Document:

Exhibit

Exhibit 10.26

TRANSACTION BONUS AND RELEASE AGREEMENT

TRANSACTION BONUS AND RELEASE AGREEMENT (this “Agreement”) by and between MATTHEW LAUTZ (“Employee”) with an address of N36 W23672 Oak Hill Lane, Pewaukee  WI  53072 and NOVATION COMPANIES, INC. (“Novation”, and together with its parents, subsidiaries and affiliates, the “Company”) with an address at 2114 Central Street, Suite
600, Kansas City, MO 64108.

1.         Termination Upon Transaction.  Upon the closing of the sale by Novation and Corvisa Services LLC of Corvisa LLC (“Corvisa”) to ShoreTel, Inc. or an affiliate thereof (the “Transaction”), Employee’s duties, responsibilities, office and title with the Company shall cease.   Employee agrees that, effective on the date of the closing of the Transaction (the “Transaction Date”), he shall resign from all of his positions with the Company, including but not limited to any officer or director positions with Novation, its subsidiaries and affiliates, and any entity related thereto.  Company agrees that it will pay Employee his unpaid salary earned up until the time of his resignation, and the Company will pay Employee for his unused vacation days, with both such payments to be made no later than 14 days following Employee's resignation.  This Agreement shall automatically be deemed null and void and the obligations of the parties hereunder shall be terminated at 12:00 a.m. Central Time on March 1, 2016 if the Transaction has not closed prior to such time.

2.    Transaction Bonus.

(a)    The Company shall pay to Employee a bonus of $285,000 (the “Transaction Bonus”), in accordance with the terms and conditions set forth below:

(i)    If,  for  Bona  Fide  Business  Reasons  (as  defined  below) only, the purchase price of the Transaction agreed to at closing (“Agreed Purchase Price”) is less than $8.0 million, then the Transaction Bonus shall be reduced by the same percentage that the Agreed Purchase Price is reduced relative to an $8.5 million purchase price.  For clarity and by way of example only, if the Agreed Purchase Price were $7.6 million, then the Agreed Purchase Price would reflect a 10.59 percent reduction relative to $8.5 million ($900,000/$8,500,000 = .1059), and the Transaction Bonus would be reduced by 10.59 percent to $254,818.50.

(ii)    “Bona Fide Business Reasons” shall mean reasons related to the valuation of the business, such as, for example, change of circumstances regarding key customer accounts or valuation of business assets.

(iii)    The Transaction Bonus shall be paid to the Employee in full on the Transaction Date.

(b)    For the avoidance of doubt, no payment shall be made under this
Agreement if the Transaction has not closed prior to 12:00 a.m. Central Time on March 1, 2016.

3.    Consideration.    Employee  agrees  and  acknowledges  that  the  payment provided for in Paragraph 2 is valid consideration for this Agreement.

4.    Evaluation Period.   Employee shall have up to seven (7) days from the date of his receipt of this Agreement to consider the terms and conditions of this Agreement. Employee may accept this Agreement at any time within the seven (7) day period by executing it and returning it to Rodney Schwatken, Chief Executive Officer, Novation Companies, Inc., 2114 Central Street, Suite 600, Kansas City, MO 64108, no later than 5:00 p.m. Central Time on the seventh (7th) day after Employee’s receipt of this Agreement.   The effective date of this Agreement shall be the day following Employee’s signing of this Agreement (the “Release Effective Date”).  In the event Employee does not accept this Agreement as set forth above, or if the Transaction has not closed prior to 12:00 a.m. Central Time on March 1, 2016, this Agreement, including but not limited to the obligation of the Company and its subsidiaries and affiliates to provide the payment referred to in Paragraph 2, shall automatically be deemed null and void.

5.    Releases.

The following subsections (a) - (d) within this paragraph 5 shall become effective upon the Transaction closing:

(a)    (i)  In consideration of the payment referred to in Paragraph 2, Employee for himself and for his heirs, executors, and assigns (hereinafter collectively referred to as the “Releasors”), forever releases and discharges the Company, the Company Group (as such term is defined in the Employment Agreement entered into as of March 2, 2012 by and between Employee and Novation (f/k/a Novastar Financial, Inc.), attached hereto as Exhibit A (the “Employment Agreement”)), and any and all of its parent corporations, subsidiaries, divisions, affiliated entities, predecessors, successors and assigns, and any and all of its or their employee benefit and/or pension plans or funds, and any of its or their past or present officers, directors, stockholders, agents, trustees, administrators, employees or assigns (whether acting as agents for such entities or in their individual capacities) (hereinafter collectively referred to as the  “Company  Releasees”),  from  any  and  all  claims,  demands,  causes  of  action,  fees  and liabilities of any kind whatsoever (based upon any legal or equitable theory, whether contractual, common-law,  statutory,  decisional,  federal,  state,  local  or  otherwise),  whether  known  or unknown, which Releasors ever had, now have or may have against the Company Releasees by reason of any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter from  the beginning of the world up  to  and including the day the Employee or the Company sign this Agreement, except for the obligations of the Company under this Agreement.

(b)    Without limiting the generality of the foregoing subparagraph (a), this Agreement is intended to and shall release the Company Releasees from any and all claims arising out of Employee’s employment with Releasees and/or the termination of Employee’s employment, including but not limited to any claim(s) under or arising out of (i) Title VII of the Civil Rights Act of 1964, as amended; (ii) the Americans with Disabilities Act, as amended; (iii) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding claims for accrued, vested benefits under any employee benefit plan of the Company in accordance with the terms of such plan and applicable law); (iv) the Age Discrimination in Employment Act, as amended, or the Older Workers Benefit Protection Act; (v) the Missouri Human Rights Act; (vi) alleged discrimination or retaliation in employment (whether based on federal, state or local law, statutory or decisional); (vii) the terms and conditions of Employee’s employment with the Company, the termination of such employment, and/or any of the events relating directly or indirectly to or surrounding that termination; and (viii) any law (statutory or decisional) providing for attorneys’ fees, costs, disbursements and/or the like.

(c)    Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent Employee from filing a charge with or participating in an investigation conducted by any g

overnmental agency, including, without limitation, the United States Equal Employment Opportunity Commission (“EEOC”) the Securities and Exchange Commission (“SEC”), or applicable state or city fair employment practices agency, to the extent required or permitted by law, including SEC compliance investigations.    Nevertheless, Employee understands and agrees that he is waiving any relief available (including, for example, monetary damages or reinstatement) under any of the claims and/or causes of action waived in Paragraphs 5(a) and (b), including but not limited to financial benefit or monetary recovery from any lawsuit filed or settlement reached by the EEOC or anyone else with respect to any claims released and waived in this Agreement.

(d)    Except for any claims arising out of Employee’s intentional or fraudulent conduct, or claims arising out of actions outside the scope of Employee’s employment with the Company, which claims are not released or discharged, the Company, the Company Group, and any and all of their parent corporations, subsidiaries, divisions, affiliated entities, predecessors, successors and assigns, and any and all of their past or present officers, directors, agents, trustees, administrators, and employees (“Company Releasors”), forever release and discharge Employee from any and all claims, demands, causes of action, fees and liabilities whatsoever (based upon any legal or equitable theory, whether contractual, common-law, statutory, decisional, federal, state, local or otherwise), whether known or unknown, which Company Releasors ever had, now have or may have against Employee by reason of any actual or alleged act, omission, transaction, practice, conduct occurrence, or other matter from the beginning of the world up to and including the Release Effective Date, except for the obligations of the Employee under this Agreement.

6.    Restrictive Covenants.  Except for information related to Corvisa, which is part of the Transaction, Employee agrees and acknowledges that the terms of Section 5.1, Obligation to Maintain Confidentiality, Section 5.2, Ownership of Property, Section 5.3, Third Party Information, Section 5.5, Non-Disparagement and Section 5.6, Cooperation, of the Employment Agreement are incorporated herein by reference, and the Employee agrees and acknowledges that he is bound by their terms, provided that nothing in this Agreement shall prevent Employee from working for Corvisa or its successor following the Transaction Date. The parties further agree that Employee is released from and not bound by Section 5.4, Noncompetition and Nonsolicitation of the Employment Agreement, such section of the Employment Agreement being deemed void upon the parties’ execution of this Agreement.

7.    Miscellaneous.

(a)    Upon request, Employee agrees to return to the Company any and all originals and copies of documents, materials, records, computers, smartphones, tablets and other electronic devices or other items which (i) are not part of the Transaction, (ii) are in the Employee’s  possession  or  control,  and  (iii)  are  belonging  to  the  Company  or  containing proprietary information relating to the Company.

(b)    For  a  period  of  one  (1)  year  following  his  execution  of  this Agreement, Employee will cooperate with the Company and/or its subsidiaries and affiliates and its/their   counsel   in   connection   with   any  reasonable   requests   for   cooperation   with   an investigation, administrative proceeding or litigation relating to any matter in which Employee was involved or of which Employee has knowledge.  The Company will pay Employee’s actual out-of-pocket expenses incurred in connection with such cooperation.

(c)    Employee agrees that, in the event he is subpoenaed by any person or entity (including, but not limited to, any government agency) to give testimony (in a deposition, court proceeding or otherwise) which in any way relates to Employee’s employment with the Company, he will give prompt notice of such request to the Company.  Employee shall contact the Company, to seek such written consent, a

nd except as required by law will make no disclosure until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure.

8.    Compromise.

(a)    The making of this Agreement is not intended, and shall not be construed, as an admission that either the Company or Employee have violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract, or committed any wrong whatsoever.

(b)    The parties agree that this Agreement may not be used as evidence in a subsequent proceeding except in a proceeding to enforce the terms of this Agreement.

9.    Additional Terms.

(a)    Employee  acknowledges  that:  (i)  he  has  carefully  read  this Agreement in its entirety; (ii) he has had an opportunity to consider fully the terms of this Agreement; (iii) he has been advised by the Company in writing to consult with an attorney of his choosing in connection with this Agreement; (iv) he fully understands the significance of all of the terms and conditions of this Agreement and he has discussed it with his independent legal counsel, or has had a reasonable opportunity to do so; (v) he has had answered to his satisfaction any questions he has asked with regard to the meaning and significance of any of the provisions of this Agreement; and (vi) he is signing this Agreement voluntarily and of his own free will and assents to all the terms and conditions contained herein.

(b)    This Agreement is binding upon, and shall inure to the benefit of, the parties and their respective heirs, executors, administrators, successors and assigns.

(c)    If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force and effect.   However, the illegality or unenforceability of such provision shall have no effect upon, and shall not impair the enforceability of, any other provision of this Agreement; provided, however,  that,  upon  any  finding  by  a  court  of  competent  jurisdiction  that  the  release  and covenants provided for by Paragraph 5 of this Agreement is illegal, void, or unenforceable, the parties agree to execute a release, waiver and/or covenant that is legal and enforceable.

(d)     This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Missouri without regard to the conflict of laws provisions thereof.  Actions to enforce the terms of this Agreement, or that relate to Employee’s employment with the Company shall be submitted to the exclusive jurisdiction of any state or federal court sitting in Missouri.

(e)    This Agreement may be executed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument of this Agreement.

(f)    This Agreement, together with all exhibits hereto, constitutes the complete understanding between the parties with respect to the termination of the Employee’s employment at the Company and supersedes any and all agreements, understandings, and discussions, whether written or oral, between the parties.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the parties.

[Signature page follows]

[Signature Page to Transaction Bonus and Release Agreement]

	
					
	 
	 
	 
	 
	 

	MATTHEW LAUTZ
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ Matthew Lautz
	 
	Date:
	12/20/2015

	 
	Matthew Lautz
	 
	 
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 
	 
	 

	NOVATION COMPANIES, INC.
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ Rodney Schwatken
	 
	Date:
	12/20/2015

	 
	Rodney Schwatken
	 
	 
	 

	 
	Chief Executive OfficerExhibit 10.1

 

 

Luisa Ingargiola

4826 Blue Jay Circle

Palm Harbor, FL 34689

 

 

Appointment Letter Agreement – FTE
Networks, Inc. Board of Directors

 

 

Dear Ms. Ingargiola:

 

We are pleased to tell you that the Board of Directors (the
"Board") of FTE Networks, Inc. (the "Company") has elected you to serve as a member of the Board commencing
from February 15, 2016. Additionally, you will serve as Chairman of the Audit Committee.

 

		1.	Your Duties:

 

		a)	You will be expected to attend (either in person or by teleconference) all regular meetings of the Board, of which we expect
to hold approximately four to six per annum, as well as to attend (either in person or by teleconference), if feasible, any special
meetings of the Board and to sign all written consents if you deem appropriate. In addition, you will be expected to perform such
other duties as are reasonably contemplated by your holding office as a director of the Company or which may reasonably be assigned
to you by the Board from time to time, including Committee(s) membership.

 

		b)	As a director you will at all times act as a fiduciary in the service of the best interests of the Company. In addition, you
agree to (i) provide all information regarding yourself as the Company requires to satisfy its disclosure obligations under applicable
securities laws; and (ii) timely file with the Securities and Exchange Commission all reports and schedules required of you in
your personal capacity by virtue of your relationship with the Company (e.g., Forms 3, 4 and 5 as contemplated by Section 16(a)
of the Securities Exchange Act of 1934). The Company will provide the necessary forms to you and will assist you to file the required
reports and schedules.

 

		c)	As you will appreciate, your time commitment will ultimately be a function of the matters confronting the Company from time
to time and matters properly requiring your attention as a director of the Company.

 

		d)	You shall comply with all the fiduciary-duty obligations of a director as imposed by Nevada law. Without limitation, you specifically
agree not to, during the time of your service on the Company's Board, serve as a director of or a consultant to any of the companies
listed on Exhibit A hereto. Subject to your fiduciary-duty obligations as a director as imposed by Nevada Law, this Letter does
not otherwise restrict you from accepting appointment as a director of any other company, providing consulting services, becoming
employed by or engaging in any other business or other activity whatsoever.

 

    	 	1	 

     

    

 

		2.	Remuneration:

 

		a)	Annual Options: The Company expects to provide you and other outside directors, for service on the Board, stock in the form
of (i) 2,500 shares of Series F Preferred Stock and (ii) an annual grant of 5,000 five-year stock options under the Company's 2016
Stock Plan with an exercise price equal to the mean average of the closing sale prices of Company common stock for the 10 trading
days immediately before the date of grant (or, the date-of-grant closing sale price of Company common stock on any national securities
exchange on which Company common stock is listed, if it has become so listed), which annual options would vest in one lump amount
immediately upon grant, subject to continuation of service. Such stock options shall remain exercisable until the earlier of the
scheduled expiration date or 18 months after the cessation of service, whichever is sooner.

 

		b)	Cash: You shall receive an annual cash stipend at a rate of $30,000, payable $5,000 quarterly on the last day of each fiscal
quarter for quarters 1-3 and $15,000 for quarter 4 payable on the last day of fiscal quarter 4, for your service on the Board.

 

		c)	Expenses: Subject to you providing the Company with receipts or other evidence of payment, the Company will pay for or reimburse
you for all travelling, hotel and other expenses reasonably incurred by you in connection with attending and returning from Board
or Committee meetings, or otherwise, in connection with the Company's business. "Reasonable" air travel expenses assume
economy class for flights under 4 hours and business class for flights over 4 hours.

 

 

 

		3.	Termination of Director Status:

 

		a)	Your status as a Director may be terminated at any time by the vote of the stockholders of the Company (including any failure
to elect you for an ensuing term at any annual meeting of stockholders) in accordance with the certificate of incorporation and
bylaws of the Company. Any such termination will not affect your rights under options that have become vested, subject to the post-service
exercisability period.

 

		b)	You acknowledge and agree that if the stockholders of the Company terminate your status as a Director (including any failure
to elect you for an ensuing term at any annual meeting of stockholders), you will have no claim of any kind, other than indemnity
claims, against the Company by reason of the termination.

 

		c)	You are at liberty to resign from the Board at any time by notice in writing to the Company.

 

    	 	2	 

     

    

 

		4.	What happens after termination of Director Status?

 

		a)	If your Director status is terminated for any reason or you resign for any reason:

 

		b)	The Company may set off any amounts you owe the Company against any amounts the Company owes to you as a Director at the date
of termination except for amounts the Company is not entitled by law to set off;

 

		c)	You must return all the Company’s property (including property leased by the Company) to the Company on termination including
all written or machine readable material, software, computers, credit cards, keys and vehicles; and

 

		d)	You shall return to the Company all confidential information and documentation (including any copies thereof) regarding the
Company and its affiliates (including confidential information of third parties entrusted to the Company) within 5 days following
the Company’s request to delete or destroy any electronic or written information relating to the Company, as shall be requested
by the Company.

 

 

 

		5.	Confidential Information:

 

		a)	You acknowledge and agree that during your service with the Company, you will receive confidential information regarding the
Company and its affiliates (including confidential information of third parties entrusted to the Company) and that you will not
disclose any such information to any other party nor use for your own benefit or for the benefit or for the benefit of any third
person any of the confidential information so obtained at any time during or after the term of your service with the Company without
the Company’s prior written consent.

 

		b)	You recognize and affirm that in the event of your breach of any provision of this Section 5, money damages would be inadequate
and the Company and its subsidiaries would have no adequate remedy at law. Accordingly, you agree that in the event of a breach
or threatened breach by you of the provisions of this Section 5, the Company, in addition and supplementary to any other rights
and remedies existing in its favor, may apply to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive r other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond
or other security).

 

    	 	3	 

     

    

 

		6.	Protection:

 

		a)	During the term of your engagement hereunder, the Company will procure and maintain directors’ and officers’ liability
insurance policies with a minimum of $2,000,000 Aggregate Limit, and to ensure you are included as an insured thereunder.

 

		b)	The Company will enter into a standard and customary Indemnification Agreement with you on terms reasonably acceptable to you
which will provide for (i) your indemnification by the Company to the fullest extent permitted by law for all acts and/or omissions
directly and/or indirectly related to any services provided by you to the Company and (ii) a continuing obligation for the payment
of your expenses in the event any action and/or investigation in commenced regarding any acts/or omissions directly and/or indirectly
related to any services provided to you by the Company, including any action and/or investigation that begins after your service
as a Director has ended.

 

 

		7.	Miscellaneous:

 

		a)	Alterations: This Letter cannot be amended except in writing signed by each party.

 

		b)	Entire Agreement: This Letter constitutes the entire agreement between the parties in connection with its subject matter and
supersedes all previous agreements or understandings between the parties in connection with its subject matter.

 

		c)	Further Action: Each party must do, at its own expense, everything reasonably necessary (including executing documents) to
give full effect to the performance of his/its obligations under this Letter and the transactions contemplated by it.

 

		d)	Waiver: A party does not waive a right, power or remedy (or any other right, power or remedy) if it fails to exercise or delays
in exercising the right, power or remedy. A single or partial exercise of a right, power or remedy does not prevent another of
further exercise of that or another right, power or remedy. A waiver of a right, power or remedy must be in writing and signed
by the party giving the waiver.

 

		e)	Relationship: This Letter does not create a relationship of employment, agency or partnership between parties. Unless the Board
adopts a specific resolution so providing, you do not have authority to bind the Company to any contract or commitment; and you
agree not to purport to do so.

 

		f)	Governing Law: This Letter shall be governed by and construed in accordance with the laws of Florida (without giving effect
to choice of law principles or rules thereof that would cause the application to the laws of any jurisdiction other than Florida).

 

		g)	Severability: Any provision of this Letter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdictions.

 

		h)	Counterparts: This Letter may be executed in counterparts. All executed counterparts constitute one document.

 

    	 	4	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Agreement as of the date set forth below.

 

	 	DIRECTOR	 	FTE NETWORKS, INC.
	 	 	 	 
	 	 	 	 
	 	By:  /s/ Luisa Ingargiola	 	By:  /s/ Michael Palleschi
	 	 	 	 
	 	Luisa Ingargiola	 	Michael Palleschi, CEO
	 	4826 Blue Jay Circle	 	999 Vanderbilt Beach Rd.
	 	Palm Harbor, Florida 34689	 	Suite 601
	 	 	 	Naples, Florida 34108
	 	Date: 02/15/16	 	Date: 02/15/16

 

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