Exhibit 4.1
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
57,671
Shares of Common Stock
of
SALISBURY
BANCORP, INC.
Issue Date: March 13, 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.
"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
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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
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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.
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"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.
"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
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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.
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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
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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.
8.
Transfer/Assignment.
(A) Subject
to compliance with clause (B) of this
Section 8, 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 ne
