Exhibit 4.1


 


UST No. 384


 


WARRANT TO PURCHASE PREFERRED STOCK


 


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


164.00164


Shares of Preferred Stock


 


of Congaree
Bancshares, Inc.


 


Issue
Date:  January 9, 2009


 


1.             Definitions.
Unless the context otherwise requires, when used herein the following terms
shall have the meanings indicated.


 


“Board of
Directors” means the board of directors of the Company, including
any duly authorized committee thereof.


 


“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.


 


“Charter”
means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.


 


“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.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any 


 


1

















 


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.


 


“Issue Date” means the date set forth in
Item 3 of Schedule A hereto.


 


“Liquidation
Amount” means the amount set forth in Item 4 of Schedule A hereto.


 


“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.


 


“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.


 


“Preferred Stock” means the series of
perpetual preferred stock set forth in Item 5 of Schedule A hereto.


 


“Purchase
Agreement” means the Securities Purchase Agreement – Standard Terms
incorporated into the Letter Agreement, dated as of the date set forth in Item
6 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.


 


“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 Preferred Stock and to own such Preferred 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.


 


“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 


 


2

















 


number of fully paid and
nonassessable shares of Preferred Stock set forth in Item 7 of Schedule A
hereto (the “Shares”), at a
purchase price per share of Preferred Stock equal to the Exercise Price.


 


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 8 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, by having the Company
withhold, from the shares of Preferred Stock that would otherwise be delivered
to the Warrantholder upon such exercise, shares of Preferred Stock issuable
upon exercise of the Warrant with an aggregate Liquidation Amount equal in
value to the aggregate Exercise Price as to which this Warrant is so exercised.


 


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. 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 preferred stock, solely for the purpose of providing for the exercise
of this Warrant, the aggregate number of shares of Preferred Stock then
issuable upon exercise of this Warrant at any time.  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.


 


3

















 


5.             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.


 


6.             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 expenses
shall be paid by the Company.


 


7.             Transfer/Assignment.


 


(a) Subject to compliance with
clause (b) of this Section 7, this Warrant and all rights hereunder
are transferable, in whole or in part, upon the books of the Company by the
registered holder hereof in person or by duly authorized attorney, and a new
warrant shall be made and delivered by the Company, of the same tenor and date
as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the
Company described in Section 3.  All
expenses (other than stock transfer taxes) and other charges payable in
connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 7 shall be paid by the Company.


 


(b) The transfer of the
Warrant and the Shares issued upon exercise of the Warrant are subject to the
restrictions set forth in Section 4.4 of the Purchase Agreement.  If and for so long as required by the
Purchase Agreement, this Warrant shall contain the legends as set forth in Section 4.2(a) of
the Purchase Agreement.


 


8.             Exchange
and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares.  The Company shall maintain a
registry showing the name and address of the Warrantholder as the registered
holder of this Warrant. This Warrant may be surrendered for exchange or
exercise in accordance with its terms, at the office of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.


 


9.             Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.


 


10.           Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
business day, then such action may be taken or such right may be exercised on
the next succeeding day that is a business day.


 


4

















 


11.           Rule 144
Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by
it under the Securities Act and the Exchange Act and the rules and
regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best
efforts to take such further action as any Warrantholder may reasonably
request, in each case to the extent required from time to time to enable such
holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (b) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such
Warrantholder a written statement that it has complied with such requirements.


 


12.           Adjustments
and Other Rights. For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs that, in the good faith
judgment of the Board of Directors of the Company, would require adjustment of
the Exercise Price or number of Shares into which this Warrant is exercisable
in order to fairly and adequately protect the purchase rights of the Warrants
in accordance with the essential intent and principles of the Purchase
Agreement and this Warrant, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board of Directors, to protect such purchase rights as
aforesaid.


 


Whenever the Exercise Price or the
number of Shares into which this Warrant is exercisable shall be adjusted as
provided in this Section 12, the Company shall forthwith file at the
principal office of the Company a statement showing in reasonable detail the
facts requiring such adjustment and the Exercise Price that shall be in effect
and the number of Shares into which this Warrant shall be exercisable after
such adjustment, and the Company shall also cause a copy of such statement to
be sent by mail, first class postage prepaid, to each Warrantholder at the
address appearing in the Company’s records.


 


13.           No
Impairment. The Company will not, by amendment of its Charter or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek 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 the carrying out of all the provisions of this Warrant and in taking of all
such action as may be necessary or appropriate in order to protect the rights
of the Warrantholder.


 


14.           Governing
Law. This Warrant will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such State. Each of the
Company and the Warrantholder agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the District of
Columbia for any civil action, suit or proceeding arising out of or relating to
this Warrant or the transactions contemplated hereby, and (b) that notice
may be served upon the Company at the address in Section 17 below and upon
the Warrantholder at the address for the Warrantholder set forth in the
registry maintained by the Company pursuant to Section 8 hereof.  To the extent permitted by applicable law, 


 


5

















 


each of the Company and the
Warrantholder hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to the Warrant or the transactions contemplated
hereby or thereby.


 


15.           Binding
Effect. This Warrant shall be binding upon any successors or assigns of the
Company.


 


16.           Amendments.
This Warrant may be amended and the observance of any term of this Warrant may
be waived only with the written consent of the Company and the Warrantholder.


 


17.           Notices.
Any notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly
given (a) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt, or (b) on the second business day
following the date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered as set forth in Item 9 of
Schedule A hereto, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice.


 


18.           Entire
Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter
Agreement (including all documents incorporated therein), contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.


 


[Remainder
of page intentionally left blank]


 


6

















 


[Form of Notice of Exercise]


	
  Date:

  	
   

  	
   

  



 


TO:         Congaree
Bancshares, Inc.


 


RE:          Election
to Purchase Preferred Stock


 


The undersigned, pursuant to the provisions
set forth in the attached Warrant, hereby agrees to subscribe for and purchase
the number of shares of the Preferred Stock set forth below covered by such
Warrant.  The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise
Price for such shares of Preferred Stock in the manner set forth in Section 3(B) of
the Warrant.  A new warrant evidencing
the remaining shares of Preferred Stock covered by such Warrant, but not yet
subscribed for and purchased, if any, should be issued in the name set forth
below.


 


	
  Number of Shares of Preferred Stock

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Aggregate Exercise Price:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
									



 


7

















 


IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed by a duly authorized officer.


 


	
  Dated: January 9,
  2009

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONGAREE BANCSHARES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ F. Harvin Ray, Jr.

  
	
   

  	
  Name:

  	
  F. Harvin Ray, Jr.

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Charlie T. Lovering, Jr.

  
	
   

  	
  Name: 

  	
  Charlie T. Lovering, Jr.

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  
					



 


 


[Signature Page to
Warrant]


 


8

















 


SCHEDULE A


 


Item 1 

Name:  Congaree Bancshares, Inc.

Corporate or other organizational form: 
Corporation

Jurisdiction of organization:  South
Carolina


 


Item 2


 


Exercise Price: 
$.01


 


Item 3


Issue Date:  January 9,
2009


 


Item 4


Liquidation Amount:   $1,000


 


Item 5


Series of Perpetual Preferred Stock:  Fixed Rate Cumulative Perpetual Preferred Stock,
Series B


 


Item 6


Date of Letter Agreement
between the Company and the United States Department of the Treasury:  January 9, 2009


 


Item 7


Number of shares of
Preferred Stock:  164.00164


 


Item 8


	
  Company’s address: 

  	
  1201 Knox Abbott Drive

  
	
   

  	
  Cayce, South Carolina 29033

  



 


Item
9


	
  Notice
  information:

  	
  F.
  Harvin Ray, Jr.

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
  1201 Knox Abbott Drive

  
	
   

  	
  Cayce, South Carolina 29033

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  J. Brennan Ryan

  
	
   

  	
  Nelson Mullins Riley & Scarborough
  LLP

  
	
   

  	
  Atlantic Station

  
	
   

  	
  201 17th Street NW,
  Suite 1700

  
	
   

  	
  Atlanta, Georgia 30363