Document:

EXHIBIT 10.3 RV

Exhibit 10.3

        
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 5, 2015 and effective on January 5, 2015, (the “Effective Date”) is by and between NeoStem, Inc. (the “Company”) and Robert S. Vaters (the “Executive”). 
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as its President and Chief Financial Officer and the Executive desires to be so employed by the Company; and 
WHEREAS, the Company and the Executive each believe it is in their respective best interests to enter into this Agreement setting forth the mutual understandings and agreements reached between the Company and the Executive with respect to the Executive’s employment with the Company and certain restrictions on the Executive’s conduct benefitting the Company during such time and thereafter, all as set forth herein.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1.Employment.  The Company agrees to employ the Executive, and the Executive agrees to be employed by the Company on a full-time basis, for the period commencing on the Effective Date and, subject to earlier termination pursuant to Section 6 below, continuing until December 31, 2018 (the “Initial Term”).  Effective upon the expiration of the Initial Term and of each Renewal Term (as defined below), if any, this Agreement and the Executive’s employment hereunder may be extended by the Company for an additional period of one (1) year, subject to earlier termination pursuant to Section 6 below (each, a “Renewal Term”), in each such case, commencing upon the expiration of the Initial Term or the then-current Renewal Term, as the case may be, but only if, at least ninety (90) calendar days prior to the expiration of the Initial Term or the then-current Renewal Term, as the case may be, the Company shall have given written notice to the Executive of the Company’s intention to extend the Term (the “Extension Notice”).  In the event that the Company does not provide an Extension Notice in the manner and within the time period set forth in the preceding sentence, the Term automatically shall expire at the end of the Initial Term or the then-current Renewal Term, as the case may be.  As used in this Agreement, the “Term” shall refer to the period beginning on the Effective Date and ending on the effective date of the termination of this Agreement and the Executive’s employment hereunder (the “Termination Date”) in accordance with this Section 1 or Section 6 below.  The Executive hereby represents and warrants to the Company that he has the legal capacity to execute and perform this Agreement, and that its execution and performance by him will not violate the terms of any existing agreement or understanding to which the Executive is a party; and the Company hereby represents and warrants to the Executive that the person executing this Agreement on its behalf has the authority to do so and to bind the Company.  

Section 2.Position and Duties.  During the Term, the Executive shall be employed as the Company’s President and Chief Financial Officer and shall perform duties consistent with such position and such other related duties as the Company’s Board of Directors (the “Board”), the Company’s Executive 

Chairman and/or the Company’s Chief Executive Officer shall reasonably request.  The Executive will report to the Chief Executive Officer and be subject to the lawful direction of the Board, the Executive Chairman and the Chief Executive Officer.  During the Term, and except for vacation in accordance with Section 5(a) below, the Executive shall devote his full business time, attention, skill and efforts to the business and affairs of the Company, its subsidiaries and other affiliates and shall comply with the Company’s codes of conduct, policies and procedures in place from time to time; provided however; the foregoing shall not prevent the Executive from (a) engaging in not-for-profit activities (e.g. board membership with charitable, educational, or religious organizations), (b) subject to the prior written approval of the Board, serving on the board of directors (or similar governing body) of not more than one (1) other for profit corporation (or other business entity) that is not a competitor of the Company (as determined by the Board), or (c) managing the Executive’s personal and immediate family member’s passive investments, as long as, in each case, such activities individually or in the aggregate do not materially interfere or conflict with the Executive’s duties hereunder or create a potential business or fiduciary conflict (in each case, as determined by the Board).  During the Term, the Executive also shall serve in such other executive-level positions or capacities as may, from time to time, be reasonably requested by the Executive Chairman and/or the Board, including, without limitation (subject to election, appointment, re-election or re-appointment, as applicable) as (i) a member of the Board and/or as a member of the board of directors or similar governing body of any of the Company’s subsidiaries or other affiliates, (ii) an officer of any of the Company’s subsidiaries or other affiliates, and/or (iii) a member of any committee of the Company and/or any of its subsidiaries or other affiliates, in each case, for no additional compensation.  Without limitation of the foregoing, within ninety (90) days of the Effective Date, the Company will initially nominate or appoint the Executive to serve as a member of the Board; provided that, an independent director is also added to the Board at the same time; and that thereafter, the Executive’s continued position as a member of the Board shall be subject to election and/or re-election by the Company’s shareholders and provided further that the failure of the Company’s shareholders to elect or re-elect the Executive to serve as a member of the Board shall not be deemed to be a breach by the Company of its obligations to the Executive hereunder or otherwise. The Executive’s initial principal place of employment for the performance of his services hereunder shall be at the Company’s corporate headquarters in New York, NY; provided; however, it is understood that the Executive shall be required to travel (both within the US and abroad) as reasonably necessary to perform his duties hereunder.

Section 3.Compensation.  For all services rendered by the Executive in any capacity required hereunder during the Term, the Executive shall be compensated as follows:

(a)The Company shall pay the Executive a base salary (the “Base Salary”) at the annualized rate of $425,000, which shall be subject to customary withholdings and authorized deductions and be payable in equal installments in accordance with the Company’s customary payroll practices in place from time to time. 

(b)The Executive shall be entitled to participate in all compensation and employee benefit plans or programs and to receive all other benefits and perquisites that are approved by the Board and are generally made available by the Company to other senior executives of the Company and to the extent permissible under the general terms and provisions of such plans or programs and in accordance with the provisions thereof.  Notwithstanding any of the foregoing, nothing in this Agreement shall require the Company or any subsidiary or affiliate thereof to establish, maintain or continue any particular plan or program nor preclude the amendment, rescission or termination of any such plan or program that may be established from time to time.  

(c)    Upon the Effective Date, the Executive shall be granted an option (the “Initial Option”) to purchase 480,000 shares (the “Initial Option Shares”) of the Company’s common stock, $.001 par value 

(the “Common Stock”) under and subject to the Company’s 2009 Equity Compensation Plan, as the same may be amended and/or restated from time to time (the “2009 Equity Plan”) at an exercise price equal to the closing price of the Common Stock on the Effective Date.  The Initial Option shall be subject in all respects to the terms and conditions of the 2009 Equity Plan and applicable law and shall be subject to a written grant agreement setting forth the terms and conditions to which such Initial Option grant shall be subject (the “Initial Grant Agreement”).  The Initial Grant Agreement will provide, among other things, that 80,000 shares of the Initial Option Shares shall be immediately vested, with the balance of the Initial Option Shares vesting in a series of sixteen successive equal quarterly installments (25,000 shares each) such that vesting is complete on the fourth anniversary of the Effective Date (in each case, subject to the Executive’s continued employment with the Company on the applicable vesting date).  The Executive shall be granted, upon the Effective Date, an additional option (the “Additional Option,” and together with the Initial Option, the “Options”) to purchase 120,000 shares (the “Additional Option Shares,” and together with the Initial Option Shares, the “Option Shares”) of the Common Stock under the 2009 Equity Plan at an exercise price equal to the closing price of the Common Stock on the Effective Date. The Additional Option also shall be subject to the terms and conditions of the 2009 Equity Plan and applicable law and shall be subject to a written grant agreement setting forth the terms and conditions to which such Additional Option grant shall be subject (the “Additional Grant Agreement”).  The Additional Grant Agreement will provide, among other things, that the Additional Option Shares shall vest and become exercisable based on two (2) individual milestones (60,000 Additional Option Shares each), subject to the Executive’s continued employment by the Company on each of the applicable 1/16 milestone vesting dates.  The milestones shall be mutually established by the Compensation Committee (or the Executive Chairman) and the Executive within three (3) months following the Effective Date.  All Options and Option Share issuances are subject to the Executive’s execution of the Company’s Insider Trading Policy.  In addition, the Executive acknowledges that in his position he will be an “affiliate” of the Company for purposes of U.S. securities laws and the Option Shares and any transfer of the Option Shares will be treated as such.  The Option Shares will be included in the Company’s registration statements on Form S‐8.
(d)    The Executive shall be eligible to receive an annual cash bonus for each calendar year ending during the Term (“Annual Bonus”).  The Executive’s maximum Annual Bonus will be up to 50% of his Base Salary.  The actual amount of each Annual Bonus will be determined by the Board and/or the Compensation Committee based upon the level of achievement of the Company’s corporate goals and objectives for the calendar year with respect to which the Annual Bonus relates and the Executive’s individual performance (in each case, as reasonably determined by the Board and/or the Compensation Committee).  Each Annual Bonus for a calendar year, to the extent earned, will be paid in a lump sum in the following calendar year.  The Annual Bonus shall not be deemed earned until the date that it is paid.  Accordingly, in order for the Executive to receive an Annual Bonus, the Executive must be actively employed by the Company at the time of such payment.  

Section 4.Business Expenses.  The Company shall pay or reimburse the Executive for all reasonable travel (it being understood that travel shall be arranged by the Company when practicable) and other reasonable expenses incurred by the Executive in connection with the performance of his duties and obligations under this Agreement, subject to the Executive’s presentation of appropriate vouchers or receipts in accordance with such policies and approval procedures as the Company may from time to time establish for employees (including but not limited to prior approval of extraordinary expenses) and to preserve any deductions for Federal income taxation purposes to which the Company may be entitled.

Section 5.Benefits; Perquisites; Expense Reimbursement.  In addition to those payments and benefits set forth above or elsewhere herein, Executive shall be entitled to the following other benefits and payments:

(a)Vacation.  Executive shall be entitled to four (4) weeks paid vacation per calendar year (pro rated in the event of a service year which is shorter than a calendar year), in addition to Company-observed holidays. Any vacation time not used during a calendar year shall be treated in accordance with the Company’s policies relating to unused vacation (currently forfeiture without compensation).

(b)Perquisites and Reimbursement of Expenses.  Executive shall receive perquisites generally available to senior executives of the Company, including, but not limited to, payment or reimbursement for cell phone, blackberry and internet service and will be reimbursed up to $10,000 for reasonable legal fees associated with preparation of this Agreement.   

(c)Supplemental Term Life and Long-Term Disability Insurance.  The Company will pay up to $10,000 annually (in the aggregate) for supplemental term life insurance coverage and supplemental long-term disability coverage.
(d)Non-Accountable Expense Allowance.  The Company will provide the Executive with an annual automobile and/or club membership allowance of $12,000 in the aggregate, payable in monthly installments.

(e)D&O Insurance.  The Executive shall be covered by the Directors and Officers Liability Insurance policy that generally covers the directors and officers of the Company, provided by the Company at its expense.

(f)Indemnification.  The Executive shall be entitled to the benefit of the indemnification provisions contained in the Company’s By-Laws or Certificate of Incorporation as they may be amended from time to time, to the extent permitted by applicable law, at the time of the assertion of any liability against the Executive.  

Section 6.Termination of Employment.  

(a)    Events of Termination.  The Executive’s employment hereunder may be terminated upon the occurrence of any of the following events:
(i)    Termination for Cause.  The Company may terminate the Executive’s employment hereunder for Cause at any time.  For purposes of this Agreement, “Cause” shall mean that, as determined by the Board, the Executive has: (A) committed gross negligence in connection with his duties as set forth herein or otherwise with respect to the business and affairs of the Company, its subsidiaries and/or its other affiliates; (B) committed fraud in connection with his duties as set forth herein or otherwise with respect to the business and affairs of the Company, its subsidiaries and/or its other affiliates; (C) engaged in personal dishonesty, willful misconduct, willful violation of any law, or material breach of fiduciary duty, in each instance, with respect to the business and affairs of the Company, its subsidiaries and/or its other affiliates; (D) been indicted for, or has been found by a court of competent jurisdiction to have committed or plead guilty to, (1) a felony (or state law equivalent) or (2) any other serious crime involving moral turpitude or that has (or is reasonably likely to have) a material adverse effect either on (x) the Executive’s ability to perform his duties under the Agreement or (y) the reputation and goodwill of the Company, regardless of whether or not such other crime is related or unrelated to the business of the Company, its subsidiaries or other affiliates; (E) shown chronic use of alcohol, drugs or other similar substances that materially affects the Executive’s work performance; (F) breached his obligations under (1) this Agreement, (2) the Confidentiality, Non-Compete and Inventions Assignment Agreement attached hereto as Exhibit A (the “Covenants Agreement”) or (3) any other agreement executed by the Executive for the benefit of the Company, its subsidiaries and/or other affiliates, provided, that, if such breach described in this clause (F) is susceptible to cure (as determined in the reasonable discretion of the Board), the Executive shall have thirty (30) days 

after notice from the Board to cure such breach; (G) failed to perform the Executive’s duties or to follow the lawful directives of the Board; provided, that, if such failure described in this clause (G) is susceptible to cure (as determined in the reasonable discretion of the Board), the Executive shall have thirty (30) days after notice from the Board to cure such failure; or (H) materially violated the Company’s written code of conduct or other written or established policies and/or procedures in place from time to time; provided, that, if such violation described in this clause (H) is susceptible to cure (as determined in the reasonable discretion of the Board), the Executive shall have thirty (30) days after notice from the Board to cure such violation.  Any notice to the Executive under this Section 6(a)(i) shall be in writing and shall specify in reasonable detail the Executive’s acts or omissions that the Company alleges constitute “Cause.”
(ii)    Termination without Cause.  The Company may terminate the Executive’s employment hereunder without Cause (other than by reason of death or Disability) at any time upon notice to Executive.
(iii)    Resignation for Good Reason.  The Executive may voluntarily terminate his employment hereunder for Good Reason (as defined below) upon written notice to the Company in accordance with the definition thereof.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events: (A) material breach by the Company of its obligations under this Agreement; or (B) the Executive’s position, duties, responsibilities, or authority have been materially reduced or the Executive has repeatedly been assigned duties that are materially inconsistent with his duties set forth herein, in each case, without the Executive’s consent; provided, that, it is understood and agreed that the failure of the shareholders of the Company to elect or re-elect the Executive to serve on the Board (or the reduction of the Executive’s position, duties, responsibilities or authority associated therewith) shall not be deemed to be a breach by the Company of its obligations under this Agreement, be deemed to be a reduction in the Executive’s position, duties, responsibilities or authority or otherwise be deemed to give rise to Good Reason.  “Good Reason” shall not be deemed to exist, however, unless (1) the Executive shall have given written notice to the Company specifying in reasonable detail the Company’s acts or omissions that the Executive alleges constitute “Good Reason” within sixty (60) days after the first occurrence of such circumstances and the Company shall have failed to cure any such act or omission within sixty (60) days of receipt of such written notice, and (2) the Executive actually terminates employment within one hundred eighty (180) days following the initial occurrence of the of any of the foregoing conditions that he considers to be “Good Reason.”  If the Executive fails to provide this-notice and-cure period prior to his resignation, or resigns more than one hundred eighty (180) days after the initial existing of the condition, his resignation will not be deemed to be for “Good Reason.” 
(iv)    Resignation without Good Reason. The Executive may voluntarily terminate his employment hereunder for any reason at any time, including for any reason that does not constitute Good Reason, upon ninety (90) days’ prior written notice to the Company, provided, however, the Company reserves the right, upon written notice to the Executive, to accept the Executive’s notice of resignation and to accelerate such notice and make the Executive’s resignation effective immediately, or on such other date prior to the Executive’s intended last day of work as the Company deems appropriate.  It is understood and agreed that the Company’s election to accelerate Executive’s notice of resignation shall not be deemed a termination by the Company without Cause for purposes of Section 6(a)(ii) of this Agreement, Section 7(a) of this Agreement or otherwise, or constitute Good Reason for purposes of Section 6(a)(iii) of this Agreement, Section 7(a) of this Agreement or otherwise.
(v)    Disability.  The Executive’s employment hereunder shall terminate upon his Disability.  For purposes of this Agreement, “Disability” shall mean that the Executive has been unable to perform his duties to the Company on account of physical or mental illness or incapacity for a period of ninety (90) consecutive calendar days or one hundred twenty (120) calendar days (whether or not consecutive) 

during any 365-day period, as a result of a condition that is treated as a total or permanent disability under the long-term disability insurance policy of the Company that covers the Executive.  
(vi)    Death. The Executive’s employment hereunder shall automatically terminate upon his death.
(vii)    Expiration of Term.  As set forth in Section 1 above, the Executive’s employment hereunder shall automatically terminate upon the expiration of the Term.  
(b)    Resignation from Directorships, Officerships and Committees.  The termination of the Executive’s employment for any reason shall constitute the Executive’s resignation from (i) any director, officer, employee or committee position the Executive has with the Company or any of its affiliates and (ii) all fiduciary positions the Executive holds with respect to any employee benefit plans or trusts established by the Company.  The Executive agrees that this Agreement shall serve as written notice of resignation in this circumstance; provided, however, the Executive agrees to take any additional actions that are deemed reasonably necessary by the Company to effectuate or evidence such resignations.
Section 7.Compensation upon Termination of Employment.  All defined terms used in this Section 7 but not defined in this Section 7 or elsewhere in this Agreement shall have the meanings ascribed to such terms in the Covenants Agreement:

(a)    Resignation for Good Reason; Termination without Cause.  In the event that, during the Term, the Company terminates Executive’s employment without Cause (other than by reason of death or Disability) or the Executive voluntarily terminates his employment for Good Reason, the Company shall, in full discharge of all of the Company’s obligations to the Executive hereunder or otherwise, provide the Executive with the following payments and benefits.
(i)    Accrued Rights.  The Company shall pay the Executive a lump-sum amount, within thirty (30) days following the Termination Date (or earlier if required by law), equal to the sum of (A) his earned but unpaid Base Salary through the last day of the Executive’s employment (“Termination Date”), (B) any bonus amount earned and vested but not paid for periods ending on or prior to the date of termination of the Executive’s employment, (C) any accrued and unused vacation time, and (D) any unreimbursed business expenses or other amounts due to the Executive from the Company as of the Termination Date (the “Accrued Rights”).
(ii) Additional Payments. Subject to Sections 7(e) and 7(f) below, the Company shall make additional payments to Executive in the form of continuation of the Executive’s then-current Base Salary (the “Additional Payments”) for a period beginning on the Termination Date and ending on the twelve (12) month anniversary of the Termination Date (the “Severance Period”), payable in accordance with the Company's regular payroll practices, commencing on the Company’s first regular payroll date that occurs on or immediately after the 60th day following the Termination Date; provided, however, the first installment payment of the Additional Payments shall include the cumulative amount of payments that would have been paid to the Executive during the period of time between the Termination Date and the date the Additional Payments commence had such payments commenced immediately following the Termination Date.  
(iii)  COBRA Assistance. If Executive then participates in the Company’s medical and/or dental plans and Executive timely elects to continue and maintain group health plan coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then, subject to Sections 7(e) and 7(f) below, the Company will pay monthly, on the Executive’s behalf, a portion of the cost of such coverage for the six (6) month period after the Termination Date, which payments will be equal to 

the amount of the monthly premium for such coverage, less the amount that Executive would have been required to pay if Executive had remained an active Executive of the Company (the “COBRA Assistance”); provided, however, that if and to the extent that the Company may not provide such COBRA Assistance without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA Assistance been provided in the manner described above or cause a violation of Section 409A (as defined in Section 19 below).
(iv)  Options. All stock options shall be treated in accordance with the 2009 Equity Plan.
(b)    Expiration of the Term. If the Executive’s employment hereunder terminates upon the expiration of the Term, then the Company shall, in full discharge of all of the Company’s obligations to the Executive hereunder or otherwise, pay and/or provide the Executive with any Accrued Rights under Section 7(a)(i) hereof.  All stock options shall be treated in accordance with the 2009 Equity Plan.
(c)    Resignation without Good Reason; Termination for Cause or upon Death or Disability.  
(i) In the event that during the Term the Company terminates Executive’s employment for Cause or the Executive voluntarily terminates his employment other than for Good Reason, the Company shall, in full discharge of all of the Company’s obligations to the Executive hereunder or otherwise, pay and/or provide the Executive with any Accrued Rights under Section 7(a)(i) hereof.  All stock options shall be treated in accordance with the 2009 Equity Plan.  
(ii) In the event that during the Term the Executive's employment is terminated due to the Executive’s death or Disability, the Company shall, in full discharge of all of the Company’s obligations to the Executive (or his estate, if applicable) hereunder or otherwise, (A) pay and/or provide the Executive (or his estate with) with any Accrued Rights under Section 7(a)(i) hereof and (B) subject to Sections 7(e) and 7(f) below, provide the COBRA Assistance under Section 7(a)(iii). All stock options shall be treated in accordance with the 2009 Equity Plan.  
(d)    No Further Rights; Continued Obligations under the Covenants Agreement.  The Executive shall have no further rights under this Agreement or otherwise to receive any other compensation or benefits after such termination or resignation of employment under the Company’s severance arrangements or otherwise, except with respect to the payments and benefits specifically provided for under this Section 7.  The Executive acknowledges and agrees that, on the expiration of the Term or the earlier termination of his employment for any reason or no reason (whether initiated by the Executive or the Company), the Executive shall continue to be bound by his obligations pursuant to the Covenants Agreement.
(e)    Release of Claims.  Notwithstanding anything contained in this Agreement to the contrary, the Company’s provision of the payments and benefits under Sections 7(a)(ii), 7(a)(iii) and 7(c)(ii) (if and as applicable) hereof shall be contingent in all respects the Executive (or, if applicable, his estate) executing (and not revoking) a general release of claims against the Company, its affiliates and related parties in a form reasonably satisfactory to the Company (the “Release”) and the Release becoming effective (and no longer subject to revocation) within sixty (60) days following the Termination Date).
(f)    Breach of Release or Covenants Agreement.  Notwithstanding anything set forth in this Agreement to the contrary, in the event of a material breach by the Executive of his obligations under the Covenants Agreement or the Release Agreement and in addition to any other remedies under the Covenants 

Agreement, the Release Agreement or at law or in equity, the Company shall have no further obligations under Sections 7(a)(ii), 7(a)(iii), or 7(c)(ii) (if and as applicable) and the Executive shall be required, upon demand, to return to the Company any Additional Payments previously made by the Company pursuant to Section 7(a)(ii).  
Section 8.    Covenants Agreement; Corporate Policies. 
(a)    Covenants Agreement.  The Executive acknowledges that Executive, as a condition to (and a material inducement for) the Company entering into this Agreement, is simultaneously executing the Covenants Agreement, which is attached hereto as Annex A, the terms of which are incorporated herein by reference, and that the terms of the Covenants Agreement will be in full force and effect as of the Effective Date and shall survive the expiration of this Agreement or the earlier termination of Executive’s employment hereunder.  
(b)    Corporate Policies.   The Executive acknowledges and agrees that during the Term, he will be bound by, and comply with, the Company’s various written corporate policies applicable to other senior executives of the Company, including but not limited to its expense reimbursement policies.
Section 9.    Withholding Taxes.  The Company may directly or indirectly withhold from any payments made under this Agreement all Federal, state, city or other taxes and all other deductions as shall be required pursuant to any law or governmental regulation or ruling or pursuant to any contributory benefit plan maintained by the Company in which the Executive may participate.
Section 10.    Notices.  All notices, requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given if delivered or mailed, postage prepaid, by certified or registered mail or by use of an independent third party commercial delivery service for same day or next day delivery and providing a signed receipt as follows:
NeoStem, Inc.
420 Lexington Avenue 
Suite 450
New York, New York  10170
Attention:  General Counsel

To the Executive:
Robert S. Vaters
444 E. 52nd Street
New York, NY 10022

with a copy to:
Wayne N. Outten
Outten & Golden LLP
3 Park Avenue, 29th Floor
New York, NY 10016
                

or to such other address as either party shall have previously specified in writing to the other.  Notice by mail shall be deemed effective on the second business day after its deposit with the United States Postal Service, notice by same day courier service shall be deemed effective on the day of deposit with the delivery service and notice by next day delivery service shall be deemed effective on the day following the deposit with the delivery service.

Section 11.    No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that nothing in this Section 11 shall preclude the assumption of such rights by executors, administrators or other legal representatives of the Executive or his estate and their conveying any rights hereunder to the person or persons entitled thereto.
Section 12.     Source of Payment.  All payments provided for under this Agreement shall be paid in cash from the general funds of the Company.  The Company shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Company shall make any investments to aid it in meeting its obligations hereunder, the Executive shall have no right, title or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments.  Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and the Executive or any other person.  To the extent that any person acquires a right to receive payments from the Company hereunder, such right, without prejudice to rights which Executives may have, shall be no greater than the right of an unsecured creditor of the Company.
Section 13.    Binding Agreement; No Assignment.  This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors, assigns, heirs, beneficiaries and representatives.  This Agreement is personal to the Executive and may not be assigned by him.  This Agreement may not be assigned by the Company except in connection with a sale of all or substantially all of its assets or a merger or consolidation of the Company, and the acquiring Company or entity expressly assumes this Agreement.  Any attempted assignment in violation of this Section 13 shall be null and void.  
Section 14.    Governing Law; Consent to Jurisdiction.  The validity, interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of New York.  In addition, the Executive and the Company irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the United States District Court sitting in New York County for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on the Executive or the Company anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  The Executive and the Company irrevocably consent to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. In any such action or proceeding, the court shall have the authority to award reasonable costs, expenses, and attorneys' fees to the party that substantially prevails.  
Section 15.    Entire Agreement; Amendments.  This Agreement (including Annex A) embodies the entire agreement between Executive and the Company with respect to the subject matter hereof and may only be amended or otherwise modified by a writing executed by all of the parties hereto.
Section 16.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which when executed shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
Section 17.    Severability; Blue-Penciling.  The provisions, sections and paragraphs, and the specific terms set forth therein, of this Agreement (including Exhibit A) are severable, except as specifically provided to the contrary herein.  If any provision, section or paragraph, or specific term contained therein, 

of this Agreement or the application thereof is determined by a court to be illegal, invalid or unenforceable, that provision, section, paragraph or term shall not be a part of this Agreement, and the legality, validity and enforceability of remaining provisions, sections and paragraphs, and all other terms therein, of this Agreement shall not be affected thereby.  The Executive acknowledges and agrees that as to himself, the restrictive covenants contained in the Covenants Agreement (the “Restrictive Covenants”) are reasonable and valid in geographical and temporal scope and in all other respects.  If any court determines that any of such Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.  It is the desire and intent of the parties that the Restrictive Covenants will be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any Restrictive Covenant shall be adjudicated to be invalid or unenforceable, such Restrictive Covenant shall be deemed amended to the extent necessary in order that such provision be valid and enforceable, such amendment to apply only with respect to the operation of such Restrictive Covenant in the particular jurisdiction in which such adjudication is made.
Section 18.    Prior Agreements.  This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company regarding the terms and conditions of Executive’s employment with the Company.
Section 19.    409A Compliance.  
(a)    Notwithstanding anything to the contrary contained herein, if necessary to comply with the restriction in Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”) concerning payments to “specified Executives,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six months after such separation shall nonetheless be delayed until the first business day of the seventh month following the Executive’s date of termination and the first such payment shall include the cumulative amount of any payments that would have been paid prior to such date if not for such restriction, together with interest on such cumulative amount during the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination.  If the Executive dies during the six-month postponement period prior to the payment, the amount of the payment deferred on account of Section 409A of the Code shall be paid to the personal representative of the Executive’s estate within 30 days after the date of the Executive’s.  For purposes of Section 7 hereof, the Executive shall be a “specified Executive” for the 12-month period beginning on the first day of the fourth month following each “Identification Date” if he is a “key Executive” (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) thereof) of the Company at any time during the 12-month period ending on the “Identification Date.”  For purposes of the foregoing, the Identification Date shall be December 31.
(b)    This Agreement is intended to comply with the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”).  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner so that no payments due under this Agreement shall be subject to an "additional tax" as defined in Section 409A(a)(1)(B) of the Code.  For purposes of Section 409A, each payment made under this Agreement shall be treated as a separate payment.  In no event may the Executive, directly or indirectly, designate the calendar year of payment.  Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of Section 7 hereof unless he would be considered to have incurred a “separation from service” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).

(c)    All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.
(d)    In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive by Section 409A or damages for failing to comply with Section 409A.

Section 20.    Section 280G Limitation. If any payment(s) or benefit(s) the Executive would receive pursuant to this Agreement and/or pursuant to any other agreement or arrangement would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this Section 20, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such payment(s) or benefit(s) (collectively, “Payments”) shall be reduced to the Reduced Amount.   The “Reduced Amount” shall be the largest portion of the Payments that can be paid or provided without causing any portion of the Payments being subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payments equal the Reduced Amount, reduction shall occur in the following order: (i) first, Severance Payments under this Agreement, (ii) second, any other cash payments due under any other agreement between the Company and the Executive; (iii) third, cancellation of the acceleration of vesting of any stock options, (iv) fourth, cancellation of the acceleration of vesting of any restricted stock and restricted stock units; and (v) lastly, other non-cash forms of benefits.  Calculations of the foregoing will be performed at the expense of the Company by an accounting firm selected by the Company.  The determinations of such accounting firm shall be final, binding and conclusive upon the Company and the Executive.

 [Signatures follow on next page]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by their respective duly authorized officers and the Executive has signed this Agreement, all as of the first date above written but effective as of the Effective Date. 

NEOSTEM, INC.

By: /s/ Robin L. Smith
Name:  Robin L. Smith
Title:  Executive Chairman of the Board
                        
ROBERT S. VATERS
/s/ Robert S. Vaters
Robert S. Vaters

Annex A to Employment Agreement
NEOSTEM, INC.
Employee Confidentiality, Non-Compete and Inventions Assignment Agreement
I (the “Employee”) recognize that NeoStem, Inc., a Delaware corporation (the “Company”), is engaged, directly or through its subsidiaries, in the business of product and process development, consulting, characterization and comparability and contract manufacturing for cell based medicine and regenerative science and storage of cells, collection and therapeutic development, as well as the research and development of proprietary cellular therapies, including a T Regulatory Cell Program in immune modulation, a CD34 Cell Program in Ischemic Repair, a very small embryonic like (VSEL) stem cell program in Tissue Regeneration and Targeted Immunotherapy Program in cancer (the “Business”).  The “Business” also includes any other regenerative medicine or stem cell initiatives which are or become a part of the Company’s (or its subsidiaries’) business during my employment tenure with the Company.  Any company with which the Company enters into, or seeks or considers entering into, a business relationship in furtherance of the Business is referred to as a “Business Partner.”
I understand that as part of my performance of duties as an employee of the Company (the “Engagement”), I will have access to confidential or proprietary information of the Company and the Business Partners, and I may make new contributions and inventions of value to the Company.  I further understand that my Engagement creates in me a duty of trust and confidentiality to the Company with respect to any information: (1) related, applicable or useful to the business of the Company, including the Company’s anticipated research and development or such activities of its Business Partners; (2) resulting from tasks performed by me for the Company; (3) resulting from the use of equipment, supplies or facilities owned, leased or contracted for by the Company; or (4) related, applicable or useful to the business of any partner, client or customer of the Company, which may be made known to me or learned by me during the period of my Engagement.
For purposes of this Agreement, the following definitions apply:
“Proprietary Information” shall mean information relating to the Business or the business of any Business Partner and generally unavailable to the public that has been created, discovered, developed or otherwise has become known to the Company or in which property rights have been assigned or otherwise conveyed to the Company or a Business Partner, which information has economic value or potential economic value to the business in which the Company is or will be engaged.  Proprietary Information shall include, but not be limited to, trade secrets, processes, formulas, writings, data, know-how, negative know-how, improvements, discoveries, developments, designs, inventions, techniques, technical data, patent applications, customer and supplier lists, financial information, business plans or projections and any modifications or enhancements to any of the above.
“Inventions” shall mean all Business-related discoveries, developments, designs, improvements, inventions, formulas, software programs, processes, techniques, know-how, writings, graphics and other data, whether or not patentable or registrable under patent, copyright or similar statutes, that are related to or useful in the business or future business of the Company or its Business Partners or result from use of premises or other property owned, leased or contracted for by the Company.  Without limiting the generality of the foregoing, Inventions shall also include anything related to the Business that derives actual or potential economic value from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use.

As part of the consideration for my Engagement pursuant to the terms of the employment agreement between the Company and me dated as of January 5, 2015 (the “Employment Agreement”), and the base salary, stock options and/or other compensation and benefits to be received by me from the Company pursuant to the Employment Agreement, I hereby agree as follows:
1.Proprietary Information and Inventions.  The Company, its Business Partners or their respective assigns, as the case may be, are and shall be the sole owner of all Proprietary Information and Inventions related to the Business and the sole owner of all patents, trademarks, service marks, copyrights, mask rights and other rights (collectively referred to herein as “Rights”) pertaining to any Proprietary Information or Inventions.  I hereby acknowledge that all original works of authorship that are made by me (solely or jointly with others) within the scope of my Engagement and which are protectable by copyright are “works for hire” as that term is defined in the United States Copyright Act (17 USCA, Section 101).  I further hereby assign to the Company, any Rights I may have or acquire in any Proprietary Information or Inventions which arise in the course of my Engagement.  I further agree to assist the Company or any person designated by it in every proper way (but at the Company’s expense) to obtain and from time to time enforce Rights relating to said Proprietary Information or Inventions in any and all countries.  I will execute all documents for use in applying for, obtaining and enforcing such Rights in such Proprietary Information or Inventions as the Company may desire, together with any assignments thereof to the Company or persons designated by it.  My obligation to assist the Company or any person designated by it in obtaining and enforcing Rights relating to Proprietary Information or Inventions shall continue beyond the cessation of my Engagement (“Cessation of my Engagement”).  In the event the Company is unable, after reasonable effort, to secure my signature on any document or documents needed to apply for or enforce any Right relating to Proprietary Information or to an Invention, whether because of my physical or mental incapacity or for any other reason whatsoever, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agents and attorneys-in-fact to act for and in my behalf and stead in the execution and filing of any such application and in furthering the application for and enforcement of Rights with the same legal force and effect as if such acts were performed by me.  

2.Confidentiality.  At all times, both during my Engagement after the Cessation of my Engagement, whether the cessation is voluntary or involuntary, for any reason or no reason, or by disability, I will keep in strictest confidence and trust all Proprietary Information, and I will not disclose or use or permit the use or disclosure of any Proprietary Information or Rights pertaining to Proprietary Information, or anything related thereto, without the prior written consent of the Company, except as may be necessary in the ordinary course of performing my duties for the Company or to enforce any of my rights under my Employment Agreement.  I recognize that the Company has received and in the future will receive from third parties (including Business Partners) their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree that I owe the Company and such third parties (including Business Partners), during my Engagement and after the Cessation of my Engagement, a duty to hold all such confidential or proprietary information in the strictest confidence, and I will not disclose or use or permit the use or disclosure of any such confidential or proprietary information without the prior written consent of the Company, except as may be necessary in the ordinary course of performing my duties for the Company consistent with the Company’s agreement with such third party or to enforce any of my rights under my Employment Agreement or otherwise.

3.Noncompetition and Nonsolicitation. 
(a)During my Engagement, and for a period of two (2) years after the Cessation of my Engagement, I will not directly or indirectly, whether alone or in concert with others or as a partner, officer, director, consultant, agent, employee or stockholder of any company or commercial enterprise, engage in 

any activity in the United States, Canada, Asia or Europe that the Company shall determine in good faith is in Competition with the Company concerning its work or any Business Partner’s work in the Business.  Further during my Engagement and for a period of two (2) years after the Cessation of my Engagement, I agree not to plan or otherwise take any preliminary steps, either alone or in concert with others to set up or reengage in any business enterprise that would be in Competition with the Company in Business; provided, however, that the foregoing shall not restrict the my ability to seek other employment following the termination of his employment with the Company (whether or not I am receiving or have received any Additional Payments) as long as I do not actually commence such employment.  

(b)During my Engagement and for a period of two (2) years after the Cessation of my Engagement, I will not directly or indirectly, whether alone or in concert with others or as a partner, officer, director, consultant, agent, employee or stockholder of any company or commercial enterprise, either alone or in concert with others, not take any of the following actions:

(i)persuade or attempt to persuade any Business Partner, Customer, Prospective Customer or Supplier to cease doing business with the Company, or to reduce the amount of business it does with the Company;
(ii)persuade or attempt to persuade any Service Provider to cease providing services to the Company or any Business Partner; or
(iii)solicit for hire or hire for himself or for any Person any Service Provider.
(iv)The following definitions are applicable to this Section 3(a):
(A)“Customer” means any Person that purchased goods or services, or engages in a collaborative arrangement with the Company from the Company at any time within 1 year prior to the date of the solicitation prohibited by Section 3(a)(i) or (ii).
(B)“Prospective Customer” means any Person with whom the Company met or to whom the Company presented for the purpose of soliciting the Person to become a Customer of the Company within 6 months prior to the date of the solicitation prohibited by Section 3(a)(i) or (ii).
(C)“Service Provider” means any Person who is an employee or independent contractor of the Company or the Company or who was within twelve (12) months preceding the solicitation prohibited by Section 3(a)(iii) or (iv) an employee or independent contractor of the Company or the Company.
(D)“Supplier” means any Person that sold goods or services to the Company, or engages in a collaborative arrangement with the Company at any time within twelve (12) months prior to the date of the solicitation prohibited by Section 3(a)(i) or (ii).
(E)“Person” means an individual, a sole proprietorship, a corporation, a limited liability company, a partnership, an association, a trust, or other business entity, whether or not incorporated.

(c)The following shall not be deemed to breach the foregoing obligations: my ownership of stock, partnership interests or other securities of any entity not in excess of two percent (2%) of any class of such interests or securities which is publicly traded.  

(d)Employee acknowledges that (i) the restrictions contained in this section are reasonable and necessary to protect the legitimate business interests of the Company, (ii) that the term of this obligation is reasonable in scope, and (iii) that this obligation is a material term, without which the Company would be unwilling to enter into an employment relationship with the Employee.

4.Delivery of Company Property and Work Product.  In the event of the Cessation of my Engagement, I will deliver to the Company all biological materials, devices, records, sketches, reports, 

memoranda, notes, proposals, lists, correspondence, equipment, documents, photographs, photostats, negatives, undeveloped film, drawings, specifications, tape recordings or other electronic recordings, programs, data, marketing material and other materials or property of any nature belonging to the Company or  its clients or customers, and I will not take with me, or allow a third party to take, any of the foregoing or any reproduction of any of the foregoing.

5.No Conflict.  I represent, warrant and covenant that my performance of all the terms of this Agreement and the performance of my duties for the Company does not and will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my Engagement.  I have not entered into, and I agree that I will not enter into, any agreement, either written or oral, in conflict herewith.

6.No Use of Confidential Information.  I represent, warrant and covenant that I have not brought and will not bring with me to the Company or use in my Engagement any materials or documents of a former employer, or any person or entity for which I have acted as an independent contractor or consultant, that are not generally available to the public, unless I have obtained written authorization from any such former employer, person or firm for their possession and use.  I understand and agree that, in my service to the Company, I am not to breach any obligation of confidentiality that I have to former employers or other persons.

7.Enforcement; Equitable Relief.  Employee acknowledges that any breach or threatened breach by Employee of any provision of this Agreement may result in immediate and irreparable injury to the Company, and that such injury may not be readily compensable by monetary damages.  In the event of any such breach or threatened breach, Employee acknowledges that, in addition to all other remedies available at law and equity, the Company shall be entitled to seek equitable relief (including a temporary restraining order, a preliminary injunction and/or a permanent injunction), and an equitable accounting of all earnings, profits or other benefits arising from such breach and will be entitled to receive such other damages, direct or consequential, as may be appropriate.  In addition, and not instead of, those rights, Employee further acknowledges that Employee shall be responsible for payment of the fees and expenses of the Company’s attorneys and experts, as well as the Company’s court costs, pertaining to any suit, action, or other proceeding, arising directly or indirectly out of Employee’s violation or threatened violation of any of the provisions of this section.  The Company shall not be required to post any bond or other security in connection with any proceeding to enforce this section.

8.Severability.  If any provision of this Agreement shall be determined by any court of competent jurisdiction to be unenforceable or otherwise invalid as written, the same shall be enforced and validated to the extent permitted by law.  All provisions of this Agreement are severable, and the unenforceability or invalidity of any single provision hereof shall not affect the remaining provisions.

9.Miscellaneous.  This Agreement shall be governed by and construed under the laws of the State of New York applied to contracts made and performed wholly within such state.  No implied waiver of any provision within this Agreement shall arise in the absence of a waiver in writing, and no waiver with respect to a specific circumstance, event or occasion shall be construed as a continuing waiver as to similar circumstances, events or occasions.  This Agreement, together with the employment agreement between the Company and myself, contains the sole and entire agreement and understanding between the Company and myself with respect to the subject matter hereof and supersedes and replaces any prior agreements to the extent any such agreement is inconsistent herewith.  This Agreement can be amended, modified, released or changed in whole or in part only by a written agreement executed by the Company and myself.  This Agreement shall be binding upon me, my heirs, executors, assigns and administrators, and it shall inure to the benefit 

of the Company and each of its successors or assigns.  This Agreement shall be effective as of the first day of my being retained to render services to the Company, even if such date precedes the date I sign this Agreement.

10.Thorough Understanding of Agreement.  I have read all of this Agreement and understand it completely, and by my signature below I represent that this Agreement is the only statement made by or on behalf of the Company upon which I have relied in signing this Agreement.

IN WITNESS WHEREOF, I have caused this Employee Confidentiality and Inventions Assignment Agreement to be signed on the date written below.
DATED:January 5, 2015
/s/ Robert S. Vaters
Robert S. VatersExhibit 10.10

 

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of December 16, 2014, by and among (i) Great Ajax
Corp., a Maryland corporation (together with any successor entity thereto, the “Company”) and (ii)  purchasers
(the “Participants”) of the Company’s common stock, $0.01 par value per share (the “Common Stock”)
in a private placement of the Common Stock by the Company completed on the date hereof, and each of the Participants’ direct
and indirect transferees. FBR Capital Markets & Co. (“FBR”) has acted as the exclusive placement agent on
behalf of the Company in connection with such private placement of the Common Stock pursuant to the terms and conditions of that
certain Engagement Letter, dated as of November 30, 2014, by and between the Company and FBR (the “Placement Agreement”).

 

This Agreement is made pursuant to the Subscription
Agreements between the Company and the Participants in the Offering (the “Subscription Agreements”), and in
accordance with the requirements of the Placement Agreement. In order to induce the Participants to enter into the Subscription
Agreements and to purchase the shares of the Company’s Common Stock in the Offering, the Company has agreed to provide the
registration rights provided for in this Agreement to the Participants, and their respective direct and indirect transferees. The
parties hereby agree as follows:

 

1.            Definitions

 

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

 

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

 

Agreement:   As defined
in the preamble.

 

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

 

Business Day:  With
respect to any act to be performed hereunder, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in New York, New York or other applicable places where such act is to occur are authorized or obligated by applicable
law, regulation or executive order to close.

 

Closing Date:  December
16, 2014, which is the date of the initial closing of the Offering.

 

    	 

    	 

    

   

Commission:  The
Securities and Exchange Commission.

 

Common Stock:  As
defined in the preamble.

 

Company:  As defined
in the preamble.

 

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

 

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

 

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

 

FBR:  As defined
in the preamble.

 

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

 

Holder:  Each record
owner of any Registrable Shares from time to time.

 

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

 

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

 

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

 

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

 

July 2014 Offering:
  As defined in the definition of Original Registration Rights Agreement.

 

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

 

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

 

Management Holders:  Thetis Asset Management
LLC, Gregory Funding LLC, Aspen Yo LLC, Lawrence Mendelsohn, Russell Schaub, Glen Ohl, Steven L. Begleiter, Daniel Hoffman, J.
Kirk Ogren, and Jonathan Bradford Handley, Jr.

 

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

 

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

 

OP Units:  common
units of limited partnership interest in the Operating Partnership.

 

    	2

    	 

    

  

Operating Partnership:
   Great Ajax Operating Partnership LP, a Delaware limited partnership.

 

Original Registration
Rights Agreement:   That certain Registration Rights Agreement, dated July 8, 2014, entered into by the Company and FBR
for the benefit of the holders of shares of Common Stock that were issued and sold in that certain private offering by the Company
(the “July 2014 Offering”) of an aggregate of 8,476,686 shares of Common Stock and by the Operating Partnership
of an aggregate of 468,106 OP Units, including shares of Common Stock and OP Units sold pursuant to the exercise by FBR of an additional
allotment option granted by the Company.

 

Participants:  As
defined in the preamble.

 

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

 

Placement Agreement: 
As defined in the preamble.

 

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

 

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

 

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

 

Registrable Shares:
 The Shares, upon original issuance thereof, and at all times subsequent thereto, including upon the transfer thereof by the original
holder or any subsequent holder and any shares or other securities issued in respect of such Shares by reason of or in connection
with any stock dividend, stock distribution, stock split, purchase in any rights offering or in connection with any exchange for
or replacement of such Shares or any combination of shares, recapitalization, merger or consolidation, or any other equity securities
issued pursuant to any other pro rata distribution with respect to the Common Stock, until, in the case of any such Share, the
earliest to occur of (i) the date on which the resale of such Share has been registered pursuant to the Securities Act and
it has been disposed of in accordance with the Registration Statement relating to it, (ii) in the event the Company is subject
to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, the date on which it has been transferred pursuant
to Rule 144 (or any similar provision then in effect) or (iii) the date on which it is sold to the Company.

 

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

 

    	3

    	 

    

  

Registration Expenses: 
Any and all fees and expenses incident to the Company’s and the Participants’ performance of or compliance with this
Agreement, including, without limitation: (i) all Commission, FINRA or other registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with international, federal or state securities or blue sky laws (including,
without limitation, any registration, listing and filing fees and fees and disbursements of counsel in connection with blue sky
qualification of any of the Registrable Shares and the preparation of a blue sky memorandum and compliance with the rules of FINRA);
(iii) all expenses in preparing or assisting in preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales
agreements, certificates and any other documents relating to the performance under and compliance with this Agreement; (iv) all
fees and expenses incurred in connection with the listing or inclusion of any of the Registrable Shares on any securities exchange
pursuant to Section 5(n) of this Agreement; (v) the fees and disbursements of counsel for the Company and of the independent
registered public accounting firm of the Company (including, without limitation, the expenses of any special audit and “cold
comfort” letters required by or incident to the performance of this Agreement); (vi) reasonable fees and disbursements
of one nationally recognized securities law firm designated to act as selling stockholders’ counsel pursuant to the Original
Registration Rights Agreement in an aggregate amount (taken together with the reasonable fees and disbursements of such counsel
payable by the Company under the Original Registration Rights Agreement) not to exceed $50,000 (such counsel, “Selling
Holders’ Counsel”); provided, however, that (a) if a Holder electing to sell Registrable Shares in an Underwritten
Offering objects to the appointment of such nationally recognized securities law counsel as Selling Holders’ Counsel or (b)
such Selling Holders’ Counsel is unable to act as counsel for a Holder in connection with an Underwritten Offering due to
a conflict of interest or because such Selling Holders’ Counsel is not licensed in the jurisdiction in which the Holder resides,
such Holder shall be required to appoint its own counsel in connection with such Underwritten Offering at the sole cost of such
Holder; and (vii) any fees and disbursements customarily paid in issues and sales of securities (including the fees and expenses
of any experts retained by the Company in connection with any Registration Statement); provided, however, that Registration
Expenses shall exclude brokers’ or underwriters’ discounts and commissions, if any, relating to the sale or disposition
of Registrable Shares by a Holder.

 

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

 

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

 

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

 

    	4

    	 

    

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Selling Holders’
Counsel:   As defined in clause (vi) of the definition for Registration Expenses.

 

Shares:   The shares
of Common Stock that are offered and sold in the Offering pursuant to the terms and conditions of the Subscription Agreements and
in accordance with the requirements of the Placement Agreement.

 

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

 

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

 

Subscription Agreements:  
As defined in the preamble.

 

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

 

    	5

    	 

    

  

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

 

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

 

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

 

2.            Registration
Rights

 

(a)            Mandatory
Shelf Registration.   The Company has confidentially submitted to the Commission on September 29, 2014, a draft shelf Registration
Statement on Form S-11 providing for the resale from time to time pursuant to Rule 415 of the registrable shares sold in the
July 2014 Offering by the holders thereof pursuant to the requirements of the Original Registration Rights Agreement (the “Shelf
Registration Statement”). Subject to Section 5 hereof, the Company hereby agrees to include the Registrable Shares in
the Shelf Registration Statement. The Company shall use its commercially reasonable efforts to cause such Shelf Registration Statement
to be declared effective by the Commission as soon as practicable after the initial filing thereof (but in no event later than
the date that is 180 days immediately following the initial filing thereof). The Shelf Registration Statement shall provide for
the resale from time to time, and pursuant to any method or combination of methods legally available (including, without limitation,
an Underwritten Offering, a direct sale to purchasers or a sale through brokers or agents, which may include sales over the internet)
by the Holders of any and all Registrable Shares.

 

(b)            IPO
Registration.  The Company first confidentially submitted to the Commission on September 22, 2014, a draft registration statement
on Form S-11 providing for the initial public offering of shares of Common Stock (the “IPO Registration Statement”).
Included as Exhibit A hereto is a written notice of election and selling stockholder questionnaire in order to afford each
Holder an opportunity to include in the IPO Registration Statement all or any part of the Registrable Shares then held by such
Holder. Each Holder desiring to include in the IPO Registration Statement all or part of the Registrable Shares held by such Holder
shall, within 10 days after the date of this Agreement, notify the Company in writing by completing, signing and delivering
such notice of election and selling stockholder questionnaire to the Company, and in such notice shall inform the Company of the
number of Registrable Shares such Holder wishes to include in the IPO Registration Statement. Any election by any Holder to include
any Registrable Shares in the IPO Registration Statement will not affect the inclusion of such Registrable Shares in the Shelf
Registration Statement until such Registrable Shares have been sold under the IPO Registration Statement.

 

(i)            Right
to Terminate IPO Registration.   The Company shall have the right to terminate or withdraw the IPO Registration Statement initiated
by it and referred to in this Section 2(b) prior to the effectiveness of such registration whether or not any Holder has elected
to include Registrable Shares in such registration; provided, however, the Company must provide each Holder that elected
to include any Registrable Shares in such IPO Registration Statement prompt written notice of such termination or withdrawal. Furthermore,
in the event the IPO Registration Statement is not declared effective within 120 days following the initial filing of the IPO Registration
Statement, unless a road show

 

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for the Underwritten Offering pursuant
to the IPO Registration Statement is actually in progress at such time, the Company shall promptly provide a new written notice
to all Holders giving them another opportunity to elect to include Registrable Shares in the pending IPO Registration Statement.
Each Holder receiving such notice shall have the same election rights afforded such Holder as described in clause (b) above.

 

(ii)         Shelf
Registration not Impacted by IPO Registration Statement.     The Company’s obligation to include the Registrable Shares in
the Shelf Registration Statement pursuant to Section 2(a) hereof shall not be affected by the filing or effectiveness of the
IPO Registration Statement, except with respect to any Registrable Shares that are actually sold pursuant to the IPO Registration
Statement. In addition, the Company’s obligation to use its commercially reasonable efforts to cause to become and keep effective
the Shelf Registration Statement pursuant to Section 2(a) hereof shall not be affected by the filing or effectiveness of an IPO
Registration Statement; provided, however, with respect to the IPO Registration Statement, if the Company has used and is
using commercially reasonable efforts to pursue the completion of such initial public offering before the effectiveness of the
Shelf Registration Statement, the Company shall have the right to defer causing the Commission to declare such Shelf Registration
Statement effective until up to 60 days after the closing date of its initial public offering pursuant to the IPO Registration
Statement; provided, further, that if such initial public offering is not completed by July 8, 2015, the Company
shall use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as soon as practicable
thereafter, but in no event later than sixty (60) days following July 8, 2015. Notwithstanding any other provision in this Agreement
to the contrary, if the deadline for causing such Shelf Registration Statement to go effective is after the 60 day period beginning
on the closing date of the Company’s initial public offering pursuant to the IPO Registration Statement, the Company shall
cause the Shelf Registration Statement to be declared effective no later than 60 days after the closing date of the Company’s
initial public offering pursuant to the IPO Registration Statement. Notwithstanding any other provision in this Agreement to the
contrary, nothing in this Section 2(b)(iii) shall affect the Company’s obligation to hold a Special Election
Meeting as provided in Section 3 hereof.

 

(c)            Issuer
Free Writing Prospectus.   The Company represents and agrees that, unless it obtains the prior consent of Holders of a majority
of the Registrable Shares (together with the holders of the registrable shares under the Original Registration Statement) that
are registered under a Registration Statement at such time or the consent of the managing underwriter in connection with any Underwritten
Offering of Registrable Shares, and each Holder represents and agrees that, unless it obtains the prior consent of the Company
and any such underwriter, it will not make any offer relating to the Shares that would constitute an “issuer free writing
prospectus,” as defined in Rule 433 (an “Issuer Free Writing Prospectus”), or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. The
Company represents that any Issuer Free Writing Prospectus will not include any information that conflicts with the information
contained in any Registration Statement or the related Prospectus, and any Issuer Free Writing Prospectus, when taken together
with the information in such Registration Statement and the related Prospectus, will not include any untrue statement of a

 

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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.

 

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

 

By electing to include
the Registrable Shares in the IPO Registration Statement, the Holder of such Registrable Shares shall be deemed to have agreed
not to effect any public sale or distribution of securities of the Company of the same or similar class or classes of the securities
included in the IPO Registration Statement or any securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 or Rule 144A under the

 

    	8

    	 

    

  

Securities Act, during such periods as reasonably
requested (but in no event for a period longer than 30 days prior to and 180 days following the effective date of the
IPO Registration Statement) by the representatives of the underwriters, if an Underwritten Offering, or by the Company in any other
registration.

 

If any Holder disapproves
of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the managing
underwriter(s), delivered by the later of (i) two Business Days after the IPO price range is communicated by the Company to such
Holder and (ii) ten Business Days prior to the effective date of the IPO Registration Statement. Any Registrable Shares excluded
or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

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

 

3.            Special
Election Meeting.

 

(a)            Trigger
Date for Special Election Meeting.   Subject to Section 3(b), if a Registration Statement registering the resale of the
Registrable Shares has not been declared effective by the Commission, and the Registrable Shares have not been listed for trading
on a national securities exchange, on or before (i) the date that is 180 days immediately following the initial filing of such
Registration Statement, (ii) if the Company undertakes an initial public offering pursuant to the IPO Registration Statement and
completes such initial public offering, the date that is 60 days after the closing date of such initial public offering, or (iii)
if the Company undertakes an initial public offering and is using commercially reasonable efforts to complete the initial public
offering, but the initial public offering is not completed by July 8, 2015, the date that is sixty (60) days following July 8,
2015 (each, the “Trigger Date”), a special meeting of the stockholders of the Company (the “Special
Election Meeting”) shall be called in accordance with the Bylaws of the Company. The Special Election Meeting shall occur
as soon as possible following the Trigger Date but in no event more than 45 days following the Trigger Date.

 

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

 

(c)            Nominations.
  Nominations of individuals for election to the Board of Directors of the Company at the Special Election Meeting may only be made
(i) by or at the direction of the Board of Directors or (ii) upon receipt by the Company of written notice of holders of registrable

 

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shares under the Original Registration Rights
Agreement and Holders of Registrable Shares hereunder entitled to cast, or direct the casting of, not less than 20% of all the
votes entitled to be cast at the Special Election Meeting (excluding Management Holders) and containing the information specified
by Section 3(e) hereof. Each individual whose nomination is made in accordance with this Section 3(d) is hereinafter referred to
as a “Nominee.” Nominees may include directors whose removal from the Board of Directors is being sought pursuant to
Section 3(c) hereof.

 

(d)            Procedure
for Stockholder Nominations.    For nominations of individuals for election to the Board of Directors to be properly brought before
the Special Election Meeting by Holders pursuant to Section 3(d) hereof, the Holders must have given notice thereof in writing
to the Secretary of the Company not later than 5:00 p.m., Eastern Time, on the 10th day after the Trigger Date. Such
notice shall include each such proposed Nominee’s written consent to serve as a director, if elected, and shall specify:

 

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

 

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

 

(e)            Notice.
  Not less than 15 days nor more than 25 days before the Special Election Meeting, the Secretary of the Company shall give to each
stockholder entitled to vote at, or to receive notice of, such meeting at such stockholder’s address as it appears in the
share transfer records of the Company, notice in writing setting forth (i) the time and place of the Special Election Meeting,
(ii) the purposes for which the Special Election Meeting has been called and (iii) the name of each Nominee.

 

(f)            Vote
of Management Shares.   The Management Holders shall not be entitled to vote any shares of Common Stock beneficially owned by
them in the removal or election of directors at the Special Election Meeting. So long as any director who was elected to the Board
of Directors at the Special Election Meeting continues to serve in such capacity as a director of the Company, the shares of Common
Stock beneficially owned by the Management Holders shall not vote in favor of the removal of any such director, the expansion of
the size of the Board of the Directors to create new vacancies, or any other proposal, the effect of which is to undermine the
intent and purpose of this Section 3, unless otherwise expressly consented to or requested by FBR. The Management Holders
shall not grant a proxy to vote any of the shares of Common Stock beneficially owned by the Management Holders to any other party
(other than a designee of FBR) to vote on such matters.

 

(g)            No
Conflicts.   The Company represents and warrants that the Charter and Bylaws of the Company reflect, and the Charter, Bylaws
and applicable law (including the

 

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Maryland General Corporation Law) do not conflict
with, the rights of Holders and the procedures for a Special Election Meeting set forth in this Section 3, and, so
long as any Holder owns any Registrable Shares, agrees not to amend or modify the Charter or Bylaws of the Company or take (or
allow to be taken) any action that could cause the Charter or Bylaws of the Company to be inconsistent or conflict with any rights
of Holders and/or the procedures for a Special Election Meeting set forth in this Section 3.

 

4.            Rules 144
and 144A Reporting

 

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

 

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

 

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

 

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

 

(i)            the
Company’s annual consolidated financial statements (including at least balance sheets, statements of profit and loss, statements
of stockholders’ equity and statements of cash flows) prepared in accordance with U.S. generally accepted accounting principles
in the United States, accompanied by an audit report of the Company’s independent accountants, no later than 90 days
after the end of each fiscal year of the Company; and

 

(ii)         the
Company’s unaudited quarterly financial statements (including at least balance sheets, statements of profit and loss, statements
of stockholders’ equity and statements of cash flows) prepared in a manner consistent with the preparation of the Company’s
annual financial statements, no later than 45 days after the end of each of the first three fiscal quarters of the Company;

 

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

 

    	11

    	 

    

  

such financial statements, and will also cooperate
with, and make management reasonably available to, FBR personnel in connection with making Company information available to investors;
and

 

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

 

5.            Registration
Procedures

 

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

 

(a)            Not
less than twenty Business Days before the effective date of any Registration Statement, provide a copy of the Registration Statement
to FBR, its counsel and Selling Holders’ Counsel for review and comment, which Registration Statement(s) shall (x) comply
as to form in all material respects with the requirements of the applicable form and include all financial statements required
by the Commission to be filed therewith and (y) be reasonably acceptable to FBR, its counsel and Selling Holders’ Counsel;
notify FBR and Selling Holders’ Counsel in writing, at least five Business Days prior to filing of any amendment or supplement
to such Registration Statement and, at least three Business Days prior to filing, provide a copy of such amendment or supplement
to FBR, its counsel and Selling Holders’ Counsel for review and comment; promptly following receipt from the Commission,
provide to FBR, its counsel and Selling Holders’ Counsel copies of any comments made by the staff of the Commission relating
to such Registration Statement and of the Company’s responses thereto for review and comment; and use its commercially reasonable
efforts to cause such Registration Statement to become effective as soon as practicable after filing and to remain effective, subject
to Section 6 hereof, until the earlier of (i) such time as all Registrable Shares covered thereby have been sold in accordance
with the intended distribution of such Registrable Shares, (ii) the date on which all Registrable Shares covered thereby have
either been transferred pursuant to Rule 144 or are eligible for resale, without any volume or manner-of-sale restrictions or compliance
by the Company with any current public information requirements, pursuant to Rule 144 (subject to the condition that the Registrable
Shares have been transferred to an unrestricted CUSIP, are listed or included on the New York Stock Exchange or the Nasdaq Global
Market, pursuant to Section 5(n) of this Agreement, or on an alternative trading system with the Registrable Shares qualified under
the applicable state securities or “blue sky” laws of all 50 states), or (iii) the date on which all Registrable Shares
covered thereby have been sold to the Company or cease to be outstanding; provided, however, that the Company

 

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shall not be required to cause the IPO Registration
Statement to remain effective for any period longer than 90 days following the effective date of the IPO Registration Statement
(subject to extension as provided in Section 6(c) hereof) provided, further, that if the Company has an effective
Shelf Registration Statement on Form S-11(or other form then available to the Company) under the Securities Act and becomes
eligible to use Form S-3 or such other short-form registration statement form under the Securities Act, the Company may, upon
30 Business Days prior written notice to all Holders, register any Registrable Shares registered but not yet distributed under
the effective Shelf Registration Statement on such a short-form Shelf Registration Statement and, once the short-form Shelf Registration
Statement is declared effective, de-register such shares under the previous Registration Statement or transfer the filing fees
from the previous Registration Statement (such transfer pursuant to Rule 429, if applicable) unless any Holder registered
under the initial Shelf Registration Statement notifies the Company within 15 Business Days of receipt of the Company notice
that such a registration under a new Registration Statement and de-registration of the initial Shelf Registration Statement would
interfere with its distribution of Registrable Shares already in progress, in which case, the Company shall delay the effectiveness
of the short-form Registration Statement and termination of the then-effective initial Registration Statement or any short-form
Registration Statement for a period of not less than 30 days from the date that the Company receives the notice from such Holders
requesting a delay;

 

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

 

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

 

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

 

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register as a broker or dealer in such jurisdiction
where it would not otherwise be required to qualify but for this Section 5(d) and except as may be required by the Securities
Act, (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any
such jurisdiction;

 

(e)            use
its commercially reasonable efforts to cause all Registrable Shares covered by such Registration Statement to be registered and
approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof to consummate the
disposition of such Registrable Shares;

 

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

 

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

 

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

 

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

 

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therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;

 

(j)            if
requested by the representative of the underwriters, if any, or any Holders of Registrable Shares being sold in connection with
such offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the representative
of the underwriters, if any, or such Holders indicate relates to them or that they reasonably request be included therein and (ii) make
all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable after the
Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

 

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

 

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

 

(m)           make
available for inspection by representatives of the Holders and the representative of any underwriters participating in any offering
pursuant to a Registration Statement and any special counsel or accountants retained by such Holders or underwriters, all financial
and other records, pertinent corporate documents and properties of the Company and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any such representatives, the representative of the
underwriters, counsel thereto or accountants in connection with a Registration Statement; provided, however, that such records,
documents or information that the Company determines, in good faith, to be confidential and notifies such representatives, representative
of the underwriters, counsel thereto or accountants are confidential shall not be disclosed by such representatives, representative
of the underwriters, counsel thereto or accountants unless (i) the disclosure of such records, documents or information is
necessary to avoid or correct a misstatement or omission in a Registration Statement or

 

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Prospectus, (ii) the release of such records,
documents or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) such
records, documents or information have been generally made available to the public; provided, further, that the representatives
of the Holders and any underwriters will use commercially reasonable efforts, to the extent practicable, to coordinate the foregoing
inspection and information gathering and not materially disrupt the Company’s business operations;

 

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

 

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

 

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

 

(q)            (i) otherwise
use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, (ii) make generally
available to its stockholders, as soon as reasonably practicable, earnings statements covering at least 12 months beginning
after the effective date of the Registration Statement that satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder, but in no event later than 45 days after the end of each fiscal year of the Company and (iii) not
file any Registration Statement or Prospectus or amendment or supplement to such Registration Statement or Prospectus to which
any Holder of Registrable Shares covered by any Registration Statement shall have reasonably objected on the grounds that such
Registration Statement or Prospectus or amendment or supplement does not comply in all material respects with the requirements
of the Securities Act, such Holder having been furnished with a copy thereof at least two Business Days prior to the filing thereof;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6.            Black-Out
Period

 

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

 

    	18

    	 

    

  

of distribution not disclosed in the Registration
Statement or any material change to such information. Upon the occurrence of any such suspension, the Company shall use its best
efforts to cause the Registration Statement to become effective or to promptly amend or supplement the Registration Statement on
a post-effective basis or to take such action as is necessary to make resumed use of the Registration Statement compatible with
the Company’s best interests, as applicable, so as to permit the Holders to resume sales of the Registrable Shares as soon
as possible.

 

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

 

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

 

7.            Indemnification
and Contribution

 

(a)            The
Company agrees to indemnify and hold harmless (i) each Holder of Registrable Shares and any underwriter (as determined in
the Securities Act) for such Holder (including, if applicable, FBR), (ii) each Person, if any, who controls (within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) any such Person described in clause (i)
(any of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling Person”),
and (iii) the respective officers, directors, partners, members, employees, representatives and agents of any such Person
or any Controlling Person (any Person referred to in clause (i), (ii) or (iii) above may hereinafter be referred to as a “Purchaser
Indemnitee”), to the fullest extent lawful, from and against any and all losses, claims, damages, judgments, actions,
out-of-pocket expenses, and other liabilities (the “Liabilities”), including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or defending any claim or action, or

 

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any investigation or Proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to such Purchaser Indemnitee, joint
or several, directly or indirectly related to, based upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or any amendment thereto), any Prospectus (or any
amendment or supplement thereto) or any Issuer Free Writing Prospectus (or any amendment or supplement thereto), or any preliminary
Prospectus or any other document used to sell the Shares, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such Liabilities arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with information relating to any Purchaser Indemnitee furnished
to the Company, or any underwriter in writing by such Purchaser Indemnitee expressly for use therein. The Company shall notify
the Holders promptly of the institution, threat or assertion of any claim, Proceeding (including any governmental investigation),
or litigation of which it shall have become aware in connection with the matters addressed by this Agreement which involves the
Company or a Purchaser Indemnitee. The indemnity provided for herein shall remain in full force and effect regardless of any investigation
made by or on behalf of any Purchaser Indemnitee.

 

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

 

(c)            If
any suit, action, Proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) above, such Person (the “Indemnified
Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”)
in writing of the commencement thereof (but the failure to so notify an Indemnifying Party shall not relieve it from any liability
which it may have under this Section 7, except to the extent the Indemnifying Party is materially prejudiced by the failure
to give notice), and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may reasonably designate in such
Proceeding and shall pay the reasonable fees

 

    	20

    	 

    

  

and expenses actually incurred by such counsel
related to such Proceeding. Notwithstanding the foregoing, in any such Proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the Indemnifying
Party failed within a reasonable time after notice of commencement of the action to assume the defense and employ counsel reasonably
satisfactory to the Indemnified Party, (iii) the Indemnifying Party and its counsel do not actively and vigorously pursue
the defense of such action or (iv) the named parties to any such action (including any impleaded parties) include both such
Indemnified Party and Indemnifying Party, or any Affiliate of the Indemnifying Party, and such Indemnified Party shall have been
reasonably advised by counsel that, either (x) there may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a conflict
may exist between such Indemnified Party and the Indemnifying Party or such Affiliate of the Indemnifying Party (in which case
the Indemnifying Party shall not have the right to assume nor direct the defense of such action on behalf of such Indemnified Party;
it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for
the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all such Indemnified Parties,
which firm shall be designated in writing by those Indemnified Parties who sold a majority of the Registrable Shares sold by all
such Indemnified Parties and any such separate firm for the Company, the directors, the officers and such control Persons of the
Company as shall be designated in writing by the Company). The Indemnifying Party shall not be liable for any settlement of any
Proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent
or if there is a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify any Indemnified Party from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party
is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
(i) includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such
Proceeding and (ii) does not include a statement as to or an admission of, fault, culpability or a failure to act by or on behalf
of the Indemnified Party.

 

(d)            If
the indemnification provided for in paragraphs (a) and (b) of this Section 7 is for any reason held to be unavailable
to an Indemnified Party in respect of any Liabilities referred to therein (other than by reason of the exceptions provided therein)
or is insufficient to hold harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in lieu
of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as
a result of such Liabilities (i) in such proportion as is appropriate to reflect the relative benefits of the Indemnified
Party on the one hand and the Indemnifying Party(ies) on the other in connection with the statements or omissions that resulted
in such Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative
fault of the Indemnifying Party(ies) and the Indemnified Party, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand

 

    	21

    	 

    

  

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

 

(e)            The
parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if such Indemnified Parties were treated as one entity for such purpose), or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 7(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to in Section 7(d) above shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Purchaser Indemnitee
be required to contribute any amount in excess of the amount by which the net proceeds received by such Purchaser Indemnitee from
sales of Registrable Shares exceeds the amount of any damages that such Purchaser Indemnitee has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Section 7, each
Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) FBR or a Holder of Registrable Shares shall have the same rights to contribution as FBR or such Holder, as the case may be,
and each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) the Company, and each officer, director, partner, employee, representative, agent or manager of the Company shall
have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or Proceeding against such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise, except to the extent that any party is materially prejudiced by the failure to give
notice. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

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

 

8.            Market
Stand-off Agreement

 

Each Holder hereby agrees
that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, directly or indirectly
sell, offer to sell (including without limitation any short sale), grant any option or otherwise transfer or dispose of any Registrable
Shares or other shares of Common Stock of the Company or any securities convertible into or

 

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exchangeable or exercisable for shares of Common
Stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound)
(i) in the case of the Company and each of its officers, directors, managers and employees, in each case to the extent such person
or entity holds shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock,
for a period beginning 30 days prior to, and continuing for 180 days following, the effective date of, the IPO Registration Statement
to the Company; (ii) in the case of all other Holders who include Registrable Shares in the IPO Registration Statement, beginning
30 days prior to, and continuing for 180 days following, the effective date of the IPO Registration Statement of the Company, and
(iii) in the case of all other Holders who do not include Registrable Shares in the IPO Registration Statement, for a period beginning
30 days prior to, and continuing for 60 days following, the effective date of an IPO Registration Statement of the Company
filed under the Securities Act; provided, however, that:

 

(a)            the
restrictions above shall not apply to Registrable Shares sold pursuant to the IPO Registration Statement or any other shares of
Common Stock purchased after the initial public offering of shares of Common Stock of the Company;

 

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

 

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

 

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

 

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

 

9.            Termination
of the Company’s Obligation

 

The Company shall have
no obligation pursuant to this Agreement with respect to any Registrable Shares proposed to be sold by a Holder in a registration
pursuant to this Agreement if, in the opinion of counsel to the Company, (i) all such Registrable Shares proposed to be sold by
a Holder may be sold in a single transaction without registration under the Securities Act pursuant to Rule 144, (ii) the
Company has become subject to the reporting requirements of Section 13 or

 

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15(d) of the Exchange Act for a period of at
least 90 days and is current in the filing of all such required reports, and (iii) the Registrable Shares have been listed for
trading on a national securities exchange.

 

10.         Limitations
on Subsequent Registration Rights

 

From and after the date
of this Agreement, the Company shall not, without the prior written consent of Holders beneficially owning not less than a majority
of the then outstanding Registrable Shares (provided, however, that for purposes of this Section 10, Registrable Shares
that are owned, directly or indirectly, by an Affiliate of the Company shall not be deemed to be outstanding), enter into any agreement
with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to
include such securities in any Registration Statement filed pursuant to the terms hereof, unless, under the terms of such agreement,
such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of
its securities will not reduce the amount of Registrable Shares of the Holders that is included, or (b) to have its securities
registered on a registration statement that could be declared effective prior to, or within 180 days of, the effective date
of any registration statement filed pursuant to this Agreement.

 

11.         Miscellaneous

 

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

 

(b)            Amendments
and Waivers.    The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company
and Holders beneficially owning not less than a majority of the then outstanding Registrable Shares; provided, however,
that for purposes of this Section 11(b), Registrable Shares that are owned, directly or indirectly, by any Management Holder
or any Affiliate thereof or any Affiliate of the Company shall not be deemed to be outstanding and, any waiver of the obligation
of the Company to call and hold a Special Election Meeting in accordance with the requirements of Section 2(b)(iii) hereof shall
require the written consent of the holders of at least 75% of the Registrable Shares and the registrable shares sold in the July
2014 Offering (excluding the Management Holders other than (i) Flexpoint Great Ajax Holdings, LLC and any other funds or accounts
managed by Flexpoint Ford or its affiliates and (ii) any funds or accounts managed by Wellington Management Company or its affiliates);
provided, further, however, that any amendments, modifications or supplements to, or any waivers or consents to departures
from, the provisions of Section 8 hereof that would have the effect of extending the 60 or 180 day periods

 

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referenced therein shall be approved by, and
shall only be applicable to, those Holders who provide written consent to such extension to the Company . No amendment shall be
deemed effective unless it applies uniformly to all Holders. Notwithstanding the foregoing, a waiver or consent to or departure
from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights
of other Holders may be given by such Holder; provided that the provisions of this sentence may not be amended, modified
or supplemented except in accordance with the provisions of the first and second sentences of this paragraph.

 

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

 

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

 

(ii)       if
to the Company, at the offices of the Company at 9400 SW Beaverton-Hillsdale Hwy, Suite 131, Beaverton, OR 97005, Attention: Chief
Financial Officer; and

 

(iii)      if
to FBR, at the offices of FBR at 1300 North 17th Street, Suite 1400, Arlington, Virginia 22209, Attention: Gavin Beske,
Esq., (facsimile: 703-469-1012).

 

(d)          Successors
and Assigns; Third Party Beneficiary.   This Agreement shall inure to the benefit of and be binding upon the successors and assigns
of each of the parties hereto. The Company and FBR agree that FBR shall be a third party beneficiary to the agreements made hereunder
between the Company and the Participants, and FBR shall have the right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect its rights hereunder.

 

(e)           Counterparts.
  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Each Subscription Agreement provides on the signature page thereof that execution and delivery of the Subscription Agreement by
the Holder also constitutes execution and delivery of this Agreement. Accordingly, the Company and each Holder acknowledges and
agrees that, upon the execution and delivery of the Subscription Agreement by both a Holder and the Company and the closing of
the issuance and sale of the Shares by the Company to such Holder pursuant to such Holder’s Subscription Agreement, such
Holder and the Company shall be deemed to have executed and delivered this Agreement.

 

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

 

(g)          Governing
Law.   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, 

 

    	25

    	 

    

  

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

 

(h)            Severability.  
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties hereto
that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

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

 

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

 

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

 

    	26

    	 

    

  

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

 

(m)         Attorneys’
Fees.   In any action or Proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover its reasonable attorneys’
fees in addition to any other available remedy.

 

[Signature pages follow]

 

    	27

    	 

    

  

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

 

	GREAT AJAX CORP.	 
	 	 
	By:	 	 
	Name: Lawrence Mendelsohn	 
	Title: Chief Executive Officer	 
	 	 
	FBR CAPITAL MARKETS & CO.	 
	 	 
	By:	 	 
	Name:	 
	Title:	 
	 	 
	HOLDER:	 
	 	 
	 	*
	Print name	 
	 	 
	By:	 	*
	Name:	 
	Title:	 

 

* See signature page to Subscription Agreement as provided in Section
11(e) hereof.

 

[Signature Page to Registration Rights Agreement]

 

    	 

    	 

    

  

EXHIBIT A

 

 

CONFIDENTIAL

Notice of Election to Register, Lock-Up Agreement and Selling Stockholder Questionnaire 

 

On September 22, 2014, the Company submitted for
confidential review to the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-11
(as amended prior to the date hereof and hereafter, the “IPO Registration Statement”) under the Securities Act
of 1933, as amended (the “Securities Act”), which included a form of prospectus (the “IPO Prospectus”)
relating to shares of common stock, par value $0.01 per share (“Common Stock”), to be issued and sold by the
Company to the public and any shares of Common Stock to be sold by the selling stockholders named therein who have made an election
to sell in the IPO (the “IPO”). The Company intends to list its Common Stock on the New York Stock Exchange
(the “NYSE”).

 

In addition, on September 29, 2014, the Company
submitted for confidential review to the SEC another registration statement on Form S-11 under the Securities Act, which includes
a form of prospectus (the “Resale Prospectus”) that will, after the IPO Registration Statement is declared effective
and the lock-up period described below has expired, allow holders of shares of Common Stock that are not sold in the IPO to sell
their shares from time to time.

 

Pursuant to the Registration Rights Agreement
(the “Registration Rights Agreement”), dated the date of the closing of the Company’s private offering
of Common Stock in December 2014 (the “Follow-on Private Offering”), you, as a purchaser of shares of Common
Stock in the Follow-on Private Offering (hereinafter, “Holder”), may request to include the shares of Common Stock
that you purchased in the private offering in the IPO Prospectus for sale in the IPO. You also may request to include any of those
shares that you do not sell in the IPO in the Resale Prospectus.

 

The managing underwriters of the IPO are expected
to be FBR Capital Markets & Co. and additional underwriters that will be identified (the “Managing Underwriters”).
The Managing Underwriters of the IPO have advised the Company that, subject to market conditions, they may be unable to underwrite
all of the shares of Common Stock that Holders request to include in the IPO Prospectus. Depending on the aggregate number of shares
of Common Stock that the Company and Holders propose to offer in the IPO, the Managing Underwriters may, pursuant to the Registration
Rights Agreement, exclude a portion of the shares of Common Stock that you propose to include in the IPO Prospectus if the Managing
Underwriters determine in good faith that marketing or other factors require a limitation on the number of shares to be underwritten
in the IPO. In that case, any shares that are so excluded from the IPO Prospectus

 

    	Exhibit A - 1

    	 

    

  

will be included in the Resale Prospectus.
Please note that shares acquired in the Follow-on Private Offering will be excluded first, before any shares of Common Stock
that were acquired by stockholders prior to the Follow-on Private Offering.

 

In order for your shares of Common Stock to be
included in the IPO Prospectus, you will have to enter into an underwriting agreement with the underwriters of the IPO, execute
any questionnaires, indemnities, lock-up agreements, security escrow or custody agreements, powers of attorney and other documents
reasonably required under the terms of the underwriting agreement, and furnish to the Company other information as the Company
may reasonably request, which may include certain opinions of counsel and certificates. The underwriting agreement and related
questionnaires and information requests will made available to you after you return a completed Notice of Election to Register,
Lock-Up Agreement and Selling Stockholder Questionnaire.

 

You may elect to withdraw all or a portion of
the shares of Common Stock you elect to include in the IPO by notifying the Company and the Managing Underwriters in writing at
least three business days prior to the commencement of the Company’s road show relating to the IPO. If you elect to
sell any of your shares of Common Stock in the IPO, the Company will contact you before the road show commences to confirm whether
you wish to sell in the IPO or withdraw your Common Stock from the IPO and sell under the Resale Prospectus at a later date.

 

The Company intends to use its commercially reasonable
efforts to cause the IPO Registration Statement to be declared effective by the SEC as soon as possible. The Company must have
the Resale Registration Statement declared effective no later than 60 days following the declaration of effectiveness of the IPO
Registration Statement.

 

The information set forth in this letter is
qualified in its entirety by the provisions of the Registration Rights Agreement. You should carefully review those provisions
in connection with a decision whether to include your shares of Common Stock in the IPO Prospectus and/or in the Resale Prospectus.

 

If you do not wish to sell any of your shares
of Common Stock acquired in the Follow-on Private Offering in the IPO or have your shares of Common Stock registered for resale
pursuant to the Resale Prospectus, you do not need to complete this Notice of Election to Register, Lock-Up Agreement and Selling
Stockholder Questionnaire. You will be able to sell your shares once the restrictions under Rule 144 have expired.

 

Beneficial owners that
do not complete and return this Notice of Election to Register, Lock-Up Agreement and Selling Stockholder Questionnaire as provided
herein will not be named as selling security holders in either the IPO Prospectus or the Resale Prospectus and therefore will not
be permitted to sell any Common Stock pursuant to the applicable Registration Statement.

 

Certain legal consequences may arise from being
named as a selling security holder in the IPO Registration Statement or the Resale Registration Statement and the applicable prospectus.
Accordingly, holders and beneficial owners of Common Stock are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling security holder in the IPO Registration Statement, including the IPO
Prospectus, or the Resale Registration Statement, including the Resale Prospectus, or both.

 

    	Exhibit A - 2

    	 

    

  

In order to sell any of your shares of Common
Stock acquired in the Follow-on Private Offering, you must complete and sign the enclosed herewith and return it to Morrison
& Foerster LLP, the Company’s corporate counsel, no later than the later of ten days after the closing of the Follow-on
Private Offering or December 24, 2014. Beneficial holders who have not completed and returned to us this Notice of Election to
Register, Lock-Up Agreement and Selling Stockholder Questionnaire on or before December 24, 2014 will not be able to sell their
shares pursuant to the IPO Prospectus or pursuant to the Resale Prospectus. Please review, complete and sign this Notice of Election
to Register, Lock-Up Agreement and Selling Stockholder Questionnaire and return the completed documents to Morrison & Foerster
LLP by registered or certified mail, return receipt requested, by overnight courier, by email or by facsimile as follows:

 

Morrison & Foerster LLP

Attention: Stephanie Uhrig

250 West 55th Street

New York, NY 10019-9601

suhrig@mofo.com

Fax: 212-468-7900

 

If you have any questions on this Notice of Election
to Register, Lock-Up Agreement and Selling Stockholder Questionnaire, please contact either: Nilene R. Evans, 212-468-8088 / nevans@mofo.com,
or Stephanie Uhrig, 212-336-4013 / suhrig@mofo.com.

 

    	Exhibit A - 3

    	 

    

  

Lock-Up Agreement

 

By execution of this Notice of Election
to Register, Lock-Up Agreement and Selling Stockholder Questionnaire, you are agreeing to the following lock-up provisions.

 

The undersigned beneficial owner of Common
Stock (the “Holder”) understands and agrees that it is restricted from either directly or indirectly offering,
selling (including, without limitation, any short sale), pledging, contracting to sell or granting any option or contract to purchase,
purchasing any option or contract to sell, granting any option, right or warrant for the sale of or otherwise dispose of or transfer
shares of Common Stock or any securities convertible into or exchangeable or exercisable for shares of Common Stock then owned
by the Holder (other than to (i) donees or equityholders of the Holder or (ii) lenders to whom shares of Common Stock are pledged
as collateral for a loan, in the case of (i) and (ii) that agree to be similarly bound) for a period commencing 30 days prior to
the effective date of the IPO Registration Statement and ending either (x) in the case of the Company’s officers, directors,
managers and employees and any Holder who elects to sell shares of Common Stock as a selling stockholder in the IPO, 180 days following
such effective date or (y) in the case of all other Holders, 60 days following such effective date; provided; however, that:

 

(a)            the
restrictions above shall not apply to shares of Common Stock sold pursuant to the IPO Prospectus or purchased on the New York Stock
Exchange after the common stock commences trading;

 

(b)            all
officers and directors of the Company holding shares of Common Stock or securities convertible into or exchangeable or exercisable
for shares of Common Stock shall enter into similar agreements for not less than the entire time period required of the Holders
hereunder;

 

(c)            the Holders shall be allowed
any concession or proportionate release allowed to any executive officer or director that entered into similar agreements; and

 

(d)            the
180-day period shall be shortened to 60 days if the underwriting agreement relating to the initial public offering is not entered
into prior to June 30, 2015.

  

 

 

Selling Stockholder Questionnaire

 

References below to “you” are to
you as the undersigned Holder or to the organization that you represent, as applicable.

 

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

 

	1.	(a)  Please print or type your name or your organization’s name precisely as it should appear in the IPO Registration Statement and/or the Resale Registration Statement.
	 	 	 
	 	 	 
	 	 
	 	(b)  Full legal name of registered Holder (if not the same as (a) above) through which shares of Common Stock listed in Item 3 below are held:
	 	 	 
	 	 	 
	 	 
	 	(c)  Full legal name of DTC participant (if applicable and if not the same as (b) above) through which shares of Common Stock listed in Item 3 below are held:
	 	 	 
	 	 	 

 

    	Exhibit A - 4

    	 

    

  

	2. 	Address for notices to Holder: 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	 	Telephone:	 	 
	 	Fax:	 	 
	 	Email address:	 	 
	 	Contact Person:	 	 

 

	3. 	Beneficial ownership of Common Stock; Election(s) to participate in one or both registrations 

 

Please indicate the type and number of shares
of Common Stock beneficially owned by you on the appropriate lines below and whether you wish to have your shares included in the
Resale Prospectus, the IPO Prospectus or both (as discussed above):

 

Please fill out only for the shares acquired
in the Follow-on Private Offering

 

	Aggregate
    Number

    of 

    Shares	 	Shares
    to be

    included in the

    Resale Prosp./

    Reg. Stmt.	 	Shares
    to be

    included in IPO

    Prosp./

    Reg. Stmt.
	 	 	 	 	 
	 	 	 	 	 

 

	4.	Beneficial ownership of securities of the Company other than the shares of Common Stock listed above in Item 3:
	 	 
	 	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 shares of Common Stock listed above in Item 3.
	 	 
	 	Type and amount of securities of the Company beneficially owned by the undersigned other than the shares of Common Stock owned by the Holder:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	Exhibit A - 5

    	 

    

   

	5.	Have you or your organization, if applicable, had any position, office or other material relationship with the Company or any of its affiliates since the inception of the Company in January 2014? 

 

 ̈
Yes                                     ̈
No

 

	 	If yes, please indicate the nature of any such relationship below:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 
	6.	Broker-Dealer Status:
	 	Is the undersigned a registered broker-dealer?
	 	 

 ̈
Yes                                       ̈
No

 

	 	Note:  In general, we will be required to identify any registered broker-dealer as an underwriter in the prospectus.
	 	 
	7.	Affiliation with Broker-Dealers:
	 	Is the undersigned an affiliate of a registered broker-dealer?  An “affiliate” of a specified person or entity means a person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person or entity specified.

 

 ̈
Yes                                       ̈
No

 

If so, please answer the remaining questions in this item.

 

(a)            Please
describe the affiliation between the undersigned and any registered broker-dealers:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

(b)            If
the shares of Common Stock were purchased by the undersigned other than in the ordinary course of business, please describe the
circumstances:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

  

    	Exhibit A - 6

    	 

    

    

(c)            If
the undersigned, at the time of its purchase of the shares of Common Stock, had any agreements or understandings, directly or indirectly,
with any person to distribute the shares of Common Stock, please describe such agreements or understandings:

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Note: If the undersigned is an affiliate of a broker-dealer
and did not purchase its shares of Common Stock in the ordinary course of business or at the time of the purchase had any agreements
or understandings, directly or indirectly, to distribute the shares of Common Stock, we must identify the undersigned as an underwriter
in the prospectus.

 

8.            Beneficial
Ownership by Natural Persons:

Please state the name of the person
who has voting or investment power over the shares of Common Stock held by the undersigned. Please describe who has or shares:
(a) voting power, which includes the power to vote, or to direct the voting of, the Common Stock held by the undersigned; and/or
(b) investment power, which includes the power to dispose, or to direct the disposition of, the Common Stock held by the undersigned
directly or indirectly, through any contract, arrangement, understanding or relationship. Please provide the information in Items
8(a) and 8(b) for each such person:

 

	1.	 
	2.	 
	3.	 
	4.	 
	5.	 
	6.	 

 

    	Exhibit A - 7

    	 

    

  

(a)            Voting
Power:

 

Name:____________________________________________________________________________

 

Number of shares over which above-named
person has voting power:

 

Please fill out only for the shares acquired
in the Follow-on Private Offering

 

	Aggregate
    Number

    of

    Shares	 	Shares
    to be

    included in the

    Resale Prosp./

    Reg. Stmt.	 	Shares
    to be

    included in IPO

    Prosp./

    Reg. Stmt.
	 	 	 	 	 
	 	 	 	 	 

 

(b)            Investment
Power:

 

Name:____________________________________________________________________________

 

Number of shares over which above-named
person has investment power:

 

Please fill out only for the shares acquired
in the Follow-on Private Offering

 

	Aggregate
    Number

    of

    Shares	 	Shares
    to be

    included in the

    Resale Prosp./

    Reg. Stmt.	 	Shares
    to be

    included in IPO

    Prosp./

    Reg. Stmt.
	 	 	 	 	 
	 	 	 	 	 

 

    	Exhibit A - 8

    	 

    

  

The Holder acknowledges
that it understands its obligation 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 shares of Common Stock pursuant to the Registration Statement. The undersigned agrees that neither it nor
any person acting on its behalf will engage in any transaction in violation of such provisions.

 

The undersigned hereby
acknowledges its obligations under the applicable Registration Rights Agreement to which it is a party to indemnify and hold harmless
certain persons set forth therein.

 

Pursuant to the Registration
Rights Agreement, the Company agreed under certain circumstances to indemnify applicable stockholders against certain liabilities.

 

In accordance with the
Holder’s obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion
in the applicable 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 applicable Registration Statement
remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address
set forth in Item 2 above.

 

    	Exhibit A - 9

    	 

    

  

In the event the Holder
transfers all or any portion of the Common Stock listed in Item 3 above after the date on which this Notice of Election to Register,
Lock-Up Agreement and Selling Stockholder Questionnaire is provided to the Company, the Holder will notify the transferee(s) at
the time of transfer of its rights and obligations under this Notice of Election to Register, Lock-Up Agreement and Selling Stockholder
Questionnaire and the Registration Rights Agreement and will notify the Company of such transfer, including the name, address and
contact information of the transferee and the number of shares transferred.

 

It is contemplated that
Sidley Austin LLP (“Sidley”) will act for those Holders who elect to participate in the IPO and desire such firm to
so represent them and sign engagement letters in the form provided by such firm, which letter will include a waiver of any conflicts
of interest. Any Holder may at its expense appoint other counsel to represent it individually. Sidley does represent FBR on a regular
basis and may also represent other underwriters to be named on a regular or other basis. Sidley will be representing the underwriters
in connection with the IPO with respect to the filing for the clearance of the underwriting arrangements with FINRA, but does not
expect to be representing the underwriters in connection with other aspects of the IPO.

 

It is also contemplated
that Sidley will review the sections of the Resale Registration Statement relating specifically to the selling stockholders named
therein (i.e., the “Selling Stockholders” and “Plan of Distribution” sections) in light of applicable SEC
rules. In this capacity Sidley will not be acting as counsel to any of the individual stockholders in connection with the Resale
Registration Statement, nor will such representation create any attorney-client relationship between it and any of such stockholders.

 

Please note that Sidley
is not in any of the capacities described above doing an overall review of either the IPO Registration Statement or the Resale
Registration Statement or doing any due diligence investigation of the Company or such documents.

 

By completing and signing
this Notice of Election to Register, Lock-Up Agreement and Selling Stockholder Questionnaire, the Holder consents to the disclosure
of the information contained herein in its answers to Items 1 through 8 above and the inclusion of such information in the applicable
Registration Statement(s) and prospectus(es). The undersigned understands that such information will be relied upon by the Company
without independent investigation or inquiry in connection with the preparation or amendment of the applicable Registration Statement(s)
and prospectus(es).

 

[Signature Page Follows]

 

    	Exhibit A - 10

    	 

    

  

Please complete, sign and
date this Notice of Election to Register, Lock-Up Agreement and Selling Stockholder Questionnaire and provide the information requested
below. Please return the completed document to Morrison & Foerster LLP, Attention: Stephanie Uhrig, 250 West 55th
Street, New York, NY 10019-9601 in the manner set forth above. If you have any questions regarding this Notice of Election to Register,
Lock-Up Agreement and Selling Stockholder Questionnaire, please contact either: Nilene R. Evans, 212-468-8088 / nevans@mofo.com
or Stephanie Uhrig, 212-336-4013 / suhrig@mofo.com.

  

	Name of Holder:	 	 
	 	(Type or Print)	 

 

	 	 
	Signature of Holder or Person Signing on Behalf of	 
	Holder if Holder is an Entity	 

 

	Title:	 	 	Date: _____________, 2014

 

	Telephone Number:	 	 	 
	Facsimile Number:	 	 	 
	Email Address:	 	 	 
	Address:	 	 	 
	 	 	 	 
	 	 	 	 

  

    	Exhibit A - 11

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