Document:

Exhibit 10.1

 

S CORPORATION TERMINATION AND

TAX SHARING AGREEMENT

 

This S Corporation Termination and Tax Sharing Agreement, dated as of               , 2018 (the “Agreement”), is made by and between Bank7 Corp., an Oklahoma corporation (the “Company”), and the trusts identified on the signature page hereto (each a “Shareholder” and collectively the “Shareholders”).

 

RECITALS:

 

A. Since its formation, the Company has elected to be an S corporation (the “S Election”) under Section 1362 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

B. The Company intends to conduct an initial public offering of its common stock registered under the Securities Act of 1933, as amended (the “Public Offering”).

 

C. Upon the consummation of the Public Offering, the Company’s status as an S corporation will terminate.

 

D. The Shareholders are currently the only shareholders of the Company, and will continue to be so until immediately before the consummation of the Public Offering.

 

E. In connection with the Public Offering, and in order to induce the investment by the public in the Company, the Company and the Shareholders desire to provide for the termination of the Company’s status as an S Corporation (as defined below) and a tax allocation and indemnification agreement in connection with tax periods prior to and following the Termination Date (as defined below), as well as the other agreements set forth herein.

 

AGREEMENT:

 

NOW, THEREFORE, for mutual consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Shareholders do hereby covenant and agree as follows:

 

ARTICLE I.

 DEFINITIONS

 

The following terms, as used herein, have the following meanings:

 

“Accumulated Adjustments Account,” or “AAA” shall have the meaning assigned to that term by Section 1368(e)(1) of the Code.

 

“Assumed Tax Rate” means, with respect to any tax period, the maximum combined federal and state income tax rates for taxpayers who are married and filing jointly, applicable for such period, taking into account the deductibility of state income tax for federal income tax purposes, applicable to an individual resident in Oklahoma.

 

“C Short Year” shall have the meaning set forth in Section 1362(e)(1)(B) of the Code.

 

“Code” shall have the meaning set forth in Recital A.

 

“Estimated Distribution” shall have the meaning set forth in Section 2.07(ii).

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“Final Distribution” shall have the meaning set forth in Section 2.07.

 

“Post-Termination Distribution” shall mean a cash distribution during the Post-Termination Transition Period as set forth in Section 1371(e) of the Code to the extent it does not exceed the AAA.

 

“Post-Termination Transition Period” shall have the meaning set forth in Section 1377(b)(1) of the Code and shall begin on the day after the last day of the Company’s S Short Year.

 

“Public Offering” shall have the meaning set forth in Recital B.

 

“S Corporation” shall have the meaning set forth in Section 1361 of the Code.

 

“S Corporation Taxable Income” shall mean, for periods (or portions thereof) beginning on or after the date the Company became an S Corporation and ending with the close of the last day of the Company’s S Short Year, the sum of (i) the Company’s items of separately stated income and gain (within the meaning of Section 1366(a)(1)(A) of the Code) reduced, to the extent applicable, by the Company’s separately stated items of deduction and loss (within the meaning of Section 1366(a)(1)(A) of the Code) and (ii) the Company’s nonseparately computed net income (within the meaning of Section 1366(a)(l)(B) of the Code).

 

“S Corporation Tax Year” means any taxable period during which the Company had an S Election in effect, including the S Short Year.

 

“S Election” shall have the meaning set forth in Recital A.

 

“S Short Year” shall mean the S Short Year of the Company (within the meaning of Section 1362(e)(1)(A) of the Code) for the calendar year in with the Termination Date occurs.

 

“S Termination Year” shall have the meaning set forth in Section 1362(e)(4) of the Code.

 

“Tax Proceeding” shall have the meaning set forth in Section 2.02.

 

“Termination Date” shall mean the date on which the Company’s status as an S Corporation is terminated by reason of the consummation of the Public Offering.

 

“Treasury Regulations” means the regulations promulgated by the United States Treasury Department under the Code.

 

ARTICLE II.

 S CORPORATION TERMINATION AND TAX SHARING

 

2.01 Termination of S Corporation Status. The Company’s status as an S Corporation shall terminate pursuant to Section 1362(d) of the Code on the Termination Date.

 

2.02 Payments Related to Future Adjustments. In the event that any final determination of an adjustment (by reason of an amended return, claim for refund, audit, judicial decision or otherwise, which determination occurs after the Termination Date (each, a “Tax Proceeding”)) results in an increase in S Corporation Taxable Income, the Company shall distribute to the each Shareholder within 30 days of such final determination, cash in an amount equal to (i) the product of (A) the amount of increase in taxable

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income to such Shareholder resulting from the adjustment and (B) the Assumed Tax Rate plus (ii) any interest and penalties imposed thereon.

 

2.03 Liability for Taxes Incurred During the S Short Year and for Tax Periods Ending Prior to the Termination Date. Each Shareholder severally, and not jointly, covenants and agrees that: (i) such Shareholder has duly included (to the best of such Shareholder’s knowledge), or will duly include, in such Shareholder’s federal, state, and local income tax returns, such Shareholder’s respective allocable shares of all items of income, gain, loss, deduction, or credit attributable to the S Short Year of the Company, (ii) its federal, state and local income tax returns shall, to the extent required by applicable law, include such Shareholder’s allocable share of S Corporation Taxable Income of the Company from all sources through and including the close of business on the last day of the S Short Year of the Company, and (iii) such Shareholder shall, to the extent required by applicable law, pay any and all taxes such Shareholder is required to pay, as a result of being a shareholder of the Company, for all taxable periods (or that portion of any period) during which the Company was an S Corporation. In addition, the Shareholders severally, and not jointly, covenant and agree to indemnify and hold the Company harmless from, against and in respect of any unpaid income tax liabilities of the Company (including interest and penalties imposed thereon) to the extent such liabilities, interest, and/or penalties are attributable to a Shareholder’s breach of any obligation contained in the immediately preceding sentence. In such case, each Shareholder shall pay to the Company cash in an amount equal to (A) the amount of such liability, interest, and/or penalty, multiplied by (B) such Shareholder’s percentage of the outstanding shares of the Company’s common stock owned by each Shareholder on the last day of any applicable period to which the applicable liability relates in proportion to such Shareholder’s ownership of the shares of the Company’s common stock owned by such Shareholder immediately prior to the effectiveness of the termination of the Company’s S Election.

 

2.04 Shareholder Indemnification for Tax Liabilities. The Shareholders severally (according to the relative percentage of the outstanding shares of the Company’s common stock owned by each Shareholder on the last day of any applicable period to which a liability described below relates) and not jointly, covenant and agree to indemnify and hold the Company harmless from, against and in respect of any unpaid income tax liabilities of the Company (including interest and penalties imposed thereon) (i) which are attributable to the S Short Year or (ii) which are incurred by the Company as a result of a final determination of an adjustment (by reason of a Tax Proceeding) to the taxable income of the Shareholders for any period, including the S Short Year or thereafter, and which (in the case of this clause (ii)) are attributable to a decrease for any period in the Shareholders’ taxable income and a corresponding increase for any period in the taxable income of the Company. Each Shareholder shall pay to the Company cash in an amount equal to: (A)(i) the amount of such increase in the tax liabilities of the Company, plus (ii) any interest and penalties imposed thereon, multiplied by (B) such Shareholder’s percentage of the outstanding shares of the Company’s common stock owned by each Shareholder on the last day of any applicable period to which a liability described below relates in proportion to such Shareholder’s ownership of the shares of the Company’s common stock owned by such Shareholder immediately prior to the effectiveness of the termination of the Company’s S Election.

 

2.05 Company Indemnification for Tax Liabilities. The Company hereby indemnifies and agrees to hold the Shareholders harmless from, against and in respect of income tax liabilities (including interest and penalties imposed thereon), if any, incurred by the Shareholders as a result of a final determination of an adjustment (by reason of a Tax Proceeding) to the taxable income of the Company for any period ending after the Termination Date (including, without limitation, the C Short Year) which results in an increase for any period in the taxable income of the Shareholders. The Company shall distribute to each Shareholder cash in an amount equal to (i) the product of (A) the amount of such increase in the taxable income of such Shareholder resulting from such final determination and (B) the Assumed Tax Rate, plus (ii) any interest and penalties imposed thereon. For purposes of this Section

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2.05, if the Shareholder is treated as a trust for federal and/or applicable state income tax purposes and the Shareholder does not pay income taxes directly with respect to such changes in the taxable income of the Company, then the increase in income tax liability of a Shareholder will include any related increase in the income tax liability of the beneficiaries of that Shareholder to the extent such increase results from a final determination of an adjustment (by reason of a Tax Proceeding) to the taxable income of the Company for any period ending after the Termination Date.

 

2.06 Payments. The Shareholders or the Company, as the case may be, shall make any payment required under Sections 2.04 or 2.05 of this Agreement within 30 days after receipt of notice from the other party that a final determination of an adjustment (by reason of a Tax Proceeding) has occurred and a payment is due by such party to the appropriate taxing authority.

 

2.07 Termination Payments to Shareholders. Immediately after the closing of the Public Offering, the Company shall distribute to the Shareholders in proportion to the ownership of the shares of the Company’s common stock owned by each Shareholder: (i) an amount equal to [$40,000,000]; and (ii), if not distributed prior to the closing of the Public Offering, an amount equal to the estimated federal and state tax liabilities of Shareholders for taxable income of the Company during the S Short Year of the Company attributable to such Shareholder, and in respect of which no prior tax distribution shall have been made (the “Estimated Distribution”). Within 90 days of the effectiveness of the termination of the Company’s S Election, the Company shall make any necessary adjustments to the Company’s income during the S Short Year attributable to the Shareholders and, (x) if the amount of the Estimated Distribution to a Shareholder under Section 2.07(ii) above is less than the amount equal to the product of (A) the amount of taxable income allocable to such Shareholder for the S Short Year of the Company and (B) the Assumed Tax Rate (the “Final Distribution”), then the Company shall, within 30 days thereafter, distribute to the Shareholders and amount equal to the excess of the Final Distribution over the Estimated Distribution; and (y) if the amount of the Final Distribution is less than the Estimated Distribution, then each Shareholder shall, within 30 days thereafter, deliver to the Company an amount equal to the excess of the Estimated Distribution over the Final Distribution.

 

ARTICLE III.

 ALLOCATION OF INCOME

 

3.01. Short Taxable Years. The parties acknowledge that the taxable year in which the Company’s status as an S Corporation is terminated will be an “S Termination Year” for tax purposes, as defined in Section 1362(e)(4) of the Code. Pursuant to Section 1362(e)(1) of the Code, the S Termination Year of the Company shall be divided into two short taxable years: an “S Short Year” and a “C Short Year.” As defined in Section 1362(e)(1)(A) of the Code, the S Short Year shall be that portion of the Company’s S Termination Year ending on the day immediately preceding the Termination Date. Pursuant to Section 1362(e)(1)(B) of the Code, that portion of the S Termination Year beginning on the Termination Date and ending on the last day of the taxable year shall be the C Short Year of the Company.

 

3.02. Closing of the Books. The Company and the Shareholder understand that for tax purposes (including for purposes of determining the Company’s S Corporation Taxable Income for its S Short Year), the Company will allocate its items of income, gain, loss, deduction and credit for its calendar year between the S Short Year and the C Short Year based on a “closing of the books.”

 

ARTICLE IV.

 TAX MATTERS

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4.01 Refunds. If the Company receives a refund of any income tax (including penalties and interest) for any period prior to the Termination Date, or as to which it has previously been indemnified by the any Shareholder, the Company shall pay an amount equal to such refund, within 30 days after receipt thereof, to such Shareholder on the last day of any applicable period to which the refund relates. If a Shareholder receives a refund of any income tax (including penalties and interest) as to which such Shareholder has previously been indemnified by the Company, such Shareholder shall, within 30 days after receipt thereon, remit an amount equal to such refund to the Company (for the avoidance of doubt, such refund shall be determined assuming such Shareholder’s only items of income, loss or deduction arise from the Company during the S Short Year).

 

4.02 Notice and Tax Proceedings.

 

(a) Any time that any Shareholder believes that such Shareholder may be entitled to a payment under this Agreement as a result of a Tax Proceeding such Shareholder shall use reasonable efforts to promptly notify the Company of such Tax Proceeding.

 

(b) The Company will have the option to represent itself in any Tax Proceeding, at its own expense and using advisors of the Company’s choice.

 

(c) The Shareholders shall cooperate fully with the Company in any Tax Proceeding and each such Shareholder shall have the right, but not the obligation, to participate in such Proceeding at such Shareholder’s own expense.

 

(d) Breach by a Shareholder of any of the provisions of this Section 4.02 will terminate the Company’s obligation to make payments to such Shareholder under Article 2 to the extent any such breach materially prejudices the result of any Tax Proceeding.

 

4.03. Inconsistent Reporting. If a Shareholder hereafter reports an item on such Shareholder’s income tax return in a manner materially inconsistent with the tax treatment reflected in the Schedule K-1 or other tax information provided to the Shareholders by the Company for a taxable period during which the Company had an S Election in effect, the Shareholder shall notify the Company of such treatment before filing the Shareholder’s income tax return. If such Shareholder fails to notify the Company of such inconsistent reporting, such Shareholder shall be liable to the Company for any losses, costs or expenses (including reasonable attorneys’ fees) arising from such inconsistent reporting, including an audit.

 

ARTICLE V.

 MISCELLANEOUS

 

5.01 Post-Termination Distributions. To the extent practicable and to the extent consistent with applicable law, subject to Section 5.02, payments or other distributions made to the Shareholders pursuant to Article II will be treated as Post-Termination Distributions for U.S. federal income tax purposes and any correspondingly applicable state and/or local tax purposes.

 

5.02 Other Distributions. To the extent that the Company’s tax return preparers determine that payments or distributions described in Section 5.01 cannot be properly treated as Post-Termination Distributions, then the amount of any payment or other distribution made to the Shareholders pursuant to Article II shall be increased by the amount of the Shareholders’ additional tax liability, if any, resulting from such payments or distributions, as reasonably determined by the Company’s tax return preparers, assuming that the Shareholders pay tax at the Assumed Tax Rate.

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5.03 Confidentiality. Each of the parties agrees that any information furnished pursuant to this Agreement is confidential and, except as and to the extent required by law or otherwise required during the course of an audit or contest or other administrative or legal proceeding, shall not be disclosed to any person or entity.

 

5.04 Successors and Access to Information. This Agreement shall be binding upon and inure to the benefit of any successor, heirs or personal representatives to any of the parties, by merger, acquisition of assets or stock in the Company or otherwise, to the same extent as if the successor, heir or personal representative had been an original party to this Agreement or the applicable Shareholder for the taxable period in question, and in such event, all references herein to a party shall refer instead to the successor, heir or personal representative of such party; provided, however, that for purposes of calculating the tax liability to which any payments under this Agreement would relate, the original Shareholders’ tax liability shall be taken into account, but any payments in connection therewith shall be made to the successor, heir or personal representative of the original Shareholders.

 

5.05 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma excluding (to the greatest extent permissible by law) any rule of law that would cause the application of the laws of any jurisdiction other than the State of Oklahoma.

 

5.06 Headings. The headings in this Agreement are for convenience only and shall not be deemed for any purpose to constitute a part or to affect the interpretation of this Agreement.

 

5.07 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one counterpart.

 

5.08 Electronic Transmission. Any facsimile or electronically transmitted copies hereof or signature hereon shall, for all purposes, be deemed originals.

 

5.09 Notices. Any notice or communication required or permitted to be given under this Agreement shall be in writing and mailed, telecopied, sent electronically or otherwise delivered to the parties at the addresses specified in Schedule A or at such other address as one party may specify by notice to the other party. All such notices and communications shall be effective when received. Any payment required to be made under this Agreement shall be mailed or delivered to the parties at the addresses specified in Schedule A or at such other address or account as one party may specify by notice to the other party.

 

5.10 Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the maximum extent practicable. In any event, all other provisions of this Agreement shall be deemed valid, binding, and enforceable to their full extent.

 

5.11 Effective Date and Survival. This Agreement shall be effective as of the Termination Date and shall remain in force and be binding so long as the applicable period of assessments (including extensions) remains unexpired for any taxes contemplated by this Agreement; provided, however, that if the Public Offering has not been consummated on or before December 31, 2018, this Agreement will be void, having no force or effect.

 

5.12 Successor Provisions. Any reference herein to any provisions of the Code or Treasury Regulations shall be deemed to include any amendments or successor provisions thereto as appropriate.

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5.13 Integration; Amendments. Except as explicitly stated herein, this Agreement embodies the entire understanding between the parties relating to its subject matter and supersedes and terminates all prior agreements and understandings among the parties with respect to such matters. No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce any party to enter into this Agreement. This Agreement shall not be modified or terminated except by a writing duly signed by each of the parties hereto, and no waiver of any provisions of this Agreement shall be effective unless in a writing duly signed by the party sought to be bound.

 

5.14 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING OUT OF THIS AGREEMENT. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.14.

 

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this S Corporation Termination and Indemnification Agreement on the date first set forth above.

 

	 	BANK7 CORP.
	 	 	 
	 	By:	 
	 	 	Thomas L. Travis,
	 	 	President and Chief Executive Officer
	 	 	 
	 	WILLIAM BRADFORD HAINES FINANCIAL SERVICES TRUST
	 	 	 
	 	By:	 
	 	 	William B. Haines, Trustee
	 	 	 
	 	LISA K. HAINES FINANCIAL SERVICES TRUST
	 	 	 
	 	By:	 
	 	 	John T. Phillips, Trustee
	 	 	 
	 	By:	 
	 	 	Lisa K. Haines, Trustee
	 	 	 
	 	JULEE S. LAWRENCE FINANCIAL SERVICES TRUST
	 	 	 
	 	By:	 
	 	 	John T. Phillips, Trustee
	 	 	 
	 	By:	 
	 	 	Julee S. Thummel, Trustee

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SCHEDULE A

 

Notices

 

	To the Company:	Bank7 Corp.
	 	1039 N.W. 63rd Street
	 	Oklahoma City, Oklahoma 73116
	 	Phone: (405) 810-8600
	 	Email: ttravis@bank7.com
	 	Attn: Thomas L. Travis, President and Chief Executive Officer
	 	 
	With a copy to:	Hunton Andrews Kurth LLP
	 	1445 Ross Avenue, Suite 3700
	 	Dallas, Texas 75202
	 	Phone: (214) 468-3351
	 	Email: bmarek@huntonak.com
	 	Attn: Brian Marek

 

To the Shareholders:

 

With a copy to:

	9Exhibit 10.4

 

 

 

 

 

 

 

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

BY AND AMONG

 

BANK7 CORP.

 

AND

 

WILLIAM BRADFORD HAINES FINANCIAL SERVICES TRUST,

 

LISA K. HAINES FINANCIAL SERVICES TRUST

 

AND

 

JULEE S. LAWRENCE FINANCIAL SERVICES TRUST

 

DATED AS OF                 , 2018

 

 

 

 

 

 

 

 

 

 

	 

	

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	DEMAND REGISTRATIONS.	1
	 	1.1	Requests for Registration	1
	 	1.2	Demand Notice	1
	 	1.3	Demand Registration Expenses	1
	 	1.4	Short-Form Registrations	1
	 	1.5	Priority on Demand Registrations	2
	 	1.6	Restrictions on Demand Registrations	2
	 	1.7	Selection of Underwriters	2
	 	1.8	Other Registration Rights	3
	 	 	 	 
	2.	PIGGYBACK REGISTRATIONS.	3
	 	2.1	Right to Piggyback	3
	 	2.2	Piggyback Expenses	3
	 	2.3	Priority on Primary Registrations	3
	 	2.4	Priority on Secondary Registrations	3
	 	 	 	 
	3.	REGISTRATION AND COORDINATION GENERALLY.	4
	 	3.1	Registration Procedures	4
	 	3.2	Registration Expenses	7
	 	3.3	Participation in Underwritten Offerings	8
	 	3.4	Company Holdback	8
	 	3.5	Current Public Information	9
	 	3.6	Shelf Take-Downs	9
	 	3.7	Withdrawal	9
	 	 	 	 
	4.	INDEMNIFICATION	9
	 	4.1	Indemnification by the Company	9
	 	4.2	Indemnification by the Holders	10
	 	4.3	Procedure	11
	 	4.4	Entry of Judgment; Settlement	11
	 	4.5	Contribution	11
	 	4.6	Other Rights	12
	 	 	 	 
	5.	DEFINITIONS.	12
	 	 	 
	6.	MISCELLANEOUS.	13
	 	6.1	No Inconsistent Agreements; Foreign Registration	13
	 	6.2	Adjustments Affecting Registrable Securities	13
	 	6.3	Remedies	14
	 	6.4	Amendment and Waiver	14
	 	6.5	Successors and Assigns; Transferees	14
	 	6.6	Severability	14
	 	6.7	Counterparts	14
	 	6.8	Descriptive Headings	15
	 	6.9	Notices	15
	 	6.10	Electronic Delivery	15
	 	6.11	Governing Law	15
	 	6.12	Exercise of Rights and Remedies	20

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REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (as the same may be amended, modified or supplemented from time to time, the “Agreement”) is made as of                 , 2018 (the “Effective Time”) by and among Bank7 Corp., an Oklahoma corporation (the “Company”) and the William Bradford Haines Financial Services Trust, the Lisa K. Haines Financial Services Trust and the Julee S. Lawrence Financial Services Trust (each of them individually, an “Initial Holder,” and collectively, the “Initial Holders”).

 

RECITALS

 

WHEREAS, as of the Effective Time, the Initial Holders own all of the outstanding shares of common stock, par value $0.01 per share (the “Common Stock”), of the Company;

 

WHEREAS, the Company is proposing to consummate an initial public offering of its Common Stock (the “Initial Public Offering”);

 

WHEREAS, as of the closing of the Initial Public Offering, the Company will have the authority to issue that number of shares of Common Stock as set forth in its Registration Statement on Form S-1 (File No. 333-[____]); and

 

WHEREAS, the parties hereto desire for the Company to provide the registration rights set forth in this Agreement. Unless otherwise noted herein, capitalized terms used herein have the meanings set forth in Section 5.

 

AGREEMENT

 

NOW, THEREFORE, the parties to this Agreement hereby agree as follows:

 

		1.	DEMAND REGISTRATIONS.

 

		1.1	Requests for Registration. Subject to the other provisions of this Section 1, a Holder or Holders may (on behalf of themselves and any of their Affiliates) initiate, after the closing of the Initial Public Offering, an unlimited number of registrations of all or part of their Registrable Securities on Form S-1 or any similar or successor long-form registration (“Long-Form Registrations”) and, if available, an unlimited number of registrations of all or part of their Registrable Securities on Form S-3 or any similar or successor short-form registration (“Short-Form Registrations”); as long as the aggregate proposed gross offering price of the Registrable Securities requested to be registered in any Demand Registration equal at least $10,000,000 or include all remaining Registrable Securities held by the Initial Holders.

 

		1.2	Demand Notice. All requests for Demand Registrations are to be made by giving written notice to the Company (a “Demand Notice”). Each Demand Notice must specify the approximate number of Registrable Securities requested to be registered.

 

		1.3	Demand Registration Expenses. The Company will pay all Registration Expenses in connection with any registration initiated as a Demand Registration, whether or not it has become effective.

 

		1.4	Short-Form Registrations. Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use any applicable short-form (unless the managing

	 

	

underwriter(s) of such offering reasonably requests the Company to use a Long-Form Registration in order to sell all of the Registrable Securities requested to be sold). After the Company has become subject to the reporting requirements of the Exchange Act, the Company will use its reasonable efforts to make Short-Form Registrations available for the sale of Registrable Securities.

 

		1.5	Priority on Demand Registrations. The Company will not include in any Demand Registration any securities which are not Registrable Securities, other than securities of the Company to be offered by the Company (the “Company Offered Securities”), without the prior written consent of the Holders of a majority of the Registrable Securities. If a Demand Registration is an underwritten offering and the managing underwriter(s) advises the Company in writing that in its opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities, if any, which can be sold therein without adversely affecting the marketability of the offering, then the Company will include in such registration (i) first, pro rata among the Holders on the basis of the percentage of Registrable Securities (on an as-converted basis, if applicable) requested to be included in such registration statement by such Holders; (ii) second, pro rata among any holders of piggyback registration rights (other than the Holders) on the basis of the percentage of the number of shares of Common Stock requested to be included in such Registration Statement by such holders; and (iii) third, shares of Common Stock to be sold for the Company’s account for which inclusion in such registration statement was requested by the Company. For the avoidance of doubt, if the total number or dollar amount of Registrable Securities requested to be included in the registration statement pursuant to this Section 1.5 exceeds the maximum number or amount that the managing underwriter or underwriters believe can be sold without adversely affecting the success of such offering, no securities, other than Registrable Securities, will be included among the securities covered by such registration.

 

		1.6	Restrictions on Demand Registrations. The Company will not be obligated to begin a Public Offering upon a Demand Registration for (i) one hundred eighty (180) days after the closing of the Initial Public Offering and (ii) one hundred eighty (180) days after the closing of any other Public Offering, in each case, except to the extent that the managing underwriter(s) agrees to a shorter lock-up period. The Company may postpone for up to one hundred twenty (120) days (from the date of the request) the filing or the effectiveness of a registration statement for a Demand Registration if and so long as the Company determines that such Demand Registration would reasonably be expected to have an adverse effect on any proposal or plan by the Company or any of its subsidiaries to engage in any acquisition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer, registration or issuance of securities, financing or other material transaction; but in such event, the Company will pay all Registration Expenses in connection with such registration. The Company may not postpone a Demand Registration more than two (2) times in any twelve (12)-month period. In addition, subject to Section 1.5, the Company will not be required to effect more than one registration under Section 1.1.

 

		1.7	Selection of Underwriters. The Holders of a majority of the Registrable Securities have the right to select the underwriter or underwriters to administer the offering for a Demand Registration.

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		1.8	Clean-Up Demand Registration.If, after a registration in compliance with Section 1.1 has become effective, the Holders have not sold all of their Registrable Securities due to proration pursuant to Section 1.5, then the Holders of a majority of the Registrable Securities will be entitled to one additional request under Section 1.1 in which the Holders then holding Registrable Securities will not be subject to proration with any other holders of securities of the Company entitled to participate in such registration; as long as such registration request complies with the requirements of this Section 1.

 

		1.9	Other Registration Rights. The Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any other Person with respect to any securities of the Company, other than this Agreement. Except as provided in this Agreement, the Company will not grant to any Person the right to request the Company to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, without the prior written approval of the Holders of a majority of the Registrable Securities.

 

		2.	PIGGYBACK REGISTRATIONS.

 

		2.1	Right to Piggyback. If the Company proposes to register any of its equity securities under the Securities Act, including any registration pursuant to Section 1.1 above (other than in connection with registration on Form S-4 or Form S-8 or any successor or similar form) and the registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”), the Company will give prompt written notice to the Holders of its intent to effect such a registration and, subject to Sections 2.3 and 2.4 below, will include in such registration all Registrable Securities held by the Holders with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the delivery of the Company’s notice. Each such Company notice must specify the approximate number of Company equity securities to be registered and the anticipated per share price range for such offering.

 

		2.2	Piggyback Expenses. The Registration Expenses of the Holders will be paid by the Company in all Piggyback Registrations, whether or not any such registration becomes effective.

 

		2.3	Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company and the managing underwriter(s) advises the Company in writing (with a copy to each applicable party hereto requesting registration of Registrable Securities) that in its opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of such offering, the Company will include in such registration: (a) first, the securities the Company proposes to sell, (b) second, the Registrable Securities requested to be included in such registration by the Holders, and (c) third, other securities requested to be included in such registration.

 

		2.4	Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of Company securities (other than the Holders), and the managing underwriter(s) advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration: (a) first, the securities requested to be included therein by the applicable holders requesting registration and the Registrable

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Securities requested to be included in such registration, pro rata among the holders of such securities and Registrable Securities on the basis of the number of shares owned by each such holder, and (b) second, other such securities requested to be included in such registration.

 

		3.	REGISTRATION AND COORDINATION GENERALLY.

 

		3.1	Registration Procedures. Whenever the requisite Holders request that any of their Registrable Securities be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as reasonably practicable:

 

		(a)	prepare and (within sixty (60) days after the end of the period within which requests for inclusion in such registration may be given to the Company) file with the Commission a registration statement with respect to such Registrable Securities and thereafter use its best efforts to cause such registration statement to become effective (and before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the Holders of a majority of the Registrable Securities for any registration in which the Holders participate copies of all such documents proposed to be filed, which documents will be subject to reasonable review by such counsel);

 

		(b)	prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary (i) to keep such registration statement effective (A) for at least ninety (90) days (subject to extension pursuant to Section 3.3(b)) or until the Holders have completed the distribution described in the registration statement relating to such distribution, whichever occurs first or, if such registration statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer, or (B) in the case of a Shelf Registration, until the earlier of (I) the date on which all Registrable Securities have been sold under the Shelf Registration or otherwise no longer qualify as Registrable Securities, (II) when all such Registrable Securities can be sold in any ninety (90)-day period under Rule 144, and (III) the latest date allowed by applicable law, and (ii) to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the Holders thereof set forth in such registration statement;

 

		(c)	furnish to the Holders such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as the Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Holders;

 

		(d)	use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as the Holders may

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reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Holders (but the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself to taxation in respect of doing business in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

 

		(e)	promptly notify the Holders, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the discovery of the happening of any event as a result of which, the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the reasonable request of the Holders, the Company will prepare and furnish to the Holders a reasonable number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the prospective purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

 

		(f)	cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

		(g)	provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

 

		(h)	enter into such customary agreements (including underwriting agreements in customary form) and perform the Company’s obligations thereunder and take all such other actions as the Holders or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (which might include effecting a stock split or a combination of shares);

 

		(i)	make available for inspection by the Holders, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by the Holders or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by the Holders, underwriter, attorney, accountant or agent in connection with such registration statement, and to cooperate and participate as reasonably requested by the Holders in road show presentations, in the preparation of the registration statement, each amendment and supplement thereto, the prospectus included therein, and other activities as the Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Holders;

 

		(j)	otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, but not later than eighteen (18) months after the effective date of the registration statement, an earnings statement covering the period of at least twelve

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(12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 issued thereunder;

 

		(k)	if there is any stop order suspending the effectiveness of a registration statement, or any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, use its reasonable best efforts promptly to obtain the withdrawal of such order;

 

		(l)	obtain one or more comfort letters, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement) addressed to the Holders, signed by the Company’s independent public accountants in the then-current customary form and covering such matters of the type customarily covered from time to time by comfort letters as the Holders may reasonably request;

 

		(m)	obtain a legal opinion of the Company’s outside counsel, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters), with respect to the registration statement, each amendment and supplement thereto, the prospectus included therein (including the preliminary prospectus) and such other documents relating thereto in the then-current customary form and covering such matters of the type customarily covered from time to time by legal opinions of such nature (in a form reasonably acceptable to the Holders);

 

		(n)	cooperate with the Holders and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter(s), if any, or the Holders may request;

 

		(o)	notify counsel for the Holders and the managing underwriter(s), immediately, and confirm the notice in writing (i) when the registration statement, or any post-effective amendment to the registration statement, becomes effective, or any supplement to the prospectus or any amendment prospectus is filed, (ii) of the receipt of any comments from the Commission, (iii) of any request of the Commission to amend the registration statement or amend or supplement the prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the registration statement for offering or sale in any jurisdiction, or of the institution or threatening of any proceedings for any such purpose;

 

		(p)	use reasonable efforts to prevent the issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any preliminary prospectus;

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		(q)	if requested by the managing underwriter(s) or the Holders, promptly include in a prospectus supplement or post-effective amendment such information as the managing underwriter(s) or the Holders reasonably requests to be included therein, including, without limitation, with respect to the number of Registrable Securities being sold by the Holders to such underwriter or agent, the purchase price being paid therefor by such underwriter or agent and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters included in such prospectus supplement or post-effective amendment; and

 

		(r)	cooperate with the Holders and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc.

 

The Company may require the Holders to furnish the Company such information relating to the sale or registration of such securities regarding the Holders and the distribution of the Holders’ securities as the Company may from time to time reasonably request in writing.

 

		3.2	Registration Expenses.

 

		(a)	All expenses incident to the Company’s performance of or compliance with this Agreement, including, without limitation, all registration, qualification and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for the Company and all independent certified public accountants, underwriters (excluding discounts and commissions) and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”), will be paid by the Company in respect of each Demand Registration and each Piggyback Registration, whether or not it has become effective, including that the Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed.

 

		(b)	In connection with each Demand Registration and each Piggyback Registration, whether or not it has become effective, the Company will pay, and reimburse the Holders for the payment of, the reasonable fees and disbursements of one legal counsel selected by the Holders, and such expenses will be considered Registration Expenses hereunder. For the avoidance of doubt, the Company will not be responsible for the payment of the reasonable fees and disbursements of more than one legal counsel for the Holders.

 

		(c)	For the avoidance of doubt, any underwriting discount or commission with respect to the sale of any Registrable Securities will be borne by the Holders and will not be considered Registration Expenses.

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		3.3	Participation in Underwritten Offerings.

 

		(a)	The Holders may not participate in any registration hereunder which is underwritten unless the Holders (i) agree to sell the Holders’ securities on the basis provided in any underwriting arrangements approved by the Person entitled hereunder to approve such arrangements (including, without limitation, pursuant to the terms of any over-allotment or “green shoe” option requested by the managing underwriter(s), but the Holders will not be required to sell more than the number of Registrable Securities that the Holders have requested the Company to include in any registration) and (ii) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

 

		(b)	The Holders agree that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1(e) above, the Holders will forthwith discontinue the disposition of their Registrable Securities pursuant to the registration statement until the Holders’ receipt of the copies of a supplemented or amended prospectus as contemplated by Section 3.1(e). If the Company gives any such notice, the applicable time period mentioned in Section 3.1(b) during which a Registration Statement is to remain effective is to be extended by the number of days during the period from and including the date of the giving of such notice pursuant to this paragraph to and including the date when the Holders have received copies of the supplemented or amended prospectus contemplated by Section 3.1(e).

 

		3.4	Company Holdback.

 

		(a)	The Company will not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during (a) with respect to any underwritten Demand Registration or any underwritten Piggyback Registration in which Registrable Securities are included, the seven (7) days before and the ninety (90) days after the effective date of such registration, and (b) upon notice from the Holders that the Holders intend to effect an underwritten distribution of Registrable Securities pursuant to a Shelf Registration, the seven (7) days before and the ninety (90) days after the date of the commencement of such distribution, in each case except as part of such underwritten registration or pursuant to registrations on Form S-4 or Form S-8, and in each case unless the managing underwriter(s) otherwise agrees.

 

		(b)	The Holders agree, if requested by the Company and the managing underwriter of Registrable Securities in connection with any underwritten public offering of the Company and if the Company’s executive officers and directors so agree, not to directly or indirectly offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of or otherwise dispose of or transfer any equity securities of the Company (or any other security the value of which is derived by reference to the equity securities of the Company) held by the Holders for ninety (90) days following the effective date of the relevant registration statement in connection with any public offering of Registrable Securities, as such underwriter may specify reasonably and in good faith. The Holders agree, if requested by the Company and

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the managing underwriter, to execute a separate letter reflecting the agreement set forth in this Section 3.4(b).

 

		3.5	Current Public Information. At all times after the Company has filed a registration statement with the Commission pursuant to the requirements of either the Securities Act or the Exchange Act, the Company will use its commercially reasonable efforts to timely file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will take such further action as the Holders may reasonably request, all to the extent required to enable the Holders to sell Registrable Securities pursuant to Rule 144.

 

		3.6	Shelf Take-Downs. At any time that a Shelf Registration is effective, if the Holders deliver a written notice to the Company (a “Take-Down Notice”) stating that they intend to effect an offering of all or part of their Registrable Securities included on the Shelf Registration, whether such offering is underwritten or non-underwritten (as long assuch underwritten offering is for more than $10,000,000) (a “Shelf Offering”) and stating the number of the Registrable Securities to be included in the Shelf Offering, then, the Company will amend or supplement the Shelf Registration as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering. In connection with any Shelf Offering, if the managing underwriter(s), if any, advises the Company in writing that in its opinion the number of Registrable Securities to be included in such Shelf Offering exceeds the number of Registrable Securities which can be sold therein without adversely affecting the marketability of the offering, such managing underwriter(s), if any, may limit the number of shares which would otherwise be included in such Shelf Offering in the same manner as is described in Section 1.5.

 

		3.7	Withdrawal. If any Holder participating in a registration hereunder disapproves of the terms of any offering, such Holder will have the right, in its sole discretion, to withdraw such Holder’s Registrable Securities from such registration by giving written notice to the Company and the managing underwriter (if any). If such registration was begun pursuant to a request under Section 1.1 and if the Holders participating in such registration withdraw such number of Registrable Securities from the offering so as to decrease the amount of Registrable Securities included in the registration below the minimum threshold set forth in Section 1.1, then the Company will permit, to the extent reasonably possible, other Holders to increase the amount of Registrable Securities they requested be included in such registration; but if the aggregate amount of Registrable Securities to be included in such registration after all such increases is less than $5,000,000, the Company may withdraw the registration, and such registration will nevertheless be counted, for purposes of Section 1.1, as a registration effected hereunder; however, such registration will not be so counted if (i) the managing underwriter or underwriters advise the participating Holders there has been a material change in market conditions, or (ii) the Company makes a public announcement that there has been a material change in the condition, business or prospects of the Company, which in either case could reasonably be expected to materially and adversely affect the ability of the underwriters to complete the offering or materially and adversely affect the price at which the Registrable Securities may be sold.

 

		4.	INDEMNIFICATION

 

		4.1	Indemnification by the Company. The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Holders and, as applicable, their respective agents (including, but not limited to, their officers, directors, trustees, employees, shareholders,

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holders of beneficial interests, members, and general and limited partners (collectively, the Holders’ “Indemnitees”)) and each Person who controls the Holders (within the meaning of the Securities Act) against any and all losses, claims, damages, liabilities, joint or several, to which such holder or any such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (a) any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto, together with any documents incorporated therein by reference or, (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse the Holders and each of their Indemnitees for any legal or any other expenses, including any amounts paid in any settlement effected with the consent of the Company, which consent will not be unreasonably withheld or delayed, incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; but the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission, made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished to the Company by the Holders expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holders.

 

		4.2	Indemnification by the Holders. In connection with any registration statement in which the Holders are participating, the Holders will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify and hold harmless the Company and its Indemnitees against any losses, claims, damages, liabilities, joint or several, to which the Company or any such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (a) any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or in any application, together with any documents incorporated therein by reference or (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information prepared and furnished to the Company by the Holders expressly for use therein, and the Holders will reimburse the Company and each such Indemnitee for any legal or any other expenses including any amounts paid in any settlement effected with the consent of the Holders, which consent will not be unreasonably withheld or delayed, incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; butthe obligation to indemnify will be limited to the net amount of proceeds received by the Holders from the sale of Registrable Securities pursuant to such

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registration statement, less any other amounts paid by the Holders in respect of such untrue statement, alleged untrue statement, omission or alleged omission.

 

		4.3	Procedure. Any Person entitled to indemnification hereunder will (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (but the failure of any indemnified party to give such notice will not relieve the indemnifying party of its obligations hereunder, except to the extent that the indemnifying party is actually prejudiced by such failure to give such notice), and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.

 

		4.4	Entry of Judgment; Settlement. The indemnifying party will not, except with the approval of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by such indemnified party.

 

		4.5	Contribution. If the indemnification provided for in this Section 4 is, other than expressly pursuant to its terms, unavailable to or is insufficient to hold harmless an indemnified party under the provisions above in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party will contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (a) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Holders and any other sellers participating in the registration statement on the other hand from the sale of Registrable Securities pursuant to the registered offering of securities as to which indemnity is sought or (b) if the allocation provided by clause (a) above is not permitted by applicable law, in such proportion as is appropriate to reflect the relative benefits referred to in clause (a) above but also the relative fault of the Company on the one hand and the Holders and any other sellers participating in the registration statement on the other hand in connection with the statement or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Holders and any other sellers participating in the registration statement on the other hand will be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) to the Company bear to the total net proceeds from the offering (before deducting expenses) to the Holders and any other sellers participating in the registration statement. The relative fault of the Company on the one hand and the Holders and any other sellers participating in the registration statement on the other hand will be determined by reference to, among other things, whether the untrue or alleged statement or omission to state a material fact relates to information supplied by the Company or by the Holders or other sellers participating in the registration statement and

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the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 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 paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph will be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4, the Holders will not be required to contribute any amount in excess of the net proceeds received by the Holders covered by the registration statement filed pursuant hereto, less any other amounts paid by the Holders in respect of such untrue statement, alleged untrue statement, omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

		4.6	Other Rights. The indemnification and contribution by any such party provided for under this Agreement are in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and will remain in full force and effect regardless of any investigation made or omitted by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of securities.

 

		5.	DEFINITIONS.

 

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person.

 

“Board” means the Board of Directors of the Company.

 

“Commission” mean the Securities and Exchange Commission and include any governmental body or agency succeeding to the functions thereof.

 

“Demand Registrations” means Long-Form Registrations and Short-Form Registrations requested pursuant to Section 1.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor federal law then in force.

 

“Holder” means (i) the Initial Holders and (ii) any other Person who subsequently becomes a holder of Registrable Securities and a party to this Agreement in accordance with Section 6.5.

 

“Initial Holder” has the meaning set forth in the preamble to this Agreement.

 

“Initial Public Offering” means the initial underwritten Public Offering of the Company registered on Form S-1 (or any successor form under the Securities Act).

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“Person” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

 

“Public Offering” means a public offering and sale of Common Stock for cash pursuant to an effective registration statement under the Securities Act.

 

“Registrable Securities” means (a) any share of Common Stock owned by the Initial Holders as of the Effective Time or thereafter acquired (other than through the exercise of options), and (b) any common equity securities issued or issuable directly or indirectly with respect to any of the foregoing securities referred to in clause (a) by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting Registrable Securities, such shares will cease to be Registrable Securities when they have been (x) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, or (y) sold to the public pursuant to Rule 144 or sold in a block sale to a financial institution in the ordinary course of its trading business, in each case in compliance with this Agreement. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities whenever such Person has the right to acquire directly or indirectly such Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected.

 

“Rule 144” means Commission Rule 144 issued under the Securities Act, as Rule 144 may be amended from time to time, or any similar successor rule that may be issued by the Commission.

 

“Securities Act” means the Securities Act of 1933 and the rules promulgated thereunder, in each case as amended from time to time.

 

“Shelf Registration” means the filing of a Short-Form Registration with the Commission in accordance with and pursuant to Rule 415 issued under the Securities Act (or any successor rule then in effect).

 

		6.	MISCELLANEOUS.

 

		6.1	No Inconsistent Agreements; Foreign Registration. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders in this Agreement. If the Board and the Holders approve a public offering or a sale of the Common Stock (or other securities representing, or exercisable for or convertible into, shares of Common Stock) pursuant to the securities laws of a country other than the United States of America, the Board has the power to amend this Agreement in such manner as it may deem reasonably necessary to ensure that the provisions of this Agreement will apply in as close to the same manner as possible under such foreign securities laws, and to otherwise preserve and give effect to the rights of the parties hereto.

 

		6.2	Adjustments Affecting Registrable Securities. The Company will not take any action, or permit any change to occur, with respect to its securities which would materially and adversely affect the ability of the Holders to include their Registrable Securities in a registration undertaken pursuant to this Agreement (including, without limitation, effecting a stock split or a combination of shares).

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		6.3	Remedies. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that, in addition to any other rights and remedies at law or in equity existing in its favor, any party is entitled to specific performance or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of this Agreement.

 

		6.4	Amendment and Waiver. This Agreement may be amended, modified, extended, terminated or waived (an “Amendment”), and the provisions hereof may be waived, only by an agreement in writing signed by the Company and the Holders; but the admission of new parties pursuant to the terms of Section 6.5 will not constitute an Amendment of this Agreement for purposes of this Section 6.4. In addition, each party hereto may waive any right hereunder, as to itself, by an instrument in writing signed by such party. The failure of any party to enforce any provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. To the extent the Amendment of any Section of this Agreement would require a specific consent pursuant to this Section 6.4, any Amendment to the definitions used in such Section as applied to such Section will also require the same specified consent.

 

		6.5	Successors and Assigns; Transferees. This Agreement is binding upon and will inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. The Initial Holders may assign, at any time, any or all of their respective rights hereunder with respect to any Registrable Securities held by the Initial Holder (but only with all related obligations) to an Affiliate; as long as (i) the Company is, within thirty (30) Business Days after such transfer or assignment, furnished with written notice of the name and address of such transferee(s) or assignee(s) and the securities with respect to which such registration rights are being assigned and (ii) each such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement through the execution and delivery of a joinder, substantially in the form of Exhibit A hereto.

 

		6.6	Term.This Agreement will terminate on the earlier of: (i) the fifth anniversary of the Effective Time; and (ii) the date on which no Initial Holder owns any Registrable Securities; but the indemnification rights and obligations pursuant to Section 4, as well as the Company’s obligations to pay Registration Expenses pursuant to this Agreement, will survive with respect to any registration statement in which any Registrable Securities of the Holders were included; and the Company is obligated to comply with any request for registration of Registrable Securities received under Section 1.1 or 2.1 prior to such termination date, whether or not such registration has been completed by the date on which this Agreement terminates.

 

		6.7	Severability. Whenever possible, each provision of this Agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement is to be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

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		6.8	Counterparts. This Agreement may be executed in separate counterparts (including by means of facsimile or electronic transmission in portable document format (pdf)), each of which is an original and all of which taken together constitute one and the same Agreement.

 

		6.9	Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

 

		6.10	Notices. Any notices and other communications required or permitted in this Agreement will be effective if in writing and (a) delivered personally, (b) sent by email, or (c) sent by overnight courier, in each case, addressed as follows:

 

	 	If to the Company, to:
	 	 
	 	Bank7 Corp.
	 	1039 N.W. 63rd Street
	 	Oklahoma City, Oklahoma
	 	Attn: Thomas L. Travis, President and Chief Executive Officer
	 	Email:
	 	 
	 	with a copy (which will not constitute notice) to:
	 	 
	 	Hunton Andrews Kurth LLP
	 	1445 Ross Avenue, Suite 3700
	 	Dallas, Texas 75202
	 	Attention:	Brian Marek
	 	Email:	bmarek@huntonak.com
	 	 	 
	 	If to the Initial Holders, to:
	 	 
	 	 
	 	 
	 	Facsimile: ( ) -
	 	 
	 	with a copy (which will not constitute notice) to:

 

Notice to the holder of record of any shares of capital stock will be deemed to be notice to the holder of such shares for all purposes hereof.

 

Unless otherwise specified herein, such notices or other communications will be deemed effective (x) on the date received, if personally delivered, (y) on the date received if delivered by facsimile on a business day, or if not delivered on a business day, on the first business day thereafter and (z) two (2) business days after being sent by overnight courier. Each of the parties hereto are entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

 

		6.11	Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof are to be governed by and construed in accordance with the domestic substantive laws of the State of Oklahoma without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

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[Signature Page Follows]

 

	16

	

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement on the day and year first above written.

 

	 	BANK7 CORP.
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 
	 	WILLIAM BRADFORD HAINES FINANCIAL SERVICES TRUST
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	 	LISA K. HAINES FINANCIAL SERVICES TRUST
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	 	JULEE S. LAWRENCE FINANCIAL SERVICES TRUST
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

	17

	

Exhibit A

 

FORM OF JOINDER TO THE

REGISTRATION RIGHTS AGREEMENT

 

THIS JOINDER (this “Joinder”) is made and entered into as of [ ], by and between Bank7 Corp., an Oklahoma corporation (the “Company”), and [ ] (the “Holder”). This Joinder joins the Holder to the Registration Rights Agreement (the “Agreement”), dated as of [_________], 2018, by and among the Company and the Initial Holders (as defined in the Agreement). Capitalized terms used in this Joinder but not otherwise defined have the meanings set forth in the Agreement.

 

WHEREAS, (i) the Holder has acquired, directly or indirectly, shares of Common Stock (the “Acquired Shares”), (ii) the Company desires to grant to the Holder certain registration rights in accordance with the terms of the Agreement, and (iii) it is a condition to the transfer or grant of such rights to the Holder that the Holder agrees to be bound by the terms of the Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Joinder and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:

 

1.Agreement to be Bound. By execution of this Joinder, the Holder will become a party to the Agreement and will be fully bound by, and subject to all of the covenants, terms and conditions of the Agreement as though an original party to the Agreement, and the Acquired Shares will be deemed Registrable Securities for all purposes of the Agreement, subject to the terms and conditions contained in the Agreement.

 

2.Successors and Assigns. Except as otherwise provided in this Joinder, this Joinder will bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and the Holder and any subsequent Holders of the Acquired Shares and the respective successors and assigns of each of them, so long as they hold such shares.

 

3.Counterparts. This Joinder may be executed in multiple counterparts (including facsimile and electronic counterparts), each of which is deemed to be an original and is binding upon the party who executed the same, and all of which taken together constitute one and the same agreement.

 

4.Governing Law. All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Joinder shall be governed by, and construed in accordance with the laws of the State of Oklahoma, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Oklahoma or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Oklahoma.

 

5.Descriptive Headings. The headings in this Joinder are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Joinder or any provision of this Joinder.

 

IN WITNESS WHEREOF, the parties to this Joinder have executed this Joinder as of the date first above written.

 

		BANK7 CORP.
	 	 
		By: 	
	 	Name:
	 	Title:
	 	 	 
	 	 	 
	 	 	[INSERT NAME OF HOLDER]

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