REGISTRATION RIGHTS AGREEMENT
Exhibit 10.4
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 8th day of
June 2006, by and among Community Bankers Acquisition Corp., a Delaware corporation (the “Company”)
and the undersigned parties listed under Holder on the signature page hereto (each, a “Holder” and,
collectively, the “Holders”).
WHEREAS, the Holders currently hold all of the issued and outstanding securities of the
Company;
WHEREAS, certain of the Holders have agreed to acquire certain warrants to purchase shares of
Common Stock of the Company pursuant to a Warrant Purchase Agreement with the representatives of
the underwriters in connection with the Company’s contemplated initial public offering;
WHEREAS, the Holders and the Company desire to enter into this Agreement to provide the
Holders with certain rights relating to the registration of shares of Common Stock held by them;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms used herein have the following meanings:
“Agreement” means this Agreement, as amended, restated, supplemented, or otherwise modified
from time to time.
“Blackout Period” means the period (A) beginning 90 days prior to the date the Company expects
to file a Registration Statement for a public offering (other than a registration statement
relating to any employee benefit plan, or a registration statement related solely to stock issued
upon conversion of debt securities) and, in the event no such Registration Statement is filed,
ending on the earlier of 90 days thereafter or the date that the Company no longer expects to file
such Registration Statement or, in the event such a Registration Statement is filed, ending on the
last day of the distribution (as contemplated in Regulation M under the Securities Exchange Act of
1934, as amended) of such public offering of securities; or (B) beginning on the date following a
determination of the Company’s board of directors made in the good faith judgment of such board of
directors that it would be materially detrimental to the Company and its stockholders for such
Registration Statement to be effected at such time, ending on the earlier of 90 days thereafter or
the date on which the Company’s board of directors determines that it would no longer be materially
detrimental to the Company and its stockholders for such Registration Statement to be effected at
such time.
“Business Combination” means a merger, capital stock exchange, asset acquisition or other
similar business combination with an operating business in the banking industry as more
specifically described in the Company’s registration statement on Form S-1, as amended, filed with
the Commission in connection with the Company’s Initial Public Offering.
“Commission” means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common Stock” means the common stock, par value $0.01 per share, of the Company.
“Company” is defined in the preamble to this Agreement.
“Demand Registration” is defined in Section 2.1.1.
“Demanding Holder” is defined in Section 2.1.1.
“Effective Date” means the date of effectiveness of the registration statement filed with the
Commission in connection with the Company’s Initial Public Offering.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Expiration Date” shall mean June 4, 2011.
“Form S-3” is defined in Section 2.3.
“Holder” is defined in the preamble to this Agreement.
“Holder Indemnified Party” is defined in Section 4.1.
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Initial Public Offering” means the Company’s initial public offering conducted in June, 2006
pursuant to the Securities Act.
“Maximum Number of Shares” is defined in Section 2.1.4.
“Notices” is defined in Section 6.3.
“Piggy-Back Registration” is defined in Section 2.2.1.
“Register,” “registered” and “registration” mean a registration effected by preparing and
filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated
thereunder, and such registration statement becoming effective.
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“Registrable Securities” means all of the shares of Common Stock owned or held by Holders or
Transferees and all of the Warrants acquired by the Holders pursuant to the Warrant Purchase
Agreement together with the shares of Common Stock issued or issuable upon exercise of such
Warrants. Registrable Securities include any warrants, shares of capital stock or other securities
of the Company issued as a dividend or other distribution with respect to or in exchange for or in
replacement of such shares of Common Stock and/or Warrants. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when: (A) a Registration
Statement with respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (B) such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further transfer shall have
been delivered by the Company and subsequent public distribution of them shall not require
registration under the Securities Act; or (C) such securities shall have ceased to be outstanding.
In addition, Registrable Securities shall not include any securities held by any Holder if such
securities are then saleable under Rule 144 in the opinion of counsel to the Company.
“Registration Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations promulgated
thereunder for a public offering and sale of Common Stock (other than a registration statement on
Form S-4 or Form S-8, or their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another entity).
“Release Date” means the date on which shares of Common Stock are disbursed from escrow
pursuant to Section 3 of that certain Stock Escrow Agreement dated as of June 8, 2006 by and among
the parties hereto and Continental Stock Transfer & Trust Company.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at the time.
“Transferee” or “Transferees” means the persons, trusts or entities to whom the Registrable
Securities are transferred (i) by gift to a member of Holder’s immediate family or to a trust, the
beneficiary of which is a Holder or a member of a Holder’s immediate family, (ii) by virtue of the
laws of descent and distribution upon death of any Holder, (iii) pursuant to a qualified domestic
relations order, or (iv) pursuant to a transfer of record ownership whereby there is no change in
beneficial ownership.
“Underwriter” means a securities dealer who purchases any Registrable Securities as principal
in an underwritten offering and not as part of such dealer’s market-making activities.
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“Warrants” means those warrants to purchase shares of Common Stock of the Company expiring
five years from the Effective Date.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Grant of Demand Right. The Company, upon the receipt of the Initial Demand Notice (as
defined below) of the Holders of at least 51% (collectively, the “Demanding Holders”) of the
Registrable Securities, agrees to register on no more than two occasions, all or any portion of the
Registrable Securities requested by the Demanding Holders in the Initial Demand Notice. With
respect to such registration request, the Company will use its commercially reasonable efforts to
file a Registration Statement covering the Registrable Securities as soon as reasonably
practicable, but no later than 60 days after the Company receives notice from the Demanding Holders
indicating their desire that the Company commence the preparation of and effect the filing of a
registration statement with the Commission as to the Registrable Securities (the “Initial Demand
Notice”), and, upon filing, use its commercially reasonable efforts to have such Registration
Statement declared effective as soon as practicable thereafter; provided, that the Company
shall be deemed to have complied with its obligation hereunder so long as it has made such
commercially reasonable efforts. Notwithstanding the foregoing, if the Company provides the
Demanding Holders notice of a Blackout Period within seven business days after it receives the
Initial Demand Notice, then: (A) the Company’s obligation to take any action pursuant to this
Section 2.1.1, including to file a Registration Statement covering the Registrable Securities,
shall be suspended during the Blackout Period; (B) the Initial Demand Notice shall thereupon be
deemed to have been received, for purposes of determining the timing of any obligation of the
Company under this Section 2.1.1 to register the Registrable Securities, on the first business day
immediately following the termination of the Blackout Period; and (C) the Company will use its
commercially reasonable efforts to file a Registration Statement covering the Registrable
Securities as soon as reasonably practicable after the termination of the Blackout Period, but no
later than 60 days after the termination of the Blackout Period, and, upon filing, use its
commercially reasonable efforts to have such Registration Statement declared effective as soon as
practicable thereafter. An Initial Demand Notice shall be effective only if it is received by the
Company during the period beginning on the Release Date and ending on the later of (x) the fifth
anniversary of the Release Date and (y) one year after the date on which the Demanding Holders
exercised Warrants that were included among the Registrable Securities. The Company shall give
written notice of its receipt of any Initial Demand Notice from any Holder(s) to all other
registered Holders of the Registrable Securities within ten business days from the date of receipt
of any such Initial Demand Notice. Once made, a request for registration pursuant to an Initial
Demand Notice provided in accordance with this Section may not be revoked, except that such a
request for registration pursuant to an Initial Demand Notice may be revoked (and shall not be
deemed to have been made for purposes of determining the rights of the Holders under this Section),
if (A) the Demanding Holders have received a notice of a Blackout Period from the Company and (B)
the Demanding Holders provide written notice to the Company within 20 days of receipt of any such
notice of a Blackout
Period requesting such revocation for the purpose of preserving the right to request
registration pursuant to an Initial Demand Notice at a time subsequent thereto. For the avoidance
of doubt, the Company may not delay the ability of the Demanding Holders to exercise their
registration rights under this Agreement by way of giving notice of a Blackout Period more than
once during any 12 month period, and any notice of a Blackout Period given by the Company to the
Demanding Holders shall not be made within four months of any previous Blackout Period notice given
by the Company.
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2.1.2 Effective Registration. A registration will not count as a Demand Registration until
the Registration Statement filed with the Commission with respect to such Demand Registration has
been declared effective and the Company has complied with all of its obligations under this
Agreement with respect thereto.
2.1.3 Underwritten Offering. If a majority-in-interest of the Demanding Holders so elect and
such Holders so advise the Company as part of their written demand for a Demand Registration, the
offering of such Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. In such event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such underwriting by a
majority-in-interest of the Holders initiating the Demand Registration.
2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the Demanding Holders
in writing that the dollar amount or number of shares of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other shares of Common Stock or other securities
which the Company desires to sell and the shares of Common Stock, if any, as to which registration
has been requested pursuant to written contractual piggy-back registration rights held by other
shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number
of shares that can be sold in such offering without adversely affecting the proposed offering
price, the timing, the distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of Shares”),
then the Company shall include in such registration: (A) first, the Registrable Securities as to
which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with
the number of shares of Registrable Securities which such Demanding Holder has requested be
included in such registration, regardless of the number of shares of Registrable Securities held by
each Demanding Holder) that can be sold without exceeding the Maximum Number of Shares; (B) second,
to the extent that the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common
Stock for the account of other persons that the Company is obligated to register pursuant to
written
contractual arrangements with such persons and that can be sold without exceeding the Maximum
Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares have not been
reached under the foregoing clauses (A), (B), and (C), the shares of Common Stock that other
security holders desire to sell that can be sold without exceeding the Maximum Number of Shares.
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2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms
of any underwriting or are not entitled to include all of their Registrable Securities in any
offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the Underwriter or Underwriters of their
request to withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding
Holders withdraws from a proposed offering relating to a Demand Registration, then such
registration shall not count as a Demand Registration provided for in this Section 2.1.
2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights. If at any time on or after the Release Date the Company proposes to
file a Registration Statement under the Securities Act with respect to an offering of equity
securities, or securities or other obligations exercisable or exchangeable for, or convertible
into, equity securities, by the Company for its own account or for shareholders of the Company for
their account (or by the Company and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (A) filed in connection with any
employee stock option or other benefit plan, (B) for an exchange offer or offering of securities
solely to the Company’s existing shareholders, (C) for an offering of debt that is convertible into
equity securities of the Company or (D) for a dividend reinvestment plan, then the Company shall
(E) give written notice of such proposed filing to the Holders of Registrable Securities as soon as
practicable but in no event less than ten (10) business days before the anticipated filing date,
which notice shall describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (F) offer to the Holders of Registrable Securities in
such notice the opportunity to register the sale of such number of shares of Registrable Securities
as such Holders may request in writing within five (5) business days following receipt of such
notice (a “Piggy-Back Registration”). For purposes of a Piggy-Back Registration (and not in the
case of a Demand Registration), the exclusion from the definition of Registrable Securities as to
Registrable Securities which are then saleable under Rule 144 contained in the last sentence of the
definition of “Registrable Securities” shall be inapplicable. The Company shall cause such
Registrable Securities to be included in such registration and shall use its commercially
reasonable efforts to cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration
to be included on the same terms and conditions as any similar securities of the Company and to
permit the sale or other disposition of such Registrable Securities in accordance with the intended
method(s) of distribution thereof. All Holders of Registrable Securities proposing to distribute
their
securities through a Piggy-Back Registration that involves an Underwriter or Underwriters
shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters
selected for such Piggy-Back Registration.
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2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the Holders of
Registrable Securities in writing that the dollar amount or number of shares of Common Stock which
the Company desires to sell, taken together with shares of Common Stock, if any, as to which
registration has been demanded pursuant to written contractual arrangements with persons other than
the Holders of Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 2.2, and the shares of Common Stock, if any, as
to which registration has been requested pursuant to the written contractual piggy-back
registration rights of other shareholders of the Company, exceeds the Maximum Number of Shares,
then the Company shall include in any such registration:
i. If the registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock, if any, including
the Registrable Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in accordance with the
number of shares of Common Stock which each such person has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with respect to which such
persons have the right to request such inclusion) that can be sold without exceeding the Maximum
Number of Shares; and
ii. If the registration is a “demand” registration undertaken at the demand of persons other
than the Holders of Registrable Securities pursuant to written contractual arrangements with such
persons, (A) first, the shares of Common Stock for the account of the demanding persons that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or
other securities that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 and any Shares as to which registration has
been requested pursuant to written contractual piggy-back registration rights which other security
holders desire to sell that can be sold without exceeding the Maximum Number of Shares (pro rata in
accordance with the number of shares of Registrable Securities held by each such Holder).
2.2.3 Withdrawal. Any Holder of Registrable Securities may elect to withdraw such Holder’s
request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written
notice to the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of the Registration
Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the
Holders of Registrable Securities in connection with such Piggy-Back Registration as provided in
Section 3.3.
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2.3 Registrations on Form S-3. The Holders of a majority in interest of Registrable Securities
may at any time and from time to time, request in writing that the Company register the resale of
any or all of such Registrable Securities on Form S-3 or any similar short-form registration which
may be available at such time (“Form S-3”); provided, however, that the Company shall not be
obligated to effect such request through an underwritten offering. Upon receipt of such written
request, the Company will promptly give written notice of the proposed registration to all other
Holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration
of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given within fifteen (15)
business days after receipt of such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration pursuant to this Section 2.3 if Form
S-3 is not available for such offering. Registrations effected pursuant to this Section 2.3 shall
not be counted as Demand Registrations effected pursuant to Section 2.1.
3. CERTAIN AGREEMENTS RESPECTING REGISTRATIONS.
3.1 Certain Registration Limitations and Procedures
3.1.1 Limitations. Notwithstanding anything herein to the contrary, the Company shall not be
obligated to effect any registration pursuant to Section 2.1 of this Agreement if the Holders of
the Registrable Securities, together with the Holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than $500,000; provided, further,
that the Company shall not be obligated to file a second Registration Statement until a
Registration Statement that has been filed is counted as a Demand Registration or is terminated or
withdrawn.
3.1.2 Copies. The Company shall, prior to filing a Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the Holders of Registrable
Securities included in such registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the Holders of Registrable Securities included in such
registration or legal counsel for any such Holders may request in order to facilitate the
disposition of the Registrable Securities owned by such Holders.
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3.1.3 Amendments and Supplements. Subject to the provisions of Section 3.2 hereof, the
Company shall use its commercially reasonable efforts to prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such Registration Statement
effective and in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of 180 days plus any period during which any such
disposition is interfered with by any stop order or injunction of the Commission or any
governmental agency or court and any period of suspension pursuant to Section 3.2) or such
securities have been withdrawn from such registration.
3.1.4 Notification. After the filing of a Registration Statement, the Company shall promptly,
and in no event more than two (2) business days after such filing, notify the Holders of
Registrable Securities included in such Registration Statement of such filing, and shall further
notify such Holders promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such Registration Statement
becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes
effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the
Company shall take all actions required to prevent the entry of such stop order or to remove it if
entered); and (iv) any request by the Commission for any amendment or supplement to such
Registration Statement or any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by such Registration
Statement, such prospectus will not contain an 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 promptly make available to the Holders of Registrable Securities included in such
Registration Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference, the Company shall furnish to the Holders of Registrable
Securities included in such Registration Statement and to the legal counsel for any such Holders,
copies of all such documents proposed to be filed sufficiently in advance of filing to provide such
Holders and legal counsel with a reasonable opportunity to review such documents and comment
thereon, and the Company shall not file any Registration Statement or prospectus or amendment or
supplement thereto, including documents incorporated by reference, to which such Holders or their
legal counsel shall object.
3.1.5 State Securities Laws Compliance. The Company shall use its commercially reasonable
efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement
under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders
of Registrable Securities included in such Registration Statement (in light of their intended plan
of distribution) may request and (ii) take such action necessary to cause such Registrable
Securities covered by the
Registration Statement to be registered with or approved by such other Governmental
Authorities as may be necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be necessary or advisable to enable the Holders of
Registrable Securities included in such Registration Statement to consummate the disposition of
such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph 3.1.5 or subject itself to taxation in any such
jurisdiction.
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3.1.6 Agreements for Disposition. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities. The representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the Holders of Registrable Securities included in such
registration statement. No Holder of Registrable Securities included in such registration statement
shall be required to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such Holder’s organization, good standing, authority, title to
Registrable Securities, lack of conflict of such sale with such Holder’s material agreements and
organizational documents, and with respect to written information relating to such Holder that such
Holder has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation. The principal executive officer of the Company, the principal financial
officer of the Company, the principal accounting officer of the Company and all other officers and
members of the management of the Company shall cooperate fully in any offering of Registrable
Securities hereunder, which cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering materials and related
documents, and participation in meetings with Underwriters, attorneys, accountants and potential
Holders.
3.1.8 Records. The Company shall make available for inspection by the Holders of Registrable
Securities included in such Registration Statement, any Underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant or other
professional retained by any Holder of Registrable Securities included in such Registration
Statement or any Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to supply all information
requested by any of them in connection with such Registration Statement.
3.1.9 Delivery of Opinions and Other Documents. The Company shall furnish to each of the
Holders participating in any of the foregoing offerings, a signed counterpart, addressed to the
participating Holders, of (i) an opinion of counsel to the Company, dated the effective date of
such Registration Statement (and, if such registration includes an underwritten public offering, an
opinion dated the date of the
closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter
dated the effective date of such Registration Statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing under the underwriting
agreement) signed by the independent public accountants who have issued a report on the Company’s
financial statements included in such Registration Statement, in each case covering substantially
the same matters with respect to such Registration Statement (and the prospectus included therein)
and, in the case of such accountants’ letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to underwriters in underwritten public offerings of securities.
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3.1.10 Earnings Statement. The Company shall comply with all applicable rules and regulations
of the Commission and the Securities Act, and make available to its shareholders, as soon as
practicable, an earnings statement covering a period of twelve (12) months, beginning within three
(3) months after the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.1.11 Listing. The Company shall use its commercially reasonable efforts to cause all
Registrable Securities included in any registration statement to be listed on such exchanges or
otherwise designated for trading in the same manner as similar securities issued by the Company are
then listed or designated or, if no such similar securities are then listed or designated, in a
manner satisfactory to the Holders of a majority of the Registrable Securities included in such
registration.
3.2 Obligation to Suspend Distribution. If after a registration statement relating to the
registration of Registrable Securities under Section 2 has been declared effective (“Effective
Registration Statement”), upon the good faith determination by the Board of Directors of the
Company that it is reasonably necessary to suspend the use of such Effective Registration Statement
or sales of Registrable Securities by Holders under such Effective Registration Statement, the
Company may, upon written notice (the “Suspension Notice”) to the Holders, direct the Holders to
suspend the use of or sales under such Effective Registration Statement. Upon the occurrence of
any such suspension, the Company shall use its commercially reasonable efforts to take or cause to
be taken such action as is necessary to permit resumed use of such Effective Registration Statement
promptly following the cessation of the Suspension Event giving rise to such suspension so as to
permit the Holders to resume use of and sales under such Effective Registration Statement as soon
as practicable thereafter. Upon cessation of the Suspension Event giving rise to such suspension,
the Company shall promptly provide the Holders with prompt written notice that the Suspension Event
has ceased (the “End of Suspension Notice”). The Holders shall not effect any sales of the
Registrable Securities pursuant to such Effective Registration Statement at any time after it has
received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice.
If so directed by the Company in a Suspension Notice, each Holder will deliver to the Company (at
the expense of the Company) all copies, other than permanent file copies then in such Holder’s
possession, of any prospectuses covering the Registrable Securities at the time of receipt of such
Suspension Notice.
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3.3 Registration Expenses. The Company shall bear all costs and expenses incurred by the
Company in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back
Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section
2.3, and all expenses incurred in performing or complying with its other obligations under this
Agreement, whether or not the Registration Statement becomes effective, including, without
limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1.11; (vi) National Association of Securities Dealers, Inc.
fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); and
(viii) the fees and expenses of any special experts retained by the Company in connection with such
registration. The Company shall have no obligation to pay any underwriting discounts or selling
commissions attributable to the Registrable Securities being sold by the Holders thereof, which
underwriting discounts or selling commissions shall be borne by such Holders. Additionally, in an
underwritten offering, all selling shareholders and the Company shall bear the expenses of the
underwriter pro rata in proportion to the respective amount of shares each is selling in such
offering. The Holders of Registrable Securities shall bear all costs and expenses incurred by them
in connection with any such registration, except to the extent specifically provided in this
Section 3.3.
3.4 Information. The Holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the
preparation of any Registration Statement, including amendments and supplements thereto, in order
to effect the registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal and applicable
state securities laws
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless each
Holder and each other Holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any,
who controls a Holder and each other Holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, a “Holder Indemnified
Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether
joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement)
of a material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arising
12
out of or based upon any omission (or alleged omission) to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to
the Company and relating to action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Holder Indemnified Party for any legal
and any other expenses reasonably incurred by such Holder Indemnified Party in connection with
investigating and defending any such expense, loss, judgment, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or
allegedly untrue statement or omission or alleged omission made in such Registration Statement,
preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the Company, in
writing, by such selling Holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members
and agents and each person who controls such Underwriter on substantially the same basis as that of
the indemnification provided above in this Section 4.1.
4.2 Indemnification by Holders of Registrable Securities. Each selling Holder of Registrable
Securities will, in the event that any registration is being effected under the Securities Act
pursuant to this Agreement of any Registrable Securities held by such selling Holder, indemnify and
hold harmless the Company, each of its directors and officers and each underwriter (if any), and
each other person, if any, who controls such selling Holder or such underwriter within the meaning
of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint
or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement
of a material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any omission or the alleged omission to
state a material fact required to be stated therein or necessary to make the statement therein not
misleading, if the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling Holder expressly for use therein,
and shall reimburse the Company, its directors and officers, and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection with investigation or
defending any such loss, claim, damage, liability or action. Each selling Holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to the amount of any net
proceeds actually received by such selling Holder.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person of any notice
of any loss, claim, damage or liability or any action in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect
thereof is to be made against any other person for indemnification hereunder, notify such other
person (the “Indemnifying
13
Party”) in writing of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such
Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually
prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any
claim or action brought against the Indemnified Party, then the Indemnifying Party shall be
entitled to participate in such claim or action, and, to the extent that it wishes, jointly with
all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory
to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the Indemnified Party and the
Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent the Indemnified Party
and its controlling persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the
fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, consent to entry of
judgment or effect any settlement of any claim or pending or threatened proceeding in respect of
which the Indemnified Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action
referred to herein, then each such 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
loss, claim, damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the
actions or omissions which resulted in such loss, claim, damage, liability or action, as well as
any other relevant equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
14
4.4.2 The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding Section 4.4.1. The amount paid or payable by an Indemnified Party as a result
of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any legal or other expenses
incurred by such Indemnified Party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 4.4, no Holder of Registrable Securities
shall be required to contribute any amount in excess of the dollar amount of the net proceeds
(after payment of any underwriting fees, discounts, commissions or taxes) actually received by such
Holder from the sale of Registrable Securities which gave rise to such contribution obligation. 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.
5. UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action as the Holders of
Registrable Securities may reasonably request, all to the extent required from time to time to
enable such Holders to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such
Rules may be amended or interpreted from time to time, or any similar Rule or regulation hereafter
adopted by the Commission.
6. MISCELLANEOUS.
6.1 Other Registration Rights. The Company represents and warrants that no person, other than
a Holder of the Registrable Securities, persons who acquired the underwriters’ unit purchase
options in the Initial Public Offering (and their Transferees) has any right to require the Company
to register any shares of the Company’s capital stock for sale or to include shares of the
Company’s capital stock in any registration filed by the Company for the sale of shares of capital
stock for its own account or for the account of any other person.
6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and
obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in
part. This Agreement and the rights, duties and obligations of the Holders of Registrable
Securities hereunder may be freely assigned or delegated by such Holder of Registrable Securities
in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder.
This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of
each Holder and Transferee. This Agreement is not intended to confer any rights or benefits on any
persons that are not party hereto other than as expressly set forth in Section 4 and this Section
6.2.
15
6.3 Notices. All notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”) required or permitted to be given hereunder or which are given with
respect to this Agreement, other than as expressly set forth in Section 2.1, shall be in writing
and shall be personally served, delivered by reputable air courier service with charges prepaid, or
transmitted by hand delivery or facsimile, addressed as set forth below, or to such other address
as such party shall have specified most recently by written notice. Notice shall be deemed given on
the date of service or transmission if personally served or transmitted by facsimile; provided,
that if such service or transmission is not on a business day or is after normal business hours,
then such notice shall be deemed given on the next business day. Notice otherwise sent as provided
herein shall be deemed given on the next business day following timely delivery of such notice to a
reputable air courier service with a pre-paid order for next-day delivery.
To the Company:
Community Bankers Acquisition Corp.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, President
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, President
with a copy to:
Xxxxxxxx Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, XX; Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.;
0000 Xxxxxxxxxxx Xxxxxx, XX; Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.;
To a Holder, to:
Community Bankers Acquisition LLC
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
The Xxxxxx X. Xxxxxx, Xx. 2004 Irrevocable Trust
c/o Community Bankers Acquisition Corp.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
c/o Community Bankers Acquisition Corp.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
16
Xxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxxxxx,
Trustees of the Xxxxxxxxx Family Trust U/A dated 8/22/97
c/o Community Bankers Acquisition Corp.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Trustees of the Xxxxxxxxx Family Trust U/A dated 8/22/97
c/o Community Bankers Acquisition Corp.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxxxx Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
6.4 Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
6.5 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and the same
instrument.
6.6 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto
and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements, representations, understandings, negotiations and discussions between
the parties, whether oral or written.
6.7 Modifications and Amendments. No amendment, modification or termination of this Agreement
shall be binding upon any party unless executed in writing by such party.
17
6.8 Titles and Headings. Titles and headings of sections of this Agreement are for convenience
only and shall not affect the construction of any provision of this Agreement.
6.9 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default
which such party has the right to waive, provided that such waiver will not be effective against
the waiving party unless it is in writing, is signed by such party, and specifically refers to this
Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or
default waived has occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding
breach thereof nor of any other agreement or provision herein contained. No waiver or extension of
time for performance of any obligations or acts shall be deemed a waiver or extension of the time
for performance of any other obligations or acts.
6.10 Remedies Cumulative. In the event that the Company fails to observe or perform any
covenant or agreement to be observed or performed under this Agreement, the Holder or any other
Holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or
action at law, whether for specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in aid of the exercise of any power granted in
this Agreement or to enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers or remedies conferred
under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be
cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement
or now or hereafter available at law, in equity, by statute or otherwise.
6.11 Governing Law. This Agreement shall be governed by, interpreted under, and construed in
accordance with the laws of the State of Delaware applicable to agreements made and to be performed
within the State of Delaware, without giving effect to any choice-of-law provisions thereof that
would compel the application of the substantive laws of any other jurisdiction.
6.12 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally waives the
right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the
transactions contemplated hereby, or the actions of the Holder in the negotiation, administration,
performance or enforcement hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
and delivered by their duly authorized representatives as of the date first written above.
| COMMUNITY BANKERS ACQUISITION CORP., a Delaware corporation |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxx X. Xxxxxxxx, President | ||||
| HOLDERS: | ||||
| /s/ Xxxx X. Xxxxxxxx | ||||
| Xxxx X. Xxxxxxxx | ||||
| Community Bankers Acquisition, LLC | ||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxx X. Xxxxxxxx, Manager | ||||
| /s/ Xxxxxx Xxxxxx | ||||
| Xxxxxx Xxxxxx, Trustee of The Xxxxx and Xxxxx Xx Xxxxxx 2006 Childrens’ Trust | ||||
| /s/ Xxxxxx X. Xxxxxx, Xx. | ||||
| Xxxxxx X. Xxxxxx, Xx., Trustee of The Xxxxxx X. Xxxxxx, Xx. 2004 Irrevocable Trust | ||||
| /s/ Xxxxxxx X. Xxxxxxx | ||||
| Xxxxxxx X. Xxxxxxx | ||||
| /s/ Xxxxx Xxxx | ||||
| Xxxxx Xxxx | ||||
| /s/ Xxxxx X. Xxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxx, Trustee of the Spainhour Family Trust U/A dated August 22, 1997 | ||||
| /s/ Xxxxxxx X. Xxxxxxxxx | ||||
| Xxxxxxx X. Xxxxxxxxx, Trustee of the Xxxxxxxxx Family Trust U/A dated August 22, 1997 | ||||
19
