Exhibit 10.2
Consulting Agreement With Southeast Financial Holdings, Inc.
This letter agreement (the "Letter Agreement") confirms the understanding
and agreement between Southeast Financial Holdings, Inc. ("SFH") and MainStreet
BankShares, Inc. (the "Company") as follows (unless otherwise defined herein).
1. The Company engages SFH as exclusive financial advisor to the Company
in connection with the Company's desire to raise capital to support
the establishment of Franklin Community Bank, N.A. In Organization.
The amount of such capital to be raised will be a minimum of
$5,999,952 and a maximum of $10,000,000.
2. SFH accepts the engagement described in Paragraph 1, and in that
connection, agrees to provide the following services:
(a) assist the Company in the preparation of the offering
circular (the "Confidential Memorandum") for distribution
and presentation to potential investors (if applicable):
(b) develop and maintain a list of potential investors, review
such list with the Company on a continuing basis, and
contact and provide detailed information and assistance to
all parties on a weekly basis:
(c) assist in the screening of interested potential investors,
including, if requested by the Company, performing a
financial analysis of any potential investor.
(d) provide at least one dedicated SFH representative on
premises to provide direct day to day support to management
and the organizers. Additionally, senior management of SFH
will be available on an as needed basis to attend and
provide support to groups of investors at breakfast and
lunch meetings as well as evening receptions. These events
requiring senior management presence should be scheduled no
less than one week in advance and all expenses of this
representation shall be borne by the Company (including but
not limited to travel and lodging and a predetermined per
diem):
(e) provide at Company's expense and approval, marketing
material, press releases and collateral material including
but not limited to creative and production assistance as
well as media selection and placement:
(f) advise the Company as to strategy and tactics for
negotiating with potential investors and participate in
presentations and negotiations relating to the
Capitalization efforts:
(g) assist the officers and management of the Company in
processing all retirement account share purchases, including
but not limited to the establishment of new accounts with
appropriate custodians and transfer of accounts currently
with custodians who do not support this type of transaction.
Finally, SFH will oversee all of these purchases until
completion:
(h) assist with due diligence and closing of escrow:
3. SFH shall be engaged for a period commencing with the execution of
this Letter Agreement by the Company and ending on the successful
completion of the capital offering (the "Termination Date") or, if
terminated earlier, the 10/th/ day after delivery of notice pursuant
to Paragraph 9 (the "Engagement Period").
4. As compensation for SFH's services hereunder, the Company shall pay to
SFH certain fees as follows:
(a) An Engagement fee of $7,500 payable upon the execution of
this Agreement.
(b) A monthly fee of $20,000 for December and $25,000 per month
thereafter payable to SFH during the term of this Agreement
commencing on December 3, 2001. Such payments shall continue
until the Termination Date.
5. For the purposes of this Letter Agreement:
"Termination Date" means the date of the closing of escrow equal to
the agreed upon capitalization.
6. In addition to any fees that may be payable to SFH, the Company shall
reimburse SFH and its affiliates, promptly upon request from time to
time, for administrative fees and reasonable out-of-pocket expenses
(including but not limited to reasonable lodging and per diem for the
on site SFH representative) also including, without limitation fees
and disbursements of counsel incurred in connection with SFH's
engagement not to exceed $10,000 in aggregate without the prior
approval of the Company, which approval shall not be unreasonably
withheld.
7. The Company shall furnish, or cause to be furnished, to SFH all
information requested by SFH for the purpose of rendering services
hereunder (the "Information"). The Company agrees to make available to
SFH, its officers, directors, employees and representatives,
including, but not limited to, the Company's certified public
accountants and legal counsel, as may be reasonably requested by SFH.
The Company recognizes and confirms that SFH:
(a) will use and rely on the information and on information
available from generally recognized public sources in
performing the services contemplated by this Letter
Agreement (including, without limitation, using any such
information in the Confidential Memorandum) without having
independently verified the same:
(b) does not assume responsibility for the accuracy or
completeness of the Information and such other information
(including, without limitation, any projections): and
(c) will not make an appraisal of any of the assets or
liabilities (whether direct, indirect, contingent or
otherwise) of the Company.
8. SFH agrees to hold in confidence in accordance with procedures it
applies generally to information of this kind and not disclose
Confidential Information, except (i) as may be required by law or as
requested by any regulator having jurisdiction over SFH and its
affiliates, (ii) to potential investors in any Capitalization who have
been informed of the confidential nature of the information provided,
and (iii) to officers, directors and employees of SFH and its
affiliates and agents and professional advisors (including, but not
limited to, auditors, attorneys and accountants) of SFH and its
affiliates who have been informed of the confidential nature of the
information provided. "Confidential Information" means information
about the Company or the Capitalization furnished by the Company to
SFH but does not include information (i) which was publicly known
(including available in regulatory filings), or otherwise known to SFH
at the time of disclosure, (ii) which subsequently becomes publicly
known through no act or omission by SFH or (iii) which otherwise
becomes known to SFH other than through disclosure by the Company or a
source actually known to be bound by a confidentiality agreement or
other legal or contractual obligation of confidentiality with respect
to such information.
9. Either the Company or SFH may terminate SFH's engagement at any time
upon thirty (30) days written notice from one party to the other.
10. Except as required by law, any advice rendered by SFH pursuant to its
engagement shall not be used or quoted in any manner or referred to in
any report, document, release or other communication (whether written
or oral) prepared, issued, transmitted, published or filed by the
company, by any person or entity controlling, controlled by or
affiliated with the Company, by any representative, agent, officer or
employee of any thereof, or by the Company without SFH's prior written
consent, which consent shall not be unreasonably withheld.
11. SFH and Company agree that any fees payable under this agreement will
be deducted from any mutually agreed upon fees payable to brokers,
agents, representatives or other parties that have an interest in
compensation.
12. This letter agreement does not constitute a commitment by SFH or any
of its affiliates to provide any financing.
13. The Company agrees that if the Capitalization is consummated, SFH may
use the Company's name and a
description of the Capitalization and SFH's role in publications
(including, but not limited to, tombstone advertisements) and other
marketing material prepared for and used in one on one presentations
to prospective clients. Without limiting the foregoing, SFH may also
publicize its services in connection herewith, including, without
limitation, granting interviews with and providing information to the
financial press and other media.
14. This Letter Agreement supercedes all prior agreements and
understandings between the Company and SFH with respect to the subject
matter hereof and may not be amended or modified except in writing
executed by both the Company and SFH. This letter agreement shall be
governed by and construed in accordance with the laws of the State of
Georgia without reference to principles of conflicts of law that would
require the application of the law of a jurisdiction other than the
State of Georgia.
15. This Letter Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which shall constitute one and
the same instrument.
If the foregoing is in accordance with the Company's understanding, please
sign and return to SFH the enclosed duplicate of this letter on or before
November 28, 2001.
SOUTHEAST FINANCIAL HOLDINGS, INC.
BY: /s/ Xxxx Xxxxxx
-----------------------
Xxxx Xxxxxx
Accepted and agreed this
30/th/ day of November, 2001.
MainStreet BankShares, Inc.
BY: /s/ X. X. XxXxxxxx
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X. X. XxXxxxxx
TITLE: President & CEO
