EXHIBIT 10.10
October 3, 2002
PERSONAL AND CONFIDENTIAL
Xx. Xxxxxxxx X. Xxxxxxxx
Executive Vice President and CFO
Old Florida Bancshares, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Dear Xxxx:
This letter serves as a contract for Austin Associates, LLC ("Austin
Associates") to serve as Primary Financial Advisor to Old Florida Bancshares,
Inc. ("Client"), to assist Client with various professional services related to
the potential acquisition of Marine Bancshares, Naples, Florida ("Target"). For
purposes of this contract, a transaction may take the form of a purchase of
stock, purchase of assets, merger or other transaction in which the Client
acquires substantially all of the assets or stock of the Target (a
"Transaction"). We understand that the Client will retain legal and tax advisors
with respect to the potential transaction referred to in this engagement letter.
The services that Austin Associates will provide Client, if requested, include:
1. Comprehensive Transactional Advisory Services
2. Due Diligence Oversight
3. Contract Negotiations; Regulatory Approvals and Closing
4. Issuance of Fairness Opinion(s)
TERMS OF ENGAGEMENT
1. Comprehensive Transactional Advisory Services
Based on the progress and status of discussions with the Target,
provide comprehensive transactional advisory services, as follows:
- Prepare valuation of the Target.
- Prepare pro forma acquisition analysis of the Target at range of
purchase prices and alternative forms of consideration. This will
assist in evaluating the impact of the transaction to earnings,
book value, performance ratios and shareholder value under a wide
range of pricing assumptions.
- Advise the board of directors regarding pricing the transaction.
- Advise the board of directors regarding negotiating strategy.
- Advise the board of directors regarding non-price issues, such as
employment contracts and terms, integration issues and corporate
structure.
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October 3, 2002
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- Advise the company regarding due diligence scope and procedures,
although participation in the actual due diligence is not
included.
- Assist the board in negotiating the financial terms of the letter
of intent and/or definitive agreement in connection with the
transaction.
- Attend and participate in board meetings related to the
transaction.
- To the extent requested, participate in meetings and/or
conferences with the Target and/or its financial and legal
advisors, to represent the Client in the negotiation of the
financial terms of the transaction.
- Assist in drafting or reviewing all press releases, shareholder,
employee and customer communications in connection with
announcement of a transaction.
- Assist in addressing other matters that may be relevant to the
transaction but may not be specifically noted above.
2. Due Diligence Oversight.
a. In conjunction with Client's management team, oversee the design
and implementation of a complete Due Diligence program, including
scope and level of information review, and coordination of data
requests.
b. Assist in the preparation of presentations, if any, to be made
during discussions with the Target. Assist in resolving any issues
which may arise during the due diligence review, including
providing post-review follow-up items.
3. Contract Negotiations; Regulatory Approvals and Closing.
a. If Client decides to proceed with a Transaction, review the
definitive agreement and advise the Client regarding appropriate
provisions related to the financial terms of the agreement.
b. Assist in the negotiation of the financial terms of the definitive
agreement, as well as the structure and negotiation of corollary
agreements (i.e., lock-up and/or option agreements, transitional
service arrangement, employment contracts, leases) relating to the
Transaction.
c. Review all required regulatory applications to consummate the
Transaction(s). Depending on the structure of the Transaction(s),
review any required securities registration statements, notice
filings required under federal and state securities laws and
regulations, including proxy statements used to solicit the vote
of Client's shareholders, if necessary. Austin Associates will
assist in preparing any necessary disclosure related to its role
as financial advisor.
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October 3, 2002
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d. Assist in effecting the closing of the Transaction, including
assistance in the preparation of closing schedules and guidance in
resolving contingencies and securing shareholder and regulatory
approvals.
4. Issuance of Fairness Opinion
Austin Associates will issue a fairness opinion to the Client as it
pertains to any Transaction involving the acquisition of the Target. A
fairness opinion is a statement that a proposed Transaction is fair to the
Client, and its stockholders, from a financial point of view. Austin
Associates will issue its opinion as to the fairness of a Transaction at
the time the Board enters into a definitive agreement related to a specific
Transaction. The fairness opinion may be attached to and/or quoted in
materials used in connection with the Transaction, including regulatory
filings, securities registration and communications to shareholders. Client
agrees to obtain Austin Associates' consent to the description of the
services rendered to Client.
PROFESSIONAL FEES
Austin Associates shall be compensated by Client for its services as follows.
1. A Retainer of $5,000 shall be paid to Austin Associates upon execution of
this engagement letter.
2. An Advisory Fee of $15,000 shall be paid to Austin Associates upon the
execution of a definitive agreement related to a Transaction involving the
acquisition of the Target.
3. A Success Fee equal to 0.50 percent of the Transaction Value, net of a
credit for the Retainer and Advisory Fees noted above, shall be paid to
Austin Associates upon the closing of a Transaction involving the
acquisition of the Target. The term Transaction Value means the market
value of the consideration paid in connection with the Transaction.
4. Client will reimburse Austin Associates for its reasonable out-of-pocket
expenses throughout the engagement. Client will be responsible for its
regulatory fees, filing fees, legal counsel or certified public accounting
fees.
OTHER TERMS
1. Ownership and Confidentiality. Client acknowledges that Austin
Associates' valuation models and software, the valuation reports and
all data, documentation and processes relating to them are the sole
property of either it or third-party software vendors ("Licensors").
Client recognizes that they are the valuable, proprietary products and
trade secrets of them (or the Licensors) embodying substantial creative
efforts, ideas and expressions. Client agrees not to use the report(s)
or other information, materials or research provided by Austin
Associates to create a computer program to produce similar information.
All information, reports, analyses, valuation and work product prepared
or developed by Austin Associates for Client pursuant to this contract
shall be used by
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Client solely in connection with the transactions contemplated herein
and shall not be released or disclosed by Client to any party,
including representatives or affiliates of Client, except as expressly
agreed to by Austin Associates in writing. Notwithstanding the
foregoing, Client may, without Austin Associates' written consent,
provide the information to any representatives it may engage to assist
Client in the transaction, provided that any representatives to whom
such information is provided are made aware of this contract and agree
to be bound by the confidentiality provisions of this paragraph 1 and,
provided further, that Client shall remain liable for any breaches of
this provision made by such representatives.
Austin Associates acknowledges that it will receive valuable
proprietary information and trade secrets of the Client in connection
with the performance of services under this Contract. Austin Associates
agrees to use its best efforts to preserve the confidentiality of such
proprietary information and trade secrets of the Client.
2. Limitation of Liability and Indemnification. Client agrees that Austin
Associates may rely fully on information provided by Client, and that
Austin Associates shall have no obligation to independently verify any
information provided by Client. Client agrees to notify Austin
Associates of any errors within ten business days after receipt of
information. Austin Associates shall have no liability to Client in
connection with the performance of services hereunder except for (i)
any breach of the confidentiality provisions of this contract or (ii)
any liability relating to matters other than confidentiality if such
liability is directly attributable to the gross negligence or willful
misconduct of Austin Associates. Client agrees to indemnify and hold
harmless Austin Associates and its members, officers, directors,
shareholders, employees and agents for their time and from and against
any and all losses, costs, damages, expenses, obligations, claims or
liabilities, including attorneys' fees and expenses, incurred by any of
such indemnified parties arising out of or related to the services
specified herein unless the same is caused by the gross negligence or
willful misconduct of Austin Associates, as determined by a court of
appropriate jurisdiction. In no event shall Austin Associates be liable
for (i) any indirect, special or consequential damages arising out of
this contract, or (ii) any direct damages in excess of the compensation
received from Client.
3. Termination: Withdrawal from Negotiations. Client reserves the sole
right to accept or reject Transaction proposals or withdraw from
negotiations with the Target for any reason, subject to the provisions
of this paragraph 3. In the event the Board of Directors elects not to
proceed with a Transaction, this contract shall terminate and the
Client shall have no further obligation under this contract, provided
that the Client does not enter into a letter of intent and/or
definitive agreement related to a Transaction on or before December 31,
2003. If the Client enters into a contract related to a business
combination transaction with the Target prior to December 31, 2003,
Client shall remain obligated to
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Austin Associates for the professional fees outlined above. If after
execution of a definitive agreement with respect to a Transaction,
Client elects not to close the Transaction for any reason other than
the Target's breach of the definitive agreement, Client's failure to
obtain regulatory approval, Client's failure to obtain shareholder
approval (if applicable) or the failure of Austin Associates to render
a fairness opinion at the time the proxy materials are to be sent to
Client's shareholders (if applicable), then Client shall remain
obligated to Austin Associates for the professional fees outlined
above. Except as otherwise specifically provided, nothing in this
Agreement will be construed to limit either Austin Associates or Client
in the conduct of its other business activities.
4. Miscellaneous. All payments due Austin Associates will be made to its
Toledo, Ohio, office, or as otherwise directed in writing. In the event
of a dispute, the prevailing party will be entitled to recover costs
including reasonable attorney's fees. This is the entire agreement and
its terms can only be changed by mutual written consent.
To indicate your acceptance, please sign both copies of this contract, returning
one to Austin Associates along with the retainer amount, and keeping one for
your records. We look forward to working with you.
AUSTIN ASSOCIATES, LLC
/s/ Xxxxx X. Xxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxx
Managing Director and Principal
ACCEPTED BY OLD FLORIDA BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxxx 10/9/02
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Date
Title: President & Chief Executive Officer
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