Exhibit 10.1


 


ASSET PURCHASE AGREEMENT


 


by and between


 


AMERICAN BURGER MOREHEAD, LLC


a North Carolina limited liability company


 


and


 


CHANTICLEER HOLDINGS, INC.,


a Delaware corporation,


 


and


 


THE BURGER COMPANY,


a North Carolina limited liability company


 


____________________________


 


Dated September 9, 2014


____________________________


 





 


ASSET PURCHASE AGREEMENT


 


THIS ASSET PURCHASE
AGREEMENT (the "Agreement") is entered into as of September 9, 2014, by and between The Burger Company, LLC, a
North Carolina limited liability company (the "Seller"), American Burger Morehead LLC, a North Carolina
limited liability company (the "Purchaser") and Chanticleer Holdings, Inc., a Delaware corporation
(the "Parent").


 


Recitals


 


WHEREAS, the
Seller is engaged in the fast casual hamburger restaurant business under the name “The Burger Company” (the "Business");
and


 


WHEREAS, upon
and subject to the terms and conditions set forth herein, the Seller proposes to sell to the Purchaser, and the Purchaser proposes
to purchase from the Seller, the Transferred Assets (defined in Section 1.1 below) used or held for use by the Seller in the conduct
of the Business and all of the assets needed to conduct the Business after the Closing, and the Purchaser proposes to assume certain
of the disclosed liabilities and obligations of the Seller related to the Business.


 


NOW, THEREFORE,
in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, each party hereby agrees as follows:


 


Agreement


 


1.  SALE OF TRANSFERRED ASSETS;
RELATED TRANSACTIONS.


 


1.1  Sale
of Transferred Assets; Excluded Assets. The Seller shall sell, assign, transfer, convey and deliver to the Purchaser at the
Closing (as defined in Section 1.8) the Transferred Assets (as defined below), free of any encumbrances ("Encumbrances"),
on the terms and subject to the conditions set forth in this Agreement. For purposes of this Agreement, "Transferred Assets"
means the following assets, provided, however, that the Transferred Assets shall not include any excluded assets
identified on Part 1.1 of the Disclosure Schedule ("Excluded Assets"):


 






    	1



    	 



    

 


(a)  All
business assets, inventory, equipment and fixtures, recipes, telephone numbers, websites, other intangible assets of the business
as set forth on Part 1.1(a) of the Disclosure Schedule;


 


(b)  all
marketing contact and lead databases data possessed by the Seller that primarily relates to the Business;


 


(c)  all
intellectual property and intellectual property rights relating to The Burger Company, including patents, trademarks, copyrights
and all other intellectual property, which may require consent to assignment, as more specifically identified in Part 1.1(c) of
the Disclosure Schedule and all goodwill of the Seller related to any of the foregoing (the “Proprietary Rights”); 


 


(d)  all
rights of the Seller under those Seller contracts identified in Part 1.1(d) of the Disclosure Schedule (the “Seller
Contracts”);


  


(e)  all
rights of the Seller under the Third Party Software licenses identified in Part 1.1(e) of the Disclosure Schedule;


 


(f)  all
rights of the Seller in those Seller Contracts for marketing, PR relationships, tradeshow space and booths, analyst relationships
and other fully or partially paid for marketing activities that primarily relate to the Business identified in Part 1.1(f) of the
Disclosure Schedule;


 


(g)  all
historical support and other related CRM data exclusively pertaining to the Business identified in Part 1.1(g) of the Disclosure
Schedule;


 


(h)  all
Governmental Authorizations (as hereinafter defined) and licensing identified in Part 2.11(b) of the Disclosure Schedule;


 


(i)  all
claims (including claims for past infringement or misappropriation of Intellectual Property or Intellectual Property Rights and
claims for breach or other violation of any Seller Contract) and causes of action of the Seller against other Persons (regardless
of whether or not such claims and causes of action have been asserted by the Seller) to the extent that they pertain to the Business,
and all rights of indemnity, warranty rights, rights of contribution, deposits, prepayments, rights to refunds, rights of reimbursement
and other rights of recovery possessed by the Seller (regardless of whether such rights are currently exercisable) to the extent
that they relate to the Business; however, notwithstanding the foregoing, the Seller retains its rights to such claims and causes
of action described above that (a) arise prior to Closing and affect the Seller’s business and (ii) arise post-Closing (solely
to the extent they are required to protect any of the Seller’s rights in its ongoing business operations);


 


(j)  all
proceeds under any insurance policies (other than any director and officer policies) payable with respect to Claims arising out
of, or in connection with, the Transferred Assets or the Assumed Liabilities (as defined in Section 1.4(a)), to the extent
such Claims pertain to matters which arose prior to the Closing;


 


(k)all books,
records, files and data of the Seller that exclusively pertain to the Business, including any files relating to the Transitioning
Employees; and


 


(l)  all
goodwill of the Business.


 


1.2  Agreements
Relating to Transfer of Transferred Assets. The Seller and the Purchaser agree that all of the Transferred Assets that can
be transmitted to the Purchaser electronically will be so delivered to the Purchaser promptly following the Closing.


 






    	2



    	 



    

 


1.3  Purchase
Price.


 


(a)  As
consideration for the sale, assignment, transfer, conveyance and delivery of the Transferred Assets to the Purchaser:


 


(i) at the
Closing, the Purchaser shall pay or cause to be paid to the Seller a total of Five Hundred and Fifty Thousand Dollars ($550,000.00),
consisting of Two Hundred and Fifty Thousand Dollars ($250,000.00) payable in cash by certified check or wire transfer of immediately
available funds to an account provided to the Purchaser by the Seller and shares of common stock of the Parent, trading under symbol
"HOTR" on the Nasdaq Capital Market, in an amount equal to Three Hundred Thousand Dollars ($300,000.00) (the "Stock
Consideration") to be issued as follows to BCD Development Properties, LLC; provided, however, that Fifty-Five Thousand
Dollars ($55,000.00) of such Stock Consideration (the "Escrowed Shares") shall be subject to the terms of an escrow
agreement (the "Escrow Agreement") in the form annexed hereto as Exhibit A; and provided further that the
Stock Consideration shall be valued at a price per share equal to the Value Weighted Average Price ("VWAP") of
the Parent’s Common Stock listed on the NASDAQ Stock Market for the five (5) Business Days prior to the Closing.


 


(ii) At the Closing,
the Purchaser shall assume the Assumed Liabilities (as defined in Section 1.4(a)).


 


(iii) The Seller shall
retain a ten percent (10%) interest ("Seller’s Net Profits") in the Net Profits of the division of the Purchaser
relating solely to the Business (operated under the name of Purchaser’s choosing) provided, however that the Business may
be operated within and by a division of the Purchaser, and such Seller’s Net Profits shall be distributed to the Seller in
the same manner and upon any distribution of the Net Profits to the Purchaser. The term "Net Profits" means the
net profits of the division of the Purchaser relating solely to the Business (operated under the name of Purchaser’s choosing)
as prepared by the Purchaser’s regularly retained independent accountants whose determination shall be final and binding.


 


1.4  Assumption
of Liabilities.


 


(a)  For
purposes of this Agreement, "Assumed Liabilities" shall mean only the following liabilities of the Seller:


 


(i)  all
obligations of the Seller under each of the Contracts identified on Part 1.4(a) of the Disclosure Schedule for the period commencing
on the Closing Date until such time as such a Contract is subject to a valid consent to assignment to Purchaser, in which case
all obligations of the Seller under such Contract shall constitute “Assumed Liabilities” hereunder without further
action; for purposes of clarification, such obligations shall not include those obligations of Seller under such Contracts for
the period prior to the Closing Date;


 


(ii)  the
obligations or liabilities of the Seller as of the Closing Date for attributable to any Transitioning Employees who elect to have
such amounts transition to the Purchaser; in amounts (with respect to each Transitioning Employee) not to exceed the amounts set
forth in Part 1.4(a) of the Disclosure Schedule; provided, further, that such amounts shall not exceed the maximum
amounts allowable under the current vacation policies of the Purchaser (it being understood that any accrued paid time off in excess
of such maximums will be paid out by Seller upon such employee’s termination of employment with Seller); and


 


(iii)  subject
to the limitations set forth above in subsection 1.4(a)(i), all obligations and liabilities of the Business arising after the Closing.


 






    	3



    	 



    

 


(b)  Notwithstanding
the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the "Assumed Liabilities" shall
not include any liability not specifically assumed and the Purchaser shall not be required to assume or to perform or discharge:


 


(i)  any
Liability of any other Person, except for the Liabilities of the Seller as specified in Part 1.4(a) of the Disclosure Schedule;


 


(ii)  any
Liability of the Seller arising from or relating to the period prior to the Closing, including without limitation any claim or
legal proceeding against the Seller relating to Claims arising prior to the Closing;


 


(iii)  any
Liability of Seller that does not pertain exclusively to the Business,


 


(iv)  any
Liability of the Seller for the payment of any Loan or Tax, including any bank loans in the name of the Business or Transfer Taxes
allocated to the Seller as provided in Section 1.6);


 


(v)  any
Liability of the Seller arising from or related to the pre-Closing employment of any Transitioning Employee (other than the Liabilities
assumed pursuant to Section 1.4(a)(ii) (relating to accrued paid time off for certain Transitioning Employees);


 


(vi)  any
Liability of the Seller arising from or related to the employment or termination of any Seller Employee who is not a Transitioning
Employee; or


 


(vii)  Any
Liability that is an obligation that may not be deductible under Section 280G of the Code or that could result in the imposition
of additional Taxes under Section 409A of the Code.


 


1.6  Allocation.
Within thirty (30) days following the Closing and subject to the reasonable approval of the Seller, the Purchaser shall prepare
an allocation of the consideration referred to in Section 1.1 among the Transferred Assets. The allocation referred to in
the preceding sentence shall be made in accordance with: (a) the reasonable fair market values of the respective Transferred
Assets and (b) the provisions of Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"),
and the rules and regulations thereunder, and shall be binding, to the extent not in conflict with applicable Legal Requirements,
upon the Purchaser and the Seller for all Tax purposes. The Purchaser and the Seller each further agrees to file, as applicable,
its respective U.S. federal income tax returns and, to the extent not in conflict with applicable law, its respective other Tax
Returns reflecting such allocation, Form 8594 and any other required reports by Section 1060 of the Code, in accordance
with said allocation


 


1.7  Transfer
Taxes. All sales, use, value-added, gross receipts, excise, registration, stamp duty, transfer or other similar taxes or governmental
fees ("Transfer Taxes") imposed or levied by reason of, in connection with or attributable to this Agreement and
the transactions contemplated hereby shall be borne 100% by the Purchaser. The parties hereto shall cooperate, to the extent reasonably
requested and permitted by applicable legal requirements, in minimizing any such Transfer Taxes, including but not limited to the
transfer by remote electronic transmission of all Transferred Assets capable of being so transmitted in accordance with Section 1.2.


 


1.8  Closing.
The execution, delivery and closing of the transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of the Purchaser at 11220 Elm Lane, Suite 203; Charlotte, North Carolina 28277, at a time to be agreed upon
by the Purchaser and the Seller on September __, 2014 (the "Closing Date"). At the Closing, the Purchaser shall
have delivered to the Seller those documents specified in Section 6.1 hereof, and the Seller shall have delivered to the Purchaser
those documents specified in Section 6.2 hereof.


 






    	4



    	 



    

 


1.9 Assignment
of Lease to Premises. On the Closing Date, the Seller shall assign its interest in the lease for the property located at 1500
West Morehead Street, Suite C, Charlotte, North Carolina (the "Lease") to the Purchaser in a form agreeable to
all parties as well as to Summit Avenue West Morehead, LLC (the "Landlord"). Seller shall be responsible for any
payments or fees owed pursuant to the Lease that arose prior to the Closing Date.


 


2.  REPRESENTATIONS AND WARRANTIES OF THE SELLER.


 


The Seller represents and warrants to the
Purchaser and Parent, subject to the exceptions set forth in the Disclosure Schedule, as follows:


 


 2.1  Incorporation,
Power and Authority.


 


(a)  The
Seller has been duly organized and is validly existing and in good standing, under the laws of the jurisdiction of its organization.
The Seller has full power and authority: (i) to execute, deliver and perform this Agreement and the other Transactional Agreements;
(ii) conduct the Business as of the date hereof in the manner in which it is currently being conducted; and (iii) to own and
use the Transferred Assets in the manner in which such assets are currently owned and used.


 


(b)  The
Seller is qualified, licensed or admitted to do business in the State of North Carolina and under the laws of all other jurisdictions
where the property owned, leased or operated by it or the nature of its business requires such qualification, license or admission
and where the failure to be so qualified, licensed or admitted would have a Material Adverse Effect (as hereinafter defined).


 


2.2  Records.
The books of account and other records of the Business of the Seller that have been provided to Purchaser (the "Financial
Records") are accurate, up to date and complete in all material respects, and have been maintained in accordance with
prudent business practices. The Financial Records fairly present the results of operations of the Business in all material respects
over the periods reflected therein.


 


2.3  Financial
Controls. The Seller maintains accurate books and records relating to the Business that reflect its assets and liabilities
and maintains proper and adequate internal accounting controls which provide assurance that (i) transactions are executed
with management's authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements
of the Business and to maintain accountability for the Business' consolidated assets; (iii) access to the Business' assets
is permitted only in accordance with management's authorization; and (iv) accounts, notes and other receivables and inventory are
recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely
basis.


 


2.4  Absence
of Changes. Except as set forth in Part 2.4 of the Disclosure Schedule and since June 30, 2014 (a) there has not been
any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or
circumstances that have occurred or arisen, could reasonably be expected to have or result in a Material Adverse Effect; (b) there
has not been any material loss, damage or destruction to any of the assets of the Business (whether or not covered by insurance);
(c) the Seller has not made any capital expenditure primarily relating to the Business that exceeds $50,000; (d) the
Seller has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or
other Indebtedness relating to the Business; (e) other than the Transactions contemplated by this Agreement, the Seller has
not entered into any material transaction outside the ordinary course of business or inconsistent with past practices with respect
to the Business; (f) other than as contemplated by this Agreement, Seller has not sold or licensed any portion of the Business
(including any tangible or intangible assets) other than in the ordinary course of business; (g) other than the Transactional Agreements,
the Seller has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases
and licenses) primarily related to the Business and outside the ordinary course of business; (h) no party to any contract involving
the Business has accelerated, terminated, modified, or cancelled any agreement, contract, lease or license (or series of related
agreements, contracts, leases, and licenses) involving more than $25,000; (i) Seller has not delayed or postponed the payment of
accounts payable or other Liabilities pertaining to the Business; (j) other than as contemplated by this Agreement, Seller has
not transferred, assigned or granted any license or sublicense with respect to Proprietary Rights pertaining to the Business, except
in the ordinary course of business; (k) other than as contemplated by this Agreement, Seller has not granted any increase in the
base compensation of any of the officers or managers of the Business who are Transitioning Employees or made any other material
change in the terms of their employment, except in the ordinary course of business; (l) the Seller has not discharged a material
Liability or Encumbrance pertaining to the Business outside of the ordinary course of business; (m) Seller has not paid any amount
to any third party with respect to any Liability pertaining to the Business that would not constitute an Assumed Liability if in
existence as of the Closing; and (n) the Seller has not agreed or committed to take any of the actions referred to in clauses "(c)"
through "(m)" of this sentence with respect to the Business. "Material Adverse Effect" means any change
or condition of any character in the Assets including, without limitation, the financial condition, results of operations or prospects
of the Business which, individually or in the aggregate, had or could reasonably be expected to have a material adverse effect
on the revenues, financial condition, results of operations, properties, assets or prospects of the Business. For purposes of this
Agreement, "Transitioning Employees" means any employee of the Seller who
accepts an employment offer made by the Purchaser or any affiliate of the Purchaser, or otherwise becomes an employee of the Purchaser
or any affiliate of the Purchaser, at or in conjunction with the Closing.


 






    	5



    	 



    

 


2.5  Title
to Assets. The Seller owns, and has good and valid title to the Transferred Assets. All of said assets are owned by the Seller
free and clear of any Encumbrances, except for (i) any lien for current Taxes not yet due and payable and (ii) Encumbrances
described in Part 2.5 of the Disclosure Schedule, which Encumbrances will be released at the Closing.


 


2.7  Customers.
The Seller has not received any written notice or other written communication indicating that any development partner of the Business
may cease dealing with the Seller or may otherwise reduce the volume of business transacted by such Person with the Business substantially
below the level of business in the most recent 12-month period.


 


2.8  Equipment;
Leasehold. Part 2.8 of the Disclosure Schedule accurately identifies all restaurant equipment, development or test/build
devices, Point of Sale (POS) Systems, and personal computers and storage devices and other associated electronic equipment used
exclusively in the conduct of the Business. Part 2.8 of the Disclosure Schedule also accurately identifies all leased tangible
assets used exclusively in the conduct of the Business. Each asset identified or required to be identified in Part 2.8 of
the Disclosure Schedule: (i) in good condition and repair (ordinary wear and tear excepted); (ii) is being operated and
otherwise used in material compliance with, all applicable legal requirements; and (iii) is adequate and appropriate for the
uses to which it is being put. The Seller has the right under valid and existing leases or other agreements to occupy and use all
leased real property which it uses in the conduct of the Business.


 


2.9  Intellectual
Property. Set forth in Part 2.9 of the Disclosure Schedule is a complete and accurate list of all patents, registered
copyrights, trademarks, trade names, trade secrets and all other intellectual property in which the Seller has proprietary rights
and which relates to the Business (hereinafter referred to as the "Proprietary Rights") and all licenses, sublicenses
or other agreements with respect thereto. The Seller owns all of the Proprietary Rights and to the best of Seller’s knowledge,
the use of such Proprietary Rights does not infringe upon the rights of any other person or entity. The Seller has not received
any notice of a claim of such infringement nor was any such claim the subject of any action, suit or proceeding involving the Seller.
The Seller has no knowledge of any infringement or improper use by any third party of the Proprietary Rights, nor has the Seller
instituted any action, suit or proceeding in which an act constituting an infringement of any of the Proprietary Rights was alleged
to have been committed by a third party. Except as set forth in Part 2.9 of the Disclosure Schedule, Seller has the right to convey,
assign and/or license, as appropriate, the Proprietary Rights pertaining to the Business and the Transferred Assets.


 






    	6



    	 



    

  


2.10  Contracts.
Part 2.10 of the Disclosure Schedule identifies each Seller Contract that constitutes a "Material Contract." For purposes
of this Agreement, each of the following shall be deemed to constitute a "Material Contract":


 


(i)  any
Seller contract (A) that relates to the employment of, or the performance of services by any Seller employee, (B) pursuant
to which the Seller is or may become obligated to make any severance, termination or similar payment to any Seller employee, or
(C) pursuant to which the Seller is or may become obligated to make any bonus, commission or similar payment (other than payments
constituting base salary) to any Seller employee;


 


(ii)  any
Seller Contract imposing any material restriction on the right or ability of the Seller (A) to compete with, or solicit any
customer of, any other person, (B) to acquire any product or other asset or any services from any other person, (C) to
solicit, hire or retain any person as an employee, consultant or independent contractor, (D) to develop, sell, supply, distribute,
offer, support or service any product or any technology or other asset to or for any other person, (E) to perform services
for any other person, or (F) to transact business with any other person;


 


(iii) 
any Seller Contract relating to the acquisition, sale, spinoff or outsourcing of any business unit or operation or any product
line;


 


(iv) any
Seller Contract creating or involving any agency relationship (including sales representative agreements), distribution or reseller
arrangement or franchise relationship;


 


(v) any
Seller Contract imposing any encumbrance with respect to any Transferred Asset;


 


(vi)  any
Seller Contract creating any partnership or joint venture or any sharing of revenues, profits, losses or costs, other than any
Seller Contracts relating to employment;


 


(vii)  to
the extent it exclusively relates to the Business, any Seller Contract involving the lease of real or personal property; 


 


(viii)  any
Seller Contract with a term of more than 60 days and that may not be terminated by the Seller (without penalty) within 60 days
after the delivery of a termination notice by the Seller;


 


(ix)  any
Seller Contract under which the transactions as contemplated hereunder would give rise to or expand any rights in favor of, or
any obligations on the part of, the Seller or any other person; and


 


(x)  any
Seller Contract that could reasonably be expected to have or result in a material adverse effect on (A) the assets, liabilities,
results of operations or financial performance of the Business or (B) the ability of the Seller to perform any of its obligations
under this Agreement.


 


The Seller has made available to Purchaser
an accurate and materially complete copy of each Seller Contract that constitutes a Material Contract.


 


(b) (i) The
Seller is not in material violation, breach or default under any Material Contract, and, to Seller’s Knowledge, no other
party to any such Material Contract is in violation, breach or default under, any Material Contract; and (ii) to the Knowledge
of the Seller, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time)
could reasonably be expected to (A) result in a material violation or breach of any of the provisions of any Material Contract,
(B) give any Person the right to declare a default or exercise any remedy under any Material Contract, (C) give any
Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any Material Contract,
(D) give any Person the right to accelerate the maturity or performance of any Material Contract, or (E) give any Person
the right to cancel, terminate or modify any Material Contract; and (iii) the Seller has not received any written notice
regarding any violation or breach of, or default under, any Material Contract. For purposes hereof, “Seller's knowledge”
or “the best of the Seller's knowledge” shall mean the knowledge of the Seller and any manager, officer and/or employee
of the Seller, and shall include information which such individuals actually knew or should have known through the performance
of the duties of such individuals in a manner that is customary in the industry including the Business.


 






    	7



    	 



    

 


2.11  Compliance with
Legal Requirements; Governmental Authorizations.


 


(a)  The
Seller is in compliance in all material respects with all applicable legal requirements with respect to the Business and the Transferred
Assets. Except as set forth in Part 2.11(a) of the Disclosure Schedule, the Seller has not received any notice or other communication
(in writing or otherwise) writ, judgment, injunction, decree, statute, law, rule, regulation or ordinance of any court or governmental,
quasi-governmental or regulatory department or authority ("Governmental Authority") or other Person regarding
any actual or possible violation of, or failure to comply with, any legal requirement with respect to the Business.


 


(b)  The
Seller has made available to the Purchaser accurate and complete copies of any and all authorizations provided by Governmental
Authorities (the "Governmental Authorization"). The Governmental Authorizations and/or licenses are valid and
in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable the Seller to conduct
the Business in the manner in which the Business is currently being conducted. Such Governmental Authorizations will be transferred
to Purchaser upon completion of the transactions contemplated herein, including the assignments contemplated therein. The Seller
has not received any notice or other communication (in writing or otherwise) from any Governmental Authority regarding (a) any
actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorizations,
or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental
Authorization. No Governmental Body has at any time challenged in writing the right of the Seller to conduct the Business as currently
conducted.


 


2.12  Tax Matters.


 


(a)  The
Seller (i) has timely paid all Taxes it is required to pay and (ii) has timely filed all required Tax Returns ("Seller
Returns") concerning or attributable to the Transferred Assets or the Business and such Seller Returns are true and correct
and were completed in accordance with applicable legal requirements.


 


(b)  The
Seller has timely paid or withheld with respect to the employees of the Seller (and timely paid over any withheld amounts to the
appropriate Taxing authority) all federal and state income Taxes and Federal Insurance Contribution Act, Federal Unemployment Tax
Act and other Taxes required to be withheld or paid.


 


(c)  The
Seller does not know of any basis for the assertion of any claim or lawsuit for any liabilities for unpaid Taxes for which the
Purchaser would become liable as a result of the transactions contemplated by this Agreement or that would result in any Encumbrance
on any of the Transferred Assets.


 


(d)  There
are no Encumbrances with respect to any Taxes upon any of the Transferred Assets, other than with respect to Taxes not yet due
and payable.


 


(e)  Notwithstanding
a certain tax obligation(s) that Seller has to the Internal Revenue Service relating to an operation of Seller that was closed
prior to Closing and which was disclosed to the Purchaser, to the extent applicable to the Transferred Assets or the Purchaser’s
ownership of the Transferred Assets or operation of the Business, the Seller has not been delinquent in the payment of any Tax,
nor is there any Tax deficiency outstanding, assessed or proposed against the Seller, nor has the Seller executed any outstanding
waiver of any statute of limitations on or extension of the period for the assessment or collection of any Tax.


 






    	8



    	 



    

 


(f)  With
respect to the Business, the Seller has no Tax holidays or similar Governmental Authority tax incentives relating or available
to the Seller. The Transactions will not have an adverse effect on the availability of any such Tax holiday or incentive prior
to the Closing Date. To the extent applicable to the Transferred Assets or the Purchaser’s ownership of the Transferred Assets
or operation of the Business, (i) no audit or other examination of any Seller Return is presently in progress, nor has the
Seller been notified of any request for such an audit or other examination; (ii) no adjustment relating to any Seller Return
has been proposed formally or, to the Knowledge of the Seller, informally by a Governmental Body to the Seller or any representative
thereof; and (iii) no Claim is pending by a Governmental Body in a jurisdiction where the Seller does not file Seller Returns
that it is or may be subject to taxation by that jurisdiction.


 


(h)  None
of the Assumed Liabilities is an obligation to make a payment that may not be deductible under Section 280G of the Code or that
could result in the imposition of additional Taxes under Section 409A of the Code as a result of the transactions contemplated
by this Agreement.


 


2.13  Employee
and Labor Matters; Benefit Plans.


 


(a)  Part
2.13(a) of the Disclosure Schedule sets forth a complete and accurate list of each Transitioning Employee and independent contractor
of the Seller that are currently providing services to the Seller with respect to the Business (including any such individual who
is on a leave of absence) To the extent applicable, Part 2.13(a) of the Disclosure Schedule also sets forth:


 


(i)  the
name, title and date of hire of each individual;


 


(ii)  each
individual's annual base salary and target bonus opportunity as of the date of this Agreement, or, in the case of an independent
contractor, the terms of compensation of such independent contractor;


 


(iii)  each
individual's accrued and unused vacation; and


 


(iv)  in
the case of any individual that is an independent contractor, a brief description of such independent contractor's duties and responsibilities
to the Seller.


 


(b)  To
the Knowledge of the Seller: (i) no Transitioning Employee intends to terminate his or her employment with the Seller (other than
by virtue of the transactions contemplated by this Agreement); and (ii) no Transitioning Employee is a party to or is bound by
any confidentiality agreement, noncompetition agreement or other Contract (with any Person) that may have a material adverse effect
on: (A) the performance by such employee of any of his or her duties or responsibilities as an employee of the Seller; or (B) the
Business with respect to the Transitioning Employees.


 


(c)  Except
as set forth in Part 2.13(c) of the Disclosure Schedule, with respect to any Transitioning Employee, the Seller is not a party
to or bound by any employment agreement or any union contract, collective bargaining agreement or similar Contract.


 


(d)  There
has not been any slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting
the Transitioning Employees. There is not now pending, and, to the knowledge of the Seller, no Person has threatened to commence,
any such slowdown, work stoppage, labor dispute or union organizing activity or any similar activity or dispute with respect to
the Business. There are no actions, suits, Claims, labor disputes or grievances pending or, to the Knowledge of the Seller, threatened
or reasonably anticipated relating to any labor, safety or discrimination matters involving any Transitioning Employee, including
charges of unfair labor practices or discrimination complaints.


 






    	9



    	 



    

 


(e)  Part
2.13(e) of the Disclosure Schedule contains an accurate and complete list as of the date hereof of each Seller employee plans and
each Seller employee agreement, in each case as relates to any of the Transitioning Employees. With respect to any Seller employee
plan: (i) such plan is, and at all times since inception has been, maintained, administered, operated and funded in all material
respects in compliance with its terms and the requirements of any and all applicable laws, statutes, orders, rules and regulations,
including, without limitation, ERISA, the Code and the regulations issued there under; and (ii) the Seller has in all material
respects properly performed all obligations, whether arising by operation of law or contract, required to be performed by any of
them in connection with such Plan.


 


(f)  Neither
the Seller nor its ERISA Affiliates have ever maintained, established, sponsored, participated in, or contributed to any Seller
Employee Plan that: (i) is subject to Title IV of ERISA; (ii) is a "multiemployer plan" within the meaning of Section
3(37) of ERISA; or (iii) promises or provides retiree medical or other retiree welfare benefits to any Person other than as required
under COBRA or other applicable legal requirements.


 


2.14  Environmental
Matters. To the best of its knowledge, the Seller possesses all permits and other Governmental Authorizations required under
applicable environmental laws in respect of the Business, and is in material compliance with the terms and conditions thereof.
The Seller has not received any notice or other communication (in writing or otherwise), whether from a Governmental Body, citizens
group, employee or otherwise, that alleges that the Seller is not in compliance with any environmental law with respect to its
operation of the Business.


 


2.15  Insurance.
The Seller has in full force and effect insurance policies of the type and in an amount (subject to reasonable deductibles) sufficient
to adequately cover the assets, business, equipment, properties and operations related to the Business.


 


2.16  Related
Party Transactions. Except as set forth in Part 2.16 of the Disclosure Schedule, no Related Party has entered into, or
has had any direct or indirect financial interest in, any Material Contract, transaction or business dealing involving the Seller
in the conduct of the Business. For purposes of this Agreement, each of the following shall be deemed to be a "Related
Party": (i) each officer or director of the Seller; and (ii) any trust or other Entity (other than the Seller)
in which any one of the Persons referred to in clause "(i)" above holds (or in which more than one of such individuals
collectively hold), beneficially or otherwise, a material voting, proprietary or equity interest.


  


2.17  Legal Proceedings;
Orders.


 


(a)  Except
as set forth in Part 2.17(a)(i) of the Disclosure Schedule, there is no pending legal proceeding, and, to the knowledge of
the Seller, no Person has threatened in writing to commence any Legal Proceeding: (i) that specifically relates to the Business
or the Transferred Assets; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or
otherwise interfering with the Transactions.


 


(b)  There
is no legal judgment or order to which the Seller, or any of the Transferred Assets, is subject. To the Knowledge of the Seller,
no Transitioning Employee is subject to any order that prohibits such Transitioning Employee from engaging in or continuing any
conduct, activity or practice relating to the Business.


 


2.18  Authority;
Binding Nature of Agreement. The Seller has all requisite power and authority to enter into and to perform its obligations
under each of the Transactional Agreements to which it is a party; and the execution, delivery and performance by the Seller of
the Transactional Agreements to which it is a party have been duly authorized by all necessary corporate action on the part of
the Seller. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar federal or
state Legal Requirements affecting the rights of creditors. Upon the execution of the Transactional Agreements at the Closing,
they shall constitute the legal, valid and binding obligation of the Seller and will be enforceable against the Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar federal or state legal
requirements affecting the rights of creditors.


 






    	10



    	 



    

 


2.19  Non-Contravention;
Consents. Except as set forth in Part 2.19 of the Disclosure Schedule, neither (i) the execution, delivery or performance
of this Agreement or any Transactional Agreement, nor (ii) the consummation of the transactions contemplated hereunder or
thereunder will directly or indirectly (with or without notice or lapse of time):


 


(a)  contravene,
conflict with or result in a violation of (i) any of the provisions of the operating agreement or organizational charter of
the Seller, or (ii) any resolution adopted by the members of the Seller;


 


(b)  contravene,
conflict with or result in a violation of, or give any Governmental Authority or other Person the right to challenge the transactions
contemplated hereunder or to exercise any remedy or obtain any relief under, any legal requirement or any order to which the Seller,
or any of the assets owned or used by the Seller, is subject;


 


(c)  contravene,
conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authority that is held by the Seller or that otherwise
relates to the Business or to any of the assets owned or used by the Seller;


 


(d)  result
in the imposition or creation of any Encumbrance upon or with respect to any Transferred Asset;


  


(e)  result
in a breach of any contract or agreement to which Seller is a party or by which its assets may be bound, including without limitation,
the Seller Contracts; or


 


(f)  require
the Seller to make any filing with any Person in connection with the execution, delivery or performance of this Agreement
or any of the other Transactions, or the consummation of the Transaction. 


 


2.20  Financial
Advisor. Except as set forth on Part 2.20 of the Disclosure Schedule, no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf
of the Seller.


 


2.21  Sufficiency
of Transferred Assets. The Transferred Assets will collectively constitute, as of the Closing, all of the properties, rights,
interests and other tangible and intangible assets necessary and sufficient to enable the Purchaser to conduct the Business in
the manner in which the Business is currently being conducted, provided that the Seller is making no representation or warranty
hereby as to the adequacy of the working capital and/or cash available to fund the Business as it will operate following the Closing.


 


2.22Marketing
Contact and Lead Database Data. Part 1.1(g) of the Disclosure Schedules contains a true and complete listing of all marketing
contact and lead database data primarily relating to the Business.


 


2.23No
Plans to Compete. As of the Closing Date, Seller has no plan or intention to offer any competing business to the Business.


 


 


3.   REPRESENTATIONS AND WARRANTIES OF THE PARENT.



 


The Parent represents and warrants to the
Seller as follows:


 






    	11



    	 



    

 


3.1  Organization
and Standing; Certificate and Bylaws. The Parent is a corporation duly organized and validly existing under, and by virtue
of, the laws of the State of Delaware and is in good standing under such laws. The Parent has all requisite corporate power and
authority to own and operate its properties and assets, and to carry on its business as presently conducted. The Parent is presently
qualified to do business as a foreign corporation in good standing in each jurisdiction where the failure to be so qualified or
in good standing would have a material adverse effect on the Parent’s business as now conducted.


 


3.2  Corporate
Power. The Parent will have at the Closing Date all requisite legal and corporate power and authority to issue the shares of
the common stock of the Parent (the “Common Stock”) issuable upon conversion of the Stock Consideration, and
to carry out and perform its obligations under the terms of this Agreement.


 


3.3  Capitalization.
As of September 3, 2014, the authorized capital stock of the Parent consists of 45,000,000 shares of Common Stock. As of September
3, 2014, there will be (i) an aggregate of 6,719,433 shares of Common Stock outstanding. The Parent’s outstanding shares
have been duly authorized and validly issued in compliance with applicable federal and state laws, and are fully paid and nonassessable.


 


3.4  Authorization.
All corporate action on the part of the Parent and its directors and stockholders necessary for the authorization, execution, delivery
and performance of this Agreement by the Parent, the authorization, sale, issuance and delivery of the Stock Consideration, the
Common Stock issuable upon conversion of the Stock Consideration, and the performance of all of the Parent’s obligations
under the Transactional Agreements has been taken or will be taken prior to the Closing. The Stock Consideration, when issued in
compliance with the provisions of this Agreement, will be validly issued, will be fully paid and nonassessable; the Common Stock
issuable upon conversion of the Stock Consideration has been duly and validly reserved and will be fully paid and nonassessable;
and the Stock Consideration and the Common Stock issued upon conversion of the Stock Consideration will be free of any liens or
encumbrances, other than any liens or encumbrances created by or imposed upon the Seller; provided, however, that the Stock Consideration,
and the Common Stock issuable upon conversion of the Stock Consideration, are subject to restrictions on transfer under state and/or
federal securities laws as set forth herein and in the Amended Rights Agreement. Other than as set forth in the Amended Rights
Agreement, the Stock Consideration and the Common Stock issuable upon conversion of the Stock Consideration are not subject to
any preemptive rights or rights of first refusal.


 


3.5  Financial
Statements. The Parent has delivered to the Seller its audited financial statements for the period ended December 31, 2013
and its unaudited financial statements for the three-month period ended June 30, 2014(the “Statement Date”).
The foregoing financial statements are referred to as the “Financial Statements.” The Financial Statements,
together with the notes thereto, have been prepared in accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated, except as disclosed therein, and present fairly the financial condition and position of
the Parent as of the Statement Date; provided, however, that the unaudited financial statements are subject to normal recurring
year-end audit adjustments (which are not expected to be material either individually or in the aggregate), and do not contain
all footnotes required under generally accepted accounting principles.


 


3.6  No
Changes. Since the Statement Date, there has not been:


 


(a)  Any
change in the assets, liabilities, financial condition, or operations of the Parent, other than changes in the” ordinary
course of business, none of which individually or in the aggregate has had or is reasonably expected to have a material adverse
effect on such assets, liabilities, financial condition or operations of the Parent;


 


(b)  Any
resignation or termination of any officer, key employee or group of employees of the Parent;


 






    	12



    	 



    

 


(c)  Any
waiver by the Parent of a valuable right or of a material debt owed to it;


 


(d)  Any
material change, except in the ordinary course of business, in the contingent obligations of the Parent by way of guaranty, endorsement,
indemnity, warranty or otherwise;


 


(e)  Any
damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties, business or
financial condition of the Parent;


 


(f)  Other
than disclosed in part 3.6(f) of the Disclosure Schedule, any material change in any compensation arrangement or agreement with
any employee, officer, director or stockholder;


 


(g)  Any
change in any material agreement to which the Parent is a party or by which it is bound which materially and adversely affects
the business, assets, liabilities, financial condition or operations of the Parent;


 


(h)  Other
than licenses to the customers in the ordinary course of business, any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets; or


 


(i)  Any
arrangement or commitment by the Parent to do any of the acts described in subsection (a) through (h) above.


 


3.7  No
Undisclosed Liabilities. The Parent has not incurred any material liability or expense which individually or in the aggregate
(i) has not been adequately reflected in the Financial Statements or (ii) has not arisen in the ordinary course of business consistent
with past practices since June 30, 2014.


 


3.8  Title
to Properties and Assets; Liens, etc. The Parent has good and marketable title to its properties and assets, and has good title
to all its leasehold interests, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (i) the
lien of current taxes not yet due and payable and (ii) possible minor liens and encumbrances which do not in any case materially
detract from the value of the property subject thereto or materially impair the operations of the Parent, and which have not arisen
otherwise than in the ordinary course of business. The Parent is in compliance with the material terms of each real property lease
to which it is a party.


 


3.9  Compliance
with Other Instruments, None Burdensome, etc. The Parent is not in violation of any term of its Bylaws or in any material respect
of any term or provision of any material mortgage, indebtedness, indenture, contract, agreement, instrument, judgment or decree
to which it is a party or by which it is bound, and to the Parent’s knowledge, the Parent is not in violation of any order,
statute, rule or regulation applicable to the Parent. The execution, delivery and performance of and compliance with this Agreement
and the issuance of the Stock Consideration and the Common Stock issuable upon conversion of the Stock Consideration, have not
resulted and will not result in any violation of, or conflict with, or constitute a default under the Parent’s Bylaws, as
amended to date, or any of its agreements, nor result in the creation of, any mortgage, pledge, lien, encumbrance or charge upon
any of the properties or assets of the Parent.


 


3.10  Litigation,
etc. Other than listed in Item 3.10 of the Disclosure Schedules, there are no actions, suits, proceedings or investigations
pending against the Parent or its properties or its officers or directors (nor, to the Parent’s knowledge, is there any threat
thereof) before any court or governmental agency that would have a material adverse effect on the Parent or change the current
equity ownership of the Parent.


 


3.11  Registration
Rights. The Parent is not under any contractual obligation to register any of its presently outstanding securities or any of
its securities which may hereafter be issued.


 






    	13



    	 



    

 


3.12  Governmental
Consent, etc. No consent, approval or authorization of or designation, declaration or filing with any governmental authority
on the part of the Parent is required in connection with the valid execution and delivery of this Agreement or the offer, sale
or issuance of the Stock Consideration, and the Common Stock issuable upon conversion of the Stock Consideration, or the consummation
of any other transaction contemplated hereby or thereby, except (i) filing of the Certificate of Merger in the office of the
Delaware Secretary of State and/or any other relevant State, and (ii) qualification (or taking such action as may be necessary
to secure an exemption from qualification, if available) of the offer and sale of the Stock Consideration, and the Common Stock
issuable upon conversion of the Stock Consideration, under applicable state Blue Sky laws, which filings and qualifications, if
required, will be accomplished in a timely manner.


 


3.13  Offering.
Subject to the accuracy of the Sellers’ representations in this Agreement, the offer, sale and issuance of the Stock Consideration
to be issued in conformity with the terms of this Agreement, and the issuance of the Common Stock to be issued upon conversion
of the Stock Consideration, do not constitute transactions exempt from the registration requirements of Section 5 of the Securities
Act of 1933, as amended (the “Securities Act”) and will not have been registered or qualified under the registration,
permit or qualification requirements of all applicable state securities laws.


 


 3.14  Tax
Returns and Payments. The Parent has filed timely any tax returns (federal, state or local) required to be filed by it. The
Parent has not been advised of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Parent
has not been advised (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof,
or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Parent has no knowledge of
any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided
for. The Parent has withheld or collected from each payment made to each of its employees, the amount of all taxes (including,
but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required
to be withheld or collected there from, and has paid the same to the proper tax receiving officers or authorized depositories.


 


3.15  Insurance.
The Parent has general directors and officers, commercial, fire and casualty insurance policies with coverage customary for companies
similarly situated to the Parent.


 


3.16  Minute
Books. The minute books of the Parent do not omit any material actions, items or events occurring at any meeting of directors
or stockholders since the time of incorporation.


 


3.17 Financial
Advisor. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of the Parent or its affiliates.


 


3.18  Financing.
As of the date of this Agreement, the Parent has sufficient financial resources so as to enable the Parent to satisfy all of its
obligations under this Agreement without further recourse to outside financing.


 


 


4.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.



 


The Purchaser represents and warrants to
the Seller as follows:


 


4.1  Organization
and Standing; Certificate and Bylaws. The Purchaser is a limited liability company duly organized and validly existing under,
and by virtue of, the laws of the State of North Carolina and is in good standing under such laws. The Purchaser has all requisite
corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted.
The Purchaser is presently qualified to do business as a foreign corporation in good standing in each jurisdiction where the failure
to be so qualified or in good standing would have a material adverse effect on the Purchaser’s business as now conducted.


 


4.2  Corporate
Power. The Purchaser will have at the Closing Date all requisite legal and corporate power and authority to carry out and perform
its obligations under the terms of this Agreement.


 






    	14



    	 



    

 


4.3  Authorization.
All corporate action on the part of the Purchaser and its members necessary for the authorization, execution, delivery and performance
of this Agreement by the Purchaser and the performance of all of the Purchaser’s obligations under the Transactional Agreements
has been taken or will be taken prior to the Closing.


 


5.  COVENANTS REGARDING EMPLOYMENT MATTERS.


 


5.1  Employees.


 


(a)  For
all periods prior to the Closing Date, in conjunction with the termination of the current Seller employees who are also Transitioning
Employees and have agreed to be employees of the Purchaser upon the Closing, the Seller will pay each such current Seller Employee
all wages, severance and any other payments due and owing, and provide each such current Seller Employee who has accrued but unused
vacation pay with a payment that constitutes the value of such Seller Employee's accrued but unused vacation pay.


 


(b)  The
covenants set forth in this Section 5 are for the sole benefit of the parties to this Agreement and are not intended to confer
any rights on third parties. Such covenants do not amend, and shall not be deemed to amend, Purchaser's benefit plans or agreements.


 


6.  CLOSING DELIVERIES. 


 


6.1 Closing
Deliveries of the Purchaser. On or prior to the Closing Date, the Purchaser shall deliver to Seller each of the following documents:


 


(a)  Proof
of Funds to Close. At least forty-eight (48) hours prior to Closing, Purchaser shall present to Seller written evidence that
Purchaser has available sufficient financial resources on hand to close and to otherwise perform all of its obligations under this
Agreement without the need to seek funding or other financial assistance or investment for any third party.


 


(b)  Bill
of Sale. A Bill of Sale in a form reasonably acceptable to the Purchaser (the "Bill of Sale"), duly executed
by the Purchaser and effective at the Closing.


 


(c)Requisite Board
Approvals. Documentation evidencing the procurement of the approvals of Purchaser’s board of directors relating
to this Agreement.


 


(d)  
Good Standing Certificate. A certificate issued by the Secretary of State of Delaware dated no earlier than one (1) Business
Day prior to the Closing Date attesting to the Parent’s good standing status. 


 


(e)Stock Certificate.
Stock certificates representing the Stock Consideration .


 


(f)Escrow Agreement.
A fully executed Escrow Agreement in a form mutually agreeable to the Purchaser and Seller relating to the Escrowed Shares.


 


6.2  Closing
Deliveries of the Seller. On or prior to the Closing Date, the Seller shall deliver to Purchaser each of the following documents:


 


(a)  Bill
of Sale. The Bill of Sale, duly executed by the Seller and effective at the Closing.


 


(b)  
Assignments. Recordable assignment agreements with respect to the Registered IP and such bills of sale, endorsements, assignments,
business transfer agreements and other documents as may reasonably be necessary or appropriate to assign, convey, transfer and
deliver to the Purchaser or an affiliate of the Purchaser good and valid title to such Transferred Assets free and clear of any
Encumbrances.


 






    	15



    	 



    

 


(c)  
Requisite Board Approvals. Documentation evidencing the procurement of the approvals of Purchaser’s board
of directors relating to this Agreement.


 


(d)  Good
Standing Certificate. A certificate issued by the Secretary of State of North Carolina dated no earlier than one (1) Business
Day prior to the Closing Date attesting to the Seller’s good standing status in each such state.


 


(e) Escrow Agreement.
A fully executed Escrow Agreement in a form mutually agreeable to the Purchaser and Seller relating to the Escrowed Shares.


 


(f)Lease
Assignment. A fully executed assignment of the Lease in a form mutually agreeable to the Purchaser, Seller and Landlord.


 


6.3Transactional
Documents. This Agreement, the Escrow Agreement, Bill of Sale and all required assignments as set forth in Section 6.2(b) shall
constitute the Transactional Documents.


 


7.  SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION.


 


7.1  Survival.


 


(a)  All
representations and warranties of the Seller (set forth in Section 2) and of the Purchaser (set forth in Section 3) shall
expire on the one year anniversary of the Closing, provided that for any good-faith claim for indemnification for alleged
breach of any such representation or warranty made prior to expiration of such period, such representation or warranty shall survive
with respect to any such claim for indemnity made on a timely basis.


 


(b)  Claims
for indemnification, compensation and reimbursement brought in accordance with and subject to this Article 7 shall be the sole
and exclusive remedy of any Indemnitee (as hereinafter defined) for monetary damages from and after the Closing with respect to
breaches of this Agreement by the Seller or the Purchaser. Without limiting the generality of the foregoing, nothing contained
in this Agreement shall limit the rights of any Indemnitee to seek or obtain injunctive relief, rescission or any other equitable
remedy to which such Indemnitee is otherwise entitled.


 


(c)  Notwithstanding
anything to the contrary, the limitations set forth in this Section 7.1 shall not apply in the case of claims based upon fraud.


 


7.2  Indemnification
by the Seller. From and after the Closing (but subject to Section 7.1), the Seller shall hold harmless and indemnify Purchaser
and/or Parent from and against, and shall compensate and reimburse Purchaser and/or Parent from and against, and promptly pay to
or reimburse Purchaser and/or Parent for any and all losses, damages and expenses (including, without limitation, reasonable attorneys'
and other advisors' fees and expenses), suits, actions, claims, deficiencies, liabilities or obligations (collectively, the "Damages”)
which are suffered or incurred by Purchaser and/or Parent or to which Purchaser and/or Parent may otherwise become subject (regardless
of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are connected with:


 


(a)  any
inaccuracy in or breach of any representation or warranty made by the Seller in this Agreement as of the date of this Agreement;


 


(b)  any
breach of any covenant or obligation of the Seller set forth in this Agreement; or


 


(c)  any
Liability of the Seller (including Liabilities pertaining to the Transferred Assets or the ownership and operation of the Business,
in each case pertaining to the period prior to the Closing) to which Purchaser and/or Parent becomes subject, other than the Assumed
Liabilities.


 






    	16



    	 



    

 


(d)any Liability
relating to the matter set forth on Part 7.2(d) of the Disclosure Schedule (the “Specified Claim Liability”),
provided, that, notwithstanding anything to the contrary in the foregoing or elsewhere in this Agreement, the Seller's indemnification
obligations with respect to the Specified Claim Liability shall survive any other scheduled termination of its warranties or indemnification
obligations under this Agreement, provided, that except in the case of fraud, Seller's indemnification obligations with
respect to the Specified Claim Liability, and except for breaches of Section 7.2(c), the exclusive method of compensating and reimbursing
Purchaser and/or Parent for any such Damages shall be a reduction in the number of Escrowed Shares pursuant to the provisions of
Section 7.4 (which Escrowed Shares shall then be returned to Purchaser).


 


7.3  Indemnification
by the Purchaser. From and after the Closing (but subject to Section 7.1), the Purchaser shall hold harmless and indemnify
Seller from and against, and shall compensate and reimburse Seller for, any Damages which are suffered or incurred by Seller or
to which Seller may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which
arise from or as a result of, or are connected with:


 


(a)  any
inaccuracy in or breach of any representation or warranty made by the Purchaser in this Agreement as of the date of this Agreement;


 


(b)  any
breach of any covenant or obligation of the Purchaser set forth in this Agreement; or


 


(c)  any
liability to which the Seller may become subject that arises from or relates to any of the Assumed Liabilities.


 


 7.4  Certain
Limitations.


 


(a)  The
Seller shall not be required to make any indemnification payment pursuant to Section 7.2 for any inaccuracy in or breach of any
representation or warranty until such time as the total amount of all Damages (including the Damages arising from such inaccuracy
or breach and all other Damages arising from any other inaccuracies or breaches of any representations or warranties) that have
been suffered or incurred by any one or more of the Indemnitees, or to which any one or more of the Indemnitees has or have otherwise
become subject, exceeds $10,000 in the aggregate. If the total amount of such Damages exceeds $10,000 in the aggregate, then the
Indemnitees shall be entitled to be indemnified against and compensated and reimbursed for the total amount of all Damages.


 


(b)  The
total amount of Damages which the Seller may be entitled to be indemnified against (i) pursuant to Section 7.3(a) shall be limited
to $25,000, and (ii) pursuant to Section 7.3(b) and 7.3(c), collectively, shall be limited to $50,000.


 


(c)None of
the limitations set forth herein Section 7.4 shall apply in the case of fraud, or with respect to the Seller's indemnification
obligations with respect to any Specified Claim Liability pursuant to Section 7.2(d).


 


(d)Notwithstanding
any provision or other remedy permitted by or in this Agreement, Seller acknowledges and agrees it may forfeit its Escrowed Shares
and Net Profits in an amount equal to any Damages suffered by Purchaser pursuant to this Section 7.4.


 


7.5  Defense
of Third Party Claims. In the event of the assertion or commencement by any Person of any claim or legal proceeding (whether
against the Purchaser, Parent or any other Person) (hereinafter an "Indemnitee") with respect to which the Seller,
Purchaser or Parent (hereinafter an "Indemnitor") may become obligated to hold harmless, indemnify, compensate
or reimburse any Indemnitee pursuant to this Section 7, the Indemnitor shall have the right, at its election, to proceed with the
defense of such claim or legal proceeding on its own by appointing legal counsel reasonably acceptable to the Indemnitee to be
the lead counsel in connection with such defense (it being understood that an Indemnitee shall be entitled to withhold consent
if the Indemnitor's counsel is subject to a conflict of interest); provided, that:


 






    	17



    	 



    

 


(a)  the
Indemnitor acknowledges and agrees in writing that the Seller Claim is an indemnifiable claim for which the Indemnitor has an indemnification
obligation pursuant to this Agreement; and


 


(b)  if
the Indemnitor shall control the defense of any such claim, the Indemnitor shall obtain the prior written consent of the Indemnitee
(which shall not be unreasonably withheld, delayed or conditioned) before entering into any settlement of a claim or ceasing to
defend such claim if such settlement imposes any obligation on Indemnitee or otherwise would restrict the activities of the Indemnitee,
or if such settlement does not expressly and unconditionally release the Indemnitee from all liabilities and obligations with respect
to such claims.


 


The Indemnitee shall give the Indemnitor
prompt notice in writing of the commencement of any such legal proceeding against the Indemnitee to which this Agreement would
be applicable; provided, however, that any failure on the part of the Indemnitee to so notify the Indemnitor shall
not limit any of the obligations of the Indemnitee under the Agreement (except to the extent such failure materially prejudices
the defense of such legal proceeding). If the Indemnitor does not elect to proceed with the defense of any such claim or Legal
Proceeding or does not do so in accordance with the terms of this Section 7.5, the Indemnitee may proceed with the defense of such
claim or legal proceeding with counsel selected by Indemnitee, all reasonable expenses relating to the defense of such claim or
legal proceeding shall be borne and paid exclusively by the Indemnitor, and the Indemnitor shall reasonably cooperate with the
Indemnitee, as applicable, by providing copies of records and information that are reasonably relevant to such legal proceeding;
provided, however, that if the Indemnitee has acknowledged its liability to provide indemnity, but has not exercised
its right to control the defense, the Indemnitee shall obtain the prior written consent of the Indemnitor (which shall not be unreasonably
withheld, delayed or conditioned) before entering into any settlement of a claim or ceasing to defend such claim if such settlement
imposes any obligation on the Indemnitor or otherwise would restrict the activities of the Indemnitor, or if such settlement does
not expressly and unconditionally release the Indemnitor from all liabilities and obligations with respect to such claims.


 


7.6  Indemnification
Claims.


 


(a)  If
any Indemnitee has incurred or suffered or claims to have incurred or suffered, or believes that it may incur or suffer, Damages
for which it is or may be entitled to be held harmless, indemnified, compensated or reimbursed under this Article 7, such Indemnitee
may deliver a notice to the Indemnitor (any such notice being referred to as a "Notice of Indemnification Claim,"
and the claim for indemnification, compensation and reimbursement described in such Notice of Indemnification Claim being referred
to as an "Indemnification Claim"), which shall (i) state that such Indemnitee believes that that there is
or has been a possible inaccuracy in or breach of a representation, warranty, covenant or obligation contained in this Agreement
or that such Indemnitee is otherwise entitled to be held harmless, indemnified, compensated or reimbursed under this Article 7,
(ii) contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a
possible inaccuracy or breach or that such Indemnitee may otherwise be entitled to be held harmless, indemnified, compensated or
reimbursed, and (iii) contain a good faith, non-binding, preliminary estimate of the aggregate dollar amount of actual and
potential Damages that have arisen and may arise as a result of the inaccuracy, breach or other matter referred to in such notice
(the aggregate amount of such estimate, as it may be modified by such Indemnitee in good faith from time to time, being referred
to as the "Claimed Amount"). 


 


(b)  In
the event that the Indemnitee has delivered a Notice of Indemnification Claim to the Indemnitor, the Indemnitor shall have ten
(10) days to deliver a written objection to the Claimed Amount set forth in the Notice of Indemnification Claim. If the Indemnitor
timely delivers such a written objection to the Indemnitee, the Indemnitee and the Indemnitor shall use commercially reasonable
efforts to resolve any such objections, but if a final resolution is not obtained within thirty (30) days after the Indemnitor
has submitted its objections, the Indemnitee and the Indemnitor shall submit the matter to non-binding mediation pursuant to Section
9.6 hereto. If the Indemnitor does not deliver a written objection within such time period, the Indemnitee shall be entitled at
such time to any amounts due and payable pursuant to such Claimed Amount in accordance with this Article 7.


 






    	18



    	 



    

 


8.  CERTAIN POST-CLOSING COVENANTS.


 


8.1  Further
Actions. From and after the Closing Date, notwithstanding any other provisions as set forth herein, Seller shall cooperate
with the Purchaser and the Purchaser's affiliates and representatives, and shall execute and deliver such documents and take such
other actions as the Purchaser may reasonably request, for the purpose of evidencing the Transactions and putting the Purchaser
in possession and control of all of the Transferred Assets. In addition, upon Purchaser's reasonable request, Seller shall deliver
to Purchaser such assets that were not included in and that do not otherwise constitute Transferred Assets but that are otherwise
necessary for the Business to be conducted in the manner in which it is currently being conducted as of the Closing Date.


 


8.2  Publicity.
The parties may issue a joint press release announcing the Transaction. Thereafter, any press release concerning the Transaction
issued by either party must be substantially consistent in all material respects with the joint press release described above.
All other communications concerning the Transaction must not be inconsistent with the joint press release.


 


8.3  Tax
Cooperation. 


 


(a)  The
Purchaser, Parent and the Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable,
such information and assistance relating to the Transferred Assets (including access to books and records) as is reasonably necessary
for the filing of all tax returns, and making of any election related to taxes, the preparation for any audit by any taxing authority,
and the prosecution or defense of any claim, suit or legal proceeding relating to any tax return.


 


8.4  Assignment
of Reseller, Consultant and Business Partner Agreements. Seller agrees to cooperate with Purchaser and Parent during the sixty
(60) day period after the Closing Date to either (i) provide an effective assignment of all reseller, consultant or other business
partner agreements previously disclosed to Purchaser and Parent and included in Part 1.1(d) of the Disclosure Schedule, or (ii)
terminate such agreements, all as specified by, and to the reasonable satisfaction of Purchaser.


 


9.  MISCELLANEOUS PROVISIONS.


 


9.1  Fees
and Expenses.


 


(a)  The
Seller shall bear and pay all fees, costs and expenses that have been incurred or that are in the future incurred by, on behalf
of or for the benefit of, the Seller in connection with: (i) the negotiation, preparation and review of this Agreement, any
other transactional agreements and all bills of sale, assignments, certificates, opinions and other instruments and documents delivered
or to be delivered in connection with the Transactional Agreements; and (ii) the consummation and performance by the Seller
of the transactions related hereto and thereto.


 


(b)  The
Purchaser and Parent shall bear and pay all fees, costs and expenses that have been incurred or that are in the future incurred
by, or on behalf or for the benefit of, the Purchaser in connection with: (i) the negotiation, preparation and review of this
Agreement, any other Transactional Agreements and all bills of sale, assignments, certificates, opinions and other instruments
and documents delivered or to be delivered in connection with the Transactional Agreements and (ii) the consummation and performance
by the Purchaser of the Transactional Agreements.


 


9.2  Attorneys'
Fees. If any legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement is brought against
any party to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements
(in addition to any other relief to which the prevailing party may be entitled).


 






    	19



    	 



    

 


9.3  Notices.
Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and
shall be deemed properly delivered, given and received: (a) when delivered by hand; (b) on the day sent by facsimile
provided that the sender has received confirmation of transmission as of or prior to 5:00 p.m. Eastern Standard time on such
day; (c) the first business day after sent by facsimile (to the extent that the sender has received confirmation of transmission
after 5:00 p.m. Eastern Standard time on the day sent by facsimile); or (d) the third business day after sent by registered
mail or by courier or express delivery service, in any case to the address or facsimile telephone number set forth beneath the
name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto):


 


If to the Purchaser or Parent:


 


Chanticleer Holdings


ATTN: Mike Pruitt


11220 Elm Lane, Suite 203


Charlotte, North Carolina 28277


 


with a copy to:


 


Ruskin Moscou Faltischek, P.C.


1425 RXR Plaza, East Tower,15th
Floor


Uniondale, New York 11556


Attn: Seth I. Rubin, Esq.


 


If to the Seller:


 


The Burger Company


2072 Kings Manor Drive


Matthews, NC 28104-6738


 


with a copy to:


 


R. David Joseph, Esquire


PO Box 2080


Greensboro, NC 27402-2080 


 


9.4  Headings.
The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of
this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.


 


9.5  Counterparts
and Exchanges by Electronic Transmission or Fax. This Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed
Agreement (in counterparts or otherwise) by electronic transmission or fax shall be sufficient to bind the parties to the terms
and conditions of this Agreement.


 


9.6  Governing
Law; Non-Binding Mediation; Venue. 


 


(a)  This
Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of North Carolina
(without giving effect to principles of conflicts of laws).


 






    	20



    	 



    

 


(b)  Except
as otherwise provided in this Agreement, all disputes arising under this Agreement or any other document referenced in this Agreement
shall be settled by non-binding mediation; provided, however, that this Section 9.6 shall not preclude any party
from seeking injunctive relief in a court of competent jurisdiction. Non-binding mediation shall be held in Charlotte, North Carolina
under the auspices of the American Arbitration Association (the "AAA") pursuant to the Mediation Procedures of
the AAA, and shall be by one mediator, independent of the parties to this Agreement, selected from a list provided by the AAA in
accordance with such Commercial Arbitration Rules. The mediator shall make his or her decision in writing at the earliest convenient
date. The decision of the mediator shall be non-binding on the parties to this Agreement. The mediator may chose to award fees
and expenses of the mediation.


 


(c)  Each
party hereto irrevocably and unconditionally: (a) agrees that any action arising out of this Agreement not otherwise resolved through
use of the mediation procedures set forth in Section 9.6(b) may be brought in any court of general jurisdiction in the County of
Mecklenburg, North Carolina; (b) in such event, consents to the jurisdiction or any such court in any such action; and (c) in such
event, waives any objection which such party may have to the laying of venue of any such action in any such court.


 


9.7  Successors and
Assigns; Parties in Interest.


 


(a)  This
Agreement shall be binding upon: the Seller and its successors and assigns (if any); and the Purchaser and its successors and assigns
(if any). This Agreement shall inure to the benefit of: the Seller; the Purchaser; the other Indemnitees; and the respective successors
and assigns (if any) of the foregoing.


 


(b)  After
the Closing Date, the Purchaser may freely assign any or all of its rights under this Agreement(including its indemnification rights
under Section 7), in whole or in part, to any other Person without obtaining the consent or approval of any other party hereto
or of any other Person; provided, however, that the Purchaser shall remain liable for all of its obligations under
this Agreement.


 


(c)  The
Seller shall not be permitted to assign any of its rights or delegate any of its obligations under this Agreement without the Purchaser's
prior written consent.


 


(d)  None
of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties to this
Agreement and their respective successors and assigns (if any). Without limiting the generality of the foregoing: (i) no employee
of the Seller shall have any rights under any Transactional Agreement; and (ii) no creditor of the Seller shall have any rights
under any Transactional Agreement.


 


9.8  Remedies
Cumulative; Specific Performance. The rights and remedies of the parties hereto shall be cumulative (and not alternative).
Each party agrees that: (a) in the event of any breach or threatened breach by any other party of any covenant, obligation
or other provision set forth in this Agreement, such party shall be entitled (in addition to any other remedy that may be available
to it) to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant,
obligation or other provision; and (ii) an injunction restraining such breach or threatened breach; and (b) no Person
shall be required to provide any bond or other security in connection with any such decree, order or injunction or in connection
with any related legal proceeding.


 


9.9  Waiver.
No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the
part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or remedy. No Person shall be deemed to have waived
any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such
claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of
such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.


 






    	21



    	 



    

 


9.10  Amendments.
This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed
and delivered on behalf of the Purchaser and the Seller.


 


9.11  Severability.
In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application
of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable,
shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.


 


8.12  Entire
Agreement. The Transactional Agreements set forth the entire understanding of the parties relating to the subject matter thereof
and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter thereof.


 


9.13  Construction.


 


(a)  For
purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include the masculine and feminine genders.


 


(b)  The
parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party
shall not be applied in the construction or interpretation of this Agreement.


 


(c)  As
used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to
be terms of limitation, but rather shall be deemed to be followed by the words "without limitation."


 


(d)  Except
as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer
to Sections of this Agreement and Schedules and Exhibits to this Agreement.


 


 


 


 


 


[signature page follows]


 






    	22



    	 



    

 


IN WITNESS WHEREOF,
each of the parties hereto has caused this Agreement to be executed as of the date first above written.


 


 


	 	PARENT:
	 	 	 
	 	CHANTICLEER HOLDINGS, INC., a 
	 	Delaware Corporation 
	 	 	 
	 	 	 
	 	By: 	/s/ Michael D. Pruitt 
	 	 	Name: Michael D. Pruitt
	 	 	Title: Chief Executive Officer 
	 	 	 
	 	 	 
	 	PURCHASER:
	 	 	 
	 	AMERICAN BURGER MOREHEAD,

LLC, a North Carolina Limited Liability

Company
	 	 	 
	 	By: American Roadside Burger, Inc., its

Managing Member 
	 	 	 
	 	By:	 /s/ Michael D. Pruitt
	 	 	Name: Michael D. Pruitt
	 	 	Title:  Chief Executive Officer 
	 	 	 
	 	 	 
	 	SELLER:
	 	 	 
	 	THE BURGER COMPANY, LLC, a North

Carolina Limited Liability Company 
	 	 	 
	 	 	 
	 	By:	 /s/ David Smith 
	 	 	Name: David Smith
	 	 	Title: Managing Member 
	 	 	 
	 	 	 
	 	By:	 /s/ Randy Smith
	 	 	Name: Randy Smith
	 	 	Title: Managing Member


  



    	23