Document:

Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT 

 

THIS REGISTRATION RIGHTS
AGREEMENT (the “Agreement”) is entered into as of February 11, 2015 by and among Chanticleer Holdings, Inc., a Delaware
corporation (the “Company”), and Carl Caserta (the “Investor”).

 

WHEREAS, pursuant
to the terms and conditions set forth in the Securities Purchase Agreement executed by and between the Company and the Investor
and dated as of even date herewith (the “SPA”), the Company has agreed to issue and sell to the Investor (i) a 9% convertible
note in the principal amount of $200,000 (the “Initial Note”) and a common stock purchase warrant to purchase 80,000
shares of the Company’s common stock, par value $0.0001 per share, exercisable at $2.50 per share for a period of up to five
(5) years from the issuance date (the “Initial Warrant”) on the Initial Closing Date, and (ii) a 9% amended and restated
convertible note in the principal amount of $800,000 (the “Amended and Restated Note”), which, when issued the Initial
Note shall be cancelled, and a common stock purchase warrant to purchase 320,000 shares of the Company’s common stock, par
value $0.0001 per share, exercisable at $2.50 per share for a period of up to five (5) years from the issuance date (the “Subsequent
Warrant”) on the Subsequent Closing Date; and

 

WHEREAS, as partial
consideration for the Investor’s purchase of the Note and Warrant, the Company has agreed to provide the Investor with certain
registration rights set forth herein with respect to the resale of the Shares purchased by the Purchasers in the Offering; and

 

Now,
therefore, in consideration of the mutual promises and the covenants as set forth herein, the parties hereto hereby
agree as follows:

 

1.           Definitions. Unless
otherwise separately defined herein, all capitalized terms used in this Agreement shall have the same meaning as is set forth in
the SPA. The following terms shall apply to this Note:

 

“Agreement”
means this Registration Rights Agreement, as the same may be amended, modified or supplemented in accordance with the terms hereof.

 

“Board”
means the Board of Directors of the Company.

 

“Common Stock”
means the Company’s authorized common stock, as constituted on the date of this Agreement, any stock into which such Common
Stock may thereafter be changed and any stock of the Company of any other class, which is not preferred as to dividends or assets
over any other class of stock of the Company and which is not subject to redemption, issued to the holders of shares of such Common
Stock upon any re-classification thereof.

 

“Commission”
means the Securities and Exchange Commission or any other governmental body at the time administering the Securities Act.

 

“Company”
has the meaning assigned to it in the preamble of this Agreement.

 

    	 

    	 

    

 

“Company Securities”
has the meaning any securities proposed to be sold by the Company for its own account in a registered public offering.

 

“Exchange Act”
means the Securities Exchange Act of 1934 (or successor statute).

 

“Excluded Forms”
means registration statements under the Securities Act, on Forms S-4 and S-8, or any successors thereto.

 

“Investor”
has the meaning assigned to it in the preamble of this Agreement.

 

“Person”
includes any natural person, corporation, trust, association, company, partnership, joint venture, limited liability company and
other entity and any government, governmental agency, instrumentality or political subdivision.

 

“Proposed Registration”
has the meaning assigned to it in Section 2(a) of this Agreement.

 

“Public Offering”
means a public offering of Common Stock or any other type of equity securities pursuant to an effective registration statement
under the Securities Act; provided that a Public Offering shall not include an offering made in connection with a business acquisition
or combination pursuant to a registration statement on Form S-4 or any successor form, or an employee benefit plan pursuant to
a registration statement on Form S-8 or any successor form.

 

The terms “register”
“registered” and “registration” refer to a registration effected by preparing and filing
a registration statement on other than any of the Excluded Forms in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.

 

“Registrable Securities”
means (i) the shares of Common Stock issuable from time to time upon the conversion of the Amended and Restated Note, and (ii)
the shares of Common Stock issuable and, as may be adjusted from time to time, upon the exercise of the Initial Warrant and Subsequent
Warrant.

 

“Selling Expenses”
means all selling commissions, finder’s fees and stock transfer taxes applicable to the Registrable Securities registered
by the Investor and all fees and disbursements of counsel for the Investor.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities Act”
means the Securities Act of 1933 (or successor statute).

 

“SPA”
has the meaning assigned to it in the preamble of this Agreement.

 

“Warrant”
shall have the meaning ascribed to it in the SPA.

 

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2.           Piggyback Registration.

 

(a)          After the Subsequent Closing date,
and each time the Company proposes for any reason to register any of its Common Stock under the Securities Act in connection with
the proposed offer and sale of its Common Stock for money, either for its own account or on behalf of any other security holder
(a “Proposed Registration”), other than pursuant to a registration statement on Excluded Forms relating
to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable
in connection with the Company’s stock option or other employee benefit plans, the Company shall promptly give written
notice of such Proposed Registration to the Investor and shall offer the Investor the right to request inclusion of its Registrable
Securities in the Proposed Registration.

 

(b)          The Investor shall have 15 days
from the receipt of such notice to deliver to the Company a written request specifying the number of Registrable Securities such
Investor intends to sell in the Proposed Registration and the Investor's intended method of disposition.

 

(c)          In the event that the Proposed Registration
by the Company is, in whole or in part, an underwritten Public Offering, the Company shall so advise the Investor as part of the
written notice given pursuant to Section 2(a), and any request under Section 2(b) must specify that the Investor’s Registrable
Securities be included in the underwriting on the same terms and conditions as the shares of Common Stock, if any, otherwise being
sold through underwriters under such registration.

 

(d)          Upon receipt of a
written request pursuant to Section 2(b), and subject to the limitations under Section 2(e) or 2(f) of this Agreement, if applicable,
the Company shall promptly use commercially reasonable efforts to cause all such Registrable Securities held by the Investor to
be registered under the Securities Act (and included in any related qualifications under blue sky laws or other compliance), to
the extent required to permit sale or disposition as set forth in the Proposed Registration.

 

(e)           Notwithstanding any
other provision of this Agreement, if any SEC Guidance (as defined below) sets forth a limitation on the number of Registrable
Securities to be registered in a Registration Statement (and the Company has used its reasonable best efforts to advocate with
the SEC for the registration of all or the maximum number of Registrable Securities), the number of Registrable Securities to be
registered on such Registration Statement will be reduced on a pro rata basis with such other securities being registered on the
applicable registration after as full an allocation as possible has been afforded for the securities for which the registration
statement has been filed. The Company shall file a new registration statement as soon as reasonably practicable covering the resale
by the Investor of not less than the number of such Registrable Securities that are not registered in the Registration Statement.
For purposes of this Agreement, SEC Guidance means (i) any publicly-available written guidance, or rule of general applicability
of the SEC staff, or (ii) oral or written comments, requirements or requests of the SEC staff to the Company in connection with
the review of a Registration Statement.

 

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(f)           Priority on Primary
Registrations. If a Proposed Registration is initiated as a primary underwritten or directed (placement agency) Public Offering
of securities by the Company and the managing underwriters or lead placement agent advise the Company and the holders of Registrable
Securities (if any holders of Registrable Securities have elected to include Registrable Securities in such Proposed Registration)
in writing that in their opinion the number of Common Shares requested to be included in such Piggyback Registration exceeds the
number which can be sold in such offering without adversely affecting the marketability of the offering (including an adverse effect
on the per share offering price), then the Company will include in such Proposed Registration (i) first, the number of Common Stock
the Company proposes to sell, (ii) second, the Registrable Securities permitted to be included in such registration, and (iii) third,
the number of Common Stock requested to be included in such Proposed Registration, in such manner as the Company may determine.

 

(g)          Priority on Secondary Registrations.
If a Proposed Registration is an underwritten or directed (placement agency) Public Offering by holders of Common Stock other than
Registrable Securities, and the managing underwriters or lead placement agent advise the Company and the holders of Registrable
Securities (if any holders of Registrable Securities have elected to include Registrable Securities in such Proposed Registration)
in writing that in their opinion the number of Common Shares to be included in such Proposed Registration exceeds the number which
can be sold in such offering without adversely affecting the marketability of the offering (including an adverse effect on the
per share offering price), then the Company will include in such Proposed Registration (i) first, the number of Common Stock relating
to the securities sold in the Company’s note offering that was conducted in January 2015, (ii) second, the number of Common
Stock requested to be included therein by the holders requesting such registration and by the holders of Registrable Securities
as to permitted amounts of Common Stock, pro rata from among such holders according to the number of Common Stock (on a fully diluted,
as converted basis) and the number of Registrable Securities, as applicable, requested by such holders to be so included, and (iii) third,
other Common Stock requested to be included in such registration, in such manner as the Company may determine.

 

3.           Obligations
of the Company. If and whenever the Company is required by the provisions hereof to effect or cause the registration of
any Registrable Securities under the Securities Act as provided herein, the Company shall:

 

(a)           use
commercially reasonable efforts to prepare and file with the Commission a registration statement with respect to such Registrable
Securities and use commercially reasonable efforts to cause such registration statement to become and remain effective;

 

(b)           use
commercially reasonable efforts to prepare and file with the Commission such amendments to such registration statement (including
post-effective amendments) and supplements to the prospectus included therein as may be necessary to keep such registration statement
effective, subject to the qualifications in Section 4(a), and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all Registrable Securities covered by such registration statement during such period in accordance
with the intended methods of disposition by the Investor set forth in such registration statement;

 

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(c)           furnish
to the Investor such number of copies of such registration statement and of each such amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary
prospectus), in conformity with the requirements of the Securities Act, and such other documents, as the Investor may reasonably
request, in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Investor;

 

(d)           use
all commercially reasonable efforts to make such filings under the securities or blue sky laws of New York to enable the the Investor
to consummate the sale in such jurisdiction of the Registrable Securities owned by the Investor;

 

(e)           notify
the Investor at any time when a prospectus relating to its Registrable Securities is required to be delivered under the Securities
Act, of the Company’s becoming aware that the prospectus included in the related registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare and furnish to
the Investor a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances
then existing;

 

(f)            otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(g)           to
use commercially reasonable efforts to cause Registrable Securities to be quoted on each trading market and/or in each quotation
service on which the Common Stock of the Company is then quoted; and

 

(h)           notify
the Investor of any stop order threatened or issued by the Commission and take all actions reasonably necessary to prevent the
entry of such stop order or to remove it if entered.

 

4.           Other Procedures.

 

(a)           Subject to the remaining
provisions of this Section 4(a) and the Company’s general obligation to use commercially reasonable efforts under Section
3, the Company shall be required to maintain the effectiveness of a registration statement (under Form S-1 or Form S-3, or successor
forms) until such date that is the earlier of (i) the date as of which all of the Holders as selling stockholders thereunder may
sell all of the Registrable Securities registered for resale thereon without restriction (including the elimination of the current
information requirement) pursuant to Rule 144, or (ii) the date when all of the Registrable Securities registered thereunder shall
have been sold, or (iii) three (3) years from the effective date of the Registration Statement. Thereafter, the Company shall be
entitled to withdraw such Registration Statement and the Holders shall have no further right to offer or sell any of the Registrable
Securities registered for resale thereon pursuant to the respective Registration Statement (or any prospectus relating thereto).
The Company shall have no liability to the Investor for delays in the Investor being able to sell the Registrable Securities (i)
as long as the Company uses commercially reasonable efforts to file a registration statement, amendments to a registration statement,
post-effective amendments to a registration statement or supplements to a prospectus contained in a registration statement (including
any amendment or post effective amendments), (ii) where the required financial statements or auditor’s consents are unavailable
or (iii) where the Company would be required to disclose information at a time when it has no duty to disclose such information
under the Securities Act, the Exchange Act, or the rules and regulations of the Commission.

 

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(b)           In consideration
of the Company’s obligations under this Agreement, the Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(e) herein, the Investor shall forthwith discontinue his sale of
Registrable Securities pursuant to the registration statement covering such Registrable Securities until the Investor’s receipt
of the copies of the supplemented or amended prospectus contemplated by said Section 3(e) and, if so directed by the Company,
shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in the Investor’s
possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

(c)           The Company’s
obligation to file any registration statement or amendment including a post-effective amendment, shall be subject to the Investor
furnishing to the Company in writing such information and documents regarding the Investor and the distribution of the Investor’s
Registrable Securities as may reasonably be required to be disclosed in the registration statement in question by the rules and
regulations under the Securities Act or under any other applicable securities or blue sky laws of the jurisdiction referred to
in Section 3(d) herein. The Company’s obligations are also subject to the Investor promptly executing any representation
letter concerning compliance with Regulation M under the Exchange Act (or any successor rule or regulation).

 

(d)           If any such registration
or comparable statement refers to the Investor by name or otherwise as a stockholder of the Company, but such reference to the
Investor by name or otherwise is not required by the Securities Act or the rules thereunder, then the Investor shall have the right
to require the deletion of the reference to the Investor.

 

(e)           In connection with the sale of Registrable
Securities, the Investor shall deliver to each purchaser a copy of the necessary prospectus and, if applicable, prospectus supplement,
within the time required by Section 5(b) of the Securities Act.

 

5.           Registration
Expenses. In connection with any registration of Registrable Securities pursuant to Section
2, the Company shall, whether or not any such registration shall become effective, from time to time, pay all expenses (other than
Selling Expenses) incident to its performance of or compliance, including, without limitation, all registration, and filing fees,
fees and expenses of compliance with securities or blue sky laws, word processing, printing and copying expenses, messenger and
delivery expenses, fees and disbursements of counsel for the Company and all independent public accountants and other Persons retained
by the Company.

 

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6.           Indemnification.

 

(a)           In the event of any registration
of any shares of Common Stock under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless
the Investor, from and against any losses, claims, damages or liabilities, joint or several, to which the Investor may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration statement
under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or any document incident to registration or qualification of any Registrable
Securities pursuant to Section 3(d) herein, or arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to any
prospectus, necessary to make the statements therein, in light of the circumstances under which they were made, not misleading,
or any violation by the Company of the Securities Act, the Exchange Act, or state securities or blue sky laws applicable to the
Company and relating to action or inaction required of the Company in connection with such registration or qualification under
the Securities Act or such state securities or blue sky laws. If the Company fails to defend the Investor as required by Section
6(c) herein, it shall reimburse (after receipt of appropriate documentation) the Investor for any legal or any other out-of-pocket
expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable to an Investor in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission
or alleged omission made in said registration statement, said preliminary prospectus, said prospectus, or said amendment or supplement
or any document incident to registration or qualification of any Registrable Securities pursuant to Section 3(d) hereof in reliance
upon and in conformity with written information furnished to the Company by the Investor specifically for use in the preparation
thereof or information omitted to be furnished by the Investor or (ii) any act or failure to act of the Investor including the
failure of the Investor to deliver a prospectus as required by Section 5(b) of the Securities Act.

 

(b)           In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this Agreement, the Investor shall indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 6(a)) the Company, each director of the Company, each officer
of the Company who signs such registration statement, the Company’s attorneys and auditors and any Person who controls the
Company within the meaning of the Securities Act, with respect to (i) any untrue statement or omission from such registration statement,
any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, if such untrue statement
or omission was made in reliance upon and in conformity with written information furnished to the Company by such Investor specifically
for use in the preparation of such registration statement, preliminary prospectus, final prospectus or amendment or supplement
or (ii) from any other act or failure to act of the Investor.

 

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(c)           Promptly
after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in Section 6(a)
or (b), such indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice
to the Indemnifying Party of the commencement of such action. The indemnifying party shall be relieved of its obligations under
this Section 6(c) to the extent that the indemnified party delays in giving notice and the indemnifying party is damaged or prejudiced
by the delay. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate
in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified
party of its election so as to assume the defense thereof, the indemnifying party shall be responsible for any legal or other
expenses subsequently incurred by the indemnifying party in connection with the defense thereof, provided, however,
that, if counsel for an indemnified party shall have reasonably concluded that there is an actual or potential conflict of interest
between the indemnified and the indemnifying party the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, and such indemnifying party shall reimburse such indemnified party and any Person
controlling such indemnified party for the fees and expenses of counsel retained by the indemnified party which are reasonably
related to the matters covered by the indemnity agreement provided in this Section 6; provided, however, that
in no event shall any indemnification by an Investor under this Section 6 exceed the net proceeds from the sale of Registered
Securities received by the Investor. No indemnified party shall make any settlement of any claims indemnified against hereunder
without the written consent of the indemnifying party, which consent shall not be unreasonably withheld. In the event that any
indemnifying party enters into any settlement without the written consent of the indemnified party the indemnifying party shall
not, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff of a release of such indemnified party from all liability in respect to such claim or litigation.

 

(d)           In order to provide for just and
equitable contribution to joint liability under the Securities Act in any case in which under any indemnified party makes a claim
for indemnification pursuant to this Section 6, but it is judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that this Section 6 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required in circumstances for which indemnification is provided under this Section
6; then, in each such case, the Company and such Investor shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject as is appropriate to reflect the relative fault of the Company and such Investor in connection with
the statements or omissions which resulted in such losses, claims, damages or liabilities, it being understood that the parties
acknowledge that the overriding equitable consideration to be given effect in connection with this provision is the ability of
one party or the other to correct the statement or omission (or avoid the conduct or take an act) which resulted in such losses,
claims, damages or liabilities, and that it would not be just and equitable if contribution pursuant hereto were to be determined
by pro-rata allocation or by any other method of allocation which does not take into consideration the foregoing equitable considerations.
Notwithstanding the foregoing, (i) no such Investor shall be required to contribute any amount in excess of the net proceeds to
him of all Registrable Securities sold by him pursuant to such registration statement, and (ii) no Person who is guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who
is not guilty of such fraudulent misrepresentation.

 

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(e)           Notwithstanding any of the foregoing,
if, in connection with an underwritten public offering of the Registrable Securities, the Company, any of the Investor and the
underwriters enter into an underwriting agreement relating to such offering which contains provisions covering indemnification
among the parties, then the indemnification provision of this Section 6 shall be deemed inoperative for purposes of such offering.

 

(f)            Following indemnification as provided
for under this Agreement, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.

 

7.           Certain Limitations on Registration
Rights. At any time prior to the effectiveness of any registration statement filed pursuant to this Agreement, if
the Company determines to file a registration statement with the Commission for the public sale of its securities and the managing
underwriter of such offering offers to purchase the Registrable Securities for its own account at the same price including underwriting
discounts and applicable expenses as paid to the Company, the Investor shall either (i) elect to include its Registrable Securities
being registered pursuant to this Agreement in the registration statement covering the sale of the Company’s securities,
or (ii) immediately cease its public sales for a period of 90 days following the effective date of the registration statement covering
the sale by the Company. Additionally, no Investor may participate in the registration statement relating to the sale by the Company
of its Common Stock as provided above unless such Investor enters into an underwriting agreement with the managing underwriter
and completes and/or executes all questionnaires, indemnities and other reasonable documents requested by the managing underwriter.
The Investor shall be deemed to have agreed by acquisition of its Registrable Securities not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities and to use its best efforts not
to effect any such public sale or distribution of any other equity security of the Company (including any short sale) or of any
security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten
public offering) within 10 days before or 90 days after the effective date of such registration statement. In such event, the Investor
shall, if requested, sign a customary market stand-off letter with the Company’s managing underwriter, and to comply with
applicable rules and regulations of the Commission.

 

8.           Rule 144. The Company
covenants that it will file the reports required to be filed under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, in the event that the Company is not required to file such reports, it will make publicly
available information as set forth in Rule 144(c)(2) promulgated under the Securities Act), and it will take such further action
as the Investor may reasonably request, or to the extent required from time to time to enable the Investor to sell its Registrable
Securities without registration under the Securities Act within the limitation of the exemption provided by (a) Rule 144 under
the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the
Commission (collectively, “Rule 144”). Upon request of the Investor, the Company will deliver to the Investor a written
statement as to whether it has complied with such requirements.

 

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9.           Severability. In the
event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.

 

10.          Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile or other electronic signature.

 

11.          Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.

 

12.          Notices
and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar overnight next business
day delivery, or by email delivery followed by overnight next business day delivery, as follows:

  

		To the Company:	Chanticleer Holdings, Inc.

7621
Little Avenue, Suite 414

Charlotte,
North Carolina 28226

Attn:
Michael D. Pruitt

 

		With a Copy to:	Ruskin Moscou Faltischek, P.C.

1425
RXR Plaza

East
Tower, 15th Floor

Uniondale,
NY 11556

Attn:
Seth I. Rubin, Esq.

  

		To the Investor:	Carl Caserta

_____________________________

_____________________________

Email:

  

		With a Copy to:	Michael D. Harris, Esq.

Nason, Yeager, Gerson,
White & Lioce, P.A.

1645 Palm Beach Lakes Blvd.,
12th Floor

West Palm Beach, FL 33401

 

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or to such other address as any of them, by
notice to the other may designate from time to time. Time shall be counted from the date of delivery.

 

13.          Attorneys’ Fees.
In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof, and any action or proceeding relating to this Agreement is filed, the prevailing party shall be entitled
to an award by the court of reasonable attorneys’ fees, costs and expenses.

 

14.          Oral Evidence. This
Agreement, together with the other Transaction Documents (as defined in the SPA), constitutes the entire Agreement between the
parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement
in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

 

15.          Additional Documents.
The parties hereto shall execute such additional instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the parties hereunder.

 

16.          Governing Law; Disputes.
The provisions of Section 5.8 and Section 5.12 of the SPA shall apply to any controversy, dispute or claim arising out of or relating
to this Agreement.

 

17.          Section or Paragraph Headings.
Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter,
or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

 

18.          Force Majeure. The
Company shall be excused from any delay in performance or for non-performance of any of the terms and conditions of this Agreement
caused by any circumstances beyond its control, including, but not limited to, any Act of God, fire, flood, or accident, interruption
of telecommunications facilities, labor dispute, unavoidable breakdown, terrorist event or civil unrest or disruption to the extent
that any of such circumstances affect the Company’s ability to perform its obligations under this Agreement or the ability
of the Commission to perform its responsibilities under the Securities Act.

 

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, each
of the parties hereto has caused this Agreement to be executed personally or by a duly authorized representative thereof as of
the day and year first above written.

 

	 	 	THE COMPANY:
	 	 
	 	 	Chanticleer Holdings, Inc.
	 	 
	 	By:	/s/ Michael D. Pruitt
	 	 	Name: Michael D. Pruitt
	 	 	Title: Chief Executive Officer
	 	 
	 	INVESTOR:
	 	 
	 	By:	/s/ Carl Caserta
	 	 	Name: Carl Caserta

 

    	12NOVC8-K-04272015Ex101

Exhibit 10.1

AGREEMENT
This Agreement (this “Agreement”) is made and entered into as of April 22, 2015, by and among Novation Companies, Inc. a Maryland corporation (the “Company”), Lone Star Value Investors, LP (“Lone Star Value Investors”), Lone Star Value Investors GP, LLC (“Lone Star Value GP”), Lone Star Value Management, LLC (“Lone Star Value Management”) and Jeffrey E. Eberwein (together with Lone Star Value Investors, Lone Star Value GP and Lone Star Value Management, collectively referred to as, “Lone Star Value”). Each member of Lone Star Value and the Company are referred to in this Agreement as a “Party” and collectively, the “Parties.” 
RECITALS
WHEREAS, the Company and Lone Star Value have engaged in various discussions and communications concerning the Company;
WHEREAS, the members of Lone Star Value are deemed to beneficially own shares of common stock, $0.01 par value, of the Company (the “Common Stock”) totaling, in the aggregate, 600,965 shares on the date of this Agreement; and
WHEREAS, the Company and the members of Lone Star Value have determined to come to an agreement with respect to the composition of the Company’s board of directors (the “Board”) and certain other matters related to the 2015 annual meeting of stockholders of the Company, including any adjournment or postponement thereof (the “2015 Annual Meeting”) and the 2016 annual meeting of stockholders, including any adjournment or postponement thereof (the “2016 Annual Meeting”), as provided in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound hereby, agree as follows:
1.Board Matters; Board Appointments; 2015 Annual Meeting.  
(a)    Effective as of the execution and delivery of this Agreement, Lone Star Value hereby irrevocably withdraws the nomination letter submitted to the Company by Lone Star Value Investors on January 22, 2015 and any related materials, notices or demands submitted to the Company in connection therewith.  Effective as of the execution of this Agreement, Lone Star Value hereby further agrees that it will not, and that it will not permit any of its Affiliates or Associates (as each is defined below) to, (i) nominate or recommend for nomination any person for election at the 2015 Annual Meeting, (ii) submit any proposal for consideration at, or bring any other business before, the 2015 Annual Meeting or (iii) initiate, encourage or participate in any “withhold” or similar campaign with respect to the 2015 Annual Meeting.  Effective as of the execution of this Agreement, Lone Star Value hereby agrees that it shall not publicly or privately encourage or support any other stockholder to take any of the actions described in this Section 1(a).
(b)    Immediately after execution of this Agreement, the Board and all applicable committees of the Board shall take all necessary actions to: (i) increase the size of the Board from 6 to 8 members; (ii) appoint Jeffrey E. Eberwein as a Class II director with a term expiring at the 2016 Annual Meeting, (iii) appoint Robert G. Pearse as a Class I director with a term expiring at the 2015 Annual Meeting.  As of this date Edward W. Mehrer has informed the Company of his intention to not stand for re-election at the 2015 Annual Meeting.  The Company agrees that: (i) the size of the Board will be reduced to seven (7) members effective as of the 2015 Annual Meeting; (ii) Mr. Pearse will be nominated for election as a Class 

    

I director on the Company’s slate at the 2015 Annual Meeting, and (iii) Mr. Eberwein will be nominated for election as a Class II director on the Company’s slate at the 2015 Annual Meeting to serve out the remaining one year term of Class II directors, and the Company shall recommend, support and solicit proxies for their election in the same manner as for all other directors.  The Company agrees that the Board shall not be increased to a size greater than seven (7) directors during the Standstill Period (as defined below) following the 2015 Annual Meeting.
(c)    The Company agrees that the Board and all applicable committees of the Board shall take all necessary actions to seek a binding stockholder approval at the 2016 Annual Meeting for a proposal to amend the Company’s Articles of Incorporation to declassify the structure of the Board (the “Declassification Proposal”) through a phased-in declassification process commencing at the 2016 Annual Meeting.  The Board shall recommend in favor of, and solicit stockholder support for, the approval of the Declassification Proposal and all directors and executive officers of the Company shall vote all shares beneficially owned by them or over which they have voting control in favor of the Declassification Proposal.  The Board and all applicable committees of the Board shall take all necessary actions to seek stockholder approval at the 2016 Annual Meeting to the Declassification Proposal.
(d)    If the Declassification Proposal is approved at the 2016 Annual Meeting, each director up for election thereafter will stand for a one-year term.  A recess to the 2016 Annual Meeting shall be called to effect the Declassification Proposal prior to the election of directors to occur at the 2016 Annual Meeting.  The Declassification Proposal shall not shorten any serving director’s term; provided that if the Declassification Proposal is approved, then Mr. Burtscher (if re-elected at the 2015 Annual Meeting) and Mr. Pearse or his substitute pursuant to Section 1(f) (if elected at the 2015 Annual Meeting), shall tender resignations effective at the 2017 Annual Meeting, including any adjournment or postponement thereof.
(e)    Messrs. Eberwein and Pearse (collectively, the “New Directors” and each a “New Director”) shall be required to: (i) comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to members of the Board; (ii) keep confidential all Company confidential information and to not disclose to any third parties discussions or matters considered in meetings of the Board or Board committees; and (iii) complete the Company’s standard director & officer questionnaire and other reasonable and customary director onboarding documentation required by the Company in connection with the election of Board members.
(f)    The Company agrees that if either New Director is unable to serve as a director, resigns as a director or is removed during the Standstill Period, then Lone Star Value shall have the ability, consistent with Section 1(j), to recommend a reasonable substitute person(s); provided that any substitute person recommended by Lone Star Value shall qualify as “independent” pursuant to NASDAQ Stock Market listing standards, and have relevant financial and business experience to fill the resulting vacancy.  In the event the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) does not accept a substitute person recommended by Lone Star Value, Lone Star Value will have the right to recommend additional substitute person(s) for consideration by the Nominating Committee.  Upon the approval and recommendation by the Nominating Committee of a replacement director nominee, the Board will take such actions as to consider such replacement director to the Board no later than 5 business days after the Nominating Committee recommendation of such replacement director, and if consistent with the Board’s fiduciary duties, the Board will take such actions as to appoint such replacement director to the Board.
(g)    The Company agrees that the New Directors shall be considered along with all other Board members for Board committee appointments in connection with the Board’s annual review of 

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committee composition.  Notwithstanding the foregoing, the Company agrees that, subject to receipt of completed D&O Questionnaires confirming their eligibility to serve, (i) Mr. Eberwein shall be appointed to serve on the Nominating Committee and Compensation Committee of the Board and (ii) Mr. Pearse shall be appointed to serve on the Audit Committee and Compensation Committee of the Board, and would be willing to serve as an “audit committee financial expert.”
(h)    During the Standstill Period, Lone Star Value hereby agrees to appear in person or by proxy at the Company’s annual meeting of stockholders and to vote all shares of Common Stock of the Company beneficially owned by it (i) in favor of the Company’s director nominees and (ii) in accordance with the recommendation of Institutional Shareholder Services (ISS) with respect to any other proposals that come before the meeting.
(i)    The Company shall use its reasonable best efforts to hold the 2015 Annual Meeting no later than June 30, 2015.
(j)    During the Standstill Period, Lone Star Value shall have the right to: (i) two (2) seats on the Board so long as Lone Star Value puts in place a Rule 10b5-1 plan to acquire within a reasonable time after the execution of the Agreement, and thereafter continues to beneficially own, in the aggregate three (3) percent (or more) of the Company’s then outstanding Common Stock, and in the event that Lone Star Value fails to so acquire and hold at least three (3) percent of the Common Stock then one of the New Directors or any replacement under Section 1(f) will provide to the Board an irrevocable letter of resignation, effective immediately; and (ii) one (1) seat on the Board for so long as Lone Star Value continues to beneficially own at least 600,965 shares of Common Stock and in the event that Lone Star Value fails to so beneficially own at least 600,965 shares of Common Stock, then the New Directors or any of their replacements under Section 1(f) will provide to the Board irrevocable letters of resignation, effective immediately.  Lone Star Value hereby agrees to notify and represent its ownership to the Company within two (2) business days of (i) beneficially owning three (3) percent the Company’s then outstanding Common Stock, (ii) Lone Star’s aggregate beneficial ownership of Common Stock then outstanding becoming less than three (3) percent and (iii) Lone Star’s aggregate beneficial ownership of Common Stock becoming less than 600,965 shares of Common Stock.
2.    Standstill Provisions.
(a)    Lone Star Value agrees that neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, in any manner, do any of the following from the date of this Agreement until the date that is 30 calendar days before the deadline for the submission of stockholder nominations for the 2016 Annual Meeting (the “Standstill Period”):
(i)    solicit, or encourage or in any way engage in any solicitation of, any proxies or consents or become a “participant” in a “solicitation” as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of proxies or consents (including, without limitation, any solicitation of consents with respect to the call of a special meeting of stockholders), in each case, with respect to securities of the Company in opposition to the recommendation or proposal of the Board, or call or seek to call, or encourage, support or influence anyone with respect to the call of, a special meeting of stockholders, or make a request for a list of the Company’s stockholders or for any books and records of the Company; provided, however, Mr. Eberwein shall have the right to request and inspect the books and records of the Company in his capacity as a director of the Company; 

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(ii)    advise, encourage, support or influence any person with respect to the voting of any securities of the Company at any annual or special meeting of stockholders, or seek to do so; 
(iii)    form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that includes all or some of the persons identified in this Agreement or any of their respective Affiliates or Associates); 
(iv)    deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock, other than any such voting trust, arrangement or agreement solely among the members of Lone Star Value and otherwise in accordance with this Agreement; 
(v)    seek or encourage any person to submit nominations in furtherance of a “contested solicitation” for the election or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or removal of any directors or with respect to the submission of any stockholder proposal; 
(vi)    make any proposal for consideration by stockholders at any annual or special meeting of stockholders of the Company (pursuant to Rule 14a-8 promulgated by the SEC under the Exchange Act or otherwise) or initiate, encourage or participate in any offer or proposal (with or without conditions) not having the approval and recommendation of the Board with respect to a share repurchase, dividend, self-tender or other change in capitalization, or with respect to any merger, acquisition, disposition, consolidation, recapitalization, restructuring, liquidation, dissolution, or other business combination or extraordinary transaction, in the case of any of the foregoing involving the Company or any subsidiary, business, division or Affiliate of the Company or encourage or assist any person or entity in connection therewith; 
(vii)    other than as provided in this Agreement, seek, alone or in concert with others, representation on the Board;
(viii)    enter into any discussions, negotiations, arrangements or understandings with any third party with respect to the matters set forth in this Section 2; 
(ix)    take any action challenging the validity or enforceability of any provisions of this Section 2; or
(x)    make or disclose any statement regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies, affairs or assets, the Common Stock, or this Agreement, that is inconsistent with the provisions of this Agreement, including, without limitation, any intent, purpose, plan or proposal that is conditioned on, or would require the waiver, amendment, nullification or invalidation of, any provision of this Agreement, or take any action that could require the Company to make any public disclosure relating to any such intent, purpose, plan, proposal or condition.
(b)    Except as expressly provided in Section 1 or Section 2(a), Lone Star Value shall be entitled to engage in private communications with stockholders and other third parties as long as such communications are in compliance with the requirements of this Agreement.

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3.    Representations and Warranties of the Company.
The Company represents and warrants to Lone Star Value that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, and (c) the execution of this Agreement, the consummation of any of the transactions contemplated by this Agreement, and the fulfillment of the terms of this Agreement, in each case in accordance with the terms of this Agreement, will not conflict with, or result in a breach or violation of the organizational documents of the Company as currently in effect and (d) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.
4.    Representations and Warranties of Lone Star Value.
Each of member of Lone Star Value jointly and severally represents and warrants to the Company that (a) the authorized signatory of such member of Lone Star Value set forth on the signature page hereto has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind it thereto, (b) this Agreement has been duly authorized, executed and delivered by such member of Lone Star Value, and is a valid and binding obligation of Lone Star Value, enforceable against each in accordance with its terms, (c) the execution of this Agreement, the consummation of any of the transactions contemplated by this Agreement, and the fulfillment of the terms of this Agreement, in each case in accordance with the terms of this Agreement, will not conflict with, or result in a breach or violation of the organizational documents of such member of Lone Star Value as currently in effect and (d) the execution, delivery and performance of this Agreement by such member of Lone Star Value does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to such member of Lone Star Value, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.  Each member of Lone Star Value jointly and severally represents that, as of the date of this Agreement, it is deemed to beneficially own such number of shares of Common Stock as are indicated in Exhibit A attached hereto.  No member of Lone Star Value is a party to any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, whether by means of derivatives or otherwise the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the Company by, including but not limited to “short” positions in shares of common stock, “long” puts, “short” calls, “short” forward or swap positions, manage the risk of share price changes for, or increase or decrease the voting power of, such member of Lone Star Value with respect to the shares of any class or series of the Company, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Company (“Short Interests”).

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5.    Mutual Non-Disparagement.  
Except as required by law, each Party covenants and agrees that, during the Standstill Period, or if earlier, until such time as the other Party or any of its agents, subsidiaries, affiliates, successors, assigns, officers, key employees or directors has breached this Section 5, neither it nor any of its agents, subsidiaries, affiliates, successors, assigns, officers, key employees or directors will in any way publicly disparage, call into disrepute, defame, slander or otherwise criticize the other Party or the other Party’s subsidiaries, affiliates, successors, assigns, officers (including any current officer of a Party or a Party’s subsidiaries who no longer serves in such capacity following the effective date of this Agreement), directors (including any current director of a Party or a Party’s subsidiaries who no longer serves in such capacity following the effective date of this Agreement), employees, stockholders, agents, attorneys or representatives, or any of their products or services, in any manner that would damage the business or reputation of such other Party, its products or services or its subsidiaries, affiliates, successors, assigns, officers (or former officers), directors (or former directors), employees, stockholders, agents, attorneys or representatives. Notwithstanding the foregoing, nothing shall prevent the making of any factual statement in any compelled testimony or production of information, whether by legal process, subpoena or as part of a response to a request for information from any governmental authority with jurisdiction over the Party from whom information is sought, or to defend against any legal claim from an independent claimant adverse to a Party.
6.    Mutual Press Release.  
Promptly following the execution of this Agreement, the Company and Lone Star Value shall jointly issue a mutually agreeable press release (the “Agreed Press Release”) announcing this Agreement, in the form attached hereto as Exhibit B.  Neither the Company nor Lone Star Value shall make any public announcement or public statement that is inconsistent with or contrary to the statements made in the Agreed Press Release, except as required by law or the rules of any stock exchange or with the prior written consent of the other Party. 
7.    Specific Performance.
Lone Star Value, on the one hand, and the Company, on the other hand, each acknowledges and agrees that irreparable injury to the other Party hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages).  Accordingly, it is agreed that Lone Star Value, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms of this Agreement, and the other Party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity.  This Section 7 is not the exclusive remedy for any violation of this Agreement. 
8.    Expenses.
Each Party shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution and effectuation of this Agreement and the transactions contemplated hereby, including, but not limited to, any matters related to the 2015 Annual Meeting; provided, however, that the Company shall reimburse Lone Star Value for the fees and expenses in connection with the negotiation of this Agreement and matters related to the 2015 Annual Meeting, including the fees and expenses of Olshan Frome Wolosky LLP, in an amount not to exceed $40,000.

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9.    Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable.  In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.
10.    Notices.
Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally or (ii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same.  The addresses for such communications shall be:
If to the Company:
Novation Companies, Inc.
2114 Central Street, Suite 600
Kansas City, Missouri 64108
		
	Attention:
	Chief Executive Officer

With copies (which shall not constitute notice) to:
Bryan Cave LLP 
One Kansas City Place
1200 Main Street, Suite 3800
Kansas City, Missouri 64105
		
	Attention:
	Gregory G. Johnson

If to Lone Star Value:
Lone Star Value Management, LLC
53 Forest Avenue, 1st Floor
Old Greenwich, Connecticut 06870
Attention:      Jeffrey E. Eberwein

With a copy (which shall not constitute notice) to:

Olshan Frome Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
Attention:      Steve Wolosky

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11.    Applicable Law.
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland without reference to the conflict of laws principles thereof that would result in the application of the laws of another jurisdiction.  Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and determined exclusively in the circuit court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division.  Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts.  Each of the Parties hereto hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable legal requirements, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter of this Agreement, may not be enforced in or by such courts.

12.    Affiliates and Associates.  
The obligations of each member of Lone Star Value herein shall be understood to apply to each of their respective Affiliates and Associates, and each member of Lone Star Value agrees that it will cause its respective Affiliates and Associates to comply with the terms of this Agreement.  As used in this Agreement, the terms “Affiliate” and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Exchange Act, and shall include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement.
13.    Voting Securities.  
As used in this Agreement, the term “Voting Securities” means the Common Stock, and any other securities (including voting preferred stock) issued by the Company which are entitled to vote generally for the election of directors of the Company, whether currently outstanding or hereafter issued (other than securities having such powers only upon the occurrence of a contingency).
14.    Counterparts.  
This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile).

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15.    Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries.  
This Agreement contains the entire understanding of the Parties hereto with respect to its subject matter.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other than those expressly set forth herein.  No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company and Lone Star Value.  No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.  The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns.  No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to any member of Lone Star Value, the prior written consent of the Company, and with respect to the Company, the prior written consent of Lone Star Value.  This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other persons.
[The remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date first above written.

	
				
	 
	Novation Companies, Inc.

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ W. Lance Anderson

	 
	 
	Name:
	W. Lance Anderson

	 
	 
	Title:
	Chairman of the Board of Directors and Chief Executive Officer

	
				
	 
	Lone Star Value Investors, LP

	 
	 
	 

	 
	By:
	Lone Star Value Investors GP, LLC 
General Partner

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Jeffrey E. Eberwein

	 
	 
	Name:
	Jeffrey E. Eberwein

	 
	 
	Title:
	Manager

	
				
	 
	Lone Star Value Investors GP, LLC

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Jeffrey E. Eberwein

	 
	 
	Name:
	Jeffrey E. Eberwein

	 
	 
	Title:
	Manager

	
				
	 
	Lone Star Value Management, LLC

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Jeffrey E. Eberwein

	 
	 
	Name:
	Jeffrey E. Eberwein

	 
	 
	Title:
	Sole Member

	
		
	 
	/s/ Jeffrey E. Eberwein

	 
	Jeffrey E. Eberwein

EXHIBIT A
	
		
	Investor
	Shares of Common Stock Beneficially Owned

	Lone Star Value Investors, LP
	600,965

	Lone Star Value Investors GP, LLC
	600,965

	Lone Star Value Management, LLC
	600,965

	Jeffrey E. Eberwein
	600,965

	 
	 

	 
	 

	Aggregate total:
	600,965

    

EXHIBIT B
[Press Release]

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