Document:

Exhibit 10.48

 

MANUFACTURING
& DISTRIBUTION JOINT VENTURE AGREEMENT

 

This
Manufacturing & Distribution Joint Venture Agreement (this “Agreement”) is made as of this ___ day of August,
2016 by and between Nanotech Materials LLC, a Florida limited liability company with its principal place of business located at
1043 North Lake Vista Circle, Davie, Florida 33329 (inclusive of all majority-owned subsidiaries, “NANOTECH”)
and Findex.com, Inc., a Nevada Corporation with its principal place of business located at 1313 South Killian Drive, Lake Park,
FL 33403 (inclusive of all majority-owned subsidiaries, “FIND”) (NANOTECH and FIND may be referred to hereinafter
individually as a “Co-Venturer” or together as the “Co-Venturers”).

 

WHEREAS,
NANOTECH is the exclusive holder of all Intellectual Property Rights attendant to and surrounding the worldwide commercial exploitation
– including the production, distribution, marketing, and sale throughout the world – of a certain rubber-glass fusion
coating technology/material to be used, among other purposes, as a slip-resistant, anti-corrosive protectant on a variety of metal
and/or other surfaces in connection with a broad range of industrial and consumer product applications, all as more specifically
identified and described on Schedule A annexed hereto and made a part hereof (the “Product”);

 

WHEREAS,
NANOTECH is desirous of producing, marketing, distributing, and selling the Product, but, as of the date hereof, lacks certain
of the required physical manufacturing/production capabilities and capacity, and related resources, as well as certain team depth
and reach in terms of marketing, distribution and sales;

 

WHEREAS,
FIND has certain manufacturing and production expertise, capabilities, and available capacity that could potentially be allocated,
utilized and dedicated in part to the production of the Product, as well as certain distribution, marketing and sales expertise
and resources that could be applied in connection with the distribution, marketing and sales of the Product worldwide;

 

WHEREAS,
NANOTECH and FIND have arrived, through discourse to date, at certain terms and conditions upon which they desire to establish
a contractual joint venture pursuant to which – as more specifically detailed hereinafter - NANOTECH shall contribute its
proprietary and exclusive Intellectual Property Rights to the Product, as well as certain global distribution, marketing and sales
services surrounding the Product, on the one hand, and FIND shall contribute its production resources and capacity, together with
certain global distribution, marketing and sales services surrounding the Product, on the other; and

 

WHEREAS,
capitalized terms used throughout this Agreement shall have the meanings assigned to them in Section 18.2 hereof or in the Section
of this Agreement to which reference is made within Section 18.3 hereof;

 

NOW,
THEREFORE, for and in consideration of the various covenants, acknowledgments, and agreements hereinafter set forth in this Agreement,
the Co-Venturers hereby agree to be bound as follows:

 

 

1. Establishment,
Purpose and Scope.

 

1.1 Generally.
As of the execution hereof, the Co-Venturers hereby establish a manufacturing and distribution business joint venture (the “Joint
Venture”), the purpose of which shall be to commercially exploit the Product to the fullest profit potential
through a combination of manufacturing/production and global/worldwide distribution, marketing, and sales.

 

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1.2Non-Limitation
on Other Pursuits. It is understood and acknowledged by each of the Co-Venturers that the other Co-Venturer is and shall continue
throughout the Term (as defined in Paragraph 2.2 immediately below) of the Joint Venture to be (i) actively involved in other
business pursuits and activities that extend beyond those strictly of the Joint Venture, with no limitation imposed by virtue
of either the establishment or existence of the Joint Venture on any such pursuits or activities, express or implied, and (ii)
independent of the other Co-Venturer for all purposes other than the Joint Venture; provided, however, that each Co-Venturer shall
exercise good faith and prudence to ensure that such other business pursuits and/or activities are not inconsistent with the achievement
by the Joint Venture of its aforestated objectives, express or implied. It is further understood and acknowledged by each of the
Co-Venturers that neither of them shall have any claim to, rights in or to, or obligations by virtue of this Agreement relating
to, such independent business pursuits and/or activities of the other Co-Venturer or any income or profits derived therefrom.

 

2.Effective
Date and Term.

 

2.1Effective
Date. This Agreement shall become effective on the date (the “Effective Date”) upon which this Agreement
shall have been executed by each of the Co-Venturers, and the Joint Venture shall commence as of such date.

 

2.2Term.
Unless extended by mutual, written agreement of the Co-Venturers pursuant to Section 7(a)(xiv) hereof, this Agreement shall continue
from the Effective date until the earlier to occur of one of the Terminating Events specifically set forth in Section 16.1 hereof
(such period in totality, the “Term”).

 

3.Form
of Joint Venture and Related Tax Matters. The Joint Venture shall be a contractual, non-equity based joint venture established
pursuant to this Agreement, and not one formed through the establishment of any jointly owned and/or operated legal entity. Notwithstanding
certain partnership-like attributes of the relationship established hereby, it is expressly understood, acknowledged, and agreed
by the Co-Venturers that this Agreement shall not establish a partnership between them as such term is applied to characterize
the relationship between or among parties specifically intending to form a legally recognized partnership, and nor shall it establish
a limited liability company or similar entity. Accordingly, the Joint Venture shall not be responsible for filing, and shall not
file, any joint, partnership, corporate or other federal or state tax returns on its own behalf separate from those filed by the
Co-Venturers respectively, and shall not issue Schedule K-1’s or similar reports to the Co-Venturers relating to their interests
in the Joint Venture.

 

4.Name
and Address of the Joint Venture. For purposes of administrative-, accounting-, and operations-related reference, the Joint
Venture shall be known internally as the “RGF Joint Venture”. The principal place of business of the Joint Venture
shall be the address of FIND’s principal manufacturing facility, as it may be relocated from time to time, but which, as
of the date hereof, is 1313 South Killian Drive, Lake Park, FL 33403.

 

5.Contributions
of the Co-Venturers. The Co-Venturers shall be obligated to make the following contributions to the Joint Venture, which contributions
shall be deemed to be both immediate (as of the date hereof) and ongoing throughout the Term of the Joint Venture, except as may
otherwise be expressly provided hereinafter in this Section 5 of this Agreement:

 

(a)NANOTECH.

 

(i)An
irrevocable, exclusive license for the Term of the Joint Venture, to use and incorporate into the Product, worldwide, all of the
Intellectual Property Rights associated with the Product; and

 

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(ii)Its
commercially reasonable best efforts throughout the Term in distributing, marketing and selling the Product worldwide.

 

(b)FIND.

 

(i)As
and when reasonably required throughout the Term, and at Actual Cost charged to the account of the Joint Venture in [advance][arrears],
all manufacturing/production and FOB shipping and logistics services relating to the Product worldwide, provided, however,
that commercially reasonable accommodation is made from time to time as and when necessary to expand then-existing production,
inventory, and shipping capacity to meet corresponding increases in demand for Product.

 

(ii)Its
commercially reasonable best efforts throughout the Term in distributing, marketing and selling the Product worldwide; and

 

(iii)Sole
and exclusive responsibility for all Joint Venture related (x) bookkeeping, record-keeping, and accounting, (y)
the preparation and dissemination of all Quarterly Financial Reports and payments for corresponding quarterly Distributable Profits
to the Co-Venturers, and (z) the administering of all responsibilities associated with the reporting and payment of sales
Taxes due on Product sold by the Joint Venture.

 

6.Product
Brand Name. Unless otherwise agreed to in writing by the Co-Venturers pursuant to Section 7(a)(vi) hereof, the Product shall
be marketed globally throughout the Term of the Joint Venture under the brand name “Rubberized Glass Fusion Protectant”
and/or “RGF Protectant.” As and when agreed to by the Co-Venturers, and based on the terms agreed to between them
regarding attendant cost and/or the treatment thereof as one of the Marketing Co-Op Charges, the Joint Venture, through the joint
initiatives of the Co-Venturers, shall as soon as practicable take all reasonably required steps to secure for the benefit of
the Joint Venture appropriate Marks and URL domains based on such brand name.

 

7.Management
and Governance of the Joint Venture. In general, the Joint Venture shall be managed through the mutual input and reasonable
cooperation of the Co-Venturers, the representatives of which shall meet, either in person or telephonically, from time to time
as reasonably required to manage the affairs of the Joint Venture. In respect of any unresolvable disagreement, the following
rules of order shall be applied in relation to the corresponding actions:

 

(a)Actions
Requiring Mutual Consent. The following actions on the part of or on behalf of the Joint Venture shall require the advance,
written, mutual consent of the Co-Venturers:

 

(i)Any
assignment of this Agreement by either Co-Venturer or any of the contribution obligations of either Co-Venturer hereunder;

 

(ii)The
periodic allocation and pro-ration of FIND’s manufacturing/production operating overhead and depreciation on capital equipment
for purposes of arriving at Actual Cost of Goods Sold under Section 11.1 hereof;

 

(iii)Any
determinations to acquire raw materials for the production of Product, or to manufacture/produce Product inventory, in either
case on a speculative basis (i.e. in the absence of confirmed purchase orders for corresponding Product);

 

(iv)Any
determinations to develop and produce co-op marketing materials to be distributed in connection with Product promotion and sales,
including both print and online (including Websites);

 

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(v)Approval
of both the design and textual content of marketing materials to be distributed in connection with Product promotion and sales,
including both print and online Web-based (and irrespective of whether constituting Marketing Co-Op Charges or not);

 

(vi)Any
change of the brand name designated for the Product pursuant to Section 6 above;

 

(vii)The
licensing or sub-licensing, or granting or conveying in any other form, to any Person of all or any part of the Intellectual Property
upon which the unique value proposition of the Product is based and around which it is centered;

 

(viii)The
divulgence to any Person(s) of all or any part of the trade secrets and/or know-how upon which the unique value proposition of
the Product is based and around which it is centered;

 

(ix)The
hiring of any employees by the Joint Venture;

 

(x)The
entering into of any manufacturer’s representative agreements relating to the Product, including the percentage of the sales
commission payable to the corresponding Authorized Manufacturer’s Representative pursuant thereto;

 

(xi)Any
transactions by the Joint Venture outside the Ordinary Course of Business of the Joint Venture;

 

(xii)The
management and/or settlement of any civil actions brought against the Joint Venture or the Co-Venturers jointly and/or severally
arising out of claims associated with the Joint Venture or the Product;

 

(xiii)Any
sale of the business of the Joint Venture to a third party, including a price acceptable to each of the Co-Venturers, and a definitive
asset sale and purchase agreement;

 

(xiv)Any
extension of the Term of this Agreement; and

 

(xv)Any
voluntary termination/dissolution of the Joint Venture.

 

(b)Action
Requiring Consent of FIND. The following actions on the part of or on behalf of the Joint Venture shall require the advance,
written consent of FIND only:

 

(i)Any
determination to extend open credit terms to a given customer, and, if so, the extent of any such credit, applying reasonable
and customary credit standards in the coatings industry; and

 

(ii)Any
capital investment on the part of FIND in property, plant and/or equipment for the benefit of the Joint Venture, whether financed
or not.

 

8.Operations
of the Joint Venture.

 

8.1Employees
and Consultants. Unless otherwise agreed in writing by each of the Co-Venturers, the Joint Venture shall neither hire nor
maintain any employees, full or part-time, throughout the Term, and nor shall it retain the services of any independent consultants;
provided, however, that the Joint Venture shall utilize the services of independent manufacturer’s representatives
if, as, and when determined by the mutual written consent of the Co-Venturers (as provided in Section 7(a)(x) hereof) to assist
and support the Joint Venture’s distribution and sales initiatives surrounding the Product.

 

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8.2Product
Sales.

 

8.2.1Marketing
and Distribution.

 

8.2.1.1Generally.
It shall be the domain of the Co-Venturers jointly, though not necessarily equally or even close to equally, to market, distribute
and sell the Product, both directly and through the development of independent distribution and sales networks.

 

8.2.1.2Marketing
Materials / Expense Co-Op. The responsibility for the development and editing from time to time of all marketing materials
relating to the Product, including the layout, design and textual content of both hard-copy printed and online Web-based materials,
as well as accompanying supplemental data sheets, shall be reasonably shared by and between the Co-Venturers working in good faith
given the stated objectives of the Joint Venture. Approval in final form of such materials by each of the Co-Venturers shall be
required in each case before their dissemination shall be authorized or permitted (as specifically required pursuant to Section
7(a)(v) above). For purposes of the managing the shared responsibility in this regard, the Joint Venture shall establish and maintain
an expense co-op through which charges to the account of the Joint Venture incurred in connection with the development and production
of marketing materials relating to the Product, whether expensed or capitalized (in each such case, “Marketing Co-Op
Charges”), shall be passed for purposes of arriving at Distributable Profits in accordance with Section 11.1 hereof.

 

8.2.1.3Trade
Show Exhibiting and Attendance. Any trade show exhibits and/or attendance by either of the Co-Venturers shall be at their
respective discretion and at their sole expense; provided, however, that, in the event that each Co-Venturer intends to
exhibit at the same show as the other (concurrently), the cost of exhibiting shall be borne equally by them as part of the Marketing
Co-Op Charges, and they shall cooperate in an effort to provide a schedule for manning the Product booth that is reasonably fair
and sensible.

 

8.2.1.4Advertising.
Either Co-Venturer may, at its own expense, place advertisements in trade and related publications of their exclusive choosing,
and setting forth their own respective contact information in the body thereof; provided, however, that the layout, design
and textual content of any such advertisement(s) shall be approved in writing in advance by the other Co-Venturer, such approval
not to be unreasonably withheld.

 

8.2.1.5Sales
Commissions and Manufacturer’s Representatives. Sales commissions of up to five percent (5%) shall be deemed authorized
in advance to each of the Co-Venturers as payable to third party manufacturer’s representatives by the Joint Venture; provided,
however, that (i) any such third party manufacturer’s representative shall have theretofore entered into a written manufacturer’s
representative agreement with FIND, as authorized agent for the Joint Venture, such agreement to be in the form to be agreed to
by both FIND and NANOTECH (in each case, an “Authorized Manufacturer’s Representative”), (ii) any obligation
on the part of the Joint Venture to honor a sales commission of any amount shall only accrue upon receipt on behalf of the Joint
Venture of full payment from the corresponding customer, and (iii) no sales commissions shall be payable on any sales not initiated
and/or consummated through the good faith, active involvement of an Authorized Manufacturer’s Representative, and no such
sales commission or any part thereof may be paid (i.e. “kicked back”) to one of the Co-Venturers or any designee
thereof.

 

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8.2.1.6
Sales Territories. Unless otherwise agreed in writing by the Co-Venturers, and reflected in the corresponding manufacturer’s
representative agreement, no territorial exclusivity to sell the Product shall be granted to any manufacturer’s representative
or other Person.

 

8.2.2Product
Purchase Orders, Quantities, Pricing and Payment Terms. Purchase orders for Product shall be obtained from prospective customers
by manufacturer’s representatives or employees of a Co-Venturer based on suggested retail price (SRP) lists furnished from
time to time by the Joint Venture to each of the Co-Venturers and to the then active manufacturer’s representatives, and
any such purchase orders shall include the quantity of Product ordered (per gallon, per pale [5 gallons], per drum [55 gallons],
or per [palette size] tote [275 gallons]), and the payment terms extended (open credit/Net 30 days, COD, or Cash in Advance) as
per the determination of FIND pursuant to Section 7(b)(i) above.

 

8.3Fulfillment
and Shipment.

 

8.3.1Production
/ Manufacturing.

 

8.3.1.1Generally.
All Product manufacturing/production shall be carried out on behalf of the Joint Venture by FIND at the production facilities
it maintains from time to time throughout the Term. Such manufacturing/production shall include, at a minimum, raw materials procurement
and storage, materials batch mixing on a just-in-time basis, and packing/preparation for shipment out to customers.

 

8.3.1.2Use
of Organized/Union Labor. It is acknowledged by the Co-Venturers that it is not anticipated by either of them that the Joint
Venture, whether directly or vis-à-vis its manufacturing operations conducted through FIND, shall become subject to any
labor union or collective bargaining agreements in the foreseeable future.

 

8.3.1.3
Quality Control. FIND shall use its commercially reasonable good faith efforts to cause the quality
management system utilized in the production of Product to meet ISO [9001:2008] [9001:2015]
standards as soon as practicable and to thereafter maintain such standards (or those that supersede them, if applicable) throughout
the Term.

 

8.3.1.4Regulatory
Compliance. The Joint Venture, acting through FIND for purposes of manufacturing, shall use its commercially reasonable best
efforts to cause the Joint Venture to be in compliance in all material respects with all applicable Environmental Permits and
the Occupational Safety & Health Administration (OSHA) standards required in connection with its production facilities and
operations utilized and relied upon by the Joint Venture.

 

8.3.2Shipping.
All Product for which purchase orders are accepted shall be shipped out [FOB warehouse] in appropriate packaging given their contents
to the corresponding customers on behalf of the Joint Venture by FIND at the production facilities it maintains from time to time
throughout the Term and utilizing the freight services of duly qualified and bonded third party carriers.

 

8.4Asset-Based
Financing / Lines of Credit. Any asset-based or other secured or unsecured commercial line of credit (whether term or revolving),
or other Indebtedness, to be used for the benefit of the operations of the Joint Venture shall be obtained and maintained by and
in the name of FIND, or, in FIND’s exclusive discretion, one of its corporate subsidiaries; provided, however, that
FIND shall be under no obligation to either obtain, maintain, or replace any such line of credit or Indebtedness at any time throughout
the Term, irrespective of applicable, available, or prevailing interest rates.

 

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9.Assets
and Liabilities of the Joint Venture. For purposes of accounting and any potential liquidation of the Joint Venture, ownership
of the assets and liabilities of the Joint Venture shall at all times be apportioned and retained by the Co-Venturers as follows:

 

	 	Item	 	%’age
    Ownership/Responsibility
	 	Assets	 	 
	 	Current
    Assets	 	 
	 	Cash
    – Working Capital	 	FIND
    100%
	 	Cash
    – Other	 	NANOTECH
    50%/FIND 50%
	 	Accounts
    Receivable	 	NANOTECH
    50%/FIND 50% *
	 	Physical
    Assets	 	 
	 	Property,
    Plant & Equipment	 	FIND
    100%
	 	Inventory	 	 
	 	Raw
    Materials	 	NANOTECH
    50%/FIND 50% *
	 	Work-In-Process	 	NANOTECH50%/FIND
    50% *
	 	Finished
    Product	 	NANOTECH
    50%/FIND 50% *
	 	Printed
    and Online Marketing Materials	 	NANOTECH
    50%/FIND 50%
	 	Intangible
    Assets, including IP 	 	NANOTECH
    50%/FIND 50%
	 	Security
    Deposits	 	NANOTECH
    100%
	 	Legal
    Claims 	 	NANOTECH
    50%/FIND 50%
	 	 	 	 
	 	Liabilities	 	 
	 	Accounts
    Payable	 	NANOTECH50%/FIND
    50%
	 	Long-Term
    Obligations	 	NANOTECH
    50%/FIND 50%
	 	Lines
    of Credit	 	[??]
	 	Civil
    Judgments and Settlements 	 	NANOTECH
    50%/FIND 50%
	 	Regulatory
    Penalties and Related	 	NANOTECH
    50%/FIND 50%

 

 * To be held in trust by FIND whenever on hand for the benefit of the Joint Venture.

 

10.Maintenance
of Books and Records; Periodic Accounting/Reporting; Access To Information.

 

10.1Maintenance
of Books and Records. The Joint Venture shall at all times keep at its principal office true and correct books and accounts
pertaining to all operations reflecting all receipts and expenditures of the business comprising the Joint Venture and all other
data and information necessary and proper to keep the Co-Venturers informed of the financial condition of the business comprising
the Joint Venture. FIND shall bear sole and exclusive responsibility for all of the foregoing.

 

10.2Access
to Books and Records. The Co-Venturers and their designated representatives shall be afforded full and complete access to
the books and records of the Joint Venture during normal business hours and upon reasonable notice for the purpose of inspection,
examination and copying or any other purpose including, without limitation, an audit of the financial records and operations of
the Joint Venture.

 

10.3Quarterly
Accounting/Reporting. Within thirty (30) days of the end of each calendar quarter, the Joint Venture shall provide each of
the Co-Venturers with a report (the “Quarterly Financial Report”) setting forth, in reasonable detail,
the financial results for the then most-recently ended calendar quarter, which report shall include at a minimum gross sales revenues,
Distributable Profits, and the corresponding distributions payable to the Co-Venturers therefrom.

 

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11.Calculation,
Division and Distribution of Joint Venture Profits.

 

11.1Calculation.
Distributable profits (“Distributable Profits”) of the Joint Venture shall be computed for each calendar
quarter and at the end of each such quarter through application of the following formula, calculated on a cash basis, where actual
cost of goods sold is equal to all costs of raw materials as well as appropriately allocated and pro-rated manufacturing/production
operating overhead and depreciation on capital equipment (“Actual Cost of Goods Sold”):

 

Gross
sales revenues, including sales Taxes

 

Less
(–) Sum of:

+
Actual Cost of Goods Sold

+
Cost of product liability insurance

+
Marketing Co-Op Charges (preceding quarter)

+
Sales commissions paid on gross sales revenues

+
Sales Taxes payable on gross sales revenues

_________________________________________________________

=      Distributable
Profits

 

11.2Division.
Distributable Profits of the Joint Venture, once arrived at, shall be allocated and divided between the Co-Venturers on a 50/50
basis.

 

11.3Distribution.
Checks reflecting Distributable Profits to which Co-Venturers are entitled shall be delivered to each of the Co-Venturers promptly
following the close of each calendar quarter, together with the corresponding Quarterly Financial Report.

 

12.Representations
and Warranties.

 

12.1NANOTECH.
As of the date of this Agreement, NANOTECH hereby represents and warrants to FIND as follows:

 

(a)NANOTECH
has all necessary power and authority as a limited liability company to execute and deliver this Agreement, and to perform its
obligations in connection with the Joint Venture. The execution and delivery of this Agreement has been duly and validly authorized
by all necessary action and no other proceedings on the part of NANOTECH are necessary to authorize this Agreement. This Agreement
has been duly and validly executed and delivered by NANOTECH, and, assuming the due authorization, execution and delivery of this
Agreement by FIND, constitutes a legal, valid and binding obligation of NANOTECH, enforceable against NANOTECH in accordance with
its terms.

 

(b)To
the best of NANOTECH’s Knowledge, the execution and delivery by NANOTECH of this Agreement does not, and the performance
by it of its obligations under this Agreement do not and will not conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to it or any agreement to which it is a party or by which any of its assets and properties
is bound, or result in or give to any Person any additional rights or entitlement to increased, additional, accelerated, or guaranteed
payments under, or result in the creation or imposition of any Lien upon it or any of its assets and properties.

 

(c)To
the best of NANOTECH’s Knowledge, there are no Proceedings pending or threatened against, relating to, or affecting either
it or any of its assets and properties which could reasonably be expected to result in the issuance of an Order restraining, limiting,
enjoining or otherwise inhibiting the license of the Intellectual Property upon which the unique value proposition of the Product
is based and around which it is centered.

 

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(d)The
Product, when produced based on the Intellectual Property contributed to the Joint Venture by NANOTECH, provides an effective,
and if produced and used properly, safe, slip-resistant, protective and anti-corrosive coating for a variety of metal and/or other
surfaces in connection with a broad range of industrial and consumer product applications.

 

(e)The
Intellectual Property upon which the Product is based and around which it is centered became known to NANOTECH strictly through
NANOTECH’s own initiatives and discovery, and NANOTECH is the sole and exclusive possessor and owner of the entire right,
interest and title to all of the Intellectual Property upon which the unique value proposition of the Product is based and

that
is applied and relied upon for the manufacture and sale of all Products by the Joint Venture as contemplated under this Agreement
free and clear of any Liens. All current and former employees, consultants and contractors of NANOTECH and/or any of its affiliates
have executed and delivered, and are in compliance with, enforceable agreements regarding the protection of Proprietary Information
and providing valid written assignments of all Intellectual Property conceived or developed by such employees, consultants or
contractors in connection with their services for NANOTECH, and no current or former employee, consultant or contractor or any
other Person has any right, claim or interest to any of the Intellectual Property around which the Product is centered.

 

12.2FIND.
As of the date of this Agreement, FIND hereby represents and warrants to NANOTECH as follows:

 

(a)FIND
has all necessary corporate power and authority to execute and deliver this Agreement, and to perform its obligations in connection
with the Joint Venture. The execution and delivery of this Agreement has been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of FIND are necessary to authorize this Agreement. This Agreement has been
duly and validly executed and delivered by FIND, and, assuming the due authorization, execution and delivery of this Agreement
by NANOTECH, constitutes a legal, valid and binding obligation of FIND, enforceable against FIND in accordance with its terms.

 

(b)To
the best of FIND’s Knowledge, the execution and delivery by it of this Agreement does not, and the performance by it of
its obligations under this Agreement do not and will not conflict with or result in a violation or breach of any term or provision
of any Law or Order applicable to it or any agreement to which it is a party or by which any of its assets and properties is bound,
or result in or give to any Person any additional rights or entitlement to increased, additional, accelerated, or guaranteed payments
under, or result in the creation or imposition of any Lien upon it or any of its assets and properties.

 

(c)Except
as otherwise may have been previously disclosed to NANOTECH, all buildings, plants, leasehold improvements, structures, facilities,
equipment and other items of tangible property and assets which are owned, leased or used by FIND in connection with its production
facilities and operations are structurally sound, free from material defects (patent and latent), have been maintained in accordance
with normal industry practice, are in good operating condition and repair (subject to normal wear and tear given the use and age
of such assets), are usable in the regular and Ordinary Course of Business and conform in all material respects to all Laws and
Authorizations relating to their construction, use and operation.

 

(d)FIND
is not a party or subject to any labor union or collective bargaining agreement, and it is not anticipated by the management of
FIND that FIND shall become a party or subject to any such agreement in the foreseeable future, including in connection with the
Joint Venture. There have not been since FIND began operations in the coatings business d/b/a EcoSmart Surface & Coatings,
and there are not now, any pending or threatened any labor disputes, work stoppages, requests for representation, pickets, work
slow-downs due to labor disagreements or any actions or arbitrations which involve the labor or employment relations of FIND.
There is no unfair labor practice, charge or complaint pending, unresolved or, to FIND’s Knowledge, threatened before the
National Labor Relations Board (NLRB), and no event has occurred or circumstance exist that may provide the basis of any work
stoppage or other labor dispute.

 

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13.Covenants.

 

13.1NANOTECH.

 

13.1.1Affirmative.
From and after the Effective Date, NANOTECH agrees that, throughout the Term, NANOTECH shall:

 

(a)Apply
its commercially reasonable best efforts to distribute, market and sell the Product worldwide;

 

(b)Immediately
license to the Joint Venture for the Term without entitlement to any further consideration any and all Intellectual Property Rights
logically or sensibly related to, attendant to, or arising out of the those Intellectual Property Rights upon which the unique
value proposition of the Product is based and around which it is centered and existing as of the date hereof, and promptly take
any and all required administrative or other steps to formalize any such Intellectual Property Right licenses as may be requested
by FIND from time to time for and on behalf of the Joint Venture;

 

(c)Promptly
present and make available to the Joint Venture any and all prospective business or product opportunities of which NANOTECH is
made aware and which are related to the manufacture, distribution and sale of the Product;

 

(d)Promptly
provide to FIND, as may be requested by FIND from time to time, any all information reasonably required by FIND to be disclosed
in its public securities filings pursuant to it under either the U.S. Securities Act of 1933 or the U.S. Securities Exchange Act
of 1934, in each case as amended to date; and

 

(e)Promptly
indemnify FIND from and against any and all Liabilities or Damages, including legal fees, actually incurred arising out of any
finding by a Governmental Authority that the use by the Joint Venture of the information purported to constitute trade secrets
or know-how around which the Product is centered, and otherwise assumed incorrectly for purposes of this Agreement to constitute
Proprietary Information, in fact constitutes an infringement of the Intellectual Property Rights of a third Person.

 

13.1.2Negative.
From and after the Effective Date, NANOTECH agrees that, throughout the Term, NANOTECH shall not:

 

(a)Disclose
or divulge verbally or in writing to any Person(s), including any Authorized Manufacturer’s Representatives, all or any
part of the trade secrets and/or know-how upon which the unique value proposition of the Product is based, and shall treat all
such Proprietary Information as strictly confidential;

 

(b)Grant
a license, assign, or otherwise convey to any Person any of the Proprietary Information constituting trade secrets or know-how
upon which the unique value proposition of the Product is based and around which it is centered;

 

    	 	10	 

     

    

 

(c)Take
any steps in the pursuit of engaging, or actually engage, directly or indirectly, in any business or venture that is or may reasonably
be deemed to be competitive with the business of the Joint Venture, in any case without the prior, express, written consent of
FIND;

 

(d)Take
any steps in the pursuit of soliciting or hiring, or actually soliciting or hiring, directly or indirectly, any then-current or
former employees or consultants of FIND, or any then-current or former Authorized Manufacturer’s Representatives for purposes
unrelated to the Joint Venture, in any case without the prior, express, written consent of FIND; or

 

(e)Request
or accept from any Authorized Manufacturer’s Representative or other Person any re-directed proceeds of any sales commissions
paid on behalf of the Joint Venture in connection with sales of Product.

 

13.2FIND.

 

13.2.1Affirmative.
From and after the Effective Date, FIND agrees that, throughout the Term (and as to subparagraph (g) immediately below throughout
the Term and for a period of five (5) years after the end of the Term), FIND shall:

 

(a)Apply
its commercially reasonable best efforts to carry out all manufacturing/production and FOB shipping and logistics services reasonably
required to meet productions demand; provided, however, that commercially reasonable accommodation is made from time to
time as and when necessary to expand then-existing production, inventory, and shipping capacity to meet corresponding increases
in demand for Product;

 

(b)Apply
its commercially reasonable best efforts to distribute, market and sell the Product worldwide;

 

(c)Use
its commercially reasonable good faith efforts to cause the quality management system utilized in
the production of Product to meet ISO [9001:2008] [9001:2015] standards as soon as practicable
and to thereafter maintain such standards (or those that supersede them, if applicable);

 

(d)Use
its commercially reasonable best efforts to cause the Joint Venture to be in compliance in all material respects with all applicable
Environmental Permits and Occupational Safety & Health Administration (OSHA) standards and other U.S. Department of Labor
workplace-related requirements (including worker’s compensation insurance coverage) mandated in connection with its production
facilities and operations utilized by the Joint Venture, and promptly indemnify NANOTECH from and against any and all Liabilities
or Damages, including penalties and fines, actually incurred arising out of Environmental Action or any non-compliance under Environmental
Laws;

 

(e)Responsibly
and in good faith (x) maintain all Joint Venture related bookkeeping, record-keeping, and accounting, (y) prepare
and disseminate all Quarterly Financial Reports and payments for corresponding quarterly Distributable Profits to the Co-Venturers,
and (z) administer all responsibilities associated with the reporting and payment of sales Taxes due on Product sold by
the Joint Venture as and when due;

 

(f)Promptly
pay as and when due all sales Taxes due on Product sold by the Joint Venture or payroll Taxes, and promptly indemnify PIAZZA from
and against any and all Liabilities or Damages, including penalties and fines, actually incurred arising out of any non-payment
to a Taxing Authority of either sales Taxes due on Product sold by the Joint Venture or payroll Taxes;

 

    	 	11	 

     

    

 

(g)
FIND shall provide a warranty that the Products are free from defects in material and/or workmanship under normal use for
a period of five (5) years from purchase by the end user, provided that the Product utilized has not been subjected to abnormal
stresses.

 

and

 

(h)Promptly
present and make available to the Joint Venture any and all prospective business or product opportunities of which FIND is made
aware and which are logically or sensibly related to, complimentary to, attendant to, or arising out of the business of the Joint
Venture, neither narrowly nor broadly defined;

 

13.1.2Negative.
From and after the Effective Date, FIND agrees that, throughout the Term (and as to subparagraph (a) immediately below throughout
the Term and at all times after the end of the Term), FIND shall not:

 

(a)Disclose
or divulge verbally or in writing to any Person(s), including any Authorized Manufacturer’s Representatives, all or any
part of the trade secrets and/or know-how and Intellectual Property upon which the unique value proposition of the Product is
based, and shall treat all such Proprietary Information as strictly confidential;

 

(b)Grant
a license, assign, or otherwise convey to any Person any of the Proprietary Information constituting trade secrets or know-how
upon which the unique value proposition of the Product is based and around which it is centered;

 

(c)Take
any steps in the pursuit of engaging, or actually engage, directly or indirectly, in any business or venture that is or may reasonably
be deemed to be competitive with the business of the Joint Venture, in any case without the prior, express, written consent of
NANOTECH;

 

(d)Take
any steps in the pursuit of soliciting or hiring, or actually solicit or hire, directly or indirectly, any then-current or former
Authorized Manufacturer’s Representatives for purposes unrelated to the Joint Venture, in any case without the prior, express,
written consent of NANOTECH; or

 

(e)Request
or accept from any Authorized Manufacturer’s Representative or other Person any re-directed proceeds of any sales commissions
paid on behalf of the Joint Venture in connection with sales of Product.

 

14.Agency
Powers; Limitations on Authority to Bind the Joint Venture. Each of the Co-Venturers shall have the authority to commit and
bind the Joint Venture strictly in relation to purchase orders accepted for Product, but only FIND shall have the authority to
commit and bind the Joint Venture in relation to purchase orders placed for raw materials or related matters of procurement. Neither
of the Co-Venturers shall have the authority, or represent themselves as having the authority, to bind the other Co-Venturer in
relation to any matters outside of the scope of the objectives and business of the Joint Venture as set forth in Section 1 hereof.

 

15.Product
Liability Insurance Coverage and Related Matters. FIND shall obtain a Product Liability insurance policy for the Product upon
terms acceptable to NANOTECH, which policy shall cover FIND and NANOTECH and all others involved in the marketing and sale of
the Product. The coverage must be acceptable to NANOTECH.

 

    	 	12	 

     

    

 

16.Termination
of the Joint Venture.

 

16.1Generally.
Except as otherwise expressly provided herein, this Agreement shall terminate and all rights and obligations hereunder shall cease,
upon the first to occur of any of the following events (each, an “Event of Termination”):

 

(i)the
date that is ten (10) years following the Effective Date (the “Initial Expiry Date”), unless, since the Effective
Date, the Initial Expiry Date shall have been extended by mutual consent of the Co-Venturers pursuant to Section 7(a)(xiv) hereof;

 

(ii)the
voluntary exit / unilateral withdrawal by one of the Co-Venturers;

 

(iii)the
sale of the business of the Joint Venture by mutual consent of the Co-Venturers pursuant to Section 7(a)(xiii); or

 

(iv)the
voluntary termination/liquidation of the Joint Venture by mutual consent of the Co-Venturers pursuant to Section 7(a)(xv) hereof.

 

16.2Effect
of Termination.

 

16.2.1Expiration
of the Term. In the event that the Term of this Agreement is not extended pursuant to mutual consent pursuant to Section 7(a)(xiv)
hereof, then, and in such Event of Termination, the Joint Venture shall (i) terminate, effective immediately, as of 5:00 pm on
the last day of the Term, and (ii) the business of the Joint Venture shall promptly be wound down pursuant to the provisions of
Section 16.3 hereof; provided, however, that both of the Co-Venturers shall thereafter separately retain an irrevocable,
exclusive (other than with respect to the other Co-Venturer) license in perpetuity to use and incorporate into the Product, worldwide,
all of the Intellectual Property Rights associated with the Product.

 

16.2.2Voluntary
Exit / Unilateral Withdrawal By A Single Co-Venturer. In the event of a voluntary exit / unilateral withdrawal by one of the
Co-Venturers prior to the Initial Expiry Date, or thereafter during any extension period of the Term, then, and in such Event
of Termination, the Joint Venture shall (i) terminate, effective upon sixty (60) days written notice from the withdrawing Co-Venturer
to the other Co-Venturer, and (ii) the business of the Joint Venture shall promptly be wound down pursuant to the provisions of
Section 16.3 hereof; provided, however, that both of the Co-Venturers shall thereafter separately retain an irrevocable,
exclusive (other than with respect to the other Co-Venturer) license in perpetuity to use and incorporate into the Product, worldwide,
all of the Intellectual Property Rights associated with the Product.

 

16.2.3Sale
of Business of Joint Venture. In the event of any sale of the business of the Joint Venture pursuant to Section 7(a)(xiii)
hereof, then, and in such Event of Termination, the Joint Venture shall (i) terminate, effective upon consummation of such sale
pursuant to the subject asset sale and purchase agreement, and (ii) the business of the Joint Venture shall promptly be wound
down pursuant to the provisions of Section 16.3 hereof.

 

    	 	13	 

     

    

 

16.2.4Voluntary
Termination/Liquidation of the Joint Venture By Mutual Consent. In the event that there is a voluntary termination/liquidation
of the Joint Venture by mutual consent pursuant to Section 7(a)(xv) hereof, then, and in such Event of Termination, the Joint
Venture shall (i) terminate, effective immediately, as of a date and time agreed to between the Co-Venturers, and (ii) the business
of the Joint Venture shall promptly be wound down pursuant to the provisions of Section 16.3 hereof; provided, however,
that both of the Co-Venturers shall thereafter separately retain an irrevocable, exclusive (other than with respect to the other
Co-Venturer) license in perpetuity to use and incorporate into the Product, worldwide, all of the Intellectual Property Rights
associated with the Product.

 

16.3Winding-Down.
Upon the occurrence of an Event of Termination, the Joint Venture shall be liquidated and wound down as soon as practicable. In
connection with the liquidation and winding-up of the Joint Venture, and with reference to the allocation of assets and liabilities
set forth in Section 9 hereof, FIND shall proceed with the liquidation of all of the assets of the Joint Venture and shall apply
and distribute the proceeds of such sale or liquidation in the following order of priority, unless otherwise required by mandatory
provisions of applicable Law:

 

(a)first,
to pay (or to make provision for payment of) all expenses of the liquidation in satisfaction of all obligations of the Joint Venture
for such expenses of liquidation;

 

(b)second,
to pay (or to make provision for the payment of) any creditors of the Joint Venture (including any Co-Venturer who is then a creditor
of the Joint Venture) in the order of priority provided by applicable Law or otherwise, in satisfaction of all debts, liabilities
or obligations of the Joint Venture due such creditors;

 

(c)third,
to the establishment of any reserve which FIND may deem reasonably necessary for any contingent or unforeseen liabilities or obligations
of the Joint Venture, including any Joint Venture reserves that may have already been set aside (such reserve to be paid over
by FIND to an escrow agent acceptable to NANOTECH, and to thereafter to be held for disbursement in payment of any of the aforementioned
liabilities and, at the expiration of such period as shall be deemed advisable by the Joint Venture [through FIND, acting on its
behalf] in its discretion for distribution of the balance in the manner hereinafter provided in this Section 16.2); and

 

(d)fourth,
after the payment (or the provision for payment) of all Indebtedness of the Joint Venture in accordance with each of the clauses
above, to the Co-Venturers or their legal representatives in accordance with the positive balances in their respective capital
accounts, after taking into account all adjustments to capital accounts for all periods, no later than the end of the fiscal year
in which the Event of Termination occurs or, if later, within ninety (90) days after the date of the liquidation of the Joint
Venture.

 

16.3Time
for Liquidation. A reasonable amount of time shall be allowed for the orderly liquidation of the assets of the Joint Venture
and the discharge of liabilities to creditors, if any, so as to enable FIND to reasonably contain and minimize losses attendant
upon liquidation.

 

16.4Final
Termination. Upon compliance with the foregoing distribution plan, the Joint Venture shall cease to be such. The provisions
of this Agreement shall remain in full force and effect during the period of winding down. Obligations to keep Intellectual Property
and related rights as a confidential and as a trade secret will remain in effect at all times during and after the Term of this
Agreement.

 

17.Dispute
Resolution.

 

17.1Choice
of Law. This Agreement and the rights of the parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Florida (without giving effect to the principles of conflict of laws thereof).

 

    	 	14	 

     

    

 

17.2Deadlock.
In the event that the Co-Venturers become unresolvably deadlocked on any issue or matter, the resolution of such issue or matter
shall be determined by an independent third party designee jointly agreed to in writing between them (an “Independent
Third Person”); provided, however, that, if the Co-Venturers are unable to agree as to the appointment of an Independent
Third Person, each of them shall submit such issue or matter to arbitration in accordance with the Expedited Commercial Rules
of the American Arbitration Association with an arbitrator (the “Arbitrator”) who is not in the business
conducted by the Joint Venture. The Independent Third Person’s or Arbitrator’s, as applicable, resolution of such
issue or matter, and such decision by the Independent Third person or Arbitrator, as applicable, shall be binding and non-appealable
with respect to the Co-Venturers. Each Co-Venturer shall bear its own attorneys’ fees and costs relating to any dispute
resolution described in this Section 17.2. All fees, costs and expenses associated with the Independent Third Party or the Arbitrator,
as applicable, shall be shared equally between the Co-Venturers.

 

17.3Equitable
Relief. The Co-Venturers hereto agree that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the Co-Venturers shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at Law or equity.

 

18.Miscellaneous.

 

18.1Notices.
Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be
in writing and shall be deemed given: (a) on the date established by the sender as having been delivered personally; (b) on
the date delivered by FedEx, UPS, or USPS as established by the sender as per courier receipt; (c) on the date sent by email
as a file attachment in .pdf format; or (d) on the fifth (5th) day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Any such communications, to be valid, must be addressed as follows:

 

If
to FIND:

 

Findex.com,
Inc.

1313
South Killian Drive

Lake
Park, FL 33403

Att:
Michael Membrado

 

If
to NANOTECH:

 

Nanotech
Materials LLC

10431
North Lake Vista Circle

Davie,
FL 33329

Att:
Matthew R. Piazza

 

or
to such other address or to the attention of such Person or Persons as the recipient party has specified by prior written notice
to the sending party (or in the case of counsel, to such other readily ascertainable business address as such counsel may hereafter
maintain). If more than one method for sending notice as set forth above is used, the earliest notice date established as set
forth above shall control.

 

    	 	15	 

     

    

 

18.2Certain
Definitions. For purposes of this Agreement, the following terms, in their capitalized forms, shall have the correspondingly
ascribed meanings:

 

“Authorization”
– any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Authority
or pursuant to any Law.

“Environment”
– all air, surface water, groundwater, land, including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.

 

“Environmental
Action” – any Proceeding brought or threatened under any Environmental Law or otherwise asserting the incurrence
of Environmental Liabilities.

 

“Environmental
Laws” – any and all applicable Laws and Authorizations issued, promulgated or entered into by any Governmental
Authority relating to the Environment, worker health and safety, preservation or reclamation of natural resources, or to the management,
handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling,
Release or threatened Release of or exposure to Hazardous Substances, whether now existing or subsequently amended or enacted,
including but not limited to: CERCLA; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the
Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300(f)
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et seq.; RCRA; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any similar or implementing
state or local Law, and any non-U.S. Laws and regulations of similar import, and all amendments or regulations promulgated thereunder;
and any common law doctrine, including but not limited to, negligence, nuisance, trespass, personal injury, or property damage
related to or arising out of the presence, release of, or exposure to Hazardous Substances.

 

“Environmental
Liabilities” – with respect to any Person, Liabilities arising out of (A) the ownership or operation of the
business of such Person or any of its subsidiaries, or (B) the ownership, operation or condition of any real property currently
or formerly owned, operated or leased by such Person or any of its subsidiaries, in each case to the extent based upon or arising
out of (i) Environmental Law, (ii) a failure to obtain, maintain or comply with any Environmental Permit, (iii) a
release of any Hazardous Substance, or (iv) the use, generation, storage, transportation, treatment, sale or other off-site
disposal of Hazardous Substances.

 

“Environmental
Permit” – any Authorization under Environmental Law, and includes any and all Orders issued or entered into by
a Governmental Authority under Environmental Law.

 

“Governmental
Authority” – any entity or body exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other
government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory,
administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations
or orders of such body have the force of Law.

 

“Hazardous
Substances” – all explosive or regulated radioactive materials or substances, hazardous or toxic materials, wastes
or chemicals, petroleum and petroleum products (including crude oil or any fraction thereof), asbestos or asbestos containing
materials, and all other materials, chemicals or substances which are regulated by, form the basis of liability or are defined
as hazardous, extremely hazardous, toxic or words of similar import, under any Environmental Law, including materials listed in
49 C.F.R. Section 172.101 and materials defined as hazardous pursuant to Section 101(14) of CERCLA.

 

    	 	16	 

     

    

 

“Indebtedness”
– any of the following: (a) any indebtedness for borrowed money, (b) any obligations evidenced by bonds, debentures,
notes or other similar instruments, (c) any obligations to pay the deferred purchase price of property or services, except
trade accounts payable and other current Liabilities arising in the Ordinary Course of Business, (d) any obligations as lessee
under capitalized leases, (e) any indebtedness created or arising under any conditional sale or other title retention agreement
with respect to acquired property, (f) any obligations, contingent or otherwise, under acceptance credit, letters of credit
or similar facilities, and (g) any guaranty of any of the foregoing.

 

“Intellectual
Property” – (i) Proprietary Information; (ii) trademarks and service marks (whether or not registered),
trade names, logos, trade dress and other proprietary indicia and all goodwill associated therewith; (iii) documentation,
advertising copy, marketing materials, web-sites, specifications, mask works, drawings, graphics, databases, recordings and other
works of authorship, whether or not protected by Copyright; (iv) software; and (v) Intellectual Property Rights, including
all Patents, Copyrights, Marks, trade secret rights, mask works, moral rights or other literary property or authors rights, and
all applications, registrations, issuances, divisions, modifications, continuations, renewals, reissuances and extensions of the
foregoing.

 

“Intellectual
Property Rights” – all forms of legal rights and protections that may be obtained for, attach to, or pertain to,
any Intellectual Property in any country of the world.

 

“Knowledge”
– of a given Person (or any similar phrase), and with respect to any fact or matter, the actual knowledge of any individual,
or in the case of any Person other than an individual, the actual knowledge of any one or more directors, executive officers,
members, managers or employees of such Person (inclusive of its Subsidiaries) or such knowledge that any such individual, or any
director, executive officer, member, manager or employee of a Person could be reasonably expected to discover after due investigation
concerning the existence of the fact or matter in question.

 

“Law”
– any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, rule, regulation
and any other binding requirement or determination of any Governmental Authority.

 

“Liability”
or “Liabilities” – any liability, Indebtedness or obligation of any kind, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether
secured or unsecured, whether joint or several, whether due or to become due, whether vested or unvested, including any liability
for Taxes.

 

“Liens”
– any liens, claims, charges, security interests, mortgages, pledges, easements, conditional sale or other title retention
agreements, defects in title, covenants or other restrictions of any kind, including, any restrictions on the use, voting, transfer
or other attributes of ownership.

 

“Marks”
– any trademarks, service marks and other proprietary indicia (whether or not registered).

 

“Order”
– any award, injunction, judgment, decree, stay, order, ruling, subpoena or verdict, or other decision entered, issued or
rendered by any Governmental Authority.

 

“Ordinary
Course of Business” – the ordinary course of business consistent with past custom and practice (including with
respect to quantity and frequency).

 

“Person”
– an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, Governmental
Authority, a person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended), or any political subdivision, agency or instrumentality of a Governmental Authority, or any other entity
or body.

 

    	 	17	 

     

    

 

“Proceeding”
or “Proceedings” – any legal or administrative actions, suits, claims, hearings, arbitrations, mediations,
proceedings (public or private) or governmental investigations that have been brought by any governmental authority or any other
Person.

 

“Proprietary
Information” – collectively, and in relation to both existing and reasonably related and derivative future, inventions
(whether or not patentable), trade secrets, methods, formulae, processes, technology, ideas, know-how, designs, tools, product
road maps, technical data, databases, customer lists, and other proprietary information and materials.

 

“Tax”
or “Taxes” – any means any and all federal, state, local, or foreign net or gross income, gross receipts,
net proceeds, sales (including manufacturing, wholesale, and retail), use, ad valorem, value added, franchise, bank shares,
withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, Environmental (including taxes
under Code §59A), profits, windfall profits, transaction, license, lease, service, service use, occupation, severance, energy,
unemployment, social security, workers’ compensation, capital, premium, and other taxes, assessments, customs, duties, fees,
levies, or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties,
additions to tax, or additional amounts with respect thereto.

 

“Tax
Returns” – any return, declaration, report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment thereof.

 

“Taxing
Authority” – any Governmental Authority having jurisdiction with respect to any Tax.

 

18.3Index
of Other Defined Terms. In addition to those terms defined above, the following terms, in their capitalized forms, shall have
the respective meanings given thereto in the sections indicated below:

 

	Defined
    Term	 	Section
	 	 	 
	“Actual
    Cost of Goods Sold”	 	11.1
	“Agreement”	 	Preamble
	“Arbitrator”	 	17.2
	“Authorized
    Manufacturer’s Representative”	 	8.2.1.5
	“Co-Venturer(s)’	 	Preamble
	“Distributable
    Profits”	 	11.1
	“Effective
    Date”	 	2.1
	“Event
    of Termination”	 	16.1
	“FIND”	 	Preamble
	“Independent
    Third Person”	 	17.2
	“Joint
    Venture”	 	1.1
	“Marketing
    Co-Op Charges’	 	8.2.1.2
	“NANOTECH”	 	Preamble
	“Product”	 	Recitals
    1
	“Quarterly
    Financial Report”	 	10.3
	“Term”	 	2.2

 

    	 	18	 

     

    

 

18.4Interpretation.

 

(a)The
meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term
and vice versa, and words denoting any of the masculine, the feminine or the neuter gender include all of the three (3) as the
context requires. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

 

(b)The
terms “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

(c)When
a reference is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference is to an Article,
Section, paragraph, Exhibit or Schedule to this Agreement unless otherwise specified.

 

(d)The
word “include”, “includes”, and “including” when used in this Agreement shall be deemed to
be followed by the words “without limitation”, unless otherwise specified.

 

(e)Unless
expressly stated to the contrary, a reference to either Co-Venturer to this Agreement or any other agreement or document shall
include such Co-Venturer’s predecessors, successors and permitted assigns.

 

(f)Reference
to any Law means such Law as amended, modified, codified, replaced or reenacted, and all rules and regulations promulgated thereunder.

 

(g)The
Co-Venturers have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against either Co-Venturer by virtue of the authorship of this
Agreement shall not apply to the construction and interpretation hereof.

 

(h)The
descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

18.5Brokers
or Finders. Neither Co-Venturer has any contractual obligations with any Person which has given rise, may give rise to or
will give rise to any obligation or Liability upon consummation of this Agreement or any business conducted by the Joint Venture.

 

18.6Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the underlying agreements contained herein are not affected in any manner materially adverse to
any Co-Venturer. Upon a determination that any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced, the Co-Venturers shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Co-Venturers
as closely as possible in a mutually acceptable manner that preserves the underlying agreements as originally contemplated to
the fullest extent possible.

 

18.7Assignment;
Binding Effect; Benefit. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned
by any of the Co-Venturers hereto (whether by operation of Law or otherwise) without the prior written consent of the other Co-Venturers.
Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the Co-Venturers hereto
and their respective executors, heirs, personal representatives, successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than
the Co-Venturers or their respective successors and assigns any rights, remedies, obligations or Liabilities under or by reason
of this Agreement.

 

    	 	19	 

     

    

 

18.8Counterparts.
This Agreement may be executed and delivered (including by email file attachment in .pdf format) in separate counterparts by the
Co-Venturers, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.

 

18.9Entire
Agreement; Amendment. This Agreement constitutes the entire agreement between the Co-Venturers with respect to the subject
matter hereof and supersedes all prior agreements and understandings among the Co-Venturers with respect thereto. It shall not
be amended except by mutual agreement in writing by both of the Co-Venturers.

 

IN
WITNESS WHEREOF, the Co-Venturers have executed this Agreement, or caused this Agreement to be executed by the respective officers
thereunto duly authorized, in each case as of the date first written above.

  

	 	FINDEX.COM,
    INC
	 	 	 
	 	By	 
	 	Name:  	Steven
    Malone
	 	Title:	President
    & Chief Executive Officer
	 	 	 
	 	NANOTECH
    MATERIALS LLC
	 	 	 
	 	By	 
	 	Name:  	Matthew
    R. Piazza
	 	Title:	Manager

 

    	 	20	 

     

    

 

Schedule
A

 

The
“Product”

 

Rubber-glass
fusion coating proprietary technology/material owned by Nanotech Materials LLC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21lov-ex101_6.htm

Exhibit 10.1

 

PURCHASE AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of the 22nd day of August 2016, by and between SPARK NETWORKS, INC. (the “Company”), a corporation organized under the laws of the State of Delaware, and the purchasers whose names and addresses are set forth on the signature pages hereof (each a “Purchaser” and together, the “Purchasers”).

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, an aggregate of 840,031 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), as set forth in this Agreement; and

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Company and each Purchaser agrees as follows: 

SECTION 1.Authorization of Sale of the Shares.  Subject to the terms and conditions of this Agreement, the Company has authorized the issuance and sale of up to 840,031 shares (the “Shares”) of Common Stock.  

SECTION 2.Agreement to Sell and Purchase the Shares.  At the Closing (as defined in Section 3), the Company will, subject to the terms of this Agreement, issue and sell to each Purchaser and each Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth, the number of Shares (at the purchase price) shown below opposite the name of each such Purchaser:

				
	
Purchaser
	
 

Number of Shares to Be 
  Purchased   
	
Price Per
Share In
 Dollars 
	
 

Aggregate 
   Price   

	
MILFAM II L.P.
	
420,015
	
$1.55
	
$651,023.25

	
Lloyd I. Miller Trust A-4

 
	
420,016
	
$1.55
	
$651,024.80

SECTION 3.Delivery of the Shares at the Closing.  The completion of the purchase and sale of the Shares (the “Closing”) shall occur at the offices of Morrison & Foerster LLP, 425 Market Street, San Francisco, California 94105 simultaneously with the execution of this Agreement, or on such later date or at such different location as the parties shall agree in writing (the date on which the Closing occurs, the “Closing Date”).

At the Closing, each Purchaser shall deliver, in immediately available funds, the full amount of the purchase price for the Shares being purchased by it hereunder by wire transfer to an account designated by the Company and the Company shall deliver to each Purchaser one or more stock certificates registered in the name of such Purchaser, or in such nominee name(s) as designated by such Purchaser in writing, representing the number of Shares set forth opposite such Purchaser’s name in Section 2 above and bearing an appropriate legend referring to the fact 

 

that the Shares were sold in reliance upon the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(2) thereof and Rule 506 thereunder. The Company will promptly substitute one or more replacement certificates without the legend at such time as the Registration Statement becomes effective.  The name(s) in which the stock certificates are to be registered are set forth in the Stock Certificate Questionnaire attached hereto as part of Appendix I. 

SECTION 4.Representations, Warranties and Covenants of the Company.  Except as set forth in the disclosure letter provided to each Purchaser in connection with this Agreement (the “Disclosure Letter”), which Disclosure Letter shall qualify any representation made herein to the extent of the disclosure contained in such Disclosure Letter, the Company hereby represents and warrants to, and covenants with, each Purchaser as follows:

4.1Organization and Qualification.  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and the Company is qualified to do business as a foreign corporation in each jurisdiction in which qualification is required, except where failure to so qualify would not reasonably be expected to have a Material Adverse Effect (as defined herein).

4.2Subsidiaries.  The Company’s subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”) are listed on Exhibit A to this Agreement. Each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and is qualified to do business as a foreign corporation in each jurisdiction in which qualification is required, except where failure to so qualify would not reasonably be expected to have a Material Adverse Effect. 

4.3Reporting Company; Form S‐3.  The Company is not an “ineligible issuer” (as defined in Rule 405 promulgated under the Securities Act) and is eligible to register the Shares for resale by each Purchaser on a registration statement on Form S‐3 under the Securities Act. The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and has filed all reports required thereby during the past twenty-four (24) calendar months.  Provided none of the Purchasers are deemed to be underwriters with respect to any shares, to the Company’s knowledge, there exist no facts or circumstances (including without limitation any required approvals or waivers or any circumstances that may delay or prevent the obtaining of accountant’s consents) that reasonably could be expected to prohibit the preparation and filing of a registration statement on Form S‐3 that will be available for the resale of the Shares by each Purchaser.

4.4Authorized Capital Stock.  The Company has duly authorized and validly issued outstanding capitalization as set forth in its Quarterly Report filed on Form 10-Q with the Securities and Exchange Commission (the “Commission”) on August 10, 2016 as of the date set forth therein. The issued and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities, and conform in all material respects to the description thereof contained in the Form S-3 Registration Statement filed by the Company on March 8, 2013 and amendments thereto (the “2013 Registration Statement”).   The 

 

number of outstanding options to purchase, or other rights to purchase or acquire, shares of Common Stock are set forth in the Company’s Quarterly Report filed on Form 10-Q with the Company on August 10, 2016 as of the date set forth therein. 

4.5Issuance, Sale and Delivery of the Shares.  The issuance and sale of the Shares have been duly authorized by the Company and the Shares, when issued, delivered and paid for in the manner set forth in this Agreement, will be validly issued, fully paid and nonassessable, and will conform in all material respects to the description thereof set forth in the 2013 Registration Statement.  No preemptive rights, commitments, rights of first offer or refusal, anti-dilution rights, rights of participation or any other rights to subscribe for or purchase any shares of Common Stock of the Company exist with respect to the issuance and sale of the Shares by the Company pursuant to this Agreement. No further approval or authority of the Company’s stockholders or the Board of Directors of the Company (the “Board”) will be required for the issuance and sale of the Shares to be sold by the Company as contemplated herein.

4.6Due Execution, Delivery and Performance of the Purchase Agreement.  The Company has full legal right, corporate power and authority to enter into the Purchase Agreement and perform the transactions contemplated hereby.  The Purchase Agreement has been duly authorized, executed and delivered by the Company.  The Purchase Agreement constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights and the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution, including but not limited to, indemnification provisions set forth in Section 7.3 of this Agreement may be limited by federal or state securities law or the public policy underlying such laws.  The execution and performance of the Purchase Agreement by the Company and the consummation of the transactions herein contemplated will not violate any provision of the certificate of incorporation or bylaws of the Company or the organizational documents of any Subsidiary and will not result in the creation of any lien, charge, security interest or encumbrance upon any assets of the Company or any Subsidiary pursuant to the terms or provisions of, or will not conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which any of the Company or any Subsidiary is a party or by which any of the Company or any Subsidiary or their respective properties may be bound or affected and in each case that would reasonably be expected to have a Material Adverse Effect or, any material statute or any authorization, judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other governmental agency or body applicable to the Company or any Subsidiary or any of their respective properties.  No consent, approval, authorization or other order of any court, regulatory body, administrative agency or other governmental agency or body is required for the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement, except for compliance with the blue sky laws and federal securities laws applicable to the offering of the Shares and such as may be required by the bylaws and rules of the National Association of Securities Dealers, Inc. or the New York Stock Exchange.  For the purposes of this Agreement the term “Material Adverse Effect” shall mean the occurrence, either individually or in the aggregate, of any material adverse effect on the earnings, business, 

 

management, properties, assets, rights, operations, condition (financial or otherwise), prospects or results of operations of the Company and its Subsidiaries, taken as a whole, except any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect:  (i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or that are generally applicable to the industry in which the Company operates, to the extent that such effects do not adversely affect the Company in a disproportionate manner to other participants in the industry in which the Company operates, (ii) effects resulting from or relating to the announcement or disclosure of the sale of the Shares or other transactions contemplated by this Agreement (provided that, for the avoidance of doubt, the exception in this clause (ii) shall not apply to “Material Adverse Effect” as used with respect to any representation or warranty herein to the extent that the purpose of such representation or warranty addresses the due execution and delivery or the public announcement hereof), or (iii) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement. 

4.7No Defaults or Consents.  Neither the execution, delivery and performance of the Purchase Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the Shares) will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, except such defaults that individually or in the aggregate would not reasonably be expected to cause a Material Adverse Effect, or require any consent or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which either the Company or its subsidiaries or any of their properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its subsidiaries or violate any provision of the charter or bylaws of the Company or any of its subsidiaries, except for such consents or waivers which have already been obtained and are in full force and effect.

4.8Contracts.  The material contracts to which the Company is a party that have been filed as exhibits to Publicly Filed Reports (as defined herein) have been duly and validly authorized, executed and delivered by the Company and constitute the legal, valid and binding agreements of the Company, enforceable by and against it in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to enforcement of creditors’ rights generally, and general equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be limited by federal or state securities laws and the public policy underlying such laws.

4.9No Actions.  Except as disclosed in the reports publicly filed with the Commission by the Company pursuant to the Securities Act and Exchange Act (collectively, the “Publicly Filed Reports”), there are no legal or governmental actions, suits or proceedings  pending or, to the Company’s knowledge, threatened against the Company or any Subsidiary before or by any court, regulatory body, arbitrator or administrative agency or any other 

 

governmental agency or body, domestic, or foreign, which actions, suits or proceedings, individually or in the aggregate, might reasonably be expected to have a Material Adverse Effect; and no labor disturbance, strike, interruption or slowdown by the employees of the Company exists or, to the Company’s knowledge, is imminent or threatened, that might reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any Subsidiary is a party to or subject to the provisions of any material injunction, judgment, decree or order of any court, regulatory body, administrative agency or other governmental agency or body that might have a Material Adverse Effect. 

4.10Properties.  The Company and each Subsidiary has good and marketable title to all the properties and assets described as owned by it in the financial statements included in the Publicly Filed Reports, that are material to the businesses of the Company and its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances and claims except (i) those, if any, reflected in such financial statements, (ii) those that are not material in amount and do not materially adversely affect the use made and proposed to be made of such property by the Company, and (iii) those that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect would not reasonably be expected. The Company and each Subsidiary holds its leased properties under valid and binding leases, with such exceptions as are not materially significant in relation to its business.  Except as disclosed in the Publicly Filed Reports the Company and any Subsidiary owns or leases all such properties as are necessary to its operations as now conducted.  

4.11No Material Adverse Change.  Except as described in the Publicly Filed Reports, (i) the Company and its Subsidiaries have not incurred any material liabilities or obligations, indirect, or contingent, or entered into any material agreement or other transaction that is not in the ordinary course of business or that could reasonably be expected to result in a material reduction in the future earnings of the Company; (ii) the Company and its Subsidiaries have not sustained any material loss or material interference with their businesses or properties from fire, flood, windstorm, accident or other calamity not covered by insurance; (iii) the Company and its Subsidiaries have not paid or declared any dividends or other distributions with respect to their capital stock and none of the Company or any Subsidiary is in material default in the payment of principal or interest on any outstanding long-term debt obligations; and (iv) there has not occurred any event that has caused or could reasonably be expected to cause a Material Adverse Effect.

4.12Intellectual Property.  The Company owns, is licensed or otherwise possesses all rights to use, all patents, patent rights, inventions, know-how (including trade secrets and other unpatented or unpatentable or confidential information, systems, or procedures), trademarks, service marks, trade names, copyrights and other intellectual property rights (collectively, the “Intellectual Property”) necessary for the conduct of its business as described in the Publicly Filed Reports.  Except as described in the Publicly Filed Reports, no claims have been asserted against the Company by any Person (as defined below) with respect to the use of any such Intellectual Property or challenging or questioning the validity or effectiveness of any such Intellectual Property that could reasonably be expected to cause a Material Adverse Effect.  For purposes of this Agreement, “Person” means any natural person, general or limited partnership, trust, corporation, limited liability company, firm, association, governmental authority or other legal entity.

 

4.13Compliance.  None of the Company nor its Subsidiaries has been advised, nor do any of them have any reason to believe, that it is not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, including, without limitation, all applicable local, state and federal environmental laws and regulations, except where failure to be so in compliance would not have a Material Adverse Effect. 

4.14Taxes.  The Company and each Subsidiary has accurately filed all required federal, state and foreign tax returns and has paid or accrued all taxes shown as due thereon, and none of the Company or any subsidiary has knowledge of a tax deficiency that has been or might be asserted or threatened against it that would reasonably be expected to have a Material Adverse Effect.  All tax liabilities accrued through the date hereof have been adequately provided for in all material respects on the books of the Company.

4.15Transfer Taxes.  On the Closing Date, all stock transfer or other taxes (other than income taxes) that are required to be paid in connection with the sale and transfer of the Shares to be sold to each Purchaser hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.

4.16Investment Company.  The Company is not an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission promulgated thereunder.

4.17Governmental Permits, Etc.  The Company and each Subsidiary has all franchises, licenses, certificates and other authorizations from such federal, state or local government or governmental agency, department or body that are currently necessary for the operation of the business of the Company as currently conducted, except where the failure to possess currently such franchises, licenses, certificates and other authorizations is not reasonably expected to have a Material Adverse Effect.  Except as disclosed in the Publicly Filed Reports, neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such permit that, if the subject of an unfavorable decision, ruling or finding, could reasonably be expected to have a Material Adverse Effect.

4.18Financial Statements.  The financial statements of the Company and the related notes and schedules thereto included in its Publicly Filed Reports fairly present, in all material respects, the financial position, results of operations, stockholders’ equity and cash flows of the Company at the dates and for the periods specified therein.  Such financial statements and the related notes and schedules thereto have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied throughout the periods involved (except as otherwise noted therein) and all adjustments necessary for a fair presentation of results for such periods have been made; provided, however, that the unaudited financial statements are subject to normal year-end audit adjustments (which are not expected to be material) and do not contain all footnotes required under generally accepted accounting principles. As of their respective dates, the Publicly Filed Reports complied in all material respects with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act of 2002.  The financial statements of the Company included (or incorporated by reference) in 

 

the Publicly Filed Reports (including the notes thereto) comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. 

4.19Internal Accounting and Disclosure Controls.  The Company maintains a system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP. The Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

4.20ERISA.  The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (herein called “ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan”; or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”); and each “Pension Plan” for which the Company would have liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

4.21Listing and Maintenance Requirements.  The issued and outstanding shares of Common Stock have been registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of such Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company is in material compliance with the listing and maintenance requirements and any other applicable rules and regulations of the New York Stock Exchange.

4.22Anti-takeover Statutes.  No “control share acquisition,” “fair price,” “moratorium” or other anti-takeover laws enacted under U.S. state or federal law apply to this Agreement or any of the transactions contemplated hereby.  

4.23Brokers and Finders.  No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated hereby.

SECTION 5.Representations, Warranties and Covenants of each Purchaser.  Purchaser represents and warrants to, and covenants with, the Company that:

 

5.1Experience.  (i) Each Purchaser is knowledgeable, sophisticated and experienced in financial and business matters, in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the purchase of the Shares, including investments in securities issued by the Company and comparable entities, has the ability to bear the economic risks of an investment in the Shares; (ii) each Purchaser is acquiring the number of Shares set forth beside its name in Section 2 above for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other Person regarding the distribution of such Shares (this representation and warranty not limiting such Purchaser’s right to sell pursuant to the Registration Statement or in compliance with the Securities Act and the rules and regulations of the Commission promulgated thereunder, or, other than with respect to any claims arising out of a breach of this representation and warranty, the Purchaser’s right to indemnification under Section 7.3); (iii) each Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares, nor will such Purchaser engage in any short sale that results in a disposition of any of the Shares by such Purchaser, except in compliance with the Securities Act and the rules and regulations of the Commission promulgated thereunder and any applicable state securities laws; (iv) each Purchaser will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of the Shares pursuant to the Registration Statement or with the applicable requirements of any exemption from the Securities Act; (v) each Purchaser has completed or caused to be completed the Registration Statement Questionnaire attached hereto as part of Appendix I, for use in preparation of the Registration Statement, and the answers thereto are true and correct, in all material respects, as of the date hereof and will be true and correct, in all material respects, as of the effective date of the Registration Statement and such Purchaser will notify the Company immediately of any material change in any such information provided in the Registration Statement Questionnaire until such time as such Purchaser has sold all of its Shares or until the Company is no longer required to keep the Registration Statement effective; and (vi) each Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act. 

5.2Reliance on Exemptions.  Each Purchaser understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act, the rules and regulations of the Commission promulgated thereunder and state securities laws and that the Company is relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of each Purchaser to acquire the Shares.

5.3Confidentiality.  

(a)Each Purchaser agrees to keep confidential all information concerning this private placement. Each Purchaser acknowledges that it is prohibited from reproducing or distributing this Agreement, or any other offering materials or other information provided by the Company in connection with such Purchaser’s consideration of its investment in the Company, in whole or in part, or divulging or discussing any of their contents, except to its financial, investment or legal advisors in connection with its proposed investment in the Shares. Each Purchaser understands that the federal securities laws impose restrictions on trading based on 

 

material, non-public information. In addition to the above, each Purchaser shall maintain in confidence the receipt and content of any notice of a Suspension (as defined in Section 5.9 below). These confidentiality obligations will terminate upon the earlier of (i) filing by the Company of a press release or press releases and a report or reports pursuant to the Exchange Act describing this offering and/or containing a copy of this Agreement and related materials or (ii) 10 days after the date of this Agreement.  In addition to the above, each Purchaser shall maintain in confidence the receipt and content of any notice of a Suspension (as defined in Section 5.9 below).  The foregoing agreements shall not apply to any information that is or becomes publicly available through no fault of such Purchaser, or that such Purchaser is legally required to disclose; provided, however, that if such Purchaser is requested or ordered to disclose any such information pursuant to any court or other government order or any other applicable legal procedure, it shall, if practicable, provide the Company with prompt notice of any such request or order in time sufficient to enable the Company to seek an appropriate protective order.  

(b)Each Purchaser will not, nor permit of any its Affiliates to, issue any press release or make any other public announcement or disclosure relating to this Agreement without the prior written approval of the Company (such consent not to be unreasonably withheld, conditioned or delayed.  The Company will provide each Purchaser with a reasonable opportunity to review and comment on any press release or other public announcement to be issued by the Company relating to this Agreement prior to the issuance, distribution or publication of such press release or other public announcement.  The term “Affiliate” shall mean 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; provided that (a) the Company and its Subsidiaries will not be deemed an Affiliate of any Purchaser and (b) no Purchaser will be deemed an Affiliate of the Company or its Subsidiaries.  

5.4Investment Decision.  Each Purchaser understands that nothing in the Agreement or any other materials presented to such Purchaser in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice.

5.5Risk of Loss.  Each Purchaser understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of such Purchaser’s investment, and such Purchaser has full cognizance of and understands the risk factors related to such Purchaser’s purchase of the Shares, including, but not limited to, those set forth under the caption “Risk Factors” in the Annual Report on Form 10-K filed by the Company with the Commission on March 11, 2016.  Each Purchaser understands that the market price of the Common Stock has been volatile and that no representation is being made as to the future value of the Common Stock.

5.6Legend.  Each Purchaser understands that, until such time as a Registration Statement has been declared effective or the Shares may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Shares will bear a restrictive legend in substantially the following form:

 

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

5.7Stop Transfer.  The certificates representing the Shares may be subject to a stop transfer order with the Company’s transfer agent that restricts the transfer of such shares except upon receipt by the transfer agent of a written confirmation from each Purchaser to the effect that such Purchaser has satisfied its prospectus delivery requirements.

5.8Residency.  Each Purchaser’s principal executive offices are in the jurisdiction set forth immediately below such Purchaser’s name on the signature pages hereto.

5.9Public Sale or Distribution.

(a)Each Purchaser hereby covenants with the Company not to make any sale of the Shares under the Registration Statement without complying with the provisions of this Agreement and without effectively causing the prospectus delivery requirement under the Securities Act to be satisfied (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule), and such Purchaser acknowledges and agrees that such Shares are not transferable on the books of the Company unless the certificate submitted to the transfer agent evidencing the Shares is accompanied by a separate Purchaser’s Certificate of Subsequent Sale:  (i) in the form of Appendix II hereto, (ii) executed by an officer of, or other authorized person designated by, such Purchaser, and (iii) to the effect that (A) the Shares have been sold in accordance with the Registration Statement, the Securities Act and any applicable state securities or blue sky laws and (B) the prospectus delivery requirement effectively has been satisfied.  Each Purchaser acknowledges that there may occasionally be times when the Company must suspend the use of the prospectus (the “Prospectus”) forming a part of the Registration Statement (a “Suspension”) until such time as an amendment to the Registration Statement has been filed by the Company and declared effective by the Commission, or until such time as the Company has filed an appropriate report with the Commission pursuant to the Exchange Act.  Without the Company’s prior written consent, which consent shall not unreasonably be withheld or delayed, each Purchaser shall not use any written materials to offer the Shares for resale other than the 

 

Prospectus, including any “free writing prospectus” as defined in Rule 405 under the Securities Act.  Each Purchaser covenants that it will not sell any Shares pursuant to such Prospectus during the period commencing at the time when the Company gives such Purchaser written notice of the suspension of the use of such Prospectus and ending at the time when the Company gives such Purchaser written notice that such Purchaser may thereafter effect sales pursuant to such Prospectus.  Each Purchaser shall maintain in confidence the receipt of any notice of suspension. Notwithstanding the foregoing, the Company agrees that no Suspension shall be for a period of longer than 60 consecutive days, no Suspension shall be for a period longer than 90 days in the aggregate in any 365 day period, and the Company will use its reasonable best efforts to minimize the length of any such Suspension.  Each Purchaser further covenants to notify the Company promptly of the sale of all of its Shares.  Following the termination of any Suspension, the Company will promptly notify each Purchaser in writing that the use of the Prospectus may be resumed and will provide each Purchaser with a copy of any amendment to the Registration Statement or supplement to the Prospectus. 

(b)At any time that each Purchaser is an affiliate of the Company, any resale of the Shares that purports to be effected under Rule 144 shall comply with all of the requirements of such rule, including the “manner of sale” requirements set forth in Rule 144(f).

5.10Organization; Validity; Enforcements.  Each Purchaser further represents and warrants to, and covenants with, the Company that (i) such Purchaser has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, (ii) the making and performance of this Agreement by each Purchaser and the consummation of the transactions herein contemplated will not violate any provision of the organizational documents of such Purchaser or conflict with, result in the material breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any material agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which such Purchaser is a party or, any statute or any authorization, judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other governmental agency or body applicable to such Purchaser, (iii) no consent, approval, authorization or other order of any court, regulatory body, administrative agency or other governmental agency or body is required on the part of such Purchaser for the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement, (iv) upon the execution and delivery of this Agreement, this Agreement shall constitute a legal, valid and binding obligation of such Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or the enforcement of creditor’s rights and the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution, including, but not limited to, the indemnification provisions set forth in Section 7.3 of this Agreement, may be limited by federal or state securities laws or the public policy underlying such laws and (v) there is not in effect any order enjoining or restraining such Purchaser from entering into or engaging in any of the transactions contemplated by this Agreement.

 

5.11Short Sales.  During the thirty (30) days prior to the date hereof, each Purchaser has not taken, and prior to the public announcement of the Closing such Purchaser shall not take, any action that has caused or will cause such Purchaser to have, directly or indirectly, sold or agreed to sell any shares of Common Stock, effected any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock. 

SECTION 6.Survival of Agreements; Non-Survival of Representations and Warranties.  Notwithstanding any investigation made by any party to this Agreement, all covenants and agreements made by the Company and each Purchaser herein and in the certificates for the Shares delivered pursuant hereto shall survive the execution of this Agreement, the delivery to such Purchaser of the Shares being purchased and the payment therefor indefinitely or for the shorter period explicitly specified therein.  All representations and warranties, made by the Company and each Purchaser herein and in the certificates for the Shares delivered pursuant hereto shall survive for a period of twelve (12) months following the later of the execution of this Agreement, the delivery to such Purchaser of the Shares being purchased and the payment therefor; provided that the representations and warranties contained in Sections 4.1 (Organization and Qualification), 4.4 (Authorized Capital Stock), 4.5 (Issuance, Sale and Delivery of the Shares), 4.6 (Due Execution, Delivery and Performance of the Agreements), 4.23 (Brokers and Finders) and 5.10 (Organization; Validity; Enforcements) shall survive for the (3) years from the date of this Agreement.

SECTION 7.Registration of the Shares; Compliance with the Securities Act.

7.1Registration Procedures and Expenses.

(a)The Company is obligated pursuant to the Purchase Agreement dated as of August 9, 2016 (the “PEAK6 Purchase Agreement”) between the Company and PEAK6 Investments, L.P. (“PEAK6”) to, within one hundred twenty (120) days of the date of the PEAK6 Purchase Agreement, prepare and file with the Commission the Registration Statement on Form S‐3 relating to the resale of the securities issued to PEAK6.  The Company hereby agrees that it will include on such Registration Statement the Shares issued to each Purchaser (collectively, the “Registrable Securities”) to enable the Purchaser to resell such Shares on the New York Stock Exchange, or the facilities of any national securities exchange on which the Common Stock is then traded or in privately-negotiated transactions.

(b)Notwithstanding anything contained herein, in the event that the Commission or applicable federal securities laws and regulations prohibit the Company from including all of the Registrable Securities requested by each Purchaser to be registered in a registration statement pursuant to Section 7.1(a), then the Company will be obligated to include in such registration statement only such limited portion of the Registrable Securities as is permitted by the Commission or such federal securities laws and regulations; and provided, further, that no securities purchased by PEAK6 pursuant to the PEAK6 Purchase Agreement shall be excluded from the Registration Statement until all Shares purchased by the Purchasers have been excluded.  The Company shall cause the registration of all of the remaining 

 

Registrable Securities to the extent permitted by the Commission or such federal securities laws and regulations at such time that the Company subsequently determines, at its election, to register any of its stock or other securities on a registration statement filed with the Commission (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule 145 of the Securities Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered); provided, however, that no securities purchased by PEAK6 pursuant to the PEAK6 Purchase Agreement shall be excluded from such subsequent registration statement until all Shares purchased by the Purchasers have been excluded. 

(c)A Purchaser may withdraw all or any part of the Registrable Securities from a Registration Statement at any time prior to the effective date of such Registration Statement.

(d)The Company shall:

(i)use its best efforts, subject to receipt of necessary information from each Purchaser, to cause the Commission to declare the Registration Statement effective;

(ii)enter into such customary agreements and take all such other actions as a Purchaser or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of Registrable Securities;

(iii)promptly prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the earliest of (i) two years after the effective date of the Registration Statement or (ii) such time as the Shares become eligible for resale by each of each Purchaser without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act or any other rule of similar effect; provided that, for the avoidance of doubt, in no event shall the Company have any obligation to keep a Registration Statement effective after such time as all of the Shares have been sold pursuant to the Registration Statement or Rule 144;

(iv)furnish to each Purchaser with respect to the Shares registered under the Registration Statement (and to each underwriter, if any, of such Shares) such number of copies of prospectuses and such other documents as such Purchaser may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Shares by such Purchaser;

(v)file documents required of the Company for normal blue sky clearance in states specified in writing by each Purchaser; provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;

 

(vi)bear all expenses in connection with the procedures in this Section 7.1 and the registration of the Shares pursuant to the Registration Statement, other than fees and expenses, if any, of counsel or other advisers to such Purchaser or underwriting discounts, brokerage fees and commissions incurred by such Purchaser, if any in connection with the offering of the Shares pursuant to the Registration Statement; 

(vii)file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof to each Purchaser promptly after filing;

(viii)in order to enable each Purchaser to sell the Shares under Rule 144 to the Securities Act, for so long as any Purchaser Beneficially Owns any Registrable Securities, use its commercially reasonable efforts to comply with the requirements of Rule 144, including without limitation, use its commercially reasonable efforts to comply with the requirements of Rule 144(c)(1) with respect to public information about the Company and to timely file all reports required to be filed by the Company under the Exchange Act;

The Company understands that each Purchaser disclaims being an underwriter, but Purchaser being deemed underwriters shall not relieve the Company of any obligations it has hereunder.  A draft of the proposed form of the questionnaire related to the Registration Statement to be completed by such Purchaser is attached hereto as Appendix I.

7.2Transfer of Shares After Registration.  Each Purchaser agrees that it will not effect any disposition of the Shares that would constitute a sale within the meaning of the Securities Act or pursuant to any applicable state securities laws, (i) if a Registration Statement is effective with respect to the resale of the Shares, except as contemplated in a Registration Statement referred to in Section 7.1 or (ii) if a Registration Statement is not effective with respect to the resale of the Shares, except as otherwise permitted by law, and that it will promptly notify the Company of any changes in the information set forth in the Registration Statement regarding such Purchaser or its plan of distribution.

7.3Indemnification.  For the purpose of this Section 7.3: (i)the term “Purchaser/Affiliate” shall mean any affiliate of a Purchaser, including a transferee who is an affiliate of a Purchaser, and any Person who controls a Purchaser or any affiliate of a Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and (ii) the term “Registration Statement” shall include any preliminary prospectus, final prospectus, free writing prospectus, exhibit, supplement or amendment included in or relating to, and any document incorporated by reference in, any registration statement of the Company which covers any Registrable Securities referred to in Section 7.1.

(a)The Company agrees to indemnify and hold harmless Purchaser and each Purchaser/Affiliate, against any and all losses, claims, damages, liabilities, costs or expenses, joint or several, to which such Purchaser or Purchaser/Affiliates becomes subject, whether under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise, or in respect of any action, audit, examination, investigation, inquiry, proceeding, hearing, litigation, arbitration or suit (including in settlement of any such litigation, if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages, liabilities, costs or expenses (or actions in respect thereof as 

 

contemplated below) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, including any Prospectus, financial statements and schedules, and all other documents filed as a part thereof, as amended at the time of effectiveness of the Registration Statement, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules 430B, 430C or 434, of the Securities Act, or the Prospectus, in the form first filed with the Commission pursuant to Rule 424(b) of the Securities Act, or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required or any amendment or supplement thereto, (ii) the omission or alleged omission to state in any of them a material fact required to be stated therein or necessary to make the statements in any Registration Statement or any amendment or supplement thereto not misleading or in the Prospectus or any amendment or supplement thereto not misleading in light of the circumstances under which they were made, or (iii) any inaccuracy in the representations or warranties of the Company contained in this Agreement, or any failure of the Company to perform its obligations hereunder or under law (in each case, without giving effect to any  “materiality” or “Material Adverse Effect” qualifications), and will promptly reimburse each Purchaser and each Purchaser/Affiliate for any legal and other expenses as such expenses are reasonably incurred by such Purchaser or such Purchaser/Affiliate in connection with investigating, defending or preparing to defend, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable for amounts paid in settlement of any such loss, claim, damage, liability, cost, penalty, fee or action: (x) if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld; (y) in the case of any inaccuracy in the representations or warranties of the Company contained in this Agreement, until (and then only for the amount in excess of) the aggregate amount of such losses, claims, damages, liabilities, costs or fees exceeds $300,000 or (z) to the extent that any such loss, claim, damage, liability, cost or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by or on behalf of each Purchaser expressly for use therein, or (ii) the failure of such Purchaser to comply with the covenants and agreements contained in Sections 5.9 or 7.2 hereof respecting the sale of the Shares, or (iii) the inaccuracy of any representation or warranty made by such Purchaser herein, (iv) any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to such Purchaser prior to the pertinent sale or sales by each Purchaser. 

(b)Each Purchaser will severally, but not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all losses, claims, damages, liabilities, costs or expenses to which the Company, each of its directors, each of its officers who signed the Registration Statement or controlling Person becomes subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, but only if such settlement is effected with the written consent of such Purchaser) insofar as such losses, claims, damages, liabilities, costs or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i) any failure by such Purchaser to comply with the covenants and agreements contained in Sections 5.9 or 7.2 hereof respecting the sale of the Shares or (ii) the inaccuracy of 

 

any representation or warranty made by such Purchaser herein or (iii) any untrue or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements in the Registration Statement or any amendment or supplement thereto not misleading or in the Prospectus or any amendment or supplement thereto not misleading in the light of the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Purchaser expressly for use therein; and such Purchaser will reimburse the Company, each of its directors, each of its officers who signed the Registration Statement or controlling Person for any legal and other expense reasonably incurred by the Company, each of its directors, each of its officers who signed the Registration Statement or controlling Person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that such Purchaser’s aggregate liability under this Section 7 shall not exceed the amount of net proceeds received by such Purchaser on the sale of the Shares pursuant to such Registration Statement. 

(c)Promptly after receipt by an indemnified party under this Section 7.3 of notice of the threat or commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 7.3 promptly notify the indemnifying party in writing thereof, but the omission to notify the indemnifying party will not relieve it from any liability that it may have to any indemnified party for contribution or otherwise under the indemnity agreement contained in this Section 7.3 to the extent it is not materially prejudiced as a result of such failure.  In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party, and the indemnifying party and the indemnified party shall have reasonably concluded, based on an opinion of counsel reasonably satisfactory to the indemnifying party, that there may be a conflict of interest between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying party to such indemnified party of its election to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 7.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, reasonably satisfactory to such indemnifying party, representing all of the indemnified parties 

 

who are parties to such action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party shall not be liable for any settlement of any action without its written consent.  In no event shall any indemnifying party be liable in respect of any amounts paid in settlement of any action unless the indemnifying party shall have approved in writing the terms of such settlement; provided that such consent shall not be unreasonably withheld.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party from all liability on claims that are the subject matter of such proceeding. 

(d)If the indemnification provided for in this Section 7.3 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party under paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages, liabilities, costs or expenses referred to herein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any losses, claims, damages, liabilities or expenses referred to herein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and each Purchaser from the private placement of Common Stock hereunder or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but the relative fault of the Company and each Purchaser in connection with the statements or omissions or inaccuracies in the representations and warranties in this Agreement and/or the Registration Statement that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and each Purchaser on the other shall be deemed to be in the same proportion as the amount paid by such Purchaser to the Company pursuant to this Agreement for the Shares purchased by such Purchaser that were sold pursuant to the Registration Statement bears to the difference (the “Difference”) between the amount such Purchaser paid for the Shares that were sold pursuant to the Registration Statement and the amount received by such Purchaser from such sale.  The relative fault of the Company on the one hand and each Purchaser on the other shall be determined by reference to, among other things, whether the untrue or alleged statement of a material fact or the omission or alleged omission to state a material fact or the inaccurate or the alleged inaccurate representation and/or warranty relates to information supplied by the Company or by such Purchaser and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in paragraph (c) of this Section 7.3, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.  The provisions set forth in paragraph (c) of this Section 7.3 with respect to the notice of the threat or commencement of any threat or action shall apply if a claim for contribution is to be made under this paragraph (d); provided, however, that no additional notice shall be required with respect to any threat or action for which notice has been given under paragraph (c) for purposes of indemnification.  The Company and each Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7.3 

 

were determined solely by pro rata allocation (even if a Purchaser were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph.  Notwithstanding the provisions of this Section 7.3, no Purchaser shall be required to contribute any amount in excess of the amount by which the Difference exceeds the amount of any damages that such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  Each Purchaser’ obligations to contribute pursuant to this Section 7.3 are several and not joint. 

7.4Termination of Conditions and Obligations.  The restrictions imposed by Section 7.2 upon the transferability of the Shares shall cease and terminate as to any particular number of the Shares upon the earlier of (i) the passage of one year from the effective date of the Registration Statement covering such Shares and (ii) at such time as an opinion of counsel satisfactory in form and substance to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act.

7.5Information Available.  The Company, upon the reasonable request of a Purchaser, shall make available for inspection by such Purchaser, any underwriter participating in any disposition pursuant to the Registration Statement and any attorney, accountant or other agent retained by such Purchaser or any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, employees and independent accountants to supply all information reasonably requested by such Purchaser or any such underwriter, attorney, accountant or agent in connection with the Registration Statement.

SECTION 8.Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed by first-class registered or certified airmail, e-mail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows:

(a)if to the Company, to:

 

	
	
	
Spark Networks, Inc.

11150 Santa Monica Boulevard, Suite 600

Los Angeles, CA, 90025

Attention: Robert O’Hare, CFO

Telephone: (310) 893-0550

E-mail: rohare@spark.net

	
with a copy to:

	
Morrison & Foerster LLP

425 Market Street

San Francisco, CA 94105

Attention: Murray A. Indick

Telephone: (415) 268-7096

E-mail: MIndick@mofo.com

 

or to such other person at such other place as the Company shall designate to each Purchaser in writing; and

(b)if to any Purchaser, to:

Lloyd I. Miller, III

3300 South Dixie Highway

Suite 1-365

West Palm Beach, Florida 33405

Telephone: (561) 287-5399 

E-Mail:  info@limadvisory.com

 

with a copy to: 

 

Andrews Kurth LLP 
Ms. Melinda Brunger, Partner
600 Travis, Suite 4200
Houston, TX  77002

Telephone: (713) 220-4305

Email: mbrunger@andrewskurth.com

 

or to such other person at such other place as such Purchaser shall designate to the Company in writing.

SECTION 9.Changes; Waiver.  This Agreement may not be modified or amended, and no provision of this Agreement may be waived, except pursuant to an instrument in writing signed by the Company and each Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding, each future holder of all such securities, and the 

 

Company. No waiver of any default with respect to any provision, condition or requirement of this Agreement will 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 will any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. 

SECTION 10.Headings.  The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

SECTION 11.Severability.  In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

SECTION 12.Governing Law; Venue.  This Agreement is to be construed in accordance with and governed by the federal law of the United States of America and the internal laws of the State of New York without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the parties.  The Company and each Purchaser submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.  The Company and each Purchaser irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

SECTION 13.WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT 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 ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY.

SECTION 14.Remedies.  The Company and each Purchaser agrees that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed by any party in accordance with their specific terms or were otherwise breached by such party.  The Company and each Purchaser accordingly agrees that, in addition to any other remedy to which the parties are entitled at law or in equity, each party is entitled to injunctive relief to prevent breaches of this Agreement by the other party and otherwise to enforce specifically the provisions of this Agreement against the other party.

SECTION 15.Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each 

 

party hereto and delivered to the other parties.  Facsimile signatures shall be deemed original signatures. 

SECTION 16.Entire Agreement.  This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters.  Each party expressly represents and warrants that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement.

SECTION 17.Fees and Expenses.  Except as set forth herein, each of the Company and each Purchaser shall pay its respective fees and expenses related to the transactions contemplated by this Agreement.

SECTION 18.Parties.  This Agreement is made solely for the benefit of and is binding upon each Purchaser and the Company and to the extent provided in Section 7.3, any Person controlling the Company or such Purchaser, the officers and directors of the Company, and their respective executors, administrators, successors and assigns and subject to the provisions of Section 7.3, no other Person shall acquire or have any right under or by virtue of this Agreement. The term “successor and assigns” shall not include any subsequent purchaser, as such purchaser, of the Shares sold to each Purchaser pursuant to this Agreement; provided that a Purchaser may assign and delegate any of its rights and obligations (i) under this Agreement to an Affiliate of such Purchaser if such Affiliate agrees in writing to be bound by the terms of this Agreement and (ii) under Section 7 to any Person that acquires Shares from such Purchaser (other than in a public offering or a sale pursuant to Rule 144) in compliance with the provisions of this Agreement representing more than 1% of the Company’s then outstanding Common Stock if such Person agrees in writing to be bound by the terms of this Agreement (in which case, each Purchaser will have no liability or obligation with respect to the obligations of the assignee hereunder).

SECTION 19.Further Assurances.  Each party agrees to cooperate fully with the other parties and to execute such further instruments, documents and agreements and to give such further written assurance as may be reasonably requested by any other party to evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement.

[Remainder of Page Left Intentionally Blank]

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written.

 

			
	
SPARK NETWORKS, INC.

	
By:
	
/s/ Robert O’Hare 

	
 
	
Name:
	
Robert O’Hare 

	
 
	
Title:
	
CFO 

 

 

 

	
	
Lloyd I. Miller Trust A-4

	
Florida - USA

	
Jurisdiction of Purchaser’s Executive Offices

 

	
By: MILFAM LLC 

	
Its:  Investment Advisor

	
By: /s/ Lloyd I. Miller III 

	
Name:  Lloyd I. Miller III

	
Title:  Manager

	
Address:

	
3300 S. Dixie Highway, Suite 1-365

	
West Palm Beach, FL  33405

	
Telephone: (561) 287-5399

	
Facsimile:  (619) 923-2908

	
E-mail: info@limadvisory.com

 

 

 

	
	
MILFAM II L.P.

	
Florida - USA

	
Jurisdiction of Purchaser’s Executive Offices

 

	
By: MILFAM LLC 

	
Its:  General Partner

	
By: /s/ Lloyd I. Miller III 

	
Name:  Lloyd I. Miller III

	
Title:  Manager

	
Address:

	
3300 S. Dixie Highway, Suite 1-365

	
West Palm Beach, FL  33405

	
Telephone: (561) 287-5399

	
Facsimile: (619) 923-2908

	
E-mail: info@limadvisory.com

 

 

EXHIBIT A

The following are subsidiaries of Spark Networks, Inc.: 

	
 
	
·
	
Spark Networks Limited [England] 

	
 
	
·
	
LOV USA, LLC [Delaware, USA] 

 

The following are subsidiaries of Spark Networks Limited: 

	
 
	
·
	
Spark Networks USA, LLC [Delaware, USA] 

	
 
	
·
	
Spark Networks (Israel) Limited [Israel] 

	
 
	
·
	
JDate Limited [England] 

 

The following are subsidiaries of LOV USA, LLC: 

	
 
	
·
	
HurryDate, LLC [Delaware, USA] 

	
 
	
·
	
MingleMatch, Inc. [Utah, USA] 

	
 
	
·
	
Kizmeet, Inc. [California, USA] 

	
 
	
·
	
Reseaux Spark Canada Ltd. [Quebec, Canada] 

	
 
	
·
	
SocialNet, Inc. [Delaware, USA] 

	
 
	
·
	
SN Events, Inc. [Delaware, USA] 

	
 
	
·
	
SN Holdco, LLC [Delaware, USA] 

	
 
	
·
	
Smooch Labs, Inc. [Delaware, USA]

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