EX-10.4






Exhibit 10.4




AMENDMENT TO NON-RECOURSE 

INDEMNITY AND SECURITY AGREEMENT



THIS AMENDMENT TO NON-RECOURSE INDEMNITY AND SECURITY AGREEMENT (this “Amendment”), is made
and entered into as of February 24, 2009, by and between CAPITALSOUTH BANK, an Alabama banking
corporation (the “Bank”), and JAMES C. BOWEN, a resident of Duval County, Florida
(“Bowen”), and is joined in by CAPITALSOUTH BANCORP, a Delaware corporation and a
registered bank holding company (“CapitalSouth”).




R E C I T A L S:




     A. The Bank and Bowen entered into that certain Non-Recourse Indemnity and Security Agreement,
dated September 14, 2007, joined in by CapitalSouth for the purposes of certain provisions (the
“Indemnity Agreement”). Capitalized terms not defined in this Amendment shall have the
meanings ascribed to them in the Indemnity Agreement.



     B. Pursuant to Section 1 of the Indemnity Agreement, Bowen agreed to indemnify the Bank and
CapitalSouth for certain Claims relating to Covered Loans.



     C. Pursuant to Section 2 of the Indemnity Agreement, Bowen has no liability or obligation with
respect to amounts subject to indemnification under Section 1 of the Indemnity Agreement (the
“Indemnified Costs”), until the Indemnified Costs incurred or accrued reach Two Million
Five Hundred Thousand Dollars ($2,500,000) (the “Threshold Amount”).



     D. Pursuant to Section 3 of the Indemnity Agreement, Bowen is responsible for 50% of all
Indemnified Costs above the Threshold Amount up to a maximum amount of $1,500,000 (the “Maximum
Amount”).



     E. Pursuant to Section G of the recitals to the Indemnity Agreement, Bowen agreed that
a Promissory Note in the original principal amount of One Million Five Hundred Thousand Dollars
($1,500,000) would be made by CapitalSouth in favor of Bowen (the “Pledged Note”), and the
Pledged Note would be used as security for Bowen’s indemnification obligations under the Indemnity
Agreement.



     F. Pursuant to that certain Restructuring Agreement dated September 30, 2008, by and among
CapitalSouth and Bowen, CapitalSouth and Bowen agreed to reduce the Maximum Amount to $500,000 and
replace the Pledged Note with a new promissory note in the original principal amount of $500,000
made by CapitalSouth in favor of Bowen (“Bowen Note II”)



     G. CapitalSouth, the Bank and Bowen now desire to amend the Indemnity Agreement to (i) reflect
the change in the Maximum Amount to $500,000 and (ii) replace the Pledged Note with Bowen Note II,
all on the terms provided herein.



 









 





A G R E E M E N T:




     NOW, THEREFORE, in consideration of the Ten Dollars ($10.00) and other good valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:



     1. Recitals Confirmed. The recitals herein are true and correct.



     2. Amendment to the Indemnity Agreement. The Indemnity Agreement is hereby amended as
follows:



          (i) In Section G of the recitals to the Indemnity Agreement, the term “(the “Pledged
Note”)” shall be deleted in its entirety, and term “Pledged Note” shall be defined to mean Bowen
Note II everywhere that term appears in the Indemnity Agreement.




          (ii) In Section 5 of the Indemnity Agreement, the term “One Million Five Hundred
Thousand Dollars ($1,500,000)” shall be deleted in its entirety and in its place shall be inserted
“Five Hundred Thousand Dollars ($500,000).”




     3. Continuing Effect of Indemnity Agreement. Except as expressly amended hereby, the
Indemnity Agreement remains in full force and effect in accordance with its terms.



     4. Governing Law. This Amendment shall be governed by, and shall be construed in
accordance with, the laws of the State of Alabama, without regard to principles governing conflicts
of law, and all applicable laws of the United States of America.



     5. Modification. No modification, amendment or waiver of any provision of this
Amendment shall be effective unless the same shall be in writing and signed by all parties, and
then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given.



     6. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall constitute an original, but when taken together all such counterparts shall constitute
but one agreement, and any party may execute this Amendment by executing any one or more of such
counterparts.



     7. Successors and Assigns, etc. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives, successors and assigns.



     8. Captions. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning of this Agreement.



[Signature Page Follows]




 









 








     IN WITNESS WHEREOF, the parties hereto have executed or caused this Amendment to be executed
and delivered as of the date first above written.



	 	 	 	 	 	 	 
	 

	 	CAPITALSOUTH BANCORP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ W. Dan Puckett	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	W. Dan Puckett	 	 
	 

	 	Its:
	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	CAPITALSOUTH BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ W. Dan Puckett	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	W. Dan Puckett	 	 
	 

	 	Its:
	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ James C. Bowen
	 	[L.S.]
	 

	 	 	 	 
	 

	 	James C. Bowen	 	 






 









 






	 	 	 	 	 	 
	STATE OF ALABAMA

	 	 	)	 
	 

	 	 	:	 
	JEFFERSON COUNTY

	 	 	)	 






     I, the undersigned, a notary public in and for said county in said state, hereby certify that
W. Dan Puckett whose name as Chairman and CEO of CAPITALSOUTH BANCORP, a Delaware corporation and a
registered bank holding company, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said instrument, he, as
such officer and with full authority, executed the same voluntarily for and as the act of said
corporation.



     Given under my hand and official seal this 24th day of February, 2009.



	 	 	 
	 

	 	/s/ Karen Ball
	 
	 	 
	 
	 	Notary Public
	 	 	 
	[NOTARIAL SEAL]
	 	My commission expires: 10/16/12






 









 






	 	 	 	 	 	 
	STATE OF ALABAMA

	 	 	)	 
	 

	 	 	:	 
	JEFFERSON COUNTY

	 	 	)	 






     I, the undersigned, a notary public in and for said county in said state, hereby certify that
W. Dan Puckett whose name as Chairman and CEO of CAPITALSOUTH BANK, an Alabama banking corporation,
is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day
that, being informed of the contents of said instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said corporation.



     Given under my hand and official seal this 24th day of February, 2009.



	 	 	 
	 

	 	/s/ Karen Ball
	 
	 	 
	 
	 	Notary Public
	 	 	 
	[NOTARIAL SEAL]
	 	My commission expires: 10/16/12






 









 






	 	 	 	 	 	 
	STATE OF GEORGIA

	 	 	)	 
	 

	 	 	:	 
	WORTH COUNTY

	 	 	)	 






     I, the undersigned, a notary public in and for said county in said state, hereby certify that
James C. Bowen, whose name is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said instrument, he
executed the same voluntarily on the day the same bears date.



     Given under my hand and official seal this 24th day of February, 2009.



	 	 	 
	 

	 	/s/ Judy S. Martin
	 
	 	 
	 
	 	Notary Public
	 	 	 
	[NOTARIAL SEAL]
	 	My commission expires: 7/24/12