EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

INDEMNIFICATION AGREEMENT (“Agreement”) made and entered into as of October 25,
2004, by and between COAST FINANCIAL HOLDINGS, INC., a Florida corporation (the
“Corporation”), and                      (the “Indemnitee”).

 

RECITALS

 

A. The Indemnitee is either a member of the board of directors of the
Corporation (the “Board of Directors”) or an officer of the Corporation, or
both, and in such capacity or capacities, or otherwise as an Agent (as defined
below) of the Corporation, is performing a valuable service for the Corporation.

 

B. Highly competent persons are becoming more reluctant to serve publicly-held
corporations as directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against risks of claims and actions against them arising out of their service
to, and activities on behalf of, such corporations.

 

C. Although the Board of Directors has determined that, in order to attract and
retain qualified persons, the Corporation will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect directors, officers,
and certain Agents serving the Corporation and its subsidiaries from certain
liabilities, the Corporation and the Indemnitee recognize the increasing
difficulty in obtaining liability insurance for directors, officers and agents
of a publicly-traded corporation at a reasonable cost.

 

D. The Board of Directors has determined that the difficulty in attracting and
retaining such persons is detrimental to the best interests of the Corporation’s
shareholders and that the Corporation should act to assure such persons that
there will be increased certainty of such protection in the future.

 

E. It is reasonable, prudent, and necessary for the Corporation to obligate
itself by contract to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Corporation free from undue concern that they
will not be so protected.

 

F. The Corporation’s bylaws (“Bylaws”) expressly allow and require the
Corporation to indemnify its directors, officers, and certain agents to the
maximum extent permitted under Florida law.

 

G. The Corporation desires the benefits of having the Indemnitee serve as a
member of the Board of Directors or an officer, or both, or as an Agent, secure
in the knowledge that any expenses, liability and losses incurred by him or her
in his or her good faith service to the Corporation will be borne by the
Corporation or its successors and assigns.

 

H. The Indemnitee is willing to serve, continue to serve, or to undertake
additional service for or on behalf of the Corporation, on the condition that he
or she be so indemnified as provided in this Agreement.

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I. This Agreement is intended to supplement and enhance the indemnity provisions
under the Corporation’s Articles of Incorporation (“Articles of Incorporation”)
and the Bylaws and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

1. Services to the Corporation. The Indemnitee agrees to serve or continue to
serve as a director or officer of the Corporation or any subsidiary of the
Corporation, or otherwise as an Agent of the Corporation, for so long as
Indemnitee is duly elected or appointed and qualified in accordance with the
applicable provisions of the Articles of Incorporation and Bylaws, or otherwise
employed by the Corporation, and until such time as Indemnitee tenders his or
her resignation in writing, fails to stand for reelection, is removed as a
director and/or officer, or his or her employment terminates, as the case may
be. The Indemnitee may from time to time also perform other services at the
request of, or for the convenience of, or otherwise benefiting the Corporation
or any Subsidiary or Affiliate. This Agreement shall not impose any obligation
on the Indemnitee or the Corporation to continue the Indemnitee’s position with
the Corporation or any Subsidiary or Affiliate beyond any period otherwise
applicable. Accordingly, the Indemnitee may resign or be removed from such
position at any time for and for reason (subject to any other contractual
obligation or other obligation imposed by operation of law), in which event the
Corporation or any Subsidiary or Affiliate shall have no obligation under this
Agreement to continue Indemnitee in any such position.

 

2. Definitions. For purposes of this Agreement, the capitalized terms below
shall have the following meanings;

 

(a) “Affiliate” shall mean any corporation, joint venture, partnership, limited
liability company, trust or other entity which (a) controls, is controlled by,
or is under common control with, the specified corporation, joint venture,
partnership, limited liability company, trust or other entity or (b) is
controlled by or is under common control with the specified individual. For
purposes of this definition, the terms “controls”, “controlled by” and “under
common control with” mean the power, directly or indirectly, to direct or cause
the direction of the management or policies of an entity whether by voting
power, contract or otherwise.

 

(b) “Agent” shall mean any person who is or was, or who has consented to serve
as, a director, officer, employee or agent of the Corporation or a subsidiary of
the Corporation whether serving in such capacity or as a director, officer,
employee, agent, fiduciary, joint venturer, partner, member, manager, or other
official of another corporation, partnership, limited liability company, joint
venture, trust, or other enterprise (including, without limitation, an employee
benefit plan) either at the request of, for the convenience of, or otherwise to
benefit the Corporation or a subsidiary of the Corporation.

 

(c) “Change of Control” shall mean the occurrence of any of the following after
the date of this Agreement: (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 30% or more of the combined voting
power of the Corporation’s then outstanding voting securities, or (ii) during
any period of two (2) consecutive years, individuals who at the beginning of
such period constituted the Board of Directors and any new director whose
election or nomination for election by the

 

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Corporation’s shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board of
Directors, (iii) any “person” is or becomes the “beneficial owner” (as those
terms are defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of Voting Securities of the Corporation representing at least 50% of the total
voting power represented by the then-outstanding Voting Securities, (iv) the
shareholders of the Corporation approve a merger or consolidation with any other
corporation or entity, other than a merger or consolidation that would result in
the Voting Securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by converted into
Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation, or (v) the
shareholders of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition of all or substantially
all of the assets of the Corporation.

 

(d) “Disinterested Director” shall mean a director of the Corporation who is not
and was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

 

(e) “Exchange Act” shall mean the Securities and Exchange Act of 1934, as
amended.

 

(f) “Expenses” shall be broadly construed and shall include, without limitation,
(i) all direct and indirect costs actually and reasonably incurred, paid, or
accrued, (ii) all attorneys’ fees, retainers, court costs, transcripts, fees of
experts, witness fees, travel expenses, food and lodging expenses while
traveling, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service, freight, or other transportation fees and expenses,
and (iii) all other disbursements or out of pocket expenses of the type
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, or investigating a Proceeding; in each case incurred in
connection with either the investigation of, the defense of, being a witness in,
participating in, preparing to prosecute or defend, settling, or appealing a
Proceeding, or establishing or enforcing a right of indemnification under this
Agreement, applicable law or otherwise. Notwithstanding any of the foregoing,
the term “Expense” shall not include any Liabilities.

 

(g) “Independent Legal Counsel” shall mean a law firm, or a member of a law
firm, selected by the Corporation and approved by Indemnitee (which approval
shall not be unreasonably withheld), that is experienced in matters of
corporation law and neither at the time of designation is, nor in the five years
immediately preceding such designation was, retained to represent: (i) the
Corporation or any of its subsidiaries or affiliates, or the Indemnitee or any
of its affiliates or any corporation of which the Indemnitee was or is a
director, officer, employee or agent, or any subsidiary or affiliate of such a
corporation, in any matter material to either such party, or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement arising on or after the date of this
Agreement, regardless of when the Indemnitee’s act or failure to act occurred.

 

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(h) “Liabilities” shall mean liabilities of any type whatsoever, including, but
not limited to, judgments (including punitive and exemplary damages), fines,
ERISA or other excise taxes and penalties, and amounts paid in settlement
(including all interest, assessments, or other charges paid or payable in
connection with or in respect of any of the foregoing).

 

(i) “Potential Change of Control” shall mean the occurrence of any of the
following: (i) the Corporation enters into an agreement or arrangement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) any “person” (as that term is used in Sections 13(d) and 14(d) of the
Exchange Act), including, without limitation, the Corporation, publicly
announces an intention to take or to consider taking actions that, if
consummated, would constitute a Change in Control; (iii) any “person” (as that
term is used in Sections 13(d) and 14(d) of the Exchange Act), who is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 30% or
more of the combined voting power of the Corporation’s then outstanding Voting
Securities; or (iv) the Board of the Corporation adopts a resolution to the
effect that, for purposes of this Agreement, ultimately result in a Change of
Control or any of the events described in Section 2(h)(i), (ii), or
(iii) hereof.

 

(j) “Proceeding” shall mean any pending, threatened, or completed action, claim,
hearing, suit, arbitration, alternative dispute resolution mechanism, inquiry,
investigation, or any other proceeding (including any appeals from any of the
foregoing), whether civil, criminal, administrative, legislative, or
investigative in nature, whether formal or informal, including, without
limitation, any such Proceeding brought by or in the right of the Corporation or
otherwise.

 

(k) “Subsidiary” shall mean any corporation, joint venture, partnership, limited
liability company, trust or other entity which is controlled by the Corporation.
For purposes of this definition, the term “controlled by” means the power,
directly or indirectly, to direct or cause the direction of the management or
policies of the applicable entity whether by voting power, contract or
otherwise.

 

(l) “Voting Securities” shall mean any securities of the Corporation that are
entitled generally to vote in the election of directors.

 

3. Basic Indemnification Agreement. Subject to the limitations set forth herein
and in Section 9 hereof:

 

(a) The Corporation shall indemnify the Indemnitee to the fullest extent
authorized or permitted under the Florida Business Corporation Act (“FBCA”) and
the provisions of the Articles of Incorporation and Bylaws in effect on the date
hereof or as FBCA, the Articles of Incorporation, or Bylaws may be amended from
time to time (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification rights
than were permitted prior to such amendment). The right to indemnification
conferred in the Articles of Incorporation and Bylaws shall be presumed to have
been relied upon by Indemnitee in serving or continuing to serve the Corporation
or any Subsidiary or Affiliate as a director, officer, or other Agent and shall
be enforceable as a contract right. The Corporation shall not adopt any
amendments to its Articles of Incorporation or Bylaws, or permit any Subsidiary
or Affiliate to adopt any amendments to its organic documents, the effect of
which would be to deny, diminish, or encumber Indemnitee’s rights to indemnity
pursuant to the Articles of Incorporation, Bylaws, or the FBCA, or any other
applicable law, as applied to any act or failure to act occurring in whole or in
part prior to the date upon which such amendment was approved by the Board of

 

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Directors or the Corporation’s shareholders, as the case may be (“Effective
Date”). In the event that the Corporation shall adopt any amendment to its
Articles or Incorporation or Bylaws, or any Subsidiary or Affiliate shall adopt
any amendment to its organic documents, the effect of which is to deny,
diminish, or encumber Indemnitee’s right to indemnity pursuant to the Articles
of Incorporation, Bylaws, or such organic documents, as the case may be, or
under the FBCA, or any other such law, such amendment shall apply only to acts
of failures to act occurring entirely after the Effective Date thereof. The
Corporation shall give notice of any such amendment to the Indemnitee.

 

(b) Without in anyway diminishing the scope of the indemnification provided by
this Section 3, and in addition to any other rights of indemnification which the
Indemnitee may have under the Articles of Incorporation, Bylaws, organic
documents of any Subsidiary or Affiliate, or other contract right, the
Corporation agrees to indemnify and hold the Indemnitee harmless (whenever the
Indemnitee is or was a witness or a party, or is threatened to be made a witness
or a party, to any Proceeding, including without limitation any Proceeding
brought by or in the right of the Corporation or any Subsidiary or Affiliate, by
reason of the fact that the Indemnitee is or was a director, officer or other
Agent of the Corporation or any Subsidiary or Affiliate, or by reason of
anything done or not done, or alleged to have been done or not done, by the
Indemnitee in such capacity) against all Expenses and Liabilities actually and
reasonably incurred by the Indemnitee or on his or her behalf in connection with
the investigation, defense, testimony in, settlement, or appeal of such
Proceeding. The parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute in the absence
of an agreement.

 

(c) In addition to, and not as a limitation of, the indemnification provided by
this Section 3, the rights of indemnification of the Indemnity provided under
this Agreement shall include those rights set forth in Sections 4, 5, and 7 of
this Agreement. Notwithstanding the provisions of this Section 3, the
Corporation shall not be required to indemnify the Indemnitee in connection with
a Proceeding commenced by the Indemnitee (other than a Proceeding commenced by
the Indemnity to enforce the Indemnitee’s rights under this Agreement) unless
the commencement of such Proceeding was authorized by the Board of Directors.

 

(d) The Corporation’s obligations to make payments under this Agreement are not
subject to diminution by set-off, counterclaim, abatement, or otherwise.
However, the Indemnitee will not be released from any liability or obligations
owed to the Corporation, whether under this Agreement or otherwise.

 

4. Payment of Expenses.

 

(a) Full Indemnification. Notwithstanding any other provision in this Agreement,
to the extent that the Indemnitee has been successful on the merits or otherwise
in defense of any Proceeding, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by the Indemnitee in connection
therewith. For purposes of this Section 4 and without limitation, the
termination of any claim, issue, or matter in any such Proceeding by dismissal,
settlement, or withdrawal, with or without prejudice, shall be deemed to be a
successful resolution as to such claim, issue, or matter.

 

(b) Partial Indemnification. Notwithstanding any other provision in this
Agreement, if the Indemnitee is not wholly successful in any Proceeding but is
successful on the merits or otherwise in defense of such Proceeding as to one or
more, but less than all, of the claims, issues, or matters in such Proceedings,
the Corporation shall indemnify the Indemnitee against all Expenses actually and
reasonably incurred by the Indemnitee in connection with each successfully
resolved claim, issue, or matter.

 

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(c) Advance of Expenses.

 

(i) All Expenses incurred by or on behalf of Indemnitee shall be advanced by the
Corporation to Indemnitee (“Expense Advance”) within 20 days after the receipt
by the Corporation of a written request for such advance which may be made from
time to time, whether prior to or after final disposition of a Proceeding
(unless there has been a final determination by a court of competent
jurisdiction or decision of an arbitrator that Indemnitee is not entitled to be
indemnified for such Expenses). Any Expense Advance requested hereby shall be
made without regard to Indemnitee’s ability to repay the amount of the Expense
Advance and without regard to the Indemnitee’s ultimate entitlement to
indemnification under this Agreement. Indemnitee’s entitlement to Expense
Advances shall include those Expenses incurred in connection with any Proceeding
by Indemnitee seeking a determination, an adjudication or an award in
arbitration pursuant to this Agreement. Each written request shall reasonably
evidence the Expenses incurred by Indemnitee in connection therewith. The
Indemnitee hereby promises to repay to the Corporation the amounts advanced if
it shall ultimately be determined that the Indemnitee is not entitled to be
indemnified pursuant to the terms of this Agreement.

 

(ii) If the Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that the Indemnitee is entitled to be
indemnified under this Agreement, as provided in Section 7, any determination
made under Section 5 hereof that the Indemnitee is not entitled to be
indemnified under this Agreement shall not be binding and Indemnitee shall not
be required to reimburse the Corporation for any Expense Advances until a final
judicial determination (as to which all rights of appeal therefrom have been
exhausted or have lapsed) is made that Indemnitee is not permitted to be
indemnified under this Agreement. Indemnitee’s obligation to reimburse the
Corporation for any Expense Advance shall be unsecured and no interest shall be
charged thereon.

 

5. Procedure for Determination of Entitlement to Indemnification.

 

(a) Whenever the Indemnitee believes that the Indemnity is entitled to
indemnification under this Agreement, the Indemnitee shall submit a written
request to the Corporation for indemnification to the attention of the corporate
secretary. The request for indemnification shall include documentation or
information which is necessary for the determination of entitlement to
indemnification and which is reasonably available to Indemnitee. In any event,
the Indemnitee shall submit Indemnitee’s claim for indemnification within a
reasonable time, not to exceed one (1) year after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of a plea of
nolo contendere or its equivalent, or final termination, whichever is the later
date for which Indemnitee requests indemnification. The secretary of the
Corporation shall, promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that Indemnitee has requested
indemnification.

 

(b) Upon written request for indemnification made pursuant to Section 5(a) of
this Agreement, a determination shall be made by the Corporation with respect to
the Indemnitee’s entitlement thereto as follows:

 

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(i) If a Change of Control shall not have occurred prior to such determination,
the Corporation, at its sole discretion, shall require such determination to be
made by any one of the following:

 

(A) the Board of Directors by a majority vote of Disinterested Directors,
whether or not such majority constitutes a quorum of the Board of Directors;

 

(B) a committee of the Board of Directors consisting solely of Disinterested
Directors designated to serve on such committee by a majority vote of
Disinterested Directors, whether or not such majority constitutes a quorum of
the Board of Directors; or

 

(C) Independent Legal Counsel, if there are no Disinterested Directors or the
Disinterested Directors so direct.

 

(ii) If a Change of Control shall have occurred prior to such determination,
such determination shall be made by the Independent Legal Counsel unless the
Indemnitee shall request that the determination be made by the Board of
Directors or the board of directors of the surviving corporation (in the event
the Corporation is not the surviving corporation as a result of such Change of
Control).

 

(c) The determination of Indemnitee’s entitlement to indemnification under
Section 5(b) hereof shall be made no later than sixty (60) days after receipt of
the written request provided pursuant to Section 5(a) hereof, provided that any
request for indemnification for Liabilities, other than amounts paid in
settlement, shall have been made after a determination thereof in a Proceeding.
If it is determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate reasonably with the person or persons making such
determination with respect to Indemnitee’s entitlement to indemnification,
including without limitation, providing to such person or persons upon
reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Expenses (including, without limitation, attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating shall be borne by the Corporation
(irrespective of the determination as to Indemnitee’s entitlement to
indemnification), and the Corporation hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

 

(d) If the determination of entitlement to indemnification is to be made by
Independent Legal Counsel pursuant to Section 5(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 5(d) hereof.
If a Change of Control shall not have occurred, the Independent Legal Counsel
shall be selected by the Board of Directors, and the Corporation shall give
written notice to Indemnitee advising him or her of the identity of the
Independent Legal Counsel so selected. If a Change of Control shall have
occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board of Directors,
in which event the preceding sentence shall apply), and Indemnitee shall given
written notice to the Corporation advising it of the identity of the Independent
Legal Counsel so selected. In either event, Indemnitee of the Corporation, as
the case may be, may within seven (7) days after such written notice of
selection shall have been given, deliver to the Corporation or to Indemnitee, as
the case may be, a written objection to such selection. Such objection may be

 

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asserted only on the ground that the Independent Legal Counsel so selected does
not meet the requirement of “Independent Legal Counsel” as defined in Section 2
of this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until a court has determined that such objection is without merit. If, within
twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 5(a) of this Agreement, no Independent Legal
Counsel shall have been selected or, if selected, shall have been objected to,
in accordance with this Section 5(d), either the Corporation or Indemnitee may
petition a court under the terms of Section 18(h) of this Agreement for
resolution for resolution of any objection that shall have been made by the
Corporation or Indemnitee to the other’s selection of Independent Legal Counsel
or for the appointment by the court of as Independent Legal Counsel, and the
person with respect to whom an objection is favorably resolved or the person so
appointed by the court shall act as Independent Legal Counsel under Section 5(b)
of this Agreement. The Corporation shall pay any and all reasonable fees and
expenses of Independent Legal Counsel incurred by such Independent Legal Counsel
in connection with acting pursuant to Section 5(b) of this Agreement, and the
Corporation shall pay all reasonable fees and expenses incident to the
procedures of this Section 5(d), regardless of the manner in which such
Independent Legal Counsel was selected or appointed. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 7 of this
Agreement, Independent Legal Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

6. Presumptions and Effect of Certain Proceedings.

 

(a) To the maximum extent permitted by the FCBA and other applicable law, in
making a determination with respect to entitlement to indemnification or an
Expense Advance hereunder, the person or persons making such determination shall
presume that Indemnitee is entitled to indemnification or an Expense Advance
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 5(a) of this Agreement or a request for Expense
Advance under Section 4(c) hereof, and the Corporation shall have the burden of
proof to overcome that presumption in connection with the making by any person
or persons of any determination contrary to that presumption.

 

(b) If the person or persons empowered or selected under Section 5 of this
Agreement to determine whether Indemnitee is entitled to indemnification shall
have failed to make the requested determination within sixty (60) days after the
receipt by the Corporation of the request therefor, the determination of
entitlement to indemnification shall be deemed to have been made and, except as
otherwise provided in Section 7(c) hereof, Indemnitee shall be deemed to be
absolutely entitled to such indemnification.

 

(c) The termination of any Proceeding or of any claim, issue, or matter therein
by judgment, order, settlement, arbitration award, or conviction, or upon a plea
of nolo contendre or its equivalent, shall not of itself (i) adversely affect
the rights of the Indemnitee to indemnification, or (ii) create a presumption
that Indemnitee did not meet any particular standard of conduct or have any
particular belief relevant to determining the Indemnitee’s rights to
indemnification hereunder.

 

7. Remedies of Indemnitee.

 

(a) In the event that (i) an initial determination is made pursuant to Section 5
of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) an

 

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Expense Advance is not timely made when and as required under this Agreement,
(iii) payment has not been timely made following a determination that Indemnitee
is entitled to indemnification or such determination is deemed to have been made
pursuant to Section 6(b) of this Agreement, or (iv) Indemnitee otherwise seeks
enforcement of this Agreement; then in each such case the Indemnitee shall be
entitled to a final adjudication in a court, under the terms of Section 18(h) of
this Agreement, of the Indemnitee’s entitlement to such indemnification or
Expense Advance. Alternatively, unless court approval is required by law for the
indemnification or Expense Advance sought by Indemnitee, Indemnitee at
Indemnitee’s option may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect, which award is to be made within 120 days
following the filing of the demand for arbitration. Except as set forth herein,
the provisions of Florida law shall apply to any such arbitration. The
Corporation shall not oppose Indemnitee’s right to seek any such adjudication or
arbitration award. In any such proceeding or arbitration, Indemnitee shall be
presumed to be entitled to indemnification and Expense Advances under this
Agreement and the Corporation shall have the burden of proof to overcome that
presumption.

 

(b) In the event that a determination shall have been made pursuant to Section 5
of this Agreement that Indemnitee is not entitled to indemnification, in whole
or in part, any judicial proceeding or arbitration commenced pursuant to this
Section 7 shall be conducted in all respects as a de novo trial or arbitration
on the merits, and Indemnitee shall not be prejudiced by reason of a
determination under Section 5 of this Agreement that the Indemnitee is not
entitled to indemnification.

 

(c) If a determination shall have been made under Section 5 hereof or deemed to
have been made pursuant to Section 6(b) of this Agreement the terms of this
Agreement that Indemnitee is entitled to indemnification, the Corporation shall
be bound by such determination, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a specific finding (which has become final) by a court
of competent jurisdiction (as to which all rights of appeal therefrom have been
exhausted or have lapsed) that all or any part of such indemnification is
expressly prohibited under applicable law or this Agreement.

 

(d) The Corporation shall be precluded from asserting in any judicial proceeding
or arbitration commenced pursuant to this Section 7 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Corporation
is bound by all the provisions of this Agreement and is precluded from making
any assertion to the contrary.

 

8. Indemnification for Expenses Incurred in Enforcing Rights. The Corporation
shall indemnify Indemnitee against any and all Expenses, and if requested by
Indemnitee, shall make an Expense Advance to the Indemnitee pursuant to the
procedures set forth in Section 4(c)(i) hereof that are incurred by the
Indemnitee in connection with any claim asserted against or action brought by
Indemnitee for:

 

(a) enforcement of this Agreement;

 

(b) indemnification of Liabilities, Expenses, or Expense Advances, by the
Corporation under this Agreement or any other written agreement between the
Corporation and the Indemnitee, or under the FBCA or the Articles of
Incorporation or Bylaws now or hereafter in effect relating to the
indemnification of the Indemnitee; or

 

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(c) recovery under any directors’ and officers’ liability insurance policies
maintained by the Corporation.

 

9. Limitations on Indemnification. No indemnification pursuant to Section 3
shall be paid by the Corporation nor shall Expenses be advanced pursuant to
Section 4(c)(i):

 

(a) Insurance. To the extent that Indemnitee has received reimbursement pursuant
to such liability insurance as may exist for Indemnitee’s benefit.
Notwithstanding the availability of such insurance, Indemnitee also may claim
indemnification from the Corporation pursuant to this Agreement by assigning to
the Corporation any claims under such insurance to the extent Indemnitee is paid
by the Corporation. Indemnitee shall reimburse the Corporation for any sums he
or she receives as indemnification from other sources to the extent of any
amount paid to him or her for that purpose by the Corporation.

 

(b) Section 16(b). On account and to the extent of any wholly or partially
successful claim against Indemnitee for an accounting of profits made for the
purchase or sale by Indemnitee of securities of the Corporation in violation of
the provisions of Section 16(b) of the Exchange Act or similar provisions of any
federal, state or local statutory law;

 

(c) Section 304 or Similar Forfeiture. On account and to the extent of any
wholly or partially successful claim against Indemnitee that such amounts
include amounts paid in bonus or other incentive-based or equity-based
compensation, or profits from the sale of securities, that the Indemnitee is
required to reimburse to the Corporation under Section 304 of the Sarbanes-Oxley
Act of 2002 or other applicable law;

 

(d) Unauthorized Settlements. Provided there has been no Change in Control, for
Liabilities in connection with Proceedings settled without the Corporation’s
consent, which consent, however, shall not be unreasonably withheld;

 

(e) Unlawful Indemnification. To the extent it would be otherwise prohibited by
law, if so established by a judgment or other final adjudication (as to which
all rights of appeal therefrom have been exhausted or have lapsed) adverse to
Indemnitee;

 

(f) Indemnitee’s Proceedings. In connection with all or any part of a Proceeding
which is initiated or maintained by or on behalf of Indemnitee, or any
Proceeding by Indemnitee against, the Corporation or its directors, officers,
employees or other Agents, unless (i) such indemnification is expressly required
to be made under the FBCA, (ii) the Proceeding was authorized by a majority of
the Disinterested Directors, (iii) there has been a Change of Control, (iv) such
indemnification is provided by the Corporation, in its sole discretion, pursuant
to the powers vested in the Corporation under the FBCA, (v) such indemnification
is provided under a written employment agreement between the Indemnitee and the
Corporation or any Subsidiary or Affiliate, (vi) such indemnification is
provided under the Articles of Incorporation or the Bylaws, or (vii) such
Proceeding is initiated or maintained to enforce the Indemnitee’s rights or the
Corporation’s obligations under this Agreement;

 

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(g) Actions Initiated by Federal Banking Agency. If and to the extent it is
sustained in connection with an administrative or civil enforcement action which
is initiated by a federal banking agency and results in a final adjudication or
finding (as to which all rights of appeal therefrom have been exhausted or have
lapsed) against Indemnitee; or

 

(h) Indemnification Prohibited by FDIC or Federal Banking Law. If and to the
extent that, on the date thereof, it is a prohibited indemnification payment
under the regulations and the general policy of the Federal Deposit Insurance
Corporation (including, without limitation, 12 C.F.R. Part 359.0 et seq.) or
federal banking law (including, without limitation, 12 U.S.C. Section 1828(k)),
as both are amended and in effect on the date of such payment.

 

10. Non-Exclusivity. The rights of the Indemnitee under this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may have now or in
the future under applicable law, the Articles of Incorporation, the Bylaws,
other written agreements between the Indemnitee and the Corporation or any
Subsidiary or Affiliate, vote of the Disinterested Directors, insurance or other
financial arrangements, or otherwise. To the extent that a change in applicable
law (whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Articles of Incorporation,
the Bylaws, this Agreement or any other written agreement between the Indemnitee
and the Corporation or any Subsidiary or Affiliate, it is the intent of the
parties that Indemnitee enjoy the greater benefits so afforded by such change.

 

11. Maintenance of Insurance. The Corporation, represents that it presently has
in place certain directors’ and officers’ liability insurance policies covering
its directors and officers. Subject only to the provisions within this
Section 11, the Corporation agrees that so long as Indemnitee shall have
consented to serve or shall continue to serve as a director, officer, or other
Agent of the Corporation or any Subsidiary or Affiliate, and at all times
thereafter so long as the Indemnitee shall be subject to any possible
Proceeding, the Corporation will use all reasonable efforts to maintain in
effect for the benefit of the Indemnitee one or more valid, binding and
enforceable policies of directors’ and officers’ liability insurance from
established and reputable insurers, providing, in all respects, coverage both in
scope and amount which is no less favorable than that provided by such policies
that are in existence on the date of this Agreement. Notwithstanding the
foregoing, the Corporation shall not be required to maintain said policies of
directors’ and officers’ liability insurance during any time period if during
such period such insurance is not reasonably available or if it is determined in
good faith by the then directors of the Corporation either that:

 

(a) The premium cost of maintaining such insurance is substantially
disproportionate to the amount of coverage provided thereunder; or

 

(b) The protection provided by such insurance is so limited by exclusion,
deductions or otherwise that there is insufficient benefit to warrant the cost
of maintaining such insurance.

 

Anything in this Agreement to the contrary notwithstanding, to the extent that
and for so long as the Corporation shall choose to continue to maintain any
policies of directors’ and officers’ liability insurance during the period
described in this Section 11, the Corporation shall maintain similar and
equivalent insurance for the benefit of the Indemnitee during such period
(unless such insurance shall be less favorable to Indemnitee than the
Corporation’s existing policies).

 

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12. Notice by Indemnitee and Defense of Claims. The Indemnitee agrees promptly
to notify the Corporation in writing upon being notified of any matter which may
be subject to indemnification hereunder or upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may be subject to indemnification hereunder,
whether civil, criminal, arbitrative, administrative or investigative; but the
omission so to notify the Corporation will not relieve the Corporation from any
liability which it may have to the Indemnitee if such omission does not actually
prejudice the Corporation’s rights and, if such omission prejudices the
Corporation’s rights, it will relieve the Corporation from liability only to the
extent of such prejudice; nor will such omission relieve the Corporation from
any liability which it may have to Indemnitee otherwise than under this
Agreement. With respect to any Proceeding:

 

(a) The Corporation will be entitled to participate therein at its own expense;

 

(b) Except as otherwise provided below, to the extent that it may wish, the
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the Indemnitee; provided, however, that the Corporation shall not be entitled to
assume the defense of any Proceeding if there has been a Change in Control.
After notice from the Corporation to the Indemnitee of its election so to assume
the defense thereof and the assumption of such defense, the Corporation will not
be liable to the Indemnitee under this Agreement for any Expense Advances
subsequently incurred by the Indemnitee in connection with the Indemnitee’s
defense except as otherwise provided below. The Indemnitee shall have the right
to employ his or her counsel in such Proceeding, but the fees and expenses of
such counsel incurred after notice from the Corporation of its assumption of the
defense thereof and the assumption of such defense shall be at the expense of
the Indemnitee unless (i) the employment of counsel by the Indemnitee has been
authorized by the Corporation, (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Corporation and
Indemnitee in the conduct of the defense of such action or that the
Corporation’s counsel may not be adequately representing Indemnitee, or
(iii) the Corporation shall not in fact have employed counsel within 20 calendar
days from receipt of such notice to assume the defense of such action; and in
each of the cases described in Section 12(b)(i), (ii), and (iii) hereof, the
fees and expenses of the Indemnitee’s counsel shall be at the expense of the
Corporation; and

 

(c) The Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim effected
without the Corporation’s written consent. The Corporation shall not settle any
action or claim in any manner which would impose any liability, obligation,
limitation or penalty on the Indemnitee without the Indemnitee’s prior written
consent. Neither the Corporation nor the Indemnitee will unreasonably withhold
or delay its or his or her consent to any proposed settlement; provided,
however, that the Indemnitee may withhold the Indemnitee’s consent if such
settlement would impose any financial obligation on the Indemnitee (which is not
reimbursed under any existing directors’ and officers’ liability insurance
policy maintained by the Corporation or any Subsidiary or Affiliate) or restrict
the Indemnitee’s business or professional activities..

 

13. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to the Indemnitee
for any reason whatsoever, the Corporation, in lieu of indemnifying the
Indemnitee, shall contribute to the amount incurred by the Indemnitee, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement or for Expenses, in connection with any claim relating to an
indemnifiable

 

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matter under this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to reflect
(a) the relative benefits received by the Corporation and the Indemnitee as a
result of the event or transaction giving rise to such Proceeding; and (b) the
relative fault of the Corporation (and its directors, officers, employees and
agents) and the Indemnitee in connection with such events or transactions.

 

14. Establishment of Trust. In the event of a Change in Control or a Potential
Change in Control, the Corporation shall, upon written request by the
Indemnitee, create a trust for the benefit of Indemnitee and from time to time
upon written request of the Indemnitee shall fund the trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the time of
each such request to be incurred in connection with investigating, preparing for
participating in, and defending any Proceeding which is subject to
indemnification under this Agreement. The amount or amounts to be deposited in
the trust pursuant to the foregoing funding obligation shall be determined by
the parties making the determination under Section 5(b) hereof. The terms of the
trust shall provide that upon a Change in Control: (a) the trust shall not be
revoked, or the principal thereof invaded, without the written consent of the
Indemnitee; (b) the trustee shall advance, within ten business days of a request
by Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby
agrees to reimburse the trust under the same circumstances for which the
Indemnitee would be required to reimburse the Corporation under Section 4(c) of
this Agreement); (c) the trust shall continue to be funded by the Corporation in
accordance with the funding obligation set forth above (d) the trustee shall
promptly pay to Indemnitee all amounts for which the Indemnitee shall be
entitled to indemnification pursuant to this Agreement or otherwise, and (e) all
unexpended funds in the trust shall revert to the Corporation upon a final
determination by the parties making the determination provided under
Section 5(b) hereof, or a final determination by a court of competent
jurisdiction (as to which all rights of appeal therefrom have been exhausted or
have lapsed), as the case may be, that Indemnitee has been fully indemnified
under the terms of this Agreement. The trustee shall be chosen by the
Indemnitee. Nothing in this Section 14 shall relieve the Corporation of any of
its obligations under this Agreement. All income earned on the assets held in
the trust shall be reported as income by the Corporation for federal, state,
local, and foreign tax purposes. The Corporation shall pay all costs of
establishing and maintaining the trust and shall indemnify the trustee against
any and all expenses (including, without limitation, attorneys’ fees and costs),
claims, liabilities, losses, and damages arising out of or relating to this
Agreement or the establishment and maintenance of the trust.

 

15. Claims Against Indemnitee. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Corporation or any affiliate of
the Corporation against Indemnitee, the Indemnitee’s spouse, heirs, executors,
or personal or legal representatives unless notice of such claim is given to
Indemnitee within two years after the date of accrual of such cause of action,
or such shorter period as may be permitted, or longer period as may be required,
by applicable law under the circumstances.

 

16. Subrogation. In the event of payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of the
Indemnitee related to, but only to the extent of, such payment. The Indemnitee
shall, without cost or expense to the Indemnitee, cooperate as may be reasonably
requested by the Corporation, in order for the Corporation to be able to secure
such rights of subrogation, including, without limitation, the execution of
documents by the Indemnitee.

 

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17. Duration and Scope of Agreement; Binding Effect. This Agreement shall
continue so long as the Indemnitee shall be subject to any possible Proceeding
subject to indemnification by reason of the fact that the Indemnitee is or was a
director, officer or other Agent of the Corporation or any Subsidiary or
Affiliate, and shall be applicable to Proceedings commenced or continued after
execution of this Agreement, whether arising from acts or omissions occurring
before or after such execution. This Agreement shall be binding upon the
Corporation, its Subsidiaries and the Corporation’s successors and assigns
(including, without limitation, any direct or indirect successor or purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Corporation) and shall inure to the benefit of the Indemnitee
and the Indemnitee’s spouse, assigns, heirs, devisees, executors, administrators
and other legal representatives. The Corporation shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise), to all or substantially all of the Corporation’s
business or assets, expressly to assume (by written agreement in form and
substance reasonably satisfactory to the Indemnitee) and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
have been required to perform if no such transaction or succession had taken
place.

 

18. General Provisions.

 

(a) Severability. If any provision or provisions of this Agreement shall be held
to be invalid, illegal, or unenforceable for any reason whatsoever: (i) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable, that is not itself invalid, illegal, or unenforceable) shall not
in any way be affected or impaired thereby; and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal, or unenforceable, that is not itself invalid, illegal, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal, or unenforceable.

 

(b) Captions. The captions in this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute part of this Agreement or
to affect the interpretation thereof.

 

(c) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same instrument.

 

(d) Interpretation. The parties intend this Agreement to be interpreted and
enforced so as to provide indemnification to the Indemnitee to the fullest
extent now or hereafter permitted by the FBCA and other applicable law.

 

(e) Modification and Waiver. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver. No waiver of any
provision of this Agreement shall be effective unless executed in writing.

 

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(f) Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, at the time of delivery, (ii) if mailed
by certified mail (return receipt requested) with postage prepaid, on the third
business day after the date on which it is so mailed, or (iii) if delivered by a
nationally recognized overnight courier service, one business day after being
deposited with such courier, and addressed: (A) if to the Corporation, to 1301 –
6th Avenue West, Suite 300, Bradenton, Florida 34205, Attention: Secretary, or
(B) if to the Indemnitee, to the address listed on the signature page below, or
(C) to such other address as either party has specified by notice given in
accordance with this Section.

 

(g) Governing Law. The parties agree that this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of Florida
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.

 

(h) Consent to Jurisdiction. The Corporation and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Florida
for all purposes in connection with any action or Proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Florida.

 

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above set forth.

 

COAST FINANCIAL HOLDINGS, INC. By:  

 

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Name:  

 

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Title:  

 

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INDEMNITEE:

 

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(Signature)

 

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(Printed Name)

Address:  

 

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[Signature page to Indemnification Agreement]