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Exhibit 10.1

REGISTRATION AND STANDSTILL AGREEMENT

 

This
Registration and Standstill Agreement, dated as of November 9, 2017
(this “Agreement”), is entered into by
and among Insignia Systems, Inc., a Minnesota corporation (the
“Company”), and
Sardar Biglari, an individual resident of Texas
(“Biglari”),
The Lion Fund II, L.P., a Delaware limited partnership
(“Lion Fund”),
and Biglari Capital Corp., a Texas limited liability company
(collectively with Biglari and Lion Fund, the “Biglari Group”).

 

WHEREAS, the Company and the Biglari
Group have determined that the interests of the Company and its
shareholders would be best served by entering into this Agreement
to (i) avoid the distraction that could result from a
contested election in connection with a special or annual meeting
of the Company’s shareholders, among other matters, and
(ii) facilitate orderly disposition of Company common stock by
the Biglari Group.

 

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

 

 

1.

Representations and Warranties of the
Company. The Company represents and warrants as
follows:

 

(a)

The Company has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.

 

(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, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting the
rights of creditors and subject to general equity
principles.

 

(c)

The execution,
delivery and performance of this Agreement by the Company does not
and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree applicable to it, 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 become a 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.

 

 

2.

Representations and Warranties of the
Biglari Group. Each member of the Biglari Group, severally,
and not jointly, represents and warrants with respect to himself or
itself as follows:

 

(a)

Such party, if a
natural person, has the power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby. Such party, if an
entity, has the corporate power and authority, the partnership
power and authority or the limited liability company power and
authority, as applicable, to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.

 

(b)

This Agreement has
been duly and validly authorized, executed, and delivered by such
member of the Biglari Group and constitutes a valid and binding
obligation and agreement of such party, and is enforceable against
such party in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws
affecting the rights of creditors and subject to general equity
principles.

 

 

 

(c)

Such party is the
“beneficial owner” of the number of shares of Common
Stock (as defined herein) that such party reported in the Amendment
No. 3 to Schedule 13D filed by members of the Biglari Group
with the SEC on March 2, 2017 (the “Schedule 13D”). Except for
those Affiliates and Associates of such party with respect to whom
a cover page is included in the Schedule 13D, no other
Affiliate or Associate of such party beneficially owns any shares
of Common Stock. Each member of the Biglari Group disclaims
beneficial ownership of the shares of Common Stock owned or
controlled by the other members except to the extent of his or its
pecuniary interest therein, and asserts that such member’s
entry into this Agreement is a separate agreement of such member
with the Company.

 

(d)

The execution,
delivery and performance of this Agreement by each member of the
Biglari Group does not and will not (i) violate or conflict
with any law, rule, regulation, order, judgment or decree
applicable to him or it, 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 become a 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 he or it is a party or by
which he or it is bound.

 

 

3.

Definitions. For purposes of
this Agreement:

 

(a)

The terms
“Affiliate” and
“Associate”
have the respective meanings set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission (the
“SEC”) under
the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”); the terms “beneficial owner” and
“beneficial ownership” shall have the respective
meanings as set forth in Rule 13d-3 promulgated by the SEC
under the Exchange Act; and the terms “person” or
“persons” shall mean any individual, corporation
(including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization or other entity of any kind or nature.

 

(b)

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

 

(c)

“Common Stock” means the Common
Stock of the Company, $0.01 par value.

 

(d)

“Registration Period” means the
period from the date of this Agreement until the earlier
of:

 

(i)

the date, if any,
that the Biglari Group’s beneficial ownership of Common Stock
has remained below 10.0% of the then outstanding shares of Common
Stock (determined in accordance with Rule 13d-3 promulgated under
the Exchange Act, or any successor rule) for 90 consecutive
calendar days;

 

(ii)

the date, if any,
that the Company no longer qualifies for the use of a registration
statement on Form S-3 or any successor form thereto for secondary
offerings;

 

(iii)

such date, if any,
as any member of the Biglari Group has materially breached any of
its commitments or obligations set forth in Sections 5, 6, 7 or 8
of this Agreement; and

 

(iv)

the third
anniversary of the date of this Agreement.

 

(e)

“Shares” mean 2,313,200 shares of
Common Stock beneficially owned by one or more members of the
Biglari Group as of the date of this Agreement, together with any
shares of Common Stock issued or issuable by way of a stock
dividend or stock split or otherwise in connection with a
combination of shares, distribution, recapitalization, merger,
consolidation, other reorganization or other similar event with
respect to the Common Stock.

 

 

2

 

 

(f)

“Standstill Period” means the
period from the date of this Agreement until the earlier
of:

 

(i)

the date, if any,
that the Biglari Group’s beneficial ownership of Common Stock
has remained below 5.0% of the then outstanding shares of Common
Stock (determined in accordance with Rule 13d-3 promulgated under
the Exchange Act, or any successor rule) for 90 consecutive
calendar days;

 

(ii)

the date, if any,
that the Company no longer qualifies for the use of a registration
statement on Form S-3 or any successor form thereto for secondary
offerings;

 

(iii)

such date, if any,
as the Company has materially breached any of its commitments or
obligations set forth in Sections 4, 5 or 8 of this Agreement;
and

 

(iv)

the third
anniversary of the date of this Agreement.

 

provided, that the
Standstill Period will be suspended, solely with respect to
Subsections 7(a), 7(c), 7(d) and 7(f) of this Agreement, during
such period, if any, between the date that any shareholder of the
Company provides written notice to the Company of its intention to
bring any business before any meeting of shareholders of the
Company or to nominate one or more persons for election as a
director of the Company and the earlier of (1) the date such
proposal or nominations are withdrawn and (2) the conclusion of
such meeting of shareholders. The Company will promptly notify the
Biglari Group of the Company’s receipt of any such
notice.

 

 

4.

Registration of Securities; Related
Matters. Promptly following the execution and delivery of
this Agreement by the parties hereto, the Company agrees to (i)
prepare a registration statement on Form S-3 or any successor form
thereto to register the resale of the Shares by any member of the
Biglari Group from time to time (the “Registration Statement”), deliver
a draft of the Registration Statement to the Biglari Group in no
event later than 10 business days after the date hereof and respond
promptly to any comments received from the Biglari Group on such
Registration Statement, (ii) file such Registration Statement with
the SEC in no event later than five business days after resolving
any comments on the Registration Statement from the Biglari Group
to the reasonable satisfaction of the Biglari Group and the
Company, and (iii) use its reasonable efforts to cause such
Registration Statement to become and remain continuously effective
during the Registration Period. The Company will use it reasonable
efforts to cause such Registration Statement to be declared
effective by the SEC as soon as practicable after the filing
thereof. The Company will not be obligated to register any
securities pursuant to a registration statement on Form S-1 or any
successor form thereto.

 

(a)

During the
Registration Period the Company will prepare and file with the SEC
such amendments, post-effective amendments and supplements to the
Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement
effective and such Registration Statement and prospectus accurate
and complete in all material respects during the Registration
Period.

 

(b)

During the
Registration Period, the Company will notify the Biglari Group
promptly after receives notice, or obtains knowledge thereof, of
the issuance of any stop order by the SEC suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for such purpose and promptly use its
reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop
order should be issued.

 

(c)

The Company will
provide to the Biglari Group a reasonable opportunity to review and
comment on the Registration, prospectus and any amendments or
supplements thereto in advance of filing, and shall consider in
good faith the reasonable comments of the Biglari
Group.

 

 

3

 

 

(d)

During the
Registration Period, the Company will notify the Biglari Group
promptly (i) after it shall receive notice thereof, of the date and
time when the Registration Statement and each post-effective
amendment thereto has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been
filed, and (ii) of any request by the SEC for the amending or
supplementing of the Registration Statement or
prospectus.

 

(e)

During the
Registration Period, each party will promptly notify the other
party of the occurrence of any event of which it becomes aware, the
result of which causes the Registration Statement or prospectus,
including any document incorporated or deemed to be incorporated
therein by reference, to contain an untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances then existing, not misleading. The Company
will prepare and promptly file with the SEC, and promptly notify
the Biglari Group of the filings of, such amendments or supplements
to the Registration Statement or prospectus as may be necessary to
correct any such statements or omissions as a result of the
event.

 

(f)

During the
Registration Period, the Company will maintain the registration of
the Common Stock under the Exchange Act, file with the SEC in a
timely manner all reports required to be filed by the Company under
the Securities Act (as defined below) and the Exchange Act in
accordance with General Instruction I.A.3(b) of Form S-3, and
otherwise use reasonable efforts to continue to qualify for the use
of a registration statement on Form S-3 (or any successor form
thereto) for secondary offerings.

 

 

5.

Indemnification.

 

(a)

The Company will
indemnify and hold harmless each member of the Biglari Group, the
partners, officers and directors of each such person, and each
person, if any, who controls such person within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange
Act (collectively, the “Biglari Indemnitees”), against
any and all losses, claims, damages, liabilities, costs and
expenses (including, without limitation, reasonable
attorneys’ fees) (joint or several) to which they, or any of
them, may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as any such losses, claims, damages,
liabilities, costs or expenses (or actions in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”): (i) any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement, including any prospectus contained
therein or any amendments or supplements thereto, (ii) the omission
or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein (in the
case of any prospectus, in light of the circumstances under which
they were made) not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities
law in connection with the offering covered by such Registration
Statement; and the Company will pay as incurred to each such
Biglari Indemnitee any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such loss,
claim, damage, liability, cost, expense or action; provided,
however, that the Company shall not be liable in any such case for
any such loss, claim, damage, liability, cost, expense or action to
the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information
furnished expressly for inclusion in the Registration Statement,
prospectus, amendment or supplement by a Biglari
Indemnitee.

 

4

 

 

(b)

The Biglari Group
will, jointly and not severally, indemnify and hold harmless the
Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities
Act or Exchange Act (collectively, the “Company Indemnitees”), against
any and all losses, claims, damages, liabilities, costs and
expenses (including, without limitation, reasonable
attorneys’ fees) (joint or several) to which a Company
Indemnitee may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities, costs or expenses (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished
by the Biglari Group specifically for inclusion in the Registration
Statement, prospectus, amendment or supplement thereto; and the
Biglari Group will pay as incurred any legal or other expenses
reasonably incurred by Company Indemnitees in connection with
investigating or defending any such loss, claim, damage, liability,
cost, expense or action if it is judicially determined that there
was such a Violation.

 

(c)

Promptly after
receipt by an indemnified party under this Section 5 of notice
of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this
Section 5, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel
reasonably satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
(i) representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to
actual or potential differing interests (including a conflict of
interest or the availability of separate defenses) between such
indemnified party and any other party represented by such counsel
in such proceeding, or (ii) the indemnifying party shall have
failed promptly to assume the defense of such action with counsel
reasonably satisfactory to the parties. The failure to deliver
written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such
indemnifying party of any liability to the indemnified party under
this Section 5, unless and to the extent that such failure is
materially prejudicial to the indemnifying party’s ability to
defend such action, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that
it may have to any indemnified party otherwise than under this
Section 5. No indemnifying party may settle or compromise, or
consent to the entry of any judgment with respect to, any claim
without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld, unless such settlement,
compromise or judgment (x) includes an unconditional release of the
indemnified party from all liability on any claims that are the
subject matter of such action, and (y) does not include a statement
as to or an admission of fault, culpability or a failure to act by
or on behalf of the indemnified party.

 

(d)

If the
indemnification provided for in this Section 5 is held by a
court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages, liabilities,
costs or expenses referred to herein, the indemnifying party, in
lieu of indemnifying such indemnified party thereunder, shall to
the extent permitted by applicable law contribute to the amount
paid or payable by such indemnified party as a result of such loss,
claim, damage, liability, cost or expense (i) in such
proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and
the indemnified party on the other from the sale of the Shares
pursuant to the Registration Statement, or (ii) if such
allocation is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits but
also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with
the Violation(s) that resulted in such loss, claim, damage,
liability, cost or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the
parties relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Biglari Group agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations described above.

 

5

 

 

(e)

The provisions of
this Section 5 shall survive the completion of any offering of
Common Stock under the Registration Statement and the termination
of this Agreement. The indemnity and contribution agreements
contained in this Section 5 are in addition to any liability that
an indemnifying party may have to an indemnified
party.

 

 

6.

Voting and Disposal of Securities;
Related Reporting.

 

(a)

The Biglari Group
will promptly file an amendment to the Schedule 13D reporting
their entry into this Agreement, amending applicable items to
conform to their obligations hereunder and appending or
incorporating by reference this Agreement as an exhibit thereto.
The Biglari Group will provide to the Company a reasonable
opportunity to review and comment on such amendment in advance of
filing, and shall consider in good faith the reasonable comments of
the Company.

 

(b)

During the
Standstill Period, the members of the Biglari Group will cause all
shares of Common Stock beneficially owned by them and their
Affiliates to be present for quorum purposes and to be voted, and
shall cause all shares of Common Stock held by their respective
Associates to be present for quorum purposes and to be voted (i) in
favor of all directors nominated by the Board for election at any
annual meeting of shareholders of the Company; and (ii) for
approval with respect to the advisory vote to approve executive
compensation, in accordance with the Board’s recommendation
on any advisory vote on the frequency of future advisory votes to
approve executive compensation, and for the ratification of the
Company’s independent auditors.

 

(c)

Notwithstanding
anything to the contrary in this Agreement, during the Registration
Period, the Biglari Group may not dispose of any Shares under the
Registration Statement, other than in privately-negotiated
transactions not in the open market, to the extent such transaction
involves a price per share of Common Stock less than
$1.05.

 

 

7.

Standstill. Each of the members
of the Biglari Group agrees that, during the Standstill Period, he
or it will not, and he or it will cause each of such person’s
Affiliates or agents or other persons acting on his or its behalf
not to, and will use commercially reasonable efforts to cause his
or its respective Associates not to:

 

(a)

submit, or
otherwise induce or encourage any other person to submit, any
shareholder proposal (pursuant to Rule 14a-8 promulgated by
the SEC under the Exchange Act or otherwise) or any notice of
nomination or other business for consideration, and will not
nominate any candidate for election to the Board or oppose the
directors nominated by the Board;

 

6

 

 

(b)

form, join in or in
any other way participate in a “partnership, limited
partnership, syndicate or other group” within the meaning of
Section 13(d)(3) of the Exchange Act with respect to the
Common Stock or deposit any shares of Common Stock in a voting
trust or similar arrangement or subject any shares of Common Stock
to any voting agreement or pooling arrangement, other than (i) with
respect to the members of the Biglari Group, solely with other
members of the Biglari Group and/or one or more Affiliates of a
member of the Biglari Group or (ii) to the extent such a group may
be deemed to result between the members of the Biglari Group and
the Company or any of its Affiliates, in each case, as a result of
this Agreement;

 

(c)

solicit proxies or
written consents of shareholders, or otherwise conduct any
nonbinding referendum with respect to Common Stock, or make, or in
any way participate in, any “solicitation” of any
“proxy” within the meaning of Rule 14a-1
promulgated by the SEC under the Exchange Act to vote, or advise,
encourage or influence any person with respect to voting, any
shares of Common Stock with respect to any matter, or become a
“participant” in any contested
“solicitation” for the election of directors with
respect to the Company (as such terms are defined or used under the
Exchange Act), other than a “solicitation” or acting as
a “participant” in support of all of the nominees of
the Board at any annual meeting of shareholders of the
Company;

 

(d)

seek, in any
capacity other than as a member of the acting majority of the
Board, to call, or to request the call of, a special meeting of the
shareholders of the Company, or seek to make, or make, a
shareholder proposal at any meeting of the shareholders of the
Company or make a request for a list of the Company’s
shareholders (or otherwise induce or encourage any other person to
initiate such proposal or request) or otherwise acting alone, or in
concert with others, seek to control or influence the governance or
policies of the Company;

 

(e)

in any capacity
effect or seek to effect (including, without limitation, by
entering into any discussions, negotiations, agreements or
understandings with any third person), offer or propose (whether
publicly or otherwise) to effect, or cause or participate in, or in
any way assist or facilitate any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect or
participate in (i) any acquisition of any material assets or
businesses of the Company or any of its subsidiaries, (ii) any
tender offer or exchange offer, merger, acquisition or other
business combination involving the Company or any of its
subsidiaries, or (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with
respect to the Company or any of its subsidiaries; provided,
however, that the foregoing shall not be deemed to prevent the
Biglari Group from making any proposal regarding any of the
foregoing directly to the Board or management of the
Company;

 

(f)

publicly disclose,
or cause or facilitate the public disclosure (including without
limitation the filing of any document or report with the SEC or any
other governmental agency or any disclosure to any journalist,
member of the media or securities analyst) of any intent, purpose,
plan or proposal to obtain any waiver, or consent under, or any
amendment of, any of the provisions of Section 6(b) or this Section
7, or otherwise seek (in any manner that would require public
disclosure by any of the members of the Biglari Group or their
respective Affiliates or Associates) to obtain any waiver, consent
under, or any amendment of, any provision of this
Agreement;

 

7

 

 

(g)

enter into any
arrangements, understandings or agreements (whether written or
oral) with, or advise, finance, assist or encourage, any other
person for the purpose of engaging, or offering or proposing to
engage, in any of the foregoing; or

 

(h)

take or cause or
induce others to take any action inconsistent with any of the
foregoing.

 

 

8.

Non-Disparagement. During the
Standstill Period:

 

(a)

The Company agrees
that it will not, and will cause its current directors and
executive officers not to, directly or indirectly at any time make,
publish or communicate to any person or entity or in any public
forum (including without limitation the filing of any document or
report or the making of any other disclosure with the SEC or any
other governmental agency unless required by law or legal process
or any disclosure to any journalist, member of the media, or
securities analyst) any defamatory or disparaging remarks,
comments, or statements concerning any member of Biglari Group, any
of their respective Affiliates or any of their respective past or
then-current directors, director nominees, officers, or
employees.

 

(b)

Each member of the
Biglari Group agrees that it will not, and will cause its
respective Affiliates not to, directly or indirectly make, publish
or communicate to any person or entity or in any public forum
(including without limitation the filing of any document or report
or the making of any other disclosure with the SEC or any other
governmental agency unless required by law or legal process or any
disclosure to any journalist, member of the media, or securities
analyst) any defamatory or disparaging remarks, comments, or
statements concerning the Company or any of its Affiliates or past
or then-current directors, director nominees, officers, employees,
customers or suppliers.

 

(c)

Notwithstanding the
foregoing and for the benefit of clarification and the avoidance of
doubt, this Section 8 shall not in any way (i) prohibit
members of the Biglari Group and their respective Affiliates from
communicating directly with the Company and its management and
Board in a non-public manner to communicate their concerns or raise
issues related to the Company, its performance, the performance of
management or any other matters related to the Company, or (ii)
restrict any member of the Biglari Group or its Affiliates from
directly or indirectly making, publishing or communicating any
remarks, comments or statements regarding Air T, Inc., Groveland
Capital LLC, Groveland Hedged Credit Fund LLC, Nicholas J. Swenson
or any of their respective Affiliates (collectively the
“Air T Group”)
or any past or then-current directors, officers or employees of any
member of the Air T Group.

 

 

9.

Specific Performance. Each
party hereto acknowledges and agrees, on behalf of itself and its
Affiliates, that irreparable harm 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. It is
accordingly agreed that the parties will be entitled to specific
relief hereunder, including, without limitation, an injunction or
injunctions to prevent and enjoin breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions
hereof in any state or federal court in the State of Minnesota, in
addition to any other remedy to which they may be entitled at law
or in equity. Any requirements for the securing or posting of any
bond with such remedy are hereby waived.

 

 

10.

Jurisdiction. Each party hereto
agrees, on behalf of itself and its Affiliates, that any actions,
suits or proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby will be brought solely and
exclusively in any state or federal court in the State of Minnesota
(and the parties agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further
agrees that service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth in
Section 15 of this Agreement will be effective

 

8

 

 

 

service of process
for any such action, suit or proceeding brought against any party
in any such court. Each party, on behalf of itself and its
Affiliates, irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby, in the
state or federal courts in the State of Minnesota, and hereby
further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
improper or inconvenient forum.

 

 

11.

Applicable Law. This agreement
shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Minnesota
applicable to contracts executed and to be performed wholly within
such state, without giving effect to the choice of law principles
of such state.

 

 

12.

Counterparts. This Agreement
may be executed in two or more counterparts, which together shall
constitute a single agreement.

 

 

13.

Severability. In the event that
any portion of this Agreement may be held to be invalid or
unenforceable for any reason, it is hereby agreed that such
invalidity or unenforceability shall not affect the other portions
of this Agreement and that the remaining covenants, terms and
conditions or portions hereof shall remain in full force and
effect, and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and
enforceable.

 

 

14.

Entire Agreement; Amendment and
Waiver; Successors and Assigns. This Agreement contains the
entire understanding of the parties hereto with respect to, and
supersedes all prior agreements relating to, its subject matter.
There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings among the parties other than
those expressly set forth herein. This Agreement may be amended
only by a written instrument duly executed by the parties hereto or
their respective successors or assigns. 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 assigns.

 

 

15.

Notices. All notices, consents,
requests, instructions, approvals and other communications provided
for herein and all legal process in regard hereto shall be in
writing and shall be deemed validly given, made or served, if
(a) given by telecopy, when such telecopy is transmitted to
the telecopy number set forth below, or to such other telecopy
number as is provided by a party to this Agreement to the other
party pursuant to notice given in accordance with the provisions of
this Section 15, and the appropriate confirmation is received
or (b) if given by any other means, when actually received
during normal business hours at the address specified in this
Section 15, or at such other address as is provided by a party
to this Agreement to the other party pursuant to notice given in
accordance with the provisions of this
Section 15:

 

9

 

 

	

if to
the Company:

 

Insignia
Systems, Inc.

8799
Brooklyn Boulevard

Minneapolis,
Minnesota 55445

Attention:
President & CEO

Email:
kristine.glancy@insigniasystems.com

 

	

with
copies to:

Faegre
Baker Daniels LLP

2200
Wells Fargo Center

90
South Seventh Street

Minneapolis,
MN 55402-3901

Attention:
Joshua L. Colburn

Email:
joshua.colburn@faegrebd.com

Facsimile:
612-766-1600

 

and

 

Kaplan,
Strangis and Kaplan, P.A.

5500
Wells Fargo Center

90
South Seventh Street

Minneapolis,
MN 55402

Attention:
James C. Melville

Email:
jcm@kspa.com

Facsimile:
612-845-7963

 

	

if to
the Biglari Group or any member thereof:

 

Sardar
Biglari

Biglari
Capital Corp.

17802
IH 10 West, Suite 400

San
Antonio, Texas 78257

Email:
Amy.Parks@biglariholdings.com

Facsimile:
210-344-3411

 

	

with a
copy to:

 

Olshan
Frome Wolosky LLP

Park
Avenue Tower

65 East
55th Street

New
York, NY 10022

Attention:
Steve Wolosky and Michael R. Neidell

Email:
swolosky@olshanlaw.com and
mneidell@olshanlaw.com

Facsimile:
212- 451-2222

 

 

16.

Expenses.
Except as otherwise provided herein (including Section 5 hereof),
all expenses incurred by the Company in complying with its
obligations pursuant to Section 4 of this Agreement will be paid by
the Biglari Group (but not to exceed $40,000 for all such expenses
other than those described in clause (iv) below), including,
without limitation, all (i) registration and filing fees; (ii)
expenses of any consents of auditors incident to or required by any
such registration; (iii) reasonable fees and expenses of the
Company’s counsel and
accountants (including reasonable fees and expenses incurred in
connection with the preparation of this Agreement), and (iv) any
and all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of the Shares, and fees and
disbursements of counsel for any member of the Biglari
Group.

 

 

17.

No Third-Party Beneficiaries.
Nothing in this Agreement is intended to confer on any person other
than the parties hereto or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason
of this Agreement.

 

 

[Signature Pages Follow]

 

 

10

 

 

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

 

 

INSIGNIA
SYSTEMS, INC.

 

 

By:
/s/ Kristine
Glancy

Kristine Glancy,
President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Registration and Standstill
Agreement]

 

 

 

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

 

 

BIGLARI
CAPITAL CORP.

 

 

By:
/s/ Sardar
Biglari

Sardar
Biglari, Chairman and Chief Executive Officer

 

 

THE
LION FUND II, L.P.

 

By:          

Biglari Capital
Corp., its general partner

 

 

By:
/s/ Sardar
Biglari

Sardar
Biglari, Chairman and Chief Executive Officer

 

 

 

/s/ Sardar Biglari

SARDAR
BIGLARI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Registration and Standstill
Agreement]merion_ex101.htm

EXHIBIT 10.1
  
 SECURITIES PURCHASE AGREEMENT
  
 This Securities Purchase Agreement (this “Agreement”) is dated as of November 9, 2017 (the “Effective Date”) by and between Merion, Inc., a Nevada corporation (the “Company”) and CHANGLIN CAO (the “Purchaser”).
  
 RECITALS
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulations D and S thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, certain securities of the Company as more fully described in this Agreement.
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:
  
 ARTICLE I.
 DEFINITIONS
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in, and construed, under Rule 405 under the Securities Act.
  
 “Board of Directors” means the board of directors of the Company.
  
 “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
  
 “Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.
  
 “Closing Date” means the day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than December 31,.
  
 “Commission” means the United States Securities and Exchange Commission.
  
 “Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
  
 “Exchange Rules” shall mean the listing rules of The OTCQB Marketplace.
  
  	 
	1
	 
 
	 

  
 “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
  
 “Per Share Purchase Price” equals $0.90 per share of Common Stock, subject to adjustment for reverse and forward stock splits, stock combinations and other similar transactions of the Common Stock that may occur after the date of this Agreement.
  
 “Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
  
 “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(c).
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(f).
  
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
  
 “Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), the Securities Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board, the Exchange Rules and applicable state securities laws and regulations. 
  
 “Shares” means an aggregate of 222,223 shares of Common Stock to be issued to the Purchaser pursuant to this Agreement (the “Shares”).
  
 “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
  
 “Subscription Amount” means, an aggregate amount of $200,000.00 to be paid for Shares purchased by the Purchaser in United States dollars and in immediately available funds.
  
 “Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
  
 “Trading Day” means a day on which the principal Trading Market is open for trading.
  
 “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the OTCQB or the OTC Pink Open Market (or any successors to any of the foregoing).
  
 “Transaction Documents” means this Agreement, and any other documents or agreements executed between the Company and the Purchaser in connection with the transactions contemplated hereunder.
  
 “Transfer Agent” means Globex Transfer, LLC, the current transfer agent of the Company, with a mailing address of 780 Deltona Blvd., Suite 202, Deltona, FL 32725, and any successor transfer agent of the Company.
  
  	 
	2
	 
 
	 

  
 ARTICLE II.
 PURCHASE AND SALE
  
 2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser agrees to purchase, up to an aggregate of 222,223 of Shares. Upon receiving the Purchaser’s Subscription Amount on the Closing Date and the delivery by the Purchaser of the other items set forth in Section 2.2 deliverable at the Closing, the Company shall deliver the Shares to the Purchaser as determined pursuant to Section 2.2(a). 
  
 2.2 Deliveries.
  
 (a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser each of the following:
  
 (i) this Agreement duly executed by the Company;
  
 (ii) subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver the Shares equal to the Purchaser’s Subscription Amount divided by the Per Share Purchase Price, in the name of the Purchaser.
  
 (b) On or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:
  
 (i) this Agreement duly executed by the Purchaser; and
  
 (ii) the Purchaser’s Subscription Amount by wire transfer to the bank account directed by the Company.
  
 2.3 Closing Conditions.
  
 (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
  
 (i) the accuracy when made and on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific date therein in which case they shall be accurate as of such date); 
  
 (ii) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed; and
  
 (iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement on or prior to the Closing Date.
  
  	 
	3
	 
 
	 

  
 (b) The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:
  
 (i) the accuracy when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they will be accurate as of such date); 
  
 (ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 
  
 (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement on or prior to the Closing Date; and
  
 (iv) there shall have been no material adverse effect with respect to the Company since the date hereof.
  
 ARTICLE III.
 REPRESENTATIONS AND WARRANTIES
  
 3.1 Representations and Warranties of the Company. Except as indicated in the SEC Reports, the Company hereby represents and warrants to the Purchaser as of the date of this Agreement and as of the Closing Date as follows:
  
 (a) Organization and Qualification. The Company and each of the Subsidiaries, if any, is an entity duly incorporated or otherwise organized and validly existing under the laws of each jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. 
  
 (b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals (as defined below).
  
 (c) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any governmental authority or any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents or the offer, issue and sale of the Shares, other than: (i) the disclosure filing required for this Agreement, (ii) such filings as are required to be made under applicable state securities laws, and (iii) such consents, waivers and authorizations that shall be obtained prior to the Closing (collectively, the “Required Approvals”).
  
 (d) Authorization of the Shares. The Shares to be sold by the Company and their issue and sale are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and free and clear of all Liens imposed by the Company.
  
 (e) Capitalization. Except as may be described in the SEC Reports, all of the issued share capital of the Company has been duly and validly authorized and issued, is fully paid and non-assessable. 
  
  	 
	4
	 
 
	 

  
 (f) SEC Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto, documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). 
  
 (g) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (h) No Broker. The Company has not employed any broker, finder or agent, nor become obligated in any way to pay any broker’s, finder’s or agent’s or similar fee with respect to the purchase and sale of the Shares.
  
 3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as made of a specific date stated therein, in which case they shall be accurate as of such date):
  
 (a) Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms.
  
 (b) Understandings or Arrangements. The Purchaser is acquiring the Shares for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Shares (this representation and warranty not limiting the Purchaser’s right to sell the Shares in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Shares as principal, not as nominee or agent, and not with a view to or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities law.
  
 (c) Foreign Investorstc "3.8. Foreign Investors" \f C \l 2. The Purchaser hereby represents that it has satisfied itself as to the full observance by the Purchaser of the laws of its jurisdiction applicable to the Purchaser in connection with the purchase of the Shares or the execution and delivery by the Purchaser of this Agreement and the Transaction Documents, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to the purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the Purchaser’s purchase, holding, redemption, sale, or transfer of the Shares. The Purchaser’s subscription and payment for, and continued beneficial ownership of, the Shares will not violate any securities or other laws of the Purchaser’s jurisdiction applicable to the Purchaser.
  
  	 
	5
	 
 
	 

  
 (d) Experience of Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
  
 (e) Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
  
 (f) Regulation S. The Purchaser is a non-U.S. person (as such term is defined in Rule 902 of Regulation S under the Securities Act) and is not acquiring the Shares for the account or benefit of a U.S. person. The Purchaser will not, within six (6) months of the date of the transfer of the Shares to the Purchaser, (i) make any offers or sales of the Shares in the United States or to, or for the benefit of, a U.S. person (in each case, as defined in Regulation S) other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act, or (ii) engage in hedging transactions with regard to the Shares unless in compliance with the Securities Act. Neither the Purchaser nor any of the Purchaser’s Affiliates or any person acting on his/her or their behalf has engaged or will engage in directed selling efforts (within the meaning of Regulation S) with respect to the Shares, and all such persons have complied and will comply with the offering restriction requirements of Regulation S in connection with the offering of the Shares outside of the United States. 
  
 (g) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first discussed the transaction with the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending on the date when this Agreement is publicly disclosed by the Company. The Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
  
 (h) Purchaser Status. At the time the Purchaser was offered the Shares, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.
  
 (i) No Registration. The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act or applicable securities laws of any state or country and therefore the Shares cannot be sold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and applicable state securities laws or exemptions from such registration requirements are available. The Company shall be under no obligation to register the Shares under the Securities Act and applicable state securities laws, and any such registration shall be in the Company’s sole discretion.
  
 (j) No General Solicitation. The Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
  
 (j) Brokers or Finders. The Purchaser has not engaged any brokers, finders or agents, and the Company has not, nor will, incur, directly or indirectly, as a result of any action taken by the Purchaser, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement.
  
  	 
	6
	 
 
	 

  
 ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES
  
 4.1 Reservation of Securities. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. 
  
 4.2 Certain Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending on the date when this Agreement is publicly disclosed by the Company. The Purchaser also covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, the Purchaser will maintain the confidentiality of the existence and terms of this transaction. 
  
 4.3 Legends. The Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in connection with a pledge as contemplated in this Section 4.3, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. The Purchaser agrees to the imprinting, so long as is required by this Section 4.3, of a legend on all of the certificates evidencing the Shares in the following form:
  
  
 	  
	 THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
	  

  
 	 
	7
	 
 
	 

  
 ARTICLE V.
 MISCELLANEOUS
  
 5.1 Termination. This Agreement may be terminated by the Company or the Purchaser by written notice to the other party if the Closing has not been consummated on or before December 31, 2017; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
  
 5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. 
  
 5.3 Entire Agreement. The Transaction Documents contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
  
 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
  
 5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
  
 5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
  
 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. No party hereto may assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company and the Purchaser. 
  
 5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in this Section 5.8.
  
  	 
	8
	 
 
	 

  
 5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the Clark County, Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Clark County, Nevada, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. 
  
 5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Shares. The terms of this Article V shall survive any termination of the Agreement pursuant to Section 5.1. 
  
 5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
  
 5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
  
 5.13 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
  
 5.14 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. The English version of this Agreement, regardless of whether a translation in any other language is or will be made, shall be the only authentic version.
  
 5.15 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 
  
 (Signature Pages Follow)
  
  	 
	9
	 
 
	 

  
 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
  
  	 COMPANY
	
	  
	  

	 MERION, INC.
	  

	 	 	 
	By:	/s/ Ding Hua Wang	
	 Name:
	DING HUA WANG	 
	Title:	President	 
	 	 	 
	 Address for Notice:
 9550 Flair Dr, Suite 302
 El Monte CA 91731
	  

	 Fax::
	  

	 Email:
	  

	  
	  
	  

	 By:
	 /s/ Changlin Cao
	  

	 Name:
	 CHANGLIN CAO
	  

	 Title: 
	  
	  

	 Address:
	  

	 Tel:
	  
	  

	 Fax::
	  
	  

	 Email:
	  
	  

  
  
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