Document:

LETTER OF AGREEMENT

 

Section 1. Services to be Rendered.
The purpose of this letter is to set forth the terms and conditions on which Chord Advisors, LLC (“Chord”) agrees
to provide The SpendSmart Payments Company (the “Company”) comprehensive outsourced accounting solutions. These
services may include, but are not limited to, all items listed in “Addendum A.” The Company represents and warrants
that it will provide on a timely basis any information requested by Chord which is necessary to perform such services and further
represents and warrants that such information shall be accurate.

 

Section 2. Engagement Period. Unless
sooner terminated as provided herein, the term of this agreement (the “Engagement Period”) shall commence on
October 15, 2013 and shall continue until terminated by either party. Each party represents that it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which the nature of its activities requires such qualification. Each party further
represents: (1) that it has full power and authority to carry on its business as presently or proposed to be conducted and to enter
into and perform its obligations under this Agreement; (2) that this Agreement has been duly authorized by all necessary corporate
actions; and (3) that this Agreement constitutes the valid and binding obligation of such party, enforceable against it in accordance
with its terms (except as such enforcement may be limited by bankruptcy, creditors’ rights laws or general principles of
equity).

 

Section 3. Fees. (a) The Company
shall pay to Chord for its services hereunder an advisory fee (the “Advisory Fee”) of $ $7,500 per month.
Advisory Fees shall be payable on or before the 15th day of each calendar month which occurs during the Engagement Period. In addition,
the Company shall grant Chord an option, which shall vest immediately, to purchase 5,000 shares of the Company’s common stock
at an exercise price of $2.00 per share. The Company shall deliver to Chord a formal option agreement within 30 days from the execution
of this agreement.

 

Section 4. Expenses. In addition
to all other fees payable to Chord hereunder, the Company hereby agrees to reimburse Chord for all reasonable out-of-pocket expenses
incurred in connection with the performance of services hereunder. No individual expenses over $50 per month will be expended without
the prior written approval of the Company.

 

 

	Confidential	Page 1

 

    	 

    	 

    

 

 

 

Section 5. Indemnification. Each
of the Company and Chord agrees to defend, indemnify and hold the other and its respective affiliates, stockholders, directors
officers, agents, employees, successors and assigns (each an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever (including, without limitation, reasonable attorneys' fees) which arise from the Company's or Chord's (as the case
may be) breach of its obligations hereunder or any representation or warranty made by it herein. It is further agreed that the
foregoing indemnity shall be in addition to any rights that either party may have at common law or otherwise, including, but not
limited to, any right to contribution.

 

Section 6. Termination of Agreement.
(a) Subject to paragraph (b) below, either party may terminate this Agreement and Chord’s engagement hereunder, with or without
cause, immediately upon written notice given to the other party at any time during the Engagement Period hereunder. In such event,
all compensation accrued to Chord prior to such cancellation, whether in the form of Advisory Fees, reimbursement for expenses
or otherwise, will become due and payable promptly upon such termination and Chord shall be relieved of any and all further obligation
to provide any services hereunder.

(b) Notwithstanding
anything to the contrary herein contained, Sections 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall survive any termination or breach
of this agreement by either party.

 

Section 7. Intellectual Property.
Chord hereby agrees that all right, title and interest in any deliverables provided by Chord will become the Company’s sole
and exclusive property. To the extent any reports or other documents delivered to the Company contain proprietary information of
Chord, Chord hereby grants the Company and its affiliates a non-exclusive, royalty-free license to use it in connection with the
subject of this Agreement.

 

Section 8. Confidentiality. Chord
understands that all communications between the Company and Chord, either oral or written, as well as any materials or information
developed or received by Chord pursuant to this Agreement, are intended to be confidential. Accordingly, Chord agrees, subject
to applicable law or court order, not to disclose any of such communications (whether written or oral), or any of the information
received or developed in the course of Chord’s work for the Company, to any person or entity apart from the Company or such
other persons or entities as the Company may designate.

 

Section 9. Severability. In case
any provision of this letter agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired thereby.

 

Section
10. Consent to Jurisdiction. This agreement shall be governed and construed in accordance with the laws of the State
of New York without regard to conflicts of laws principles. The parties further consent to the exclusive jurisdiction of the State
and Federal courts located within the City, County and State of New York to resolve any dispute arising under this Agreement, and
waive any defense to such jurisdiction based upon inconvenient forum.

 

 

	Confidential	Page 2

 

    	 

    	 

    

 

 

 

Section 11. Other Services. If the
Company desires additional services not provided for in this agreement, any such additional services shall be covered by a separate
agreement between the parties hereto.

 

Section 12. Entire Agreement. This
letter agreement contains the entire agreement of the Company and Chord, and supersedes any and all prior discussions and agreements,
whether oral or written, with respect to the matters addressed herein.

 

Section 13. Counterparts. This letter
agreement may executed in two or more counterparts, each of which shall be considered an original and all of which, taken together,
shall be considered as one and the same instrument.

 

Please evidence your
acceptance of the provisions of this letter by signing below and returning a copy to Chord Advisors, LLC.

 

 

Very truly yours,

 

 

/s/ David Horin

David Horin

President
and Founder

Chord Advisors, LLC

 

 

ACCEPTED AND AGREED

AS OF THE DATE FIRST ABOVE WRITTEN:

 

 

		By:	/s/ Bill Hernandez

Name:
Bill Hernandez

Title:
President

 

 

	Confidential	Page 3INDEMNIFICATION AGREEMENT

 

 

This is an Indemnification
Agreement dated as of ______ between HARRIS & HARRIS GROUP, INC., a New York corporation (the “Company”),
and ______ (the “Indemnitee”).

 

1.Recitals.
The Indemnitee is a director or an officer of the Company. Article 8 of the Company's Certificate of Incorporation, as currently
amended (the “Certificate of Incorporation”), obligates the Company to indemnify its directors and officers
to the fullest extent permitted by the New York Business Corporation Law, as amended (the “NYBCL”), subject
to the limitations imposed by the Investment Company Act of 1940, as amended (the “Investment Company Act”)
and the Rules and Regulations adopted thereunder. In accordance with the NYBCL and in consideration of the Indemnitee's continuing
services to the Company, the Company and the Indemnitee desire to enter into this Agreement.

 

2.Indemnitee's
Services. The Indemnitee shall diligently administer the Company's affairs in the position or positions described in paragraph
1. Subject to any obligation imposed by contract or by operation of law, (a) the Indemnitee may at any time and for any reason
resign from such position or positions, and (b) the Company may at any time and for any reason (or no reason) terminate the Indemnitee's
employment in such position or positions, in each case subject to any other contractual obligation or any obligation or restriction
imposed by the Certificate of Incorporation or by-laws of the Company (the “By-Laws”) or otherwise by operation
of law.

 

3.Indemnification.
The Company shall indemnify the Indemnitee and hold the Indemnitee harmless against any loss or liability related to or arising
from the Indemnitee's service as a director, officer, employee, or agent of the Company, or of any subsidiary or affiliate of the
Company (each, an “Affiliated Company”) or in any capacity whether as a director, officer, employee, agent or
in any other capacity, for any other corporation, investee, partnership, joint venture, trust, employee benefit plan or other enterprise
on behalf of the Company or an Affiliated Company (each, an “Entity”), upon the following terms and conditions:

 

(a)The Company shall,
to the fullest extent permitted by the NYBCL as now in effect (and to such greater or, with respect to acts or omissions occurring
thereafter, to such lesser extent, as the NYBCL (or of any successor codification of the New York corporation laws) may hereafter
from time to time permit the Company to hold the Indemnitee harmless from and indemnify the Indemnitee against (1) all judgments
rendered, fines levied, and other assessments (including amounts paid in settlement of any claims, if approved by the Company),
plus (2) all reasonable costs and expenses (including, without limitation, attorney’s fees, retainers, court costs, transcript
costs, experts’ fees, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage
and delivery service fees), and all other disbursements of the types customarily incurred in connection with the defense of any
threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative (an “Action”),
related to or arising from (1) any actual or alleged act or omission of the Indemnitee at any time as a director, officer, employee,
or agent of the Company or of any Affiliated Company or Entity, or (2) the Indemnitee's past, present, or future status as a director,
officer, employee, or agent of the Company or of any Affiliated Company or Entity. For the avoidance of doubt, unless prohibited
by the NYBCL or other applicable New York law, the Indemnitee may seek indemnification under this Agreement to the extent such
indemnification is not prohibited by Section 11 of this Agreement.

 

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(b)
 To obtain indemnification under this Agreement, the Indemnitee shall
submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available
to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.
The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Company’s Board
of Directors in writing that the Indemnitee has requested indemnification. Upon written request by the Indemnitee for indemnification,
a determination, if required by the NYBCL or other applicable New York law, with respect to Indemnitee’s entitlement thereto
shall promptly be made in each specific case as set forth in paragraph 3(c) below.

 

(c)Subject to a determination
by a majority of the disinterested directors or a committee thereof who are not a party to such Action or by independent legal
counsel in a written opinion that the Indemnitee is likely to have satisfied the standard for indemnification under the
NYBCL and the Investment Company Act, upon presentation from time to time of such invoices, statements for services rendered, or
other similar documentation as the Company may reasonably request, the Company shall advance to or reimburse the Indemnitee for
all reasonable costs and expenses incurred of the types specified in paragraph 3(a) in the defense of any threatened, pending,
or completed Action, as and when such costs are incurred.

 

(d)The Company shall
indemnify the Indemnitee under this Agreement only as authorized in a specific case upon a determination that indemnification of
the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the
NYBCL or in any other applicable provision of New York law. Such determination shall be made, at the Indemnitee’s option,
either (1) by a majority vote of a quorum of the Company's disinterested directors who are not parties to such Action (2) by the
Company’s entire Board of Directors upon the opinion in writing of independent legal counsel that indemnification is proper
in the circumstances because the applicable standard of conduct set forth in the NYBCL has been met by the Indemnitee, or (3) by
the Company’s shareholders upon a finding that the Indmenitee has met the applicable standard of conduct set forth in the
NYBCL. The Company shall pay the fees and expenses of any independent legal
counsel chosen by the Company to make the determination contemplated by this paragraph 3(c).

 

(e)The indemnification
provided by this Agreement shall apply only to (1) actual or alleged acts or omissions that occur during the Indemnitee's service
as a director, officer, employee, or agent of the Company or of any Affiliated Company or Entity, and (2) actual or threatened
Actions in which the Indemnitee is joined or named as a party, but which relate to or arise from alleged acts or omissions that
occurred before the Indemnitee's service as a director, officer, employee, or agent of the Company or of any Affiliated Company
or Entity, or which relate to acts or omissions alleged against any former directors, officers, employees, or agents of the Company
or of any Affiliated Company or Entity.

 

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(f)Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her service as a director, officer,
employee, or agent of the Company, any Affiliated Company or any Entity, a witness in any Action, whether instituted by the Company
or any other party, and to which Indemnitee is not a party, he shall be advanced all reasonable expenses and indemnified against
all expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

(f)Nothing in this
Agreement shall be deemed or construed to create any liability of the Company (g) to former directors, officers, employees, or
agents or their predecessors other than the Indemnitee, or to any other person not a party to this Agreement, or (2) exceeding
the liability that the Company may lawfully incur in accordance with the NYBCL or in any other applicable provision of New York
law.

 

4.Conduct of
Litigation.

 

(a)If any Action
is made, brought, or threatened against the Indemnitee for which the Indemnitee may be indemnified under this Agreement, the Indemnitee
shall, to the extent not inconsistent with any private insurance coverage obtained by the Company:

 

(l)Permit the Company
to conduct the Indemnitee's defense of the Action at the Company's expense and with the use of counsel selected by the Company;
or

 

(2)Retain counsel
acceptable to the Indemnitee and the Company to defend or counsel the Indemnitee with respect to the Action, and permit the Company
to monitor and direct the Indemnitee's defense.

 

(b)The Company shall
at all times have the option to undertake the Indemnitee's defense of any Action for which the Indemnitee may be indemnified under
this Agreement. If the Company elects to conduct the Indemnitee's defense, the Indemnitee shall cooperate fully with the Company
in the defense of the Action. If the Company elects to conduct the Indemnitee's defense after the Indemnitee proceeds under paragraph
4(a)(2), the Company shall advance or reimburse the Indemnitee for the reasonable costs, including attorneys' fees, incurred by
the Indemnitee in enabling the Company to undertake the Indemnitee's defense.

 

5.Reimbursement
of Expenses. As required by the NYBCL, if the Company makes any payment to the Indemnitee under this Agreement, and if it is
ultimately determined that the Indemnitee was not entitled to be indemnified by the Company under the NYBCL or the Investment Company
Act, the Indemnitee shall promptly repay the Company for all amounts paid to the Indemnitee under this Agreement which exceed the
indemnification to which the Indemnitee is lawfully entitled.

 

6.Enforcement
of Agreement. If the Indemnitee makes a claim for indemnification under this Agreement and the Company refuses to indemnify
the Indemnitee, and if the Indemnitee then prevails in an action or proceeding brought to enforce this Agreement, the Company shall
pay all reasonable costs and expenses (including attorneys' fees) incurred by the Indemnitee in connection with the action or proceeding
in addition to any other indemnification required under this Agreement.

 

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7.Notice of
Claims. If the Indemnitee receives a complaint, claim, or other notice of any loss, claim, damage, or liability giving rise
to a claim for indemnification under this Agreement, the Indemnitee shall promptly notify the Company of the complaint, claim,
or other notice. Any failure to notify the Company, however, shall not relieve the Company from any liability under this Agreement
unless the Company (a) is materially prejudiced by the failure (such as, for example, where the failure results in the exclusion
or denial of the Company's otherwise available insurance coverage), and (b) had no actual knowledge of the complaint, claim, or
other notice. In no event shall the Company be obligated to indemnify the Indemnitee for any settlement of any Action effected
without the Company's prior consent.

 

8.Termination.

 

(a)This Agreement
shall terminate (1) upon termination of the Indemnitee's service as a director, officer, employee, or agent of the Company, any
Affiliated Company and any Entity, or (2) upon the Company's written notice to the Indemnitee that, in the reasonable opinion of
the Company, the Indemnitee has not complied with paragraph 4 of this Agreement. The Company shall not issue any such notice merely
because it disagrees with a business judgment or judgments of the Indemnitee.

 

(b)The termination
of this Agreement shall not:

 

(l)terminate the
Company's liability to the Indemnitee for (A) Actions against the Indemnitee related to or arising from acts or omissions occurring
or alleged to have occurred before termination of this Agreement, or (B) Actions that name or join the Indemnitee as a party, but
relate to or arise from acts or omissions alleged to have occurred before the Indemnitee's service as a director, officer, employee,
or agent, or acts or omissions alleged against former directors, officers, employees, or agents; or

 

(2)render the terms
and conditions of this Agreement inapplicable to any Actions subject to paragraph 8(b)(1).

 

9.Subrogation. If the Company
makes any payment to the Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all
of the Indemnitee's rights of recovery and the Indemnitee shall execute any documents and take any actions necessary to secure
such rights (including execution of any documents necessary to enable the Company to bring suit to enforce such rights).

 

10.Insurance
Reimbursements. The Company shall not be required to make any payment of amounts otherwise indemnifiable under this Agreement
if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement,
or otherwise.

 

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11.Limitation
on Indemnification. Notwithstanding any provision of this Agreement, no indemnification, advancement or allowance shall be
made under this Agreement in any circumstance where it appears:

(1) that the indemnification would be inconsistent with the Certificate of Incorporation, the By-Laws, a resolution of the
Company’s Board of Directors or shareholders, an agreement or other proper corporate action, in effect at the time of the
accrual of the alleged cause of action asserted in the threatened or pending action or proceeding in which the expenses were incurred
or other amounts were paid, which prohibits or otherwise limits indemnification;

(2) if there has been a settlement approved by a court, that the indemnification would be inconsistent with any condition
with respect to indemnification expressly imposed by the court in approving the settlement; or

 

(3) that a judgment or other
final adjudication adverse to the Indemnitee establishes that his or her acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so adjudicated, or that the Indemnitee personally gained
in fact a financial profit or other advantage to which such Indemnitee was not legally entitled.

 

12.Notices.
Any notice or other communication required or permitted under this Agreement shall be deemed given when hand-delivered or sent
by registered United States mail, postage prepaid and return-receipt requested, to the intended recipient at the address set forth
below or at such other address as the recipient shall hereafter furnish the sender in writing:

 

If to the Indemnitee:

 

 

If to the Company:Harris
& Harris Group, Inc.

1450 Broadway –
24th Floor

New York, New York
10018

Attn: The Chairman
of the Board

 

12.Governing
Law. The laws of New York and to the extent inconsistent therewith, the Investment Company Act, shall govern the validity,
interpretation, and construction of this Agreement. Nothing in this Agreement shall require any unlawful action or inaction by
any party.

 

13.Modification.
No modification of this Agreement shall be binding unless executed in writing by the Indemnitee and the Company.

 

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14.Headings.
All “paragraph” references in this Agreement refer to numbered paragraphs of this Agreement. Paragraph headings are
not part of this Agreement, but are solely for convenience of reference and shall not affect the meaning or interpretation of this
Agreement or any provision in it.

 

15.Sole Benefit.
Nothing expressed or referred to in this Agreement is intended or shall be construed to give any person other than the Company,
its successors and assigns, and the Indemnitee and the Indemnitee's personal representatives, heirs, or devisees, any legal or
equitable right, remedy, or claim under or with respect to this Agreement or any provisions contained herein. The assumption of
obligations and statements of responsibilities and all conditions and provisions of this Agreement are for the sole benefit of
the Company, its successors and assigns, and the Indemnitee and the Indemnitee's personal representatives, heirs, or devisees.

 

16.Effect of
Prior Agreements. This Agreement contains the entire understanding between the Company and the Indemnitee with respect to the
subject matter hereof and supersedes any prior indemnification agreement between the Company or any predecessor of the Company
and the Indemnitee.

 

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IN WITNESS WHEREOF,
the Indemnitee and the Company have executed this Agreement as of the first date written above.

 

 

THE INDEMNITEE

 

By:___________________________

Name: 

Title:

 

 

 

HARRIS & HARRIS GROUP, INC.

 

 

By:___________________________

Name: 

Title:

 

    	 

    	 

    

UNDERTAKING TO REPAY INDEMNIFICATION EXPENSES

 

 

          
I, _________, agree to reimburse the Company for all amounts paid by the Company pursuant to this Agreement, upon the terms and
subject to the conditions set forth in Section 5 of the Indemnification Agreement dated as of ______, between the Company and me
(the defined terms herein being as defined in such agreement).

 

 

 

                                                                      
Signature:                                                        

                                                                       Name:

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