Exhibit 10.12

 

 

 

 

 

 

 

 

INVESTOR RIGHTS AGREEMENT

 

BY AND AMONG

 

CURIOSITYSTREAM INC.,

 

HENDRICKS FACTUAL MEDIA, LLC,

 

SOFTWARE ACQUISITION HOLDINGS LLC

 

AND

 

THE INVESTORS SIGNATORY HERETO

 

DATED October 14, 2020

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       1. DEFINITIONS 1       2. REGISTERED OFFERINGS 4       3.
PROCEDURES 8       4. INDEMNIFICATION 12       5. BOARD RIGHTS 14       6.
INFORMATION RIGHTS 17       7. SPONSOR VETO RIGHTS 17       8. RESTRICTIONS ON
TRANSFER 18       9. TERMINATION 19       10. MISCELLANEOUS 19

 

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INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT, dated as of October 14, 2020 (this “Agreement”),
is made and entered into by and among Software Acquisition Group, Inc., a
Delaware corporation (“Parent”), CuriosityStream Inc., a Delaware corporation
and wholly owned subsidiary of Parent (the “Company”), Software Acquisition
Holdings LLC, a Delaware limited liability company (“Sponsor”), Hendricks
Factual Media, LLC, a Delaware limited liability company (“Hendricks”), and each
of the holders of Parent Common Stock (as defined herein) signatory hereto (each
an “Investor” and collectively the “Investors”).

 

RECITALS

 

WHEREAS, pursuant to that Agreement and Plan of Merger, dated as of August 10,
2020 (the “Merger Agreement”), by and among Parent, CS Merger Sub, Inc. (“Merger
Sub”), the Company, and Hendricks, the Company merged with and into Merger Sub
and became a wholly owned subsidiary of Parent (the “Merger”);

 

WHEREAS, in connection with the Merger, the Company Stockholders (as defined in
the Merger Agreement) received shares of Parent Common Stock in exchange for
their shares of Company Common Stock (as defined in the Merger Agreement);

 

WHEREAS, Parent has agreed to file a resale registration statement for the
resale of the Merger Shares (as defined below);

 

WHEREAS, the Sponsor and the Investors are holders of Parent Common Stock; and

 

WHEREAS, Parent has agreed to provide to the Holders and the Sponsor the rights
set forth in this Agreement, subject to the terms and conditions hereof.

 

NOW, THEREFORE, in consideration of the premises and the mutual premises and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,

 

IT IS AGREED as follows:

 

1. DEFINITIONS

 

As used in this Agreement, the following terms shall have the following
meanings:

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under common control with, such
specified Person; provided that for purposes of this Agreement no Holder shall
be deemed to be an Affiliate of any other Holder solely as a result of such
Holder’s ownership of securities in Parent.

 

“Agreement” shall have the meaning set forth in the Preamble hereof.

 

“Board” shall mean the Board of Directors of the Parent.

 

 

 

 

“Business Day” shall mean any day except Saturday, Sunday or any days on which
banks are generally not open for business in New York, New York.

 

“Commission” means the Securities and Exchange Commission.

 

“Company” shall have the meaning set forth in the Preamble hereof.

 

“Company Stockholders” has the meaning given to such term in the Merger
Agreement; provided that, for purposes of this Agreement, each Investor shall be
deemed not to be a Company Stockholder.

 

“Demand Registration” shall have the meaning set forth in Section 2(a)(ii) of
this Agreement.

 

“Exchange” shall have the meaning set forth in Section 5(c) of this Agreement.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or
any corresponding provision of succeeding law) and the rules and regulations
thereunder.

 

“FINRA” shall mean the Financial Industry Regulatory Authority.

 

“Hendricks” shall have the meaning set forth in the Preamble hereof.

 

“Holders” shall mean, collectively, Hendricks and the Investors.

 

“Initial Lock-Up Period” shall have the meaning set forth in Section 7(a) of
this Agreement.

 

“Investor” shall have the meaning set forth in the Preamble hereof.

 

“Liabilities” shall have the meaning set forth in Section 4(a)(i) of this
Agreement.

 

“Lock-Up Period” shall have the meaning set forth in Section 7(b) of this
Agreement.

 

“Maximum Threshold” shall have the meaning set forth in Section 2(c)(i) of this
Agreement.

 

“Merger” shall have the meaning set forth in the Recitals hereof.

 

“Merger Agreement” shall have the meaning set forth in the Recitals hereof.

 

“Merger Shares” means those shares of Parent Common Stock issued to the Company
Stockholders as consideration in the Merger.

 

“Non-Holder Securities” shall have the meaning set forth in Section 2(c)(i) of
this Agreement.

 

“Parent” shall have the meaning set forth in the Preamble hereof.

 

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“Parent Common Stock” means the Class A common stock, par value $0.0001 per
share, of Parent.

 

“Person” shall mean any individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization or other
governmental or legal entity.

 

“Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act and any term sheet filed pursuant
to Rule 434 under the Securities Act), as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of Registrable Securities covered by such Registration Statement and by all
other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus or prospectuses.

 

“Registrable Merger Securities” shall mean at any time all Merger Shares,
including any shares or other securities issued in respect of such Merger Shares
by reason of or in connection with any stock dividend, stock distribution, stock
split, purchase in any rights offering or in connection with any exchange,
conversion or replacement of such Merger Shares or any combination of shares,
recapitalization, merger or consolidation, or any other equity securities of
Parent issued pursuant to any other pro rata distribution with respect to the
Parent Common Stock; provided, however, that such Registrable Merger Securities
shall cease to be Registrable Merger Securities with respect to any Company
Stockholder upon the earliest to occur of (a) when such Registrable Merger
Securities shall have been sold, transferred, disposed of or exchanged by such
Company Stockholder, (b) the date on which such Registrable Merger Securities
can be sold by such Company Stockholder in accordance with Rule 144 without
volume limitations and (c) the date on which such securities shall have ceased
to be outstanding.

 

“Registrable Securities” shall mean at any time all equity securities of Parent
or of any successor of Parent beneficially owned (as such term is defined in
Rule 13d-3 under the Exchange Act) by any Holder, including any and all equity
securities of Parent or of any successor of Parent acquired and held in such
capacity subsequent to the date hereof; provided, however, that such Registrable
Securities shall cease to be Registrable Securities with respect to any Holder
upon the earliest to occur of (a) when such Registrable Securities shall have
been sold, transferred, disposed of or exchanged by such Holder, (b) the date on
which such Registrable Securities can be sold by such Holder in accordance with
Rule 144 without volume limitations and (c) the date on which such securities
shall have ceased to be outstanding.

 

“Registration Statement” means any registration statement of Parent filed with
the Commission under the Securities Act which covers any Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all materials incorporated by
reference or deemed to be incorporated by reference in such Registration
Statement.

 

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“Sale Expenses” shall mean (a) the fees and disbursements of counsel and
independent public accountants for Parent incurred in connection with Parent’s
performance of or compliance with this Agreement, including the expenses of any
special audits or “comfort” letters required by or incident to such performance
and compliance, and any premiums and other costs of policies of insurance
obtained by Parent against liabilities arising out of the sale of any
securities, (b) all filing and stock exchange fees, all fees and expenses of
complying with securities or “blue sky” laws (including any legal investment
memoranda related thereto), all fees and expenses of custodians, transfer agents
and registrars, all printing and producing expenses, messenger and delivery
expenses, (c) expenses relating to any analyst or investor presentations or any
“road shows” undertaken in connection with the marketing or selling of
Registrable Securities, (d) fees and expenses in connection with any review by
FINRA of the underwriting arrangements or other terms of the offering, and all
fees and expenses of any “qualified independent underwriter,” and (e) costs of
any selling agreements and other documents in connection with the offering, sale
or delivery of Registrable Securities; provided, however, that “Sale Expenses”
shall not include any out-of-pocket expenses of any Company Stockholder or
Holder (other than as set forth in clause (b) above), transfer taxes,
underwriting or brokerage commissions or discounts associated with effecting any
sales of Registrable Merger Securities or Registrable Securities that may be
offered, which expenses shall be borne by such Company Stockholder or Holder.

 

“Securities Act” Securities Act of 1933, as amended.

 

“Shelf Registration Statement” shall have the meaning set forth in Section 2(a)
hereof.

 

“Sponsor” shall have the meaning set forth in the Preamble hereof.

 

“Sponsor Designee” shall have the meaning set forth in Section 5(a) of this
Agreement.

 

“Sponsor’s Initial Equity Stake” shall mean all shares of Parent Common Stock,
on an as-converted basis, beneficially owned by the Sponsor on the date of the
consummation of the transactions contemplated by the Merger Agreement.

 

“Suspension Period” shall have the meaning set forth in Section 2(e) of this
Agreement.

 

“Termination Date” shall have the meaning set forth in Section 9(a) of this
Agreement.

 

“Transfer” shall have the meaning set forth in Section 7(a) of this Agreement.

 

“Underwritten Offering” shall mean a sale of securities of Parent to an
underwriter or underwriters for reoffering to the public.

 

2. REGISTERED OFFERINGS

 

(a) Registration Rights.

 

(i) Mandatory Registration. Parent agrees to file with the Commission on or
before January 13, 2020 (the “Filing Deadline”) a shelf Registration Statement
on Form S-1, or such other form under the Securities Act then available to
Parent, providing for the resale of all Registrable Merger Securities pursuant
to Rule 415, from time to time, by the Company Stockholders (a “Mandatory
Registration Statement”). Parent shall use commercially reasonable efforts to
cause such Mandatory Registration Statement to be declared effective by the
Commission as soon as practicable after the filing thereof. The Mandatory
Registration Statement shall provide for the resale from time to time, and
pursuant to any method or combination of methods legally available (including,
without limitation, an Underwritten Offering, a direct sale to purchasers or a
sale through brokers or agents) to the Company Stockholders of any and all
Registrable Merger Securities.

 

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(ii) Demand Registration. So long as Parent does not have an effective Shelf
Registration Statement with respect to the Registrable Securities, any one or
more Holders may request registration under the Securities Act of all or a part
of the Registrable Securities at any time and from time to time. Parent shall,
subject to any Suspension Period, use commercially reasonable efforts to file
with the Commission as promptly as practicable, but not more than thirty (30)
days, following receipt of any such request for Demand Registration one or more
Registration Statements on appropriate form with respect to all such Registrable
Securities (a “Demand Registration Statement”); provided that no such Demand
Registration Statement shall be required to be filed prior to the expiration of
the Initial Lock Up Period. Parent shall use commercially reasonable efforts to
cause such Demand Registration Statement to be declared effective by the
Commission as soon as practicable after the filing thereof. The Demand
Registration Statement shall provide for the resale from time to time, and
pursuant to any method or combination of methods legally available (including,
without limitation, an Underwritten Offering, a direct sale to purchasers, a
sale through brokers or agents or a distribution in kind to the equity owners of
any Holder) to the Holders of any and all Registrable Securities. Under no
circumstances shall Parent be obligated to effect more than two (2) Demand
Registrations in respect of the Registrable Securities of any Investor and its
Affiliates.

 

(iii) Shelf Registration. At any time that Parent is eligible to register the
Registrable Securities on a registration statement on Form S-3, Parent shall use
commercially reasonable efforts to file with the Commission, one or more
registration statements on Form S-3 with respect to the Registrable Securities
and any securities beneficially owned by the Sponsor or its Affiliates under the
Securities Act for the offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act (the “Shelf Registration Statement”). If such
Shelf Registration Statement is not automatically declared effective by the
Commission or does not automatically become effective, Parent shall use its
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the Commission as soon as reasonably practicable after the
filing thereof. The Shelf Registration Statement and any form of prospectus
included therein (or prospectus supplement relating thereto) shall reflect the
plan of distribution or method of sale as any Holder, the Sponsor or any of
their respective Affiliates may reasonably request prior to the effectiveness of
such Shelf Registration Statement.

 

(iv) Underwritten Offerings. Any Holder shall have a right to conduct an
Underwritten Offering pursuant to a Registration Statement with an anticipated
aggregate offering price of at least $30.0 million. If any of the Registrable
Securities covered by the Registration Statement are to be sold in an
Underwritten Offering, the requesting Holders shall have the right to select the
managing underwriter or underwriters by a majority vote of the Registrable
Securities requested to be sold in such Underwritten Offering, subject to
Parent’s consent (not to be unreasonably withheld, conditioned or delayed).

 

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(b) Piggyback Rights.

 

(i) Right to Piggyback. Whenever Parent proposes to pursue an Underwritten
Offering of any shares of Parent Common Stock, whether for its own account or
for the account of one or more of its stockholders, Parent shall give prompt
written notice to the Holders of its intention to pursue such Underwritten
Offering and shall include in such Underwritten Offering all Registrable
Securities with respect to which Parent has received written requests for
inclusion therein within two (2) Business Days after the receipt of Parent’s
notice. Parent may terminate, suspend or postpone the Underwritten Offering at
any time in its sole discretion.

 

(ii) Withdrawal. A Holder may elect to withdraw its request for inclusion of any
Registrable Securities in any Underwritten Offering by giving written notice to
Parent of such request to withdraw prior to the filing of a final Prospectus
with the Commission pursuant to Rule 424 under the Securities Act. Parent
(whether on its own determination or as the result of a withdrawal by a Holder)
may postpone, suspend or terminate such Underwritten Offering at any time prior
to the consummation of such Underwritten Offering without thereby incurring any
liability to any Holder. In the case of any withdrawal by a Holder, Parent shall
not be required to pay any expenses incurred by such Holder in connection with
such Underwritten Offering.

 

(c) Priority.

 

(i) Priority on Secondary Underwritten Offerings. If, in connection with an
Underwritten Offering that is effectuated for the account of stockholders of
Parent, including pursuant to Section 2(a)(iii) hereof, in which Registrable
Securities are included, the managing underwriters of such Underwritten Offering
advise Parent in writing that, in their opinion and in consultation with Parent,
the number of shares of Parent Common Stock, including any Registrable
Securities, requested to be included in such Underwritten Offering exceeds the
number that can be sold in such Underwritten Offering and/or that the number of
Registrable Securities proposed to be included in any such Underwritten Offering
would adversely affect the price per share of Parent’s equity securities to be
sold in such Underwritten Offering (such maximum number of securities or
Registrable Securities, as applicable, the “Maximum Threshold”), the number of
shares of Parent Common Stock to be included in such Underwritten Offering shall
be allocated among the Holders and holders of Non-Holder Securities as follows:
(A) first, the shares comprised of Registrable Securities and the shares of
Parent Common Stock of a holder of Parent’s securities other than Registrable
Securities (“Non-Holder Securities”) that either (1) Parent is obligated to
include pursuant to written contractual rights entered into prior to or on the
date hereof or (2) such other contractual rights governing the applicable
Non-Holder Securities provide that the Holder’s participation rights in such
offering are pari passu with respect to registration cutbacks in the same
fashion as set forth in this clause (A), pro rata, based on the amount of such
Parent Common Stock initially requested to be included by the Holders or holders
of Non-Holder Securities or as such Holder or holders of Non-Holder Securities
may otherwise agree, that can be sold without exceeding the Maximum Threshold;
(B) second, to the extent that the Maximum Threshold has not been reached under
the foregoing clause (A), Non-Holder Securities that Parent is obligated to
include pursuant to written contractual rights entered into after the date
hereof that do not comply with clause (A)(2) above, that can be sold without
exceeding the Maximum Threshold; and (C) third, to the extent that the Maximum
Threshold has not been reached under the foregoing clauses (A) and (B), the
shares of Parent Common Stock or other securities that Parent desires to sell
that can be sold without exceeding the Maximum Threshold.

 

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(ii) Priority on Primary Underwritten Offerings. If, in connection with an
Underwritten Offering that is initiated by Parent primarily for its own account,
the managing underwriters of such Underwritten Offering advise Parent in writing
that, in their opinion and in consultation with Parent, the number of shares of
Parent Common Stock, including any Registrable Securities, requested to be
included in such Underwritten Offering exceeds the Maximum Threshold, the number
of shares of Parent Common Stock to be included in such Underwritten Offering
shall be allocated as follows: (A) first, the shares of Parent Common Stock or
other securities to be sold by Parent; (B) second, the shares comprised of
Registrable Securities and Non-Holder Securities that Parent is obligated to
include pursuant to written contractual rights entered into prior to or on the
date hereof, pro rata, based on the amount of such Parent Common Stock initially
requested to be included by the Holders or holders of Non-Holder Securities or
as such Holders or holders of Non-Holder Securities may otherwise agree, that
can be sold without exceeding the Maximum Threshold; and (C) third, to the
extent that the Maximum Threshold has not been reached under the foregoing
clauses (A) and (B), Non-Holder Securities that Parent is obligated to include
pursuant to written contractual rights entered into after the date hereof, that
can be sold without exceeding the Maximum Threshold.

 

(iii) Block Trades. Notwithstanding the foregoing, if a Holder wishes to engage
in an underwritten block trade off of an effective Registration Statement, such
Holder may notify Parent of the block trade offering no fewer than two (2)
Business Days prior to the day such offering is to commence and Parent shall use
its commercially reasonable efforts to facilitate such offering (which may close
as early as two (2) Business Days after the date it commences); provided that in
the case of such underwritten block trade, only such Holder shall have a right
to notice of and to participate in such offering.

 

(d) Continued Effectiveness. Parent shall use commercially reasonable efforts to
keep any Registration Statement continuously effective for the period beginning
on the date on which such Registration Statement is declared effective and
ending on the date that all of Registrable Securities or Registrable Merger
Securities registered under the Registration Statement cease to be Registrable
Securities or Registrable Merger Securities, as applicable. During the period
that such Registration Statement is effective, Parent shall use commercially
reasonable efforts to supplement or make amendments to the Registration
Statement, if required by the Securities Act or if reasonably requested by
Holder (whether or not required by the form on which the securities are being
registered), including to reflect any specific plan of distribution or method of
sale, and shall use its commercially reasonable efforts to have such supplements
and amendments declared effective, if required, as soon as practicable after
filing.

 

(e) Suspension Period. Notwithstanding any provision of this Agreement to the
contrary, if the Board determines in good faith that any use of a Registration
Statement or Prospectus hereunder involving Registrable Securities or
Registrable Merger Securities:

 

(i) would reasonably be expected to materially impede, delay or interfere with,
or require premature disclosure of, any material financing, offering,
acquisition, disposition, merger, corporate reorganization, segment
reclassification or discontinuance of operations that is required to be
reflected in pro forma or restated financial statements that amends historical
financial statements of Parent, or other significant transaction or any
negotiations, discussions or pending proposals with respect thereto, involving
Parent or any of its subsidiaries, or

 

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(ii) would require, after consultation with counsel to Parent, the disclosure of
material non-public information, the disclosure of which would (x) not be
required to be made if a Registration Statement were not being used and (y)
reasonably be expected to materially and adversely affect Parent, then Parent
shall be entitled to suspend, for not more than sixty (60) consecutive days (a
“Suspension Period”), but in no event (A) more than three (3) times in any
consecutive twelve (12) month period (which periods may be successive) and (B)
for more than an aggregate of ninety (90) days in any rolling twelve (12) month
period, commencing on the date of this Agreement, the use of any Registration
Statement or Prospectus and shall not be required to amend or supplement the
Registration Statement, any related Prospectus or any document incorporated
therein by reference. Parent promptly will give written notice of any such
Suspension Period the Holders and the Company Stockholders.

 

(f) Sale Expenses. Subject to the limitations set forth in Section 2(b)(ii), all
Sale Expenses of any Holder or Company Stockholder incurred in connection with
Section 2 and Section 3 shall be borne by Parent.

 

3. PROCEDURES

 

(a) In connection with the filing of any Registration Statement or sale of
Registrable Securities or Registrable Merger Securities as provided in this
Agreement, Parent shall use commercially reasonable efforts to, as expeditiously
as reasonably practicable:

 

(i) notify promptly the Company Stockholders and Holders and, if requested by a
Company Stockholder or Holder, confirm such advice in writing promptly at the
address determined in accordance with Section 10(e), (A) of the issuance by the
Commission or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, (B) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Securities or Registrable Merger
Securities covered thereby, the representations and warranties of Parent
contained in any underwriting agreement, securities sales agreement or other
similar agreement, if any, relating to the offering cease to be true and correct
in all material respects, (C) of the happening of any event or the discovery of
any facts during the period a Registration Statement is effective as a result of
which such Registration Statement or any document incorporated by reference
therein contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or, in the case of the prospectus, contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (which information
shall be accompanied by an instruction to suspend the use of the Registration
Statement and the prospectus until the requisite changes have been made), (D) of
the receipt by Parent of any notification with respect to the suspension of the
qualification of Registrable Securities or Registrable Merger Securities, for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose and (E) of the filing of a post-effective amendment to such
Registration Statement;

 

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(ii) furnish each Company Stockholder’s or Holder’s legal counsel, if any,
copies of any comment letters relating to such Company Stockholder or Holder
received from the Commission or any other request by the Commission or any state
securities authority for amendments or supplements to a Registration Statement
and prospectus or for additional information relating to such Company
Stockholder or Holder;

 

(iii) use commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as promptly as
practicable;

 

(iv) upon the occurrence of any event or the discovery of any facts, as
contemplated by Section 3(a)(i)(C) and Section 3(a)(i)(D), as promptly as
practicable after the occurrence of such an event, use its commercially
reasonable efforts to prepare a supplement or post-effective amendment to the
Registration Statement or the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Securities or Registrable Merger
Securities, as applicable, such prospectus will not contain at the time of such
delivery any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or will remain so qualified, as
applicable. At such time as such public disclosure is otherwise made or Parent
determines that such disclosure is not necessary, in each case to correct any
misstatement of a material fact or to include any omitted material fact, Parent
agrees promptly to notify the Company Stockholders or Holders, as applicable, of
such determination and to furnish any Company Stockholder or Holder such number
of copies of the prospectus as amended or supplemented, as such Company
Stockholder or Holder may reasonably request;

 

(v) enter into agreements in customary form (including underwriting agreements)
and take all other reasonable and customary appropriate actions in order to
expedite or facilitate the disposition of such Registrable Merger Securities or
Registrable Securities regardless of whether an underwriting agreement is
entered into and regardless of whether the registration is an underwritten
registration, including:

 

(A) for an Underwritten Offering, making such representations and warranties to
the underwriters, if any, in form, substance and scope as are customarily made
by issuers to underwriters in similar Underwritten Offerings as may be
reasonably requested by them;

 

(B) for an Underwritten Offering, obtaining opinions of counsel to Parent and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to any managing underwriter(s) and their counsel)
addressed to the underwriters, if any, covering the matters customarily covered
in opinions requested in Underwritten Offerings and such other matters as may be
reasonably requested by the underwriter(s);

 

(C) for an Underwritten Offering, obtaining “comfort” letters and updates
thereof from Parent’s independent registered public accounting firm (and, if
necessary, any other independent certified public accountants of any subsidiary
of Parent or of any business acquired by Parent for which financial statements
are, or are required to be, included in the Registration Statement) addressed to
the underwriter(s), such letters to be in customary form and covering matters of
the type customarily covered in “comfort” letters to underwriters in connection
with similar Underwritten Offerings;

 

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(D) entering into a securities sales agreement with the Company Stockholder or
Holder(s) and an agent of Company Stockholder or Holder(s) providing for, among
other things, the appointment of such agent for the Holder(s) for the purpose of
soliciting purchases of Registrable Merger Securities or Registrable Securities,
which agreement shall be in form, substance and scope customary for similar
offerings;

 

(E) if an underwriting agreement is entered into, using commercially reasonable
efforts to cause the same to set forth indemnification provisions and procedures
substantially similar to the indemnification provisions and procedures set forth
in Section 4 with respect to the underwriters or, at the request of any
underwriters, in the form customarily provided to underwriters in similar types
of transactions; and

 

(F) delivering such documents and certificates as may be reasonably requested
and as are customarily delivered in similar offerings to the managing
underwriters, if any;

 

(vi) make available for inspection by any underwriter participating in any
disposition pursuant to a Registration Statement, the Company Stockholders’ or
Holders’ legal counsel and any accountant retained by a Company Stockholder or
Holder, all financial and other records, pertinent corporate documents and
properties or assets of Parent reasonably requested by any such Persons
(excluding all trade secrets and other proprietary or privileged information) to
the extent required for the offering, and cause the respective officers,
directors, employees, and any other agents of Parent to supply all information
reasonably requested by any such representative, underwriter, counsel or
accountant in connection with a Registration Statement, and make such
representatives of Parent available for discussion of such documents as shall be
reasonably requested by Parent; provided, however, that the Company
Stockholders’ or Holders’ legal counsel, if any, and the representatives of any
underwriters will use commercially reasonable efforts, to the extent reasonably
practicable, to coordinate the foregoing inspection and information gathering
and to not unreasonably disrupt Parent’s business operations;

 

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(vii) a reasonable time prior to filing any Registration Statement, any
prospectus forming a part thereof, any amendment to such Registration Statement,
or amendment or supplement to such prospectus, provide copies of such document
to the underwriter(s) of an Underwritten Offering of Registrable Securities;
within five (5) Business Days after the filing of any Registration Statement,
provide copies of such Registration Statement to any Holder’s legal counsel upon
request; consider in good faith making any changes requested and make such
changes in any of the foregoing documents as are legally required prior to the
filing thereof, or in the case of changes received from any Holder’s legal
counsel by filing an amendment or supplement thereto, as the underwriter or
underwriters, or in the case of changes received from a Holder’s legal counsel
relating to such Holder or the plan of distribution of Registrable Securities,
as such Holder’s legal counsel reasonably requests prior to the effectiveness of
the applicable Registration Statement; not file any such document in a form to
which any underwriter shall not have previously been advised and furnished a
copy of; not include in any amendment or supplement to such documents any
information about any Holders or any change to the plan of distribution of
Registrable Securities that would limit the method of distribution of
Registrable Securities unless such Holder’s legal counsel has been advised in
advance and has approved such information or change (it being understood that
any Holder that determines not to approve the inclusion of such change or
information that has been specifically requested by the Commission will not have
its Registrable Securities included in such Registration Statement and Parent
shall not be in breach of this Agreement as a result of such exclusion); and
reasonably during normal business hours make the representatives of Parent
available for discussion of such document as shall be reasonably requested by
the Holders’ legal counsel, if any, on behalf of a Holder, Holder’s legal
counsel or any underwriter;

 

(viii) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering at least twelve (12) months which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(ix) cooperate and assist in any filings required to be made with FINRA and in
the performance of any due diligence investigation by any underwriter and its
counsel (including any “qualified independent underwriter” that is required to
be retained in accordance with the rules and regulations of FINRA);

 

(x) if Registrable Securities are to be sold in an Underwritten Offering,
include in the registration statement to be used all such information as may be
reasonably requested by the underwriters for the marketing and sale of such
Registrable Securities; and

 

(xi) in connection with an Underwritten Offering, cause the appropriate officers
of Parent to (A) prepare and make presentations at any “road shows” and before
analysts and (B) use their commercially reasonable efforts to cooperate as
reasonably requested by the underwriters in the offering, marketing or selling
of Registrable Securities.

 

(b) Each Company Stockholder or Holder agrees that, upon receipt of any notice
from Parent of the happening of any event or the discovery of any facts of the
type described in Section 3(a)(i), each Company Stockholder or Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement relating to such Registrable Securities until such
Company Stockholder’s or Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(a)(i), and, if so directed by
Parent, each Company Stockholder or Holder will deliver to Parent (at Parent’s
expense) all copies in such Company Stockholder’s or Holder’s possession, other
than permanent file copies then in such Company Stockholder’s or Holder’s
possession, of the prospectus covering such Registrable Merger Securities or
Registrable Securities at the time of receipt of such notice.

 

(c) Parent may (as a condition to any Holder’s participation in an Underwritten
Offering or Holder’s or Company Stockholder’s inclusion in a Registration
Statement) require each Holder of Registrable Securities or Company Stockholder
of Registrable Merger Securities to furnish to Parent such information regarding
the Company Stockholder or Holder and the proposed distribution by the Company
Stockholder or Holder as Parent may from time to time reasonably request in
writing.

 

11

 

 

4. INDEMNIFICATION

 

(a) Indemnification by Parent. Parent agrees to indemnify and hold harmless each
Company Stockholder and Holder, and the respective officers, directors,
partners, employees, representatives and agents of each Company Stockholder and
Holder, and each Person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) a Company Stockholder
and Holder, as follows:

 

(i) against any and all loss, liability, claim, damage, judgment, actions, other
liabilities and expenses whatsoever (the “Liabilities”), as incurred, arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment or supplement thereto)
pursuant to which Registrable Merger Securities or Registrable Securities were
registered under the Securities Act at the time such Registration Statement
became effective, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom at such date of a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

 

(ii) against any and all Liabilities, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that any such settlement is
effected with the written consent of Parent; and

 

(iii) against any and all expense whatsoever, as incurred (including the fees
and disbursements of counsel chosen by any indemnified party), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under Section 4(a)(i) or Section 4(a)(ii);
provided, however, that the indemnity obligations in this Section 4(a) shall not
apply to any Liabilities (A) to the extent arising out of any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to Parent by any Company
Stockholder or Holder with the understanding that such information will be used
in a Registration Statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto) or (B) to the extent they arise from the use of
any Registration Statement during any Suspension Period.

 

12

 

 

(b) Indemnification by the Company Stockholders and Holders. Company
Stockholders and Holders agree, severally and not jointly, to indemnify and hold
harmless Parent, and each of its respective officers, directors, partners,
employees, representatives and agents and any person controlling Parent, against
any and all Liabilities described in the indemnity contained in Section 4(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Company Stockholder or Holder furnished to Parent by such
Company Stockholder or Holder with the understanding that such information will
be used in the Registration Statement (or any amendment thereto) or such
prospectus (or any amendment or supplement thereto); provided, however, that no
Company Stockholder or Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Company Stockholder or Holder
from the sale of Registrable Merger Securities or Registrable Securities
pursuant to such Registration Statement.

 

(c) Notices of Claims, etc. Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

 

(d) Contribution. If the indemnification provided for in this Section 4 is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any Liabilities referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such Liabilities incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of Parent, on the one hand, and the Company Stockholders or
Holders, on the other hand, in connection with the statements or omissions which
resulted in such Liabilities, as well as any other relevant equitable
considerations.

 

The relative fault of Parent on the one hand and the Company Stockholders or
Holders on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by Parent or a Company Stockholder or Holder and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

 

13

 

 

Parent and each Company Stockholder and Holder agree that it would not be just
and equitable if contribution pursuant to this Section 4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 4. The
aggregate amount of Liabilities incurred by an indemnified party and referred to
above in this Section 4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any 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.

 

For purposes of this Section 4, each Person, if any, who controls a Company
Stockholder or Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Company Stockholder or Holder, and each director of Parent, and each Person, if
any, who controls Parent within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
Parent.

 

5. BOARD RIGHTS

 

(a) Board Designation and Board Observer. Effective as of the Closing (as such
term is defined in the Merger Agreement) and, at the request of the Sponsor, at
any other time at which a Sponsor Designee (as defined below) is not a member of
the Board, Parent shall, at the next annual or special meeting of stockholders
of Parent, as applicable, at which directors are to be elected, nominate for
election to the Board two (2) qualified persons as directors to be chosen by the
Sponsor (each, a “Sponsor Designee”) if the Sponsor so elects. If Parent has a
classified Board of directors at the time of the nomination of any Sponsor
Designee, then each Sponsor Designee shall be nominated for election into the
class of directors whose date of reelection shall be furthest from the date of
nomination. Parent and each of its Affiliates shall take all actions necessary
to cause the Sponsor Designee previously identified by the Sponsor and vetted by
Parent in accordance with Section 5(c) to be appointed to the Board as promptly
as reasonably practicable. Following the Closing, Parent shall take all actions
necessary to cause any Sponsor Designee vetted by Parent in accordance with
Section 5(c) to be included in the slate of nominees recommended by the Board
for election as a director at each applicable annual or special meeting of
stockholders at which directors of the class in which such director serves are
to be elected, and to cause the Sponsor Designee to be nominated for election
and to support election of such Person to the Board. For so long as the Sponsor
and its Affiliates collectively hold at least 50% of the Sponsor’s Initial
Equity Stake, Parent’s obligations under this Section 5 shall survive. Once the
Sponsor and its Affiliates collectively own less than such amount, Parent’s and
its Affiliates’ obligations under this Section 5 shall terminate; provided,
however that Parent and its Affiliates shall not take any action to remove or
replace any Sponsor Designee from the Board until such the normally scheduled
expiration of such Sponsor Designee’s term. If the Sponsor elects not to
nominate a Sponsor Designee at any time or the Sponsor Designee resigns or is
removed and is not replaced or nominated in accordance with and in the timeframe
provided in Section 5(b), the Sponsor may select one (1) non-voting observer to
participate in any Board meeting (including any committee thereof) for so long
as the Sponsor and its Affiliates collectively holds at least 50% of the
Sponsor’s Initial Equity Stake (the “Sponsor Observer”). The Sponsor Observer
shall be bound by the same policies and rules that govern the Board (including
but not limited to confidentiality obligations and trading restrictions).
Additionally, for so long as the Sponsor and its Affiliates collectively holds
at least 50% of the Sponsor’s Initial Equity Stake, the Sponsor may appoint a
Sponsor Observer to the Board at any time a Sponsor Designee is not serving on
the Board, and such appointment will not prejudice in any respect Sponsor’s
right to appoint a successor Sponsor Designee so long as a Sponsor Designee
candidate is timely designated by the Sponsor in accordance with Section 5(b)
and such interim observer right will terminate when such newly designated
Sponsor Designee is elected to the Board.

 

14

 

 

(b) Replacement. Subject to the Certificate of Incorporation of Parent, if a
vacancy occurs because of death, disability, disqualification, resignation or
removal of a Sponsor Designee, Sponsor shall have the right to designate such
Person’s successor in accordance with this Agreement if Sponsor does so within
sixty (60) calendar days of the date that the Sponsor receives notice from
Parent that the departed Sponsor Designee ceased to serve on the Board, subject
to a determination of the Board in good faith, after consultation with outside
legal counsel, that such action would not constitute a breach of its fiduciary
duties or applicable law, or the requirements of any securities exchange on
which Parent’s equity securities are listed, shall take all reasonable actions
necessary to promptly fill the vacancy with such successor Sponsor Designee;
provided, however, that if the Board determines that such action would
constitute a breach of its fiduciary duties or applicable law, Parent shall
promptly notify the Sponsor of the occurrence of such event and permit the
Sponsor to designate an alternate Sponsor Designee to fill such vacancy within
sixty (60) calendar days of receiving such notice.

 

(c) Designee Requirements. Any Sponsor Designee will be subject to Parent’s
customary due diligence process, including its review of a completed customary
questionnaire and a background check. Based on the foregoing, Parent may object
to any proposed Sponsor Designee provided (i) it does so in good faith, and (ii)
such objection is based upon any of the following: (A) such proposed director
does not meet the independence requirements of the Nasdaq Capital Market LLC or
such other national securities exchange on which the Parent Common Stock is
admitted to trading (the “Exchange”), (B) such proposed director was convicted
in a criminal proceeding or is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses), (C) such proposed
director was the subject of any order, judgment, or decree not subsequently
reversed, suspended or vacated of any court of competent jurisdiction,
permanently or temporarily enjoining such proposed director from, or otherwise
limiting, the following activities: (x) engaging in any type of business
practice, or (y) engaging in any activity in connection with the purchase or
sale of any security or in connection with any violation of federal or state
securities laws, (D) such proposed director was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
federal or state authority barring, suspending or otherwise limiting for more
than 60 days the right of such person to engage in any activity described in
clause (B)(y), or to be associated with persons engaged in such activity, (E)
such proposed director was found by a court of competent jurisdiction in a civil
action or by the Commission to have violated any federal or state securities
law, and the judgment in such civil action or finding by the Commission has not
been subsequently reversed, suspended or vacated, (F) such proposed director was
the subject of, or a party to any federal or state judicial or administrative
order, judgment, decree, or finding, not subsequently reversed, suspended or
vacated, relating to a violation of any federal or state securities laws or
regulations or (G) such proposed director does not meet the qualifications for
directors established in good faith by Parent’s corporate governance and
nominating or similar committee. In the event the Board reasonably finds the
proposed director to be unsuitable based upon one or more of the foregoing
clauses (A) through (F) and reasonably objects to the identified director, the
Sponsor shall be entitled to propose a different nominee to the Board within 30
calendar days of Parent’s notice to the Sponsor of its objection to the proposed
Sponsor Designee and such nominee shall be subject to the review process
outlined above.

 

15

 

 

(d) Holder Obligations. Each Holder and each of their respective Affiliates
agree to vote (at any annual meeting of the stockholders of Parent or special
meeting of the stockholders of Parent) all securities entitled to vote in the
election of directors then beneficially owned (whether so beneficially owned as
of the date hereof or hereafter acquired) in favor of, or otherwise to consent
to the election or appointment of a Sponsor Designee, as applicable.

 

(e) Subsidiary Boards. Parent shall take all necessary action to cause the
Sponsor Designee, if any (or any Person designated by the Sponsor Designee) at
the request of such Sponsor Designee to be elected to the board of directors (or
similar governing body) of each material operating subsidiary of Parent. The
Sponsor Designee or the Sponsor Observer, as applicable, shall have the right to
attend (in person or remotely) any meetings of the board of directors (or
similar governing body or committee thereof) of each subsidiary of Parent.

 

(f) Board Committees. Unless otherwise agreed in writing by the Sponsor, subject
to applicable law and applicable Exchange rules, Parent shall take all necessary
action to cause the Sponsor Designee, if any, to be appointed to any one or more
of the standing committees of the Board of the Sponsor’s choosing; provided that
if the Sponsor shall request appointment of Sponsor Designee to the Audit
Committee of the Board, the Sponsor Designee must satisfy any independence
requirements of the Exchange and the Commission and have the financial knowledge
to serve on the Audit Committee required by applicable rules and regulations of
the Exchange and the Commission, as determined in good faith by the Board, but
shall not be required to be an “audit committee financial expert” as such term
is defined by the Commission. The Sponsor Designee or Sponsor Observer, as
applicable, shall have the right to attend (in person or remotely) any meetings
of any committee of the Board and receive any materials provided to any
committee of the Board, unless, in the case of a Sponsor Observer, the Board
determines in good faith that there is a conflict or such Sponsor Observer’s
presence or receipt of materials would reasonably be expected to impact the
privileged nature of any matter being discussed.

 

(g) Compensation, Indemnification and Insurance. At the discretion of Sponsor,
the Sponsor Designee, if any, shall be entitled to the same retainer, equity
compensation or other fees or compensation, including travel and expense
reimbursement, paid to the non-employee directors of Parent for their services
as a director, including any service of any committee of the Board. Parent shall
reimburse any reasonable commercial travel and expenses incurred by the Sponsor
Observer, if any, in connection with attending any meetings of the Board, any
committee of the Board, or any board of directors (or similar governing body) of
any subsidiary of Parent. For so long as any Sponsor Designee continues to serve
as a director or any Sponsor Observer continues to act as a non-voting observer,
and for a period of six (6) years thereafter (or, if longer, the period of time
set forth in Parent’s Certificate of Incorporation), Parent shall, to the extent
permitted by applicable law, indemnify such Sponsor Designee or Sponsor Observer
and shall include such persons for coverage under any directors’ and officers’
liability insurance policies maintained by it to the same extent it now
indemnifies and provides insurance for the nonexecutive members of the Board. In
all directors’ and officers’ insurance policies, each Sponsor Designee and
Sponsor Observer shall be covered as an insured in such a manner as to provide
such Sponsor Designee or Sponsor Observer with rights and benefits under such
insurance policies no less favorable than provided to the other non-executive
directors of Parent. The Sponsor Designee or Sponsor Observer, as applicable
shall be permitted to participate in any meeting of the Board, any committee of
the Board, or any board of directors (or similar governing body) of any
subsidiary of Parent via teleconference.

 

(h) Board Observer. Parent shall provide the Sponsor Observer, if any, with
copies of all notices, minutes, consents, and other materials that it provides
to the members of the Board, any committee of the Board, or any board of
directors (or similar governing body) of any subsidiary of Parent, at the same
time and in the same manner as provided to such members.

 

16

 

 

6. INFORMATION RIGHTS

 

(a) Right to Information. From and after the date hereof and until the Sponsor
and its Affiliates collectively no longer hold at least 50% of Sponsor’s Initial
Equity Stake, the Sponsor shall be entitled to receive any information received
by the Sponsor Designee or Sponsor Observer, as applicable; provided, however,
that the Sponsor shall not be entitled to receive information provided to the
Sponsor Designee or Sponsor Observer, as applicable, if the Board (or committee
thereof) determines in good faith, based on the advice of Parent counsel, that
such omission may be necessary in order to preserve Parent’s attorney-client
privilege, and the Sponsor shall not be entitled to receive, and Parent may
screen the Sponsor Designee and the Sponsor Observer from, information related
to any matter that involves any dispute, transaction or contract negotiation,
amendment or modification, or other situation that involves a direct conflict of
interest between Parent and/or one or more of its subsidiaries, on the one hand,
and Sponsor and/or one or more of its Affiliates, on the other hand, due to such
persons being on opposite sides of such dispute, transaction or contract
negotiation, amendment or modification or other situation. Any such information
may be provided to the Sponsor by Parent or the Sponsor Designee or Sponsor
Observer, as applicable. The Sponsor, in its sole discretion, may decline to
receive such information upon written notice to Parent.

 

(b) Confidentiality. Sponsor shall maintain the confidentiality of any
confidential and proprietary information of Parent (“Proprietary Information”)
using the same standard of care as it applies to its own confidential
information, except for any Proprietary Information which is publicly available
or a matter of public knowledge generally. Nothing herein shall prevent the
Sponsor from (i) using Proprietary Information to enforce its rights under this
Agreement or the rights granted to it as a holder of Parent Common Stock
contained in Parent’s Certificate of Incorporation; (ii) disclosing Proprietary
Information to Sponsor’s attorneys, accountants, consultants, and other
professionals, to the extent necessary to obtain their services in connection
with monitoring and managing the Sponsor’s investment in Parent so long as such
professionals are obligated to maintain the confidentiality of the same; (iii)
disclosing a summary of Proprietary Information as to the performance of Parent
to the Sponsor’s investment professionals that are bound by appropriate trading
policies, or the Sponsor’s co-investors, provided that such recipients are
subject to standard confidentiality obligations with respect to such information
no less protective of Parent’s interests than this Section 6(b) and Sponsor
shall not waive such confidentiality obligations of co-investor recipients with
respect to such information; and (iv) disclosing Proprietary Information as may
otherwise be required by law, if the Sponsor promptly notifies Parent of such
disclosure and takes reasonable steps to minimize the extent of any such
required disclosure. The foregoing shall not be considered Proprietary
Information and shall not prohibit the use by Sponsor of any such information
received pursuant to this Section 6(b) if and solely to the extent such
information (w) is or becomes generally available to or known by the public
other than as a result of a breach of the confidentiality provisions of this
Agreement, including the confidentiality obligations as required by this
Agreement that apply to Persons not party to this Agreement to whom Sponsor has
disclosed such information as permitted hereunder, (x) was available to Sponsor
or its Affiliates, a Sponsor Designee or a Sponsor Observer, as applicable,
prior to Parent’s disclosure to any such person, (y) is or becomes available to
Sponsor or its Affiliates, a Sponsor Designee or a Sponsor Observer, as
applicable, from a source other than Parent, or (z) has already been, or is
hereafter, independently developed by Sponsor without reference to,
incorporation of or other use of the Proprietary Information; provided, however,
that, in the case of clauses (x) and (y), such information was not known to the
Sponsor, a Sponsor Designee or a Sponsor Observer, as applicable, to be
disclosed by the source of such information in violation of a confidentiality
obligation (whether by agreement, duty or otherwise) to Parent with respect to
such information.

 

(c) Material Non-Public Information. Sponsor hereby acknowledges that it is
aware that the United States securities laws prohibit any person who has
material, non-public information concerning a company from purchasing or selling
securities of such company or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities. Notwithstanding anything
to the contrary in this Agreement, the parties acknowledge and agree that the
purpose of this Section 6 is to protect the confidential nature of the
Proprietary Information, and not to restrict the Sponsor’s or its Affiliates
abilities to trade in securities or financial instruments of any issuer (whether
physical or derivative, including any OTC derivative or other instrument
referencing such security or financial instrument).

 

(d) Use of Proprietary Information. Sponsor agrees that it may only use the
Proprietary Information delivered pursuant to Section 6(a) to evaluate and
manage its investment in Parent and not for any other purpose.

 

7. SPONSOR VETO RIGHTS

 

Prior to the later to occur of (a) the date that Sponsor and its Affiliates
collectively beneficially own less than 50% of the Sponsor’s Initial Equity
Stake and (b) the date that the last Sponsor Designee resigns or is fails to be
reelected to the Board, neither Parent nor any of its Affiliates shall take, or
be permitted to take, any action, whether as a single transaction or a series of
related transactions, without the prior written consent of Sponsor, to make any
change in or amendment to its Certificate of Incorporation or bylaws that (i)
has a disproportionate impact on the Parent Common Stock or rights with respect
thereto held by the Sponsor relative to the Parent Common Stock held by Parent’s
other holders of Parent Common Stock or (ii) conflicts with or has the effect of
restricting in any manner the Sponsor’s and its Affiliates’ rights under this
Agreement.

 

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8. RESTRICTIONS ON TRANSFER

 

(a) Initial Lock-up Period. Prior to one hundred and eighty (180) days following
the date hereof (the “Initial Lock-Up Period”), each Holder agrees, severally
and not jointly, that it will not directly or indirectly sell, transfer, pledge,
hypothecate, encumber, assign or otherwise dispose of (“Transfer”) any of
Holder’s Parent Common Stock; provided that any shares of Parent Common Stock
acquired in connection with a Primary PIPE Investment (as defined in the Merger
Agreement) shall not be subject to the Initial Lock-Up Period. For the purposes
of this Section 8(a) and Section 8(b), the following shall not be considered a
Transfer:

 

(i) transfers of shares of Parent Common Stock (i) as a bona fide gift or gifts,
(ii) by will, other testamentary document or intestate succession to the legal
representative, heir, beneficiary or a member of the immediate family of the
Holder or (iii) by operation of law, such as pursuant to a qualified domestic
order or as required by a divorce settlement;

 

(ii) the establishment of a trading plan pursuant to Rule 10b5-1 promulgated
under the Exchange Act, provided that (i) such plan does not provide for the
transfer of Parent Common Stock or any securities convertible into or
exercisable or exchangeable for Parent Common Stock during the Initial Lock-Up
Period and (ii) no filing or public announcement under the Exchange Act or
otherwise is required or voluntarily made by or on behalf of the Holder or
Parent in connection with the establishment of such plan;

 

(iii) if the Holder is a corporation, limited liability company, partnership,
trust or other entity, transfers to its stockholders, members, partners or trust
beneficiaries as part of a distribution, or to any corporation, partnership or
other entity that is its affiliate;

 

(iv) transfers to Parent in connection with the “net” or “cashless” exercise of
options or other rights to purchase shares of Parent Common Stock granted
pursuant to an equity incentive plan, stock purchase plan or other arrangement
in satisfaction of any tax withholding obligations through cashless surrender or
otherwise, provided, that any shares of Parent Common Stock issued upon exercise
of such option or other rights shall remain subject to the terms of this
Agreement; and

 

(v) pledges in a bona fide transaction that are in effect as of the date hereof
to a lender to the Holder, as set forth on Schedule I;

 

provided, that in each transfer pursuant to clauses (i), (iii) and (v), the
transferee agrees to be bound in writing by the terms of this Section 8(a) prior
to such transfer and such transfer shall not involve a disposition for value;
and provided further, that in each transfer pursuant to clauses (i), (iii), and
(iv), no filing or public announcement under the Exchange Act or otherwise is
required or voluntarily made by any party in connection with such transfer. For
purposes of this Agreement, “immediate family” shall mean any relationship by
blood, marriage, domestic partnership or adoption, not more remote than first
cousin.

 

(b) Subsequent Lock-up Periods. In connection with any Underwritten Offering of
equity securities of Parent, each Holder shall not Transfer any Registrable
Securities (other than those Registrable Securities included in such
Underwritten Offering pursuant to this Agreement), without the prior written
consent of Parent, during the seven days prior to and up to ninety (90) days
following the date of pricing of such Underwritten Offering (the “Lock-Up
Period”), except in the event the underwriters managing the Underwritten
Offering otherwise agree by written consent. Each Holder agrees to execute a
lock-up agreement in favor of the underwriters to such effect (in each case on
substantially the same terms and conditions as all such holders) and, in any
event, that the underwriters in any Underwritten Offering shall be third party
beneficiaries of this Section 7(b); provided that such Holder shall only be
required to be subject to the Lock-Up Period and execute such lock-up if and to
the extent the other Holders and the directors and executive officers of Parent
have executed a lock-up on terms at least as restrictive with respect to the
relevant Underwritten Offering.

 

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9. TERMINATION

 

(a) Survival. The rights of the Holders under this Agreement shall terminate in
accordance with the terms of this Agreement and in any event, upon the date that
each such party holds no Registrable Securities (the “Termination Date”).
Notwithstanding the foregoing, the obligations of the parties under Section 4 of
this Agreement shall remain in full force and effect following such time. The
rights of the Sponsor under this Agreement shall terminate in accordance with
the terms of this Agreement and in any event, upon the later to occur of (a) the
date that Sponsor and its Affiliates collectively beneficially own less than 50%
of the Sponsor’s Initial Equity Stake and (b) the date that the last Sponsor
Designee resigns or is fails to be reelected to the Board.

 

10. MISCELLANEOUS

 

(a) Covenants Relating To Rule 144. For so long as Parent is subject to the
reporting requirements of Section 13 or 15 of the Securities Act, Parent
covenants that it will file the reports required to be filed by it under the
Securities Act and Section 13(a) or 15(d) of the Exchange Act and the rules and
regulations adopted by the Commission thereunder. If Parent ceases to be so
required to file such reports, Parent covenants that it will upon the request of
a Holder, the Sponsor, or any of their respective Affiliates, to the extent such
information is required for such Person to sell Parent securities (i) make
publicly available such information as is necessary to permit sales pursuant to
Rule 144 under the Securities Act, (ii) deliver such information to a
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the Securities Act and it will take such further action as any Holder may
reasonably request, and (iii) take such further action that is reasonable in the
circumstances, in each case, to the extent required, from time to time, to
enable a Holder to sell its Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (A) Rule
144 under the Securities Act, as such Rule may be amended from time to time, (B)
Rule 144A under the Securities Act, as such rule may be amended from time to
time, or (C) any similar rules or regulations hereafter adopted by the
Commission.

 

(b) Upon the request of a Holder, the Sponsor, or any of their respective
Affiliates, Parent will deliver to such Person a written statement as to whether
it has complied with such requirements of the Securities Act and the Exchange
Act, a copy of the most recent annual and quarterly report(s) of Parent, and
such other reports, documents or stockholder communications of Parent, and take
such further actions consistent with Section 10(a), as such Person may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such Person to sell any such Registrable Securities without
registration.

 

19

 

 

(c) No Inconsistent Agreements. Parent has not entered into, and Parent will not
after the date of this Agreement enter into, any agreement which is inconsistent
with the rights granted to the Holders and the Sponsor pursuant to this
Agreement or otherwise conflicts with the provisions of this Agreement. The
rights granted to each Holder and the Sponsor hereunder do not and will not for
the term of this Agreement in any way conflict with the rights granted to the
holders of Parent’s other issued and outstanding securities under any such
agreements.

 

(d) Amendments and Waivers. The provisions of this Agreement may be amended or
waived at any time only by the written agreement of Parent, the Sponsor and the
Holders owning a majority in voting power of the Registrable Securities. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder, the Sponsor and Parent. No failure to exercise, or delay in
exercising, any right, remedy, power or privilege.

 

(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, registered first-class
mail, facsimile, e-mail transmission or any courier guaranteeing overnight
delivery: (i) if to a Holder, at the most current address given by such Holder
to Parent by means of a notice given in accordance with the provisions of this
Section 10(e); (ii) if to Sponsor, to 1980 Festival Plaza Drive, Ste. 300, Las
Vegas, Nevada 89135, Attention: Jonathan Huberman; and (iii) if to Parent, to
8484 Georgia Avenue, Suite 700, Silver Spring, Maryland 20910. All such notices
and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; two (2) Business Days after being
deposited in the mail, postage prepaid, if mailed; when delivered in the local
time of the recipient, if sent by facsimile or e-mail (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party) and on the next Business Day if timely delivered to an air
courier guaranteeing overnight delivery.

 

(f) Successor and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors of Parent, the Sponsor and each Holder. Other than
with respect to registration rights provided hereunder which may be assigned by
a Holder to its Affiliates, no party can assign its rights under this Agreement
without the prior written consent of the other parties.

 

(g) Specific Enforcement. Without limiting the remedies available to each of the
parties hereto, each party acknowledges that any failure by any party to comply
with its obligations this Agreement may result in material irreparable injury to
the other parties for which there is no adequate remedy at law, that it would
not be possible to measure damages for such injuries precisely and that, in the
event of any such failure, each party may obtain such relief as may be required
to specifically enforce Parent’s, the Sponsor’s or any Holder’s obligations
under this Agreement.

 

20

 

 

(h) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(i) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE.

 

(k) Dispute Resolution. The parties (a) hereby irrevocably and unconditionally
submit to the jurisdiction of the state courts of Delaware and to the
jurisdiction of the United States District Court for the District of Delaware
for the purpose of any suit, action or other proceeding arising out of or based
upon this Agreement, (b) agree not to commence any suit, action or other
proceeding arising out of or based upon this Agreement except in the state
courts of Delaware or the United States District Court for the District of
Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court.

 

(l) WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
SECURITIES OR THE SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN
FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE
SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

 

(m) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

 

[SIGNATURE PAGE FOLLOWS]

 

21

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.

 

  SOFTWARE ACQUISITION GROUP, INC.         By: /s/ Jonathan Huberman   Name: 
Jonathan Huberman   Title: Chairman, CEO & CFO         CURIOSITYSTREAM INC.    
    By: /s/ Clint Stinchcomb   Name: Clint Stinchcomb   Title: President and
Chief Executive Officer         SOFTWARE ACQUISITION HOLDINGS LLC         By:
/s/ Jonathan Huberman   Name: Jonathan Huberman   Title: Chairman, CEO & CFO    
    HENDRICKS FACTUAL MEDIA LLC         By: /s/ John Hendricks   Name: John
Hendricks   Title: Manager

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ John Hendricks   John Hendricks       Address for Notice:
  8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Clint Stinchcomb   Clint Stinchcomb       Address for
Notice:   8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Matthew Blank   Matthew Blank       Address for Notice:  
8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Elizabeth Hendricks   Elizabeth Hendricks       Address
for Notice:   8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Patrick Keeley   Patrick Keeley       Address for Notice:
  8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Tia Cudahy   Tia Cudahy       Address for Notice:   8484
Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

  INVESTOR:       /s/ Jason Eustace   Jason Eustace       Address for Notice:  
8484 Georgia Ave., Suite 700,   Silver Spring, MD 20910

 

[Signature Page to Investor Rights Agreement]