proposed engagement

 

<PAGE>

 

 

 

 

 

 

 

 

                                   EXHIBIT 1.1

 

 

<PAGE>

 

 

 

 

 

April 21, 2003

 

 

Board of Directors

Attn: Robert J. Larison, Jr.

President & Chief Executive Officer

Atlantic Coast Federal Corporation

505 Haines Avenue

Waycross, GA 31501

 

RE: Plan of Stock Issuance

 

Gentlemen:

 

This letter sets forth the terms of the proposed engagement between Friedman,

Billings, Ramsey and Co., Inc. ("FBR") and Atlantic Coast Federal. Corporation

(the "Company"), whereby the Company's common stock will be issued to the

public.

 

FBR is prepared to assist the Company in connection with the offering of its

shares of common stock during the Subscription Offering and Community Offering

as such terms are defined in the Plan. The specific terms of the services

contemplated hereunder shall be set forth in a definitive sales agency agreement

(the "Agreement") between FBR and the Company to be executed prior to mailing of

the Offering material. The price of the shares during the Subscription Offering

and Community Offering will be the price established by the Company's Board of

Directors, based upon an independent appraisal as approved by the appropriate

regulatory authorities, provided such price is mutually acceptable to FBR and

the Company.

 

In connection with the Subscription Offering and Community Offering, FBR will

render the following services:

 

o   Act as the Financial Advisor to the Company

o   Create marketing materials and formulate a marketing plan

o   Conduct training for all Directors and Employees concerning the stock

    offering

o   Manage Stock Center and staff with FBR personnel

o   Assist the Company and Attorneys with listing on Nasdaq

 

At the appropriate time, FBR, in conjunction with its counsel, will conduct an

examination of the relevant documents and records of the Bank, as FBR deems

necessary and appropriate. The Bank will make all documents, records and other

information deemed necessary by FBR or its counsel available to them upon

request.

 

For its services hereunder, FBR will receive the following compensation and

reimbursement from the Bank:

 

1.  A management fee of $25,000 payable as follows: $12,500 upon the signing of

this letter and $12,500 upon receiving regulatory approval of the Plan

application. Should the Plan be terminated for any reason not attributable to

the action or inaction of FBR, FBR shall have earned and be entitled to be paid

fees accruing through the stage at which point the termination occurred.

 

<PAGE>

 

                                                         Atlantic Coast Federal.

                                                                   April 2, 2003

                                                                     Page 2 of 5

 

 

2.  A marketing fee of 0.90% based on the amount of Common Stock sold in the

Subscription Offering and Community Offering, excluding shares sold to the Board

of Directors, senior management, employees and the Employee Stock Ownership

Plan. The management fee of $25,000 will be subtracted from the marketing fee.

 

3.  The marketing fee is to be payable to FBR at closing as defined in the

Agreement to be entered into between FBR and the Bank.

 

4.  FBR shall be reimbursed for reasonable allocable expenses incurred by it,

including legal fees and expenses of up to $40,000, whether or not the Agreement

is consummated.

 

It is further understood that the Bank will pay all other reasonable expenses of

the Plan including but not limited to its attorneys' fees, NASD filing fees,

filing and registration fees and fees relating to any required state securities

law filings, telephone charges, air freight, supplies, conversion agent charges,

transfer agent charges, fees relating to auditing and accounting and costs of

printing all documents necessary in connection with the foregoing.

 

For purpose of FBR's obligation to file certain documents and to make certain

representations to the NASD in connection with the Plan, the Bank warrants that:

(a) the Bank has not privately placed any securities within the last 18 months;

(b) there have been no material dealings within the last 12 months between the

Bank and any NASD member or any person related to or associated with any such

member; (c) none of the officers or directors of the Bank has any affiliation

with the NASD; (d) except as contemplated by this engagement letter with FBR,

the Bank has no financial or management consulting contracts outstanding with

any other person; (e) the Bank has not granted FBR a right of first refusal with

respect to the underwriting of any future offering of the Bank's common stock;

and (f) there has been no intermediary between FBR and the Bank in connection

with the public offering of the Bank shares, and no person is being compensated

in any manner for providing such service.

 

The Company agrees to indemnify FBR and its controlling persons, representatives

and agents in accordance with the indemnification provisions (the

"Indemnification Provisions") set forth in Appendix A, and agrees to the other

provisions of Appendix A, which is incorporated herein by this reference,

regardless of whether the proposed Offering is consummated.

 

This letter is merely a statement of intent and is not a binding legal agreement<