WARRANT TO PURCHASE
COMMON 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
1,012,048
Shares of Common
Stock
of MB Financial,
Inc .
Issue Date: December 5,
2008
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.
“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.
“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 30th 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.
“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 1 4E
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.
“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
(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.
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 expenses
shall be paid by the Company.
