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EXHIBIT 1.2
ESCROW AGREEMENT
Between
COASTAL COMMUNITY GROUP, INC.,
a Florida corporation
(the "Company")
and
SUNTRUST BANK, MIAMI, N.A.
(the "Escrow Agent")
and
COAST PARTNERS SECURITIES, INC.
(the "Managing Dealer")
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RECITALS
THIS ESCROW AGREEMENT is made and entered into between the Company, the
Escrow Agent and the Managing Dealer as of ___________, 1999.
A. WHEREAS, the Company proposes to offer and sell through one or more
registered broker-dealers in a public offering (the "Offering") a minimum of
Nine Million Dollars ($9,000,000) and a maximum of Ten Million Dollars
($10,000,000) of shares of the Company's common stock, $0.01 par value (the
"Shares").
B. WHEREAS, the Managing Dealer intends to sell the Shares as the
Company's agent on a "best efforts all or none" basis as to 900,000 Shares (the
"Minimum Shares") and on a "best efforts" basis as to the remaining 100,000
Shares in the Offering.
C. WHEREAS, each Share will be sold at a price of Ten Dollars ($10.00),
as described in the Company's Registration Statement (as defined below).
D. WHEREAS, the Company has filed a Registration Statement on Form SB-2
and all amendments thereto (the "Registration Statement") with the Securities
and Exchange Commission (the "SEC") in accordance with the General Rules and
Regulations under the Securities Act of 1933, as amended (the "Act"), covering
the Offering of up to 1,000,000 Shares.
E. WHEREAS, the Company and the Managing Dealer propose to establish an
escrow account with the Escrow Agent in compliance with Rule 240.15c2-4 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, in which funds received from subscribers will be deposited pending
completion of the escrow period.
F. WHEREAS, the Escrow Agent is willing to establish an escrow account
on the terms and subject to the conditions hereinafter set forth.
G. WHEREAS, the term "Selected Dealer" as used herein shall include the
Managing Dealer and other selected dealers as part of the selling group. All
Selected Dealers shall be bound by this Agreement. However, for purposes of
communications and directives, the Escrow Agent need only accept instructions
from the Managing Dealer, as the representative of the Selected Dealers.
H. WHEREAS, the Company has agreed to reimburse the Escrow Agent in the
full amount for any items returned unpaid to the Escrow Agent, after all funds
held in escrow have been dispersed.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration, it is agreed as
follows:
1. RECITALS. All of the above recitals are true and correct.
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2. ESTABLISHMENT OF ESCROW AGREEMENT. Prior to the date on which
the Registration Statement is declared effective by the SEC (the "Effective
Date"), the parties hereto shall establish, and by execution of this Agreement
hereby agree to establish, an escrow account, which escrow account shall be
entitled "Coastal Community Group, Inc. - SunTrust Bank Miami, N.A. as Escrow
Agent" (the "Escrow Account").
3. ESCROW PERIOD. The "Escrow Period" shall begin with the
Effective Date and shall terminate upon the earlier of the following to occur
(the "Termination Date"):
(a) 5:00 p.m. (Miami time) on the 90th day after the
Effective Date unless extended in writing by the Company for an
aggregate 90 additional days as described in the Registration Statement
(as extended, the "Offering Termination Date"), if gross proceeds
representing the sale of the Minimum Shares have not been deposited by
the Offering Termination Date; or
(b) if (i) gross proceeds representing the sale of the
Minimum Shares have been deposited by the Offering Termination Date and
(ii) the Company receives a "Notice of Intent to Approve" from the
Florida Department of Banking and Finance within 180 days after the
Offering Termination Date, 5:00 p.m. (Miami time) on the date specified
as the "Initial Closing Date" by the Company and the Managing Dealer in
writing (which date shall be at least one but not more than 15 business
days after the conditions specified in (i) and (ii) have been
satisfied), provided that (y) the Escrow Agent has confirmed that it
has received in the Escrow Account gross proceeds of $9,000,000
representing completion of the sale of the Minimum Shares and (z) the
Company has provided the Escrow Agent with a copy of the Notice of
Intent to Approve; or
(c) 5:00 p.m. (Miami time) on the date on which the
Escrow Agent receives written notice from the Company and the Managing
Dealer of a determination to terminate the Offering, whether or not the
Minimum Shares are sold.
Promptly after the SEC declares the Registration Statement effective,
the Company shall advise the Escrow Agent in writing of the Effective Date. The
Escrow Agent need not accept checks, drafts, money orders or monies from
prospective purchases prior to the Effective Date.
On the Initial Closing Date, the Company will accept subscriptions for
an amount of Shares equal to at least $900,000, Shares will be issued to the
subscribers whose subscriptions have been accepted by the Company, and the funds
held in the Escrow Account shall be paid to the Company in accordance with
Section 5 hereof. To the extent that on the Initial Closing Date there are
subscriptions that have not been rejected by the Company and payment for the
Shares subscribed for in such subscriptions has been deposited in the Escrow
Account and constitute "collected funds" (meaning funds which have cleared
normal banking channels and are in the form of cash), then such subscriptions
shall be deemed accepted on the Initial Closing Date. Payments for any
subscriptions rejected on the Initial Closing Date shall be handled in
accordance with Section 6 hereof.
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The Company is aware and understands that during the Escrow Period it
will not be entitled to any funds received into escrow and no amounts deposited
in the Escrow Account shall become the property of the Company or any other
entity, or be subject to the debts of the Company or any other entity, and the
Escrow Agent shall not make any disbursements from the Escrow Account except as
expressly provided herein or pursuant to any lawful order issued to the Escrow
Agent by a tribunal of competent jurisdiction.
4. ESCROW DEPOSITS. The Company and the Managing Dealer have
included a statement in the Prospectus or supporting documents instructing
subscribers to make checks for the purchase of Shares payable to "SunTrust Bank
Miami, N.A. as Escrow Agent - Coastal Community Group, Inc." Any checks received
that are made payable to any party other than the Escrow Agent as provided in
the preceding sentence shall be returned, with the subscription agreement, to
the Selected Dealer who submitted the check.
The Escrow Agent agrees to deposit into the Escrow Account, upon
receipt thereof, any and all checks, drafts, money orders and other instruments
and monies payable to the Escrow Agent as escrow agent for the purchase of the
Shares. Simultaneously with the delivery to the Escrow Agent of a check, draft,
money order or other instrument or money received from a prospective purchaser
of the Shares, the Selected Dealer making such delivery shall provide the Escrow
Agent with a copy of the purchaser's subscription agreement containing the name,
address, and social security or tax identification number of the prospective
purchaser and of the amount paid and number of Shares subscribed for by such
purchaser. The Escrow Agent shall have the right to rely fully on the
subscription agreements so furnished to it by the Selected Dealers.
5. DISBURSEMENTS FROM THE ESCROW ACCOUNT.
(a) If on or before the Termination Date the Escrow Agent
has received in the Escrow Account gross proceeds of $9,000,000 in
deposited funds representing at least the Minimum Shares, the Escrow
Agent shall notify the Company and the Managing Dealer in writing of
this fact. Except as otherwise provided in this Agreement, the Escrow
Agent shall hold such monies, along with any additional proceeds
deposited in the Escrow Account from sales of Shares after the proceeds
from the Minimum Shares have been deposited, until given written
instructions by the Company and the Managing Dealer as to the
disbursement of the funds in the Escrow Account; provided that no funds
shall be disbursed to the Company unless it has provided the Escrow
Agent with a copy of a "Notice of Intent to Approve" issued by the
Florida Department of Banking and Finance; further provided that no
funds shall be disbursed to the Company until the Escrow Agent has
received $9,000,000 in "collected funds" (meaning funds which have
cleared normal banking channels and are in the form of cash). Any
interest earned on the funds in the Escrow Account shall be paid to the
Company, subject to the provisions of Section 7 below.
(b) In the event that the Escrow Agent does not receive
in accordance with this Agreement $9,000,000 representing the proceeds
from the sale of the Minimum Shares prior to the Termination Date, the
Escrow Agent shall refund in a timely manner to each prospective
purchaser the amount actually received from such purchaser, with
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interest thereon and without deduction therefrom, and the Escrow Agent
shall notify the Company and the Managing Dealer of its distribution of
the funds in the Escrow Account. Notwithstanding the provisions of
Section 7 below, any interest earned on the escrowed funds shall be
paid to prospective purchasers as equitably as possible pro rata in
accordance with each prospective purchaser's subscription amount and
the length of time such amount was held in the Escrow Account. The
purchase money returned to such purchasers shall be free and clear of
any and all claims of the Company, the Managing Dealer or any of their
creditors.
(c) Upon the disbursement of all or any portion of the
escrowed funds in accordance with either subsection (a) or (b) above,
the Escrow Agent will have no further responsibility with respect to
the escrow deposits so disbursed, and upon disbursement from the Escrow
Account in accordance with said subsections, will have no further
responsibility under this Agreement. In this regard it is expressly
agreed and understood that in no event shall the aggregate amount of
disbursements made by the Escrow Agent exceed the amounts deposited in
the Escrow Account.
6. COLLECTION PROCEDURE. The Escrow Agent is hereby authorized to
forward each check, draft or other instrument for collection and, upon
collection of the proceeds of each check, draft or other instrument deposit the
collected proceeds in the Escrow Account. Any check, draft or other instrument
returned unpaid to the Escrow Agent shall be returned to the Selected Dealer
that submitted the check. In such cases, the Escrow Agent will notify the
Company and the Managing Dealer of such return. If the Company rejects any
subscription for which the Escrow Agent has already collected funds, the Escrow
Agent shall issue a refund check to the rejected prospective purchaser. If the
Escrow Agent has not yet submitted a rejected purchaser's check, draft or other
instrument for collection, the Escrow Agent shall remit such purchaser's check,
draft or other instrument directly to the purchaser. It is understood and agreed
that should any check, draft or other instrument be returned unpaid for any
reason after the Escrow Period that would cause the collected aggregate proceeds
from the sale of the Shares to be less than $9,000,000, then no money shall be
payable to the Company or the Managing Dealer from the Escrow Account and the
Escrow Agent shall comply with Section 5(b) hereof.
7. INVESTMENT OF ESCROW AMOUNT. The Escrow Agent may invest the
funds deposited into the Escrow Account in such accounts or investments as the
Company may specify by written notice; provided that the Company only may
specify investments in (a) banks accounts, (b) bank money-market accounts, (c)
short-term certificates of deposit issued by a bank, or (d) short-term
securities issued or guaranteed by the United States government. Until otherwise
directed, the Escrow Agent shall invest the escrowed funds in repurchase
agreements collaterized with the United States government and government agency
bills, bonds and/or notes, so long as the contracted yield on such assets shall
be normally equivalent to the bid of the "Fed Funds Rate" as provided by the
Wall Street Journal less 75 basis points (the "Specified Rate"). As partial
compensation for its services and in addition to all other compensation to the
Escrow Agent provided for herein, the Escrow Agent shall be entitled to retain,
for its account, any earnings realized on the investments in the overnight
repurchase transactions in excess of the Specified Rate.
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8. REGISTRATION STATEMENT. The Company shall provide the Escrow
Agent with a copy of those pages of the Registration Statement and supporting
documents which reference the Escrow Agent or this Agreement ("Reference
Pages"). The Company will not file the Registration Statement with the SEC or
finalize the supporting documents until it has received the Escrow Agent's
approval of the Reference Pages. The Escrow Agent agrees to provide the Company,
by facsimile, with its approval of the Reference Pages or acceptable
modifications thereto within two (2) business days after receipt of the
Reference Pages. The Escrow Agent shall only review the Reference Pages and
shall not review or have any obligation to review any other portion of the
Registration Statement, the supporting documents or any of the other documents
delivered by purchasers in connection with their purchase of the Shares. The
Company shall not file or finalize amended Reference Pages until it has received
the Escrow Agent's approval of the amended Reference Pages in accordance with
this Section.
9. RIGHTS, DUTIES AND RESPONSIBILITIES OF ESCROW AGENT. It is
understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature. It is further agreed that:
(a) The Escrow Agent shall not be liable for any action
taken or omitted hereunder except in the case of its bad faith, gross
negligence or willful misconduct. The Escrow Agent shall be entitled to
consult with counsel of its own choosing and shall not be liable for
any action taken, suffered or omitted by it in reasonable reliance upon
the advice of such counsel. Any reasonable expenses incurred by Escrow
Agent in connection with such consultation shall be reimbursed by the
Company.
(b) The Escrow Agent shall not be liable or responsible
to perform any act pertaining to the proposed offering of Shares, other
than as set forth in this Agreement, or because of the loss of any
monies arising through insolvency or the act or default or omission of
any person other than the Escrow Agent. The Escrow Agent shall not be
responsible for the application of the proceeds deposited with it and
paid out, withdrawn or transferred in accordance with this Agreement.
(c) The Escrow Agent shall have no responsibility at any
time to ascertain whether or not any security interest exists in the
funds in the Escrow Account or any part thereof or to file any
financing statement under the Uniform Commercial Code with respect to
the Escrow Account or any part thereof.
(d) The Escrow Agent will not be required to disburse any
funds from the Escrow Account, unless such funds have been on deposit
for a sufficient period that the Escrow Agent, in its sole discretion,
deems them to be clear.
(e) The Escrow Agent shall have no responsibility with
respect to the use or application of any funds or other property paid
or delivered by the Escrow Agent pursuant to the provisions hereof.
(f) The Escrow Agent shall under no circumstances be
required to furnish a formal accounting for the proceeds in the Escrow
Account other than to notify the Company as to each payment or
disbursement made to or from the Escrow Account.
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(g) The Escrow Agent shall have no responsibility to
determine the validity of any Notice of Intent to Approve obtained by
the Company and presented to the Escrow Agent.
(h) This Agreement sets forth exclusively the duties of
the Escrow Agent with respect to any and all matters pertinent hereto
and on implied duties or obligation shall be read into this Agreement
against the Escrow Agent.
10. NO INTERESTS CREATED IN FUND. The Escrow Agent shall not issue
any certificate of deposit, stock certificates or any other instrument or
document representing any interest in the Escrow Account, except that it may
send a written notice to the Company and/or the Managing Dealer acknowledging
receipt or disbursement of the deposited funds.
11. AMENDMENT; RESIGNATION. This Agreement may be altered or
amended only with the written consent of the Company, the Managing Dealer and
the Escrow Agent. The Escrow Agent may resign as Escrow Agent at any time upon
10 days' prior written notice to the Company and the Managing Dealer. In the
case of the Escrow Agent's resignation, its only duty shall be to hold and
dispose of the funds in the Escrow Account in accordance with the original
provisions of this Agreement until a successor Escrow Agent shall be appointed
and written notice of the name and address of such successor Escrow Agent shall
be given to the Escrow Agent by the Company and the Managing Dealer, whereupon
the Escrow Agent's only duty shall be to pay over to the successor Escrow Agent
the funds in the Escrow Account, less any portion thereof previously paid out in
accordance with this Agreement.
12. WARRANTIES. The Company warrants to and agrees with the Escrow
Agent that, unless otherwise expressly set forth in this Agreement, at the time
of this Agreement and upon disbursement of the funds in the Escrow Account in
accordance with this Agreement:
(a) no party other than the parties hereto and the
prospective purchasers have, or shall have, any lien, claim or security
interest in the Escrow Account or any part thereof;
(b) no financing statement under the Uniform Commercial
Code is on file in any jurisdiction claiming a security interest in or
describing (whether specially or generally) the Escrow Account or any
part thereof; and
(c) the Registration Statement complies with the Act and
the Offering has been and/or will be made in compliance with applicable
federal and state securities laws.
13. FEES AND EXPENSES. In addition to the compensation provided
for in Section 7 above and the indemnification provided for in Section 14 below,
without regard to the amount deposited in the Escrow Account pursuant to this
Agreement, the Escrow Agent shall be entitled to: (a) a fee determined in
accordance with, and payable by the Company as specified in, the Schedule of
Fees for Escrow Services, a copy of which is attached hereto as Schedule 1 and
incorporated herein by reference, which fee must be paid by the Company to the
Escrow Agent at the time of execution of this Agreement; and (b) be reimbursed
by the Company for any reasonable expenses for performing its obligations in
connection with this Agreement, including, but not limited to, costs, expenses
and legal fees incurred by the Escrow Agent relating to the
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review of documents pertaining to this Agreement. If, before the Termination
Date, the collected funds in the Escrow Account equal or exceed $9,000,000 and
the Company receives a "Notice of Intent to Approve" issued by the Florida
Department of Banking and Finance, the Escrow Agent may deduct from the funds in
the Escrow Account all amounts owed to it pursuant to this Agreement, whether or
not prior to or after any distribution from the Escrow Account. If the balance
in the Escrow Account does not reach $9,000,000 or if the Company does not
receive a "Notice of Intent to Approve" within 180 days after the Offering
Termination Date, no amounts owing to the Escrow Agent pursuant to this
Agreement shall be paid out of or chargeable to the funds on deposit in the
Escrow Account, notwithstanding the provisions of Section 7 above. However, this
shall not relieve the Company or the Managing Dealer, as the case may be, of any
of their obligations to the Escrow Agent under this Agreement.
14. INDEMNIFICATION. The Company agrees to indemnify the Escrow
Agent and its officers, agents, directors and stockholders (herein, the
"Indemnities") against, and hold them harmless of and from, any and all loss,
liability, cost, damage and expense, including without limitation, reasonable
attorneys' fees, which the Indemnities may suffer or incur by reason of any
action, claim or proceeding brought by any third party against the Indemnities,
arising out of or relating in any way to this Agreement or any transaction
contemplated by this Agreement, or in the performance of its duties hereunder
including, but not limited to any interpleader action.
15. GOVERNING LAW, JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
and the proper venue and jurisdiction for any action or claim with respect to
this Agreement or any document delivered pursuant hereto shall be in the Circuit
Court in Dade County, Florida. The parties agree that service of process in any
such action or claim shall be deemed valid if made by registered mail, return
receipt requested, sent to the addresses set forth in Section 17 hereof. Nothing
in this Agreement is intended to or shall confer upon anyone other than the
parties hereto any legal or equitable right, remedy or claim.
16. ASSIGNABILITY. This Agreement shall not be assignable without
the written consent of all of the parties hereto. All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the successors and permitted assigns of the
parties.
17. NOTICES. All notices and other communications given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if (a) delivered by hand, (b) mailed by registered or certified
mail, return receipt required, or (c) transmitted by any standard form of
telecommunications and confirmed. All notices and communications shall be
addressed as follows:
If to the Company: Coastal Community Group, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, CEO
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with a copy to: Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
One Xxxxxxxx Xxxxx
Xxx Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
If to the Managing Dealer: Coast Partners Securities, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
with a copy to: Xxxxx Xxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
If to the Escrow Agent: SunTrust Bank, Miami, N.A.
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx del Oso, Commercial Trust
Department
18. SEVERABILITY. If any provision of the Agreement or the
application thereof to any person or circumstances shall be determined to be
invalid or unenforceable, the remaining provisions of the Agreement or the
application of such provision to persons or circumstances other than those to
which it is held invalid or unenforceable shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law.
19. EXECUTION IN SEVERAL COUNTERPARTS. This Agreement may be
executed in several counterparts or by separate instruments, and all of such
counterparts and instruments shall constitute one agreement, binding on all of
the parties hereto.
20. PRONOUNS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
context may require.
21. CAPTIONS. All captions are for convenience only and shall not
limit or define the text hereof.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understanding (written or oral) of the
parties in connection herewith.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
"COMPANY"
By
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Name
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Title
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"MANAGING DEALER"
By
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Name
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Title
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"ESCROW AGENT"
By
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Ary X. Xxxxxxx
Vice-President
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SCHEDULE I
SCHEDULE OF FEES
FOR ESCROW SERVICES
1. $1,000 Acceptance Fee for review of Escrow Agreement and set
up of the account (payable upon execution of Escrow Agreement).
2. Minimum $3,000 Annual Administration Fee, which includes
deposits of all Subscribers (payable upon execution of Escrow Agreement).
