Document:

10.1

Exhibit 10.1

DEALER-MANAGER AGREEMENT

November 30, 2016

Monarch Capital Group, LLC

As Dealer-Manager

500 Fifth Avenue, Suite 2240

New York, NY 10110

Ladies and Gentlemen:

The following will confirm our agreement relating to the proposed subscription rights offering (the “Rights Offering”) to be undertaken by RMG Networks Holding Corporation, a Delaware corporation (the “Company”), pursuant to which the Company will distribute to holders of record of its common stock, par value $0.0001 per share (the “Common Stock”), subscription rights (the “Rights”) as set forth in the Prospectus Supplement to be filed on or about November 30, 2016 to the Company’s Form S-3 shelf registration statement (File No. 333-214043) first filed with the U.S. Securities and Exchange Commission (the “Commission”) on October 11, 2016, as amended, to subscribe for and purchase shares of Common Stock (the “Rights Shares”), at a subscription price equal to $0.62 per share in cash (the “Subscription Price”).

1.

The Rights Offering.

(a)

The Company proposes to undertake the Rights Offering pursuant to which each holder of Common Stock shall receive 0.20991 of a Right for each share of Common Stock held of record at the close of business on November 29, 2016 (the “Record Date”). Holders of Rights will be entitled to subscribe for and purchase, at the Subscription Price, one share of Common Stock for every Right granted to Holders on the Record Date (the “Basic Subscription Right”). 

(b)

The Rights shall be non-transferable. The Rights Shares are expected to be listed on the Nasdaq Capital Market (the “NasdaqCM”) and shall be transferable in accordance with applicable state “blue sky” laws, rules and regulations. 

(c)

Any holder of Rights who fully exercises all Basic Subscription Rights issued to such holder is entitled to subscribe for Rights Shares which were not otherwise subscribed for by others pursuant to their Basic Subscription Rights (the “Over-Subscription Right”). The Over-Subscription Right shall allow a holder of a Right to subscribe for an additional amount equal to any and all of the Rights Shares which were not otherwise subscribed for as of the Expiration Date (as defined below). Rights Shares acquired pursuant to the Over-Subscription Rights are subject to allotment and certain limitations (including the allocation of certain Rights Shares not subscribed for pursuant to the Basic Subscription Right to certain standby purchasers)and pro rata allocation, as more fully discussed in the Prospectus (as defined herein).

(d)

The Rights will expire at 5:00 p.m., New York City time, on December 22, 2016, (the “Expiration Date”). The Company shall have the right to extend the Expiration Date for up to an additional 30 trading days in its sole discretion. 

(e)

All funds from the exercise of Basic Subscription Rights and Over-Subscription Rights will be deposited with Broadridge Corporate Issuer Solutions, Inc., as the subscription agent (the “Subscription Agent”), and held in a segregated account with the Subscription Agent pending a final determination of the number of Rights Shares to be issued pursuant to the exercise of Basic Subscription Rights and Over-Subscription Rights. As soon as is practicable, the Company shall conduct a closing of the Rights Offering (a “Closing”). 

2.

Appointment as Dealer-Manager; Role of Dealer-Manager.  The Company hereby engages Monarch Capital Group, LLC (“Monarch”) as the exclusive dealer-manager (the “Dealer-Manager”) in connection with the Rights Offering, and authorizes the Dealer-Manager to act as such on its behalf in connection with the Rights Offering, in accordance with this Dealer-Manager Agreement (this “Agreement”).  Until the Expiration Date, the Company will not solicit, negotiate with or enter into any agreement with any placement agent, financial advisor, dealer manager, brokers, dealers or underwriters or any other person or entity in connection with the Rights Offering.  On the basis of the representations and warranties and agreements of the Company contained in this Agreement and subject to and in accordance with the terms and conditions hereof, the Dealer-Manager agrees that as Dealer-Manager it will, in accordance with its customary practice and to the extent requested by the Company, use its commercially reasonable efforts to (i) advise on pricing, structuring and other terms and conditions of the Rights Offering, including whether to provide for  transferability, tradability and oversubscription rights and limits (it being acknowledged that such services have been previously provided pursuant to the Engagement Letter (as defined herein) without compensation therefor), (ii) provide guidance on general market conditions and their impact on the Rights Offering, (iii) assist the Company in drafting a presentation that may be used to market the Rights Offering to existing and potential investors, describing the proposed capital raising, the Company’s history and performance to date, track records of key executives, highlights of the Company’s business plan and the intended use of proceeds from the Rights Offering, (iv) advise on the selection of the Information Agent and Subscription Agent (it being acknowledged that such 

advice has been previously rendered pursuant to the Engagement Letter), (v) assist the Company with its understanding of state blue sky laws and retaining of counsel to assist with the blue sky filings related to the Rights Offering and (vi) solicit the holders of the Rights to encourage them to exercise such Rights.  For the avoidance of doubt and notwithstanding anything that may be to the contrary in this Agreement, the Company and the Dealer-Manager hereby agree that the Dealer-Manager will not underwrite the Rights Offering, the Dealer-Manager has no obligation to act, and will not act, in any capacity as an underwriter in connection with the Rights Offering and the Dealer-Manager has no obligation to purchase or procure purchases of the Rights Shares offered in connection with the Rights Offering.  The Company agrees that it will not hold the Dealer-Manager liable or responsible for the failure of the Rights Offering in the event that the Rights Offering is not successfully consummated for any reason.

3.

No Liability for Acts of Brokers, Dealers, Banks and Trust Companies. The Dealer-Manager shall not be subject to any liability to the Company or any of the Company’s Subsidiaries (as defined below) or “affiliates” (“Affiliates,” as such term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)) for any act or omission on the part of any broker or dealer in securities (other than the Dealer-Manager) or any bank or trust company or any other management, shareholders, creditors or any other natural person, partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, or other entity or organization (each, a “Person”), and the Dealer-Manager shall not be liable for its own acts or omissions in performing its obligations as advisor or Dealer-Manager hereunder or otherwise in connection with the Rights Offering or the related transactions, except for any losses, claims, damages, liabilities and expenses determined in a final judgment by a court of competent jurisdiction to have resulted directly from any such acts or omissions undertaken or omitted to be taken by the Dealer-Manager through its gross negligence or willful misconduct. In soliciting or obtaining exercises of Rights, the Dealer-Manager shall not be deemed to be acting as the agent of the Company or as the agent of any broker, dealer, bank or trust company, and no broker, dealer, bank or trust company shall be deemed to be acting as the Dealer-Manager’s agent or as the agent of the Company. As used herein, the term “Subsidiary” means a Subsidiary of the Company as defined in Rule 405 of the Securities Act. Unless the context specifically requires otherwise, the term “Company” as used in this Agreement means the Company and its Subsidiaries collectively on a consolidated basis.

4.

The Offer Documents.

(a)

There will be used in connection with the Rights Offering certain materials in addition to the Registration Statement, Preliminary Prospectus, Base Prospectus and any Prospectus Supplement as filed (each as defined herein), including: (i) all exhibits to the Registration Statement which pertain to the conduct of the Rights Offering, (ii) any soliciting materials relating to the Rights Offering approved by the Company and (iii) any free writing prospectus with respect to the Rights Offering filed by the Company (collectively with the Registration Statement and the Prospectus, the “Offer Documents”). The Dealer-Manager shall be given an opportunity to review and comment upon the Offer Documents.  Any references in this Agreement to the Registration Statement or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Prospectus, as the case may be.

(b)

The Company agrees to furnish the Dealer-Manager with as many copies as it may reasonably request of the final forms of the Offer Documents and the Dealer-Manager is authorized to use copies of the Offer Documents in connection with its acting as Dealer-Manager. The Dealer-Manager hereby agrees that it will not disseminate any written material for or in connection with the solicitation of exercises of Rights pursuant to the Rights Offering other than the Offer Documents.

(c)

The Company represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed therewith as exhibits thereto (each in the form of which has been approved by the Dealer-Manager), will be used in connection with the Rights Offering by or on behalf of the Company without the prior approval of the Dealer-Manager, which approval will not be unreasonably withheld. In the event that the Company uses or permits the use of any such solicitation material in connection with the Rights Offering, then the Dealer-Manager shall be entitled to withdraw as Dealer-Manager in connection with the Rights Offering and the related transactions without any liability or penalty to the Dealer-Manager or any other Person identified in Section 11 hereof as an “indemnified party,” and the Dealer-Manager shall be entitled to receive the payment of all fees and expenses payable under this Agreement or the Engagement Letter which have accrued to the date of such withdrawal or which otherwise thereafter become payable.

5.

Representations and Warranties. The Company represents and warrants to the Dealer-Manager that:

(a)

The Company has prepared and filed with the Commission a registration statement, and an amendment or amendments thereto, on Form S-3 (File No. 333-214043) including a prospectus (the “Base Prospectus”) for the registration of the Rights and the Rights Shares under the Securities Act, which Registration Statement, as so amended prior to the Effective Time (including post-effective amendments, if any), has been declared effective by the Commission and copies of which have heretofore been delivered to the Dealer-Manager.  At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act.  Such Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said rule.  Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance 

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with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of the Securities Act Regulations.  The information included in such prospectus that was omitted from such Registration Statement at the time it became effective but that is deemed to be part of such Registration Statement at the time it became effective pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A Information.” The Base Prospectus and each prospectus used before such Registration Statement became effective, and any prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is referred to herein as a “Preliminary Prospectus.”   For purposes of this Agreement, “Effective Time” means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; “Effective Date” means the date of the Effective Time; “Registration Statement” means such Registration Statement, as amended at the Effective Time, including any documents which are exhibits thereto; and “Prospectus” means such final prospectus, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act, including the Base Prospectus all information or reports under the Securities Exchange Act of 1934, as amended, incorporated in the Prospectus by reference. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus. All references in this Agreement to the Registration Statement, a Preliminary Prospectus, and the Prospectus, or any amendments or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The Prospectus delivered to the Dealer-Manager for use in connection with the Rights Offering will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.

(b)

The Registration Statement (together with all exhibits filed as part of the Registration Statement) conforms, and any Preliminary Prospectus and the Prospectus and any further amendments or supplements to the Registration Statement conforms or will conform, when they are filed with or become effective by the Commission, as the case may be, in each case, in all material respects to the requirements of the Securities Act and collectively do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (with respect to the Prospectus, in the light of the circumstances under which they were made) not misleading; provided that no representation or warranty is made by the Company as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Dealer-Manager specifically for inclusion therein, it being acknowledged and agreed that such information provided by or on behalf of the Dealer-Manager consists solely and exclusively of disclosure of the name of the Dealer-Manager acting in its capacity as dealer-manager for the Rights Offering contained in the Prospectus (collectively, the “Dealer-Manager Information”) under appropriate headings and in its final form as approved by the Dealer-Manager and its counsel.

(c)

There are no contracts, agreements, plans or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act which have not been described in the Prospectus or filed as exhibits to the Registration Statement or referred to in, or incorporated by reference into, the exhibit table of the Registration Statement as permitted by the Securities Act.

(d)

The Company and each of its Subsidiaries have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the absence of such power or authority (either individually and in the aggregate) could not reasonably be expected to have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects (as such prospects are disclosed or described in the Prospectus) of the Company or its Subsidiaries; (ii) the long-term debt or capital stock of the Company or its Subsidiaries; or (iii) the Rights Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (any such effect being a “Material Adverse Effect”).

(e)

This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Dealer-Manager, constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

(f)

Neither the Company nor any of its Subsidiaries: (i) is in violation of its charter or by-laws, (ii) in default under or in breach of, and no event has occurred which, with notice or lapse of time or both, would constitute a default or breach under or result in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever (each, a “Lien”) upon any of their property or assets pursuant to, any material contract, agreement, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a 

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party or by which it is bound or to which any of its properties or assets is subject, or (iii) is in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order, foreign and domestic, to which it or its properties or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its properties or assets or to the conduct of its business, except, in the case of clauses (ii) and (iii) above, any violation, default or failure to possess the same that would not have a Material Adverse Effect.

(g)

Prior to or on the date hereof: (i) the Company and the Subscription Agent have or will have entered into a subscription agency agreement (the “Subscription Agency Agreement”) if required by the Subscription Agent and (ii) the Company and Broadridge Corporate Issuer Solutions, Inc. (the “Information Agent”) have or will have entered into an information agency agreement (the “Information Agency Agreement”) if required by the Information Agent. When executed by the Company, if applicable, each of the Subscription Agency Agreement and the Information Agency Agreement will have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by Subscription Agent or the Information Agent, as the case may be, will constitute a valid and legally binding agreement of the Company enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

(h)

The Rights to be issued and distributed by the Company have been duly and validly authorized and, when issued and delivered in accordance with the terms of the Offer Documents, will be duly and validly issued, and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Rights is or will be subject to personal liability by reason of being such a holder, and the Rights conform to the description thereof contained in the Prospectus. The shares of Common Stock issuable upon exercise of any Rights have been duly and validly authorized and, when issued and delivered in accordance with the terms of the Rights, will be duly and validly issued, fully paid and non-assessable and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Common Stock is or will be subject to personal liability by reason of being such a holder, and the Common Stock conforms to the description thereof contained in the Prospectus.

(i)

Except as disclosed in the Prospectus with respect to the Company’s authorized capitalization, the Rights Shares have been duly and validly authorized and reserved for issuance upon exercise of the Rights and are free of statutory and contractual preemptive rights and are sufficient in number to meet the exercise requirements of the Rights Offering; and Rights Shares, when so issued and delivered against payment therefore in accordance with the terms of the Rights Offering, will be duly and validly issued, fully paid and non-assessable, with no personal liability attaching to the ownership thereof, and will conform to the description thereof contained in the Prospectus.

(j)

The Common Stock is quoted on the Nasdaq Capital Market (“NasdaqCM”).  Except as described in the Current Report on Form 8-K filed by the Company on September 23, 2016, the Company has not received an oral or written notification from the NasdaqCM or any court or any other federal, state, local or foreign governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets (“Governmental Authority”) of any inquiry or investigation or other action that would cause the Common Stock or the Rights Shares to not be quoted on the NasdaqCM.

(k)

The Company has an authorized capitalization as set forth under the caption “Capitalization” in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Company capital stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the Registration Statement. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights.

(l)

[Reserved].

(m)

The Company and its Subsidiaries own or lease all such assets or properties as are necessary to the conduct of its business as presently operated and as proposed to be operated as described in the Registration and the Prospectus. The Company or its Subsidiaries have good and marketable title in fee simple to all assets or real property and good and marketable title to all personal property owned by them, in each case free and clear of any Lien, except for such Liens as are described in the Registration Statement and the Prospectus. Any assets or real property and buildings held under lease or sublease by the Company or any Subsidiary is held under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the use made and proposed to be made of such property and buildings by the Company or such Subsidiary. Neither the Company nor any Subsidiary has received any notice of any material claim adverse to its ownership of any real or personal property or of any material claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any Subsidiary.

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(n)

The Company and its Subsidiaries have all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other Governmental Authorities and all third parties, foreign and domestic (collectively, with the Licensing Requirements described below, the “Consents”), to own, lease and operate their properties and conduct their businesses as presently being conducted and as disclosed in the Registration Statement and the Prospectus, and each such Consent is valid and in full force and effect. The Company has not received notice of any investigation or proceedings which results in or, if decided adversely to the Company, could reasonably be expected to result in, the revocation of any Consent or reasonably be expected to have a Material Adverse Effect. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

(o)

The execution, delivery and performance of this Agreement by the Company, the issuance of the Rights in accordance with the terms of the Offer Documents, the issuance of Rights Shares in accordance with the terms of the Rights Offering, and the consummation by the Company of the transactions contemplated hereby, the Subscription Agency Agreement and the Information Agency Agreement, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries or any of its Affiliates is a party or by which the Company or any of its Subsidiaries or its Affiliates is bound or to which any of the properties or assets of the Company or any of its Subsidiaries or its Affiliates is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its Subsidiaries or any statute or any order, rule or regulation of any Governmental Authority; and except for the registration of the Rights and the Rights Shares under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the distribution of the Rights and the sale of the Rights Shares by the Company, no consent, approval, authorization or order of, or filing or registration with, any such court or Governmental Authority is required for the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby.

(p)

Except as otherwise set forth in the Prospectus, there are no contracts, agreements or understandings between the Company and any Person granting such Person the right to require the Company to include such securities in the securities registered pursuant to the Registration Statement. No holder of any security of the Company has any rights of rescission or similar rights with respect to such securities held by them.

(q)

Neither the Company nor any of its Subsidiaries has sustained, since the date of the latest balance sheet included in the Prospectus or after such date and as disclosed in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since such date or after such date and as disclosed in the Prospectus, there has not been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity, results of operations or prospects (as such prospects are disclosed or described in the Prospectus) of the Company and its Subsidiaries (a “Material Adverse Change”). Since the date of the latest balance sheet presented in the Prospectus, the Company has not incurred or undertaken any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions which are disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(r)

Whitley Penn LLP (“Whitley”) and Baker Tilly Virchow Krause, LLP (together  with Whitley, the “Auditors”), whose reports relating to the Company are included in the Registration Statement, are independent registered public accountants as required by the Securities Act, the Exchange Act and the rules and regulations promulgated by the Public Company Accounting Oversight Board (the “PCAOB”). The Auditors, to the best of the Company’s knowledge, are each duly registered and in good standing with the PCAOB. Neither of the Auditors has, during the periods covered by the financial statements included in the Registration Statement, the Preliminary Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

(s)

The financial statements, including the notes thereto, and any supporting schedules included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the financial position as of the dates indicated and the cash flows and results of operations for the periods specified of the Company. Except as otherwise stated in the Registration Statement, any Preliminary Prospectus and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved. Any supporting schedules included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information required to be stated therein. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement. The other financial and statistical information included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information included therein and have been prepared on a basis consistent with that of the financial statements that are included in the Registration Statement, such Preliminary Prospectus and the Prospectus and the books and records of the respective entities presented therein.

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(t)

There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, any Preliminary Prospectus and the Prospectus in accordance with Regulation S-X under the Securities Act which have not been included as so required. The pro forma and/or as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and include all adjustments necessary to present fairly, in all material respects, in accordance with generally accepted accounting principles the pro forma and as adjusted financial position of the respective entity or entities presented therein at the respective dates indicated and their cash flows and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro forma as adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

(u)

The statistical, industry-related and market-related data included in the Registration Statement, any Preliminary Prospectus and the Prospectus are based on or derived from sources which the Company reasonably believes are reliable and accurate, and such data agree with the sources from which they are derived. All applicable third party consents have been obtained in order for such data to be included in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(v)

Except as disclosed in the Registration Statement and the Prospectus, the Company maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(w)

The Company’s Board of Directors has validly appointed an audit committee, compensation committee and nominating and corporate governance committee whose composition satisfies the requirements of the rules and regulations of the Commission and the Company’s Board of Directors and/or audit committee, compensation committee and the nominating corporate governance committee has each adopted a charter as described in the Registration Statement, and such charters are in full force and effect as of the date hereof. Neither the Company’s Board of Directors nor the audit committee thereof has been informed, nor is any director of the Company aware, of: (i) except as disclosed in the Registration Statement and the Prospectus, any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

(x)

The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) applicable to the Company, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other Governmental Authority or self regulatory entity or agency, except for violations which, singly or in the aggregate, are disclosed in the Prospectus or would not have a Material Adverse Effect.

(y)

No relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Affiliate of the Company, on the other hand, which is required by the Securities Act or the Exchange Act to be described in the Registration Statement or the Prospectus which is not so described as required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes-Oxley, directly or indirectly, including through any Affiliate of the Company (other than as permitted under Sarbanes-Oxley for depositary institutions), extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

(z)

Except as described in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property or asset of the Company or any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its Subsidiaries, are reasonably likely to have a Material Adverse Effect; and to the best of the Company’s knowledge, except as disclosed in the Prospectus, no such proceedings are threatened or contemplated by Governmental Authorities or threatened by others.

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(aa)

The Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except where the failure to make such filings or make such payments, either individually or in the aggregate, could not reasonably be expected to have, a Material Adverse Effect. The Company has made adequate charges, accruals and reserves in its financial statements above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has not been finally determined.

(bb)

Each of the Company and its Subsidiaries maintains insurance of the types and in the amounts which the Company believes to be reasonable and sufficient for a company of its size operating in the Company’s industry, including, but not limited to: (i) directors’ and officers’ insurance (including insurance covering the Company, its directors and officers for liabilities or losses arising in connection with the Rights Offering, including, without limitation, liabilities or losses arising under the Securities Act, the Exchange Act and applicable foreign securities laws), (ii) insurance covering real and personal property owned or leased against theft, damage, destruction, acts of vandalism and all other risks customarily insured against and (iii) business interruption insurance. There are no claims by the Company or any of its Subsidiaries under any policy or instrument described in this paragraph as to which any insurance company is denying liability or defending under a reservation of rights clause. All of the insurance policies described in this paragraph are in full force and effect. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(cc)

The Company and its Subsidiaries own or possess or have the right to use on reasonable terms all patents, patent rights, patent applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names, service names and other intellectual property (collectively, “Intellectual Property”) necessary to carry on their respective businesses as described in the Prospectus and as proposed to be conducted; and neither the Company nor any of its Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interests of the Company or any of its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, might result in a Material Adverse Effect.  All former and current employees of the Company or any of its Subsidiaries (and, to the Company’s knowledge, all other agents, consultants and contractors of the Company or any of its subsidiaries who contributed to or participated in the conception or development of any Intellectual Property for the Company or any of its Subsidiaries) have executed written contracts or agreements that assign to the Company all rights to any inventions, improvements, discoveries or information relating to the business of the Company and its subsidiaries, including without limitation all Intellectual Property owned, controlled by or in the possession of the Company or any of its subsidiaries.  To the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any of the Intellectual Property by any third party, employee or former employee.  Each agreement and instrument (each, a “License Agreement”) pursuant to which any Intellectual Property is licensed to the Company or any of its subsidiaries is in full force and effect, has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company or the applicable subsidiary, as the case may be, enforceable against the Company or such subsidiary in accordance with its terms, except as enforcement thereof may be subject to bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; the Company and its subsidiaries are in compliance with their respective obligations under all License Agreements and, to the knowledge of the Company, all other parties to any of the License Agreements are in compliance with all of their respective obligations thereunder; no event or condition has occurred or exists that gives or would give any party to any License Agreement the right, either immediately or with notice or passage of time or both, to terminate or limit (in whole or in part) any such License Agreement or any rights of the Company or any of its subsidiaries thereunder, to exercise any of such party’s remedies thereunder, or to take any action that would adversely affect any rights of the Company or any of its subsidiaries thereunder or that might have a Material Adverse Effect and the Company is not aware of any facts or circumstances that would result in any of the foregoing or give any party to any License Agreement any such right; and neither the Company nor any of its subsidiaries has received any notice of default, breach or non-compliance under any License Agreement.

(dd)

Except as described in any Preliminary Prospectus, the Prospectus and the Registration Statement, the Company: (i) is and at all times has been in full compliance with all statutes, rules, regulations or guidance applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured, distributed or sold by the Company or any component thereof (such statutes, rules, regulations or guidance, collectively, “Applicable Laws”); (ii) has not received any notice of adverse finding, warning letter, untitled letter or other correspondence or notice from any Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) possesses all Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations; (iv) has not received notice of any claim, suit, 

7

proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Authority or third party is considering any such claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action; (v) has not received notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; (vi) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission), except, in the case of each of clauses (i), (ii) and (iii), for any default, violation or event that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

(ee)

Neither the Company nor, to the Company’s knowledge, any of the Company’s directors, officers or employees has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect.

(ff)

Neither the Company nor any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Securities Act with the offer and sale of the Rights Shares pursuant to the Registration Statement.

(gg)

Except as described in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee or other compensation by the Company with respect to the issuance or exercise of the Rights or the sale of the Rights Shares or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, the Company’s officers, directors and employees or Affiliates that may affect the Dealer-Manager’s compensation, as determined by the Financial Industry Regulatory Authority, Inc. (“FINRA”). Except as previously disclosed by the Company to the Dealer-Manager in writing, no officer, director, or beneficial owner of 5% or more of any class of the Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) or any other Affiliate is a member or a Person associated, or affiliated with a member of FINRA. No proceeds from the exercise of the Rights will be paid to any FINRA member, or any Persons associated or affiliated with a member of FINRA, except as specifically contemplated herein. Except as previously disclosed by the Company to the Dealer-Manager, no Person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of FINRA.

(hh)

There are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim against the Company or the Dealer-Manager for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated by this Agreement. Other than the Dealer-Manager, the Company has not employed any brokers, dealers or underwriters in connection with solicitation of exercise of Rights in the Rights Offering, and except provided for in Sections 6 and 7 hereof, no other commissions, fees or discounts will be paid by the Company or otherwise in connection with the Rights Offering.

(ii)

Neither the Company nor, to the Company’s knowledge, any of the Company’s officers, directors, employees or agents has at any time during the last five (5) years: (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments that are not prohibited by the laws of the United States of any jurisdiction thereof.

(jj)

The Company has not and will not, directly or indirectly through any officer, director or Affiliate of the Company or through any other Person: (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights Shares, (ii) since the filing of the Registration Statement sold, bid for or purchased, or paid any Person (other than the Dealer-Manager) any compensation for soliciting exercises or purchases of, the Rights or the Rights Shares and (iii) until the later of the expiration of the Rights or the completion of the distribution (within the meaning of Regulation M under the Exchange Act) of the Rights Shares, sell, bid for or purchase, apply or agree to pay to any Person (other than the Dealer-Manager) any compensation for soliciting another to purchase any other securities of the Company (except for the solicitation of the exercises of Rights pursuant to this Agreement). The foregoing shall not apply to the offer, sale, agreement to sell or delivery with respect to: (i) Rights Shares offered and sold upon exercise of the Rights, as described in the Prospectus, or (ii) any shares of Common Stock sold pursuant to the Company’s employee benefit plans.

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(kk)

Each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) included in the Registration Statement and the Prospectus has been made or reaffirmed with a reasonable basis and has been disclosed in good faith.

As used in this Agreement, references to matters being “material” with respect to the Company or any matter relating to the Company shall mean a material item, event, change, condition, status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, prospects (as such prospects are disclosed or described in any Preliminary Prospectus or the Prospectus), operations or results of operations of the Company and its Subsidiaries, taken as a whole. 

As used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the officers of the Company who are named in the Prospectus, with the assumption that such officers shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals of their duties as officers or directors of the Company).

6.

Compensation. Notwithstanding (and in lieu of) the compensation outlined in the Engagement Letter, the Dealer-Manager shall receive the fees for acting in its capacity as the Dealer-Manager, as set forth herein. In consideration for its services in the Rights Offering, the Dealer-Manager shall receive a cash fee equal to 7% of the dollar amount received by the Company from any cash exercise of the Rights issued to investors in the Rights Offering (excluding all proceeds received by the Company from Donald R. Wilson, Jr., Gregory H. Sachs, and parties related to each of them).  All payments to be made by the Company pursuant to this Section 6 and Section 7 below shall be made at the Closing by wire transfer of immediately available funds and consummation of the subscriptions for Rights Shares pursuant to the exercise of Rights (the “Closing Date”).

7.

Expenses.  In addition to the Dealer-Manager’s compensation for services hereunder pursuant to Section 6 hereof, the Company shall pay or cause to be paid, the following expenses: 

(a)

all expenses (including any taxes) incurred in connection with the Rights Offering and the preparation, issuance, execution, authentication and delivery of the Rights and the Rights Shares;

(b)

all fees, expenses and disbursements of the Company’s accountants, legal counsel and other third party advisors;

(c)

all reasonable and documented costs and expenses of the Dealer-Manager as set forth in the Engagement Letter and reimbursable upon any termination of this Agreement only as permitted by FINRA Rule 5110(f)(2)(D);

(d)

all fees and expenses of the Subscription Agent and the Information Agent;

(e)

all fees, expenses and disbursements (including, without limitation, fees and expenses of the Company’s accountants and counsel) in connection with the preparation, printing, filing, delivery and shipping of the Registration Statement (including the financial statements therein and all amendments and exhibits thereto), each Preliminary Prospectus, the Prospectus, the other Offer Documents and any amendments or supplements of the foregoing and any printing, delivery and shipping of this Agreement, the costs of distributing the terms of any agreement relating to any organization of soliciting dealers, if any, to the members thereof by mail, fax or other means of communications;

(f)

all fees, expenses and disbursements relating to the registration or qualification of the Rights and the Rights Shares under the “blue sky” securities laws of any states or other jurisdictions and all fees and expenses associated with the preparation of the preliminary and final forms of Blue Sky Memoranda;

(g)

all filing fees of the Commission;

(h)

all filing fees relating to the review of the Rights Offering by FINRA;

(i)

any applicable listing or other fees;

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(j)

the cost of printing certificates representing the Rights and the Rights Shares;

(k)

all advertising charges pertaining to the Rights Offering;

(l)

the cost and charges of the Company’s transfer agent(s) or registrar(s); and

(m)

all other costs and expenses incident to the performance of its obligations hereunder for which provision is not otherwise made in this Section.

(n)

All payments to be made by the Company pursuant to this Section 7 shall be made promptly after the termination or expiration of the Rights Offering or, if later, promptly after the related fees, expenses or charges accrue and an invoice therefor is sent by the Dealer-Manager. The Company shall perform its obligations set forth in this Section 7 whether or not the Rights Offering commences or any Rights are exercised pursuant to the Rights Offering.

8.

Shareholder Lists; Subscription Agent; Information Agent. 

(a)

The Company will cause the Dealer-Manager to be provided with any cards or lists showing the names and addresses of, and the number of shares of Common Stock held by, the holders of shares of Common Stock as of a recent date and will use its best efforts to cause the Dealer-Manager to be advised from time to time during the period, as the Dealer-Manager shall request, of the Rights Offering as to any transfers of record of shares of Common Stock. 

 

(b)

The Company (i) has arranged for Broadridge Corporate Issuer Solutions, Inc. to serve as subscription agent in connection with the Rights Offering (the “Subscription Agent”), (ii) will arrange for the Subscription Agent to advise the Dealer-Manager regularly as to such matters as the Dealer-Manager may reasonably request, including the number of Rights that have been exercised, and (iii) will arrange for the Subscription Agent to be responsible for receiving subscription funds paid.

(c)

The Company has arranged for Broadridge Corporate Issuer Solutions, Inc. to serve as Information Agent in connection with the Rights Offering (together with the Subscription Agent, the “Agents”) and to perform services in connection with the Rights Offering that are customary for an information agent.

9.

Covenants of the Company.  The Company covenants and agrees with the Dealer-Manager:

(a)

To use its best efforts to cause the Registration Statement and any amendments thereto to become effective; to advise the Dealer-Manager, promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment thereto, becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Dealer-Manager with copies thereof; to prepare a Prospectus in a form approved by the Dealer-Manager (such approval not to be unreasonably withheld or delayed) and to file such Prospectus pursuant to Rule 424(b) under the Securities Act within the time prescribed by such rule; to advise the Dealer-Manager, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Rights for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal.

(b)

To deliver promptly to the Dealer-Manager, at any such location as requested by the Dealer Manger, such number of the following documents as the Dealer-Manager shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement, any other Offer Documents filed as exhibits, the computation of the ratio of earnings to fixed charges and the computation of per share earnings), (ii) each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus and (iii) any document incorporated by reference in the Prospectus (excluding exhibits thereto); and, if the delivery of a prospectus is required at any time during which the Prospectus relating to the Rights or the Rights Shares is required to be delivered under the Securities Act and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Dealer-Manager and, upon its request, to file such document and to prepare and furnish without charge to the Dealer-Manager as many copies as the Dealer-Manager may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance.

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(c)

To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the judgment of the Company or the Dealer-Manager, be necessary or advisable in connection with the distribution of the Rights or the sale of the Rights Shares or be requested by the Commission.

(d)

Prior to filing with the Commission any: (i) Preliminary Prospectus, (ii) amendment to the Registration Statement, any document incorporated by reference in the Prospectus or (iii) any Prospectus pursuant to Rule 424 of the Securities Act, to furnish a copy thereof to the Dealer-Manager and counsel for the Dealer-Manager and obtain the consent of the Dealer-Manager to the filing (which consent shall not be unreasonably withheld).

(e)

To furnish to the Dealer-Manager copies of all materials not available via EDGAR furnished by the Company to its shareholders and all public reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which any of the Company’s securities may be listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder.

(f)

To qualify or register the Rights and the Rights Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws of those jurisdictions designated by the Dealer-Manager, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Rights and the Rights Shares. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Dealer-Manager promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Rights and the Rights Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.

(g)

To apply the net proceeds from the exercise of the Rights in the manner described under the caption “Use of Proceeds” in the Prospectus.

(h)

To apply for the listing of Rights Shares on the NasdaqCM and to use its best efforts to complete that listing, subject only to official notice of issuance (if applicable), prior to the expiration of the Rights Offering.

(i)

To take such steps as shall be necessary to ensure that neither the Company nor any Subsidiary shall become an “investment company” within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder.

(j)

To advise the Dealer-Manager, directly or through the Subscription Agent, from time to time, as the Dealer-Manager shall request, of the number of Rights Shares subscribed for, and arrange for the Subscription Agent to furnish the Dealer-Manager with copies of written reports it furnishes to the Company concerning the Rights Offering.

(k)

To commence mailing the Offer Documents to record holders of the Common Stock not later than the second business day following the record date for the Rights Offering, and complete such mailing as soon as practicable.

(l)

To reserve and keep available for issue upon the exercise of the Rights such number of authorized but unissued shares of Rights Shares as will be sufficient to permit the exercise in full of all Rights, except as otherwise contemplated by the Prospectus.

(m)

To not take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights Shares.

10.

Conditions of Dealer-Manager’s Obligations. The obligations of the Dealer-Manager hereunder are subject to (and the occurrence of any Closing shall be conditioned upon) the accuracy, as of the date hereof and at all times during the Rights Offering, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder and to the following additional conditions:

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(a)

(i) The Registration Statement shall have become effective and the Prospectus shall have been timely filed with the Commission in accordance with the Securities Act; (ii) all post-effective amendments to the Registration Statement shall have become effective; (iii) no stop order suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued and no proceedings for the issuance of any such order shall have been initiated or threatened, and (iv) any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been disclosed to the Dealer-Manager and complied with to the Dealer-Manager’s reasonable satisfaction.

(b)

The Dealer-Manager shall not have been advised by the Company or shall have discovered and disclosed to the Company that the Registration Statement or the Prospectus or any amendment or supplement thereto, contains an untrue statement of fact which in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material, or omits to state a fact which, in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

(c)

All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Rights, the Rights Shares, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Dealer-Manager, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

(d)

On the Closing Date, there shall have been furnished to the Dealer-Manager the signed opinion (addressed to the Dealer-Manager) of Greenberg Traurig, LLP, counsel for the Company, dated the date hereof and in form and substance satisfactory to counsel for the Dealer-Manager, to the effect of the opinions set forth on Exhibit A hereto.

(e)

The Company shall have furnished to the Dealer-Manager a letter of each of the Auditors, addressed to the Dealer-Manager and dated the date hereof: (i) confirming that they are independent registered public accountants of the Company within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under the PCAOB and applicable rules of the Commission, and (ii) stating, as of the date of the letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date of the letter), the conclusions and findings of such firm with respect to the financial information and other matters specified by the Dealer-Manager.

(f)

The Company shall have furnished to the Dealer-Manager a certificate, dated as of the Closing Date, of its Chief Executive Officer or President and its Chief Financial Officer stating that:

i.

To the best of their knowledge after reasonable investigation, the representations, warranties, covenants and agreements of the Company hereof are true and correct in all material respects;

ii.

The conditions set forth in this Agreement have been fulfilled;

iii.

Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, neither the Company nor any of its Subsidiaries has sustained any material loss or interference with its business, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding;

iv.

Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change; and

v.

They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) the Registration Statement and the Prospectus, as of the Effective Date, did not include any untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus.

(g)

Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus any Material Adverse Change, the effect of which is, in the judgment of the Dealer-Manager, so material and adverse as to make it impracticable or inadvisable to proceed with the Rights Offering.

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(h)

The NasdaqCM shall have approved the Rights Shares for listing, subject only to official notice of issuance.

(i)

All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer-Manager. If any of the conditions specified in this Section 10 shall not have been fulfilled when and as required by this Agreement, this Agreement and all obligations of the Dealer-Manager hereunder may be canceled at, or at any time during the Rights Offering, by the Dealer-Manager. Any such cancellation shall be without liability of the Dealer-Manager to the Company. Notice of such cancellation shall be given the Company in writing, or by telegraph or telephone and confirmed in writing. 

11.

Indemnification and Contribution.

(a)

The Company agrees to indemnify and hold harmless the Dealer-Manager and its affiliates and any officer, director, employee or agent of Monarch or any such affiliates and any Person controlling (within the meaning of Section 20(a) of the Exchange Act) the Dealer-Manager or any of such affiliates (collectively, the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities, expenses and actions (including shareholder actions, in respect thereof) whatsoever, under the Securities Act or otherwise (as incurred or suffered and including, but not limited to, any and all legal or other expenses incurred in connection with investigating, preparing to defend or defending any lawsuit, claim or other proceeding, commenced or threatened, whether or not resulting in any liability, which legal or other expenses shall be reimbursed by the Company promptly after receipt of any invoices therefore from the Dealer-Manager), (A) arising out of or based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Offer Documents or any amendment or supplement thereto, in any other solicitation material used by the Company or authorized by it for use in connection with the Rights Offering, or in any blue sky application or other document prepared or executed by the Company (or based on any written information furnished by the Company) specifically for the purpose of qualifying any or all of the Rights or the Rights Shares under the securities laws of any state or other jurisdiction (any such application, document or information being hereinafter called a “Blue Sky Application”) or arising out of or based upon the omission or alleged omission to state in any such document a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (other than statements or omissions made in reliance upon and in conformity with the Dealer-Manager Information), (ii) any withdrawal or termination by the Company of, or failure by the Company to make or consummate, the Rights Offering, (iii) any actions taken or omitted to be taken by an indemnified party with the consent of the Company or in conformity with actions taken or omitted to be taken by the Company or (iv) any failure by the Company to comply with any agreement or covenant, contained in this Agreement or (B) arising out of, relating to or in connection with or alleged to arise out of, relate to or be in connection with, the Rights Offering, any of the other transactions contemplated thereby or the performance of Monarch’s services to the Company with respect to the Rights Offering.  The Company will not be liable to any Indemnified Party under the foregoing indemnification and reimbursement provisions, (i) for any settlement by an Indemnified Party effected without its prior written consent (not to be unreasonably withheld); or (ii) to the extent that any loss, claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from the Dealer-Manager’s willful misconduct or gross negligence. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company or its security holders or creditors related to or arising out of the engagement of the Dealer-Manager pursuant to, or the performance by the Dealer-Manager of the services contemplated by, this Agreement except to the extent that any loss, claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from the Dealer-Manager’s willful misconduct or gross negligence.

(b)

Promptly after receipt by an Indemnified Party of notice of any intention or threat to commence an action, suit or proceeding or notice of the commencement of any action, suit or proceeding, such Indemnified Party will, if a claim in respect thereof is to be made against the Company pursuant hereto, promptly notify the Company in writing of the same. In case any such action is brought against any Indemnified Party and such Indemnified Party notifies the Company of the commencement thereof, the Company may elect to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party.  Within 15 days following receipt of notice from an Indemnified Party or the receipt of such claim, the Company will notify the Dealer-Manager that the Company will assume control of the defense.  An Indemnified Party may employ counsel to participate in the defense of any such action provided, that the employment of such counsel shall be at the Indemnified Party’s own expense, unless (i) the employment of such counsel has been authorized in writing by the Company, (ii) the Indemnified Party has reasonably concluded (based upon advice of counsel to the Indemnified Party) that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those available to the Company, or that a conflict or potential conflict exists (based upon advice of counsel to the Indemnified Party) between the Indemnified Party and the Company that makes it impossible or inadvisable for counsel to the Indemnifying Party to conduct the defense of both the Company and the Indemnified Party (in which case the Company will not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) the Company has not in fact employed counsel reasonably satisfactory to the Indemnified Party to assume the defense of such action within a reasonable time after receiving notice of the action, suit or proceeding, in each of which cases the reasonable fees, disbursements and other charges of such counsel will be at the expense of the Company; provided, further, that in no event shall the Company be required to pay fees and expenses for 

13

more than one firm of attorneys representing Indemnified Parties unless the defense of one Indemnified Party is unique or separate from that of another Indemnified Party subject to the same claim or action. Any failure or delay by an Indemnified Party to give the notice referred to in this paragraph shall not affect such Indemnified Party’s right to be indemnified hereunder, except to the extent that such failure or delay causes actual harm to the Company, or prejudices its ability to defend such action, suit or proceeding on behalf of such Indemnified Party.

(c)

If the indemnification provided for in the foregoing paragraph is judicially determined to be unavailable (other than in accordance with the terms hereof) to any Indemnified Party otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying such person hereunder, whether or not the Dealer-Manager is the person entitled to indemnification or reimbursement, the Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the Dealer-Manager, on the other hand, of the Rights Offering or (ii) if the allocation provided for in clause (i) above is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of each of the Company and the Dealer-Manager, as well as any other relevant equitable considerations; provided, however, in no event shall the Dealer-Manager’s aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by the Dealer-Manger under this Agreement.  For the purposes of this Agreement, the relative benefits to the Company and to the Dealer-Manager of the engagement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid or received or contemplated to be received by the Company in the Rights Offering, whether or not the Rights Offering is consummated, bears to (b) the fees paid or to be paid to the Dealer-Manager under this Agreement.

(d)

The Company also agrees that neither the Dealer-Manager, nor any other Indemnified Party, shall have any liability to the Company for or in connection with the Dealer-Manager’s engagement as Dealer-Manager, except for any such liability for losses, claims, damages, liabilities or expenses incurred by the Company which are finally judicially determined to have resulted primarily from the Dealer-Manager’s bad faith, willful misconduct, or gross negligence.  The foregoing agreement shall be in addition to any rights that the Dealer-Manager, the Company or any Indemnified Party may have at common law or otherwise, including, but not limited to, any right to contribution.  For the sole purpose of enforcing and otherwise giving effect to the provisions of this Agreement, the Company hereby consents to personal jurisdiction and service and venue in any court in which any claim which is subject to this agreement is brought against the Dealer-Manager or any other indemnified party.

(e)

The Company agrees that it will not, without the prior written consent of the Dealer-Manager, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Dealer-Manager is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent (i) relates solely to the payment of monetary damages and does not include any admission of liability on the part of MCG, and (ii) includes an unconditional release, reasonably satisfactory in form and substance to the Dealer-Manager, releasing the Dealer-Manager from all liability arising out of such claim, action, suit or proceeding.

(f)

In the event that an Indemnified Party is requested or required to appear as a witness in any action brought by or on behalf of or against the Company in which such Indemnified Party is not named as a defendant, the Company agrees to promptly reimburse the Dealer-Manager on a monthly basis for all expenses reasonably incurred by it in connection with such Indemnified Party’s appearing and preparing to appear as such a witness, including, without limitation, the reasonable fees and disbursements of its legal counsel.

(g)

If multiple claims are brought, and indemnification is permitted under applicable law and provided for under this Agreement with respect to at least one of such claims, the Company agrees that any judgment or arbitration award shall be conclusively deemed to be based on claims as to which indemnification is permitted and provided for, except to the extent the judgment or arbitrate award expressly states that it, or any portion thereof, is based solely on a claim as to which indemnification is not available.

12.

Effective Date of Agreement; Termination.

(a)

This Agreement shall become effective upon the later of the time on which the Dealer-Manager shall have received notification of the effectiveness of the Registration Statement and the time which this Agreement shall have been executed by all of the parties hereto.

(b)

This Agreement shall terminate upon the earliest to occur of (a) the consummation, termination or withdrawal of the Rights Offering, and (b) the withdrawal by the Dealer-Manager pursuant to Section 4. 

14

13.

Survival of Certain Provisions.  The agreements contained in Sections 3, 6, 7, 11 and 13 through 21 hereof and the representations, warranties and agreements of the Company contained in Section 5 hereof shall survive the consummation of or failure to commence the Rights Offering and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party; provided, that the Company’s obligations under Section 7 to reimburse the Dealer Manager for accountable expenses are subject to FINRA Rule 5110 (f)(2)(D) in that such expenses are only reimbursable to the extent actually incurred.

14.

Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by facsimile with immediate telephonic confirmation or (c) sent by registered or certified mail, return receipt requested, postage prepaid, to the parties hereto as follows

If to the Dealer-Manager:

Monarch Capital Group, LLC

500 Fifth Avenue, Suite 2240

New York, NY 10110

Attention: Mr. Michael Potter, Chairman

With a copy to:

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

Attention: Kenneth A. Schlesinger, Esq.

Email: kschlesinger@olshanlaw.com

Facsimile: (212) 451-2252

If to the Company:

RMG Networks Holding Corporation

15301 Dallas Parkway, Suite 500

Addison, TX 75001

Attention: Robert Michelson, Chief Executive Officer and President

With a copy to:

Greenberg Traurig, LLP

77 West Wacker, Suite 2500

Chicago, IL 60601

Attention: Ameer Ahmad, Esq. and Jason Simon, Esq.

Email: ahmada@gtlaw.com and simonj@gtlaw.com

Facsimile: (312) 456-8435 and (703) 749-1301

15.

Parties. This Agreement shall inure to the benefit of and be binding upon the Dealer-Manager, the Company and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those Persons, except that the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the Person or Persons, if any, who control the Dealer-Manager within the meaning of Section 15 of the Act. Nothing in this Agreement shall be construed to give any Person, other than the Persons referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

16.

Amendment.  This Agreement may not be amended or modified except in writing signed by each of the parties hereto.

17.

Governing Law; Venue.  This Agreement shall be deemed to have been executed and delivered in New York and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of New York, without regard to the conflicts of laws principals thereof (other than Section 5-1401 of The New York General Obligations Law). Each of the Dealer-Manager and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, (b) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (c) 

15

irrevocably consents to the jurisdiction of Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Dealer-Manager and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the underwriters mailed by certified mail to the Dealer-Manager’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, ANY PRELIMINARY PROSPECTUS AND THE PROSPECTUS.

18.

Entire Agreement.  This Agreement, together with the exhibit attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein.  Except as set forth herein to the contrary, the engagement letter entered into by and between the Company and the Dealer-Manager, dated October 19, 2016, as amended (the “Engagement Letter”), shall continue to be effective and the term therein shall continue to survive and be enforceable by the parties thereto, in accordance with its terms.  

19.

Severability.  If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

20.

Headings.  The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

21.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic transmission shall constitute valid and sufficient delivery thereof. If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

[Signature Page Follows]

16

			
	 
	Very truly yours,

	 
	 

	 
	RMG NETWORKS HOLDING CORPORATION

	 
	 
	 

	 
	 
	 

	 
	By:

	/s/ Robert Michelson

	 
	Name:

	Robert Michelson

	 
	Title:

	Chief Executive Officer and President

Accepted and agreed as of the date first written above:

MONARCH CAPITAL GROUP, LLC

By:    /s/ Michael Potter                    

Name:  Michael Potter

Title:  Chairman

[Signature Page to Dealer-Manager Agreement]

17

EXHIBIT A

1.

The Company is incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement, the Offer Documents and the Prospectus and to enter into and perform its obligations under the Dealer-Manager Agreement and the Rights.

2.

The Company’s authorized capital consists of [_____________________].

3.

The Rights and Rights Shares to be issued and sold by the Company pursuant to the Registration Agreement have been duly and validly authorized and, when issued and delivered to and paid for, will be duly and validly issued and fully paid and nonassessable and will conform to the descriptions thereof contained in the Registration Statement, the Offer Documents and the Prospectus; and the issuance of such Rights and Rights Shares is not subject to any preemptive or similar rights.

4.

The Dealer-Manager Agreement has been duly authorized, executed and delivered by the Company and the Company has all the requisite corporate power and authority to enter into the Dealer-Manager Agreement and to perform their obligations thereunder.

5.

The issue and sale of the Rights and Rights Shares to be sold by the Company pursuant to the Registration Statement, the execution of the Dealer-Manager Agreement by the Company and the compliance by the Company with all of the provisions of the Dealer-Manager Agreement and the consummation of the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument, included as an exhibit to the Registration Statement or as an exhibit to any other registration statement or report filed by the Company with the Commission, to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject, nor will such action result in any violation of the provisions of the certificate or articles of incorporation or by-laws (or other organizational documents) of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Rights and Rights Shares to be sold by the Company pursuant to the Registration Statement or the consummation by the Company of the transactions contemplated by the Dealer-Manager Agreement, except the registration under the Securities Act of the Rights and Rights Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws, as to which we express no opinion.

6.

Other than as set forth in the Registration Statement, the Offer Documents and the Prospectus, to our knowledge, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, individually or in the aggregate, would have or may reasonably be expected to have a material adverse effect on the general affairs, business, prospects, management, financial position, shareholders’ equity or results of operations of the Company and its subsidiaries, considered as one enterprise, or would prevent or impair the consummation of the transactions contemplated by the Dealer-Manager Agreement , or which are required to be described in the Registration Statement, the Offer Documents and the Prospectus; and, to our knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.

7.

The Company is not and, after giving effect to the offering and sale of the Rights as contemplated herein and the application of the net proceeds therefrom as described in the Registration Statement, the Offer Documents and the Prospectus, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940.

8.

The Registration Statement, including any Rule 462(b) Registration Statement, has been declared effective under the Securities Act; any required filing of the Prospectus pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by Rule 424(b); all material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433 under the Securities Act; and no stop order suspending the effectiveness or use of the Registration Statement, the Offer Documents and the Prospectus has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to our knowledge, threatened by the Commission.

9.

To our knowledge, there are no statutes or regulations that are required to be described in the Registration Statement, the Offer Documents and the Prospectus that are not described as required.

10.

The Company has applied for the listing of Rights Shares on the NasdaqCM and has duly filed a notification with respect to the listing of the Rights Shares on the NasdaqCM, which has been approved by the NasdaqCM.

18

11.

The Registration Statement, the Offer Documents and the Prospectus and any further amendments and supplements thereto made by the Company (other than the financial statements, related schedules and other financial data therein, as to which we do not express an opinion), comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations thereunder; and we do not know of any amendment to the Registration Statement, the Offer Documents and the Prospectus required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be described in the Registration Statement, the Offer Documents and the Prospectus which are not filed or described as required.

12.

The documents incorporated by reference in the Registration Statement, the Offer Documents and the Prospectus, or any further amendment or supplement thereto made by the Company (other than the financial statements and related schedules therein, as to which we express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder.

13.

To our knowledge there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to shares of Common Stock or other securities to include such shares of Common Stock or other securities as part of the offering contemplated hereby.

In addition, although we are not passing upon and do not assume any responsibility for nor have they independently verified, the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Offer Documents and the Prospectus, in connection with the preparation of the Registration Statement, the Offer Documents and the Prospectus, we have participated in conferences with representatives and counsel of the Dealer-Manager and with certain officers and employees of, and counsel and independent certified public accountants for, the Company, at which conferences the contents of the Registration Statement, the Offer Documents and the Prospectus and related matters were discussed, and we advise the Dealer-Manager that nothing has come to our attention that would lead us to believe that:

·

as of its effective date, the Registration Statement (other than the financial statements, related schedules and other financial data therein, as to which we do express no opinion), contained an untrue statement of a material fact required to be stated therein or necessary to make the statements therein not misleading,

·

as of the Effective Time, the Offer Documents (other than the financial statements, related schedules and other financial data therein, as to which express no opinion) contain an untrue statement of a material fact or omits 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 

·

as of its date or as of the applicable time of delivery, the Prospectus (other than the financial statements, related schedules and other financial data therein, as to which we express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

provided, however, that we do not assume any responsibility for the accuracy, completeness or fairness of the statements made or the information contained in, incorporated by reference in, or omitted from, the Registration Statement, the Offer Documents or the Prospectus, and we do not express any view or belief with respect to the financial statements and the related notes thereto or financial schedules or other financial, statistical or accounting data or information or assessments of or reports on the effectiveness of internal control over financial reporting included in, incorporated by reference in, or omitted from, the Registration Statement, the Offer Documents or the Prospectus.

The purpose of our engagement was not to establish or confirm factual matters set forth in the Registration Statement, the Offer Documents or the Prospectus, and we have not undertaken any obligation to verify independently any of the factual matters set forth in the Registration Statement, the Offer Documents or the Prospectus.

1910.2

Exhibit 10.2

STANDBY PURCHASE AGREEMENT

This STANDBY PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of November 30, 2016, among RMG Networks Holding Corporation, a Delaware corporation (the “Company”), 2012 DOOH Investments LLC (“DOOH Investments”), DRW Commodities, LLC (“DRW Commodities”), and Children’s Trust C/U The Donald R. Wilson 2009 GRAT #1 (the “Trust” and together with DRW Commodities and DOOH Investments, the “Standby Purchasers” and each a “Standby Purchaser”).

RECITALS

WHEREAS, the Company proposes to distribute, at no charge, to each holder of record of shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) as of the close of business on November 29, 2016 (the “Record Date”) non-transferable rights (the “Rights”) to subscribe for and purchase additional shares of Common Stock (the “Rights Offering”);

WHEREAS, the Company will seek to raise a total of approximately $4,800,000 in connection with the Rights Offering;

WHEREAS, in connection with the Rights Offering, the Company’s stockholders of record as of the Record Date will receive 0.20991 of a Right for each share of Common Stock held as of the Record Date;

WHEREAS, each whole Right will entitle the holder thereof to purchase one share of Common Stock (the “Basic Subscription Rights”) at a subscription price equal to $0.62 per share (the “Subscription Price”);

WHEREAS, if and to the extent that all stockholders do not fully exercise their Basic Subscription Rights, each holder of a Right who exercises in full its Basic Subscription Right in the Rights Offering will be entitled to subscribe for additional shares of Common Stock (the “Oversubscription Rights”) to the extent they are available following the purchase of the First Standby Shares (as such term is defined below) by the Standby Purchasers pursuant hereto; and

WHEREAS, in order to facilitate the Rights Offering, the Standby Purchasers have agreed and committed, to purchase at the Subscription Price, subject to the terms and conditions of this Agreement, the First Standby Shares and such additional number of shares of Common Stock that remain unsubscribed following the exercise of the Oversubscription Rights in full (the “Unsubscribed Shares”), provided that the maximum number of shares of Common Stock that the Standby Purchasers shall be obligated to purchase pursuant to this Agreement shall be the sum of the First Standby Shares and the Maximum Additional Standby Shares (as such term is defined below).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the parties hereto agree as follows:

1.

Additional Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” of any Person means any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person; provided, for purposes of this Agreement, the Company and its subsidiaries shall not be deemed to be Affiliates of any Standby Purchaser.

“Business Day” means any day, other than a Saturday, Sunday or other day on which banks in the city of New York are required or permitted to close.  

“Control” has the meaning specified in Rule 12b-2 under the Exchange Act.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“First Standby Shares” means the number of shares of Common Stock calculated as (i) 4,645,161 shares minus (ii) the total number of shares (if any) subscribed for by the Standby Purchasers and any of their Affiliates pursuant to the exercise of the Basic Subscription Rights.

“Maximum Additional Standby Shares” means the number of shares of Common Stock calculated as (i) 5,645,161 shares minus (ii) (A) the total number of shares (if any) subscribed for by the Standby Purchasers and any of their Affiliates pursuant to the exercise of the Basic Subscription Rights and (B) the First Standby Shares.

1

“Person” means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, governmental entity or other entity of any kind or nature.

“Pro Rata Portion” means, with respect to each Standby Purchaser, the percentage set forth opposite such Standby Purchaser’s name in Annex A.  

“Remaining Shares” means the total number of shares of Common Stock issuable pursuant to the Rights Offering minus the total number of shares of Common Stock subscribed for by stockholders of the Company pursuant to the exercise of the Basic Subscription Rights.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Trading Day” means any day on which the NASDAQ Capital Market is open for trading. 

2.

Rights Offering; Standby Commitment.

(a)

      Prospectus.  As promptly as reasonably practicable after the date of this Agreement, the Company shall prepare and file with the SEC, pursuant to Rule 424 under the Securities Act, a final prospectus supplement relating to the Rights Offering (the “Prospectus Supplement”), which will supplement the base prospectus contained in the Registration Statement on Form S-3 (SEC File No. 333-214043) (the “Registration Statement”) filed by the Company with the SEC and declared effective on November 2, 2016.  Such base prospectus, in the form in which it appears in the Registration Statement, as supplemented by the Prospectus Supplement is hereinafter referred to as the “Prospectus.”  The Prospectus Supplement shall be provided to the Standby Purchasers and their counsel prior to its filing with the SEC, and the Standby Purchasers and their counsel shall be given a reasonable opportunity to review and comment upon the Prospectus Supplement (and any post-effective amendments to the Registration Statement and any other amendments or supplements to the Prospectus that may be filed prior to the Closing or otherwise in connection with the Rights Offering).  The Prospectus Supplement shall reflect the terms of the Rights Offering as set forth in this Agreement (including, without limitation, the recitals set forth above).

(b)

   Rights Offering.  Promptly following the date on which the Prospectus Supplement is filed with the SEC, the Company shall distribute the Prospectus to the Company’s stockholders of record as of the Record Date and thereafter promptly commence the Rights Offering upon the terms set forth herein.  The Rights offering shall remain open for at least twenty (20) days, but no more than thirty (30) days, or such longer period as the Board of Directors of the Company determines is necessary to comply with applicable law.  Prior to the termination of this Agreement, the Company shall not amend any of the terms of the Rights Offering described in this Agreement (including, without limitation, in the recitals set forth above), terminate the Rights Offering or waive any material conditions to the closing of the Rights Offering, in each case, without the prior written consent of all of the Standby Purchasers. Subject to the terms and conditions of the Rights Offering, the Company shall effect the closing of the Rights Offering as promptly as practicable following the end of the Subscription Period. The closing of the Rights Offering shall occur at the time, for the Subscription Price and in the manner and on the terms set forth in the Prospectus Supplement, which terms shall be consistent with this Agreement in all respects.  

(c)

   Standby Purchase Commitment. If upon the expiration of the Rights Offering there are any Remaining Shares, each Standby Purchaser agrees to purchase from the Company, and the Company agrees to issue and sell to such Standby Purchaser (or its designee), at the Subscription Price, its Pro Rata Portion of the lesser of the First Standby Shares and the Remaining Shares. If the number of Remaining Shares is greater than the number of First Standby Shares, and if following exercise by the Company’s stockholders of the Oversubscription Rights and after giving effect to all of the Standby Purchasers’ purchase of shares pursuant to the immediately preceding sentence there are Unsubscribed Shares available, each Standby Purchaser agrees to purchase from the Company, and the Company agrees to issue and sell to such Standby Purchaser (or its designee), at the Subscription Price, its Pro Rata Share of the lesser of such remaining Unsubscribed Shares and the Maximum Additional Standby Shares (the lesser of the foregoing (if any), together with the First Standby Shares that the Standby Purchasers are  obligated to purchase hereunder, the “Standby Shares”). Each Standby Purchaser acknowledges that the precise number of Standby Shares it will be obligated to purchase hereunder is yet to be determined, and could be its Pro Rata Portion of the full number of First Standby Shares and Maximum Additional Standby Shares. The offering of the Standby Shares to the Standby Purchasers is referred to herein as the “Standby Offering”.

2

(d)

   Amount of Standby Shares. During the Rights Offering, the Company will regularly advise each Standby Purchaser of the number of shares of Common Stock for which stockholders have exercised their Rights and will promptly respond to inquiries from any Standby Purchaser in that regard. Promptly, but in no event more than two (2) Business Days following the expiration of the Rights Offering, the Company will determine the number of Standby Shares and notify each Standby Purchaser in writing of the number of Standby Shares and the aggregate purchase price for such shares, determined as provided herein (the “Closing Purchase Amount”), as well as each Standby Purchaser’s Pro Rata Portion of the Standby Shares and Closing Purchase Amount. 

(e)

   Closing. On the basis of the representations and warranties and subject to the terms and conditions herein set forth, the closing of the purchase and sale of the Standby Shares (the “Closing”) shall take place at the offices of Greenberg Traurig, LLP, Chicago, Illinois on the same day as the closing of the purchase and sale of the shares subscribed for in the Rights Offering, or as soon thereafter as is reasonably practicable (and in any event within three (3) Business Days following such date) (as applicable, the “Closing Date”). At the Closing, the Company shall deliver or cause to be delivered to each Standby Purchaser (or its designee) one or more certificates (or evidence of book-entry records) representing such Standby Purchaser’s Pro Rata Portion of the Standby Shares, and such Standby Purchaser shall deliver (or cause to be delivered) to the Company, by wire transfer, such Standby Purchaser’s Pro Rata Portion of the Closing Purchase Amount.   

(f)

   Assignment to Affiliates.  Each Standby Purchaser shall have the right to arrange for one or more of its Affiliates (each, an “Affiliated Purchaser”) or one or more other Standby Purchasers to purchase any Standby Shares otherwise to be purchased by such Standby Purchaser pursuant to this Agreement, by written notice to the Company at least two (2) Business Days prior to the Closing Date, which notice shall be signed by the Standby Purchaser making such arrangement and each Affiliated Purchaser or other Standby Purchaser to which such arrangement relates, and shall contain a confirmation by such Affiliated Purchaser or other Standby Purchaser of the accuracy with respect to it of the representations set forth in Section 3. In no event will any such arrangement relieve any Standby Purchaser from its obligations under this Agreement (except that the obligation of the Standby Purchaser making such arrangement to purchase any of its Pro Rata Portion of the Standby Shares shall be reduced to the extent that Affiliated Purchasers or other Standby Purchasers purchase any of such Standby Shares at the Closing).

(g)

   Expense Reimbursement.  In consideration for each Standby Purchaser’s commitment to purchase the Standby Shares upon the terms set forth herein, the Company will promptly reimburse or pay, as the case may be, on the Closing Date, or if this Agreement is terminated prior to the Closing Date, within two Business Days following such termination, the out-of-pocket costs and expenses incurred by such Standby Purchaser in connection with the transactions contemplated hereby (including, without limitation, the Rights Offering, the Standby Offering, the Prospectus, and any subsequent registration statement, prospectus or prospectus supplement covering the resale of the Standby Shares, the commitment to purchase the Standby Shares hereunder and the negotiation and execution of this Agreement or any other document or instruments contemplated hereby), including reasonable fees and disbursements of counsel to each Standby Purchaser (collectively, “Transaction Expenses”). The provision for the payment of the Transaction Expenses is an integral part of the transactions contemplated by this Agreement and without this provision no Standby Purchaser would have entered into this Agreement.

(h)

   No Oversubscription.  Without limiting the rights of the Standby Purchasers hereunder (including, without limitation, the right to purchase the First Standby Shares or the Maximum Additional Standby Shares), each Standby Purchaser agrees that it will not exercise any of its Oversubscription Rights in the Rights Offering.

3.

Representations and Warranties of the Standby Purchasers. Each Standby Purchaser represents and warrants to the Company, severally and not jointly, on behalf of itself only, as follows:

(a)

   Existence and Good Standing; Authority. Such Standby Purchaser is (i) a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware, in the case of DRW Commodities, or Illinois, in the case of DOOH Investments, with full power and authority to perform its obligations under this Agreement; or (ii) in the case of the Trust, a trust duly formed in accordance with the laws of the state of Illinois.

(b)

   Enforceability. This Agreement is valid, binding and enforceable against such Standby Purchaser in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principals.

3

(c)

   No Conflicts. Such Standby Purchaser is not in default under any agreement, indenture or instrument to which such Standby Purchaser is a party, the effect of which violation or default could reasonably be expected to have a material adverse  effect  on  such Standby Purchaser’s ability to consummate the transactions contemplated by this Agreement, and the execution, delivery and performance of this Agreement by such Standby Purchaser and the consummation of the transactions contemplated hereby will not conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of such Standby Purchaser pursuant to the terms of any agreement, indenture or instrument to which such Standby Purchaser is a party, or any order, rule or regulation of any court or governmental agency having jurisdiction over such Standby Purchaser or any of its or his property, except in any case as would not have a material adverse effect on such Standby Purchaser’s ability to consummate the transactions contemplated by this Agreement; and, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required to be made or obtained  by such Standby Purchaser for the execution, delivery and performance  of this Agreement by such Standby Purchaser; provided that the parties acknowledge that each Standby Purchaser shall be obligated to make filings under Sections 13(d) and 16 of the Exchange Act in connection therewith.

(d)

   Accredited Standby Purchaser. Such Standby Purchaser is an “accredited investor” as that term is defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

(e)

   Information; Knowledge of Business. Such Standby Purchaser is familiar with the business of the Company. Such Standby Purchaser has knowledge and experience in financial and business matters; is familiar with the investments of the type that it is contemplated by this Agreement, is fully aware of the problems and risks involved in making an investment of this type, and is capable of evaluating the merits and risks of this investment. Such Standby Purchaser acknowledges that, prior to executing this Agreement, it has had the opportunity to ask questions of and receive answers or obtain additional information from a representative of the Company concerning the financial and other affairs of the Company.  Neither such Standby Purchaser’s familiarity with the business of the Company and access to information nor any due diligence investigations conducted by such Standby Purchase or its affiliates, advisors or representatives shall modify, amend or affect such Standby Purchaser’s right to rely on the representations and warranties of the Company contained in this Agreement.

(f)

   Investment Intent. The Standby Purchaser is acquiring the Standby Shares for its own account, as principal, and with no present intention of participating, directly or indirectly, in a distribution of the Standby Shares so acquired in violation of the Securities Act.  

(g)

   Limited Liquidity. Such Standby Purchaser has no need for immediate liquidity in such Standby Purchaser’s investment in the Standby Shares and understands that there are restrictions on the subsequent resale or other transfer of the Standby Shares.

(h)

   Restricted Securities. Such Standby Purchaser understands that the Standby Shares purchased by such Standby Purchaser will be deemed “restricted securities” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold, assigned, conveyed, pledged, hypothecated or otherwise transferred by a holder thereof except pursuant to Rule 144, pursuant to an effective registration statement registering such Standby Shares under the Securities Act or in a transaction otherwise exempt from registration under the Securities Act. Further, such Standby Purchaser acknowledges that the following legend (but no other legend) shall be placed on the certificate(s) representing the Standby Shares:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

(i)

   No Manipulation or Stabilization of Price. Such Standby Purchaser has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company in order to facilitate the sale or resale of any securities of the Company in connection with the Rights Offering, and such Standby Purchaser does not have actual knowledge of any such action taken or to be taken by any person that has not been publicly disclosed.

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(j)

   Ownership. As of the date of this Agreement, each Standby Purchaser and its Affiliates (excluding for this purpose Affiliates that are also Standby Purchasers) are the record owners of, in the aggregate, the shares of Common Stock and warrants exercisable to purchase shares of Common Stock as set forth on Schedule 3(j).

4.

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

(a)

   Existence and Good Standing; Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority to conduct its business as currently conducted and proposed to be conducted and to perform its obligations under this Agreement.

(b)

   Authorization of Agreement; Enforceability. This Agreement has been duly and validly authorized (including by a duly appointed special committee of the Board of Directors of the Company consisting solely of directors who are both independent and disinterested), executed and delivered by the Company, and no further consent or action is required by the Company, its Board of Directors (or any committee thereof) or its stockholders. This Agreement is valid, binding and enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principals.

(c)

   Due Authorization and Issuance of Shares. All of the shares of Common Stock to be issued pursuant to this Agreement will have been duly authorized for issuance prior to the Closing, and, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable; and none of such shares of Common Stock will have been issued in violation of the preemptive rights of any security holders of the Company arising as a matter of law or under or pursuant to the Company’s Certificate of Incorporation, as amended, the Company’s Bylaws, as amended, or any material agreement or instrument to which the Company is a party or by which it is bound.  

(d)

   No Conflicts. The Company is not in violation of its Certificate of Incorporation, as amended, or Bylaws, as amended, or in default under any agreement, indenture or instrument to which the Company is a party, the effect of which violation or default could reasonably be expected to have a material adverse effect on the business, operations, results of operations, condition (financial or otherwise), asset, properties or prospects of the Company and its subsidiaries, taken as a whole, or on the legality, validity or enforceability of this Agreement or on the Company’s ability to perform its obligations hereunder or to consummate the Rights Offering or the Standby Offering (a “Material Adverse Effect”), and the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby will not (i) conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company pursuant to the terms of, any agreement, indenture or instrument to which the Company is a party, which conflict, breach, default, lien, charge or encumbrance would have, or could reasonably be expected to have, a Material Adverse Effect, or (ii) result in a violation of the Certificate of Incorporation or Bylaws of the Company, any law or any order, rule or regulation of any court, governmental agency or self-regulatory organization (including The NASDAQ Stock Market, LLC) having jurisdiction over the Company or any of its property; and, except as required by the Securities Act and the Exchange Act as expressly contemplated hereby, no consent, authorization or order of, or filing or registration with, any court, self-regulatory organization or governmental agency is required for the execution, delivery and performance of this Agreement, other than filings with The NASDAQ Stock Market, LLC that have been properly completed and filed prior to the date hereof.

(e)

   Capitalization.  As of the date of this Agreement, (i) the Company is authorized to issue up to 250,000,000 shares of Common Stock and has 37,182,041 shares of Common Stock issued and outstanding; and (ii) the Company is authorized to issue up to 1,000,000 shares of preferred stock, of which 280,000 have been designated as Series A Preferred Stock, and has no shares of Series A Preferred Stock issued or outstanding. As of the date of this Agreement, there are outstanding options to purchase an aggregate of 2,115,000 shares of Common Stock, warrants to purchase an aggregate of 9,649,318 shares of Common Stock and 265,000 shares of Common Stock are reserved for issuance pursuant to the Company’s 2013 Equity Incentive Plan. All of the outstanding shares of Common Stock and Series A Preferred Stock have been duly and validly authorized and issued and are fully paid and non-assessable and were not issued in violation of any preemptive rights, resale rights, rights of first refusal or similar rights.  Except as set forth in this Section 4(e), no shares of capital stock or other equity securities or voting interest in the Company or any of its subsidiaries are issued, reserved for issuance or outstanding.  Except for the issuance of options in the ordinary course of business under the Company’s 2013 Equity Incentive Plan described in the Registration Statement and the Prospectus, since the respective dates as of which information is provided in the Registration Statement and the Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company, other than this Agreement.

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(f)

   No Manipulation or Stabilization of Price. The Company has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company in order to facilitate the sale or resale of any securities of the Company, and the Company is not aware of any such action taken or to be taken by any person that has not been publicly disclosed.

(g)

   Registration Statement. Except with respect to statements in or omissions from the Registration Statement or Prospectus based upon written information relating to the Standby Purchasers furnished by the Standby Purchasers to the Company specifically for use therein, (i) (A) at the time the Registration Statement initially became effective, (B) at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of prospectus), (C) at the time any Common Stock is first sold in the Rights Offering and (D) on the Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act and the did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) on its date, at the time of filing the Prospectus Supplement pursuant to Rule 424(b) and on the Closing Date, the Prospectus will conform in all material respects to the requirements of the Securities Act and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. For purposes of this paragraph, the Registration Statement and Prospectus, as applicable, shall be deemed to include all such financial statements, financial information and schedules and other information which are incorporated by reference in or otherwise deemed by the Securities Act to be a part of or included in the Registration Statement or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include the subsequent filing of any document under the Exchange Act that is deemed to be incorporated therein by reference therein or otherwise deemed by the Securities Act to be part of the Registration Statement of the Prospectus (as applicable).  The Company was at the time of filing the Registration Statement, and at the date hereof, remains eligible to use Form S-3 under the Securities Act.  As of the date hereof, the sale of Common Stock in the Rights Offering and pursuant to this Agreement complies, and as of the Closing Date, the sale of Common Stock in the Rights Offering and hereunder will comply, with the requirements of General Instruction I.B.6 of Form S-3.

(h)

   SEC Filings.  

(i)

Since January 1, 2015, the Company has timely filed all reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto (collectively the “Company SEC Documents”), that were required to be filed with the SEC under the Exchange Act. As of their respective filing dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the Company SEC Documents contained, when filed with the SEC, and if amended, as of the date of such amendment, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances in which they were made, not misleading.

(ii)

The Company’s consolidated financial statements, including the notes thereto, included or incorporated by reference in the Company SEC Documents (the “Company Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) consistently applied in all material respects (except as may be indicated in the notes and schedules thereto) during the periods involved and present fairly in all material respects the Company’s consolidated financial position at the dates thereof and of its operations and cash flows for the periods specified therein (subject to the absence of notes and year-end adjustments that are not material in the case of unaudited statements).

(iii)

Neither the Company nor any of its Subsidiaries has any liabilities or obligations (accrued, absolute, contingent or otherwise) of a nature that would be required to be accrued or reflected in a consolidated balance sheet prepared in accordance with GAAP, other than liabilities or obligations (A) reflected on, reserved against, or disclosed in the notes to, the consolidated balance sheets of the Company Financial Statements or (B) incurred in the ordinary course of business consistent since the date of the last consolidated balance sheet in the Company Financial Statements.

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(i)

   Anti-Takeover Statutes.  The board of directors of the Company has taken such actions and votes as are necessary on its part to render the provisions of any applicable “fair price,” “moratorium,” “control share acquisition” or any other anti-takeover statute (including Section 203 of the Delaware General Corporation Law (“DGCL”)) or similar federal or state statute inapplicable to this Agreement and the transactions contemplated hereby, including the Company’s issuance to each Standby Purchaser of all of the shares of Common Stock that such Standby Purchaser may purchase hereunder and otherwise in the Rights Offering and such Standby Purchaser’s and such Standby Purchaser’s affiliates and associates (within the meaning of Section 203 of the DGCL)  ownership of all of the shares of Common Stock that such Standby Purchaser and such Standby Purchaser’s affiliates’ and associates’ will own immediately following the Closing.  The Company has not adopted a shareholder rights plan (or “poison pill”) or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company.

(j)

   Acknowledgment Regarding the Standby Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that the Standby Purchasers are acting solely in the capacity of an arm’s length purchasers with respect to the Rights Offering, the Standby Shares and the transactions contemplated thereby and otherwise in connection with the Rights Offering. The Company further acknowledges that no Standby Purchaser is acting as a financial advisor or fiduciary of the Company with respect to the Rights Offering or the transactions contemplated hereby and any advice given by any Standby Purchaser or any of its representatives or agents in connection with the transactions contemplated hereby or the Rights Offering is merely incidental to such Standby Purchaser’s purchase of the Standby Shares.  The Company further represents to the Standby Purchasers that the Company’s decision to enter into this Agreement and to effect the Rights Offering on their respective terms has been based solely on the independent evaluation of the Rights Offering and the transactions contemplated hereby by the Company and its legal counsel, financial advisors and other representatives.

(l)

   NASDAQ Listing.  The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the NASDAQ Capital Market. Except as set forth in the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2016 (the “Bid Price 8-K”), the Company is in compliance in all material respects with all rules and regulations of the NASDAQ Capital Market, and the Company has no knowledge of any facts or circumstances which would reasonably lead to delisting or suspension, or termination of the trading or quotation of, the Parent Common Stock by or on the NASDAQ Capital Market in the foreseeable future.  Except as set forth in the Bid Price 8-K, the Company has received no communication, written or oral, from the SEC or the NASDAQ Capital Market regarding the suspension or termination of trading of the Common Stock on the NASDAQ Capital Market.  All of the shares of Common Stock issuable to the Company’s stockholders pursuant to this Agreement and the Rights Offering will be approved for listing on the NASDAQ Capital Market as of the Closing Date, subject only to notice of issuance.

(m)

   Financial Advisors. The Company represents and warrants to the Standby Purchasers that, except as disclosed in the most recent draft of the Prospectus Supplement furnished to the Standby Purchasers prior to the execution and delivery of this Agreement, (i) it has not engaged a placement agent, broker or financial advisor in connection with the Rights Offering or the transactions contemplated hereby and (b) there are no fees, commissions or expenses payable to any broker, finder or agent relating to or arising out of the transactions contemplated hereby.  The Company shall be responsible for the payment of any broker’s commissions or similar feels relating to or arising out of the transactions contemplated hereby.  The Company shall pay, and hold each Investor harmless against, any liability, loss or expense (including reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim for any such payment.  

5.

Conditions to Closing.

(a)

   Conditions to Both Parties’ Obligations. The obligations of the Company and each Standby Purchaser to  consummate the transactions contemplated hereunder in connection with the Standby Offering are subject to the fulfillment, on or prior to the Closing Date, of the following conditions:

(i)

the Rights Offering shall have been consummated at the Subscription Price and otherwise upon the terms set forth herein and in the Prospectus;

(ii)

no judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering unachievable, the consummation of the Standby Offering or the transactions contemplated by this Agreement; and

(iii)

all required approvals and consents that are required in connection with the consummation of the transactions contemplated by this Agreement shall have been duly obtained and shall be effective.

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(b)

   Conditions to Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereunder in connection with the Standby Offering are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:

(i)

the representations and warranties of each Standby Purchaser in Section 2 shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if made as of such date; and

(ii)

the Standby Purchasers shall have performed all of their respective obligations hereunder.

(c)

   Conditions to Standby Purchasers’ Obligations. The obligations of each Standby Purchaser to consummate the transactions contemplated hereunder in connection with the Standby Offering are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:

(i)

the representations and warranties of the Company in Section 3 shall be true and correct as of the date hereof and as of the Closing Date as if made as of such date; 

(ii)

the Company shall have performed all of its obligations hereunder;

(iii)

to the extent such Standby Purchaser has exercised its Basic Subscription Rights, the Company shall have issued to such Standby Purchaser all shares of Common Stock issuable as a result of such exercise; 

(iv)

the Company shall have executed and delivered to the Standby Purchasers the Registration Rights Agreement (as defined below); 

 

(v)

no stop order shall have been entered by the SEC with respect to the Registration Statement; and

(vi)

 since the date of this Agreement, (A) there shall not have occurred any changes or events that, individually or in the aggregate would reasonably be expected to result in material adverse effect on the financial condition, business, properties, assets or prospects of the Company and its subsidiaries, taken as a whole; and (B) there shall not have occurred (i) a material adverse change in the financial markets in the United States, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, or (ii) a material disruption in commercial banking or securities settlement or clearance services in the United States, or (iii) a declaration of a banking moratorium by either Federal or New York authorities.

6.

Survival. The covenants, representations and warranties of the parties contained in this Agreement or in any certificate delivered hereunder shall survive the Closing hereunder. 

7.

Covenants.

(a)

   SEC Filings. The Company agrees, as soon as reasonably practicable after the Company is advised or obtains knowledge thereof, to advise the Standby Purchasers of (i) the issuance by the Commission of any stop order, or of the initiation or threatening of any proceeding, suspending the effectiveness of the Registration Statement on the Registration Statement or any order preventing or suspending the use of any prospectus or any amendment or supplement thereto in connection with the Rights Offering, (ii) the issuance by any state securities commission of any notice of any proceedings for the suspension of the qualification of the shares of Common Stock for offering or sale in any jurisdiction  or of the initiation, or the threatening, of any  proceeding for such purpose, or (iii) any request by the Commission for any amendment to the Registration Statement or for additional information. The Company shall use its reasonable best efforts to prevent the issuance of any such order or the imposition of any such suspension and, if any such order is issued or suspension is imposed, to obtain the withdrawal thereof as promptly as possible.

8

(b)

   Information About Standby Purchasers. Each Standby Purchaser agrees to furnish to the Company all information with respect to such Standby Purchaser that may be necessary for inclusion in the Registration Statement or any amendment thereto, or any prospectus or prospectus supplement to be filed pursuant thereto, and such information will not contain any untrue statement of material fact or omit to state a material fact required to be stated in the Registration Statement or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(c)

   Public Announcements. Neither the Company nor any Standby Purchaser shall issue any public announcement, statement or  other disclosure with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other party hereto, which consent shall not be unreasonably withheld or delayed, except if such public announcement, statement or other disclosure is required by applicable law (including, in the case of each Standby Purchaser, Sections 13(d) and 16 of the Exchange Act) or applicable stock market regulations, in which case the disclosing party shall consult in advance with respect to such disclosure with the other parties to the extent reasonably practicable.  The Company represents, warrants and covenants to each Standby Purchaser that no public announcement made by or on behalf of the Company relating to the Rights Offering contained or will contain any untrue statement of material fact or omit to state a material fact required to be stated in such public announcement or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d)

   NASDAQ Listing. The Company shall cause the shares of Common Stock issued to the Standby Purchasers hereunder or otherwise in the Rights Offering to be listed on the NASDAQ Capital Market.

(e)

   Operations. The Company will, and will cause its subsidiaries to, operate the Company’s business (including the business of the Company’s subsidiaries) in the ordinary course of business consistent with past practice through the Closing Date.  Without limiting the generality of the immediately preceding sentence, the Company shall not, and shall cause each of its subsidiaries not to: (i) issue, grant, deliver or sell any capital stock, equity security, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) its capital stock (other than with respect to (A) the issuance of the Rights and the Common Stock issuable upon the exercise thereof, (B) the issuance of the Standby Shares, (C) the granting of options or other equity awards under the Company’s 2013 Equity Incentive Plan and (D) the issuance of shares upon the exercise of options previously granted under the Company’s 2013 Equity Incentive Plan), (ii) effect any stock split, stock dividend, stock combination, recapitalization or similar event with respect to the Common Stock, (iii) make any amendments to its organizational documents, (iv) sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination, other than sales of assets in the ordinary course of business consistent with past practice; (v) make any material acquisitions, by purchase or other acquisition of shares or other equity interests, or by merger, consolidation or other business combination, or material purchase of any property or assets, to or from any Person; (vi) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, or (vii) approve, agree or commit to do, or set a record date for, any of the foregoing.

(f)

   Lock-Up. Each Standby Purchaser acknowledges and agrees that, without the prior written consent of the Company, during the period commencing on the Closing Date and continuing for a period of six months thereafter, such Standby Purchaser shall not (i) sell, assign, transfer (including by operation of law), incur any liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever, dispose of or otherwise encumber (each, a “Transfer”), (b) make any short sale of, grant any option for the purchase of, or (c) enter into any hedging or similar transaction with the same economic effect as a Transfer of, any of the Standby Shares.  Notwithstanding the foregoing, each Standby Purchaser may (a) transfer Standby Shares (i) as a bona fide gift or gifts, or by will or intestacy, or (ii) to (x) any family partnership or trust for the benefit of Donald R. Wilson and/or one or more members of his immediate family or (y) any affiliate of such Standby Purchaser or any charitable organization formed by such Standby Purchaser or any of its affiliates, provided, in any such case, that the transferee agrees to be bound in writing by the terms of this paragraph prior to such transfer; (b) transfer Standby Shares to partners, members, stockholders or beneficiaries of the Standby Purchaser, provided that (y) the transferee agrees to be bound in writing by the terms of this Section 7(f) prior to such transfer and (z) such transfer does not involve a disposition for value.  Furthermore, the restrictions contained in this Section 7(f) shall not apply to any transfers, sales, tenders or other dispositions of Standby Shares pursuant to a tender offer for Common Stock of the Company or any merger, consolidation or other business combination involving the Company or its securities. 

(g)

   Rule 144. For a period of two (2) years after the Closing Date and thereafter until there are no “Registrable Securities” (as such term shall be defined in the Registration Rights Agreement (as defined below)), the Company will use its commercially reasonable efforts to timely file all reports and other documents required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, if the Company is not required 

9

to file such reports, it will, upon the request of any Standby Purchaser, make publicly available such information as necessary to permit sales pursuant to Rule 144 of the Securities Act), and will use commercially reasonable efforts to take such further action as such Standby Purchaser may reasonably request, all to the extent required from time to time to enable the Standby Purchasers to sell Standby Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 of the Securities Act.

(h)

   Registration Rights Agreement. At or prior to the Closing, the Company shall enter into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Standby Purchasers, in form and substance reasonably acceptable to the Standby Purchasers, pursuant to which the Company shall agree to, as soon as practicable following the Closing Date, register all of the shares held by the Standby Purchasers and/or their respective Affiliates, including all shares of Common Stock held by the Standby Purchasers and/or their respective Affiliates as of the date hereof.  Such Agreement shall provide for demand and “piggyback” registration rights, including with respect to underwritten offerings.

(i)

   Satisfaction of Closing Conditions.  The Company shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 5 of this Agreement. Without limiting the foregoing, the Company shall use its reasonable best efforts, and shall cause its Affiliates to use their reasonable best efforts, to, take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary to consummate the Rights Agreement as provided in this Agreement and the Prospectus Supplement. 

(j)

   Legend Removal.  Certificates evidencing any of the Standby Shares shall not contain any legend (including the legend set forth in Section 3(h) hereof), (i) while a registration statement covering the resale of such Standby Shares is effective under the Securities Act, (ii) following any sale of such Standby Shares, or in the event a Standby Purchaser provides customary representations and covenants that such Standby Shares are being sold, pursuant to Rule 144, (iii) if such Standby Shares are eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions thereunder, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Securities and Exchange Commission).  The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent if required by the transfer agent to effect the removal of the legend hereunder.  The Company agrees that at such time as such legend is no longer required under this Section 7(j) , it will, no later than the earlier of (X) three (3) business days and (Y) the number of business days comprising the Standard Settlement Period (as defined below) following the delivery by a Standby Purchaser to the Company or the transfer agent of a certificate representing Standby Shares bearing a restrictive legend (the “Legend Removal Date”), deliver or cause to be delivered to such Standby Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company shall not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in Section 3(h) hereof.  Certificates for Standby Shares subject to legend removal hereunder shall be transmitted by the transfer agent to a Standby Purchaser by crediting the account of such Standby Purchaser’s prime broker with the Depository Trust Company System (“DTC”) through its Deposit/Withdrawal at Custodian system as directed by such Standby Purchaser.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of business days, on the Company’s primary trading market with respect to the Common Stock (which as of the date of this Agreement is the NASDAQ Capital Market) as in effect on the date of delivery of a certificate representing the applicable Standby Shares (or the date of crediting such Standby Shares with DTC, as applicable), as the case may be, issued without a restrictive legend.

8.

Termination.

(a)

   By the Standby Purchasers. The Standby Purchasers may terminate this Agreement (i) if the Company materially breaches any of its representations and warranties or any of its covenants or obligations under this Agreement and such breach is not cured within five (5) Business Days following written notice to the Company, or (ii) in the event of an incurable failure of a condition to close that cannot be unilaterally waived by the Company.  Following the termination of this Agreement pursuant to this Section 8(a), the Company shall not commence, effect or consummate the Rights Offering or a similar offering within six months of such termination without the prior written consent of the Standby Purchasers.

(b)

   By the Company. The Company may terminate this Agreement (i) in the event the Company, in its reasonable judgment, determines that it is not in the best interests of the Company and its stockholders to proceed with the Rights Offering; (ii) if consummation of the Rights Offering or the Standby Offering is prohibited by applicable law, rules or regulations, or (iii) if a Standby Purchaser materially breaches any of its representations and warranties or any of its covenants or obligations under this Agreement and such breach is not cured within five (5) Business Days following written notice to the Standby Purchasers, or (iv) in the event of incurable failure of a condition to close that cannot be unilaterally waived by the Standby Purchasers; provided that, except in the case of a termination pursuant to clause (iii) of this Section 8(b), the Company shall not commence, effect or consummate the Rights Offering or a similar offering within six months of such termination without the prior written consent of the Standby Purchasers.

10

(c)

   Other. Either of the parties hereto may terminate this Agreement if the Closing has not occurred by the close of business on January 31, 2017 through no fault of the terminating party; provided that, the Company shall not commence or effect the Rights Offering or a similar offering within six months following such termination without the prior written consent of the Standby Purchasers. In addition, this Agreement shall terminate upon the parties’ mutual consent.

(d)

   Effect of Termination. The Company and each Standby Purchaser hereby agree that any termination of this Agreement pursuant to this Section 8 (other than termination by one party in the event of a breach of this Agreement by the other party or a misrepresentation of any of the statements made hereby by the other party), shall be without liability to the Company or any Standby Purchaser.

9.

Notices. All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed  by  the party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (a) on the date delivered if delivered in person, (b) on the next Business Day after it is transmitted if delivered by email (subject to absence of a message back to the sender of undeliverability); or (c) on the next Business Day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows:

If to the Company:

RMG Networks Holding Corporation

15301 Dallas Parkway, Suite 500

Addison, TX 75001

Attention: General Counsel

Email: bob.robinson@rmgnetworks.com

with a copy to:

Greenberg Traurig, LLP

77 West Wacker Drive, Suite 3100

Chicago, IL 60601

Attn: Ameer Ahmad, Esq.

Email: ahmada@gtlaw.com

If to any Standby Purchaser:

c/o DRW Holdings, LLC

540 W. Madison St., Suite 2500

Chicago, IL 60661

Attn:  General Counsel

Email: GeneralCounsel@DRWHoldings.com

with a copy to:

Katten Muchin Rosenman LLP

525 W. Monroe St.

Chicago, Illinois 60661

Attn: Mark D. Wood

Email:  mark.wood@kattenlaw.com 

or to such other representative or at such other address of a party as such party hereto may furnish to the other party in writing in accordance with this Section 8.

10.

Indemnification, Contribution.

(a)

   Whether or not the Rights Offering, the Closing or the other transactions contemplated hereby are consummated or this Agreement is terminated, the Company (in such capacity, the “Indemnifying Party”) shall indemnify, defend and hold harmless each Standby Purchaser and each Affiliated Purchaser, their respective Affiliates and their respective officers, directors, members, managers, partners, employees, agents, advisors, controlling persons, heirs, trustees, beneficiaries, successors and assigns, as applicable (each, an “Indemnified Person”), from and against any and all losses, claims, damages, 

11

liabilities, amounts paid in settlement and reasonable expenses, joint or several (“Losses”) incurred by such Indemnified Person or to which any such Indemnified Person may become subject arising out of or in connection with any claim, challenge, litigation, investigation or proceeding (“Proceedings”) arising out of or relating to the Rights Offering, the Standby Offering, this Agreement, the Registration Statement, or the Prospectus, any amendment or supplement thereto or the transactions contemplated by any of the foregoing and shall reimburse such Indemnified Persons for any reasonable legal fees and expenses or other out-of-pocket expenses incurred in connection with investigating, responding to or defending any of the foregoing; provided that the foregoing indemnification will not apply to Losses to the extent that they resulted from (i) statements or omissions in the  Prospectus or any amendment or supplement thereto made in reliance upon or in conformity with information relating to such Indemnified Person furnished to the Company in writing by or on behalf of such Indemnified Person expressly for use in the Prospectus or any amendment or supplement thereto or (ii) the material breach of this Agreement by a Standby Purchaser or an Affiliated Purchaser. If for any reason the foregoing indemnification is unavailable to any Indemnified Person (except as set forth in the proviso to the immediately preceding section) or insufficient to hold it harmless, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and such Indemnified Person on the other hand as well as any relevant equitable considerations.

(b)

   Promptly after receipt by an Indemnified Person of notice of the commencement of any Proceedings with respect to which the Indemnified Person may be entitled to indemnification hereunder, such Indemnified Person will, if a claim is to be made hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement thereof; provided that the omission so to notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have hereunder except to the extent it has been materially prejudiced by such failure. In case any such Proceedings are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, to the extent that it may elect by written notice delivered to such Indemnified Person, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Person; provided that if the defendants in any such Proceedings include both such Indemnified Person and the Indemnifying Party and such Indemnified Person shall have concluded that there may be legal defenses available to it that are different from or additional to those available to the Indemnifying Party, such Indemnified Person shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such Proceedings and approval by such Indemnified Person of counsel, the Indemnifying Party shall not be liable to such Indemnified Person for expenses incurred by such Indemnified Person thereafter in connection with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one firm of counsel, plus local counsel, in any jurisdiction representing the Indemnified Person), (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice of commencement of the Proceedings or (iii) the Indemnifying Party shall have authorized in writing the employment of counsel for such Indemnified Person.

11.

Entire Agreement. This Agreement constitutes the entire agreement and understanding among the Standby Purchasers and the Company with respect to the subject matter hereof, and supersedes all prior agreements and understandings relating to the subject matter hereof.

12.

Third Party Beneficiary. This Agreement is for the benefit only of the parties hereto, and for purposes of Section 10 the Indemnified Persons, and no other party may assert or enforce any rights derived from this agreement. 

13.

Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware (other than its rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby). 

14.

Amendments. This Agreement may be modified or amended only with the written consent of the Company and all of the Standby Purchasers.

15.

Severability. If any provision of this Agreement shall be invalid under the applicable law of any jurisdiction, the remainder of this Agreement shall not be affected thereby.

16.

Modification of Rights Offering. The Company may (a) waive irregularities in the manner of the exercise of the Rights, or (b) waive conditions relating to the method of the exercise of the Rights, in each case without the consent of the Standby Purchasers.

12

17.

Assignment.  Except as provided Section 2(f) of this Agreement, neither party hereto shall have the right to assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other party.

18.

Counterparts; Electronic Delivery.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.  Electronic transmission of a “pdf” of a counterpart signature page hereto shall have the same effect as personal delivery of a manually executed original signature page hereto.

19.

Interpretative Matters.  Unless the context otherwise requires, (i) all references to Sections, Schedules, Annexes or Exhibits are to Sections, Schedules, Annexes or Exhibits contained in or attached to this Agreement, (ii) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP, (iii) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (iv) the use of the word “including” in this Agreement shall be by way of example rather than limitation and (v) the word “or” shall not be exclusive.

21.

Independent Nature of Standby Purchasers’ Obligations and Rights.  The obligations of each Standby Purchaser under this Agreement and with respect to the Standby Offering  are several and not joint with the obligations of any other Standby Purchaser, and no Standby Purchaser shall be responsible in any way for the performance of the obligations of any other Standby Purchaser under any this Agreement or with respect to the Standby Offering.  The decision of each Standby Purchaser to purchase shares of Common Stock pursuant to this Agreement or in the Rights Offering has been made by such Standby Purchaser independently of any other Standby Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other Standby Purchaser or by any agent or employee of any other Standby Purchaser, and no Standby Purchaser or any of its agents or employees shall have any liability to any other Standby Purchaser (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained in this Agreement, and no action taken by any Standby Purchaser pursuant thereto or with respect to the Rights Offering, shall be deemed to constitute the Standby Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Standby Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or the Rights Offering.  Each Standby Purchaser acknowledges that no other Standby Purchaser has acted as agent for such Standby Purchaser in connection with making its investment hereunder and that no other Standby Purchaser will be acting as agent of such Standby Purchaser in connection with monitoring its investment hereunder.  Each Standby Purchaser shall be entitled to independently protect and enforce its rights, including the rights arising out of this Agreement, and it shall not be necessary for any other Standby Purchaser to be joined as an additional party in any proceeding or action for such purpose.

[Signature Page Follows]

13

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

			
	 
	COMPANY:

	 
	 

	 
	RMG NETWORKS HOLDING CORPORATION

	 
	 
	 

	 
	By:

	/s/ Robert Michelson

	 
	Name:

	Robert Michelson

	 
	Title:

	CEO/President

	 
	 
	 

	 
	 
	 

	 
	STANDBY PURCHASERS:

	 
	 

	 
	2012 DOOH INVESTMENTS LLC

	 
	 
	 

	 
	By:

	DOOH Investment Manager LLC

	 
	Its:

	Manager

	 
	 
	 

	 
	 
	 

	 
	By:

	/s/ Donald R. Wilson, Jr.

	 
	Name:

	Donald R. Wilson, Jr.

	 
	Title:

	Manager

	 
	 
	 

	 
	 
	 

	 
	DRW COMMODITIES, LLC

	 
	 
	 

	 
	By:

	/s/ Donald R. Wilson, Jr.

	 
	Name:

	Donald R. Wilson, Jr.

	 
	Title:

	Manager

	 
	 
	 

	 
	 
	 

	 
	CHILDREN’S TRUST C/U THE 

DONALD R. WILSON 2009 GRAT #1

	 
	 
	 

	 
	By:

	/s/ Jennifer Wilson

	 
	Name:

	Jennifer Wilson

	 
	Title:

	Trustee

14

ANNEX A

PRO RATA PORTIONS

			
	Standby Purchaser

	 
	Pro Rata Portion

	2012 DOOH Investments LLC

	 
	10.8336%

	DRW Commodities, LLC

	 
	19.0487%

	Children’s Trust C/U The Donald R. Wilson 2009 GRAT #1

	 
	70.1177%

Schedule 3(j)

					
	Standby Purchaser

	 
	Common Stock Owned by Standby Purchaser and its Affiliates (excluding other Standby Purchasers)

	 
	Warrants Owned by Standby Purchaser and its Affiliates (excluding other Standby Purchasers)

	2012 DOOH Investments LLC

	 
	1,339,048

	 
	2,533,333

	DRW Commodities, LLC 

	 
	2,354,450

	 
	0

	Children’s Trust C/U The Donald R. Wilson 2009 GRAT #1

	 
	8,666,666

	 
	0

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