Document:

Form of Director Warrant Agreement

 Exhibit 10.4 
 TOUCHSTONE BANCSHARES, INC. 
 DIRECTOR WARRANT AGREEMENT 
             , 2007 
  

									
	 Warrant Holder:
	 	  
	 		  	No. of Shares:	 	  

 Touchstone Bancshares, Inc. (the “Company”), a Georgia corporation and the
holding company for Touchstone National 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, in
recognition of the financial risk undertaken by the Warrant Holder in organizing the Bank and the Company, and the continuing involvement of the Warrant Holder in the management of the Company and the Bank. Such Warrants are granted on the following
terms and conditions: 
 1. Exercise of Warrants. One-third of the shares (the “Shares”) subject to the Warrants
granted in this Director Warrant Agreement shall vest on each of the first three anniversaries of the date of the opening of the Bank, subject to the Warrant Holder’s continued service with the Company or the Bank as of such date as an
executive officer or director. Exercise of the Warrants is subject to the following: 
 (a) Exercise Price. The exercise price (the
“Exercise Price”) shall 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. Eastern Standard Time on the tenth anniversary of the opening date of the bank (subject to earlier termination in certain circumstances pursuant to Section 5 below), 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. 
 (d) Method of Exercise. The Warrants shall be exercisable by a written notice delivered to the Chief Executive Officer 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 Director Warrant Agreement.

 (e) 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 Director 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
Director Warrant Agreement. 
 (f) 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 Bank or the holder hereof, as applicable, obtains any approval or other clearance which
the Bank determines to be necessary or advisable from the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Comptroller of the Currency 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 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 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 laws. 
  

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	 	4.	Transfer and Assignment. 

 (a) Except
in the case of the Warrant Holder’s death, and thereupon only by will or under the laws of descent and distribution, this Director Warrant Agreement and the Warrants may not be assigned, transferred, 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. 
 (b) The Shares issued upon exercise of the Warrants granted in this Director Warrant Agreement may not be
transferred or sold unless the transfer is exempt from further regulatory approval or otherwise permissible under applicable law, including state and federal securities laws, and will bear a legend to this effect. 
  

	 	5.	Mandatory Exercise; Termination. 

 (a) Warrant
Holder shall exercise all of Warrant Holder’s then exercisable Warrants within 90 days of the date that Warrant Holder ceases to serve the Company or the Bank, as the case may be, as an executive officer, or director, or the then
exercisable Warrants shall terminate; provided that such 90 day period shall be extended to one year if the cessation of service was a result of the Warrant Holder’s death or disability. In the event the Warrant Holder fails to exercise
any of the Warrants referred to in this subparagraph within the specified day period, such Warrants shall be forfeited. 
 (b) 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 to require the Warrant
Holders to either (i) exercise or forfeit all or part of their Warrants or (ii) allow the Warrants to be terminated. If the Regulatory Agencies so direct the Company, then the Warrant Holder must exercise or forfeit the Warrants as set
forth below. 
 (c) When the Company or the Bank is required to increase its capital as described in subsection (b) 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 Director Warrant 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”); and (iii) stating that the failure of the Warrant holder to exercise the Warrants shall result in their automatic termination. 
 (d) If the Warrant Holder does not exercise the Warrants pursuant to the terms of the Notice, this Director Warrant Agreement shall be automatically
terminated on the Deadline, 

  

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without further act or action by the Warrant Holder or the Company, and the Warrant Holder shall deliver this Director Warrant 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 Director Warrant Agreement, the Company shall issue a new Director Warrant Agreement in compliance with Section 1(e) hereof.

 6. 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, 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. 
 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. 
  

	 	8.	Miscellaneous. 

 (a) Notices. All notices,
requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, telegram or facsimile transmission, or if mailed, by postage prepaid first class mail,
on the third business day after mailing, to the following address (or at such other address as a party may notify the other hereunder): 
 To
the Company: 
 Touchstone Bancshares, Inc. 
 3740 Davinci Court, Suite 150 
 Norcross, Georgia 30092 
 Attn: Mr. William R. Short 
 President and CEO 
  

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 To the Warrant Holder: 
  

							
	  
	 		  		  	
	  
	 		  		  	
	  
	 		  		  	

 (b) Amendment. Neither this Director Warrant Agreement nor the rights granted hereunder may
be amended, changed or waived except in writing signed by each party hereto. 
 (c) Counterparts. This Director Warrant Agreement may
be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 
 (d)
Governing Law. This Director Warrant Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia. 
 IN WITNESS WHEREOF, the Company has executed and the holder has accepted this Director Warrant Agreement as of the date and year first above written. 
  

			
	 TOUCHSTONE BANCSHARES, INC.

		
	 By:
	 	  

	 Print Name:
	 	  

	 Title:
	 	  

  

			
	 ATTEST
	 	
		
	 (CORPORATE SEAL)
	 	
	
	  

	 Secretary
	 	

  

			
	WARRANT HOLDER
		
	 By:
	 	  

	 Print Name:
	 	  

	 Title:
	 	  

  

 5Form of Escrow Agreement

 Exhibit 10.5 
 ESCROW AGREEMENT 
 THIS ESCROW AGREEMENT (this “Agreement”) is entered into and
effective as of the      day of                     , 2007, by and between Touchstone Bancshares,
Inc., a Georgia corporation (the “Company”), and The Bankers Bank (the “Escrow Agent”). 
 W I T N E S S E T H:

 WHEREAS, the Company proposes to offer and sell (the “Offering”) up to 4,156,250 shares of Common Stock, $0.01
par value per share (the “Shares”), to investors at $10.00 per Share pursuant to a registered public offering; and 
 WHEREAS, the Company desires to establish an escrow for funds forwarded by subscribers for Shares, and the Escrow Agent is willing to serve as Escrow Agent upon the terms and conditions herein set forth. 
 NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows: 
  

	 	1.	Deposit with Escrow Agent. 

 (a) The Escrow
Agent agrees that it will from time to time accept, in its capacity as escrow agent, subscription funds for the Shares (the “Escrowed Funds”) in the form of checks received by the Company from subscribers. All checks shall be made payable
to the Escrow Agent. If any check does not clear normal banking channels in due course, the Escrow Agent will promptly notify the Company. Any check which does not clear normal banking channels and is returned by the drawer’s bank to Escrow
Agent will be promptly turned over to the Company along with all other subscription documents relating to such check. Any check received that is made payable to a party other than the Escrow Agent shall be returned to the Company for return to the
proper party. The Company in its sole and absolute discretion may reject any subscription for shares for any reason and upon such rejection it shall notify and instruct the Escrow Agent in writing to return the Escrowed Funds by check made payable
to the subscriber. If the Company rejects or cancels any subscription for any reason the Company will retain any interest earned on the Escrowed Funds to help defray organizational costs. 
 (b) Subscription agreements for the Shares shall be reviewed for accuracy by the Company and, immediately thereafter, the Company shall deliver to the
Escrow Agent the following information: (i) the name and address of the subscriber; (ii) the number of Shares subscribed for by such subscriber; (iii) the subscription price paid by such subscriber; (iv) the subscriber’s tax
identification number certified by such subscriber; and (v) a copy of the subscription agreement. 
 2. Investment of Escrowed
Funds. Upon collection of each check by the Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or certificates of deposit which are fully insured by the Federal Deposit Insurance Corporation or another agency of the
United States government, short-term securities issued or fully guaranteed by the United States government, or such other investments as the Escrow Agent and the Company shall agree. The 

 
Company shall provide the Escrow Agent with instructions from time to time concerning in which of the specific investment instruments described above the
Escrowed Funds shall be invested, and the Escrow Agent shall adhere to such instructions. Interest and other earnings shall start accruing on such funds as soon as such funds would be deemed to be available for access under applicable banking laws
and pursuant to the Escrow Agent’s own banking policies. 
 3. Distribution of Escrowed Funds. The Escrow Agent shall
distribute the Escrowed Funds in the amounts, at the times, and upon the conditions hereinafter set forth in this Agreement. 
 (a) If at any
time on or prior to the expiration date of the offering as described in the prospectus relating to the offering, (the “Closing Date”), (i) the Escrow Agent has certified to the Company in writing that the Escrow Agent has received at
least $31,250,000 in Escrowed Funds, and (ii) the Escrow Agent has received a certificate from the President or the Chairman of the Board of the Company that all other conditions to the release of funds as described in the Company’s
prospectus related to the Offering as filed with the Securities and Exchange Commission have been met, then the Escrow Agent shall deliver the Escrowed Funds to the Company to the extent such Escrowed Funds are collected funds. Funds will not be
released without written approval from the Office of the Comptroller of the Currency. If any portion of the Escrowed Funds are not collected funds, then the Escrow Agent shall notify the Company of such facts and shall distribute such funds to the
Company only after such funds become collected funds. For purposes of this Agreement, “collected funds” shall mean all funds received by the Escrow Agent, which have cleared normal banking channels. 
 (b) If the Escrowed Funds do not, on or prior to the Closing Date, become deliverable to the Company based on failure to meet the conditions described in
Paragraph 3(a), or if the Company terminates the offering at any time prior to the Closing Date and delivers written notice to the Escrow Agent of such termination (the “Termination Notice”), the Escrow Agent shall return the Escrowed
Funds, without interest, which are collected funds as directed in writing by the Company to the respective subscribers in amounts equal to the subscription amount theretofore paid by each of them. All uncleared checks representing Escrowed Funds
which are not collected funds as of the initial Closing Date shall be collected by the Escrow Agent, and together with all related subscription documents thereof shall be delivered to the Company by the Escrow Agent, unless the Escrow Agent is
otherwise specifically directed in writing by the Company. 
 4. Distribution of Interest. Any interest earned on the Escrowed
Funds shall be retained by the Company. 
 5. Service Charges. A $20.00 per check fee will be charged if the escrow account has
to be refunded due to a failure to complete the subscription. All such fees are payable upon the release of the Escrowed Funds, and the Escrow Agent is hereby authorized to deduct such fees from the Escrowed Funds prior to any release thereof
pursuant to Section 3 hereof. 
  

	 	6.	Liability of Escrow Agent. 

 (a) In
performing any of its duties under the Agreement, or upon the claimed failure 

  

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to perform its duties hereunder, the Escrow Agent shall not be liable to anyone for any damages, losses or expenses which it may incur as a result of the
Escrow Agent so acting, or failing to act; provided, however, the Escrow Agent shall be liable for damages arising out of its willful default or misconduct or its gross negligence under this Agreement. Accordingly, the Escrow Agent shall not incur
any such liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of its counsel or counsel for the Company which is given with respect to any questions relating to the duties and responsibilities of the
Escrow Agent hereunder; or (ii) any action taken or omitted to be taken in reliance upon any document, including any written notice or instructions provided for in this Escrow Agreement, not only as to its due execution and to the validity and
effectiveness of its provisions but also as to the truth and accuracy of any information contained therein, if the Escrow Agent shall in good faith believe such document to be genuine, to have been signed or presented by a proper person or persons,
and to conform with the provisions of this Agreement. 
 (b) The Company agrees to indemnify and hold harmless the Escrow Agent against any
and all losses, claims, damages, liabilities and expenses, including, without limitation, reasonable costs of investigation and counsel fees and disbursements which may be imposed by the Escrow Agent or incurred by it in connection with its
acceptance of this appointment as Escrow Agent hereunder or the performance of its duties hereunder, including, without limitation, any litigation arising from this Escrow Agreement or involving the subject matter thereof; except, that if the Escrow
Agent shall be found guilty of willful misconduct or gross negligence under this Agreement, then, in that event, the Escrow Agent shall bear all such losses, claims, damages and expenses. 
 (c) If a dispute ensues between any of the parties hereto which, in the opinion of the Escrow Agent, is sufficient to justify its doing so, the Escrow
Agent shall retain legal counsel of its choice as it reasonably may deem necessary to advise it concerning its obligations hereunder and to represent it in any litigation to which it may be a part by reason of this Agreement. The Escrow Agent shall
be entitled to tender into the registry or custody of any court of competent jurisdiction all money or property in its hands under the terms of this Agreement, and to file such legal proceedings as it deems appropriate, and shall thereupon be
discharged from all further duties under this Agreement. Any such legal action may be brought in any such court as the Escrow Agent shall determine to have jurisdiction thereof. In connection with such dispute, the Company shall indemnify the Escrow
Agent against its court costs and reasonable attorney’s fees incurred. 
 (d) The Escrow Agent may resign at any time upon giving thirty
(30) days written notice to the Company. If a successor escrow agent is not appointed by Company within thirty (30) days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor
escrow agent, and the Escrow Agent herein shall be fully relieved of all liability under this Agreement to any and all parties upon the transfer of the Escrowed Funds and all related documentation thereto, including appropriate information to assist
the successor escrow agent with the reporting of earnings of the Escrowed Funds to the appropriate state and federal agencies in accordance with the applicable state and federal income tax laws, to the successor escrow agent designated by the
Company appointed by the court. 
 7. Appointment of Successor. The Company may, upon the delivery of thirty
(30) days’ written notice appointing a successor escrow agent to the Escrow Agent, terminate the services of the Escrow Agent hereunder. In the event of such termination, the Escrow Agent shall immediately deliver to the successor escrow
agent selected by the Company all 

  

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documentation and Escrowed Funds including interest earnings thereon in its possession, less any fees and expenses due to the Escrow Agent or required to be
paid by the Escrow Agent to a third party pursuant to this Agreement. 
 8. Notice. All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given three days after having been deposited for mailing if sent by registered mail, or certified mail return receipt
requested, or delivery by courier, to the respective addresses set forth below: 
  

			
	 If to the subscribers for Shares:
	  	To their respective addresses as specified in their Subscription Agreements.
		
	 The Company:
	  	Touchstone Bancshares, Inc.
		  	3740 Davinci Court, Suite 150
		  	Norcross, Georgia 30092
		  	Attention: William R. Short
		  	Chief Executive Officer
		
	 With a copy to:
	  	Smith, Gambrell & Russell, LLP
		  	Suite 3100, Promenade II
		  	1230 Peachtree Street, N.E.
		  	Atlanta, Georgia 30309
		  	Attention: Robert C. Schwartz, Esq.
		
	 The Escrow Agent:
	  	The Bankers Bank
		  	2410 Paces Ferry Road
		  	600 Paces Summit
		  	Atlanta, Georgia 30339-4098
		  	Attention: Loan Operations

 9. Representations of the Company. The Company hereby acknowledges that the status
of the Escrow Agent with respect to the offering of the Shares is that of agent only for the limited purposes herein set forth, and hereby agrees it will not represent or imply that the Escrow Agent, by serving as the Escrow Agent hereunder or
otherwise, has investigated the desirability or advisability in an investment in the Shares, or has approved, endorsed or passed upon the merits of the Shares, nor shall the Company use the name of the Escrow Agent in any manner whatsoever in
connection with the offer or sale of the Shares, other than by acknowledgment that it has agreed to serve as Escrow Agent for the limited purposes herein set forth. 
  

	 	10.	General. 

 (a) This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State of Georgia. 
 (b) The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 
  

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 (c) This Agreement sets forth the entire agreement and understanding of the parties with regard to this
escrow transaction and supersedes all prior agreements, arrangements and understandings relating to the subject matter hereof. 
 (d) This
Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance. The failure
of any part at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver in any one or more instances by any part of any condition, or of the breach of any
term contained in this Agreement, whether by conduct or otherwise, shall be deemed to be, or construed as, a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of the breach of any other terms of this
Agreement. 
 (e) This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. 
 (f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors and assigns. The Escrow Agent shall be bound only by the terms of this Escrow Agreement and shall not be bound by or incur any liability with respect to any other agreement or understanding between the
parties except as herein expressly provided. The Escrow Agent shall not have any duties hereunder except those specifically set forth herein. 
 (g) No interest in any part to this Agreement shall be assignable in the absence of a written agreement by and between all the parties to this Agreement, executed with the same formalities as this original Agreement. 
 IN WITNESS WHEREOF, the parties have duly executed this Agreement as the date first written above. 
  

							
	 COMPANY:
	  	ESCROW AGENT:
		
	 TOUCHSTONE BANCSHARES, INC.
	  	THE BANKERS BANK
				
	 By:
	 	  
	  	By:	  	  

		 	 William R. Short
	  	Name:	  	  

		 	 Chief Executive Officer
	  	Title:	  	  

  

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