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Exhibit 4.1
UNDERWRITER'S WARRANT
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To Purchase [ ] Shares of Common Stock
of
Northern Star Financial, Inc.
THIS CERTIFIES THAT, for good and valuable consideration, Berthel
Fisher & Company Financial Services, Inc. (the "Underwriter"), or its registered
assigns, is entitled to subscribe for and purchase from Northern Star Financial,
Inc., a Minnesota corporation (the "Company"), at any time after September ___,
2001, up to and including September ___, 2006, [10% of shares sold]
___________________ (__________) fully paid and nonassessable shares of the
Common Stock of the Company at the price of $12.60 per share (the "Warrant
Exercise Price"), subject to the antidilution provisions of this Warrant.
Reference is made to this Warrant in the Underwriting Agreement dated September
___, 2000, by and between the Company and the Underwriter. The shares which may
be acquired upon exercise of this Warrant are referred to herein as the "Warrant
Shares." As used herein, the term "Holder" means the Underwriter, any party who
acquires all or a part of this Warrant as a registered transferee of the
Underwriter, or any record holder or holders of the Warrant Shares issued upon
exercise, whether in whole or in part, of the Warrant; the term "Common Stock"
means and includes the Company's presently authorized common stock, $.01 par
value, and shall also include any capital stock of any class of the Company
hereafter authorized which shall not be limited to a fixed sum or percentage in
respect of the rights of the holders thereof to participate in dividends or in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution, or winding up of the Company, provided, however, that the Warrant
Shares shall include shares designated as Common Stock on the date this Warrant
was originally issued; and the term "Convertible Securities" means any stock or
other securities convertible into, or exchangeable for, Common Stock.
This Warrant is subject to the following provisions, terms and
conditions:
1. Exercise; Transferability.
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(a) The rights represented by this Warrant may be exercised by the
Holder hereof, in whole or in part (but not as to a fractional share of Common
Stock), by written notice of exercise (in the form attached hereto) delivered to
the Company at the principal office of the Company prior to the expiration of
this Warrant and accompanied or preceded by the surrender of this Warrant along
with a check in payment of the Warrant Exercise Price for such shares or without
payment of cash pursuant to Section 10 hereof.
(b) Until exercisable, this Warrant may not be sold, assigned,
hypothecated, or otherwise transferred, other than by will or pursuant to the
operation of law, except to a person who is an officer or partner of the
Underwriter. Further, this Warrant may not be sold, transferred, assigned,
hypothecated or divided into two or more Warrants of smaller
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denominations, nor may any Warrant Shares issued pursuant to exercise of this
Warrant be transferred, except as provided in Section 7 hereof.
2. Exchange and Replacement. Subject to Sections l and 7 hereof,
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this Warrant is exchangeable upon the surrender hereof by the Holder to the
Company at its office for new Warrants of like tenor and date representing in
the aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant;
provided, however, that if the Underwriter shall be such Holder, an agreement of
indemnity by such Holder shall be sufficient for all purposes of this Section 2.
This Warrant shall be promptly canceled by the Company upon the surrender hereof
in connection with any exchange or replacement. The Company shall pay all
expenses, taxes (other than stock transfer taxes), and other charges payable in
connection with the preparation, execution, and delivery of Warrant pursuant to
this Section 2.
3. Issuance of the Warrant Shares.
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(a) The Company agrees that the shares of Common Stock purchased
hereby shall be and are deemed to be issued to the Holder as of the close of
business on the date on which this Warrant shall have been surrendered and the
payment made for such Warrant Shares as aforesaid. Subject to the provisions of
the next section, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding fifteen (15)
days after the rights represented by this Warrant shall have been so exercised,
and, unless this Warrant has expired, a new Warrant representing the right to
purchase the number of Warrant Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the Holder
within such time.
(b) Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for Warrant Shares upon exercise of this
Warrant except in accordance with exemptions from the applicable securities
registration requirements or registrations under applicable securities laws.
Nothing herein, however, shall obligate the Company to effect registrations
under federal or state securities laws, except as provided in Section 9. If
registrations are not in effect and if exemptions are not available when the
Holder seeks to exercise the Warrant, the Warrant exercise period will be
extended, if need be, to prevent the Warrant from expiring, until such time as
either registrations become effective or exemptions are available, and the
Warrant shall then remain exercisable for a period of at least 30 calendar days
from the date the Company delivers to the Holder written notice of the
availability of such registrations or exemptions. The Holder agrees to execute
such documents and make such representations, warranties, and agreements as may
be required solely to comply with the
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exemptions relied upon by the Company, or the registrations made, for the
issuance of the Warrant Shares.
4. Covenants of the Company. The Company covenants and agrees that
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all Warrant Shares will, upon issuance, be duly authorized and issued, fully
paid, nonassessable, and free from all taxes, liens, and charges with respect to
the issue thereof. The Company further covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for the purpose of issue
or transfer upon exercise of the subscription rights evidenced by this Warrant a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
5. Antidilution Adjustments. The provisions of this Warrant are
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subject to adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to time
such that in case the Company shall hereafter:
(i) pay any dividends on any class of stock of the
Company payable in Common Stock or Convertible Securities;
(ii) subdivide its then outstanding shares of Common
Stock into a greater number of shares; or
(iii) combine outstanding shares of Common Stock, by
reclassification or otherwise;
then, in any such event, the Warrant Exercise Price in effect immediately prior
to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (a) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Warrant
Exercise Price, by (b) the total number of shares of Common Stock outstanding
immediately after such event (including the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and
the resulting quotient shall be the adjusted Warrant Exercise Price per share.
An adjustment made pursuant to this Subsection shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this Subsection, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation of the adjusted Warrant Exercise
Price between or among shares of such classes of capital stock or shares of
Common Stock and other capital stock. All calculations under this Subsection
shall be made to the nearest cent or to the nearest 1/100 of a share, as the
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case may be. In the event that at any time as a result of an adjustment made
pursuant to this Subsection, the Holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive any shares of the Company other
than shares of Common Stock, thereafter the Warrant Exercise Price of such other
shares so receivable upon exercise of any Warrant shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock contained in this Section.
(b) Upon each adjustment of the Warrant Exercise Price pursuant to
Section 5(a) above, the Holder of each Warrant shall thereafter (until another
such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price
the number of shares, calculated to the nearest full share, obtained by
multiplying the number of shares specified in such Warrant (as adjusted as a
result of all adjustments in the Warrant Exercise Price in effect prior to such
adjustment) by the Warrant Exercise Price in effect prior to such adjustment and
dividing the product so obtained by the adjusted Warrant Exercise Price.
(c) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), there shall be no adjustment under
Subsection (a) of this Section above but the Holder of each Warrant then
outstanding shall have the right thereafter to convert such Warrant into the
kind and amount of shares of stock and other securities and property which he
would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale, or conveyance had such Warrant
been converted immediately prior to the effective date of such consolidation,
merger, statutory exchange, sale, or conveyance and in any such case, if
necessary, appropriate adjustment shall be made in the application of the
provisions set forth in this Section with respect to the rights and interests
thereafter of any Holders of the Warrant, to the end that the provisions set
forth in this Section shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock and other
securities and property thereafter deliverable on the exercise of the Warrant.
The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then and in
each such case, the Company shall give written notice thereof, by first-class
mail, postage prepaid, addressed to the Holder as shown on the books of the
Company, which notice shall state the Warrant Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares of
Common Stock purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
6. No Voting Rights. This Warrant shall not entitle the Holder to
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any voting rights or other rights as a shareholder of the Company.
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7. Notice of Transfer of Warrant or Resale of the Warrant Shares.
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(a) Subject to the sale, assignment, hypothecation, or other transfer
restrictions set forth in Section 1 hereof, the Holder, by acceptance hereof,
agrees to give written notice to the Company before transferring this Warrant or
transferring any Warrant Shares of such Holder's intention to do so, describing
briefly the manner of any proposed transfer. Promptly upon receiving such
written notice, the Company shall present copies thereof to the Company's
counsel and to counsel to the original purchaser of this Warrant. If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Warrant or to dispose of
Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided that an appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel and satisfactory to the
Company to prevent further transfers which would be in violation of Section 5 of
the Securities Act of 1933, as amended (the "1933 Act") and applicable state
securities laws; and provided further that the prospective transferee or
purchaser shall execute such documents and make such representations,
warranties, and agreements as may be required solely to comply with the
exemptions relied upon by the Company for the transfer or disposition of the
Warrant or Warrant Shares.
(b) If in the opinion of either of the counsel referred to in this
Section 7, the proposed transfer or disposition of this Warrant or such Warrant
Shares described in the written notice given pursuant to this Section 7 may not
be effected without registration or qualification of this Warrant or such
Warrant Shares the Company shall promptly give written notice thereof to the
Holder, and the Holder will limit its activities in respect to such as, in the
opinion of both such counsel, are permitted by law.
8. Fractional Shares. Fractional shares shall not be issued upon the
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exercise of this Warrant, but in any case where the Holder would, except for the
provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
same fraction of the Fair Market Value (as defined in Section 10(d)) per share
of Common Stock as of the close of business on the date the Holder exercises the
Warrant.
9. Registration Rights.
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(a) If the Company at any time after August ___, 2001 and prior to
the end of the one-year period following complete exercise of this Warrant, but
no more than six (6) years from the date of this Warrant, proposes to register
under the 1933 Act (except by a Form S-4 or Form S-8 Registration Statement or
any successor forms thereto) or qualify for a public distribution under Section
3(b) of the 1933 Act, any of its securities, it will give written notice to all
Holders of this Warrant, any Warrants issued pursuant to Section 2 and/or
Section 3(a) hereof, and any
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Warrant Shares not therefore registered under the 1933 Act and sold of its
intention to do so and, on the written request of any such Holder given within
twenty (20) days after receipt of any such notice (which request shall specify
the interest in this Warrant or the Warrant Shares intended to be sold or
disposed of by such Holder and describe the nature of any proposed sale or other
disposition thereof), the Company will use its best efforts to cause all such
Warrant Shares, the Holders of which shall have requested the registration or
qualification thereof, to be included in such registration statement proposed to
be filed by the Company; provided, however, that if a greater number of Warrant
Shares is offered for participation in the proposed offering than in the
reasonable opinion of the managing underwriter of the proposed offering can be
accommodated without adversely affecting the proposed offering, then the amount
of Warrant Shares proposed to be offered by such Holders for registration, as
well as the number of securities of any other selling shareholders participating
in the registration, shall be proportionately reduced to a number deemed
satisfactory by the managing underwriter and provided further, that nothing
herein shall prevent the Company from, at any time, abandoning or delaying any
registration.
(b) Further, on a one-time basis only, during the five-year period
commencing one year after the date of this Warrant, upon request by the Holder
or Holders of an aggregate of at least a majority in interest of this Warrant,
of any Warrants issued pursuant to Section 2 and/or Section 3(a) hereof, and of
any Warrant Shares not theretofore registered under the 1933 Act and sold, the
Company will promptly take all necessary steps to register or qualify, under the
1933 Act and the securities laws of such states as the Holders may reasonably
request, such number of Warrant Shares issued and to be issued upon conversion
of the Warrants requested by such Holders in their request to the Company;
provided, however, that the Company shall not be obligated to effect any such
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registration or qualification pursuant to this Section 9(b) (and upon the
happening of the occurrences referred to in subparagraph (i) below may withdraw
or abandon any such registration):
(i) if the Company shall furnish to such holders a certificate signed
by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, (x) the
offering would interfere in any material respect with any financing,
acquisition, corporate reorganization or other material transaction
under consideration by the Company or (y) there is some other material
development relating to the condition (financial or other) of the
Company that has not been disclosed to the general public and as to
which it is in the Company's best interests to not disclose such
development; provided, however, that, in any such event, the Company
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shall only have the right to defer the filing of the registration
statement for a period of not more than ninety (90) days after the
Company furnishes the holders with such certificate;
(ii) from and after the date on which the Company has filed a
registration statement with the SEC relating to an underwritten
offering that has resulted in the holders being given the opportunity
to include Warrant Shares in such registration statement pursuant to
the provisions of Section 9(a) hereof, through and until such period
of time as reasonably required by the managing underwriter for such
other underwritten offering but in no event longer than six months
after the effective date of such registration statement; or
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(iii) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or
compliance.
The Company shall keep effective and maintain any registration, qualification,
notification, or approval specified in this Subsection (b) for such period as
may be reasonably necessary for such Holder or Holders of such Warrant Shares to
dispose thereof and from time to time shall amend or supplement the prospectus
used in connection therewith to the extent necessary in order to comply with
applicable law; provided, however, if the registration specified in this
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Subsection (b) is pursuant to a Form SB-2 or S-1 Registration Statement or
successor form thereto, the Company is only required to maintain such
registration during the 90-day period immediately following the effective date
of such registration.
(c) With respect to each inclusion of securities in a registration
statement pursuant to this Section 9, the Company shall bear the following fees,
costs, and expenses: all registration, filing and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if the Company is required to bear such fees and disbursements), all internal
expenses, the premiums and other costs of policies of insurance against
liability arising out of the public offering, and legal fees and disbursements
and other expenses of complying with state securities laws of any jurisdictions
in which the securities to be offered are to be registered or qualified. Fees
and disbursements of special counsel and accountants for the selling Holders,
underwriting discounts and commissions, and transfer taxes for selling Holders
and any other expenses relating to the sale of securities by the selling Holders
not expressly included above shall be borne by the selling Holders.
(d) The Company hereby indemnifies each of the Holders of this
Warrant and of any Warrant Shares, and the officers and directors, if any, who
control such Holders, within the meaning of Section 15 of the 1933 Act, against
all losses, claims, damages, and liabilities caused by (1) any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (and as amended or supplemented if the Company shall
have furnished any amendments thereof or supplements thereto), or any
Preliminary Prospectus or any state securities law filings; and (2) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading except
insofar as such losses, claims, damages, or liabilities are caused by any untrue
statement or omission contained in information furnished in writing to the
Company by such Holder expressly for use therein; and each such Holder by its
acceptance hereof severally agrees that it will indemnify and hold harmless the
Company, each of its officers who signs such Registration Statement, and each
person, if any, who controls the Company, within the meaning of Section 15 of
the 1933 Act, with respect to losses, claims, damages, or liabilities which are
caused by any untrue statement or omission contained in information furnished in
writing to the Company by such Holder expressly for use therein.
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10. Additional Right to Convert Warrant.
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(a) The holder of this Warrant shall have the right to require the
Company to convert this Warrant (the "Conversion Right") at any time after it is
exercisable, but prior to its expiration into shares of Company Common Stock as
provided for in this Section 10. Upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of any
Warrant Exercise Price) that number of shares of Company Common Stock equal to
the quotient obtained by dividing (x) the value of the Warrant at the time the
Conversion Right is exercised (determined by subtracting the aggregate Warrant
Exercise Price for the Warrant Shares in effect immediately prior to the
exercise of the Conversion Right from the aggregate Fair Market Value for the
Warrant Shares immediately prior to the exercise of the Conversion Right) by (y)
the Fair Market Value of one share of Company Common Stock immediately prior to
the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Holder, at any time
or from time to time, prior to its expiration, on any business day by delivering
a written notice in the form attached hereto (the "Conversion Notice") to the
Company at the offices of the Company exercising the Conversion Right and
specifying (i) the total number of shares of Common Stock the Holder will
purchase pursuant to such Conversion Right and (ii) a place and date not less
than one or more than 20 business days from the date of the Conversion Notice
for the closing of such purchase.
(c) At any closing under Section 10(b) hereof, (i) the Holder will
surrender the Warrant and (ii) the Company will deliver to the Holder a
certificate or certificates for the number of shares of Company Common stock
issuable upon such conversion, together with cash, in lieu of any fraction of a
share, and (iii) the Company will deliver to the Holder a new warrant
representing the number of shares, if any, with respect to which the Warrant
shall not have been exercised.
(d) Fair Market Value of a share of Common Stock as of a particular
date (the "Determination Date") shall mean:
(i) If the Company's Common Stock is traded on an exchange
or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System, then the average
closing or last sale prices, respectively, reported for the ten (10)
business days immediately preceding the Determination Date, and
(ii) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System but is traded on the
over-the-counter market, then the average closing bid and asked prices
reported for the ten (10) business days immediately preceding the
Determination Date.
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IN WITNESS WHEREOF, Northern Star Financial, Inc. has caused this Warrant
to be signed by its duly authorized officer and this Warrant to be dated
September ___, 2000.
NORTHERN STAR FINANCIAL, INC.
By:______________________________
Its:_____________________
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To: Northern Star Financial, Inc.
NOTICE OF EXERCISE OF WARRANT -
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To Be Executed by the Registered Holder in Order to Exercise the Warrant
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, _________________ of the shares issuable upon the exercise of
such Warrant, and requests that certificates for such shares (together with a
new Warrant to purchase the number of shares, if any, with respect to which this
Warrant is not exercised) shall be issued in the name of
______________________________
(Print Name)
Please insert social security
or other tax identification
number of registered holder of
certificate (______________) Address:
______________________________
______________________________
Date: _______________ ______________________________
Signature*
*The signature on the Notice of Exercise of Warrant must correspond exactly to
the name as written upon the face of the Warrant in every particular without
alteration or enlargement or any change whatsoever. When signing on behalf of a
corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.
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ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrants.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto _____________________________, the assignee, whose address is
______________________ and whose tax identification or social security number is
__________________ the right represented by the foregoing Warrant to purchase
_______ shares of the Common Stock of Northern Star Financial, Inc. to which the
within Warrant relates and appoints _____________, attorney, to transfer said
right on the books of Northern Star Financial, Inc. with full power of
substitution in the premises.
Name of Warrant Holder/Assignor
Dated:________________ ___________________________________
(Signature)*
Address of Warrant Holder/Assignor:
Tax Identification No. or Social ___________________________________
Security No. of Warrant Holder/Assignor
___________________________________
______________________________
*Note: The above signature should correspond exactly with the name on the first
page of the Warrant or with the name of the assignee appearing on a duly
executed assignment form.
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CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant
pursuant to Section 10)
The undersigned hereby irrevocably elects a cashless exercise of the
right of purchase represented by the within Warrant Certificate for, and to
purchase thereunder, ______________ shares of Common Stock, as provided for in
Section 10 therein.
Please issue a certificate or certificates for such Common Stock in
the name of, and pay any cash for any fractional share to:
Name____________________________________
(Please print Name)
Address_________________________________
________________________________________
Tax Identification No. or Social
Security No.____________________________
Signature_______________________________
NOTE: The above signature should correspond exactly with the name on
the first page of this Warrant Certificate or with the name of the assignee
appearing on a duly executed assignment form.
And if said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of said undersigned for the balance remaining of the shares
purchasable thereunder rounded up to the next higher number of shares.
