EXHIBIT 99.10
SUBSCRIPTION AGENT AGREEMENT
This SUBSCRIPTION AGENT AGREEMENT (the "Agreement") is made and
entered into as of ___________, 1997, by and between NATIONAL MERCANTILE
BANCORP, a California corporation (the "Company"), and U.S. STOCK TRANSFER
CORPORATION, a California corporation (the "Subscription Agent"), with reference
to the following:
A. The Company has filed with the Securities and Exchange Commission
(the "Commission"), under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively the "1933 Act"), a
Registration Statement on Form S-2, No. 333-21455 (in the form in which it first
becomes effective under the 1933 Act, and as it may thereafter be amended, the
"Registration Statement"), relating to the proposed distribution by the Company
of nontransferable subscription rights (the "Rights") to holders of record
("Record Date Holders") of shares of common stock, no par value, of the Company
(the "Common Stock") as of the close of business on March 31, 1997 (the "Record
Date"), at a rate of one Right for each share of Common Stock held on the Record
Date, and the proposed sale of up to 650,000 newly-issued shares (the
"Underlying Shares") of noncumulative convertible preferred stock (the
"Preferred Stock"), $10.00 stated value, (collectively, the "Offering").
B. Holders of Rights ("Rights Holders") will be entitled to
subscribe to purchase 1.624 Underlying Shares for each Right (the "Basic
Subscription Privilege") at a per share price (the "Subscription Price"), which
price will be set forth in the prospectus which forms a part of the Registration
Statement (in the form in which the Registration Statement first becomes
effective, and as thereafter amended or supplemented, the "Prospectus") by post-
effective amendment to the Registration Statement.
C. Rights Holders who exercise the Basic Subscription Privilege in
full also will be entitled to subscribe at the Subscription Price (the
"Oversubscription Privilege") to purchase additional Underlying Shares, if any,
remaining after satisfaction of all subscriptions pursuant to the Basic
Subscription Privilege and the sale of shares of Preferred Stock to the Private
Purchasers (as described in the Prospectus) (the "Excess Underlying Shares").
D. The Company wishes the Subscription Agent to act on its behalf in
connection with the Offering as set forth herein, and the Subscription Agent is
willing so to act.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. APPOINTMENT OF SUBSCRIPTION AGENT. The Company hereby
appoints the Subscription Agent to act as agent in accordance with the
instructions set forth in this Agreement, and the Subscription Agent hereby
accepts such appointment and shall take such
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actions as may be necessary to effectuate the terms of this Agreement. The
Company may from time to time appoint such co-agents as it may deem necessary or
desirable.
SECTION 2. DISTRIBUTION OF RIGHTS. The Company has authorized the
distribution of the Rights and, following the effectiveness of the Registration
Statement and the Record Date, will issue such Rights to Record Date Holders as
contemplated by the Registration Statement and the Prospectus. The Company will
notify promptly the Subscription Agent upon the effectiveness of the
Registration Statement. The Company will cause U.S. Stock Transfer Corporation,
as transfer agent and registrar for the Common Stock (the "Transfer Agent"), to
provide such assistance as the Company may require to effect the distribution of
the Rights to Record Date Holders, including assistance in determining the
number of Rights to be distributed to each such Record Date Holder (including
Rights distributed to Record Date Holders on behalf of beneficial owners holding
through such Record Date Holders pursuant to the provisions for rounding up
fractional Rights set forth in Section 5(a), below). The Subscription Agent
will provide assistance in distributing the Prospectus, the Subscription Right
Certificates evidencing the Rights (the "Subscription Right Certificates"), the
Instructions As to Use of Subscription Right Certificates (the "Instructions")
and all other ancillary documents relating to the Offering to Record Date
Holders. The Subscription Right Certificates and the Instructions will be
substantially in the forms attached hereto as Exhibits A and B, respectively.
SECTION 3. OVERSUBSCRIPTION PRIVILEGE. If there are insufficient
Excess Underlying Shares to satisfy all exercised Oversubscription Privileges,
Excess Underlying Shares will be allocated among Rights Holders, including
Qualified Financial Institutions (as defined below) that hold Rights for
beneficial owners, who exercise the Oversubscription Privilege. Subject to the
allocation and possible deduction described in Section 7(i) below, Excess
Underlying Shares will be allocated pro rata among such Rights Holders based
upon the number of Underlying Shares subscribed for pursuant to each such Rights
Holder's Basic Subscription Privilege relative to the aggregate Underlying
Shares subscribed for pursuant to the Basic Subscription Privilege by all such
Rights Holders. To the extent that such pro rata allocation results in any
Rights Holder being allocated more Excess Underlying Shares than such Rights
Holder subscribed for pursuant to the Oversubscription Privilege, then such
Rights Holder will be allocated only the number of Excess Underlying Shares
subscribed for, and the remaining Excess Underlying Shares will be similarly and
successively reallocated among all other Rights Holders exercising the
Oversubscription Privilege. It will be the responsibility of Rights Holders to
allocate prorated Excess Underlying Shares among any beneficial owners for which
such Rights Holders are acting.
SECTION 4. SIGNATURE AND REGISTRATION.
(a) The Subscription Right Certificates will be executed on behalf of
the Company by its President, Chairman of the Board and Chief Executive Officer
and by its Secretary, an Assistant Secretary or Chief Financial Officer by
facsimile signature. Any Subscription Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of execution of such
facsimile signature, is a proper officer of the Company to sign
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such Subscription Right Certificate, even if at the date of the execution of
this Agreement or the date of actual issuance of such certificate such person is
not such an officer.
(b) The Subscription Agent will keep or cause to be kept, at its
principal offices in the State of California, books for registration and
transfer of the Rights issued hereunder. Such books will show the names and
addresses of the respective Rights Holders and the number of Rights evidenced by
each outstanding Subscription Right Certificate.
SECTION 5. EXCHANGE OF SUBSCRIPTION RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN SUBSCRIPTION RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 9 hereof, any Subscription
Right Certificate, may be exchanged for any number of Subscription Right
Certificates or for a single Subscription Right Certificate of different
denominations; provided, however, that the aggregate number of Rights evidenced
by the Subscription Right Certificate or Certificates so issued does not exceed
the aggregate number of Rights evidenced by the Subscription Right Certificate
or Certificates surrendered in exchange therefor. No Subscription Right
Certificates evidencing fractional Rights will be issued upon exchange of
other Subscription Right Certificates, and any instructions to exchange
Subscription Right Certificates that would result in the issuance of
Subscription Right Certificates evidencing fractional Rights are to be rejected.
(b) Any Rights Holder desiring to exchange any Subscription Right
Certificate or Certificates must make such requests in writing to the
Subscription Agent and surrender the Subscription Right Certificate or
Certificates to be exchanged to the Subscription Agent. Thereupon the
Subscription Agent will deliver to the person entitled thereto a Subscription
Right Certificate or Certificates, as the case may be, as so requested. In all
cases of transfer by an attorney-in-fact, the original power of attorney, duly
approved, or a copy thereof, duly certified, must be deposited and remain with
the Subscription Agent. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority satisfactory to the Subscription Agent must be produced and may be
required to be deposited and to remain with the Subscription Agent in its
discretion. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any exchange
of Subscription Right Certificates.
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(c) Upon receipt by the Company and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Subscription Right Certificate, and, in case of loss, theft or destruction, of
indemnity and/or security satisfactory to them, in their sole discretion, and
reimbursement to the Company and the Subscription Agent of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the
Subscription Right Certificate, if mutilated, the Subscription Agent will make
and deliver a new Subscription Right Certificate of like tenor to the registered
Rights Holder in lieu of the Subscription Right Certificate so lost, stolen,
destroyed or mutilated. If required by the Company or the Subscription Agent,
an indemnity bond must be sufficient in the judgment of each party to protect
the Company, the Subscription Agent or any agent thereof from any loss which any
of them may suffer if a lost, stolen, destroyed or mutilated Subscription Right
Certificate is replaced.
SECTION 6. SUBSEQUENT ISSUE OF SUBSCRIPTION RIGHT CERTIFICATES.
Subsequent to the original issuance of the Subscription Right Certificates, no
Subscription Right Certificates will be issued except as provided herein.
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE;
LIMITATIONS.
(a) Subject to the allocation and possible reduction described in
Section 7(i) below, a Rights Holder may exercise Rights held by such Rights
Holder by properly completing, signing and delivering the Subscription Right
Certificate representing such Rights, with any required signature guarantees,
together with payment in full of the Subscription Price for the aggregate number
of Underlying Shares subscribed for pursuant to such Rights Holder's exercise of
the Basic Subscription Privilege and the Oversubscription Privilege, before any
proration or reduction with respect to the Oversubscription Privilege. Subject
to the allocation and possible reduction described in Section 7(i) below, a
Rights Holder also may exercise Basic Subscription Privileges by complying with
the procedures described in Section 7(f), below, with respect to DTC Exercised
Rights (as hereinafter defined). Except as provided in Sections 7(d) and 7(f),
below, and subject to Section 12(b), below, Subscription Right Certificates and
payment of the Subscription Price must be received by the Subscription Agent
before 5:00 p.m., California time, on __________, 1997, or such later time and
date to which the Rights may be extended by the Company at its option (the
"Expiration Time"), and a Right will not be deemed exercised until the
Subscription Agent receives both payment of the Subscription Price and a duly
executed Subscription Right Certificate (or until the Guaranteed Delivery
Procedures set forth in Section 7(d), below, or the procedures with respect to
DTC Exercised Rights set forth in Section 7(f), below, have been complied with).
A Rights Holder's Oversubscription Privilege must be exercised concurrently with
such Rights Holder's Basic Subscription Privilege, except for DTC Exercised
Rights, as described in Section 7(f), below. Once a Rights Holder has exercised
a Right, such exercise may not be revoked. The Rights will expire at the
Expiration Time. The Company may notify the Subscription Agent either orally or
in writing of any extension of the Expiration Time. If the Company gives an
oral notice of an extension, it will confirm such extension in writing.
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(b) Unless a Subscription Right Certificate (i) provides that the
Underlying Shares to be issued pursuant to the exercise of Rights represented
thereby are to be registered in the name of and delivered to the registered
holder of such Subscription Right Certificate, or (ii) is submitted for the
account of a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. (the "NASD"), or
a commercial bank or trust company having an office or correspondent in the
United States (each, an "Eligible Institution"), signatures on such Subscription
Right Certificate must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15(a)(2) of the Securities Exchange Act of 1934, as
amended.
(c) The Subscription Price will be payable in United States dollars
(i) by check, certified check or bank draft drawn upon a United States bank, or
postal, telegraphic or express money order, payable to the order of the
Subscription Agent, or (ii) by wire transfer of funds to the account of the
Subscription Agent, as agent for the Company maintained for such purpose at
First Professional Bank, ABA #000000000 credit to (Subscriber's name, for
further credit to National Mercantile Bancorp Account #004-802578. The
Subscription Price will be deemed to have been received by the Subscription
Agent only upon (i) clearance of any uncertified check, (ii) receipt by the
Subscription Agent of any certified check or bank draft drawn upon a United
States bank, or any postal, telegraphic or express money order, or (iii) receipt
of collected funds in the Subscription Agent's account designated above, in
payment of the Subscription Price.
(d) If a Rights Holder wishes to exercise Rights, but time will not
permit such Rights Holder to cause the Subscription Right Certificate or
Certificates evidencing such Rights to reach the Subscription Agent at or prior
to the Expiration Time, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:
(i) Such Rights Holder has caused payment in full of the Subscription
Price for the aggregate number of Underlying Shares subscribed for pursuant to
such Rights Holder's exercise of the Basic Subscription Privilege and, if
applicable, the Oversubscription Privilege, before any proration or reduction
with respect to the Oversubscription Privilege, to be received as set forth in
Section 7(c) above, by the Subscription Agent at or before the Expiration Time;
(ii) The Subscription Agent receives, at or prior to the Expiration
Time, a guarantee notice (a "Notice of Guaranteed Delivery"), substantially in
the form distributed with the Subscription Right Certificates, from an Eligible
Institution, stating the name of the exercising Rights Holder, the number of
Rights represented by the Subscription Right Certificate or Certificates held by
such exercising Rights Holder, the number of Underlying Shares being subscribed
for pursuant to the Basic Subscription Privilege and the number of Underlying
Shares, if any, being subscribed for pursuant to the Oversubscription Privilege,
and guaranteeing the delivery to the Subscription Agent of the Subscription
Right Certificate or Certificates evidencing such Rights within two (2) business
days following the date of the Notice of Guaranteed Delivery; and
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(iii) The properly completed Subscription Right Certificate or
Certificates evidencing the Rights being exercised, with any required signatures
guarantee, are received by the Subscription Agent within two (2) business days
following the date of the Notice of Guaranteed Delivery relating thereto. The
Notice of Guaranteed Delivery may be delivered to the Subscription Agent in the
same manner as Subscription Right Certificates, or may be transmitted to the
Subscription Agent by telegram or facsimile transmission (telecopy no. (818)
502-0674.
(e) If a Subscription Right Certificate does not indicate the number
of Underlying Shares subscribed for or if the Subscription Price payment
forwarded to the Subscription Agent is insufficient to purchase the number of
Underlying Shares subscribed for, the Rights Holder will be deemed to have
exercised the Basic Subscription Privilege with respect to the maximum number of
whole Underlying Shares that may be subscribed for based on the Subscription
Price delivered to the Subscription Agent and, to the extent that the payment
delivered by such Rights Holder exceeds the aggregate Subscription Price with
respect to the Basic Subscription Privilege, the Rights Holder will be deemed to
have exercised the Oversubscription Privilege with respect to the maximum number
of whole Underlying Shares that may be subscribed for with such excess amount.
If a Rights Holder (other than a Qualified Financial Institution) exercises an
Oversubscription Privilege without exercising its Basic Subscription Privilege
in full, such Rights Holder will be deemed to have exercised such Basic
Subscription Privilege to the fullest possible extent, and the Oversubscription
Privilege will be deemed exercised only to the extent of payments received from
such Rights Holder in excess of the aggregate Subscription Price applicable to
such deemed Basic Subscription Privilege exercise.
(f) The exercise of the Basic Subscription Privilege (but not the
Oversubscription Privilege) may be effected, through the facilities of the
Depository Trust Company the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (Rights so exercised are referred to as
"DTC Exercised Rights"). A holder of DTC Exercised Rights may exercise the
Oversubscription Privilege in respect thereof by properly executing and
delivering to the Subscription Agent, at or before the Expiration Time, a DTC
Participant Oversubscription Exercise Form (substantially in the form attached
hereto as Exhibit D), together with payment of the appropriate Subscription
Price for the number of Underlying Shares for which the Oversubscription
Privilege is to be exercised, before any proration or reduction.
(g) The Subscription Agent will pay to, credit to the account of, or
otherwise transfer to the Company all funds received by the Subscription Agent
in payment of the Subscription Price for Underlying Shares subscribed for
pursuant to the Basic Subscription Privilege as soon as practicable following
receipt thereof and of all related documents.
(h) Funds received by the Subscription Agent in payment of the
Subscription Price for Excess Underlying Shares subscribed for pursuant to the
Oversubscription Privilege will be held in a segregated account pending issuance
of such Excess Underlying Shares. The Subscription Agent will pay to, credit to
the account of, or otherwise transfer to the Company all funds received in
payment of the Subscription Price pursuant to the Oversubscription Privilege,
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as soon as practicable following the Expiration Time and allocation of Excess
Underlying Shares for purchase pursuant to the Oversubscription Privilege.
(i) The Company may notify the Subscription Agent either orally or in
writing that (i) it will not issue shares of Common Stock to any Rights Holder
who is required, in the Company's sole judgment and discretion, to obtain prior
clearance, approval or nondisapproval from any state or federal bank regulatory
authority to own or control such shares unless, prior to the Expiration Time,
evidence of such clearance, approval or nondisapproval has been provided to the
Company; or (ii) it will limit the number of shares issuable to any Rights
Holder if, as a result of exercises of Rights (pursuant to the Basic
Subscription Privilege or the Oversubscription Privilege), in the aggregate or
to any Rights Holder, there exists a risk, in the Company's sole judgment and
discretion, that certain tax benefits will be subject to limitation under
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") or
there exists a risk of any other adverse tax consequence to the Company.
SECTION 8. DELIVERY OF STOCK CERTIFICATES; REFUNDS.
The Subscription Agent will, on each business day commencing
___________, 1997, and ending on the second business day immediately following
the Expiration Time, furnish the Transfer Agent with such information as the
Transfer Agent may reasonably require, and in such form as the Transfer Agent
may reasonably request, to allow the Transfer Agent to issue certificates
representing all Underlying Shares to be issued pursuant to Basic Subscription
Privileges exercised on the previous business day and will, as soon as
practicable following the Expiration Time and allocation of Excess Underlying
Shares for purchase pursuant to the Oversubscription Privilege and as requested
by the Transfer Agent, furnish the Transfer Agent with such information as the
Transfer Agent may reasonably require, and in such form as the Transfer Agent
may reasonably request, to allow the Transfer Agent to issue certificates
evidencing any Excess Underlying Shares purchased pursuant to Oversubscription
Privileges. Unless the Subscription Right Certificate provides otherwise,
certificates for Underlying Shares purchased pursuant to the exercise of Rights
will be registered in the name of the Rights Holder exercising such Rights. Any
refund, without interest, of the Subscription Price for Excess Underlying Shares
subscribed for but not sold due to proration or otherwise will be mailed or
delivered by the Subscription Agent to the Rights Holder to whom such refund is
due as soon as practicable after the Expiration Time.
SECTION 9. FRACTIONAL RIGHTS AND SHARES. No fractional Rights or
cash in lieu thereof will be issued or paid. The number of Rights distributed
to each Record Date Holder or beneficial owner holding through a Qualified
Financial Institution that complies with the procedures set forth in Section
5(a) above will be rounded up to the next whole number. All questions as to the
validity and eligibility of any rounding of fractional Rights (including,
without limitation, in connection with the surrender by a Qualified Financial
Institution of a Subscription Right Certificate, as set forth in Section 5(a)
hereof) will be determined by the Company in its sole discretion, and its
determination will be final and binding.
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SECTION 10. FOREIGN AND CERTAIN OTHER SHAREHOLDERS. Subscription
Right Certificates will not be mailed to Record Date Holders whose registered
addresses are outside the United States and Canada or who have an APO or FPO
address (collectively, "Foreign Record Date Holders"). Subscription Right
Certificates evidencing Rights otherwise distributable to Foreign Record Date
Holders will be delivered to the Subscription Agent, which will hold such
Subscription Right Certificates for the account of such Foreign Record Date
Holders and upon notice from such Foreign Record Date Holders will exercise the
Rights on their behalf. To so exercise their Rights, Foreign Record Date
Holders must notify the Subscription Agent not later than 5:00 p.m., California
time, on ________, 1997. If no such instructions have been received by the
Subscription Agent by such time, the rights will expire and become worthless.
SECTION 11. AMENDMENTS AND WAIVERS; TERMINATION.
(a) The Company reserves the right to extend the Expiration Time, and
to amend the terms and conditions of the Offering, whether the amended terms are
more or less favorable to Rights Holders.
(b) All questions as to the validity, form, eligibility (including
time of receipt and record ownership) and acceptance of any exercise of Rights
will be determined by the Company, in its sole discretion, and Company reserves
the right to reject any exercise if such exercise is not in accordance with the
terms of the Offering or is not in proper form, or if the acceptance thereof or
the issuance of Underlying Shares pursuant thereto could be deemed unlawful.
The Company also reserves the right to waive any deficiency or irregularity
(including, without limitation, any deficiency with respect to time of receipt
of a Subscription Right Certificate or the Subscription Price for all Underlying
Shares subscribed for pursuant thereto) or to permit a defect or irregularity to
be corrected within such time as it may determine. Subscriptions will not be
deemed to have been received or accepted until all irregularities have been
waived or cured within such time as the Company determines in its sole
discretion. Neither the Company nor the Subscription Agent will be under any
duty to give notification of any defect or irregularity in connection with the
submission of Subscription Right Certificates or incur any liability for failure
to give such notification.
(c) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, President and Chief Executive Officer, any Vice President
(including any Senior or Executive Vice President), the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company, or any other
person designated by any of them, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for any
action taken or suffered to be taken by it in good faith in accordance with the
instructions of any such officer.
SECTION 12. REPORTS. The Subscription Agent will notify Sandler
X'Xxxxx & Partners, L.P., (the "Dealer Manager"), the Company and their
designated representatives by telephone each business day during the period
commencing on ___________, 1997, and ending at the Expiration Time (and in the
case of deliveries pursuant to the Guaranteed Delivery
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Procedure, the period ending two (2) business days after the Expiration Time),
which notice will thereafter be conformed in writing, of (i) the number of
Rights exercised each day, (ii) the number of Underlying Shares subscribed for
pursuant to the Basic Subscription Privilege each day and the number of such
shares for which payment has been received, (iii) the number of Underlying
Shares subscribed for pursuant to the Oversubscription Privilege each day and
the number of such Underlying Shares for which payment has been received, (iv)
the number of Rights exercised pursuant to the Guaranteed Delivery Procedure
each day, (v) the number of Rights for which defective Subscription Right
Certificates have been received each day, (vi) the number of requests from
Qualified Financial Institutions holding Rights on behalf of more than one
beneficial holder to effect an exchange of a Subscription Right Certificate or
Certificates so as to obtain additional Rights to which such beneficial holders
are entitled, as set forth in Section 5(a), above, and the increase in the
number of Rights that would result from such exchange, and (vii) cumulative
totals with respect to the information set forth in each of the clauses (i)
through (vii) above. At or before 5:00 p.m., California time, on the first
business day following the Expiration Time, the Subscription Agent will certify
in writing to the Company and the Dealer Manager the cumulative totals through
the Expiration Time with respect to the information set forth in clauses (i)
through (iv) above. The Subscription Agent also will maintain and update a
listing of Rights Holders who have fully or partially exercised their Rights and
Rights Holders who have not exercised their Rights. The Subscription Agent will
provide the Company, the Dealer Manager and their respective designated
representatives with the information compiled pursuant to this Section 12 and
any Subscription Right Certificates or other documents or date from which such
information derived, as any of them may request. The Subscription Agent hereby
represents and warrants that the information contained in each notification
referred to in this Section 12 will be accurate in all material respects.
SECTION 13. PAYMENT OF TAXES. The Company will pay when due all
document, stamp and other taxes, if any, that may be payable with respect to the
issuance or delivery of any Rights or the issuance of any Underlying Shares upon
the exercise of Rights; provided, however, that the Company will not be liable
for any tax arising out of any transaction that results in, or is deemed to
constitute, an exchange of Rights or Underlying Shares or a constructive
dividend with respect to the Rights or Underlying Shares. Except as provided
above, all transfer and other taxes incurred in connection with the exercise of
Rights will be for the account of the transferor of the Rights, and no such
taxes will be paid by the Company or the Subscription Agent. If any transfer
tax is imposed for any reason other than the issuance of Underlying Shares to a
Rights Holder upon exercise of Rights by such Rights Holder, the amount of any
such transfer taxes (whether imposed on such Rights Holder or any other person)
will be payable by such person and the Subscription Agent will be entitled to
refuse to implement such exercise or other requested action unless it is
furnished with proof satisfactory to it of the payment of such transfer taxes by
such Rights Holder or other person.
SECTION 14. CANCELLATION AND DESTRUCTION OF SUBSCRIPTION RIGHT
CERTIFICATES. All Subscription Right Certificates surrendered for the purpose of
exercise, exchange, substitution or transfer will be canceled by the
Subscription Agent, and no Subscription Right Certificates will be issued in
lieu thereof, except as expressly permitted by this Agreement. The Company will
deliver to the Subscription Agent for cancellation and retirement, and the
Subscription Agent will
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so cancel and retire, any Subscription Right Certificates purchased or acquired
by the Company otherwise than upon the exercise thereof. The Subscription Agent
will either deliver all canceled Subscription Right Certificates to the Company
or, at the written request of the Company, destroy such canceled Subscription
Right Certificates, and in such case will deliver a certificate of destruction
thereof to the Company.
SECTION 15. FEES OF THE SUBSCRIPTION AGENT; INDEMNIFICATION.
(a) The Company shall pay to the Subscription Agent compensation in
accordance with the fee schedule attached hereto as Exhibit E for all services
rendered by it hereunder and, from time to time, on demand of the Subscription
Agent, its reasonable expenses and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder.
(b) The Company shall indemnify and hold the Subscription Agent
harmless against any losses, claims, damages, liabilities, costs and expenses
(including reasonable fees and disbursements of legal counsel) which the
Subscription Agent may incur or become subject to arising from or out of any
claim or liability resulting from actions taken as Subscription Agent pursuant
to this Agreement; provided, however, that indemnity does not extend to, and the
Subscription Agent will not be indemnified or held harmless with respect to,
such losses, claims, damages, liabilities, costs and expenses incurred or
suffered by the Subscription Agent as a result, or arising out, of the
Subscription Agent's negligence, misconduct, bad faith or breach of this
Agreement. In connection therewith, (i) in no case will the Company be liable
with respect to any claim against the Subscription Agent unless the Subscription
Agent notifies the Company in writing of the assertion of a claim against it or
of any action commenced against it, promptly after the Subscription Agent has
notice of any such assertion of a claim or has been served with the summons or
other first legal process giving information as to the nature and basis of the
claim; (ii) the Company will be entitled to participate at its own expense in
the defense of any suit brought to enforce any such claim, and if the Company so
elects, it will assume the defense of any such suit, in which event the Company
will not thereafter be liable for the fees and expenses of any additional
counsel that the Subscription Agent may retain, so long as the Company retains
counsel satisfactory to the Subscription Agent, in the exercise of the
Subscription Agent's reasonable judgment, to defend such suit; and (iii) the
Subscription Agent agrees not to settle any litigation in connection with any
claim or liability with respect to which it may seek indemnification from the
Company without the prior written consent of the Company.
(c) The Subscription Agent will be protected and will incur no
liability for or with respect to any action taken, suffered or omitted by it
without negligence and in good faith in connection with its administration of
this Agreement in reliance upon any Subscription Right Certificate, instrument
of assignment or transfer, power of attorney, endorsement, affidavit letter,
notice, direction, consent, certificate, statement or other paper or document
reasonably believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged by the proper person or persons.
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(d) Anything in this Agreement to the contrary notwithstanding, in no
event will the Subscription Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Subscription Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
SECTION 16. MERGER OR CONSOLIDATION OF SUBSCRIPTION AGENT. Any
corporation into which the Subscription Agent or any successor Subscription
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Subscription Agent or
any successor Subscription Agent may be a party, or any corporation succeeding
to the corporate trust business of the Subscription Agent or any successor
Subscription Agent, will be the successor to the Subscription Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 17. CONCERNING THE SUBSCRIPTION AGENT. The Subscription
Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions:
(a) The Subscription Agent may consult with legal counsel acceptable
to the Company (who may be, but is not required to be, legal counsel for the
Company), and the opinion of such counsel will be full and complete
authorization and protection to the Subscription Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Subscription Agent may deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, President and
Chief Executive Officer, any Vice President (including any Senior or Executive
Vice President), the Treasurer or any Assistant Treasurer, or the Secretary of
the Company and delivered to the Subscription Agent, and such certificate will
be full authorization to the Subscription Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Subscription Agent will have no responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except the
due execution by the Subscription Agent, and the enforceability of, this
agreement), or with respect to the validity or execution of any Subscription
Right Certificate.
(d) Nothing herein precludes the Subscription Agent from acting
in any other capacity for the Company.
(e) The Subscription Agent shall not, and shall not permit any
affiliate to sell or purchase, from the date hereof to the Expiration Time, any
Common Stock, or establish any short or long position with respect thereto, for
its own account or the account of any affiliate of the Subscription Agent.
11
SECTION 18. CERTIFICATE TAX MATTERS.
(a) The Subscription Agent shall comply with the information reporting
and backup withholding requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), including, without limitation, where appropriate, on a
timely basis, filing with the Internal Revenue Service and furnishing to Rights
Holders duly completed Forms 1099B. The Subscription Agent also will collect
and duly preserve Forms W-8 and W-9 and other forms or information necessary to
comply with the backup withholding requirement of the Code.
(b) The Subscription Agent shall withhold from payments made to Rights
Holders amounts sufficient to comply with the backup withholding requirements of
the Code.
SECTION 19. NOTICES TO THE COMPANY, RIGHTS HOLDERS AND SUBSCRIPTION
AGENT. All notices and other communication provided for or permitted hereunder
are to be made by hand delivery, prepaid first class mail, telex or telecopier:
(a) If to the Company, to:
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx,
Executive Vice President and Chief
Administration Officer
(b) If to the Subscription Agent:
By hand delivery, Overnight Courier or mail to:
U.S. Stock Transfer Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention:
(c) If to the Dealer Manager, to:
Sandler X'Xxxxx & Partners, L.P.
Xxx Xxxxx Xxxxx Xxxxxx
000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to:
Xxxxxxx, Xxxxxx & Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
00
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx Xxxxxxxx, Esq.
(d) If to a Rights Holder, to the address shown on the registry
books of the Company.
All such notices and communications will be deemed to have been duly
given when delivered by hand, if personally delivered; two business days after
being deposited in the mail, postage, prepaid, if mailed as aforesaid; when
answered back, if telexed; and when receipt is acknowledged, if telecopied.
SECTION 20. SUPPLEMENTS AND AMENDMENTS. The Company and the
Subscription Agent may from time to time supplement or amend this Agreement
without the approval of any Rights Holders.
SECTION 21. SUCCESSORS. All the covenants and provisions of the
Agreement by or for the benefit of the Company or the Subscription Agent will
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 22. TERMINATION. This Agreement will terminate at 5:00 p.m.,
California time, on the thirtieth day following the Expiration Time.
SECTION 23. GOVERNING LAW. This Agreement will be deemed to be a
contract made under the laws of the State of California and for all purposes is
to be construed in accordance with the internal laws of said State.
SECTION 24. BENEFITS OF THIS AGREEMENT. Except as set forth in
Section 12, nothing in this Agreement is to be construed to give to any person
or corporation other than the Company, the Subscription Agent and the Rights
Holders any legal or equitable right, remedy or claim under this Agreement.
This Agreement is for the sole and exclusive benefit of the Company, the
Subscription Agent and the Rights Holders. Notwithstanding the foregoing, the
representations, warranties and agreements of the Subscription Agent also are
made for the benefit of the Dealer Manager, who is intended to be, and hereby
expressly is constituted, third party beneficiary of such representations,
warranties and agreements.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts will for all purposes be
deemed to be an original, but all such counterparts will together constitute one
and the same instrument.
SECTION 26. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and do not
control or affect the meaning or construction of any of the provision hereof.
13
IN WITNESS WHEREOF, each of the parties hereto has caused the
Agreement to be duly executed as of the date first above written.
NATIONAL MERCANTILE BANCORP,
a California corporation
By
-----------------------------------------------
Its
----------------------------------------------
U.S. STOCK TRANSFER CORPORATION,
a California Corporation
By
------------------------------------------------
Its
----------------------------------------------
14
EXHIBIT E
U.S. STOCK TRANSFER CORPORATION
SUBSCRIPTION AGENT DUTIES AND FEES
FOR NATIONAL MERCANTILE BANCORP
Subscription Agent Duties and Services
--------------------------------------
. Calculate and verify number of rights to be issued to each
shareholder.
. Issue and mail notice of exercise form to each subscriber along with
the appropriate rights offering material.
. Split-up, issue and mail subscription right certificates as requested
by offerees.
. Receive and time stamp surrendered subscription right certificates and
checks.
. Examine subscription right certificates and checks for acceptance.
. Write regarding deficient items.
. Calculate and verify exercise price received and number of shares to
be issued for each basic and oversubscription privilege.
. Deposit checks into a fiduciary account.
. Invest funds into [name of Account] on second business day after
deposit.
. Wire funds to corporation's account on business day following end of
offering period.
. Handle all letters of inquiry regarding lost, destroyed or stolen
subscription right certificates.
. If applicable, adjust rights on disputed claims as per Company's
instructions and refund to the holder any excess subscription price
resulting from a reduction of rights exercised.
. Reflect restrictive legend on certain stock certificates to be issued
in connection with the offering. Please provide us the exact legend to
be shown on the new certificates.
. Keep accurate controls of all subscription right certificates
exercised and cancellation of certificates.
. Issue and mail stock certificates to subscribers covering basic
subscription shares.
. Issue and mail stock certificates to subscribers, covering
oversubscription shares.
. Issue and mail stock certificates covering shares resulting from the
standby purchase agreements.
. Furnish periodic reports of exercised rights.
. Track oversubscription privileges.
. Calculate pro-ration on oversubscription.
Subscription Agent Fees
-----------------------
[$5,000.00]
Plus out-of-pocket expenses incurred such as postage, telephone and
telegraph, shipping costs, insurance, stationery, overtime, counsel and
fees, etc.
