FEE EQUITIZATION AGREEMENT March 27, 2024

Exhibit 10.38

March 27, 2024

WHEREAS, pursuant to that certain engagement letter between Arrowroot Acquisition Corp., a Delaware corporation (together with any Successor (as defined herein), the “Company”), and Xxxxxx LLP (“Cooley”), dated October 20, 2020 (as it may be amended from time to time, the “Engagement Letter”), the Company has incurred fees and expenses payable to Cooley in an aggregate amount of $2,000,000 (the “Deferred Fee”). Capitalized terms used herein and not defined shall have their respective meanings ascribed to such terms in the Engagement Letter. For the avoidance of doubt, all references to the “Company” herein shall also refer to the publicly traded surviving or successor entity to the Company following the consummation of any Business Combination (the “Successor”), and the Company shall cause any Successor to expressly assume all of the Company’s obligations to Cooley under this letter agreement (this “Agreement”) upon consummation of any Business Combination.

WHEREAS, the Company has entered into that certain Agreement and Plan of Merger and Reorganization (as amended, the “Business Combination Agreement”) with respect to a Business Combination, as contemplated by the final prospectus of the Company, filed with the Securities and Exchange Commission (the “SEC”) (File No. 333-252997) dated March 1, 2021 (the “Transaction”) with iLearningEngines Inc., a Delaware corporation (including any affiliates thereof, the “Target”); and

WHEREAS, the Target has entered into an engagement letter with Cooley (the “Target Engagement Letter”), and for the avoidance of doubt, this Agreement is not intended to alter, amend or modify any of the terms of the Target Engagement Letter.

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Cooley hereby agree as follows:

Intentionally Omitted.

Payment: The Deferred Fee shall be payable by the Company to Cooley in the form of a certain number (as determined below) of shares (the “Cooley Fee Shares”) of the publicly traded common equity securities of the resulting public entity following the Transaction (the “New Common Stock”).

Issuance of Cooley Fee Shares: The Company hereby agrees that, upon or immediately prior to the initial filing of the Resale Registration Statement (as defined below), the Company (or any Successor) shall issue, transfer and deliver, or cause to be issued, transferred and delivered, the Cooley Fee Shares to Cooley payable hereunder in satisfaction of the Deferred Fee, in book-entry form, by irrevocable instruction from the Company (or its Successor) to its duly appointed transfer agent for the shares of New Common Stock (the “Transfer Agent”).

The number of Cooley Fee Shares to be so issued, transferred and delivered to Cooley in satisfaction of the Deferred Fee shall be equal to the greater of (a) the dollar amount of the Deferred Fee divided by $10.00 and (b) the quotient obtained by dividing (x) the dollar amount of the Deferred Fee by (y) the VWAP (as defined herein) of the New Common Stock over the seven (7) Trading Days immediately preceding the date of the initial filing of the Resale Registration Statement.

Any Cooley Fee Shares so issued, transferred and delivered to Cooley in satisfaction of the Deferred Fee shall be validly issued, fully paid and non-assessable and free and clear of all liens, encumbrances and other restrictions on the pledge, sale or other transfer of such shares of New Common Stock (including any restrictions that may arise due to contractual “lock-ups.” but excluding any restrictions that may arise due to applicable U.S. federal or state securities laws) (collectively, “Restrictions”).

Resale &Stockholder Rights: The Company further hereby agrees that all Cooley Fee Shares shall be issued, transferred and delivered to Cooley with (x) “registration rights,” enabling Cooley to promptly resell, freely trade and otherwise dispose of its Cooley Fee Shares (as further described below) and (y) “pre-emptive,” “anti-dilution,” “tag,” and “drag” stockholder rights, in each case, substantially consistent with those registration and stockholder rights received by any investor in any “public investment in private equity” (or “PIPE”) that closes substantially concurrently with the Transaction (or if no PIPE closes in connection therewith, then substantially consistent with those provided to the Sponsor with respect to any of the equity securities it holds in the Company), if any (collectively, the “Stockholder Rights”). For the avoidance of doubt, the definition of PIPE shall not include the Company Convertible Notes, and Stockholder Rights shall not include the conversion rights of the Company Convertible Notes.

Pursuant to the “registration rights” described above, the Company hereby agrees that it (or any Successor) shall:

(a)

Prepare and, as soon as practicable, but in no event later than sixty (60) days following the consummation of the Transaction (the “Closing”), file with the SEC a re-sale registration statement on Form S-1 (or any successor form) to register the re-sale of all of the Cooley Fee Shares (the “Resale Registration Statement”);

(b)

Use its commercially reasonable efforts to cause the Resale Registration Statement to be declared effective by the SEC by (i) the 90th calendar day after the date of the initial filing thereof, if the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Resale Registration Statement will not be reviewed by the SEC, (ii) by the 120th calendar day after the date of the initial filing thereof, if such Resale Registration Statement is subject to review by the SEC, or (iii) in any event, no later than the 180th calendar day after the Closing;

(c)

Use commercially reasonable efforts to maintain (i) the effectiveness of the Resale Registration Statement and (ii) the New Common Stock’s authorization for quotation or listing on Nasdaq Stock Market (or any other “national securities exchange” registered with the SEC under Section 6 of the Exchange Act), in each case, until the earlier of (i) the date upon which all Cooley Fee Shares have been sold, disposed or otherwise transferred by Cooley or are otherwise no longer outstanding and (ii) the two (2) year anniversary of the date of the effectiveness of the Resale Registration Statement;

(d)

If following the effective date of the Resale Registration Statement, the Resale Registration Statement ceases to become effective or available and any Cooley Fee Shares remain outstanding, (i) file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act, and (ii) otherwise meet the public reporting requirements so that, from and after the twelve (12) month anniversary of the Closing until the earlier of the two (2) year anniversary of the effectiveness of the Resale Registration Statement and the date on which none of the Cooley Fee Shares are held by Cooley (and/or its affiliates), Cooley (and/or its affiliates) will be entitled to re-sell, freely trade or otherwise dispose of all of the Cooley Fee Shares issuable hereunder without restriction or limitation pursuant to Rule 144 under the Act; and

(e)

Following either (i) the effectiveness of the Resale Registration Statement, and/or (ii) the one year anniversary of the Closing (if relying on Rule 144 under Act), in each case (as applicable), upon Xxxxxx’x request and provided that Cooley provides any reasonable requested representation letters, (x) instruct and cause its legal counsel to promptly provide the necessary “blanket” legal opinion(s) to the Transfer Agent so that such Transfer Agent may remove any “restrictive legends” from the Cooley Fee Shares, (y) take all actions reasonably necessary to cause the Transfer Agent to remove any such “restrictive legends” from the Cooley Fee Shares, and (z) take any such further action as Cooley may reasonably request, in each case, to enable Cooley (and/or its affiliates) to promptly resell, freely trade or otherwise dispose of the Cooley Fee Shares

(such obligations set forth in clauses (a)-(e) above, the “Resale Rights Obligations”).

Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to delay or postpone the effectiveness of the Resale Registration Statement, and from time to time to require Cooley not to sell under the Resale Registration Statement or to suspend the effectiveness thereof, if the negotiation or consummation of a material transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event the Company’s board of directors reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Resale Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Resale Registration Statement would be expected, in the reasonable determination of the Company’s board of directors, upon the advice of legal counsel, to cause the Resale Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”); provided, however, that the Company may not delay or suspend the Resale Registration Statement on more than three occasions or for more than sixty (30) consecutive calendar days, or more than one hundred and eighty (90) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Resale Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Cooley agrees that (i) it will immediately discontinue offers and sales of the Cooley Fee Shares under the Resale Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Cooley receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, Cooley will destroy, all copies of the prospectus covering the Cooley Fee Shares in Xxxxxx’x possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Cooley Fee Shares shall not apply (i) to the extent Cooley is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.

Intentionally Omitted.

Other Defined Terms: For purposes of this Agreement:

(a)

“VWAP” shall mean, for the New Common Stock for a specified period, the dollar volume-weighted average price for the New Common Stock on the Principal Market, for such period, as reported by Bloomberg through its “AQR” function. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

(b)

“Principal Market” shall mean the principal national securities exchange on which the New Common Stock is then listed or traded.

(c)

“Trading Day” shall mean any day on which the Principal Market is open for trading (regular way), including any day on which it is open for trading (regular way) for a period of time less than the customary time.

No Fees Refundable: For the avoidance of doubt, once paid or issued, no fees payable hereunder, whether in cash or New Common Stock, respectively, will be refundable under any circumstances.

Further Assurances: Each of the Company and Cooley will, upon request of the other, execute such other documents, instruments or agreements as may be reasonable or necessary to effectuate the agreements set forth in this Agreement.

Confidentiality: This Agreement (including the terms set forth herein) is confidential, and neither this Agreement (including the terms set forth herein) nor Xxxxxx’x role in the Transaction may be filed publicly or otherwise disclosed by the Company to any other party (except the Target) without Xxxxxx’x prior written consent.

10.

Termination: This Agreement will terminate automatically upon the earlier of:

(a)

the satisfaction in full of the payment of the Deferred Fee, including, for the avoidance of doubt, the issuance, transfer and delivery of the Cooley Fee Shares to Cooley, free and clear of all Restrictions, including (x) the effectiveness of the Resale Registration Statement related thereto and the continued satisfaction of the Resale Rights Obligations, (y) the removal of all restrictive legends on all Cooley Fee Shares enabling Cooley (and/or its affiliates) to promptly resell, freely trade or otherwise dispose of all such Cooley Fee Shares, and (z) the sale by Cooley (and/or its affiliates) of all of the Cooley Fee Shares issuable hereunder, in each case, upon the terms and conditions set forth herein;

(b)

the date upon which all Cooley Fee Shares have been sold, disposed or otherwise transferred by Cooley (and/or its affiliates) or are otherwise no longer outstanding; and

(c)

the termination of the Business Combination Agreement.

11.

Successor: Prior to the Closing, if the agreements executed by the Company in connection therewith do not directly or indirectly provide for the assumption by the Successor of the Company’s obligations under the Engagement Letter, as amended by this Agreement, the Company shall cause such Successor to (x) execute and deliver to Cooley a joinder agreement, in form and substance reasonably satisfactory to Cooley, pursuant to which it shall join the Engagement Letter, as amended by this Agreement, as a signatory and a party and thus be subject to all of the terms and conditions set forth therein and herein that apply to the Company, and (y) comply with the obligations and covenants of the Company set forth therein and herein.

12.

Miscellaneous: The terms of this Agreement shall be interpreted, enforced, governed by and construed in a manner consistent with the provisions of the Engagement Letter. Without limiting the foregoing, Section 19 (Arbitration) of the Engagement Letter are hereby incorporated by reference into this Agreement. In this Agreement, unless the context otherwise requires, the term “including” (and with correlative meaning “include”) shall be deemed in each case to be followed by the words “without limitation.” The parties agree that they have jointly participated in the drafting and negotiation of this Agreement, and in the event that any ambiguity or question of intent or interpretation of this Agreement 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 provision of this Agreement. With respect to any dispute, claim or controversy directly or indirectly relating to or arising out of this Agreement, the termination or validity of this Agreement, any alleged breach of this Agreement or the determination of the scope of the applicability of this Agreement to this Section 12 (any of the foregoing, a “Claim”), the costs and the reasonable attorneys’ fees of the prevailing party (it being understood that the determination as to which party prevailed shall be made by the court in such Claim) shall be borne by the party who did not prevail.

13.

Engagement Letter. The Engagement Letter, as amended by this Agreement (together with the other agreements and documents being delivered pursuant to or in connection with the Engagement Letter or this Agreement), constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Except as expressly provided in this Agreement, all of the terms and provisions in the Engagement Letter are and shall remain in full force and effect, on the terms and subject to the conditions set forth therein. This Agreement does not constitute, directly or by implication, an amendment, modification or waiver of any provision of the Engagement Letter, or any other right, remedy, power or privilege of any party to the Engagement Letter, except as expressly set forth herein. Any reference to the Engagement Letter in the Engagement Letter or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the Engagement Letter, as amended or modified by this Agreement (or as the Engagement Letter may be further amended, modified or supplemented after the date hereof in accordance with the terms thereof). For the avoidance of doubt, nothing herein shall alter, amend or modify the obligations of the Target with respect to the Target Engagement Letter.

[Signature Page Follows]

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed and delivered by its duly authorized signatory as of the date first set forth above. Facsimile and electronic signatures are as effective as original signatures.

	XXXXXX LLP

	By:	/s/ Xxxx Xxxxxxx
	Name:	Xxxx Xxxxxxx
	Title:	Attorney-in-Fact

	ARROWROOT ACQUISITION CORP.

	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Partner

Acknowledged and agreed to:

ILEARNINGENGINES INC.

By:	/s/ X.X. Xxxxxxxxxxx
Name:	X.X. Xxxxxxxxxxx
Title:	Chief Executive Officer

[Signature page to Fee Reduction Agreement]

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FEE EQUITIZATION AGREEMENT March 27, 2024

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