Document:

Registration Rights Agreement

 Exhibit 10.31 

 
  
 REGISTRATION RIGHTS AGREEMENT 
 among 

ALERIS HOLDING COMPANY 
 and 
 THE PARTIES LISTED HEREIN 

 
  

Dated: June 1, 2010 
  

 
  

 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	 	  	Page	 
			
	1.	 	Definitions and Interpretation	  	 	1	  
		 	(a)	  	Certain Definitions	  	 	1	  
		 	(b)	  	Interpretation	  	 	8	  
			
	2.	 	General; Securities Subject to this Agreement	  	 	8	  
		 	(a)	  	Grant of Rights	  	 	8	  
		 	(b)	  	Registrable Securities	  	 	8	  
		 	(c)	  	Holders of Registrable Securities	  	 	9	  
			
	3.	 	Demand Registration	  	 	9	  
		 	(a)	  	Request for Demand Registration	  	 	9	  
		 	(b)	  	Request for Short-Form Registration	  	 	10	  
		 	(c)	  	Limitations on Demand and Short-Form Registrations	  	 	10	  
		 	(d)	  	Incidental or “Piggy-Back” Rights with Respect to Demand and Short-Form Registrations	  	 	11	  
		 	(e)	  	Effective Registration	  	 	12	  
		 	(f)	  	Underwriting Procedures	  	 	13	  
		 	(g)	  	Selection of Underwriters	  	 	14	  
			
	4.	 	Incidental or “Piggy-Back” Registration	  	 	14	  
		 	(a)	  	Request for Incidental or “Piggy-Back” Registration	  	 	14	  
		 	(b)	  	IPO Sales	  	 	15	  
			
	5.	 	Shelf Registration	  	 	16	  
		 	(a)	  	Request for Shelf Registration	  	 	16	  
		 	(b)	  	Shelf Underwriting Procedures	  	 	17	  
		 	(c)	  	Limitations on Shelf Registrations	  	 	17	  
		 	(d)	  	Additional Selling Stockholders	  	 	18	  
		 	(e)	  	Automatic Shelf Registration	  	 	18	  
		 	(f)	  	Not a Demand Registration	  	 	19	  
			
	6.	 	Holdback Agreements	  	 	19	  
		 	(a)	  	Investor Holder Holdback Agreements	  	 	19	  
		 	(b)	  	Company Holdback Agreements	  	 	19	  
		 	(c)	  	Additional Holdback Agreements	  	 	20	  
		 	(d)	  	Third Party Beneficiaries in Holdback Agreements	  	 	20	  
			
	7.	 	Registration Procedures	  	 	20	  
		 	(a)	  	Obligations of the Company	  	 	20	  
		 	(b)	  	Seller Obligations	  	 	25	  
		 	(c)	  	Notice to Discontinue	  	 	26	  
		 	(d)	  	Registration Expenses	  	 	26	  
		 	(e)	  	Hedging Transactions	  	 	27	  

  
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	 	 	 	  	 	  	Page	 
			
	8.	 	Indemnification; Contribution	  	 	28	  
		 	(a)	  	Indemnification by the Company	  	 	28	  
		 	(b)	  	Indemnification by Investor Holders	  	 	29	  
		 	(c)	  	Conduct of Indemnification Proceedings	  	 	29	  
		 	(d)	  	Contribution	  	 	30	  
			
	9.	 	Exchange Act Reporting and Rule 144	  	 	31	  
			
	10.	 	Miscellaneous	  	 	31	  
		 	(a)	  	Recapitalizations, Exchanges, etc.	  	 	31	  
		 	(b)	  	No Inconsistent Agreements	  	 	31	  
		 	(c)	  	Remedies	  	 	32	  
		 	(d)	  	Amendments and Waivers	  	 	32	  
		 	(e)	  	Notices	  	 	32	  
		 	(f)	  	Successors and Assigns; Third Party Beneficiaries	  	 	33	  
		 	(g)	  	Headings	  	 	34	  
		 	(h)	  	GOVERNING LAW; CONSENT TO JURISDICTION	  	 	34	  
		 	(i)	  	WAIVER OF JURY TRIAL	  	 	34	  
		 	(j)	  	Severability	  	 	34	  
		 	(k)	  	Rules of Construction	  	 	34	  
		 	(l)	  	Interpretation	  	 	35	  
		 	(m)	  	Entire Agreement	  	 	35	  
		 	(n)	  	Further Assurances	  	 	35	  
		 	(o)	  	Other Agreements	  	 	35	  
		 	(p)	  	Counterparts	  	 	35	  
		 	(q)	  	Termination	  	 	35	  
			
	Schedule 1	  	Other holders of at least 5% of the outstanding shares of Common Stock	  			
	Schedule 2	  	Plan of Distribution	  			

 REGISTRATION RIGHTS AGREEMENT 

REGISTRATION RIGHTS AGREEMENT, dated June 1, 2010 (this “Agreement”), among Aleris Holding Company (f/k/a AHC1
Holding Co.), a Delaware corporation (the “Company”), the investment funds and accounts managed by Oaktree Capital Management, L.P., a Delaware limited partnership, or its Affiliates set forth on the signature pages hereto
(“Oaktree”), the investment funds and accounts managed by Apollo Management VII, L.P., a Delaware limited partnership, as set forth on the signature pages hereto (“Apollo”), and other holders of at least 5% of the
outstanding shares of Common Stock (as defined herein) as listed on Schedule 1 hereto (together with Oaktree and Apollo, the “Investors”). Capitalized terms used but not otherwise defined herein shall have the respective
meanings ascribed to such terms in Section 1. 
 R E C I T A L S :

 A. Pursuant to the Equity Commitment Agreement, dated February 5, 2010 (the “Equity Commitment
Agreement”), among the Company and certain of the Investors, the Investors have agreed to purchase on the date hereof, and the Company has agreed to issue and sell, for the purchase price set forth therein, (i) units consisting of
shares of Common Stock and IntermediateCo Notes (as defined herein), issued upon the exercise of the rights allocated to such Investor and its Affiliates (as defined herein) under the joint plan of reorganization of the Company and its affiliated
debtors (the “Plan”) in respect of its Eligible Claims (as defined therein) and (ii) such Investor’s Backstop Percentage (as defined therein) of such units as are offered pursuant to the Plan but not purchased on or before
the expiration of the rights issued by the Company as part of the Plan. 
 B. Concurrently herewith, the Company and the
Investors are entering into the Stockholders Agreement, pursuant to which the parties thereto have agreed to, among other things, certain tag-along rights, preemptive rights and certain corporate governance rights and obligations. 

C. In order to induce each of the Investors to purchase and/or elect to receive shares of Common Stock pursuant to the Equity Commitment
Agreement and/or the Plan, and to induce the parties hereto to enter into the Stockholders Agreement, the Company has agreed to grant registration rights with respect to the Registrable Securities as set forth in this Agreement. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Definitions and
Interpretation. 
 (a) Certain Definitions. As used in this Agreement, the following capitalized terms shall have
the meanings ascribed to them below. 

 “Affiliate” means any Person who is an “affiliate” as defined in
Rule 12b-2 promulgated under the Exchange Act. 
 “Agreement” means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof. 
 “Apollo” has the meaning set forth in the
preamble to this Agreement. 
 “Apollo Stockholders” means Apollo and any Permitted Transferee (as defined in
the Stockholders Agreement) thereof to whom Registrable Securities are transferred in accordance with the Stockholders Agreement and Section 10(f). 
 “Approved Underwriter” has the meaning set forth in Section 3(f). 
 “Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act. 

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

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of
New York are authorized or required by law or executive order to close. 
 “Closing Price” means, with
respect to the Registrable Securities, as of the date of determination, (i) if the Registrable Securities are listed on a national securities exchange, the closing price per share of a Registrable Security on such date published in The Wall
Street Journal (National Edition) or, if no such closing price on such date is published in The Wall Street Journal (National Edition), the average of the closing bid and asked prices on such date, as officially reported on the principal
national securities exchange on which the Registrable Securities are then listed or admitted to trading; or (ii) if the Registrable Securities are not then listed or admitted to trading on any national securities exchange but are designated as
national market system securities by FINRA, the last trading price per share of a Registrable Security on such date; or (iii) if there shall have been no trading on such date or if the Registrable Securities are not designated as national
market system securities by FINRA, the average of the reported closing bid and asked prices of the Registrable Securities on such date as shown by The NASDAQ OMX Group, Inc. and reported by any member firm of The New York Stock Exchange, Inc.
selected by the Company; or (iv) if none of clauses (i), (ii) or (iii) is applicable, a market price per share determined in good faith by the Board of Directors or, if such determination is not satisfactory to the Designated Holder
for whom such determination is being made, by a nationally recognized investment banking firm mutually selected by the Company and such Designated Holder, the expenses for which shall be borne equally by the Company and such Designated Holder. If
trading is conducted on a continuous basis on any exchange, then the closing price shall be at 4:00 P.M. New York City time. 
 “Commission” means the Securities and Exchange Commission. 

  
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 “Common Stock” means the common stock, par value $0.01 per share, of the
Company or any other capital stock of the Company into which such stock is reclassified, reconstituted, exchanged or substituted and any other common stock of the Company. 
 “Company” has the meaning set forth in the preamble to this Agreement. 
 “Company Underwriter” has the meaning set forth in Section 4(a). 
 “Contemporaneous Company Offering” has the meaning set forth in Section 5(b). 
 “Demand Initiating Holders” has the meaning set forth in Section 3(a). 
 “Demand Registration” has the meaning set forth in Section 3(a). 
 “Designated Holder” means each of the Oaktree Stockholders, the Apollo Stockholders, the Other 10% Investor Stockholders and any transferee (whether direct or indirect) of any of the
foregoing to whom Registrable Securities have been transferred in accordance with Section 10(f), other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or
Rule 144 or Regulation S promulgated under the Securities Act. 
 “Designated Holder Free Writing
Prospectus” means each Free Writing Prospectus prepared by or on behalf of the relevant Designated Holder or used or referred to by such Designated Holder in connection with the offering of Registrable Securities. 

“Determination Date” has the meaning set forth in Section 5(e). 

“EDGAR” means the Electronic Data Gathering, Analysis and Retrieval System of the Commission. 

“Equity Commitment Agreement” has the meaning set forth in Recital A. 

“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations of the Commission promulgated
thereunder. 
 “FINRA” means the Financial Industry Regulatory Authority or any successor regulatory authority.

 “Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated
under the Securities Act. 
 “Hedging Counterparty” means a broker-dealer registered under Section 15(b)
of the Exchange Act or an Affiliate thereof. 
 “Hedging Transaction” means any transaction involving a
security linked to the Registrable Class Securities or any security that would be deemed to be a 

  
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“derivative security” (as defined in Rule 16a-1(c) promulgated under the Exchange Act) with respect to the Registrable Class Securities or transaction (even if not a security) which
would (were it a security) be considered such a derivative security, or which transfers some or all of the economic risk of ownership of the Registrable Class Securities, including any forward contract, equity swap, put or call, put or call
equivalent position, collar, non-recourse loan, sale of exchangeable security or similar transaction. For the avoidance of doubt, neither the IntermediateCo Notes nor the IntermediateCo Preferred Stock shall be deemed to be securities covered by the
preceding sentence, and transactions involving the IntermediateCo Notes or the IntermediateCo Preferred Stock shall not be deemed to be Hedging Transactions. For the avoidance of doubt, the following transactions shall be deemed to be Hedging
Transactions: 
 (i) transactions by an Investor Holder in which a Hedging Counterparty engages in short sales of Registrable
Class Securities pursuant to a Prospectus and may use Registrable Securities to close out its short position; 
 (ii)
transactions pursuant to which an Investor Holder sells short Registrable Class Securities pursuant to a Prospectus and delivers Registrable Securities to close out its short position; 

(iii) transactions by an Investor Holder in which the Investor Holder delivers, in a transaction exempt from registration under the
Securities Act, Registrable Securities to the Hedging Counterparty who will then publicly resell or otherwise transfer such Registrable Securities pursuant to a Prospectus or an exemption from registration under the Securities Act; and 

(iv) a loan or pledge of Registrable Securities to a Hedging Counterparty who may then become a selling stockholder and sell the loaned
shares or, in an event of default in the case of a pledge, sell the pledged shares, in each case, in a public transaction pursuant to a Prospectus. 
 “Holdback Agreements” has the meaning set forth in Section 6(a). 
 “Holdback Period” has the meaning set forth in Section 6(a). 

“Holders’ Counsel” has the meaning set forth in Section 7(d)(ii). 

“Incidental Registration” has the meaning set forth in Section 4(a). 

“Indemnified Party” has the meaning set forth in Section 8(c). 

“Indemnifying Party” has the meaning set forth in Section 8(c). 

“Initial Demand Registration Date” means, with respect to the Oaktree Stockholders, the date hereof, with respect to the
Apollo Stockholders and the Sankaty Stockholders, the IPO Effectiveness Date, and with respect to each of the additional 

  
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Other 10% Investor Stockholders, the one-year anniversary of the IPO Effectiveness Date. 
 “Initial Public Offering” means the initial public offering of any shares of Common Stock pursuant to an effective Registration Statement. 

“Initiating Holder” has the meaning set forth in Section 3(b). 

“Inspectors” has the meaning set forth in Section 7(a)(x). 

“IntermediateCo” means Aleris International, Inc. (f/k/a AHC Intermediate Co.), a Delaware corporation and a subsidiary
of the Company. 
 “IntermediateCo Note Indenture” means that certain IntermediateCo Note Indenture to be
entered into between IntermediateCo and an indenture trustee to be named pursuant to the Plan. 
 “IntermediateCo
Notes” means subordinated, unsecured notes issued pursuant to the IntermediateCo Note Indenture in an aggregate principal amount equal to Forty-Five and 00/100 Million Dollars ($45,000,000) and having such other terms, covenants, and
conditions set forth therein. 
 “IntermediateCo Preferred Stock” means exchangeable preferred stock issued by
IntermediateCo having the terms and conditions set forth in that certain Certificate of Designations for the Series A Exchangeable Preferred Stock, dated as of the date hereof. 

“Investor Holder” means each of the Investors and any transferee (whether direct or indirect) of any of the foregoing to
whom Registrable Securities have been transferred in accordance with Section 10(f), other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or Rule 144 or
Regulation S promulgated under the Securities Act. 
 “Investors” has the meaning set forth in the preamble to
this Agreement. 
 “IPO Effectiveness Date” means the date upon which the Company closes its Initial Public
Offering. 
 “Issuer Free Writing Prospectus” means any “issuer free writing prospectus” as defined
in Rule 433 promulgated under the Securities Act. 
 “Liability” has the meaning set forth in
Section 8(a). 
 “Market Price” means, on any date of determination, the average of the daily Closing
Price of the Registrable Securities for the immediately preceding 30 days on which the national securities exchanges are open for trading. 
 “Oaktree” has the meaning set forth in the preamble to this Agreement. 

  
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 “Oaktree Stockholders” means Oaktree and any Permitted Transferee (as
defined in the Stockholders Agreement) thereof to whom Registrable Securities are transferred in accordance with the Stockholders Agreement and Section 10(f). 
 “Other 10% Investors” means, other than Oaktree and Apollo, holders of at least 10% of the outstanding shares of Common Stock as of the date hereof as listed on Schedule 1
hereto. 
 “Other 10% Investor Stockholders” means the Other 10% Investors and any Permitted Transferee (as
defined in the Stockholders Agreement) thereof to whom Registrable Securities are transferred in accordance with the Stockholders Agreement and Section 10(f). 
 “Person” means any individual, corporation, partnership, joint venture, association, limited liability company, trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity, and shall include any successor (by merger or otherwise) of such entity. 

“Plan” has the meaning set forth in Recital A. 
 “Prospectus” means any “prospectus” as defined in Rule 405 promulgated under the Securities Act. 
 “Records” has the meaning set forth in Section 7(a)(x). 

“Registrable Class Securities” means the Registrable Securities and any other securities of the Company that are of the
same class as the relevant Registrable Securities. 
 “Registrable Securities” means each of the following:
(i) any and all shares of Common Stock owned by the Investor Holders or issued or issuable upon exchange of IntermediateCo Preferred Stock or IntermediateCo Notes and any shares of Common Stock issued or issuable upon conversion of any shares
of preferred stock or exercise of any warrants acquired by any of the Investor Holders after the date hereof; (ii) any other shares of Common Stock acquired or owned by any of the Investor Holders prior to the IPO Effectiveness Date, or
acquired or owned by any of the Investor Holders after the IPO Effectiveness Date if such Investor Holder is an Affiliate of the Company; and (iii) any shares of Common Stock issued or issuable to any of the Investor Holders with respect to the
Registrable Securities by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise and any shares of Common Stock issuable upon conversion,
exercise or exchange thereof. 
 “Registration Expenses” has the meaning set forth in Section 7(d).

 “Registration Statement” means a registration statement filed pursuant to the Securities Act, including an
Automatic Shelf Registration Statement. 

  
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 “Requested Shelf Registered Securities” has the meaning set forth in
Section 5(b). 
 “Sankaty” means Sankaty Advisors, LLC, on behalf of the funds and accounts it manages or
advises. 
 “Sankaty Stockholders” means Sankaty and any Permitted Transferee (as defined in the Stockholders
Agreement) thereof to whom Registrable Securities are transferred in accordance with the Stockholders Agreement and Section 10(f). 
 “Seasoned Issuer” means an issuer eligible to use Form S-3 or F-3 under the Securities Act for a secondary offering in reliance on General Instruction I.B.1 to those Forms. 

“Securities Act” means the Securities Act of 1933 and the rules and regulations of the Commission promulgated
thereunder. 
 “Shelf Initiating Holders” has the meaning set forth in Section 5(a). 

“Shelf Registered Securities” means, with respect to a Shelf Registration, any Registrable Securities whose sale is
registered pursuant to the Registration Statement filed in connection with such Shelf Registration. 
 “Shelf
Registration” has the meaning set forth in Section 5(a). 
 “Shelf Requesting Holder” has the
meaning set forth in Section 5(b). 
 “Short-Form Initiating Holders” has the meaning set forth in
Section 3(b). 
 “Short-Form Registration” has the meaning set forth in Section 3(b). 

“Stockholders Agreement” means the Stockholders Agreement, dated the date hereof, among the Company and the Investors as
the same may be amended, supplemented or otherwise modified from time to time. 
 “Suspension Period” has the
meaning set forth in Section 3(c). 
 “Transfer” means, with respect to any security, the offer for sale,
sale, pledge, transfer or other disposition or encumbrance (or any transaction or device that is designed to or could be expected to result in the transfer or the disposition by any Person at any time in the future) of such security, and shall
include the entering into of any swap, hedge or other derivatives transaction or other transaction that transfers to another in whole or in part any rights, economic benefits or risks of ownership, including by way of settlement by delivery of such
security or other securities in cash or otherwise. 
 “underwritten public offering” of securities means a
public offering of such securities registered under the Securities Act in which an underwriter, placement 

  
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agent or other intermediary participates in the distribution of such securities, including a Hedging Transaction in which a Hedging Counterparty participates. 

“Valid Business Reason” has the meaning set forth in Section 3(c). 

“Well-Known Seasoned Issuer” means a “well-known seasoned issuer” as defined in Rule 405 promulgated under the
Securities Act and which (i) is a “well-known seasoned issuer” under paragraph (1)(i)(A) of such definition or (ii) is a “well-known seasoned issuer” under paragraph (1)(i)(B) of such definition and is also
eligible to register a primary offering of its securities relying on General Instruction I.B.1 of Form S-3 or Form F-3 under the Securities Act. 
 (b) Interpretation. Unless otherwise noted: 
 (i) All references to laws,
rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor thereto in effect at the time. 

(ii) All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be
references to the comparable successor thereto. 
 (iii) All references to agreements and other contractual instruments shall
be deemed to be references to such agreements or other instruments as they may be amended from time to time. 
 (iv) Whenever
the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” 

2. General; Securities Subject to this Agreement. 
 (a) Grant of Rights. The Company hereby grants registration rights to the Investor Holders upon the terms and conditions set forth in this Agreement. 

(b) Registrable Securities. For the purposes of this Agreement, Registrable Securities will irrevocably cease to be Registrable
Securities when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) (A) the entire amount of the Registrable Securities owned by the relevant Investor Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Investor Holder, each
in their reasonable judgment, without any limitation as to volume pursuant to Rule 144 promulgated under the Securities Act and (B) such Investor Holder owning such Registrable Securities owns less than 5% of the outstanding shares of Common
Stock on a fully diluted basis, (iii) the Registrable Securities are proposed to be sold or 

  
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distributed by a Person not entitled to the registration rights granted by this Agreement, (iv) the date on which such Registrable Securities have been disposed of pursuant to Rule 144 or
(v) the date on which such Registrable Securities cease to be outstanding. 
 (c) Holders of Registrable
Securities. A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities, or holds an option to purchase, or a security convertible into, or exercisable or exchangeable for, Registrable
Securities whether or not such purchase, conversion, exercise or exchange has actually been effected. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities,
the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities. Registrable Securities issuable upon exercise of an option or upon conversion, exercise or
exchange of another security shall be deemed outstanding for the purposes of this Agreement. 
 3. Demand Registration.

 (a) Request for Demand Registration. Subject to Section 6(a), at any time following the Initial Demand
Registration Date with respect to the Oaktree Stockholders, the Apollo Stockholders, the Sankaty Stockholders or the Other 10% Investor Stockholders, as the case may be, such Oaktree Stockholder, Apollo Stockholder, Sankaty Stockholder and/or Other
10% Investor Stockholder will have the right (collectively, the “Demand Initiating Holders”) to make a written request to the Company to register, and the Company shall register in accordance with the terms of this Agreement, the
sale of the number of Registrable Securities stated in such request under the Securities Act (other than pursuant to a Registration Statement on Form S-4 or S-8), on Form S-1 or any similar long-form registration (a “Demand
Registration”); provided, however, that the Company shall not be obligated to effect: (A) more than three Demand Registrations in the case of the Oaktree Stockholders, more than two Demand Registrations in the case of the
Apollo Stockholders, more than one Demand Registration in the case of the Sankaty Stockholders and more than one Demand Registration in the case of each of the additional Other 10% Investor Stockholders; (B) a Demand Registration if within the
12-month period preceding the date of the written request for a Demand Registration the Company has effected either (1) two Demand Registrations (including registrations effected pursuant to Section 3(b) and Section 5(b)) or
(2) one Demand Registration (including registrations effected pursuant to Section 3(b) and Section 5(b)) and another registration statement of the Company under the Securities Act with respect to the Common Stock has been declared
effective within the 12-month period preceding such written request for such Demand Registration and at least $50 million of the then outstanding Registrable Securities were entitled pursuant to the terms of this Agreement to be included in such
registration statement; (C) a Demand Registration if the Demand Initiating Holders propose to sell their Registrable Securities at an anticipated aggregate offering price (calculated based upon the Market Price of the Registrable Securities on
the date of filing of the Registration Statement with respect to such Registrable Securities and including any Registrable Securities subject to any applicable over-allotment option) to the public of less than, in the case of the Initial

  
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Public Offering, $100 million, and in the case of any offering other than the Initial Public Offering, $50 million, or (D) during the pendency of a Suspension Period. For purposes of the
preceding sentence, two or more Registration Statements filed in response to one request for a Demand Registration shall be counted as one Demand Registration. Each request for a Demand Registration by the Demand Initiating Holders shall state
the amount of the Registrable Securities proposed to be sold and the intended method of disposition thereof. In addition, the Company shall not be obligated to effect any Demand Registration (including registrations effected pursuant to
Section 3(b) and Section 5(b)) during the period starting with the date that is 60 days prior to the Company’s board of directors’ good faith estimate of the date of filing of, and ending on the date that is 90 days after the
effective date of, a Company initiated registration statement, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration to become effective and the Company has complied with the
requirements of Section 4. 
 (b) Request for Short-Form Registration. Subject to Section 6(a), so long as the
Company is a Seasoned Issuer, each of the Oaktree Stockholders, each of the Apollo Stockholders and each of the other Designated Holders (so long as such Oaktree Stockholder, Apollo Stockholder or other Designated Holder, as the case may be,
together with their respective Affiliates, holds at least 10% of the outstanding Common Stock), will have the right (collectively, the “Short-Form Initiating Holders” and, together with the Demand Initiating Holders, the
“Initiating Holders”) to make a written request to the Company to register, and the Company shall register in accordance with the terms of this Agreement, the sale of the number of Registrable Securities stated in such request under
the Securities Act on Form S-3 or any similar short-form registration (other than a Shelf Registration) (a “Short-Form Registration”); provided, however, that the Company shall not be obligated to effect such demand
for a Short-Form Registration if the Short-Form Initiating Holders propose to sell their Registrable Securities at an anticipated aggregate offering price (calculated based upon the Market Price of the Registrable Securities on the date of filing of
the Registration Statement with respect to such Registrable Securities and including any Registrable Securities subject to any applicable over-allotment option) to the public of less than $25 million; provided further, however, that the Company
shall be obligated to effect such demand for a Short-Form Registration if one of the Short-Form Initiating Holders proposes to sell all of its remaining Registrable Securities pursuant to such demand. Each request for a Short-Form Registration by
the Short-Form Initiating Holders shall state the amount of the Registrable Securities proposed to be sold and the intended method of disposition thereof. The Short-Form Initiating Holders shall be entitled to an unlimited number of Short-Form
Registrations and such registrations shall not be counted as a Demand Registration for the purposes of this Agreement. 
 (c)
Limitations on Demand and Short-Form Registrations. If the Board of Directors, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would (i) materially impede,
delay or interfere with, or require premature disclosure of, any material financing, offering, acquisition, corporate reorganization, merger or segment 

  
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reclassification or discontinuance of operations or other material transaction or matter involving the Company or any of its subsidiaries or any negotiations, discussions or pending proposals
with respect thereto involving the Company or any of its subsidiaries or (ii) would require disclosure of non-public material information, the disclosure of which would reasonably be expected to materially and adversely affect the Company
(each, a “Valid Business Reason”), (A) the Company may postpone filing a Registration Statement relating to a Demand Registration or Short-Form Registration until such Valid Business Reason no longer exists, and (B) in
case a Registration Statement has been filed relating to a Demand Registration or Short-Form Registration, the Company may cause such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing
such Registration Statement, in each case, for a reasonable period of time (each, a “Suspension Period”). The Company shall give written notice to all Designated Holders of its determination to postpone, withdraw or postpone
amending or supplementing a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. If the Company gives notice of its
determination to postpone, withdraw or postpone amending or supplementing a Registration Statement pursuant to this Section 3(c), the Company shall extend the period during which such Registration Statement shall be maintained effective
pursuant to this Agreement (including, in the case of a Demand Registration, the period referred to in the second sentence of Section 3(e)) by the number of days during the period from and including the date of the giving of such notice
pursuant to this Section 3(c) to and including the date when sellers of such Registrable Securities under such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by and meeting the
requirements of Section 7(a)(viii). It is also agreed that, notwithstanding the requirements of Section 7(a)(ii) or any other provision of this Agreement to the contrary, each year the Company updates a Registration Statement, which is
required to be filed hereunder, pursuant to the undertakings contained therein (A) the Company may need to suspend the use of such Registration Statement to the extent such Registration Statement has not been declared effective by the
Commission prior to the time it is required to be updated under the Securities Act and (B) to the extent such Registration Statement undergoes Commission review, the Company will need to suspend the use of such Registration Statement pending
completion of such review. Notwithstanding anything to the contrary contained herein, the Company may not postpone, withdraw or postpone amending or supplementing a filing under this Section 3(c) or Section 5(c) due to a Valid Business
Reason more than three times for a period of up to 90 days in the aggregate in any consecutive 12 month period. 
 (d)
Incidental or “Piggy-Back” Rights with Respect to Demand and Short-Form Registrations. Each of the Investor Holders (other than the Initiating Holders who have requested the relevant Demand Registration or Short-Form Registration
under Sections 3(a) and 3(b), respectively) that holds 5% or more of the outstanding shares of Common Stock (disregarding any dilution of such Investor Holder’s percentage ownership of Common Stock other than as a result of any issuance of New
Securities (as defined in the Stockholders Agreement) pursuant to Section 4.1 of the Stockholders Agreement in which such Investor Holder was eligible to, but failed to, 

  
 11 

 
acquire New Securities) at the time of a Demand Registration or Short-Form Registration may offer such Investor Holder’s Registrable Securities under any such Demand Registration or
Short-Form Registration pursuant to this Section 3(d). The Company shall (i) as promptly as practicable but in no event later than five days after the receipt of a request for a Demand Registration or Short-Form Registration from any
Initiating Holders, give written notice thereof to all such Investor Holders (other than such Initiating Holders), which notice shall specify the number of Registrable Securities subject to the request for a Demand Registration or Short-Form
Registration, whether such request is for a Demand Registration or a Short-Form Registration, the names and notice information of the Initiating Holders and the intended method of disposition of such Registrable Securities and (ii) subject to
Section 3(f), include in the Registration Statement filed pursuant to such Demand Registration or Short-Form Registration all of the Registrable Securities requested by such Investor Holders for inclusion in such Registration Statement from
whom the Company has received a written request for inclusion therein within 10 days after the receipt by such Investor Holders of such written notice referred to in clause (i) above. Each such request by such Investor Holders shall specify the
number of Registrable Securities proposed to be registered and such Investor Holder shall send a copy of such request to the Initiating Holders. The failure of any Investor Holder to respond within such 10-day period referred to in clause
(ii) above shall be deemed to be a waiver of such Investor Holder’s rights under this Section 3(d) with respect to such Demand Registration or Short-Form Registration. Any Investor Holder may waive its rights under this
Section 3(d) prior to the expiration of such 10-day period by giving written notice to the Company, with a copy to the Initiating Holders. If an Investor Holder sends the Company a written request for inclusion of part or all of such Investor
Holder’s Registrable Securities in a registration, such Investor Holder shall not be entitled to withdraw or revoke such request without the prior written consent of the Company in the Company’s sole discretion unless, as a result of facts
or circumstances arising after the date on which such request was made relating to the Company or to market conditions, such Investor Holder reasonably determines that participation in such registration would have a material adverse effect on such
Investor Holder. 
 (e) Effective Registration. The Company shall use its commercially reasonable efforts to cause any
such Demand Registration or Short-Form Registration to become effective as promptly as practicable but in no event later than (i) 120 days after it receives a request under Section 3(a) for a Demand Registration and (ii) 90 days
after it receives a request under Section 3(b) for a Short-Form Registration (unless the Registration Statement relating to such request would be required pursuant to the rules and regulations of the Securities Act to include any audited or
unaudited consolidated or pro forma financial statements that are not then currently available, in which case, promptly after such financial statements are available), and in each case to remain effective thereafter. A registration shall not
constitute a Demand Registration until it has become effective and remains continuously effective for the lesser of (A) the period during which all Registrable Securities registered in the Demand Registration are sold and (B) 90 days;
provided, however, that a registration shall not constitute a Demand Registration if (x) after such Demand Registration has become effective, such registration or the related offer, sale or distribution of Registrable Securities
thereunder is interfered 

  
 12 

 
with by any stop order, injunction or other order or requirement of the Commission or other governmental agency, court or other Person for any reason not attributable to the Initiating Holders
and such interference is not thereafter eliminated or (y) the conditions specified in the underwriting agreement, if any, entered into in connection with such Demand Registration are not satisfied or waived, other than by reason of a failure by
the Initiating Holders. 
 (f) Underwriting Procedures. If the Company or the Initiating Holders holding a majority of
the Registrable Securities held by all of the Initiating Holders so elect, the Company shall use its commercially reasonable efforts to cause the offering made pursuant to such Demand Registration or Short-Form Registration to be in the form of a
firm commitment underwritten public offering, and the managing underwriter or underwriters for such offering shall be an investment banking firm or firms of national reputation selected to act as the managing underwriter or underwriters of the
offering in accordance with Section 3(g) (each, an “Approved Underwriter”). In connection with any Demand Registration or Short-Form Registration under this Section 3 (including any request pursuant to Section 3(d))
involving an underwritten public offering, none of the Registrable Securities held by any Investor Holder making a request for inclusion of such Registrable Securities pursuant to Section 4(a) shall be included in such underwritten public
offering unless such Investor Holder accepts the terms of the offering as agreed upon by the Company, the Initiating Holders and the Approved Underwriter, and then only in such quantity as will not, in the opinion of the Approved Underwriter,
jeopardize the success of such offering by the Initiating Holders. If the Approved Underwriter advises the Company and the requesting Investor Holders in writing that the aggregate amount of such Registrable Securities requested to be included in
such offering exceeds the number of securities which can be sold in such offering within a price range acceptable to the holders of a majority of the Registrable Securities requested to be included in such offering, then the Company shall include in
such registration only the aggregate amount of Registrable Securities that the Approved Underwriter believes may be sold and shall reduce the amount of Registrable Securities to be included in such registration and shall include first, the
Registrable Securities for which inclusion in such underwritten offering was requested by the Initiating Holder(s), pro rata (if applicable), based on the number of Registrable Securities beneficially owned by each such Initiating Holder(s),
second, other Registrable Securities of Investor Holders requested to be included in such offering, pro rata based on the number of Registrable Securities owned by each such party, and third, the equity securities offered by the
Company by its own account; provided, however, that, in the event that, due to a cutback in accordance with this clause (f), a Demand Initiating Holder is unable to sell at least 80% of the Registrable Securities initially proposed to
be sold by such Demand Initiating Holder pursuant to a Demand Registration, such Demand Initiating Holder shall be entitled to withdraw its demand if it pays the Registration Expenses and any expenses pursuant to Section 7(d)(ii) associated
with such registration incurred to date, and such offering shall neither constitute a Demand Registration nor count against the limit thereof. 

  
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 (g) Selection of Underwriters. If an offering of Registrable Securities made
pursuant to any Demand Registration or Short-Form Registration is in the form of an underwritten public offering, the holders of a majority of the Registrable Securities held by all of the Initiating Holders shall select the Approved Underwriter
(such Approved Underwriter to be reasonably acceptable to the Company); provided, however, that if such Demand Registration or Short-Form Registration is in the form of an underwritten public offering which upon its consummation will
result in the Initial Public Offering, the Company shall select the Approved Underwriter (such Approved Underwriter to be reasonably acceptable to the holders of a majority of the Registrable Securities held by all of the Initiating Holders).

 4. Incidental or “Piggy-Back” Registration. 

(a) Request for Incidental or “Piggy-Back” Registration. At any time after the IPO Effectiveness Date, if the Company
proposes to file a Registration Statement with respect to an offering by the Company for its own account (other than a Registration Statement on Form S-4 or S-8) or for the account of any stockholder of the Company (other than for the account
of any Designated Holder pursuant to Section 3 or Section 5), then the Company shall give written notice of such proposed filing to each of the Investor Holders that, as of the date of such notice, holds 5% or more of the outstanding
shares of Common Stock (disregarding any dilution of such Investor Holder’s percentage ownership of Common Stock other than as a result of any issuance of New Securities (as defined in the Stockholders Agreement) pursuant to Section 4.1 of
the Stockholders Agreement in which such Investor Holder was eligible to, but failed to, acquire New Securities) at least 10 days before the anticipated filing date, and such notice shall describe the proposed registration, offering price (or
reasonable range thereof) and distribution arrangements, and offer such Investor Holder the opportunity to register the number of Registrable Securities as each such Investor Holder may request (an “Incidental Registration”). In
connection with any Incidental Registration under this Section 4(a) involving an underwritten public offering, the Company shall, within 10 days after the notice provided for in the preceding sentence, cause the managing underwriter or
underwriters (the “Company Underwriter”) to permit each such Investor Holder who has so requested in writing to participate in the Incidental Registration to include the number of such Investor Holder’s Registrable Securities
specified by such Investor Holder in such offering on the same terms and conditions as the securities of the Company or for the account of such other stockholder, as the case may be, included therein. In connection with any Incidental Registration
under this Section 4(a) involving an underwritten public offering, the Company shall not be required to include any Registrable Securities in such underwritten public offering unless the Investor Holders thereof accept the terms of the
underwritten public offering as agreed upon between the Company, such other stockholders, if any, and the Company Underwriter, and then only in such quantity as the Company Underwriter advises the Company and the requesting Investor Holders in
writing will not jeopardize the success of the offering by the Company. If the Company Underwriter advises the Company and the requesting Investor Holders that the registration of all or part of the Registrable Securities which the Investor Holders
have requested to be included exceeds the number of securities which can be 

  
 14 

 
sold in such offering within a price range acceptable to the Company, then the Company shall include in such Incidental Registration only the aggregate amount of Registrable Securities that the
Company Underwriter believes may be sold, if any, and shall include in such registration, first, all of the securities to be offered for the account of the Company; second, the Registrable Securities to be offered for the account of
the Investor Holders pursuant to this Section 4(a), as a group, pro rata based on the number of Registrable Securities owned by each such Investor Holder; and third, any other securities requested to be included in such offering.

 (b) IPO Sales. Subject to Section 3(d), if any Investor Holder is permitted to offer Registrable Securities in
connection with the Initial Public Offering, then each of the other Investor Holders that hold 5% or more of the outstanding shares of Common Stock (disregarding any dilution of such Investor Holder’s percentage ownership of Common Stock other
than as a result of any issuance of New Securities (as defined in the Stockholders Agreement) pursuant to Section 4.1 of the Stockholders Agreement in which such Investor Holder was eligible to, but failed to, acquire New Securities) at the
time of the Initial Public Offering may likewise offer Registrable Securities in connection with the Initial Public Offering pursuant to this Section 4(b). In the event that any Investor Holder will be permitted to offer Registrable Securities
in connection with the Initial Public Offering, the Company shall (i) as early as reasonably practicable, provide each Investor Holder specified in the previous sentence with written notice of such fact, which notice shall specify the name(s)
of the Investor Holder(s) that will be permitted to offer Registrable Securities in connection with the Initial Public Offering and the intended method of disposition of such Registrable Securities and (ii) subject to Section 3(f), include
in the Registration Statement filed in connection with the Initial Public Offering all of the Registrable Securities requested by such Investor Holders for inclusion in such Registration Statement from whom the Company has received a written request
for inclusion therein within 10 days after the receipt by such Investor Holders of such written notice referred to in clause (i) above. Each such request by such Investor Holders shall specify the number of Registrable Securities proposed to be
registered. The failure of any Investor Holder to respond within such 10-day period referred to in clause (ii) above shall be deemed to be a waiver of such Investor Holder’s rights under this Section 4(b). Any Investor Holder may
waive its rights under this Section 4(b) prior to the expiration of such 10-day period by giving written notice to the Company. If an Investor Holder sends the Company a written request for inclusion of part or all of such Investor
Holder’s Registrable Securities in the Initial Public Offering, such Investor Holder shall not be entitled to withdraw or revoke such request without the prior written consent of the Company in the Company’s sole discretion unless, as a
result of facts or circumstances arising after the date on which such request was made relating to the Company or to market conditions, such Investor Holder reasonably determines that participation in such Initial Public Offering would have a
material adverse effect on such Investor Holder. If the Company Underwriter advises the Company and the requesting Investor Holders that the registration of all or part of the Registrable Securities which the Investor Holders have requested to be
included exceeds the number of securities which can be sold in such offering within a price range acceptable to the Company, then the Company shall include in the Initial Public Offering only the aggregate amount of

  
 15 

 
Registrable Securities, if any, that the Company Underwriter believes may be sold and shall include in such registration, first, all of the securities to be offered for the account of the
Company; second, the Registrable Securities to be offered for the account of the Investor Holders pursuant to this Section 4(b), as a group, pro rata based on the number of Registrable Securities owned by each such Investor
Holder; and third, any other securities requested to be included in the Initial Public Offering. 
 5. Shelf
Registration. 
 (a) Request for Shelf Registration. So long as the Company is a Seasoned Issuer, each of the
Oaktree Stockholders, each of the Apollo Stockholders and each of the other Designated Holders (so long as such Oaktree Stockholder, Apollo Stockholder or other Designated Holder, as the case may be, together with their respective Affiliates, held
at least 10% of the outstanding Common Stock as of the Effective Date), will have the right (collectively, the “Shelf Initiating Holders”) to make a written request that the Company register, under the Securities Act on
Form S-3 in an offering on a delayed or continuous basis pursuant to Rule 415 promulgated under the Securities Act (a “Shelf Registration”), the sale of all or a portion of the Registrable Securities owned by such Shelf
Initiating Holders. Upon receipt of a request for a Shelf Registration, the Company shall give written notice of such request to all of the Designated Holders (other than the Shelf Initiating Holders) as promptly as practicable but in no event later
than 10 days before the anticipated filing date of such Form S-3, and such notice shall describe the proposed Shelf Registration, the intended method of disposition of such Registrable Securities and any other information that at the time would be
appropriate to include in such notice, and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request in writing to the Company, given within 10 days after their receipt
from the Company of the written notice of such Shelf Registration. The “Plan of Distribution” section of such Form S-3 shall permit all lawful means of disposition of Registrable Securities, including firm-commitment underwritten public
offerings, block trades, agented transactions, sales directly into the market, purchases or sales by brokers, Hedging Transactions and sales not involving a public offering. With respect to each Shelf Registration, the Company shall (i) as
promptly as practicable after the written request of the Shelf Initiating Holders, file a Registration Statement and (ii) use its commercially reasonable efforts to cause such Registration Statement to be declared effective as promptly as
practicable, but in any event not later than 60 days after it receives a request therefore (unless the Registration Statement relating to such request would be required pursuant to the rules and regulations of the Securities Act to include any
audited or unaudited consolidated or pro forma financial statements that are not then currently available, in which case for each of (i) and (ii), promptly after such financial statements are available), and remain effective until there are no
longer any Shelf Registered Securities. The obligations set forth in this Section 5(a) shall not apply if the Company has a currently effective Automatic Shelf Registration Statement covering all Registrable Securities of the Designated Holders
in accordance with Section 5(e) and has otherwise complied with its obligations pursuant to this Agreement. 

  
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 (b) Shelf Underwriting Procedures. Upon written request by a Designated Holder of
Shelf Registered Securities (the “Shelf Requesting Holder”), which request shall specify the amount of such Shelf Requesting Holder’s Shelf Registered Securities to be sold (the “Requested Shelf Registered
Securities”), the Company shall use its commercially reasonable efforts to cause the sale of such Requested Shelf Registered Securities to be in the form of a firm commitment underwritten public offering (unless otherwise consented to by
the Shelf Requesting Holder) if the anticipated aggregate offering price (calculated based upon the Market Price of the Registrable Securities on the date of such written request and including any Registrable Securities subject to any applicable
over-allotment option) to the public equals or exceeds $20 million (including causing to be produced and filed any necessary Prospectuses or Prospectus supplements with respect to such offering). The managing underwriter or underwriters selected for
such offering shall be selected by the Company and shall be reasonably acceptable to the Shelf Requesting Holder, and each such underwriter shall be deemed to be an Approved Underwriter with respect to such offering. If the Approved Underwriter
advises the Company that the aggregate amount of such Shelf Registered Securities requested to be included in such underwritten offering exceeds the number of securities which can be sold in such offering within a price range acceptable to the
holders of a majority of the Registrable Securities requested to be included, then the Company shall include in such offering only the aggregate amount of Shelf Registered Securities that the Approved Underwriter believes may be sold and shall
reduce the amount of Shelf Registered Securities to be included in such offering, first, as to the Shelf Registered Securities offered by the Company for its own account, if any; second, as to the Shelf Registered Securities of
Designated Holders who are not Shelf Requesting Holders, as a group, if any; and third, as to the Shelf Registered Securities of the Shelf Requesting Holders, as a group, pro rata based on the number of Registrable Securities owned by
each such Shelf Requesting Holder. Notwithstanding the foregoing, in connection with any offering of Requested Shelf Registered Securities involving an underwritten public offering that occurs or is scheduled to occur within 30 days of a proposed
registered underwritten public offering of equity securities for the Company’s own account (a “Contemporaneous Company Offering”), the Company shall not be required to cause such offering of Requested Shelf Registered
Securities to take the form of an underwritten public offering but shall instead offer the Shelf Requesting Holder the ability to include its Requested Shelf Registered Securities in the Contemporaneous Company Offering pursuant to Section 4.

 (c) Limitations on Shelf Registrations. If the Board of Directors has a Valid Business Reason, (i) the Company
may postpone filing a Registration Statement relating to a Shelf Registration until such Valid Business Reason no longer exists and (ii) in case a Registration Statement has been filed relating to a Shelf Registration, the Company may cause
such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such Registration Statement or may suspend other required registration actions under this Agreement. The Company shall give
written notice to all Designated Holders of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each 

  
 17 

 
case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone, withdraw or postpone amending or supplementing a filing under
this Section 5(c) or Section 3(c) due to a Valid Business Reason more than three times for a period of up to 90 days in the aggregate in any consecutive 12 month period. 

(d) Additional Selling Stockholders. After the Registration Statement with respect to a Shelf Registration becomes effective,
upon written request by one or more Designated Holders (which written request shall specify the amount of such Designated Holders’ Registrable Securities to be registered), the Company shall, as promptly as practicable after receiving such
request, (i) if it is a Seasoned Issuer or Well-Known Seasoned Issuer, or if such Registration Statement is an Automatic Shelf Registration Statement, file a Prospectus supplement to include such Designated Holders as selling stockholders in
such Registration Statement or (ii) if it is not a Seasoned Issuer or Well-Known Seasoned Issuer, and the Registrable Securities requested to be registered represent more than 10% of the outstanding Registrable Securities, file a post-effective
amendment to the Registration Statement to include such Designated Holders in such Shelf Registration and use commercially reasonable efforts to have such post-effective amendment declared effective. 

(e) Automatic Shelf Registration. When the Company becomes a Well-Known Seasoned Issuer, (i) the Company shall give written
notice to all of the Designated Holders as promptly as practicable but in no event later than five Business Days thereafter, and such notice shall describe, in reasonable detail, the basis on which the Company has become a Well-Known Seasoned
Issuer, and (ii) the Company shall, as promptly as practicable, register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities held by the Designated Holders in accordance with the terms of this
Agreement. The Company shall use its commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable, but in no event later than 15 Business Days after it becomes a Well-Known Seasoned Issuer, and to
cause such Automatic Shelf Registration Statement to remain effective thereafter until there are no longer any Registrable Securities held by the Designated Holders. The Company shall give written notice of filing such Registration Statement to all
of the Designated Holders as promptly as practicable thereafter. At any time after the filing of an Automatic Shelf Registration Statement by the Company, if it is reasonably likely that it will no longer be a Well-Known Seasoned Issuer as of a
future determination date (the “Determination Date”), at least 30 days prior to such Determination Date, the Company shall (A) give written notice thereof to all of the Designated Holders as promptly as practicable but in no
event later than 10 Business Days prior to such Determination Date and (B) if the Company is a Seasoned Issuer, file a Registration Statement on Form S-3 with respect to a Shelf Registration in accordance with Section 5(a), treating all
selling stockholders identified as such in the Automatic Shelf Registration Statement (and amendments or supplements thereto) as Shelf Requesting Holders and use all commercially reasonable efforts to have such Registration Statement declared
effective prior to the Determination Date. Any registration pursuant to this Section 5(e) shall be deemed a Shelf Registration for purposes of this Agreement. 

  
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 (f) Not a Demand Registration. Other than as specified in Section 3(a), no
Shelf Registration pursuant to this Section 5 shall be deemed a Demand Registration pursuant to Section 3. 
 6.
Holdback Agreements. 
 (a) Investor Holder Holdback Agreements. To the extent requested by an Approved
Underwriter or the Company Underwriter, as the case may be, in the case of an underwritten public offering, each Investor Holder agrees (i) not to effect any Transfer of any Registrable Class Securities or any securities convertible into or
exchangeable or exercisable for such Registrable Class Securities, (ii) not to grant any option to purchase or enter into any Hedging Transactions or similar transactions with the same economic effect as a sale of any Registrable Class
Securities and (iii) not to make any request for the registration of the Transfer of any Registrable Class Securities or any securities convertible into or exchangeable or exercisable for such Registrable Class Securities, in each case,
(A) during the period beginning on the IPO Effectiveness Date and ending on the date that is 180 days thereafter, except as part of such Initial Public Offering and (B) for 90 days from the effective date of the Registration Statement for
any subsequent underwritten public offering, except as part of such underwritten public offering (each, a “Holdback Period”); provided, however, that if (1) during the last 17 days of a Holdback Period, the
Company releases earnings results or material news or a material event relating to the Company occurs or (2) prior to the expiration of a Holdback Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of a Holdback Period, then in each case such Holdback Period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the occurrence of the material news or
material event, as applicable, unless the Approved Underwriter or the Company Underwriter waives, in writing, such extension. For the avoidance of doubt, the Company shall not be required to file a Demand Registration, Short-Form Registration or
Shelf Registration during the periods set forth in clause (iii) of the immediately preceding sentence, except as part of such underwritten public offering. Upon request by the Approved Underwriters or the Company Underwriter (as the case may
be), each Investor Holder shall enter into customary holdback agreements (“Holdback Agreements”) on terms consistent with the preceding sentence so long as all Investor Holders owning an equal or greater number of Registrable
Securities are likewise required to enter into such an agreement. No Investor Holder subject to this Section 6(a) shall be released from any obligation under any agreement, arrangement or understanding entered into pursuant to this
Section 6(a) unless all other Investor Holders subject to the same obligation are also released. 
 (b) Company
Holdback Agreements. 
 (i) With respect to any Demand Registration or Short-Form Registration, the Company shall not
(except as part of such Demand Registration or Short-Form Registration), unless waived by the Approved Underwriters or the Company Underwriter (as the case may be), effect any Transfer of Registrable Class Securities, or any securities convertible
into or exchangeable or exercisable for Registrable Class 

  
 19 

 
Securities (except pursuant to a Registration Statement on Form S-4 or S-8), (A) during the period beginning on the IPO Effectiveness Date and ending on the date that is 180 days
thereafter, except as part of such Initial Public Offering and (B) for 90 days from the effective date of the Registration Statement for any subsequent underwritten public offering, except as part of such Demand Registration or Short-Form
Registration. Upon request by the Approved Underwriters or the Company Underwriter (as the case may be), the Company shall, from time to time, enter into Holdback Agreements on terms consistent with the preceding sentence. 

(ii) With respect to any Shelf Registration and offering of Requested Shelf Registered Securities that takes the form of an underwritten
public offering, the Company shall not (except as part of such offering), unless waived by the Approved Underwriters or the Company Underwriter (as the case may be), effect any Transfer of Registrable Class Securities, or any securities convertible
into or exchangeable or exercisable for such Registrable Class Securities (except pursuant to a Registration Statement on Form S-4 or S-8), during the period beginning on the date the Shelf Requesting Holder delivers its request pursuant to the
first sentence of Section 5(b) and ending on the date that is 90 days after the date of the underwritten public offering, except as part of such Shelf Registration. Upon request by the Approved Underwriters or the Company Underwriter (as
the case may be), the Company shall, from time to time, enter into Holdback Agreements on terms consistent with the preceding sentence. 
 (c) Additional Holdback Agreements. With respect to each relevant offering, the Company shall use its commercially reasonable efforts to cause all of its officers, directors and holders of more
than 5% of the Registrable Class Securities (or any securities convertible into or exchangeable or exercisable for such Registrable Class Securities) to execute holdback agreements that contain restrictions that are no less restrictive than the
restrictions contained in the Holdback Agreements executed by the Investor Holders. 
 (d) Third Party Beneficiaries in
Holdback Agreements. Any Holdback Agreements executed by the Investor Holders pursuant to this Section 6 shall contain provisions naming the Company as an intended third-party beneficiary thereof and requiring the prior written consent of
the Company for any amendments thereto or waivers thereof. Any holdback agreements executed by the Company’s officers, directors or other stockholders pursuant to this Section 6 shall contain provisions naming the selling stockholders in
the relevant offering that are Investor Holders as intended third-party beneficiaries thereof and requiring the prior written consent of such stockholders holding a majority of the Registrable Securities for any amendments thereto or waivers
thereof. 
 7. Registration Procedures. 
 (a) Obligations of the Company. Whenever registration of Registrable Securities has been requested or required pursuant to Section 3, Section 4 or Section 5, the Company shall use
its commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended 

  
 20 

 
method of distribution thereof as promptly as practicable, and in connection with any such request or requirement, the Company shall: 

(i) as soon as commercially practicable, prepare and file with the Commission a Registration Statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of such Registrable Securities in accordance with the intended method of distribution thereof (unless the Registration Statement
relating to such request would be required pursuant to the rules and regulations of the Securities Act to include any audited or unaudited consolidated or pro forma financial statements that are not then currently available, in which case, promptly
after such financial statements are available), and cause such Registration Statement to become effective; provided, however, that (A) before filing a Registration Statement or Prospectus or any amendments or supplements thereto
(including any documents incorporated by reference therein), or before using any Issuer Free Writing Prospectus, the Company shall provide Holders’ Counsel and any other Inspector with an adequate and appropriate opportunity to review and
comment on such Registration Statement, each Prospectus included therein (and each amendment or supplement thereto) and each Issuer Free Writing Prospectus to be filed with the Commission, subject to such documents being under the Company’s
control, and (B) the Company shall notify the Holders’ Counsel and each seller of Registrable Securities pursuant to such Registration Statement of any stop order issued or threatened by the Commission and take all actions required to
prevent the entry of such stop order or to remove it if entered; 
 (ii) use commercially reasonable efforts to keep each
Registration Statement continuously effective during the period such Registration Statement is required to remain effective pursuant to the terms of this Agreement and, as soon as commercially practicable, prepare and file with the Commission such
amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the lesser of (A) 100 days and (B) such shorter period
which will terminate when all Registrable Securities covered by such Registration Statement have been sold; provided, that in the case of a Shelf Registration, the Company shall keep such Registration Statement effective until all Registrable
Securities covered by such Registration Statement shall have been sold or have otherwise ceased to be Registrable Securities, and shall comply with the provisions of the Securities Act with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement; 
 (iii) as soon as commercially practicable, furnish without charge to each seller of Registrable Securities and each underwriter, prior to filing a Registration Statement, at least one copy of such
Registration Statement as is proposed to be filed, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (other than exhibits, documents that are incorporated by reference and such documents that
are otherwise publicly available on EDGAR), the Prospectus included in such Registration Statement (including each 

  
 21 

 
preliminary Prospectus), any Prospectus filed pursuant to Rule 424 promulgated under the Securities Act and any Issuer Free Writing Prospectus as each such seller may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by such seller; 
 (iv) unless any Registrable Securities
shall be in book-entry form only, cooperate with the selling Investor Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (unless required
by applicable securities laws), and enable such Registrable Securities to be in such denominations and registered in such names as the selling Investor Holders may request at least two (2) Business Days before any sale of Registrable
Securities; 
 (v) as soon as commercially practicable, register or qualify such Registrable Securities under such other
securities or “blue sky” laws of such jurisdictions as any seller of Registrable Securities may request, and to continue such registration or qualification in effect in such jurisdiction for as long as permissible pursuant to the laws
of such jurisdiction, or for as long as any such seller requests or until all of such Registrable Securities are sold, whichever is shortest, and do any and all other acts and things that may be reasonably necessary or advisable to enable any such
seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided, however, that the Company shall not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 7(a)(v), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction; 

(vi) use commercially reasonable efforts to promptly cause any Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental entity within the United States as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities in accordance with the intended methods
of disposition set forth in such Registration Statement; 
 (vii) as soon as commercially practicable, notify each seller of
Registrable Securities: (A) when a Prospectus, any Prospectus supplement, any Issuer Free Writing Prospectus, a Registration Statement or a post-effective amendment to a Registration Statement is proposed to be or has been filed with the
Commission, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the Commission or any other federal or state governmental authority for amendments or
supplements to a Registration Statement, related Prospectus or Issuer Free Writing Prospectus or for additional information; (C) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation or threatening of any proceedings for that purpose; (D) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose; (E) of the existence of any 

  
 22 

 
fact or happening of any event that makes any statement of a material fact in such Registration Statement, related Prospectus or Issuer Free Writing Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue or which would require the making of any changes in the Registration Statement, Prospectus or Issuer Free Writing Prospectus in order that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such Prospectus or Issuer Free Writing Prospectus,
it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and
(F) of the determination by counsel of the Company that a post-effective amendment to a Registration Statement is advisable; 
 (viii) as soon as commercially practicable, upon the occurrence of any event contemplated by Section 7(a)(vii)(E) or, subject to Sections 3(c) and 5(c), the existence of a Valid Business Reason, as
promptly as practicable, prepare a supplement or amendment to such Registration Statement, related Prospectus or Issuer Free Writing Prospectus and furnish to each seller of Registrable Securities a reasonable number of copies of such supplement to
or an amendment of such Registration Statement, Prospectus or Issuer Free Writing Prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such Prospectus or Issuer Free Writing Prospectus, it will
not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 

(ix) enter into and perform customary agreements (including underwriting and indemnification and contribution agreements in customary
form with the Approved Underwriter or the Company Underwriter, as applicable) and take such other commercially reasonable actions as are required in order to expedite or facilitate each disposition of Registrable Securities and shall provide all
reasonable cooperation, including causing appropriate officers to attend and participate in “road shows” and other information meetings organized by the Approved Underwriter or Company Underwriter, if applicable (taking into account the
needs of the Company’s businesses and the responsibilities of such officers with respect thereto and the requirement of the marketing process), and causing counsel to the Company to deliver customary legal opinions in connection with any such
underwriting agreements; provided, however, that the Company shall have no obligation to participate in “road shows” in connection with any underwritten offering or other information meetings (A) in which the aggregate
offering price to the public is less than $50 million and (B) more than twice in any consecutive 12-month period; 
 (x)
make available at reasonable times for inspection by any seller of Registrable Securities, any managing underwriter participating in any 

  
 23 

 
disposition of such Registrable Securities pursuant to a Registration Statement, Holders’ Counsel and any managing underwriter and its counsel (collectively, the
“Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company’s and its subsidiaries’ officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement. Records that the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors (and the Inspectors shall
confirm their agreement in writing in advance to the Company) unless (A) the disclosure of such Records is necessary, in the Company’s judgment, to avoid or correct a misstatement or omission in the Registration Statement, (B) the
release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction after exhaustion of all appeals therefrom or (C) the information in such Records was known to the Inspectors on a non-confidential
basis prior to its disclosure by the Company and such knowledge is adequately demonstrated to the Company upon request or has been made generally available to the public. Each seller of Registrable Securities agrees that it shall, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction, give written notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of the Records deemed
confidential; 
 (xi) if such sale is pursuant to an underwritten public offering, obtain a “comfort” letter dated
the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by
“comfort” letters as Holders’ Counsel or the managing underwriter reasonably requests; 
 (xii) furnish, at the
request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration an opinion, dated such date, of counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters, if any, may reasonably request and are customarily included in
such opinions; 
 (xiii) with respect to each Free Writing Prospectus, the preliminary Prospectus and all other information, in
each case, with respect to such offering of securities, that is deemed, under Rule 159 promulgated under the Securities Act, to have been conveyed to purchasers of such securities at the time of sale of such securities (including a contract of
sale), ensure that no Registrable Securities be sold “by means of” (as defined in Rule 159A(b) promulgated under the Securities Act) such Free Writing Prospectus or other materials without the prior written consent of the Investor Holders
of the Registrable Securities covered by such registration statement, which Free 

  
 24 

 
Writing Prospectuses or other materials shall be subject to the review of Holders’ Counsel; 
 (xiv) within the deadlines specified by the Securities Act, make all required filings of all Prospectuses and Free Writing Prospectuses with the Commission; 

(xv) within the deadlines specified by the Securities Act, make all required filing fee payments in respect of any Registration
Statement or Prospectus used under this Agreement (and any offering covered thereby); 
 (xvi) comply with all applicable
rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but no later than 15 months after the effective date of the Registration Statement, an earnings statement covering a period
of 12 months beginning after the effective date of the Registration Statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; 

(xvii) use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which
Registrable Class Securities issued by the Company are then listed, provided that the applicable listing requirements are satisfied; 
 (xviii) keep Holders’ Counsel advised as to the initiation and progress of any registration under Section 3, Section 4 or Section 5 and provide Holders’ Counsel with all
correspondence with the Commission in connection with any such Registration Statement; 
 (xix) cooperate with each seller of
Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA; and 

(xx) use commercially reasonable efforts to take all other steps deemed reasonably necessary in the reasonable judgment of the Company
to effect the registration and disposition of the Registrable Securities contemplated hereby. 
 Notwithstanding anything
contained herein to the contrary, the Company shall be obligated to register Registrable Securities of a Holder in a Shelf Registration Statement or in a Registration Statement on Form S-3 only to the extent permitted by applicable securities laws.

 (b) Seller Obligations. In connection with any offering under any Registration Statement under this Agreement, each
Investor Holder: 
 (i) shall promptly furnish to the Company in writing such information with respect to such Investor Holder
and the intended method of disposition of its Registrable Securities as the Company may reasonably request or as 

  
 25 

 
may be required by law for use in connection with any related Registration Statement or Prospectus (or amendment or supplement thereto) and all information required to be disclosed in order to
make the information previously furnished to the Company by such Investor Holder not contain a material misstatement of fact or necessary to cause such Registration Statement or Prospectus (or amendment or supplement thereto) not to omit a material
fact with respect to such Investor Holder necessary in order to make the statements therein not misleading; and 
 (ii) shall
comply with the Securities Act and the Exchange Act and all applicable state securities laws and comply with all applicable regulations in connection with the registration and the disposition of the Registrable Securities. 

Each Investor Holder further represents that it has not prepared or had prepared on its behalf or used or referred to, and agrees that it
will not prepare or have prepared on its behalf or used or refer to, any Free Writing Prospectus, and has not distributed and will not distribute any written materials in connection with the offer or sale of Common Stock without the prior written
consent of the Company and, in connection with any underwritten offering, the underwriters. Any such Free Writing Prospectus consented to by the Company and the underwriters, as the case may be, is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents and agrees that it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, including in respect of timely filing with the
SEC, legending and record keeping. 
 (c) Notice to Discontinue. Each Investor Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in Section 7(a)(vii)(E), such Investor Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Investor Holder’s receipt of the copies of the supplemented or amended Prospectus or Issuer Free Writing Prospectus contemplated by Section 7(a)(iv) and, if so directed by the Company, such
Investor Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Investor Holder’s possession, of the Prospectus or Issuer Free Writing Prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the Company shall give any such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement
(including the period referred to in Section 7(a)(ii)) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7(a)(ii)(E) to and including the date when sellers of such
Registrable Securities under such Registration Statement shall have received the copies of the supplemented or amended Prospectus or Issuer Free Writing Prospectus contemplated by and meeting the requirements of Section 7(a)(iv). 

(d) Registration Expenses. 

  
 26 

 (i) The Company shall pay all expenses arising from or incident to its performance of,
or compliance with, this Agreement (including all expenses in connection with a Demand Registration, Short-Form Registration, Incidental Registration or Shelf Registration), including (i) Commission, stock exchange and FINRA registration and
filing fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky”
qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, (iv) the reasonable fees, charges and expenses of counsel to the Company, any necessary
counsel retained by the Company with respect to state securities law matters and of its independent public accountants, and any other accounting fees, charges and expenses incurred by the Company (including any expenses arising from any
“comfort” letters or any special audits incident to or required by any registration or qualification), and (v) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration or piggy-back
registration thereon, Incidental Registration or Shelf Registration pursuant to the terms of this Agreement, regardless of whether such Registration Statement is declared effective. All of the expenses described in the preceding sentence of this
Section 7(d) are referred to herein as “Registration Expenses.” 
 (ii) The Company shall reimburse or
pay, as the case may be, the Designated Holders of Registrable Securities included in such registration for the reasonable charges and expenses incurred by such Designated Holders, including the reasonable legal fees and out-of-pocket expenses of
one counsel and one local counsel selected and retained by the Designated Holders holding a majority of Registrable Securities being registered in such registration (“Holders’ Counsel”) within a reasonable period of time not to
exceed 45 days after a detailed invoice approved by such Designated Holders. 
 (iii) The Investor Holders of Registrable
Securities sold pursuant to a Registration Statement shall bear the expense of any broker’s commission or underwriter’s discount or commission and transfer taxes and other fees relating to the registration and sale of such Investor
Holders’ Registrable Securities and, subject to clause (ii) above, shall bear the fees and expenses of their own counsel. 
 (e) Hedging Transactions. 
 (i) The Company agrees that, in connection
with any proposed Hedging Transaction, if, in the reasonable judgment of Holders’ Counsel, it is necessary or desirable to register under the Securities Act such Hedging Transaction or sales or transfers (whether short or long) of Registrable
Class Securities in connection therewith, then the Company shall use its commercially reasonable efforts to take such actions (which may include, among other things, the filing of a post-effective amendment to a Registration Statement to include
additional or changed information that is material or is otherwise required to be disclosed, including a description of such Hedging Transaction, the name of the Hedging Counterparty, identification of the Hedging Counterparty or its Affiliates as
underwriters or potential underwriters, if applicable, or 

  
 27 

 
any change to the plan of distribution) as may reasonably be required to register such Hedging Transaction or sales or transfers of Registrable Class Securities in connection therewith under the
Securities Act in a manner consistent with the rights and obligations of the Company hereunder with respect to the registration of Registrable Securities. Any information provided by the Investor Holders regarding the Hedging Transaction that is
included in a Registration Statement, Prospectus or Issuer Free Writing Prospectus pursuant to this Section 7(e) shall be deemed to be information provided by the Investor Holders selling Registrable Securities pursuant to such Registration
Statement for purposes of Section 7(b). 
 (ii) All Registration Statements in which Investor Holders may include
Registrable Securities under this Agreement shall be subject to the provisions of this Section 7(e), and the registration of Registrable Class Securities thereunder pursuant to this Section 7(e) shall be subject to the provisions of this
Agreement applicable to any such Registration Statements; provided, however, that the selection of any Hedging Counterparty shall not be subject to Section 3(g), but the Hedging Counterparty shall be selected by the Investor
Holders of a majority of the Registrable Class Securities subject to the Hedging Transaction that are proposed to be included in such Registration Statement. 
 (iii) If in connection with a Hedging Transaction, a Hedging Counterparty or any Affiliate thereof is (or may be considered) an underwriter or selling stockholder, then it shall be required to provide
customary indemnities to the Company regarding the plan of distribution and like matters. 
 (iv) The Company further agrees to
include, under the caption “Plan of Distribution” (or the equivalent caption), in each Registration Statement, and any related Prospectus (to the extent such inclusion is permitted under applicable Commission regulations and is consistent
with comments received from the Commission during any Commission review of the Registration Statement), language substantially in the form of Schedule 2 hereto and to include in each Prospectus supplement filed in connection with any proposed
Hedging Transaction language mutually agreed upon by the Company, the relevant Investor Holders and the Hedging Counterparty describing such Hedging Transaction. 
 8. Indemnification; Contribution. 
 (a) Indemnification by the
Company. The Company shall indemnify and hold harmless each Investor Holder, its stockholders, partners, members, directors, officers, Affiliates and each Person who controls (within the meaning of Section 15 of the Securities Act) such
Investor Holder from and against any and all losses, claims, damages, liabilities and expenses, or any action or proceeding in respect thereof (including reasonable costs of investigating, defending against or appearing as a third-party witness in
connection with any losses, claims, damages, liabilities and expenses, or any action or proceeding in respect thereof and reasonable attorneys’ fees and out-of-pocket expenses) (each, a “Liability”) arising out of or based upon
(i) any untrue or alleged untrue statement of a material fact contained in a Registration Statement 

  
 28 

 
pursuant to which Registrable Securities were registered or a Prospectus or a Issuer Free Writing Prospectus or in any amendment or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or necessary in the case of any Prospectus or Issuer Free Writing Prospectus, in the light of the circumstances under which they were made, to make the statements therein not
misleading; provided, however, that the Company shall not be liable in any such case to the extent that any such Liability arises (i) out of or is based upon an untrue or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor Holder (including the information provided pursuant to Section 7(b)(i)) expressly for use therein) or
(ii) out of sales of Registrable Securities made during a period specified in, and after notice is given pursuant to, Section 3(c) or Section 5(c). 
 (b) Indemnification by Investor Holders. In connection with any offering in which an Investor Holder is participating pursuant to Section 3, 4 or 5, such Investor Holder shall indemnify and
hold harmless the Company, any underwriter retained by the Company, each other Investor Holder, their respective directors, officers, other Affiliates and each Person who controls the Company, such other Investor Holders or such underwriter (within
the meaning of Section 15 of the Securities Act) from and against any and all Liabilities arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in a Registration Statement pursuant to which
Registrable Securities were registered or a Prospectus, a Designated Holder Free Writing Prospectus or an Issuer Free Writing Prospectus included in any such Registration Statement or in any amendment or supplement thereto, or (ii) the omission
or alleged omission to state therein a material fact required to be stated therein or necessary in the case of any Prospectus, Designated Holder Free Writing Prospectus or Issuer Free Writing Prospectus, in the light of the circumstances under which
they were made, to make the statements therein not misleading, in each case, to the extent (except with respect to a Designated Holder Free Writing Prospectus) such Liabilities arise out of or are based upon written information furnished by such
Investor Holder or on such Investor Holder’s behalf expressly for inclusion therein (including the information provided pursuant to Section 7(b)(i)) and is so included in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Investor Holder; provided, however, that the obligation to indemnify shall be individual, not joint and several, for each Investor Holder and the total amount to be indemnified by such Investor
Holder pursuant to this Section 8(b) shall be limited to the net proceeds (after deducting the underwriters’ discounts and commissions) received by such Investor Holder in the offering to which the Registration Statement, Prospectus,
Designated Holder Free Writing Prospectus or Issuer Free Writing Prospectus relates. 
 (c) Conduct of Indemnification
Proceedings. Any Person entitled to indemnification hereunder (the “Indemnified Party”) shall give prompt written notice to the indemnifying party (the “Indemnifying Party”) after the receipt by the Indemnified
Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement;

  
 29 

 
provided, however, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the Indemnified Party hereunder
(except to the extent that the Indemnifying Party forfeits substantive rights or defenses by reason of such failure). If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party
shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to
such Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel reasonably satisfactory to the Indemnified Party within a reasonable time after receipt by the
Indemnifying Party of the institution of the action or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and either (A) representation of such
Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (B) there may be one or more legal defenses available to the Indemnified Party that are different from
or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party; it being understood, however, that the
Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Parties. No Indemnifying Party shall be liable for any settlement entered into
without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the written consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement (A) includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any Indemnified Party. 
 (d) Contribution. If the indemnification provided for in this Section 8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any Liabilities referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such Liabilities, as well as any other relevant equitable considerations. The relative faults of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates
to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The

  
 30 

 
amount paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal
or other fees, charges or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding; provided, that the total amount to be contributed by such Investor Holder shall be limited to the net
proceeds (after deducting the underwriters’ discounts and commissions) received by such Investor Holder in the offering. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. 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. 
 9. Exchange Act Reporting and Rule 144. The Company covenants that from and after the IPO Effectiveness Date it shall (a) file any reports required to be filed by it under the Exchange Act and
(b) take such further action as each Designated Holder may reasonably request (including providing any information necessary to comply with Rule 144 promulgated under the Securities Act), all to the extent required from time to time to
enable such Designated Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 promulgated under the Securities Act, as such rule may be
amended from time to time, or Regulation S promulgated under the Securities Act or (ii) any similar rules or regulations hereafter adopted by the Commission. The Company shall, upon the request of any Designated Holder, deliver to such
Designated Holder a written statement as to whether it has complied with such requirements. 
 10. Miscellaneous.

 (a) Recapitalizations, Exchanges, etc. The provisions of this Agreement shall apply to the full extent set forth
herein with respect to (i) the shares of Common Stock and (ii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the
date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to assume this Agreement or enter into a new registration rights agreement with the Investor Holders on terms substantially
the same as this Agreement as a condition of any such transaction. 
 (b) No Inconsistent Agreements. The Company
represents and warrants that it has not granted to any Person the right to request or require the Company to register any securities issued by the Company, other than the rights granted to the Investor Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the rights granted to the Investor Holders in this Agreement or grant any additional registration rights to any Person or with respect to any

  
 31 

 
securities that are not Registrable Securities that are prior in right to or inconsistent with the rights granted in this Agreement. 

(c) Remedies. The Investor Holders, in addition to being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their rights under this Agreement, without need for a bond. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate or that there is need for a bond. 

(d) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given unless consented to in writing by (i) the Company and (ii) the Investor Holders holding Registrable Securities representing (after giving
effect to any adjustments) at least a majority of the aggregate number of Registrable Securities owned by the Oaktree Stockholders, the Apollo Stockholders and the other Designated Holders; provided, however, that no amendment,
modification or supplement to this Agreement may materially adversely affect the rights of any Investor Holder in a disproportionate manner unless consented to in writing by such Investor Holder. Any such written consent shall be binding upon the
Company and all of the Investor Holders. 
 (e) Notices. All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be made by registered or certified first-class mail, return receipt requested, telecopy, electronic transmission, courier service or personal delivery: 

(i) if to the Company: 
 Aleris Holding Company 
 25825 Science Park Drive, Suite 400

 Beachwood, Ohio 44122 

Telecopy: (216) 910-3654 
 Attention: Christopher R. Clegg 
 with copies to: 

Fried, Frank, Harris, Shriver & Jacobson LLP 

One New York Plaza 
 New York, New York 10004 
 Telecopy: (212) 859-4000

 Attention: Christopher Ewan 

  
 32 

 (ii) if to Oaktree: 

Oaktree Capital Management, L.P. 

333 South Grand Avenue, 28th Floor 

Los Angeles, California 90071 
 Telecopy: (213) 830-8810 

                 (213) 830-6499

 Attention: Scott L. Graves 

                 Brian Laibow

 (iii) if to Apollo: 
 Apollo Management VII, L.P. 
 c/o Apollo Management 

9 West 57th Street 
 New York, New York 10019 
 Telecopy: (212) 515-3263

 Attention: Eric L. Press 

                 Matthew R.
Michelini 
 (iv) if to Sankaty: 
 Sankaty Advisors LLC 
 111 Huntington Ave 

Boston, Massachusetts 02199 
 Telecopy: (617) 516-2710 
 Attention: Jeff Robinson

 (v) if to any other Investor Holder, at its address as it appears on the record books of the Company. 

All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; five Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied or electronically transmitted. Any party may by
notice given in accordance with this Section 10(e) designate another address or Person for receipt of notices hereunder. 

(f) Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the parties hereto as hereinafter provided. This Agreement and the rights hereunder with respect thereto shall be, with respect to any Registrable Security, transferred to any Person who is the transferee of such
Registrable Security, without the consent of the Company, but only if transferred in compliance with the Stockholders Agreement. At the time of the transfer of any Registrable Security as contemplated by this Section 10(f), such transferee
shall execute and deliver to the Company an instrument, in form and substance reasonably satisfactory to the Company, to evidence its 

  
 33 

 
agreement to be bound by, and to comply with, this Agreement as an Oaktree Stockholder, Apollo Stockholder, Sankaty Stockholder, Other 10% Investor Stockholder or Investor Holder, as the case may
be. All of the obligations of the Company hereunder shall survive any such transfer. Except as provided in Section 8, no Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this
Agreement. 
 (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 
 (h) GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION. The parties hereto irrevocably submit to the
exclusive jurisdiction of the any court of the State of New York over any suit, action or proceeding arising out of or relating to this Agreement or the affairs of the Company. To the fullest extent they may effectively do so under applicable law,
the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they 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. 

(i) WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE, WHETHER IN WHOLE
OR IN PART, UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
 (j) Severability. If any one or more
of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 

(k) Rules of Construction. Unless the context otherwise requires, references to sections or subsections refer to sections or
subsections of this Agreement. Terms defined in the singular have a comparable meaning when used in the plural, and vice versa. 

  
 34 

 (l) Interpretation. The parties hereto acknowledge and agree that (i) each
party hereto and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision, (ii) the rule of construction to the effect that any ambiguities are resolved against the drafting party shall
not be employed in the interpretation of this Agreement and (iii) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto, regardless of which party was generally responsible for the preparation of this
Agreement. 
 (m) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto with respect to the subject matter contained herein. There are no restrictions, promises, representations, warranties or undertakings with
respect to the subject matter contained herein, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter. 

(n) Further Assurances. Each of the parties shall execute such documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the provisions of this Agreement. 
 (o) Other Agreements. Nothing
contained in this Agreement shall be deemed to be a waiver of, or release from, any obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of the Company imposed by, any other
agreement, including the Stockholders Agreement. 
 (p) 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. 

(q) Termination. The obligations of the Company and of any holders of the Company’s securities that have rights under this
Agreement, other than those obligations contained in Section 8, shall terminate with respect to the Company and any such holder if such holder no longer holds any Registrable Securities. Notwithstanding anything to the contrary contained
herein, this Agreement will terminate at any time by a written instrument signed by each Investor. 
 [Remainder of page
intentionally left blank] 

  
 35 

 IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this
Agreement on the date first written above. 
  

			
	Aleris Holding Company
		
	By:	 	 /s/ Christopher R. Clegg

		 	Name: Christopher R. Clegg
		 	Title: Executive Vice President, Secretary and General CounselChange in Control Agreement

 EXHIBIT 10.05 

 
 STATE OF NORTH
CAROLINA 
 COUNTY OF DAVIE 

 
 CHANGE IN
CONTROL AGREEMENT 
  

THIS CHANGE IN CONTROL AGREEMENT (the
“Agreement”) is entered into as of the 16th day of September, 2009 (the “Effective Date”), by and between BANK OF THE CAROLINAS (“BOC”)
and ROBERT W. JOHNSON (“Employee”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Employee currently is employed as Senior Vice President and Chief Lending Officer of BOC, and in such position he shall be expected to provide leadership and
guidance in the growth and development of BOC’s business; and, 
  
 WHEREAS, Employee’s experience and knowledge of banking operations and lending policies, and his knowledge of and standing and reputation in BOC’s market
area, is of benefit to BOC in the continuation of BOC’s business, and, for that reason, BOC desires to retain Employee’s services as an employee of BOC; and, 

 
 WHEREAS, as an
inducement to Employee’s continued employment, BOC has agreed to provide for certain payments to Employee in the event of a termination of Employee’s employment with BOC under certain circumstances in conjunction with a change in control
of BOC, and, to set forth the terms and conditions of that arrangement, BOC and Employee desire to enter into this Agreement. 
  

NOW, THEREFORE, in consideration of the premises and mutual promises, covenants and
conditions hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which hereby are acknowledged, BOC and Employee hereby agree as follows: 
  
 1.    Effective Date of Agreement.    This
Agreement shall be effective on the Effective Date set out above and shall remain in effect until terminated as provided herein. 
  

2.    Payment in Certain Events. 
  
 (a)    Subject to the limitations set forth herein (including
Paragraphs 3, 5, 6 and 7 below), if at the effective time of, or any time within 24 months following, a “Change in Control” (as defined below): 
  

(i)    BOC terminates Employee’s employment other than for “Cause” (as defined
in Paragraph 4 below), or, 
  

(ii)    a “Termination Event” (as defined below) occurs and, thereafter, within such
24-month period, Employee voluntarily terminates his own employment with BOC, following the giving of written notice to BOC and an opportunity for BOC to cure or remedy the Termination Event, in the manner described in Paragraph 2(g) below;

  
 then (subject to the limitations set forth herein) Employee shall
be entitled to receive from BOC, and BOC shall be obligated to pay or cause to be paid to Employee, an amount equal to his base salary for 36 months at his annual rate of salary in effect at the time of termination. 

 
 (b)    For
purposes of this Agreement, but only to the extent consistent with Section 409A of the Internal Revenue Code of 1986, as amended, regulations and guidance promulgated thereunder, as applicable (“Section 409A”), a “Change in
Control” shall be deemed to have occurred if, after the Effective Date: 
  
 (i)    any “Person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly, in any
manner, acquires beneficial ownership of more than fifty percent of the shares entitled to vote in the election of directors of BOC or its parent bank holding company, Bank of the Carolinas Corporation (“BankCorp”), or in any manner
acquires control of the election of a majority 

  
 1 

 
of the directors of BOC or BankCorp (excluding BOC, BankCorp, any wholly-owned subsidiary of BOC or BankCorp, or any employee benefit plan sponsored or maintained by BOC or BankCorp); or

  

(ii)    BOC or BankCorp consolidates or merges with or into another corporation, or otherwise
is reorganized, where BOC or BankCorp is not the resulting or surviving corporation in such transaction, unless the transaction involves only two or more of BOC, BankCorp or a wholly-owned subsidiary of BOC or BankCorp; or 

 
 (iii)    all or
substantially all the assets of BOC or BankCorp are sold or otherwise transferred to or acquired by any other corporation, association or other person, entity or group. 

 
 However, notwithstanding anything contained
herein to the contrary, for purposes of this Agreement the term “Change in Control” shall not include a transaction approved by BOC’s or BankCorp’s Board of Directors which results in BOC or BankCorp merging with, transferring
its assets to or becoming the subsidiary of a corporation or other entity newly formed at the direction of BOC’s or BankCorp’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the
purpose of serving as BOC’s or BankCorp’s parent bank holding company), and in which the holders possessing, directly or indirectly, a majority of the shares entitled to vote in the election of BankCorp’s directors immediately before
the transaction or series of related transactions (other than those who exercise statutory rights of dissent and appraisal) will hold, directly or indirectly, a majority of shares entitled to vote in the election of directors of the surviving or
transferee entity immediately after the transaction or series of related transactions. Further, and notwithstanding the other provisions of this Paragraph 2, a transaction or event shall not be considered a Change in Control if, prior to the
consummation or occurrence of such transaction or event, BOC and Employee agree in writing that the same shall not be treated as a Change in Control for purposes of this Agreement, in which event Employee shall be deemed to have forever waived all
right to any payment under this Agreement as a result of that transaction or event, but not to any future transaction or event. 
  

(c)    For purposes of this Agreement, all references to “BOC” shall include any
“Successor” (as defined below) to BOC which shall have assumed and become liable for BOC’s obligations hereunder (whether such assumption is by agreement, operation of law or otherwise). “Successor” refers to any Person or
entity (corporate or otherwise) into which BOC (or any such Successor) shall be merged or consolidated or to which all or substantially all of BOC’s (or any such Successor’s) assets shall be transferred in any manner. 

 
 (d)    For
purposes of this Agreement, but only to the extent consistent with the definition of “good reason termination” under Section 409A, a “Termination Event” shall be deemed to have occurred if, following a Change in Control, and
without Employee’s express written consent: 
  
 (i)    Employee’s annual base salary rate is materially reduced below the annual rate in effect as of the effective date of the Change in Control or as the same shall have
been increased from time to time following such effective date; or 
  
 (ii)    Employee is transferred to a job location which is more than 25 miles (by most direct highway route) from his principal work location at the effective date of the Change
in Control. 
  
 However,
notwithstanding the other provisions of this Paragraph 2, an event shall not be considered a Termination Event if, prior to the occurrence of such event, BOC and Employee agree in writing that the same shall not be treated as a Termination Event for
purposes of this Agreement, in which event Employee shall be deemed to have forever waived all right to any payment under this Agreement as a result of that event, but not to any future such event. 

 
 A Termination Event shall be deemed to have
occurred on the date such action or event giving rise to the Termination Event is implemented or takes effect or, if later, on the date on which notice of the action or event giving rise to the Termination Event is given to Employee. 

 
 (e)    If
Employee’s employment is terminated by BOC without Cause prior to the effective time of a Change in Control, but following the date on which BOC’s or BankCorp’s board of directors takes action to approve an agreement (including any
definitive agreement or an agreement in principle) relating to the Change in Control, and if that Change in Control later becomes effective, then, for purposes of this Agreement, such termination of employment shall be deemed to have occurred at the
effective time of the Change in Control. 
  
 (f)    Amounts payable pursuant to this Section 2 shall be paid, at the election of Employee as indicated below, either in (i) a lump sum payment which shall be
due and payable by BOC within 45 days following the “Termination 

  
 2 

 
Date” (as defined below), or (ii) in 36 equal monthly payments which shall commence on the 45th day following the Termination Date and be made on the same day of each consecutive
month thereafter until all such monthly payments have been paid. For purposes of this Agreement, the “Termination Date” will be the effective date of the termination of Employee’s employment which gives rise to BOC’s payment
obligation under this Paragraph 2. 
  

Employee irrevocably elects that amounts payable pursuant to this Paragraph 2 be paid (check one): 

 

 ̈    In a lump sum as described above. 

 

 ̈    In 36 equal monthly payments as described above.

  

(g)    In order to for Employee to become entitled to any payments under Paragraph 2(a)(ii) of
this Agreement, the Termination Date must occur within 24 months following the Change in Control. In order to terminate his employment pursuant to Paragraph 2(a)(ii), Employee must, within thirty (30) days following the occurrence of the
Termination Event, give written notice to BOC describing the Termination Event and Employee’s intention to terminate his employment (a “Notice of Termination Event”). Following its receipt of Employee’s Notice of
Termination Event, BOC shall have a period of 30 days within which it may cure or remedy the Termination Event (the “Cure Period”). 
  

If Employee gives a Notice of Termination Event to BOC and the Termination Event is not cured or remedied by BOC during the Cure Period,
then, unless Employee previously has given written notice to BOC as provided below that he withdraws the Notice of Termination Event and waives the Termination Event, the Termination Date shall be the earlier of (i) the expiration date
of the Cure Period, or (ii) the date following Employee’s receipt of the written notice from BOC in which it notifies Employee that it will not cure or remedy the Termination Event. If Employee does not give the required Notice of
Termination Event to BOC within the 30-day period following the occurrence of a Termination Event as described above, or if Employee gives the required Notice of Termination Event and the Termination Event is cured or remedied by BOC within the Cure
Period or, prior to the end of the Cure Period, Employee gives written notice to BOC that he withdraws his Notice of Termination Event and waives the Termination Event, then Employee thereafter shall have no rights to any payment hereunder with
respect to that Termination Event but shall retain rights, if any, hereunder with respect to any other or further Termination Event occurring as to which such notice period has not expired. 
  
 (h)    It is the intent of the parties hereto that all payments made
pursuant to this Agreement be deductible by BOC for federal income tax purposes to the maximum extent permissible under applicable law and regulations, and that no such payments result in the imposition of an excise tax on Employee. Notwithstanding
anything contained in this Agreement to the contrary, if the Corporate Governance Committee of BOC’s Board of Directors, based upon the advice of BOC’s independent certified public accountants or legal counsel, reasonably believes that any
payments to be made to or for the benefit of Employee under this Agreement on account of a Change in Control (whether separately or in combination with other payments to be made to or for the benefit of Employee pursuant to any other agreements or
arrangements) would be deemed to be “parachute payments” as that term is defined in Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), without regard to Section 280G(e) of the Code,
then the payments provided for under this Agreement or such other payments may be modified or reduced in amount by BOC to the extent (but only to the extent) which, based on the advice of BOC’s independent certified public accountants or legal
counsel, the Corporate Governance Committee of BOC’s Board of Directors in good faith deems to be necessary to avoid the imposition of excise taxes on Employee under Section 4999 of the Code and the disallowance of a deduction to BOC under
Section 280G(a) of the Code. 
  

In the event the amount of any payments are required to be reduced pursuant to this Paragraph 2(h), the last payments in
time shall be reduced first, and if any payments to be reduced otherwise would be made at the same time, payments other than cash shall be reduced first. 
  

3.    Exclusions.    Notwithstanding anything contained herein to the
contrary, it is expressly understood and agreed by Employee that: 
  
 (a)    Employee shall not be entitled to any payments under this Agreement in the event (i) BOC terminates Employee’s employment for Cause, or
(ii) Employee voluntarily terminates his employment with BOC other than as provided in Paragraph 2(a)(ii) and 2(g) above, or (iii) Employee’s employment with BOC terminates or is terminated due to his death,
“Retirement” (as defined below) or “Disability” (as defined below); and, 

  
 3 

 (b)    Employee’s employment with BOC is on
an “at will” basis and this Agreement does not constitute an employment contract or an agreement by BOC to employ Employee for any particular period of time or in any particular capacity. Nothing in this Agreement is intended or should be
interpreted to confer upon Employee the right to continue in the employ of BOC or to interfere with or restrict in any way the right of BOC to discharge Employee or terminate his employment at any time or for any reason whatsoever, with or without
Cause, and without any obligation or liability to Employee except as herein provided, it being the intent of the parties hereto only to provide for payment of the severance benefits specified herein in the event of the termination of Employee’s
employment with BOC under the certain circumstances described in Paragraph 2(a) of this Agreement. 
  
 4.    Other Definitions. 
  

(a)    For purposes of this Agreement, BOC shall have “Cause” to terminate
Employee’s employment upon: 
  

(i)    A determination by BOC, in good faith, that (A) Employee has breached in any
material respect any of the terms or conditions of any employment agreement under which Employee is bound with BOC, or code of conduct or ethics policies that apply to Employee or to BOC’s employees generally from time to time,
(B) following reasonable notice of such failure and an opportunity to correct performance deficiencies, Employee has failed to perform or discharge his or her duties or responsibilities of employment in a reasonably competent and
satisfactory manner, or (C) Employee is engaging or has engaged in willful misconduct or conduct which is materially detrimental to the general business prospects of BOC or BankCorp or which has had or likely will have a material adverse
effect on BOC’s or BankCorp’s business or reputation; 
  
 (ii)    The violation by Employee of any applicable federal or state law, or any applicable rule, regulation, order or statement of policy promulgated by any governmental agency
or authority having jurisdiction over BOC, BankCorp or any of their affiliates or subsidiaries (a “Regulatory Authority,” including without limitation the Federal Deposit Insurance Corporation, the North Carolina Banking Commission, the
North Carolina Commissioner of Banks, the Federal Reserve Board, the Securities and Exchange Commission or any other regulatory agency), which results from Employee’s negligence, willful misconduct or intentional disregard of such law, rule,
regulation, order or policy statement and results in any substantial damage, monetary or otherwise, to BOC, BankCorp or any of their affiliates or subsidiaries or to their reputation; 
  
 (iii)    The commission in the course of Employee’s employment
with BOC of an act of fraud, embezzlement, theft or proven personal dishonesty (whether or not such act or charge results in criminal indictment, charges, prosecution or conviction); 
  
 (iv)    The conviction of Employee of any felony or any criminal
offense involving dishonesty or breach of trust, or the occurrence of any event described in Section 19 of the Federal Deposit Insurance Act or any other event or circumstance which disqualifies Employee from serving as an employee or executive
officer of, or a party affiliated with, BOC; or, in the event Employee becomes unacceptable to, or is removed, suspended or prohibited from participating in the conduct of BOC’s affairs (or if proceedings for that purpose are commenced) by, any
Regulatory Authority; or 
  

(v)    The exclusion of Employee by the carrier or underwriter from coverage under BOC’s
and BankCorp’s then current “blanket bond” or other fidelity bond or insurance policy covering their directors, officers or employees, or the occurrence of any event which BOC believes, in good faith, will result in Employee being
excluded from such coverage, or having coverage limited as to Employee as compared to other covered officers or employees, pursuant to the terms and conditions of such “blanket bond” or other fidelity bond or insurance policy. 

 

(b)    “Disability” means the absence of Employee from his or her employment
duties on a full-time basis for one hundred eighty (180) consecutive business days as a result of incapacity due to physical or mental illness or injury (subject to BOC’s obligations and Employee’s rights under (i) Title I
of the Americans with Disabilities Act, §504 of the Rehabilitation Act, and the Family and Medical Leave Act, and to (ii) the vacation leave, disability leave, sick leave and any other leave policies of BOC). 

 

(c)    “Retirement” shall mean any termination of Employee’s employment with BOC
which is treated as a retirement (whether early, normal or delayed retirement) under the terms of any qualified retirement benefit plan generally applicable to BOC’s salaried employees and in which Employee is a participant, or any other
termination of employment that Employee and BOC mutually agree in writing to treat as a Retirement. 

  
 4 

 5.    Regulatory
Requirements.    Notwithstanding anything contained in this Agreement to the contrary, and in addition to the provisions of Paragraphs 6 and 7 below, it is understood and agreed that BOC (or any of its Successors)
shall not be required to make any payment or take any action under this Agreement if: 
  

(a)    it is declared by any Regulatory Authority to be insolvent, in default or operating in
an unsafe or unsound manner, or if 
  

(b)    in the opinion of its counsel such payment or action (i) would be prohibited
by or would violate any provision of state or federal law applicable to BOC, including without limitation the Federal Deposit Insurance Act, as now in effect or hereafter amended, (ii) would be prohibited by or would violate any
applicable rules, regulations, orders or formal statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise is prohibited by any Regulatory Authority. 

 
 6.    Section 409A
Matters.    Employee and BOC intend for this Agreement to comply with Section 409A. For that purpose, and notwithstanding anything contained in this Agreement to the contrary, Employee and BOC agree as follows:

  

(a)    Interpretation of Defined Terms.    The terms used in
this Agreement shall be defined and interpreted in a manner that is consistent with Section 409A, and in the event of any ambiguity in any of the terms or provisions of this Agreement, those terms or provisions shall be interpreted in a manner
so as to comply with the applicable requirements of Section 409A; 
  
 (b)    Treatment of Installment Payments.    To the extent Employee is entitled to a series of installment payments under the provisions of
this Agreement, such installment payments shall be treated as a series of separate payments for purposes of Section 409A, as applicable; 
  

(c)    Requirement of “Separation from Service;” Payments to “Specified
Employees.”    In the case of a payment upon the termination of Employee’s employment, no payment shall be made under this Agreement unless the termination of employment constitutes a “separation from
service” under Section 409A, and, if BOC determines that Employee is a “specified employee” within the meaning of Section 409A on the date of any such separation from service (the “Separation from Service Date”),
then (i) any installment payments (including reimbursement for expenses) which BOC is obligated to pay to Employee under this Agreement that would result in a tax, interest, and/or penalties under Section 409A if paid during the
first six months after the Separation from Service Date shall be delayed and accumulated by BOC and the accumulated amount shall be payable to Employee in a lump sum on the date that is six months and one week after the Separation from Service Date,
with any additional installment payments for which BOC is obligated after that six-month period being payable on the same schedule as Employee’s base salary was being paid by BOC on the Separation from Service Date, and (ii) any
lump-sum payment (including reimbursement for expenses) which BOC is obligated to pay to Employee under this Agreement that would result in a tax, interest, and/or penalties under Section 409A if paid during the first six months after the
Separation from Service Date shall be delayed and be payable to Employee in a lump sum on the date that is six months and one week after the Separation from Service Date; 

 

(d)    Expense Reimbursement.    To the extent Employee is
entitled to the reimbursement of any expenses or in-kind benefits under the provisions of this Agreement that is subject to Section 409A, the right to such reimbursement or benefit shall not be subject to exchange for another benefit and such
reimbursement shall be paid by BOC no later than two and one-half months after the year in which the expense is incurred, except as otherwise provided in Section 409A. 

 

(e)    Authority to Modify Agreement.    This Agreement may
be amended at any time by BOC, without Employee’s consent, to the extent necessary to comply with, and avoid the imposition on Employee of an excise tax under, Section 409A; provided, however, that in the event that the terms of
this Agreement, any payments made hereunder, or any action or inaction by BOC with respect thereto, shall be deemed not to comply with Section 409A, BOC shall not be liable to Employee for any income or excise taxes or any other amounts
imposed on or payable by Employee with respect to any payments made hereunder or for any actions, decisions or determinations made by BOC in good faith. 

 

(f)    Survival of Covenants.    Employee’s covenants
and agreements and BOC’s rights provided for in this Paragraph 6 shall survive and remain fully in effect following the actual termination of Employee’s employment with BOC. 

  
 5 

 7.    Compliance with CPP
Rules.    Employee understands and agrees that BankCorp is a participant in the U.S. Department of the Treasury’s TARP Capital Purchase Program (the “CPP”), and, as a result, BOC and BankCorp are bound by
applicable law, rules, regulations and guidance restricting or pertaining to the compensation of officers and employees of CPP participants and their subsidiaries which are now in effect or may later be established (including but not limited to the
rules and guidance currently set forth in interim final rules appearing at 31 C.F.R. Part 30 promulgated under Sections 101(a)(1), 101(c)(5) and 111 of the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and
Reinvestment Act of 2009) (collectively, the “CPP Rules”). Employee and BOC intend for this Agreement and payments and benefits payable to Employee hereunder to comply with the CPP Rules and, for that purpose, and notwithstanding anything
contained in this Agreement to the contrary, Employee and BOC agree as follows: 
  
 (a)    Prohibited Payments; Authority to Modify Agreement.    In no event shall BOC have any obligation to make any payment, or provide any
compensation (whether in the form of cash, stock or otherwise) or other benefit to Employee (including without limitation any “Golden Parachute Payment,” as that term is defined in the CPP Rules, or any other payment or benefit payable in
connection with or following any termination of Employee’s employment), to the extent that BOC’s Board of Directors or its Corporate Governance Committee determines, in its sole judgment, that such payment, compensation or other benefit
would violate or be prohibited by or inconsistent with the CPP Rules. 
  
 If, in the sole judgment of BOC’s Board of Directors or its Corporate Governance Committee, any provision of this Agreement, or any such payment, compensation or benefit for which BOC is or becomes
obligated to Employee under this Agreement, would violate or be prohibited by or inconsistent with the CPP Rules, then the Board or that Committee shall have the authority, exercisable unilaterally and without the Employee’s consent, to modify
any or all of the provisions of this Agreement, or to reduce or eliminate any such payment, compensation or other benefit, to the extent the Board or Committee, in its sole judgment, considers necessary in order to comply with the CPP
Rules.
  
 The Board or
Committee’s power to modify this Agreement shall be effective for so long as BOC and BankCorp are subject to the CPP Rules. The Board’s or Committee’s action modifying this Agreement may, but need not, be in the form of a written
amendment or supplement to this Agreement, or in the form of a duly adopted resolution.
  

(b)    Recovery of Bonus and Incentive Compensation.    If,
in the sole judgment of the Bank’s Board of Directors or its Compensation Committee, any payment or benefit paid or provided to Employee under this Agreement that the Board or Committee deems to be a “Bonus” or “Incentive
Compensation” (as those terms are defined in the CPP Rules) was based on materially inaccurate financial statements or on any other materially inaccurate performance criteria, that payment or benefit shall not have been earned by Employee,
shall be subject to recovery by the Bank or Bancorp, and shall be repaid by Employee to the Bank within 15 days after written demand by the Bank. The Employee’s repayment obligations shall survive termination of this Agreement and shall be
effective for as long as Bancorp is subject to applicable CPP Rules. 
  
 (c)    Waiver.    Employee hereby acknowledges and agrees that, for as long as BankCorp is a participant in the CPP, BOC and Bancorp
will be bound by the CPP Rules and any implementing guidance issued by the U.S. Treasury or other federal agencies. Employee hereby grants the waiver required by the U.S. Treasury to release the United States and BOC and BankCorp from any
claims that Employee might otherwise have as a result of any modification of Agreement as provided above, and agrees to execute such other documents as the U.S. Treasury may require to evidence this waiver. 

 

(d)    Survival of Covenants.    Employee’s covenants
and agreements and BOC’s rights provided for in this Paragraph 7 shall survive and remain fully in effect following the actual termination of Employee’s employment with BOC. 
  
 8.    Termination of Agreement.    Except
as provided in Paragraphs 6 and 7 above, this Agreement automatically shall terminate and become null and void upon any termination of Employee’s employment with BOC other than a termination of employment which results in an obligation on the
part of BOC to make payments as provided for under Paragraph 2(a) above; and, following any such termination of this Agreement, it shall be of no further force or effect and Employee shall have no further rights hereunder. 

 
 9.    Taxes; Required
Withholdings.    Employee shall be solely responsible for any and all federal, state and local income and other taxes (including excise taxes) owed on account of his or her receipt of the payments provided for in
this 

  
 6 

 
Agreement. To the extent that the BOC reasonably believes itself obligated to do so, it may withhold any such taxes from payments made to Employee hereunder. If the amount of any such taxes that
BOC believes itself required to withhold and transmit to any governmental or taxing authority exceeds the amount of any payments then due and payable under this Agreement and from which such withholding may be made, then BOC may require that
Employee pay to it the full amount of any such taxes then due and, if Employee shall fail to make such payment, BOC may itself advance and pay the amount of those taxes and recover any such payments by offset against future payments due under this
Agreement. 
  

10.    Unfunded Arrangement.    BOC’s obligation to make payments
to any person under this Agreement is purely contractual, and Employee and BOC do not intend that the amounts payable hereunder be held by BOC in trust or as a segregated fund for Employee or any other person entitled to payments hereunder. The
benefits provided under this Agreement shall be payable solely from the general assets of BOC, and neither Employee nor any other person entitled to payments hereunder shall have any interest in any assets of BOC by virtue of this
Agreement. BOC’s obligation under this Agreement shall be merely that of an unfunded and unsecured promise of BOC to pay money in the future. To the extent that this Agreement should be deemed to be a “pension plan,” Employee and
BOC intend that it be unfunded for federal income tax purposes, as well as for Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). 

 
 11.    Survivor Annuities
and QDROs.    Nothing contained in this Agreement is intended to give or shall give any spouse or former spouse of Employee or any other person any right to benefits under this Agreement by virtue of Sections
401(a)(11) and 417 of the Code (relating to qualified preretirement survivor annuities and qualified joint and survivor annuities) or Code Sections 401(a)(13)(B) and 414(p) (relating to qualified domestic relations orders). 

 
 12.    Payments After
Death. 
  

(a)    Except as otherwise provided in this Paragraph 12, in the event that Employee shall die
before his or her receipt of any payments to which he has then become entitled under this Agreement, those remaining payments shall be paid to Employee’s beneficiary or beneficiaries, if any, designated by Employee in an effective designation
of beneficiary delivered to BOC as provided in this Paragraph 12. If, at the time of Employee’s death, (i) no effective beneficiary designation is on file with BOC, or (ii) no beneficiary designated by Employee has
survived Employee, then Employee’s estate conclusively shall be deemed to be the beneficiary designated to receive any amounts then remaining payable to Employee under this Agreement. In either case, upon BOC’s payment to Employee’s
beneficiary, BOC shall be fully relieved of any further obligation with respect to payments under this Agreement. 
  

(b)    In order to designate one or more beneficiaries, Employee shall file a written
designation with BOC in the form attached as Appendix A to this Agreement. Each such designation shall specify, by name(s), the person(s) to whom any such remaining payments shall be made following Employee’s death. From time to time, Employee
may change or revoke a beneficiary designation without the consent of the previously named beneficiary(ies) by filing a new beneficiary designation form with BOC, and the filing of a new designation form automatically shall revoke any and all
designation forms previously filed with BOC. A beneficiary designation form not properly filed with BOC prior to Employee’s death shall be of no force or effect under this Agreement. 
  
 (c)    Subject to reasonable restrictions imposed by BOC and to
BOC’s right to refuse to accept such a designation for reasons satisfactory to it, Employee may designate more than one beneficiary and/or alternative or contingent beneficiaries, in which case Employee’s designation form shall specify the
relative shares and terms and conditions upon which amounts shall be paid to such multiple or alternative or contingent beneficiaries. 
  

(d)    In making all determinations regarding Employee’s beneficiary(ies), the latest
designation form filed by Employee with BOC shall control, and all changes in circumstances that occur after the filing of that designation shall be ignored by BOC. For example, if Employee’s spouse is designated as beneficiary in the latest
designation filed by Employee but, thereafter, is divorced from Employee, such designation shall remain valid until and unless Employee files a later beneficiary designation form with BOC naming a different beneficiary. However, notwithstanding
anything contained in any designation of beneficiary to the contrary, if there are circumstances which cause BOC to be unsure as to the person who is entitled to any payments following Employee’s death, then BOC may withhold those payments
until entitlement to them is determined by a Court of proper jurisdiction, or, at its option, BOC may make those payments to Employee’s personal representative and, upon such payment, BOC shall be fully relieved of any further obligation with
respect to any further payments under this Agreement. 

  
 7 

 (e)    Any check for a payment under this
Agreement that is issued on or before the date of Employee’s death shall remain payable to Employee and shall be handled accordingly, whether or not the check actually is received by Employee prior to death. Any check issued after the date of
Employee’s death shall be the property of Employee’s beneficiary(ies) determined in accordance with this Paragraph 12. 
  

13.    Administration.    The named fiduciary shall be BOC which
shall have the authority to control and manage the operation and administration of this Agreement. The administration of this Agreement shall be under the supervision of a director, officer or employee of BOC (hereinafter referred to as the
“Administrator”) designated by BOC’s Board of Directors. It shall be a principal duty of the Administrator to see that this Agreement is carried out, in accordance with its terms. 

 
 14.    Successors and
Assigns.    This Agreement shall inure to the benefit of and be binding upon BOC and any corporate or other Successor to BOC and on Employee and his or her heirs, successors and assigns. However, notwithstanding
anything contained herein to the contrary, neither Employee nor Employee’s estate or any designated beneficiary shall have any right to sell, assign, transfer or otherwise convey the right to receive any payment under this Agreement. To the
extent permitted by law, no benefits payable under this Agreement shall be subject to the claim of any creditor of Employee, Employee’s estate or any designated beneficiary, or to any legal process by any creditor of any such person.

  

15.    Modification; Waiver; Amendments.    Except to the extent
specifically provided otherwise herein, no provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the parties hereto. Except as otherwise specifically set
forth herein, no waiver by either party hereto, at any time, of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party, shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided. 

 
 16.    Applicable
Law.    The parties hereto agree that without regard to principles of conflicts of laws, the internal laws of the State of North Carolina shall govern and control the validity, interpretation, performance and enforcement
of this Agreement. 
  

17.    Severability.    The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 
  

18.    Headings.    The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
  

19.    Notices.    Except as otherwise may be provided herein, all notices,
claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when hand delivered or sent by facsimile transmission by one party to the other, or when deposited by one
party with the United States Postal Service, postage prepaid, and addressed to the other party at his or its designated address listed below, or at such other address as such other party shall have designated in a written notice given as provided in
this Paragraph: 
  

			
	If to BOC:	  	If to Employee:
		
	 Bank of The Carolinas
	  	 Robert W. Johnson

	 135 Boxwood Village Drive
	  	 250 Oakmont Circle

	 Mocksville, N.C. 27028
	  	 Pinehurst, N.C. 28370

	 Attention: President and Chief Executive Officer
	  	

  

19.    Counterparts.    This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. 
  

20.    Entire Agreement.    This Agreement contains the entire understanding
and agreement of the parties, and there are no agreements, promises, warranties, covenants or undertakings other than those expressly set forth or referred to herein. 

  
 8 

 IN WITNESS WHEREOF, the
parties have executed this Agreement on the day and year first hereinabove written. 
  

			
	BANK OF THE CAROLINAS
		
	 By:
	 	/s/    ROBERT E.
MARZIANO        
		 	President and Chief Executive Officer

 

	
	EMPLOYEE:
	
	/s/    ROBERT W.
JOHNSON        (SEAL)
	Robert W. Johnson

  
 9 

 APPENDIX A 

 
 DESIGNATION OF BENEFICIARY

  
 Pursuant to the terms of the
CHANGE IN CONTROL AGREEMENT dated as of September 16, 2009, between the undersigned and Bank of the Carolinas (“BOC”), I hereby designate the following
beneficiary(ies) to receive any payments which may be due to me under such Agreement after my death. This Designation of Beneficiary is made under, and my and my beneficiary(ies)’ rights, and BOC’s obligations, hereunder shall be subject
to, the terms and conditions of the Agreement. 
  

PRIMARY BENEFICIARY(IES):    (If more than one is listed, I intend
for the payments to be divided between or among all Primary Beneficiaries as co-beneficiaries in the percentages listed, or equally if no percentages are listed, rather than as alternative or contingent beneficiaries or in any order of listing or
otherwise. In more than one is named and one of them has died, I intend for the payments that otherwise would be delivered to that person to be delivered to the surviving Primary Beneficiary or, if more than one, divided equally among the surviving
Primary Beneficiaries.) 
  

                   
                                         
                        % 
  

                   
                                         
                        % 
  

                   
                                         
                        % 
  

CONTINGENT BENEFICIARY(IES):    (If I have listed one or more
Contingent Beneficiaries, I intend for them to receive payments only if no Primary Beneficiary survives me. If more than one is listed, then, unless I have indicated otherwise as provided below, I intend for the payments to be divided between or
among all Contingent Beneficiaries as co-contingent beneficiaries in the percentages listed, or equally if no percentages are listed, rather than in any order of listing or otherwise, and, if one of them has died, I intend for the payments that
otherwise would be delivered to that person to be made to the surviving Contingent Beneficiary or, if more than one, divided equally among the surviving Contingent Beneficiaries. Alternatively, if I intend for one or more Contingent Beneficiary(ies)
to receive payments in any particular order, or to the exclusion of any other(s) listed, I have indicated that below.) 
  

                   
                                         
                        % 
  

                   
                                         
                        % 
  

                   
                                         
                        % 
  

This designation hereby revokes any prior designation which may have been in effect. 

 

							
	Date:                             
          , 2009	    	EMPLOYEE:	  	  
	  	
		    		  	Robert W. Johnson	  	
	  
	    		  		  	
	Witness	    		  		  	
			
		    	RECEIPT ACKNOWLEDGED BY:	  	
			
		    	  
	  	
			
		    	Title:                          
                                         
               	  	
			
		    	Date:                          
                                 , 20    
	  	

  
 10

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