EXHIBIT 10.2

 
SECOND AMENDMENT TO GUARANTEE AGREEMENT
 
Between
 
CAPITOL BANCORP LTD.,
 
as Guarantor
 
and
 
The Bank of New York Mellon Trust Company, N.A.,
 
as Guarantee Trustee
 

8.5% SUBORDINATED DEBENTURES DUE 2027

 
 

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This Second Amendment to the Guarantee Agreement (“Second Amendment”) is
effective as of February 8, 2011, between Capitol Bancorp Ltd., a bank holding
company duly organized and existing under the laws of the State of Michigan (the
“Guarantor”), and The Bank of New York Mellon Trust Company, N.A., a national
banking association duly organized and existing under the laws of the United
States, as Guarantee Trustee (the “Guarantee Trustee”).  Capitalized terms not
otherwise defined in this Second Amendment will have the meanings given them in
the Guarantee Agreement or the Indenture.
 
RECITALS

WHEREAS, the Guarantor executed and delivered the Indenture, dated as of
December 18, 1997, and amended July 31, 2009, to the Guarantee Trustee (as
amended, the “Indenture”), to provide for the issuance of the Guarantor’s 8.50 %
Subordinated Debentures Due 2027 (the “Debentures”);
 
WHEREAS, pursuant to the terms of the Indenture, the Guarantor has deferred the
payment of interest on the Debentures for up to 20 consecutive quarters
beginning on June 30, 2009;
 
WHEREAS, pursuant to the terms of the Indenture, the Guarantor is restricted
from redeeming certain debt securities during the Extended Interest Payment
Period;
 
WHEREAS, Guarantor and Guarantee Trustee executed the Guarantee Agreement on
December 18, 1997;
 
WHEREAS, Guarantor and Guarantee Trustee amended the Guarantee Agreement on July
31, 2009;
 
WHEREAS, the Guarantee Agreement, as amended, contains the same language as the
Indenture concerning such restrictions;
 
WHEREAS, the Guarantor seeks to amend those restrictions as they relate to the
redemption of certain debt securities resulting from an exchange of the
Guarantor’s common stock for trust preferred securities issued by an affiliate
of Guarantor;
 
WHEREAS, this Second Amendment has been approved by the Holders of at least a
Majority in liquidation amount of the Preferred Securities pursuant to Section
9.2 of the Guarantee Agreement;
 
WHEREAS, the Guarantor has requested the Guarantee Trustee join with it in the
execution and delivery of this Second Amendment pursuant to Section 9.2 of the
Indenture and has delivered to the Guarantee Trustee Board Resolutions, an
Officers’ Certificate, and an Opinion of Counsel and all other covenants and
conditions precedent, if any, provided for in the Guarantee Agreement relating
to the execution of this Second Amendment have been complied with as of the date
hereof with respect to such authorization; and
 

 
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WHEREAS, all things necessary to make this Second Amendment a valid agreement of
the Guarantor, in accordance with its terms have been performed, and the
execution and delivery of this Second Amendment has been duly authorized in all
respects;
 
NOW, THEREFORE, THIS SECOND AMENDMENT WITNESSETH:
 
For and in consideration of the terms of this Second Amendment, and for the
purpose of setting forth, as provided in the Guarantee, the Guarantor covenants
and agrees, with the Guarantee Trustee, as follows:
 
ARTICLE 1.

 
AMENDED SECTIONS
 
1.           Section 6.1 is replaced in its entirety with the following
language:
 
 
SECTION 6.1. LIMITATION OF TRANSACTIONS.

So long as any Preferred Securities remain outstanding, if there shall have
occurred an Event of Default under this Preferred Securities Guarantee, an Event
of Default under the Trust Agreement or during an Extended Interest Payment
Period (as defined in the Indenture), then (a) the Guarantor shall not declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
dividends or distributions in common stock of the Guarantor; provided, however,
that a dividend distribution in the form of capital stock of a subsidiary of the
Guarantor paid on or with respect to the capital stock of the Guarantor is
permitted if the subsidiary becomes a co-guarantor with the Guarantor under the
Guarantee Agreement prior to such dividend distribution, (ii) any declaration of
a non-cash dividend in connection with the implementation of a shareholders'
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, and (iii)
purchases of common stock of the Guarantor related to the rights under any of
the Guarantor's benefit plans for its directors, officers or employees), (b) the
Guarantor shall not make any payment of principal or interest on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures (other than as a result of any exchange
of the Guarantor’s common stock for securities ranking pari passu with the Trust
Preferred Securities and the resultant cancellation of debt securities ranking
pari passu with the Debentures).

ARTICLE 2.

 
MISCELLANEOUS
 
Section 2.1  Ratification of Guarantee. The Guarantee and the Guarantee
Agreement, as amended by this Second Amendment, is in all respects ratified and
confirmed, and this Second Amendment shall be deemed part of the Guarantee
Agreement in the manner and to the extent herein and therein provided.
 
 
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Section 2.2  Capitalized Terms.  Capitalized terms shall have the meaning
ascribed to them under the Guarantee Agreement or the Indenture.
 
Section 2.3  Governing Law. This Second Amendment shall be governed by, and
construed in accordance with, the laws of Michigan.
 
Section 2.4  Severability. In case any one or more of the provisions contained
in the Guarantee or this Second Amendment shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of the Guarantee or this
Second Amendment, but the Guarantee and this Second Amendment shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
 
Section 2.5  Counterparts. This Second Amendment may be executed in any number
of counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
 
Section 2.6  Concerning the Guarantee Trustee.  The Guarantee Trustee shall not
be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Second Amendment or for or in respect of the recitals
contained herein, or with respect to any document used in connection with the
solicitation of consents from the holders of Trust Securities or the consents of
such holders, all of which recitals are made solely by the Guarantor.  All of
the provisions contained in the Guarantee Agreement in respect of the rights,
privileges, immunities, powers, and duties of the Guarantee Trustee shall be
applicable in respect of the Second Amendment as fully and with like force and
effect as though fully set forth in full herein.
 
 
[Signature page follows]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
duly executed, all as of the day and year first above written.
 

 
CAPITOL BANCORP LTD.

By:      ___________________________                                                     
    Name:
    Title:

THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Guarantee
Trustee

By:      ___________________________                                                     
    Name:
    Title:
 

 

 
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