EXHIBIT 4(b)
CAPITOL BANCORP
LTD.
Warrant
to Purchase Common Stock
Date of Issuance:
February ___, 2009Certificate No. CW-[___]
VOID AFTER FEBRUARY [
], 2014
THIS CERTIFIES THAT, for value
received, [
], or permitted registered assigns ( Holder ), is
entitled to subscribe for and purchase at the Exercise Price
(defined below) from Capitol Bancorp Ltd., a Michigan corporation (
Company ), up to [
] shares of the common stock of the Company, no par value per share
( Common Stock ). This warrant is one of a series of
warrants issued by the Company as of the date hereof (individually
a Warrant ; collectively, Company
Warrants ) in connection with the resale of Trust Preferred
Securities issued by Capitol Trust XII, a Delaware statutory
trust, from time to time that may be offered for resale by the
Company or certain affiliates of the Company.
1.
Definitions.
As used herein, the following terms
shall have the following respective meanings:
(a)
“Eligible
Market” means
any of the New York Stock Exchange, the American Stock Exchange,
The NASDAQ Global Market, The NASDAQ Global Select Market or The
NASDAQ Capital Market.
(b)
“Exercise
Period” shall
mean the period commencing six months after the date hereof
and ending five years from the date hereof, unless sooner
terminated as provided below.
(c)
“Exercise
Price” shall
mean $10.00 per share, subject to adjustment pursuant to
Section 4 below.
(d)
“Exercise
Shares” shall
mean the shares of Common Stock issuable upon exercise of this
Warrant.
(e)
“Trading
Day” shall mean
(a) any day on which the Common Stock is listed or quoted and
traded on its primary Trading Market, (b) if the Common Stock
is not then listed or quoted and traded on any Eligible Market,
then a day on which trading occurs on the OTC Bulletin Board (or
any successor thereto), or (c) if trading does not occur on
the OTC Bulletin Board (or any successor thereto), any business
day.
(f)
“Trading
Market” shall
mean the OTC Bulletin Board or any other Eligible Market, or any
national securities exchange, market or trading or quotation
facility on which the Common Stock is then listed or
quoted.
2.
Exercise
of Warrant. The rights
represented by this Warrant may be exercised in whole or in part at
any time during the Exercise Period, by delivery of the following
to the Company at its address set forth on the signature page
hereto (or at such other address as it
may designate
by notice in writing to the Holder):
(a)
An executed Notice of Exercise in
the form attached hereto;
(b)
Payment of the Exercise Price either
(i) in cash or by check or (ii) if permitted by the
Company, pursuant to Section 3 below; and
Execution and
delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Exercise
Shares, if any. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company
to the Holder by crediting the account of the Holder’s prime
broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission system if the Company is a participant
in such system, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within three
business days from the delivery to the Company of the Notice of
Exercise, surrender of this Warrant and payment of the aggregate
Exercise Price as set forth above. This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by
the Company. The person in whose name any certificate or
certificates for Exercise Shares are to be issued upon exercise of
this Warrant shall be deemed to have become the holder of record of
such shares on the date on which this Warrant was surrendered and
payment of the Exercise Price was made, irrespective of the date of
delivery of such certificate or certificates, except that, if the
date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open.
3.
Net
Exercise. If during the
Exercise Period the fair market value of one share of the Common
Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant
by payment of cash or by check, the Company may, in its sole
discretion, permit the Holder to effect a “net
exercise” of this Warrant, in which event, if so effected,
the Holder shall receive Exercise Shares equal to the value (as
determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise
in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following
formula:
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the number of
Exercise Shares to be issued to the Holder
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the number of
Exercise Shares with respect to which this Warrant is being
exercised
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the Fair Market
Value (as defined below) of one share of the Company’s Common
Stock (at the date of such calculation)
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Exercise Price
(as adjusted to the date of such calculation)
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For purposes of this Warrant, the
“Fair Market Value” of one share of
Common Stock shall mean (i) the average of the closing sales
prices for the shares of Common Stock on The New York Stock
Exchange or other Eligible Market where the Common Stock is listed
or traded as reported by Bloomberg Financial Markets (or a
comparable reporting service of national reputation selected by the
Company and reasonably acceptable to the Holder if Bloomberg
Financial Markets is not then reporting sales prices of such
security) (collectively, Bloomberg ) for the
ten consecutive trading days immediately prior to the Exercise
Date, or (ii) if an Eligible Market is not the principal
Trading Market for the shares of Common Stock, the average of the
reported sales prices reported by Bloomberg on the principal
Trading Market for the Common Stock during the same period, or, if
there is no sales price for such period, the last sales price
reported by Bloomberg for such period, or (iii) if neither of
the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for
such security as reported by Bloomberg, or if no sales price is so
reported for such security, the last bid price of such security as
reported by Bloomberg or (iv) if fair market value cannot be
calculated as of such date on any of the foregoing bases, the fair
market value shall be as determined by the Board of Directors of
the Company in the exercise of its good faith judgment.
4.
Issuance
of New Warrants. Upon any
partial exercise of this Warrant, the Company, at its expense, will
forthwith and, in any event within five business days, issue and
deliver to the Holder a new warrant or warrants of like tenor,
registered in the name of the Holder, exercisable, in the
aggregate, for the balance of the number of shares of Common Stock
remaining available for purchase under this Warrant.
5.
Payment
of Taxes and Expenses. The Company shall pay any recording, filing,
stamp or similar tax which may be payable in respect of any
transfer involved in the issuance of, and the preparation and
delivery of certificates (if applicable) representing, (i) any
Exercise Shares purchased upon exercise of this Warrant and/or
(ii) new or replacement warrants in the Holder’s name or
the name of any transferee of all or any portion of this Warrant;
provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in
the issuance, delivery or registration of any certificates for
Exercise Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant
or receiving Exercise Shares upon exercise hereof.
6.
Exercise
Limitations and Holder’s Restrictions.
A Holder, other than an Excluded
Holder, shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2, Section 3 or
otherwise, to the extent that after giving effect to such issuance
after exercise, such Holder (together with such Holder’s
affiliates), as set forth on the applicable Notice of Exercise,
would beneficially own in excess of 9.9% of the number of shares of
the Common Stock outstanding immediately after giving effect to
such issuance. For purposes of this Section 6, the
number of shares of Common Stock beneficially owned by such Holder
and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which
the determination of such sentence is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon
(A) exercise of the remaining, nonexercised portion of this
Warrant beneficially owned by such Holder or any of its affiliates
and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company
(including, without limitation, any other shares of
Common
Stock or Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 6, beneficial ownership
shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended ( Exchange
Act ), it being acknowledged by a Holder that the Company
is not representing to such Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and such
Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the extent that the
limitation contained in this Section 6 applies, the
determination of whether this Warrant is exercisable (in relation
to other securities owned by such Holder) and of wh
