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EXHIBIT 10.3
XXXXX X. XXXXX & CO. 00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
INVESTMENT BANKERS Xxxxxxxxxxxx, XX 00000-0000
JACKSONVILLE TAMPA Telephone 000-000-0000
Telecopier 904-354-7033
September 20, 2000
CONFIDENTIAL
Xx. Xxxx X. Xxxxxxx
Chairman, Chief Executive Officer
Coastline Community Group, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxxx:
The purpose of this letter is to set forth a proposed agreement between Xxxxx
X. Xxxxx & Co. ("Xxxxx") and Coastline Community Group, Inc. (the "Company")
which is the proposed bank holding company for Coastline National Bank (In
Organization) (the "Bank"), whereby Xxxxx will be retained by the Company for
the purpose of providing marketing services to the Company in regard to the
Company's objective of raising $8,500,000 to $10,000,000 in equity capital for
the Company, a portion of which will be used to capitalize the Bank.
The Company plans to raise the indicated equity capital by offering common
shares of the Company commencing in October of this year (the "Offering"). The
Offering will be made to investors via an offering circular to be prepared by
the Company. The common shares will be registered with the SEC.
The shares will be offered to investors in three phases:
o FIRST PHASE
To the directors and organizers who have indicated that they will
collectively subscribe to approximately 150,000 shares representing
$1,500,000 at the proposed offering price of $10.00 per share.
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Mr. Xxxx Xxxxxxx
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September 20, 2000
o SECOND PHASE
To investors located in the service area of the Bank with the objective of
obtaining as many subscriptions as possible for the balance of the shares
(the "Community Offering").
o THIRD PHASE
To other investors with the objective of obtaining subscriptions for any
and all shares remaining unsold in the prior two phases (the "General
Offering").
An escrow agent will be appointed by the Company and subscription funds will be
placed in escrow until the minimum capital required by the regulators of
$8,500,000 has been achieved. The marketing and selling of shares in Phases Two
and Three may occur simultaneously as determined by Xxxxx and the Company.
DUTIES
The services to be provided by Xxxxx will include the following:
x Xxxxx will serve as the exclusive financial advisor to the
Company in connection with all phases of the Offering.
x Xxxxx will provide marketing services for the Offering and
licensed brokers to be on site to facilitate the marketing
services. Xxxxx will provide appropriate oversight to ensure
compliance with securities laws for the Offering.
x Xxxxx will act as Sales Agent in marketing the shares in the
Community and General Offerings and will assist the Company
in raising the desired funds on a best efforts basis.
FEES
1) Upon acceptance of this agreement, Xxxxx will be paid a consulting fee
of $3,000 with two additional payments of $3,000, payable monthly,
commencing thirty days subsequent to the execution of this agreement.
Commencing the fourth month from the execution of this agreement,
Xxxxx will be paid an expense allowance of $5,000, payable monthly for
three months. These consulting fees and expense allowances will not
exceed $24,000. Xxxxx will recommend the services of The Meritas Group
of Chapel Hill, NC, or a firm providing similar services, which will
provide qualified personnel responsible to the Company for carrying
out the necessary bookkeeping, compliance, and related duties. The
Meritas Group, or a similar firm, will provide the Company with a
software package designed to facilitate compliance and bookkeeping.
This software package is capable of providing daily, weekly, and
monthly reports reflecting the status of subscriptions as well as
demographic information that may be pertinent. If the Offering is
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Mr. Xxxx Xxxxxxx
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September 20, 2000
successful and the minimum amount of funds raised, all fees paid to
Xxxxx as consulting fees and expenses will be deducted from the
transaction fees payable to Xxxxx at closing.
2) Xxxxx will be paid the following transaction fees at closing:
x Xxxxx will not receive a transaction fee for the shares
subscribed to by the Directors of the Company, which is
anticipated to be approximately 150,000 shares, or
$1,500,000.
x Xxxxx will be paid a transaction fee of 4.0% on all funds
raised in the Community Offering. Subscribers in the
Community Offering will consist of investors located in the
Bank's service area, as defined, as well as friends and
associates of directors and organizers whose names will be
provided in writing to Xxxxx.
x Xxxxx will be paid a transaction fee of 6.0% on all
subscriptions generated in the General Offering.
x Xxxxx, at its discretion, will solicit interest from other
registered broker-dealers to participate in the General
Offering via a dealer selling agreement, which will provide
commission payments to participating dealers of 4.0%.
EXPENSES
The Company will pay the legal costs for Xxxxx, which will not exceed $15,000
unless extraordinary legal services, approved by the Company, are required. The
Company will be responsible for the fees and expenses of The Meritas Group, or
a similar firm, if said services are necessary.
DUE DILIGENCE
Xxxxx and its legal counsel will be given the opportunity to perform due
diligence prior to the commencement of the Offering and prior to the execution
of this agreement.
INDEMNIFICATION
The Company agrees to indemnify and hold harmless Xxxxx, its directors,
officers, and shareholders against any lawsuits, claims, damages, or
liabilities (or actions or proceedings in respect thereof) to which Xxxxx or
such person may become subject related to our engagement with the Company and
will reimburse Xxxxx and each such person for all legal and other expenses
incurred in connection with investigating or defending any such loss, claim,
damage, liability, action, or proceeding whether or not in connection with
pending or threatened litigation in which Xxxxx or any such person is a party;
provided, however, that the Company will not be liable in any such case for
losses, claims, damages, liabilities, or expenses that a court of competent
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Mr. Xxxx Xxxxxxx
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September 20, 2000
jurisdiction shall have found in a final judgment to have arisen primarily from
the gross negligence or willful misconduct of Xxxxx or the party claiming a
right to indemnification. This indemnity agreement will be in addition to any
liability, which the Company may otherwise have.
The provisions of this agreement relating to indemnification shall survive
termination or modification of our engagement and shall be binding upon any
successors or assigns of the Company.
Please indicate that the terms described herein are agreeable by signing and
returning to us the enclosed duplicate of this letter. We look forward to
working with you on this project and look forward to a successful outcome.
Very truly yours,
XXXXX X. XXXXX & CO.
By: /s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxx, Xx.
President
ACCEPTED AND AGREED This 29th Day Of September 2000.
COASTLINE COMMUNITY GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
