SUBSCRIPTION AGENT AGREEMENT September , 2008
[CAPITALSOUTH
BANCORP LETTERHEAD]
Exhibit 10.16
SUBSCRIPTION
AGENT AGREEMENT
September , 2008
September , 2008
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
In connection with your appointment as Subscription Agent in the
transaction described herein, CapitalSouth Bancorp, a Delaware
corporation (the “Company”), hereby
confirms its arrangements with you as follows:
| 1. | Stock Offerings. |
The Company is distributing, at no charge, to the record holders
of shares of its common stock, par value $1.00 per share
(“Common Stock”), as of 5:00 p.m.,
Eastern Time,
on ,
2008 (the “Record Date”),
non-transferable subscription rights (the
“Rights”) to subscribe for and purchase
shares of Common Stock (the “Rights
Offering”). Each record holder is entitled to
receive one Right for each share of Common Stock held by such
record holder at the Record Date. Each Right entitles the holder
thereof to subscribe
for shares
of Common Stock (the “Basic Subscription
Right”) at a subscription price of
$ per share of Common Stock (the
“Subscription Price”). Each holder of
Rights who exercises in full his, her or its Basic Subscription
Right will be entitled, subject to allotment, to subscribe for
additional shares of Common Stock at the Subscription Price
pursuant to the Basic Subscription Right (the
“Over-Subscription Privilege”). To the
extent that sufficient Unsubscribed Shares (as defined below)
are not available to honor all Over-Subscription Privilege
requests, the Unsubscribed Shares will be allocated as described
in the Prospectus (as defined herein). Rights shall cease to be
exercisable at 5:00 p.m., Xxxxxxx Xxxx,
xx ,
0000, unless the Company extends the period for exercising
Rights until no later
than ,
2008 (as it may be extended, the “Expiration
Time”). The Company shall notify you orally and
confirm in writing an extension of the Expiration Time. Rights
are evidenced by non-transferable rights certificates in
registered form (“Rights Certificates”).
The Rights Offering will be conducted in the manner and upon the
terms and conditions set forth in the Company’s final
Prospectus, dated as
of ,
2008 (the “Prospectus”), which is
incorporated herein by reference and made a part hereof as if
set forth in full herein.
| 2. | Appointment of Subscription Agent. |
You are hereby appointed as Subscription Agent to effect the
Rights Offering in accordance with the Prospectus. Each
reference to you in this letter is to you in your capacity as
Subscription Agent unless the context indicates otherwise.
| 3. | Delivery of Documents. |
Enclosed herewith are the following, the receipt of which you
acknowledge by your execution hereof:
(a) a copy of the Prospectus, attached hereto as
Annex A;
(b) Form of Rights Certificate, attached hereto as
Annex B;
(c) Form of Instructions for Use of Rights Certificates,
attached hereto as Annex C;
(d) Form of Letter to Stockholders that are Record Holders,
attached hereto as Annex D;
(e) Form of Letter to Stockholders who are Dealers or
Nominees, attached hereto as Annex E;
(f) Form of Letter to Clients who are Beneficial Holders,
attached hereto as Annex F;
(g) Form of Nominee Holder Certification Form, attached
hereto as Annex G; and
(h) Form of tax guidelines for registered holders, attached
hereto as Annex H.
As soon as is reasonably practical, you shall mail or cause to
be mailed to each holder of Common Stock whose address of record
is within the United States on the Record Date, those documents
listed above in (a) through (h) as you are instructed,
in writing, by the Company. Prior to your mailing of the
documents, the Company will provide you with blank Rights
Certificates which you will prepare and issue in the names of
registered record holders of Common Stock at the close of
business on the Record Date. The Rights Certificate will
indicate the number of Rights to which they are entitled. The
Company will also provide you with a sufficient number of copies
of each of the documents to be mailed with the Rights
Certificates.
You shall refrain from mailing any documents to any registered
record holder of Common Stock on the Record Date whose address
of record is outside the United States, and shall hold such
Rights Certificates for the account of such stockholder subject
to such stockholder making arrangements with the Subscription
Agent satisfactory to you and to the Company for the exercise
thereby, and following the instructions of the stockholder for
the exercise of such Rights if such instructions are confirmed
by the Company and are received at or before 5:00 p.m.,
Eastern Time,
on ,
2008.
| 4. | Subscription Procedure. |
(a) Upon your receipt prior to the Expiration Time (by mail
or delivery), as Subscription Agent, of (i) any Rights
Certificate completed and endorsed for exercise, as provided on
the reverse side of the Rights Certificate or Nominee Holder
Certification from the Depository Trust Company or other
nominee of the subscriber and (ii) payment in full of the
aggregate Subscription Price in United States funds by
(x) certified check payable to Registrar and Transfer
Company (drawn upon a United States bank), (y) postal,
telegraphic or express money order payable to Registrar and
Transfer Company, or (z) wire transfer of immediately
available funds to accounts maintained by you, you shall, as
soon as practicable after the Expiration Time, upon written
instruction of the Company, mail to the appropriate address
properly listed on the Rights Certificates, stock certificates
representing the shares of Common Stock duly subscribed for,
deliver to the Depository Trust Company shares subscribed
by beneficial owners, and furnish a list of all such information
to the Company.
(b) As soon as reasonably practical following the
Expiration Time, you shall calculate the number of shares of
Common Stock to which each subscriber is entitled pursuant to
such subscriber’s Over-Subscription Privilege. The
Over-Subscription Privilege may only be exercised by holders who
fully exercise their Basic Subscription Right. The maximum
amount of shares of Common Stock available pursuant to the
Over-Subscription Privilege shall equal the number of shares of
Common Stock that have not been subscribed and paid for pursuant
to the Basic Subscription Right (the “Unsubscribed
Shares”), it being understood
that shares
are offered for sale. If there are sufficient Unsubscribed
Shares at the Expiration Time to satisfy all subscriptions of
record holders exercising their Rights under the
Over-Subscription Privilege, each holder shall be allotted the
number of Unsubscribed Shares, at the Subscription Price, having
a value equal to the amount subscribed for. If there is an
insufficient number of Unsubscribed Shares at the Expiration
Time after record holders have exercised Rights under their
Basic Subscription Right to satisfy all subscriptions of record
holders exercising their Rights under the Over-Subscription
Privilege, you will allocate the Unsubscribed Shares among the
record holders who exercised their Over-Subscription Privilege
as follows:
(i) To the extent the aggregate Subscription Price of the
actual number of shares of Common Stock available to a record
holder pursuant to the Over-Subscription Privilege is less than
the amount that such record holder actually paid in connection
with the exercise of the Over-Subscription Privilege, such
record holder will be allocated only the number of Unsubscribed
Shares actually available to him. Unsubscribed Shares will be
allocated among stockholders who over-subscribed by multiplying
the number of shares requested by each stockholder through the
exercise of their Over-Subscription Privileges by a fraction
that equals (x) the number of shares available to be issued
through Over-Subscription Privileges divided by (y) the
total number of shares requested by all subscribers through the
exercise of their Over-Subscription Privileges.
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(ii) To the extent the amount that a record holder actually
paid in connection with the exercise of the Over-Subscription
Privilege is less than the aggregate Subscription Price of the
actual number of shares of Common Stock available to such record
holder pursuant to the Over-Subscription Privilege, such record
holder will be allocated the full number of Unsubscribed Shares
for which the subscriber paid.
Any fractional shares of Common Stock to which persons
exercising their Basic Subscription Rights or Over-Subscription
Privilege would otherwise be entitled shall be rounded down to
the next whole share of Common Stock.
(c) Upon calculating the number of shares of Common Stock
to which each subscriber is entitled pursuant to the
Over-Subscription Privilege and the amount overpaid, if any, by
each subscriber, you shall, as soon as practicable, furnish a
list of all such information to the Company.
(d) If a lesser number of Unsubscribed Shares is allotted
to a subscriber than the subscriber has tendered payment for,
you shall remit the difference to the registered holder without
interest or deduction at the same time as certificates are
mailed.
(e) Funds received by you pursuant to the Rights Offering
shall be held by you in a segregated account. Upon mailing
certificates representing the securities and refunding Rights
Holders for additional shares subscribed for but not allocated,
if any, you shall promptly remit to the Company all funds
received in payment of the Subscription Price for shares sold in
the Rights Offering.
| 5. | Defective Exercise of Rights; Lost Rights Certificates. |
The Company shall have the absolute right to reject any
defective exercise of Rights or to waive any defect in exercise.
Unless requested to do so by the Company, you shall not be under
any duty to give notification to holders of Rights Certificates
of any defects or irregularities in subscriptions. Subscriptions
will not be deemed to have been made until any such defects or
irregularities have been cured or waived within such time as the
Company shall determine. You shall as soon as practicable return
Rights Certificates with the defects or irregularities which
have not been cured or waived, to the holder of the Rights. If
any Rights Certificate is alleged to have been lost, stolen or
destroyed, you should follow the same procedures followed for
lost stock certificates representing Common Stock you use in
your capacity as transfer agent for the Common Stock.
| 6. | Other Delivery. |
You shall deliver to the Company the exercised Rights
Certificates and record of shares subscribed for by stockholders
who are beneficial owners in accordance with written directions
received from the Company, and you shall deliver to third party
purchasers who have purchased shares in any subsequent offering
of unsubscribed shares, to their registered addresses,
certificates representing the securities subscribed for as
instructed in writing by the Company.
| 7. | Reports. |
You shall notify the Company by telephone on or before the close
of business on each Wednesday and Friday (unless such day is a
bank holiday) business day during the period commencing on the
first Friday after the mailing of the Rights and ending at the
Expiration Time (a “Bi-Weekly Notice”),
which notice shall thereafter be confirmed in writing, of
(a) the number of Rights exercised during the period
covered by such bi-weekly notice, (b) the number of Rights
for which defective exercises have been received during the
period covered by such bi-weekly notice, and (c) the
cumulative total of the information set forth in
clauses (a) and (b) above. You shall provide such
notices on a more frequent basis as requested by the Company as
the Expiration Time approaches. You shall also report the number
of shares associated with the Rights in (a). At or before
5:00 p.m., Eastern Time, on the first business day
following the Expiration Time you shall certify in writing to
the Company the cumulative total through the Expiration Time of
all the information set forth above in this paragraph 7.
You shall also maintain and update a listing of holders who have
fully or partially
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exercised their Rights, and holders who have not exercised their
Rights. You shall provide the Company or its designees with such
information compiled by you pursuant to this paragraph 7
upon any request by the Company or its designees.
| 8. | Future Instructions. |
With respect to notices or instructions to be provided by the
Company hereunder, you may rely and act on any written
instruction signed by any of the following officers of the
Company:
W. Xxx Xxxxxxx — Chairman and Chief Executive
Officer
Xxxxx X. Xxxxx — Chief Financial Officer
| 9. | Payment of Fees and Expenses. |
The Company will pay you compensation for acting in your
capacity as Subscription Agent hereunder as provided in the
attached Fee Schedule.
| 10. | Indemnification. |
The Company covenants and agrees to indemnify and hold you
harmless against any costs, expenses (including reasonable
documented fees of legal counsel), losses or damages, which may
be paid, incurred or suffered by or to which you may become
subject to, or arising from or out of, any claim or liability
resulting from your actions as Subscription Agent pursuant
hereto; provided that such covenant and agreement does
not extend to such costs, expenses, losses and damages incurred
or suffered by you as a result of, or arising out of, your own
gross negligence, misconduct or bad faith or that of any
affiliates or directors, officers, employees, attorneys and
agents used by you in connection with the performance of your
duties as Subscription Agent pursuant hereto.
| 11. | Notices. |
Unless otherwise provided herein, all reports, notices and other
communications required or permitted to be given hereunder shall
be in writing and delivered by hand or confirmed telecopy or by
first class U.S. mail, postage prepaid, and shall be
deemed received upon receipt if delivered by hand or telecopy,
or three business days after deposit in the U.S. mail if
delivered by U.S. mail and shall be addressed as follows:
(a) If to the Company, to:
CapitalSouth Bancorp
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
(b) If to you, to:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention:
Telephone: 000-000-0000 x
Telecopy: 000-000-0000
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention:
Telephone: 000-000-0000 x
Telecopy: 000-000-0000
| 12. | Miscellaneous. |
(a) If any provision of this Agreement shall be held
illegal, invalid, or unenforceable by any court, this Agreement
shall be construed and enforced as if such provision had not
been contained herein and shall be deemed an Agreement among us
to the full extent permitted by applicable law.
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(b) In the event that any claim of inconsistency between
this Agreement and the terms of the Rights Offering arise, as
they may from time to time be amended, the terms of the Rights
Offering shall control, except with respect to the duties,
liabilities and rights, including compensation and
indemnification of you as Subscription Agent, which shall be
controlled by the terms of this Agreement.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama, without giving
effect to conflict of laws rules or principles, and shall inure
to the benefit of and be binding upon the successors and assigns
of the parties hereto; provided that this Agreement may
not be assigned by any party without the prior written consent
of all other parties.
(d) No provision of this Agreement may be amended, modified
or waived, except in a written document signed by both parties.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
[Signatures
on Following Page]
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Please acknowledge receipt of this letter and confirm your
agreement concerning your appointment as Subscription Agent and
the arrangements herein provided by signing and returning the
enclosed copy hereof, whereupon this Agreement and your
acceptance of the terms and conditions herein provided shall
constitute a binding Agreement between us.
Yours truly,
| By: |
|
Name:
| Title: |
Agreed and Accepted:
REGISTRAR AND TRANSFER COMPANY
| By: |
|
Name:
| Title: |
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