Exhibit 10.3

STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT is entered into as of October 7, 2016, by and among
TPG VI Pantera Holdings, L.P., a Delaware limited partnership (“TPG”), Parkway,
Inc., a Maryland corporation (the “Company”), and, solely for purposes of
Article IV and related definitions, TPG VI Management, LLC, a Delaware limited
liability company (the “TPG Manager”).

WHEREAS, pursuant to that certain Agreement and Plan of Merger by and among
Parkway Properties, Inc., a Maryland corporation (“Legacy Parkway”), Parkway
Properties LP (“Legacy Parkway LP”), a Delaware limited partnership, Cousins
Properties Incorporated, a Georgia corporation (“Cousins”), and Clinic Sub Inc.,
a Maryland corporation (“Merger Sub”), dated as of April 28, 2016 (as it may be
amended, restated, or otherwise modified from time to time, and together with
all exhibits, schedules, and other attachments thereto, the “Merger Agreement”),
(i) Legacy Parkway merged with and into Merger Sub with Merger Sub continuing as
the surviving corporation (the “Merger”) and (ii) Cousins and Legacy Parkway LP
completed a restructuring resulting in the contribution of the Houston Business
(as defined in the Merger Agreement) to the Company and the distribution of
shares of the Company (the “Distribution”) to the stockholders of Cousins
immediately following the Merger (as defined in the Merger Agreement);

WHEREAS, TPG received 4,808,454 shares of Common Stock of the Company in
connection with the Distribution; and

WHEREAS, TPG and the Company desire to enter into this Agreement in order to
generally set forth their respective rights and responsibilities, and to
establish various arrangements and restrictions with respect to, among other
things, (a) actions that may or may not be undertaken in respect of the shares
of Common Stock Beneficially Owned by TPG, (b) the governance of the Company,
(c) certain registration rights with respect to the Registrable Securities (as
defined herein) and (d) other related matters with respect to the Company.

NOW, THEREFORE, in consideration of the premises set forth above and of the
mutual representations, covenants, and obligations hereinafter set forth, and
for other good and valuable consideration, the receipt, sufficiency, and
adequacy of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Defined Terms

As used herein, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person, including, with respect to
TPG, any Affiliated Fund of TPG; provided, however, that in no event shall
(a) any of the portfolio companies in which TPG’s Affiliates have an investment,
or (b) the Company, any of its Subsidiaries, or any of the Company’s other

 

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controlled Affiliates be deemed to be Affiliates of TPG for purposes of this
Agreement; and provided, further, that no investment bank that may employ or
have as a partner a member of the Company Board shall be deemed to be an
“Affiliate” of TPG for purposes of this Agreement.

“Affiliated Fund” shall mean, in the case of TPG, each corporation, trust,
limited liability company, general or limited partnership, or other Person with
whom TPG is under common control or to which TPG or an Affiliate of TPG is the
investment adviser.

“Agreement” means this Stockholders Agreement, as it may be amended, restated,
or otherwise modified from time to time, together with all exhibits, schedules,
and other attachments hereto.

“Beneficial Ownership” means, with respect to any Security, the ownership of
such Security by any “Beneficial Owner,” as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that, in calculating the
beneficial ownership of any particular “person” (as that term is used in Section
13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial
ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms
“Beneficially Own, “Beneficially Owned” and “Beneficial Owner” shall have
correlative meaning.

“Business Day” means any day that is not a Saturday, a Sunday, or any other day
on which banks are required or authorized by Law to be closed in the City of New
York, in the State of New York.

“Capital Stock” means, with respect to any Person at any time, any and all
shares, interests, participations, or other equivalents (however designated, and
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited), limited liability company membership interests, or
equivalent ownership interests in, or issued by, such Person.

“Change of Control” means (i) a sale of all or substantially all of the direct
or indirect assets of the Company (including by way of any reorganization,
merger, consolidation or other similar transaction), (ii) a direct or indirect
acquisition of Beneficial Ownership of Voting Securities of the Company by
another Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act), by means of any transaction or series of transactions (including
any reorganization, merger, consolidation, joint venture, share transfer or
other similar transaction), pursuant to which the stockholders of the Company
immediately preceding such transaction or transactions collectively own,
following the consummation of such transaction or transactions, less than fifty
percent (50%) of the Voting Securities of the Company or the surviving entity,
as the case may be, or (iii) the obtaining by any Person or “group” (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of the power (whether
or not exercised) of the power to elect a majority of the members of the Company
Board (or similar governing body) of the Corporation.

“Committee” has the meaning set forth in Section 2.1(b).

“Common Stock” means the Common Stock of the Company, par value $0.001 per
share.

 

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“Company” has the meaning set forth in the Recitals hereto.

“Company Board” means the board of directors of the Company.

“Contracting Party” has the meaning set forth in Section 6.10.

“control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two (2) or more Persons, means
the possession, directly or indirectly, of the power to direct, or cause the
direction of, the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract, or by any
other means.

“Controlling Person” has the meaning set forth in Section 4.9(a).

“Convertible Securities” means any evidence of indebtedness, shares of Capital
Stock (other than Common Stock) or other Securities (including Options) that are
directly or indirectly convertible into, or otherwise exchangeable or
exercisable for, Shares.

“Damages” has the meaning set forth in Section 4.9(a).

“DCR” has the meaning set forth in Section 2.3.

“Debt” means, with respect to the Company and its subsidiaries, all liabilities,
including all obligations in respect of principal, accrued interest, penalties,
fees and premiums, for (a) indebtedness for borrowed money (including principal
and accrued interest), (b) indebtedness evidenced by notes, debentures, bonds or
other similar instruments (including principal and accrued interest), (c)
“earn-out” obligations and other obligations for the deferred purchase price of
property, goods or services (other than trade payables or accruals incurred in
the ordinary course of business), (d) indebtedness for payments arising in
respect of drawn letters of credit or bankers’ acceptances or secured by a
purchase money mortgage or other lien to secure all or part of the purchase
price of the property subject to such mortgage or lien, (e) liabilities and
obligations under capital leases (determined in accordance with GAAP), and (f)
indebtedness of third Persons which is directly or indirectly guaranteed by the
Company or any of its subsidiaries.

“Demand Registration” has the meaning set forth in Section 4.2(a).

“Director” means, with respect to any Person, any member of the board of
directors of such Person (other than any advisory, honorary or other non-voting
member of such board).

“DTC” has the meaning set forth in Section 4.8.

“Equity Issuance” means any issuance, sale or placement of any Common Stock or
other Capital Stock of the Company or any of its subsidiaries, and any issuance,
sale or placement of any other Securities of the Company or any of its
subsidiaries that are convertible or exchangeable into Common Stock or other
Capital Stock of the Company or any of its subsidiaries; provided, however, that
no Permitted Issuance shall constitute or be deemed to constitute an “Equity
Issuance” for purposes of this Agreement.

 

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

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Full Cooperation” means, in connection with any Underwritten Offering, where,
in addition to the cooperation otherwise required by this Agreement, members of
senior management of the Company (including the chief executive officer and
chief financial officer) fully cooperate with the underwriter(s) in connection
with all reasonable and customary recommendations and requests of such
underwriter(s), and make themselves available upon reasonable notice to
participate in due diligence meetings or calls, “road-show” and other reasonable
and customary marketing activities in such locations (domestic and foreign) as
recommended by the underwriter(s).

“GAAP” means United States generally accepted accounting principles in effect as
of the date hereof.

“Holder” means TPG and any Permitted Transferee that becomes a Holder pursuant
to Section 4.13, and solely for purposes of Article IV and related definitions,
the TPG Manager.

“Indemnified Party” has the meaning set forth in Section 4.9(c).

“Indemnifying Party” has the meaning set forth in Section 4.9(c).

“Law” means any statue, law, regulation, ordinance, rule, injunction, order,
decree, directive, or any similar form of decision of, or determination by, any
governmental or self-regulatory authority.

“Mailing Date” has the meaning set forth in Section 2.1(a).

“Merger Agreement” has the meaning set forth in the Recitals hereto.

“New Parkway LP” means Parkway Operating Partnership LP, a Delaware limited
partnership and the operating partnership of the Company.

“Non-Recourse Party” has the meaning set forth in Section 6.10.

“NYSE” means the New York Stock Exchange and any successor thereto.

“Options” means any options, warrants, or other rights to subscribe for,
purchase, or otherwise acquire shares of Capital Stock of the Company (or any
successor thereto).

“Permitted Issuance” means (a) any issuance of Capital Stock upon the exercise
of Options outstanding as of the date of this Agreement and in accordance with
their terms as in effect on the date of this Agreement, (b) any issuance, sale
or authorization pursuant to the

 

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Company’s existing compensation arrangements for its directors, officers,
employees, consultants and agents, (c) any issuance, sale or authorization
pursuant to any future compensation arrangements for the Company’s directors,
officers, employees, consultants and agents that are approved by the Company’s
Compensation Committee, (d) any issuance, sale or authorization pursuant to or
in connection with any dividend reinvestment plan or employee stock purchase
plan of the Company or the establishment thereof, (e) any issuance in exchange
for limited partnership units in Legacy Parkway LP or limited partnership units
in New Parkway LP in accordance with the limited partnership agreement of Legacy
Parkway LP or the limited partnership agreement of New Parkway LP, respectively,
and (e) any issuance, sale or placement of Capital Stock as consideration in any
acquisition transaction, including any Change of Control, that has been approved
by the Company Board.

“Permitted Transferee” has the meaning set forth in Section 4.13.

“Person” means an individual, corporation, partnership, limited liability
company, association, trust, or other entity or organization, including any
governmental authority.

“Piggyback Registration” has the meaning set forth in Section 4.3(a).

“Pro Rata Portion” means, with respect to TPG and its Affiliates at a given time
and with respect to a given Equity Issuance, a number of shares of Common Stock,
other Capital Stock or other Securities to be issued, sold or placed in the
Equity Issuance equal to the product of (a) the number of shares of Common
Stock, other Capital Stock or other Securities proposed to be issued, sold or
placed in the Equity Issuance, multiplied by (b) a fraction, the numerator of
which is the aggregate number of shares of Common Stock Beneficially Owned by
TPG and its Affiliates on the basis of the number of shares of Common Stock
issued and outstanding immediately prior to the Equity Issuance, and the
denominator of which is the aggregate number of shares of outstanding Common
Stock on the basis of the number of shares of Common Stock issued and
outstanding immediately prior to the Equity Issuance.

“Registrable Securities” means at any time, the shares of Common Stock held
beneficially or of record by any of the Holders, including shares of Common
Stock acquired by way of a dividend, stock split, recapitalization, plan of
reorganization, merger, sale of assets or otherwise. Registrable Securities
shall continue to be Registrable Securities until (x) they are sold pursuant to
an effective Registration Statement under the Securities Act or (y) they may be
sold by their Holder without registration under the Securities Act pursuant to
Rule 144 (or any similar provision then in force) without limitation thereunder
on volume or manner of sale or other restrictions under Rule 144.

“Registration Expenses” has the meaning set forth in Section 4.4.

“Registration Statement” means any registration statement filed by the Company
under the Securities Act that covers any of the Registrable Securities,
including a prospectus, amendment and supplements thereto, and all exhibits and
material incorporated by reference therein.

 

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“Rule 144” means Rule 144 promulgated under the Securities Act or any successor
federal statute, rules, or regulations thereto, and in the case of any
referenced section of any such statute, rule, or regulation, any successor
section thereto, collectively as from time to time amended and in effect.

“SEC” means the Securities and Exchange Commission.

“Securities” means Capital Stock, limited partnership interests, limited
liability company interests, beneficial interests, warrants, options, restricted
stock units, notes, bonds, debentures, and other securities, equity interests,
ownership interests and similar obligations of every kind and nature of any
Person.

“Securities Act” means the Securities Act of 1933 or any successor federal
statute, and the rules and regulations of the Securities and Exchange Commission
thereunder, and in the case of any referenced section of any such statute, rule
or regulation, any successor section thereto, collectively and as from time to
time amended and in effect.

“Shares” means (a) all shares of the Capital Stock of the Company originally
issued to, or issued with respect to shares originally issued to, or held by, a
stockholder of the Company, whenever issued, including all shares of the Company
issued upon the exercise, conversion, or exchange of any Convertible Securities
and (b) all Convertible Securities originally granted or issued to, or held by,
any stockholder (treating such Convertible Securities as a number of shares
equal to the number of shares of the Company for which such Convertible
Securities may be converted or exercised, for all purposes of this Agreement,
except as otherwise set forth herein).

“Suspension Notice” has the meaning set forth in Section 4.7(a).

“Stockholder Approval” means the affirmative vote of holders of a majority of
the Common Stock present or represented and entitled to vote at a meeting of
stockholders of the Company (other than Common Stock held by TPG and its
Affiliates) of certain matters related to the transactions contemplated this
Agreement, including without limitation the matters set forth in Section 2.1(b)
and Section 3.1(a) hereof that are conditioned on such approval.

“Stockholders Meeting” has the meaning set forth in Section 3.1.

“TPG Manager” has the meaning set forth in the Recitals hereto.

“TPG Nominated Directors” has the meaning set forth in Section 2.1(a).

“Underwriters’ Maximum Number” means, for any Demand Registration or Piggyback
Registration, that number of securities to which such registration should, in
the opinion of the managing underwriter(s) of such registration, in light of
marketing factors, be limited.

“Underwritten Offering” has the meaning set forth in Section 4.2(b).

“Voting Securities” means at any time shares of any class of Capital Stock or
other Securities of the Company that are then entitled to vote generally in the
election of Directors and

 

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not solely upon the occurrence and during the continuation of certain specified
events, and any Convertible Securities that may be converted into, exercised
for, or otherwise exchanged for such shares of Capital Stock.

Section 1.2 Other Definitional Provisions. When used in this Agreement, the
words “hereof,” “herein,” and “hereunder,” and words of similar import shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article and Section references are to this Agreement unless
otherwise specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Whenever the
words “include,” “includes,” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”

ARTICLE II

GOVERNANCE

Section 2.1 TPG’s Representation on Company Board.

(a) On the Closing Date (as defined in the Merger Agreement), if the number of
members constituting the Company Board is other than seven (7), the Company
Board shall promptly be reconstituted such that the number of members
constituting the Company Board shall be seven (7), subject to increase or
decrease by the Company Board from time-to-time, in accordance with the
certificate of incorporation and bylaws of the Company and this Agreement. On
the Closing Date, the Company shall promptly cause up to two (2) persons (in the
aggregate) designated by TPG to be appointed to the Company Board in the manner
provided in the Company’s governing documents for filling vacancies on the
Company Board; provided, that, to the extent TPG has not designated two (2) such
persons before Closing, the Company shall promptly cause the remaining persons
to be appointed to the Company Board when such persons are designated by
TPG. Following the date hereof, subject to Section 2.1(f), for any meeting (or
consent in lieu of a meeting) of the Company’s stockholders for the election of
members of the Company Board, (i) so long as TPG, together with its Affiliates,
Beneficially Owns as of the date of mailing of the Company’s definitive proxy
statement in connection with such meeting (the “Mailing Date”) at least five
percent (5%), but equal to or less than thirty percent (30%), of the outstanding
Common Stock on the basis of the number of shares of Common Stock issued and
outstanding, the Company shall include two (2) persons designated by TPG as
members of the slate of Company Board nominees proposed by the Company Board for
election by the Company’s stockholders and, subject to the Company Board’s
fiduciary duties, shall recommend that the Company’s stockholders vote in favor
of the election of all two (2) such nominees, (ii) so long as TPG, together with
its Affiliates, Beneficially Owns as of the Mailing Date at least two and one
half percent (2.5%), but less than five percent (5%), of the outstanding Common
Stock on the basis of the number of shares of Common Stock issued and
outstanding, the Company shall include one (1) person designated by TPG as a
member of the slate of Company Board nominees proposed by the Company Board for
election by the Company’s stockholders and, subject to the Company Board’s
fiduciary duties, shall recommend that the Company’s stockholders vote in favor
of the election of such nominee, (iii) if TPG, together with its Affiliates,
Beneficially Owns as of the Mailing Date less than two and one half (2.5%) of
the outstanding Common Stock on the basis of the number of shares of Common
Stock issued and

 

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outstanding, the Company shall not be required to include any persons designated
by TPG as members of the slate of Company Board nominees and (iv) if TPG,
together with its Affiliates, Beneficially Owns as of the Mailing Date greater
than thirty percent (30%) of the outstanding Common Stock on the basis of the
number of shares of Common Stock issued and outstanding, the Company shall
include three (3) persons designated by TPG as members of the slate of Company
Board nominees proposed by the Company Board for election by the Company’s
stockholders and, subject to the Company Board’s fiduciary duties, shall
recommend that the Company’s stockholders vote in favor of the election of all
three (3) such nominees. The members of the Company Board nominated or elected
pursuant to this Section 2.1(a) are referred to herein as the “TPG Nominated
Directors.” The Company Board shall not withdraw any nomination or, subject to
the Company Board’s fiduciary duties, recommendation required under this Section
2.1(a), unless TPG delivers to the Company Board a written request for such
withdrawal. Further, (i) for any meeting (or consent in lieu of a meeting) of
the Company’s stockholders for the election of members of the Company Board, the
Company Board shall not nominate, in the aggregate, a number of nominees greater
than the number of members of the Company Board, (ii) subject to the Company
Board’s fiduciary duties, the Company Board shall not recommend the election of
any other person to a position on the Company Board for which a TPG Nominated
Director has been nominated, and (iii) the Company shall use commercially
reasonable efforts to cause each TPG Nominated Director to be elected to the
Company Board. If elected to the Company Board, each TPG Nominated Director will
hold his or her office as a member of the Company Board for such term as is
provided in the articles of incorporation and bylaws of the Company, or until
his or her death, resignation or removal from the Company Board or until his or
her successor has been duly elected and qualified in accordance with the
provisions of this Agreement, the articles of incorporation and bylaws of the
Company, and applicable Law.

(b) On the Closing Date, the Company shall promptly cause the committee of the
Company Board called the Investment Committee (the “Investment Committee”) and
the committee of the Board called the Compensation Committee (the “Compensation
Committee” and together with the Investment Committee, each a “Committee”) to be
comprised of not more than four (4) members. On the Closing Date, the Company
shall promptly cause (i) two (2) TPG Nominated Directors (in the aggregate)
designated by TPG to be appointed to the Investment Committee; provided, that,
to the extent TPG has not designated up to two (2) TPG Nominated Directors for
appointment to the Investment Committee before Closing, the Company shall
promptly cause such persons to be appointed to such Committee when such persons
are designated by TPG and (ii) one (1) TPG Nominated Director designated by TPG
to be appointed to the Compensation Committee; provided, that, to the extent TPG
has not designated one (1) TPG Nominated Director for appointment to the
Compensation Committee before Closing, the Company shall promptly cause such
person to be appointed to such Committee when such person is designated by
TPG. Following such appointment(s), (i) so long as TPG, together with its
Affiliates, Beneficially Owns at least five percent (5%) of the outstanding
Common Stock on the basis of the number of shares of Common Stock issued and
outstanding, the Company Board shall include two (2) TPG Nominated Directors
designated by TPG on the Investment Committee and one (1) TPG Nominated Director
designation by TPG on the Compensation Committee, (ii) so long as TPG, together
with its Affiliates, Beneficially Owns at least two and one half percent (2.5%),
but less than five percent (5%), of the outstanding Common Stock on

 

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the basis of the number of shares of Common Stock issued and outstanding, the
Company Board shall include one (1) TPG Nominated Director designated by TPG on
the Investment Committee and one (1) TPG Nominated Director designation by TPG
on the Compensation Committee and (iii) if TPG, together with its Affiliates,
Beneficially Owns less than two and one half percent (2.5%) of the outstanding
Common Stock on the basis of the number of shares of Common Stock issued and
outstanding, the Company Board shall not be required to include any persons
designated by TPG on any Committee. For so long as TPG has the right to
designate any TPG Nominated Directors to serve on the Committees, (x) the
Company Board shall maintain a committee called the Investment Committee, the
rights and responsibilities of which shall include those described on Exhibit A
hereto, and a committee called the Compensation Committee, the rights and
responsibilities of which shall include those described on Exhibit B hereto,
(y) each Committee may only take action with the affirmative vote of at least a
majority of its members and (z) (A) the Company Board will not authorize, and
the Company Board will not cause to be taken, any action described on Exhibit A
or in clause (ii) of Exhibit B hereto, as the case may be, absent the
affirmative approval of the Investment Committee or the Compensation Committee,
as the case may be, and (B) subject to and only following the receipt of
Stockholder Approval, the Company Board will not authorize, and the Company
Board will not cause to be taken, any action described in clause (i) of Exhibit
B hereto absent the affirmative approval of the Compensation
Committee. Furthermore, for so long as TPG has the right to designate any TPG
Nominated Directors to serve on the Committees, if to the extent that any TPG
Nominated Director is not permitted to serve on the Compensation Committee for
any reason, including pursuant to Section 2.1(f) or Section 2.1(g) below, the
Company Board shall create a new Committee in accordance with this Section
2.1(b), that includes the requisite number of TPG Nominated Directors, and that
has the rights and responsibilities described on Exhibit B hereto. Any such
Committee may only take action with the affirmative vote of at least a majority
of its members and (x) the Company Board will not authorize, and the Company
will not cause to be taken, any action described in clause (ii) of Exhibit B
hereto absent the affirmative approval of such action by such Committee, and (y)
subject to and only following receipt of Stockholder Approval, the Company Board
will not authorize, and the Company Board will not cause to be taken, any action
described in clause (i) of Exhibit B hereto absent the affirmative approval by
such Committee.

(c) If TPG’s, together with its Affiliates’, Beneficial Ownership of outstanding
Common Stock on the basis of the number of shares of Common Stock issued and
outstanding, falls below any percentage threshold set forth in Section 2.1(b)
above, TPG shall cause one or more, as applicable, of the TPG Nominated
Directors to resign from any Committees on which such TPG Nominated Directors
serve effective as of the date that is the earlier of the end of such TPG
Nominated Director’s term and six months from the date on which TPG’s Beneficial
Ownership fell below the applicable percentage, such that the remaining number
of TPG Nominated Directors on such Committees does not exceed the number that
TPG is then entitled to designate appointment pursuant to the terms and
conditions of Section 2.1(b). If TPG’s, together with its Affiliates’,
Beneficial Ownership of outstanding Common Stock on the basis of the number of
shares of Common Stock issued and outstanding, falls below any percentage
threshold set forth in Section 2.1(a) and Section 2.1(b) above, the number of
directors that TPG shall be entitled to designate for nomination or appointment
at any meeting (or consent in lieu of a meeting) of the Company’s stockholders
for the election of members of the Company

 

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Board or any Committee thereof shall be reduced to such number that does not
exceed the number that TPG is then entitled to designate for nomination or
appointment pursuant to the terms and conditions of Section 2.1(a) and Section
2.1(b) above, as applicable, and TPG shall cause one or more, as applicable, of
the TPG Nominated Directors to resign as of the date that is the earlier of the
end of such TPG Nominated Director’s term and six months from the date on which
TPG’s Beneficial Ownership fell below the applicable percentage. If, after the
date on which TPG’s Beneficial Ownership fell below the applicable percentage
and before the effective date of the TPG Director’s resignation in accordance
with the preceding sentence, TPG or its Affiliates acquire additional shares of
Common Stock which meet the percentage thresholds set forth in Sections 2.1(a)
and 2.1(b) above, then the number of directors that TPG shall be entitled to
designate for nomination or appointment at any meeting (or consent in lieu of a
meeting) of the Company’s stockholders for the election of members to the
Company Board or any Committee thereof shall be increased to the applicable
number set forth in Sections 2.1(a) and 2.1 (b) (otherwise, the number of
directors that TPG shall be entitled to so designate shall be forever so
reduced, even if TPG or its Affiliates shall subsequently acquire additional
shares of Common Stock). In addition, TPG shall cause any TPG Nominated Director
to resign promptly from the Company Board and any Committees on which such TPG
Nominated Director serves if such TPG Nominated Director, as determined by the
Company Board in good faith after consultation with outside legal counsel, (i)
is prohibited or disqualified from serving as a director of the Company or a
member of any such Committees under any rule or regulation of the SEC, the NYSE
or by applicable Law, (ii) has engaged in acts or omissions constituting a
breach of the TPG Nominated Director’s duty of loyalty to the Company and its
stockholders, (iii) has engaged in acts or omissions that involve intentional
misconduct or an intentional violation of Law or (iv) has engaged in any
transaction involving the Company from which the TPG Nominated Director derived
an improper personal benefit that was not disclosed to the Company Board prior
to the authorization of such transaction; provided, however, that, subject to
the limitations set forth in Section 2.1(a) and Section 2.1(b), TPG shall have
the right to replace such resigning TPG Nominated Director with a new TPG
Nominated Director, such newly named TPG Nominated Director to be appointed
promptly to the Company Board in place of the resigning TPG Nominated Director
in the manner set forth in the Company’s governing documents for filling
vacancies on the Company Board. Nothing in this paragraph (c) or elsewhere in
this Agreement (except Section 2.1(e)) shall confer any third-party beneficiary
or other rights upon any person designated hereunder as a TPG Nominated
Director, whether during or after such person’s service on the Company Board.

(d) For so long as TPG has the right to designate at least one (1) TPG Nominated
Director for nomination to the Company Board pursuant to Section 2.1(a) above,
the Company Board shall (i) fill vacancies created by reason of death, removal
or resignation of any TPG Nominated Director promptly upon request by TPG and
only as directed by TPG, subject to the terms and conditions set forth in
Section 2.1(a) above and Sections 2.1(f) and 2.1(g) below, and (ii) fill
vacancies created by reason of death, removal or resignation of any director who
is not a TPG Nominated Director (a “Non-TPG Director”) promptly upon request by
the Non-TPG Directors and only as directed by the Non-TPG Directors; provided,
however, that any such director designated by the Non-TPG Directors shall, as a
condition precedent to his or her nomination, meet each of the requirements set
forth in clauses (i) – (iv) of Section 2.1(f) below (it being understood that,
for the purposes hereof, the word “TPG” appearing in clause (i) thereof

 

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shall be replaced with the words “the Non-TPG Directors”), other than, in the
case of any non-independent or management director, the requirements of clause
(iii) thereof. Further, for so long as TPG has the right to designate at least
one (1) TPG Nominated Director for appointment to any Committee pursuant to
Section 2.1(b) above, the Company Board shall appoint and remove the TPG
Nominated Directors as members of any such Committee promptly upon request by
TPG and only as directed by TPG, and shall fill vacancies created by reason of
death, removal or resignation of any TPG Nominated Director promptly upon
request by TPG and only as directed by TPG, subject to the terms and conditions
set forth in Section 2.1(b) and 2.1(c) above and Sections 2.1(f) and 2.1(g)
below. So long as TPG has promptly named a replacement, following any death,
removal or resignation of any TPG Nominated Director, and prior to any the
appointment of such replacement in accordance with this Agreement, the Company
Board agrees not to authorize or take, and agrees to cause each Committee not to
authorize or take, any action that would otherwise require the consent of a TPG
Nominated Director until such time as such newly named TPG Nominated Director
has been so appointed to the Board or such Committee.

(e) Each TPG Nominated Director that is elected to the Company Board shall be
indemnified by the Company and its subsidiaries, if applicable, in connection
with his or her service as a member of the Company Board or any Committee to the
fullest extent permitted by law and will be exculpated from liability for
damages to the fullest extent permitted by law. Without limiting the foregoing
in this Section 2.1(e), each TPG Nominated Director who is elected to the
Company Board shall be entitled to receive from the Company and its
subsidiaries, if applicable, the same insurance coverage in connection with his
or her service as a member of the Company Board and any Committee as is provided
for each of the other members of the Company Board or Committee, as applicable.

(f) TPG shall only designate a person to be a TPG Nominated Director (i) who TPG
believes in good faith has the requisite skill and experience to serve as a
director of a publicly-traded company, (ii) who is not prohibited from or
disqualified from serving as a director of the Company pursuant to any rule or
regulation of the SEC, the NYSE or applicable Law, (iii) who meets the
independence standards set forth in Section 303A.02(b) of the NYSE Listed
Company Manual and (iv) with respect to which no event required to be disclosed
pursuant to Item 401(f) of Regulation S-K of the 1934 Act has
occurred. Notwithstanding anything to the contrary in this Section 2.1, the
parties hereto agree that members of the Company Board shall retain the right to
object to the nomination, election or appointment of any TPG Nominated Director
for service on the Company Board or any Committee if the members of the Company
Board determine in good faith, after consultation with outside legal counsel,
that such TPG Nominated Director fails to meet the criteria set forth above or,
with respect to any TPG Nominated Director to be appointed to the Company’s
Audit Committee, Governance Committee or Compensation Committee, any other rule
or regulation of the SEC, the NYSE or applicable Law that applies to members of
a company’s audit committee, governance committee or compensation committee
(including for purposes of Section 16 of the Exchange Act and Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”)). In the event that
the members of the Company Board object to the nomination, election or
appointment of any TPG Nominated Director to the Company Board or any Committee
pursuant to the terms of this Section 2.1(f), the Company Board shall nominate
or appoint, as applicable, another

 

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individual designated by TPG as the TPG Nominated Director nominated for
election to the Company Board or appointed to the Committee, as applicable, that
meets the criteria set forth in this Section 2.1(f) and Section 2.1(g).

(g) Notwithstanding anything to the contrary in this Section 2.1, nothing shall
prevent the Company Board from acting in accordance with their respective
fiduciary duties or applicable Law or stock exchange requirements. The Company
Board shall have no obligation to nominate, elect or appoint any TPG Nominated
Director if such nomination, election or appointment would violate applicable
Law or NYSE requirements or result in a breach by the Company Board of its
fiduciary duties to its stockholders; provided, however, that the foregoing
shall not affect the right of TPG to designate an alternative individual as the
TPG Nominated Director nominated for election to the Company Board or appointed
to the Committee, as applicable, subject to the other terms, conditions and
provisions in this Article II.

(h) The rights of TPG set forth in this Section 2.1 shall be in addition to, and
not in limitation of, such voting rights that TPG may otherwise have as a holder
of capital stock of the Company.

Section 2.2 Consent Rights.

(a) For so long as TPG, together with its Affiliates, Beneficially Owns at least
five percent (5%) of the outstanding Common Stock on the basis of the number of
shares of Common Stock issued and outstanding, prior written consent of TPG will
be required for:

(i) Any increase or decrease of the size of any Committee; and

(ii) Any change in the rights and responsibilities of either the Investment
Committee or the Compensation Committee (or any additional Committee created in
accordance with the last sentence of Section 2.1(b)) as set forth in Exhibit A
or Exhibit B, as applicable (other than as expressly contemplated hereby).

(b) Notwithstanding the foregoing and for the avoidance of doubt, the consent
rights set forth in paragraph (a) above shall not apply, and TPG’s prior written
consent shall not be required for any actions taken or to be taken, in
connection with a Change of Control of the Company. The rights of TPG and its
Affiliates set forth in this Section 3.2 shall be in addition to, and not in
limitation of, such voting rights that TPG and its Affiliates may otherwise have
as holders of capital stock of the Company.

Section 2.3 Domestically Controlled Status. The Company shall, at least once in
each calendar year, and, upon the prior request of TPG, one additional time
within such calendar year, determine whether the Company is a “domestically
controlled qualified investment entity” within the meaning of Section 897(h)(4)
of the Code (a “DCR”); provided, however, that such examination shall be limited
to information filed publicly with the SEC with respect to the ownership of
stock of the Company (i.e., Schedules 13) and any information related to the
ownership of the Company provided by TPG, and that the Company shall not be
required to take any action (or to not take any action) so as to be treated as a
DCR at any given time; provided, further, that TPG shall not request that the
Company conduct an examination within 180 days prior to the Company’s completion
of its most recent prior examination.

 

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ARTICLE III

PRE-EMPTIVE RIGHTS

Section 3.1 Pre-Emptive Rights.

(a) For so long as TPG, together with its Affiliates, Beneficially Owns at least
five percent (5%) of the outstanding Common Stock on the basis of the number of
shares of Common Stock issued and outstanding, and subject to any rules of the
NYSE that may limit or restrict such purchases, TPG or one or more TPG
Affiliates designated by TPG shall have the option and right (but not the
obligation) to participate (or nominate any of TPG’s Affiliates to participate)
in any Equity Issuance by purchasing in the aggregate up to TPG’s and its
Affiliates’ Pro Rata Portion of such Equity Issuance at the same price and the
same terms and conditions as offered to other investors in the Equity Issuance.

(b) The Company agrees to use its reasonable best efforts to take any and all
action, or to cause such action to be taken, as is necessary or appropriate to
allow TPG or its Affiliate(s), as applicable, to fully participate in any Equity
Issuance in accordance with the provisions of this Agreement.

(c) In the event the Company proposes to undertake an Equity Issuance, the
Company shall promptly give TPG prior written notice of its intention,
describing the type of equity interests, the price at which such securities are
proposed to be issued (or, in the case of an underwritten or privately placed
offering in which the price is not known at the time the notice is given, the
method of determining the price and an estimate thereof), the timing of such
proposed Equity Issuance and the general terms and conditions upon which the
Company proposes to effect the Equity Issuance. TPG and its Affiliates shall
have fifteen (15) Business Days (or, if the Company expects that the proposed
Equity Issuance will be effected in less than fifteen (15) Business Days, such
shorter period, that shall be as long as practicable, as may be required in
order for TPG and its Affiliates to participate in such proposed Equity
Issuance) from the date TPG receives notice of the proposed Equity Issuance to
elect to purchase their Pro Rata Portion of such Equity Issuance for the
consideration and upon the terms specified in the notice provided by the Company
pursuant to this Section 3.1(b) by giving written notice to the Company and
stating therein the quantity of equity interests to be purchased. Any such
notice shall be irrevocable. Any purchase of Equity Interests by TPG and its
Affiliates pursuant to this Section 3.1 shall occur contemporaneously with, and
be subject to the same terms and conditions as, the closing of the sale of the
Equity Interests by the Company to the other parties.

(d) The purchase by TPG and its Affiliates of Equity Interests pursuant to this
Section 3.1 shall be subject to the limitations on stock ownership set forth in
the Company’s organizational documents; provided, that Company shall provide any
necessary waiver of such limitations upon receipt of a representation letter
from TPG and its Affiliates (or updated representation letter, as the case may
be, similar to the representation letter provided by TPG and its Affiliates in
connection with the Distribution).

 

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(e) In the event that neither TPG nor any of its Affiliates exercises the right
forth in this Section 3.1 within the applicable period as set forth above, the
Company shall be permitted to sell the equity interests in respect of which such
pre-emptive rights were not exercised. In the event that the Company has not
sold the equity interests within ninety (90) days of its notice to TPG as
contemplated by Section 3.1(b), for purposes of this Section 3.1 such proposed
Equity Issuance shall be deemed to have been terminated, and the Company shall
provide TPG with a new notice prior to undertaking a subsequent Equity Issuance.

(f) The Company shall have the right, in its sole discretion, at all times prior
to consummation of any proposed Equity Issuance giving rise to the rights
granted by this Section 3.1, to abandon, withdraw or otherwise terminate such
proposed Equity Issuance, without any liability to TPG or its Affiliates.

ARTICLE IV

REGISTRATION RIGHTS

Section 4.1 Registration at Closing. The Company shall use commercially
reasonable efforts to file, within thirty (30) days of Closing, a Registration
Statement registering for sale all of the Registrable Securities held by the
Holders and, as soon as practicable thereafter, cause such Registration
Statement to become effective (and remain effective until the completion of the
distribution contemplated thereby) and file a final prospectus relating thereto,
subject, in each of the foregoing cases, to the ability of the Company to
satisfy financial statement requirements related to the closing of the Merger.
The plan of distribution set forth in the prospectus included in the
Registration Statement shall include such methods of distribution as reasonably
requested by the Holders. For the avoidance of doubt, such registration shall
not be deemed a “Demand Registration” for purposes of the limitations set forth
in Section 4.2(a).

Section 4.2 Demand Registration.

(a) Subject to the provisions hereof, at any time on or after the date that is
180 days after the Closing Date (as defined in the Merger Agreement), the
Holders of a majority of Registrable Securities shall have the right to require
the Company to file a Registration Statement registering for sale all or part of
their respective Registrable Securities under the Securities Act (a “Demand
Registration”) by delivering a written request therefor to the Company (i)
specifying the number of Registrable Securities to be included in such
registration by such Holder or Holders, (ii) specifying whether the intended
method of disposition thereof is pursuant to an Underwritten Offering (as
defined below), and (iii) containing all information about such Holder required
to be included in such Registration Statement in accordance with applicable
law. As soon as practicable after the receipt of such demand, the Company shall
(x) promptly notify all Holders from whom the request for registration has not
been received and (y) use reasonable best efforts to effect such registration
(including, without limitation, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) of the Registrable Securities that the Company has
been so requested to register; provided, however, that (i) the Holders shall not
make a request for a Demand Registration under this Section 4.2(a) for
Registrable Securities having an anticipated

 

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aggregate offering price of less than $5,000,000, (ii) the Holders will not be
entitled to require the Company to effect more than three (3) Demand
Registrations in the aggregate under this Agreement, and (iii) the Company will
not be obligated to effect more than one (1) Demand Registration in any six (6)
month period.

(b) The offering of the Registrable Securities pursuant to such Demand
Registration may be in the form of an underwritten public offering (an
“Underwritten Offering”). In such case, (i) the Company may designate the
managing underwriter(s) of the Underwritten Offering, provided that such Holders
may designate a co-managing underwriter to participate in the Underwritten
Offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed and (ii) the Company shall (together with the
Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form for underwriting
agreements for firm commitment offerings of equity securities with the managing
underwriter(s) proposing to distribute their securities through such
Underwritten Offering, which underwriting agreement shall have indemnification
provisions in substantially the form as set forth in Section 4.9 of this
Agreement; provided, that (i) the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of the
underwriter(s) shall also be made to and for the benefit of the Holders
proposing to distribute their securities through the Underwritten Offering, (ii)
no Holder shall be required to make any representations and warranties to, or
agreements with, any underwriter in a registration other than customary
representations, warranties and agreements and (iii) the liability of each
Holder in respect of any indemnification, contribution or other obligation of
such Holder arising under such underwriting agreement (a) shall be limited to
losses arising out of or based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement, incorporated document or other such disclosure document or other
document or report, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder expressly for inclusion
therein and (b) shall not in any event, absent fraud or intentional
misrepresentation, exceed an amount equal to the net proceeds to such Holder
(after deduction of all underwriters’ discounts and commissions) from the
disposition of the Registrable Securities disposed of by such Holder pursuant to
such Underwritten Offering. No Holder may participate in any such Underwritten
Offering unless such Holder agrees to sell its Registrable Securities on the
basis provided in such underwriting agreement and completes and executes all
questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting agreement. The Company shall not
be obligated to effect or participate (a) more than two (2) Underwritten
Offerings in any twelve (12) month period, and (b) in any Underwritten Offering
during any lock-up period required by the underwriter(s) in any prior
underwritten offering conducted by the Company on its own behalf or on behalf of
the Holders.

(c) If, in connection with an Underwritten Offering, the managing underwriter(s)
advise the Company that in its or their reasonable opinion the number of
securities proposed to be included in such registration exceeds the
Underwriters’ Maximum Number, then (i) the Company shall so advise all Holders
of Registrable Securities to be included in such Underwritten Offering and (ii)
the Company will be obligated and required to include in such Underwritten
Offering only that number of Registrable Securities requested by the Holders

 

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thereof to be included in such registration that does not exceed such
Underwriters’ Maximum Number, such Registrable Securities to be allocated pro
rata among the Holders thereof on the basis of the number of Registrable
Securities requested to be included therein by each such Holder. No shares of
Common Stock held by any Person other than Registrable Securities held by the
Holders shall be included in a Demand Registration without the prior written
consent of the holders of a majority in interest of the Registrable Securities.

(d) A registration will not be deemed to have been effected as a Demand
Registration unless the Registration Statement relating thereto has been
declared effective by the SEC, at least 75% of the Registrable Securities
requested to be included in the registration by the Holders are included in such
registration, and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided, however, that
if, after it has become effective, (i) such Registration Statement or the
related offer, sale or distribution of Registrable Securities thereunder is or
becomes the subject of any stop order, injunction or other order or requirement
of the SEC or any other governmental or administrative agency, or if any court
prevents or otherwise limits the sale of the Registrable Securities pursuant to
the registration, and in each case less than all of the Registrable Securities
covered by the effective Registration Statement are actually sold by the selling
Holder or Holders pursuant to the Registration Statement, or (ii) if, in the
case of an Underwritten Offering, the Company fails to provide Full Cooperation,
then such registration will be deemed not to have been effected for purposes of
clause (ii) of the proviso to Section 4.2(a). If (i) a registration requested
pursuant to this Section 4.2 is deemed not to have been effected as a Demand
Registration or (ii) the registration requested pursuant to this Section 4.2
does not remain continuously effective until forty-five (45) days after the
commencement of the distribution by the Holders of the Registrable Securities
covered by such registration, then the Company shall continue to be obligated to
effect a Demand Registration pursuant to this Section 4.2 of the Registrable
Securities included in such registration. In circumstances not including the
events described in the immediately two preceding sentences of this Section
4.2(d), each Holder of Registrable Securities shall be permitted voluntarily to
withdraw all or any part of its Registrable Securities from a Demand
Registration at any time prior to the commencement of marketing of such Demand
Registration, provided that such registration nonetheless shall count as a
Demand Registration for purposes of clause (ii) of the proviso to Section
4.2(a).

Section 4.3 Piggyback Registration.

(a) At any time after the one (1) year anniversary of the Closing Date (as
defined in the Merger Agreement), if (and on each occasion that) the Company
proposes to register any of its securities under the Securities Act (other than
pursuant to Section 4.1 or Section 4.2) for the account of any of its security
holders and such registration permits the inclusion of the Registrable
Securities (each such registration not withdrawn or abandoned prior to the
effective date thereof being herein referred to as a “Piggyback Registration”),
the Company shall give written notice to all Holders of such proposal promptly,
but in no event later than ten (10) Business Days prior to the anticipated
filing date.

(b) Subject to the provisions contained in paragraphs (a) and (c) of this
Section 4.3 and in the last sentence of this paragraph (b), the Company will be
obligated and

 

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required to include in each Piggyback Registration such Registrable Securities
as requested in a written notice from any Holder delivered to the Company no
later than five (5) Business Days following delivery of the notice from the
Company specified in Section 4.3(a). The Holders of Registrable Securities shall
be permitted to withdraw all or any part of their shares from any Piggyback
Registration at any time on or before the fifth business day prior to the
planned effective date of such Piggyback Registration, except as otherwise
provided in any written agreement with the Company’s underwriter(s) establishing
the terms and conditions under which such Holders would be obligated to sell
such securities in such Piggyback Registration. The Company may terminate or
withdraw any Piggyback Registration prior to the effectiveness of such
registration, whether or not the Holders have elected to include Registrable
Securities in such registration.

(c) If a Piggyback Registration is an Underwritten Offering on behalf of a
holder of Company securities other than Holders, and the managing underwriter(s)
advise the Company that in its or their reasonable opinion the number of
securities proposed to be included in such registration exceeds the
Underwriters’ Maximum Number, then the Company shall include in such
registration (i) first, the number of securities requested to be included
therein by the holder(s) originally requesting such registration, (ii) second,
the number of securities requested to be included therein by all Holders who
have requested registration of Registrable Securities in accordance with Section
4.3(a), pro rata on the basis of the aggregate number of Registrable Securities
requested to be included by each such Holder and (iii) third, any other
securities that have been requested to be so included by any other person.

(d) In any Piggyback Registration that is an Underwritten Offering, the Company
shall have the right to select the managing underwriter(s) for such
registration.

(e) The Company shall not grant to any Person the right to request the Company
to register any shares of Company securities in a Piggyback Registration unless
such rights are consistent with the provisions of this Section 4.3.

Section 4.4 Registration Expenses. In connection with registrations pursuant to
Section 4.1, Section 4.2 or Section 4.3 hereof, the Company shall pay all of the
costs and expenses incurred in connection with the registrations thereunder (the
“Registration Expenses”), including all (a) registration and filing fees and
expenses, including, without limitation, those related to filings with the SEC,
(b) fees and expenses of compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (c) reasonable processing,
duplicating and printing expenses, including expenses of printing prospectuses
reasonably requested by any Holder, (d) of the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties, the expense of any liability
insurance and the expense of any annual audit or quarterly review), (e) fees and
expenses incurred in connection with listing the Registrable Securities for
trading on a national securities exchange, (f) fees and expenses in connection
with the preparation of the registration statement and related documents
covering the Registrable Securities, (g) fees and expenses, if any, incurred
with respect to any filing with FINRA, (h) any documented out-of-pocket expenses
of the underwriter(s) incurred with the approval of the Company, (i) the cost of
providing any CUSIP

 

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or other identification numbers for the Registrable Securities, (j) fees and
expenses and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including,
without limitation, the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letters requested), (k) fees and expenses of any special experts
retained by the Company in connection with such registration, and (l) reasonable
and documented fees and expenses of one firm of counsel for the Holders to be
selected by the Holders of a majority of the Registrable Securities to be
included in such registration (“Holders’ Counsel”); provided, however, that the
Company shall reimburse the Holders for the reasonable and documented fees and
disbursements one, but not more than one, additional counsel retained by any
Holder for the purpose of rendering any opinion required by the Company or the
managing underwriter(s) to be rendered on behalf of such Holder in connection
with any Demand Registration. Other than as provided in the foregoing sentence,
the Company shall have no obligation to pay any out-of-pocket expenses of the
Holders relating to the registrations effected pursuant to this
Agreement. Notwithstanding the foregoing, Holders shall be responsible, on a pro
rata basis based on the number of Registrable Securities included in the
applicable registered offering by each such Holder, for any underwriting
discounts and commissions attributable to the sale of Registrable Securities
pursuant to a Registration Statement. The obligation of the Company to bear the
expenses described in this Section 4.4 and to pay or reimburse the Holders for
the expenses described in this Section 4.4 shall apply irrespective of whether
any sales of Registrable Securities ultimately take place.

Section 4.5 Registration Procedures. In the case of each registration effected
by the Company pursuant to this Agreement, the Company shall keep each Holder
advised in writing as to the initiation of each registration and as to the
completion thereof. In connection with any such registration:

(a) The Company will, as soon as reasonably practicable (and in any event,
within 90 days) after its receipt of the request for registration under Section
4.2(a), prepare and file with the Commission a Registration Statement on
Form S-1, Form S-3 or another appropriate Securities Act form reasonably
acceptable to the Holders, and use reasonable best efforts to cause such
Registration Statement to become and remain effective until the completion of
the distribution contemplated thereby.

(b) The Company will (i) promptly prepare and file with the Commission such
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for as long as such registration is required to
remain effective pursuant to the terms hereof, (ii) cause the prospectus to be
supplemented by any required prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act, and (iii) comply with
the provisions of the Securities Act applicable to it with respect to the
disposition of all Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders set forth in such Registration Statement or
supplement to the prospectus.

(c) The Company will, at least ten (10) days prior to filing a Registration
Statement or at least five (5) days prior to filing a prospectus or any
amendment or supplement to

 

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such Registration Statement or prospectus, furnish to (i) each Holder of
Registrable Securities covered by such Registration Statement, (ii) Holders’
Counsel and (iii) each underwriter of the Registrable Securities covered by such
Registration Statement, copies of such Registration Statement and each amendment
or supplement as proposed to be filed, together with any exhibits thereto, which
documents will be subject to reasonable review and comment by each of the
foregoing Persons within five (5) days after delivery, and thereafter, furnish
to such Holders, Holders’ Counsel and the underwriter(s), if any, such number of
copies of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents or information as such Holder,
Holders’ Counsel or the underwriter(s) may reasonably request in order to
facilitate the disposition of the Registrable Securities in accordance with the
plan of distribution set forth in the prospectus included in the Registration
Statement; provided, however, that notwithstanding the foregoing, if the Company
intends to file any prospectus, prospectus supplement or prospectus sticker that
does not make any material changes in the documents already filed, then Holders’
Counsel will be afforded such opportunity to review such documents prior to
filing consistent with the time constraints involved in filing such document,
but in any event no less than one (1) day.

(d) The Company will promptly notify each Holder of any stop order issued or
threatened by the SEC and, if entered, use reasonable best efforts to prevent
the entry of such stop order or to remove it as soon as reasonably possible.

(e) On or prior to the date on which the Registration Statement is declared
effective, the Company shall use reasonable best efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any Holder reasonably requests and do any and all other lawful
acts and things which may be reasonably necessary or advisable to enable the
Holders to consummate the disposition in such jurisdictions of such Registrable
Securities, and use commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period which the Registration Statement is required to be kept effective;
provided that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction.

(f) The Company will notify each Holder, Holders’ Counsel and the underwriter(s)
promptly and (if requested by any such Person) confirm such notice in writing,
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or prospectus or for
additional information to be included in any Registration Statement or
prospectus or otherwise, (iii) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or blue sky laws or the initiation of any
proceedings for that purpose, and (iv) of the happening of any event that
requires the making of any changes in a Registration

 

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Statement or related prospectus or any document incorporated or deemed to be
incorporated by reference therein so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements in the Registration Statement
and prospectus not misleading in light of the circumstances in which they were
made; and, as promptly as practicable thereafter, prepare and file with the SEC
and furnish a supplement or amendment to such prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each Holder hereby
agrees to keep any disclosures under subsection (iv) above confidential until
such time as a supplement or amendment is filed.

(g) The Company will furnish customary closing certificates and other
deliverables to the underwriter(s) and the Holders and enter into customary
agreements satisfactory to the Company (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities.

(h) The Company will make available for inspection by any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by any such seller or underwriter
(in each case after reasonable prior notice and at reasonable times during
normal business hours and without unnecessary interruption of the Company’s
business or operations), all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with the Registration Statement.

(i) The Company, during the period when the prospectus is required to be
delivered under the Securities Act, promptly will file all documents required to
be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act.

(j) The Company shall use reasonable best efforts to cause all Registrable
Securities registered pursuant to the terms hereof to be listed on each national
securities exchange on which the Common Stock of the Company is then listed.

(k) The Company shall use commercially reasonable efforts to cooperate and
assist in obtaining of all necessary approvals from FINRA, if any.

(l) The Company shall provide a transfer agent and registrar for the Registrable
Securities not later than the effective date of such Registration Statement.

(m) If requested, the Company shall furnish to each Holder a copy of all
documents filed with and all correspondence from or to the SEC in connection
with the offering of Registrable Securities.

 

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(n) The Company otherwise shall use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC.

(o) The Company shall furnish to any requesting underwriter in an Underwritten
Offering, addressed to such underwriter, (i) an opinion of the Company’s counsel
(which may be the Company’s General Counsel), dated the date of closing of the
sale of any Registrable Securities thereunder, as well as a consent to be named
in the Registration Statement or any prospectus thereto, and (ii) comfort
letters and consent to be named in the Registration Statement or any prospectus
relating thereto signed by the Company’s independent public accountants who have
examined and reported on the Company’s financial statements included in the
Registration Statement, in each case covering substantially the same matters
with respect to the Registration Statement (and the prospectus included therein)
and (in the case of the accountants’ comfort letters) with respect to events
subsequent to the date of the financial statements, as are customarily covered
in opinions of issuer’s counsel and in accountants’ comfort letters delivered to
the underwriters in underwritten public offerings of securities, to the extent
that the Company is required to deliver or cause the delivery of such opinion or
comfort letters to the underwriters in an Underwritten Offering.

(p) In connection with each Demand Registration, the Company shall cause there
to occur Full Cooperation.

For purposes of Section 4.5(a) and Section 4.5(b), the period of distribution of
Registrable Securities in a firm commitment underwritten public offering shall
be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable
Securities in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Securities covered thereby and one hundred twenty
(120) days after the effective date thereof.

Section 4.6 Holders’ Obligations. The Company may require each Holder to
promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration, including all such information as may be
requested by the SEC. Each Holder agrees that, notwithstanding the provisions of
Section 4.7 hereof, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 4.5(f) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 4.5(f) hereof, and, if so directed by the Company, such Holder will
deliver to the Company all copies, other than permanent file copies then in such
Holder’s possession and retained solely in accordance with record retention
policies then-applicable to such Holder, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective by the number
of days during the period from and including the date of the giving of notice
pursuant to Section 4.5(f) hereof to the date when the Company shall make
available to the Holders a prospectus supplemented or amended to conform with
the requirements of Section 4.5(f) hereof.

 

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Section 4.7 Blackout Provisions.

(a) Notwithstanding anything in this Agreement to the contrary, by delivery of
written notice to the participating Holders (a “Suspension Notice”) stating
which one or more of the following limitations shall apply to the addressee of
such Suspension Notice, the Company may (i) postpone effecting a registration
under this Agreement, or (ii) require such addressee to refrain from disposing
of Registrable Securities under the registration, in either case for a period of
no more than forty-five (45) consecutive days from the delivery of such
Suspension Notice (which period may not be extended or renewed). The Company may
postpone effecting a registration or apply the limitations on dispositions
specified in clause (ii) of this Section 4.7(a) if (x) the Company Board, in
good faith, determines that such registration or disposition would materially
impede, delay or interfere with any material transaction then pending or
proposed to be undertaken by the Company or any of its subsidiaries, or (y) the
Company in good faith determines that the Company is in possession of material
non-public information the disclosure of which during the period specified in
such notice the Company Board, in good faith, reasonably believes would not be
in the best interests of the Company; provided that the Company may not take any
actions pursuant to this Section 4.7(a) for a period of time in excess of ninety
(90) days in the aggregate in any twelve (12)-month period.

(b) If the Company shall take any action pursuant to clause (ii) of Section
4.7(a) with respect to any participating Holder in a period during which the
Company shall be required to cause a Registration Statement to remain effective
under the Securities Act and the prospectus to remain current, such period shall
be extended for such Person by one (1) day beyond the end of such period for
each day that, pursuant to Section 4.7(a), the Company shall require such Person
to refrain from disposing of Registrable Securities owned by such Person.

Section 4.8 Exchange Act Registration. The Company will use its reasonable best
efforts to timely file with the SEC such information as the SEC may require
under Section 13(a) or Section 15(d) of the Exchange Act, and the Company shall
use its reasonable best efforts to take all action as may be required as a
condition to the availability of Rule 144 or Rule 144A under the Securities Act
with respect to its Common Stock. The Company shall furnish to any holder of
Registrable Securities forthwith upon request such reports and documents as a
holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a holder to sell any such Registrable Securities without
registration to the extent that such reports or documents are not publicly
available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system
or any successor system thereto. Certificates evidencing Registrable Securities
shall not contain any legend at such time as a Holder has provided reasonable
evidence to the Company (including any customary broker’s or selling
stockholder’s letters but expressly excluding an opinion of counsel other than
with respect to clauses (d) or (e) below), that (a) there has been a sale of
such Registrable Securities pursuant to an effective registration statement, (b)
there has been a sale of such Registrable Securities pursuant to Rule 144
(assuming the transferor is not an affiliate of the Company), (c) such
Registrable Securities are then eligible for sale under Rule 144(b)(i), (d) in
connection with a sale, assignment or other transfer (other than under Rule
144), upon request of the Company, such Holder provides the Company with an
opinion of counsel to such Holder, in a reasonably acceptable form, to the
effect that such sale, assignment or transfer of the Registrable Securities may
be made without registration under the applicable

 

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requirements of the Securities Act or (e) such legend is not required under
applicable requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the SEC). Following such time as
restrictive legends are not required to be placed on certificates representing
Registrable Securities pursuant to the preceding sentence, the Company will, no
later than three (3) Business Days following the delivery by a Holder to the
Company or the Company’s transfer agent of a certificate representing
Registrable Securities containing a restrictive legend and the foregoing
evidence (and opinion if applicable), deliver or cause to be delivered to such
Holder a certificate representing such Registrable Securities that is free from
all restrictive and other legends or credit the balance account of such Holder’s
or such Holder’s nominee with the Depository Trust Company (the “DTC”) (if DTC
is then offered by the Company and its transfer agent) with a number of shares
of Common Stock equal to the number of shares of Common Stock represented by the
certificate so delivered by such Holder.

Section 4.9 Indemnification.

(a) Indemnification by the Company. The Company agrees, notwithstanding the
termination of this Agreement, to indemnify and hold harmless, to the fullest
extent permitted by law, each Holder and each of its managers, members, managing
members, general and limited partners, officers, directors, employees and
agents, and each Person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the managers, members, managing members, general and limited partners,
officers, directors, employees and agents of such controlling Person (each, a
“Controlling Person”), from and against any and all losses, claims, damages,
settlement amounts (only if the Company consented in writing to the settlement,
which consent shall not be unreasonably withheld), liabilities, reasonable
attorneys’ fees, costs and expenses of investigating and defending any such
claim (collectively, “Damages”) and any action in respect thereof to which such
Holder, its managers, members, managing members, general and limited partners,
officers, directors, employees and agents, and any such Controlling Persons may
become subject to under the Securities Act or otherwise, but only insofar as
such Damages (or proceedings in respect thereof) arise out of, or are based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or prospectus of the Company (or any
amendment or supplement thereto) or any preliminary prospectus of the Company,
or arise out of, or are based upon, any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which they
were made, except insofar as the same are based upon information furnished in
writing to the Company by such Holder or any of its managers, members, managing
members, general partners, officers, directors, employees, agents and
Controlling Persons expressly for use therein, and, consistent with and subject
to the foregoing, shall reimburse such Holder, its managers, members, managing
members, general and limited partners, officers, directors, employees and
agents, and each such Controlling Person for any legal and other expenses
reasonably incurred by such Holder, its managers, members, managing members,
general and limited partners, officers, directors, employees and agents, or any
such Controlling Person in investigating or defending or preparing to defend
against any such Damages or proceedings. In addition to the indemnity contained
herein, the Company will reimburse each Holder for its reasonable out-of-pocket
legal and other expenses (including the reasonable out-of-pocket cost of any
investigation, preparation and travel in connection therewith) as incurred in
connection therewith, as promptly as practicable after such expenses are
incurred and invoiced.

 

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(b) Indemnification by the Holder. The Holders agree, severally and not jointly,
to indemnify and hold harmless the Company, its officers, directors, employees
and agents and each Person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the managers, members, managing members, general and limited partners,
officers, directors, employees and agents of such controlling Person, to the
same extent as the foregoing indemnity from the Company to the Holders, but only
with respect to information related to the Holders, or their plan of
distribution, furnished in writing by the Holders or any of their managers,
members, managing members, general partners, officers, directors, employees,
agents and Controlling Persons to the Company expressly for use in any
Registration Statement or prospectus, or any amendment or supplement thereto, or
any preliminary prospectus. No Holder shall be required to indemnify any Person
pursuant to this Section 4.9(b) for any amount in excess of the net proceeds
received by such Holder from the sale of the Registrable Securities sold for the
account of such Holder.

(c) Conduct of Indemnification Proceedings. Promptly after receipt by any Person
(an “Indemnified Party”) of notice of any claim or the commencement of any
action in respect of which indemnity may be sought pursuant to Section 4.9(a) or
Section 4.9(b), the Indemnified Party shall, if a claim in respect thereof is to
be made against the Person against whom such indemnity may be sought (an
“Indemnifying Party”), notify the Indemnifying Party in writing of the claim or
the commencement of such action; provided, that the failure to notify the
Indemnifying Party shall not relieve it from any liability that it may have to
an Indemnified Party except to the extent of any actual prejudice resulting
therefrom. If any such claim or action shall be brought against an Indemnified
Party, and it shall notify the Indemnifying Party thereof, the Indemnifying
Party shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified Indemnifying Party, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the Indemnifying Party
shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof; provided, that the Indemnified Party shall have the right to employ
separate counsel to represent the Indemnified Party and its Controlling Persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Indemnified Party against the Indemnifying Party,
but the fees and expenses of such counsel shall be for the account of such
Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the retention of, and reimbursement of fees for,
such counsel or (ii) in the reasonable opinion of counsel to such Indemnified
Party representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicts of interest between them, it being
understood, however, that the Indemnifying Party shall not, in connection with
any one such claim or action or separate but substantially similar or related
claims or 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 (together with appropriate local counsel) at any
time for all Indemnified Parties. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any claim or
pending or

 

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threatened proceeding in respect of which the Indemnified Party is or would
reasonably have been a party and indemnity would reasonably have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its written consent.

Section 4.10 No Inconsistent Agreements. The Company shall not hereafter enter
into any agreement with respect to any of its securities (including any
registration or similar agreement) which is inconsistent with or violates the
material rights granted to the Holders in this Agreement.

Section 4.11 Lock-Up Agreements. Each of the Holders and the Company agrees
that, in connection with an Underwritten Offering in respect of which
Registrable Securities are being sold, or in connection with any other public
offering of Common Stock by the Company, if requested by the underwriter(s), it
will enter into customary “lock-up” agreements pursuant to which it will agree
not to, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any Common Stock or any securities convertible
or exchangeable into Common Stock (subject to customary exceptions) for a period
not to exceed ninety (90) days from the effective date of the Registration
Statement pertaining to such Registrable Securities or from such other date as
may be requested by the underwriter(s). The Company further agrees that, in
connection with an Underwritten Offering in respect of which Registrable
Securities are being sold, if requested by the managing underwriter(s), it will
exercise its best efforts to obtain agreements (in the underwriters’ customary
form) from its directors and executive officers not to, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or otherwise dispose of,
any Common Stock or any securities convertible or exchangeable into Common Stock
(subject to customary exceptions), for a period not to exceed ninety (90) days
from the effective date of the Registration Statement pertaining to such
Registrable Securities or from such other date as may be requested by the
underwriter(s).

Section 4.12 Termination of Registration Rights. The rights granted under this
Article IV shall terminate on the earlier of the date that (a) the Holders no
longer Beneficially Own any Registrable Securities or (b) all Registrable
Securities are eligible for sale without any volume or other limitations or
restrictions; provided, however, that the indemnification provisions set forth
in Section 4.9 shall survive such termination.

Section 4.13 Assignment; Binding Effect. The rights and obligations provided in
this Article IV may be assigned in whole or in part by any Holder to a
controlled affiliate of such Holder or to any member, general or limited partner
or stockholder of any such Holder (each, a “Permitted Transferee”) without the
consent of the Company or any other Holder. Such assignment shall be effective
upon receipt by the Company of (a) written notice from the Holder certifying
that the transferee is a Permitted Transferee, stating the name and address of
the Permitted Transferee and identifying the amount of Registrable Securities
with respect to which the rights under this Agreement are being transferred, and
(b) a written agreement from the Permitted Transferee to be bound by all of the
terms of this Article IV as a “Holder.” Upon receipt of the documents referenced
in clauses (a) and (b) of this Section 4.13, the Permitted

 

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Transferee shall thereafter be deemed to be a “Holder” for all purposes of this
Article IV. Except as set forth in this Section 4.13, the rights and obligations
provided in this Article IV may not be assigned by any party hereto without the
prior written consent of each of the other parties hereto.

ARTICLE V

COVENANTS

Section 5.1 No Conflicting Agreements. For so long as this Agreement remains in
effect, neither the Company nor TPG shall enter into any stockholder agreement
or arrangement of any kind with any Person with respect to any Shares or other
Securities, or otherwise act or agree to act in concert with any Person with
respect to any Shares or other Securities, to the extent such agreement,
arrangement, or concerted act would controvert, or otherwise be inconsistent in
any material respect with, the provisions of this Agreement.

Section 5.2 Further Assurances. Each of TPG and the Company agrees to execute
and deliver all such further documents and do all acts and things that from time
to time may reasonably be required to effectively carry out or better evidence
or perfect the full intent and meaning of this Agreement.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Amendment and Waiver. This Agreement may not be amended, except by
an agreement in writing, executed by each of TPG and the Company, and compliance
with any term of this Agreement may not be waived, except by an agreement in
writing executed on behalf of the party against whom the waiver is intended to
be effective. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of any such provision and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.

Section 6.2 Severability. If any provision of this Agreement shall be declared
by any court of competent jurisdiction to be illegal, void, or otherwise
unenforceable, all other provisions of this Agreement, to the extent permitted
by Law, shall not be affected and shall remain in full force and effect. Upon
any such determination, the parties shall negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.

Section 6.3 Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, together with the agreements and other documents and instruments
referred to herein, embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes and
preempts any prior understandings, agreements, or representations by or among
the parties, written or oral, that may have related to the subject matter hereof
in any way.

Section 6.4 Successors and Assigns. Except as expressly set forth herein,
neither this Agreement nor any of the rights or obligations of any party under
this Agreement (including any rights under Article II and Article III hereof)
may be assigned, in whole or in part (except by

 

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operation of Law), by either party without the prior written consent of the
other party, and any such transfer or attempted transfer without such consent
shall be null and void. This Agreement shall be binding upon and shall inure to
the benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns.

Section 6.5 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same agreement.

Section 6.6 Remedies.

(a) Each party hereto acknowledges that monetary damages would not be an
adequate remedy in the event that each and every one of the covenants or
agreements in this Agreement are not performed in accordance with their terms,
and it is therefore agreed that, in addition to, and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order, or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
each and every one of the terms and provisions hereof. Each party hereto agrees
not to oppose the granting of such relief in the event a court determines that
such a breach has occurred, and to waive any requirement for the securing or
posting of any bond in connection with such remedy.

(b) All rights, powers, and remedies provided under this Agreement or otherwise
available in respect hereof at Law or in equity shall be cumulative and not
alternative, and the exercise or beginning of the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power, or remedy by such party.

Section 6.7 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (upon
telephonic confirmation of receipt), on the first (1st) Business Day following
the date of dispatch if delivered by a recognized next day courier service, or
on the third (3rd) Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.

If to the Company:

Parkway, Inc.

390 N. Orange Avenue

Suite 2400

Orlando, FL 32801

Attn: General Counsel

Fax No.: (407) 209-0061

with a copy (which shall not constitute notice) to:

Hogan Lovells US LLP

Columbia Square

 

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555 Thirteenth Street, NW

Washington, D.C. 20004

Attention: David W. Bonser; Bruce W. Gilchrist

Fax No.: (202) 637-5910

If to TPG:

c/o TPG Global, LLC

301 Commerce St, Suite 3300

Fort Worth, Texas 76102

Attn: General Counsel

Facsimile: (817) 871-4001

with a copy (which shall not constitute notice) to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036

Attention: Carl P. Marcellino

Fax: (646) 728-1523

Section 6.8 Governing Law; Venue and Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the
Laws of the State of New York, without regard to, or otherwise giving effect to,
any body of Law or other rule that would cause or otherwise require the
application of the Laws of any other jurisdiction.

(b) Any action or proceeding against either the Company or TPG relating in any
way to this Agreement may be brought exclusively in the courts of the State of
New York or (to the extent subject matter jurisdiction exists therefore) the
United States District Court for the Southern District of New York, and each of
the Company and TPG irrevocably submits to the jurisdiction of both such courts
in respect of any such action or proceeding. Any actions or proceedings to
enforce a judgment issued by one of the foregoing courts may be enforced in any
jurisdiction.

(c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH
OF THE COMPANY AND TPG HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION, OR SUIT
(WHETHER IN CONTRACT, TORT, OR OTHERWISE), INQUIRY, PROCEEDING, OR INVESTIGATION
ARISING OUT OF, OR BASED UPON, THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING. EACH OF THE COMPANY AND TPG

 

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ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTY THAT THIS SECTION
6.8(C) CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH IT IS RELYING, AND WILL RELY
IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. THE
COMPANY OR TPG MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.8(C)
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 6.9 Third Party Benefits. Except the provisions in Section 6.10, none of
the provisions of this Agreement are for the benefit of, or shall be enforceable
by, any third-party beneficiary.

Section 6.10 No Recourse Against Others. All claims, causes of action (whether
in contract or in tort, in law or in equity, or granted by statute),
obligations, or liabilities that may be based upon, be in respect of, arise
under, out of or by reason of, be connected with, or relate in any manner to
this Agreement, or the negotiation, execution, performance or breach of this
Agreement (including any representation or warranty made in, in connection with,
or as an inducement to, this Agreement), may be made only against (and are those
solely of) the entities that are expressly identified as parties in the preamble
to this Agreement (the “Contracting Parties”). No Person who is not a
Contracting Party, including any and all former, current or future directors,
officers, employees, incorporators, members, general or limited partners,
controlling persons, managers, management companies, equityholders, affiliates,
agents, attorneys, or representatives of, and any and all former, current or
future financial advisors or lenders to, any Contracting Party, and any and all
former, current or future directors, officers, employees, incorporators,
members, general or limited partners, controlling persons, managers, management
companies, equityholders, affiliates, agents, attorneys, or representatives of,
and any and all former, current or future financial advisors or lenders to, any
of the foregoing, and any and all former, current or future heirs, executors,
administrators, trustees, successors or assigns of any of the foregoing (the
“Non-Recourse Parties”), shall have any liability (whether in contract or in
tort, in law or in equity, or granted by statute) for any claims, causes of
action, obligations or liabilities arising under, out of, in connection with, or
related in any manner to this Agreement, or the negotiation, execution,
performance, or breach of this Agreement; and, to the maximum extent permitted
by Law, each Contracting Party hereby waives and releases all such claims and
causes of action against any such Non-Recourse Parties. Without limiting the
foregoing, to the maximum extent permitted by Law, (a) each Contracting Party
hereby waives and releases any and all rights, claims, demands, or causes of
action that may otherwise be available at law or in equity, or granted by
statute, to avoid or disregard the entity form of a Contracting Party or
otherwise impose liability of a Contracting Party on any Non-Recourse Party,
whether granted by statute or based on theories of equity, agency, control,
instrumentality, alter ego, domination, sham, single business enterprise,
piercing the corporate, limited liability company or limited partnership veil,
unfairness, undercapitalization, or otherwise, in each case in connection with,
or related in any manner to this Agreement, or the negotiation, execution,
performance, or breach of this Agreement; and (b) each Contracting Party
disclaims any reliance upon any Non-Recourse Parties with respect to the
performance of this Agreement or any representation or warranty made in, in
connection with, or as an inducement to this Agreement.

 

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Section 6.11 Interpretation. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

Section 6.12 Expenses. Except to the extent otherwise expressly provided herein,
the Company shall reimburse TPG and its Affiliates, upon presentation of
appropriate documentation, for all reasonable out-of-pocket expenses incurred by
TPG and its Affiliates after the date hereof in connection with enforcement of
this Agreement.

Section 6.13 Termination. Except to the extent otherwise expressly provided
herein, this Agreement, and all of the rights and obligations set forth herein,
shall terminate and be of no further force or effect in the event that (a) TPG
and its Affiliates cease to Beneficially Own any shares of Common Stock and (b)
the registration rights and obligations set forth in Article IV (other than
those set forth in Section 4.9) have terminated pursuant to Section 4.12.

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

 

COMPANY: PARKWAY, INC. By:  

/s/ Scott E. Francis

Name:   Scott E. Francis Title:   Executive Vice President and Chief Accounting
Officer TPG: TPG VI PANTERA HOLDINGS, L.P.   By: TPG Genpar VI Delfir AIV, L.P.,
its general partner   By: TPG Genpar VI Delfir AIV Advisors, LLC, its general
partner By:  

/s/ Michael LaGatta

Name:   Michael LaGatta Title:   Vice President TPG MANAGER: TPG VI MANAGEMENT,
LLC By:  

/s/ Michael LaGatta

Name:   Michael LaGatta Title:   Vice President

(Signature Page to Stockholders Agreement)

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Exhibit A

Investment Committee Rights and Responsibilities

The Investment Committee rights and responsibilities shall include committee
approval for each of the following:

(i) Any incurrence, assumption, guaranty or other similar assumption of
liability by the Company or any of its subsidiaries in respect of any Debt with
a principal amount attributed to the Company’s share of greater than
$20,000,000; and

(ii) Such other transactions as set forth on Annex I hereto.

Notwithstanding the foregoing, the consent rights set forth in paragraphs (i)
and (ii) above shall not apply, and committee approval shall not be required for
any actions taken or to be taken, in connection with:

1. a Change in Control of the Company; or

2. any sale, issuance, or authorization of the issuance or sale, of any Capital
Stock, Convertible Securities or other Securities (excluding debt Securities to
the extent otherwise prohibited by items (i) or (ii) above) of the Company or
any of its subsidiaries; or

3. an Operating Company Acquisition (defined below) in which the aggregate
consideration (which shall be the sum of the value of Capital Stock of the
Company or any of its subsidiaries issued to the seller and the principal amount
of debt of the target that is assumed or repaid in the transaction) is greater
than or equal to $1 billion and the consideration does not include the issuance
by the Company or any subsidiary of the Company of any debt Securities or the
payment of cash consideration; provided that any such Operating Company
Acquisition initially shall be considered by the Committee and will be
considered by the full Board of Directors only if the Committee Votes on such
transaction and the vote results in a 2-2 tie.

As used herein, “Operating Company Acquisition” shall mean any transaction or
series of transactions pursuant to which the Company and/or one or more of its
subsidiaries acquire, whether by merger, consolidation, share exchange, purchase
of equity, purchase of assets or otherwise, directly or indirectly, a majority
of the Capital Stock of an operating company (or substantially all of the
business and assets of an operating company), regardless of whether such
operating company also (x) owns (directly or through its subsidiaries) real
property or (y) has existing Debt not incurred in contemplation of such
acquisition transaction.

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Exhibit B

Compensation Committee Rights and Responsibilities

In addition to its current mandate (as previously provided to TPG), the
Compensation Committee Charter rights and responsibilities shall include
committee approval for each of the following:

(i) The hiring or termination of any of the Company’s Chief Executive Officer,
Chief Financial Officer, Chief Operating Officer and Chief Investment Officer,
or any material change in any of the duties of any such executive officer; and

(ii) Any issuance, sale or authorization pursuant to any future compensation
arrangements for the Company’s directors, officers, employees, consultants and
agents.

Notwithstanding the foregoing, the consent rights set forth in paragraph (i)
above shall not apply, and committee approval shall not be required for any
actions taken or to be taken, in connection with a Change of Control of the
Company.

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ANNEX I

Parkway, Inc.

Investment Approvals

Leases – See approvals required under “Operational Approvals” for leases that
require certain levels of investment capital

Acquisitions and Dispositions

New fee-simple property acquisitions and dispositions

Under $20 million – Must be approved by the Chief Investment Officer (“CIO”) and
the Management Investment Committee (the “MIC”); provided, that the approval of
the Investment Committee will be required for acquisitions or dispositions under
$20 million in the event that such acquisitions exceed $50 million in the
aggregate in any fiscal year or such dispositions exceed $50 million in the
aggregate in any fiscal year. In addition, acquisitions of undeveloped parcels
of land require the approval of the Investment Committee of the Board of
Directors. Documents require one signature, which can be any executive officer.
Property description and summary acquisition/disposition economics should be
included for information purposes in the board meeting materials for the first
subsequent meeting following such acquisition or disposition.

$20 million to $100 million – Must be approved by the CIO, the MIC and the
Investment Committee of the Board. Documents require one signature, which can
any executive officer. Property description and summary acquisition/disposition
economics should be included for informational purposes in the board meeting
materials for the first subsequent meeting following such an acquisition.

Over $100 million – Must be approved by the CIO, the MIC, the Investment
Committee of the Board and the Board. Documents require two signatures, which
can be any two executive officers. If acquisition/disposition economics change
materially from the time of approval to closing, the revised summary
acquisition/disposition economics should be included for informational purposes
in the board meeting materials for the first subsequent meeting following such
an acquisition.

Jointly-owned property acquisitions

Approvals should be obtained the same as for fee-simple property acquisitions
and dispositions, with the dollar amounts representing Parkway’s share of the
Gross Asset Value. In addition, the Board is required to approve any
acquisition/disposition with a Gross Asset Value of $300 million or higher,
regardless of Parkway’s ownership share. Additional approvals may be needed from
the joint venture or fund partner, as dictated in the joint venture agreement or
the fund agreement.

Note: The Management Investment Committee shall be made up of the Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, and Chief
Investment Officer. While not an official voting member of the Management
Investment Committee, the Managing Director in the affected market should also
participate in any meetings/recommendations and the Chief Accounting Officer
should participate if there are questions surrounding accounting treatment of
any item related to the investment.

 

34

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Financial Approvals

All required approvals outlined below are subject to any approvals required
within relevant credit agreements and / or partnership, joint venture, or other
similar agreements.

All approvals required, whether by members of management, the Investment
Committee of the Board or the Board, shall be subject to no further material
economic revisions to the terms of the relevant activity. If a material economic
revision occurs after approval, then a secondary approval must be received prior
to closing.

Non-Recourse Mortgage Financing (new or existing assets, single asset)

Less than $20 million in Principal at Parkway’s Share and 50% Loan to Value or
Less: Must be approved by the Treasurer, the Chief Financial Officer and the
MIC. Documents require one signature, which can be any of the following
officers: any executive officer who is a member of the MIC, the General Counsel
or the Treasurer. Summary description of the financing should be included in the
meeting materials for the first board meeting subsequent to the closing of the
financing.

Less than $20 million in Principal at Parkway’s Share and Greater than 50% Loan
to Value or any refinancing that requires a pay down of the existing loan: Must
be approved by the Treasurer, Chief Financial Officer, the MIC, and the
Investment Committee of the Board. Documents require one signature, which can be
any of the following officers: any executive officer who is a member of the MIC,
the General Counsel or the Treasurer. Summary description of the financing
should be included in the meeting materials for the first board meeting
subsequent to the closing of the financing.

$20 million to $99.9 million in Principal at Parkway’s Share, Regardless of Loan
to Value: Must be approved by the Treasurer, Chief Financial Officer, the MIC,
and the Investment Committee of the Board. Documents require one signature,
which can be any of the following officers: any executive officer who is a
member of the MIC, the General Counsel or the Treasurer. Summary description of
the financing should be included in the meeting materials for the first board
meeting subsequent to the closing of the financing.

$100 million in Principal or Greater at Parkway’s Share, Regardless of Loan to
Value: Must be approved by the Treasurer, Chief Financial Officer, the MIC, the
Investment Committee of the Board and the full Board. Documents require two
signatures, which can be the Chief Financial Officer or Chief Executive Officer
and any other executive officer. Summary description of the financing should be
included in the meeting materials for the first board meeting subsequent to the
closing of the financing.

All Recourse Mortgage Financing, Unsecured Financing, Cross Collateralized
Non-Recourse Financing, Credit Facilities (including secured), or Bridge
Facilities (equity or debt)

Must be approved by the Treasurer, Chief Financial Officer, the MIC, the
Investment Committee of the Board and the full Board. Documents require two
signatures, which can be the Chief Financial Officer or Chief Executive Officer
and any other executive officer. A detailed term sheet for the financing should
be included in the meeting materials for the first board meeting subsequent to
the closing of the financing.

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Equipment Leases (in connection with retrofitting of building systems)

Less than $500,000 in Principal on a Consolidated Basis: Must be approved by the
Treasurer, the Chief Financial Officer, and the Managing Director in the
affected market. Documents require one signature, which can be any executive
officer or the Managing Director in the affected market.

$500,000 or Greater in Principal on a Consolidated Basis: Must be approved by
the Treasurer, the Chief Financial Officer, and the Managing Director in the
affected market. Documents require one signature, which can be any executive
officer.

Note: The Management Investment Committee shall be made up of the Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, and Chief
Investment Officer. While not an official voting member of the Management
Investment Committee, the Managing Director in the affected market should also
participate in any meetings/recommendations and the Chief Accounting Officer
should participate if there are questions concerning the accounting treatment of
any item related to the financing.

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Operational Approvals

“Yes” denotes required approvals

 

    

PM

  

MD

  

COO

  

Investment

Committee

of BOD

Leases

 

The approval of the Investment Committee of BOD is required for leases with
significant negative capital variance $1,000,000 to annual leasing budget or
capital expenditures budget.

 

*  Leases that are approved as part of annual budgeting process do not require
additional Investment Committee of BOD approvals.

Terms and square foot (sf): Under $750,000 Tenant Improvements and under 20,000
rsf       Yes       Over $750,000 Tenant Improvements or over 20,000 rsf and
under 100,000 rsf       Yes    Yes    Over 100,000 rsf       Yes    Yes    *Yes
Tenant Improvements: If not approved through budget process. Under $750,000
@pky’s share       Yes       Over $750,000 and under $2,000,000 @pky’s share   
   Yes    Yes    Over $2,000,000 @pky’s share       Yes    Yes    *Yes Other:
Joint Venture / Fund    Same guidelines as above, with additional approvals as
stated in the partner leasing agreement. Third Party Owners    Approved and
executed as stated in the leasing agreement with the owner Leasing Commissions
   Approver cannot be recipient of commissions License Agreements   

Must be executed by an officer

Must be short term and have no capital expenditures

Tenant Improvements (TI)   

For TI amounts initially approved via Lease Agreements

This pertains to projects that are managed by Parkway

Note receivable for overage       Yes       Contracts under $250,000    Yes   
      Over $250,000 (AIA Contract Required)    Yes    Yes       Change orders
increases on contracts in aggregate over $250,000       Yes       Overruns in
excess of 10% for contracts over $250,000       Yes    Yes    NOTE: Any
non-tenant reimbursement (Landlord work) overages less than $5K can have a PM
approval. Also, any non-tenant reimbursement (Landlord work) overages over $5K
to $250K requires additional MD approval.

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PM

  

MD

  

COO

  

Investment
Committee
of BOD

Non-Revenue Enhancements (NRE)

  

Competitive bids required for jobs over $25,000

Jobs outside of budget need approval of COO

Negative Variances of $10,000 or 10% to annual capital budget require COO
approval.

Under $5,000

  

To be expensed per corporate Fixed Asset Policy

Over $5,000 Under $25,000

  

Yes

        

Over $25,000 and under $250,000

      Yes      

Over $250,000

      Yes    Yes    NOTE: Any non-tenant reimbursement (Landlord work) overages
less than $5K can have a PM approval. Also, any non-tenant reimbursement
(Landlord work) overages over $5K to $250K requires additional MD approval.

Tenant Receivable Write offs

Under $5,000

  

Yes

        

Over $5,000 and less than $10,000

      Yes      

Over $10,000 and less than $20,000

      Yes (with additional approval by VP – Controller Property Accounting)   
  

Over $20,000

         Yes   

Vendor Invoices

Under $75,000

  

Yes

        

Over $75,000

      Yes      

Note: Corporate invoices require officer approval in lieu of PM or MD approval

Contracts

           

Service Contracts:

  

Competitive bids required every 2 years

Under $100,000 annual commitment, with 30 day no penalty term option   

Yes

         Over $100,000 annual commitment, or term fees less than $250,000, or no
termination policy   

Yes

  

Yes

  

Review

   Over 2 year or stated termination fees are over $250,000 but less than
$500,000       Yes    Yes    Term option requires over $500,000 in term fees   
   Yes    Yes    Yes Operating and Capital Equipment leases (i.e. office,
fitness, computer equipment)    Requires same approval and contract signatures
as service contracts, with additional approval of VP Finance and Capital Markets
Equipment Leases for Retrofitting building systems:    VP Finance & Capital
Markets and CFO approval required

Under $500,000 in principal consolidated basis

           

Over $500,000 in principal consolidated basis