EXHIBIT 99.4
THE WARRANTS MAY NOT BE ASSIGNED OR TRANSFERRED BY THE WARRANT HOLDER, EXCEPT
WITH THE COMPANY'S PRIOR WRITTEN CONSENT IN LIMITED CIRCUMSTANCES AS DESCRIBED
HEREIN, AND IF SO REQUESTED BY THE COMPANY, THE DELIVERY BY THE WARRANT HOLDER
TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY STATING THAT SUCH TRANSFER OR ASSIGNMENT IS IN COMPLIANCE WITH THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.
XXXXX.XXX, INC.
STOCK WARRANT AGREEMENT
____________________, 200__
WARRANT HOLDER:____________________________ NO. OF SHARES:____________________
THIS IS TO CERTIFY THAT, for good and valuable consideration received,
xxxxx.xxx, Inc. (the "Company"), a Georgia corporation and the holding company
for ebank (the "Bank"), hereby grants to the person identified above as the
Warrant Holder warrants (the "Warrants") to purchase the number of shares set
forth above. Such Warrants are granted on the following terms and conditions:
1. EXERCISE OF WARRANTS. The Warrants granted in this Agreement may be
--------------------
exercised in whole or in part at any time beginning on or after the date of this
Agreement through the Expiration Date (defined below), subject to the
restrictions and conditions set forth in this Agreement.
(a) EXERCISE PRICE. The exercise price (the "Exercise Price") shall be
--------------
$____ per Share, subject to adjustment pursuant to Section 2 below.
(b) EXPIRATION OF WARRANT TERM. The Warrants will expire on the earlier
---------------------------
of 5:00 p.m. Eastern Standard Time on the fifth anniversary of the
date of this Agreement, or 30 days after the Company mails notice to
the Warrant Holder that that the closing price of the Company's
common stock equaled or exceeded $____ per shares for 20 consecutive
trading days, and may not be exercised thereafter (the "Expiration
Date");
(c) PAYMENT. The purchase price for Shares as to which the Warrants
-------
are being exercised shall be paid in cash, by wire transfer, by
certified or bank cashier's check, or by personal check drawn on
funds on deposit with the Bank, or by cashless exercise as set forth
below.
(d) CASHLESS EXERCISE.
------------------
(i) In lieu of the payment of the Exercise Price, the Warrant
Holder may propose to have the Company convert the Warrant, in
whole or in part,
into Shares of the Company as described below. The Company has
complete discretion whether to permit the Warrant Holder to
effect a cashless exercise. To effect a cashless exercise, the
Warrant Holder shall request in writing that the Company
deliver to the Warrant Holder (without payment by the Warrant
Holder of any of the Exercise Price) and in accordance with
this Section 1 that amount of Common Stock of the Company
equal to the product of (x) the number of Shares as to which
the Warrant is being exercised multiplied by (y) a fraction
the numerator of which is the per Share Market Price (as
defined herein) of the Common Stock less the Exercise Price
then in effect and the denominator of which is the per Share
Market Price (in each case adjusted for fractional shares as
herein provided). The Company has no obligation to permit such
cashless exercise under any circumstances, and shall notify
the Warrant Holder within a reasonable time after delivery of
the notice whether it will honor such request;
(ii) "Market Price" on any date shall mean (i) the closing sales
-------------
price of the Common Stock, regular way, on such date on the
national securities exchange having the greatest volume of
trading in the Common Stock during the thirty-day period
preceding the day the value is to be determined or, if such
exchange was not open for trading on such date, the next
preceding date on which it was open; (ii) if the Common Stock
is not traded on any national securities exchange, the average
of the closing high bid and low asked prices of the Common
Stock on the over-the-counter market on the day such value is
to be determined, or in the absence of closing bids on such
day, the closing bids on the next preceding day on which there
were bids; or (iii) if the Common Stock also is not traded on
the over-the-counter market, the fair market value as
determined in good faith by the Board based on such relevant
facts as may be available to the Board, which may include
opinions of independent experts, the price at which recent
sales have been made, the book value of the Common Stock, and
the Company's current and future earnings.
(e) METHOD OF EXERCISE. The Warrants shall be exercisable by a written
------------------
notice delivered to the President or Secretary of the Company which
shall:
(i) State the owner's election to exercise the Warrants, the
number of Shares with respect to which it is being exercised,
the person in whose name the stock certificate for such Shares
is to be registered, and such person's address and tax
identification number (or, if more than one, the names,
addresses and tax identification numbers of such persons);
(ii) Be signed by the person or persons entitled to exercise the
Warrants and, if the Warrants are being exercised by any
person or persons other than the original holder thereof, be
accompanied by proof satisfactory to counsel for the Company
of the right of such person or persons to exercise the
Warrants; and
-2-
(iii) Be accompanied by the originally executed copy of this Stock
Warrant Agreement.
(f) PARTIAL EXERCISE. In the event of a partial exercise of the
-----------------
Warrants, the Company shall either issue a new agreement for the
balance of the Shares subject to this Stock Warrant Agreement after
such partial exercise, or it shall conspicuously note hereon the
date and number of Shares purchased pursuant to such exercise and
the number of Shares remaining covered by this Stock Warrant
Agreement.
(g) RESTRICTIONS ON EXERCISE. The Warrants may not be exercised (i) if
--------------------------
the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities or banking
laws or other law or regulation or (ii) unless the Company or the
holder hereof, as applicable, obtains any approval or other
clearance which the Company determines to be necessary or advisable
from the Office of Thrift Supervision, the Federal Deposit Insurance
Corporation or any other state or federal banking regulatory agency
with regulatory authority over the operation of Company or the Bank
(collectively the "Regulatory Agencies"). The Company may require
representations and warranties from the Warranty Holder as required
to comply with applicable laws or regulations, including the
Securities Act of 1933 and state securities laws.
2. ANTI-DILUTION; MERGER. If, prior to the exercise of Warrants
----------------------
hereunder, the Company (i) declares, makes or issues, or fixes a record date for
the determination of holders of common stock entitled to receive, a dividend or
other distribution payable on the Shares in shares of its capital stock, (ii)
subdivides the outstanding Shares, (iii) combines the outstanding Shares, (iv)
issues any shares of its capital stock by reclassification of the Shares,
capital reorganization or otherwise (including any such reclassification or
reorganization in connection with a consolidation or merger or and sale of all
or substantially all of the Company's assets to any person), then the Exercise
Price, and the number and kind of shares receivable upon exercise, in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to
receive the aggregate number and kind of shares which, if such Warrant had been
exercised immediately prior to such time, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination, reclassification, reorganization, consideration,
merger or sale.
3. VALID ISSUANCE OF COMMON STOCK. The Company possesses the full
----------------------------------
authority and legal right to issue, sell, transfer, and assign this Warrant and
the Shares issuable pursuant to this Warrant. The issuance of this Warrant
vests in the holder the entire legal and beneficial interests in this Warrant,
free and clear of any liens, claims, and encumbrances and subject to no legal or
equitable restrictions of any kind except as described herein. The Shares that
are issuable upon exercise of this Warrant, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and non-assessable, and
will be free of restrictions on transfer other than restrictions under
applicable state and federal securities.
4. RESTRICTIONS ON TRANSFERABILITY. The Warrants may not be assigned or
-------------------------------
transferred by the Warrant Holder without the Company's prior written consent
and, if so requested by the Company, the delivery by the Warrant Holder to the
Company of an opinion of counsel in form
-3-
and substance satisfactory to the Company stating that such transfer or
assignment is in compliance with the Securities Act of 1933 and applicable state
securities laws.
5. COVENANTS OF THE COMPANY. During the term of the Warrants, the
----------------------------
Company shall:
(a) at all times authorize, reserve and keep available, solely for
issuance upon exercise of this Warrant, sufficient shares of common
stock from time to time issuable upon exercise of this Warrant;
(b) on receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the
case of loss, theft, or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation
of this Warrant, at its expense execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor; and
(c) on surrender for exchange of this Warrant or any Warrant substituted
therefor pursuant hereto, properly endorsed, to the Company, at its
expense, issue and deliver to or on the order of the holder thereof a
new Warrant or Warrants of like tenor, in the name of such holder or
as such holder (on payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces
thereof for the issuances of the number of shares of common stock
issuable pursuant to the terms of the Warrant or Warrants so
surrendered.
6. COVENANTS OF THE WARRANT HOLDER. The Warrant Holder understands that
-------------------------------
this Warrant and the Common Stock issuable upon exercise of the Warrant may not
be sold, transferred or otherwise disposed of without registration under the
Securities Act of 1933, or an exemption therefrom, that in the absence of an
effective registration statement covering such shares or an available exemption
from registration under the Securities Act of 1933, such shares must be held
indefinitely, and that the certificates representing the Shares will bear a
legend to this effect. The holder understands that the Shares are not
registered under the Securities Act of 1933 on the ground that the sale provided
for in this Stock Warrant Agreement and the issuance of securities hereunder is
exempt from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof, and that the Company's reliance on such exemption is predicated in
part on the Warrant Holder's representations set forth herein. In the absence
of an effective registration statement covering the Shares, the Warrant Holder
will sell, transfer or otherwise dispose of the Shares only pursuant to an
exemption from the requirements for registration under the Securities Act of
1933. The Warrant Holder also acknowledges and agrees that the resale of shares
issuable upon exercise of the Warrant is subject to the terms and conditions of
a Registration Rights Agreement dated as of the date hereof.
7. NO DILUTION OR IMPAIRMENT. The Company shall not amend its
-----------------------------
Articles of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other voluntary action for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in carrying
out all such action as may be reasonably necessary in order to protect the
exercise rights of the holder against improper dilution or other impairment.
-4-
8. AMENDMENT. Neither this Agreement nor the rights granted hereunder
---------
may be amended, changed or waived except in writing signed by each party hereto.
9. NOTICE. The address of record for Warrant Holder maintained by the
------
Company for all purposes of this Warrant Agreement and the Shares shall be that
address set forth beneath Warrant Holder's signature on the Subscription
Agreement. Warrant Holder may change his address of record only by notifying
the Company in the manner prescribed herein. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to
either party must be in writing, and shall be personally delivered, sent by
certified or registered mail, postage prepaid or by overnight courier such as
Fedex to such party at the address of record. Any notice under this Agreement
or with respect to the Shares shall be deemed to have been sufficiently given or
served and effective for all purposes when deposited with the United States
Postal Service or overnight courier.
IN WITNESS WHEREOF, the Company has executed and the holder has accepted
this Stock Warrant Agreement as of the date and year first above written.
XXXXX.XXX, INC.
By:________________________________
Chief Executive Officer
(CORPORATE SEAL)
Attest:____________________________
Secretary
WARRANT HOLDER:
By:________________________________
Signature
___________________________________
Print Name
-5-
Schedule to Exhibit 99.4
------------------------
Between October 2000 and June 2001, a total of 115 investors purchasing "capital
units" consisting of Series A Preferred and Original Warrants in the first
private offering of such securities entered into stock warrant agreements in the
form of this Exhibit 99.4 to purchase an aggregate of 1,000,000 shares of Common
Stock with an exercise price of $3.50 per share and a termination date on the
earlier of five years from the date of their issuance or 30 days after the
Company notifies the holder that the closing price of the Company's Common Stock
has equaled or exceeded $5.00 per share for 20 consecutive days.
In June 2001 and on January 28, 2002, a total of 10 investors purchasing
"capital units" consisting of Series A Preferred and Original Warrants in the
second and third private offerings of such securities entered into stock warrant
agreements in the form of this Exhibit 99.4 to purchase an aggregate of 215,000
shares of Common Stock with an exercise price of $4.00 per share and a
termination date on the earlier of five years from the date of their issuance or
30 days after the Company notifies the holder that the closing price of the
Company's Common Stock has equaled or exceeded $5.50 per share for 20
consecutive days.
