Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into this ___ day of __________, 200__, by and among Appalachian Bancshares,
Inc., a Georgia corporation (the "Company") and _______________________
("Holder").
WHEREAS, Holder has agreed to purchase from the Company ____ shares of
Common Stock of the Company, at a price of $15.00 per share (the "Shares"), in
accordance with that certain subscription agreement, entered into by and between
the Company and Holder (the "Subscription Agreement"), to which this Agreement
is attached;
NOW, THEREFORE, for and in consideration of the covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby mutually agree as follows:
1. Definitions. Unless otherwise defined herein, the following terms shall
have the following respective meanings:
"Agreement" shall mean this Registration Rights Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean the Company's $.01 par value per share common
stock.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Holder" shall mean the purchaser of the Shares, as set forth above, and,
pursuant to a transfer or assignment of the Shares which meets the requirements
of Section 4 of this Agreement, any transferee or assignee of the Shares.
"Other Holders" means persons who hold Other Registrable Securities.
"Other Registrable Securities" means shares of Common Stock held by any
person, other than Holder, who holds registration rights in respect of Common
Stock.
(The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (as hereinafter defined), and the declaration
or ordering of the effectiveness of such registration statement.)
"Registrable Securities" shall mean the Shares acquired by Holder from the
Company, pursuant to the Subscription Agreement; provided, however, that the
Shares shall only be treated as Registrable Securities if and so long as (i)
they have not been sold through a broker, dealer, or underwriter in a public
distribution or public securities transaction, (ii) they have not been sold in a
transaction exempt from the registration and prospectus delivery requirement of
the Securities Act under Section 4(1) thereof, so that all transfer restrictions
and restrictive legends with respect thereto are removed upon the consummation
of such sale, (iii) they have not been transferred or assigned to more than
three (3) transferees or assignees, (iv) the Company is given written notice, by
the Holder, of such sale, transfer or assignment of the Shares prior to such
sale, transfer or assignment, and (v) the Holder otherwise is in compliance with
the provisions of Section 4 of this Agreement.
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with Section 5 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company and one counsel of record for
Holder, blue sky fees and expenses, and the expense of any special audits
incident to, or required by, any such registration.
"Restricted Securities" shall mean the securities of the Company required
to bear a restrictive legend, such as the legend set forth in Section 3 hereof
(or any similar restrictive legend).
"Securities Act" shall mean 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 from time to time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the securities registered by Holder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
2. Restrictions on Transferability. The Restricted Securities shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act. With respect to Restricted Securities held by Holder,
Holder will cause any proposed transferee of the Restricted Securities held
by such Holder to agree to take and hold such Restricted Securities subject
to the provisions and upon the conditions specified in this Agreement.
3. Restrictive Legend. Each certificate representing Registrable Securities
shall (unless otherwise permitted by the provisions of Section 4 below) be
stamped or otherwise imprinted with a legend in substantially the following
form (in addition to any legend required under applicable state securities
laws):
"THE SECURITIES EVIDENCED HEREBY WERE ISSUED AND SOLD WITHOUT REGISTRATION
UNDER THE FEDERAL SECURITIES ACT OF
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1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE, IN RELIANCE UPON CERTAIN EXEMPTIVE PROVISIONS OF SAID ACTS. SAID
SECURITIES CANNOT BE SOLD OR TRANSFERRED EXCEPT (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER ANY APPLICABLE STATE LAWS OR THE
SECURITIES ACT, (2) PURSUANT TO RULE 144 PROMULGATED UNDER THE SECURITIES
ACT, OR (3) OTHER EXEMPTION FROM SUCH REGISTRATION, AS TO WHICH THE ISSUER
HAS RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO ISSUER."
4. Notice of Proposed Transfers. Holder, by acceptance of each certificate
representing Restricted Securities, agrees to comply in all respects with
the provisions of this Section 4. Prior to any proposed transfer of any
Restricted Securities, unless there is, in effect, a registration statement
under the Securities Act covering the proposed transfer, Holder shall give
written notice to the Company of Holder's intention to effect such
transfer. Each such notice shall describe the manner and circumstances of
the proposed transfer in sufficient detail, and shall, if the Company so
requests, be accompanied (except in transactions in compliance with Rule
144 promulgated by the Commission under the Securities Act) by a written
opinion of legal counsel, who shall be reasonably satisfactory to the
Company, addressed to the Company and reasonably satisfactory in form and
substance to the Company's counsel, to the effect that the proposed
transfer of the Restricted Securities may be effected without registration
under the Securities Act, whereupon Holder shall be entitled to transfer
such Restricted Securities in accordance with the terms of the notice
delivered by Holder to the Company. Each certificate evidencing the
Restricted Securities, transferred in accordance with this Section 4, shall
bear the appropriate restrictive legend set forth in Section 3 above,
except that such certificate shall not bear such restrictive legend if, in
the opinion of counsel for the Company, such legend is not required in
order to establish compliance with any provisions of the Securities Act.
5. Company Registration.
(a) Notice of Registration. If the Company shall determine to register any
of its securities, either for its own account or the account of a
security holder or holders, other than a registration relating solely
to employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction, the Company will:
(i) promptly give to Holder written notice thereof; and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made within 20 business days after
receipt of such written notice from the Company, by Holder,
provided that to the extent so advised by the underwriters in
accordance with Section 5(b) below, the Company may limit the
amount of Registrable Securities to be included by Holder in any
registration and, to the extent so advised by the underwriters,
may exclude all Registrable Securities entirely from the
registration relating to the Company's registration of it's
securities.
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(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company
shall so advise Holder by written notice. If proposing to distribute
Holder's securities through such underwriting, Holder shall (together
with the Company) enter into an underwriting agreement in customary
form with the underwriter, or underwriters, selected by the Company.
Notwithstanding any other provision of this Section 5, if the
underwriter, or (as the case may be) the representative of the
underwriters, advises the Company in writing that, in its opinion,
inclusion of the full number of Registrable Securities and Other
Registrable Securities requested to be included in the registration
would adversely affect the underwriting, the underwriter or
representative of the underwriters may limit the number of shares of
Registrable Securities and Other Registrable Securities to be included
in the registration and underwriting. The Company shall so advise
Holder and Other Holders of the limitation and the number of
Registrable Securities and Other Registrable Securities to be excluded
from the registration by reason of the limitation imposed by the
underwriter or representative of the underwriters. The number of
shares of Registrable Securities and Other Registrable Securities to
be excluded from the registration shall be allocated pro rata among
Holder and those Other Holders who are requesting registration, based
on the ratio that the number of Registrable Securities and Other
Registrable Securities, proposed to be registered by each of Holder
and Other Holders, bears to the total number of Registrable Securities
and Other Registrable Securities proposed to be registered by Holder
and Other Holders in the registration.
If Holder or any Other Holder who has requested inclusion in such
registration, as provided above, disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company and
the underwriter. The securities so withdrawn shall also be withdrawn from
registration.
(c) Notwithstanding the foregoing, the Company may, in its sole discretion
and without the consent of, or prior notice to, Holder or Other
Holders, withdraw any registration statement referred to in this
Section 5 and abandon the proposed offering at any time without
thereby incurring any liability to Holder or any Other Holder.
(d) Notwithstanding the foregoing, the Company shall not be required to
register any Registrable Securities, pursuant to this Section 5, if
Holder can, within one hundred twenty-five days (125) of notice of
registration, sell the Registrable Securities pursuant to the
Commission's Rule 144 or another exemption from registration.
6. Expenses of Registration. The Company will pay all Registration Expenses
incurred by the Company in connection with registrations allowed pursuant
to Section 5. All Selling Expenses relating to securities registered by
Holder shall be borne by Holder, on a pro rata basis, based on the ratio
that the number of Registrable Securities held by Holder, and proposed to
be registered, bears to the total number of Registrable Securities and
Other Registrable Securities proposed to be registered by Holder and Other
Holders in the registration.
7. Registration Procedures. In the case of each registration, qualification,
or compliance effected by the Company pursuant to this Agreement, the
Company will keep Holder
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advised in writing as to the initiation of each registration, qualification
and compliance and as to the completion thereof. At its expense, the
Company will:
(a) Keep such registration, qualification, or compliance effective for a
period of 180 days or until Holder has completed the distribution
described in the registration statement relating thereto, whichever
first occurs; provided, however, that (i) such 180-day period shall be
extended for a period of time equal to the period Holder refrains from
selling any securities included in such registration at the request of
an underwriter of Common Stock (or other securities) of the Company;
and (ii) in the case of any registration of Registrable Securities on
Form S-3 which are intended to be offered on a continuous or delayed
basis, such 180-day period shall be extended, if necessary, to keep
the registration statement effective until all such Registrable
Securities are sold.
(b) Furnish such number of prospectuses and other documents incident
thereto as Holder, from time to time, may reasonably request in order
to facilitate the disposition of securities owned by Holder.
(c) Prepare and file with the Commission such amendments and supplements
to such registration statement, and the prospectus used in connection
with such registration statement, as may be necessary to comply with
the provisions of the Securities Act, with respect to the disposition
of all securities covered by such registration statement.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement, under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by Holder,
provided that the Company shall not be required, in connection
therewith or as a condition thereto, to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions (unless already qualified in such state).
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
Holder, if participating in such underwriting, shall also enter into
and perform its obligations under such an agreement.
(f) Notify Holder of Registrable Securities and Other Holders of Other
Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing.
(g) Cause all such Registrable Securities and Other Registrable Securities
covered by such registration statement to be listed on each securities
exchange on which the same class of securities issued by the Company
are then listed, if the listing of such Registrable Securities is then
permitted under the rules and regulations of such exchange and, if
requested by
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Holder, cause all such Registrable Securities, if the Company's
securities are not already listed, to be listed on any securities
exchange reasonably requested by Holder.
(h) Provide a transfer agent and registrar for all such Registrable
Securities and Other Registrable Securities not later than the
effective date of such registration statement;
(i) Enter into such customary agreements (including underwritten
agreements in customary form) and take all such other actions as
Holder, Other Holders or the underwriters, if any, reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities and Other Registrable Securities (including effecting a
stock split or a combination of shares);
(j) Make available for inspection by any seller who holds 10% or more of
the aggregate amount of the Registrable Securities and Other
Registrable Securities, by any underwriter participating in any
disposition pursuant to such registration statement, and by any
attorney, accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement;
(k) Otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months
beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(l) Permit Holder, if, in the Company's reasonable judgment, Holder might
be deemed to be an underwriter or a controlling person of the Company,
to participate in the preparation of such registration or comparable
statement, and permit Holder to require the insertion therein of
material, furnished to the Company in writing, which, in the
reasonable judgment of Holder and Holder's counsel, should be
included;
(m) In the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending
or preventing the use of any related prospectus, or suspending the
qualification of any Registrable Securities and Other Registrable
Securities included in such registration statement for sale in any
jurisdiction, the Company shall use commercially reasonable efforts
promptly to obtain the withdrawal of such order;
(n) Use commercially reasonable efforts to cause such Registrable
Securities and Other Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable
Securities; and
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(o) Obtain a cold comfort letter from the Company's independent
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a
majority of the aggregate amount of Registrable Securities and Other
Registrable Securities being sold pursuant to the applicable
registration statement may reasonably request.
8. Termination of Registration Rights. The registration rights granted
pursuant to this Agreement shall terminate on the second anniversary of the
date of this Agreement.
9. Indemnification.
(a) The Company will indemnify Holder, each of its officers, directors and
partners, if any, and Holder's legal counsel and independent
accountants, and each person controlling Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing incurred
in settlement of any litigation, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, or any
violation by the Company of any rule or regulation promulgated under
the 1934 Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse Holder,
each of its officers, directors and partners, if any, and Holder's
legal counsel and independent accountants, and each person controlling
Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company
will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission,
made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by Holder or
underwriter and stated to be specifically for use therein.
(b) If Registrable Securities held by Holder are included in the
securities as to which such registration, qualification or compliance
is being effected, Holder will indemnify the Company, each of its
directors and officers and its legal counsel and independent
accountants, each underwriter, if any, of the Company's securities
covered by such a registration statement, and each person who controls
the Company or such underwriter, within the meaning of Section 15 of
the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse the
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Company, such directors, officers, legal counsel, independent
accountants, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or
other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by
Holder and stated to be specifically for use therein;
(c) Each party entitled to indemnification under this Section 9 (the
"Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not be unreasonably
withheld or delayed), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, except to the extent, but only to the extent, that the
Indemnifying Party's ability to defend against such claim or
litigation is impaired as a result of such failure to give notice. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability
with respect to such claim or litigation.
(d) If the indemnification provided for in this Section 9 is held by a
court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection
with the statement or omissions that resulted in such loss, liability,
claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the
parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
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10. Information by Holder. If included in any registration, Holder shall
furnish to the Company such information regarding Holder, and the
distribution proposed by Holder, as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
11. Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company,
the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities
to the general public;
(b) Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under
the Securities Act and the 1934 Act;
(c) Upon request, furnish to Holder a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any
time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the 1934 Act, a
copy of the most recent annual or quarterly report of the Company, and
such other reports and documents of the Company as Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing Holder to sell any such securities without
registration.
12. Transfer of Registration Rights. The registration rights granted pursuant
to this Agreement may be assigned to a transferee or assignee of the
Shares, provided that the Shares remain "Registrable Securities," as
defined in Section 1 of this Agreement.
13. Governing Law. This Agreement and the legal relations between the parties
arising hereunder shall be governed by and interpreted in accordance with
the laws of the State of Georgia, without giving effect to the conflict of
laws provisions thereof. The parties hereto agree to submit to the
jurisdiction of the federal and state courts of the State of Georgia with
respect to the breach or interpretation of this Agreement or the
enforcement of any and all rights, duties, liabilities, obligations,
powers, and other relations between the parties arising under this
Agreement.
14. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties regarding rights to
registration. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
15. Notices, etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
delivery to the party to be notified in person or by courier service, or
five days after deposit with the United States mail, by registered or
certified mail, postage prepaid, addressed (a) if to Holder, to Holder's
address set forth below Holder's signature on this Agreement, or at such
other address as Holder shall have furnished to the Company in writing, or
(b) if to the Company, to its address set forth below its signature on this
Agreement to the attention of the Corporate Secretary, or at such other
address as the Company shall have furnished to Holder.
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17. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing
such counterparts, and all of which together shall constitute one
instrument.
18. Amendment. Any provision of this Agreement may be amended, waived or
modified only upon the written consent of all the parties hereto. Any party
to this Agreement may waive any of his or her rights or the Company's
obligations hereunder without obtaining the consent of any other person.
19. Term. This Agreement shall remain in full force and effect until Holder no
longer holds any equity securities of the Company or two (2) years from the
date hereof, whichever occurs first.
[Signatures Appear on Following Page]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the ___ day of _________________, 200__.
THE COMPANY:
APPALACHIAN BANCSHARES, INC.
By:
--------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
Address:
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
HOLDER:
Name:
------------------------
Address:
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