Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is dated as of June 30, 2015 and
is made by and among ConnectOne Bancorp, Inc., a New Jersey corporation (the
“Company”), and the purchasers named in Schedule 1 to the Purchase Agreement (as
defined below) (collectively, the “Purchasers”).

 

This Agreement is made pursuant to the Subordinated Note Purchase Agreement
dated June 30, 2015 by and among the Company and the Purchasers (the “Purchase
Agreement”), which provides for the sale by the Company to the Purchasers of
$50,000,000 aggregate principal amount of the Company’s 5.75% Fixed to Floating
Rate Subordinated Notes due 2025, which were issued on June 30, 2015 (the
“Subordinated Notes”). In order to induce the Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the Purchasers’
obligations thereunder, the Company has agreed to provide to the Purchasers and
their respective direct and indirect transferees and assigns the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

1.        Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

 

“1933 Act” shall mean the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

 

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the SEC promulgated thereunder.

 

“Additional Interest” shall have the meaning set forth in Section 2(e) hereof.

 

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

 

“Closing Date” shall mean June 30, 2015.

 

“Company” shall have the meaning set forth in the preamble to this Agreement and
also includes the Company’s successors.

 

“Depositary“ shall mean The Depository Trust Company, or any other depositary
appointed by the Company, including any agent thereof; provided, however, that
any such depositary must at all times have an address in the Borough of
Manhattan, The City of New York.

 

“Event Date” shall have the meaning set forth in Section 2(e).

 

“Exchange Offer” shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration” shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration Statement” shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) covering the Registrable Securities, and all

 

amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.

 

“Exchange Securities” shall mean the 5.75% Fixed to Floating Rate Subordinated
Notes due 2025 issued by the Company under the Indenture containing terms
identical to the Subordinated Notes (except that (i) interest thereon shall
accrue from the last date to which interest has been paid or duly provided for
on the Subordinated Notes or, if no such interest has been paid or duly provided
for, from the Interest Accrual Date, (ii) provisions relating to an increase in
the stated rate of interest thereon upon the occurrence of a Registration
Default shall be eliminated, (iii) the transfer restrictions and legends
relating to restrictions on ownership and transfer thereof as a result of the
issuance of the Subordinated Notes without registration under the 1933 Act shall
be eliminated, (iv) the denominations thereof shall be $1,000 and integral
multiples of $1,000 and (v) all of the Exchange Securities will be represented
by one or more global Exchange Securities in book-entry form unless exchanged
for Exchange Securities in definitive certificated form under the circumstances
provided in the Indenture to be offered to Holders of Registrable Securities in
exchange for Registrable Securities pursuant to the Exchange Offer).

 

“FINRA” shall mean the Financial Industry Regulatory Authority, Inc.

 

“Holders” shall mean (i) the Purchasers, for so long as they own any Registrable
Securities, and each of their respective successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture and (ii) each Participating Broker-Dealer that holds
Exchange Securities for so long as such Participating Broker-Dealer is required
to deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities.

 

“Indenture” shall mean the indenture, dated as of June 30, 2015, by and between
the Company and U.S. Bank National Association, as trustee, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.

 

“Interest Accrual Date” means June 30, 2015.

 

“Majority Holders” shall mean the Holders of a majority of the aggregate
principal amount of Registrable Securities outstanding, excluding Exchange
Securities referred to in clause (ii) of the definition of “Holders” above;
provided that whenever the consent or approval of Holders of a specified
percentage of Registrable Securities or Exchange Securities is required
hereunder, Registrable Securities and Exchange Securities held by the Company or
any of its affiliates (as such term is defined in Rule 405 under the 1933 Act)
shall be disregarded in determining whether such consent or approval was given
by the Holders of such required percentage.

 

“Notifying Broker-Dealer” shall have the meaning set forth in Section 3(f).

 

“Participating Broker-Dealer” shall have the meaning set forth in Section 3(f).

 

“Person” shall mean an individual, partnership, joint venture, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including a prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Shelf Registration Statement, and by all other
amendments and

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supplements to a prospectus, including post-effective amendments, and in each
case including all material incorporated or deemed to be incorporated by
reference therein.

 

“Purchase Agreement” shall have the meaning set forth in the preamble to this
Agreement.

 

“Purchasers” shall have the meaning set forth in the preamble of this Agreement.

 

“Registrable Securities” shall mean the Subordinated Notes; provided, however,
that any Subordinated Notes shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Subordinated Notes shall have been
declared effective under the 1933 Act and such Subordinated Notes shall have
been disposed of pursuant to such Registration Statement, (ii) such Subordinated
Notes shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii) such
Subordinated Notes shall have ceased to be outstanding, or (iv) such
Subordinated Notes have been exchanged for Exchange Securities which have been
registered pursuant to the Exchange Offer Registration Statement upon
consummation of the Exchange Offer unless, in the case of any Exchange
Securities referred to in this clause (iv), such Exchange Securities are held by
Participating Broker-Dealers or otherwise are not freely tradable without any
limitations or restrictions under the 1933 Act (in which case such Exchange
Securities will be deemed to be Registrable Securities until such time as such
Exchange Securities are sold to a purchaser in whose hands such Exchange
Securities are freely tradeable without any limitations or restrictions under
the 1933 Act).

 

“Registration Default” shall have the meaning set forth in Section 2(e).

 

“Registration Expenses” shall mean any and all expenses incident to performance
of or compliance by the Company with this Agreement, including without
limitation: (i) all SEC, stock exchange or FINRA registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state or
other securities or blue sky laws and compliance with the rules of FINRA
(including reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with qualification of any of the Exchange Securities or
Registrable Securities under state or other securities or blue sky laws and any
filing with and review by FINRA), (iii) all expenses of any Persons in
preparing, printing and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, any underwriting agreements, securities
sales agreements, certificates representing the Subordinated Notes or Exchange
Securities and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) all fees and expenses
incurred in connection with the listing, if any, of any of the Subordinated
Notes or Exchange Securities on any securities exchange or exchanges or on any
quotation system, (vi) all fees and disbursements relating to the qualification
of the Indenture under applicable securities laws, (vii) the fees and
disbursements of counsel for the Company and the fees and expenses of
independent public accountants for the Company or for any other Person, business
or assets whose financial statements are included in any Registration Statement
or Prospectus, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance, (viii) the
fees and expenses of a “qualified independent underwriter” as defined by FINRA
Rule 5121 (if required by FINRA rules) and the fees and disbursements of its
counsel, (ix) the fees and expenses of the Trustee, any registrar, any
depositary, any paying agent, any escrow agent or any custodian, in each case
including fees and disbursements of their respective counsel, and (x) in the
case of an underwritten offering, any fees and disbursements of the underwriters
customarily paid by issuers or sellers of securities and the fees and expenses
of any special experts retained by the Company in connection with any
Registration Statement but excluding (except as otherwise provided herein) fees
of counsel to the underwriters or the Holders and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.

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“Registration Statement” shall mean any registration statement of the Company
relating to any offering of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement (including, without limitation, any
Exchange Offer Registration Statement and any Shelf Registration Statement), and
all amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Shelf Registration” shall mean a registration effected pursuant to Section 2(b)
hereof.

 

“Shelf Registration Statement” shall mean a “shelf” registration statement of
the Company pursuant to the provisions of Section 2(b) of this Agreement which
covers all of the Registrable Securities, as the case may be, on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated or deemed
to be incorporated by reference therein.

 

“Subordinated Notes” shall have the meaning set forth in the preamble to this
Agreement.

 

“TIA” shall mean the Trust Indenture Act of 1939, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

 

“Trustee” shall mean the trustee with respect to the Subordinated Notes and the
Exchange Securities under the Indenture.

 

“Underwriters” shall have the meaning set forth in Section 5(a).

 

For purposes of this Agreement, (i) all references in this Agreement to any
Registration Statement, preliminary prospectus or Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval
system; (ii) all references in this Agreement to financial statements and
schedules and other information which is “contained,” “included” or “stated” in
any Registration Statement, preliminary prospectus or Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Registration Statement,
preliminary prospectus or Prospectus, as the case may be; (iii) all references
in this Agreement to amendments or supplements to any Registration Statement,
preliminary prospectus or Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is incorporated or deemed to be
incorporated by reference in such Registration Statement, preliminary prospectus
or Prospectus, as the case may be; (iv) all references in this Agreement to Rule
144, Rule 144A, Rule 405 or Rule 415 under the 1933 Act, and all references to
any sections or subsections thereof or terms defined therein, shall in each case
include any successor provisions thereto; and (v) all references in this
Agreement to days (but not to business days) shall mean calendar days.

 

2.        Registration Under the 1933 Act.

 

(a)      Exchange Offer Registration. The Company shall (A) file with the SEC on
or prior to the 90th day after the Closing Date an Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange all of
the Registrable Securities for a like aggregate principal amount of Exchange
Securities, (B) use its reasonable best efforts to cause such Exchange Offer

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Registration Statement to be declared effective by the SEC no later than the
120th day after the Closing Date, (C) use its reasonable best efforts to cause
such Registration Statement to remain effective until the closing of the
Exchange Offer and (D) use its reasonable best efforts to consummate the
Exchange Offer no later than 45 days after the effective date of the Exchange
Offer Registration Statement. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for Exchange Securities (assuming
that such Holder is not an affiliate of the Company within the meaning of Rule
405 under the 1933 Act, acquires the Exchange Securities in the ordinary course
of such Holder’s business and has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of distributing such
Exchange Securities) to trade such Exchange Securities from and after their
receipt without any limitations or restrictions under the 1933 Act or under the
securities or blue sky laws of the states of the United States.

 

In connection with the Exchange Offer, the Company shall:

 

(i)       promptly mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;

 

(ii)      keep the Exchange Offer open for not less than 20 business days (or
longer if required by applicable law) after the date notice thereof is mailed to
the Holders and, during the Exchange Offer, offer to all Holders who are legally
eligible to participate in the Exchange Offer the opportunity to exchange their
Registrable Securities for Exchange Securities;

 

(iii)     use the services of a depositary with an address in the Borough of
Manhattan, The City of New York for the Exchange Offer;

 

(iv)     permit Holders to withdraw tendered Registrable Securities at any time
prior to the close of business, Englewood Cliffs, New Jersey time, on the last
business day on which the Exchange Offer shall remain open, by sending to the
institution specified in the Prospectus or the related letter of transmittal or
related documents a telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Registrable Securities
delivered for exchange, and a statement that such Holder is withdrawing its
election to have such Subordinated Notes exchanged;

 

(v)      notify each Holder that any Registrable Security not tendered will
remain outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of Participating Broker-Dealers
as provided herein); and

 

(vi)     otherwise comply in all material respects with all applicable laws
relating to the Exchange Offer.

 

The Exchange Securities shall be issued under the Indenture, which shall be
qualified under the TIA. The Indenture shall provide that the Exchange
Securities and the Subordinated Notes shall vote and consent together on all
matters as a single class and shall constitute a single series of debt
securities issued under the Indenture.

 

As soon as practicable after the close of the Exchange Offer, the Company shall:

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(i)       accept for exchange all Registrable Securities duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the terms of
the Exchange Offer Registration Statement and the letter of transmittal which is
an exhibit thereto;

 

(ii)      deliver, or cause to be delivered, to the Trustee for cancellation all
Registrable Securities so accepted for exchange by the Company; and

 

(iii)     cause the Trustee promptly to authenticate and deliver Exchange
Securities to each Holder of Registrable Securities so accepted for exchange
equal in principal amount to the principal amount of the Registrable Securities
of such Holder so accepted for exchange.

 

Interest on each Exchange Security will accrue from the last date on which
interest was paid or duly provided for on the Subordinated Notes surrendered in
exchange therefor or, if no interest has been paid or duly provided for on such
Subordinated Notes, from the Interest Accrual Date. The Exchange Offer shall not
be subject to any conditions, other than (i) that the Exchange Offer, or the
making of any exchange by a Holder, does not violate any applicable law or any
applicable interpretation of the staff of the SEC, (ii) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer which, in the
Company’s judgment, would reasonably be expected to impair the ability of the
Company to proceed with the Exchange Offer, and (iii) that the Holders tender
the Registrable Securities to the Company in accordance with the Exchange Offer.
Each Holder of Registrable Securities (other than Participating Broker-Dealers)
who wishes to exchange such Registrable Securities for Exchange Securities in
the Exchange Offer will be required to represent that (i) it is not an affiliate
(as defined in Rule 405 under the 1933 Act) of the Company, (ii) any Exchange
Securities to be received by it will be acquired in the ordinary course of
business and (iii) it has no arrangement with any Person to participate in the
distribution (within the meaning of the 1933 Act) of the Exchange Securities,
and shall be required to make such other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to render
the use of Form S-4 or another appropriate form under the 1933 Act available.

 

(b)        Shelf Registration. (i) If, because of any change in law or
applicable interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason (A) the Exchange Offer Registration Statement is
not declared effective within 120 days following the Closing Date or (B) the
Exchange Offer is not consummated within 45 days after effectiveness of the
Exchange Offer Registration Statement (provided that if the Exchange Offer
Registration Statement shall be declared effective after such 120-day period or
if the Exchange Offer shall be consummated after such 45-day period, then the
Company’s obligations under this clause (ii) arising from the failure of the
Exchange Offer Registration Statement to be declared effective within such
120-day period or the failure of the Exchange Offer to be consummated within
such 45-day period, respectively, shall terminate), or (iii) if any Holder is
not eligible to participate in the Exchange Offer or elects to participate in
the Exchange Offer but does not receive Exchange Securities which are freely
tradeable without any limitations or restrictions under the 1933 Act, the
Company shall, at its cost:

 

(A)        as promptly as practicable, but no later than (a) the 180th day after
the Closing Date or (b) the 60th day after any such filing obligation arises,
whichever is later, file with the SEC a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by the Majority
Holders of such Registrable Securities and set forth in such Shelf Registration
Statement;

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(B)        use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the SEC as promptly as practicable, but in
no event later than (a) the 225th day after the Closing Date or (b) the 105th
day after an obligation to file with the SEC a Shelf Registration Statement
arises, whichever is later. In the event that the Company is required to file a
Shelf Registration Statement pursuant to clause (iii) above, the Company shall
file and use its reasonable best efforts to have declared effective by the SEC
both an Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities and a Shelf Registration Statement (which
may be a combined Registration Statement with the Exchange Offer Registration
Statement) with respect to offers and sales of Registrable Securities held by
such Holder described in clause (iii) above;

 

(C)        use its reasonable best efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as required, in order
to permit the Prospectus forming part thereof to be usable by Holders for a
period of two years after the latest date on which any Subordinated Notes are
originally issued by the Company (subject to extension pursuant to the last
paragraph of Section 3) or, if earlier, when all of the Registrable Securities
covered by such Shelf Registration Statement (i) have been sold pursuant to the
Shelf Registration Statement in accordance with the intended method of
distribution thereunder, or (ii) cease to be Registrable Securities; and

 

(D)        notwithstanding any other provisions hereof, use its best efforts to
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any Prospectus forming a part thereof and any supplements thereto comply in all
material respects with the 1933 Act, (ii) any Shelf Registration Statement and
any amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement and any
amendment or supplement to such Prospectus does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, clauses (ii) and (iii) shall not apply
to any statement in or omission from a Shelf Registration Statement or a
Prospectus made in reliance upon and conformity with information relating to any
Holder, Participating Broker-Dealer or underwriter of Registrable Securities
furnished to the Company in writing by such Holder, Participating Broker-Dealer
or underwriter, respectively, expressly for use in such Shelf Registration
Statement or Prospectus.

 

The Company further agrees, if necessary, to supplement or amend the Shelf
Registration Statement if reasonably requested by the Majority Holders with
respect to information relating to the Holders and otherwise as required by
Section 3(b) below, to use its reasonable best efforts to cause any such
amendment to become effective and such Shelf Registration Statement to become
usable as soon as practicable thereafter and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.

 

(c)        Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) and 2(b) and, in the
case of any Shelf Registration Statement, will reimburse the Holders for the
reasonable fees and disbursements of one counsel (in addition to any local
counsel) designated in writing by the Majority Holders to act as counsel for the
Holders of the Registrable Securities in connection therewith. Each Holder shall
pay all fees and disbursements of its counsel other than as set forth in the
preceding sentence or in the definition of Registration Expenses and all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder’s Registrable Securities pursuant to a
Shelf Registration Statement.

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(d)        Effective Registration Statement.

 

(i)        The Company shall be deemed not to have used its reasonable best
efforts to cause the Exchange Offer Registration Statement or any Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite periods set forth herein if the Company voluntarily takes
any action that could reasonably be expected to result in any such Registration
Statement not being declared effective or remaining effective or in the Holders
of Registrable Securities (including, under the circumstances contemplated by
Section 3(f) hereof, Exchange Securities) covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period unless
(A) such action is required by applicable law or (B) such action is taken by the
Company in good faith and for valid business reasons (but not including
avoidance of the Company’s obligations hereunder), including the acquisition or
divestiture of assets or a material corporate transaction or event so long as
the Company promptly complies with the notification requirements of Section 3(k)
hereof, if applicable. Nothing in this paragraph shall prevent the accrual of
Additional Interest on any Registrable Securities or Exchange Securities.

 

(ii)        An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof shall
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Registration Statement shall be deemed not to have been effective during the
period of such interference until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume.

 

(iii)      During any 365-day period, the Company may, by notice as described in
Section 3(e), suspend the availability of a Shelf Registration Statement (and,
if the Exchange Offer Registration Statement is being used in connection with
the resale of Exchange Securities by Participating Broker-Dealers as
contemplated by Section 3(f), the Exchange Offer Registration Statement) and the
use of the related Prospectus for up to two periods of up to 45 consecutive days
each (except for the consecutive 45-day period immediately prior to final
maturity of the Subordinated Notes), but no more than an aggregate of 90 days
during any 365-day period, upon the happening of any event or the discovery of
any fact referred to in Section 3(e)(vi), but subject to compliance by the
Company with its obligations under the last paragraph of Section 3.

 

(e)        Increase in Interest Rate. In the event that:

 

(i)        the Exchange Offer Registration Statement is not filed with the SEC
on or prior to the 90th day following the Closing Date, or

 

(ii)       the Exchange Offer Registration Statement is not declared effective
by the SEC on or prior to the 120th day following the Closing Date, or

 

(iii)      the Exchange Offer is not consummated on or prior to the 45th day
following the effective date of the Exchange Offer Registration Statement, or

 

(iv)      if required, a Shelf Registration Statement is not filed with the SEC
on or prior to (A) the 180th day following the Closing Date or (B) the 60th day
after the obligation to file with the SEC a Shelf Registration Statement arises,
whichever is later, or

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(v)        if required, a Shelf Registration Statement is not declared effective
on or prior to (a) the 225th day following the Closing Date or (b) the 105th day
after an obligation to file with the SEC a Shelf Registration Statement arises,
whichever is later, or

 

(vi)        a Shelf Registration Statement is declared effective by the SEC but
such Shelf Registration Statement ceases to be effective or such Shelf
Registration Statement or the Prospectus included therein ceases to be usable in
connection with resales of Registrable Securities for any reason and (A) the
aggregate number of days in any consecutive 365-day period for which the Shelf
Registration Statement or such Prospectus shall not be effective or usable
exceeds 90 days, (B) the Shelf Registration Statement or such Prospectus shall
not be effective or usable for more than two periods (regardless of duration) in
any consecutive 365-day period or (C) the Shelf Registration Statement or such
Prospectus shall not be effective or usable for a period of more than 45
consecutive days, or

 

(vii)      the Exchange Offer Registration Statement is declared effective by
the SEC but, if the Exchange Offer Registration Statement is being used in
connection with the resale of Exchange Securities as contemplated by Section
3(f) of this Agreement, the Exchange Offer Registration Statement ceases to be
effective or the Exchange Offer Registration Statement or the Prospectus
included therein ceases to be usable in connection with resales of Exchange
Securities for any reason during the 180-day period referred to in Section
3(f)(B) of this Agreement (as such period may be extended pursuant to the last
paragraph of Section 3 of this Agreement) and (A) the aggregate number of days
in any consecutive 365-day period for which the Exchange Offer Registration
Statement or such Prospectus shall not be effective or usable exceeds 90 days,
(B) the Exchange Offer Registration Statement or such Prospectus shall not be
effective or usable for more than two periods (regardless of duration) in any
consecutive 365-day period or (C) the Exchange Offer Registration Statement or
the Prospectus shall not be effective or usable for a period of more than 45
consecutive days,

 

(each of the events referred to in clauses (i) through (vii) above being
hereinafter called a “Registration Default”), the per annum interest rate borne
by the Registrable Securities shall be increased (“Additional Interest”) by
one-quarter of one percent (0.25%) per annum immediately following such 90-day
period in the case of clause (i) above, immediately following such 120-day
period in the case of clause (ii) above, immediately following such 45-day
period in the case of clause (iii) above, immediately following any such 180-day
period or 60-day period, whichever ends later, in the case of clause (iv) above,
immediately following any such 225-day period or 105-day period, as applicable,
in the case of clause (v) above, immediately following the 90th day in any
consecutive 365-day period, as of the first day of the third period in any
consecutive 365-day period or immediately following the 45th consecutive day,
whichever occurs first, that a Shelf Registration Statement shall not be
effective or a Shelf Registration Statement or the Prospectus included therein
shall not be usable as contemplated by clause (vi) above, or immediately
following the 90th day in any consecutive 365-day period, as of the first day of
the third period in any consecutive 365-day period or immediately following the
45th consecutive day, whichever occurs first, that the Exchange Offer
Registration Statement shall not be effective or the Exchange Offer Registration
Statement or the Prospectus included therein shall not be usable as contemplated
by clause (vii) above, which rate will be increased by an additional one-quarter
of one percent (0.25%) per annum immediately following each 90-day period that
any Additional Interest continues to accrue under any circumstances; provided
that the aggregate increase in such annual interest rate may in no event exceed
one-half of one percent (0.50%) per annum. Upon the filing of the Exchange Offer
Registration Statement after the 90-day period described in clause (i) above,
the effectiveness of the Exchange Offer Registration Statement after the 120-day
period described in clause (ii) above, the consummation of the Exchange Offer
after the 45-day period described in clause (iii) above, the filing of the Shelf
Registration Statement after the 180-day period or 60-day period day, as the
case may be, described in clause (iv) above, the effectiveness of a

9

Shelf Registration Statement after the 225-day period or 105-day period, as
applicable, described in clause (v) above, or the Shelf Registration Statement
once again being effective or the Shelf Registration Statement and the
Prospectus included therein becoming usable in connection with resales of
Registrable Securities, as the case may be, in the case of clause (vi) above, or
the Exchange Offer Registration Statement once again becoming effective or the
Exchange Offer Registration Statement and the Prospectus included therein
becoming usable in connection with resales of Exchange Securities, as the case
may be, in the case of clause (vii) thereof, the interest rate borne by the
Subordinated Notes from the date of such filing, effectiveness, consummation or
resumption of effectiveness or usability, as the case may be, shall be reduced
to the original interest rate so long as no other Registration Default shall
have occurred and shall be continuing at such time and the Company is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, one or more Registration Defaults shall again occur,
the interest rate shall again be increased pursuant to the foregoing provisions.
Notwithstanding anything in this Agreement to the contrary, the Company will not
be obligated to pay any Additional Interest in the case of a Shelf Registration
Statement with respect to any Holder of Registrable Securities who fails to
timely provide all information with respect to Holder that is reasonably
requested by the Company to enable it to timely comply with its obligations
under Section 2(b).

 

The Company shall notify the Trustee within three business days after each and
every date on which an event occurs in respect of which Additional Interest is
required to be paid (an “Event Date”). Additional Interest shall be paid by
depositing with the Trustee, in trust, for the benefit of the Holders of
Registrable Securities, on or before the applicable interest payment date,
immediately available funds in sums sufficient to pay the Additional Interest
then due. The Additional Interest due shall be payable on each interest payment
date to the record Holder of Registrable Securities entitled to receive the
interest payment to be paid on such date as set forth in the Indenture. Each
obligation to pay Additional Interest shall be deemed to accrue from and
including the day following the applicable Event Date.

 

Anything herein to the contrary notwithstanding, any Holder who was, at the time
the Exchange Offer was pending and consummated, eligible to exchange, and did
not validly tender, its Subordinated Notes for Exchange Securities in the
Exchange Offer will not be entitled to receive any Additional Interest.

 

(f)        Specific Enforcement. Without limiting the remedies available to the
Holders or any Participating Broker-Dealer, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2(a) and
2(b) hereof may result in material irreparable injury to the Holders or the
Participating Broker-Dealers for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, any Holder and any Participating Broker-Dealer
may obtain such relief as may be required to specifically enforce the Company’s
obligations under Sections 2(a) and 2(b).

 

3.         Registration Procedures. In connection with the obligations of the
Company with respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall:

 

(a)        prepare and file with the SEC a Registration Statement or, if
required, Registration Statements, within the time periods specified in Section
2, on the appropriate form under the 1933 Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration Statement, be
available for the sale of the Registrable Securities by the selling Holders
thereof and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference all
financial statements required by the SEC to be filed therewith, and use its
reasonable best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof;

10

(b)        prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period;
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act and the 1934 Act with respect to the
disposition of all Registrable Securities covered by each Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the selling Holders thereof;

 

(c)        in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least ten business days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is being filed
and advising such Holders that the distribution of Registrable Securities will
be made in accordance with the method elected by the Majority Holders; (ii)
furnish to each Holder of Registrable Securities, to counsel for the Holders and
to each underwriter of an underwritten offering of Registrable Securities, if
any, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such other
documents as such Holder, counsel or underwriter may reasonably request,
including financial statements and schedules and, if such Holder, counsel or
underwriter so requests, all exhibits (including those incorporated by
reference) in order to facilitate the public sale or other disposition of the
Registrable Securities; and (iii) subject to the penultimate paragraph of this
Section 3, the Company hereby consents to the use of the Prospectus, including
each preliminary Prospectus, or any amendment or supplement thereto by each of
the Holders and underwriters of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by any Prospectus or any
amendment or supplement thereto;

 

(d)        use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or “blue sky” laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request, to cooperate with the Holders
and the underwriters of any Registrable Securities in connection with any
filings required to be made with FINRA, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d) or (ii) take any action which would subject it to general service
of process or taxation in any such jurisdiction if it is not then so subject;

 

(e)        in the case of a Shelf Registration, notify each Holder of
Registrable Securities and counsel for such Holders promptly and, if requested
by such Holder or counsel, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments or
supplements to a Registration Statement or Prospectus or for additional
information after a Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to such offering cease to be true and correct, (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vi) of the
happening of any event or the discovery of any facts during the period a Shelf
Registration Statement is effective which is contemplated in Section 2(d)(i) or
which makes any statement

11

made in such Shelf Registration Statement or the related Prospectus untrue in
any material respect or which constitutes an omission to state a material fact
in such Shelf Registration Statement or Prospectus and (vii) of any
determination by the Company that a post-effective amendment to a Registration
Statement would be appropriate. Without limitation to any other provisions of
this Agreement, the Company agrees that this Section 3(e) shall also be
applicable, mutatis mutandis, with respect to the Exchange Offer Registration
Statement and the Prospectus included therein to the extent that such Prospectus
is being used by Participating Broker-Dealers as contemplated by Section 3(f);

 

(f)        (A) in the case of an Exchange Offer, (i) include in the Exchange
Offer Registration Statement (1) a “Plan of Distribution” section covering the
use of the Prospectus included in the Exchange Offer Registration Statement by
broker-dealers who have exchanged their Registrable Securities for Exchange
Securities for the resale of such Exchange Securities and (2) a statement to the
effect that any such broker-dealers who wish to use the related Prospectus in
connection with the resale of Exchange Securities acquired as a result of
market-making or other trading activities will be required to notify the Company
to that effect, together with instructions for giving such notice (which
instructions shall include a provision for giving such notice by checking a box
or making another appropriate notation on the related letter of transmittal)
(each such broker-dealer who gives notice to the Company as aforesaid being
hereinafter called a “Notifying Broker-Dealer”), (ii) furnish to each Notifying
Broker-Dealer who desires to participate in the Exchange Offer, without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any broker-dealer who
holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities (a “Participating
Broker-Dealer”), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must deliver
a prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities, (iv) subject to the penultimate paragraph of
this Section 3, the Company hereby consents to the use of the Prospectus forming
part of the Exchange Offer Registration Statement or any amendment or supplement
thereto by any Notifying Broker-Dealer in connection with the sale or transfer
of Exchange Securities, and (v) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to participate in
the Exchange Offer the following provision:

 

“If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable Securities, it
represents that the Registrable Securities to be exchanged for Exchange
Securities were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus meeting
the requirements of the 1933 Act in connection with any resale of such Exchange
Securities pursuant to the Exchange Offer; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an “underwriter” within the meaning of the 1933 Act;”

 

(B)        to the extent any Notifying Broker-Dealer participates in the
Exchange Offer, (i) the Company shall use its reasonable best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement for a
period of 180 days (subject to extension pursuant to the last paragraph of this
Section 3) following the last date on which exchanges are accepted pursuant to
the Exchange Offer, and (ii) the Company will comply, insofar as relates to the
Exchange Offer Registration Statement, the Prospectus included therein and the
offering and sale of Exchange

12

Securities pursuant thereto, with its obligations under Section 2(b)(D), the
last paragraph of Section 2(b), Section 3(c), 3(d), 3(e), 3(g), 3(i), 3(j),
3(k), 3(n), 3(o), 3(p), 3(q) and 3(r), and the last three paragraphs of this
Section 3 as if all references therein to a Shelf Registration Statement, the
Prospectus included therein and the Holders of Registrable Securities referred,
mutatis mutandis, to the Exchange Offer Registration Statement, the Prospectus
included therein and the applicable Notifying Broker-Dealers and, for purposes
of this Section 3(f), all references in any such paragraphs or sections to the
“Majority Holders” shall be deemed to mean, solely insofar as relates to this
Section 3(f), the Notifying Broker-Dealers who are the Holders of the majority
in aggregate principal amount of the Exchange Securities which are Registrable
Securities; and

 

(C)        the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b) or 3(k) hereof, or take any other
action as a result of this Section 3(f), for a period exceeding 180 days
(subject to extension pursuant to the last paragraph of this Section 3) after
the last date on which exchanges are accepted pursuant to the Exchange Offer and
Notifying Broker-Dealers shall not be authorized by the Company to, and shall
not, deliver such Prospectus after such period in connection with resales
contemplated by this Section 3;

 

(g)        in the case of a Shelf Registration, furnish counsel for the Holders
of Registrable Securities and counsel for any underwriters of Registrable
Securities copies of any request by the SEC or any state securities authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information;

 

(h)        use its reasonable best effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide immediate notice to each Holder of the withdrawal of any such order;

 

(i)        in the case of a Shelf Registration, upon request furnish to each
Holder of Registrable Securities, without charge, at least one conformed copy of
each Registration Statement and any post-effective amendments thereto (without
documents incorporated or deemed to be incorporated therein by reference or
exhibits thereto, unless requested);

 

(j)        in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and cause such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and in a
form eligible for deposit with the Depositary and registered in such names as
the selling Holders or the underwriters, if any, may reasonably request in
writing at least two business days prior to the closing of any sale of
Registrable Securities;

 

(k)        in the case of a Shelf Registration, upon the occurrence of any event
or the discovery of any facts as contemplated by Section 3(e)(vi) hereof, use
its best efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain at the time of such delivery any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company agrees to notify each Holder
to suspend use of the Prospectus as promptly as practicable after the occurrence
of such an event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct such
misstatement

13

or omission. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus, as amended
or supplemented, as such Holder may reasonably request;

 

(l)        obtain CUSIP and ISIN numbers for all Exchange Securities or
Registrable Securities, as the case may be, not later than the effective date of
a Registration Statement, and provide the Trustee with printed or word-processed
certificates for the Exchange Securities or Registrable Securities, as the case
may be, in a form eligible for deposit with the Depositary;

 

(m)        (i) cause the Indenture to be qualified under the TIA in connection
with the registration of the Exchange Securities or Registrable Securities, as
the case may be, (ii) cooperate with the Trustee and the Holders to effect such
changes, if any, to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and (iii) execute, and use its
reasonable best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, if any, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner;

 

(n)        in the case of a Shelf Registration, the holders of a majority in
principal amount of the Registrable Securities registered pursuant to such Shelf
Registration Statement shall have the right to direct the Company to effect not
more than one underwritten registration and, in connection with such
underwritten registration, the Company shall enter into agreements (including
underwriting agreements or similar agreements) and take all other customary and
appropriate actions (including those reasonably requested by the holders of a
majority in principal amount of the Registrable Securities being sold) in order
to expedite or facilitate the disposition of such Registrable Securities and in
such connection, in a manner that is reasonable and customary:

 

(i)        make such representations and warranties to the Holders of such
Registrable Securities and the underwriters, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten offerings as
may be reasonably requested by such Holders and underwriters;

 

(ii)        obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, and the Holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder and the
underwriters, covering the matters customarily covered in opinions requested in
sales of securities or underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters;

 

(iii)       obtain “cold comfort” letters and updates thereof with respect to
such Shelf Registration Statement and the Prospectus included therein, all
amendments and supplements thereto and all documents incorporated or deemed to
be incorporated by reference therein from the Company’s independent certified
public accountants and from the independent certified public accountants for any
other Person or any business or assets whose financial statements are included
or incorporated by reference in the Shelf Registration Statement, each addressed
to the underwriters, and use reasonable best efforts to have such letters
addressed to the selling Holders of Registrable Securities, such letters to be
in customary form and covering matters of the type customarily covered in “cold
comfort” letters to underwriters in connection with similar underwritten
offerings and such letters to be delivered at the time of the pricing of such

14

underwritten registration with an update to such letter to be delivered at the
time of closing of such underwritten registration;

 

(iv)       if an underwriting agreement or other similar agreement is entered
into, cause the same to set forth indemnification and contributions provisions
and procedures substantially equivalent to the indemnification and contributions
provisions and procedures set forth in Section 5 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to Section 5
hereof or such other indemnification and contributions as shall be satisfactory
to the Company, the applicable underwriters and the Holders of the majority in
principal amount of the Registrable Securities being sold; and

 

(v)       deliver such other documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings.

 

The documents referred to in Sections 3(n)(ii) and 3(n)(v) shall be delivered at
the closing under any underwriting or similar agreement as and to the extent
required thereunder. In the case of any such underwritten offering, the Company
shall provide written notice to the Holders of all Registrable Securities of
such underwritten offering at least 30 days prior to the filing of a prospectus
supplement for such underwritten offering. Such notice shall (x) offer each such
Holder the right to participate in such underwritten offering, (y) specify a
date, which shall be no earlier than 15 days following the date of such notice,
by which such Holder must inform the Company of its intent to participate in
such underwritten offering and (z) include the instructions such Holder must
follow in order to participate in such underwritten offering;

 

(o)        in the case of a Shelf Registration, upon request make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by such Holders or
underwriters, all financial statements and other records, documents and
properties of the Company reasonably requested by any such Persons, and cause
the respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such Persons in
connection with a Shelf Registration Statement;

 

(p)        in the case of a Shelf Registration, a reasonable time prior to
filing any Shelf Registration Statement, any Prospectus forming a part thereof,
any amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to the Holders of Registrable
Securities, to the underwriter or underwriters, of an underwritten offering of
Registrable Securities, and to counsel for any such Holders, or underwriters,
and make such changes in any such document prior to the filing thereof as the
Holders of Registrable Securities, any such underwriter or underwriters or any
of their respective counsel may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such documents
as shall be reasonably requested by the Holders of Registrable Securities, or
any underwriter, and shall not at any time make any filing of any such document
of which such Holders, their counsel or any underwriter shall not have
previously been advised and furnished a copy or to which such Holders, their
counsel or any underwriter shall reasonably object within a reasonable time
period;

 

(q)        in the case of a Shelf Registration, use its reasonable best efforts
to cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Company are then listed if requested
by the Majority Holders or by the underwriter or underwriters of an underwritten
offering of Registrable Securities, if any;

15

(r)        in the case of a Shelf Registration, use its reasonable best efforts
to cause the Registrable Securities to be rated with the appropriate rating
agencies, if so requested by the Majority Holders of Registrable Securities or
by the underwriter or underwriters of an underwritten offering, unless the
Registrable Securities are already so rated;

 

(s)        otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and, with respect to each
Registration Statement and each post-effective amendment, if any, thereto and
each filing by the Company of an Annual Report on Form 10-K, make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering at least twelve months which shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder; and

 

(t)        cooperate and assist in any filings required to be made with FINRA
and in the performance of any due diligence investigation by any underwriter and
its counsel.

 

In the case of a Shelf Registration Statement, the Company may (as a condition
to such Holder’s participation in the Shelf Registration) require each Holder of
Registrable Securities to furnish to the Company such information regarding such
Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing
and require such Holder to agree in writing to be bound by all provisions of
this Agreement applicable to such Holder.

 

In the case of a Shelf Registration Statement, each Holder agrees and, in the
event that any Participating Broker-Dealer is using the Prospectus included in
the Exchange Offer Registration Statement in connection with the sale of
Exchange Securities pursuant to Section 3(f), each such Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts of the kind described in
Section 3(e)(ii), 3(e)(iii) or 3(e)(v) through 3(e)(vii) hereof, such Holder or
Participating Broker-Dealer, as the case may be, will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
receipt by such Holder or Participating Broker-Dealer, as the case may be, of
(i) the copies of the supplemented or amended Prospectus contemplated by Section
3(k) hereof or (ii) written notice from the Company that the Shelf Registration
Statement or the Exchange Offer Registration Statement, respectively, are once
again effective or that no supplement or amendment is required. If so directed
by the Company, such Holder or Participating Broker-Dealer, as the case may be,
will deliver to the Company (at the Company’s expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. Nothing in this paragraph shall prevent the accrual of
Additional Interest on any Registrable Securities.

 

If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to the immediately preceding paragraph, the
Company shall be deemed to have used its reasonable best efforts to keep the
Shelf Registration Statement or, in the case of Section 3(f), the Exchange Offer
Registration Statement, as the case may be, effective during such period of
suspension; provided that (i) such period of suspension shall not exceed the
time periods provided in Section 2(d)(iii) hereof and (ii) the Company shall use
its reasonable best efforts to file and have declared effective (if an
amendment) as soon as practicable thereafter an amendment or supplement to the
Shelf Registration Statement or the Exchange Offer Registration Statement or
both, as the case may be, or the Prospectus included therein and shall extend
the period during which the Shelf Registration Statement or the Exchange Offer
Registration Statement or both, as the case may be, shall be maintained
effective pursuant to this Agreement (and, if applicable, the period during
which Participating Broker-Dealers may use the Prospectus included in the
Exchange Offer Registration Statement pursuant to Section 3(f) hereof) by the
number of days during the period from and including the date of the giving of
such notice to and

16

including the earlier of the date when the Holders or Participating
Broker-Dealers, respectively, shall have received copies of the supplemented or
amended Prospectus necessary to resume such dispositions and the effective date
of written notice from the Company to the Holders or Participating
Broker-Dealers, respectively, that the Shelf Registration Statement or the
Exchange Offer Registration Statement, respectively, are once again effective or
that no supplement or amendment is required.

 

4.        Underwritten Registrations. If any of the Registrable Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Majority Holders of such Registrable
Securities included in such offering and shall be reasonably acceptable to the
Company.

 

No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder’s
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.

 

5.        Indemnification and Contribution.

 

(a)      The Company agrees to indemnify and hold harmless each Holder, each
Participating Broker-Dealer, each underwriter who participates in an offering of
Registrable Securities (each, an “Underwriter”) and each Person, if any, who
controls any Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act, as follows:

 

(i)        against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, including all documents
incorporated therein by reference, or any omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or Prospectus (or any amendment or supplement thereto) or any
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

 

(ii)        against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission described in subparagraph (i) above; provided that
(subject to Section 5(d) below) any such settlement is effected with the written
consent of the Company; and

 

(iii)       against any and all expense whatsoever, as incurred (including,
subject to Section 5(c) below, the fees and disbursements of counsel chosen by
any indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission described in subparagraph (i) above, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

17

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Holder, Participating Broker-Dealer or Underwriter with respect to such Holder,
Participating Broker-Dealer or Underwriter, as the case may be, expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).

 

(b)        Each Holder, severally but not jointly, agrees to indemnify and hold
harmless the Company, each director of the Company, each officer of the Company
who signed the Registration Statement, each Participating Broker-Dealer, each
Underwriter and each other selling Holder and each Person, if any, who controls
the Company, any Underwriter, any Participating Broker-Dealer or any other
selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 5(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Holder furnished to the Company by such Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); provided, however, that no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.

 

(c)        Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. Counsel to the respective
indemnified parties shall be selected as follows: (i) counsel to the Company,
its directors, each of its officers who signed the Registration Statement and
all Persons, if any, who control the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall be selected by the Company;
(ii) counsel to the Holders (other than Participating Broker-Dealers) and all
Persons, if any, who control any Holders (other than any Participating
Broker-Dealers) within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall be selected by the Holders who held or hold, as the case
may be, a majority in aggregate principal amount of the Registrable Securities
held by all such Holders; (iii) counsel to the Underwriters of any particular
offering of Registrable Securities and all Persons, if any, who control any such
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall be selected by such Underwriters; and (iv) counsel to the
Participating Broker-Dealers and all Persons, if any, who control any such
Participating Broker-Dealer within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall be selected by the Participating Broker-Dealers
who held or hold, as the case may be, a majority in aggregate principal amount
of the Exchange Securities referred to in Section 3(f) hereof held by all such
Participating Broker-Dealers. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for (A) the fees and expenses of more
than one counsel (in addition to any local counsel) separate from the
indemnifying parties’ own counsel for the Company and all other Persons referred
to in clause (i) of this paragraph, (B) the fees and expenses of more than one
counsel (in addition to any local counsel) separate from the indemnifying
parties’ own counsel for all Holders (other than Participating Broker-Dealers)
and all other Persons referred to in clause (ii) of this paragraph, (C) the fees
and expenses of more than one counsel (in addition to any local counsel)
separate from the indemnifying parties’ own counsel for all Underwriters of any
particular offering of Registrable Securities

18

and all other Persons referred to in clause (iii) of this paragraph, and (D) the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from the indemnifying parties’ own counsel for all Participating
Broker-Dealers and all other Persons referred to in clause (iv) of this
paragraph, in each case in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 5 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)        If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
shall not be liable for any settlement of the nature contemplated by
Section 5(a)(ii) effected without its written consent if such indemnifying party
(x) reimburses such indemnified party in accordance with such request to the
extent that the indemnifying party in its judgment considers such request to be
reasonable and (y) provides written notice to the indemnified party stating the
reason it deems the unpaid balance unreasonable, in each case no later than 45
days after receipt by such indemnifying party of the aforesaid request from the
indemnified party.

 

(e)        If the indemnification provided for in this Section 5 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or parties or such
indemnified party or parties, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

 

(f)        The Company and the Holders agree that it would not be just or
equitable if contribution pursuant to this Section 5 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 paragraph (e) above. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation

19

or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

 

Notwithstanding the provisions of this Section 5, no Holder, Participating
Broker-Dealer or Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which Registrable Securities
sold by it were offered exceeds the amount of any damages that such Holder,
Participating Broker-Dealer or Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 5, each Person, if any, who controls a Holder,
Participating Broker-Dealer or Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Holder, Participating Broker-Dealer or Underwriter, as the
case may be, and each director of the Company, each officer of the Company who
signed the Registration Statement and each Person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.

 

The respective obligations of the Holders, Participating Broker-Dealers and
Underwriters to contribute pursuant to this Section 5 are several in proportion
to the principal amount of Subordinated Notes purchased by them and not joint.

 

The indemnity and contribution provisions contained in this Section 5 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any Holder,
Participating Broker-Dealer or Underwriter or any Person controlling any Holder,
Participating Broker-Dealer or Underwriter, or by or on behalf of the Company,
its officers or directors or any Person controlling the Company, (iii)
acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities or Exchange Securities pursuant to a Shelf Registration Statement.

 

6.        Miscellaneous.

 

(a)      Rule 144 and Rule 144A. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file all reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so required to file such reports, it will
upon the request of any Holder or beneficial owner of Registrable Securities (i)
make publicly available such information (including, without limitation, the
information specified in Rule 144(c)(2) under the 1933 Act) as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to
be delivered, promptly following a request by any Holder or beneficial owner of
Registrable Securities or any prospective purchaser or transferee designated by
such Holder or beneficial owner, such information (including, without
limitation, the information specified in Rule 144A(d)(4) under the 1933 Act) as
is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (iii)
take such further action that is reasonable in the circumstances, in each case
to the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act, as
such Rule may be amended from time to time, or (z) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder or
beneficial

20

owner of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.

 

(b)        No Inconsistent Agreements. The Company has not entered into nor will
the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof;
provided that the Company will not be precluded from entering into any agreement
after the date hereof which may or does result, directly or indirectly, in the
payment of Additional Interest. The rights granted to the Holders hereunder do
not and will not in any way conflict with and are not and will not be
inconsistent with the rights granted to the holders of any of the Company’s
other issued and outstanding securities under any other agreements entered into
by the Company or any of its subsidiaries.

 

(c)        Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of at
least a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
departure.

 

(d)        Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, electronic mail, or any courier guaranteeing overnight
delivery (i) if to a Holder or Participating Broker-Dealer at the most current
address set forth on the records of the registrar under the Indenture, (ii) if
to the Company, initially at the address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(d) and (iv) if to any Underwriter, at the most
current address given by such Underwriter to the Company by means of a notice
given in accordance with the provisions of this Section 6(d), which address
initially shall be the address set forth in the applicable underwriting
agreement.

 

All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if sent via electronic mail; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

 

(e)        Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.

 

(f)        Third Party Beneficiary. Each Holder and Participating Broker-Dealer
shall be a third party beneficiary of the agreements made hereunder and shall
have the right to enforce such agreements

21

directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of other Holders hereunder. Each Holder, by its
acquisition of Subordinated Notes, shall be deemed to have agreed to the
provisions of Section 5(b) hereof.

 

(g)        Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

(h)        Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

 

(i)        Restriction on Resales. If the Company or any of its subsidiaries or
affiliates (as defined in Rule 144 under the 1933 Act) shall redeem, purchase or
otherwise acquire any Registrable Security or any Exchange Security which is a
“restricted security” within the meaning of Rule 144 under the 1933 Act, the
Company will deliver or cause to be delivered such Registrable Security or
Exchange Security, as the case may be, to the Trustee for cancellation and
neither the Company nor any of its subsidiaries or affiliates will hold or
resell such Registrable Security or Exchange Security or issue any new Security
or Exchange Security to replace the same.

 

(j)        GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY.

 

(k)        Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

 

[SIGNATURE PAGE FOLLOWS]

22

IN WITNESS WHEREOF, Company has caused this Registration Rights Agreement to be
executed by its duly authorized representative as of the date first above
written.

 

  COMPANY:             CONNECTONE BANCORP, INC.             By:         Name:
Frank S. Sorrentino III       Title:   Chief Executive Officer  

 

[Signature Page to Registration Rights Agreement]

 

IN WITNESS WHEREOF, the Purchaser has caused this Registration Agreement to be
executed by its duly authorized representative as of the date first above
written.

 

  PURCHASER:             [INSERT PURCHASER’S NAME]             By:         Name:
      Title:  

 

[Signature Page to Registration Rights Agreement]