exv10w4



 






Exhibit 10.4




REGISTRATION RIGHTS AGREEMENT




     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the ___day of
___, 2005, by and among: Community Bankers Acquisition Corp., a Delaware corporation (the
“Company”); and the undersigned parties listed under Investor on the signature page hereto (each,
an “Investor” and collectively, the “Investors”).



     WHEREAS, the Investors currently hold all of the issued and outstanding securities of the
Company;



     WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the
Investors with certain rights relating to the registration of shares of Common Stock held by them;



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



1. DEFINITIONS. The following capitalized terms used herein have the following meanings:




     “Agreement” means this Agreement, as amended, restated, supplemented, or otherwise modified
from time to time.



     “Commission” means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.



     “Common Stock” means the common stock, par value $0.01 per share, of the Company.



     “Company” is defined in the preamble to this Agreement.



     “Demand Registration” is defined in Section 2.1.1.



     “Demanding Holder” is defined in Section 2.1.1.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.



     “Form S-3” is defined in Section 2.3.



     “Indemnified Party” is defined in Section 4.3.



     “Indemnifying Party” is defined in Section 4.3.



 









 





     “Initial Public Offering” means the Company’s initial public offering conducted in
___, 2005 pursuant to the Securities Act.



     “Investor” is defined in the preamble to this Agreement.



     “Investor Indemnified Party” is defined in Section 4.1.



     “Maximum Number of Shares” is defined in Section 2.1.4.



     “Notices” is defined in Section 6.3.



     “Piggy-Back Registration” is defined in Section 2.2.1.



     “Register,” “registered” and “registration” mean a registration effected by preparing and
filing a registration statement or similar document in compliance with the requirements of the
Securities Act, and the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.







     “Registrable
Securities” mean all of the shares of Common Stock owned or held
by Investors or Transferees.
Registrable Securities include any warrants, shares of capital stock or other securities of the
Company issued as a dividend or other distribution with respect to or in exchange for or in
replacement of such shares of Common Stock. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect
to the sale of such securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in accordance with such
Registration Statement; (b) such securities shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been delivered by the Company
and subsequent public distribution of them shall not require registration under the Securities Act;
(c) such securities shall have ceased to be outstanding, or (d) the Registrable Securities are
salable under Rule 144(k) in the opinion of counsel to the Company.







     “Registration Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations promulgated
thereunder for a public offering and sale of Common Stock (other than a registration statement on
Form S-4 or Form S-8, or their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another entity).



     “Release Date” means the date on which shares of Common Stock are disbursed from escrow
pursuant to Section 3 of that certain Stock Escrow Agreement dated as of ___, 2005 by and among
the parties hereto and Continental Stock Transfer & Trust Company.



2









 





     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at the time.






     “Transferee”
or “Transferees” means the persons, trusts or entities to whom the
Registrable Securities are transferred (i) by gift to a member of
Investor’s immediate family or to a trust, the beneficiary of
which is an Investor or a member of an Investor’s immediate
family, (ii) by virtue of the laws of descent and distribution upon
death of any Investor, (iii) pursuant to a qualified domestic
relations order, or (iv) pursuant to a transfer of record ownership
whereby there is no change in beneficial ownership.






     “Underwriter” means a securities dealer who purchases any Registrable Securities as principal
in an underwritten offering and not as part of such dealer’s market-making activities.



2. REGISTRATION RIGHTS.




     2.1 Demand Registration.



          2.1.1 Request for Registration. At any time and from time to time on or after the Release
Date, the holders of a majority-in-interest of the Registrable Securities held by the Investors or
the Transferees of the Investors, may make a written demand for registration under the Securities
Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a
Demand Registration shall specify the number of shares of Registrable Securities proposed to be
sold and the intended method(s) of distribution thereof. The Company will notify all holders of
Registrable Securities of the demand, and each holder of Registrable Securities who wishes to
include all or a portion of such holder’s Registrable Securities in the Demand Registration (each
such holder including shares of Registrable Securities in such registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice
from the Company. Upon any such request, the Demanding Holders shall be entitled to have their
Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the
provisos set forth in Section 3.1.1. The Company shall not be obligated to effect more than an
aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of Registrable
Securities.




          2.1.2 Effective Registration. A registration will not count as a Demand Registration until the
Registration Statement filed with the Commission with respect to such Demand Registration has been
declared effective and the Company has complied with all of its obligations under this Agreement
with respect thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order or injunction of the Commission or any other governmental agency
or court, the Registration Statement with respect to such Demand Registration will be deemed not to
have been declared effective, unless and until, (i) such stop order or injunction is removed,
rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders
thereafter elect to continue the offering; provided, further, that the Company shall not be
obligated to file a second Registration Statement until a Registration Statement that has been
filed is counted as a Demand Registration or is terminated or withdrawn.




          2.1.3 Underwritten Offering. If a majority-in-interest of the Demanding Holders so elect and
such holders so advise the Company as part of their written demand for a Demand Registration, the
offering of such Registrable Securities pursuant to such





3









 












Demand Registration shall be in the form of an underwritten offering. In such event, the right
of any holder to include its Registrable Securities in such registration shall be conditioned upon
such holder’s participation in such underwriting and the inclusion of such holder’s Registrable
Securities in the underwriting to the extent provided herein. All Demanding Holders shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such underwriting by a
majority-in-interest of the holders initiating the Demand Registration.








          2.1.4 Reduction of Offering. Subject to the rights of the holders of securities issued or
issuable upon exercise of those certain Unit Purchase Options to be issued to I-Bankers Securities,
Inc. or their designees in connection with the Company’s Initial Public Offering, if the managing
Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount or number of shares
of Registrable Securities which the Demanding Holders desire to sell, taken together with all other
shares of Common Stock or other securities which the Company desires to sell and the shares of
Common Stock, if any, as to which registration has been requested pursuant to written contractual
piggy-back registration rights held by other shareholders of the Company who desire to sell,
exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering
without adversely affecting the proposed offering price, the timing, the distribution method, or
the probability of success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which Demand Registration has been
requested by the Demanding Holders (pro rata in accordance with the number of shares of Registrable
Securities which such Demanding Holder has requested be included in such registration, regardless
of the number of shares of Registrable Securities held by each Demanding Holder) that can be sold
without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding the Maximum Number
of Shares; (iii) third, to the extent that the Maximum Number of Shares has not been reached under
the foregoing clauses (i) and (ii), the shares of Common Stock for the account of other persons
that the Company is obligated to register pursuant to written contractual arrangements with such
persons and that can be sold without exceeding the Maximum Number of Shares; and (v) fourth, to the
extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i),
(ii), and (iii), the shares of Common Stock that other shareholders desire to sell that can be sold
without exceeding the Maximum Number of Shares.




          2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms
of any underwriting or are not entitled to include all of their Registrable Securities in any
offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the Underwriter or Underwriters of their
request to withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to





4









 








such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from
a proposed offering relating to a Demand Registration, then such registration shall not count as a
Demand Registration provided for in this Section 2.1.




     2.2 Piggy-Back Registration.



          2.2.1 Piggy-Back Rights. If at any time on or after the Release Date the Company proposes to
file a Registration Statement under the Securities Act with respect to an offering of equity
securities, or securities or other obligations exercisable or exchangeable for, or convertible
into, equity securities, by the Company for its own account or for shareholders of the Company for
their account (or by the Company and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any
employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities
solely to the Company’s existing shareholders, (iii) for an offering of debt that is convertible
into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company
shall (v) give written notice of such proposed filing to the holders of Registrable Securities as
soon as practicable but in no event less than ten (10) days before the anticipated filing date,
which notice shall describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (vi) offer to the holders of Registrable Securities in
such notice the opportunity to register the sale of such number of shares of Registrable Securities
as such holders may request in writing within five (5) days following receipt of such notice (a
“Piggy-Back Registration”). The Company shall cause such Registrable Securities to be included in
such registration and shall use its best efforts to cause the managing Underwriter or Underwriters
of a proposed underwritten offering to permit the Registrable Securities requested to be included
in a Piggy-Back Registration to be included on the same terms and conditions as any similar
securities of the Company and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof. All holders of
Registrable Securities proposing to distribute their securities through a Piggy-Back Registration
that involves an Underwriter or Underwriters shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.




          2.2.2 Reduction of Offering. Subject to the rights of the holders of securities issued or
issuable upon exercise of those certain Unit Purchase Options to be issued to I-Bankers Securities,
Inc. or its designees in connection with the Company’s Initial Public Offering, if the managing
Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering
advises the Company and the holders of Registrable Securities in writing that the dollar amount or
number of shares of Common Stock which the Company desires to sell, taken together with shares of
Common Stock, if any, as to which registration has been demanded pursuant to written contractual
arrangements with persons other than the holders of Registrable Securities hereunder, the
Registrable Securities as to which registration has been requested under this Section 2.2, and the
shares of Common Stock, if any, as to which registration has been requested pursuant to the written
contractual piggy-back registration rights of other





5









 








shareholders of the Company, exceeds the Maximum Number of Shares, then the Company shall
include in any such registration:








               (i) If the registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock, if any, including
the Registrable Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in accordance with the
number of shares of Common Stock which each such person has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with respect to which such
persons have the right to request such inclusion) that can be sold without exceeding the Maximum
Number of Shares; and











               (ii) If the registration is a “demand” registration undertaken at the demand
of persons other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for the account of the
demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to
the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A),
the shares of Common Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A) and (B), the Registrable
Securities as to which registration has been requested under this
Section 2.2 and any shares as to which registration has been
requested pursuant to written contractual piggy-back registration rights which other shareholders
desire to sell that can be sold without exceeding the Maximum Number
of Shares (pro rata in
accordance with the number of shares of Registrable Securities held
by each such holder).







          2.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s
request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written
notice to the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company may also elect to withdraw a registration statement at any time prior to
the effectiveness of the Registration Statement. Notwithstanding any such withdrawal, the Company
shall pay all expenses incurred by the holders of Registrable Securities in connection with such
Piggy-Back Registration as provided in Section 3.3.








     2.3
Registrations on Form S-3. The holders of a majority in interest of Registrable Securities may at any time and from
time to time, request in writing that the Company register the resale of any or all of such
Registrable Securities on Form S-3 or any similar short-form registration which may be available at
such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such
request through an underwritten offering. Upon receipt of such written request, the Company will
promptly give written notice of the proposed registration to all other holders of Registrable
Securities, and, as soon as practicable thereafter, effect the registration of all or such portion
of such







6









 





holder’s or holders’ Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within fifteen (15) days after receipt of such
written notice from the Company; provided, however, that the Company shall not be obligated to
effect any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available for
such offering; or (ii) if the holders of the Registrable Securities, together with the holders of
any other securities of the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at any aggregate price to the public of
less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as
Demand Registrations effected pursuant to Section 2.1.




3. REGISTRATION PROCEDURES.




     3.1 Filings; Information. Whenever the Company is required to effect the registration of any
Registrable Securities pursuant to Section 2, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the intended method(s) of
distribution thereof as expeditiously as practicable, and in connection with any such request:



          3.1.1 Filing Registration Statement. The Company shall, as expeditiously as possible and in
any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to
Section 2.1, prepare and file with the Commission a Registration Statement on any form for which
the Company then qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use its best efforts to
cause such Registration Statement to become and remain effective for the period required by Section
3.1.3; provided, however, that the Company shall have the right to defer any Demand Registration
for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to
deferment of any demand registration to which such Piggy-Back Registration relates, in each case if
the Company shall furnish to the holders a certificate signed by the Chief Executive Officer of the
Company stating that, in the good faith judgment of the Board of Directors of the Company, it would
be materially detrimental to the Company and its shareholders for such Registration Statement to be
effected at such time; provided further, however, that the Company shall not have the right to
exercise the right set forth in the immediately preceding proviso more than once in any 365-day
period in respect of a Demand Registration hereunder.




          3.1.2 Copies. The Company shall, prior to filing a Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the holders of Registrable
Securities included in such registration, and such holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities included in such





7









 








registration or legal counsel for any such holders may request in order to facilitate the
disposition of the Registrable Securities owned by such holders.




          3.1.3 Amendments and Supplements. The Company shall prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such Registration Statement
effective and in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of one hundred eighty (180) days plus any period during
which any such disposition is interfered with by any stop order or injunction of the Commission or
any governmental agency or court) or such securities have been withdrawn.




          3.1.4 Notification. After the filing of a Registration Statement, the Company shall promptly,
and in no event more than two (2) business days after such filing, notify the holders of
Registrable Securities included in such Registration Statement of such filing, and shall further
notify such holders promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such Registration Statement
becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes
effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the
Company shall take all actions required to prevent the entry of such stop order or to remove it if
entered); and (iv) any request by the Commission for any amendment or supplement to such
Registration Statement or any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by such Registration
Statement, such prospectus will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein not
misleading, and promptly make available to the holders of Registrable Securities included in such
Registration Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference, the Company shall furnish to the holders of Registrable
Securities included in such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents and comment
thereon, and the Company shall not file any Registration Statement or prospectus or amendment or
supplement thereto, including documents incorporated by reference, to which such holders or their
legal counsel shall object.




          3.1.5 State Securities Laws Compliance. The Company shall use its best efforts to (i) register
or qualify the Registrable Securities covered by the Registration Statement under such securities
or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable
Securities included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action





8









 








necessary to cause such Registrable Securities covered by the Registration Statement to be
registered with or approved by such other Governmental Authorities as may be necessary by virtue of
the business and operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable Securities in such
jurisdictions; provided, however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify but for this
paragraph 3.1.5 or subject itself to taxation in any such jurisdiction.




          3.1.6 Agreements for Disposition. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities. The representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the holders of Registrable Securities included in such
registration statement. No holder of Registrable Securities included in such registration statement
shall be required to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such holder’s organization, good standing, authority, title to
Registrable Securities, lack of conflict of such sale with such holder’s material agreements and
organizational documents, and with respect to written information relating to such holder that such
holder has furnished in writing expressly for inclusion in such Registration Statement.




          3.1.7 Cooperation. The principal executive officer of the Company, the principal financial
officer of the Company, the principal accounting officer of the Company and all other officers and
members of the management of the Company shall cooperate fully in any offering of Registrable
Securities hereunder, which cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering materials and related
documents, and participation in meetings with Underwriters, attorneys, accountants and potential
investors.




          3.1.8 Records. The Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant or other
professional retained by any holder of Registrable Securities included in such Registration
Statement or any Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to supply all information
requested by any of them in connection with such Registration Statement.




          3.1.9 Opinions and Comfort Letters. The Company shall furnish to each holder of Registrable
Securities included in any Registration Statement a signed counterpart, addressed to such holder,
of (i) any opinion of counsel to the Company





9









 








delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public
accountants delivered to any Underwriter. In the event no legal opinion is delivered to any
Underwriter, the Company shall furnish to each holder of Registrable Securities included in such
Registration Statement, at any time that such holder elects to use a prospectus, an opinion of
counsel to the Company to the effect that the Registration Statement containing such prospectus has
been declared effective and that no stop order is in effect.




          3.1.10 Earnings Statement. The Company shall comply with all applicable rules and regulations
of the Commission and the Securities Act, and make available to its shareholders, as soon as
practicable, an earnings statement covering a period of twelve (12) months, beginning within three
(3) months after the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.




          3.1.11 Listing. The Company shall use its best efforts to cause all Registrable Securities
included in any registration to be listed on such exchanges or otherwise designated for trading in
the same manner as similar securities issued by the Company are then listed or designated or, if no
such similar securities are then listed or designated, in a manner satisfactory to the holders of a
majority of the Registrable Securities included in such registration.




     3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale
registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company,
pursuant to a written insider trading compliance program adopted by the Company’s Board of
Directors, of the ability of all “insiders” covered by such program to transact in the Company’s
securities because of the existence of material non-public information, each holder of Registrable
Securities included in any registration shall immediately discontinue disposition of such
Registrable Securities pursuant to the Registration Statement covering such Registrable Securities
until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv)
or the restriction on the ability of “insiders” to transact in the Company’s securities is removed,
as applicable, and, if so directed by the Company, each such holder will deliver to the Company all
copies, other than permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such notice.







     3.3
Registration Expenses. The Company shall bear all costs and expenses
incurred by the Company in
connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all
expenses incurred in performing or complying with its other obligations under this Agreement,
whether or not the Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky”
laws (including fees and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including,







10









 









without limitation, all salaries and expenses of its officers and employees); (v) the fees and
expenses incurred in connection with the listing of the Registrable Securities as required by
Section 3.1.11; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company (including the expenses or costs associated with the delivery
of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and
expenses of any special experts retained by the Company in connection with such registration and
(ix) the fees and expenses of one legal counsel selected by the holders of a majority-in-interest
of the Registrable Securities included in such registration. The Company shall have no obligation
to pay any underwriting discounts or selling commissions attributable to the Registrable Securities
being sold by the holders thereof, which underwriting discounts or selling commissions shall be
borne by such holders. Additionally, in an underwritten offering, all selling shareholders and the
Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount
of shares each is selling in such offering. The holders of
Registrable Securities shall bear all costs and expenses incurred by
them in connection with any such registration except to the extent
specifically provided in this Section 3.3.







     3.4 Information. The holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the
preparation of any Registration Statement, including amendments and supplements thereto, in order
to effect the registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal and applicable
state securities laws.



4. INDEMNIFICATION AND CONTRIBUTION.




     4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless each
Investor and each other holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any,
who controls an Investor and each other holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified
Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether
joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement)
of a material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arising out of or based upon any omission (or alleged omission) to state
a material fact required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration; and the Company shall promptly reimburse the
Investor Indemnified Party for any legal and any other expenses reasonably incurred by such
Investor Indemnified Party in connection with investigating and defending any such expense, loss,
judgment, claim, damage, liability or action; provided,



11









 





however, that the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or
allegedly untrue statement or omission or alleged omission made in such Registration Statement,
preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the Company, in
writing, by such selling holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members
and agents and each person who controls such Underwriter on substantially the same basis as that of
the indemnification provided above in this Section 4.1.




     4.2 Indemnification by Holders of Registrable Securities. Each selling holder of Registrable
Securities will, in the event that any registration is being effected under the Securities Act
pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and
hold harmless the Company, each of its directors and officers and each underwriter (if any), and
each other person, if any, who controls such selling holder or such underwriter within the meaning
of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint
or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement
of a material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any omission or the alleged omission to
state a material fact required to be stated therein or necessary to make the statement therein not
misleading, if the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly for use therein,
and shall reimburse the Company, its directors and officers, and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection with investigation or
defending any such loss, claim, damage, liability or action. Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to the amount of any net
proceeds actually received by such selling holder.



     4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person of any notice
of any loss, claim, damage or liability or any action in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect
thereof is to be made against any other person for indemnification hereunder, notify such other
person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or
action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may
have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is
actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with
respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party
shall be entitled to participate in such claim or action, and, to the extent that it wishes,
jointly with all other Indemnifying



12









 





Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of investigation; provided,
however, that in any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no
more than one such separate counsel) to represent the Indemnified Party and its controlling persons
who may be subject to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such
counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.




     4.4 Contribution.



          4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action
referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such
loss, claim, damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the
actions or omissions which resulted in such loss, claim, damage, liability or action, as well as
any other relevant equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.




          4.4.2 The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding Section 4.4.1. The amount paid or payable by an Indemnified Party as a result
of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any legal or other expenses
incurred by such Indemnified Party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities





13









 








shall be required to contribute any amount in excess of the dollar amount of the net proceeds
(after payment of any underwriting fees, discounts, commissions or taxes) actually received by such
holder from the sale of Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.




5. UNDERWRITING AND DISTRIBUTION.




     5.1 Rule 144. The Company covenants that it shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action as the holders of
Registrable Securities may reasonably request, all to the extent required from time to time to
enable such holders to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such
Rules may be amended from time to time, or any similar Rule or regulation hereafter adopted by the
Commission.



6. MISCELLANEOUS.




     6.1 Other Registration Rights. The Company represents and warrants that no person, other than
a holder of the Registrable Securities, I-Bankers Securities Incorporated or its designees has any
right to require the Company to register any shares of the Company’s capital stock for sale or to
include shares of the Company’s capital stock in any registration filed by the Company for the sale
of shares of capital stock for its own account or for the account of any other person.







     6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and
obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in
part. This Agreement and the rights, duties and obligations of the holders of Registrable
Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities
in conjunction with and to the extent of any transfer of Registrable Securities by any such holder.
This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of
each Investor and Transferee. This Agreement is not intended to confer any rights or benefits on any persons that are
not party hereto other than as expressly set forth in Section 4 and this Section 6.2.







     6.3 Notices. All notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”) required or permitted to be given hereunder or which are given with
respect to this Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram,
telex or facsimile, addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if
such service or transmission is not on a business day or is after normal business hours, then such
notice shall be deemed given on



14









 





the next business day. Notice otherwise sent as provided herein shall be deemed given on the
next business day following timely delivery of such notice to a reputable air courier service with
an order for next-day delivery.



To the Company:


Community Bankers Acquisition Corp.

717 King Street

Alexandria, Virginia 22314

Attn: Gary A. Simanson, President


with a copy to:


Dilworth Paxson LLP

1818 N Street, N.W.

Suite 400

Washington DC 20036

Attn: Kathleen L. Cerveny, Esq.;


To an Investor, to:



Gary A. Simanson

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314


Community Bankers Acquisition LLC

717 King Street

Alexandria, Virginia 22314


David Zalman

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314






The Eugene
S. Putnam Jr. 2004

Irrevocable Trust

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314










Stewart J. Paperin

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314


Keith Walz

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314







David W.
Spainhour and

Carolyn E. Spainhour, Trustees

of the Spainhour Family Trust

U/A dated 8/22/97

c/o Community Bankers Acquisition Corp.

717 King Street

Alexandria, VA 22314










15









 







with a copy to:


Dilworth Paxson LLP

1818 N Street, N.W.

Suite 400

Washington DC 20036

Attn: Kathleen L. Cerveny, Esq.



     6.4 Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.



     6.5 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and the same
instrument.



     6.6 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto
and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements, representations, understandings, negotiations and discussions between
the parties, whether oral or written.



     6.7 Modifications and Amendments. No amendment, modification or termination of this Agreement
shall be binding upon any party unless executed in writing by such party.



     6.8 Titles and Headings. Titles and headings of sections of this Agreement are for convenience
only and shall not affect the construction of any provision of this Agreement.



     6.9 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default
which such party has the right to waive, provided that such waiver will not be effective against
the waiving party unless it is in writing, is signed by such party, and specifically refers to this
Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or
default waived has occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding
breach thereof nor of any other agreement or provision herein contained. No waiver or extension of
time for performance of any obligations or acts shall be deemed a waiver or extension of the time
for performance of any other obligations or acts.



     6.10 Remedies Cumulative. In the event that the Company fails to observe or perform any
covenant or agreement to be observed or performed under this Agreement,



16









 





the Investor or any other holder of Registrable Securities may proceed to protect and enforce
its rights by suit in equity or action at law, whether for specific performance of any term
contained in this Agreement or for an injunction against the breach of any such term or in aid of
the exercise of any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to post a bond. None of
the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other right, power or
remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.




     6.11 Governing Law. This Agreement shall be governed by, interpreted under, and construed in
accordance with the laws of the State of Delaware applicable to agreements made and to be performed
within the State of Delaware, without giving effect to any choice-of-law provisions thereof that
would compel the application of the substantive laws of any other jurisdiction.



     6.12 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally waives the
right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the
transactions contemplated hereby, or the actions of the Investor in the negotiation,
administration, performance or enforcement hereof.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





17









 








     IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
and delivered by their duly authorized representatives as of the date first written above.











	 	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION
CORP., a Delaware
corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Gary A. Simanson, President
	 
	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	 
	 	 	Gary A. Simanson
	 
	 	 	 	 
	 	 	 
	 	 	Community Bankers Acquisition, LLC
	 	 	By: Gary A. Simanson, Manager
	 
	 	 	 	 
	 	 	 
	 	 	David Zalman
	 
	 	 	 	 
	 	 	 
	 	 	Eugene S. Putnam, Jr.
Trustee of

The Eugene S. Putnam, Jr. 2004

Irrevocable Trust
	 
	 	 	 	 
	 	 	 
	 	 	David W. Spainhour,
Trustee of The
Spainhour Family Trust U/A dated
August 22, 1997
	 
	 	 	 	 
	 	 	 
	 	 	Carolyn E. Spainhour,
Trustee
of The Spainhour Family Trust
U/A dated August 22, 1997
	 
	 	 	 	 
	 	 	 
	 	 	Stewart J. Paperin
	 
	 	 	 	 
	 	 	 
	 	 	Keith Walz










18