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Exhibit 4.2 Warrant
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 396,412 Shares of Common Stock of Bridge
Capital Holdings Issue Date: December 23, 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). 2
“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. 3
“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
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 t
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