EXHIBIT 10.3
  
REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of May
10, 2010 by and between Jacksonville Bancorp, Inc., a Florida corporation (the
“Company”), and the investors listed on the signature page(s) hereto (the
“Investors”).
 
RECITALS
 
WHEREAS, this Agreement is made pursuant to a Stock Purchase Agreement (the
“Stock Purchase Agreement”), dated as of May 10, 2010, by and between the
Company and each Investor;
 
WHEREAS, pursuant to the Stock Purchase Agreement, and subject to the terms and
conditions set forth therein, (a) the Investors have agreed to purchase from the
Company, pursuant to a private placement by the Company, shares (the “Shares”)
of the Company’s common stock, par value $0.01 (the “Common Stock”), and (b) the
Company has agreed to issue and sell the Shares to the Investors; and
 
WHEREAS, as a condition to the consummation of the transactions contemplated by
the Stock Purchase Agreement, the Company has agreed to enter into this
Agreement in order to grant certain registration rights to the Investors, as set
forth below.
 
NOW, THEREFORE, in consideration of the foregoing promises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereto agree as
follows:
 
SECTION 1.        GENERAL
 
1.1           Definitions.  As used in this Agreement, the following terms shall
have the following respective meanings:
 
“ABI” means Atlantic BankGroup, Inc., a Florida corporation.
 
“Acquisition” means the acquisition of ABI by merger with the Company.
 
“Agreement” has the meaning set forth in the recitals.
 
“Affiliate” of any Person means any other Person controlling, controlled by or
under common control with such particular person or entity.  The term “control”
(including the terms “controlling”, “controlled” and “under common control
with”) as used with respect to any Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
 
“Allowable Suspension Period” has the meaning set forth in Section 2.5.

 
 

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“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.
 
“CapGen” means CapGen Capital Group IV LP, a Delaware limited partnership.
 
“Closing” means the Closing, as defined in the Stock Purchase Agreement.
 
“Common Stock” has the meaning set forth in the recitals.
 
“Company” has the meaning set forth in the preamble.
 
“Effective Date” means the date that the registration statement filed pursuant
to Section 2.1(b) is first declared effective by the Commission.
 
“Effectiveness Deadline” means, with respect to the initial registration
statement required to be filed pursuant to Section 2.1(b), the earlier of (i)
the 60th calendar day following the Filing Date (or the 120th calendar day
following the Filing Date in the event that such registration statement is
subject to review by the SEC or additional financial statements reflecting the
acquisition of ABI are required by SEC rules or are requested by SEC staff) and
(ii) the 5th Business Day after the date the Company is notified (orally or in
writing, whichever is earlier) by the SEC that such registration statement will
not be “reviewed” or will not be subject to further review; provided that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for business.
 
“Effectiveness Period” has the meaning set forth in Section 2.1(b).
 
“Event” has the meaning set forth in Section 2.1(b).
 
“Event Date” has the meaning set forth in Section 2.1(b).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or similar
federal statute successor thereto, and the rules and regulations of the
Commission promulgated thereunder, as they each may be in effect from time to
time.
 
“Filing Date” means the earlier of (i) the Filing Deadline and (ii) the date on
which the initial Mandatory Registration is filed with the SEC.
 
“Filing Deadline” has the meaning set forth in Section 2.1(b).
 
“Form S-1” means a registration statement on Form S-1 under the Securities Act
as in effect on the date hereof or any successor or similar registration form
under the Securities Act subsequently adopted by the SEC.
 
“Form S-3” means a registration statement on Form S-3 under the Securities Act
as in effect on the date hereof or any successor or similar registration form
under the Securities Act subsequently adopted by the SEC which permits inclusion
or incorporation of substantial information by reference to other documents
filed by the Company with the SEC.

 
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“Holder” means any Investor and any transferee thereof, which holds directly of
record or indirectly through a broker-dealer or securities clearing agency of
record and following notice to the Company and a proper transfer of Shares, from
time to time, Registrable Securities, provided that the Investor may transfer
its rights under this Agreement to its Affiliates without notice or consent from
the Company.
 
“Holder Affiliates” has the meaning set forth in Section 2.8(a).
 
“Investors” has the meaning set forth in the preamble.
 
“Liquidated Damages” has the meaning set forth in Section 2.1(b).
 
“Mandatory Registration” has the meaning set forth in Section 2.1(b).
 
“Misstatement” has the meaning set forth in Section 2.4(g).
 
“New Stock” means Common Stock or securities convertible into, or exchangeable
or exercisable for Common Stock, or which have voting rights or participation
features with Common Stock, offered in a public or nonpublic offering by the
Company.
 
“Person” means any individual, corporation, partnership, sole proprietorship,
joint venture, limited liability company, business trust, joint stock company,
trust, association or unincorporated organization or any government or any
agency or political subdivision thereof.
 
“Qualified Equity Offering” means a public or nonpublic offering of New Stock
solely for cash and not pursuant to a Special Registration; provided, however,
that none of the following offerings shall constitute a Qualified Equity
Offering:  (a) any offering pursuant to any stock purchase plan, dividend
reinvestment plan, stock ownership plan, stock option or equity compensation or
incentive plan or other similar plan where stock is being issued or offered to a
trust, other entity or otherwise, to or for the benefit of any employees,
potential employees, officers or directors of the Company, or (b) any offering
made as consideration pursuant to an acquisition or business combination
(whether structured as a merger or otherwise), a partnership or joint venture or
strategic alliance or investment by the Company or similar non-capital raising
transaction (but not an offering to raise capital or monies to pay the purchase
consideration for such an acquisition).
 
“Register,” “registered,” and “registration” shall refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement.
 
“Registrable Securities” means (a) the Shares; (b) any other shares of Common
Stock held by the Holders and purchased from the Company, whether directly, or
indirectly through an underwriter or placement agent; and (c) any Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right, preferred stock or other security which is issued after the
Closing as) a dividend, stock split or other distribution or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization with respect to, or in exchange for or in replacement of, the
Common Stock held by the Holders, provided, however, that Registrable Securities
shall not include any shares of Common Stock which have been sold to the public
by a Holder either pursuant to a registration statement or Rule 144, or which
have been sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned.

 
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“Registrable Securities then outstanding” shall be the number of shares
determined by calculating the total number of shares of the Company’s Common
Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to exercisable or convertible
securities.
 
“Registration Expenses” shall mean all fees and expenses incurred by the Company
relating to any registration, qualification or compliance pursuant to this
Agreement (including any Mandatory Registration or Shelf Registration),
including, without limitation, all registration and filing fees, exchange
listing fees, transfer agent’s and registrar’s fees, cost of distributing
prospectuses in preliminary and final form as well as any supplements thereto,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, Financial Industry Regulatory Authority fees,  expenses of
the Company’s independent accountants, and fees and expenses of underwriters
(excluding discounts and commissions) and any other Persons retained by the
Company, but shall not include the compensation of regular employees of the
Company, which shall be paid in any event by the Company, and shall not include
Selling Expenses, which shall be paid by the Holders.  Notwithstanding the
foregoing, Registration Expenses shall include the reasonable, documented, fees
and expenses of one counsel chosen by the Holders of a majority of the
Registrable Securities covered by such registration for such counsel rendering
services customarily performed by counsel for selling shareholders that are
submitted to the Company in writing.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC” or “Commission” means the Securities and Exchange Commission or any
successor agency.
 
“SEC Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the SEC staff and (ii) the Securities Act.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, or similar
federal statute successor thereto, and the rules and regulations of the
Commission promulgated thereunder, as they each may, from time to time, be in
effect.
 
“Selling Expenses” shall mean all underwriting discounts, selling commissions
and stock transfer taxes applicable to the sale of Registrable Securities and
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).
 
“Shares” has the meaning set forth in the recitals.
 
“Shelf Registration” has the meaning set forth in Section 2.1(b).

 
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“Shelf Termination Date” has the meaning set forth in Section 2.1(b).
 
“Special Registration” means the registration of (a) equity securities and/or
options or other rights in respect thereof solely registered on Form S-4 or Form
S-8 (or any successor or similar registration form under the Securities Act) or
(b) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, management, employees, potential employees,
consultants, customers, lenders or vendors of the Company or its direct or
indirect subsidiaries or in connection with dividend reinvestment or stock
purchase plans.
 
“Stock Purchase Agreement” has the meaning set forth in the recitals.
 
“Suspension Period” has the meaning set forth in Section 2.5.
 
“Violation” has the meaning set forth in Section 2.9(a).
 
SECTION 2.        REGISTRATION
 
2.1           Demand Registration and Shelf Registration.
 
(a)           Subject to the conditions of this Section 2.1, so long as the
Holders hold at least 25% of the Shares purchased pursuant to the Stock Purchase
Agreement or resulting from such Shares by virtue of a stock split, stock
dividend or distribution in respect of such purchase by the Holders as of the
date hereof, if the Company shall receive a written request from the Holders
that the Company file a registration statement under the Securities Act covering
the registration of at least 25% of the Registrable Securities then outstanding
or a lesser percent if the anticipated aggregate offering price based on the
then-current market prices, net of underwriting discounts and commissions, would
exceed $2,500,000, then the Company shall, within 10 days of the receipt
thereof, give written confirmation of such request to the Holders, and subject
to the limitations of this Section 2.1, effect, as expeditiously as reasonably
possible, the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered.

 
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(b)          Mandatory Registration.
 
(i)           The Company shall use its reasonable best efforts to file by the
30th day following the Closing or if the Company is required to file audited or
pro forma financial statements with the SEC to reflect the Acquisition, not
later than two (2) Business Days after the date of filing such financial
statements with the SEC on or prior to the deadline for filing such financial
statements (such date, the “Filing Deadline”), with the SEC, a registration
statement on Form S-1 or such other SEC form which the Company is eligible to
use with respect to the resale from time to time, whether underwritten or
otherwise, of the Registrable Securities by the Holders.  The Company shall use
Form S-3, if it is then eligible to use Form S-3.  The Company shall use its
reasonable best efforts to promptly respond to all SEC comments, if any, related
to such registration statement but in any event within two weeks of the receipt
thereof, and shall use its reasonable best efforts to obtain all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all of the Holders’ Registrable
Securities, including causing such registration statement to be declared
effective by the SEC as soon as practicable after filing and no later than the
Effectiveness Deadline.  The Company shall use its reasonable best efforts to
maintain the effectiveness of the registration effected pursuant to this Section
2.1(b) at all times.  The registration contemplated by this Section 2.1(b) is
referred to herein as the “Mandatory Registration.”  The Mandatory Registration
shall be filed with the SEC in accordance with and pursuant to Rule 415
promulgated under the Securities Act (or any successor rule then in effect) (a
“Shelf Registration”).  So long as any such Shelf Registration is effective as
required herein and in compliance with the Securities Act and is usable for
resale of Registrable Securities, the Holders shall be entitled to demand any
number of takedowns (including underwritten takedowns, provided that (i) the
Registrable Securities requested to be included in such underwritten takedown
constitute at least 25% of the Registrable Securities then outstanding or (ii)
the anticipated aggregate offering price based on the then-current market
prices, net of underwriting discounts and commissions, would exceed $2,500,000
from the Shelf Registration.  In connection with any such takedown, the Company
shall take all customary and reasonable actions that the Company would take in
connection with an underwritten registration pursuant to Section 2.1(a) or
Section 2.3 (including, without limitation, all actions referred to in Section
2.5 necessary to effectuate such sale in the manner determined by the Holders of
at least a majority of the Registrable Securities to be included in such
underwritten takedown).  The Company shall use its reasonable best efforts to
cause the registration statement or statements filed hereunder to remain
effective until such date (the “Shelf Termination Date”) that is the earlier of
(i) the date on which all Registrable Securities included in the registration
statement shall have been sold or shall have otherwise ceased to be Registrable
Securities and (ii) the date that all Registrable Securities covered by such
registration statement may be sold without volume or manner of sale restrictions
under Rule 144 (after taking into account any Holder’s status as an Affiliate of
the Company) for purposes of Rule 144 and without the requirement for compliance
by the Company with the current public information requirements under Rule
144(c)(1) or, if applicable, Rule 144(i)(2), as determined by counsel to the
Company (the “Effectiveness Period”).  In the event the Mandatory Registration
must be effected on Form S-1 or any similar long-form registration as the
Company may elect or is required to use, such registration shall nonetheless be
filed as a Shelf Registration and the Company shall use all reasonable best
efforts to keep such registration current and effective, including by filing
periodic post-effective amendments to update the information therein, including
the financial statements contained in such registration statement in accordance
with Regulation S-X promulgated under the Securities Act until the Shelf
Termination Date.  The Company shall not include in the Mandatory Registration
any securities which are not Registrable Securities without the prior written
consent of the Holders of at least a majority of the Registrable Securities
included in such registration.  The Company shall request effectiveness of a
Registration Statement as of 5:00 P.M. New York City time on a Business
Day.  The Company shall promptly notify the Holders via facsimile or electronic
mail in a “.pdf” format data file of the effectiveness of a Registration
Statement within one (1) Business Day of the Effective Date. The Company shall,
by 9:30 A.M. New York City time on the first Business Day after the Effective
Date, file a final Prospectus with the Commission, as required by Rule 424(b).

 
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(ii)          Notwithstanding the registration obligations set forth in this
Section 2.1(b), in the event the SEC informs the Company that all of the
Registrable Securities then outstanding cannot, as a result of the application
of Rule 415 of the Securities Act, be registered for resale as a secondary
offering on a single registration statement, the Company agrees to promptly (i)
inform each of the Holders thereof and use its commercially reasonable efforts
to file amendments to the initial registration statement as required by the SEC
and/or (ii) withdraw the initial registration statement and file a new
registration statement, in either case covering the maximum number of
Registrable Securities permitted to be registered by the SEC, on Form S-3, Form
S-1 or such other form available to the Company to register for resale the
Registrable Securities as a secondary offering; provided, that prior to filing
such amendment or new registration statement, the Company shall be obligated to
use its commercially reasonable efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, Compliance and Disclosure Interpretation
612.09. Notwithstanding any other provision of this Agreement, if any SEC
Guidance sets forth a limitation of the number of Registrable Securities or
other shares of Common Stock permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding that the
Company used diligent efforts to advocate with the SEC for the registration of
all or a greater number of Registrable Securities), the number of Registrable
Securities or other shares of Common Stock to be registered on such registration
statement will be reduced on a pro rata basis. In the event the Company amends
the initial registration statement or files a new registration statement, as the
case may be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the SEC, as promptly as allowed by
SEC or SEC Guidance provided to the Company or to registrants of securities in
general, one or more registration statements on Form S-3, Form S-1 or such other
form available to the Company to register for resale those Registrable
Securities that were not registered for resale on the initial registration
statement, as amended, or the new registration statement.
 
(iii)         If: (i) the initial registration statement required to be filed
pursuant to Section 2.1(b) is not filed with the SEC on or prior to the Filing
Deadline, or (ii) the initial registration statement required to be filed
pursuant to Section 2.1(b) is not declared effective by the SEC (or otherwise
does not become effective) for any reason on or prior to the Effectiveness
Deadline (any such failure an “Event,” and the date on which such Event occurs,
an “Event Date” for purposes of this Section 2.1(b)(iii)), then in addition to
any other rights the Holders may have hereunder or under applicable law, on each
Event Date, the Company shall pay one time to each Holder an amount in cash, as
liquidated damages and not as a penalty (“Liquidated Damages”), equal to 1% of
the purchase price paid in cash for any Registrable Securities held by such
Holder on the Event Date.  The parties agree that notwithstanding anything to
the contrary herein or in the Stock Purchase Agreement, no Liquidated Damages
shall be payable if as of the relevant Event Date, the Registrable Securities
may be sold by non-affiliates without volume or manner of sale restrictions
under Rule 144 and the Company is in compliance with the current public
information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if
applicable), as determined by counsel to the Company.  The Effectiveness
Deadline for a Registration Statement shall be extended without default or
Liquidated Damages hereunder in the event that the Company’s failure to obtain
the effectiveness of the registration statement on a timely basis results from
the failure of an Investor to timely provide the Company with information
requested by the Company and necessary to complete the registration statement in
accordance with the requirements of the Securities Act (in which case the
Effectiveness Deadline would be extended).

 
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(iv)         In the event that Form S-3 is not available for the registration of
the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form and (ii)
undertake to register the Registrable Securities on Form S-3 promptly after such
form is available, provided that the Company shall maintain the effectiveness of
the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the Commission.
 
(c)          Notwithstanding any other provision of this Section 2.1 or Section
2.2, if the managing underwriter advises the Company that marketing factors
require a limitation of the number of securities to be underwritten (including
Registrable Securities), then the Company shall so advise the Holders of
Registrable Securities which would otherwise be included in such underwritten
registration or takedown off the registration statement, and the number of
shares of Registrable Securities that may be included in the underwriting shall
be allocated to the Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities held by all such Holders.  Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration or takedown, as applicable.
 
(d)          Other than any Mandatory Registration required pursuant to Section
2.1(b), the Company may include in any registration pursuant to Section 2.1(a)
other securities for sale for its own account or for the account of any other
Person; provided that, if the managing underwriter for the offering shall
determine that the number of shares proposed to be offered in such offering
would be reasonably likely to adversely affect such offering, then the
Registrable Securities to be sold by the Holders shall be included in such
registration before any securities proposed to be sold for the account of the
Company or any other Person.
 
2.2          Piggyback Registrations.
 
(a)           The Company shall notify each Holder who holds Registrable
Securities in writing at least 10 Business Days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (whether in connection with a public
offering of securities by the Company, a public offering of securities by
shareholders of the Company, or both, but excluding any registration relating to
an offering that is not a Qualified Equity Offering or which is a Special
Registration, or a registration on any registration form that does not permit
secondary sales) and in any event including a registration resulting from
obligations arising out of any other registration rights agreement to which the
Company is a party, and shall afford each such Holder an opportunity to include
in such registration statement all or part of the Registrable Securities held by
such Holder.  Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by such Holder shall, within
five (5) Business Days after receipt of the above-described notice from the
Company, so notify the Company in writing.  Such notice shall state such
Holder’s desire to include all or a part of the Registrable Securities held by
such Holder.  If a Holder decides not to include all of its Registrable
Securities in any registration statement thereafter filed by the Company, such
Holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration statements
as may be filed by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth herein.

 
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(b)           Underwriting.  If the registration statement under which the
Company gives notice under this Section 2.2 is for an underwritten offering, the
Company shall so advise in such notice the Holders who hold Registrable
Securities.  In such event, the right of any such Holder to be included in a
registration pursuant to this Section 2.2 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of the Registrable
Securities such Holder desires to include in such registration in the
underwriting.  All Holders proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company.
 
Notwithstanding any other provision of this Agreement, if the managing
underwriter determines in good faith that marketing factors require a limitation
of the number of Shares to be underwritten in a registration statement pursuant
to this Section 2.2, the number of Shares that may be included in such
underwriting shall be allocated first to the Company; second, to all Holders who
are entitled to participate and who have elected to participate in the offering
pursuant to the terms of this Agreement, on a pro rata basis based upon the
total number of Shares held by each such participating Holder that are subject
to piggyback registration rights pursuant hereto; and third, to any other
shareholder of the Company on a pro rata basis.
 
If any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter, delivered at least 10 calendar days prior to the effective date of
the registration statement or in the case of a registration statement on Form
S-3 or similar short-form registration statement, by the close of business on
the first Business Day after the public notice of an offering or if the offering
is publicly announced at the beginning of a Business Day, 4:00 P.M. Eastern Time
on such day.
 
(c)           Right to Terminate Registration.  The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.2
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.  The Registration Expenses
of such withdrawn registration shall be borne by the Company in accordance with
Section 2.3.
 
2.3           Expenses of Registration.  Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance hereunder shall be borne by the Company.  The
obligation of the Company to bear Registration Expenses shall apply irrespective
of whether a registration, once properly demanded or requested becomes effective
or is withdrawn or suspended. All Selling Expenses incurred shall be borne by
the Holders of the Shares so registered pro rata on the basis of the number of
Shares so registered.  Notwithstanding the foregoing, the Holders and not the
Company shall be required to pay for expenses of any registration proceeding
begun pursuant to Section 2.1(a), the request of which has been subsequently
withdrawn by the Holders, unless (a) the Company has requested the Holders to
withdraw such request or the Company and the Holders of a majority of Registered
Securities requesting such registration determine that such request should be
withdrawn, (b) the withdrawal is based upon material adverse information
concerning the Company that the Company had not publicly disclosed prior to the
request for registration or that the Company had not otherwise notified the
Holders of at the time of such request for registration or (c) the Holders of a
majority of Registrable Securities requesting such registration, as the case may
be, agree to forfeit their right to one requested registration pursuant to
Section 2.1(a).

 
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If the Holders are required to pay the Registration Expenses, such expenses
shall be borne by the Holders of Registrable Securities requesting such
registration in proportion to the number of Registrable Securities for which
registration was requested.  If the Company is required to pay the Registration
Expenses of a withdrawn offering pursuant to clause (a) above, then the Holders
shall not forfeit their rights pursuant to Section 2.1(a).
 
2.4           Obligations of the Company.  In the case of a Mandatory
Registration and whenever required to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as practicable:
 
(a)           In the case of a Mandatory Registration, prepare and file with the
SEC a registration statement, and all amendments and supplements thereto and
related prospectuses and issuer free writing prospectuses as may be necessary to
comply with applicable securities laws, with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective, provided that before filing a registration
statement or prospectus or any amendments or supplements thereto and issuer free
writing prospectuses, the Company shall furnish to the one counsel selected by
the Holders of a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed and
give such counsel a reasonable opportunity to review and comment on such
documents before they are filed and the opportunity to object to any information
pertaining to the Holders that is contained therein, and the Company shall make
any changes with respect to, and in reliance upon, information regarding the
Holders reasonably requested by such counsel to such documents prior to filing,
and notify each Holder of the effectiveness of each registration statement filed
hereunder.
 
(b)           In the case of all registration statements other than a Mandatory
Registration Statement, prepare and file with the SEC a registration statement,
and all amendments and supplements thereto and related prospectuses and issuer
free writing prospectuses as may be necessary to comply with applicable
securities laws, with respect to such Registrable Securities and use all
reasonable best efforts to cause such registration statement to become
effective, provided that, before filing a registration statement or prospectus
or any amendments or supplements thereto and issuer free writing prospectuses,
the Company shall furnish to the counsel selected by the Holders of a majority
of Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed and give such counsel a reasonable
opportunity to review and comment on such documents before they are filed and
the opportunity to object to any information pertaining to the Holders that is
contained therein, and the Company shall make any changes reasonably requested
by such counsel with respect to and in reliance upon, information regarding the
Holders to such documents prior to filing, notify in writing each Holder of the
effectiveness of each registration statement filed hereunder, and, upon the
request of the holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 180 days or, if
earlier, until the Holder or Holders have completed the distribution related
thereto, or, a period ending on the earlier of (i) the date on which all
Registrable Securities included in the registration statement shall have been
sold or shall have otherwise ceased to be Registrable Securities and (ii) the
date that all Registrable Securities covered by such registration statement may
be sold without volume or manner of sale restrictions under Rule 144 (after
taking into account any Holder’s status as an Affiliate of the Company), and
without the requirement for the Company to be in compliance with the current
public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if
applicable), as determined by counsel to the Company.

 
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(c)           Provide to each Holder a copy of any disclosure regarding the plan
of distribution or the selling Holders, in each case, with respect to such
Holder, at least two (2) Business Days in advance of any filing with the SEC of
any registration statement or any amendment or supplement thereto that includes
such information.
 
(d)           Furnish to the selling Holders such number of copies of a
prospectus, including a preliminary prospectus, and each amendment and
supplement thereto, in conformity with the requirements of the Securities Act,
and such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
 
(e)           Use its reasonable 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 the
selling Holders; 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 jurisdictions.
 
(f)            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.  Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
 
(g)           Promptly notify each Holder who holds 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 under
which they were made (a “Misstatement”) and the Company shall promptly prepare
and file with the SEC (and furnish to each such Holder a reasonable number of
copies of) a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
 
(h)           Use its reasonable best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a “comfort” letter dated as of such date, from the independent registered public
accountants of the Company, in form and substance as is customarily given by
independent registered public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

 
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(i)            Promptly notify each Holder who holds Registrable Securities
covered by such registration statement in the event of the issuance of any stop
order suspending the effectiveness of a registration statement, or any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any equity securities included in such registration statement
for sale in any jurisdiction, and use its reasonable best efforts promptly to
obtain the withdrawal of such order.
 
(j)            Prior to the termination of registration rights in connection
with all of the outstanding Registrable Securities held by Holders other than
CapGen and other Affiliates of the Company and except in the case of a
registration statement on Form S-3 or similar short-form registration statement
filed to register any shares of Common Stock issued in connection with a Special
Registration, in connection with an offering excluded from a Qualified Equity
Offering in connection with securities issued to CapGen, the Company shall not
grant to any other Person other than CapGen the right to request the Company to
register any shares of Common Stock for resale in a registration on Form S-1 or
Form S-3 (or a similar short-form registration statement) without the consent of
Holders holding a majority of Registrable Securities unless (i) the registration
or sale of such shares of Common Stock was expressly permitted by the Stock
Purchase Agreement and (ii) such rights are consistent with the provisions
hereof.
 
(k)           The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of Registrable Securities (whether through The
Depository Trust Company, book-entry or physical certificates), which
certificates shall be free, to the extent permitted under law, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may reasonably
request.  Registrable Securities in certificated form and free from all
restrictive legends may be transmitted by the transfer agent to a Holder by
crediting the account of such Holder’s prime broker with DTC as directed by such
Holder.
 
(l)            The Company shall otherwise use commercially reasonable efforts
to comply with all applicable rules and regulations of the Commission under the
Securities Act and the Exchange Act, including Rule 172, notify the Holders
promptly if the Company no longer satisfies the conditions of Rule 172 and take
such other actions as may be reasonably necessary to facilitate the registration
of the Registrable Securities hereunder.
 
(m)          The Company shall use commercially reasonable efforts to list the
Registrable Securities covered by such registration statement with any
securities exchange on which the Common Stock of the Company is then listed.
 
2.5           Suspension of Sales.  Upon receipt of written notice from the
Company that a registration statement or prospectus contains a Misstatement,
each Holder who holds Registrable Securities shall forthwith discontinue
disposition of Registrable Securities until such Holder has received copies of
the supplemented or amended prospectus that corrects such Misstatement, or until
such Holder is advised in writing by the Company that the use of the prospectus
may be resumed (a “Suspension Period”), and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company’s expense) all copies, other
than permanent file copies then in such Holder’s possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.  No single Suspension Period shall exceed 30 consecutive days and,
during any 365-day period, the aggregate of all Suspension Periods shall not
exceed an aggregate of 60 days (each Suspension Period complying with this
provision being an “Allowable Suspension Period”).  In addition, the Allowable
Suspension Period shall also include up to 30 days in each case where an
amendment to the registration statement on Form S-1 is required to update such
registration statement, subject to a 15 day further extension if such amendment
is reviewed by the SEC, in each case, solely as a result of the filing of
periodic reports and current reports under the Exchange Act.

 
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2.6           Termination of Registration Rights.  A Holder’s registration
rights shall expire if all Registrable Securities held by such Holder (and its
Affiliates, partners, members and former members) may be sold without volume or
manner of sale restrictions under Rule 144 (after taking into account any
Holders’ status as an Affiliate of the Company as determined by the Company),
and without the requirement for the Company to be in compliance with the current
public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if
applicable), as determined by counsel to the Company.  In no event shall this
Agreement terminate as to a Holder that is an Affiliate of the Company prior to
the expiration of three months after such Holder ceased to be an Affiliate of
the Company, and provided further that at least one year has elapsed since such
Holder acquired the Shares from the Company or from an Affiliate of the Company.
 
2.7           Delay of Registration; Furnishing Information.
 
(a)           No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
 
(b)           It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Sections 2.1 or Section 2.2 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
 
(c)           The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.1(a) (except that any expenses in
connection with such registration or attempted registration shall be
Registration Expenses) if the number of shares or the anticipated aggregate
offering price of the Registrable Securities to be included in the registration
does not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company’s obligation to
initiate such registration as specified in Section 2.1(a).
 
2.8           Indemnification.  In the event any Registrable Securities are
included in a registration statement under this Section 2:

 
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(a)           To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers, directors, agents, general partners,
managing members, managers, affiliates and employees of each Holder
(collectively, “Holder Affiliates”), and each Person, if any, who controls such
Holder and Holder Affiliates within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, or the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively, a “Violation”):  (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, except to the extent that such untrue
statement or alleged untrue statement is based solely upon information provided
in writing by such Holder expressly for use therein, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, except to the extent
that such omission or alleged omission is based solely upon information provided
in writing by such Holder expressly for use therein or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will pay to
each such Holder or Holder Affiliate, or controlling person, as accrued, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 2.9(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the prior written
consent of the Company.
 
(b)           To the extent permitted by law and provided that such Holder is
not entitled to indemnification pursuant to Section 2.8(a) above with respect to
such matter, each selling Holder (severally and not jointly) will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages, or liabilities to which any of the foregoing
persons may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any (i) untrue
statement or alleged untrue statement of a material fact regarding such Holder
and provided in writing by such Holder expressly for use in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments, supplements or free writing prospectuses thereto or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, in each case to the extent (and only to the extent) that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, amendment,
supplement or free writing prospectuses thereto, in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration statement; and each such Holder will pay
the Company or controlling Person, as accrued, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action as a result of such Holder’s
untrue statement or omission; provided, however, that the indemnity agreement
contained in this Section 2.8(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holders; provided, that, (x) the
indemnification obligations in this Section 2.8(b) shall be individual and
several not joint for each Holder and (y) in no event shall the aggregate of all
indemnification payments by any Holder under this Section 2.8(b) exceed the net
proceeds from the offering received by such Holder.

 
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(c)           Promptly after receipt by an indemnified party under this Section
2.9 of notice of the commencement of any claim or action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses of such counsel to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, except to the extent such failure
to give notice has a material adverse effect on the ability of the indemnifying
party to defend such action.
 
(d)           If the indemnification provided for in this Section 2.8 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 statements 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.  Notwithstanding
the foregoing, the amount any Holder will be obligated to contribute pursuant to
this Section 2.8(d) will be limited to an amount equal to the per share offering
price (less any underwriting discount and commissions) multiplied by the number
of shares sold by such Holder pursuant to the registration statement which gives
rise to such obligation to contribute (less the aggregate amount of any damages
which such Holder has otherwise been required to pay in respect of such loss,
liability, claim, damage, or expense or any substantially similar loss,
liability, claim, damage, or expense arising from the sale of such Registrable
Securities).  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
hereunder from any person who was not guilty of such fraudulent
misrepresentation.

 
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(e)           Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control; provided that the indemnification provisions of the Holders in
any underwriting agreement may not conflict with the provisions of this Section
2.8 without the consent of the Holders.
 
(f)            The obligations of the Company and the Holders under this Section
2.8 shall survive the completion of any offering of shares of Common Stock in a
registration statement under this Section 2, and otherwise.  The indemnity and
contribution agreements contained in this Section 2.8 are in addition to any
liability that an indemnifying party may have to an indemnified party.
 
2.9           Rule 144 Reporting.  With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its reasonable best efforts to:
 
(a)           make and keep public information available, as those terms are
understood and defined in Rule 144 or any similar or analogous rule promulgated
under the Securities Act, at all times after the effective date of this
Agreement;
 
(b)           file with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
 
(c)           so long as a Holder owns any Registrable Securities, furnish to
such Holder promptly upon request: a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the Exchange Act;
a copy of the most recent annual or quarterly report of the Company; and such
other reports and documents as a Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.
 
SECTION 3.        MISCELLANEOUS
 
3.1           Successors and Assigns.  Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including any
transferees of any shares of Registrable Securities).  In addition, whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the Holders as such shall be for the
benefit of, and enforceable by, any subsequent Holder.  Nothing in this
Agreement, express or implied, is intended to, or shall confer upon any Person
other than the parties hereto or their respective successors and assigns
(including any transferees of any shares of Registrable Securities) or any
subsequent Holder any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
 
3.2           Governing Law.  This Agreement shall be governed by and construed
under the laws of the State of New York without regard to its conflicts of laws
rules.

 
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3.3           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
3.4           Titles, etc.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.  Herein, the singular shall include the plural and
vice versa, any reference to gender shall include any genders and the words
“include”, “including” and derivations thereof shall mean without limitation,
whether by enumeration or otherwise.
 
3.5           Notices.  Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate, or by delivery with a reliable overnight delivery
service by three (3) days’ advance written notice to the other parties.
 
3.6           Amendments and Waivers.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company, and the Holders as long as the Holders
hold Registrable Securities.  Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder of any Registrable
Securities then outstanding and the Company.
 
3.7           Severability.  If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
 
3.8           Aggregation of Stock.  All shares of Registrable Securities held
or acquired by any Holders which are Affiliates shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
 
3.9           Entire Agreement.  This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof.
 
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IN WITNESS WHEREOF, the parties hereto have caused and this Agreement to be
executed by their respect undersigned officers thereto duly authorized as of the
date set forth in the first paragraph hereof.
 
JACKSONVILLE BANCORP, INC.
   
By:
/s/  Gilbert J. Pomar, III
 
Name:  Gilbert J. Pomar, III
 
Title: President
   
Address: 100 North Laura Street, Suite 1000
 Jacksonville, Florida 32202
 Attention: Gilbert J. Pomar, III
   
INVESTOR
   
By:
   
Name:
 
Title:
   
Address:

  
[Signature Page to Registration Rights Agreement]
  

 
 

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