Exhibit 10.2

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into this ___
day of ________, 2013 by and among First Federal Bancshares of Arkansas, Inc.
(the “Company”), an Arkansas corporation, and Bear State Financial Holdings,
LLC, an Arkansas limited liability company (“Bear State”) and each of the
undersigned signatories (each of Bear State Financial Holdings, LLC and the
undersigned signatories individually, a “Holder” and collectively, the
“Holders”).

 

WHEREAS, the Company proposes to issue up to 2,531,645 shares of its common
stock, par value $0.01 per share (“Common Stock”) in a private offering (the
“Offering”);

 

WHEREAS, in order to induce Bear State to enter into a subscription agreement
for the purchase of 2,291,593 shares of Common Stock in the Offering, the
Company agreed to provide certain registration rights under the Securities Act
of 1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “Securities Act”), and applicable state
securities laws for the shares of Common Stock to be issued to Bear State in the
Offering;

 

WHEREAS, the remaining Holders previously entered into commitment letters (the
“Commitments”) with the Company pursuant to which such Holders committed to
purchase the remaining number of shares of Common Stock in the Offering to cause
the Offering to be fully subscribed; and

 

WHEREAS, the terms of the Commitments provide that such Holders will be given
certain registration rights with respect to the shares of Common Stock that they
purchase in the Offering.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Holders agree as follows:

 

SECTION 1.     Registration.

 

1.1     General. At the request of a Holder, the Company shall use its
reasonable best efforts to prepare and file with the Securities and Exchange
Commission (“SEC”) one or more Shelf Registration Statements (or, if permitted
by the rules of the SEC, otherwise designate an existing Shelf Registration
Statement filed with the SEC to cover such Registrable Securities) providing for
the resale pursuant to Rule 415 from time to time by the Holder(s) of such
number of shares of Registrable Securities requested by the Holder(s) to be
registered thereby, and, to the extent the Shelf Registration Statement has not
theretofore been declared effective or is not automatically effective upon such
filing, the Company shall use reasonable best efforts to cause such Shelf
Registration Statement to be declared or become effective as soon as practicable
and to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable
Securities for a period from the date of its initial effectiveness until the
time as there are no such Registrable Securities remaining (including by
refiling such Shelf Registration Statement (or a new Shelf Registration
Statement) if the initial Shelf Registration Statement expires). Notwithstanding
the registration obligations set forth in this Section 1.1, in the event the SEC
informs the Company that all of the Registrable Securities cannot, as a result
of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company agrees to promptly (a) inform
each of the Holders thereof and use its commercially reasonable efforts to file
amendments to the initial Shelf Registration Statement as required by the SEC
and/or (b) withdraw the initial Shelf Registration Statement and file a new
Shelf Registration Statement, in either case covering the maximum number of
Registrable Securities permitted to be registered by the SEC, on such form
available to the Company to register for resale the Registrable Securities as a
secondary offering; provided, however, that prior to filing such amendment or
new Shelf Registration Statement, the Company shall be obligated to use its
reasonable best efforts to advocate with the SEC 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 Shelf 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 Shelf Registration
Statement will be reduced as follows: first, the Company shall reduce or
eliminate the shares of Common Stock to be included by any Person other than a
Holder; second, the Company shall reduce or eliminate any shares of Common Stock
to be included by any Affiliate (which shall not include any of the Holders or
their Affiliates) of the Company; and third, the Company shall reduce the number
of Registrable Securities to be included by all Holders on a pro rata basis
based on the total number of unregistered Registrable Securities held by such
Holders, subject to a determination by the SEC that certain Holders must be
reduced before other Holders based on the number of Registrable Securities held
by such Holders. In the event the Company amends the initial Shelf Registration
Statement or files a new Shelf Registration Statement, as the case may be, under
clauses (a) or (b) above, the Company will use its commercially reasonable
efforts to file with the SEC, as promptly as allowed by the SEC or SEC Guidance
provided to the Company or to registrants of securities in general, one or more
registration statements on such form available to the Company to register for
resale those Registrable Securities that were not registered for resale on the
initial Shelf Registration Statement, as amended, or the new Shelf Registration
Statement. No Holder shall be named as an “underwriter” in any Registration
Statement without such Holder’s prior written consent.

 

 
 

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1.2     Demand Registration.

 

(a)     Initiating Holders shall have the right, by written notice (the “Demand
Notice”) given to the Company, to request, at any time and from time to time
during such periods when a Shelf Registration Statement or Shelf Registration
Statements covering all of the Holder’s Registrable Securities is or are not
existing and effective, that the Company register under and in accordance with
the provisions of the Securities Act all or any portion of the Registrable
Securities designated by such Initiating Holders. Upon receipt of a Demand
Notice, the Company shall promptly (and in any event within ten (10) business
days from the date of receipt of such Demand Notice), notify each Holder (other
than the Initiating Holders) of the receipt of such Demand Notice and allow such
other Holder the opportunity to include Registrable Securities held by such
Holders in the proposed registration by submitting its own written notice to the
Company within ten (10) business days of receipt of the Company notice to such
other Holder. The Company, within forty-five (45) days of the date on which the
Company receives the Demand Notice, shall file with the SEC, and the Company
shall thereafter use its best efforts to cause to be declared effective as
promptly as practicable, a registration statement on the appropriate form for
the registration and sale as shall be selected by the Company and as shall be
reasonably acceptable to the Holders registering Registrable Securities, in
accordance with the intended method or methods of distribution (which may be by
an underwritten offering), of the total number of Registrable Securities
specified by the Holders in such Demand Notice (a “Demand Registration
Statement”). If the Holders registering Registrable Securities intend to
distribute any Registrable Securities by means of an underwritten offering, they
shall promptly so advise the Company and the Company shall take all reasonable
steps to facilitate such distribution, including the actions required pursuant
to Section 3. The managing underwriters in any such distribution shall be
mutually acceptable to the Company and the Holders registering Registrable
Securities in such underwritten offering. Any Demand Registration Statement may,
at the request of the Holders submitting the Demand Notice, be a “shelf”
registration pursuant to Rule 415, if available.

 

 
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(b)     The Company shall use reasonable best efforts to keep each Demand
Registration Statement filed pursuant to this Section 1.2 continuously effective
and usable for the resale of the Registrable Securities covered thereby for a
period of one hundred eighty (180) days from the date on which the SEC declares
such Demand Registration Statement effective, as such period may be extended
pursuant to this Section 1.2(b). The time period for which the Company is
required to maintain the effectiveness of any Demand Registration Statement
shall be extended by the aggregate number of days of all suspension periods
pursuant to Section 4 occurring with respect to such Demand Registration
Statement.

 

(c)     The Company shall be entitled to suspend the use of any effective
Registration Statement under this Section 1.2 under the circumstances set forth
in Section 4.

 

1.3     Any registration (except for any registration made pursuant to Section
1.2) pursuant to this Section 1 shall be effected by means of a shelf
registration under the Securities Act (a “Shelf Registration Statement”) in
accordance with the methods and distribution set forth in the Shelf Registration
Statement and Rule 415. If the Holder intends to distribute any Registrable
Securities by means of an underwritten offering it shall promptly so advise the
Company, and the Company shall take all reasonable steps to facilitate such
distribution, including the actions required pursuant to Section 3. The lead
underwriters in any such distribution shall be selected by the Holders of a
majority of the Registrable Securities to be distributed.

 

     1.4     Piggyback Registration Rights.     If the Company proposes to
register any of its securities, whether or not for its own account (including,
without limitation, pursuant to the exercise of any demand registration rights
pursuant to Section 1.2), other than a registration pursuant to Section 1.1 or a
Special Registration, and the registration form to be filed may be used for the
registration or qualification for distribution of Registrable Securities, the
Company shall give prompt written notice to the Holders of its intention to
effect such a registration (but in no event less than ten (10) business days
prior to the anticipated filing date) and shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within ten (10) business days after the date of
the Company’s notice (a “Piggyback Registration”). Any such person that has made
such a written request may withdraw its Registrable Securities from such
Piggyback Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the fifth (5th) business day prior to the
planned effective date of such Piggyback Registration. The Company may terminate
or withdraw any registration under this Section 1.4 prior to the effectiveness
of such registration, whether or not the Holders have elected to include
Registrable Securities in such registration.

 

1.5     If the registration referred to in Section 1.4 is proposed to be
underwritten, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 1.4. In such event, the right of the Holders to
registration pursuant to this Section 1 shall be conditioned upon such Persons’
participation in such underwriting and the inclusion of such Persons’
Registrable Securities in the underwriting, and each such Person shall (together
with the Company and the other Persons distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company.
If any participating Person disapproves of the terms of the underwriting, such
Person may elect to withdraw therefrom by written notice to the Company, the
managing underwriter and the Holders.

 

 
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1.6     In the event (a) that the Company grants “piggyback” registration rights
to one or more third parties to include their securities in an underwritten
offering under the Shelf Registration Statement pursuant to Section 1.1 or (b)
that a Piggyback Registration under Section 1.4 relates to an underwritten
offering, and in any such case the managing underwriters advise the Company that
in their reasonable opinion the number of securities requested to be included in
such offering exceeds the number which can be sold without adversely affecting
the marketability of such offering (including an adverse effect on the per share
offering price), the Company shall include in such registration or prospectus
only such number of securities that in the reasonable opinion of such
underwriters can be sold without adversely affecting the marketability of the
offering (including an adverse effect on the per share offering price), which
securities shall be so included in the following order of priority: (i) first,
solely in the case of a Piggyback Registration under Section 1.4 relating to a
primary offering on behalf of the Company, any securities the Company proposes
to sell for its own account, (ii) second, Registrable Securities of the Holders
who have requested registration of Registrable Securities pursuant to Section
1.1 or Section1.4, as applicable, pro rata on the basis of the aggregate number
of such securities or shares owned by each such Holder and (iii) third, any
other securities of the Company that have been requested to be so included.

 

1.7     In the event that Form S-3 is not available for the registration of the
resale of Registrable Securities under Section 1.1, the Company shall (a)
register the resale of the Registrable Securities on another appropriate form,
including, without limitation, Form S-1 and (b) 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 Shelf
Registration Statement then in effect until such time as a Shelf Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the SEC.

 

SECTION 2.     Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the Holders selling in such
registration pro rata on the basis of the aggregate number of securities or
shares being sold.

 

SECTION 3.     Obligations of the Company. The Company shall use its reasonable
best efforts for so long as there are Registrable Securities outstanding, to
take such actions as are under its control to not become an ineligible issuer
(as defined in Rule 405 under the Securities Act). In addition, whenever
required to effect the registration of any Registrable Securities or facilitate
the distribution of Registrable Securities pursuant to an effective Shelf
Registration Statement, the Company shall, as expeditiously as reasonably
practicable:

 

3.1     By 9:30 a.m. New York City time on the first business day after the
Effective Date of a Shelf Registration Statement, file a final prospectus with
the SEC, as required by Rule 424(b) under the Securities Act.

 

3.2     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 three (3) business days in advance of any filing with the SEC of any
registration statement or any amendment or supplement thereto that includes such
information.

 

3.3     Prepare and file with the SEC a prospectus supplement with respect to a
proposed offering of Registrable Securities pursuant to an effective
registration statement, subject to Section 3, and keep such registration
statement effective or such prospectus supplement current.

 

 
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3.4     Prepare and file with the SEC such amendments and supplements to the
applicable registration statement and the prospectus or prospectus supplement
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.

 

3.5     Furnish to the Holders and any underwriters such number of copies of the
applicable registration statement and each such amendment and supplement thereto
(including in each case all exhibits) and of a prospectus, including a
preliminary prospectus, 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 or to be distributed
by them.

 

3.6     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 Holders or
any managing underwriter(s), to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by such
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.

 

3.7     Notify each Holder of Registrable Securities 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 applicable prospectus, 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
(which notice shall not contain any material non-public information).

 

3.8     Within one (1) business day after such event, give written notice to the
Holders (which notice shall not contain any material nonpublic information):

 

(a)     when any registration statement filed pursuant to Section 1 or any
amendment thereto has been filed with the SEC (except for any amendment effected
by the filing of a document with the SEC pursuant to the Securities Exchange Act
of 1934 (“Exchange Act”) and when such registration statement or any
post-effective amendment thereto has become effective;

 

(b)     of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information;

 

(c)     of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings
for that purpose;

 

(d)     of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of the Common Stock for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose;

 

(e)     of the happening of any event that requires the Company to make changes
in any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made); and

 

 
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(f)     if at any time the representations and warranties of the Company
contained in any underwriting agreement contemplated by Section 3.12 cease to be
true and correct.

 

3.9     Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration
statement referred to in Section 3.8(c) at the earliest practicable time.

 

3.10     Upon the occurrence of any event contemplated by Section 3.7 or 3.8(e)
and subject to the Company’s rights under Section 4, the Company shall promptly
prepare a post-effective amendment to such registration statement or a
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to the Holders and any underwriters, the
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

 

3.11     Use reasonable best efforts to procure the cooperation of the Company’s
transfer agent in settling any offering or sale of Registrable Securities,
including with respect to the transfer of physical stock certificates into
book-entry form in accordance with any procedures reasonably requested by the
Holders or any managing underwriter(s).

 

3.12     In the event of an underwritten offering pursuant to Section 1.1 or
Section 1.4 enter into an underwriting agreement in customary form, scope and
substance and take all such other actions reasonably requested by the Holders of
a majority of the Registrable Securities being sold in connection therewith or
by the managing underwriter(s), if any, to expedite or facilitate the
underwritten disposition of such Registrable Securities, and in connection
therewith in any underwritten offering (including making members of management
and executives of the Company available to participate in “road shows,” similar
sales events and other marketing activities), (a) make such representations and
warranties to the Holders that are selling shareholders and the managing
underwriter(s), if any, with respect to the business of the Company and its
subsidiaries, and the Shelf Registration Statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, in customary form, substance and scope, and, if true, confirm the same if
and when requested, (b) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing
underwriter(s), if any, covering the matters customarily covered in such
opinions requested in underwritten offerings, (c) use its reasonable best
efforts to obtain “cold comfort” letters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any business acquired by the Company for which financial
statements and financial data are included in the applicable registration
statement) who have certified the financial statements included in such
registration statement, addressed to each of the managing underwriter(s), if
any, such letters to be in customary form and covering matters of the type
customarily covered in “cold comfort” letters, (d) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures customary in underwritten offerings, and (e) deliver such documents
and certificates as may be reasonably requested by the Holders of a majority of
the Registrable Securities being sold in connection therewith, their counsel and
the managing underwriter(s), if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (a) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.

 

3.13     Make available for inspection by a representative of Holders that are
selling shareholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where normally kept, during reasonable business hours, financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information,
in each case, reasonably requested by any such representative, managing
underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.

 

 
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3.14     Cause all such Registrable Securities to be listed on each securities
exchange on which the same class of securities issued by the Company are then
listed or, if the same class of securities is not then listed on any securities
exchange, use its reasonable best efforts to cause all such Registrable
Securities of such class to be listed on NASDAQ.

 

3.15     If requested by Holders of a majority of the Registrable Securities
being registered and/or sold in connection therewith, or the managing
underwriter(s), if any, promptly include in a prospectus supplement or amendment
such information as the Holders of a majority of the Registrable Securities
being registered and/or sold in connection therewith or managing underwriter(s),
if any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has
received such request.

 

3.16     Timely provide to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

SECTION 4.     Suspension of Sales. Upon receipt of written notice from the
Company that a registration statement, prospectus or prospectus supplement
contains or may contain an untrue statement of a material fact or omits or may
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that circumstances exist that make
inadvisable use of such registration statement, prospectus or prospectus
supplement, each Holder of Registrable Securities shall forthwith discontinue
disposition of Registrable Securities pursuant to such registration statement
until such Holder has received copies of a supplemented or amended prospectus or
prospectus supplement, or until such Holder is advised in writing by the Company
that the use of the prospectus and, if applicable, prospectus supplement may be
resumed, 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 and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice (each such suspension, a “Suspension Period”). No
single Suspension Period shall exceed thirty (30) consecutive days, and during
any three hundred sixty-five (365) day period, the aggregate of all Suspension
Periods shall not exceed an aggregate of sixty (60) days.

 

SECTION 5.     Termination of Registration Rights. A Holder’s registration
rights as to any securities held by such Holder (and its Affiliates, partners,
members and former members) shall not be available unless such securities are
Registrable Securities.

 

SECTION 6.     Furnishing Information.

 

6.1     The Holders shall not use any free writing prospectus (as defined in
Rule 405) in connection with the sale of Registrable Securities without the
prior written consent of the Company.

 

6.2     It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 3 as to a selling Holder that such selling
Holder, and the underwriters, if any, 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 registered offering of their Registrable Securities.

 

 
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SECTION 7.     Indemnification.

 

7.1     The Company agrees to indemnify each Holder and, if a Holder is a Person
other than an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each Person, if any, that controls a Holder
within the meaning of the Securities Act (each, an “Indemnitee”), against any
and all Losses, joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents
incorporated therein by reference or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto);
or any omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that the Company shall not be
liable to such Indemnitee in any such case to the extent that any such Loss is
based solely upon (i) an untrue statement or omission made in such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto or contained in
any free writing prospectus (as such term is defined in Rule 405) prepared by
the Company or authorized by it in writing for use by such Holder (or any
amendment or supplement thereto), in reliance upon and in conformity with
information regarding such Indemnitee or its plan of distribution or ownership
interests which was furnished in writing to the Company by such Indemnitee
expressly for use in connection with such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (ii) offers or sales effected by or on
behalf such Indemnitee “by means of” (as defined in Rule 159A) a “free writing
prospectus” (as defined in Rule 405) that was not authorized in writing by the
Company. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of an Indemnitee and shall survive the
transfer of the Registrable Securities by Holders.

 

7.2     Indemnification Procedures.

 

(a)     If any proceeding shall be brought or asserted against any Indemnitee,
such Indemnitee shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnitee and the payment of all
reasonable fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnitee to give such notice shall not
relieve the Company of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have materially and adversely
prejudiced the Company.

 

(b)     An Indemnitee shall have the right to employ separate counsel in any
such proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee or
Indemnitees unless: (1) the Company has agreed in writing to pay such fees and
expenses; (2) the Company shall have failed promptly to assume the defense of
such proceeding and to employ counsel reasonably satisfactory to such Indemnitee
in any such proceeding; or (3) the named parties to any such proceeding
(including any impleaded parties) include both such Indemnitee and the Company,
and such Indemnitee shall have been advised by counsel that a conflict of
interest exists if the same counsel were to represent such Indemnitee and the
Company; provided, that the Company shall not be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all
Indemnitees. The Company shall not be liable for any settlement of any such
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. The Company shall not, without
the prior written consent of the Indemnitee, effect any settlement of any
pending proceeding in respect of which any Indemnitee is a party, unless such
settlement includes an unconditional release of such Indemnitee from all
liability on claims that are the subject matter of such proceeding.

 

 
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(c)     Subject to the terms of this Agreement, all fees and expenses of the
Indemnitee (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such proceeding in a manner
not inconsistent with this Section 7.2) shall be paid to the Indemnitee, as
incurred, within twenty (20) business days of written notice thereof to the
Company; provided, that the Indemnitee shall promptly reimburse the Company for
that portion of such fees and expenses applicable to such actions for which such
Indemnitee is finally judicially determined to not be entitled to
indemnification hereunder. The failure to deliver written notice to the Company
within a reasonable time of the commencement of any such action shall not
relieve the Company of any liability to the Indemnitee under this Section 7,
except to the extent that the Company is materially and adversely prejudiced in
its ability to defend such action.

 

7.3     If the indemnification provided for in Section 7.1 is unavailable to an
Indemnitee with respect to any Losses or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Indemnitee, on the one hand, and the Company, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of the Company, on the one hand, and of the Indemnitee, on the other hand,
shall be determined by reference to, among other factors, whether the untrue
statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; the Company and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 7.3
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in Section
7.1. No Indemnitee guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from the
Company if the Company was not guilty of such fraudulent misrepresentation.

 

7.4     The indemnity and contribution agreements contained in this Section 7
are in addition to any liability that the Company may have to the Indemnitees.

 

SECTION 8.     Assignment of Registration Rights. The rights of the Holders to
registration of Registrable Securities pursuant to Section 1 may be assigned by
the Holders to a transferee or assignee of Registrable Securities; provided,
however, that the transferor shall, within ten (10) days after such transfer,
furnish to the Company written notice of the name and address of such transferee
or assignee and the number and type of Registrable Securities that are being
assigned and such transferee or assignee of Registrable Securities shall agree
to be bound by the terms of this Agreement.

 

SECTION 9.     Holdback. With respect to any underwritten offering of
Registrable Securities by the Holders pursuant to this Agreement, the Company
agrees not to effect (other than pursuant to such registration or pursuant to a
Special Registration) any public sale or distribution, or to file any
registration statement (other than such registration or a Special Registration)
covering any of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the period not to exceed
ten (10) days prior and ninety (90) days following the effective date of such
offering or such longer period up to ninety (90) days as may be requested by the
managing underwriter. The Company also agrees to cause each of its directors and
senior executive officers to execute and deliver customary lockup agreements in
such form and for such time period up to ninety (90) days as may be requested by
the managing underwriter. “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 successor form) or (b) shares of equity
securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants, customers, lenders or
vendors of the Company or its subsidiaries or in connection with dividend
reinvestment plans.

 

 
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SECTION 10.     Rule 144; Rule 144A 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:

 

10.1     make and keep adequate current public information with respect to the
Company available, as those terms are understood and defined in Rule 144(c)(1)
or any similar or analogous rule promulgated under the Securities Act, at all
times after the effective date of this Agreement;

 

10.2     so long as a Holder owns any Registrable Securities, furnish to such
Holder(s) forthwith upon request: (a) a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 under the Securities
Act and of the Exchange Act; (b) a copy of the most recent annual or quarterly
report of the Company; and (c) such other reports and documents as the Holder(s)
may reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration; and

 

10.3     to take such further action as any Holder may reasonably request, all
to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act.

 

SECTION 11.     Defined Terms. As used in this Agreement, the following terms
shall have the following respective meanings:

 

11.1     “Affiliate” means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with, such other
Person provided that no security holder of the Company shall be deemed to be an
Affiliate of any other security holder or of the Company or any of its
subsidiaries solely by reason of any investment in the Company. For purposes of
this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”) when used with respect to any
Person, means the possession, directly or indirectly, of the power to cause the
direction of management or policies of such Person, whether through the
ownership of voting securities by contract or otherwise.

 

11.2     “Effective Date” means the date that the Shelf Registration Statement
filed pursuant to Section 1.1 is first declared effective by the SEC.

 

11.3     “Holders’ Counsel” means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being
registered.

 

11.4     “Initiating Holders” means any Holder or Holders who in the aggregate
hold not less than 25% of the outstanding Registrable Securities.

 

11.5     “Losses” means any and all losses, damages, reasonable costs,
reasonable expenses (including reasonable attorneys’ fees and disbursements),
liabilities, settlement payments, awards, judgments, fines, obligations, claims,
and deficiencies of any kind.

 

 
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11.6     “Person” means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, governmental entity or other entity of any kind, and
shall include any successor (by merger or otherwise) of such entity.

 

11.7     “Register,” “registered” and “registration” shall refer to a
registration effected by preparing and (a) filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement or (b) filing a prospectus and/or prospectus supplement
in respect of an appropriate effective registration statement.

 

11.8     “Registrable Securities” means (a) all Common Stock issued in the
Offering and (b) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in clause (a) by way of conversion,
exercise or exchange thereof or stock dividend or stock split or in connection
with a combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, provided that,
once issued, such securities shall not be Registrable Securities when (i) they
are sold pursuant to an effective registration statement under the Securities
Act, (ii) they may be immediately sold pursuant to Rule 144 without limitation
thereunder on volume or manner of sale and without the requirement for the
Company to be in compliance with the current public information required under
Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (iii) they shall have ceased
to be outstanding or (iv) they have been sold in a private transaction in which
the transferor’s rights under this Agreement are not assigned to the transferee
of the securities. No Registrable Securities may be registered under more than
one registration statement at one time.

 

11.9     “Registration Expenses” means all expenses incurred by the Company in
effecting any registration pursuant to this Agreement (whether or not any
registration or prospectus becomes effective or final) or otherwise complying
with its obligations under this Agreement, including, without limitation, all
registration, filing and listing fees, printing expenses, fees and disbursements
of counsel for the Company, blue sky fees and expenses, expenses incurred in
connection with any “road show,” the reasonable fees and disbursements of
Holders’ Counsel (not to exceed $100,000), and expenses of the Company’s
independent accountants in connection with any regular or special reviews or
audits incident to or required by any such registration, but shall not include
Selling Expenses and the compensation of regular employees of the Company, which
shall be paid in any event by the Company.

 

11.10     “Rule 158,” “Rule 159A,” “Rule 405” and “Rule 415” mean, in each case,
such rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.

 

11.11     “SEC Guidance” means (A) any publicly-available written or oral
guidance, comments, requirements or requests of the SEC staff and (B) the
Securities Act.

 

11.12     “Selling Expenses” means all 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 Holders’ Counsel included in Registration Expenses).

 

SECTION 12.     Forfeiture of Rights. At any time, any holder of Registrable
Securities (including any Holder) may elect to forfeit its rights set forth in
this Agreement from that date forward; provided, that a Holder forfeiting such
rights shall nonetheless be entitled to participate under Sections 1.4 – 1.7 in
any Pending Underwritten Offering to the same extent that such Holder would have
been entitled to if the holder had not withdrawn; and provided, further, that no
such forfeiture shall terminate a Holder’s rights or obligations under Section 7
with respect to any prior registration or Pending Underwritten Offering.
“Pending Underwritten Offering” means, with respect to any Holder forfeiting its
rights pursuant to this Section 12, any underwritten offering of Registrable
Securities in which such Holder has advised the Company of its intent to
register its Registrable Securities either pursuant to Section 1.1 or 1.4 prior
to the date of such Holder’s forfeiture.

 

 
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SECTION 13     Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, e-mail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:

 

if to the Company, to:

 

First Federal Bancshares of Arkansas, Inc.

1401 Highway 62-65 North,

Harrison, Arkansas 72601

Attention: Christopher M. Wewers

Facsimile: (501) 907-5351

E-mail: cwewers@ffbh.com

 

with a copy to:

 

Kutak Rock LLP

124 W. Capitol Ave.

Suite 2000

Little Rock, Arkansas 72201

Attention: Daniel L. Heard

Facsimile: (501) 975-3001

E-mail: daniel.heard@kutakrock.com

 

 

or to such other person at such other place as the Company shall designate to
the Holders in writing; and

 

if to a Holder, at its address as set forth at the end of this Agreement, or at
such other address or addresses as may have been furnished to the Company in
writing.

 

SECTION 14.     Amendments. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and each of the
Holders. Any amendment or waiver effected in accordance with this Section 14
shall be binding upon the Company and each Holder and their respective
successors and assigns.

 

SECTION 15.     Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.

 

SECTION 16.     Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

 

SECTION 17.     Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Arkansas applicable to contracts
made and to be performed entirely within such state, without giving effect to
its conflicts of law principles.

 

 
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SECTION 18.     Jurisdiction. The parties hereby agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Eastern
District of Arkansas sitting in Little Rock, Arkansas, so long as such court
shall have subject matter jurisdiction over such suit, action or proceeding or,
if it does not have subject matter jurisdiction, in any Arkansas state court
sitting in Little Rock, Arkansas, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum.  Process in any
such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.  The
parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the state and federal courts referred to above for any
actions, suits or proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby.

 

SECTION 19.     Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties. Facsimile signatures shall be deemed original
signatures.

 

SECTION 20.     Entire Agreement. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any of the Holders make any representation,
warranty, covenant or undertaking with respect to such matters. Each party
expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this Agreement.

 

SECTION 21.     Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurance as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

 

[Remainder of Page Left Intentionally Blank]

 

 

 
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IN WITNESS WHEREOF, the Company and each of the Holders have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

 

 

COMPANY:

         

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

                     

By:

    Name: Christopher M. Wewers     Title: President and Chief Executive Officer
 

 

 

 
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IN WITNESS WHEREOF, the Company and each of the Holders have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

 

 

HOLDER:

                           

By:

    Name:          

Address:

                           

Telephone:

         

Email Address:

 

 

 

 

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