Exhibit 10.1

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of February 19, 2014 between National General Holdings Corp., a Delaware
corporation (together with any successor entity thereto, the “Company”), and FBR
Capital Markets & Co., a Delaware corporation, as the initial
purchaser/placement agent (“FBR”) for the benefit of FBR, the purchasers of the
Company’s common stock, $0.01 par value per share (“Common Stock”), as
participants (“Participants”) in the private placement by the Company of shares
of its Common Stock, and the direct and indirect transferees of FBR, and each of
the Participants.

This Agreement is made pursuant to the Purchase/Placement Agreement (the
“Purchase/Placement Agreement”), dated as of February 11, 2014, between the
Company and FBR in connection with the purchase and sale or placement of an
aggregate of 11,800,000 shares of Common Stock (plus an additional 1,770,000
shares to cover additional allotments, if any). In order to induce FBR to enter
into the Purchase/Placement Agreement, the Company has agreed to provide the
registration rights provided for in this Agreement to FBR, the Participants, and
their respective direct and indirect transferees. The execution of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase/Placement Agreement.

The parties hereby agree as follows:

1. Definitions

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

Accredited Investor Shares: Shares initially sold by the Company to “accredited
investors” (within the meaning of Rule 501(a) promulgated under the Securities
Act) as Participants.

Affiliate: As to any specified Person, (i) any Person directly or indirectly
owning, controlling or holding, with power to vote, ten percent or more of the
outstanding voting securities of such other Person, (ii) any Person, ten percent
or more of whose outstanding voting securities are directly or indirectly owned,
controlled or held, with power to vote, by such other Person, (iii) any Person
directly or indirectly controlling, controlled by or under common control with
such other Person, (iv) any executive officer, director, trustee or general
partner of such Person and (v) any legal entity for which such Person acts as an
executive officer, director, trustee or general partner. An indirect
relationship shall include circumstances in which a Person’s spouse, children,
parents, siblings or mother, father, sister- or brother-in-law is or has been
associated with a Person.

Agreement: As defined in the preamble.

Board of Directors: As defined in Section 6(a) hereof.

Business Day: With respect to any act to be performed hereunder, each Monday,
Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in New York,

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New York or other applicable places where such act is to occur are authorized or
obligated by applicable law, regulation or executive order to close.

Closing Date: February 19, 2014 or such other time or such other date as FBR and
the Company may agree.

Commission: The Securities and Exchange Commission.

Common Stock: As defined in the preamble.

Company: As defined in the preamble.

Controlling Person: As defined in Section 7(a) hereof.

End of Suspension Notice: As defined in Section 6(b) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.

FBR: As defined in the preamble.

FINRA: The Financial Industry Regulatory Authority, formerly the National
Association of Securities Dealers, Inc.

Holder: Each record owner of any Registrable Shares from time to time, including
FBR and its Affiliates to the extent FBR or any such Affiliate holds any
Registrable Shares.

Indemnified Party: As defined in Section 7(c) hereof.

Indemnifying Party: As defined in Section 7(c) hereof.

IPO Registration Statement: As defined in Section 2(b) hereof.

JOBS Act: The Jumpstart Our Business Startups Act, as amended, and the rules and
regulations promulgated by the Commission thereunder.

Issuer Free Writing Prospectus: As defined in Section 2(c) hereof.

Liabilities: As defined in Section 7(a) hereof.

No Objections Letter: As defined in Section 5(t) hereof.

Nominee: As defined in Section 3(c) hereof.

Participants: As defined in the preamble.

 

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Person: An individual, partnership, corporation, trust, unincorporated
organization, government or agency or political subdivision thereof, or any
other legal entity.

Proceeding: An action, claim, suit or proceeding (including without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or, to the knowledge of the Person subject thereto, threatened.

Prospectus: The prospectus included in any Registration Statement, including any
preliminary prospectus at the “time of sale” within the meaning of Rule 159
under the Securities Act and all other amendments and supplements to any such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
prospectus.

Purchase/Placement Agreement: As defined in the preamble.

Purchaser Indemnitee: As defined in Section 7(a) hereof.

Registrable Shares: The Rule 144A Shares, the Accredited Investor Shares, the
Regulation S Shares, upon original issuance thereof, and at all times subsequent
thereto, including upon the transfer thereof by the original holder or any
subsequent holder and any shares or other securities issued in respect of such
Registrable Shares by reason of or in connection with any stock dividend, stock
distribution, stock split, purchase in any rights offering or in connection with
any exchange for or replacement of such Registrable Shares or any combination of
shares, recapitalization, merger or consolidation, or any other equity
securities issued pursuant to any other pro rata distribution with respect to
the Common Stock, until, in the case of any such Rule 144A Share, Accredited
Investor Share or Regulation S Share, the earliest to occur of (i) the date on
which the resale of such share has been registered pursuant to the Securities
Act and it has been disposed of in accordance with the Registration Statement
relating to it, (ii) in the event the Company is subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act, the date on which it
has been transferred pursuant to Rule 144 (or any similar provision then in
effect) or is freely saleable pursuant to Rule 144 without any restriction
thereunder as to volume, manner of sale or current public information, and is
listed or included on the NASDAQ Global Market, or (iii) the date on which it is
sold to the Company.

Registration Default: As defined in Section 2(f) hereof.

Registration Expenses: Any and all expenses incident to the Company’s and FBR’s
performance of or compliance with this Agreement, including, without limitation:
(i) all Commission, securities exchange, and FINRA registration, listing,
inclusion and filing fees; (ii) all fees and expenses incurred in connection
with compliance with international, federal or state securities or blue sky laws
(including, without limitation, any registration, listing and filing fees and
fees and disbursements of counsel in connection with blue sky qualification of
any of the Registrable Shares and the preparation of a blue sky memorandum and
compliance with the rules of FINRA); (iii) all expenses in preparing or
assisting in preparing, word processing, duplicating, printing, delivering and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements,
certificates and

 

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any other documents relating to the performance under and compliance with this
Agreement; (iv) all fees and expenses incurred in connection with the listing or
inclusion of any of the Registrable Shares on any securities exchange pursuant
to Section 5(n) of this Agreement; (v) the fees and disbursements of counsel for
the Company and of the independent registered public accounting firm of the
Company (including, without limitation, the expenses of any special audit and
“cold comfort” letters required by or incident to the performance of this
Agreement); (vi) reasonable fees and disbursements of Selling Holders’ Counsel,
not to exceed $50,000; and (vii) any fees and disbursements customarily paid in
issues and sales of securities (including the fees and expenses of any experts
retained by the Company in connection with any Registration Statement);
provided, however, that Registration Expenses shall exclude (a) brokers’ or
underwriters’ discounts and commissions, if any, relating to the sale or
disposition of Registrable Shares by a Holder, (b) the fees and disbursements of
counsel for any brokers or underwriters, other than such fees and expenses
(x) as provided in clause (vi) above, (y) specifically agreed to be paid under
this Agreement or (z) that the Company shall have agreed in writing with such
underwriter to pay, and (c) all transfer taxes and transfer fees in connection
with a registration of Registrable Shares pursuant to this Agreement.

Registration Statement: Any registration statement of the Company that covers
the resale of Registrable Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.

Regulation S: Regulation S (Rules 901-905) promulgated by the Commission under
the Securities Act, as such rules may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such regulation.

Regulation S Shares: Shares initially resold by FBR pursuant to the
Purchase/Placement Agreement to “non-U.S. persons” (in accordance with
Regulation S) in an “offshore transaction” (in accordance with Regulation S).

Rule 144: Rule 144 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 144A: Rule 144A promulgated by the Commission pursuant to the Securities
Act, as such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 144A Shares: Shares initially resold by FBR pursuant to the
Purchase/Placement Agreement to “qualified institutional buyers” (as such term
is defined in Rule 144A).

Rule 158: Rule 158 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

 

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Rule 159: Rule 159 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 405: Rule 405 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 415: Rule 415 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 424: Rule 424 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 429: Rule 429 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Rule 433: Rule 433 promulgated by the Commission pursuant to the Securities Act,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.

Selling Holders’ Counsel: Counsel for the Holders selected by FBR and reasonably
acceptable to the Company, or if not selected by FBR, then such other counsel,
reasonably acceptable to the Company, selected by the Holders holding a majority
of the Registrable Shares to be included in the Registration Statement.

Shares: The shares of Common Stock being offered and sold pursuant to the terms
and conditions of the Purchase/Placement Agreement.

Shelf Registration Statement: As defined in Section 2(a) hereof.

Special Election Meeting: As defined in Section 3(a) hereof.

Specified Executive Officers: For purposes of Section 2(f) hereof, Michael
Karfunkel, chairman and chief executive officer of the Company, and Michael
Weiner, chief financial officer of the Company.

Suspension Event: As defined in Section 6(b) hereof.

 

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Suspension Notice: As defined in Section 6(b) hereof.

Trigger Date: As defined in Section 3(a) hereof.

Underwritten Offering: A sale of securities of the Company to an underwriter or
underwriters for re-offering to the public.

2. Registration Rights

(a) Mandatory Shelf Registration. As set forth in Section 5 hereof, the Company
agrees to file with the Commission as soon as reasonably practicable following
the date of this Agreement (but in no event later than the date that is
seventy-five (75) days after the date of this Agreement) a shelf Registration
Statement on Form S-1 or such other form under the Securities Act then available
to the Company providing for the resale of any Registrable Shares pursuant to
Rule 415 from time to time by the Holders (a “Shelf Registration Statement”).
The Company shall use its commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the Commission as soon as
practicable after the initial filing thereof but in any event within one hundred
and fifty (150) days after the date this Agreement. Any Shelf Registration
Statement shall provide for the resale from time to time, and pursuant to any
method or combination of methods legally available (including, without
limitation, an Underwritten Offering, a direct sale to purchasers or a sale
through brokers or agents, which may include sales over the internet) by the
Holders of any and all Registrable Shares; provided, however, that any
underwriter engaged in connection with any such resale shall be FBR or any other
underwriter reasonably acceptable to the Company.

(b) IPO Registration. If the Company proposes to file a registration statement
on Form S-1 or such other form under the Securities Act providing for the
initial public offering of shares of Common Stock prior to the effectiveness of
the Shelf Registration Statement (the “IPO Registration Statement”), the Company
will notify in writing each Holder of the filing within five (5) Business Days
after the initial filing and afford each Holder an opportunity to include in the
IPO Registration Statement all or any part of the Registrable Shares then held
by such Holder. Each Holder desiring to include in the IPO Registration
Statement all or part of the Registrable Shares held by such Holder shall,
within twenty (20) days after mailing or delivery of the above-described notice
from the Company, so notify the Company in writing, and in such notice shall
inform the Company of the number of Registrable Shares such Holder wishes to
include in the IPO Registration Statement. Any election by any Holder to include
any Registrable Shares in the IPO Registration Statement will not affect the
inclusion of such Registrable Shares in the Shelf Registration Statement until
such Registrable Shares have been sold under the IPO Registration Statement.
Furthermore, in the event the IPO Registration Statement is not declared
effective within one hundred twenty (120) days following the initial filing of
the IPO Registration Statement, unless a road show for the Underwritten Offering
pursuant to the IPO Registration Statement is actually in progress at such time,
the Company shall promptly provide a new written notice to all Holders giving
them another opportunity to elect to include Registrable Shares in the pending
IPO Registration Statement. Each Holder receiving such notice shall have the
same election rights afforded such Holder as described in this clause (b). For
the avoidance of doubt, a

 

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Holder shall have no right to receive notice of and to elect to be included in
the IPO Registration Statement at any time following the effectiveness of the
Shelf Registration Statement.

(i) Right to Terminate IPO Registration. The Company shall have the right to
terminate or withdraw the IPO Registration Statement initiated by it and
referred to in this Section 2(b) prior to or after the effectiveness of such
registration whether or not any Holder has elected to include Registrable Shares
in such registration; provided, however, the Company must provide each Holder
that elected to include any Registrable Shares in such IPO Registration
Statement prompt written notice following such termination or withdrawal.

(ii) Selection of Underwriter. Subject to the terms and conditions set forth in
that certain engagement letter, dated April 16, 2013, by and between FBR and the
Company, and any rights of FBR set forth therein, the Company shall have the
sole right to select the managing underwriter(s) and any other underwriter(s)
for its initial public offering, regardless of whether any Registrable Shares
are included in the IPO Registration Statement or otherwise.

(iii) Shelf Registration not Impacted by IPO Registration Statement. The
Company’s obligation to file the Shelf Registration Statement pursuant to
Section 2(a) hereof shall not be affected by the filing or effectiveness of the
IPO Registration Statement. In addition, the Company’s obligation to file and
use its commercially reasonable efforts to cause to become and keep effective
the Shelf Registration Statement pursuant to Section 2(a) hereof shall not be
affected by the filing or effectiveness of an IPO Registration Statement;
provided, however, if the Company files an IPO Registration Statement before the
effective date of the Shelf Registration Statement, the Company shall have the
right to defer causing the Commission to declare such Shelf Registration
Statement effective until up to 60 days after the closing date of its initial
public offering pursuant to the IPO Registration Statement.

(c) Issuer Free Writing Prospectus. In the case of an Underwritten Offering, the
Company represents and agrees that, unless it obtains the prior consent of the
managing underwriter in connection with any Underwritten Offering of Registrable
Shares, and each Holder represents and agrees that, unless it obtains the prior
consent of the Company and any such underwriter, it will not make any offer
relating to the Shares that would constitute an “issuer free writing
prospectus,” as defined in Rule 433 (an “Issuer Free Writing Prospectus”), or
that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405, required to be filed with the Commission. The Company represents that
any Issuer Free Writing Prospectus used or approved by the Company in connection
with any offer relating to the Shares will not include any information that
conflicts with the information contained in any Registration Statement or the
related Prospectus, and any Issuer Free Writing Prospectus, when taken together
with the information in such Registration Statement and the related Prospectus,
will not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

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(d) Underwriting. The Company shall advise all Holders of the lead managing
underwriter for the Underwritten Offering proposed under the IPO Registration
Statement. The right of any such Holder to include any of its Registrable Shares
in the IPO Registration Statement pursuant to Section 2(b) shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Shares in the underwriting to the extent provided herein.
All Holders proposing to distribute their Registrable Shares through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter(s) selected for such underwriting and complete and
execute any questionnaires, powers of attorney, indemnities, custody agreements,
securities escrow agreements and other documents, including opinions of counsel,
reasonably required under the terms of such underwriting, and furnish to the
Company such information as the Company may reasonably request in writing for
inclusion in the Registration Statement; provided, however, that no Holder shall
be required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such Holder and such Holder’s intended method of distribution and any
other representation required by law or reasonably requested by the
underwriters. Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) determine(s) in good faith that marketing factors
require a limitation on the number of shares to be included, then the managing
underwriter(s) may exclude shares (including Registrable Shares) from the IPO
Registration Statement and Underwritten Offering, and any shares included in
such IPO Registration Statement and Underwritten Offering shall be allocated
first, (subject to the last proviso of this paragraph) to the Company, and
second, to each of the Holders requesting inclusion of their Registrable Shares
in such IPO Registration Statement (on a pro rata basis based on the total
number of Registrable Shares then held by each such Holder who is requesting
inclusion); provided, however, that the number of Registrable Shares to be
included in the IPO Registration Statement shall not be reduced unless all other
securities of the Company held by (i) officers, directors, other employees of
the Company and consultants and (ii) other holders of the Company’s capital
stock with registration rights that are inferior (with respect to such
reduction) to the registration rights of the Holders set forth herein, are first
entirely excluded from the underwriting and registration; provided, further,
however, that Holders of Registrable Shares shall be permitted to include
Registrable Shares comprising at least 25% of the total securities included in
the Underwritten Offering proposed under the IPO Registration Statement.

By electing to include the Registrable Shares in the IPO Registration Statement,
the Holder of such Registrable Shares shall be deemed to have agreed not to
effect any public sale or distribution of securities of the Company of the same
or similar class or classes of the securities included in the IPO Registration
Statement or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during such periods as reasonably requested (but in no event for
a period longer than thirty (30) days prior to and one hundred eighty (180) days
following the effective date of the IPO Registration Statement) by the
representatives of the underwriters, if an Underwritten Offering, or by the
Company in any other registration; provided, however, that if (1) during the
last 17 days of such restricted period the Company issues an earnings release or
material news or a material event relating to the Company occurs, or (2) prior
to the expiration of such restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
such restricted period, then, in each case, the restrictions imposed by

 

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the representatives of the underwriters may continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or event, unless the
representatives of the underwriters waive, in writing, such an extension.

If any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter(s), delivered at least ten (10) Business Days prior to the effective
date of the IPO Registration Statement. Any Registrable Shares excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration.

(e) Expenses. The Company shall pay all Registration Expenses in connection with
the registration of the Registrable Shares pursuant to this Agreement. Each
Holder participating in a registration pursuant to this Section 2 shall bear
such Holder’s proportionate share (based on the total number of Registrable
Shares sold in such registration) of all discounts and commissions payable to
underwriters or brokers and all transfer taxes and transfer fees in connection
with a registration of Registrable Shares pursuant to this Agreement.

(f) Penalty Provisions. If the Company does not file a Shelf Registration
Statement registering the resale of the Registrable Shares in accordance with
Section 2(a) hereof within seventy-five (75) days after the date of this
Agreement, other than as a result of the Commission being unable to accept such
filing (a “Registration Default”), then (i) the Company agrees not to authorize,
award or pay, and each Specified Executive Officer shall lose and forfeit his
right to (or his opportunity to earn) 50% of such Specified Executive Officer’s
bonus for his service, performance or employment for the year 2014 (whether in
cash, equity or other compensation and whether such bonus is paid in during 2014
or thereafter) and, (ii) for each additional 30-day period following the
Registration Default for which the Registration Default shall have not been
cured, the Company agrees not to authorize, award or pay, and each Specified
Executive Officer shall lose and forfeit his right to (or his opportunity to
earn) an additional 10% of such bonus, such that each Specified Executive
Officer will lose and forfeit his entire 2014 bonus if the Registration Default
continues for five full consecutive 30-day periods following date initial date
of default. The Company agrees to abide by the provisions of this Section 2(f)
in good faith and shall not take any action to circumvent the purpose and spirit
hereof, including but not limited to, renaming a Specified Executive Officer’s
2014 bonus as something else, or creating, awarding or granting a new or
difference bonus or other form of compensation to replace or compensate for all
or any portion of a Specified Executive Officer’s 2014 bonus which has been
forfeited in accordance with the provisions of this Section 2(f).

(g) JOBS ACT Submissions. For purposes of this Agreement, if the Company elects
to confidentially submit a draft of the Shelf Registration Statement with the
Commission pursuant to the JOBS Act, the date on which the Company makes such
confidential submission will be deemed the initial filing date of such Shelf
Registration Statement.

3. Special Election Meeting.

(a) If a Shelf Registration Statement registering the resale of the Registrable
Shares has not been declared effective by the Commission, or the Registrable
Shares have not been

 

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listed for trading on the NASDAQ Global Market prior to one hundred and fifty
(150) days after the date of this Agreement (the “Trigger Date”), then a special
meeting of stockholders (the “Special Election Meeting”) shall be called not
less than five days after the Trigger Date in accordance with the Bylaws of the
Company. The Special Election Meeting shall occur as soon as possible following
the Trigger Date but in no event more than ninety (90) days after the Trigger
Date.

(b) Purposes of Meeting. The Special Election Meeting shall be called solely for
the purposes of: (i) considering and voting upon proposals to remove each
then-serving director of the Company; and (ii) electing such number of directors
as there are then vacancies on the Board of Directors of the Company (including
any vacancies created by the removal of any director pursuant to this Section 3.
The removal of any director pursuant to this Section 3 shall be effective
immediately upon the receipt of the final report of the Inspector of Elections
for the Special Election Meeting of the result of the vote on the proposal to
remove such director.

(c) Nominations. Nominations of individuals for election to the Board of
Directors of the Company at the Special Election Meeting may only be made (i) by
or at the direction of the Board of Directors or (ii) upon receipt by the
Company of written notice of one or more Holders entitled to cast, or direct the
casting of, not less than 5% of all the votes entitled to be cast at the Special
Election Meeting and containing the information specified by Section 3(d) hereof
and the Bylaws of the Company. Each individual whose nomination is made in
accordance with this Section 3(c) is hereinafter referred to as a “Nominee.”

(d) Procedure for Stockholder Nominations. For nominations of individuals for
election to the Board of Directors to be properly brought before the Special
Election Meeting by Holders pursuant to Section 3(c) hereof, the Holders must
have given notice thereof in writing to the Secretary of the Company not later
than 5:00 p.m., Eastern Time, on the 15th day after the delivery of the notice
of the Special Election Meeting in accordance with the Company’s Bylaws. Such
notice shall include each such proposed Nominee’s written consent to serve as a
director, if elected, and shall specify:

(i) as to each proposed Nominee, the name, age, business address and residence
address of such proposed Nominee and all other information relating to such
proposed Nominee that would be required, pursuant to Regulation 14A promulgated
under the Exchange Act (or any successor provision), to be disclosed in a
contested solicitation of proxies with respect to the election of such
individual as a director; and

(ii) as to each Holder giving the notice, the class, series and number of all
shares of beneficial interest of the Company that are owned by such Holder,
beneficially or of record.

(e) Notice. Not less than fifteen (15) nor more than twenty-five (25) days
before the Special Election Meeting, the Secretary of the Company shall give to
each stockholder entitled to vote at, or to receive notice of, such meeting at
such stockholder’s address as it appears in the share transfer records of the
Company, notice in writing setting forth (i) the time and place of the

 

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Special Election Meeting, (ii) the purposes for which the Special Election
Meeting has been called and (iii) the name of each Nominee.

4. Rules 144 and 144A Reporting

With a view to making available the benefits of certain rules and regulations of
the Commission that may at any time permit the sale of the Registrable Shares to
the public without registration, the Company agrees to:

(a) make and keep current public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration statement under the Securities Act
filed by the Company for an offering of its securities to the general public;

(b) use commercially reasonable efforts to file with the Commission in a timely
manner all reports and other documents required to be filed by the Company under
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements);

(c) so long as a Holder owns any Registrable Shares, if the Company is not
required to file reports and other documents under the Securities Act and the
Exchange Act, it will make available other information as required by, and so
long as necessary to permit sales of Registrable Shares pursuant to, Rule 144 or
Rule 144A, and in any event shall make available (either by mailing a copy
thereof, by posting on the Company’s website, or by press release) to each
Holder a copy of:

(i) the Company’s annual consolidated financial statements (including at least
balance sheets, statements of profit and loss, statements of stockholders’
equity and statements of cash flows) prepared in accordance with U.S. generally
accepted accounting principles in the United States, accompanied by an audit
report of the Company’s independent accountants, no later than ninety (90) days
after the end of each fiscal year of the Company (or if such 90th day is not a
Business Day, the immediately following Business Day); and

(ii) the Company’s unaudited quarterly financial statements (including at least
balance sheets, statements of profit and loss, statements of stockholders’
equity and statements of cash flows) prepared in a manner consistent with the
preparation of the Company’s annual financial statements, no later than
forty-five (45) days after the end of each of the first three fiscal quarters of
the Company (or if such 45th day is not a Business Day, the immediately
following Business Day);

(d) the Company shall hold, a reasonable time after the availability of such
financial statements and upon reasonable notice to the Holders and FBR (either
by mail, by posting on the Company’s website, or by press release), a quarterly
investor conference call to discuss such financial statements, which call will
also include an opportunity for the Holders to ask questions of management with
regard to such financial statements, and will also cooperate with, and make

 

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management reasonably available to, FBR personnel in connection with making
Company information available to investors; and

(e) so long as a Holder owns any Registrable Shares, to furnish to the Holder
promptly upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time after ninety
(90) days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), (ii) a copy of the most recent
annual or quarterly report of the Company, and (iii) such other reports and
documents of the Company, and take such further actions, as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such Registrable Shares without
registration.

5. Registration Procedures

In connection with the obligations of the Company with respect to any
registration pursuant to this Agreement, the Company shall use its commercially
reasonable efforts to effect or cause to be effected the registration of the
Registrable Shares under the Securities Act to permit the sale of such
Registrable Shares by the Holder or Holders in accordance with the Holder’s or
Holders’ intended method or methods of distribution, and the Company shall:

(a) notify FBR and Selling Holders’ Counsel, in writing, at least ten
(10) Business Days prior to filing a Registration Statement, of its intention to
file a Registration Statement with the Commission and, at least five
(5) Business Days prior to filing, provide a copy of the Registration Statement
to FBR and Selling Holders’ Counsel for review and comment; prepare and file
with the Commission, as specified in this Agreement, the Registration
Statement(s), which Registration Statement(s) shall (x) comply as to form in all
material respects with the requirements of the applicable form and include all
financial statements required by the Commission to be filed therewith and (y) be
reasonably acceptable to FBR and Selling Holders’ Counsel; notify FBR and
Selling Holders’ Counsel in writing, at least five (5) Business Days prior to
filing of any amendment or supplement to such Registration Statement and, at
least three (3) Business Days prior to filing, provide a copy of such amendment
or supplement to FBR and Selling Holders’ Counsel for review and comment;
promptly following receipt from the Commission, provide to FBR and Selling
Holders’ Counsel copies of any comments made by the staff of the Commission
relating to such Registration Statement and of the Company’s responses thereto
for review and comment; and use its commercially reasonable efforts to cause
such Registration Statement to become effective as soon as practicable after
filing and to remain effective, subject to Section 6 hereof, until the earliest
of (i) such time as all Registrable Shares covered thereby have been sold in
accordance with the intended distribution of such Registrable Shares, (ii) there
are no Registrable Shares outstanding or (iii) the first anniversary of the
effective date of such Registration Statement (subject to extension as provided
in Section 6(c) hereof and the condition that the Registrable Shares have been
transferred to an unrestricted CUSIP, are listed or included on the NASDAQ
Global Market, pursuant to Section 5(n) of this Agreement, or on an alternative
trading system with the Registrable Shares qualified under the applicable state
securities or “blue sky” laws of all fifty (50) states), and can be sold under
Rule 144 without limitation as to volume, manner of sale or current public
information thereunder; provided, however, that the Company shall not be
required

 

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to cause the IPO Registration Statement to remain effective for any period
longer than ninety (90) days following the effective date of the IPO
Registration Statement (subject to extension as provided in Section 6(c) hereof)
provided, further, that if the Company has an effective Shelf Registration
Statement on Form S-1 (or other form then available to the Company) under the
Securities Act and becomes eligible to use Form S-3 or such other short-form
registration statement form under the Securities Act, the Company may file a
post-effective amendment on Form S-3 to such registration statement on Form S-1,
so long as there is no lapse in effectiveness of the Shelf Registration
Statement;

(b) subject to Section 5(i) hereof, (i) prepare and file with the Commission
such amendments and post-effective amendments to each such Registration
Statement as may be necessary to keep such Registration Statement effective for
the period described in Section 5(a) hereof; (ii) cause each Prospectus
contained therein to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 or any similar rule that may
be adopted under the Securities Act; and (iii) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof;

(c) furnish to the Holders, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable Shares; the
Company consents, subject to Section 6 hereof, to the use of such Prospectus,
including each preliminary Prospectus, by the Holders, if any, in connection
with the offering and sale of the Registrable Shares covered by any such
Prospectus;

(d) use its commercially reasonable efforts to register or qualify, or obtain
exemption from registration or qualification for, all Registrable Shares by the
time the applicable Registration Statement is declared effective by the
Commission under all applicable state securities or “blue sky” laws of such
jurisdictions as FBR or any Holder of Registrable Shares covered by a
Registration Statement shall reasonably request in writing, keep each such
registration or qualification or exemption effective during the period such
Registration Statement is required to be kept effective pursuant to Section 5(a)
and do any and all other acts and things that may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Shares owned by such Holder; provided, however,
that the Company shall not be required to (i) qualify generally to do business
in any jurisdiction or to register as a broker or dealer in such jurisdiction
where it would not otherwise be required to qualify but for this Section 5(d)
and except as may be required by the Securities Act, (ii) subject itself to
taxation in any such jurisdiction, or (iii) submit to the general service of
process in any such jurisdiction;

(e) use its commercially reasonable efforts to cause all Registrable Shares
covered by such Registration Statement to be registered and approved by such
other governmental agencies or authorities as may be necessary to enable the
Holders thereof to consummate the disposition of such Registrable Shares;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction or to register as a broker or
dealer in any jurisdiction

 

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where it would not otherwise be required to qualify but for this Section 5(e)
and except as may be required by the Securities Act, (ii) subject itself to
taxation in any jurisdiction, or (iii) submit to the general service of process
in any jurisdiction (except service of process with respect to the offering and
sale of Registrable Securities);

(f) notify FBR and each Holder promptly and, if requested by FBR or any Holder,
confirm such advice in writing (1) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (2) of the issuance by the Commission or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any Proceeding for that purpose, (3) of any
request by the Commission or any other federal, state or foreign governmental
authority for (A) amendments or supplements to a Registration Statement or
related Prospectus or (B) additional information and (4) of the happening of any
event during the period a Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus or any document
incorporated by reference therein contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (which information shall
be accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) and (5) at the request of any such Holder,
promptly to furnish to such Holder a reasonable number of copies of a supplement
to or an amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchaser of such securities, such 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;

(g) use its commercially reasonable efforts to avoid the issuance of, or if
issued, to obtain the withdrawal of, any order enjoining or suspending the use
or effectiveness of a Registration Statement or suspending the qualification of
(or exemption from qualification of) any of the Registrable Shares for sale in
any jurisdiction, as promptly as practicable;

(h) upon request, furnish to each requesting Holder of Registrable Shares
covered by a Registration Statement, without charge, one conformed copy of such
Registration Statement and any post-effective amendment or supplement thereto
(without documents incorporated therein by reference or exhibits thereto, unless
requested);

(i) except as provided in Section 6 hereof, upon the occurrence of any event
contemplated by Section 5(f)(4) hereof, use its commercially reasonable efforts
to promptly prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Shares, such Prospectus will not contain
any 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;

(j) if requested by the representative of the underwriters, if any, or any
Holders of Registrable Shares being sold in connection with such offering,
(i) promptly incorporate in a Prospectus supplement or post-effective amendment
such information as the representative of the underwriters, if any, or such
Holders indicate relates to them or that they reasonably request be

 

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included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as reasonably practicable
after the Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;

(k) in the case of an Underwritten Offering, use its commercially reasonable
efforts to furnish to the underwriters a signed counterpart, addressed to the
underwriters, of: (i) an opinion of counsel for the Company, dated the date of
each closing under the underwriting agreement, reasonably satisfactory to the
underwriters; and (ii) a “comfort” letter, dated the effective date of such
Registration Statement and the date of each closing under the underwriting
agreement, signed by the independent public accountants who have certified the
Company’s financial statements included in such Registration Statement, covering
substantially the same matters with respect to such Registration Statement (and
the Prospectus included therein) and with respect to events subsequent to the
date of such financial statements, as are customarily covered in accountants’
letters delivered to underwriters in underwritten public offerings of securities
and such other financial matters as the underwriters may reasonably request;

(l) enter into customary agreements (including in the case of an Underwritten
Offering, an underwriting agreement in customary form and reasonably
satisfactory to the Company) and take all other reasonable action in connection
therewith in order to expedite or facilitate the distribution of the Registrable
Shares included in such Registration Statement and, in the case of an
Underwritten Offering, make representations and warranties to the Holders
covered by such Registration Statement and to the underwriters in such form and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same to the extent customary if and when requested;

(m) make available for inspection by Selling Holders’ Counsel and the
representative of any underwriters participating in any disposition pursuant to
a Registration Statement and any special counsel or accountants retained by such
underwriters, all financial and other records, pertinent corporate documents and
properties of the Company and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representatives, the representative of the underwriters, counsel thereto or
accountants in connection with a Registration Statement; provided, however, that
such records, documents or information that the Company determines, in good
faith, to be confidential and notifies such representatives, representative of
the underwriters, counsel thereto or accountants are confidential shall not be
disclosed by such representatives, representative of the underwriters, counsel
thereto or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a misstatement or omission in a
Registration Statement or Prospectus, (ii) the release of such records,
documents or information is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (iii) such records, documents or information
have been generally made available to the public; provided, further, that
Selling Holders’ Counsel and any underwriters will use commercially reasonable
efforts, to the extent practicable, to coordinate the foregoing inspection and
information gathering and not materially disrupt the Company’s business
operations;

 

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(n) use its commercially reasonable efforts (including, without limitation,
seeking to cure any deficiencies cited by the exchange or market in the
Company’s listing or inclusion application) to list or include all Registrable
Shares on the NASDAQ Global Market;

(o) prepare and file in a timely manner all documents and reports required by
the Exchange Act and, to the extent the Company’s obligation to file such
reports pursuant to Section 15(d) of the Exchange Act expires prior to the
expiration of the effectiveness period of the Registration Statement as required
by Section 5(a) hereof, the Company shall register the Registrable Shares under
the Exchange Act and shall maintain such registration through the effectiveness
period required by Section 5(a) hereof;

(p) provide a CUSIP number for all Registrable Shares, not later than the
effective date of the Registration Statement;

(q) (i) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and (ii) make generally
available to its stockholders, as soon as reasonably practicable, earnings
statements covering at least twelve (12) months beginning after the effective
date of the Registration Statement that satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder, but in no event later than ninety (90) days after
the end of each fiscal year of the Company;

(r) provide and cause to be maintained a registrar and transfer agent for all
Registrable Shares covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement;

(s) in connection with any sale or transfer of the Registrable Shares (whether
or not pursuant to a Registration Statement) that will result in the securities
being delivered no longer being Registrable Shares, cooperate with the Holders
and the representative of the underwriters, if any, to facilitate (unless any
Registrable Shares shall be in book-entry only form) the timely preparation and
delivery of certificates representing the Registrable Shares to be sold, which
certificates shall not bear any restrictive transfer legends (other than as
required by the Company’s Amended and Restated Certificate of Incorporation, as
it may be amended from time to time) and to enable such Registrable Shares to be
in such denominations and registered in such names as the representative of the
underwriters, if any, or the Holders may request at least three (3) Business
Days prior to any sale of the Registrable Shares;

(t) in connection with the initial filing of a Shelf Registration Statement and
each amendment thereto with the Commission pursuant to Section 2(a) hereof,
cooperate with FBR in connection with the filing with FINRA of all forms and
information required or requested by FINRA in order to obtain written
confirmation from FINRA that FINRA does not object to the fairness and
reasonableness of the underwriting terms and arrangements (or any deemed
underwriting terms and arrangements) (each such written confirmation, a “No
Objections Letter”) relating to the resale of Registrable Shares pursuant to the
Shelf Registration Statement, including, without limitation, information
provided to FINRA through its Public Offering System, and pay all costs, fees
and expenses incident to FINRA’s review of the Shelf Registration Statement and
the

 

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related underwriting terms and arrangements, including, without limitation, all
filing fees associated with any filings or submissions to FINRA and the legal
expenses, filing fees and other disbursements of FBR and any other FINRA member
that is the Holder of, or is affiliated or associated with an owner of,
Registrable Shares included in the Shelf Registration Statement (including in
connection with any initial or subsequent member filing);

(u) in connection with the initial filing of a Shelf Registration Statement and
each amendment thereto with the Commission pursuant to Section 2(a) hereof,
provide to FBR and its representatives, the opportunity to conduct due
diligence, including, without limitation, an inquiry of the Company’s financial
and other records, and make available members of its management for questions
regarding information which FBR may request in order to fulfill any due
diligence obligation on its part;

(v) upon effectiveness of the first Registration Statement filed under this
Agreement, take such actions and make such filings as are necessary to effect
the registration of the Common Stock under the Exchange Act simultaneously with
or immediately following the effectiveness of the Registration Statement; and

(w) in the case of an Underwritten Offering, use its commercially reasonable
efforts to cooperate and assist in any filings required to be made with FINRA
and in the performance of any due diligence investigation by any underwriter and
its counsel (including any “qualified independent underwriter,” if applicable)
that is required to be retained in accordance with the rules and regulations of
FINRA.

The Company may require the Holders to furnish (and each Holder shall furnish)
to the Company such information regarding the proposed distribution by such
Holder of such Registrable Shares as the Company may from time to time
reasonably request in writing or as shall be required to effect the registration
of the Registrable Shares, and no Holder shall be entitled to be named as a
selling stockholder in any Registration Statement and no Holder shall be
entitled to use the Prospectus forming a part thereof if such Holder does not
provide such information to the Company. Any Holder that sells Registrable
Shares pursuant to a Registration Statement or as a selling security holder
pursuant to an Underwritten Offering shall be required to be named as a selling
shareholder in the related prospectus and to deliver a prospectus to purchasers.
Each Holder further agrees to furnish promptly to the Company in writing all
information required from time to time to make the information previously
furnished by such Holder not misleading.

Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(f)(3) or 5(f)(4)
hereof, such Holder will immediately discontinue disposition of Registrable
Shares pursuant to a Registration Statement until such Holder’s receipt of the
copies of the supplemented or amended Prospectus. If so directed by the Company,
such Holder will deliver to the Company (at the expense of the Company) all
copies in its possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus covering such Registrable Shares current at the
time of receipt of such notice.

 

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6. Black-Out Period

(a) Subject to the provisions of this Section 6 and a good faith determination
by a majority of the independent members of the board of directors of the
Company (the “Board of Directors”) that it is in the best interests of the
Company to suspend the use of the Registration Statement, following the
effectiveness of a Registration Statement (and the filings with any
international, federal or state securities commissions), the Company, by written
notice to FBR and the Holders, may direct the Holders to suspend sales of the
Registrable Shares pursuant to a Registration Statement for such times as the
Company reasonably may determine is necessary and advisable (but in no event for
more than an aggregate of ninety (90) days in any rolling twelve (12) month
period commencing on the Closing Date or more than sixty (60) days in any
rolling ninety (90) day period), if any of the following events shall occur:
(i) the representative of the underwriters of an Underwritten Offering of
primary shares by the Company has advised the Company that the sale of
Registrable Shares pursuant to the Registration Statement would have a material
adverse effect on the Company’s primary Underwritten Offering; (ii) the majority
of the independent members of the Board of Directors of the Company shall have
determined in good faith that (A) the offer or sale of any Registrable Shares
would materially impede, delay or interfere with any proposed financing, offer
or sale of securities, acquisition, corporate reorganization or other
significant transaction involving the Company, (B) after the advice of counsel,
the sale of Registrable Shares pursuant to the Registration Statement would
require disclosure of non-public material information not otherwise required to
be disclosed under applicable law, and (C) (x) the Company has a bona fide
business purpose for preserving the confidentiality of such transaction,
(y) disclosure would have a material adverse effect on the Company or the
Company’s ability to consummate such transaction, or (z) the proposed
transaction renders the Company unable to comply with Commission requirements,
in each case under circumstances that would make it impractical or inadvisable
to cause the Registration Statement (or such filings) to become effective or to
promptly amend or supplement the Registration Statement on a post-effective
basis, as applicable; or (iii) the majority of the independent members of the
Board of Directors of the Company shall have determined in good faith, after the
advice of counsel, that it is required by law, rule or regulation or that it is
in the best interests of the Company to supplement the Registration Statement or
file a post-effective amendment to the Registration Statement in order to
incorporate information into the Registration Statement for the purpose of
(1) including in the Registration Statement any prospectus required under
Section 10(a)(3) of the Securities Act; (2) reflecting in the prospectus
included in the Registration Statement any facts or events arising after the
effective date of the Registration Statement (or of the most recent
post-effective amendment) that, individually or in the aggregate, represent a
fundamental change in the information set forth therein; or (3) including in the
prospectus included in the Registration Statement any material information with
respect to the plan of distribution not disclosed in the Registration Statement
or any material change to such information. Upon the occurrence of any such
suspension, the Company shall use its commercially reasonable efforts to cause
the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such
action as is necessary to make resumed use of the Registration Statement
compatible with the Company’s best interests, as applicable, so as to permit the
Holders to resume sales of the Registrable Shares as soon as possible.

 

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(b) In the case of an event that causes the Company to suspend the use of a
Registration Statement (a “Suspension Event”), the Company shall give written
notice (a “Suspension Notice”) to FBR and the Holders to suspend sales of the
Registrable Shares and such notice shall state generally the basis for the
notice and that such suspension shall continue only for so long as the
Suspension Event or its effect is continuing and the Company is using its
commercially reasonable efforts and taking all reasonable steps to terminate
suspension of the use of the Registration Statement as promptly as possible. The
Holders shall not effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company and prior to receipt of an End of Suspension
Notice (as defined below). If so directed by the Company, each Holder will
deliver to the Company (at the expense of the Company) all copies other than
permanent file copies then in such Holder’s possession of the Prospectus
covering the Registrable Shares at the time of receipt of the Suspension Notice.
The Holders may recommence effecting sales of the Registrable Shares pursuant to
the Registration Statement (or such filings) following further notice to such
effect (an “End of Suspension Notice”) from the Company, which End of Suspension
Notice shall be given by the Company to the Holders and FBR in the manner
described above promptly following the conclusion of any Suspension Event and
its effect.

(c) Notwithstanding any provision herein to the contrary, if the Company shall
give a Suspension Notice pursuant to this Section 6, the Company agrees that it
shall extend the period of time during which the applicable Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from the date of receipt by the Holders of the
Suspension Notice to and including the date of receipt by the Holders of the End
of Suspension Notice and copies of the supplemented or amended Prospectus
necessary to resume sales.

7. Indemnification and Contribution

(a) The Company agrees to indemnify and hold harmless (i) each Holder of
Registrable Shares and any underwriter (as determined in the Securities Act) for
such Holder (including, if applicable, FBR), (ii) each Person, if any, who
controls (within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) any such Person described in clause (i) (any
of the Persons referred to in this clause (ii) being hereinafter referred to as
a “Controlling Person”), and (iii) the respective officers, directors, partners,
members, employees, representatives and agents of any such Person or any
Controlling Person (any Person referred to in clause (i), (ii) or (iii) above
may hereinafter be referred to as a “Purchaser Indemnitee”), to the fullest
extent lawful, from and against any and all losses, claims, damages, judgments,
actions, out-of-pocket expenses, and other liabilities (the “Liabilities”),
including without limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or Proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Purchaser Indemnitee, joint or several, directly or indirectly related to, based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or
any amendment thereto), any Prospectus (or any amendment or supplement thereto)
or any Issuer Free Writing Prospectus (or any amendment or supplement thereto),
or any preliminary Prospectus or any other document used to sell the Shares, or
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

 

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the circumstances under which they were made, not misleading, except insofar as
such Liabilities arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Purchaser Indemnitee furnished to the Company,
or any underwriter in writing by such Purchaser Indemnitee expressly for use
therein. The Company shall notify the Holders promptly of the institution,
threat or assertion of any claim, Proceeding (including any governmental
investigation), or litigation of which it shall have become aware in connection
with the matters addressed by this Agreement which involves the Company or a
Purchaser Indemnitee. The indemnity provided for herein shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Purchaser Indemnitee.

(b) In connection with any Registration Statement in which a Holder of
Registrable Shares is participating, and as a condition to such participation,
such Holder agrees, severally and not jointly, to indemnify and hold harmless
the Company and each Person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act and their
respective officers, directors, partners, members, employees, representatives
and agents of such Person or Controlling Person to the same extent as the
foregoing indemnity from the Company to each Purchaser Indemnitee, but only with
reference to untrue statements or omissions or alleged untrue statements or
omissions made in reliance upon and in strict conformity with information
relating to such Holder furnished to the Company in writing by such Holder
expressly for use in such Registration Statement (or any amendment thereto),
Prospectus (or any amendment or supplement thereto), Issuer Free Writing
Prospectus (or any amendment or supplement thereto) or any preliminary
Prospectus. Absent gross negligence or willful misconduct, the liability of any
Holder pursuant to this paragraph shall in no event exceed the net proceeds
received by such Holder from sales of Registrable Shares pursuant to such
Registration Statement (or any amendment thereto), Prospectus (or any amendment
or supplement thereto), Issuer Free Writing Prospectus (or any amendment or
supplement thereto) or any preliminary Prospectus.

(c) If any suit, action, Proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to paragraph (a) or
(b) above, such Person (the “Indemnified Party”) shall promptly notify the
Person against whom such indemnity may be sought (the “Indemnifying Party”) in
writing of the commencement thereof (but the failure to so notify an
Indemnifying Party shall not relieve it from any liability which it may have
under this Section 7, except to the extent the Indemnifying Party is materially
prejudiced by the failure to give notice), and the Indemnifying Party, upon
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may reasonably designate in such Proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
Proceeding. Notwithstanding the foregoing, in any such Proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party,
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed in writing to the contrary, (ii) the Indemnifying Party failed within a
reasonable time after notice of commencement of the action to assume the defense
and employ counsel reasonably satisfactory to the Indemnified Party, (iii) the
Indemnifying Party and its counsel do not actively pursue the defense of such
action or (iv) the named parties to any such action (including any impleaded

 

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parties) include both such Indemnified Party and Indemnifying Party, or any
Affiliate of the Indemnifying Party, and such Indemnified Party shall have been
reasonably advised by counsel that, either (x) there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party or such Affiliate of the Indemnifying Party
or (y) a conflict may exist between such Indemnified Party and the Indemnifying
Party or such Affiliate of the Indemnifying Party (in which case the
Indemnifying Party shall not have the right to assume nor direct the defense of
such action on behalf of such Indemnified Party; it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such Indemnified Parties, which firm shall be
designated in writing by those Indemnified Parties who sold a majority of the
Registrable Shares sold by all such Indemnified Parties and any such separate
firm for the Company, the directors, the officers and such control Persons of
the Company as shall be designated in writing by the Company). The Indemnifying
Party shall not be liable for any settlement of any Proceeding effected without
its written consent, which consent shall not be unreasonably withheld, but if
settled with such consent or if there is a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify any Indemnified Party from and against
any Liability for which such Indemnified Party would be liable under paragraph
(a) or (b), as applicable, of this Section 7 by reason of such settlement or
judgment. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened Proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement (i) includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such Proceeding and
(ii) does not include a statement as to or an admission of, fault, culpability
or a failure to act by or on behalf of the Indemnified Party.

(d) If the indemnification provided for in paragraphs (a) and (b) of this
Section 7 is for any reason held to be unavailable to an Indemnified Party in
respect of any Liabilities referred to therein (other than by reason of the
exceptions provided therein) or is insufficient to hold harmless a party
indemnified thereunder, then each Indemnifying Party under such paragraphs, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Liabilities
(i) in such proportion as is appropriate to reflect the relative benefits of the
Indemnified Party on the one hand and the Indemnifying Party(ies) on the other
in connection with the statements or omissions that resulted in such
Liabilities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Indemnifying Party(ies) and the Indemnified Party, as well as any
other relevant equitable considerations. The relative fault of the Company on
the one hand and any Purchaser Indemnitees on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Purchaser Indemnitees
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

 

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(e) The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if such
Indemnified Parties were treated as one entity for such purpose), or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 7(d) above. The amount paid or payable by
an Indemnified Party as a result of any Liabilities referred to in Section 7(d)
above shall be deemed to include, subject to the limitations set forth above,
any reasonable legal or other expenses actually incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which
the net proceeds received by such Purchaser Indemnitee from sales of Registrable
Shares exceeds the amount of any damages that such Purchaser Indemnitee has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 7, each
Person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act) FBR or a Holder of Registrable Shares
shall have the same rights to contribution as FBR or such Holder, as the case
may be, and each Person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act) the Company, and
each officer, director, partner, employee, representative, agent or manager of
the Company shall have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or Proceeding against such party in respect of which a claim
for contribution may be made against another party or parties, notify each party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise, except to the extent that any party is materially
prejudiced by the failure to give notice. 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.

(f) The indemnity and contribution agreements contained in this Section 7 will
be in addition to any liability which the Indemnifying Parties may otherwise
have to the Indemnified Parties referred to above. The Purchaser Indemnitee’s
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Registrable Shares sold by each of the Purchaser
Indemnitees hereunder and not joint.

8. Market Stand-off Agreement

Each Holder hereby agrees that it shall not, to the extent requested by the
Company or an underwriter of securities of the Company, directly or indirectly
sell, offer to sell (including without limitation any short sale), grant any
option or otherwise transfer or dispose of any Registrable Shares or other
shares of Common Stock of the Company or any securities convertible into or
exchangeable or exercisable for shares of Common Stock of the Company then owned
by such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) (i) in the case of the Company and each of its officers,
directors, managers and employees, in each case to the extent such person or
entity holds shares of Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock, for a period beginning
on the effective date of, and continuing for up to one hundred eighty (180) days
following the effective date of, the

 

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IPO Registration Statement of the Company; (ii) in the case of all other Holders
who include Registrable Shares in the IPO Registration Statement, beginning on
the effective date of, and continuing for one hundred eighty (180) days
following the effective date of the IPO Registration Statement of the Company,
and (iii) in the case of all other Holders who do not include Registrable Shares
in the IPO Registration Statement, for a period of sixty (60) days following the
effective date of an IPO Registration Statement of the Company filed under the
Securities Act; provided, however, if (1) during the last 17 days of the
applicable restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (2) prior to the
expiration of the applicable restricted period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day
of the applicable restricted period, then, in each case, the restrictions
imposed by this Agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or event, unless the managing underwriter in an
Underwritten Offering waives, in writing, such an extension; provided, further,
however, that:

(a) the restrictions above shall not apply to Registrable Shares sold pursuant
to the IPO Registration Statement;

(b) all executive officers and directors of the Company then holding shares of
Common Stock of the Company or securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company enter into agreements that
are no less restrictive;

(c) the Holders shall be allowed any concession or proportionate release allowed
to any officer or director that entered into agreements that are no less
restrictive (with such proportion being determined by dividing the number of
shares being released with respect to such officer or director by the total
number of issued and outstanding shares held by such officer or director);
provided, that nothing in this Section 8(c) shall be construed as a right to
proportionate release for the executive officers and directors of the Company
upon the expiration of the sixty (60) day period applicable to all Holders other
than the executive officers and directors of the Company; and

(d) this Section 8 shall not be applicable if a Shelf Registration Statement of
the Company filed under the Securities Act has been declared effective prior to
the filing of an IPO Registration Statement.

In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the securities
subject to this Section 8 and to impose stop transfer instructions with respect
to the Registrable Shares and such other securities of each Holder (and the
securities of every other Person subject to the foregoing restriction) until the
end of such period.

9. Termination of the Company’s Obligation

The Company shall have no obligation pursuant to this Agreement with respect to
any Registrable Shares proposed to be sold by a Holder in a registration
pursuant to this Agreement if, in the opinion of counsel to the Company, all
such Registrable Shares proposed to be sold by a

 

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Holder (i) are freely saleable pursuant to Rule 144 (or any successor or
analogous rule) without any restriction as to volume, manner of sale or current
public information thereunder, and (ii) are listed or included on the NASDAQ
Global Market.

10. [Reserved]

11. Miscellaneous

(a) Remedies. In the event of a breach by the Company of any of its obligations
under this Agreement, each Holder, in addition to being entitled to exercise all
rights provided herein or, in the case of FBR, in the Purchase/Placement
Agreement, or granted by law, including the rights granted in Section 2(f)
hereof and recovery of damages, will be entitled to seek specific performance of
its rights under this Agreement. Subject to Section 7, the Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.

(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be
given, without the written consent of the Company and Holders beneficially
owning not less than a majority of the then outstanding Registrable Shares;
provided, however, that for purposes of this Section 11(b), Registrable Shares
that are owned, directly or indirectly, by an Affiliate of the Company shall not
be deemed to be outstanding; provided, further, however, that (i) Sections 2(a),
2(f) and 3 may not be amended, modified or supplemented, and waivers or consents
thereto or departures therefrom may not be given, without the written consent of
the Company and Holders beneficially owning not less than 67% of the then
outstanding Registrable Shares and (ii) any amendments, modifications or
supplements to, or any waivers or consents to departures from, the provisions of
Section 8 hereof that would have the effect of extending the sixty (60) or one
hundred eighty (180) day periods referenced therein shall be approved by, and
shall only be applicable to, those Holders who provide written consent to such
extension. Except as provided for in clause (ii) of the preceding sentence, no
amendment shall be deemed effective unless it applies uniformly to all Holders.
Notwithstanding the foregoing, a waiver or consent to or departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of a Holder whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders may be given by such Holder; provided
that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the first and second
sentences of this paragraph.

(c) Notices. All notices and other communications, provided for or permitted
hereunder, shall be made in writing and delivered by facsimile (with receipt
confirmed), overnight courier or registered or certified mail, return receipt
requested, or by telegram:

(i) if to a Holder, at the most current address given by the transfer agent and
registrar of the Shares to the Company; and

 

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(ii) if to the Company, at the offices of the Company at National General
Holdings Corp., 59 Maiden Lane, 38th Floor, New York, New York 10038, Attention:
General Counsel (facsimile: (212) 380-9498); and

(iii) if to FBR, at the offices of FBR at 1001 Nineteenth Street North,
Arlington, Virginia 22209, Attention: General Counsel (facsimile 703-469-1140).

(d) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto,
including, without limitation and without the need for an express assignment or
assumption, subsequent Holders. The Company agrees that the Holders shall be
third party beneficiaries to the agreements made hereunder by FBR and the
Company, and each Holder shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights hereunder; provided, however, that such Holder fulfills all
of its obligations hereunder.

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

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

(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY STATE COURT IN THE STATE OF NEW YORK OR ANY FEDERAL COURT
SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(h) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or

 

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substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(i) Entire Agreement. This Agreement, together with the Purchase/Placement
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.

(j) Registrable Shares Held by the Company or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Shares
is required hereunder, Registrable Shares held by the Company or its Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

(k) Adjustment for Stock Splits, etc. Wherever in this Agreement there is a
reference to a specific number of shares, then upon the occurrence of any
subdivision, combination, or stock dividend of such shares, the specific number
of shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the effect on the outstanding shares of such class or series
of stock by such subdivision, combination, or stock dividend.

(l) Survival. This Agreement is intended to survive the consummation of the
transactions contemplated by the Purchase/Placement Agreement. The
indemnification and contribution obligations under Section 7 of this Agreement
shall survive the termination of the Company’s obligations under Section 2 of
this Agreement.

[Signature page follows]

 

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

 

NATIONAL GENERAL HOLDINGS CORP. By:  

/s/ Mike Weiner

  Name:   Mike Weiner   Title:   Chief Financial Officer FBR CAPITAL MARKETS &
CO. By:  

/s/ Paul Dell’Isola

  Name:   Paul Dell’Isola   Title:   Senior Managing Director

[Signature Page to Registration Rights Agreement]