Assignment, Assumption, Joinder AND AMENDMENT Agreement

JF Franchise Systems, LLC

 

This ASSIGNMENT, Assumption AND JOINDER Agreement (this “Agreement”) is entered
into effective as of December _______, 2013 by and between Cameron M. Harris,
Darrell C. Ferguson, Joseph H. Drury, and H. Keith Stoneman (individually as
“Assignor”, and together as “Assignors”), Chanticleer Holdings, Inc., a Delaware
corporation (as “Assignee”), and JF Franchise Systems, LLC, a North Carolina
limited liability company (the “Company”). Terms capitalized herein but not
otherwise defined shall have the meaning ascribed thereto in the Amended and
Restated Operating Agreement of the JF Franchise Systems, LLC, a North Carolina
limited liability company dated as of the 1st day of June, 2008, and in effect
as of the date hereof (the “Operating Agreement”).

 

FOR AND IN CONSIDERATION OF the payment of the purchase price and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt, adequacy and legal sufficiency of which are hereby acknowledged, the
parties do hereby agree as follows:

 

1.           Assignment and Assumption. The Assignors hereby assign, sell,
transfer and set over (collectively, the "Assignment") to the Assignee, the
Assignors’ rights, titles, benefits, privileges and interests in and to a
Fifty-One Percent (51%) Preferred Membership Interest and Shares in the Company
so that the Assignors’ Interest are reduced, as set out in Exhibit A hereto. The
Assignee hereby accepts the Assignment and assumes and agrees to observe and
perform all of the duties, obligations, terms, provisions and covenants to be
observed, performed, paid or discharged from and after the date hereof, with
respect to Assignors’ Preferred Membership Interest being transferred in the
Company.

 

2.           Purchase Price. The Assignee shall pay the sum of One Thousand
Dollars ($1,000.00) to H. Dockery Teele, Jr., PA, as Escrow Agent on or before
December ______, 2013. The Escrow Agent shall pay the amounts received as set
out in Schedule I, attached.

 

3.           Joinder in Operating Agreement. The undersigned Assignee hereby
agrees (i) to become a Preferred Member of the Company, (ii) to become a party
to the Operating Agreement and to be bound by and to comply with the terms,
conditions and provisions of the Operating Agreement by executing this
Assignment, Assumption, Joinder and Amendment Agreement.

 

4.           Recapitalization and Amendment of Operating Agreement. The
Operating Agreement is amended by replacing its Exhibit A by the Exhibit A,
attached and the Company is recapitalized so that the Membership Interest and
Units are owned by the Members as set out in Exhibit A. The Assignors each
acknowledge that the Company is not indebted to them for prior services, loans,
or contractual obligations.         

 

5.           Representations By Assignors. To induce the Assignee to accept the
delivery of this Assignment, the Assignors each hereby represent and warrant the
following to the Assignee with respect to their Preferred Membership Interest
that, on the date hereof and at the time of such delivery:

 

5.1.          Each Assignor is the legal and beneficial owner of the Preferred
Membership Interest being assigned. Each Assignor has not sold, transferred, or
encumbered any or all of the Preferred Membership Interest. Subject to the
provisions of the Operating Agreement, each Assignor has the full and sufficient
right at law and in equity to transfer and assign the Preferred Membership
Interest, and is transferring and assigning the Preferred Membership Interest to
the Assignee free and clear of any and all right, title, or interest of any
other person whatsoever.

 

 

 

 

5.2.          Each Assignor has been given no notice of any default by the
Assignor in performing his obligations under the provisions of the Operating
Agreement and, to the best of the Assignor=s knowledge, information, and belief,
the Assignor is not in default in performing those obligations.

 

5.3.          All Preferred Members of the Company have consented to this
Agreement. There are no Common Members.

 

5.4.          The Assignors also are the Preferred Members of JF Restaurants,
LLC (“JFR”) and own a majority of the Preferred Unit Percentage Interest in JFR,
and by Majority Approval hereby authorize the Manager of JFR to join in this
Agreement to acknowledge consent and agree to this Agreement and the
Recapitalization on behalf of JFR.

 

6.           Consent to Transfers.

 

6.1           The parties hereby consent to the transfer by [_____] of [___] of
his Preferred Share Percentage Interest (and Shares representing said Interest)
to [_________], it being agreed for such Shares to be subject to the terms of
the Operating Agreement; such transfer is reflected in Exhibit A, attached
hereto.

 

6.2           The parties hereby consent to the future transfer by Joseph Drury
of 5.00% of his Preferred Share Percentage Interest (and Shares representing
said Interest) to Chanticleer Holdings, Inc. subject to the execution of such
joinder and other documents required for such Shares to be subject to the terms
of the Operating Agreement.

 

6.3           All the parties consent to the future transfer of [________]
Membership Interest and Shares to [_______] and its becoming a Preferred Member
upon [__________] executing such joinder and other documents required by the
Operating Agreement to become a Preferred Member.

 

7.           Miscellaneous. This Agreement may be executed in one or more
counterparts, including facsimile counterparts, each of which shall be deemed an
original but all of which, taken together, shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Agreement via facsimile
transmission shall be equally as effective as delivery of an original executed
counterpart. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina, without regard to its choice of
law principles.

 

IN WITNESS WHEREOF, the parties have executed this Assignment, Assumption and
Joinder Agreement as of the date first above written.

 

  ASSIGNORS:           Cameron M. Harris           Darrell C. Ferguson

 

 

 

 

      Joseph H. Drury         H. Keith Stoneman   ASSIGNEE:   Chanticleer
Holdings, Inc.       By:         (print name)   Its:  

 

THIS AGREEMENT IS

CONSENTED AND AGREED TO:

JF Restaurants, LLC

 

    By:  Joseph H. Drury, Manager   Dated:  December _______, 2013  

 

Acknowledgement of Assignment and Admission as a Preferred Member. The Company
hereby acknowledges and agrees that all the terms and conditions for the valid
transfer of Assignors’ Preferred Membership Interest in the Company to Assignee
has been satisfied or waived and that the Assignee is hereby admitted as a
Preferred Member of the Company.

 

Dated: December ______, 2013

 

  THE COMPANY:   JF Franchise Systems, LLC           By: Joseph H. Drury,
Manager

 

 

 

 

EXHIBIT A

JF FRANCHISE SYSTEMS, LLC

CAPITALIZATION SCHEDULE

(AS OF DECEMBER _______, 2013)

 

Member  Capital Account
(1)   Preferred Shares
(2)   Preferred Share
Percentage
Interest (3)   Common Shares
(4)   Percentage
Interest (5)   Convertible
Loans (6)   Non-Convertible
Loans (7)  Chanticleer Holdings, Inc.  $51,000.00    51.00    51.00    -0-  
 51.00    -0-    -0-                                                        
                                                                              
              Total  $100,000.00    100.00    100.00    -0-    100.00    -0-  
 -0- 

 

Notes:

(1)  Capital accounts adjusted to reflect the Company’s value as of the date of
this Amendment and recapitalization.

 

(2)  Reflects (i) the Units after recapitalization, (ii) assignment of [___]
Preferred Share Percentage Interest and Shares by [____] to [________], and
(iii) the 51% assignment of Preferred Membership and Percentage Interest to
Chanticleer by the Preferred Members.

 

(3)  Reflects the reallocation of Preferred Units after (2) above.

 

(5)  Reflects Percentage Interest after (2) and (3) above.

 

Each Preferred Member hereby acknowledges and agrees that this Exhibit A is
accurate with respect to himself and each other Preferred Member as of December
_______, 2013.

 

                  CMH   DCF   JHD   HKS   CH, Inc.

 

 

 

 

Schedule I

 

 

 

 

Assignment, Assumption, Joinder AND AMENDMENT Agreement

jf restaurants, llc

 

This ASSIGNMENT, Assumption AND JOINDER Agreement (this “Agreement”) is entered
into effective as of December _______, 2013 by and between Cameron M. Harris,
Ferguson Family Investments, LLC, Joseph H. Drury, and H. Keith Stoneman
(individually as “Assignor”, and together as “Assignors”), Chanticleer Holdings,
Inc., a Delaware corporation (as “Assignee”), and JF Restaurants, LLC, a North
Carolina limited liability company (the “Company”). Terms capitalized herein but
not otherwise defined shall have the meaning ascribed thereto in the Second
Amended and Restated Operating Agreement of the JF Restaurants, LLC, a North
Carolina limited liability company dated as of the 1st day of January, 2010, and
in effect as of the date hereof (the “Operating Agreement”).

 

FOR AND IN CONSIDERATION OF the payment of the purchase price and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt, adequacy and legal sufficiency of which are hereby acknowledged, the
parties do hereby agree as follows:

 

1.           Assignment and Assumption. The Assignors hereby assign, sell,
transfer and set over (collectively, the "Assignment") to the Assignee, the
Assignors’ rights, titles, benefits, privileges and interests in and to a
Fifty-One Percent (51%) Preferred Membership Interest and Units in the Company
so that the Assignors’ Interest are reduced, as set out in Exhibit A hereto. The
Assignee hereby accepts the Assignment and assumes and agrees to observe and
perform all of the duties, obligations, terms, provisions and covenants to be
observed, performed, paid or discharged from and after the date hereof, with
respect to Assignors’ Preferred Membership Interest being transferred in the
Company.

 

2.           Purchase Price. The Assignee has paid, and the Assignors’
acknowledge the payment of Four Hundred Thirty-Four Thousand Three Hundred
Twenty-Four and 71/100 Dollars ($434,324.71) to the Company. The Assignee shall
pay the additional sum of One Hundred Twenty-Five Thousand Six Hundred
Seventy-Five and 29/100 Dollars ($125,675.29) to H. Dockery Teele, Jr., PA, as
Escrow Agent on or before December ______, 2013. The Escrow Agent shall pay the
amounts received as set out in Schedule I, attached.

 

3.           Joinder in Operating Agreement. The undersigned Assignee hereby
agrees (i) to become a Preferred Member of the Company, (ii) to become a party
to the Operating Agreement and to be bound by and to comply with the terms,
conditions and provisions of the Operating Agreement by executing this
Assignment, Assumption, Joinder and Amendment Agreement.

 

4.           Recapitalization and Amendment of Operating Agreement. The
Operating Agreement is amended by replacing its Exhibit A by the Exhibit A,
attached and the Company is recapitalized so that the Membership Interest and
Units are owned by the Members as set out in Exhibit A. As a part of said
recapitalization and in consideration of the Purchase Price, the Assignors each
agree that all loans of any kind made or held by each of them or their
affiliates to the Company are deemed paid and satisfied, and the Assignors each
release the Company from any obligation to pay said loans, and further
acknowledge that the Company is not indebted to them for prior services or
contractual obligations.         

 

5.           Representations By Assignors. To induce the Assignee to accept the
delivery of this Assignment, the Assignors each hereby represent and warrant the
following to the Assignee with respect to their Preferred Membership Interest
that, on the date hereof and at the time of such delivery:

 

5.1.          Each Assignor is the legal and beneficial owner of the Preferred
Membership Interest being assigned. Each Assignor has not sold, transferred, or
encumbered any or all of the Preferred Membership Interest. Subject to the
provisions of the Operating Agreement, each Assignor has the full and sufficient
right at law and in equity to transfer and assign the Preferred Membership
Interest, and is transferring and assigning the Preferred Membership Interest to
the Assignee free and clear of any and all right, title, or interest of any
other person whatsoever.

 

 

 

 

5.2.          Each Assignor has been given no notice of any default by the
Assignor in performing his obligations under the provisions of the Operating
Agreement and, to the best of the Assignor=s knowledge, information, and belief,
the Assignor is not in default in performing those obligations.

 

5.3.          All Preferred Members and Common Members of the Company have
consented to this Agreement.

 

6.           Consent to Transfer. The parties hereby consent to the transfer by
Joseph Drury of Five Percent (5%) of his Preferred Unit Percentage Interest (and
the Units representing such Interest) to Chanticleer Holdings, Inc. subject to
the execution of such joinder and other documents required for such Units to be
subject to the terms of the Operating Agreement.

 

7.           Miscellaneous. This Agreement may be executed in one or more
counterparts, including facsimile counterparts, each of which shall be deemed an
original but all of which, taken together, shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Agreement via facsimile
transmission shall be equally as effective as delivery of an original executed
counterpart. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina, without regard to its choice of
law principles.

 

IN WITNESS WHEREOF, the parties have executed this Assignment, Assumption and
Joinder Agreement as of the date first above written.

 

  ASSIGNORS:           Cameron M. Harris       Ferguson Family Investments, LLC
        By:       Darrell C. Ferguson, Manager             Joseph H. Drury      
    H. Keith Stoneman

 

 

 

 

  ASSIGNEE:   Chanticleer Holdings, Inc.       By:         (print name)   Its:  

 

CONSENTED AND AGREED TO:           Thomas G. Lewison           Shelley Curtin  
        Dana Sinkler  

 

Acknowledgement of Assignment and Admission as a Preferred Member. The Company
hereby acknowledges and agrees that all the terms and conditions for the valid
transfer of Assignors’ Preferred Membership Interest in the Company to Assignee
has been satisfied or waived and that the Assignee is hereby admitted as a
Preferred Member of the Company.

 

Dated: December ______, 2013

  THE COMPANY:   JF Restaurants, LLC           By: Joseph H. Drury, Manager

 

 

 

 

EXHIBIT A

JF RESTAURANTS, LLC CAPITALIZATION SCHEDULE

(AS OF DECEMBER _______, 2013)

 

Member  Capital Account
(1)   Preferred Units
(2)   Preferred Unit
Percentage
Interest (3)   Common Units
(4)   Percentage
Interest (5)   Convertible
Loans (6)   Non-Convertible
Loans (7)  Chanticleer Holdings, Inc.  $560,000.00    47.25    51.00      
 47.25                                                                          
                                                                              
                                                                                
                                  Total  $1,098,039.00    92.65    100.00  
 4.90    100.00           

Notes:

(1)  Capital accounts adjusted to reflect the Company’s value as of the date of
this Amendment and recapitalization.

 

(2)  Reflects (i) the Units after recapitalization and satisfaction of Member
loans, (ii) assignment of [________] (principal and accrued interest) of
Convertible Loans and [________] (principal and accrued interest) of
Non-Convertible Loans by [____] to [_________], (iii) [_______] re-assignment to
[___________], and (iv) the 51% assignment of Preferred Membership and
Percentage Interest to Chanticleer by the Preferred Members.

 

(3)  Reflects the reallocation of Preferred Units after (2) above.

 

(4)  Reflects the reduction of Common Units following (2) above.

 

(5)  Reflects Percentage Interest after (2) (3) and (4) above.

 

(6)  Reflects conversion of Convertible Loans to Preferred Members Percentage
Interest and Units at 130%

 

(7)  Reflects conversion of Non-Convertible Loans to Preferred Members
Percentage Interest and Units at 100%

 

Each Preferred Member hereby acknowledges and agrees that this Exhibit A is
accurate with respect to himself and each other Preferred Member as of December
_______, 2013.

 

                              CMH   FFI, LLC   JHD   HKS   TGL   SC   DS   CH,
Inc.

 

 

 

 

Schedule I