Exhibit 10.16

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

KLX Energy Services Holdings, Inc.

 

and

 

Thomas P. McCaffrey

 

Dated as of September 14, 2018

 

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REGISTRATION RIGHTS AGREEMENT, dated as of September 14, 2018 (this
“Agreement”), by and among (i) KLX Energy Services Holdings, Inc., a Delaware
corporation (the “Company”), and (ii) Thomas P. McCaffrey (together with his
permitted transferees, collectively, the “Shareholder”).

 

.

 

RECITALS

 

WHEREAS, KLX Inc. (“KLX”), directly and through its various subsidiaries, is
engaged in the business of, among other things, the provision of completion,
intervention and production services to the major onshore oil and gas producing
regions of the United States (the “ESG Business”);

 

WHEREAS, the Board of Directors of KLX (the “Board”) has determined that (i) the
separation of the ESG Business from KLX and (ii) operating the ESG Business as
an independent, publicly-traded company as part of a taxable spin-off (the
“Spin-Off”) present the best available alternative for maximizing stockholder
value with respect to the ESG Business;

 

WHEREAS, in connection with the Spin-Off, KLX has incorporated the Company,
which from its formation and on the date hereof, is a direct wholly-owned
subsidiary of the Company;

 

WHEREAS, in connection with and in order to effect the Spin-Off, KLX entered
into the Distribution Agreement (the “Distribution Agreement”), dated July 13,
2018, by and among KLX, the Company and KLX Energy Services LLC, a Delaware
limited liability company and wholly-owned subsidiary of KLX;

 

WHEREAS, KLX owns all of the issued and outstanding shares of common stock, par
value $0.01 per share, of the Company (the “KLX Energy Services Common Stock”);

 

WHEREAS, pursuant to the terms and subject to the conditions of the Distribution
Agreement, KLX desires to contribute (the “Contribution”) 100% of the membership
interests in KLX Energy Services LLC to the Company in exchange for the
assumption by the Company of the liabilities related to the ESG Business;

 

WHEREAS, following the Contribution and pursuant to the terms and subject to the
conditions of the Distribution Agreement, KLX desires to distribute, by way of a
dividend, to the holders of record of the issued and outstanding common stock of
KLX (the “KLX Common Stock”) as of the close of business of the Nasdaq Global
Select Market on September 3, 2018 (the “Record Date”, and each such
stockholder, a “Record Holder”), on a pro rata basis (in each case without
consideration being paid by such stockholders), all of the outstanding shares of
KLX Energy Services Common Stock, par value $0.01 per share or, more
specifically, 0.4 shares of KLX Energy Services Common Stock for every 1 share
of KLX Common Stock, par value $0.01 per share, of the Corporation held by such
Record Holder on the Record Date (the “Distribution”);

 

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WHEREAS, concurrently with the consummation of the transactions contemplated
above, the Company and the Shareholder desire to provide for certain
registration rights in respect of certain Shares (as defined below) that are
held or will be held by the Shareholder.

 

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

 

Section 1.                                           Certain Definitions.  As
used herein, the following terms shall have the following meanings:

 

“Additional Piggyback Rights” has the meaning ascribed to such term in
Section 2.2(b).

 

“Additional Piggyback Shares” has the meaning ascribed to such term in
Section 2.3(a)(iii).

 

“Affiliate” as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.  For the purposes of this definition “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities (the
ownership of more than 50% of the voting securities of an entity shall for
purposes of this definition be deemed to be “control”), by contract or
otherwise.  For the avoidance of doubt, neither the Company nor any Person
controlled by the Company shall be deemed to be an Affiliate of any Holder.

 

“Agreement” has the meaning ascribed to such term in the Preamble.

 

“Assumption Agreement” means an agreement in the form set forth in Exhibit A
hereto whereby a permitted transferee of Registrable Securities who acquires
such Registrable Securities becomes a party to, and agrees to be bound, to the
same extent as its transferor, by the terms of this Agreement.

 

“automatic shelf registration statement” has the meaning ascribed to such term
in Section 2.4.

 

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

 

“Block Trade Notice” has the meaning ascribed to such term in Section 2.1(e).

 

“Business Day” means a day, other than Saturday, Sunday, federal or New York
State holiday or other day on which commercial banks in the City of New York are
authorized or required by law or other governmental action to close.

 

“Claims” has the meaning ascribed to such term in Section 2.9(a).

 

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“Certificate of Incorporation” means the certificate of incorporation or similar
constitutive document of the Company filed with the Secretary of State of the
State of Delaware, as it may be amended from time to time.

 

“Company” has the meaning ascribed to such term in the Preamble and, for
purposes of this Agreement, such term shall include any Subsidiary or parent
company of the Company and any successor to the Company or any Subsidiary or
parent company of the Company who becomes the issuer of Shares.

 

“Company Block Trade Notice” has the meaning ascribed to such term in
Section 2.1(e).

 

“Company Shelf Underwriting” has the meaning ascribed to such term in
Section 2.2(a).

 

“Company Shelf Notice” has the meaning ascribed to such term in Section 2.2(a).

 

“Confidential Information” has the meaning ascribed to such term in
Section 4.14.

 

“Demand Exercise Notice” has the meaning ascribed to such term in
Section 2.1(a)(i).

 

“Demand Party” has the meaning ascribed to such term in Section 2.1(a)(i).

 

“Demand Registration” has the meaning ascribed to such term in
Section 2.1(a)(i).

 

“Demand Registration Request” has the meaning ascribed to such term in
Section 2.1(a)(i).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC issued under such Act, as they may from time to
time be in effect.

 

“Expenses” means any and all fees and expenses incident to the Company’s
performance of or compliance with Section 2 of this Agreement, including,
without limitation:  (i) SEC, stock exchange or FINRA registration and filing
fees and all listing fees and fees with respect to the inclusion of securities
on the New York Stock Exchange, Nasdaq or on any other U.S. or non-U.S.
securities market on which the Shares are or may be listed or quoted, (ii) fees
and expenses of compliance with state securities or “blue sky” laws of any state
or jurisdiction of the United States or compliance with the securities laws of
foreign jurisdictions and in connection with the preparation of a “blue sky”
survey, including, without limitation, reasonable fees and expenses of outside
“blue sky” counsel and securities counsel in foreign jurisdictions (but no more
than one such counsel in any one jurisdiction), (iii) word processing, printing
and copying expenses (including, without limitation, expenses of printing
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing any prospectus or free writing
prospectus), (iv) messenger and delivery expenses, (v) expenses incurred in
connection with any road show, (vi) fees and disbursements of counsel for the
Company, (vii) with respect to each registration or underwritten offering, the
reasonable and documented fees and disbursements of counsel for the Shareholder
(the “Selling Shareholder Counsel”), together in each case with any local
counsel, (viii) fees and disbursements of all independent public

 

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accountants (including the expenses of any audit/review and/or “cold comfort”
letter and updates thereof) and fees and expenses of other Persons, (ix) fees
and expenses payable to a Qualified Independent Underwriter, (x) fees and
expenses of any transfer agent or custodian, (xi) any other fees and
disbursements of underwriters, if any, customarily paid by issuers of
securities, and reasonable and documented fees and expenses of counsel for the
underwriters in connection with any filing with or review by FINRA and
(xii) expenses for securities law liability insurance and, if any, rating agency
fees.

 

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

 

“Holder” or “Holders” means (1) any Person who is a party to this Agreement or
(2) any transferee of Registrable Securities to whom any Person who is a party
to this Agreement shall assign or transfer any rights hereunder in accordance
with this Agreement, provided that such transferee has agreed in writing to be
bound by the terms of this Agreement in respect of such Registrable Securities
pursuant to an Assumption Agreement.

 

“Initiating Holders” has the meaning ascribed to such term in Section 2.1(a)(i).

 

“Majority Participating Holders” means Participating Holders holding more than
50% of the Registrable Securities proposed to be included in any offering of
Registrable Securities by such Participating Holders pursuant to Section 2.1 or
Section 2.2.

 

“Manager” has the meaning ascribed to such term in Section 2.1(c).

 

“Merger Agreement” has the meaning ascribed to such term in the Recitals.

 

“Minimum Threshold” means $10 million.

 

“Opt-Out Request” has the meaning ascribed to such term in Section 4.16.

 

“Participating Holders” means all Holders of Registrable Securities which are
proposed to be included in any offering of Registrable Securities pursuant to
Section 2.1 or Section 2.2.

 

“Partner Distribution” has the meaning ascribed to such term in
Section 2.1(a)(iii).

 

“Person” means any individual, corporation, company, limited liability company,
partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of any
kind or nature whatsoever.

 

“Piggyback Notice” has the meaning ascribed to such term in Section 2.2(a).

 

“Postponement Period” has the meaning ascribed to such term in Section 2.1(b).

 

“Qualified Independent Underwriter” means a “qualified independent underwriter”
within the meaning of FINRA Rule 5121.

 

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“Registrable Securities” means (a) any Shares held by the Holders at any time
(including those held as a result of, or issuable upon, the conversion or
exercise of Share Equivalents), whether now owned or acquired by the Holders at
a later time, (b) any Shares issued or issuable, directly or indirectly, in
exchange for or with respect to the Shares referenced in clause (a) above by way
of stock dividend, stock split or combination of shares or in connection with a
reclassification, recapitalization, merger, share exchange, consolidation or
other reorganization and (c) any securities issued in replacement of or exchange
for any securities described in clause (a) or (b) above.  As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (A) a registration statement covering the sale of such Registrable
Securities has been declared effective under the Securities Act and such
Registrable Securities have been disposed of in accordance with such effective
registration statement, or (B) such securities shall have been sold under
Rule 144 (or any successor provision thereto).

 

“Rule 144” and “Rule 144A” each have the meaning ascribed to such term in
Section 4.2.

 

“SEC” means the U.S. Securities and Exchange Commission or such other federal
agency which at such time administers the Securities Act.

 

“Section 2.3(a) Sale Number” has the meaning ascribed to such term in
Section 2.3(a).

 

“Section 2.3(a)(x) Sale Number” has the meaning ascribed to such term in
Section 2.3(a).

 

“Section 2.3 Block Trade Sale Number” has the meaning ascribed to such term in
Section 2.3(a).

 

“Section 2.3(b)(x) Sale Number” has the meaning ascribed to such term in
Section 2.3(b).

 

“Section 2.3(b) Block Trade Sale Number” has the meaning ascribed to such term
in Section 2.3(b).

 

“Section 2.3(c) Sale Number” has the meaning ascribed to such term in
Section 2.3(c).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC issued under such Act, as they may from time to time be
in effect.

 

“Shares” means the shares of common stock, par value $0.01 per share, of the
Company, and any and all securities of any kind whatsoever which may be issued
after the date hereof in respect of, or in exchange for, such shares of common
stock pursuant to a merger, consolidation, stock split, stock dividend or
recapitalization of the Company or otherwise.

 

“Share Equivalents” means, with respect to the Company, all options, warrants
and other securities convertible into, or exchangeable or exercisable for (at
any time or upon the occurrence of any event or contingency and without regard
to any vesting or other conditions to which such securities may be subject), or
depositary receipts or depositary shares representing or evidencing, Shares or
other equity securities of the Company (including, without limitation, any note
or debt security convertible into or exchangeable for Shares or other equity
securities of the Company).

 

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“Shelf Registrable Securities” has the meaning ascribed to such term in
Section 2.1(e).

 

“Shelf Registration Statement” has the meaning ascribed to such term in
Section 2.1(e).

 

“Shelf Underwriting” has the meaning ascribed to such term in Section 2.1(e).

 

“Shelf Underwriting Notice” has the meaning ascribed to such term in
Section 2.1(e).

 

“Shelf Underwriting Request” has the meaning ascribed to such term in
Section 2.1(e).

 

“Subsidiary” means any direct or indirect subsidiary of the Company on the date
hereof and any direct or indirect subsidiary of the Company organized or
acquired after the date hereof.

 

“Valid Business Reason” has the meaning ascribed to such term in Section 2.1(b).

 

“WKSI” has the meaning ascribed to such term in Section 2.1(a)(i).

 

Section 2.                                           Registration Rights.

 

2.1.                            Demand Registrations.

 

(a)                                 (i)                                    
Subject to Sections 2.1(b) and 2.3, at any time and from time to time following
the date hereof, the Shareholder (a “Demand Party”) shall have the right to
require the Company to file one or more registration statements under the
Securities Act covering all or any part of its and its Affiliates’ Registrable
Securities by delivering a written request therefor to the Company specifying
the number of Registrable Securities to be included in such registration and the
intended method of distribution thereof.  Any such request by any Demand Party
pursuant to this Section 2.1(a)(i) is referred to herein as a “Demand
Registration Request” and the registration so requested is referred to herein as
a “Demand Registration” (with respect to any Demand Registration, the
Holder(s) making such demand for registration being referred to as the
“Initiating Holders”).  Any Demand Registration Request may request that the
Company register Registrable Securities on an appropriate form, including a
shelf registration statement, and, if the Company is a well-known seasoned
issuer (as defined in Rule 405 under the Securities Act, a “WKSI”), an automatic
shelf registration statement.  The Company shall give written notice (the
“Demand Exercise Notice”) of such Demand Registration Request to each of the
Holders of record of Registrable Securities, if any other than the Initiating
Holding, at least five (5) Business Days prior to the filing of any registration
statement under the Securities Act.

 

(ii)                                  The Company, subject to Sections 2.3 and
2.6, shall include in a Demand Registration (x) the Registrable Securities of
the Initiating Holders and (y) the Registrable Securities of any other Holder of
Registrable Securities which shall have made a written request to the Company
for inclusion in such registration pursuant to Section 2.2 (which request shall
specify the maximum number of Registrable Securities intended to be disposed of
by such Participating Holder) within five (5) days following the receipt of any
such Demand Exercise Notice.

 

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(iii)                               The Company shall, as expeditiously as
reasonably possible, but subject to Section 2.1(b), use its commercially
reasonable efforts to (x) file with the SEC (no later than forty-five (45) days
from the Company’s receipt of the applicable Demand Registration Request) and
cause to be declared effective such registration under the Securities Act as
soon as reasonably practicable thereafter (including, without limitation, by
means of a shelf registration pursuant to Rule 415 under the Securities Act if
so requested and if the Company is then eligible to use such a registration)
with respect to the Registrable Securities which the Company has been so
requested to register, for distribution in accordance with the intended method
of distribution and (y) if requested by the Initiating Holders, obtain
acceleration of the effective date of the registration statement relating to
such registration.

 

(b)                                 Notwithstanding anything to the contrary in
Section 2.1(a), the Demand Registration rights granted in Section 2.1(a) are
subject to the following limitations:  (i) the Company shall not be required to
effect more than (x) five (5) Demand Registrations on Form S-1 or any similar
long-form registration at the request of the Shareholder; provided, however,
that the Shareholder shall be entitled to request an unlimited number of Demand
Registrations on Form S-3 or any similar short-form registration (including
pursuant to Rule 415 under the Securities Act) or take-downs or other offerings
off an existing Form S-3; (ii) each registration or offering in respect of a
Demand Registration Request made by any Holder must include, in the aggregate,
Shares having an aggregate market value of at least the lesser of (a) the
Minimum Threshold (based on the Shares included in such registration by all
Holders participating in such registration) and (b) the Initiating Holder’s
remaining  Shares; and (iii) if the Board, in its good faith judgment,
determines that any registration of Registrable Securities should not be made or
continued because it would materially and adversely interfere with any existing
or potential material financing, acquisition, corporate reorganization, merger,
share exchange or other transaction or event involving the Company or any of its
subsidiaries or because the Company does not yet have appropriate financial
statements of any acquired or to be acquired entities available for filing (in
each case, a “Valid Business Reason”), then (x) the Company may postpone filing
a registration statement relating to a Demand Registration Request until five
(5) Business Days after such Valid Business Reason no longer exists, but in no
event for more than forty-five (45) days after the date the Board determines a
Valid Business Reason exists and (y) in case a registration statement has been
filed relating to a Demand Registration Request, if the Valid Business Reason
has not resulted in whole or part from actions taken or omitted to be taken by
the Company, the Company may, to the extent determined in the good faith
judgment of the Board to be reasonably necessary to avoid interference with any
of the transactions described above, suspend use of or, if required by the SEC,
cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration statement
until five (5) Business Days after such Valid Business Reason no longer exists,
but in no event for more than forty-five (45) days after the date the Board
determines a Valid Business Reason exists (such period of postponement or
withdrawal under this clause (v), the “Postponement Period”).  The Company shall
give written notice to the Initiating Holders and any other Holders that have
requested registration pursuant to Section 2.1 or Section 2.2 of its
determination to postpone or suspend use of or withdraw a registration statement
and of the fact that the Valid Business Reason for such postponement or
suspension or withdrawal no longer exists, in each case, promptly after the
occurrence thereof; provided, however, the

 

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Company shall not be permitted to postpone or suspend use of or withdraw a
registration statement after the expiration of any Postponement Period until
twelve (12) months after the expiration of such Postponement Period.

 

If the Company shall give any notice of postponement or suspension or withdrawal
of any registration statement pursuant to clause (iii) above, the Company shall
not, during the Postponement Period, register any Shares, other than pursuant to
a registration statement on Form S-4 or S-8 (or an equivalent registration form
then in effect).  Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company that the Company has determined to
suspend use of, withdraw, terminate or postpone amending or supplementing any
registration statement pursuant to clause (iii) above, such Holder will
discontinue its disposition of Registrable Securities pursuant to such
registration statement.  If the Company shall have suspended use of, withdrawn
or terminated a registration statement filed under Section 2.1(a)(i) (whether
pursuant to clause (iii) above or as a result of any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court), the Company shall not be considered to have effected a Demand
Registration for the purposes of this Agreement until the Company shall have
permitted use of such suspended registration statement or filed a new
registration statement covering the Registrable Securities covered by the
withdrawn or terminated registration statement and such registration statement
shall have been declared effective and shall not have been withdrawn.  If the
Company shall give any notice of suspension, withdrawal or postponement of a
registration statement, the Company shall, not later than five (5) Business Days
after the Valid Business Reason that caused such suspension, withdrawal or
postponement no longer exists (but in no event later than forty-five (45) days
after the date of the suspension, postponement or withdrawal), as applicable,
permit use of such suspended registration statement or use its reasonable best
efforts to effect the registration under the Securities Act of the Registrable
Securities covered by the withdrawn or postponed registration statement in
accordance with this Section 2.1 (unless the Initiating Holders shall have
withdrawn such request, in which case the Company shall not be considered to
have effected a Demand Registration for the purposes of this Agreement and such
request shall not count as a Demand Registration Request under this Agreement),
and following such permission or such effectiveness such registration shall no
longer be deemed to be suspended, withdrawn or postponed pursuant to clause
(v) of Section 2.1(iii) above.

 

(c)                                  In connection with any Demand Registration
(including any Shelf Underwriting or Underwritten Block Trade (as defined
below)), the Holders of a majority of the Registrable Securities included in
such Demand Registration shall have the right to designate the lead managing
underwriter (any lead managing underwriter for the purposes of this Agreement,
the “Manager”) in connection with any underwritten offering pursuant to such
registration and each other managing underwriter for any such underwritten
offering and counsel for the Participating Shareholders; provided that in each
case, each such underwriter is reasonably satisfactory to the Company, which
approval shall not be unreasonably withheld or delayed.

 

(d)                                 No Demand Registration shall be deemed to
have occurred for purposes of Section 2.1(a) (i) if the registration statement
relating thereto (x) does not become effective, (y) is not maintained effective
for a period of at least one hundred eighty (180) days after the

 

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effective date thereof or such shorter period during which all Registrable
Securities included in such registration statement have actually been sold
(provided, however, that such period shall be extended for a period of time
equal to the period the Holder of Registrable Securities refrains from selling
any securities included in such registration statement at the request of the
Company or an underwriter of the Company), or (z) is subject to a stop order,
injunction, or similar order or requirement of the SEC during such period,
(ii) if any of the Registrable Securities requested by such Initiating Holder to
be included in such Demand Registration are not so included pursuant to
Section 2.3 (even where some or most of such Holder’s Registrable Securities are
included in such Demand Registration), (iii) if the method of disposition is a
firm commitment underwritten public offering and any of the applicable
Registrable Securities identified in the preliminary prospectus or preliminary
prospectus supplement, as applicable, for such offering as being sold by the
Participating Holders have not been sold pursuant thereto or (iv) if the
conditions to closing specified in any underwriting agreement, purchase
agreement or similar agreement entered into in connection with the registration
relating to such request are not satisfied (other than as a result of a default
or breach thereunder by such Initiating Holder(s) or its Affiliates) or are
otherwise not waived by such Initiating Holder(s).

 

(e)                                  In the event that the Company files a shelf
registration statement under Rule 415 of the Securities Act pursuant to a Demand
Registration Request and such registration becomes effective (such registration
statement, a “Shelf Registration Statement”), the Initiating Holders with
respect to such Demand Registration Request and the other Demand Parties with
Registrable Securities registered on such Shelf Registration Statement (or, in
the case of an automatic shelf registration statement, the Demand Parties) shall
have the right at any time or from time to time to elect to sell pursuant to an
underwritten offering Registrable Securities available for sale pursuant to such
registration statement.  For purposes hereof, any Registrable Securities issued
to the Shareholder on Form S-8 and registered with the SEC for reoffer or resale
pursuant to a reoffer/resale prospectus filed by the Company in connection with
the Form S-8 shall be deemed registered on a Shelf Registrable Statement and to
benefit from the provisions of this Section 2.1(e) and all other provisions of
this agreement including, without limitation, Sections 2.4, 2.5. and 2.9 hereof.
Any such Initiating Holder or Demand Party shall make such election by
delivering to the Company a written request (a “Shelf Underwriting Request”) for
such underwritten offering specifying the number of Registrable Securities that
such Initiating Holder or Demand Party, as applicable, desires to sell pursuant
to such underwritten offering (the “Shelf Underwriting”).  As promptly as
practicable, but no later than two (2) Business Days after receipt of a Shelf
Underwriting Request, the Company shall give written notice (the “Shelf
Underwriting Notice”) of such Shelf Underwriting Request to the Holders of
record (if any) of other Registrable Securities registered on such Shelf
Registration Statement (or, in the case of an automatic shelf registration
statement, the Holders of record (if any) of Registrable Securities) (“Shelf
Registrable Securities”).  The Company, subject to Sections 2.3 and 2.6, shall
include in such Shelf Underwriting (x) the Registrable Securities of the
Initiating Holders and (y) the Shelf Registrable Securities of any other Holder
of Shelf Registrable Securities (if any) which shall have made a written request
to the Company for inclusion in such Shelf Underwriting (which request shall
specify the maximum number of Shelf Registrable Securities intended to be
disposed of by such Holder) within five (5) days after the receipt of the Shelf
Underwriting Notice.  The Company shall, as expeditiously as possible (and

 

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in any event within twenty (20) days after the receipt of a Shelf Underwriting
Request), but subject to Section 2.1(b), use its commercially reasonable efforts
to facilitate such Shelf Underwriting.  Notwithstanding the foregoing, if a
Demand Party wishes to engage in an underwritten block trade or similar
transaction or other transaction with a 2-day or less marketing period
(collectively, “Underwritten Block Trade”) pursuant to a Shelf Registration
Statement (either through filing an automatic shelf registration statement or
through a take-down from an already effective Shelf Registration Statement),
then notwithstanding the foregoing time periods, such Demand Party only needs to
notify the Company of the Underwritten Block Trade two (2) Business Days prior
to the day such Underwritten Block Trade is to commence, and the Company shall
notify the other Holders (the “Company Block Trade Notice”) on the same day, and
such other Holders (if any) must elect whether or not to participate by the next
Business Day (i.e., one (1) Business Day prior to the date such offering is to
commence).  The Company shall as expeditiously as possible, but subject to
Section 2.1(b), use its commercially reasonable efforts to facilitate such
Underwritten Block Trade (which may close as early as two (2) Business Days
after the date it commences); provided, however, that the Demand Party
requesting such Underwritten Block Trade shall use commercially reasonable
efforts to work with the Company and the underwriters prior to making such
request in order to facilitate preparation of the registration statement
(including filing an automatic shelf registration statement), prospectus and
other offering documentation related to the Underwritten Block Trade.  In the
event a Demand Party requests such an Underwritten Block Trade, notwithstanding
anything to the contrary in this Section 2.1 or in Section 2.2, any holder of
Shares who is not a Holder shall have no right to notice of or to participate in
such Underwritten Block Trade at any time.  The Company shall, at the request of
any Initiating Holder, file any prospectus supplement or, if the applicable
Shelf Registration Statement is an automatic shelf registration statement, any
post-effective amendments and otherwise take any action necessary to include
therein all disclosure and language deemed necessary or advisable by the
Initiating Holders or any other Holder of Shelf Registrable Securities to effect
such Shelf Underwriting.  Once a Shelf Registration Statement has been declared
effective, the Demand Parties may request, and the Company shall be required to
facilitate, subject to Section 2.1(b), an unlimited number of Shelf
Underwritings with respect to such Shelf Registration Statement. Notwithstanding
anything to the contrary in this Section 2.1(e), each Shelf Underwriting must
include, in the aggregate, Shares having an aggregate market value of at least
the lesser of (a) the Minimum Threshold (based on the Shares included in such
Shelf Underwriting by all Holders participating in such Shelf Underwriting) and
(b) the Initiating Holder’s remaining Shares.

 

(f)                                   Any Initiating Holder may revoke a Demand
Registration Request delivered by such Initiating Holder at any time prior to
the effectiveness of such Demand Registration and such Demand Registration shall
have no further force or effect and such request shall not count as a Demand
Registration Request under this Agreement.

 

(g)                                  In the event that any Holder fails to take
all steps necessary to commence an Underwritten Block Trade within two
(2) Business Days of the date on which a Company Block Trade Notice is sent to
such Holder, then, notwithstanding anything to the contrary in Sections 2.1 and
2.2, the Demand Party requesting the Underwritten Block Trade shall have the
right to exclude such Holder from participating in such Underwritten Block
Trade.

 

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2.2.                            Piggyback Registrations.

 

(a)                                 If the Company proposes or is required
(pursuant to Section 2.1 or otherwise) to register any of its equity securities
for its own account or for the account of any other shareholder under the
Securities Act (other than pursuant to registrations on Form S-4 or Form S-8 or
any similar successor forms thereto), the Company shall give written notice (the
“Piggyback Notice”) of its intention to do so to each of the Holders of record
of Registrable Securities at least five (5) Business Days prior to the filing of
any registration statement under the Securities Act.  Piggyback rights included
in this Section 2.2(a) include the right to piggyback on underwritten offerings
or underwritten Block Trades by other shareholders of the Company whose shares
may be registered on a reoffer/resale prospectus filed pursuant to a Form S-8.
Upon the written request of any such Holder, made within five (5) days following
the receipt of any such Piggyback Notice (which request shall specify the
maximum number of Registrable Securities intended to be disposed of by such
Holder and the intended method of distribution thereof), the Company shall,
subject to Sections 2.2(c), 2.2(f), 2.3 and 2.6 hereof, use its reasonable best
efforts to cause all such Registrable Securities, the Holders of which have so
requested the registration thereof, to be registered under the Securities Act
with the securities which the Company at the time proposes to register to permit
the sale or other disposition by the Holders (in accordance with the intended
method of distribution thereof) of the Registrable Securities to be so
registered, including, if necessary, by filing with the SEC a post-effective
amendment or a supplement to the registration statement filed by the Company or
the prospectus related thereto.  There is no limitation on the number of such
piggyback registrations pursuant to the preceding sentence which the Company is
obligated to effect.  No registration of Registrable Securities effected under
this Section 2.2(a) shall relieve the Company of its obligations to effect
Demand Registrations under Section 2.1 hereof.  If the Company proposes or is
required (pursuant to Section 2.1 or otherwise) to sell pursuant to an
underwritten offering Registrable Securities available for sale pursuant to a
Shelf Registration Statement (a “Company Shelf Underwriting”), the Company
shall, as promptly as practicable, give written notice of such Company Shelf
Underwriting (a “Company Shelf Notice”) to each Holder of Shelf Registrable
Securities. In addition to any equity securities that the Company proposes to
sell for its own account in such Company Shelf Underwriting, the Company shall,
subject to Sections 2.3 and 2.6, include in such Company Shelf Underwriting the
Registrable Securities of any Holder which shall have made a written request to
the Company for inclusion in such Company Shelf Underwriting (which request
shall specify the maximum number of Registrable Securities intended to be
disposed of by such Holder) within five (5) Business Days after the receipt of
the Company Shelf Notice.  Notwithstanding the foregoing, (x) if the Company
wishes to engage in an Underwritten Block Trade pursuant to a Shelf Registration
Statement (a “Company Underwritten Block Trade”), then notwithstanding the
foregoing time periods, the Company only needs to notify the Shareholder of the
Company Underwritten Block Trade two (2) Business Days prior to the day such
Company Underwritten Block Trade is to commence and the Company shall notify the
Shareholder and such Shareholder must elect whether or not to participate by the
next Business Day (i.e., one (1) Business Day prior to the date such
Underwritten Block Trade is to commence), and the Company shall as expeditiously
as possible use its commercially reasonable efforts to facilitate such Company
Underwritten Block Trade (which may close as early as two (2) Business Days
after the date it commences), and (y) if a

 

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Demand Party wishes to engage in an Underwritten Block Trade pursuant to a Shelf
Registration Statement, then the provisions set forth in Section 2.1(e) shall
apply to such Underwritten Block Trade. In the event the Company or a Demand
Party requests a Company Underwritten Block Trade or an Underwritten Block
Trade, as applicable, notwithstanding anything to the contrary in Section 2.1 or
in this Section 2.2, any holder of Shares who does not constitute a Holder shall
have no right to notice of or to participate in such Company Underwritten Block
Trade or Underwritten Block Trade, as applicable.

 

(b)                                 The Company, subject to Sections 2.3 and 2.6
and the final sentence of Section 2.2(a), may elect to include in any
registration statement and offering pursuant to demand registration rights by
any Person or otherwise, (i) authorized but unissued Shares or Shares held by
the Company as treasury shares and (ii) any other Shares which are requested to
be included in such registration pursuant to the exercise of piggyback
registration rights granted by the Company on or after the date hereof and which
are not inconsistent with the rights granted in, or otherwise conflict with the
terms of, this Agreement (“Additional Piggyback Rights”); provided, however,
that, with respect to any underwritten offering, including a block trade, such
inclusion shall be permitted only to the extent that it is pursuant to, and
subject to, the terms of the underwriting agreement or arrangements, if any,
entered into by the Initiating Holders or the Majority Participating Holders in
such underwritten offering.

 

(c)                                  If, at any time after giving a Piggyback
Notice and prior to the effective date of the registration statement filed in
connection with such registration, (i) any Initiating Holder determines for any
reason not to proceed with the proposed registration, the Company may at its
election give written notice of such determination to each Holder of record of
Registrable Securities and thereupon will be relieved of its obligation to
register any Registrable Securities in connection with such registration and
(ii) other than in connection with a Demand Registration, the Company shall
determine for any reason not to register or to delay registration of such equity
securities, the Company may, at its election, give written notice of such
determination to all  Holders of record of Registrable Securities and (x) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, without prejudice, however, to the rights of Holders under
Section 2.1, and (y) in the case of a determination to delay such registration
of its equity securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other equity securities.

 

(d)                                 Any Holder shall have the right to withdraw
its request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 2.2 by giving written notice to the Company
of its request to withdraw; provided, however, that such request must be made in
writing prior to the earlier of the execution of the underwriting agreement or
the execution of the custody agreement with respect to such registration or as
otherwise required by the underwriters.

 

(e)                                  Notwithstanding anything contained herein
to the contrary, the Company shall, at the request of any Holder; file any
prospectus supplement or post-effective amendments, or include in the initial
registration statement any disclosure or language, or include in any

 

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prospectus supplement or post-effective amendment any disclosure or language,
and otherwise take any action, deemed necessary or advisable by such Holder.

 

2.3.                            Allocation of Securities Included in
Registration Statement.

 

(a)                                 If any requested registration made pursuant
to Section 2.1 (including a Shelf Underwriting) involves (x) an underwritten
offering and the Manager of such offering shall advise the Company and any
Holder of Registrable Securities included in such underwritten offering that, in
its view, the number of securities requested to be included in such underwritten
offering by the Holders of Registrable Securities, the Company or any other
Persons exercising Additional Piggyback Rights exceeds the largest number (the
“Section 2.3(a)(x) Sale Number”) that can be sold in an orderly manner in such
underwritten offering within a price range acceptable to the Initiating Holders
and the Majority Participating Holders, or (y) an Underwritten Block Trade and
the number of securities requested to be included in such Underwritten Block
Trade by the Holders of Registrable Securities or any other Persons exceeds the
number that are sold in any such Underwritten Block Trade (the
“Section 2.3(a) Block Trade Sale Number” and, together with the
Section 2.3(a)(x) Sale Number, the “Section 2.3(a) Sale Number”), the Company
shall use its reasonable best efforts to include in such underwritten offering:

 

(i)                                     first, all Registrable Securities
requested to be included in such underwritten offering by the Holders thereof
(including pursuant to the exercise of piggyback rights pursuant to
Section 2.2(a)); provided, however, that if the number of such Registrable
Securities exceeds the Section 2.3(a) Sale Number, the number of such
Registrable Securities (not to exceed the Section 2.3(a) Sale Number) to be
included in such underwritten offering shall be allocated on a pro rata basis
among all Holders requesting that Registrable Securities be included in such
underwritten offering (including pursuant to the exercise of piggyback rights
pursuant to Section 2.2(a)), based on the number of Registrable Securities then
owned by each such Holder requesting inclusion in relation to the aggregate
number of Registrable Securities owned by all Holders requesting inclusion;

 

(ii)                                  second, to the extent that the number of
Registrable Securities to be included pursuant to clause (i) of this
Section 2.3(a) is less than the Section 2.3(a) Sale Number, any securities that
the Company proposes to register or sell, up to the Section 2.3(a) Sale Number;
and

 

(iii)                               third, to the extent that the number of
Registrable Securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(a) is less than the Section 2.3(a) Sale Number, the remaining
securities to be included in such underwritten offering shall be allocated on a
pro rata basis among all Persons requesting that securities be included in such
underwritten offering pursuant to the exercise of Additional Piggyback Rights
(“Additional Piggyback Shares”), based on the number of Additional Piggyback
Shares then owned by each Person requesting inclusion in relation to the
aggregate number of Additional Piggyback Shares owned by all Persons requesting
inclusion, up to the Section 2.3(a) Sale Number.

 

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(b)                                 If any registration or offering made
pursuant to Section 2.2 involves (x) an underwritten primary offering on behalf
of the Company after the date hereof and the Manager shall advise the Company
that, in its view, the number of securities requested to be included in such
underwritten offering by the Holders of Registrable Securities, the Company or
any other Persons exercising Additional Piggyback Rights exceeds the largest
number (the “Section 2.3(b)(x) Sale Number”) that can be sold in an orderly
manner in such underwritten offering within a price range acceptable to the
Company or (y) a Company Underwritten Block Trade and the number of securities
requested to be included in such Company Underwritten Block Trade by the
Company, the Holders of Registrable Securities or any other Persons exceeds the
number that are sold in any such Company Underwritten Block Trade (the
“Section 2.3(b) Block Trade Sale Number” and, together with the
Section 2.3(b)(x) Sale Number, the “Section 2.3(b) Sale Number”), the Company
shall use its reasonable best efforts to include in such underwritten offering:

 

(i)                                     first, all equity securities that the
Company proposes to register or sell for its own account;

 

(ii)                                  second, to the extent that the number of
Registrable Securities to be included pursuant to clause (i) of this
Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining
Registrable Securities to be included in such underwritten offering shall be
allocated on a pro rata basis among all Holders requesting that Registrable
Securities be included in such underwritten offering pursuant to the exercise of
piggyback rights pursuant to Section 2.2(a), based on the number of Registrable
Securities then owned by each such Holder requesting inclusion in relation to
the aggregate number of Registrable Securities owned by all Holders requesting
inclusion, up to the Section 2.3(b) Sale Number; and

 

(iii)                               third, to the extent that the number of
Registrable Securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(b) is less than the Section 2.3(b) Sale Number, the remaining
securities to be included in such underwritten offering shall be allocated on a
pro rata basis among all Persons requesting that securities be included in such
underwritten offering pursuant to the exercise of Additional Piggyback Rights,
based on the number of Additional Piggyback Shares then owned by each Person
requesting inclusion in relation to the aggregate number of Additional Piggyback
Shares owned by all Persons requesting inclusion, up to the Section 2.3(b) Sale
Number.

 

(c)                                  If any registration pursuant to Section 2.2
involves an underwritten offering that was initially requested by any
Person(s) (other than a Holder) to whom the Company has granted registration
rights which are not inconsistent with the rights granted in, and do not
otherwise conflict with the terms of, this Agreement and the Manager shall
advise the Company that, in its view, the number of securities requested to be
included in such underwritten offering exceeds the number (the
“Section 2.3(c) Sale Number”) that can be sold in an orderly manner in such
underwritten offering within a price range acceptable to the Company, the
Company shall include in such underwritten offering:

 

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(i)                                     first, the shares requested to be
included in such underwritten offering shall be allocated on a pro rata basis
among such Person(s) requesting the registration and all Holders requesting that
Registrable Securities be included in such underwritten offering pursuant to the
exercise of piggyback rights pursuant to Section 2.2(a), based on the aggregate
number of securities or Registrable Securities, as applicable, then owned by
each of the foregoing requesting inclusion in relation to the aggregate number
of securities or Registrable Securities, as applicable, owned by all such
Holders and Persons requesting inclusion, up to the Section 2.3(c) Sale Number;

 

(ii)                                  second, to the extent that the number of
Registrable Securities and securities to be included pursuant to clause (i) of
this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the remaining
securities to be included in such underwritten offering shall be allocated on a
pro rata basis among all Persons requesting that securities be included in such
underwritten offering pursuant to the exercise of Additional Piggyback Rights,
based on the number of Additional Piggyback Shares then owned by each Person
requesting inclusion in relation to the aggregate number of Additional Piggyback
Shares owned by all Persons requesting inclusion, up to the Section 2.3(c) Sale
Number; and

 

(iii)                               third, to the extent that the number of
Registrable Securities and securities to be included pursuant to clauses (i) and
(ii) of this Section 2.3(c) is less than the Section 2.3(c) Sale Number, the
remaining securities to be included in such underwritten offering shall be
allocated to shares the Company proposes to register or sell for its own
account, up to the Section 2.3(c) Sale Number.

 

(d)                                 If, as a result of the proration provisions
set forth in clauses (a), (b) or (c) of this Section 2.3, any Holder shall not
be entitled to include all Registrable Securities in an underwritten offering
that such Holder has requested be included, such Holder may elect to withdraw
such Holder’s request to include Registrable Securities in the registration to
which such underwritten offering relates or may reduce the number requested to
be included; provided, however, that (x) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and
(y) such withdrawal or reduction shall be irrevocable and, after making such
withdrawal or reduction, such Holder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal or
reduction was made to the extent of the Registrable Securities so withdrawn or
reduced.

 

2.4.                            Registration Procedures.  If and whenever the
Company is required by the provisions of this Agreement to effect or cause the
registration of and/or participate in any offering or sale of any Registrable
Securities under the Securities Act as provided in this Agreement (or use
reasonable best efforts to accomplish the same), the Company shall, as
expeditiously as reasonably possible:

 

(a)                                 prepare and file all filings with the SEC
and FINRA required for the consummation of the offering, including preparing and
filing with the SEC a registration statement on an appropriate registration form
of the SEC for the disposition of such Registrable

 

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Securities in accordance with the intended method of disposition thereof, which
registration form (i) shall be selected by the Company (except as provided for
in a Demand Registration Request) and (ii) shall, in the case of a shelf
registration, be available for the sale of the Registrable Securities by the
selling Holders thereof and such registration statement shall comply as to form
in all material respects with the requirements of the applicable registration
form and include all financial statements required by the SEC to be filed
therewith, and the Company shall use its reasonable best efforts to cause such
registration statement to become effective and remain continuously effective for
such period as any Participating Holder pursuant to such registration statement
shall request (provided, however, that as far in advance as reasonably
practicable before filing a registration statement or prospectus or any
amendments or supplements thereto, or comparable statements under securities or
state “blue sky” laws of any jurisdiction, or any free writing prospectus
related thereto, the Company will furnish to the Demand Parties, counsel for
each of the Participating Holders and counsel for the Manager, if any, copies of
reasonably complete drafts of all such documents proposed to be filed (including
all exhibits thereto and each document incorporated by reference therein to the
extent then required by the rules and regulations of the SEC), which documents
will be subject to the reasonable review and reasonable comment of such counsel
(including any objections to any information pertaining to any Participating
Holder and its plan of distribution and otherwise to the extent necessary, if at
all, to complete the filing or maintain the effectiveness thereof), and the
Company shall make the changes reasonably requested by such counsel and shall
not file any registration statement or amendment thereto, any prospectus or
supplement thereto or any free writing prospectus related thereto to which
counsel for the Participating Holders, the Majority Participating Holders or the
underwriters, if any, shall reasonably object); provided, however, that,
notwithstanding the foregoing, in no event shall the Company be required to file
any document with the SEC which in the view of the Company or its counsel
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make any statement therein
not misleading; provided, further, that any Participating Holder shall be
entitled to review and provide reasonable comment on disclosure regarding itself
included or proposed to be included in any such filing;

 

(b)                                 (i) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith and such free writing prospectuses and Exchange Act
reports as may be necessary to keep such registration statement continuously
effective for such period as any Participating Holder pursuant to such
registration statement shall request and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement, and any prospectus so
supplemented to be filed pursuant to Rule 424 under the Securities Act, in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (ii) provide notice to such
sellers of Registrable Securities and the Manager, if any, of the Company’s
reasonable determination that a post-effective amendment to a registration
statement would be appropriate;

 

(c)                                  furnish, without charge, to each
Participating Holder and each underwriter, if any, of the securities covered by
such registration statement such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all

 

16

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exhibits), the prospectus included in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, each free writing prospectus
utilized in connection therewith, in each case, in all material respects in
conformity with the requirements of the Securities Act, and other documents, as
such seller and underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities owned by such
seller (the Company hereby consenting to the use in accordance with all
applicable laws of each such registration statement (or amendment or
post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) or free writing prospectus by each such
Participating Holder and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such registration
statement or prospectus);

 

(d)                                 use its reasonable best efforts to register
or qualify the Registrable Securities covered by such registration statement
under such other securities or state “blue sky” laws of such jurisdictions as
any sellers of Registrable Securities or any managing underwriter, if any, shall
reasonably request in writing, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such sellers or underwriter,
if any, to consummate the disposition of the Registrable Securities in such
jurisdictions in accordance with the intended methods of disposition (including
keeping such registration or qualification in effect for so long as such
registration statement remains in effect), except that in no event shall the
Company be required to qualify to do business as a foreign corporation in any
jurisdiction where it would not, but for the requirements of this paragraph (d),
be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;

 

(e)                                  promptly notify each Participating Holder
and each managing underwriter, if any: (i) when the registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement related
thereto, any post-effective amendment to the registration statement or any free
writing prospectus has been filed with the SEC and, with respect to the
registration statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or state securities authority for
amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the securities or state “blue sky”
laws of any jurisdiction or the initiation of any proceeding for such purpose;
(v) of the existence of any fact of which the Company becomes aware which
results in the registration statement or any amendment thereto, the prospectus
related thereto or any supplement thereto, any document incorporated therein by
reference, any free writing prospectus or the information conveyed to any
purchaser at the time of sale to such purchaser containing an untrue statement
of a material fact or omitting to state a material fact required to be stated
therein or necessary to make any statement therein not misleading (which notice
shall notify the Participating Holders only of the occurrence of such an event
and shall provide no additional information regarding such event to the extent
such information would constitute material non-public information); and (vi) if
at any time the representations and

 

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warranties contemplated by any underwriting agreement, securities sale
agreement, or other similar agreement, relating to the offering shall cease to
be true and correct; and, if the notification relates to an event described in
clause (v), unless the Company has declared that a Postponement Period exists,
the Company shall promptly prepare and furnish to each such seller and each
underwriter, if any, a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading;

 

(f)                                   comply (and continue to comply) with all
applicable rules and regulations of the SEC (including, without limitation,
maintaining disclosure controls and procedures (as defined in Exchange Act
Rule 13a-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rule 13a-15(f)) in accordance with the Exchange Act), and make
generally available to its security holders, as soon as reasonably practicable
after the effective date of the registration statement (and in any event within
forty-five (45) days, or ninety (90) days if it is a fiscal year, after the end
of such twelve month period described hereafter), an earnings statement (which
need not be audited) covering the period of at least twelve (12) consecutive
months beginning with the first day of the Company’s first calendar quarter
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;

 

(g)                                  (i) cause all such Registrable Securities
covered by such registration statement to be listed on the principal securities
exchange on which similar securities issued by the Company are then listed (if
any), if the listing of such Registrable Securities is then permitted under the
rules of such exchange, and (ii) comply (and continue to comply) with the
requirements of any self-regulatory organization applicable to the Company,
including without limitation all corporate governance requirements;

 

(h)                                 cause its senior management, officers,
employees and independent public accountants (in the case of the independent
public accountants, subject to any applicable accounting guidance regarding
their participation in the offering or the due diligence process) and other
experts to participate in, make themselves available, supply such information as
may reasonably be requested and to otherwise facilitate and cooperate with the
preparation of the registration statement and prospectus and any amendments or
supplements thereto (including participating in meetings, drafting sessions, due
diligence sessions and rating agency presentations) taking into account the
Company’s reasonable business needs;

 

(i)                                     provide and cause to be maintained a
transfer agent and registrar for all such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement and, in the case of any secondary equity offering, provide and enter
into any reasonable agreements with a custodian for the Registrable Securities;

 

(j)                                    enter into such customary agreements
(including, if applicable, an underwriting agreement) and take such other
actions as the Initiating Holder or the Majority Participating

 

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Holders or the underwriters shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;

 

(k)                                 use its reasonable best efforts (i) to
obtain opinions from the Company’s counsel, including local counsel, and a “cold
comfort” letter, updates thereof and consents from the independent public
accountants who have certified the financial statements of the Company (and/or
any other financial statements) included or incorporated by reference in such
registration statement, in each case, in customary form and covering such
matters as are customarily covered by such opinions and “cold comfort” letters
(including, in the case of such “cold comfort” letter, events subsequent to the
date of such financial statements) delivered to underwriters in underwritten
public offerings, which opinions and letters shall be dated the dates such
opinions and “cold comfort” letters are customarily dated and otherwise
reasonably satisfactory to the underwriters, if any, and to the Majority
Participating Holders and to furnish to each Participating Holder upon its
request and to each underwriter, if any, a copy of such opinions and letters
addressed to such underwriter and each Participating Holder to the extent
permitted by the Company’s independent public accountants;

 

(l)                                     deliver promptly to each Demand Party,
to counsel for each of the Participating Holders and to each managing
underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions with
the SEC or its staff with respect to the registration statement, and, upon
receipt of such confidentiality agreements as the Company may reasonably
request, make reasonably available for inspection by counsel for the
Participating Holders, by counsel for any underwriter participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by the Participating Holders or any
such underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company’s
officers, directors and employees to supply all information reasonably requested
by any such counsel for the Participating Holders, counsel for an underwriter,
attorney, accountant or agent in connection with such registration statement;

 

(m)                             use its reasonable best efforts to prevent the
issuance or obtain the withdrawal of any order suspending the effectiveness of
the registration statement, or the lifting of any suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction,
in each case, as promptly as reasonably practicable;

 

(n)                                 provide a CUSIP number for all Registrable
Securities, not later than the effective date of the registration statement and,
if applicable, provide the applicable transfer agent with printed certificates
for the Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;

 

(o)                                 use its commercially reasonable efforts to
make available its senior management and employees for participation in “road
shows” and other marketing efforts and otherwise provide reasonable assistance
to the underwriters (taking into account the Company’s reasonable business needs
and the requirements of the marketing process) in the marketing of Registrable
Securities in any underwritten offering;

 

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(p)                                 promptly prior to the filing of any document
which is to be incorporated by reference into the registration statement or the
prospectus (after the initial filing of such registration statement), and prior
to the filing or use of any free writing prospectus, provide copies of such
document to counsel for the Participating Holders and to each managing
underwriter, if any, and make the Company’s representatives reasonably available
for discussion of such document and make such changes in such document
concerning the Participating Holders prior to the filing thereof as counsel for
the Participating Holders or underwriters may reasonably request (provided,
however, that, notwithstanding the foregoing, in no event shall the Company be
(i) required to file any document with the SEC which in the view of the Company
or its counsel contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make any statement
therein not misleading or (ii) prohibited from filing any document with the SEC
which the Company or its counsel reasonably believes to be required by law to be
so filed);

 

(q)                                 furnish to counsel for the Participating
Holders upon its request, to each Demand Party upon its request and to each
managing underwriter, without charge, upon request, at least one conformed copy
of the registration statement and any post-effective amendments or supplements
thereto, including financial statements and schedules, all documents
incorporated therein by reference, the prospectus contained in such registration
statement (including each preliminary prospectus and any summary prospectus),
any other prospectus and prospectus supplement filed under Rule 424 under the
Securities Act and all exhibits (including those incorporated by reference) and
any free writing prospectus utilized in connection therewith;

 

(r)                                    cooperate with the Participating Holders
and the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement at least one (1) Business Day prior to any sale of
Registrable Securities to the underwriters or, if not an underwritten offering,
in accordance with the instructions of the Participating Holders at least one
(1) Business Day prior to any sale of Registrable Securities and instruct any
transfer agent and registrar of Registrable Securities to release any stop
transfer orders in respect thereof (and, in the case of Registrable Securities
registered on a Shelf Registration Statement, at the request of any Holder,
prepare and deliver certificates representing such Registrable Securities not
bearing any restrictive legends and deliver or cause to be delivered an opinion
or instructions to the transfer agent in order to allow such Registrable
Securities to be sold from time to time);

 

(s)                                   use its commercially reasonable efforts to
prepare for inclusion and include in any prospectus or prospectus supplement if
requested by any managing underwriter updated financial or business information
for the Company’s most recent period or current quarterly period (including
estimated results or ranges of results) if required for purposes of marketing
the offering in the view of the managing underwriter;

 

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(t)                                    take no direct or indirect action
prohibited by Regulation M under the Exchange Act; provided, however, that to
the extent that any prohibition is applicable to the Company, the Company will
use its reasonable best efforts to make any such prohibition inapplicable;

 

(u)                                 use its commercially reasonable efforts to
cause the Registrable Securities covered by the applicable registration
statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the Participating Holders or the
underwriters, if any, to consummate the disposition of such Registrable
Securities in accordance with the intended methods thereof;

 

(v)                                 take all such other commercially reasonable
actions as are necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Securities;

 

(w)                               take all reasonable action to ensure that any
free writing prospectus utilized in connection with any registration covered by
Section 2.1 or 2.2 complies in all material respects with the Securities Act, is
filed in accordance with the Securities Act to the extent required thereby, is
retained in accordance with the Securities Act to the extent required thereby,
will not conflict with a related prospectus, prospectus supplement and related
documents and, when taken together with the related prospectus, prospectus
supplement and related documents,  will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

 

(x)                                 in connection with any underwritten
offering, if at any time the information conveyed to a purchaser at the time of
sale includes any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, promptly file with
the SEC such amendments or supplements to such information as may be necessary
so that the statements as so amended or supplemented will not, in the light of
the circumstances, be misleading;

 

(y)                                 to the extent required by the rules and
regulations of FINRA, retain a Qualified Independent Underwriter acceptable to
the managing underwriter; and

 

(z)                                  use its commercially reasonable efforts to
cooperate with the managing underwriters, their counsel, the Participating
Holders and counsel for the Participating Holders in connection with the
preparation and filing of any applications, notices, registrations and responses
to requests for additional information with FINRA, the New York Stock Exchange,
Nasdaq, or any other national securities exchange on which the Ordinary Shares
are or are to be listed.

 

To the extent the Company is a WKSI at the time any Demand Registration Request
is submitted to the Company, and such Demand Registration Request requests that
the Company file an automatic shelf registration statement (as defined in
Rule 405 under the Securities Act) (an “automatic shelf registration statement”)
on Form S-3, the Company shall file an automatic shelf registration statement
which covers those Registrable Securities which are requested to be

 

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registered.  To the extent the Company has filed an automatic shelf registration
statement, the Company shall use its commercially reasonable efforts to remain a
WKSI (and not become an ineligible issuer (as defined in Rule 405 under the
Securities Act)) during the period during which such automatic shelf
registration statement is required to remain effective.  If the Company is
requested to register Registrable Securities on an automatic shelf registration
statement, the Company shall pay the applicable filing fee related to such
Registrable Securities at the time of filing of the automatic shelf registration
statement.  If the automatic shelf registration statement has been outstanding
for at least three (3) years, at or prior to the end of the third year the
Company shall, upon request, refile a new automatic shelf registration statement
covering the Registrable Securities which remain outstanding.  If at any time
when the Company is required to re-evaluate its WKSI status the Company
determines that it is not a WKSI, the Company shall use its commercially
reasonable efforts to refile the shelf registration statement on Form S-3 and,
if such form is not available, Form S-1 and keep such registration statement
effective during the period during which such registration statement is required
to be kept effective.

 

If the Company files any shelf registration statement for the benefit of the
holders of any of its securities other than the Holders, and the Holders do not
request that their Registrable Securities be included in such Shelf Registration
Statement, the Company agrees that it shall include in such registration
statement such disclosures as may be required by Rule 430B under the Securities
Act (referring to the unnamed selling security holders in a generic manner by
identifying the initial offering of the securities to the Holders) in order to
ensure that the Holders may be added to such shelf registration statement at a
later time through the filing of a prospectus supplement rather than a
post-effective amendment.

 

The Company may require as a condition to the Company’s obligations under this
Section 2.4 that each Participating Holder as to which any registration is being
effected (i) furnish the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request, provided that such information is necessary for the Company to
consummate such registration and shall be used only in connection with such
registration and (ii) provide any underwriters participating in the distribution
of such securities such information as the underwriters may request and execute
and deliver any agreements, certificates or other documents as the underwriters
may request.

 

Each Holder of Registrable Securities agrees that upon receipt of any notice
from the Company of the happening of any event of the kind described in clause
(v) of paragraph (e) of this Section 2.4, such Holder will discontinue such
Holder’s 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
paragraph (e) of this Section 2.4 and, if so directed by the Company, will
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession of the prospectus
covering such Registrable Securities that was in effect at the time of receipt
of such notice.  In the event the Company shall give any such notice, the
applicable period mentioned in paragraph (b) of this Section 2.4 shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the

 

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date when each Participating Holder covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by paragraph (e) of this Section 2.4. The period(s) during which the Holders are
required to discontinue disposition of securities pursuant to this paragraph
shall not exceed forty-five (45) days with respect to any one such period within
any 365 day period (either alone or in combination with a Postponement Period
pursuant to Section 2.1(b) hereof).

 

The Company agrees not to include in any registration statement or any amendment
to any registration statement with respect to any Registrable Securities, or in
any prospectus, or any amendment of or supplement to the prospectus, or any free
writing prospectus, any disclosure that refers to any Holder covered thereby by
name, or otherwise identifies such Holder, without the consent of such Holder,
such consent not to be unreasonably withheld or delayed, unless such disclosure
is required by law, in which case the Company shall provide written notice to
such Holder no less than five (5) Business Days prior to the filing.  If any
such registration statement or comparable statement under state “blue sky” laws
refers to any Holder by name or otherwise as the Holder of any securities of the
Company, then such Holder shall have the right to require the insertion therein
of language, in form and substance reasonably satisfactory to such Holder and
the Company, to the effect that the holding by such Holder of such securities is
not to be construed as a recommendation by such Holder of the investment quality
of the Company’s securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company.

 

To the extent that any Holder is or may be deemed to be an “underwriter” of
Registrable Securities pursuant to any SEC comments or policies, the Company
agrees that (1) the indemnification and contribution provisions contained in
Section 2.9 shall be applicable to the benefit of such Holder in its role as an
underwriter or deemed underwriter in addition to its capacity as a Holder and
(2) such Holder shall be entitled to conduct the due diligence which an
underwriter would normally conduct in connection with an offering of securities
registered under the Securities Act, including without limitation receipt of
customary opinions and comfort letters addressed to such Holder.

 

2.5.                            Registration Expenses.

 

(a)                                 The Company shall pay all Expenses with
respect to any registration or offering of Registrable Securities pursuant to
Section 2, whether or not a registration statement becomes effective or the
offering is consummated.

 

(b)                                 Notwithstanding the foregoing, (x) the
provisions of this Section 2.5 shall be deemed amended to the extent necessary
to cause these expense provisions to comply with state “blue sky” laws of each
state in which the offering is made, and (y) in connection with any underwritten
offering hereunder, each Participating Holder shall pay all underwriting
discounts and commissions and any transfer taxes, if any, attributable to the
sale of such Registrable Securities, pro rata with respect to payments of
discounts and commissions in accordance with the number of shares sold in the
offering by such Holder. In addition, each Participating Holder

 

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shall pay the expenses of its own counsel and advisors, except to the extent
provided in the definition of “Expenses.”

 

2.6.                            Certain Limitations on Registration Rights.  In
the case of any registration under Section 2.1 involving an underwritten
offering, or, in the case of a registration under Section 2.2, if the Company
has determined to enter into an underwriting agreement in connection therewith,
all securities to be included in such underwritten offering shall be subject to
such underwriting agreement and no Person may participate in such underwritten
offering unless such Person (i) agrees to sell such Person’s securities on the
basis provided therein and completes and executes all reasonable questionnaires,
and other documents (including custody agreements and powers of attorney, if
any) which must be executed in connection therewith; provided, however, that all
such documents shall be consistent with the provisions hereof and (ii) provides
such other information to the Company or the underwriter as may be necessary to
register such Person’s securities.

 

2.7.                            Limitations on Sale or Distribution of Other
Securities.

 

(a)                                 Each Holder agrees, (i) to the extent
requested by a managing underwriter, if any, of any underwritten public offering
in which one or more Holders is selling Shares pursuant to a registration or
offering effected pursuant to Section 2.1 (including any Shelf Underwriting
pursuant to Section 2.1(e)), not to sell, transfer or otherwise dispose of,
including any sale pursuant to Rule 144, any Shares  or Share Equivalents (other
than as part of such underwritten public offering) during the time period
reasonably requested by the managing underwriter, not to exceed ninety (90) days
from the pricing date of such offering or such shorter period as the managing
underwriter, the Company or any executive officer or director of the Company
shall agree to (and the Company hereby also so agrees (except that the Company
may effect any sale or distribution of any such securities pursuant to a
registration on Form S-4 or Form S-8, or any successor or similar form which
(x) is then in effect or (y) shall become effective upon the conversion,
exchange or exercise of any then outstanding Share Equivalents), to use its
reasonable best efforts to cause each holder of any equity security or any
security convertible into or exchangeable or exercisable for any equity security
of the Company purchased from the Company at any time other than in a public
offering, and all directors and executive officers of the Company, to so agree),
and (ii) to the extent requested by a managing underwriter of any underwritten
public offering in which one or more Holders is selling  Shares pursuant to the
exercise of piggyback rights under Section 2.2 hereof, not to sell, transfer or
otherwise dispose of, including any sale pursuant to Rule 144, any Shares or
Share Equivalents (other than as part of such underwritten public offering)
during the time period reasonably requested by the managing underwriter, which
period shall not exceed ninety (90) days from the pricing date of such offering
or such shorter period as the managing underwriter, the Company or any executive
officer or director of the Company shall agree to.  In the circumstances
specified in this Section 2.7(a), each Holder agrees to execute and deliver
customary lock-up agreements for the benefit of the underwriters with such form
and substance as the managing underwriter shall reasonably determine.

 

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(b)                                 The Company hereby agrees that, in
connection with an offering pursuant to Section 2.1 (including any Shelf
Underwriting pursuant to Section 2.1(e)) or Section 2.2, the Company shall not
sell, transfer, or otherwise dispose of, any Shares or Share Equivalents (other
than as part of such underwritten public offering, a registration on Form S-4 or
Form S-8 or any successor or similar form which is (x) then in effect or
(y) shall become effective upon the conversion, exchange or exercise of any then
outstanding Share Equivalents), until a period of ninety (90) days (or such
shorter period to which the Majority Participating Holders shall agree)  shall
have elapsed from the pricing date of such offering, except to the extent
otherwise agreed to by the underwriters as provided in any lock-up agreement
required in connection with such offering; and the Company shall (i) so provide
in any registration rights agreements hereafter entered into with respect to any
of its securities and (ii) use its reasonable best efforts to cause each holder
of any equity security or any security convertible into or exchangeable or
exercisable for any equity security of the Company purchased from the Company at
any time other than in a public offering and all directors and executive
officers of the Company to so agree.

 

2.8.                            No Required Sale.  Nothing in this Agreement
shall be deemed to create an independent obligation on the part of any Holder to
sell any Registrable Securities pursuant to any effective registration
statement.  A Holder is not required to include any of its Registrable
Securities in any registration statement, is not required to sell any of its
Registrable Securities which are included in any effective registration
statement, may sell any of its Registrable Securities in any manner in
compliance with applicable law (including pursuant to Rule 144) even if such
shares are already included on an effective registration statement, and may
request that Registrable Securities be registered or sold pursuant to a
registration statement even if such Shares are eligible to be sold pursuant to
Rule 144.

 

2.9.                            Indemnification.

 

(a)                                 In the event of any registration or offer
and sale of any securities of the Company under the Securities Act pursuant to
this Section 2, including without limitation any sale of securities of the
Company registered on a reoffer/resale prospectus filed in connection with a
Form S-8, the Company will (without limitation as to time), and hereby agrees
to, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, each Participating Holder, its directors, officers,
fiduciaries, employees, stockholders, members, general and limited partners,
affiliates, successors and assigns (and the directors, officers, fiduciaries,
employees, stockholders, members, general and limited partners, affiliates,
successors and assigns thereof), each other Person who participates as a seller
(and its directors, officers, fiduciaries, employees, stockholders, members,
general and limited partners, affiliates, successors and assigns), underwriter
or Qualified Independent Underwriter, if any, in the offering or sale of such
securities, each officer, director, employee, stockholder, fiduciary, managing
director, agent, affiliate, consultant, representative, successor, assign or
partner of such underwriter or Qualified Independent Underwriter, and each other
Person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any such Participating Holder, seller or
any such underwriter or Qualified Independent Underwriter and each director,
officer, employee, stockholder, fiduciary, managing director, affiliate,
successor, assign or partner of such controlling Person (and all controlling
Persons of any such Persons or other

 

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controlling Persons), from and against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company’s consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise in respect thereof
(collectively, “Claims”), insofar as such Claims arise out of, are based upon,
relate to or are in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement under which
such securities were registered under the Securities Act or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or any free
writing prospectus utilized in connection therewith, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iii) any untrue
statement or alleged untrue statement of a material fact in the information
conveyed by the Company or any underwriter to any purchaser at the time of the
sale to such purchaser, or the omission or alleged omission to state therein a
material fact required to be stated therein, or (iv) any violation by the
Company of any federal, state or common law rule or regulation applicable to the
Company and relating to any action required of or inaction by the Company in
connection with any such offering of Registrable Securities, and the Company
will reimburse any such indemnified party for any documented legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim as such expenses are incurred;
provided, however, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact or omission
or alleged omission of a material fact made in such registration statement or
amendment thereof or supplement thereto or in any such prospectus or any
preliminary, final or summary prospectus or free writing prospectus in reliance
upon and in strict conformity with written information furnished to the Company
by or on behalf of such indemnified party specifically for use therein.  Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such indemnified party
and shall survive the transfer of such securities by such seller.

 

(b)                                 Each Participating Holder (and, if the
Company requires as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 2.1 or 2.2, any
underwriter and Qualified Independent Underwriter, if any) shall, severally and
not jointly, indemnify and hold harmless (in the same manner and to the same
extent as set forth in paragraph (a) of this Section 2.9) to the extent
permitted by law the Company, its officers who signed the applicable
registration statement and its directors, each Person controlling the Company
within the meaning of the Securities Act and all other prospective sellers and
their directors, officers, stockholders, fiduciaries, managing directors,
affiliates, successors, assigns or general and limited partners and respective
controlling Persons with respect to any untrue statement or alleged untrue
statement of any material fact in, or omission or alleged omission of any
material fact from, such registration statement, any

 

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preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, or any free writing prospectus utilized in connection
therewith, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in strict conformity with written
information furnished to the Company or its representatives by or on behalf of
such Participating Holder or underwriter or Qualified Independent Underwriter,
if any, specifically for use therein, and each such Participating Holder,
underwriter or Qualified Independent Underwriter, if any, shall reimburse such
indemnified party for any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Claim
as such expenses are incurred; provided, however, that the aggregate amount
which any such Participating Holder shall be required to pay pursuant to this
Section 2.9 (including pursuant to indemnity, contribution or otherwise) shall
in no case be greater than the amount of the net proceeds actually received by
such Participating Holder upon the sale of the Registrable Securities pursuant
to the registration statement giving rise to such Claim; provided, further, that
such Participating Holder shall not be liable in any such case to the extent
that prior to the filing of any such registration statement or prospectus or
amendment thereof or supplement thereto, or any free writing prospectus utilized
in connection therewith, such Participating Holder has furnished in writing to
the Company information expressly for use in such registration statement or
prospectus or any amendment thereof or supplement thereto or free writing
prospectus which corrected or made not misleading information previously
furnished to the Company.  The Company and each Participating Holder hereby
acknowledge and agree that, unless otherwise expressly agreed to in writing by
such Participating Holders to the contrary, for all purposes of this Agreement,
the only information furnished or to be furnished to the Company for use in any
such registration statement, preliminary, final or summary prospectus or
amendment or supplement thereto, or any free writing prospectus, are statements
specifically relating to (i) the beneficial ownership of Shares by such
Participating Holder and its Affiliates as disclosed in the section of such
document entitled “Selling Shareholders” or “Principal and Selling Shareholders”
or other variations thereof and (ii) the name and address of such Participating
Holder.  If any additional information about such Holder or the plan of
distribution (other than for an underwritten offering) is required by law to be
disclosed in any such document, then such Holder shall not unreasonably withhold
its agreement referred to in the immediately preceding sentence.  Such indemnity
and reimbursement of expenses shall remain in full force and effect regardless
of any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.

 

(c)                                  Indemnification similar to that specified
in the preceding paragraphs (a) and (b) of this Section 2.9 (with appropriate
modifications) shall be given by the Company and each Participating Holder with
respect to any required registration or other qualification of securities under
any applicable securities and state “blue sky” laws.

 

(d)                                 Any Person entitled to indemnification under
this Agreement shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure of any
indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of this Section 2.9,
except to the extent the indemnifying party is materially and actually
prejudiced thereby and shall not relieve the

 

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indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 2.  In case any action or proceeding is
brought against an indemnified party and such indemnified party shall have
notified the indemnifying party of the commencement thereof (as required above),
the indemnifying party shall be entitled to participate therein and, unless in
the reasonable opinion of outside counsel to the indemnified party a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such Claim, to assume the defense thereof jointly with any other indemnifying
party similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party that it so chooses, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
(i) if the indemnifying party fails to take reasonable steps necessary to defend
diligently the action or proceeding within twenty (20) days after receiving
notice from such indemnified party that the indemnified party believes it has
failed to do so; or (ii) if such indemnified party who is a defendant in any
action or proceeding which is also brought against the indemnifying party
reasonably shall have concluded that there may be one or more legal or equitable
defenses available to such indemnified party which are not available to the
indemnifying party or which may conflict with or are different from those
available to another indemnified party with respect to such Claim; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense and
the indemnifying party shall be liable for any expenses therefor.  No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.

 

(e)           If for any reason the foregoing indemnity is unavailable,
unenforceable or is insufficient to hold harmless an indemnified party under
Sections 2.9(a), (b) or (c), then each applicable indemnifying party shall
contribute to the amount paid or payable to such indemnified party as a result
of any Claim in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other hand, with respect to such Claim.  The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  If, however, the allocation provided in the second preceding sentence
is not permitted by applicable law, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative faults but also
the relative benefits of the indemnifying party and the indemnified party as
well as any other relevant

 

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equitable considerations.  The parties hereto agree that it would not be just
and equitable if any contribution pursuant to this Section 2.9(e) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this Section 2.9(e).  The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such Claim.  No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.  Notwithstanding anything in this Section 2.9(e) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount greater than the amount
of the net proceeds received by such indemnifying party from the sale of
Registrable Securities pursuant to the registration statement giving rise to
such Claim, less the amount of any indemnification payment made by such
indemnifying party pursuant to Sections 2.9(b) and (c).  In addition, no Holder
of Registrable Securities or any Affiliate thereof shall be required to pay any
amount under this Section 2.9(e) unless such Person or entity would have been
required to pay an amount pursuant to Section 2.9(b) if it had been applicable
in accordance with its terms.

 

(f)            The indemnity and contribution agreements contained herein shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the transfer
of the Registrable Securities by any such party.

 

(g)           The indemnification and contribution required by this Section 2.9
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred; provided, however, that the recipient thereof
hereby undertakes to repay such payments if and to the extent it shall be
determined by a court of competent jurisdiction that such recipient is not
entitled to such payment hereunder.

 

2.10.       Limitations on Registration of Other Securities; Representation. 
From and after the date of this Agreement, the Company shall not, without the
prior written consent of the Shareholder, enter into any agreement with any
holder or prospective holder of any securities of the Company giving such holder
or prospective holder any registration rights the terms of which are (i) more
favorable taken as a whole than the registration rights granted to the Holders
hereunder unless the Company shall also give such rights to such Holders or
(ii) on parity with the registration rights granted to the Holders hereunder.

 

2.11.       No Inconsistent Agreements.  The Company shall not hereafter enter
into any agreement with respect to its securities that is inconsistent in any
material respects with the rights granted to the Holders in this Agreement.

 

29

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Section 3.              Underwritten Offerings.

 

3.1.         Requested Underwritten Offerings.  If requested by the underwriters
for any underwritten offering pursuant to a registration requested under
Section 2.1, the Company shall enter into a customary underwriting agreement
with the underwriters.  Such underwriting agreement shall (i) be satisfactory in
form and substance to the Majority Participating Holders, (ii) contain terms not
inconsistent with the provisions of this Agreement to the extent the
underwriters of such offering agree to such terms and (iii) contain such
representations and warranties by, and such other agreements on the part of, the
Company and such other terms as are generally prevailing in agreements of that
type, including, without limitation, indemnities and contribution agreements on
substantially the same terms as those contained herein or as otherwise customary
for the lead underwriter for such offering and agreed to by the Majority
Participating Holders.  Any Participating Holder shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holder; provided, however, that the Company shall not be required
to make any representations or warranties with respect to written information
specifically provided by a Participating Holder for inclusion in the
registration statement.  Unless otherwise agreed by the Majority Participating
Holders and the underwriters, each such Participating Holder shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such Participating Holder, its ownership of and title to the
Registrable Securities, any written information specifically provided by such
Participating Holder for inclusion in the registration statement and its
intended method of distribution; and any liability of such Participating Holder
to any underwriter or other Person under such underwriting agreement for
indemnity, contribution or otherwise shall in no case be greater than the amount
of the net proceeds received by such Participating Holder upon the sale of
Registrable Securities pursuant to such underwriting agreement and in no event
shall relate to anything other than information about such Holder specifically
provided by such Holder for use in the registration statement and prospectus (in
each case unless otherwise agreed by the underwriters and the Majority
Participating Holders).

 

3.2.         Piggyback Underwritten Offerings.  In the case of a registration
pursuant to Section 2.2, if the Company shall have determined to enter into an
underwriting agreement in connection therewith, all of the Participating
Holders’ Registrable Securities to be included in such registration shall be
subject to such underwriting agreement.  Any Participating Holder shall be a
party to such underwriting agreement and may, at its option, require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such Participating Holder and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holder; provided, however, that the Company shall not be required
to make any representations or warranties with respect to written information
specifically provided by a Participating Holder for inclusion in the
registration statement.  Unless otherwise agreed by the Majority Participating
Holders and the underwriters, each such Participating Holder shall not be

 

30

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required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such Participating Holder, its ownership of and title to the
Registrable Securities, any written information specifically provided by such
Participating Holder for inclusion in the registration statement and its
intended method of distribution; and any liability of such Participating Holder
to any underwriter or other Person under such underwriting agreement shall in no
case be greater than the amount of the net proceeds received by such
Participating Holder upon the sale of Registrable Securities pursuant to such
underwriting agreement and in no event shall relate to anything other than
information about such Holder specifically provided by such Holder for use in
the registration statement and prospectus (in each case unless otherwise agreed
by the underwriters and Majority Participating Holders).

 

Section 4.              General.

 

4.1.         Adjustments Affecting Registrable Securities.  The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
Shares which would adversely affect the ability of any Holder of any Registrable
Securities to include such Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration.  Subject to the foregoing, the Company
agrees that it will take all reasonable steps necessary to effect a subdivision
of Shares if in the reasonable judgment of (a) the Majority Participating
Holders or (b) the managing underwriter for the offering in respect of a Demand
Registration Request, such subdivision would enhance the marketability of the
Registrable Securities.  Each Holder agrees to vote all of its shares of capital
stock in a manner, and to take all other actions reasonably necessary, to permit
the Company to carry out the intent of the preceding sentence including, without
limitation, voting in favor of an amendment to the Company’s organizational
documents in order to increase the number of authorized shares of capital stock
of the Company.  In any event, the provisions of this Agreement shall apply, to
the full extent set forth herein with respect to the Registrable Securities, to
any and all shares of capital stock of the Company, any successor or assign of
the Company (whether by merger, share exchange, consolidation, sale of assets or
otherwise) or any Subsidiary or parent company of the Company which may be
issued in respect of, in exchange for or in substitution of, Registrable
Securities and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalizations and the like occurring after the
date hereof.

 

4.2.         Rule 144 and Rule 144A.  The Company covenants that (i) so long as
it remains subject to the reporting provisions of the Exchange Act, it will
timely file the reports required to be filed by it under the Securities Act or
the Exchange Act (including, but not limited to, the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c)(1)(i) of Rule 144
under the Securities Act, as such Rule may be amended (“Rule 144”)) or, if the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales by such Holder under Rule 144, Rule 144A under the Securities Act, as such
Rule may be amended (“Rule 144A”), or any similar rules or regulations hereafter
adopted by the SEC, and (ii) it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to

 

31

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enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (A) Rule 144,
(B) Rule 144A or (C) any similar rule or regulation hereafter adopted by the
SEC.  Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.  To the extent any Holder desires to sell Registrable
Securities pursuant to Rule 144, the Company agrees to provide customary
instructions to the transfer agent to remove any restrictive legends from such
Shares and to provide or cause any customary opinions of counsel to be delivered
to the transfer agent in connection with any such sale.  In addition, the
Company agrees to remove any restrictive legend from the Registrable Securities
upon the reasonable request of any Holder as soon as reasonably permitted by
applicable law and customary practice (including customary transfer agent
practices).

 

4.3.         Nominees for Beneficial Owners.  If Registrable Securities are held
by a nominee for the beneficial owner thereof, the beneficial owner thereof may,
at its option, be treated as the Holder of such Registrable Securities for
purposes of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders of Registrable Securities contemplated by this Agreement); provided,
however, that the Company shall have received assurances reasonably satisfactory
to it of such beneficial ownership.

 

4.4.         Amendments and Waivers.  Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or any Holder unless such modification, amendment
or waiver is approved in writing by the Company and the Demand Parties.  No
waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar).  No
failure or delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof or of any other or future
exercise of any such right, power or privilege.

 

4.5.         Notices.  All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by facsimile or
email of a PDF document (with confirmation of transmission) if sent during
normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient or (d) on the third (3rd) day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications must be sent to the respective parties at
the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 4.5):

 

if to the Company:

 

KLX Energy Services Holdings, Inc.

 

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1300 Corporate Center Way

Wellington, Florida 33414

Attention:              Jonathan Mann

Email:                    jonathan.mann@klxe.com

 

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

 

Freshfields Bruckhaus Deringer US LLP

601 Lexington Avenue
New York, NY 10022
Attention:              Valerie Ford Jacob

E-mail:                   valerie.jacob@freshfields.com

 

if to the Shareholder:

 

Thomas P. McCaffrey
c/o KLX Inc.

1300 Corporate Center Way

Wellington, Florida 33414

Attention:              Thomas P. McCaffrey

Email:                    Tom.McCaffrey@KLX.com

 

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

 

Freshfields Bruckhaus Deringer US LLP

601 Lexington Avenue
New York, NY 10022
Attention:              Valerie Ford Jacob

E-mail:                   valerie.jacob@freshfields.com

 

If to any other Holder, at such Holder’s address as set forth on such Holder’s
signature page hereto or to an Assumption Agreement.

 

4.6.         Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and the respective successors, permitted assigns, heirs
and personal representatives of the parties hereto, whether so expressed or
not.  This Agreement may not be assigned by the Company without the prior
written consent of the Shareholder.  No Holder shall have the right to assign
all or part of its rights and obligations under this Agreement without the prior
written consent of the other parties hereto; provided, that any Holder may
assign this Agreement to one or more of its Affiliates without the prior written
consent of the other parties hereto, and any Holder may assign this Agreement to
one or more third parties who acquire Shares from such Holder other than in a
public underwritten offering or sales generally into the open market pursuant to
Rule 144; provided, further, that such Holder’s Affiliate (or Affiliates) or
other permitted transferee executes and delivers to the Company an Assumption
Agreement.  Upon any such assignment,

 

33

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such assignee shall have and be able to exercise and enforce all rights of the
assigning Holder which are assigned to it and, to the extent such rights are
assigned, any reference to the assigning Holder shall be treated as a reference
to the assignee.  If any Holder shall acquire additional Registrable Securities,
such Registrable Securities shall be subject to all of the terms, and entitled
to all the benefits, of this Agreement.

 

4.7.         Entire Agreement.  This Agreement and the other documents referred
to herein or delivered pursuant hereto which form part hereof constitute the
entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter hereof.

 

4.8.         Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. 
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than those of the State of New York.

 

Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby or thereby shall be brought in the
federal or state courts located in the State of New York, and each party
irrevocably submits to the exclusive jurisdiction of such courts (and the
appropriate appellate courts therefrom) in any such suit, action or proceeding. 
The parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or any proceeding in any such court and irrevocably
waive and agree not to plead or claim in any such court that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.  Service of process, summons, notice or other document by
certified or registered mail to such party’s address set forth herein shall be
effective service of process for any suit, action or other proceeding brought in
any such court.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OR AGENT OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 4.8.

 

34

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4.9.         Interpretation; Construction.

 

(a)           The table of contents and headings in this Agreement are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof. 
Where a reference in this Agreement is made to a Section, such reference shall
be to a Section of this Agreement unless otherwise indicated.  Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”

 

(b)           The parties have participated jointly in negotiating and drafting
this Agreement.  In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

 

4.10.       Counterparts.  This Agreement may be executed and delivered in any
number of separate counterparts (including by facsimile or electronic mail),
each of which shall be an original, but all of which together shall constitute
one and the same agreement.

 

4.11.       Severability.  The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.  If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

 

4.12.       Remedies.  The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. 
It is accordingly agreed that each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, without the posting of
any bond, and, if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.  All remedies, either under this
Agreement, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.

 

4.13.       Further Assurances.  Each party hereto shall do and perform or cause
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

35

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4.14.       Restructuring.  To the extent that the Board of the Company elects
to effect a restructuring or recapitalization of the Company or substantially
all of the business of the Company through a subsidiary or parent company of the
Company or otherwise, the provisions of this Agreement shall be appropriately
adjusted, and the Holders and the Company shall enter into such further
agreements and arrangements as shall be reasonably necessary or appropriate to
provide the Holders with substantially the same registration rights as they
would have under this Agreement, giving due consideration to the nature of the
new public entity, the nature of the securities to be offered and tax and other
relevant considerations.

 

4.15.       Opt-Out Rights.  Each Holder shall have the right, at any time and
from time to time (including after receiving information regarding any potential
public offering), to elect to not receive any notice that the Company or any
other Holders otherwise are required to deliver pursuant to this Agreement by
delivering to the Company a written statement signed by such Holder that it does
not want to receive any notices hereunder (an “Opt-Out Request”); in which case
and notwithstanding anything to the contrary in this Agreement the Company and
other Holders shall not be required to, and shall not, deliver any notice or
other information required to be provided to Holders hereunder to the extent
that the Company or such other Holders reasonably expect would result in a
Holder acquiring material non-public information within the meaning of
Regulation FD promulgated under the Exchange Act.  An Opt-Out Request may state
a date on which it expires or, if no such date is specified, shall remain in
effect indefinitely.  A Holder who previously has given the Company an Opt-Out
Request may revoke such request at any time, and there shall be no limit on the
ability of a Holder to issue and revoke subsequent Opt-Out Requests; provided
that each Holder shall use commercially reasonable efforts to minimize the
administrative burden on the Company arising in connection with any such Opt-Out
Requests.

 

[Remainder of Page Intentionally Left Blank]

 

36

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

 

 

KLX ENERGY SERVICES HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Amin J. Khoury

 

 

Name: Amin J. Khoury

 

 

Title: Chairman, CEO and President

 

 

 

 

 

THOMAS P. MCCAFFREY

 

 

 

 

 

/s/ Thomas P. McCaffrey

 

37

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Exhibit A

 

ASSUMPTION AGREEMENT

 

This Assumption Agreement (this “Assumption Agreement”) is made as of [     ],
by and among [     ] (the “Transferring Holder”) and [     ] (the “New Holder”),
in accordance with that certain Registration Rights Agreement, dated as of
September 14, 2018 (as amended from time to time, the “Agreement”), by and among
KLX Energy Services Holdings, Inc. (the “Company”) and Thomas P. McCaffrey.

 

WHEREAS, the Agreement requires the New Holder, as a condition to the assignment
of Transferring Holder’s rights under the Agreement, to become a party to the
Agreement by executing this Assumption Agreement, and upon the New Holder
signing this Assumption Agreement, the Agreement will be deemed to be amended to
include the New Holder thereunder;

 

NOW, THEREFORE, in consideration of the foregoing, and of the representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:

 

Section 1                                              Party to the Agreement. 
By execution of this Assumption Agreement, as of the date hereof the New Holder
is hereby made a party to the Agreement with all rights and obligations of the
Shareholder.  The New Holder hereby agrees to become a party to the Agreement
and to be bound by, and subject to, all of the representations, covenants, terms
and conditions of the Agreement that are applicable to, and assignable under the
Agreement by, the Transferring Holder, in the same manner as if the New Holder
were an original signatory to the Agreement.  Execution and delivery of this
Assumption Agreement by the New Holder shall also constitute execution and
delivery by the New Holder of the Agreement, without further action of any
party.

 

Section 2                                              Defined Terms. 
Capitalized terms used but not defined herein shall have the meanings set forth
in the Agreement unless otherwise noted.

 

Section 3                                              Representations and
Warranties of the New Holder.

 

3.1                               Authorization.  The New Holder has all
requisite [corporate] power and authority and has taken all action necessary in
order to duly and validly approve the New Holder’s execution and delivery of,
and performance of its obligations under, this Assumption Agreement.  This
Assumption Agreement has been duly executed and delivered by the New Holder and
constitutes a legal, valid and binding agreement of the New Holder, enforceable
against the New Holder in accordance with its terms.

 

3.2                               No Conflict.  The New Holder is not under any
obligation or restriction, whether or otherwise, nor shall it assume any such
obligation or restriction, that does or would materially interfere or conflict
with the performance of its obligations under this Assumption Agreement.

 

Section 4                                              Further Assurances.  Each
party hereto shall do and perform or cause to be done and performed all such
further acts and things and shall execute and deliver all such other agreements,
certificates, instruments, and documents as any other party hereto reasonably
may

 

--------------------------------------------------------------------------------

 

request in order to carry out the intent and accomplish the purposes of this
Assumption Agreement and the consummation of the transactions contemplated
hereby.

 

Section 5                                              Governing Law; Submission
to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than those of the State of New York.

 

Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby or thereby shall be brought in the
federal or state courts located in the State of New York, and each party
irrevocably submits to the exclusive jurisdiction of such courts (and the
appropriate appellate courts therefrom) in any such suit, action or proceeding. 
The parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or any proceeding in any such court and irrevocably
waive and agree not to plead or claim in any such court that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.  Service of process, summons, notice or other document by
certified or registered mail to such party’s address set forth herein shall be
effective service of process for any suit, action or other proceeding brought in
any such court.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OR AGENT OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 5.

 

Section 6                                              Counterparts.  This
Assumption Agreement may be executed and delivered in any number of separate
counterparts (including by facsimile or electronic mail), each of which shall be
an original, but all of which together shall constitute one and the same
agreement.

 

Section 7                                              Entire Agreement.  This
Assumption Agreement, the Registration Rights Agreement and the other documents
referred to herein or delivered pursuant hereto which form part hereof
constitute the entire agreement and understanding between the parties hereto,
and supersedes all prior agreements and understandings, relating to the subject
matter hereof.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned
parties have executed this Assumption Agreement as of the date first above
written.

 

 

TRANSFERRING HOLDER

 

 

 

[     ]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

NEW HOLDER

 

 

 

[     ]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Notice Address: [     ]

 

[     ]

 

[     ]

 

Attention: [     ]

 

Facsimile: [     ]

 

Email: [      ]

 

Accepted and Agreed to as of

 

the date first written above:

 

 

 

CORPORATION

 

 

 

KLX ENERGY SERVICES HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

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