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
352,977
Shares of Common
Stock
of
First Northern Community
Bancorp
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 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
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.
“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.
“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.
