Document:

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

by and between

LEGG MASON, INC.

and

KKR I-L LIMITED

May 23, 2012

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 Definitions

 	
 1

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 Registration
 Under the 1933 Act

 	
 4

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.1

 	
 Shelf
 Registration

 	
 4

 
	
  

 	
 2.2

 	
 Expenses

 	
 7

 
	
  

 	
 2.3

 	
 Effectiveness

 	
 7

 
	
  

 	
 2.4

 	
 Suspension

 	
 7

 
	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
 Registration
 Procedures

 	
 8

 
	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 Indemnification;
 Contribution

 	
 11

 
	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 Distributions
 by Holders

 	
 15

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 Miscellaneous

 	
 19

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.1

 	
 No
 Inconsistent Agreements

 	
 19

 
	
  

 	
 6.2

 	
 Amendments
 and Waivers

 	
 19

 
	
  

 	
 6.3

 	
 Notices

 	
 20

 
	
  

 	
 6.4

 	
 Successors

 	
 20

 
	
  

 	
 6.5

 	
 Third Party
 Beneficiaries

 	
 21

 
	
  

 	
 6.6

 	
 Specific
 Enforcement

 	
 21

 
	
  

 	
 6.7

 	
 Counterparts

 	
 21

 
	
  

 	
 6.8

 	
 Headings

 	
 21

 
	
  

 	
 6.9

 	
 GOVERNING
 LAW

 	
 21

 
	
  

 	
 6.10

 	
 Severability

 	
 21

 
	
  

 	
 6.11

 	
 Entire
 Agreement

 	
 21

 
	
  

 	
 6.12

 	
 Interpretation

 	
 21

 

INDEX
OF DEFINED TERMS

	
  

 	
  

 	
  

 
	
 1933 Act

 	
  

 	
 1

 
	
 1934 Act

 	
  

 	
 1

 
	
 Affiliate

 	
  

 	
 1

 
	
 Agreement

 	
  

 	
 1

 
	
 Automatic
 Shelf Registration Statement

 	
  

 	
 1

 
	
 Beneficially
 Own

 	
  

 	
 1

 
	
 Business Day

 	
  

 	
 1

 
	
 Closing Date

 	
  

 	
 1

 
	
 Common Stock

 	
  

 	
 2

 
	
 Company

 	
  

 	
 1

 
	
 Company
 Supported Distribution

 	
  

 	
 2

 
	
 Delay Period

 	
  

 	
 15

 
	
 Depositary

 	
  

 	
 2

 
	
 Effectiveness
 Period

 	
  

 	
 2

 
	
 Expiration
 Date

 	
  

 	
 2

 
	
 Free Writing
 Prospectus

 	
  

 	
 2

 
	
 Holder

 	
  

 	
 2

 
	
 indemnified
 party

 	
  

 	
 11

 
	
 Initial
 Purchaser

 	
  

 	
 2

 
	
 Issuer Free
 Writing Prospectus

 	
  

 	
 2

 
	
 KKR Holder

 	
  

 	
 1

 
	
 Majority
 Holders

 	
  

 	
 2

 
	
 Note
 Exchange Agreement

 	
  

 	
 1

 
	
 Notes

 	
  

 	
 1

 
	
 Number of
 Warrant Shares

 	
  

 	
 2

 
	
 Person

 	
  

 	
 3

 
	
 Pre-Announcement
 Periods

 	
  

 	
 16

 
	
 Prospectus

 	
  

 	
 3

 
	
 Questionnaire

 	
  

 	
 5

 
	
 Registrable
 Securities

 	
  

 	
 3

 
	
 Registration
 or Offering Expenses

 	
  

 	
 3

 
	
 Rule 144A

 	
  

 	
 3

 
	
 SEC

 	
  

 	
 4

 
	
 Securities

 	
  

 	
 1

 
	
 Sellers

 	
  

 	
 1

 
	
 Shelf
 Registration

 	
  

 	
 4

 
	
 Shelf
 Registration Statement

 	
  

 	
 4

 
	
 Sponsor

 	
  

 	
 4

 
	
 Substantial
 Distribution

 	
  

 	
 4

 
	
 Suspension
 Period

 	
  

 	
 7

 
	
 Threshold
 Amount

 	
  

 	
 4

 
	
 Underwriter

 	
  

 	
 4

 
	
 Warrant
 Agent

 	
  

 	
 4

 
	
 Warrant
 Agreement

 	
  

 	
 4

 
	
 Warrants

 	
  

 	
 1

 
	
 Well-Known
 Seasoned Issuer

 	
  

 	
 4

 

- ii -

REGISTRATION RIGHTS AGREEMENT

          REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of May 23, 2012, by and
between LEGG MASON, INC., a Maryland corporation (the “Company”), and
KKR I-L LIMITED (the “KKR Holder”).  

          This
Agreement is made pursuant to the Note Exchange Agreement, dated May 16, 2012
(the “Note Exchange Agreement”), by and among the Company, the Holders
named on Schedule I thereto (the “Sellers”) and, for limited purposes, the
Sponsor (as defined below), which provides for the repurchase by the Company
from the Sellers of $1,250,000,000 aggregate principal amount of the Company’s
2.50% Convertible Senior Notes due 2015 (the “Notes”). In consideration
of the repurchase of the Notes, the Termination (as defined in the Note
Exchange Agreement) and the amendment of certain agreements that were entered
into when the Notes were issued, the Company desires to issue to the KKR
Holder, Citibank, N.A., Credit Suisse International and HSBC Bank USA, National
Association warrants (“Warrants”) to purchase shares of the Company’s
Common Stock (as defined below). The Warrants, together with the shares of
Common Stock deliverable upon exercise of the Warrants, are referred to herein
as the “Securities.” In order to induce the KKR Holder to enter into the
Note Exchange Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Note Exchange Agreement. 

          In
consideration of the foregoing, the parties hereto agree as follows: 

          1.
Definitions. 

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

          “1933
Act” shall mean the Securities Act of 1933, as amended.

          “1934
Act” shall mean the Securities Exchange Act of l934, as amended.

          “Affiliate”
shall have the meaning given to it in the Note Exchange Agreement.

          “Automatic
Shelf Registration Statement” shall have the meaning set forth in
Rule 405 of the 1933 Act.

          “Beneficially
Own” or “Beneficial Ownership” shall have the meaning set forth in
Rule 13d-3 of the rules and regulations promulgated under the Exchange Act.

          “Business
Day” shall mean any calendar day on which the New York Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market and the Securities and
Exchange Commission are open for trading or business, as the case may be.

          “Closing
Date” shall have the meaning given to it in the Note Exchange Agreement.

-1-

          “Common
Stock” shall mean any shares of common stock, $0.10 par value, of the
Company and any other shares of common stock as may constitute “Common Stock”
for purposes of the Warrant Agreement.

          “Company
Supported Distribution” means a distribution of Warrants or Common Stock
that are Registrable Securities in connection with which Holders have invoked
their rights for cooperation from the Company under Section 5 of this
Agreement.

          “Depositary”
shall mean The Depository Trust Company and its successors or assigns, or any
other depositary appointed by the Company; provided, however, that such appointed
depositary must have an address in the Borough of Manhattan, in The City of New
York, unless no such depositary is available.

          “Effectiveness
Period” shall mean the period beginning on the date the Shelf Registration
Statement is effective pursuant to Section 2.1 hereof and ending on the earlier
of (i) such time as all the Securities cease to be Registrable Securities and
(ii) the date that is 90 days following the Expiration Date.

          “Expiration
Date” shall have the meaning given to it in the Warrant Agreement.

          “Free
Writing Prospectus” shall have the meaning set forth in Rule 405 of
the 1933 Act.

          “Holder”
shall mean the KKR Holder, for so long as it owns any Registrable Securities,
and each Affiliate of the Sponsor or the KKR Holder that Beneficially Owns
Registrable Securities.

          “Initial
Purchaser” shall mean an initial purchaser or placement agent in connection
with the offer or sale of Securities pursuant to a Company Supported
Distribution effected under Rule 144A.

          “Issuer
Free Writing Prospectus” shall have the meaning set forth in Rule 433
of the 1933 Act.

          “Majority
Holders” shall mean Holders holding over 50% of the aggregate number of
Warrants constituting Registrable Securities outstanding; provided that, for the
purpose of this definition, a holder of shares of Common Stock delivered upon
exercise of the Warrants, shall be deemed to hold an aggregate number of
Warrants (in addition to the number of Warrants held by such holder) equal to
the quotient of (A) the number of such shares of Common Stock held by such
holder and (B) the Number of Warrant Shares in effect at the time of the
exercise of the Warrants as determined in accordance with the Warrant
Agreement; provided
further that whenever the consent or approval of the Majority
Holders or of a specified percentage of the Holders of Registrable Securities
is required hereunder, Warrants or Common Stock delivered upon exercise of the
Warrants that are held by the Company or any Subsidiary of the Company shall be
disregarded, and Warrants held by any Holder shall be included in determining
whether such consent or approval was given by the Majority Holders or such
specified percentage of the Holders of Registrable Securities.

          “Number
of Warrant Shares” shall have the meaning set forth in the Warrant
Agreement. 

-2-

          “Person”
shall mean an individual, partnership (general or limited), corporation,
limited liability company, trust, unincorporated organization or other entity,
or a government or agency or political subdivision thereof.

          “Prospectus”
shall mean the prospectus relating to the Securities included in a Shelf
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including
any such prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all materials
incorporated by reference therein.

          “Registrable
Securities” shall mean all or any of the Securities; provided, however, that such
Securities shall cease to be Registrable Securities when (i) a Shelf
Registration Statement with respect to such Securities shall have become
effective under the 1933 Act and such Securities shall have been sold or
transferred pursuant to such Shelf Registration Statement, (ii) such
Securities have been transferred in compliance with Rule 144 under the 1933 Act
(or any successor provision thereto), or (iii) such Securities shall have
ceased to be outstanding. 

          “Registration
or Offering Expenses” shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including:
(i) all SEC registration and filing fees, (ii) in the case of a Company
Supported Distribution for the benefit of the Holders, all reasonable fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of one counsel for any
Underwriters, Initial Purchasers or Holders in connection with blue sky
qualification of any of the Registrable Securities), (iii) all expenses of
the Company in preparing or assisting in preparing, word processing, printing
and distributing any Shelf Registration Statement and any Prospectus, and, in
the case of a Company Supported Distribution, any offering or information
memorandum, any amendments or supplements thereto, any securities sales
agreements and any other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on
any securities exchange or exchanges, (v) all rating agency fees, if any,
(vi) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including, in the case of a
Company Supported Distribution, the expenses of any “comfort letters”,
(vii) the reasonable fees and expenses of the Warrant Agent, and any
escrow agent or custodian, and (viii) the reasonable fees and expenses of
a single counsel to the Holders in connection with the Shelf Registration
Statement and in connection with a Company Supported Distribution, which
counsel shall be selected by the Majority Holders, but excluding any
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder and, except as
provided under clause (viii) above, all reasonable expenses and fees for
all counsel and other professionals representing the Holders in connection with
the sale or disposition of Registrable Securities.

          “Rule
144A” means Rule 144A under the 1933 Act.

-3-

          “SEC”
shall mean the Securities and Exchange Commission or any successor agency or
government body performing the functions currently performed by the United
States Securities and Exchange Commission.

          “Shelf
Effectiveness Deadline” shall mean the date 180 days after the Closing
Date.

          “Shelf
Registration” shall mean a registration effected pursuant to
Section 2.1.

          “Shelf
Registration Statement” shall mean a “shelf” registration statement of the
Company pursuant to the provisions of Section 2.1 of this Agreement which
covers all of the Registrable Securities on an appropriate form under
Rule 415 under the 1933 Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein; provided, however, that a registration
statement shall not be deemed a Shelf Registration Statement until such time as
it includes a Prospectus relating to the Securities.

          “Sponsor”
shall mean Kohlberg Kravis Roberts & Co. L.P.

          “Substantial
Distribution” shall mean an offer and sale of Securities that are
Registrable Securities of at least the Threshold Amount by one or more Holders
to purchasers that are not Affiliates of the Company (other than the Sponsor or
its Affiliates to the extent they are deemed to be “Affiliates” of the Company
at such time), where such offer and sale is made pursuant to either Rule 144A
or pursuant to a bona fide public offering made pursuant to the Shelf
Registration Statement.

          “Threshold
Amount” shall mean, with respect to an offer and sale of Securities that
are Registrable Securities, an aggregate of at least 4,687,500 Warrants (calculated, with
respect to Common Stock as set forth in the definition of “Majority Holders”); provided, however,
if the proposed offer and sale of Securities relates to all of the Securities
held by a Holder and its Affiliates, “Threshold Amount” shall mean an aggregate
of at least 1,420,454 Warrants. 

          “Warrant
Agent” shall have the meaning set forth in the Warrant Agreement.

          “Warrant
Agreement” means the Warrant Agreement dated as of the date hereof between
the Company and the Warrant Agent. 

          “Underwriter”
shall mean an underwriter, as defined in the 1933 Act, of the Securities in
connection with an offering thereof under a Shelf Registration Statement
pursuant to and in accordance with a Company Supported Distribution.

          “Well-Known
Seasoned Issuer” shall have the meaning set forth in Rule 405 of the
1933 Act.

          2.
Registration Under the 1933 Act. 

                    2.1
Shelf Registration.

-4-

                              (a)
No later than 90 days after the Closing Date the Company shall, at its cost,
file with the SEC a Shelf Registration Statement relating to the offer and sale
of the Registrable Securities by the Holders that have provided the
Questionnaire and the other information pursuant to Section 2.1(d). The Company
shall, at its cost, use its commercially reasonable efforts to cause such Shelf
Registration Statement to become or be declared effective under the 1933 Act as
promptly as is reasonably practicable after such Shelf Registration Statement
is filed, but in no event later than the Shelf Effectiveness Deadline. If the
Company is a Well-Known Seasoned Issuer at the time of filing the Shelf
Registration Statement with the SEC, such Shelf Registration Statement shall be
designated by the Company as an Automatic Shelf Registration Statement.

                              (b)
The Company shall, at its cost, use its commercially reasonable efforts,
subject to Section 2.4, to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the 1933 Act in
order to permit the Prospectus forming part thereof to be usable by Holders
during the Effectiveness Period. Upon the expiration of an Automatic Shelf
Registration Statement, so long as it remains a Well-Known Seasoned Issuer the
Company shall file a new Shelf Registration Statement which shall be designated
by the Company as an Automatic Shelf Registration Statement.

                              (c)
The Company shall cause the Shelf Registration Statement and the related Prospectus
and any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement or such amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the 1933 Act, and (ii)
not to contain any untrue statement of a material fact required to be stated
therein or necessary in order to make the statements therein (in the case of
the Prospectus, in the light of the circumstances in which they were made) not
misleading.

                              (d)
Notwithstanding any other provision hereof, no Holder of Registrable Securities
may include any of its Registrable Securities in the Shelf Registration
Statement pursuant to this Agreement unless the Holder furnishes to the Company
a fully completed notice and questionnaire in the form attached hereto as
Exhibit A (the “Questionnaire”) and such other information in writing as
the Company may reasonably request in writing for use in connection with the
Shelf Registration Statement and in any application to be filed with or under
state securities laws. At least 30 business days prior to the filing of the
Shelf Registration Statement, the Company will provide notice to the Holders of
its intention to file the Shelf Registration Statement. In order to be named as
a selling securityholder in the Shelf Registration Statement or Prospectus at
the time of effectiveness of the Shelf Registration Statement, each Holder must
no later than 20 days following notice by the Company as set forth in the
previous sentence, furnish in writing the completed Questionnaire and such
other information that the Company may reasonably request in writing, if any,
to the Company and the Company will include the information from the completed
Questionnaire and such other information, if any, in the Shelf Registration
Statement and the Prospectus, as necessary and in a manner, so that upon
effectiveness of the Shelf Registration Statement the Holder will be permitted
to deliver the Prospectus to purchasers of the Holder’s Registrable Securities.
Each Holder shall update such information upon the written request of the
Company. From and after the date that the Shelf Registration Statement becomes
effective, upon receipt of a completed Questionnaire and such other information
that the Company may reasonably request in writing, if any, the Company shall
(i) within 20 Business Days after receipt of such Questionnaire and such other
information, use commercially reasonable efforts to file any 

-5-

amendments or
supplements to the Shelf Registration Statement necessary for such Holder to be
named as a selling securityholder in the Prospectus contained therein to permit
such Holder to deliver the Prospectus to purchasers of the Holder’s Securities,
provided that
if a post-effective amendment to the Shelf Registration Statement is required,
the Company shall not be obligated to file more than one such amendment for all
such holders during one fiscal quarter, provided, further, that if such
Questionnaire and such other information is delivered during a Suspension
Period, the Company shall so inform the Holder delivering such Questionnaire
and such other information and shall take the action described in this Section
2.1(d) (i) within five Business Days after the expiration of the Suspension Period
and (ii) if the Company files a post-effective amendment to the Shelf
Registration Statement, use its commercially reasonable efforts to cause such
post-effective amendment to become or be declared effective under the 1933 Act
as promptly as practicable. Holders that do not deliver a completed written
Questionnaire and such other information, as provided for in this
Section 2.1(d), will not be named as selling securityholders in the
Prospectus. Each Holder named as a selling securityholder in the Prospectus
agrees to promptly furnish to the Company in writing all information required
to be disclosed in order to make information previously furnished to the
Company by the Holder not materially misleading and any other information
regarding such Holder and the distribution of such Holder’s Registrable
Securities as the Company may from time to time reasonably request in writing
for inclusion in the Shelf Registration Statement.

                              (e)
Each Holder agrees that if such Holder wishes to sell Registrable Securities
pursuant to a Shelf Registration Statement and related Prospectus it will do so
only in accordance with Section 2.1(d) and subject to Section 2.4.
Each Holder agrees not to sell any Registrable Securities pursuant to the Shelf
Registration Statement without delivering, or causing to be delivered, a
Prospectus (excluding those materials incorporated by reference therein) to the
purchaser thereof or complying with Rule 153 under the 1933 Act and, following
termination of the Effectiveness Period, to notify the Company, within ten days
of a written request by the Company, of the amount of Registrable Securities
sold pursuant to the Shelf Registration Statement.

                              (f)
The Company agrees that, in the context of a registered Company Supported
Distribution, and only for the period of 30 days from the earlier of the public
announcement or commencement of marketing efforts with respect to such Company
Supported Distribution, unless it obtains the prior consent of the managing
Underwriter (which consent shall not be unreasonably withheld or delayed), and
each Holder agrees that, unless it obtains the prior written consent of the
Company, it will not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a Free Writing Prospectus required to be filed with the SEC. The
Company represents that any Issuer Free Writing Prospectus prepared by it or
authorized by it in writing for use by such Holder will be delivered to each
such Holder and will not include any information that conflicts with the
information contained in the Shelf Registration Statement or the Prospectus and
that any such Issuer Free Writing Prospectus, when taken together with the
information in the Shelf Registration Statement and the Prospectus, will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

-6-

          The
Company agrees to supplement or amend the Shelf Registration Statement if
required by the 1933 Act or the rules and regulations thereunder or by the
instructions applicable to the registration form used by the Company or, to the
extent the Company does not reasonably object, as reasonably requested by the
KKR Holder with respect to information relating to the KKR Holder or by the
Warrant Agent on behalf of the Holders covered by such Shelf Registration Statement
with respect to information relating to such Holders, and to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after it is used or filed with the SEC; provided, however,
that any such amendment or supplement filed by the Company via the EDGAR system
will be deemed to have been furnished to the Holders of Registrable Securities.

                    2.2
Expenses. The Company shall pay all Registration or Offering Expenses in
connection with the registration pursuant to Section 2.1 and, without
duplication, in connection with a Company Supported Distribution pursuant to
Section 5. Each Holder shall pay all underwriting and placement discounts and
commissions, agency and placement fees, brokers commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder’s Registrable
Securities.

                    2.3
Effectiveness. After a Shelf Registration Statement is effective, if the
offering of Registrable Securities pursuant to a Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or any other governmental agency or court, such Shelf Registration
Statement will be deemed not to have been effective during the period of such interference,
until the offering of Registrable Securities pursuant to such Shelf
Registration Statement may legally resume.

                    2.4
Suspension. Notwithstanding any other provision hereof, the Company may
suspend the use of any Prospectus for a period not to exceed an aggregate of 60
days in any 90-day period or an aggregate of 120 calendar days in any 360-day
period, as such period may be reduced pursuant to Section 5(b) hereof (each, a
“Suspension Period”), if the Company shall have determined in good faith
that because of valid business reasons (not including avoidance of the
Company’s obligations hereunder), including without limitation plans for a
registered public offering, an acquisition or other proposed or pending
corporate developments and similar events or because of filings with the SEC,
it is in the best interests of the Company to suspend such use, and prior to
suspending such use the Company provides the Holders with written notice of
such suspension, which notice need not specify the nature of the event giving
rise to such suspension (and, upon receipt of such notice, each Holder agrees
not to sell any Registrable Securities pursuant to the Shelf Registration
Statement until such Holder is advised in writing that the Prospectus may be
used, which notice the Company agrees to provide promptly following the lapse
of the event or circumstances giving rise to such suspension), provided
that 60 days shall be increased to 75 days if the Company shall have determined
in good faith that the disclosure of previously undisclosed proposed or pending
material business transaction would be reasonably likely to impede its ability
to consummate such transaction. Each Holder shall keep confidential any
communications received by it from the Company regarding the suspension of the
use of the Prospectus (including the fact of the suspension), except as
required by applicable law.

-7-

          3.
Registration Procedures.

          In
connection with the obligations of the Company with respect to the Shelf Registration,
the Company shall, subject to the rights of the Company to invoke and maintain
a Suspension Period in accordance with Section 2.4 of this Agreement without
being in violation of any of the provisions hereof:

                              (a)
not less than five days prior to filing the Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to the Shelf Registration
Statement or amendment or supplement to such Prospectus (other than amendments
and supplements that do nothing more than name Holders and provide information
with respect thereto), furnish to the Holders or any Underwriter or designee
thereof and one special counsel to the Holders or any Underwriter or designee
thereof copies of all such documents proposed to be filed and use its
commercially reasonable efforts to reflect in each such document when so filed
with the SEC such comments as the Holders or any Underwriter or designee
thereof and such special counsel to the Holders or any Underwriter or designee
thereof reasonably shall propose within three days of the delivery of such
copies to the Holders or any Underwriter or designee thereof and counsel to the
Holders or any Underwriter or designee thereof. In addition, if any Holder that
has provided the Questionnaire and the other information required by
Section 2.1(d) shall so request in writing, a reasonable time prior to
filing any such documents, the Company shall furnish to such Holder copies of
all such documents proposed to be filed and use its commercially reasonable
efforts to reflect in each such document when so filed with the SEC such
comments as such Holder reasonably shall propose within three Business Days of
the delivery of such copies to such Holder; 

                              (b)
ensure that (i) the Shelf Registration Statement and any amendment thereto and
any Prospectus forming part thereof and any amendment or supplement thereto
complies in all material respects with the 1933 Act, and (ii) the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;

                              (c)
use its commercially reasonable efforts at all times, except as provided in
Section 2.4, to take all steps necessary to effect and maintain the
registration of all of the Registrable Securities covered by the Shelf
Registration Statement;

                              (d)
prepare and file with the SEC such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary under applicable law to
keep the Shelf Registration Statement effective for the Effectiveness Period,
subject to Section 2.4; and cause each Prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to be filed in
compliance with Rule 424 (or any similar provision then in force) under
the 1933 Act and use its commercially reasonable efforts to comply during the
Effectiveness Period with the provisions of the 1933 Act, the 1934 Act and the
rules and regulations thereunder required to enable the disposition of all
Registrable Securities covered by the Shelf Registration Statement in accordance
with the intended method or methods of distribution (as provided to the Company
in the Questionnaires) by the selling Holders thereof;

-8-

                              (e)
(i) notify in writing each Holder of Registrable Securities of the filing of
a Shelf Registration Statement or any post-effective amendment to a Shelf
Registration Statement and of when any such Shelf Registration Statement or any
post-effective amendment to a Shelf Registration Statement has become
effective; (ii) during the Effectiveness Period, furnish to each Holder of
Registrable Securities that has provided the Questionnaires and the information
required by Section 2.1(d) and to each Underwriter, if any, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or Underwriter may reasonably request in writing, including
financial statements and schedules and, if such Holder or Underwriter so
requests, all exhibits thereto in connection with the sale or other disposition
of the Registrable Securities; and (iii) subject to Section 2.4 and
to any notice by the Company in accordance with Section 3(g) of the
existence of any fact of the kind described in Sections 3(g) (i), (ii),
(iii), (iv) and (v), hereby consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders and Underwriters
of Registrable Securities that has provided the Questionnaire and the other
information required by Section 2.1(d) in connection with the offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto in the manner set forth therein;

                              (f)
use its commercially reasonable efforts to register or qualify or cooperate
with the Holders and Underwriters in connection with the registration or
qualification (or exemption from such registration or qualification) of the
Registrable Securities under all applicable state securities or “blue sky” laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Shelf Registration Statement and each Underwriter shall reasonably request in
writing, and do any and all other acts and things which may be reasonably
necessary or advisable to maintain such registration or qualification and to
enable each such Holder and Underwriter to consummate the disposition in each
such jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(f),
or (ii) take any action which would subject it to general service of process
or taxation in any such jurisdiction where it is not then so subject;

                              (g)
notify as promptly as reasonably practicable each Holder of Registrable
Securities under a Shelf Registration that has provided the Questionnaire and
the other information required by Section 2.1(d) and, if requested by such
Holder, confirm such advice in writing promptly (i) of any request,
following the effectiveness of the Shelf Registration Statement under the 1933
Act, by the SEC or any state securities authority for post-effective amendments
and supplements to a Shelf Registration Statement and Prospectus or for
additional information after the Shelf Registration Statement has become
effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Shelf
Registration Statement or the initiation of any proceedings for that purpose,
(iii) of the occurrence (but not the nature of or details concerning) of
any event or the discovery of any facts during the period a Shelf Registration
Statement is effective which makes any statement made in such Shelf
Registration Statement or the related Prospectus untrue in any material respect
or which requires the making of any changes in such Shelf Registration
Statement or Prospectus in order to make the statements therein not misleading,
(provided,
however,
that no notice by the Company shall be required pursuant to this clause
(iii) in the event that the Company either promptly files a Prospectus supplement
to update the Prospectus or a Form 8-K or other appropriate 1934 Act
report that is incorporated by reference into 

-9-

the Shelf
Registration Statement, which, in either case, contains the requisite
information that results in such Shelf Registration Statement no longer
containing any untrue statement of material fact or omitting to state a
material fact necessary to make the statements therein not misleading),
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose and (v) of any determination by the Company that a post-effective
amendment to such Shelf Registration Statement would be required by applicable
law;

                              (h)
provided a Holder (collectively with its Affiliates) then holds at least 1,420,454 Registrable Securities
(calculated with respect to Common Stock, as set forth in the definition of
“Majority Holders”), as promptly as reasonably practicable furnish to such
Holder and any Underwriter or designee thereof (i) copies of any comment
letters received from the SEC with respect to a Shelf Registration Statement
and, if requested by such Holder in connection with an offering of Registrable
Securities, copies of any comment letters received from the SEC with respect to
any documents incorporated therein and (ii) any other request by the SEC
or any state securities authority for amendments or supplements to a Shelf
Registration Statement and Prospectus or for additional information with
respect to the Shelf Registration Statement and Prospectus;

                              (i)
use its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Shelf Registration Statement or the
qualification of the securities therein for sale in any jurisdiction at the
earliest practicable moment or, if any such order or suspension is made
effective during any Suspension Period, at the earliest practicable moment
after the Suspension Period;

                              (j)
upon the occurrence of any event or the discovery of any facts, each as
contemplated by Sections 3(g)(i), (ii), (iii), (iv) and (v), as promptly as
practicable after the occurrence of such an event or within the time period
required by Section 2.4, use its commercially reasonable efforts to prepare a
supplement or post-effective amendment to the Shelf Registration Statement or
the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not contain at
the time of such delivery any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and, at such time as
such public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the Company agrees
promptly to notify each Holder that has provided the Questionnaire and the
other information required by Section 2.1(d) of such determination and to
furnish each Holder such number of copies of the Prospectus as amended or
supplemented, as such Holder may reasonably request;

                              (k)
use its commercially reasonable efforts to cause all Registrable Securities
which are Common Stock to be listed on any securities exchange or inter-dealer
quotation system on which shares of Common Stock are then listed;

                              (l)
make generally available to its security holders earning statements covering at
least 12 months (which need not be audited) satisfying the provisions of
Section 11(a) of 

-10-

the 1933 Act
and Rule 158 thereunder as soon as reasonably practicable and, in any
event, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year), or such longer period as may be permitted under
the 1934 Act, beginning with the first month of the Company’s first fiscal
quarter commencing after the effective date of the Shelf Registration
Statement; 

                              (m)
make a reasonable effort to provide such information as is required for any
filings required to be made with the Financial Industry Regulatory Authority;
and

                              (n)
not later than the effective date of the Shelf Registration Statement, provide
a CUSIP number for the Securities registered under the Shelf Registration
Statement and provide the Warrant Agent with certificates for such Securities,
free of any restrictive legends, in a form eligible for deposit with the
Warrant Agent as custodian for Depositary.

          Without
limiting the provisions of Section 2.1(d), the Company may (as a condition
to such Holder’s participation in the Shelf Registration) require each Holder
of Registrable Securities to furnish to the Company such information regarding
the Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing.
Each Holder agrees promptly to furnish to the Company in writing all
information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not misleading, any other
information regarding such Holder and the distribution of such Registrable
Securities as may be required to be disclosed in the Prospectus or Shelf
Registration Statement under applicable law or pursuant to SEC comments and any
information otherwise reasonably required by the Company to comply with
applicable law or regulations.

          Each
Holder agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind
described in Section 3(g)(i), (ii), (iii), (iv) and (v), such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Prospectus included in the Shelf Registration Statement until such Holder’s
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(j) or written notice from the Company that the Shelf
Registration Statement is again effective and no amendment or supplement is
needed, and, if so directed by the Company, such Holder will deliver to the
Company (at the Company’s expense) all copies in such Holder’s possession,
other than permanent file copies then in such Holder’s possession, of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice.

          4.
Indemnification; Contribution.

                              (a)
Indemnification
by the Company. The Company agrees to indemnify and hold harmless
the KKR Holder, each Holder who provided the Questionnaire and the other
information to the Company in accordance with Section 2.1(d) and each of
their respective directors, officers and employees and agents and each Person,
if any, who controls the KKR Holder or such Holder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act (each of the
foregoing is referred to herein as an “indemnified party”)
(i) against any loss, claim, damage, liability or expense, as incurred, to
which such indemnified party may become subject, insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) 

-11-

arises out of
or is based upon (x) any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement (or, in each case,
any amendment or supplement thereto), including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact, in each case, necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
(y) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact, in each case,
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (z) any untrue
statement or alleged untrue statement of a material fact contained in any
Issuer Free Writing Prospectus prepared by it or authorized by it in writing
for use by such Holder (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact, in each case,
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (ii) against
any and all reasonable out-of-pocket expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) above; and to
reimburse each indemnified party for any and all expenses (including the fees
and disbursements of counsel chosen by the indemnified parties) as such
expenses are reasonably incurred by such indemnified party in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage, liability
or expense incurred by an indemnified party to the extent, but only to the
extent, (A) arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by such
indemnified party expressly for use in the Shelf Registration Statement (or, in
each case, any amendment or supplement thereto), any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or any Issuer Free
Writing Prospectus (or any amendment or supplement thereto) or (B) use of a
Prospectus during a period when use of such Prospectus has been suspended
pursuant to Section 2.4 hereof, provided that such Holder has received
notice of such suspension. The indemnity agreement set forth in this
Section 4(a) shall be in addition to any liabilities that the Company may
otherwise have.

                              (b)
Indemnification
by the Holders. Each Holder who has provided the Questionnaire and
the other information to the Company in accordance with Section 2.1(d),
severally, but not jointly, agrees to indemnify and hold harmless the Company,
the KKR Holder and the other selling Holders who have provided the
Questionnaire and the other information to the Company in accordance with
Section 2.1(d) and each of their respective directors, officers, employees
and agents and each Person, if any, who controls the Company, the KKR Holder or
any other selling Holder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 4(a),
as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Shelf Registration
Statement (or, in each case, any amendment thereto), any preliminary prospectus
or the Prospectus included therein (or any amendment or 

-12-

supplement
thereto) or any Issuer Free Writing Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information with
respect to such Holder furnished to the Company by or on behalf of such Holder
expressly for use in the Shelf Registration Statement (or, in each case, any
amendment thereto), such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or any Issuer Free Writing Prospectus (or any
amendment or supplement thereto).

                              (c)
Notifications
and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 4 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 4, notify the
indemnifying party in writing of the commencement thereof, but the failure to
so notify the indemnifying party (1) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure materially prejudices the indemnifying
party and (2) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict will arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that
there may be material legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (other than one local counsel), reasonably approved by the
indemnifying party, representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.

                              (d)
Settlements.
The indemnifying party under this Section 4 shall not be liable for any
settlement of any proceeding effected without its written consent, which shall
not be withheld unreasonably, but if settled with such consent or if there is a
final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the 

-13-

foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 4(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 45 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (x) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding and (y) 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 the indemnification provided for in this Section 4 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Holders on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

          The
relative fault of the indemnifying parties on the one hand and the indemnified
parties and the Holders on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, or by the Holders and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

          The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 4. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 4 shall be
deemed to include any reasonable out-of-pocket legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue or alleged untrue statement or omission or alleged
omission.

          Notwithstanding
the provisions of this Section 4, no Holder shall be required to indemnify
or contribute any amount in excess of the amount by which the total price at
which the Securities sold by such Holder exceeds the amount of any damages
which such Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.

-14-

          No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.

          For
purposes of this Section 4, each director, officer, employee and agent of
any Holder, or each Person, if any, who controls any Holder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as such Holder, and each director, officer,
employee or agent of the Company, and each Person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as
the Company.

                              (f) The provisions of this
Section 4 shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Holder or the Company or any
indemnified person referred to in this Section 4, and shall survive the sale by
a Holder of securities covered by the Shelf Registration Statement.

          5.
Distributions by Holders

                              (a)
If the Company shall at any time receive a written request from Holders then
able to participate in a Substantial Distribution that in the aggregate have
Beneficial Ownership of at least the Threshold Amount of Registrable Securities
(i) that the Company assist in a Substantial Distribution, (ii) stating that
such Holders have a current bona fide intent to effectuate a Substantial
Distribution and (iii) providing verification that such Holders Beneficially
Own at least the Threshold Amount of Registrable Securities, the Company will
(x) provide reasonable notice of the request to each Holder pursuant to which
the Company will offer to include such Holder’s Registrable Securities in such
Substantial Distribution upon a written request from such Holder received by
the Company within 10 days of such notice (such request to specify the number
of such Holder’s Registrable Securities that such Holder requests be included
in such Substantial Distribution) and (y) provide such Holders (including such
Holders that submitted a written request within such ten-day period) with its
reasonable cooperation, as requested by such Holders, to facilitate such Substantial
Distribution; provided, that the Company shall only be required to assist
the Holders with an aggregate of three such Substantial Distributions; provided,
further,
that the Company shall not be required to assist any Holders with a Substantial
Distribution more than twice in any 365 day period; and provided, further,
that the Company will only be required to provide Holders with such cooperation
until the earlier of consummation of the Company Supported Distribution or 45
days following the earlier of the public announcement or commencement of
marketing efforts with respect to such distribution. Under any circumstances
and for such periods as the Company would be permitted to initiate a Suspension
Period pursuant to Section 2.4, the Company shall have the right to delay the
commencement (e.g., the taking of any external activity, but not including
internal, non-public preparatory work) of a Company Supported Distribution (a “Delay
Period”) for a period of days which, when aggregated with any pending or
prior Suspension Periods and Delay Periods, would not exceed the 60 and 120-day
limits set forth in Section 2.4 without, in the context of a registered Company
Supported Distribution, formally initiating a Suspension Period, provided that
any such Delay Periods may not exceed and shall reduce (on a day-for-day basis)
the 60 and 120-day limits referred to in Section 2.4 unless otherwise agreed by
the Majority Holders participating in such registered Company Supported
Distribution In addition, 

-15-

under no
circumstances shall the Company be required to commence a Company Supported
Distribution at any time during the three week period immediately preceding the
scheduled public disclosure of results for any quarter (the “Pre-Announcement
Periods”) and any delay during that time shall not be counted against the
Suspension Period. If a request for a Company Supported Distribution has been
made before any Delay Period or Pre-Announcement Period, however, the Company
will provide reasonable cooperation as is reasonably requested during such
Delay Period or Pre-Announcement Period to permit such Company Supported
Distribution to be commenced promptly following the expiration of such Delay
Period or Pre-Announcement Period. For the avoidance of doubt, any Company
Supported Distribution shall not require any pre-clearance under any stock
trading policies of the Company in effect at such time.

          For
purposes of the three Substantial Distributions with which the Company is
required to provide the Holders with assistance, it shall be deemed to be a
Substantial Distribution for which the Company has provided assistance if the
Holders request such assistance and the Substantial Distribution is cancelled,
terminated or otherwise not consummated, unless such cancellation, termination
or failure to consummate such Substantial Distribution is based upon material
adverse information concerning the Company of which the Holders initiating such
Substantial Distribution were not aware at the time of such request.

                              (b)
In furtherance of the Company’s undertakings, and subject to the limitations in
Section 5(a), the Company agrees to use its commercially reasonable efforts to
enter into such customary agreements (on terms reasonably acceptable to the
Company) and take all other customary and appropriate actions in order to
expedite or facilitate the disposition of the Registrable Securities being
offered and sold in a Substantial Distribution by the Holders in which the
Company provides cooperation, including: 

	
  

 	
  

 
	
  

 	
                                    (i)
 using commercially reasonable efforts to obtain opinions of counsel to the
 Company and updates thereof addressed to the Underwriters or Initial
 Purchasers, if any, covering matters as are customarily requested in opinions
 covering secondary resale offerings of companies of comparable size,
 maturities and lines of business as the Company;

 
	
  

 	
  

 
	
  

 	
                                    (ii)
 using commercially reasonable efforts to obtain “comfort” letters and updates
 thereof from the Company’s independent certified public accountants (and, if
 necessary, any other independent certified public accountants of any
 subsidiary of the Company or of any business acquired by the Company for
 which financial statements are, or are required to be, included in the Shelf
 Registration Statement or offering memorandum, as the case may be) addressed
 to the Underwriters or Initial Purchasers, if any, such letters covering
 matters as are customarily requested in comfort letters covering secondary
 resale offerings of companies of comparable size, maturities and lines of
 business as the Company;

 
	
  

 	
  

 
	
  

 	
                                    (iii)
 making reasonably available for inspection by each Holder and the
 Underwriters or Initial Purchasers, if any, participating in any Substantial
 Distribution, and any attorney, accountant or other agent retained by any
 such Holder or Underwriter or Initial Purchaser, all relevant financial and
 other records and pertinent corporate documents 

 

-16-

	
  

 	
  

 
	
  

 	
 of the
 Company as are customarily made available in secondary resale offerings of
 companies of comparable size, maturities and lines of business as the
 Company;

 
	
  

 	
  

 
	
  

 	
                                    
 (iv) using commercially reasonable efforts to cause the Company’s officers,
 directors, employees, accountants and auditors to supply all relevant
 information, and causing appropriate persons to be reasonably available for
 discussions concerning such documents, as reasonably requested by any such
 Holder, Underwriter, Initial Purchaser, attorney, accountant or agent in
 connection with any such Substantial Distribution as is customary for similar
 due diligence examinations;

 
	
  

 	
  

 
	
  

 	
                                    
 (v) delivering such documents and certificates (including an offering or
 information memorandum in the context of a Substantial Distribution effected
 pursuant to Rule 144A) to the Holders and the Underwriters or Initial
 Purchasers, if any, as may be reasonably requested by such Holders,
 Underwriters or Initial Purchasers and as are customarily delivered in
 secondary resale offerings of companies of comparable size, maturities and
 lines of business as the Company; 

 
	
  

 	
  

 
	
  

 	
                                    
 (vi) making appropriate members of senior management, which shall, in the
 Company’s discretion, not include the Chief Executive Officer of the Company,
 reasonably available to participate in one due diligence conference call
 lasting no more than one hour with the Underwriters, the Initial Purchasers and
 the Holders participating in such Substantial Distribution; provided,
 that in the event of a Substantial Distribution in excess of 4,687,500 Registrable Securities
 (calculated with respect to Common Stock as set forth in the definition of
 “Majority Holders”) the Company shall, in addition to the foregoing, make
 appropriate members of senior management, which shall include the Chief
 Executive Officer of the Company at the request of such Holders, reasonably
 available to participate in one conference call lasting no more than one hour
 with potential investors, but for the avoidance of doubt, such members of
 senior management (A) shall only be required to review the Company and its
 business in any such conference call, (B) shall not be required to address the
 suitability of any investment in the Warrants or the terms of the Warrants in
 any such conference call, and (C) shall not be required to provide any
 projections in any such conference call;

 
	
  

 	
  

 
	
  

 	
                                    
 (vii) if an underwriting or purchase, sale or agency agreement is entered
 into, causing the same to set forth indemnification provisions and procedures
 substantially equivalent to the indemnification provisions and procedures set
 forth in Section 4 with respect to the Underwriters or Initial Purchasers and
 all other parties to be indemnified pursuant to said Section or, at the
 request of any Underwriters or Initial Purchasers, in the form customarily
 provided to such Underwriters or Initial Purchasers in similar types of
 transactions; 

 
	
  

 	
  

 
	
  

 	
                                    
 (viii) not selling, offering or agreeing to sell, granting any option for the
 sale of, or otherwise transferring or disposing of securities of the same
 type (including any underlying securities) as the Registrable Securities
 included in such Substantial Distribution, or any securities convertible into
 or exchangeable or exercisable for such securities, during the ten days prior
 to the pricing of such Substantial Distribution and until 

 

-17-

	
  

 	
  

 
	
  

 	
 the earlier of
 (A) the end of any lock-up period which the Underwriters or Initial
 Purchasers deem is necessary to effectuate the Substantial Distribution
 (which in no event will be greater than 45 days), which lock-up period shall
 begin on the date of the pricing of such Substantial Distribution, and (B)
 the abandonment of such Substantial Distribution, provided that the Company
 may offer, issue and sell shares of securities of the same type (including
 any underlying securities) as the Registrable Securities (1) pursuant to any
 employee, officer or director stock or benefit plan, (2) upon the conversion
 or exercise of securities, or rights with respect to any such securities,
 outstanding on the date of the commencement of the Substantial Distribution,
 or (3) issued or to be issued by the Company in connection with an
 acquisition; and

 
	
  

 	
  

 
	
  

 	
                                    
 (ix) (A) causing the Chief Executive Officer, the Chief Financial Officer and
 each other executive officer of the Company as the Underwriters or the
 Initial Purchasers reasonably determine is necessary to effectuate such
 Substantial Distribution, and (B) requesting each director of the Company and
 each Person who then Beneficially Owns more than 5% of the Common Stock, to
 agree not to effect any public or private sale or distribution or otherwise
 dispose (including sales pursuant to Rule 144 under the 1933 Act) of any
 Common Stock during the period of no more than 45 days referred to in clause
 (viii) above (except as part of such Substantial Distribution, if otherwise
 permitted and subject to reasonable and customary exceptions including, but
 not limited to, the exercise of stock options or warrants), unless each
 Holder and the Underwriters or Initial Purchasers, if any, participating in
 any Substantial Distribution otherwise agree. 

 
	
  

 	
  

 
	
  

 	
           Other
 than as provided in this Section 5 (and in the context of a registered
 Substantial Distribution, the other applicable provisions of this Agreement),
 the Company shall not be obligated to cooperate to facilitate any
 underwritten offering to facilitate a Substantial Distribution or otherwise.
 For the avoidance of doubt, (1) the Company shall not be required to provide
 an opinion on an investment in the Registrable Securities to facilitate a
 Substantial Distribution or otherwise and (2) the Company shall not be
 required to participate in more than one conference call lasting no more than
 one hour with potential investors, and for the avoidance of doubt, the
 members of senior management of the Company participating in any such call
 (A) shall only be required to review the Company and its business in such
 conference call, (B) shall not be required to address the suitability of any
 investment in the Warrants or the terms of the Warrants, and (C) shall not be
 required to provide any projections.

 
	
  

 	
  

 
	
  

 	
           In
 connection with any Substantial Distribution in which the Company provides
 assistance to the Holders or the Underwriters or the Initial Purchasers
 thereto, if any, the Company may require each Holder or Underwriter or
 Initial Purchaser, and their attorneys, accountants or agents retained by
 them, to maintain in confidence and not to disclose to any other person any
 information or records provided as part of such assistance and reasonably
 designated by the Company as being confidential, until such time as (A) such
 information becomes a matter of public record (whether by virtue of its
 inclusion in such registration statement or otherwise), or (B) such person
 shall be required so to disclose such information pursuant to a subpoena or
 order of any court or other governmental agency or body having jurisdiction
 over the matter (subject to the requirements of such order, and only after
 such 

 

-18-

	
  

 	
  

 
	
  

 	
 person shall
 have given the Company prompt prior written notice of such requirement), or
 (C) such information is required to be set forth in the Shelf Registration
 Statement or the prospectus or offering or information memorandum included
 therein or in an amendment to such Shelf Registration Statement or an amendment
 or supplement to such prospectus in order that such Shelf Registration
 Statement, prospectus, amendment or supplement, complies with applicable
 requirements of the federal securities laws and the rules and regulations of
 the Commission and does not contain an untrue statement of a material fact or
 omit to state therein a material fact required to be stated therein or
 necessary to make the statements therein not misleading in light of the
 circumstances then existing or (D) such information becomes available to any
 such person from a source other than the Company and such source is not bound
 by a confidentiality agreement or other confidentiality obligations or
 duties, as the case may be.

 

                    If
any of the Registrable Securities to be sold in a Substantial Distribution are
to be sold in an underwritten offering, the Underwriter or Underwriters and
Initial Purchaser or Initial Purchasers that will manage such offering will be
selected by the Majority Holders of such Registrable Securities included in
such offering and shall be reasonably acceptable to the Company. 

          (h)
This Section 5 shall terminate, and the Holders shall have no rights pursuant
to this Section 5, upon the earlier to occur of (i) the date on which the
Holders collectively Beneficially Own less than 1,420,454 Registrable Securities
(calculated with respect to Common Stock as set forth under the definition of
“Majority Holders”) and (ii) the termination of the Effectiveness Period.

          6.
Miscellaneous.

                    6.1
No Inconsistent Agreements. The Company has not entered into and the
Company will not after the date of this Agreement enter into any agreement with
respect to its securities which conflicts with the rights granted to the
Holders of Registrable Securities in this Agreement. The rights granted to the
Holders hereunder do not for the term of this Agreement conflict with the
rights granted to the holders of the Company’s other issued and outstanding
securities under any such agreements.

                    6.2
Amendments and Waivers. The provisions of this Agreement may not be
amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Majority Holders; provided, however, if the
proposed amendment, qualification, modification, supplement or waiver, as the
case may be, has a material and disproportionate adverse effect on certain
Holders as compared to the remaining Holders, the consent of the Holders so
affected will be required in addition to the consent of the Majority Holders; provided,
further,
that no amendment, qualification, supplement, waiver or consent with respect to
Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder; and provided,
further, that the provisions of this Section 6.2 may not be
amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of each Holder, except that any provision of this
Section 6.2 which provides that an amendment to this Agreement may be made
upon the written consent of the Majority Holders may itself be amended,
qualified, modified or supplemented, and 

-19-

waivers or
consents to departures from any such provision may be given if the Company
obtains the written consent of the Majority Holders. Notwithstanding the
foregoing (except the foregoing provisos), (i) a waiver or consent to departure
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not directly or indirectly affect
the rights of other Holders may be given by the Majority Holders, determined on
the basis of the Registrable Securities being sold rather than registered under
such Shelf Registration Statement and (ii) this Agreement may be amended by a
written agreement between the Company and the Majority Holders, without the
consent of the Holders of the Registrable Securities, in order to cure any
ambiguity or to correct or supplement any provision contained herein, provided
that no such amendment shall adversely affect the interest of the Holders of
Registrable Securities. Each Holder of Registrable Securities outstanding at
the time of any amendment, modification, waiver or consent pursuant to this
Section 6.2, shall be bound by such amendment, modification, waiver or
consent, whether or not any notice or writing indicating such amendment,
modification, waiver or consent is delivered to such Holder. Notwithstanding
the foregoing, Section 5 may only be amended, qualified or supplemented if
approved by the Holders.

                   6.3
 Notices. All notices, consents and other communications provided
for or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, facsimile, any courier guaranteeing overnight
delivery or by electronic delivery (a) if to a Holder, in the manner set
forth in the Warrant Agreement; and (b) if to the Company, initially at
the Company’s address set forth in the Note Exchange Agreement, and thereafter
at such other address of which notice is given in accordance with the
provisions of this Section 6.3.

          All
such notices and communications shall be deemed to have been duly given when
delivered in person or by private courier with receipt, if telefaxed when
verbal or email confirmation from the recipient is received, or three (3) days
after being deposited in the United States mail, first-class, registered or
certified, return receipt requested, with postage paid.

          Copies
of all such notices, demands, or other communications to any Holder shall be
deemed to have been duly given, if such notice has been duly given to the
Warrant Agent under the Warrant Agreement, at the address specified in such
Warrant Agreement.

                    6.4
Successors. This Agreement shall inure to the benefit of and be binding
upon the parties hereto, the Holders, their respective successors and the
indemnified persons referred to in Section 4; provided that in no event
shall any Person who Beneficially Owns or otherwise owns or holds any Registrable
Securities, other than a Holder, have any benefit or any legal or equitable
right, remedy or claim under this Agreement; provided, further,
that nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the Note
Exchange Agreement or the Warrant Agreement. Any Registrable Securities
acquired by a Holder in any manner, whether by operation of law or otherwise,
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Holder shall be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Note Exchange Agreement and the Warrant Agreement, and
such Holder shall be entitled to receive the benefits hereof. 

-20-

                    6.5
Third Party Beneficiaries. Each Holder of Registrable Securities shall
be a third party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the KKR Holder, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.

                    6.6
Specific Enforcement. Without limiting the remedies available to the KKR
Holder and the other Holders, the Company acknowledges that any failure by the
Company to comply with its obligations under Section 2.1 may result in
material irreparable injury to the KKR Holder or the other Holders for which
there is no adequate remedy at law, that it may not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the KKR Holder or any other Holder may seek such relief as may be required to
specifically enforce the Company’s obligations under Section 2.1.

                    6.7
Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                    6.8
Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                    6.9
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO EACH
HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                    6.10
Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby. 

                    6.11
Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                    6.12
Interpretation. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
subsection references are to this Agreement unless otherwise specified. The
headings in this Agreement are included for convenience of reference only and
will not limit or otherwise affect the meaning or interpretation of this Agreement.
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they will be 

-21-

deemed to be
followed by the words “without limitation.” The phrases “the date of this
Agreement,” “the date hereof” and terms of similar import, unless the context
otherwise requires, will be deemed to refer to the date set forth in the first
paragraph of this Agreement. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. All
matters to be agreed to by any party hereto must be agreed to in writing by
such party unless otherwise indicated herein.

-22-

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

	
  

 	
  

 	
  

 
	
  

 	
 LEGG MASON, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Jeff
 Nattans

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Jeff
 Nattans

 
	
  

 	
  

 	
 Title: EVP

 

[SIGNATURE PAGE—REGISTRATION RIGHTS
AGREEMENT]

Confirmed and
accepted as of the date

first above written:

	
  

 	
  

 
	
 KKR I-L LIMITED

 
	
  

 	
  

 
	
 By:

 	
   /s/ William
 J. Janetschek

 
	
  

 	

 

 
	
  

 	
   Name:
 William J. Janetschek

 
	
  

 	
   Title: 

 

[SIGNATURE PAGE—REGISTRATION RIGHTS
AGREEMENT]

EXHIBIT
A

SELLING
SECURITYHOLDER QUESTIONNAIRE

          The
undersigned beneficial owner (the “Selling Securityholder”) of the
Warrants (the “Warrants”) of Legg Mason, Inc. (the “Company”) or
the shares of the Company’s Common Stock, par value $0.10 per share, issuable
upon exercise of the Warrants (the “Common Stock” and, together with the
Warrants, the “Registrable Securities”) hereby gives notice to the Company
of its intention to sell or otherwise dispose of Registrable Securities
beneficially owned by it and listed below in Item 3 (unless otherwise
specified under Item 3) pursuant to the Shelf Registration Statement. The
undersigned, by signing and returning this Selling Securityholder
Questionnaire, understands that it will be bound by the terms and conditions of
this Selling Securityholder Questionnaire and the Registration Rights
Agreement, dated as of May 23, 2012, by and between the Company and KKR I-L Limited.

          Selling
security holders that do not complete this Questionnaire and deliver it to the
Company as provided below will not be named selling security holders in the
prospectus and therefore will not be permitted to sell any Registrable Securities
pursuant to the Shelf Registration Statement.

          Pursuant
to the Registration Rights Agreement, the undersigned has agreed to indemnify
and hold harmless the Company’s directors, the Company’s officers and each
person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), from and against
certain losses arising in connection with statements concerning the undersigned
made in the Shelf Registration Statement or the related prospectus in reliance
upon the information provided in this Selling Securityholder Questionnaire. The
undersigned hereby acknowledges its obligations under the Registration Rights
Agreement to indemnify and hold harmless certain persons set forth therein.

          Certain
legal consequences arise from being named a selling security holder in the
Shelf Registration Statement and the related prospectus. Accordingly, holders
and beneficial holders are advised to consult their own securities law counsel
regarding the consequences of being named or not named as a selling security
holder in the Shelf Registration Statement and the related prospectus.

          The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 (a)

 	
  

 	
 Full Legal Name of Selling
 Securityholder:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
  

 	
 Full
 Legal Name of Registered Holder (if not the same as (a) above) through which
 Registrable Securities listed in (3) below are held:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
  

 	
 Full
 Legal Name of DTC Participant (if applicable and if not the same as (b)
 above) through which Registrable Securities listed in (3) below are held:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
  

 	
 Address for Notices to
 Selling Securityholder:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Telephone
 (including area
 code):_____________________________________________________________________________________

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Fax
 (including area code):__________________________________________________________________________________________

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Contact
 Person:__________________________________________________________________________________________________

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
  

 	
 Beneficial Ownership of
 Registrable Securities:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)
 	
  

 	
 Type and Number of
 Registrable Securities beneficially owned:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
  

 	
 CUSIP No(s). of such
 Registrable Securities beneficially owned:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
           Beneficial
 Ownership of Other Securities of the Company Owned by the Selling
 Securityholder:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           Except
 as set forth below in this Item (4), the undersigned is not the
 beneficial or registered owner of any securities of the Company other than
 the Registrable Securities listed above in Item (3).

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
  

 	
 Type and Amount of Other
 Securities beneficially owned by the Selling Securityholder:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
  

 	
 CUSIP No(s). of such Other
 Securities beneficially owned:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
           Relationship
 with the Company:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
           Except
 as set forth below, neither the undersigned nor any of its affiliates,
 officers, directors or principal equity holders (5% or more) has held any
 position or office or has had any other material relationship with the
 Company (or its predecessors or affiliates) during the 

 

A-2

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 past three years.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 State
 any exceptions
 here:_____________________________________________________________________________________________

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
  

 	
 Is the Selling
 Securityholder a registered broker-dealer?

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Yes         o

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 No          o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 If “Yes”, please answer
 subsection (a) and subsection (b):

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 Did the Selling
 Securityholder acquire the Registrable Securities as compensation for
 underwriting/broker-dealer activities to the Company?

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                     Yes    o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                     No     o

 
	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 If you answered “No” to
 question 6(a), please explain your reason for acquiring the Registrable
 Securities:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
  

 	
 Is the Selling Securityholder
 an affiliate of a registered broker-dealer?

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Yes       o

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 No        o

 
	
  

 
	
  

 	
  

 	
         If
 “Yes”, please identify the registered broker-dealer(s), describe the nature
 of the affiliation(s) and answer subsection (a) and subsection (b):

 
	
  

 	
   

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 Did the Selling
 Securityholder purchase the Registrable Securities in the ordinary course of
 business (if no, please explain)?

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                   
  Yes    o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                   
  No    o

 
	
  

 	
  

 	
  

 	
              _______                        
                                                                                              
                       
                      Explain:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 Did the Selling
 Securityholder have an agreement or understanding, directly or indirectly,
 with any person to distribute the Registrable Securities at the same time the
 Registrable Securities were originally purchased (if yes, please explain)?

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                     Yes    o                        
                     
                         
                             
                            
                  Explain:

 

A-3

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
              _______

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
                     No        o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
  

 	
 Is the Selling
 Securityholder a non-public entity?

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Yes       o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 No        o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 If “Yes”, please answer
 subsection (a):

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 Identify the natural
 person or persons that have voting or investment control over the Registrable
 Securities that the non-public entity owns:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (9)

 	
  

 	
 Plan of Distribution:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
         Except
 as set forth below, the undersigned Selling Securityholder (including its
 donees and pledgees) intends to distribute the Registrable Securities listed
 above in Item (3) pursuant to the Shelf Registration Statement only as
 follows (if at all): Such Registrable Securities may be sold from time to
 time directly by the undersigned Selling Securityholder or, alternatively, in
 accordance with the Registration Rights Agreement, through underwriters,
 broker-dealers or agents. If the Registrable Securities are sold through
 underwriters or broker-dealers, the Selling Securityholders will be
 responsible for underwriting discounts or commissions or agent commissions.
 Such Registrable Securities may be sold in one or more transactions at fixed
 prices, at prevailing market prices at the time of sale, at varying prices
 determined at the time of sale, or at negotiated prices. Such sales may be
 effected in transactions (which may involve cross or block transactions)
 (i) on any national securities exchange or quotation service on which
 the Registrable Securities may be listed or quoted at the time of sale,
 (ii) in the over-the-counter market, (iii) in transactions
 otherwise than on such exchanges or services or in the over-the-counter
 market, or (iv) through the writing of options. In connection with sales
 of the Registrable Securities or otherwise, the undersigned Selling
 Securityholder may enter into hedging transactions with broker-dealers, which
 may in turn engage in short sales of the Registrable Securities in the course
 of hedging positions they assume. The undersigned Selling Securityholder may
 also sell Registrable Securities short and deliver Registrable Securities to
 close out short positions, or loan or pledge Registrable Securities to
 broker-dealers that in turn may sell such securities.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 State any exceptions here:______________________________________________________________________________________________

 

          The
undersigned Selling Securityholder acknowledges that it understands its
obligations to comply with the provisions of the Securities Exchange Act of
1934, as amended, and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations),
in connection with any offering of Registrable Securities pursuant to the Shelf

A-4

Registration
Agreement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.

          Pursuant
to the Registration Rights Agreement, the Company has agreed under certain
circumstances to indemnify the Selling Securityholder against certain
liabilities.

          In
accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law or by the staff
of the Commission for inclusion in the Shelf Registration Statement, the
undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains
effective. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery to the address set forth below.

          By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (9) above and the
inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.

          By
signing below, the undersigned agrees that if the Company notifies the
undersigned that Shelf Registration Statement is not available, the undersigned
will suspend use of the prospectus until notice from the Company that the
prospectus is again available.

          Once
this Selling Securityholder Questionnaire is executed by the undersigned and
received by the Company, the terms of this Selling Securityholder
Questionnaire, and the representations, warranties and agreements contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company and the undersigned with respect to the Registrable Securities
beneficially owned by the undersigned and listed in Item (3) above. This
Selling Securityholder Questionnaire shall be governed in all respects by the
laws of the State of New York.

          IN
WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Selling Securityholder Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Dated:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Beneficial
 Owner

 	
  

 

A-5

	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
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PLEASE RETURN THE COMPLETED AND EXECUTED 

SELLING SECURITYHOLDER QUESTIONNAIRE TO THE COMPANY AT:

LEGG MASON, INC. 

100 International Drive

Baltimore, MD 21202

Fax: ___________________

Attn: Tom Merchant, Deputy

General Counsel

A-6Exhibit 10.1

May 23, 2012

Kohlberg
Kravis Roberts & Co. L.P.

9 West 57th Street

New York, NY 10019

Amended and Restated Standstill Agreement

Ladies and
Gentlemen:

          Reference
is made to that certain letter agreement (the “Standstill Agreement”) dated
as of January 14, 2008 between Kohlberg Kravis Roberts & Co. L.P. (“KKR”)
and Legg Mason, Inc. (“LM”). In connection with the acquisition by
one or more affiliates of KKR (the “Transaction”) of warrants (the “Warrants”)
to purchase shares of LM’s common stock, par value $0.10 per share (“Common Stock”),
having the terms set forth in the warrant agreement dated as of May 23, 2012
(the “Warrant
Agreement”), and as a condition to LM’s execution of the Note
Exchange Agreement of even date herewith (the “Note Exchange Agreement”), LM
and KKR hereby enter into this letter agreement (this “Agreement”) amending and
restating the Standstill Agreement as follows.

          KKR
agrees, during the period (the “Standstill Period”) from the date hereof
until such time as neither KKR nor any of its affiliates beneficially owns or
Owns any Warrants or a number of shares of Common Stock issued upon the
exercise of any Warrants that exceeds 4.9% of the outstanding shares of Common
Stock, that it
and its Representatives will not, directly or indirectly, unless
consented to in advance by the Chief Executive Officer or the lead independent
director of LM: (a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or announce any intention to effect or cause or
participate in or in any way assist, facilitate or encourage any other Person
to effect or seek, offer or propose (whether publicly or otherwise) to effect
or participate in, (i) any acquisition of any securities (or beneficial
ownership thereof), or rights or options to acquire any securities (or
beneficial ownership thereof), or any assets, indebtedness or businesses of LM
or any of its affiliates, provided, however, that KKR and its
affiliates may acquire beneficial ownership or Ownership of (A) any or all of
the Warrants issuable by LM pursuant to the Note Exchange Agreement, (B) any
shares of Common Stock issued upon the exercise of Warrants pursuant to the
terms of the Warrant Agreement or upon the conversion of any 2.50% Convertible
Senior Notes due 2015 of LM (the “Convertible
Notes”) issued pursuant to the Indenture, dated as of January 31,
2008, between The Bank of New York, as trustee, and LM (the “Indenture”), (C) shares of Common Stock
that KKR or its affiliates acquire from LM in connection with any stock split
or subdivision of common shares of LM that are already held by them at the time
of such acquisition, (D) shares of capital stock of LM (other than Common
Stock), evidences of LM’s indebtedness or other assets or property or rights, or
warrants to acquire shares of capital stock of LM or other securities, in each
case, that KKR or its affiliates acquire from LM pursuant to the Warrant
Agreement or the Indenture in connection 

- 2 -

with any
distribution thereof by LM to holders of the Common Stock and (E) any
securities of LM, or rights or options to acquire any securities of LM, to the
extent reasonably estimated to reduce or close out any short position or “put
equivalent position” (within the meaning of Rule 16a-1 under the Exchange Act
of 1934, as amended (the “Exchange Act”)) effected to monetize or
hedge any Warrants or Convertible Notes that are Owned or beneficially owned by
KKR or any of its affiliates, (ii) any tender or exchange offer, consolidation,
business combination, acquisition, merger, joint venture or other business
combination involving LM, any of its affiliates or any of the assets of LM or
its affiliates, (iii) any recapitalization, stock dividend, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to LM
or any of its affiliates or (iv) any “solicitation” of “proxies” (as such terms
are used in the proxy rules of the Securities and Exchange Commission) to vote
any voting securities of LM or any of its affiliates or consents to any action
from any holder of any voting securities of LM or any of its affiliates or seek
to advise or influence any Person with respect to the voting of or the granting
of any consent with respect to any voting securities of LM; (b) form, join or
in any way participate in a “group” (as defined under the Exchange Act) in
connection with the voting securities of LM or otherwise act in concert with
any person in respect of any such securities; (c) otherwise act, alone or in
concert with others, to seek representation on or to control or influence the
management, board of directors or policies of LM or to obtain representation on
the board of directors of LM or any committee thereof; (d) enter into any
discussions or arrangements with any third party with respect to any of the
foregoing; (e) request that LM or any of its Representatives amend or waive any
provision of this Agreement, or make any public announcement with respect to
the restrictions of this Agreement, or take any action which would reasonably
be expected to require LM to make a public announcement regarding any potential
transaction; or (f) advise, assist or encourage, or direct any Person to
advise, assist or encourage any other Person or Persons, in connection with any
of the foregoing. 

          The
restrictions set forth herein will not apply as to KKR and its affiliates if
any of the following occurs:

                    (i)
a third party who is not an affiliate of KKR (a “Third Party”) acquires
beneficial ownership of 50% of the outstanding Voting Stock; or

                    (ii)
LM enters into an agreement pursuant to which a Third Party would acquire all
or substantially all of the stock or assets of LM or LM would be merged or
consolidated with another Person, unless immediately following the consummation
of such transaction the stockholders of LM immediately prior to the
consummation of such transaction would continue to hold (in substantially the
same proportion as their ownership of LM’s voting stock immediately prior to
the transaction) more than 50% of all of the outstanding common stock or other
securities entitled to vote for the election of directors of the surviving or
resulting entity in such transaction or any direct or indirect parent thereof; provided
that this clause shall not be applicable after such agreement is terminated.

          As
used in this Agreement, the term “Person” shall be broadly interpreted to
include, without limitation, the media and any individual, corporation,
company, partnership, limited liability company, or other entity or group. As
used in this Agreement, the term “affiliate” shall mean any other Person that
directly, or indirectly through one or more intermediates, directly or
indirectly, controls, is controlled by, or is under common control with, such Person;
the term 

- 3 -

“Representatives”
shall mean, collectively, a party’s directors, officers, affiliates, employees
or consultants, to the extent they are acting on such party’s behalf; the term
“beneficial
ownership” or variations thereof, when used with respect to
securities, means such term as used in any of Section 13(d) or Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder; and the
terms “Ownership”
and “Own”,
when used with respect to securities, shall mean bearing all or substantially
all economic risk of loss or appreciation (less no more than a fixed or
floating interest rate return) in the value of, and any profit (less no more
than a fixed or floating interest rate return) derived from a transaction in,
such securities. 

          Notwithstanding
anything herein to the contrary, except as provided in this paragraph, this
Agreement shall not apply to affiliates of KKR that are Non-Investor
Affiliates. “Non-Investor Affiliates” are affiliates of KKR (x) whose business
is distinct from private equity and (y) whose investments, investment strategy
and related activity (including any investments, investment strategy or related
activity with respect to the Common Stock) are not executed, developed,
directed or undertaken by KKR or its affiliates or their respective
Representatives (other than Non-Investor Affiliates or their Representatives).
If non-public, proprietary information with respect to LM is made available to
a Non-Investor Affiliate or its Representative (other than to compliance
personnel for compliance purposes only) by KKR or its affiliates (other than
Non-Investor Affiliates) (such a situation, a “Wall Cross”), then this
Agreement shall apply to such Non-Investor Affiliate without regard to the
first sentence of this paragraph. At all times during the Standstill Period,
for so long as a Wall Cross has not occurred with respect to a Non-Investor
Affiliate:

                    (i)
Such Non-Investor Affiliate shall be permitted to acquire shares of Common Stock
and securities exchangeable or exercisable for, or convertible into, shares of
Common Stock (collectively, “Common Equity”) only (A) in an amount
(together with the Common Equity Owned or beneficially owned (determined
without aggregation with any affiliate of KKR that is not a Non-Investor
Affiliate) by all other Non-Investor Affiliates) up to 4.9% of the then
outstanding shares of Common Stock (including, with respect to an acquisition
of exchangeable, exercisable or convertible securities, the shares of Common
Stock issuable upon exchange, exercise or conversion thereof), and (B) if such
Non-Investor Affiliate is able to make the passive investor certification
specified in clause (i) of the proviso of Rule 13d-1(b)(1) under the Exchange
Act with respect to the acquisition of such Common Equity.

                    (ii)
If such Non-Investor Affiliate is unable to make such passive investor
certification, then such Non-Investor Affiliate shall not (A) acquire any
Common Equity or (B) initiate any proposal for a transaction or action that
would be prohibited pursuant to clause (a)(ii), (a)(iii) or (a)(iv) of the
second paragraph of this Agreement if such transaction were effected, or such
action were taken, by KKR.

          The
terms of this Agreement may be modified or waived only by a separate writing
signed by LM and KKR that expressly modifies or waives any such term.

          It
is understood and agreed that no failure or delay by LM in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege under
this Agreement.

- 4 -

          This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

          Subject
to applicable law, each party hereby irrevocably and unconditionally (i)
submits to the exclusive jurisdiction of the courts of the State of New York
and of the United States of America, in each case located in the County of New
York in the State of New York, for any action, suit or proceeding arising out
of or relating to this Agreement and the transactions contemplated hereby and
(ii) agrees not to commence any action, suit or proceeding relating thereto
except in such courts. Subject to applicable law, each party hereby irrevocably
and unconditionally (i) waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the Transaction, in
the courts of the State of New York and of the United States of America, in
each case located in the County of New York in the State of New York, and (ii)
waives and agrees not to plead or claim that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.

          KKR
acknowledges that LM would be irreparably injured by a breach of this Agreement
by KKR, that monetary remedies would be inadequate to protect LM against any
actual or threatened breach or continuation of any breach of this Agreement,
and, without prejudice to any other rights and remedies otherwise available to
LM, KKR agrees to the granting of equitable relief, including injunctive relief
and specific performance, in LM’s favor without proof of actual damages in the
event of KKR’s actual or threatened breach of this Agreement.

          In
the event of an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by LM and KKR and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement. Further, if any
term or provision of this Agreement, or any application thereof to any
particular set of facts or circumstances, shall, to any extent and for any
reason, be held to be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to facts or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby and shall be construed as if such invalid or
unenforceable provision had to such extent never been contained herein and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

          This
Agreement may be signed in one or more counterparts which, when taken together,
shall constitute one and the same instrument.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 LEGG MASON,
 INC.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
      /s/
 Jeff Nattans

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: Jeff
 Nattans

 
	
  

 	
 Title: EVP

 

Confirmed and
agreed to as of

the date first written above:

	
  

 	
  

 
	
 KOHLBERG
 KRAVIS ROBERTS & CO. L.P.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:
 

 
	
 Title: 

 

[SIGNATURE PAGE—AMENDED AND RESTATED STANDSTILL AGREEMENT] 

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 LEGG MASON,
 INC.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
      

 
	
  

 	
  

 	

 

 
	
  

 	
 Name:

 
	
  

 	
 Title: 

 

Confirmed and
agreed to as of

the date first written above:

	
  

 	
  

 
	
 KOHLBERG
 KRAVIS ROBERTS & CO. L.P.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ William
 J. Janetschek

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:
 William J. Janetschek

 
	
 Title: Chief
 Financial Officer

 

[SIGNATURE PAGE—AMENDED AND RESTATED STANDSTILL AGREEMENT]

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