Exhibit 4.1
UST Sequence No. 701
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO
THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE
ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH
SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
330,554
Shares of Common Stock
of Southern First Bancshares, Inc.
Issue Date: February 27, 2009
1.
Definitions . Unless the context otherwise requires, when
used herein the following terms shall have the meanings
indicated.
“ Affiliate ” has the meaning ascribed to it in
the Purchase Agreement.
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“ Appraisal Procedure ” means a procedure
whereby two independent appraisers, one chosen by the Company and
one by the Original Warrantholder, shall mutually agree upon the
determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If within
30 days after appointment of the two appraisers they are unable to
agree upon the amount in question, a third independent appraiser
shall be chosen within 10 days thereafter by the mutual consent of
such first two appraisers. The decision of the third
appraiser so appointed and chosen shall be given within 30 days
after the selection of such third appraiser. If three
appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than
twice the amount by which the other determination is disparate from
the middle determination, then the determination of such appraiser
shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon the
Company and the Original Warrantholder; otherwise, the average of
all three determinations shall be binding upon the Company and the
Original Warrantholder. The costs of conducting any Appraisal
Procedure shall be borne by the Company.
“ Board of Directors ” means the board of
directors of the Company, including any duly authorized committee
thereof.
“ Business Combination ” means a merger,
consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.
“ business day ” means any day except Saturday,
Sunday and any day on which banking institutions in the State of
New York generally are authorized or required by law or other
governmental actions to close.
“ Capital Stock ” means (A) with respect to any
Person that is a corporation or company, any and all shares,
interests, participations or other equivalents (however designated)
of capital or capital stock of such Person and (B) with respect to
any Person that is not a corporation or company, any and all
partnership or other equity interests of such Person.
“ Charter ” means, with respect to any Person,
its certificate or articles of incorporation, articles of
association, or similar organizational document.
“ Common Stock ” has the meaning ascribed to it
in the Purchase Agreement.
“ Company ” means the Person whose name,
corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.
“ conversion ” has the meaning set forth in
Section 13(B).
“ convertible securities ” has the meaning set
forth in Section 13(B).
“ CPP ” has the meaning ascribed to it in the
Purchase Agreement.
“ Exchange Act ” means the Securities Exchange
Act of 1934, as amended, or any successor statute, and the rules
and regulations promulgated thereunder.
“ Exercise Price ” means the amount set forth in
Item 2 of Schedule A hereto.
“ Expiration Time ” has the meaning set forth in
Section 3.
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“ Fair Market Value ” means, with respect to any
security or other property, the fair market value of such security
or other property as determined by the Board of Directors, acting
in good faith or, with respect to Section 14, as determined by the
Original Warrantholder acting in good faith. For so long as the
Original Warrantholder holds this Warrant or any portion thereof,
it may object in writing to the Board of Director’s
calculation of fair market value within 10 days of receipt of
written notice thereof. If the Original Warrantholder and the
Company are unable to agree on fair market value during the 10-day
period following the delivery of the Original Warrantholder’s
objection, the Appraisal Procedure may be invoked by either party
to determine Fair Market Value by delivering written notification
thereof not later than the 30 th day after
delivery of the Original Warrantholder’s objection.
“ Governmental Entities ” has the meaning
ascribed to it in the Purchase Agreement.
“ Initial Number ” has the meaning set forth in
Section 13(B).
“Issue Date” means the date set forth in Item 3
of Schedule A hereto.
“ Market Price ” means, with respect to a
particular security, on any given day, the last reported sale price
regular way or, in case no such reported sale takes place on such
day, the average of the last closing bid and ask prices regular
way, in either case on the principal national securities exchange
on which the applicable securities are listed or admitted to
trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices
as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that
purpose. “Market Price” shall be determined
without reference to after hours or extended hours trading. If such
security is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be
(i) in the event that any portion of the Warrant is held by the
Original Warrantholder, the fair market value per share of such
security as determined in good faith by the Original Warrantholder
or (ii) in all other circumstances, the fair market value per share
of such security as determined in good faith by the Board of
Directors in reliance on an opinion of a nationally recognized
independent investment banking corporation retained by the Company
for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the Market
Price of the Common Stock on the “trading day”
preceding, on or following the occurrence of an event, (i) that
trading day shall be deemed to commence immediately after the
regular scheduled closing time of trading on the New York Stock
Exchange or, if trading is closed at an earlier time, such earlier
time and (ii) that trading day shall end at the next regular
scheduled closing time, or if trading is closed at an earlier time,
such earlier time (for the avoidance of doubt, and as an example,
if the Market Price is to be determined as of the last trading day
preceding a specified event and the closing time of trading on a
particular day is 4:00 p.m. and the specified event occurs at 5:00
p.m. on that day, the Market Price would be determined by reference
to such 4:00 p.m. closing price).
“
Ordinary Cash Dividends ” means a regular quarterly
cash dividend on shares of Common Stock out of surplus or net
profits legally available therefor (determined in accordance with
generally accepted accounting principles in effect from time to
time), provided that Ordinary Cash Dividends shall not
include any cash dividends paid subsequent to the Issue Date to the
extent the aggregate per share dividends paid on the outstanding
Common Stock in any quarter exceed the amount set forth in Item 4
of Schedule A hereto, as adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar
transaction.
UST Sequence No. 701
“ Original Warrantholder ” means the United
States Department of the Treasury. Any actions specified to
be taken by the Original Warrantholder hereunder may only be taken
by such Person and not by any other Warrantholder.
“ Permitted Transactions ” has the meaning set
forth in Section 13(B).
“Person” has the meaning given to it in Section 3(a)(9)
of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act.
“Per Share Fair Market Value” has the meaning set forth
in Section 13(C).
“Preferred Shares” means the perpetual preferred stock
issued to the Original Warrantholder on the Issue Date pursuant to
the Purchase Agreement.
“Pro Rata Repurchases” means any purchase of shares of
Common Stock by the Company or any Affiliate thereof pursuant to
(A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder
or (B) any other offer available to substantially all holders of
Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other
Person or any other property (including, without limitation, shares
of Capital Stock, other securities or evidences of indebtedness of
a subsidiary), or any combination thereof, effected while this
Warrant is outstanding. The “ Effective Date
” of a Pro Rata Repurchase shall mean the date of acceptance
of shares for purchase or exchange by the Company under any tender
or exchange offer which is a Pro Rata Repurchase or the date of
purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.
“ Purchase Agreement ” means the Securities
Purchase Agreement – Standard Terms incorporated into the
Letter Agreement, dated as of the date set forth in Item 5 of
Schedule A hereto, as amended from time to time, between the
Company and the United States Department of the Treasury (the
“ Letter Agreement ”), including all annexes and
schedules thereto.
“ Qualified Equity Offering ” has the meaning
ascribed to it in the Purchase Agreement.
“Regulatory Approvals” with respect to the
Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
“ SEC ” means the U.S. Securities and Exchange
Commission.
“ Securities Act ” means the Securities Act of
1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
“ Shares ” has the meaning set forth in Section
2.
UST Sequence No. 701
“trading day” means (A) if the shares of Common
Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day
or (B) if the shares of Common Stock are traded on any national or
regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares
of Common Stock (i) are not suspended from trading on any national
or regional securities exchange or association or over-the-counter
market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or
regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the shares of
Common Stock.
“ U.S. GAAP ” means United States generally
accepted accounting principles.
“ Warrantholder ” has the meaning set forth in
Section 2.
“ Warrant ” means this Warrant, issued pursuant
to the Purchase Agreement.
2. Number of
Shares; Exercise Price . This certifies that, for value
received, the United States Department of the Treasury or its
permitted assigns (the “ Warrantholder ”) is
entitled, upon the terms and subject to the conditions hereinafter
set forth, to acquire from the Company, in whole or in part, after
the receipt of all applicable Regulatory Approvals, if any, up to
an aggregate of the number of fully paid and nonassessable shares
of Common Stock set forth in Item 6 of Schedule A hereto, at a
purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the “
Shares ”) and the Exercise Price are subject to
adjustment as provided herein, and all references to “Common
Stock,” “Shares” and “Exercise Price”
herein shall be deemed to include any such adjustment or series of
adjustments.
3. Exercise of
Warrant; Term . Subject to Section 2, to the extent permitted
by applicable laws and regulations, the right to purchase the
Shares represented by this Warrant is exercisable, in whole or in
part by the Warrantholder, at any time or from time to time after
the execution and delivery of this Warrant by the Company on the
date hereof, but in no event later than 5:00 p.m., New York City
time on the tenth anniversary of the Issue Date (the “
Expiration Time ”), by (A) the surrender of this
Warrant and Notice of Exercise annexed hereto, duly completed and
executed on behalf of the Warrantholder, at the principal executive
office of the Company located at the address set forth in Item 7 of
Schedule A hereto (or such other office or agency of the Company in
the United States as it may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the
books of the Company), and (B) payment of the Exercise Price for
the Shares thereby purchased:
(i) by having the
Company withhold, from the shares of Common Stock that would
otherwise be delivered to the Warrantholder upon such exercise,
shares of Common stock issuable upon exercise of the Warrant equal
in value to the aggregate Exercise Price as to which this Warrant
is so exercised based on the Market Price of the Common Stock on
the trading day on which this Warrant is exercised and the Notice
of Exercise is delivered to the Company pursuant to this Section 3,
or
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(ii) with the consent of
both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the
Company, or by wire transfer of immediately available funds to an
account designated by the Company.
If the Warrantholder does not exercise this Warrant in its
entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding
three business days, a new warrant in substantially identical form
for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised.
Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of
this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory
Approvals.
4. Issuance of
Shares; Authorization; Listing . Certificates for Shares
issued upon exercise of this Warrant will be issued in such name or
names as the Warrantholder may designate and will be delivered to
such named Person or Persons within a reasonable time, not to
exceed three business days after the date on which this Warrant has
been duly exercised in accordance with the terms of this
Warrant. The Company hereby represents and warrants that any
Shares issued upon the exercise of this Warrant in accordance with
the provisions of Section 3 will be duly and validly authorized and
issued, fully paid and nonassessable and free from all taxes, liens
and charges (other than liens or charges created by the
Warrantholder, income and franchise taxes incurred in connection
with the exercise of the Warrant or taxes in respect of any
transfer occurring contemporaneously therewith). The Company agrees
that the Shares so issued will be deemed to have been issued to the
Warrantholder as of the close of business on the date on which this
Warrant and payment of the Exercise Price are delivered to the
Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be
actually delivered on such date. The Company will at all
times reserve and keep available, out of its authorized but
unissued Common Stock, solely for the purpose of providing for the
exercise of this Warrant, the aggregate number of shares of Common
Stock then issuable upon exercise of this Warrant at any
time. The Company will (A) procure, at its sole expense, the
listing of the Shares issuable upon exercise of this Warrant at any
time, subject to issuance or notice of issuance, on all principal
stock exchanges on which the Common Stock is then listed or traded
and (B) maintain such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts to
ensure that the Shares may be issued without violation of any
applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5. No Fractional
Shares or Scrip . No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this
Warrant. In lieu of any fractional Share to which the
Warrantholder would otherwise be entitled, the Warrantholder shall
be entitled to receive a cash payment equal to the Market Price of
the Common Stock on the last trading day preceding the date of
exercise less the pro-rated Exercise Price for such fractional
share.
UST Sequence No. 701
6. No Rights as
Stockholders; Transfer Books . This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a
stockholder of the Company prior to the date of exercise hereof.
The Company will at no time close its transfer books against
transfer of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
7. Charges,
Taxes and Expenses . Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made
without charge to the Warrantholder for any issue or transfer tax
or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expens
