EXHIBIT 4.1
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.
SWEETWATER FINANCIAL GROUP, INC.
STOCK WARRANT AGREEMENT
___________, 2003
Warrant Holder: No. of Shares:
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Sweetwater Financial Group, Inc. (the "Company"), a Georgia
corporation and the holding company for Georgian Bank (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, representing 0.37 shares
of common stock for every share of common stock purchased by
the Warrant Holder in the Company's 2003 private placement
offering, in consideration of the financial risk associated
with Warrant Holder's investment in the Company during its
implementation of a new business plan. Such Warrants are
granted on the following terms and conditions:
1. Exercise of Warrants. One-third of the shares (the "Shares")
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subject to the Warrants granted in this Agreement shall vest on each of the
first three anniversaries of the date the Company closed the private placement
offering, which was , 2003 (the "Completion Date"). Exercise
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of the Warrants is subject to the following:
(a) Exercise Price. The exercise price (the "Exercise Price") shall
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be $10.00 per Share, subject to adjustment pursuant to Section 2
below.
(b) Expiration of Warrant Term. The Warrants will expire at 5:00 p.m.
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Eastern Standard Time on the fifth anniversary of the Completion
Date, and may not be exercised thereafter (the "Expiration
Date").
(c) Payment. The purchase price for Shares as to which the Warrants
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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.
(d) Method of Exercise. The Warrants shall be exercisable by a
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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 Bank of
the right of such person or persons to exercise the
Warrants; and
(iii) Be accompanied by the originally executed copy of this Stock
Warrant Agreement.
(e) Partial Exercise. In the event of a partial exercise of the
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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.
(f) Restrictions on Exercise. The Warrants may not be exercised (i)
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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, the Bank, or the holder hereof, as applicable, obtains
any approval or other clearance which the Company and the Bank
determine to be necessary or advisable from the Federal Reserve
Board, 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 Warrant 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
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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
(including a reverse stock split), (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
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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. Compliance with Securities Laws. This Agreement and the Warrants
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represented hereby were issued in reliance on an exemption from registration
under the Securities Act of 1933 (the "Act") pursuant to Section 4(2) thereof,
and other applicable exemptions under state securities laws. The Company's
reliance on such exemption is predicated in part on the Warrant Holder's
representations set forth herein. Warrant Holder understands that the Warrants
and the Shares issuable upon exercise of the Warrants may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act of 1933, or an exemption therefrom, and that in the absence of an effective
registration statement covering such shares or an available exemption from
registration under the Securities Act, such Shares must be held indefinitely.
5. Restrictions on Transferability. This Agreement and the Warrants may
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not be assigned, transferred (except as provided above), pledged, or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of these
Warrants contrary to the provisions hereof shall be without legal effect. The
Shares issuable on exercise of 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 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.
6. Restrictive Legend. Each certificate for Shares issued upon exercise
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of the Warrant shall bear a legend stating that they have not been registered
under the Securities Act of 1933 or any state securities laws and referring to
the restrictions on transferability and sale herein.
7. Mandatory Exercise; Termination.
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(a) Either the Company or the Bank may be required to increase its
capital to meet capital requirements imposed by statute, rule,
regulation, or guideline. In order to achieve such capital
increase, the Regulatory Agencies may direct the Company or the
Bank to require the Warrant Holders to either (i) exercise all or
part of their Warrants or (ii) allow the Warrants to be
terminated. If the Regulatory Agencies so direct the Company or
the Bank, then the Warrant Holder must exercise or forfeit the
Warrants as set forth below.
(b) When the Company or the Bank is required to increase its capital
as described in subsection (a) above, the Company shall send a
notice (the "Notice") to the Warrant Holder (i) specifying the
number of Shares relating to the Warrants for which the Warrants
must be exercised (the "Number") (if less than all shares
relating to warrants held by all holders of warrants of the
Company under agreements substantially similar to this one are
required by the Company to be exercised or cancelled, the Number
for the Warrant Holder shall reflect a proportionate allocation
based on the number of Shares subject to this Agreement as
compared to the total number of shares subject to warrants held
by all such warrant holders as a group); (ii) specifying the date
prior to which the Warrants must be totally or partially
exercised, as the case may be (the "Deadline"); (iii) specifying
the Exercise Price for the Shares to be purchased pursuant to the
Warrants (such Exercise Price not to be less than current book
value per share); and (iv) stating that the failure of the
Warrant holder to exercise the Warrants shall result in their
automatic termination.
(c) If the Warrant Holder does not exercise the Warrants pursuant to
the terms of the Notice, this Agreement shall be automatically
terminated on the Deadline, without further act or action by the
Warrant Holder or the Company, and the Warrant Holder shall
deliver this Agreement to the Company for cancellation. If the
Number is less than the total number of Shares that are then
subject to exercise under this Agreement, the Company shall issue
a new Stock Warrant Agreement in compliance with Section 1(e)
hereof.
8. Covenants of the Company. During the term of the Warrants, the
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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 therefore 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.
9. No Dilution or Impairment. The Company shall not amend its
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Certificate 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.
10. Amendment. Neither this Agreement nor the rights granted hereunder
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may be amended, changed or waived except in writing signed by each party hereto.
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.
SWEETWATER FINANCIAL GROUP, INC.
By:
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President
(CORPORATE SEAL)
Attest:
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Secretary
WARRANT HOLDER:
By:
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Signature
By:
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Print Name
