Document:

Co-Marketing Agreement with EMTS, LLC

 Exhibit 10.10 
  
 CO-MARKETING AGREEMENT 
 Between 
 SOURCE ATLANTIC, INC. (“SA”) 
 And 
 EMTS, LLC
(“EMTS”) 
  
 June 8, 2004 

 
 Source Atlantic, Inc. (“SA”), a Delaware corporation having an office at
55 Accord Park Drive, Rockland, MA 02370 and EMTS, LLC, (“EMTS”) a Texas corporation with its principal place of business at 8 Inverness Drive East Suite 245 Englewood, CO 80112 (each a “Party”, and collectively the
“Parties”) hereby agree as follows: 
  

	1.	Background 

  
 WHEREAS, SA has developed a suite of products and services (the “HourGlass Solution”) designed to help hospitals and healthcare companies lower overall project and capital asset acquisition costs by
tightly managing the planning, budgeting, procurement and delivery of capital equipment, IT, furniture and related materials. 
  
 WHEREAS, (EMTS), has developed a host of maintenance, support and procurement services WHEREAS, SA desires to complement its existing products and service offering by
providing its clients and partners access to this combined package. 
  
 WHEREAS
EMTS and SA also desire to provide each other with the opportunity to market each Party’s products and services to the other Party’s customers and contacts in exchange for referral fees, all on the terms and conditions set forth herein.

  

	2.	Definitions 

  
 The following terms shall have the meanings ascribed to them in this Article: 
  
 “Effective Date” means the date of this Agreement, which is set forth immediately below the title of this Agreement. 
  
 “EMTS Prospect” means any potential customer for SA products or services that is registered by EMTS as a prospect under the
provisions of Section 2.3. 
  
 “Intellectual Property” means (i)
all patents, copyrights, trademarks, trade secrets, (ii) all concepts, techniques, know how, procedures, designs, methodologies, inventions, discoveries, marks, and works of authorship, in each case, in all forms, formats, languages and versions,
and (iii) all right, title and interest, including copyright, in and to any of the foregoing, in all territories, under any and all applicable bodies of law (including, without limitation, under the laws of patent, copyright, trademark, trade secret
and mask works), and all applications, registrations 

 “SA Prospect” means any potential customer for EMTS’s products or services that is registered by SA
as a prospect under the provisions of section 2.4 or any user who accesses the any EMTS site directly through SA’s web site, pursuant to Section 2.5. 
  
 “Term” means the term of this Agreement. 
  

	3.	Marketing 

  
 Appointment as Authorized Remarketer 
  
 Each Party hereby agrees to actively market the other Party’s products and services to its current and prospective customers, and each Party hereby appoints the other Party as an “Authorized Remarketer” for its products and
services, provided, however, that only SA shall be authorized to enter into a contract or license for any of SA’s products or services and only EMTS shall be authorized to enter into any contract or license for any of EMTS’s products or
services. Marketing Plan 
  
 SA and EMTS shall work together to jointly define and
implement a marketing plan for each other’s products and services. EMTS shall be SA’s preferred provider Such marketing plan shall be in writing and executed by both Parties on or prior to August 1st 2004. The plan shall cover marketing
initiatives such as direct mail, newsletter articles, advertising, press release, and other marketing mediums, including a plan regarding which marketing and other sales-related expenses will be paid by each partySales Assistance 
  
 At either Party’s reasonable request, the other Party shall provide the following sales
assistance: (a) hosting of remote demonstrations through the internet; (b) providing on-site demonstrations; (c) participating in telephone calls with prospects; and (d) completing such other tasks as the requesting Party may reasonably request in
order to close a sale for the other Party’s products or services. 
  
 Registering Opportunities and Sales 
  
 Each Party shall register
each of its prospects with the other Party by providing notice of the name and address of the prospect. Unless the Party receiving such notice informs the other Party within seven (7) business days (by written notice) that it has already made a
sales presentation to that prospect within the last six months, each such prospect shall be deemed a prospect of the Party providing such notice. Each prospect shall be considered registered as such for a period of six months. During that period,
the other Party shall not approach, nor shall it permit any of its independent resellers to approach, that prospect in order to market its products or services. If no agreement has been executed with such at the end of such six-month period, such
registration period shall be extended in increments of three months, so long as the Party seeking to extend the registration reasonably demonstrates that it is making progress towards the completion of a sale with the prospect. 
  
 Either Party may at any time, in its sole discretion, abandon its effort to complete a sale
to a prospect by providing notice to the other Party, in which case the other Party and its independent resellers shall be free to approach the prospect. 
  

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	5.	Compensation 

  
 EMTS shall pay SA a referral fee equal to 5% of revenue received by EMTS from SA Prospects for EMTS’s procurement and maintenance services during the first 12 months of the applicable agreement. 
  
 SA shall pay EMTS a referral fee equal to 5% of the revenue received by SA from any
transaction with an EMTS Prospect during the first 12 months of the applicable agreement with the EMTS Prospect. 
  
 Fees shall be paid quarterly. Reports will be submitted quarterly indicating the manner in which the payment was computed. 
  
 In the case SA contracts with EMTS directly for support services SA will provide a detailed
Scope of Work in return EMTS will provide a detailed Proposal. In which case an addendum to this marketing agreement will be developed and enclosed herein and Exhibit 1 
  

	6.	Representations and Warranties 

  
 Source Atlantic 
  
 SA represents and warrants to EMTS that: 
  
 SA is
a corporation, duly organized and existing under the laws of the State of Delaware, with its principal place of business in Rockland, Massachusetts; 
  
 SA has full power and authority to execute and deliver this Agreement and to take any and all other action necessary to consummate the transactions provided for in this
Agreement; and 
  
 (The execution and delivery of this Agreement and the
consummation of its terms do not violate or constitute a default under the corporate charter or bylaws of SA, any law, order, writ, injunction or decree of any court, governmental agency or arbitration tribunal, or the terms of any other contract or
commitment to which SA is a part or by which it is bound. 
  
 EMTS

  
 EMTS represents and warrants to SA that: 
  
 EMTS is a limited liability corporation, duly organized and existing under the laws of the
State of Colorado with its principal place of business 8 Inverness Drive East Suite 245 Englewood, CO 80112; 
  
 EMTS has full power and authority to execute and deliver this Agreement and to take any and all other action necessary to consummate the transactions provided for in this Agreement; and 
  

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 The execution and delivery of this Agreement and the consummation of its terms do not violate or constitute a default
under the corporate charter or bylaws of EMTS, any law, order, writ, injunction or decree of any court, governmental agency or arbitration tribunal, or the terms of any other contract or commitment to which EMTS is a part or by which it is bound.

  

	7.	Disclaimer of Implied Warranties 

  
 EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THERE ARE NO WARRANTIES, OF ANY KIND OR NATURE, WHETHER EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. 
  

	8.	Indemnity 

  
 Indemnification by SA 
  
 SA shall
indemnify, defend and hold harmless EMTS and its directors, officers, employees against all damages arising from or in connection with any misrepresentation or breach of any representation, warranty or covenant of SA under this Agreement or any
claim of a customer arising out of SA’s performance of its duties under any contract SA may enter into with an EMTS Prospect. 
  
 Indemnification by EMTS 
  
 EMTS shall indemnify, defend and hold harmless SA and its directors, officers and employees against all damages arising from or in connection with any misrepresentation or breach of any representation, warranty or
covenant of EMTS hereunder or any claim of a customer arising out of EMTS’s performance of its duties for any transaction with an SA Prospect. 
  
 Notice of Indemnification. 
  
 A Party seeking indemnification pursuant to this Article (an “Indemnified Party”) from or against the assertion of any claim by a third person (a
“Third Person Assertion”) will give prompt notice to the Party from whom indemnification is sought (the “Indemnifying Party”); provided, however, that failure to give prompt notice will not relieve the Indemnifying
Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual material prejudice by such failure). 
  
 Assumption of Defense. 
  
 The Indemnifying Party will have the right, exercisable by written notice to the Indemnified Party, to assume the defense of a Third Person Assertion. If the Indemnifying Party assumes such defense, the Indemnifying
Party may select counsel in its sole discretion. 
  
 Settlement.

  
 The Party controlling the defense of a Third Person Assertion, will have
the right to consent to the entry of judgment with respect to, or otherwise settle, such Third Person Assertion with the prior written consent of the other Party, which consent will not be unreasonably withheld. 
  

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	9.	Intellectual Property 

  
 General 
  
 Nothing in this Agreement shall give either Party any rights in the Intellectual Property of the other Party, except as specifically set forth herein. 
  
 No Infringement 
  
 Each Party represents and warrants to the other Party that none of its products or services will infringe on the Intellectual Property
rights of any third Party. 
  
 Trademark and Trade Name 
  
 This Agreement does not give either Party any ownership rights or interest in the other
Party’s trade name or trademarks, except as set forth herein. SA may identify itself in its marketing materials as “Authorized Reseller – EMTS, LLC” EMTS may identify itself in its marketing materials as “Authorized Reseller
– Source Atlantic, Inc.” EMTS grants to SA a non-exclusive, non-transferable, revocable right to use the EMTS name, trademarks, tradenames, logos, graphics, banners, buttons, links, slogans and similar identifying materials (the
“EMTS Marks”) solely in connection with the display of links and banners pursuant to Section 2.5 hereof. SA grants to EMTS a non-exclusive, non-transferable, revocable right to use the SA name, trademarks, tradenames, logos,
graphics, banners, buttons, links, slogans and similar identifying materials (the “SA Marks”) solely in connection with the display of links and banners pursuant to Section 2.5 hereof. 
  

	10.	Confidential Information 

  
 Restrictions on Use 
  
 With respect to any data, drawing, diagram, source or object code, specification, documents or other information supplied by either Party to the other and clearly identified in writing as confidential or that, from
the type of material or the context in which it was disclosed, is clearly intended to be confidential (hereinafter referred to as “Confidential Information”), the receiving Party agrees: (a) to use such Confidential Information only
in the performance of the services under this Agreement; (b) not to make copies of any such Confidential Information or any part thereof without the express written permission of the other Party; (c) not to disclose any such Confidential Information
or any part thereof to a person outside that Party’s business organization for any purpose; (d) to limit dissemination of such Confidential Information to persons within that Party’s business organization, who have a need to see such
Confidential Information for purpose of such services; and (e) to return such Confidential Information and any copies thereof to the other Party at the completion of all services under this Agreement or at such earlier date as the other Party may
designate. 
  
 Exclusions 
  
 Confidential Information shall not include information that: (a) is, as of the time of its
disclosure or thereafter becomes, part of the public domain through a source other than the receiving Party; (b) was known to the receiving Party as of the time of its disclosure; (c) independently developed by the receiving Party without reference
to the Confidential Information; (d) is subsequently learned from a third Party that does not impose an obligation of confidentiality upon the 

  

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receiving Party; (e) is required to be disclosed pursuant to law or regulation, government authority, duly authorized subpoena or court order, whereupon the
receiving Party shall provide notice to the disclosing Party prior to such disclosure; or (f) is approved for disclosure by prior written consent of the disclosing Party. 
  

	11.	Term and Termination 

  
 Term 
  
 The Term shall commence on the
Effective Date and continue for five ( 5 ) years. The term shall automatically renew for additional one-year periods unless either Party gives the other notice not less than 60 days prior to the end of the Term, of its intention not to renew the
Term. 
  
 Termination 
  
 Either Party may terminate this Agreement upon sixty (60) days notice to the other Party.

  
 Effect of Termination 
  
 The following provisions shall apply upon expiration or earlier termination of this
Agreement: 
  
 Each shall be entitled to receive from the other, all referral fees
earned with respect to any transaction with one of its prospects up to the date of termination. 
  
 SA shall cease to solicit orders for EMTS and shall cease to hold itself out as an authorized Remarketer for EMTS. 
  
 EMTS shall cease to solicit orders for SA and shall cease to hold itself out as an authorized Remarketer for SA. 
  
 SA shall remove all EMTS banners and/or links from its web site. EMTS shall remove all SA
banners and/or links from its web site 
  
 Each Party hereto shall remit all
payments then due to the other, and remit all other payments that become due to the other Party promptly. 
  
 Each Party shall within ten (10) business days after such expiration or termination return to the other Party or destroy all of the other Party’s Intellectual Property and Confidential Information that it may
have in its possession and shall certify to the other Party in writing its compliance with this requirement within such period. 
  
 Other than that which is expressly provided for herein, or that which by its terms survives termination, all rights and obligations shall cease upon the effective date of
termination. 
  

	12.	General 

  
 Independent Contractor 
  
 Each of the
Parties to this agreement are independent contractors and nothing contained in this agreement shall be construed as creating a joint venture, partnership, licensor-licensee, principal-agent or mutual owner relationship between or among the Parties
hereto and no Party shall by virtue of this agreement, have any right or power to create any obligation expressed or implied on behalf of any other Party. No Party, or any employee of a Party shall be deemed to be an employer of the other Party by
virtue of this agreement. 
  

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 Non-Solicitation of Personnel 
  
 Each Party agrees, during the term of this Agreement, not to hire or engage, or attempt to hire or engage, directly or indirectly, the
employees or independent consultants of the other Party who work hereunder, except as may be agreed to in writing by both Parties. Any violation of this section will be considered a material breach of this Agreement. 
  
 Entire Agreement 
  
 This Agreement constitutes the entire and sole agreement between the Parties with respect to the subject matter hereof and supersedes any
prior agreements, negotiations, understandings, or other matters, whether oral or written, with respect to the subject matter hereof. This Agreement cannot be modified, changed or amended, except for in writing signed by a duly authorized
representative of each of the Parties. 
  
 Notices 
  
 All notices shall be in writing and shall be deemed to be given or made when delivered by
hand, an overnight delivery service that routinely provides confirmation of delivery or U.S. mail to the Party at the address set forth in this Agreement. Notice given by hand shall be effective when given. Notice given by overnight delivery service
shall be effective when, according to the records of the delivery service, delivery is made; and delivery by first class US mail shall be effective three business days after deposit in the US mails. 
  
 Limitations on Actions 
  
 Any claim to enforce any right of either Party hereunder or arising as a result of an alleged breach of this Agreement must be commenced
within twelve (12) months after the claim arises or the breach occurs, except a claim for payment which must be commenced twelve (12) months from the date of last payment. 
  
 Assignment and Delegation 
  
 Neither Party shall assign or delegate this Agreement or any rights, duties or obligations hereunder to any other person and/or entity without prior express written
approval of the other Party. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the successors, legal representatives and assignees of the Parties hereto. 
  
 Third Parties 
  
 Nothing in this Agreement shall be construed as giving any person, firm, corporation or other entity, other than the Parties to this
Agreement and their respective successors and permitted assigns, any right, remedy or claim under this Agreement of any of its provisions. 
  
 Injunctive Relief 
  
 Each of the Parties to this Agreement acknowledge that use or disclosure of the information described in Article 8 hereof in a manner inconsistent with this Agreement will give rise to irreparable injury to the other
Party which cannot be adequately compensated in damages and that the other Party may seek and obtain equitable or injunctive relief to prevent or restrain such unauthorized use or disclosure, together with any other remedies which may be available
to such Party. 
  

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 Review of Books and Records 
  
 Each Party shall allow the other Party to inspect and review its records in order to determine the other Party’s compliance with the
terms of this Agreement. Either Party may examine any and all invoices and accounting records regarding sales to the other Party’s prospects during the Term and for one year after end of the Term. All such information examined shall remain
privileged and confidential between the Parties. In the event either Party needs to seek injunctive relief for the violation of this provision, the other Party shall be entitled to reimbursement for reasonable attorney’s fees in the pursuit of
such an effort. 
  
 Waiver 
  
 No waiver by any Party of any one or more of its rights or remedies under this Agreement
shall be deemed to be a waiver of any prior or subsequent rights or remedy hereunder or at law. 
  
 Force Majeure 
  
 Neither Party shall be
in breach hereof by reason of its delay in performance of or failure to perform any of its obligations hereunder, if that delay or failure is caused by strikes, acts of God or the public enemy, riots, incendiaries, interference by civil or military
authorities, compliance with governmental priorities for materials, or any fault beyond its control or without its fault or negligence. 
  
 Severability 
  
 If any portion of this agreement is to be void, invalid, or otherwise unenforceable, in whole or part, the remaining portions of this agreement shall remain in effect. 
  
 Duplicate Originals 
  
 This Agreement may be signed in two or more separate copies, which of which Fax should be deemed a duplicate original. 
  
 IN WITNESS WHEREOF, the Parties by their duly authorized representatives, have caused this
agreement to be executed as of the date first written above. 
  

									
	 SOURCE ATLANTIC, INC.
	 	 	 	 EMTS, LLC

					
	By:	 	s/s    CHRIS SANBORN        	 	 	 	By:	 	s/s    CHARLES W. GEORGE        
	 Name:
	 	Chris Sanborn	 	 	 	 Name:
	 	Charles W. George
	 Title:
	 	VP Operations	 	 	 	 Title:
	 	President

  

 8Employment Agreement

 Exhibit 10.27 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (“Agreement”) is made and entered into as of the date below, by and between NOVASTAR MORTGAGE, INC. (the
“EMPLOYER”) and Dave Pazgan (the “EMPLOYEE”). The EMPLOYER hereby agrees to employ EMPLOYEE and EMPLOYEE hereby accepts employment upon the terms and conditions set forth below. 
  

	 	1.	EMPLOYMENT BY COMPANY 

  
 EMPLOYEE shall be employed by the EMPLOYER in the position of Executive Vice-President of Wholesale Operations, hereinafter
referred to as “EVP-Wholesale”. EMPLOYEE shall be responsible to direct and control all corporate financial activity with final authority on financial policies and procedures as well as other duties/territories, which shall be
assigned at the sole discretion of the EMPLOYER. Reports to the Chief Executive Officer. 
  
 EMPLOYEE warrants and agrees that he/she has the skill, aptitude, and ability to perform the services for which he/she is being employed,
and that he/she will adhere to the standards of performance for the fulfillment of those duties, which EMPLOYER shall in its discretion from time to time prescribe. EMPLOYEE represents that he/she has not entered into any agreements which are
effective at the time of the execution of this Agreement which would prevent him/her from performing his/her duties as EVP-Wholesale, including but not limited to, any non-competition or non-disclosure agreement with former employers.

  
 EMPLOYEE hereby agrees that he/she will
devote all of his/her working time and attention and give his/her diligent effort and skill exclusively to the business and interests of EMPLOYER, and that he/she will perform such services, as may from time to time be assigned to him/her, and shall
do his/her utmost to further enhance and develop the best interests and welfare of the EMPLOYER in all respects. EMPLOYEE agrees that he/she will give full attention and fully comply with the rules and procedures as may from time to time be
promulgated by EMPLOYER in its sole discretion. 
  
 EMPLOYEE shall not, without prior written consent of the EMPLOYER, at any time during the term of this Agreement: (a) accept employment with, or render services of a business, professional or commercial nature to any person other than the
EMPLOYER; (b) engage in, own or provide financial or other assistance to any person, venture or activity which the EMPLOYER may in good faith consider to be competitive with or adverse to the EMPLOYER, whether directly or indirectly, alone or with
any other person as a principle, agent, shareholder, participant, partner, promoter, director, officer, manager, employee, consultant, sales representative or otherwise; or (c) engage in any venture or activity which the Officers or the Board of
Directors of the EMPLOYER may in good faith consider to interfere with EMPLOYEE’S performance of his duties. 
  

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	 	2.	COMPENSATION 

  

	 	A.	Base Salary. The EMPLOYER agrees to pay EMPLOYEE an annual base salary of $250,000. Base salary is payable in equal bi-weekly installments or at such other time or times as
the EMPLOYER’S policies and practices provide. EMPLOYEE will be eligible to receive annual salary increases during the term of this Agreement at the sole discretion of the EMPLOYER. Any such increases shall automatically become part of this
Agreement and shall not alter any other terms of this Agreement. 

  

	 	B.	Performance Bonus. EMPLOYEE shall be eligible to receive a performance bonus, hereinafter referred to as “Bonus,” with a target of up to 100%, but not to exceed 200%, of
base salary (pro-rata over the portion of year employed) based upon predetermined goals approved by NovaStar’s Compensation Committee. For 2004 only, EMPLOYEE is guaranteed a Bonus of at least 50% of base salary (pro-rata for portion of year
employed) unless EMPLOYEE is terminated for cause. 

  

	 	C.	Benefits. EMPLOYEE shall be entitled to participate in any benefit programs adopted from time to time by EMPLOYER for the benefit of its employees at an appropriate level for the
duties of EMPLOYEE, and EMPLOYEE shall be entitled to receive such other fringe benefits as may be granted from time to time by the EMPLOYER’S Board of Directors or its Compensation Committee for the benefit of its employees and/or employees at
an appropriate level of duties of EMPLOYEE. EMPLOYEE shall be entitled to participate in any benefits plans available to other executive employees of EMPLOYER at an appropriate level for the duties of the office, subject to any restrictions
(including waiting periods) specified in such plans. Separate written descriptions of available benefits will be provided from time to time, and the EMPLOYER reserves, in its sole and absolute discretion, the right to modify these benefits in whole
or in part at any time. 

  

	 	D.	Vacation. EMPLOYEE shall be entitled to five (5) weeks of paid vacation on an annual basis, with such vacation to be accrued and taken in accordance with EMPLOYER’S standard
vacation policies. 

  

	 	E.	Business Expenses. EMPLOYER shall reimburse EMPLOYEE for any and all necessary, customary and usual expenses, properly receipted in accordance with EMPLOYER’S policies and
procedures, incurred by EMPLOYEE on behalf of EMPLOYER. 

  

	 	F.	Options and Restricted Stock. Company Stock Options and/or restricted stock, hereinafter referred to as “Incentives” may from time to time be offered to Company
Executives. Such Incentives shall be governed by a separate Incentive document and the decision to offer Incentives is at the sole discretion of EMPLOYER. 

  

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	 	3.	AT WILL EMPLOYMENT 

  
 EMPLOYEE and EMPLOYER acknowledge that there is no agreement, express or implied, between them for any specified term or period of
employment, nor for continuing or long-term employment. The employment relationship between EMPLOYEE and EMPLOYER is completely and, in all respects, at-will. Either EMPLOYEE or EMPLOYER has the absolute right to terminate the employment
relationship, at any time, with or without cause, for any reason or no reason and no reason need be given. The fact that other sections of this Agreement provide differential post-termination benefits to EMPLOYEE on the basis of whether EMPLOYEE is
termination With Cause or Without Cause, as defined, below, does not undermine the at-will nature of the employment relationship. This is the entire agreement between EMPLOYEE and EMPLOYER regarding the matters set forth in this paragraph.

  

	 	4.	TERMINATION OF EMPLOYMENT BY EMPLOYER 

  
 Termination For Cause. For purposes of this Agreement, Termination for Cause shall mean the existence of or a belief by the
EMPLOYER in the existence of facts which constitute a basis for termination of employee’s employment in view of relevant factors and circumstances, which may include, but are not limited to, EMPLOYEE’S duties, responsibilities, conduct on
the job or otherwise, job performance, and employment record. Acts or omissions which could constitute a basis for termination for Cause include, but are not limited to: 
  

	 	(a)	Breach of any of the terms of this Agreement; 

  

	 	(b)	Failure to perform duties in accordance with the standards from time to time established by the EMPLOYER or conduct which the EMPLOYER determines may impair or tend to impair the
integrity of the EMPLOYER, including but not limited to: 

  

	 	(1)	Insubordination; 

  

	 	(2)	Gross misconduct; 

  

	 	(2)	Theft, Misappropriation or Embezzlement; 

  

	 	(3)	Dishonesty; 

  

	 	(4)	Neglect in performance of or failure to attend to the performance of duties; 

  

	 	(5)	Employee’s breach of fiduciary duty; 

  

	 	(6)	Any inaccurate, incomplete, or misleading oral or written statements made by the EMPLOYEE at any time, including but not limited to, any such statements in interviews, resumes,
curriculum vitae, job application, or other related oral or written communications; and 

  

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	 	(c)	Any act or omission, which is inconsistent with the business interests of the EMPLOYER. 

  
 Termination For Death of Disability. EMPLOYEE’S employment may be terminated by EMPLOYER upon
the death or disability of EMPLOYEE, consistent with any rights or obligations of the EMPLOYER and the EMPLOYEE under the Americans with Disabilities Act, or any other applicable constitutional provision or statute; 
  
 Termination Without Cause. EMPLOYEE’S employment
may be terminated by EMPLOYER without cause at any time and at its sole discretion. 
  

	 	5.	TERMINATION OF EMPLOYMENT BY EMPLOYEE FOR GOOD REASON. 

  
 The EMPLOYEE shall have the right to terminate this Agreement for Good Reason. For purposes of this Agreement, “Good Reason” shall mean the
occurrence, without the EMPLOYEE’S written consent, of any one or more of the following events: 
  

	 	(a)	A reduction in title and/or compensation of the EMPLOYEE or the assignment of duties to the EMPLOYEE not consistent with those of an executive of the Company, except in connection
with the Company’s termination of the EMPLOYEE’S employment for Cause pursuant to Section 4 or as otherwise expressly contemplated herein; 

  

	 	(b)	The Company’s material breach of any of the provisions of this Agreement, including, but not limited to, a reduction by the Company in the EMPLOYEE’S Base Salary in effect
as of the Effective Date; or a material change in the conditions of the EMPLOYEE’S employment; or 

  

	 	(c)	The relocation of the Company’s principal executive offices to a location more than fifty (50) miles from its location as of the Effective Date or the Company’s requiring
the EMPLOYEE to be based anywhere other than the Company’s principal executive offices, except for requiring travel on the Company’s business to an extent substantially consistent with the EMPLOYEE’S duties hereunder.

  
 The EMPLOYEE agrees to provide the Company with
thirty (30) days’ prior written notice of any termination for Good Reason. 
  

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 6. TREATMENT OF COMPENSATION AND BENEFITS UPON TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE OR BY
EMPLOYEE WITHOUT GOOD REASON. 
  
 Salary
Continuation. EMPLOYEE is not entitled to any continuation of salary or other base pay if EMPLOYEE is either terminated by EMPLOYER for Cause or if EMPLOYEE resigns his/her employment. 
  
 Incentive Pay. EMPLOYEE is not entitled to Incentive
Pay if EMPLOYEE is either terminated by EMPLOYER for Cause or if EMPLOYEE resigns his/her employment. 
  
 Health Benefits. EMPLOYEE is entitled to continue Health Benefits coverage pursuant to the terms of COBRA if EMPLOYEE is either
terminated by EMPLOYER for Cause or if EMPLOYEE resigns his/her employment. 
  
 Stock Options and Restricted Stock. The vesting period ceases immediately upon EMPLOYEE’s termination by EMPLOYER for Cause or if EMPLOYEE resigns his/her employment. The provisions of the Stock Option
Agreement will otherwise be controlling. 
  
 7. TREATMENT OF
COMPENSATION AND BENEFITS UPON TERMINATION OF EMPLOYMENT BY EMPLOYER AFTER CHANGE IN CONTROL OTHER THAN FOR CAUSE, OR BY EMPLOYEE FOR GOOD REASON. 
  
 If the EMPLOYEE’S employment shall be terminated after a Change in Control as defined by Section 10, (a) by the Company other than for Cause, or (b)
by the EMPLOYEE for Good Reason, the EMPLOYEE shall be entitled to the following benefits: 
  
 Severance Payment. EMPLOYEE shall be paid an amount equal to two times the Executive’s combined current year Base Salary and
actual Bonus compensation for the preceding fiscal year; provided, however, the severance amount shall not be less than Five Hundred Thousand Dollars ($500,000.00) nor more (once the minimum is reached, than one percent (1.0%) of the book value of
the Company (i.e., the amount reported on the Company’s balance sheet prepared in accordance with generally accepted accounting principles as stockholder’s equity). The Severance Payment shall be payable fifty percent (50%) within five (5)
days after the termination date and the remaining fifty percent (50%) shall be payable in twelve (12) equal consecutive monthly installments beginning on the first day of the month following the termination date. 
  
 Health Benefits. EMPLOYEE is entitled to continue
Health Benefits coverage pursuant to the terms of COBRA if EMPLOYEE is either terminated by EMPLOYER after a Change in Control or if EMPLOYEE terminates employment with Good Reason. 
  

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 Stock Options and Restricted Stock. Vesting will accelerate to the date of
termination. In other words, after a Change in Control, if EMPLOYEE is either terminated by EMPLOYER, other than for Cause, or if EMPLOYEE terminates employment with Good Reason, EMPLOYEE shall immediately be vested with all stock options and
restricted stock awarded by the Company which have not been exercised prior to the termination date. The provisions of the Stock Option Agreement will otherwise be controlling. 
  
 8. TREATMENT OF COMPENSATION AND BENEFITS UPON TERMINATION BY EMPLOYER FOR DEATH OR DISABILITY. 
  
 Salary Continuation. EMPLOYEE is not entitled to any
continuation of salary or other base pay if EMPLOYEE is terminated by EMPLOYER due to EMPLOYEE’s death or disability. 
  
 Incentive Pay. EMPLOYEE is not entitled to Incentive Pay if EMPLOYEE is terminated by EMPLOYER due to EMPLOYEE’s death or
disability. 
  
 Health Benefits. EMPLOYEE
(or EMPLOYEE’S family) is entitled to continue Health Benefits coverage pursuant to the terms of COBRA if EMPLOYEE is terminated by EMPLOYER due to death or disability. 
  
 Stock Options and Restricted Stock. The vesting period continues without acceleration upon
EMPLOYEE’s termination by EMPLOYER due to disability. All stock options and restricted stock shall immediately and completely vest upon EMPLOYEE’s termination due to death. The provisions of the Stock Option Agreement will otherwise be
controlling. 
  
 9. TREATMENT OF COMPENSATION AND BENEFITS UPON
TERMINATION BY EMPLOYER WITHOUT CAUSE OR BY EMPLOYEE FOR GOOD REASON. 
  
 Consultancy Agreement. In the event EMPLOYEE is terminated without Cause or by EMPLOYEE for GOOD REASON, EMPLOYEE and EMPLOYER shall immediately enter into an independent contractor/consultant agreement
pursuant to which EMPLOYEE shall receive pay in an amount equal to twelve (12) months base salary only (hereinafter “Consultancy Pay”) in exchange for consulting services. The term of the consultancy will be for 12 months after the date of
EMPLOYEE’s termination (“Consulting Period”). EMPLOYEE agrees to make himself or herself available to EMPLOYER for up to ten (10) hours per week, whether by telephone, e-mail, or in person, on an as-needed basis to consult with
respect to matters that were within EMPLOYEE’s job description during the course of EMPLOYEE’s employment. EMPLOYEE agrees to respond promptly, reasonably and cooperatively to EMPLOYER’s requests for assistance. Barring special
circumstances, the consulting 
  

 6 

 hours shall not be cumulative; accordingly, hours not used within a given week will be waived by the
EMPLOYER, but EMPLOYEE will receive his or her full pay under this paragraph. However, EMPLOYER reserves the right to require EMPLOYEE to provide more than ten (10) hours of service per week in the event that special circumstances arise in which
EMPLOYEE’s unique assistance is required by EMPLOYER. (Examples of special circumstances include, but are not limited to assistance in litigation or responding to government inquiries). In order to protect EMPLOYER’s confidential and trade
secret information from use or disclosure to a party other than the EMPLOYER, and to enable the Company to be able to obtain the benefits of EMPLOYEE’s consulting obligations hereunder, EMPLOYEE agrees that so long as he is accepting
Consultancy Pay pursuant to this section, he (a) will not accept employment or consulting work in any capacity with any competitor of EMPLOYER; and (b) will continue to abide by the provisions of paragraphs 8, and 9, below. In the event that
EMPLOYEE accepts subsequent employment or other consulting work within the Consulting Period, EMPLOYEE will be required to spend no more than five (5) hours per week consulting with EMPLOYER. EMPLOYEE understands that this is a material term of this
Agreement. 
  
 Incentive Pay. In the event
EMPLOYEE is terminated without Cause, EMPLOYEE, at EMPLOYER’S discretion, shall be entitled to Incentive Pay in an amount equal to the pro-rata portion of incentive pay for the period of employment beginning January 1st of the year in which the termination occurs and ending the date of termination. The full amount, at EMPLOYER’S
discretion, of pro-rated Incentive Pay will be paid to EMPLOYEE in one lump sum payment made within thirty (30) days after the EMPLOYEE’S termination date. 
  
 Health Benefits. EMPLOYEE is entitled to continue Health Benefits coverage pursuant to the terms of
COBRA if EMPLOYEE is terminated by EMPLOYER without cause. 
  
 Stock Options and Restricted Stock. The vesting period for the year in which the termination occurs will accelerate to the date of termination. In other words, upon termination without cause, EMPLOYEE shall
immediately be vested with all stock options and restricted that would have been vested at the end of he year in which the termination occurred. All other vesting ceases upon termination. The provisions of the Stock Option Agreement will otherwise
be controlling. 
  
 10. CHANGE IN CONTROL. A “Change
in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied. 
  

	 	(a)	Any “person” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other than the Company; any trustee or
other fiduciary holding securities under an Executive benefit plan of the Company; or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the
Company), is 

  

 7 

 or becomes the “beneficial owner” (as defined by Rule 13d-3 under the Exchange Act), directly
or indirectly, of the securities of the Company (not including securities beneficially owned by such person, any securities acquired directly from the Company or from a transferor in a transaction expressly approved or consented to by the Board of
Directors) representing more than 25% of the combined voting power of the Company’s then outstanding securities; or 
  

	 	(b)	During any period of two consecutive years (not including any period prior to the execution of the Agreement), individuals who at the beginning of such period constitute the Board
of Directors and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this section), (i) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved by a vote of at least (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved or (ii) whose election is to replace a person who ceases to be a director due to death, disability or age, cease for any reason to constitute a majority thereof; or 

  

	 	(c)	The shareholders of the Company approve a merger or consolidation of the Company with another corporation, other than (i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an Executive benefit plan of the Company, at least 75% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or

  

	 	(d)	The shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the
Company’s assets. 

  

	 	11.	NON-COMPETITION PROVISION 

  
 During Employment. EMPLOYEE agrees that during his/her employment by EMPLOYER he/she will not engage directly or indirectly in any location within
the United States, in any business of the same or similar nature to the business of EMPLOYER or any business in which EMPLOYER is engaged in developing, nor will 
  

 8 

 EMPLOYEE participate directly or indirectly in the ownership or management of any enterprise engaged in
such a business within the United States, including ownership or management as defined by the Sarbanes-Oxley Act of 2002. This provision acts in concert with Section 1, Employment by Company, which requires EMPLOYEE to devote all of EMPLOYEE’S
effort and skill exclusively to EMPLOYER.  
  
 Upon
Termination of Employment. EMPLOYEE agrees that he/she will not seek or accept employment with any business in direct competition with EMPLOYER for a period of one year after termination of the employment relationship, anywhere in the United
States. EMPLOYEE further agrees that for a period of one year, he/she will neither contact nor solicit business from any employee, customer or independent contractor, past, present or future, of the EMPLOYER. 
  

	 	12.	NON-INTERFERENCE AND NON-SOLICITATION PROVISION 

  
 EMPLOYEE agrees that during the term of his/her employment with EMPLOYER and for a period of one (1) year after termination of employment
with EMPLOYER for any reason: (1) EMPLOYEE shall not either directly or directly interfere with the business of EMPLOYER or any of its subsidiaries or affiliates; and (2) EMPLOYEE shall not directly or indirectly solicit any of EMPLOYER’S
employees to leave EMPLOYER and/or to work for another employer or business, whether or not the solicited employee would commit any breach of his or her own employment terms by leaving the service of the EMPLOYER. Thus, EMPLOYEE agrees that he/she
will not either directly or indirectly initiate any communications or direct others to initiate any communications with EMPLOYER’S employees regarding the possibility of employment elsewhere during the term of this non-solicitation provision.

  

	 	13.	CONFIDENTIALITY/TRADE SECRET PROVISION 

  
 EMPLOYER has created, developed, and adopted confidential, proprietary and/or trade secret information. Additionally, EMPLOYER has entered
into agreements with third parties whereby these third parties produce confidential, proprietary and/or trade secret information for EMPLOYER. Such information has independent actual or potential economic value from not being generally known to the
public or other persons who can obtain economic value from its disclosure or use, and is not readily available or independently ascertainable through any source other than EMPLOYER. Such information is subject to reasonable efforts to maintain its
secrecy. 
  
 The trade secrets of EMPLOYER
include, but are not limited to, EMPLOYER’S lending policies and procedures, contracts and agreements with lenders, investors, and other clients (“Clients”), information regarding the Clients (including but not limited to 

 

 9 

 Client Lists and potential Client Lists), loan applicants, borrowers and other customers, budgets,
forecasts, financial statements, broker lists, client contracts, the particular needs of each client and broker, the manner in which business is conducted with each client and broker, records, sales techniques, methods of data processing, forecasts,
information concerning employees and their salaries, performance and personnel file information, and various financial information of EMPLOYER. EMPLOYEE further understands and agrees that any and all of the above produced or used by EMPLOYEE during
the period of employment belongs to EMPLOYER and not to EMPLOYEE. 
  
 In recognition that the business of EMPLOYER and the nature of EMPLOYEE’S work will require EMPLOYEE to have access to confidential, proprietary, and/or trade secret information of EMPLOYER and/or its clients
which, if disclosed in an unauthorized manner, could be highly prejudicial to EMPLOYER and/or its clients: 
  

	 	1.	EMPLOYEE agrees not to disclose in any manner any confidential, proprietary, and/or trade secret information, either directly or indirectly, either during employment with EMPLOYER
or following termination of employment, except as required in the course of employment with EMPLOYER. 

  

	 	2.	EMPLOYEE agrees to take all precautions reasonably necessary to prevent the unauthorized use, disclosure, or dissemination of confidential, proprietary, and/or trade secret
information either during employment with EMPLOYER or following termination of employment. 

  

	 	3.	Upon termination, EMPLOYEE will immediately turn over to EMPLOYER all confidential, proprietary, and/or trade secret documents, lists and records, or other writings or personal
property relating to the business of the EMPLOYER in any manner obtained during the term of employment. EMPLOYEE hereby agrees and understands that all loans, loan files, loan documentation, client lists and potential client lists are the possession
and property of EMPLOYER. Upon termination, EMPLOYEE shall cease using, shall immediately return, and shall not misappropriate or use any loans, loan files, loan documentation, client lists or potential client lists. In addition, upon termination,
EMPLOYEE shall leave in possession of EMPLOYER all equipment, furniture and supplies owned or leased by EMPLOYER. 

  
 EMPLOYEE recognizes and acknowledges that none of the above provisions or EMPLOYER”S exercise of any rights thereunder shall limit
the rights of EMPLOYER under applicable statutes and common law rules regarding trade secrets, including, without limitation, the Uniform Trade Secrets Act. 
  

 10 

	 	14.	ASSIGNMENT: SUCCESSORS 

  
 The rights, which accrue to the EMPLOYER under this Agreement, shall pass to its successors and assigns. EMPLOYEE may not assign any right
under this Agreement with respect to the employment relationship, commencement, and termination of the employment relationship. 
  

	 	15.	ENTIRE AGREEMENT BETWEEN THE PARTIES 

  
 This Agreement constitutes the entire agreement (“Entire Agreement”) of the parties and supercedes any prior or contemporaneous
agreement by and between the parties, except Stock Option Agreements as discussed herein. The Entire Agreement can be modified only by a written instrument executed by EMPLOYEE and EMPLOYER’S President, on behalf of the EMPLOYER. Section
Headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 
  

	 	16.	SEVERABILITY 

  
 In the event that one or more of the paragraphs contained herein are held to be invalid by a court of competent jurisdiction, the
remainder of the contract will continue in full force and effect. 
  

	 	17.	GOVERNING LAW 

  
 This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance
with the laws of the State of Missouri. 
  

	 	18.	ARBITRATION PROVISION 

  
 Any controversy, dispute or claim (“Claim”) whatsoever between EMPLOYEE on the one hand, and EMPLOYER, or any of its employees,
officers, and agents (collectively “COMPANY PARTIES”) on the other hand, including but not limited to any dispute about the validity, interpretation, effect or alleged violation of this Agreement, must be settled by binding arbitration, at
the request of either party, in accordance with the Employment Dispute Resolution Procedures of the American Arbitration Association or other similar organization in the County and State in which EMPLOYEE is employed. The claims covered by this
agreement include, but are not limited to, claims for wages and other compensation, claims for breach of contract (express or implied), tort claims, claims for discrimination (including, but not limited to, 
  

 11 

 race, sex, sexual orientation, religion, national origin, age, marital status, medical condition, and
disability), and claims for violation of any federal, state, or other governmental law, statute, regulations, or ordinance, except for claims for worker’s compensation or unemployment insurance benefits. 
  
 The Arbitrator shall apply the chosen State’s
applicable substantive law and Evidence Code to the proceeding. The arbitration shall take place in the County and State in which EMPLOYEE is or was employed by EMPLOYER. The parties shall be entitled to conduct discovery. The Arbitrator shall
prepare in writing and provide to the parties a decision and award, which includes factual findings and the reasons upon which the decision is based. The decision of the Arbitrator shall be binding and conclusive on the parties and unreviewable for
error of law or legal reasoning of any kind, except as otherwise required by law. Judgment upon the award rendered by the Arbitrator may be entered in any court having proper jurisdiction. The fees for the Arbitrator shall be paid by the EMPLOYER.
Each party shall bear its or his/her own fees and costs incurred in connection with the Arbitration, except for any attorneys’ fees or costs, which are awarded to a party by the Arbitrator pursuant to statute or contract which provides for
recovery of such fees and/or costs from the other party. 
  
 The Arbitration agreement between EMPLOYEE and EMPLOYER Parties constitutes the entire agreement between the parties with respect to the matters referenced herein. This Arbitration agreement can be modified only by a
written instrument executed by the EMPLOYEE and the current President of the EMPLOYER. 
  
 Both the EMPLOYER and the EMPLOYEE understand and agree that by using arbitration to resolve any Claims between them or any or all of the
EMPLOYER Parties they are giving up any right that they may have to a judge or jury trial with regard to those Claims. Both EMPLOYER and EMPLOYEE understand and agree that each is entering into this Agreement voluntarily. 
  

	 	19.	ATTORNEY’S FEES 

  
 The prevailing party in any action or dispute between EMPLOYER and EMPLOYEE shall be entitled to recover reasonable attorneys’ fees
and other costs incurred in that action or proceeding in addition to any other relief to which the prevailing party may be entitled. 
  

	 	20.	WAIVER; MODIFICATION 

  
 Failure to insist upon compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver of or relinquishment of such right or power at any other
time or times. 
  

 12 

	 	21.	NEGOTIATION 

  
 The parties warrant and agree that the terms of this Agreement were the subject of negotiations between them. EMPLOYEE acknowledges that
he/she has read this Agreement and has had full opportunity to seek independent legal advice before signing it. 
  

			
	 Date:
                        
	 	  

	 	 	 Dave Pazgan

	 	 	 EMPLOYEE

		
	 Date:
                        
	 	  

	 	 	 Lance Anderson

	 	 	 President

	 	 	 NovaStar Mortgage, Inc.

  

 13

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