EXHIBIT 10.1
FORM OF
WARRANT MODIFICATION
AGREEMENT
This WARRANT MODIFICATION AGREEMENT
(the “ Agreement ”), dated as of
November 14, 2005 (the “ Effective Date ”),
is made pursuant to the terms of the Warrant Agreement and Form of
Warrant, dated as of
, 200 , (as supplemented or amended to the date
of this Agreement, the “ Warrant Agreement ”),
and is entered into by and between Flag Financial Corporation, a
Georgia corporation (“ Company ”), and
(the “ Holder ”).
WHEREAS, the Company has entered
into an Agreement and Plan of Merger pursuant to which the Company
will merge with First Capital Bancorp, Inc. with the Company being
the surviving corporation (the “ Merger
”);
WHEREAS, in connection with the
Merger, the Company has proposed to raise at least $5,000,000 in
new capital through the exercise of the outstanding Warrants by the
Warrant Holders;
WHEREAS, in order to induce the
Warrant Holders (including the Holder) to forfeit their rights to
exercise the Warrants for the remaining term until the respective
expiration dates and to exercise the Warrants on or prior to
November 14, 2005 (“ Term Forfeiture ”),
the Company proposes to amend and reduce the exercise prices of the
Warrants to the amounts as set forth below in this Agreement (the
“ Price Adjustments ,” and, together with Term
Forfeiture, the “ Warrant Adjustments
”);
WHEREAS, the Board of Director of
the Company and a special committee of the Board of Directors of
the Company have both determined that the Warrant Adjustments were
in the best interests of the Company and its
shareholders;
WHEREAS, the Company and the Holder
desire to amend certain terms of the Warrant Agreement by means of
this Agreement to reflect the Warrant Adjustments; and
WHEREAS, pursuant to the terms of
Section 14 of the Warrant Agreement, the Company and the
Holder have the power to amend and modify the terms of the Warrant
Agreement.
NOW, THEREFORE, in consideration of
the above premises and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
Company and the Holder hereby agree as follows:
SECTION 1. Definitions;
Interpretation . Unless otherwise defined herein, all
capitalized terms used herein and defined in the Warrant Agreement
shall have the respective
meanings given to those terms in the Warrant
Agreement. Other rules of construction set forth in the Warrant
Agreement, to the extent not inconsistent with this Agreement,
apply to this Agreement and are hereby incorporated by
reference.
SECTION 2. Amendment to Warrant
Agreement and Warrant Certificate(s) . The Company and the
Holder hereby agree as follows:
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(a)
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Section 4
of the Warrant Agreement shall be amended and restated to read in
its entirety as follows:
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“SECTION 4. Duration and
Exercise of Warrants . The
