STANDSTILL AGREEMENT

 

This STANDSTILL AGREEMENT (this “Agreement”) is entered into as of this 7th day
of August, 2012, by and among KIT digital, Inc., a Delaware corporation (“KIT”
or the “Company”) and each of the parties listed on the signature pages hereto
as an Investor (each, an “Investor” and collectively, the “Investors”).

 

WHEREAS, Costa Brava Partnership III L.P. and the persons and entities
affiliated with it listed on the signature pages hereto (collectively “Costa
Brava” and each person and entity so identified thereon being a “member of Costa
Brava” or a “Costa Brava member”) are the beneficial owner of approximately 6.9%
of the outstanding shares of Common Stock of KIT;

 

WHEREAS, JEC Capital Partners, LLC and the persons and entities affiliated with
it and/or listed on the signature pages hereto (collectively “JEC” and each
person and entity so identified thereon being a “member of JEC” or a “JEC
member”) are the beneficial owner of approximately 7.7% of the outstanding
shares of Common Stock of KIT; and

 

WHEREAS, the Company, JEC and Costa Brava desire to enter into a global
agreement to resolve certain proceedings, controversies and disputes pertaining
or relating to the Company’s 2012 annual meeting of shareholders, which the
Company agrees to use its commercially reasonable efforts to hold before
December 31, 2012 (the “2012 Annual Meeting”).

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1. Immediate Reconstitution of, and appointment to, Board of Directors. The
Company, JEC and Costa Brava hereby acknowledge and agree that:

 

(a) Effective August 7, 2012, (i) the Company shall expand the size of the board
of directors (the “Board”) to six (6) directors, (ii) Joseph Mullin shall resign
from the Board; (iii) Seth W. Hamot (the “Costa Brava Director”) shall be
appointed to serve as a director, (iv) K. Peter Heiland (the “JEC Director”)
shall be appointed to serve as a director, (v) the JEC Director shall be
appointed a member of the Nominating and Corporate Governance Committee, which
at such time also shall include William Russell and Greg Petersen, and (vi) the
Costa Brava Director shall be appointed a member of the Compensation Committee,
which at such time also shall include Mr. Petersen and Wayne Walker.

 

(b) The Nominating and Corporate Governance Committee (or a duly constituted
subcommittee thereof) (the “Nominating Committee”) of the Board will recommend
for nomination and the Board will nominate each of Mr. Hamot and Mr. Heiland
(collectively, the “Investor Nominees”) for election at the 2012 Annual Meeting
and will recommend a vote for the Investor Nominees and solicit proxies from the
Company’s stockholders for the election of the Investor Nominees at the 2012
Annual Meeting.

 

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(c) The Nominating Committee of the Board will recommend for nomination, and the
Board will nominate each of, the Investor Nominees for election at the 2013
annual meeting of shareholders (the “2013 Annual Meeting”) and any other Later
Election Meeting (as defined below) occurring in 2013 but earlier than the 2013
Annual Meeting and will recommend a vote for the Investor Nominees and solicit
proxies from the Company’s stockholders for the election of the Investor
Nominees at such 2013 Annual Meeting and any such other Later Election Meeting,
provided with respect to each Investor Nominee that he continues to serve on the
Board at the time of the nominations for Director for such meeting. If either
such Investor Nominee is not willing to serve or resigns from the Board after
such nomination, such recommendation need not be made and such proxies need not
be solicited with respect to such Investor Nominee.

 

(d) The size of the Board shall be fixed at six (6), except as determined by a
vote of the Board of Directors.

 

2. 2012 Annual Meeting and Other Election Matters. The Company agrees to use its
commercially reasonable efforts to hold the 2012 Annual Meeting no later than
December 31, 2012. Each member of Costa Brava and each member of JEC agrees to
vote and cause to be voted all the shares which he or it owns as of the record
date, either beneficially or as of record, for the 2012 Annual Meeting in favor
of each of those individuals recommended for nomination as directors by the
Company’s Nominating and Corporate Governance Committee and nominated for
election as director by the Board. At any subsequent annual or special meeting
of stockholders of the Company (or adjournments thereof), with respect to each
matter relating to directors or the election of directors (whether removal,
replacement, or otherwise, and whether at a meeting or through a written
consent), each member of Costa Brava and each member of JEC, to the extent a
Standstill Period (as defined below) is applicable to them, agree to vote and
cause to be voted all shares which he or it owns as of the record date for such
meeting or written consent, either beneficially or as of record, in favor of the
election to the Board of those director nominees recommended by the Board,
against the removal of any directors whose removal is not recommended by the
Board, and all as otherwise recommended by the Board in relation to any matters
relating to directors or the Board, the members of the Board, the size of the
Board, the constitution or composition of the Board, or otherwise relating to
any of the foregoing.

 

3. Settlement Expense Reimbursement. The Company shall remit to JEC an amount
not to exceed $300,000 and to Costa Brava an amount not to exceed $260,000, in
each case in consideration of certain of its costs in connection with the items
described in the Schedules 13D and amendments thereto previously filed by JEC
and Costa Brava, respectively, provided that such amounts are in respect of
documented actual third party out of pocket expenses. The Company will pay such
amounts by wire transfer of immediately available funds to an account designated
in writing by the relevant party no later than 12:00 p.m. (Eastern Time) on the
date which is seven (7) calendar days after the Company’s receipt of the
relevant invoices, together with appropriately detailed backup or a
certification of such costs by such third party, provided to the Company by each
of JEC and Costa Brava in respect of such expenses.

 

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4. Company Representations and Warranties. The Company represents and warrants
to each of JEC and Costa Brava as follows:

 

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has the full power
and authority to execute, deliver and carry out the terms and provisions of this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement; and

 

(b) This Agreement has been duly and validly authorized by the Board, and
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, and no
other proceeding on the part of the Company is necessary to authorize the
execution, delivery and performance of this Agreement.

 

(c) The Company acknowledges that the parties are entering into this single
agreement among all of them in the interest of simplicity.

 

5. Costa Brava Representations and Warranties. Each member of Costa Brava
represents and warrants to the Company as follows:

 

(a) To the extent that a member of Costa Brava is an entity, it is duly
organized, validly existing and in good standing under the laws of the state in
which it was incorporated or organized. It has the full power and authority to
execute, deliver and carry out the terms and provisions of this Agreement, and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement; and

 

(b) This Agreement has been duly and validly authorized by each member of Costa
Brava’s governing bodies, and executed and delivered by each member of Costa
Brava and constitutes its valid and binding obligation, enforceable against each
member of Costa Brava in accordance with its terms, and no other proceeding on
its part is necessary to authorize the execution, delivery and performance of
this Agreement.

 

(c) No Costa Brava member is party to any agreement, arrangement, understanding
or relationship, including any repurchase or similar so-called “stock borrowing”
agreement or arrangement, engaged in, directly or indirectly, whether by means
of derivatives or otherwise, the purpose or effect of which is to mitigate loss
to, reduce the economic risk (of ownership or otherwise) of shares of any class
or series of the Company by, including but not limited to “short” positions in
shares of common stock, “long” puts, “short” calls, “short” forward or swap
positions, manage the risk of share price changes for, or increase or decrease
the voting power of, such Investor with respect to the shares of any class or
series of the Company, or which provides, directly or indirectly, the
opportunity to profit from any decrease in the price or value of the shares of
any class or series of the Company (collectively “Short Interests”).

 

(d) The responses to the questionnaire titled “KIT digital, Inc. Questionnaire -
Candidates for Director” delivered to the Company by the Costa Brava Director
are true and correct in all material respects.

 

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6. JEC Representations and Warranties. Each member of JEC represents and
warrants to the Company as follows:

 

(a) To the extent that a member of JEC is an entity, it is duly organized,
validly existing and in good standing under the laws of the state in which it
was incorporated or organized. It has the full power and authority to execute,
deliver and carry out the terms and provisions of this Agreement, and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement; and

 

(b) This Agreement has been duly and validly authorized by each member of JEC’s
governing bodies, and executed and delivered by each member of JEC and
constitutes its valid and binding obligation, enforceable against each member of
JEC in accordance with its terms, and no other proceeding on its part is
necessary to authorize the execution, delivery and performance of this
Agreement.

 

(c) No JEC member is party to any Short Interests.

 

(d) The responses to the questionnaire titled “KIT digital, Inc. Questionnaire -
Candidates for Director” delivered to the Company by the JEC Director are true
and correct in all material respects.

 

7. Publicity. The Company, JEC and Costa Brava will issue a joint press release
before the financial markets in New York open on August 7, 2012 in the form
attached hereto as Exhibit A (the “Press Release”). Until the Press Release is
issued, the Company, JEC and Costa Brava shall keep the contents of this
Agreement confidential other than as required by law. The Company, on the one
hand, and JEC and Costa Brava, each on the other hand, will each file an 8-K (in
the case of the Company) and a Schedule 13D amendment (in the case of each of
JEC and Costa Brava) announcing this Agreement and attaching this Agreement and
the Press Release as exhibits thereto, all simultaneously with, or promptly
following, the issuance of the Press Release.

 

8. Standstill Agreement.

 

(a) Initial Standstill Periods. Each member of Costa Brava agrees that until
immediately after the 2013 Annual Meeting or such earlier time, after the 2012
Annual Meeting, that the Costa Brava Director ceases to serve on the Board,
neither Costa Brava nor any of its Affiliates or Associates (as such terms are
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) shall, directly or indirectly, in any manner, acting alone or
in concert with others, take any of the actions set forth in Section 8(a)(i)
through 8(a)(xi) below, except as expressly permitted by the Standstill
Exception (as defined in Section 8(c) below) or as otherwise permitted below;
and each member of JEC agrees that until immediately after the 2013 Annual
Meeting or such earlier time, after the 2012 Annual Meeting, that the JEC
Director ceases to serve on the Board, neither JEC nor any of its Affiliates of
Associates shall, directly or indirectly, in any manner, acting alone or in
concert with others, take any of the actions set forth in Section 8(a)(i)
through 8(a)(xi) below, except as expressly permitted by the Standstill
Exception or as otherwise permitted below:

 

(i) nominate or propose any candidates for the Board or seek to change or alter
the composition or size or membership of the Board or the removal or replacement
of any director or call or seek the call of any meeting of stockholders;

 

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(ii) submit a shareholder proposal under Rule 14a-8 of the Securities Exchange
Act of 1934, directly or indirectly, to the Company or seek any referendum or
the like by the shareholders of the Company;

 

(iii) file a proxy or consent statement in opposition to the Company or
otherwise obtain or solicit proxies or consents from any shareholders of the
Company or be a participant in or make any solicitation for a matter relating to
the Board;

 

(iv) enter into any contract, arrangement or understanding with any person
(other than an Affiliate or Associate, subject to the percentage ownership
limitation below, for which K. Peter Heiland (in the event of an Affiliate or
Associate of a JEC member), or for which Seth Hamot (in the event of an
Affiliate or Associate of a Costa Brava member), has and maintains all voting
and investment and other applicable authority or which Affiliate or Associate
signs a joinder to this Agreement agreeing to be bound by all the terms and
conditions hereof as a JEC member or a Costa Brava member as applicable) with
respect to any securities of KIT, including but not limited to any acquisition
of any securities (or beneficial ownership thereof), joint venture, loan or
option agreement, put or call, guarantee of loans, guarantee of profits or
division of losses or profits, it being understood that Costa Brava members’ and
JEC members’ aggregate holdings in KIT’s securities shall not exceed 9.9% and
9.9% beneficial ownership under Section 13(d) of the Exchange Act, respectively,
of the common stock of the Company;

 

(v) commence or enter into any tender offer or exchange offer, merger,
acquisition or other business combination or extraordinary transaction involving
the Company or any of its subsidiaries;

 

(vi) form, join or in any way participate in a “group” (as defined under the
Exchange Act) with respect to the Company or its securities;

 

(vii) otherwise act, alone or in concert with others, to seek to influence the
management, Board or policies of KIT or take any action to seek the removal of
any member of the Board, change the size of the Board, obtain additional
representation on the Board, or take any other action related to the management
or the Board;

 

(viii) disclose any intention, plan, proposal or arrangement or other matter
inconsistent with its obligations under this Section 8(a) (provided that this
clause (viii) shall not prohibit a confidential, non-public disclosure with
respect to the matters for which a waiver may be sought under clause (xi)
below);

 

(ix) effect or seek (including, without limitation, entering into any
discussions, negotiations, agreements or understandings with any third person),
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, or in any way, advise, assist or encourage any other person or
entity in connection with any action which it is prohibited from taking under
this Section 8(a) or which is inconsistent with its obligations under this
Section 8(a) (including via any supporting public statement with respect thereto
or any adverse public statement regarding the Company or the Board or any of its
members);

 

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(x) knowingly take any action which would, or would reasonably be expected to,
force the Company to make a public announcement (or result in the Company making
a public announcement) regarding any of the types of the foregoing matters; or

 

(xi) request, directly or indirectly, any amendment or waiver or modification
of, or deviation from, any provision of this Section 8 (including this sentence)
or any other provision of this Agreement by the Company or any of its agents or
representatives (provided that this clause (xi) shall not prohibit a JEC member
or a Costa Brava member from confidentially requesting from the Board of the
Company an amendment, waiver or modification, or deviation, from this Section 8
to permit the JEC members or the Costa Brava members (respectively) to engage in
a transaction subject to clause (v) above or for them to exceed the ownership
limitation set forth in clause (iv) above).

 

The period of restriction under this Section 8(a) shall be referred to herein as
the “Standstill Period” in relation to the Costa Brava members and the JEC
members (it being understood that the Costa Brava members and the JEC members
may have different Standstill Periods due to the application of this Section 8).

 

(b) Cooling Off Period. In addition to the foregoing (and not in limitation
thereof), for a period of forty-five (45) days from and after the cessation of
service of the Costa Brava Director as a director of the Company, the
restrictions set forth in Section 8(a) shall continue to apply to each Costa
Brava member as to any matter related to the election of directors, the removal
or replacement of directors, the size, constitution or composition of the Board,
or any other matter related to the Board or any director. In addition to the
foregoing (and not in limitation thereof), for a period of forty-five (45) days
from and after the cessation of service of the JEC Director as a director of the
Company, the restrictions set forth in Section 8(a) shall continue to apply to
each JEC member as to any matter related to the election of directors, the
removal or replacement of directors, the size, constitution or composition of
the Board, or any other matter related to the Board or any director. For the
avoidance of doubt, the obligations of the Costa Brava members shall continue in
full force and effect and not be affected by the provisions of this Section 8(b)
in the event of the cessation of service of the JEC Director and the obligations
of the JEC members shall continue in full force and effect and not be affected
by the provisions of this Section 8(b) in the event of the cessation of service
of the Costa Brava Director. The forty-five (45) day period referred to in this
paragraph (b) is sometimes referred to herein as a “Cooling Off Period”
applicable to them. For clarification, during the Cooling Off Period, no member
of JEC and no member of Costa Brava shall, subject to their rights under Section
8(d), publicly disparage the Board, the management of the Company or the
Company.

 

(c) Special Standstill Exception. In addition, notwithstanding anything in this
Section 8 to the contrary, in the event that the Company affirmatively solicits,
after the date hereof, shareholder approval of any Extraordinary Matter (as
defined below), the provisions of Sections 8(a) and (b) above shall not apply
with respect to the Investors’ solicitation in opposition to such Extraordinary
Matter, it being understood that all other provisions of this Agreement shall
continue to apply to all other matters other than the Extraordinary Matter, even
if such other matters are part of the same solicitation as the Extraordinary
Matter. For purposes hereof, an “Extraordinary Matter” shall mean each of (x) a
tender offer or other similar transaction initiated by a third party and (y) a
shareholder approval solicitation initiated by the Company (and not in response
to any solicitation or similar action by any shareholder) for a matter that is
not related to election of directors, removal or replacement of directors, size
or constitution or composition of the Board, or any other Board or director
related matters. For clarification purposes, it is understood and agreed that
Company solicitation of (i) shareholder approval of a merger under the General
Corporation Law of the State of Delaware or (ii) shareholder approval of a
change of control transaction or financing required by Nasdaq’s shareholder
approval rules shall be an Extraordinary Matter. Further, if such a merger or
change of control transaction or financing includes matters with respect to the
Board which would be approved merely by the approval of such merger or change of
control transaction or financing (and not to be considered separately by
shareholders from such merger or change of control transaction or financing),
then such merger, change of control transaction or financing transaction shall
nonetheless still be considered an Extraordinary Matter hereunder. For
clarification purposes, an “Extraordinary Matter” does not include a proxy or
consent solicitation or other action with respect to the election or removal or
replacement of directors, except as set forth in the preceding sentence.

 

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(d) Acting in Capacity as a Director. Nothing in this Section 8 shall in any way
restrict or limit the JEC Director or the Costa Brava Director, in each case
confidentially (and without knowingly causing or leading to a public disclosure
with respect thereto) and solely in his capacity as a member of the Board, from
expressing or advocating for his or her views to the Board, officers of the
Company, any other director, or at Board meetings and by voting on matters
before the Board (or any committee of the Board) in his capacity as a director.
Each of the JEC Director and the Costa Brava Director acknowledge their
fiduciary duties as directors of the Company and that such fiduciary duties
include a duty of confidentiality with respect to the confidential information
of the Company and that such information may not be used as a shareholder or by
any other member of JEC or Costa Brava (as applicable) and shall only be used by
the JEC Director and the Costa Brava Director in his capacity as a director. The
Company represents that each of its current directors has made a substantially
equivalent oral acknowledgement in connection with the parties’ entry into this
Agreement. Notwithstanding any other provision of this Agreement to the
contrary, nothing in this Agreement shall limit or prevent either the JEC
Director or the Costa Brava Director from resigning and stating generally in
connection therewith in a letter or orally to the Board of Directors of the
Company (which to the extent required by applicable rules, will be disclosed by
the Company in an 8-K filing and will be disclosed by JEC or Costa Brava (as
applicable) in a Schedule 13D amendment) (i) that he has a one or more
disagreements with one or more other Board members related to operations,
policies, management, board composition, strategic transactions or the like
(generally disclosing each of such matters, but not the specifics thereof) and
(ii) that he and the other members of JEC or Costa Brava (as the case may be)
may commence or intend to commence a consent solicitation or other election
contest following the end of the Standstill Period or Cooling Off Period, as
applicable, to seek to remedy such disagreement.

 

(e) Affiliates and Related Parties. Each member of Costa Brava shall cause each
of its Affiliates and Associates to abide by the restrictions applicable to such
Affiliates and Associates under this Agreement and by all other provisions of
this Agreement applicable to any member of Costa Brava as if expressly
applicable to such Affiliates and Associates. Each member of JEC shall cause
each of its Affiliates and Associates to abide by the restrictions applicable to
such Affiliates and Associates under this Agreement and by all other provisions
of this Agreement applicable to any member of JEC as if expressly applicable to
such Affiliates and Associates.

 

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(f) Limited Termination of Cooling Off Period. Notwithstanding anything to the
contrary in this Agreement, if the Board shall either (x) amend the Bylaws of
the Company with respect to shareholder nominations of directors for election at
an annual or special meeting of shareholders after the 2012 Annual Meeting (such
annual or special meeting of shareholders at which directors are to be elected
after the 2012 Annual Meeting being referred to as a “Later Election Meeting”)
in a manner adverse to shareholders and in a manner not required by applicable
law or exchange regulation, (y) set the date for an annual meeting which is a
Later Election Meeting as a date more than thirty (30) days different from the
anniversary of the prior year’s annual meeting of shareholders or (z) fail to
nominate and maintain the nomination of the Costa Brava Director and the JEC
Director (in either case if still on the Board) for election at the 2013 Annual
Meeting and any earlier occurring Later Election Meeting in 2013, in the case of
each of clauses (x), (y) and (z) without the approval of the Costa Brava
Director and the JEC Director (in either case if still on the Board), with the
result that the JEC Director or the Costa Brava Director shall not have notice
of the adoption of such amendment, establishment of such 2013 Annual Meeting
date or failure to nominate in sufficient time to permit him to resign from the
Board, abide by the Cooling Off Period, and have at least sixty (60) days to
secure and propose nominees to provide timely notice of such shareholder’s
intent to nominate one or more individuals to the Board under the Bylaws for
such Later Election Meeting, then following the resignation of the JEC Director
or the Costa Brava Director who has not approved such matter in clause (x), (y)
or (z) above, as the case may be, the Cooling Off Period shall not apply (to the
JEC members (in the event of such resignation of the JEC Director) or the Costa
Brava members (in the event of such resignation of the Costa Brava Director)).

  

9. Resignation. Notwithstanding anything to the contrary contained herein or
otherwise, by execution of this Agreement each of the Costa Brava Director and
the JEC Director does hereby irrevocably and automatically tender its
resignation as a director of the Company (which the Board may choose not to
accept) effective, upon the earlier of (i) such time as the aggregate beneficial
ownership of the Common Stock by Costa Brava (in the event of the Costa Brava
Director) or JEC (in the event of the JEC Director) shall be less than 1%
beneficial ownership of the Common Stock by such party, as applicable, as a
whole (as calculated under 13(d)), (ii) after the date hereof such party (or any
of its members hereunder or its Affiliates or Associates) establishes, directly
or indirectly, any Short Interest, and (iii) material breach of this Agreement
by Costa Brava or any of its members or Affiliates or Associates (in the case of
the Costa Brava Director) or JEC or any of its members or Affiliates or
Associates (in the case of the JEC Director) and written notice in respect of
such breach to the applicable director by the Company. Costa Brava and JEC agree
to certify to the Company as to the number of shares of Common Stock
beneficially owned by, and any Short Interest of, such party (and its members
and Affiliates and Associates) at such times and from time to time as reasonably
requested by the Company. From and after the occurrence of the earliest of (i),
(ii) and (iii) above, as to Costa Brava or JEC, the Company shall have no
further obligations under this Agreement as to Costa Brava or JEC, as
applicable. From and after the occurrence of a material breach of this Agreement
by the Company or any director (other than the Costa Brava Director or the JEC
Director), provided that the Company and such director have been given notice
and a reasonable opportunity to cure for matters which can be cured, each of
Costa Brava, JEC and all Costa Brava members and JEC members and each of such
parties’ respective Affiliates and Associates shall have no further obligations
under this Agreement.

 

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10. Specific Performance. Each of the parties acknowledges and agrees that the
other party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each party agrees that, without posting
bond or other undertaking, the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
claim, action, cause of action or suit, whether in contract or tort or
otherwise, whether at law or in equity instituted in accordance with Paragraph
16 below. Each party further agrees that, in the event of an action for specific
performance in respect of such breach, it shall not assert the defense that a
remedy at law would be adequate. The foregoing is in addition to, and not
limitation of, any other remedies available at law or in equity.

 

11. Notice. Any notices, consents, determinations, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

To the Company:

 

KIT digital, Inc.
26 West 17th Street, 2nd Floor
New York, NY 10011
Attention: Chairman of the Board

 

Tel: 646-553-4845
Fax: 212-730-4561
Email: wvrussell@yahoo.com

 

with a copy to:

 

Greenberg Traurig, LLP
77 West Wacker Drive, Suite 2500
Chicago, Illinois 60601
Attention: Peter H. Lieberman
Tel: 312-456-8417
Fax: 312-456-8435
Email: liebermanp@gtlaw.com

 

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To the Investors:

 

Costa Brava Partnership III L.P.
222 Berkeley Street
Boston, MA 02116
Attention: Seth W. Hamot
Tel: 617-595-4400
Email: seth@rrhcap.com

 

with a copy to:

 

Ropes & Gray LLP
800 Boylston Street
Boston, MA 02199
Attention: Jeffrey R. Katz, Esq.
Tel: (617) 951-7072
Fax: (617) 235-0617
Email: jeffrey.katz@ropesgray.com

and

 

JEC Capital Partners, LLC
68 Mazzeo Drive
Randolph, MA 02368
Attention: K. Peter Heiland
Tel: (781) 326-5700
Fax: (781) 326-3004
Email: peter@jeccapital.com

 

with a copy to:

 

Nutter, McClennen & Fish LLP
155 Seaport Blvd.
Boston, MA 02210
Attention: James E. Dawson, Esq.
Tel: 617-439-2623
Fax: 617-310-9623
Email: jdawson@nutter.com

 

12. Amendments and Waivers; Interpretation. No amendment or waiver of any
provision of this Agreement will be valid and binding unless it is in writing
and signed, in the case of an amendment, by the Company, JEC and Costa Brava, or
in the case of a waiver, by the party against whom the waiver is to be
effective. No waiver by any party of any breach or violation or, default under
or inaccuracy in any representation, warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent breach,
violation, default of, or inaccuracy in, any such representation, warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence. No delay or omission on the part of any
party in exercising any right, power or remedy under this Agreement will operate
as a waiver thereof. It is agreed that the JEC Director may bind each other JEC
member hereunder and the Costa Brava Director may bind each other Costa Brava
member hereunder. For avoidance of doubt, nothing herein shall preclude the
Board from itself at any time and from time to time increasing of decreasing the
size of the Board or changing its own composition, provided that such shall not
affect or limit the obligations of the parties hereunder. Each of the parties
has participated in the drafting of this Agreement and this Agreement shall not
be construed against any party hereto as the drafter hereof. As used in this
Agreement, the term including shall mean including without limitation.

 

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13. Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. Nothing in this Section 13 shall
limit the obligations hereunder of any of the parties hereto.

 

14. Counterparts. This Agreement may be executed in any number of counterparts,
which may be exchanged by PDF or facsimile each of which will be deemed an
original, but all of which together will constitute but one and the same
instrument. This Agreement will become effective when duly executed by each
party hereto.

 

15. Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, each party hereto
intends that such provision will be construed by modifying or limiting it so as
to be valid and enforceable to the maximum extent compatible with, and possible
under, applicable law.

 

16. Governing Law. This Agreement, the rights of the parties and all actions
arising in whole or in part under or in connection herewith, will be governed by
and construed in all respects, including validity, interpretation and effect, in
accordance with the laws of Delaware, applicable to contracts executed and to be
performed wholly within such State without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws
of any other jurisdiction. Each party hereto agrees, on behalf of itself and its
Affiliates and Associates, that any actions, suits or proceedings arising out of
or relating to this Agreement or the transactions contemplated hereby will be
brought solely and exclusively in the Chancery Court of the State of Delaware,
or if such court does not accept jurisdiction then any federal court in the
State of Delaware, and the parties agree not to commence any action, suit or
proceeding relating thereto except in such courts, and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
the respective addresses set forth in the notice section hereof will be
effective service of process for any such action, suit or proceeding brought
against any party in any such court. Each party, on behalf of itself and its
Affiliates and Associates, irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby, in the Chancery Court of the
State of Delaware or if such court does not accept jurisdiction then the federal
courts in the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an improper or inconvenient forum.

 

17. Waiver of Jury Trial. To the extent not prohibited by applicable law that
cannot be waived, the parties hereby waive, and covenant that they will not
assert (whether as plaintiff, defendant or otherwise), any right to trial by
jury in any action arising in whole or in part under or in connection with this
agreement or any of the contemplated transactions, whether now existing or
hereafter arising, and whether sounding in contract, tort or otherwise. The
parties agree that any of them may file a copy of this Section with any court as
written evidence of the knowing, voluntary and bargained-for agreement among the
parties irrevocably to waive its right to trial by jury in any proceeding
whatsoever between them relating to this agreement or any of the contemplated
transactions will instead be tried in a court of competent jurisdiction by a
judge sitting without a jury.

 

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18. Termination. If not sooner terminated by mutual agreement of the parties,
this Agreement and the respective obligations of the parties hereunder shall
terminate on the earlier of (x) immediately following the 2013 Annual Meeting
and (y) December 31, 2013.

 

[Next page is the signature page.]

 

12

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as
of the date first written above.

 

 

 

KIT digital, Inc.

 

By: /s/ William V. Russell
Name: William V. Russell
Title: Chairman of the Board

 

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INVESTORS:

 

 

 

COSTA BRAVA MEMBERS:

 

COSTA BRAVA PARTNERSHIP III L.P.

By: Roark, Rearden & Hamot, LLC,
its General Partner

 

By: /s/ Seth W. Hamot
Name: Seth W. Hamot
Title: President

ROARK, REARDEN & HAMOT, LLC

By: /s/ Seth W. Hamot
Name: Seth W. Hamot
Title: President

/s/ Seth W. Hamot

Seth W. Hamot

 

 

 

JEC MEMBERS:

JEC II ASSOCIATES, LLC

By: /s/ K. Peter Heiland
Name: K. Peter Heiland
Title: Manager

JEC CAPITAL PARTNERS LLC

By: /s/ K. Peter Heiland
Name: K. Peter Heiland
Title: Managing Partner

 

 

 

/s/ K. Peter Heiland
K. Peter Heiland

 

 

 

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EXHIBIT A

[Press Release]