or dissolution of the Company or a sale of all or substantially all of the assets of
the Company.

 

“Confidential Information” means
any and all information of the Company and its Affiliates that is not generally available to the public. Confidential
Information also includes any information received by the Company or any of its Affiliates from any Person with any
understanding, express or implied, that it will not be disclosed. Confidential Information does not include information that
enters the public domain, other than through your breach of your obligations under this agreement.

 

“Person” means an
individual, a corporation, a limited liability company,  an association, a partnership, an estate, a trust or any
other entity or organization, other than the Company or any of its Affiliates.

 

7.          Conflicting
Agreements. You hereby represent and warrant that your signing of this agreement and the performance
of your obligations under it will not breach or be in conflict with any other agreement to which you are a party or are bound and
that you are not now subject to any covenants against competition or similar covenants or any court order that could affect the
performance of your obligations under this agreement. You agree that you will not disclose to or use on behalf of the Company any
proprietary information of a third party without that party’s consent. 

 

8.          Withholding.
All payments made by the Company under this agreement shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law. 

 

    	 

    	 

    
 

9.          Assignment.
Neither you nor the Company may make any assignment of this agreement or any interest in it, by operation of law or otherwise,
without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under
this agreement without your consent to one of its Affiliates or to any Person with whom the Company shall hereafter affect a reorganization,
consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets. This agreement shall
inure to the benefit of and be binding upon you and the Company, and each of your and its respective successors, executors, administrators,
heirs and permitted assigns. 

 

10.         Severability.
If any portion or provision of this agreement shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this agreement, or the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of
this agreement shall be valid and enforceable to the fullest extent permitted by law. 

 

11.         Miscellaneous.

 

(a)         This agreement sets forth the entire agreement
between you and the Company and replaces all prior and contemporaneous communications, agreements and understandings, written or
oral, with respect to the terms and conditions of your employment. This agreement may not be modified or amended, and no breach
shall be deemed to be waived, unless agreed to in writing by you and an expressly authorized representative of the Board. The headings
and captions in this agreement are for convenience only and in no way define or describe the scope or content of any provision
of this agreement. This agreement may be executed in two or more counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This is a Delaware contract and shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. In the event of any alleged
breach or threatened breach of this agreement, the parties hereby consent and submit to the jurisdiction of the federal and state
courts in and of the State of Delaware and to service of legal process in the State of Delaware.

 

(b)         Notwithstanding any other
payment schedule provided herein, if you are identified on the date of termination as a “specified employee”
within the meaning of Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”), then:

 

(i)         Any payment that is considered
nonqualified deferred compensation subject to Section 409A of the Code (including the regulations promulgated thereunder,
“Section 409A”), as determined by the Company in its sole discretion, and payable on account of a
“separation from service,” will be  made on the date that is the earlier of (A) the expiration of the
six (6)-month period beginning on the date of your “separation from service”, and (B) your death (the
“Delay Period”) to the extent required under Section 409A. Upon the expiration of the Delay Period, all payments
delayed pursuant to this subsection (whether they would have otherwise been payable in a single sum or in installments in the
absence of such delay) will be paid to you in a lump sum, and all remaining payments due under this agreement will be paid or
provided in accordance with the normal payment dates specified for them herein.

 

    	 

    	 

    

 

(ii)         You shall pay the cost of
any benefits to be provided during the Delay Period that are considered nonqualified deferred compensation subject to
Section 409A, as determined by the Company in its sole discretion, and are provided on account of a “separation from
service”; the Company shall reimburse you for that portion of the costs that the Company would otherwise have paid or
would otherwise have provided upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided
by the Company in accordance with the procedures specified herein.

 

(c)         For purposes of Section 409A, your right
to receive any installment payment pursuant to this agreement will be treated as a right to receive a series of separate and distinct
payments.

 

(d)         In no event whatsoever will the Company
be liable for any additional tax, interest or penalty that may be imposed on you by Section 409A or damages for failing to comply
with Section 409A.

 

(e)         Whenever a payment under
this agreement specifies a payment period with reference to a number of days (e.g., “payment will be made within thirty
(30) days following the date of termination”), the actual date of payment within the specified period will be
within the sole discretion of the Company.

 

12.         Notices.
Any notices provided for in this agreement shall be in writing and shall be effective when delivered in person or deposited in
the United States mail, postage prepaid, and addressed to you at your last known address on the books of the Company or, in the
case of the Company, to it at its principal place of business, attention of the Board, or to such other address as either party
may specify by notice to the other actually received. 

 

    	 

    	 

    
 

 

 

If the foregoing is acceptable to you,
please sign this letter in the space provided and return it to me. We will provide a countersigned copy for your records.

 

Sincerely yours,

 

 

Dayl Pearson

President and Chief Executive Officer

 

 

 

Accepted and Agreed:

 

 

                                                                          

Edward Gilpin

 

 

 

 

 

                           

Date

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