Document:

EXHIBIT 10.6

 

EXECUTION VERSION

 

SUBSCRIPTION AGREEMENT 

 

This SUBSCRIPTION
AGREEMENT (this “Agreement”) is made as of February 14, 2020, by and between Franchise Group, Inc., a Delaware
corporation (the “Company”), and Kayne FRG Holdings, L.P., a Delaware limited partnership (the “Subscriber”),
that is subscribing hereby to purchase shares of Common Stock, par value $0.01 per share, of the Company (“Common Stock”).

 

WHEREAS, the
Company has entered into that certain Agreement and Plan of Merger, dated as of December 28, 2019, by and among American Freight
Group Inc., a Delaware corporation (“Target”), Franchise Group Newco Intermediate AF, LLC, a Delaware limited
liability company and indirect subsidiary of the Company (“Parent”), Franchise Group Merger Sub AF, Inc., a
Delaware corporation and direct wholly owned subsidiary of Parent (“Merger Sub”) and The Jordan Company, L.P.,
a Delaware limited partnership, solely in its capacity as Representative (as defined therein) (as such agreement may be amended,
restated or otherwise modified from time to time, the “Merger Agreement”), pursuant to which, among other things,
subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Target, with Target
continuing as the surviving corporation in such merger and as an indirect subsidiary of the Company (the “Transaction”);

 

WHEREAS, on
December 28, 2019, the Company entered into a debt commitment letter with the Subscriber (the “Debt Commitment Letter”)
and related fee letters (the “Fee Letters” and, together with the Debt Commitment Letter, the “DCL”),
pursuant to which the Subscriber has agreed to provide $200,000,000 of debt financing for the Transaction subject to the terms
and conditions set forth in the DCL (the “Debt Commitment”); and

 

WHEREAS, as
consideration and payment for services rendered by the Subscriber to the Company and its affiliates in connection with the Debt
Commitment and the debt financing contemplated thereby (the “Consideration”), the Subscriber desires to subscribe
for from the Company, and the Company desires to issue and sell to the Subscriber in exchange for the Consideration, the Subscription
Shares (as defined below), subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE,
in consideration of the premises and of the mutual representations, warranties, covenants and obligations hereinafter set forth
and such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1. Purchase and Sale of Common Stock.
Subject to the terms and conditions set forth in this Agreement, contemporaneously with the consummation of the Transaction, the
Subscriber shall purchase, and the Company shall issue and sell to the Subscriber, 1,250,000 shares of Common Stock (the “Subscription
Shares”) in exchange for the Consideration. The issuance by the Company of the Subscription Shares and the subscription
by the Subscriber of the Subscription Shares in exchange for the Consideration are hereby collectively referred to herein as the
“Subscription”.

 

2. Closing.

 

		(a)	The closing of the purchase and sale of the Subscription Shares (the “Closing”)
shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, on the same day as
(and contemporaneously with) the closing of the Transaction pursuant to the Merger Agreement, or at such different time or date
and at such other place as the Subscriber and the Company may mutually agree in writing (the “Closing Date”).

 

     

    

    

		(b)	At the Closing, the Company shall evidence, or cause to be evidenced, the Subscription Shares in
book entry format with the Company’s transfer agent.

 

3. Representations and Warranties of
the Subscriber. The Subscriber hereby represents and warrants to the Company, as of the date hereof (except to the extent another
date is specified below), as follows:

 

		(a)	Authority and Approval; Enforceability. The Subscriber has all requisite power, authority
and legal capacity to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the
Subscription. The execution, delivery and performance by the Subscriber of this Agreement, and the consummation by it of the Subscription,
have been duly and validly authorized by all necessary action on the part of the Subscriber, and no other proceedings on the part
of the Subscriber are necessary to authorize the execution and delivery by the Subscriber of this Agreement and the consummation
by it of the Subscription. This Agreement has been duly executed and delivered by the Subscriber and, assuming due authorization,
execution and delivery hereof by the Company, is a legal, valid and binding obligation of the Subscriber, enforceable against the
Subscriber in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other Applicable Laws affecting creditors’ rights generally from time to time in effect and by general principles of
equity).

 

		(b)	Non-contravention. The execution, delivery and performance of this Agreement, and the consummation
of the Subscription, do not and will not conflict with, or result in any violation or breach of, or default (with or without notice
or lapse of time or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the
loss of a benefit under, or result in the creation of any lien (other than liens, if any, contained in the certificate of incorporation
or bylaws of the Company and restrictions on transfer pursuant to applicable securities laws, in each case in respect of the Subscription
Shares) in or upon any of the properties or other assets of the Subscriber under, (i) the organizational documents of the Subscriber
(if Subscriber is an entity), (ii) any Contract to which the Subscriber is a party or any of its properties or other assets is
subject or (iii) subject to (x) the filing of a Schedule 13D or an amendment to an existing Schedule 13D filing under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and (y) such filings and approvals as may be required
by any applicable state securities or “blue sky” laws, any Applicable Law with respect to the Subscriber or its properties
or other assets, other than, in the case of clauses (ii) and (iii), any such conflicts, violations, breaches, defaults, rights,
losses or liens that have not had or would not reasonably be expected to have, individually or in the aggregate, a Subscriber Material
Adverse Effect.

 

		(c)	Litigation. There is no Action pending or, to the Knowledge of the Subscriber, threatened,
and to the Knowledge of Subscriber, there is no external investigation pending or threatened with respect to the Subscriber, nor
is there any material judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator outstanding with
respect to the Subscriber, except in each case for any Actions that have not had and would not reasonably expected to have, individually
or in the aggregate, a Subscriber Material Adverse Effect.

 

		(d)	No Brokers. Other than the payment of fees and reimbursement of expenses of the Subscriber
and its affiliates pursuant to the DCL, no broker, investment banker, financial advisor or other person is entitled to any broker’s,
finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses, in connection with
the Subscription based upon arrangements made by or on behalf of the Subscriber.

 

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		(e)	Accredited Investor; Purchase for Own Account; No Registration.

 

	i.		The Subscriber has such knowledge and experience in financial and business matters such that it
is capable of evaluating the merits and risks of its investment.

 

	ii.		The Subscriber is an “accredited investor” as defined in Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the “Securities Act”).

 

	iii.		The Subscriber is experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment in the Company and has such knowledge and experience in financial and business matters that the Subscriber
is capable of evaluating the merits and risks of the investment in the Subscription Shares and can afford a complete loss of its
investment.

 

	iv.		The Subscriber is acquiring the Subscription Shares for investment only and for its own account,
and not with a view toward or for sale in connection with any distribution thereof. The Subscriber has no present plan or intention
of distributing, selling, exchanging, transferring or otherwise disposing of any such Subscription Shares.

 

	v	.	The Subscriber has been advised and understands that (1) the Subscription Shares have not been
registered under the Securities Act, or any state securities or “blue sky” laws and, therefore, cannot be resold unless
they are registered under the Securities Act and applicable state securities and “blue sky” laws or unless an exemption
from such registration requirements is available, (2) the Subscriber may be required to hold, and continue to bear the economic
risk of its investment in, the Subscription Shares indefinitely, unless the offer and sale of such Subscription Shares is subsequently
registered under the Securities Act and all applicable state securities and “blue sky” laws or an exemption from such
registration is available, (3) Rule 144 promulgated under the Securities Act is not presently available with respect to the sale
of any Subscription Shares, (4) when and if the Subscription Shares may be disposed of without registration under the Securities
Act in reliance on Rule 144 of the Securities Act, the amount of Subscription Shares that may be disposed of may be limited in
accordance with the terms and conditions of such Rule and (5) if an exemption under Rule 144 of the Securities Act is not available,
the public offer or sale of the Subscription Shares without registration will require compliance with some other exemption under
the Securities Act and compliance with any state securities or “blue sky” laws.

 

4. Representations and Warranties of
the Company. Except as disclosed in the reports, schedules, forms, statements and other documents (including exhibits and other
information incorporated therein) with the SEC since October 31, 2019 but prior to the date hereof and publicly available on the
SEC’s Electronic Data Gathering Analysis and Retrieval system (collectively, the “Company SEC Documents”)
(but (i) without giving effect to any amendment thereof filed with or furnished to the SEC on the date of this Agreement and (ii)
excluding any disclosure (other than statements of historical fact) contained in such Company SEC Documents under the heading “Risk
Factors” or “Cautionary Statement About Forward-Looking Statements” or similar heading and any other disclosures
contained or referenced therein of factors or risks that are predictive, cautionary or forward-looking in nature), the Company
represents and warrants to the Subscriber, as of the date hereof (except to the extent another date is specified below), as follows:

 

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		(a)	Organization, Standing and Corporate Power. The Company is a corporation duly incorporated,
validly existing and in good standing under the Applicable Laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now being conducted. Each Subsidiary of the Company is an entity duly organized, validly
existing and in good standing (except to the extent the “good standing” concept is not applicable in any relevant jurisdiction)
under the Applicable Laws of the jurisdiction in which it is formed and has all requisite corporate, limited liability company
or other entity power and authority to carry on its business as now being conducted, except to the extent that any failure to be
so organized, validly existing and in good standing has not had or would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. The Company and each of its Subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing or operation
of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. The Company has, prior to the date hereof, made available to the Subscriber true and complete copies of the certificate
of incorporation and bylaws of the Company. There has been no breach by the Company of the certificate of incorporation or bylaws
of the Company, each as in effect from time to time, except as would not have a Company Material Adverse Effect.

 

		(b)	Subsidiaries. All the outstanding shares of capital stock of, or other equity interests
in, each Subsidiary of the Company have been validly issued and, where applicable, are fully paid and nonassessable, and are owned
directly or indirectly by the Company free and clear of any liens other than Permitted Liens. Except (i) as set forth on Schedule
5(b) hereto and (ii) for the capital stock or other equity or voting interests of its Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity or voting interests in any person. Neither the execution and delivery
of this Agreement, nor the consummation of the Transaction, by the Company will conflict with or result in a breach of, or trigger
a right of first refusal or other preferential purchase right or preemptive right under any organizational documents, partnership
agreement, joint venture agreement, stockholders agreement or similar agreement in connection with the Company’s or its Subsidiaries’
ownership of any capital stock or other equity or voting interests in any Person set forth on Schedule 5(b) hereto.

 

		(c)	Authority and Approval; Enforceability. The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the Subscription.
The execution, delivery and performance by the Company of this Agreement and the consummation by it of the Subscription, have been
duly and validly authorized by the board of directors of the Company and no other corporate action on the part of the Company pursuant
to the Applicable Laws of the State of Delaware, the applicable listing standards of the Nasdaq Stock Market or otherwise, is necessary
to authorize the execution and delivery by the Company of this Agreement and the consummation by it of the Subscription. This Agreement
has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Subscriber,
is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other Applicable Laws affecting creditors’
rights generally from time to time in effect and by general principles of equity).

 

		(d)	Non-contravention. The execution, delivery and performance of this Agreement, and the consummation
of the Subscription, do not and will not, conflict with, or result in any violation or breach of, or default (with or without notice
or lapse of time or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the
loss of a benefit under, or result in the creation of any lien in or upon any of the properties or other assets of the Company
or any of its Subsidiaries under, (i) the organizational documents of the Company, (ii) any Contract to which the Company or any
of its Subsidiaries is a party or any of their respective properties or other assets is subject or (iii) any Applicable Law with
respect to the Company or any of its Subsidiaries or their respective properties or other assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, breaches, defaults, rights, losses or liens that have not had or would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

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		(e)	Capital Structure. The authorized capital stock of the Company consists of (i) 180,000,000
shares of Common Stock and (ii) 20,000,000 shares of Voting Non-Economic Preferred Stock, par value $0.01 per share (“Preferred
Stock”). As of January 24, 2020, (A) 20,604,225 shares of Common Stock were issued and outstanding, (B) 1,886,667 shares
of Preferred Stock were issued and outstanding, (C) there were restricted stock units issued under the JTH Holding, Inc. 2011 Equity
and Cash Incentive Plan (the “2011 Stock Plan”) covering 63,682 shares of Common Stock, (D) there were options
to acquire 460,285 shares of Common Stock outstanding under the 2011 Stock Plan, (E) there were restricted stock units and performance
restricted stock units issued under the Franchise Group, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”)
covering 601,666 shares of Common Stock and (F) 4,398,334 shares of Common Stock were reserved for future issuances pursuant to
the 2019 Plan.

 

		(f)	Valid Issuance. The Common Stock issuable in the Subscription, when issued, sold and delivered
at the Closing, will be duly authorized and validly issued, fully paid and nonassessable, and will be issued free and clear of
any liens (other than such liens created by the certificate of incorporation of the Company or by applicable securities law) or
any preemptive rights.

 

		(g)	Company SEC Documents; No Undisclosed Liabilities.

 

		(i)	The Company has timely filed or furnished the Company SEC Documents. No Subsidiary of the Company
is required to file or furnish, or files or furnishes, any form, report or other document with the SEC.

 

		(ii)	As of their respective dates, the Company SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be, applicable to such Company SEC Documents, and,
as of their respective dates, none of the Company SEC Documents contained 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 therein, in light of the circumstances
under which they were made, not misleading, unless such information contained in any Company SEC Document has been amended or superseded
by a later-filed Company SEC Document that was filed prior to the date hereof.

 

		(iii)	The financial statements of the Company included in the Company SEC Documents comply as of their
respective dates as to form in all material respects with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited statements, for normal
and recurring year-end adjustments not material in amount and as permitted by Form 10-Q of the SEC or other rules and regulations
of the SEC) applied by the Company on a consistent basis during the periods and at the dates involved (except as may be indicated
therein or in the notes thereto) and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended
(except, in the case of unaudited statements, for normal and recurring year-end adjustments not material in amount and as permitted
by Form 10-Q of the SEC or other rules and regulations of the SEC). Neither the Company nor any of its Subsidiaries maintains any
“off balance sheet arrangements” within the meaning of Item 303 of Regulation S-K of the SEC.

 

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		(iv)	Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required under GAAP to be reflected on a consolidated balance
sheet of the Company and its Subsidiaries (including the notes thereto), except for any such liabilities or obligations (A) accrued,
disclosed, reflected or reserved against in the most recent financial statements (including any related notes) contained in the
Company SEC Documents filed prior to the date of this Agreement, (B) incurred in the ordinary course of business since the date
of the latest balance sheet included in such financial statements, (C) incurred in connection with this Agreement, the Merger Agreement,
the agreements and documents ancillary thereto, the Subscription, the Transaction and the other transactions ancillary to the Transaction
or (D) that have not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect.

 

		(h)	Absence of Certain Changes or Events. Since October 31, 2019, until the date of this Agreement,
(i) the Company and its Subsidiaries have conducted their respective businesses in all material respects in accordance with the
ordinary course of such businesses and (ii) (A) there has not been any change, effect, event, circumstance, occurrence or state
of facts that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
(B) neither the Company nor one of its Subsidiaries has sold, leased, transferred, assigned or otherwise disposed of any material
assets, other than in the ordinary course of business consistent with past practice, (C) the Company has not (1) declared, set
aside or paid any distribution in respect of the capital stock of the Company or other equity interests of the Company or (2) redeemed
or purchased any capital stock of the Company or other equity interests of the Company, (D) neither the Company nor its Subsidiaries
have made, changed or revoked any material Tax election, filed an amended Tax Return, settled any Tax audit or changed any Tax
accounting periods or methods and (E) neither the Company nor its Subsidiaries have committed to do any of the foregoing.

 

		(i)	Litigation. There is no material Action pending or, to the Knowledge of the Company, threatened,
and the Company has no Knowledge of any material external investigation pending or threatened with respect to the Company or its
Subsidiaries, nor is there any material judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator
outstanding with respect to the Company or any of its Subsidiaries.

 

		(j)	Compliance with Applicable Laws.

 

		(i)	The Company and each of its Subsidiaries are and have been since October 31, 2019, in compliance
with all Applicable Laws, their properties or other assets or their business or operations, except for such violations or noncompliance
that have not been and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
The Company and its Subsidiaries have in effect all Permits necessary to carry on their businesses as currently conducted, and
there has occurred no violation of, default (with or without notice or lapse of time or both) under, or event giving to others
any right of termination, amendment or cancellation of, with or without notice or lapse of time or both, any Permit, except for
such violation, defaults, terminations, amendments or cancellations that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Company Material Adverse Effect. There is no event which has occurred that would reasonably
be expected to result in the termination, revocation, cancellation, non-renewal or adverse modification of any such Permit, except
where such termination, revocation, cancellation, non-renewal or adverse modification would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

 

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		(ii)	Since October 31, 2019, (A) neither the Company nor any of its Subsidiaries has received any written
notice from any Governmental Authority that alleges or relates to (1) any violation or noncompliance (or reflects that the Company
or any of its Subsidiaries is under investigation or the subject of an inquiry by any such Governmental Authority for such alleged
noncompliance) with any Applicable Law or (2) any fine, assessment or cease and desist order, or the suspension, revocation or
limitation or restriction of any Permit and (B) neither the Company nor any of its Subsidiaries has entered into any agreement
or settlement with any Governmental Authority with respect to its alleged noncompliance with, or violation of, any Applicable Law,
except in each case in clauses (A) and (B) above to the extent any such violation, noncompliance, fine, assessment, order, suspension,
revocation, limitation or restriction has not had and would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.

 

		(k)	No Brokers. No broker, investment banker, financial advisor or other person is entitled
to any broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses,
in connection with the Subscription based upon arrangements made by or on behalf of the Company or its Subsidiaries.

 

5. Lock-up.

 

The Subscriber agrees that, during the
period beginning from the date hereof and continuing to and including the date that is six months after the date hereof (the “Lock-Up
Period”), it will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise
transfer, assign or dispose of any of the Subscription Shares. The foregoing restriction is expressly agreed to preclude the Subscriber
from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result
in a sale or disposition of the Subscription Shares even if such shares would be disposed of by someone other than the Subscriber.
Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant
of any right (including. without limitation, any put or call option) with respect to any of the Subscription Shares or with respect
to any security that includes, relates to, or derives any significant part of its value from such shares. Notwithstanding the foregoing,
the Subscriber may:

 

		(a)	transfer the Subscription Shares in connection with a change of control transaction that is consummated
during the Lock-Up Period that has been approved by the board of directors of the Company; provided, that in the event that
such change of control transaction is not completed, the Subscription Shares shall remain subject to the restrictions contained
in this Section 5 to the extent that the Lock-Up Period has not expired;

 

		(b)	transfer the Subscription Shares to (i) another corporation, partnership, limited liability company
or other entity that controls, is controlled by or is under common control with the Subscriber or (ii) as part of a disposition,
transfer or distribution by the Subscriber to its partners, limited liability company members or other equity holders, or if the
Subscriber is a corporation, to any wholly-owned subsidiary of such corporation; provided, however, that in any such
case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving
and holding such Subscription Shares subject to the provisions of this Section 5 and there shall be no further transfer
of such Subscription Shares except in accordance with this Section 5; provided, further, that any such transfer
shall not involve a disposition for value; and

 

		(c)	transfer the Subscription Shares in connection with a registered public offering (whether or not
underwritten) that is consummated during the Lock-Up Period in which shares of common stock held by one or more funds controlled
by Vintage Capital Management, LLC are being offered to the public in such registered public offering.

 

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For purposes of clause (a) of this Section
5,

 

“Capital Stock”
shall mean any and all shares, interests, participations, or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests
and membership interests, and any and all warrants, rights, or options to purchase, or other arrangements or rights to acquire
any of the foregoing.

 

“change of
control transaction” shall mean:

 

		(i)	after the Closing Date, any Person or two or more Persons acting in concert (other than Permitted
Holders or the Company, any Subsidiary of the Company or any successor entity thereto) shall have acquired beneficial ownership,
directly or indirectly, of Capital Stock of Franchise Group New Holdco, LLC (“Global Parent”) (or other securities
convertible into such Capital Stock) representing 20% or more of the combined voting power of all Capital Stock of Global Parent,

 

		(ii)	during any period of 24 consecutive months commencing on or after the Closing Date, the occurrence
of a change in the composition of the Board of Directors of the Company such that a majority of the members of such Board of Directors
are not Continuing Directors,

 

		(iii)	after the Closing Date, Global Parent fails to own and control, directly or indirectly, 100% of
the Capital Stock (other than directors’ qualifying shares, issuances pursuant to any equity incentive plan or similar plan,
or other nominal issuance in order to comply with local laws) of each other Loan Party (as such term is defined in the Credit Agreement)
(other than as permitted by Section 6.10 of the Credit Agreement),

 

		(iv)	after the Closing Date, the Specified Holders fail to own and control, directly or indirectly,
Capital Stock in Global Parent or the Company, as applicable, in an aggregate amount equal to 80% or greater than the aggregate
amount of Capital Stock of Global Parent and the Company, as applicable, that is owned and controlled directly by the Specified
Holders immediately following the Closing (in each case, on a fully-diluted basis (and taking into account all Capital Stock of
Global Parent and the Company that the Specified Holders may have the right to acquire pursuant to any option right); provided,
that any exchange of Capital Stock of Global Parent held by the Specified Holders for Capital Stock of the Company effectuated
by the Specified Holders, the Company or Global Parent after the Closing Date shall be disregarded for purposes of this clause
(iv), or

 

		(v)	the occurrence of a Change of Management after the Closing Date.

 

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“Change of Management”
shall mean that Brian Kahn’s direct or indirect management responsibilities of Franchise Group Intermediate Holdco, LLC are
materially diminished from those held by him as of the Closing, in each case, other than as a result of (a) death or (b) physical
or mental incapacity.

 

“Continuing Director”
shall mean (1) any member of the Board of Directors of the Company who was a director (or comparable manager) of the Company on
the date hereof and (2) any individual who becomes a member of the Board of Directors of the Company after the date hereof if such
individual was approved, appointed, or nominated for election to the Board of Directors of the Company by either a majority of
the Permitted Holders or a majority of the Continuing Directors.

 

“Credit Agreement”
shall mean that certain Credit Agreement, dated as of February 14, 2020, as amended, restated, supplemented, or otherwise modified
from time to time, by and among, Franchise Group Intermediate Holdco, LLC, a Delaware limited liability company (“Lead
Borrower”), as a borrower, Merger Sub, as a borrower (which, on the Closing Date, shall be merged with and into Target,
with Target surviving such merger as a borrower), certain other Subsidiaries of Lead Borrower from time to time party thereto as
borrowers, Global Parent, as a guarantor, certain Subsidiaries of Lead Borrower from time to time party thereto as guarantors,
the lenders from time to time party, GACP Finance Co., LLC, a Delaware limited liability company, in its capacity as administrative
agent for each lender, and Kayne Solutions Fund, L.P., a Delaware limited partnership, in its capacity as collateral agent.

 

“Permitted Holders”
shall mean (a) Vintage Capital Management, LLC, (b) Brian Kahn, (c) Lauren Kahn, (d) Tributum, L.P., (e) Stefac LP, (f) Vintage
Tributum, L.P., (g) Kahn Capital Management, LLC, (h) Vintage Vista GP, LLC, (i) Andrew Laurence, (j) B. Riley FBR, Inc., (k) Bryant
R. Riley, (l) any direct or indirect current or former equityholders of Buddy’s Newco, LLC or Global Parent, (m) Samjor Family
LP, (n) Vintage RTO, L.P. and (o) any Affiliates, general partners, limited partners, investment managers, investment advisors,
investment funds or direct or indirect equity holders, successors or assigns of any of the foregoing.

 

“Specified Holders”
shall mean (a) Samjor Family LP, and (b) Brian Kahn.

 

6. Remedies. The parties hereto
agree that irreparable damage would occur and that they would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement without proof of actual damages and without the requirement to post any
bond or other security, this being in addition to any other remedy to which any such party is entitled at law or in equity.

 

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7. Miscellaneous.

 

		(a)	Notices. Except for notices that are specifically required by the terms of this Agreement
to be delivered orally, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall
be deemed given, delivered and/or provided (i) when delivered personally or when sent by e-mail of a .pdf attachment (provided
no notice of non-delivery is generated), or (ii) on the next Business Day when dispatched for overnight delivery by Federal Express
or a similar courier, in either case, to the parties hereto at the following addresses (or at such other address for a party hereto
as shall be specified by like notice):

 

if to the Company, to:

 

Franchise Group, Inc.

1716 Corporate Landing Parkway

Virginia Beach, VA 23454

Email: tiffany.mcwaters@libtax.com

Attention: Tiffany McMillan-McWaters

with a copy to:

 

Vintage Capital Management, LLC

4705 S. Apopka Vineland Road, Suite 210

Orlando, FL 32819

Email: bkahn@vintcap.com

Attention: Brian Kahn

 

and

 

Troutman Sanders LLP

600 Peachtree Street NE

Suite 3000

Atlanta, GA 30308

Email: David.Ghegan@troutman.com

Attention: David W. Ghegan

and

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Email: rleaf@willkie.com; dmun@willkie.com

Attention: Russell L. Leaf; Daniel Mun

 

if to the Subscriber, to:

 

Kayne FRG Holdings, L.P.

1800 Avenue of the Stars, 3rd
Floor

Los Angeles CA 90067

Attention: Seth Zeleznik

Email: szeleznik@kaynecapital.com

Telephone No.: (424) 581-3809

 

    - 10 -

     

    

 

with a copy to:

 

Paul Hastings LLP

515 S. Flower Street, 25th
Floor

Los Angeles, CA 90071

Email: JenniferHildebrandt@paulhastings.com

Attention: Jennifer B. Hildebrandt

 

		(b)	Further Assurances. The parties agree to execute and deliver to each other such other documents
and to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent
of this Agreement.

 

		(c)	Exclusivity of Representations and Warranties; No Limitation of Other Representations or Warranties.

 

		(i)	The representations and warranties made by the Subscriber in Section 3 of this Agreement
and those contained in the Accredited Investor Questionnaire delivered by the Subscriber in connection with this Subscription (the
“Questionnaire”) are the exclusive representations and warranties made by the Subscriber in connection with
the Subscription. The Company hereby acknowledges that none of the Subscriber, any of its Subsidiaries, any of their respective
equity holders or Representatives, or any other person, has made or is making any other express or implied representation or warranty
with respect to the Subscriber, including any information provided or made available to the Company or its Subsidiaries or Representatives,
in anticipation or contemplation of the Subscription. Nothing in any representation or warranty in this Agreement or the Questionnaire
shall in any way limit or restrict the scope, applicability or meaning of any other representation or warranty made by the Subscriber
in this Agreement or the Questionnaire.

 

 

 

		(ii)	The representations and warranties made by the Company in Section 4 of this Agreement are
the exclusive representations and warranties made by the Company in connection with the Subscription. The Subscriber hereby acknowledges
that none of the Company, any of its Subsidiaries, any of their respective equity holders or Representatives, or any other person,
has made or is making any other express or implied representation or warranty with respect to the Company and its Subsidiaries
or any of their respective businesses, operations, assets or liabilities, including any information provided or made available
to the Subscriber or its Representatives, in anticipation or contemplation of the Subscription. Nothing in any representation or
warranty in this Agreement shall in any way limit or restrict the scope, applicability or meaning of any other representation or
warranty made by the Company or its Subsidiaries in this Agreement.

 

		(d)	Waivers and Amendments.

 

		(i)	At any time prior to the Closing, each party hereto may (A) extend the time for the performance
of any of the obligations or other acts of the other party hereto or (B) subject to the proviso to the first sentence of Section
7(d)(iii) of this Agreement and to the extent permitted by Applicable Law, waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party hereto.

 

    - 11 -

     

    

 

		(ii)	The failure of any party to this Agreement to exercise any of its rights under this Agreement or
otherwise shall not constitute a waiver by such party of such right.

 

 

		(iii)	This Agreement may not be amended except by an instrument in writing signed on behalf of each of
the parties hereto; provided, that notwithstanding anything herein to the contrary, Section 7(h) (and any provision
of this Agreement to the extent a modification, waiver or termination of such provision would modify the substance of any of the
foregoing provisions) may not be modified, waived or terminated in a manner that impacts or is adverse in any respect to a Non-Recourse
Party without the prior written consent of such Non-Recourse Party.

 

		(e)	Severability. Except as expressly set forth in this Agreement, if any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties hereto as closely as possible to the fullest extent permitted by Applicable
Law in an acceptable manner to the end that the Subscription is fulfilled to the extent possible.

 

		(f)	Entire Agreement.  This Agreement (including the Schedules hereto), the Merger Agreement
and that certain registration rights agreement, dated as of the date hereof, by and between the Company and the Subscriber, constitute
the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties hereto with
respect to the subject matter hereof and thereof.

 

		(g)	No Third-Party Beneficiaries. Except with respect to the Non-Recourse Parties, who are intended
express third-party beneficiaries of the provisions of Section 7(h), this Agreement (including the Exhibits and Schedules
hereto) is not intended to confer upon any person other than the parties hereto any rights, benefits or remedies.

 

		(h)	No Recourse. Except for any party who is a signatory to this Agreement, and only to the
extent of such party’s obligations hereunder, no former, current or future direct or indirect equity holders, controlling
persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners
or assignees of the Company or the Subscriber or of any former, current or future direct or indirect equity holder, controlling
person, stockholder, director, officer, employee, member, manager, trustee, general or limited partner, Affiliate, agent or assignee
of the Company or the Subscriber (collectively, “Non-Recourse Parties”) shall have any liability or obligation
for any of the representations, warranties, covenants, agreements, obligations or liabilities of the Company or the Subscriber,
as applicable, under this Agreement or of or for any Action based on, in respect of, or by reason of, the Subscription, (including
the breach, termination or failure to consummate the Subscription), whether based on contract, tort or strict liability, by the
enforcement of any assessment, by any legal or equitable proceeding, by virtue of any Applicable Law or otherwise and whether by
or through attempted piercing of the corporate or partnership veil, by or through a claim by or on behalf of a party who is a signatory
to this Agreement or any other person or otherwise. The parties hereto hereby agree that the Non-Recourse Parties shall be express
third party beneficiaries of this Section 7(h).

 

		(i)	Successors and Assigns. Subject to the provisions of Section 7(n), all the terms
and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors
and permitted assigns of the parties hereto.

 

		(j)	Choice of Law. This Agreement shall be governed by, and construed in accordance with, the
Applicable Laws of the State of Delaware, regardless of the Applicable Laws that might otherwise govern under applicable principles
of conflicts of Applicable Laws thereof.

 

    - 12 -

     

    

		(k)	Exclusive Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or in the event, but only in the event,
that such court does not have subject matter jurisdiction over such action or proceeding, the Superior Court of the State of Delaware
(Complex Commercial Division) or, if subject matter jurisdiction over the action or proceeding is vested exclusively in the federal
courts of the United States of America, the United States District Court for the District of Delaware) (such courts, the “Chosen
Courts”). In addition, each of the parties hereto irrevocably (a) submits itself to the exclusive jurisdiction of the
Chosen Courts for the purpose of any Action directly or indirectly based upon, relating to or arising out of this Agreement or
the Subscription, or any related agreement, certificate or other document delivered in connection therewith or the negotiation,
execution, interpretation, enforcement or performance hereof or thereof, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from the Chosen Courts and (c) agrees that it will not bring
any action relating to this Agreement or the Subscription in any court other than the Chosen Courts. Each of the parties hereto
hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any Action with
respect to this Agreement or the Subscription, or any related agreement, certificate or other document delivered in connection
therewith or the negotiation, execution, interpretation, enforcement or performance hereof or thereof, (x) any claim that it is
not personally subject to the jurisdiction of the Chosen Courts for any reason other than the failure to serve in accordance with
this Section 7(k), (y) any claim that it or its property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in the Chosen Courts (whether through service of notice, attachment prior to judgment, attachment in
aid of execution of judgment, execution of judgment or otherwise) and (z) to the fullest extent permitted by the applicable Law,
any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper or (iii) this Agreement, or the subject matter of this Agreement, may not be enforced in or by
such courts. Each of the parties hereto hereby irrevocably consents to service being made through the notice procedures set forth
in Section 7(a) and agrees that service of any process, summons, notice or document by email or mail to the respective addresses
set forth in Section 7(a) shall be effective service of process for any Action in connection with this Agreement or the
Subscription. Nothing in this Section 7(k) shall affect the right of any party hereto to serve legal process in any other
manner permitted by Applicable Law.

 

		(l)	WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THE PERFORMANCE OF SERVICES THEREUNDER OR RELATED THERETO.
EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A
CLAIM, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 7(l).

 

    - 13 -

     

    

		(m)	Survival of Provisions; Knowledge.

 

		(i)	The representations and warranties made by the parties hereto in Section 3 and Section
4 hereof shall survive the Closing until the first anniversary of the Closing, and any claim with respect thereto must be made
prior to the expiration of such survival period; provided, that if any claim with respect thereto is made prior to the expiration
of such survival period, then the applicable representation or warranty that is the subject of such claim shall survive until such
time as such claim is finally resolved by the parties or finally determined by a court of competent jurisdiction and is non-appealable.
The covenants and agreements made by the parties hereto shall survive the Closing in accordance with their terms.

 

		(ii)	The Company shall not be liable to the Subscriber based upon or arising out of any inaccuracy in
or breach of any of the representations or warranties of the Company contained in this Agreement to the extent that any such inaccuracy
or breach was within the Knowledge of the Subscriber on or prior to the date hereof.

 

		(n)	Assignment. No party to this Agreement may assign any of its rights or obligations under
this Agreement without the prior written consent of the other party to this Agreement; provided, that the Subscriber may
assign any of its rights or obligation under this Agreement, in whole or in part, to an Affiliate of the Subscriber without the
prior written consent of the Company, except that any such assignment shall not receive the Subscriber of its obligations under
this Agreement.

 

		(o)	Defined Terms; Interpretation. Except as otherwise expressly provided herein, capitalized
terms used but not defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement. For purposes
of this Agreement, (1) “Knowledge” means with respect to any party hereto the actual (but not constructive or
imputed) knowledge of such party hereto or, if applicable, the executive officers of such party hereto (except with respect to
Section 7(m)(ii) hereof, after due inquiry of such party hereto or, if applicable, the officers of such party hereto with
oversight responsibilities for the matter in question), (2) “Subscriber Material Adverse Effect” means any change,
effect, event, circumstance, occurrence or state of facts that prevents or materially impairs or materially delays the ability
of the Subscriber to consummate the Subscription, (3) “Representatives” means, with respect to any Person, such
Person’s Affiliates and direct and indirect equity holders and its and their respective directors, officers, employees, agents,
representatives, consultants and advisors and (4) “Company Material Adverse Effect” means any state of facts,
change, event, circumstance, condition, development, effect or occurrence that, individually or in the aggregate, (a) has had,
or would reasonably be expected to have, a material adverse effect on the assets, properties, financial or other condition or results
of operations of the Company and its Subsidiaries, taken as a whole, or (b) prevents or materially delays, or would reasonably
be expected to prevent or materially delay, the consummation of the transactions contemplated hereby; provided, however,
that in determining whether there has been a Company Material Adverse Effect, any state of facts, change, event, circumstance,
condition, development, effect or occurrence arising out of, or resulting from any of the following shall be disregarded: (i) general
economic, business, industry, trade or credit, financial or capital market conditions (whether in the United States or internationally),
including any conditions affecting generally the industries or markets in which the Company and its Subsidiaries operates; (ii)
except with respect to the representations and warranties set forth in Section 4(f), the taking of any action expressly
required by this Agreement, the Merger Agreement or the Related Agreements; (iii) except with respect to the representations and
warranties set forth in Section 4(f), the negotiation, entry into and announcement of this Agreement, the Merger Agreement
or pendency or consummation of the Merger, including any Action in connection with the Merger; (iv) the taking of any action at
the written request of Parent; (v) pandemics, earthquakes, tornados, hurricanes, floods, acts of God and other similar force majeure
events; (vi) acts of war (whether declared or not declared), sabotage, terrorism, military actions or the escalation thereof; (vii)
any changes in Applicable Laws, regulations or accounting rules, including GAAP or interpretations thereof, or any changes in general
legal, regulatory, trade or political conditions; and (viii) the failure by any member of the Company and its Subsidiaries to meet
any projections, estimates or budgets for any period prior to, on or after the date of this Agreement, except that any state of
facts, change, event, circumstance, condition, development, effect or occurrence giving rise to such failure may be taken into
account in determining whether there has been a “Company Material Adverse Effect”; provided, that notwithstanding
the foregoing, in the case of the foregoing clauses (i), (v), (vi) and (vii) of this definition, any such state of facts, change,
event, circumstance, condition, development, effect or occurrence that has a disproportionate effect on the Company and its Subsidiaries,
taken as a whole, relative to other participants operating in the same or similar businesses or industries as the Company and its
Subsidiaries, may be taken into account in determining whether a “Company Material Adverse Effect” has occurred. The
provisions of Section 1.1 of the Merger Agreement are incorporated herein by reference, mutatis mutandis.

 

    - 14 -

     

    

		(p)	Counterparts. This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties. Facsimile signatures or signatures received as a .pdf attachment to electronic mail
shall be treated as original signatures for all purposes of this Agreement.

 

[Remainder of page intentionally left
blank.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    - 15 -

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the day and year first above written.

 

 

	 	THE COMPANY:	 
	 	FRANCHISE GROUP, INC.	 
	 		  	 

  

 

	 	By:	 	 
	 		Name: Eric Seeton	 
	 		Title: Chief Financial Officer	 

 

 

 

 

 

 

 

 

 

     
[Signature Page to Kayne Subscription Agreement]

    

    

 

 

	 	THE SUBSCRIBER:	 
	 	KAYNE
FRG HOLDINGS, L.P.	 
	 	 	 
	 		By: KAFRG Investors GP, LLC	 
	 		Its: General Partner	 

 

  

	 	By:	 	 
	 		Name:	 
	 		Title:	 

 

 

 

 

 

 

 

     
[Signature Page to Kayne Subscription Agreement]

    

    

 

SCHEDULE 5(b)

Minority Equity Interests

 

The Company owns approximately 18.3% of Trilogy Software Inc.EXHIBIT 10.7

 

 

 

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

DATED AS OF

 

FEBRUARY 14, 2020

 

BY AND BETWEEN

 

FRANCHISE GROUP, INC.

 

AND

 

KAYNE FRG HOLDINGS, L.P.

 

 

 

 

 

 

 

 

 

    

    

    

 

TABLE OF CONTENTS

 

	Article I   DEFINITIONS	2
	1.1   Certain Definitions	2
	1.2   Other Terms	4
	Article II   REGISTRATION RIGHTS	4
	2.1   Shelf Registration Statement	4
	2.2   Blackout Periods	5
	2.3   Piggyback Registration	6
	2.4   Registration Procedures	7
	2.5   Obligations of the Parties	11
	2.6   Expenses	12
	2.7   Indemnification; Contribution	12
	2.8   Indemnification Procedures	14
	2.9   Rule 144	15
	2.10   Transfer of Registration Rights	15
	Article III   MISCELLANEOUS	16
	3.1   Notices	16
	3.2   Waiver	16
	3.3   Counterparts	17
	3.4   Applicable Law	17
	3.5   WAIVER OF JURY TRIAL	17
	3.6   Severability	17
	3.7   Further Action	17
	3.8   Delivery by Electronic Transmission	17
	3.9   Entire Agreement	18
	3.10   Remedies	18
	3.11   Descriptive Headings; Interpretation	18
	3.12   Amendments	19

 

 

    

    

    

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated February [●], 2020, is made and entered into by and between Franchise
Group, Inc., a Delaware corporation (the “Company”), and Kayne FRG Holdings, L.P., a Delaware limited partnership
(the “Investor”). Except as expressly provided herein, capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Subscription Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Company
has entered into that certain Agreement and Plan of Merger, dated as of December 28, 2019, by and among American Freight Group
Inc., a Delaware corporation (“Target”), Franchise Group Newco Intermediate AF, LLC, a Delaware limited liability
company and indirect subsidiary of the Company (“Parent”), Franchise Group Merger Sub AF, Inc., a Delaware corporation
and direct wholly owned subsidiary of Parent (“Merger Sub”), and The Jordan Company, L.P., a Delaware limited
partnership, solely in its capacity as Representative (as defined therein) (as such agreement may be amended, restated or otherwise
modified from time to time, the “Merger Agreement”), pursuant to which, among other things, subject to the terms
and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Target, with Target continuing as the surviving
corporation in such merger and as an indirect subsidiary of the Company (the “Transaction”);

 

WHEREAS, on December
28, 2019, the Company entered into a debt commitment letter with the Investor (the “Debt Commitment Letter”)
and related fee letters (the “Fee Letters” and, together with the Debt Commitment Letter, the “DCL”),
pursuant to which the Investor agreed to provide $200,000,000 of debt financing for the Transaction subject to the terms and conditions
set forth in the DCL (the “Debt Commitment”);

 

WHEREAS, as consideration
and payment for services rendered by the Investor to the Company and its affiliates in connection with the Debt Commitment and
the debt financing contemplated thereby (the “Consideration”), the Investor subscribed for from the Company,
and the Company issued and sold to the Investor in exchange for the Consideration, 1,250,000 shares (the “Subscription
Shares”) of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”), subject
to the terms and conditions set forth in that certain Subscription Agreement, dated the date hereof, between the Company and Investor
(the “Subscription Agreement”);

 

WHEREAS, pursuant to
Section 5 of the Subscription Agreement, during the period beginning from the date of the Subscription Agreement and continuing
to and including the date that is six months after the date thereof (the “Lock-Up Period”), the Investor agreed
that, subject to certain exceptions, it will not offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise transfer, assign or dispose of any of the Subscription Shares; and

 

WHEREAS, the Company
and the other parties hereto desire to enter into this Agreement in order to set forth certain registration rights applicable to
the Subscription Shares upon the expiration of the Lock-Up Period.

 

    - 1 -

    

    

NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

Article
I

 

DEFINITIONS

 

1.1             
Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1:

 

“Action”
means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international Governmental Entity or any arbitration or mediation tribunal.

 

“Affiliate”
means, as to any Person, any other Person which, directly or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, such Person; provided, however, that neither the Investor nor any of its Affiliates
shall be deemed to be an Affiliate of the Company or any of its Subsidiaries for purposes of this Agreement, and neither the Company
nor any of its Subsidiaries shall be deemed to be an Affiliate of the Investor or any of its Subsidiaries for purposes of this
Agreement. As used in this definition, “control” (including with correlative meanings, “controlled by”
and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of voting securities, by contract or otherwise).

 

“Board of
Directors” means the Board of Directors of the Company.

 

“Business
Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by applicable Law to close.

 

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

 

“Governmental
Entity” means any United States federal, state or local, or foreign, international or supranational, government, court
or tribunal, or administrative, executive, governmental or regulatory or self-regulatory body, agency or authority thereof.

 

“Law”
means any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule,
regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by
a Governmental Entity.

 

“Non-Vintage
Investors” means the investors, other than the Vintage Group Members, listed on Schedule 1 to that certain Registration
Rights Agreement, dated as of July 10, 2019, as amended, among the Company and the investors listed on Schedule 1 thereto.

 

    - 2 -

    

    

“Parties”
means the Company and each of the stockholders that are parties hereto, and each, a “Party”.

 

“Person”
means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization, limited liability
company or governmental or other entity.

 

“Registrable
Shares” means, at any time, (i) the Subscription Shares and (ii) any shares of capital stock or other equity securities
issued in exchange for or in substitution of a dividend or distribution on any Subscription Shares, but excluding any such Subscription
Shares that have, after the date hereof, been Transferred pursuant to (a) a registration statement or valid registration exemption
under, and in compliance with the requirements of, the Securities Act such that such shares are freely tradeable or (b) Rule 144
under, and in compliance with the requirements of, the Securities Act.

 

“Representatives”
means, with respect to any Person, such Person’s officers, directors, managers, employees, financing sources, consultants,
agents, financial advisors, attorneys, accountants, other advisors, Affiliates and other representatives.

 

“SEC”
means the Securities and Exchange Commission.

 

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

 

“Subsidiary”
means, with respect to any Person, another Person, an amount of the voting securities or other voting ownership interests of which
is sufficient, together with any contractual rights, to elect at least a majority of its board of directors or other governing
body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly
by such first Person; provided, that neither the Company nor any of its Subsidiaries shall be deemed to be a Subsidiary
of the Investor or any of its Subsidiaries for purposes of this Agreement.

 

“Transfer”
means, directly or indirectly (whether by merger, operation of law or otherwise), to sell, transfer, assign or otherwise dispose
of or encumber (other than as security in connection with any bona fide loan or financing transaction) any direct or indirect economic,
voting or other rights in or to any Common Stock, including by means of (i) the Transfer of an interest in a Person that directly
or indirectly holds such Common Stock or (ii) a hedge, swap or other derivative.

 

“underwritten
offering” means an offering in which Securities of the Company are sold to one or more underwriters (as defined in Section
2(a)(11) of the Securities Act) for resale to the public.

 

“Vintage Group”
means collectively, Tributum, L.P., Vintage Tributum LP, Vintage Capital Management, LLC, Samjor Family LP, Vintage RTO, L.P.,
Stefac LP, Brian Kahn and Lauren Kahn, as tenants by the entirety, and B. Riley FBR, Inc. and any of their respective Affiliates
(excluding the Company, Franchise Group New Holdco, LLC and their respective Subsidiaries), successors and permitted assigns who
hold common units of Franchise Group New Holdco, LLC, shares of the Company’s Voting Non-Economic Preferred Stock or shares
of Common Stock.

 

    - 3 -

    

    

“Vintage Group
Member” means each member of the Vintage Group.

 

1.2             
Other Terms. For purposes of this Agreement, the following terms have the meanings set forth in the sections indicated.

 

	Agreement	Preamble
	Blackout Period	2.2
	Claim Notice	2.8(a)
	Claims	2.7(a)
	Closing	Recitals
	Common Stock	Recitals
	Company	Preamble
	Consideration	Recitals
	Counsel	2.4(a)(i)
	DCL	Recitals
	Debt Commitment	Recitals
	Debt Commitment Letter	Recitals
	Effective Period	2.4(a)(iii)
	Fee Letters	Recitals
	Indemnifying Party	2.8(a)
	Investor	Preamble
	Lock-Up Period	Recitals
	Merger Agreement	Recitals
	Merger Sub	Recitals
	Parent	Recitals
	Participating Investors	2.3(b)
	Piggyback Registration	2.3(a)
	Required Investor Information	2.5(a)
	Shelf Registration Statement	2.1
	Subscription Agreement	Recitals
	Subscription Shares	Recitals
	Target	Recitals
	Transaction	Recitals

 

 

 

    - 4 -

    

    

Article
II

REGISTRATION RIGHTS

 

2.1             
Shelf Registration Statement. As promptly as practicable after the date hereof, but in any event no later than the
expiration of the Lock-Up Period, the Company shall prepare and file with the SEC a “shelf” registration statement
on Form S-1 (or Form S-3 if the Company is eligible to use Form S-3 at such time) with respect to the offer and resale of all Registrable
Shares in accordance with Rule 415, except to the extent the Company has an existing shelf registration statement covering the
Common Stock which may be used for the purposes contemplated herein (such new or existing registration statement together with
any additional registration statements filed to register any Registrable Shares, the “Shelf Registration Statement”).
Upon becoming eligible to use Form S-3, the Company shall promptly file a Shelf Registration Statement on Form S-3, which may be
in the form of a post-effective amendment to the Shelf Registration Statement on Form S-1, covering all of the then Registrable
Shares and will maintain the effectiveness of the Shelf Registration Statement on Form S-3 (or such comparable or successor form)
then in effect until such time as there are no Registrable Shares. The Company will use its reasonable best efforts to (i) cause
the Shelf Registration Statement, when filed, to comply in all material respects with all legal requirements applicable thereto,
(ii) respond as promptly as reasonably practicable to, and resolve all comments received from, the SEC or its staff concerning
the Shelf Registration Statement, (iii) have the Shelf Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and (iv) maintain the effectiveness of (and availability for use of) the Shelf Registration Statement
(including by filing any post-effective amendments thereto or prospectus supplements in respect thereof) until such time as there
are no Registrable Shares. Notwithstanding the foregoing provisions of this Section 2.1, if the SEC prevents the Company
from including on a registration statement any or all of the Registrable Shares to be registered pursuant to this Section 2.1
due to limitations on the use of Rule 415 of the Securities Act for the resale of Registrable Shares by the Investor, such registration
statement shall register the resale of a number of Registrable Shares which is equal to the maximum number of shares as is permitted
by the SEC, and the Company shall use its reasonable best efforts to register all such remaining Registrable Shares for resale
as promptly as reasonably practicable in accordance with the applicable rules, regulations and guidance of the SEC.

 

2.2             
Blackout Periods. Notwithstanding anything in Section 2.1 to the contrary, the Company shall be entitled to
postpone and delay the filing or effectiveness (but not the preparation) of any registration statement or the offer or sale of
any Registrable Shares thereunder (i) for reasonable periods of time in advance of the release of the Company’s quarterly
and annual financial results and (ii) for reasonable periods of time, not in excess of an aggregate of ninety (90) calendar days
in any twelve (12)-month period and in no event more than two times in any twelve (12)-month period (any such postponement and
delay permitted by this Section 2.2 being, a “Blackout Period”), if (A) the Board of Directors determines
in its good faith judgment that any such filing or effectiveness of a registration statement or the offering or sale of any Registrable
Shares thereunder would (1) materially impede, materially delay or otherwise materially interfere with any pending or proposed
material acquisition, disposition, corporate reorganization or other similar material transaction involving the Company as to which
the Company has taken substantial steps and is proceeding with reasonable diligence to effect, (2) materially adversely affect
any registered underwritten public offering of the Company’s securities for the Company’s account as to which the Company
has taken substantial steps (including, but not limited to, selecting a managing underwriter for such offering) and is proceeding
with reasonable diligence to effect such offering, or (3) require disclosure of material non-public information which, in the reasonable
discretion of the Board of Directors, acting in good faith, would have a material adverse effect on the business, operations or
management of the Company or any of its Affiliates if disclosed at such time or (B) the Board of Directors determines in its good
faith judgment that the Company is required by law, rule or regulation to amend or supplement the affected registration statement
or the related prospectus so that such registration statement or prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall give written notice to the Investor of its determination to postpone or
delay the filing of such registration statement or other imposition of a Blackout Period and a general statement of the reason
for such deferral and an approximation of the anticipated delay; provided, further, that in the event that the Company
proposes to register shares of Common Stock (other than in connection with a registered underwritten public offering of the Company’s
securities for the Company’s account) during a Blackout Period, the Company shall not pursuant to this Section 2.2
be entitled to postpone or delay the filing or effectiveness of any registration statement or the offer or sale of any Registrable
Shares during such Blackout Period. Upon notice by the Company to the Investor of any such determination, the Investor shall, except
as required by applicable Law, keep the fact of any such notice strictly confidential, and during any Blackout Period (or until
such Blackout Period shall be earlier terminated in writing by the Company), promptly halt any offer, sale, trading or transfer
by it of any shares of Common Stock and promptly halt any use, publication, dissemination or distribution of any prospectus or
prospectus supplement covering such Registrable Shares and, if so directed by the Company, shall deliver to the Company any copies
then in its possession of any such prospectus or prospectus supplement. A deferral of the filing or effectiveness of a registration
statement or other imposition of a Blackout Period pursuant to this Section 2.2 shall be lifted as soon as practicable (and
in no event later than the 90th calendar day in any 12-month period), and the Company shall promptly (and in any event
within five (5) Business Days) notify in writing the Investor of the termination of the Blackout Period and the absence of the
circumstances giving rise to such Blackout Period.

 

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2.3             
Piggyback Registration.

 

(a)              
Whenever the Company proposes to publicly sell or register for sale any of its securities in an underwritten offering pursuant
to a registration statement under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or any similar
successor forms thereto) (a “Piggyback Registration”), the Company shall give prompt written notice to the Investor
of its intention to effect such sale or registration and, subject to Section 2.3(b) and subject to Section 5 of the Subscription
Agreement, shall include in such transaction all Registrable Shares with respect to which the Company has received a written request
from the Investor for inclusion therein within ten (10) Business Days after the receipt of the Company’s notice. The managing
underwriter or underwriters to administer the underwritten offering pursuant to a Piggyback Registration shall be chosen by the
Company in its sole discretion. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration
at any time in its sole discretion.

 

 

 

 

    - 6 -

    

    

(b)              
If the managing underwriter or underwriters of any proposed underwritten offering of Registrable Shares included in a Piggyback
Registration informs the Company and the Investor that, in its or their opinion, the number of Registrable Shares which the Investor
intends to include in such offering exceeds the number which can be sold in such offering without being likely to have a significant
adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the
shares of Common Stock proposed to be registered by the Company shall be included therein and, if additional Registrable Shares
or shares of Common Stock can be so registered, then the Registrable Shares or shares of Common Stock to be included in such underwritten
offering, up to the maximum number of additional shares of Registrable Shares and Common Stock that, in the opinion of such managing
underwriter or underwriters, can be sold without having such adverse effect, shall (i) first,
be allocated to the Vintage Group Members until all of the shares of Common Stock, if any, that the Vintage Group Members propose
to sell have been included therein, (ii) second, and only if all the shares referred to in clause (i) of this Section 2.3(b) have
been included, the number of shares of Common Stock proposed to be sold by the Investor and the Non-Vintage Investors (collectively,
the “Participating Investors”), with such number to be allocated pro rata among the Participating Investors
that have requested to participate in such offering based on the proportion that the number of shares of Common Stock proposed
to be sold in such offering by each Participating Investor bears to the total number of shares of Common Stock proposed to be sold
by all Participating Investors in such offering (provided, that any securities thereby allocated to a Participating Investor
that exceed such Participating Investor’s request shall be reallocated among the remaining requesting Participating Investors
in like manner) and (iii) third, and only if all of the shares of Common Stock referred to in clause (ii) of this Section 2.3(b)
have been included in such Piggyback Registration, any other securities eligible for inclusion in such offering may be included
therein.

 

(c)              
No registration of Registrable Shares effected pursuant to a request under this Section 2.3 shall relieve the Company
of its obligations under Section 2.1 through Section 2.2.

 

2.4             
Registration Procedures.

 

(a)              
Without limiting the foregoing provisions of this Agreement, in connection with each registration statement prepared pursuant
to this Article II pursuant to which Registrable Shares will be offered and sold, and in accordance with the intended method
or methods of distribution of the Registrable Shares as described in such registration statement, the Company shall use its reasonable
best efforts to, as expeditiously as reasonably practicable:

 

    - 7 -

    

    

(i)                
prepare and file with the SEC such registration statement on an appropriate registration form of the SEC and cause such
registration statement to become effective under the Securities Act as promptly as reasonably practicable after the filing thereof,
which registration statement shall comply as to form in all materials respects with the requirements of the applicable form and
include or incorporate by reference all financial statements required by such form to be filed therewith or incorporated by reference
therein; provided, that before filing a registration statement or prospectus or any amendments or supplements thereto, the
Company shall furnish to one counsel for the Investor (which such counsel shall be confirmed to the Company in writing (the “Counsel”))
draft copies of all such documents proposed to be filed (other than any portion thereof which contains information for which the
Company has sought confidential treatment) as far in advance as reasonably practicable prior to filing (and in any event at least
five (5) Business Days prior to such filing or such shorter time period as may be agreed by the Investor and the Company), which
documents will be subject to the reasonable review and (except for exhibits) comment of the Investor and the Counsel and the underwriters
in connection with any underwritten offering, and the Company shall reasonably consider all such comments, edits and objections
and incorporate any such comments and edits proposed reasonably and in good faith prior to filing any amendment or supplement to
any registration statement;

 

(ii)             
furnish without charge to the Investor and the underwriters, if any, at least one conformed copy of the registration statement
and each post-effective amendment or supplement thereto (including all schedules and exhibits but excluding all documents incorporated
or deemed incorporated therein by reference, unless requested in writing by the Investor or an underwriter, except to the extent
such exhibits and schedules are currently available via EDGAR and other than any portion thereof which contains information for
which the Company has sought confidential treatment) and such number of copies of the registration statement and each amendment
or supplement thereto (excluding exhibits and schedules) and the summary, preliminary, final, amended or supplemented prospectuses
included in such registration statement as the Investor or such underwriter may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Shares being sold by the Investor (the Company hereby consents to the use in accordance
with the U.S. securities laws of such registration statement (or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto) by the Investor and the underwriters, if any, in connection with the offering and
sale of the Registrable Shares covered by such registration statement or prospectus);

 

(iii)           
keep such registration statement effective and updated (including the filing of a new registration statement upon the expiration
of a prior one) with respect to the disposition of all Registrable Shares subject thereto until the date on which there are no
Registrable Shares (the “Effective Period”), and prepare and file with the SEC such amendments, post-effective
amendments and supplements to the registration statement and the prospectus as may be necessary to maintain the effectiveness of
the registration for the Effective Period) and cause the prospectus (and any amendments or supplements thereto) to be filed with
the SEC;

 

    - 8 -

    

    

(iv)            
register or qualify the Registrable Shares covered by such registration statement under such other securities or “blue
sky” laws of such jurisdictions in the United States as the Investor and any managing underwriter or underwriters may reasonably
request, keep such registrations or qualifications in effect for so long as the registration statement remains in effect, and do
any and all other acts and things which may be reasonably necessary to enable the Investor or any underwriter to consummate the
disposition of the Registrable Shares in such jurisdictions; provided, however, that in no event shall the Company
be required to (A) qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements
of this clause (iv), be required to be so qualified, or (B) take any action which would subject it to service of process (other
than in connection with the sale of the securities covered by the registration statement) or taxation in any jurisdiction where
it would not otherwise be obligated to do so, but for this clause (iv);

 

(v)              
cause all Registrable Shares covered by such registration statement to be listed (after notice of issuance) on the New York
Stock Exchange, the NASDAQ Global Select Market or on the principal securities exchange, interdealer quotation system or over-the-counter
market on which Common Stock is then listed or quoted;

 

(vi)            
promptly notify the Investor and the managing underwriter or underwriters in connection with any underwritten offering after
becoming aware thereof, (A) when the registration statement or any related prospectus or any amendment or supplement thereto has
been filed, and, with respect to the registration statement or any post-effective amendment, when the same has become effective,
(B) of any request by the SEC or any U.S. state securities authority for amendments or supplements to the registration statement
or the related prospectus or for additional information, (C) of the issuance by the SEC of any stop order suspending the effectiveness
of the registration statement or the initiation of any proceedings for that purpose, (D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable Shares for sale in any jurisdiction or the initiation of
any proceeding for such purpose, or (E) within the Effective Period of the happening of any event or the existence of any fact
which makes any statement in the registration statement or any post-effective amendment thereto, prospectus or any amendment or
supplement thereto, or any document incorporated therein by reference untrue in any material respect or which requires the making
of any changes in the registration statement or post-effective amendment thereto or any prospectus or amendment or supplement thereto
so that they will not 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, in light of the circumstances under which they were made, not misleading;

 

(vii)         
during the Effective Period, obtain the withdrawal of any order enjoining or suspending the use or effectiveness of the
registration statement or any post-effective amendment thereto or the lifting of any suspension of the qualification of any of
the Registrable Shares for sale in any jurisdiction;

 

(viii)       
deliver to the Investor and the managing underwriter or underwriters in connection with any underwritten offering copies
of all material correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions
with the SEC or its staff with respect to the registration statement (except to the extent such correspondence is currently available
via EDGAR or relates to information subject to a confidential treatment request); provided, that any such delivery, review
or investigation shall not interfere unreasonably with the Company’s business;

 

    - 9 -

    

    

(ix)            
provide and cause to be maintained a transfer agent and registrar for all Registrable Shares covered by such registration
statement not later than the effective date of such registration statement;

 

(x)              
cooperate with the Investor and the managing underwriter or underwriters in connection with any underwritten offering to
facilitate the timely preparation and delivery of certificates representing the Registrable Shares to be sold under the registration
statement in a form eligible for deposit with the Depository Trust Corporation not bearing any restrictive legends (other than
as required by the Depository Trust Corporation) and not subject to any stop transfer order with any transfer agent, and cause
such Registrable Shares to be issued in such denominations and registered in such names as the managing underwriters in connection
with such underwritten offering may request in writing or, if not an underwritten offering, in accordance with the instructions
of the Investor, in each case at least two (2) Business Days prior to the closing of any sale of Registrable Shares;

 

(xi)            
in the case of a firm commitment underwritten offering, enter into, concurrently with the Investor, an underwriting agreement
customary in form and substance (taking into account the Company’s prior underwriting agreements) and reasonably acceptable
to the Company for a firm commitment underwritten secondary offering of the nature contemplated by the applicable registration
statement;

 

(xii)         
obtain an opinion from the Company’s counsel and a “cold comfort” letter from the Company’s independent
public accountants (and, if necessary, any other independent certified public accountants of any Subsidiary of the Company or of
any business acquired by the Company for which financial statements and financial data is, or is required to be, included in the
registration statement) in customary form and covering such matters as are customarily covered by such opinions and “cold
comfort” letters in connection with an offering of the nature contemplated by the applicable registration statement;

 

(xiii)       
provide to the Counsel and to the managing underwriters in connection with any underwritten offering and no later than the
time of filing of any document which is to be incorporated by reference into the registration statement or prospectus (after the
initial filing of such registration statement), copies of any such document; and

 

(xiv)        
otherwise comply with all applicable rules and regulations of the SEC and any applicable national securities exchange.

 

    - 10 -

    

    

(b)              
In the event that the Company would be required, pursuant to Section 2.4(a)(vi)(E) to notify the Investor or the
managing underwriter or underwriters in connection with any underwritten offering of the occurrence of any event specified therein,
the Company shall, subject to Section 2.4(c), as promptly as practicable, prepare and furnish to the Investor and to each
such underwriter a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers
of Registrable Shares that have been registered pursuant to this Agreement, such prospectus shall not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The Investor agrees that, upon receipt of any notice
from the Company pursuant to Section 2.4(a)(vi)(C), Section 2.4(a)(vi)(D) or Section 2.4(a)(vi)(E) hereof,
it shall, and shall use all reasonable best efforts to cause any sales or placement agent or agents for the Registrable Shares
and the underwriters, if any, to, forthwith discontinue disposition of the Registrable Shares until such Person shall have received
notice from the Company that such offers and sales of the Registrable Shares may be resumed and, if applicable, such Person shall
have received copies of such amended or supplemented prospectus and, if so directed by the Company, to destroy all copies, other
than permanent file copies, then in its possession of the prospectus (prior to such amendment or supplement) covering such Registrable
Shares as soon as practicable after the Investor’s receipt of such notice.

 

(c)              
In the case of any Piggyback Registration, all Registrable Shares to be included in such registration shall be subject to
the applicable underwriting agreement and the Investor may not participate in such registration unless the Investor agrees to sell
its securities on the basis provided therein and completes and executes all questionnaires, indemnities, underwriting agreements
and other documents which must be executed in connection therewith, and provides such other information to the Company or the underwriter
as may be reasonably requested to register such Person’s Registrable Shares.

 

2.5             
Obligations of the Parties.

 

(a)              
Investor Information. The Investor shall furnish to the Company in writing such information (“Required Investor
Information”) regarding the Investor, the Registrable Shares held by it and its intended method of distribution of the
Registrable Shares as the Company may from time to time reasonably request in writing, and shall execute such documents in connection
with such registration as may reasonably be required to effect the registration, in order for the Company to comply with its obligations
under all applicable securities and other laws and to ensure that the prospectus relating to such Registrable Shares, or any amendment
or supplement to a registration statement or prospectus, conforms to the applicable requirements of the Securities Act and the
rules and regulations thereunder. If the Investor fails to provide the requested information or execute such documents in connection
with such registration as may reasonably be required to effect the registration within five (5) Business Days of the receipt by
the Investor of such request, the Company shall be entitled to refuse to register the Investor’s Registrable Shares in the
applicable registration statement. The Investor shall notify the Company as promptly as practicable of any inaccuracy or change
in any Required Investor Information previously furnished by the Investor to the Company or of the occurrence of any event, in
either case as a result of which any prospectus relating to the Registrable Shares contains or would contain an untrue statement
of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, in connection with any registration, and promptly furnish
to the Company any additional information required to correct and update such previously furnished Required Investor Information
or required so that such prospectus shall not contain an 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.

 

    - 11 -

    

    

(b)              
Filing Cooperation. The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any registration statement in which any Registrable Shares held by the Investor are being included.

 

(c)              
Holdback. If requested by the managing underwriter(s) for an underwritten offering (primary or secondary) of any
equity securities (or securities convertible into or exchangeable or exercisable for equity securities) of the Company, the Investor
hereby agrees not to effect any Transfer of any shares of Common Stock (or securities convertible into or exchangeable or exercisable
for Common Stock), including any sale pursuant to Rule 144 under the Securities Act, and not to effect any Transfer of any other
equity security of the Company (in each case, other than as part of such underwritten public offering) during the ten (10) days
prior to, and during the 90-day period (or such shorter period as the managing underwriter(s) may permit in writing) beginning
on, the effective date of the related registration statement (or date of the prospectus supplement if the offering is made pursuant
to a “shelf” registration) pursuant to which such underwritten offering shall be made, provided that all of the Company’s
executive officers and directors and any other holders of Common Stock who are selling shares of Common Stock in such underwritten
offering enter into similar agreements for the same time period and on no less restrictive terms.

 

2.6             
Expenses. The Company shall bear all other fees and expenses in connection with any registration statement prepared,
filed or caused to become effective pursuant to this Article II, including all registration and filing fees, all printing
costs and all fees and expenses of counsel and accountants for the Company and its Subsidiaries. In no event shall the Company
be responsible for any underwriting, broker or similar commissions of the Investor or any legal fees or other costs of the Investor
that are not described in the immediately preceding sentence.

 

2.7             
Indemnification; Contribution.

 

(a)              
In the event any Registrable Shares are included in a registration statement contemplated by this Agreement, the Company
shall, and it hereby agrees to, indemnify and hold harmless, or cause to be indemnified and held harmless, the Investor and its
officers, directors, managers, partners, employees, agents, representatives, trustees and controlling Persons, if any, in any offering
or sale of the Registrable Shares, against any losses, claims, damages or liabilities in respect thereof and expenses (including
reasonable fees and expenses of counsel) or Actions in respect thereof (collectively, “Claims”), to which each
such indemnified party may become subject, insofar as such Claims (including any amounts paid in settlement effected with the consent
of the Company as provided herein) arise out of or are based upon an untrue statement or alleged untrue statement of a material
fact contained in any registration statement, or any preliminary or final prospectus contained therein, or any amendment or supplement
thereto, or any document incorporated by reference therein, or arise out of or are based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading, and the Company shall, and it hereby agrees to, reimburse, upon request, the Investor
for any legal or other out-of-pocket fees and expenses reasonably incurred and documented by it in connection with investigating
or defending any such Claims; provided, that the Company shall not be liable to the Investor (or its officers, directors,
managers, partners, employees, agents, representatives, trustees and controlling Persons, if any) in any such case to the extent
that any such Claims arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, or preliminary or final prospectus, or amendment or supplement thereto, in reliance upon and
in conformity with the Required Investor Information furnished to the Company in writing by the Investor or on behalf of the Investor
by any Representative of the Investor, expressly for use therein, that is the subject of the untrue statement or omission.

 

    - 12 -

    

    

(b)              
In the event any Registrable Shares are included in a registration statement contemplated by this Agreement, the Investor
shall, and hereby agrees to indemnify and hold harmless the Company and its officers, directors, managers, employees, agents, representatives
and controlling Persons, if any, in any offering or sale of its Registrable Shares against any Claims to which each such indemnified
party may become subject, insofar as such Claims (including any amounts paid in settlement as provided herein), or Actions in respect
thereof, arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration
statement, or any preliminary or final prospectus contained therein, or any amendment or supplement thereto, or any document incorporated
by reference therein, or arise out of or are based upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, and the Investor shall, and it hereby agrees to
reimburse the Company for any legal or other out-of-pocket fees and expenses reasonably incurred and documented by the Company
in connection with investigating or defending any such Claims, in each case only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and in conformity with the Required Investor Information
furnished to the Company in writing by the Investor or its Representative expressly for use therein that is the subject of the
untrue statement or omission; provided, however, that the liability of the Investor hereunder shall be limited to
an amount equal to the dollar amount of the net proceeds actually received by the Investor from the sale of Registrable Shares
sold by the Investor pursuant to such registration statement or prospectus.

 

(c)              
The Investor and the Company agree that if, for any reason, the indemnification provisions contemplated by Section 2.7(a)
or Section 2.7(b) are unavailable to or are insufficient to hold harmless an indemnified party in respect of any Claims
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such Claims in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to the applicable offering of securities. The relative fault of
such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. If, however, the allocation in the first sentence of this Section
2.7(c) is not permitted by applicable Law, then each indemnifying party shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such relative faults, but also the relative benefits
of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this Section 2.7(c) were to be determined by
pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred
to in the preceding sentences of this Section 2.7(c). The amount paid or payable by an indemnified party as a result of
the Claims referred to above shall be deemed to include (subject to the limitations set forth in Section 2.8) any legal
or other out-of-pocket fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending
any such Action. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding the foregoing,
the Investor shall not be liable to contribute any amount in excess of the dollar amount equal to the sum of (i) the net proceeds
received by the Investor from the sale of Registrable Shares sold by the Investor pursuant to such registration statement or prospectus,
minus (ii) any amounts paid or payable by the Investor pursuant to Section 2.7(b) (except in the case of fraud or willful
misconduct by the Investor).

 

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2.8             
Indemnification Procedures.

 

(a)              
If an indemnified party shall desire to assert any claim for indemnification provided for under Section 2.7 in respect
of, arising out of or involving a Claim or Action against the indemnified party, such indemnified party shall notify the Company
or the Investor, as the case may be (the “Indemnifying Party”), in writing of such Claim, the amount or the
estimated amount of damages sought thereunder to the extent then ascertainable (which estimate shall not be conclusive of the final
amount of such Claim), any other remedy sought thereunder, any relevant time constraints relating thereto and, to the extent practicable,
any other material details pertaining thereto (a “Claim Notice”) promptly after receipt by such indemnified
party of written notice of the Claim; provided, that failure to provide a Claim Notice shall not affect the indemnification
obligations provided hereunder except to the extent the Indemnifying Party shall have been materially prejudiced as a result of
such failure. The indemnified party shall deliver to the Indemnifying Party, promptly after the indemnified party’s receipt
thereof, copies of all notices and documents (including court papers) received by the indemnified party relating to the Claim;
provided, however, that failure to provide any such copies shall not affect the indemnification obligations provided
hereunder except to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure.

 

    - 14 -

    

    

(b)              
The Indemnifying Party shall have the right to assume the defense of any Claim for which indemnification is being sought
and if the Indemnifying Party assumes such defense, the Indemnifying Party shall employ counsel for such defense that is reasonably
satisfactory to the indemnified party and shall pay all reasonable out-of-pocket fees and expenses incurred in connection with
such defense. Should the Indemnifying Party so elect to assume the defense of a Claim, the Indemnifying Party will not be liable
to the indemnified party for legal expenses subsequently incurred by the indemnified party in connection with the defense thereof,
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such indemnified party; or
(iii) such indemnified party shall have been advised by counsel that an actual or potential conflict of interest exists if the
same counsel were to represent such indemnified party and the Indemnifying Party or any other indemnified party (in which case,
if such indemnified party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Party); provided, that the Indemnifying Party shall not be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to not more than one local counsel that may be required in the opinion
of such firm) at any time for all indemnified parties hereunder. If the Indemnifying Party assumes such defense, the indemnified
party shall have the right to participate in the defense thereof and to employ counsel, at its own expense (except as provided
in the immediately preceding sentence), separate from the counsel employed by the Indemnifying Party. If the Indemnifying Party
chooses to defend any Claim, the indemnified party shall reasonably cooperate in the defense or prosecution thereof. Such cooperation
shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such Claim, and the indemnified party shall use reasonable best efforts to make
its employees and other representatives available on a mutually convenient basis during regular business hours to provide additional
information and explanation of any material provided hereunder. Whether or not the Indemnifying Party shall have assumed the defense
of a Claim, the indemnified party shall not admit any liability with respect to, or settle, compromise or discharge, such Claim
without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld, conditioned or
delayed). The Indemnifying Party may pay, settle or compromise a Claim without the written consent of the indemnified party, so
long as such settlement includes (A) an unconditional release of the indemnified party from all liabilities and obligations in
respect of such Claim, (B) does not subject the indemnified party to any injunctive relief or other equitable remedy, and (C) does
not include a statement or admission of fault, culpability or failure to act by or on behalf of any indemnified party.

 

2.9             
Rule 144. The Company will (i) file the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, will,
upon the request of the Investor, make publicly available other information), (ii) take such further action as the Investor may
reasonably request, all to the extent required from time to time to enable the Investor to sell Common Stock without registration
under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such rule
may be amended from time to time or (b) any similar rule or regulation hereafter adopted by the SEC, (iii) provide opinion(s) of
counsel as may be reasonably necessary in order for the Investor to avail itself of any such rule or regulation to allow the Investor
to sell such Common Stock without registration, and (iv) remove, or cause to be removed, the notation of any restrictive legend
on the Investor’s book-entry account maintained by the Company’s transfer agent, and bear all costs associated with
the removal of such legend in the Company’s books. Upon the reasonable request of the Investor, the Company will deliver
to the Investor a written statement as to whether the Company has filed the reports required to be filed under the Exchange Act
for a period of at least ninety (90) days prior to the date of such written statement.

 

    - 15 -

    

    

2.10         
Transfer of Registration Rights. The rights of the Investor under this Agreement may be assigned to any direct or
indirect transferee (including any Affiliate) of the Investor permitted under this Agreement who agrees in writing to be subject
to and bound by all the terms and conditions of this Agreement. In furtherance of the foregoing and in lieu of an assignment of
rights pursuant to the foregoing sentence, if requested by the Investor in connection with any such Transfer by the Investor, the
Company will enter into one or standalone registration rights agreements for the benefit of such direct or indirect transferee
providing for registration rights that are substantially consistent with the rights of the Investor under this Agreement. The Company
shall use its reasonable best efforts to amend or supplement the Shelf Registration Statement or related prospectus as may be necessary
in order to reflect any distribution or transfer of Registrable Shares by the Investor to any of its direct or indirect equity
holders that does not involve a disposition for value upon written notice by any such direct or indirect equity holder to the Company
of any such distribution or transfer, provided that any such direct or indirect equity holder provides such information
to the Company as may be reasonably requested to effect such amendment or supplement of the Registration Statement or related prospectus.

 

Article
III

 

MISCELLANEOUS

 

3.1             
Notices. Except for notices that are specifically required by the terms of this Agreement to be delivered orally,
all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given, delivered
and/or provided (a) when delivered personally or when sent by email of a .pdf attachment (provided, that no notice of non-delivery
is generated), or (b) on the next Business Day when dispatched for overnight delivery by Federal Express or a similar courier,
in either case, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

if to the Company, to:

 

Franchise Group, Inc.

1716 Corporate Landing Parkway

Virginia Beach, VA 23454

Attention: General Counsel or Legal
Department

 

with a copy to:

 

Troutman Sanders LLP

600 Peachtree Street, NE

Suite 3000

Atlanta, GA 30308

Email: david.ghegan@troutman.com

Attention: David W. Ghegan, Esquire

 

    - 16 -

    

    

if to the Investor, to:

 

Kayne FRG Holdings, L.P.

1800 Avenue of the Stars, 3rd Floor

Los Angeles, CA 90067

Attention: Seth Zeleznik

Email: szeleznik@kaynecapital.com

Telephone No.: (424) 581-3809

 

with a copy
to:

 

Paul Hastings LLP

515 S. Flower Street, 25th Floor

Los Angeles, CA 90071

Email: jenniferhildebrandt@paulhastings.com

Attention: Jennifer B. Hildebrandt

 

 

3.2             
Waiver. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement or condition
of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach
or any other covenant, duty, agreement or condition, regardless of how long such failure continues.

 

3.3             
Counterparts. This Agreement may be executed in separate counterparts, each of which will be an original and all
of which together shall constitute one and the same agreement binding on all the Parties.

 

3.4             
Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware,
without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Any dispute relating
hereto shall be heard exclusively in the state or federal courts of the State of Delaware, and the parties irrevocably agree to
jurisdiction and venue therein.

 

3.5             
WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE PERFORMANCE OF SERVICES THEREUNDER OR RELATED THERETO. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A CLAIM, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF
THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.5.

 

    - 17 -

    

    

3.6             
Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective
and valid under applicable Law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other
provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

3.7             
Further Action. The Parties shall execute and deliver all documents, provide all information and take or refrain
from taking such actions as may be reasonably necessary or appropriate to achieve the purposes of this Agreement.

 

3.8             
Delivery by Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection
with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of
an electronic transmission, including by a facsimile machine, .PDF or via email, shall be treated in all manner and respects as
an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed
version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of electronic transmission by a facsimile machine, .PDF or via email to deliver a signature
or the fact that any signature or agreement or instrument was transmitted or communicated through such electronic transmission
as a defense to the formation of a contract and each such party forever waives any such defense.

 

3.9             
Entire Agreement. This Agreement and the Subscription Agreement embody the entire agreement and understanding among
the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

 

3.10         
Remedies. To the fullest extent permitted by applicable Law, any Person having any rights under any provision of
this Agreement or any other agreements contemplated hereby shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other
rights granted by Law.

 

    - 18 -

    

    

3.11         
Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only
and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa. The use of the word “including” in this Agreement shall be by way of example rather than
by limitation. Reference to any agreement, document, or instrument means such agreement, document or instrument as amended or otherwise
modified from time to time in accordance with the terms thereof, and if applicable hereof, and references to all attachments thereto
and instruments incorporated therein. Without limiting the generality of the immediately preceding sentence, no amendment or other
modification to any agreement, document or instrument that requires the consent of any Person pursuant to the terms of this Agreement
or any other agreement will be given effect hereunder unless such Person has consented in writing to such amendment or modification.
Any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such Law as from time
to time amended, modified or supplemented, including by succession of comparable successor Laws. All references to any period of
days shall be deemed to be to the relevant number of calendar days unless otherwise specified. When calculating the period of time
before which, within which or following which, any act is to be done or step taken under this Agreement, the date that is the reference
date in calculating such period will be included, and if the last day of a period measured in Business Days is a non-Business Day,
the period in question will end on the next succeeding Business Day. The use of the words “or,” “either”
and “any” shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement. Wherever a conflict exists between this Agreement and any other agreement,
this Agreement shall control but solely to the extent of such conflict.

 

3.12         
Amendments. This Agreement may be amended or modified in writing by the Company and the Investor.

 

[Signature Pages
Follow.]

 

 

 

 

 

 

 

    - 19 -

    

    

 

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

 

 

 

COMPANY:

 

 

	 	FRANCHISE GROUP, INC.
	 	 
	 	 
	 	 
	 	By:	/s/ Eric Seeton	 
	 		Name: Eric Seeton
	 		Title: Chief Financial Officer

 

 

 

 

 

 

 

 

 

     
Signature Page to Registration Rights Agreement

    

    

 

INVESTOR:

 

 

	 	Kayne
frg HOLDINGS, L.P.
	 	 
	 	By:
	 	 
	 	 
	 	 
	 	By:	/s/ Jon Levinson	 
	 		Name: Jon Levinson
	 		Title: Managing Director

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