EXHIBIT 1.1

                               4,800,000 Units (1)

                      COASTAL BANCSHARES ACQUISITION CORP.

                             UNDERWRITING AGREEMENT

                                February 14, 2005


I-Bankers Securities Incorporated
Newbridge Securities Corporation
As Representatives of the several
   Underwriters named in Schedule I hereto
c/o I-Bankers Securities Incorporated
1560 East Southlake Boulevard, Suite 232
Southlake, TX  76092

Dear Sirs:

     Coastal  Bancshares   Acquisition   Corp.,  a  Delaware   corporation  (the
"Company")  proposes,  subject to the terms and conditions  contained herein, to
sell to you and the other  underwriters  named on  Schedule I to this  Agreement
(the   "Underwriters")   for  whom  you  are  acting  as  Representatives   (the
"Representatives"),  an aggregate of 4,800,000  Units (the "Firm  Units") of the
Company,  at a purchase  price (net of discounts and  commissions)  of $5.52 per
Firm Unit. The Underwriters,  severally and not jointly,  agree to purchase from
the Company the number of Firm Units set forth opposite their  respective  names
on Schedule I attached hereto and made a part hereof at a purchase price (net of
discounts  and  commissions)  of $5.52 per Firm  Unit.  The Firm Units are to be
offered initially to the public  ("Offering") at the offering price of $6.00 per
Firm Unit.  Each Firm Unit consists of one share of the Company's  common stock,
par value $0.01 per share ("Common Stock"), and two warrants ("Warrant(s)"). The
shares of Common Stock and the  Warrants  included in the Firm Units will not be
separately  transferable  until 90 days  after the  effective  date  ("Effective
Date")  of the  Registration  Statement  (as  hereinafter  defined)  unless  the
Representatives  inform the Company of their decision to allow earlier  separate
trading,  but in no event will the Representatives  allow separate trading until
the preparation of an audited balance sheet of the Company reflecting receipt by
the Company of the  proceeds of the Offering and the filing of a Form 8-K by the
Company which includes such balance sheet.  Each Warrant  entitles its holder to
exercise it to purchase  one share of Common  Stock for $5.00  during the period
commencing  on the later of the  consummation  by the  Company of its  "Business
Combination" or one year from the Effective Date of the  Registration  Statement
and terminating on the five-year  anniversary of the Effective  Date.  "Business
Combination" shall mean any merger, capital stock exchange, asset acquisition or
other similar business combination  consummated by the Company with an operating
company in the IT security industry (as described more fully in the Registration
Statement).

     The Company has prepared and filed in conformity  with the  requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and  regulations  thereunder  (the "Rules")  adopted by the Securities and
Exchange Commission (the "Commission") a Registration  Statement (as hereinafter

_______________________

(1)  Plus an  option  to  purchase  up to  720,000  additional  Units  to  cover
over-allotments.


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defined) on Form S-1 (No.  333-118294),  including a Preliminary  Prospectus (as
hereinafter defined) relating to the Securities,  and such amendments thereof as
may  have  been  required  to  the  date  of  this  Agreement.  Copies  of  such
Registration  Statement  (including all  amendments  thereof) and of the related
Preliminary Prospectus have heretofore been delivered by the Company to you. The
term "Preliminary  Prospectus" means any preliminary  prospectus included at any
time as a part of the Registration Statement or filed with the Commission by the
Company pursuant to Rule 424(a) of the Rules. The term "Registration  Statement"
as used in this Agreement means the initial  registration  statement  (including
all exhibits, financial schedules and all documents and information deemed to be
a part of the  Registration  Statement  through  incorporation  by  reference or
otherwise),  as amended at the time and on the date it  becomes  effective  (the
"Effective  Date"),  including the information (if any) contained in the form of
final Prospectus filed with the Commission  pursuant to Rule 424(b) of the Rules
and deemed to be part thereof at the time of effectiveness pursuant to Rule 430A
of the Rules. If the Company has filed an abbreviated  registration statement to
register  additional  Securities  pursuant to Rule  462(b)  under the Rules (the
"462(b) Registration Statement"),  then any reference herein to the Registration
Statement  shall also be deemed to include such 462(b)  Registration  Statement.
The term "Prospectus" as used in this Agreement means the Prospectus in the form
included in the Registration  Statement at the time of effectiveness or, if Rule
430A of the Rules is relied on, the term Prospectus shall also include the final
Prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.

     The  Company  understands  that the  Underwriters  propose to make a public
offering of the Units, as set forth in and pursuant to the  Prospectus,  as soon
after the Effective Date and the date of this  Agreement as the  Representatives
deem advisable.  The Company hereby confirms that the  Underwriters  and dealers
have been authorized to distribute or cause to be distributed  each  Preliminary
Prospectus and are authorized to distribute the Prospectus (as from time to time
amended or  supplemented  if the Company  furnishes  amendments  or  supplements
thereto to the Underwriters).

     1. Sale, Purchase, Delivery and Payment for the Shares. On the basis of the
representations,  warranties  and  agreements  contained  in, and subject to the
terms and conditions of, this Agreement:

     (a) The Company agrees to issue and sell to each of the  Underwriters,  and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company,  at a  purchase  price of $6.00 per Unit  ($5.52 net of  discounts  and
commissions) (the "Initial Price"),  the number of Firm Units set forth opposite
the name of such  Underwriter  under  the  column  "Number  of Firm  Units to be
Purchased" on Schedule I to this Agreement,  subject to adjustment in accordance
with Section 6 hereof.

     (b) For the purposes of covering any over-allotments in connection with the
distribution  and sale of the Firm  Units,  the  Company  hereby  grants  to the
Underwriters,  severally  and  not  jointly,  an  option  to  purchase  up to an
additional  720,000  units  from the  Company  ("Over-allotment  Option").  Such
additional 720,000 Units are hereinafter referred to as "Option Units." The Firm
Units and the  Option  Units are  hereinafter  collectively  referred  to as the
"Units," and the Units, the shares of Common Stock and the Warrants  included in
the Units and the shares of Common Stock  issuable upon exercise of the Warrants
are  hereinafter  referred  to  collectively  as the  "Public  Securities."  The
purchase price to be paid for the Option Units will be the same price per Option
Unit as the price per Firm Unit set forth in Section 1(a) hereof.

     The  Over-allotment  Option granted  pursuant to Section 1(b) hereof may be
exercised by the  Representatives as to all (at any time) or any part (from time
to time) of the  Option  Units  within 45 days  after the  Effective  Date.  The
Underwriters will not be under any obligation to purchase any Option Units prior
to the exercise of the Over-allotment  Option. The Over-allotment Option granted

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hereby  may be  exercised  by the  giving of oral  notice to the  Company by the
Representatives,  which  must be  confirmed  in  writing  by  overnight  mail or
facsimile  transmission setting forth the number of Option Units to be purchased
and the date and time for  delivery  of and  payment  for the Option  Units (the
"Option Closing Date"), which will not be later than five full business days nor
earlier than two full  business  days after the date of the notice or such other
time as shall be agreed  upon by the  Company  and the  Representatives,  at the
offices of the I-Bankers Securities Incorporated  ("I-Bankers") or at such other
place as shall be  agreed  upon by the  Company  and the  Representatives.  Upon
exercise of the  Over-allotment  Option,  the Company  will become  obligated to
convey to the  Underwriters,  and, subject to the terms and conditions set forth
herein, the Underwriters will become obligated to purchase, the number of Option
Units specified in such notice.

     (c) Payment of the purchase  price for,  and  delivery of the  certificates
for, the Firm Units shall be made at 10:00 A.M.,  New York time, on February 18,
2005, or such other date, not later than the fifth business day  thereafter,  or
at such  earlier  time as shall be agreed  upon by the  Representatives  and the
Company at the  offices of  I-Bankers  or at such other place as shall be agreed
upon by the Representatives  and the Company.  The hour and date of delivery and
payment for the Firm Units are called "Closing Date." Payment for the Firm Units
shall  be made on the  Closing  Date at the  Representatives'  election  by wire
transfer in Federal (same day) funds or by certified or bank cashier's  check(s)
in New York  Clearing  House  funds,  payable  as  follows:  $24,768,000  of the
proceeds  received by the Company for the Firm Units shall be  deposited  in the
trust fund established by the Company for the benefit of the public stockholders
as described in the Registration  Statement ("Trust Fund") pursuant to the terms
of  an  Investment  Management  Trust  Agreement  ("Trust  Agreement")  and  the
remaining  proceeds  shall be paid to the order of the Company upon  delivery to
you of certificates  (in form and substance  satisfactory  to the  Underwriters)
representing  the Firm Units (or through the facilities of the Depository  Trust
Company  ("DTC")) for the account of the  Underwriters.  The Firm Units shall be
registered  in such name or names and in such  authorized  denominations  as the
Representatives  may request in writing at least two full business days prior to
the Closing  Date.  The Company will permit the  Representatives  to examine and
package the Firm Units for delivery, at least one full business day prior to the
Closing  Date.  The Company  shall not be  obligated to sell or deliver the Firm
Units  except  upon  tender of payment by the  Representatives  for all the Firm
Units.

     In addition, in the event that any or all of the Option Units are purchased
by the  Underwriters,  payment  of  the  purchase  price,  and  delivery  of the
certificates  for, the Option Units shall be made on the Option  Closing Date at
the Representatives' election by wire transfer in Federal (same day) funds or by
certified or bank cashier's  check(s) in New York Clearing House funds,  payable
to the Trust Fund at the offices of I-Bankers or at such other place as shall be
agreed  upon by the  Representatives  and the  Company  upon  delivery to you of
certificates representing such securities (or through the facilities of DTC) for
the account of the Underwriters.  The certificates representing the Option Units
to be delivered  will be in such  denominations  and registered in such names as
the  Representatives  request not less than two full  business days prior to the
Closing Date or the Option  Closing  Date,  as the case may be, and will be made
available to the Representatives  for inspection,  checking and packaging at the
aforesaid office of the Company's  transfer agent or correspondent not less than
one full business day prior to such Closing Date.

     (d) The  Company  hereby  agrees to issue  and sell to the  Representatives
(and/or  their  designees) on the  Effective  Date an option  ("Representatives'
Purchase   Option")  for  the   purchase  of  an  aggregate  of  325,000   units
("Representatives'  Units") for an aggregate purchase price of $100. Each of the
Representatives'  Units is  identical  to the Firm Units.  The  Representatives'
Purchase  Option shall be  exercisable,  in whole or in part,  commencing on the
later  of the  consummation  of a  Business  Combination  or one  year  from the
Effective  Date and expiring on the five-year  anniversary of the Effective Date
at an initial exercise price per Representatives'  Unit of $7.50, which is equal

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to one hundred  twenty-five  percent (125%) of the initial public offering price
of a Unit. the Representatives' Purchase Option, the Representatives' Units, the
Representatives'  Warrants and the shares of Common Stock issuable upon exercise
of the Representatives' Warrants are hereinafter referred to collectively as the
"Representatives' Securities." The Representative's Securities will be identical
to those offered to the public except that the  Representative's  Warrants shall
have an exercise price of $6.65. The Public Securities and the  Representatives'
Securities are hereinafter  referred to collectively  as the  "Securities."  The
Representatives  understand  and agree that there are  significant  restrictions
against transferring the  Representatives'  Purchase Option during the first one
hundred eighty (180) days after the Effective Date, as set forth in Section 3 of
the Representatives' Purchase Option.

     Payment of the purchase price of, and delivery of the certificates for, the
Representatives'  Purchase Option shall be made on the Closing Date. The Company
shall deliver to the  Representatives,  upon payment therefor,  certificates for
the Representatives' Purchase Option in the name or names and in such authorized
denominations as the Representatives may request.

     2.  Representations  and Warranties of the Company.  The Company represents
and warrants to each Underwriter,  as of the date hereof, as of the Closing Date
and as of each Option Closing Date (if any), as follows:

     (a) At the time the  Registration  Statement  became  effective  and at all
times subsequent  thereto up to the Closing Date and the Option Closing Date, if
any, the  Registration  Statement and the  Prospectus  will contain all material
statements that are required to be stated therein in accordance with the Act and
the Regulations,  and will in all material  respects conform to the requirements
of the Act and the  Regulations;  neither  the  Registration  Statement  nor the
Prospectus, nor any amendment or supplement thereto, on such dates, will contain
any untrue  statement  of a  material  fact or omit to state any  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances under which they were made, not misleading.  When any
Preliminary  Prospectus  was first filed with the  Commission  (whether filed as
part of the Registration Statement for the registration of the Securities or any
amendment  thereto or pursuant to Rule 424(a) of the  Regulations)  and when any
amendment  thereof or  supplement  thereto was first filed with the  Commission,
such Preliminary  Prospectus and any amendments thereof and supplements  thereto
complied or will comply in all material respects with the applicable  provisions
of the Act and the  Regulations  and did not and  will  not  contain  an  untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The representation
and  warranty  made in this Section  2(a) does not apply to  statements  made or
statements  omitted in reliance upon and in conformity with written  information
furnished to the Company with respect to the Underwriters by the Representatives
expressly for use in the  Registration  Statement or Prospectus or any amendment
thereof or supplement thereto.

     (b) The  Company  has filed  with the  Commission  a Form 8-A  registration
statement  providing for the registration  under the Securities  Exchange Act of
1934,  as  amended  ("Exchange  Act"),  of the Units,  the Common  Stock and the
Warrants,  which  registration  statement complies in all material respects with
the Exchange Act. The registration of the Units, Common Stock and Warrants under
the  Exchange Act has been  declared  effective  by the  Commission  on the date
hereof. Neither the Commission nor, to the best of the Company's knowledge,  any
state regulatory authority has issued any order or threatened to issue any order
preventing or suspending the use of any Preliminary Prospectus or has instituted
or,  to the  best  of the  Company's  knowledge,  threatened  to  institute  any
proceedings with respect to such an order.

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     (c) The agreements and documents  described in the  Registration  Statement
and the Prospectus  conform to the descriptions  thereof  contained  therein and
there are no  agreements  or other  documents  required to be  described  in the
Registration  Statement or the  Prospectus or to be filed with the Commission as
exhibits to the Registration Statement that have not been so described or filed.
Each agreement or other instrument (however characterized or described) to which
the  Company is a party or by which its  property or business is or may be bound
or affected and (i) that is referred to in the  Prospectus,  or (ii) is material
to the Company's business, has been duly and validly executed by the Company, is
in full force and effect and is  enforceable  against  the  Company  and, to the
Company's  knowledge,  the other parties thereto,  in accordance with its terms,
except (x) as such  enforceability  may be limited  by  bankruptcy,  insolvency,
reorganization or similar laws affecting  creditors'  rights  generally,  (y) as
enforceability of any  indemnification or contribution  provision may be limited
under the federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the  equitable  defenses  and to the  discretion  of the court  before which any
proceeding  therefor may be brought,  and none of such agreements or instruments
has been  assigned by the  Company,  and neither the Company nor, to the best of
the Company's knowledge, any other party is in breach or default thereunder and,
to the best of the Company's  knowledge,  no event has occurred  that,  with the
lapse of time or the giving of notice,  or both,  would  constitute  a breach or
default thereunder.  To the best of the Company's knowledge,  performance by the
Company of the material  provisions of such  agreements or instruments  will not
result  in a  violation  of  any  existing  applicable  law,  rule,  regulation,
judgment,  order or decree of any  governmental  agency  or court,  domestic  or
foreign,  having  jurisdiction  over  the  Company  or  any  of  its  assets  or
businesses,  including, without limitation, those relating to environmental laws
and regulations.

     (d) No  securities of the Company have been sold by the Company or by or on
behalf of, or for the benefit of, any person or persons controlling,  controlled
by, or under common control with the Company within the three years prior to the
date hereof, except as disclosed in the Registration Statement.

     (e) The disclosures in the Registration  Statement  summarizing the effects
of Federal,  State and local  regulation on the Company's  business as currently
contemplated are correct  summaries in all material  respects and do not omit to
state a material fact.

     (f) The statistical and related data included in the Registration Statement
are based on or derived from  sources  that the Company  believes to be reliable
and accurate.

     (g)  Since the  respective  dates as of which  information  is given in the
Registration  Statement  and the  Prospectus,  except as otherwise  specifically
stated therein,  (i) there has been no material adverse change in the condition,
financial  or  otherwise,  or business of the  Company,  (ii) there have been no
material  transactions  entered into by the Company,  other than as contemplated
pursuant to this Agreement,  and (iii) no member of the Company's management has
resigned from any position with the Company.

     (h) Subsequent to the respective dates as of which  information is given in
the  Registration  Statement and the Prospectus,  and except as may otherwise be
indicated or contemplated herein or therein,  the Company has not (i) issued any
securities or incurred any liability or obligation,  direct or  contingent,  for
borrowed  money;  or (ii)  declared  or paid  any  dividend  or made  any  other
distribution on or in respect to its equity securities.

     (i)  Hein &  Associates  LLP  ("Hein"),  whose  report  is  filed  with the
Commission as part of the Registration Statement, are independent accountants as

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required by the Act and the Regulations and such accountants, in the performance
of their work for the Company,  are not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act of 2002. Hein has not, during the periods
covered by the financial statements included in the Prospectus,  provided to the
Company any non-audit  services,  as such term is used in Section  10A(g) of the
Exchange   Act.   There  are  no  material   off-balance   sheet   transactions,
arrangements,  obligations  (including  contingent  obligations)  or  any  other
relationships  with  unconsolidated  entities or other persons,  that may have a
material current or, to the Company's knowledge, a material future effect on the
Company's  financial  condition,  changes  in  financial  condition,  results of
operations,  liquidity, capital expenditures,  capital resources, or significant
components of revenues or expenses.

     (j) The financial  statements,  including the notes thereto and  supporting
schedules  included in the Registration  Statement and Prospectus fairly present
in all material respects the financial  position,  the results of operations and
the cash  flows of the  Company  at the dates and for the  periods to which they
apply;  and such  financial  statements  have been prepared in  conformity  with
generally accepted accounting  principles,  consistently  applied throughout the
periods  involved;  and the supporting  schedules  included in the  Registration
Statement present fairly in all material respects the information required to be
stated therein.  The Registration  Statement discloses all material  off-balance
sheet   transactions,    arrangements,    obligations    (including   contingent
obligations),  and  other  relationships  of  the  Company  with  unconsolidated
entities or other  persons that may have a material  current or future effect on
the Company's financial condition,  changes in financial  condition,  results of
operations,  liquidity, capital expenditures,  capital resources, or significant
components of revenues or expenses.

     (k) The Company had at the date or dates  indicated in the Prospectus  duly
authorized,   issued  and  outstanding   capitalization  as  set  forth  in  the
Registration  Statement and the Prospectus.  Based on the assumptions  stated in
the  Registration  Statement  and the  Prospectus,  the Company will have on the
Closing Date the adjusted stock capitalization set forth therein.  Except as set
forth in, or contemplated by, the Registration Statement and the Prospectus,  on
the Effective Date and on the Closing Date, there will be no options,  warrants,
or other rights to purchase or  otherwise  acquire any  authorized  but unissued
shares of Common Stock of the Company or any security convertible into shares of
Common Stock of the Company,  or any contracts or  commitments  to issue or sell
shares of Common  Stock or any such  options,  warrants,  rights or  convertible
securities.

     (l) All issued and  outstanding  securities  of the Company  have been duly
authorized and validly issued and are fully paid and  non-assessable;  except as
described in or expressly contemplated by the Registration Statement,  there are
no outstanding  rights  (including,  without  limitation,  pre-emptive  rights),
warrants or options to acquire, or instruments  convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company, or any
contract,  commitment,  agreement,  understanding  or  arrangement  of any  kind
relating  to the  issuance  of  any  capital  stock  of the  Company,  any  such
convertible or exchangeable  securities or any such rights, warrants or options.
The authorized  Common Stock conforms in all material respects to all statements
relating thereto contained in the Registration Statement and the Prospectus. The
offers and sales of the  outstanding  Common  Stock were at all  relevant  times
either  registered under the Act and the applicable state securities or Blue Sky
laws or, based in part on the  representations  and warranties of the purchasers
of such shares of Common Stock, exempt from such registration requirements.

     (m) The Securities have been duly authorized and, when issued and paid for,
will be validly issued,  fully paid and non-assessable;  the holders thereof are
not and will not be  subject  to  personal  liability  by reason  of being  such
holders; the Securities are not and will not be subject to the preemptive rights
of any  holders of any  security of the  Company or similar  contractual  rights

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granted by the Company;  and all corporate  action  required to be taken for the
authorization,  issuance  and sale of the  Securities  has been duly and validly
taken.  The Securities  conform in all material  respects to all statements with
respect  thereto  contained in the  Registration  Statement.  When  issued,  the
Representatives' Purchase Option, the Representatives' Warrants and the Warrants
will constitute valid and binding  obligations of the Company to issue and sell,
upon exercise  thereof and payment of the respective  exercise prices  therefor,
the  number  and  type of  securities  of the  Company  called  for  thereby  in
accordance with the terms thereof and such Representatives' Purchase Option, the
Representatives'  Warrants and the Warrants are enforceable  against the Company
in accordance with their respective terms, except (i) as such enforceability may
be limited by bankruptcy,  insolvency,  reorganization or similar laws affecting
creditors' rights generally,  (ii) as enforceability of any  indemnification  or
contribution  provision  may be limited  under the federal and state  securities
laws, and (iii) that the remedy of specific performance and injunctive and other
forms of equitable  relief may be subject to the  equitable  defenses and to the
discretion of the court before which any proceeding therefor may be brought.

     (n) Except as set forth in the Prospectus,  no holders of any securities of
the Company or any rights  exercisable for or convertible or  exchangeable  into
securities  of the Company have the right to require the Company to register any
such  securities of the Company under the Act or to include any such  securities
in a registration statement to be filed by the Company.

     (o) This Agreement,  the Warrant  Agreement (as hereinafter  defined),  the
Trust Agreement,  the Services Agreement (as hereinafter defined) and the Escrow
Agreement (as hereinafter  defined) have been duly and validly authorized by the
Company and constitute,  and the Representatives'  Purchase Option has been duly
and validly  authorized by the Company and, when  executed and  delivered,  will
constitute, the valid and binding agreements of the Company, enforceable against
the  Company in  accordance  with  their  respective  terms,  except (i) as such
enforceability  may be  limited by  bankruptcy,  insolvency,  reorganization  or
similar laws affecting  creditors' rights  generally,  (ii) as enforceability of
any  indemnification or contribution  provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance and
injunctive  and other forms of equitable  relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

     (p)  The  execution,  delivery,  and  performance  by the  Company  of this
Agreement,  the Warrant  Agreement,  the  Representatives'  Purchase Option, the
Trust  Agreement,   the  Services  Agreement  and  the  Escrow  Agreement,   the
consummation by the Company of the transactions herein and therein  contemplated
and the  compliance  by the Company with the terms hereof and thereof do not and
will not,  with or without the giving of notice or the lapse of time or both (i)
result in a breach of, or conflict with any of the terms and  provisions  of, or
constitute a default under, or result in the creation, modification, termination
or imposition of any lien,  charge or encumbrance upon any property or assets of
the Company  pursuant to the terms of any  agreement or  instrument to which the
Company is a party except pursuant to the Trust Agreement referred to in Section
2(gg) hereof (ii) result in any violation of the  provisions of the  certificate
of  incorporation  or the by-laws of the Company;  or (iii) violate any existing
applicable law, rule, regulation,  judgment, order or decree of any governmental
agency or court,  domestic or foreign,  having  jurisdiction over the Company or
any of its properties or business.

     (q) No material default exists in the due performance and observance of any
term,  covenant or  condition  of any  material  license,  contract,  indenture,
mortgage,  deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material
agreement or  instrument to which the Company is a party or by which the Company
may be bound or to which  any of the  properties  or assets  of the  Company  is
subject.  The  Company  is not in  violation  of any  term or  provision  of its

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certificate  of  incorporation  or  by-laws  or in  violation  of  any  material
franchise, license, permit, applicable law, rule, regulation, judgment or decree
of any governmental  agency or court,  domestic or foreign,  having jurisdiction
over the Company or any of its properties or businesses.

     (r) The Company has all requisite  corporate  power and authority,  and has
all necessary  authorizations,  approvals,  orders,  licenses,  certificates and
permits of and from all  governmental  regulatory  officials  and bodies that it
needs  as of the date  hereof  to  conduct  its  business  as  described  in the
Prospectus. The disclosures in the Registration Statement concerning the effects
of  federal,  state and local  regulation  on this  offering  and the  Company's
business purpose as currently  contemplated are correct in all material respects
and do not omit to state a  material  fact  required  to be  stated  therein  or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     (s) The Company has all  corporate  power and  authority to enter into this
Agreement  and to  carry  out the  provisions  and  conditions  hereof,  and all
consents, authorizations,  approvals and orders required in connection therewith
have been obtained.  No consent,  authorization or order of, and no filing with,
any court,  government  agency or other body is required for the valid issuance,
sale and delivery,  of the Securities and the  consummation of the  transactions
and  agreements  contemplated  by this  Agreement,  the Warrant  Agreement,  the
Representatives'  Purchase Option,  the Trust Agreement and the Escrow Agreement
and as contemplated by the Prospectus, except with respect to applicable federal
and state securities laws.

     (t) To the best of the Company's  knowledge,  all information  contained in
the  questionnaires  ("Questionnaires")  completed  by  each  of  the  Company's
officers,   directors,  and  stockholders  immediately  prior  to  the  Offering
("Initial  Stockholders")  and provided to the Underwriters as an exhibit to his
or her Insider  Letter (as defined in Section  2(ff)) is true and correct in all
material  respects and the Company has not become aware of any information which
would cause the information  disclosed in the  Questionnaires  completed by each
Initial Stockholder to become inaccurate and incorrect in all material respects.

     (u)  There  is  no  action,   suit,   proceeding,   inquiry,   arbitration,
investigation,  litigation or governmental proceeding pending or, to the best of
the Company's knowledge, threatened against, or involving the Company or, to the
best of the  Company's  knowledge,  any Initial  Stockholder  which has not been
disclosed in the Registration Statement or the Questionnaires.

     (v) The  Company  has been duly  organized  and is  validly  existing  as a
corporation   and  is  in  good  standing   under  the  laws  of  its  state  of
incorporation, and is duly qualified to do business and is in good standing as a
foreign  corporation  in each  jurisdiction  in which its  ownership or lease of
property or the conduct of business  requires such  qualification,  except where
the failure to qualify would not have a material adverse effect on the Company.

     (w) The  Commission  has not issued any order  preventing or suspending the
use of any Preliminary Prospectus or Prospectus or any part thereof.

     (x) Except as described in the Prospectus,  there are no claims,  payments,
arrangements,  agreements  or  understandings  relating  to  the  payment  of  a
finder's,   consulting  or  origination  fee  by  the  Company  or  any  Initial
Stockholder  with respect to the sale of the  Securities  hereunder or any other
arrangements, agreements or understandings of the Company or, to the best of the
Company's  knowledge,  any Initial Stockholder that may affect the Underwriters'
compensation,  as determined by the National  Association of Securities Dealers,
Inc. ("NASD").

                                       8
<PAGE>

     (y) The  Company  has not made any direct or  indirect  payments  (in cash,
securities or otherwise) (i) to any person, as a finder's fee, consulting fee or
otherwise,  in  consideration  of such person raising capital for the Company or
introducing  to the  Company  persons  who  raised or  provided  capital  to the
Company,  (ii) to any NASD  member or (iii) to any person or entity that has any
direct or indirect  affiliation or association with any NASD member,  within the
twelve  months prior to the date on which the  Registration  Statement was filed
with the Commission or thereafter, other than payments to the Representatives.

     (z) None of the net proceeds of the Offering will be paid by the Company to
any  participating  NASD  member  or  its  affiliates,  except  as  specifically
authorized  herein  and  except  as may be paid in  connection  with a  Business
Combination as contemplated by the Prospectus.

     (aa) Based on the Questionnaires, except as set forth on Schedule 2(aa), no
officer,  director  or  any  beneficial  owner  of  the  Company's  unregistered
securities has any direct or indirect  affiliation or association  with any NASD
member.  The Company will advise the  Representatives  and their counsel,  if it
learns  that any  officer,  director  or  owner of at least 5% of the  Company's
outstanding  Common Shares is or becomes an affiliate or associated person of an
NASD member participating in the offering.

     (bb) Neither the Company nor any of the Initial  Stockholders  or any other
person  acting on behalf of the Company has,  directly or  indirectly,  given or
agreed to give any  money,  gift or similar  benefit  (other  than  legal  price
concessions  to customers in the ordinary  course of business) to any  customer,
supplier,  employee or agent of a customer or supplier,  or official or employee
of any governmental  agency or  instrumentality  of any government  (domestic or
foreign) or any political party or candidate for office (domestic or foreign) or
any  political  party or  candidate  for office  (domestic  or foreign) or other
person who was,  is, or may be in a position  to help or hinder the  business of
the Company (or assist it in connection with any actual or proposed transaction)
that (i) might  subject  the  Company  to any  damage or  penalty  in any civil,
criminal or  governmental  litigation  or  proceeding,  (ii) if not given in the
past,  might have had a  material  adverse  effect on the  assets,  business  or
operations  of the  Company  as  reflected  in any of the  financial  statements
contained  in the  Prospectus  or (iii) if not  continued  in the future,  might
adversely affect the assets,  business,  operations or prospects of the Company.
The Company's  internal  accounting  controls and  procedures  are sufficient to
cause the Company to comply with the Foreign  Corrupt  Practices Act of 1977, as
amended.

     (cc) Any certificate  signed by any duly authorized  officer of the Company
and  delivered to you or to your counsel  shall be deemed a  representation  and
warranty by the Company to the Underwriters as to the matters covered thereby.

     (dd) The Company has entered into a warrant  agreement  with respect to the
Warrants and the  Representatives'  Warrants with  Continental  Stock Transfer &
Trust Company  ("Continental")  substantially in the form filed as an exhibit to
the Registration  Statement  ("Warrant  Agreement"),  providing for, among other
things,  the payment of a warrant  solicitation  fee as  contemplated by Section
3(l) hereof.

     (ee) The  Company  has  caused  to be duly  executed  legally  binding  and
enforceable  agreements  (except  (i) as such  enforceability  may be limited by
bankruptcy,  insolvency,  reorganization  or similar laws  affecting  creditors'
rights generally, (ii) as enforceability of any indemnification, contribution or
non-compete  provision  may be limited  under the federal  and state  securities
laws, and (iii) that the remedy of specific performance and injunctive and other
forms of equitable  relief may be subject to the  equitable  defenses and to the
discretion of the court before which any proceeding therefor may be brought) the
form of which is annexed as Exhibit 10.1 to the Registration Statement ("Insider
Letter"),  pursuant  to which each of the  Initial  Stockholders  of the Company

                                       9
<PAGE>

agrees to certain matters,  including but not limited to, the matters  described
as  being  agreed  to by them  under  the  "Proposed  Business"  section  of the
Prospectus.

     (ff) The  Company  has caused  the  Initial  Stockholders  to enter into an
escrow agreement ("Escrow  Agreement") with Continental ("Escrow Agent") in form
and substance  satisfactory to the Underwriters,  whereby the Common Stock owned
by the Initial  Stockholders  will be held in escrow by the Escrow Agent,  until
the third  anniversary of the Effective Date unless released earlier as provided
for in the Escrow Agreement. During such escrow period, the Initial Stockholders
shall be prohibited from selling or otherwise  transferring  such shares (except
to spouses and children of Initial  Stockholders,  trusts  established for their
benefit,  family  partnerships,  to a transferee that does not affect beneficial
ownership  and as otherwise set forth in the Escrow  Agreement)  but will retain
the right to vote such shares. To the Company's knowledge,  the Escrow Agreement
is enforceable  against each of the Initial  Stockholders  and will not, with or
without  the  giving of notice or the lapse of time or both,  result in a breach
of, or conflict with any of the terms and provisions of, or constitute a default
under, any agreement or instrument to which any of the Initial Stockholders is a
party. The Escrow Agreement shall not be amended,  modified or otherwise changed
without the prior written consent of the Representatives.

     (gg) The Company  has  entered  into the Trust  Agreement  with  respect to
certain  proceeds of the  Offering  in form and  substance  satisfactory  to the
Representatives,  which  agreement  shall not be amended,  modified or otherwise
changed without the prior written consent of the Representatives.

     (hh) No Initial Stockholder,  employee,  officer or director of the Company
is subject to any noncompetition  agreement or  non-solicitation  agreement with
any employer or prior employer which could  materially  affect his ability to be
an Initial Stockholder, employee, officer and/or director of the Company.

     (ii) No more than 45% of the "value" (as defined in Section 2(a)(41) of the
Investment  Company Act of 1940  ("Investment  Company  Act")) of the  Company's
total assets  consist of, and no more than 45% of the Company's net income after
taxes is derived from, securities other than "Government securities" (as defined
in Section 2(a)(16) of the Investment Company Act).

     (jj) The Company does not own an interest in any corporation,  partnership,
limited liability company, joint venture, trust or other business entity.

     (kk) There are no  business  relationships  or related  party  transactions
involving  the  Company or any other  person  required  to be  described  in the
Prospectus that have not been described as required.

     3. Covenants of the Company. The Company covenants and agrees as follows:

     (a) The  Company  will  use its best  efforts  to  cause  the  Registration
Statement, if not effective at the time of execution of this Agreement,  and any
amendments  thereto,  to become  effective as promptly as possible.  The Company
shall prepare the Prospectus in a form approved by the  Representatives and file
such  Prospectus  pursuant to Rule 424(b) under the Securities Act no later than
the  Commission's  close of business on the second  business day  following  the
execution and delivery of this Agreement,  or, if applicable,  such earlier time
as may be required by the Rules.

     (b) The Company shall promptly  advise the  Representatives  in writing (i)
when any  post-effective  amendment  to the  Registration  Statement  shall have
become effective, (ii) of any request by the Commission for any amendment of the

                                       10
<PAGE>

Registration  Statement or the  Prospectus  or for any  additional  information,
(iii) of the  issuance  by the  Commission  of any  stop  order  suspending  the
effectiveness  of the  Registration  Statement  or of any  order  preventing  or
suspending  the  use  of  any  Preliminary  Prospectus  or  the  institution  or
threatening  of any  proceeding  for that  purchase,  (iv) of the receipt by the
Company of any notification  with respect to the suspension of the qualification
of the Shares for sale in any  jurisdiction  or the initiation or threatening of
any proceeding for such purpose and (v) of the happening of any event during the
period  described in Section  3(c) hereof that,  in the judgment of the Company,
makes any statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  The Company shall
not file any  amendment  of the  Registration  Statement  or  supplement  to the
Prospectus  or any  document  incorporated  by  reference  in  the  Registration
Statement unless the Company has furnished the Representatives a copy for review
prior to filing and shall not file any such proposed  amendment or supplement to
which the  Representatives  reasonably  object.  The Company  shall use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.

     (c) During the time when a Prospectus is required to be delivered under the
Act, or the Exchange Act, the Company will use all reasonable  efforts to comply
with all  requirements  imposed  upon it by the  Act,  the  Regulations  and the
Exchange Act and by the regulations under the Exchange Act, as from time to time
in force,  so far as necessary to permit the continuance of sales of or dealings
in the  Public  Securities  in  accordance  with the  provisions  hereof and the
Prospectus.  If at any time when a Prospectus  relating to the Public Securities
is required to be delivered  under the Act, or the Exchange Act, any event shall
have occurred as a result of which, in the opinion of counsel for the Company or
counsel for the Underwriters,  the Prospectus,  as then amended or supplemented,
includes an untrue  statement of a material  fact or omits to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading,  or if
it is necessary at any time to amend the  Prospectus to comply with the Act, the
Company will notify the  Representatives  promptly and prepare and file with the
Commission,  subject  to  Section  3(b)  hereof,  an  appropriate  amendment  or
supplement in accordance with Section 10 of the Act.

     (d) For a period of five  years  from the  Effective  Date,  or until  such
earlier  time upon which the Company is required to be  liquidated,  the Company
will use its best  efforts to maintain  the  registration  of the Units,  Common
Stock and Warrants  under the  provisions  of the Exchange Act. The Company will
not  deregister  the Units under the  Exchange  Act  without  the prior  written
consent of the Representatives.

     (e) The  Company  will  endeavor  in good faith,  in  cooperation  with the
Representatives,  at or prior to the time  the  Registration  Statement  becomes
effective,  to qualify the Public  Securities  for  offering  and sale under the
securities  laws of such  jurisdictions  as the  Representatives  may reasonably
designate within the United States, provided that no such qualification shall be
required in any  jurisdiction  where, as a result thereof,  the Company would be
subject to service of general  process or to taxation  as a foreign  corporation
doing  business  in  such   jurisdiction.   In  each  jurisdiction   where  such
qualification  shall be effected,  the Company will, unless the  Representatives
agree  that  such  action is not at the time  necessary  or  advisable,  use all
reasonable  efforts to file and make such statements or reports at such times as
are or may be  required  by the laws of such  jurisdiction.  The Company and the
Representatives  agree that with respect to qualifying the Public Securities for
offering  and sale under  securities  laws  outside of the  United  States,  the
Company will be relying solely on the  Underwriters  and their agents to perfect
all  filings  required  by  such  foreign  jurisdictions  and to make  all  such
statements  and  reports at such times as are or may be  required by the laws of

                                       11
<PAGE>

such  foreign  jurisdictions;   provided  that  the  Company  will  provide  any
assistance as reasonably requested by the Underwriters for such perfection.

     (f) The Company will deliver to each of the several  Underwriters,  without
charge,  from time to time during the period when the  Prospectus is required to
be delivered  under the Act or the Exchange  Act,  such number of copies of each
Preliminary  Prospectus and the Prospectus as such  Underwriters  may reasonably
request  and,  as  soon  as  the  Registration  Statement  or any  amendment  or
supplement  thereto  becomes  effective,  deliver to you two  original  executed
Registration Statements,  including exhibits, and all post-effective  amendments
thereto and copies of all exhibits filed  therewith or  incorporated  therein by
reference and all original executed consents of certified experts.

     (g) For a period of five  years  from the  Effective  Date,  or until  such
earlier date upon which the Company is required to be  liquidated,  the Company,
at its expense,  shall cause its regularly engaged independent  certified public
accountants  to review (but not audit) the Company's  financial  statements  for
each of the first three fiscal  quarters prior to the  announcement of quarterly
financial  information,  the  filing  of the  Company's  Form  10-Q (or  10-QSB)
quarterly  report  and  the  mailing  of  quarterly  financial   information  to
stockholders.

     (h) The Company will not consummate a Business Combination with any
entity which is affiliated with any Initial Stockholder unless the Company
obtains an opinion from an independent investment banking firm that the Business
Combination is fair to the Company's stockholders from a financial perspective.

     (i) The Company has entered into an agreement  ("Services  Agreement") with
Coastal  Acquisition,  LLC pursuant to which the Coastal  Acquisition,  LLC will
make  available to the Company  general and  administrative  services  including
office space, utilities and secretarial support for the Company's use for $7,500
per month.

     (j) Except as set forth above in Section  3(h) or 3(i),  the Company  shall
not  pay  any  Initial  Stockholder  or any of  their  affiliates  any  fees  or
compensation  from the Company for services rendered to the Company prior to, or
in connection  with, the consummation of a Business  Combination;  provided that
the Initial Stockholders shall be entitled to reimbursement from the Company for
their reasonable  out-of-pocket expenses incurred in connection with seeking and
consummating a Business  Combination;  and provided,  further, that such persons
shall be entitled  to  receive,  upon  consummation  of a Business  Combination,
commissions  for monies raised by them for the Company in  connection  with such
Business  Combination,  at rates which are no less favorable to the Company than
those which the Company would pay to unaffiliated third parties.

     (k) The Company  will apply to be included in Standard & Poor's  Daily News
and Corporation  Records Corporate  Descriptions for a period of five years from
the consummation of a Business  Combination.  Promptly after the consummation of
the Offering,  the Company shall take such steps as may be necessary to obtain a
secondary market trading exemption for the Company's  securities in the State of
California.  The Company  shall also take such other action as may be reasonably
requested by the  Representatives to obtain a secondary market trading exemption
in such other states as may be requested by the Representatives.

     (l) The Company  hereby  engages the  Representatives,  on a  non-exclusive
basis, as its agents for the  solicitation of the exercise of the Warrants.  The
Company will (i) assist the  Representatives  with respect to such solicitation,
if requested by the Representatives,  and (ii) at the Representatives'  request,

                                       12
<PAGE>

provide the Representatives, and direct the Company's transfer and warrant agent
to provide to the  Representatives,  at the Company's cost,  lists of the record
and, to the extent known,  beneficial  owners of, the Warrants.  Commencing  one
year  from the  Effective  Date,  the  Company  will pay the  Representatives  a
commission  of five  percent  of the  exercise  price of the  Warrants  for each
Warrant exercised,  payable on the date of such exercise,  on the terms provided
for in the Warrant Agreement,  only if permitted under the rules and regulations
of the NASD and only to the extent that an investor who  exercises  his Warrants
specifically  designates,  in writing,  that the  Representatives  solicited his
exercise.  The  Representatives  may  engage  sub-agents  in their  solicitation
efforts. The Company agrees to disclose the arrangement to pay such solicitation
fees to the  Representatives in any Prospectus used by the Company in connection
with the registration of the shares of Common Stock underlying the Warrants.

     (m) Promptly  after the execution of a definitive  agreement for a Business
Combination,  the  Company  shall  retain  a  financial  public  relations  firm
reasonably acceptable to the Representatives for a term to be agreed upon by the
Company and the Representatives.

     (n) For a period  of five  years  from  the  Effective  Date or until  such
earlier time at which the Company is liquidated, the Company will furnish to the
Representatives  and their counsel  copies  (which may be electronic  copies) of
such financial  statements and other periodic and special reports as the Company
from time to time furnishes generally to holders of any class of its securities,
and promptly furnish to the  Representatives  (i) a copy of each periodic report
the Company shall be required to file with the Commission,  (ii) a copy of every
press release and every news item and article with respect to the Company or its
affairs  which was  released  by the  Company,  (iii) a copy of each Form 8-K or
Schedules  13D, l3G,  14D-l or 13E-4  received or prepared by the Company,  (iv)
five  copies  of each  registration  statement  filed  by the  Company  with the
Commission under the Securities Act, (v) a copy of monthly  statements,  if any,
setting forth such information regarding the Company's results of operations and
financial position (including balance sheet, profit and loss statements and data
regarding outstanding purchase orders) as is regularly prepared by management of
the Company and (vi) such additional  documents and information  with respect to
the  Company and the  affairs of any future  subsidiaries  of the Company as the
Representatives may from time to time reasonably request.

     (o) For a period of five years  following the Effective  Date or until such
earlier  time at which the Company is  liquidated,  the Company  shall  retain a
transfer and warrant agent acceptable to the Representatives  ("Transfer Agent")
and will furnish to the  Representatives  at the Company's sole cost and expense
such transfer  sheets of the Company's  securities  as the  Representatives  may
request,  including the daily and monthly  consolidated  transfer  sheets of the
Transfer Agent and DTC. The  Representatives  acknowledge that Continental is an
acceptable Transfer Agent.

     (p) Until such time as the Public  Securities are listed or quoted,  as the
case may be, on the New York Stock  Exchange,  the  American  Stock  Exchange or
quoted on the Nasdaq National Market,  or until such earlier time upon which the
Company is required to be liquidated,  the Company shall engage  Dilworth Paxson
LLP  ("Dilworth  Paxson"),  for a one-time fee of $5,000  payable on the Closing
Date, to deliver and update to the  Underwriters  on a timely basis,  but in any
event on the Closing Date, a written report  detailing those states in which the
Public  Securities may be traded in non-issuer  transactions  under the Blue Sky
laws of the fifty States ("Secondary Market Trading Survey").

     (q) During  such time as the Public  Securities  are quoted on the NASD OTC
Bulletin  Board (or any  successor  trading  market such as the  Bulletin  Board
Exchange) or the Pink Sheets,  LLC (or similar  publisher of quotations)  and no
other   automated   quotation   system,   the  Company   shall  provide  to  the
Representatives,  at its expense, such reports published by the NASD or the Pink
Sheets,  LLC  relating  to  price  trading  of  the  Public  Securities,  as the
Representatives shall reasonably request.

                                       13
<PAGE>

     (r) For a period  equal to seven  years from the date  hereof,  the Company
will not take any  action  or  actions  which  may  prevent  or  disqualify  the
Company's use of Form S-1 (or other  appropriate  form) for the  registration of
the Warrants and the Representatives' Warrants under the Act.

     (s) The Company  hereby  agrees to pay on each of the Closing  Date and the
Option  Closing Date,  if any, to the extent not paid on the Closing  Date,  all
expenses  incident to the  performance  of the  obligations of the Company under
this  Agreement,  including  but not limited to (i) the  preparation,  printing,
filing and  mailing  (including  the  payment of  postage  with  respect to such
mailing) of the Registration Statement and exhibits thereto, the Preliminary and
Final  Prospectuses  and the printing and mailing of this  Agreement and related
documents,  including the cost of all copies thereof and any amendments  thereof
or  supplements  thereto  supplied to the  Underwriters  in quantities as may be
required  by the  Underwriters,  (ii)  the  printing,  engraving,  issuance  and
delivery of the Units,  the shares of Common Stock and the Warrants  included in
the Units and the  Representative's  Purchase Option,  including any transfer or
other taxes payable thereon,  (iii) the  qualification of the Public  Securities
under  state or  foreign  securities  or Blue Sky laws,  including  the costs of
printing  and  mailing  the  Preliminary  and Final Blue Sky  Memoranda  and all
amendments and supplements  thereto,  fees and  disbursements of Dilworth Paxson
retained  for such  purpose  and a one-time  fee of $5,000  payable to  Dilworth
Paxson for the preparation of the Secondary  Market Trading Survey,  (iv) filing
fees,  costs and  expenses  (including  disbursements  for the  Representatives'
counsel)  incurred  in  registering  the  Offering  with the NASD,  (v) costs of
placing  "tombstone"  advertisements  in The Wall Street  Journal,  The New York
Times and a third  publication  to be  selected  by the  Representatives  not to
exceed $10,000,  (vi) fees and  disbursements of the transfer and warrant agent,
(vii) the Company's expenses  associated with "due diligence"  meetings arranged
by the Representatives including a videotape or powerpoint presentation,  (viii)
the preparation, binding and delivery of transaction "bibles," in form and style
reasonably  satisfactory to the  Representatives and transaction lucite cubes or
similar  commemorative items in a style and quantity as reasonably  requested by
the  Representatives,  and (ix) all other  costs and  expenses  incident  to the
performance of its obligations  hereunder  which are not otherwise  specifically
provided for in this Section  3(s).  The Company also agrees that it will engage
and pay for an  investigative  search  firm of the  Representatives'  choice  to
conduct an  investigation  of the principals of the Company as shall be mutually
selected by the Representatives and the Company.  The Representatives may deduct
from the net  proceeds  of the  Offering  payable to the  Company on the Closing
Date,  or the Option  Closing  Date, if any, the expenses set forth herein to be
paid  by the  Company  to  the  Representatives  and  others.  If  the  Offering
contemplated by this Agreement is not consummated for any reason  whatsoever for
reasons not attributable to the  Underwriters,  then the Company shall reimburse
the Underwriters in full for their out of pocket  accountable  expenses actually
incurred by the Representatives.  The Representatives  shall retain such part of
the  nonaccountable   expense  allowance   (described  below  in  Section  3(t))
previously  paid,  if any, as shall equal its actual  out-of-pocket  accountable
expenses and refund the balance.  If the amount  previously paid is insufficient
to cover such actual  out-of-pocket  accountable  expenses,  the  Company  shall
remain  liable for and promptly pay any other actual  out-of-pocket  accountable
expenses.

     (t) The Company  further  agrees that, in addition to the expenses  payable
pursuant  to  Section   3(s),   on  the  Closing   Date,  it  will  pay  to  the
Representatives  a  nonaccountable  expense  allowance equal to one and one-half
percent  (1.5%) of the gross  proceeds  received by the Company from the sale of
the Firm Units (less any amounts previously paid) by deduction from the proceeds
of the Offering contemplated herein.

     (u) The  Company  further  agrees  that,  in the event the  Representatives
assist  the  Company  in trying to obtain  stockholder  approval  of a  proposed
Business  Combination,  the Company agrees to reimburse the  Representatives for
all out-of-pocket expenses,  including,  but not limited to, "road-show" and due
diligence expenses.

                                       14
<PAGE>

     (v) The Company will apply the net proceeds  from the Offering  received by
it in a manner consistent with the application  described under the caption "Use
Of Proceeds" in the Prospectus.

     (w) The Company will make  generally  available to its security  holders as
soon as  practicable,  but not later  than the first day of the  fifteenth  full
calendar month following the Effective Date, an earnings  statement  (which need
not  be  certified  by  independent  public  or  independent   certified  public
accountants  unless  required  by the Act or the  Regulations,  but which  shall
satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a
period of at least twelve consecutive months beginning after the Effective Date.

     (x) In the event any person or entity  (regardless of any NASD  affiliation
or  association)  is engaged  to assist  the  Company in its search for a merger
candidate or to provide any other merger and acquisition  services,  the Company
will provide the following to the NASD prior to the consummation of the Business
Combination:  (i)  complete  details of all  services  and copies of  agreements
governing such services;  and (ii)  justification as to why the person or entity
providing  the merger and  acquisition  services  should  not be  considered  an
"underwriter  and related  person" with respect to the Company's  initial public
offering,  as such term is defined in Rule 2710 of the NASD's Conduct Rules. The
Company  also agrees that proper  disclosure  of such  arrangement  or potential
arrangement  will be made in the proxy statement which the Company will file for
purposes of soliciting stockholder approval for the Business Combination.

     (y) Except with  respect to the  agreement  between the Company and Cary M.
Grossman  and W. Donald  Brunson  annexed as Exhibit  10.13 to the  Registration
Statement,  neither the Company,  nor, to its  knowledge,  any of its employees,
directors or stockholders (without the consent of the Representatives) has taken
or will  take,  directly  or  indirectly,  any  action  designed  to or that has
constituted  or that might  reasonably  be expected to cause or result in, under
the Exchange Act, or otherwise,  stabilization  or  manipulation of the price of
any security of the Company to facilitate the sale or resale of the Units.

     (z) The  Company  will  maintain a system of internal  accounting  controls
sufficient to provide reasonable  assurances that: (i) transactions are executed
in  accordance  with  management's  general  or  specific  authorization,   (ii)
transactions  are  recorded  as  necessary  in order to  permit  preparation  of
financial statements in accordance with generally accepted accounting principles
and to maintain  accountability for assets,  (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the  recorded  accountability  for assets is compared  with  existing  assets at
reasonable  intervals  and  appropriate  action  is taken  with  respect  to any
differences.

     (aa) For a period  of five  years  from the  Effective  Date or until  such
earlier  time upon which the Company is required to be  liquidated,  the Company
shall retain Hein or other independent public accountants  reasonably acceptable
to the Representatives.

     (bb) The Company shall, on the date hereof,  retain its independent  public
accountants  to audit the financial  statements of the Company as of the Closing
Date ("Audited Financial  Statements")  reflecting the receipt by the Company of
the proceeds of the initial public  offering.  As soon as the Audited  Financial
Statements become available, the Company shall immediately file a Current Report
on Form 8-K with the  Commission,  which  Report  shall  contain  the  Company's
Audited Financial Statements.

                                       15
<PAGE>

     (cc)  Company  shall  advise the NASD if it is aware that any 5% or greater
stockholder of the Company becomes an affiliate or associated  person of an NASD
member participating in the distribution of the Company's Public Securities.

     (dd) All corporate  proceedings and other legal matters  necessary to carry
out the provisions of this Agreement and the  transactions  contemplated  hereby
shall  have  been  done  to the  reasonable  satisfaction  to  counsel  for  the
Underwriters.

     (ee) The Company shall cause the proceeds of the Offering to be held in the
Trust Fund to be invested only in "government securities" with specific maturity
dates as set forth in the Trust Agreement and disclosed in the  Prospectus.  The
Company  will  otherwise  conduct  its  business in a manner so that it will not
become  subject to the  Investment  Company Act.  Furthermore,  once the Company
consummates a Business Combination,  it will be engaged in a business other than
that of investing, reinvesting, owning, holding or trading securities.

     (ff) From the Effective  Date, and for a period of one hundred twenty (120)
days thereafter, the Company shall not, without the prior written consent of the
Representatives,  issue,  sell, offer to sell, grant any option for the sale of,
to otherwise dispose of, directly or indirectly,  any equity securities or other
securities  convertible  into,  exercisable  for,  or  exchangeable  for  equity
securities except with respect to the Offering.  Further,  the Company shall not
designate  or issue any of its  "blank  check"  preferred  stock  prior to or in
connection  with the proposed  business  combination  without the prior  written
consent of the Representatives.

     4. Conditions of Underwriters' Obligations.  The obligations of the several
Underwriters  to purchase and pay for the Units,  as provided  herein,  shall be
subject to the continuing  accuracy of the representations and warranties of the
Company as of the date hereof and as of each of the Closing  Date and the Option
Closing  Date,  if any,  to the  accuracy of the  statements  of officers of the
Company made pursuant to the  provisions  hereof and to the  performance  by the
Company of its obligations hereunder and to the following conditions:

     (a) The Registration  Statement has been declared  effective on the date of
this Agreement, and, at each of the Closing Date and the Option Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no  proceedings  for such purpose shall have been  instituted or
shall be pending or  contemplated  by the Commission and any request on the part
of the Commission for  additional  information  shall have been complied with to
the reasonable satisfaction of Dilworth Paxson, counsel to the Underwriters.

     (b)  By  the  Effective  Date,  the  Representatives  shall  have  received
clearance from the NASD as to the amount of compensation allowable or payable to
the Underwriters as described in the Registration Statement.

     (c) No  order  suspending  the  sale  of  the  Units  in  any  jurisdiction
designated  by you  pursuant to Section 3(e) hereof shall have been issued on or
before either the Closing Date or the Option  Closing Date,  and no  proceedings
for that purpose shall have been instituted or shall be contemplated.

     (d) On the  Closing  Date,  the  Representatives  shall have  received  the
favorable opinion of Jenkens & Gilchrist,  P.C. ("Jenkens & Gilchrist")  counsel
to the Company,  dated the Closing Date, addressed to the Representatives and in
form and substance satisfactory to Dilworth Paxson to the effect that:

                                       16
<PAGE>

          (i) The Company has been duly  incorporated and is validly existing as
a  corporation  and  is in  good  standing  under  the  laws  of  its  state  of
incorporation.  The Company is duly  qualified and licensed and in good standing
as a foreign  corporation in each  jurisdiction  in which it has certified to us
that it owns or leases any properties or maintains  employees,  except where the
failure to qualify would not have a material adverse effect on the Company.

          (ii) All issued and  outstanding  securities  of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; except
as described in or expressly contemplated by the Registration  Statement,  there
are no outstanding rights (including,  without limitation,  pre-emptive rights),
warrants or options to acquire, or instruments  convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company, or any
contract,  commitment,  agreement,  understanding  or  arrangement  of any  kind
relating  to the  issuance  of  any  capital  stock  of the  Company,  any  such
convertible or exchangeable  securities or any such rights, warrants or options.
The authorized  Common Stock conforms in all material respects to all statements
relating thereto contained in the Registration Statement and the Prospectus. The
offers and sales of the  outstanding  Common  Stock were at all  relevant  times
either  registered under the Act and the applicable state securities or Blue Sky
laws or, based in part on the  representations  and warranties of the purchasers
of such shares of Common Stock, exempt from such registration requirements.  The
authorized and  outstanding  capital stock of the Company is as set forth in the
Prospectus.

          (iii) The Securities  have been duly  authorized  and, when issued and
paid for, will be validly issued, fully paid and non-assessable.  The Securities
are not and will not be subject to the  preemptive  rights of any holders of any
security of the Company  arising by operation of law or under the Certificate of
Incorporation  or Bylaws  of the  Company.  When  issued,  the  Representatives'
Purchase Option, the Representatives'  Warrants and the Warrants will constitute
valid and binding  obligations  of the Company to issue and sell,  upon exercise
thereof and payment  therefor,  the number and type of securities of the Company
called for thereby and such Warrants, the Representatives'  Purchase Option, and
the  Representatives'  Warrants,  when  issued,  in each case,  are  enforceable
against the Company in accordance  with their  respective  terms,  except (a) as
such enforceability may be limited by bankruptcy, insolvency,  reorganization or
similar laws affecting creditors' rights generally, (b) as enforceability of any
indemnification  or contribution  provision may be limited under the federal and
state  securities  laws,  and (c) that the remedy of  specific  performance  and
injunctive  and other forms of equitable  relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.  The  certificates  representing  the  Securities are in due and
proper form.

          (iv) This Agreement has been duly  authorized,  executed and delivered
by the  Company.  The  Warrant  Agreement,  the  Services  Agreement,  the Trust
Agreement and the Escrow  Agreement  have each been duly and validly  authorized
and,  when  executed  and  delivered  by  the  Company,   constitute,   and  the
Representatives'  Purchase  Option has been duly and validly  authorized  by the
Company and, when executed and delivered, will constitute, the valid and binding
obligations of the Company,  enforceable  against the Company in accordance with
their  respective  terms,  except (a) as such  enforceability  may be limited by
bankruptcy,  insolvency,  reorganization  or similar laws  affecting  creditors'
rights generally,  (b) as enforceability of any  indemnification or contribution
provisions may be limited under the federal and state  securities  laws, and (c)
that the  remedy of  specific  performance  and  injunctive  and other  forms of
equitable relief may be subject to the equitable  defenses and to the discretion
of the court before which any proceeding therefor may be brought.

          (v) The execution,  delivery and  performance of this  Agreement,  the
Warrant Agreement,  the Representatives'  Purchase Option, the Escrow Agreement,
the Trust  Agreement  and the Services  Agreement,  the issuance and sale of the

                                       17
<PAGE>

Securities,  the  consummation  of  the  transactions  contemplated  hereby  and
thereby,  and compliance by the Company with the terms and provisions hereof and
thereof,  do not and will not, with or without the giving of notice or the lapse
of time, or both, (a) to such counsel's knowledge, conflict with, or result in a
breach of, any of the terms or provisions of, or constitute a default under,  or
result in the creation or modification of any lien, security interest, charge or
encumbrance  upon any of the properties or assets of the Company pursuant to the
terms  of,  any  mortgage,  deed of  trust,  note,  indenture,  loan,  contract,
commitment  or  other  agreement  or  instrument  filed  as an  exhibit  to  the
Registration  Statement,  (b) result in any  violation of the  provisions of the
Certificate  of  Incorporation  or the  By-Laws of the  Company,  or (c) to such
counsel's knowledge, violate any United States statute or any judgment, order or
decree, rule or regulation applicable to the Company of any court, United States
federal,  state or other regulatory  authority or other governmental body having
jurisdiction over the Company, its properties or assets.

          (vi) The Registration  Statement,  each Preliminary Prospectus and the
Prospectus and any post-effective  amendments or supplements thereto (other than
the  financial  statements  included  therein,  as to which no  opinion  need be
rendered) each as of their  respective dates complied as to form in all material
respects with the  requirements of the Act and  Regulations.  The Securities and
each agreement filed as an exhibit to the Registration  Statement conform in all
material  respects to the  description  thereof  contained  in the  Registration
Statement  and the  Prospectus.  No United  States  federal or state  statute or
regulation  required to be  described  in the  Prospectus  is not  described  as
required, nor , to such counsel's knowledge, are any contracts or documents of a
character  required  to be  described  in  the  Registration  Statement  or  the
Prospectus  or to be filed as  exhibits  to the  Registration  Statement  not so
described or filed as required.

          (vii) The  Registration  Statement is effective under the Act. To such
counsel's  knowledge,   no  stop  order  suspending  the  effectiveness  of  the
Registration  Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened  under the Act or applicable  state
securities laws.

          (viii)  To such  counsel's  knowledge,  there  is no  action,  suit or
proceeding  before or by any court of governmental  agency or body,  domestic or
foreign,  now pending,  or threatened against the Company that is required to be
described in the Registration Statement.

     In addition,  Counsel has  participated  in  conferences  with officers and
other representatives of the Company,  representatives of the independent public
accountants for the Company and representatives of the Underwriters at which the
contents of the Registration Statement,  the Prospectus and related matters were
discussed  and although such counsel is not passing upon and does not assume any
responsibility  for the  accuracy,  completeness  or fairness of the  statements
contained in the Registration  Statement and Prospectus (except as otherwise set
forth in this opinion), on the basis of the foregoing (relying as to materiality
to a large extent upon facts provided by officers and other  representatives  of
the Company) no facts have come to the  attention  of such counsel  which should
lead them to believe  that  either  the  Registration  Statement  at the time it
became  effective   (including  the  information   deemed  to  be  part  of  the
Registration  Statement at the time of effectiveness  pursuant to Rule 430A(b)),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the  statements  therein
not  misleading or that the Prospectus as of its date and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state any material  fact  required to be stated  therein or necessary to make
the  statements  therein,  in light of the  circumstances  under which they were
made,  not  misleading  (it being  understood  that such counsel need express no
opinion with respect to the exhibits  (other than with respect to the  summaries
thereof  contained in the  Registration  Statement  and  Prospectus),  financial
statements and schedules and other  financial and  statistical  data included in
the Registration Statement or Prospectus).

                                       18
<PAGE>

     (e) On each of the Closing Date and the Option  Closing  Date,  if any, the
Representatives   shall  have  received  the  favorable  opinion  of  Jenkens  &
Gilchrist,  dated the Closing Date or the Option  Closing  Date, as the case may
be,  addressed  to the  Representatives  and in form  and  substance  reasonably
satisfactory  to Dilworth  Paxson,  confirming  as of the  Closing  Date and, if
applicable,  the Option Closing Date, the statements made by Jenkens & Gilchrist
in its opinion delivered on the Effective Date.

     In rendering  its opinion,  Jenkens & Gilchrist  may rely (i) as to matters
involving the  application  of laws other than the laws of the United States and
jurisdictions  in which they are  admitted,  to the extent  Jenkens &  Gilchrist
deems proper and to the extent  specified in such  opinion,  if at all,  upon an
opinion or opinions (in form and substance  reasonably  satisfactory to Dilworth
Paxson) of other counsel reasonably acceptable to Dilworth Paxson, familiar with
the  applicable  laws,  and (ii) as to matters of fact,  to the extent they deem
proper,  on certificates or other written  statements of officers of the Company
and officers of departments of various jurisdictions having custody of documents
respecting  the corporate  existence or good  standing of the Company,  provided
that copies of any such  statements  or  certificates  shall be delivered to the
Underwriters'  counsel if requested.  The opinion of Jenkens & Gilchrist and any
opinion  relied upon by Jenkens &  Gilchrist  shall  include a statement  to the
effect that it may be relied upon by counsel for the Underwriters in its opinion
delivered to the Underwriters.

     (f) At the time this Agreement is executed, and at each of the Closing Date
and the Option Closing Date, if any, you shall have received a letter, addressed
to the  Representatives  and in form and substance  satisfactory in all respects
(including the non-material nature of the changes or decreases, if any, referred
to in  clause  (iii)  below) to you and to  Dilworth  Paxson  from  Hein  dated,
respectively,  as of the date of this  Agreement  and as of the Closing Date and
the Option Closing Date, if any:

          (i) Confirming that they are independent  accountants  with respect to
the Company  within the meaning of the Act and the  applicable  Regulations  and
that they have not,  during  the  periods  covered by the  financial  statements
included in the Prospectus,  provided to the Company any non-audit services,  as
such term is used in Section 10A(g) of the Exchange Act;

          (ii) Stating that in their  opinion the  financial  statements  of the
Company included in the Registration  Statement and Prospectus comply as to form
in all material respects with the applicable accounting  requirements of the Act
and the published Regulations thereunder;

          (iii) Stating that, on the basis of a limited  review which included a
reading of the latest available  unaudited interim  financial  statements of the
Company  (with an  indication  of the  date of the  latest  available  unaudited
interim financial statements),  a reading of the latest available minutes of the
stockholders  and board of directors and the various  committees of the board of
directors,  consultations  with  officers  and other  employees  of the  Company
responsible for financial and accounting matters and other specified  procedures
and  inquiries,  nothing  has come to their  attention  which would lead them to
believe that (a) the unaudited  financial  statements of the Company included in
the  Registration  Statement do not comply as to form in all  material  respects
with the applicable  accounting  requirements  of the Act and the Regulations or
are not fairly  presented  in  conformity  with  generally  accepted  accounting
principles applied on a basis substantially  consistent with that of the audited
financial statements of the Company included in the Registration Statement,  (b)
at a date not later than five days prior to the Effective Date,  Closing Date or
Option  Closing  Date,  as the case may be,  there was any change in the capital
stock or  long-term  debt of the Company,  or any decrease in the  stockholders'
equity of the Company as compared  with  amounts  shown in the November 30, 2004
balance sheet included in the Registration Statement, other than as set forth in
or contemplated by the  Registration  Statement,  or, if there was any decrease,
setting  forth the amount of such  decrease,  and (c)  during  the  period  from
November  30,  2004 to a  specified  date not later  than five days prior to the

                                       19
<PAGE>

Effective  Date,  Closing Date or Option Closing Date, as the case may be, there
was any decrease in  revenues,  net earnings or net earnings per share of Common
Stock, in each case as compared with the  corresponding  period in the preceding
year and as compared with the  corresponding  period in the  preceding  quarter,
other than as set forth in or contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount of such decrease;

          (iv)  Setting  forth,  at a date not later than five days prior to the
Effective Date, the amount of liabilities of the Company (including a break-down
of commercial papers and notes payable to banks);

          (v) Stating that they have compared  specific dollar amounts,  numbers
of shares, percentages of revenues and earnings,  statements and other financial
information  pertaining to the Company set forth in the  Prospectus in each case
to  the  extent  that  such  amounts,  numbers,   percentages,   statements  and
information may be derived from the general accounting  records,  including work
sheets,  of the Company and excluding any questions  requiring an interpretation
by legal counsel,  with the results  obtained from the  application of specified
readings,  inquiries and other  appropriate  procedures (which procedures do not
constitute  an  examination  in  accordance  with  generally  accepted  auditing
standards) set forth in the letter and found them to be in agreement;

          (vi) Stating that they have not during the immediately  preceding five
year period brought to the attention of the Company's  management any reportable
condition related to internal  structure,  design or operation as defined in the
Statement  on Auditing  Standards  No. 60  "Communication  of  Internal  Control
Structure  Related  Matters  Noted  in an  Audit,"  in  the  Company's  internal
controls; and

          (vii)  Statements as to such other matters incident to the transaction
contemplated hereby as you may reasonably request.

     (g) At each of the Closing Date and the Option  Closing  Date,  if any, the
Representatives  shall have received a certificate  of the Company signed by the
Chairman of the Board or the President and the Secretary or Assistant  Secretary
of the Company,  dated the Closing Date or the Option  Closing Date, as the case
may be,  respectively,  to the effect  that (i) the Company  has  performed  all
covenants  and  agreements  and complied  with all  conditions  required by this
Agreement to be performed or complied with by the Company prior to and as of the
Closing  Date,  or the  Option  Closing  Date,  as the  case  may be;  (ii)  the
conditions set forth in Section 4(h) hereof have been satisfied as of such date;
(iii) as of Closing Date and the Option  Closing  Date,  as the case may be, the
representations  and warranties of the Company set forth in Section 2 hereof are
true and correct;  (iv) they have carefully examined the Registration  Statement
and the  Prospectus  and, in their  opinion (A) as of the  Effective  Date,  the
Registration  Statement and Prospectus did not include any untrue statement of a
material  fact and did not omit to state a material  fact  required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances  under  which they were made,  not  misleading,  and (B) since the
Effective  Date no event  has  occurred  which  should  have been set forth in a
supplement or otherwise  required an amendment to the Registration  Statement or
the  Prospectus;  and (iv) no stop order  suspending  the  effectiveness  of the
Registration  Statement has been issued and, to their knowledge,  no proceedings
for that purpose have been instituted or are pending under the Act. In addition,
the  Representatives  will have received such other and further  certificates of
officers of the Company as the Representatives may reasonably request.

     (h) At each of the Closing Date and the Option  Closing  Date,  if any, the
Representatives  shall have received a certificate  of the Company signed by the

                                       20
<PAGE>

Secretary or Assistant  Secretary of the Company,  dated the Closing Date or the
Option Date, as the case may be, respectively, certifying (i) that the copies of
the by-laws and certificate of incorporation of the Company attached thereto are
true and complete, have not been modified and are in full force and effect, (ii)
that the  resolutions  relating  to the  public  offering  contemplated  by this
Agreement  are in full force and effect  and have not been  modified,  (iii) all
correspondence  between the Company or its counsel and the Commission,  and (iv)
as to the incumbency of the officers of the Company.  The documents  referred to
in such certificate shall be attached to such certificate.

     (i) Prior to and on each of the Closing Date and the Option  Closing  Date,
if any,  (i) there shall have been no  material  adverse  change or  development
involving a prospective material adverse change in the condition or the business
activities,  financial or otherwise,  of the Company from the latest dates as of
which such condition is set forth in the Registration  Statement and Prospectus,
(ii) no action suit or proceeding,  at law or in equity, shall have been pending
or threatened  against the Company or any Initial  Stockholder  before or by any
court or  federal  or state  commission,  board or other  administrative  agency
wherein an  unfavorable  decision,  ruling or finding may  materially  adversely
affect the business, operations or financial condition or income of the Company,
except as set forth in the Registration Statement and Prospectus,  (iii) no stop
order shall have been issued  under the Act and no  proceedings  therefor  shall
have been initiated or threatened by the Commission,  and (iv) the  Registration
Statement and the Prospectus  and any  amendments or  supplements  thereto shall
contain all  material  statements  which are  required  to be stated  therein in
accordance  with the Act and the  Regulations  and shall conform in all material
respects to the  requirements  of the Act and the  Regulations,  and neither the
Registration  Statement  nor the  Prospectus  nor any  amendment  or  supplement
thereto shall  contain any untrue  statement of a material fact or omit to state
any  material  fact  required  to be stated  therein  or  necessary  to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

     (j)  On  the  Closing  Date,  the  Company  shall  have  delivered  to  the
Representatives  executed copies of the Escrow  Agreement,  the Trust Agreement,
the Warrant Agreement,  the Services Agreement,  the Warrant Purchase Agreement,
all of the Insider  Letters and lock-up  letters  executed by the  officers  and
directors and their affiliates in such form acceptable to the Representatives.

     (k)  On  the  Closing  Date,  the  Company  shall  have  delivered  to  the
Representatives executed copies of the Representatives' Purchase Option.

     (l) All proceedings taken in connection with the authorization, issuance or
sale of the Securities as herein  contemplated shall be reasonably  satisfactory
in form and substance to you and to Dilworth  Paxson and you shall have received
from such  counsel a favorable  opinion,  dated the Closing  Date and the Option
Closing  Date,  if any,  with  respect to such of these  proceedings  as you may
reasonably  require. On or prior to the Effective Date, the Closing Date and the
Option Closing Date, as the case may be, counsel for the Underwriters shall have
been furnished such documents,  certificates and opinions as they may reasonably
require  for the  purpose of  enabling  them to review or pass upon the  matters
referred  to in this  Section  4(k),  or in  order  to  evidence  the  accuracy,
completeness  or  satisfaction  of  any of the  representations,  warranties  or
conditions herein contained.

     (m) On the  Closing  Date,  the  Representatives  shall have  received  the
Secondary Market Trading Survey from Dilworth Paxson.

     5. Indemnification.

     (a)  Subject to the  conditions  set forth  below,  the  Company  agrees to
indemnify and hold harmless each of the  Underwriters,  and each dealer selected

                                       21
<PAGE>

by you  that  participates  in the  offer  and  sale of the  Securities  (each a
"Selected  Dealer")  and  each  of  their  respective  directors,  officers  and
employees  and  each  person,   if  any,  who  controls  any  such   Underwriter
("controlling  person")  within the  meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all loss,  liability,  claim,  damage
and expense whatsoever  (including but not limited to any and all legal or other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  litigation,  commenced  or  threatened,  or any claim  whatsoever,  whether
arising  out of any action  between any of the  Underwriters  and the Company or
between any of the  Underwriters and any third party or otherwise) to which they
or any of them may become  subject  under the Act, the Exchange Act or any other
statute or at common law or  otherwise  or under the laws of foreign  countries,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in (i) any Preliminary  Prospectus,  the  Registration
Statement  or the  Prospectus  (as from  time to time  each may be  amended  and
supplemented);  (ii) in any  post-effective  amendment or  amendments or any new
registration  statement and  prospectus  in which is included  securities of the
Company  issued or  issuable  upon  exercise  of the  Representatives'  Purchase
Option; or (iii) any application or other document or written  communication (in
this Section 5  collectively  called  "application")  executed by the Company or
based upon written  information  furnished by the Company in any jurisdiction in
order to qualify the Units under the  securities  laws thereof or filed with the
Commission,  any state securities commission or agency, Nasdaq or any securities
exchange;  or the  omission or alleged  omission  therefrom  of a material  fact
required to be stated  therein or necessary to make the statements  therein,  in
the light of the  circumstances  under  which  they were made,  not  misleading,
unless such  statement or omission was made in reliance  upon and in  conformity
with written information furnished to the Company with respect to an Underwriter
by or on  behalf  of  such  Underwriter  expressly  for  use in any  Preliminary
Prospectus,  the  Registration  Statement  or  Prospectus,  or any  amendment or
supplement thereof,  or in any application,  as the case may be. With respect to
any untrue statement or omission or alleged untrue statement or omission made in
the Preliminary Prospectus,  the indemnity agreement contained in this paragraph
shall not inure to the benefit of any  Underwriter  to the extent that any loss,
liability,  claim,  damage or expense of such Underwriter  results from the fact
that a copy of the Prospectus was not given or sent to the person  asserting any
such loss, liability, claim or damage at or prior to the written confirmation of
sale  of the  Securities  to  such  person  as  required  by  the  Act  and  the
Regulations,  and if the untrue  statement or omission has been corrected in the
Prospectus,  unless  such  failure to  deliver  the  Prospectus  was a result of
non-compliance  by the Company with its  obligations  under Section 3(f) hereof.
The Company agrees promptly to notify the Representatives of the commencement of
any  litigation  or  proceedings  against  the  Company or any of its  officers,
directors or  controlling  persons in connection  with the issue and sale of the
Securities or in connection with the Registration Statement or Prospectus.

     (b) If any action is brought against an Underwriter, a Selected Dealer or a
controlling  person in  respect of which  indemnity  may be sought  against  the
Company  pursuant to Section 5(a),  such  Underwriter  or Selected  Dealer shall
promptly notify the Company in writing of the institution of such action and the
Company shall assume the defense of such action,  including the  employment  and
fees of counsel  (subject  to the  reasonable  approval of such  Underwriter  or
Selected  Dealer,  as the case may be) and  payment  of  actual  expenses.  Such
Underwriter,  Selected  Dealer or  controlling  person  shall  have the right to
employ its or their own counsel in any such case,  but the fees and  expenses of
such counsel  shall be at the expense of such  Underwriter,  Selected  Dealer or
controlling  person unless (i) the  employment of such counsel at the expense of
the Company  shall have been  authorized in writing by the Company in connection
with the defense of such  action,  or (ii) the Company  shall not have  employed
counsel to have charge of the defense of such action,  or (iii) such indemnified
party or parties  shall have  reasonably  concluded  that there may be  defenses
available  to it or them  which  are  different  from  or  additional  to  those
available to the Company (in which case the Company  shall not have the right to
direct  the  defense  of such  action  on  behalf  of the  indemnified  party or
parties),  in any of which events the  reasonable  fees and expenses of not more
than one  additional  firm of attorneys  selected by the  Underwriter,  Selected
Dealer and/or controlling person shall be borne by the Company.  Notwithstanding

                                       22
<PAGE>

anything to the contrary  contained herein, if the Underwriter,  Selected Dealer
or controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any  settlement of such
action which approval shall not be unreasonably withheld.

     (c) Each  Underwriter,  severally and not jointly,  agrees to indemnify and
hold harmless the Company, its directors,  officers and employees and agents who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any and all loss, liability,  claim, damage and expense
described  in  the  foregoing   indemnity   from  the  Company  to  the  several
Underwriters,  as  incurred,  but only  with  respect  to untrue  statements  or
omissions,  or alleged untrue  statements or omissions  made in any  Preliminary
Prospectus,  the  Registration  Statement  or  Prospectus  or any  amendment  or
supplement  thereto  or in any  application,  in  reliance  upon,  and in strict
conformity with,  written  information  furnished to the Company with respect to
such  Underwriter by or on behalf of the  Underwriter  expressly for use in such
Preliminary  Prospectus,   the  Registration  Statement  or  Prospectus  or  any
amendment or supplement  thereto or in any such application.  In case any action
shall be brought against the Company or any other person so indemnified based on
any  Preliminary  Prospectus,  the  Registration  Statement or Prospectus or any
amendment  or  supplement  thereto or any  application,  and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each other person so
indemnified  shall have the rights and duties given to the several  Underwriters
by the provisions of Section 5(b).

     (e) In order to provide for just and equitable  contribution  under the Act
in any case in which (i) any  person  entitled  to  indemnification  under  this
Section 5 makes claim for  indemnification  pursuant hereto but it is judicially
determined  (by the entry of a final  judgment or decree by a court of competent
jurisdiction  and the  expiration  of time to appeal  or the  denial of the last
right of appeal)  that such  indemnification  may not be  enforced  in such case
notwithstanding  the fact that this  Section 5 provides for  indemnification  in
such case, or (ii) contribution under the Act, the Exchange Act or otherwise may
be  required  on  the  part  of any  such  person  in  circumstances  for  which
indemnification  is provided  under this Section 5, then, and in each such case,
the Company and the  Underwriters  shall  contribute  to the  aggregate  losses,
liabilities,  claims,  damages and expenses of the nature  contemplated  by said
indemnity  agreement incurred by the Company and the Underwriters,  as incurred,
in such  proportions  that the  Underwriters  are  responsible  for that portion
represented by the percentage that the  underwriting  discount  appearing on the
cover page of the  Prospectus  bears to the  initial  offering  price  appearing
thereon and the Company is  responsible  for the  balance;  provided,  that,  no
person guilty of a fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Act) shall be entitled to contribution  from any person who was not
guilty of such fraudulent  misrepresentation.  Notwithstanding the provisions of
this Section 5(e), no Underwriter  shall be required to contribute any amount in
excess of the  amount by which the total  price at which the  Public  Securities
underwritten  by it and  distributed  to the public  were  offered to the public
exceeds the amount of any  damages  that such  Underwriter  has  otherwise  been
required  to pay in respect of such  losses,  liabilities,  claims,  damages and
expenses.  For purposes of this Section, each director,  officer and employee of
an  Underwriter  or the Company,  as  applicable,  and each person,  if any, who
controls an  Underwriter or the Company,  as  applicable,  within the meaning of
Section  15 of the Act  shall  have  the  same  rights  to  contribution  as the
Underwriters or the Company, as applicable.

     (f) Within  fifteen days after  receipt by any party to this  Agreement (or
its  representatives)  of  notice of the  commencement  of any  action,  suit or
proceeding,  such party will, if a claim for  contribution in respect thereof is
to be made against another party ("contributing party"), notify the contributing

                                       23
<PAGE>

party  of  the  commencement   thereof,  but  the  omission  to  so  notify  the
contributing  party will not relieve it from any liability  which it may have to
any other party other than for contribution  hereunder. In case any such action,
suit or  proceeding  is brought  against  any party,  and such party  notifies a
contributing party or its representatives of the commencement thereof within the
aforesaid  fifteen days, the contributing  party will be entitled to participate
therein with the  notifying  party and any other  contributing  party  similarly
notified.  Any such contributing  party shall not be liable to any party seeking
contribution  on account of any  settlement  of any claim,  action or proceeding
effected by such party seeking  contribution on account of any settlement of any
claim, action or proceeding effected by such party seeking  contribution without
the written consent of such  contributing  party.  The  contribution  provisions
contained in this Section are intended to supersede,  to the extent permitted by
law,  any right to  contribution  under the Act,  the  Exchange Act or otherwise
available. The Underwriters'  obligations to contribute pursuant to this Section
5(f) are several and not joint.

     6. Default by an Underwriter.

     (a) If any  Underwriter  or  Underwriters  shall  default  in its or  their
obligations   to  purchase  the  Firm  Units  or  the  Option   Units,   if  the
Over-allotment  Option is  exercised,  hereunder,  and if the number of the Firm
Units or Option Units with respect to which such default relates does not exceed
in the  aggregate  10% of the  number  of Firm  Units or Option  Units  that all
Underwriters have agreed to purchase  hereunder,  then such Firm Units or Option
Units to which the default  relates  shall be  purchased  by the  non-defaulting
Underwriters in proportion to their respective commitments hereunder.

     (b) In the event that the default  addressed in Section 6(a) above  relates
to more than 10% of the Firm Units or Option Units,  you may in your  discretion
arrange for yourself or for another party or parties to purchase such Firm Units
or Option Units to which such default relates on the terms contained  herein. If
within one business day after such default relating to more than 10% of the Firm
Units or Option  Units you do not arrange for the purchase of such Firm Units or
Option  Units,  then the Company  shall be  entitled to a further  period of one
business day within which to procure  another party or parties  satisfactory  to
you to purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default  relates as provided in this Section 6, this  Agreement
will terminate  without liability on the part of the Company (except as provided
in Sections 3(s) and 5 hereof) or the several  Underwriters  (except as provided
in  Section 5 hereof);  provided,  however,  that if such  default  occurs  with
respect to the Option Units,  this  Agreement  will not terminate as to the Firm
Units;  and  provided  further that  nothing  herein shall  relieve a defaulting
Underwriter of its liability,  if any, to the other several  Underwriters and to
the Company for damages occasioned by its default hereunder.

     (c) In the event that the Firm Units or Option  Units to which the  default
relates are to be purchased  by the  non-defaulting  Underwriters,  or are to be
purchased by another  party or parties as  aforesaid,  you or the Company  shall
have the  right to  postpone  the  Closing  Date or  Option  Closing  Date for a
reasonable  period,  but not in any event exceeding five business days, in order
to effect  whatever  changes may thereby be made  necessary in the  Registration
Statement or the Prospectus or in any other documents and arrangements,  and the
Company agrees to file promptly any amendment to the  Registration  Statement or
the Prospectus that in the opinion of counsel for the  Underwriters  may thereby
be made  necessary.  The  term  "Underwriter"  as used in this  Agreement  shall
include any party substituted under this Section 6 with like effect as if it had
originally been a party to this Agreement with respect to such Securities.

     7.  Right to Appoint  Representatives.  For a period of five years from the
Effective  Date,  upon  notice  from the  Representatives  to the  Company,  the
Representatives  shall have the right to send a representative  (who need not be

                                       24
<PAGE>

the same  individual  from  meeting to meeting) to observe  each  meeting of the
Board of Directors of the Company;  provided that such representative shall sign
a  Regulation  FD  compliant   confidentiality  agreement  which  is  reasonably
acceptable  to the  Representatives  and its  counsel  in  connection  with such
representative's  attendance at meetings of the Board of Directors; and provided
further that upon written notice to the Representatives, the Company may exclude
the  representative  from meetings  where, in the written opinion of counsel for
the Company,  the  representative's  presence would destroy the  attorney-client
privilege. The Company agrees to give the Representatives written notice of each
such  meeting and to provide the  Representatives  with an agenda and minutes of
the  meeting no later than it gives such notice and  provides  such items to the
other directors, and reimburse the representative of the Representatives for his
reasonable  out-of-pocket expenses incurred in connection with its attendance at
the meeting, including but not limited to, food, lodging and transportation.

     8 Additional Covenants.

     (a) The Company hereby agrees that until the Company consummates a Business
Combination,  it shall not issue any  shares of Common  Stock or any  options or
other securities convertible into Common Stock, or any shares of Preferred Stock
which  participate in any manner in the Trust Fund or which vote as a class with
the Common Stock on a Business Combination.

     (b) The Company  hereby  agrees that it will not commence its due diligence
investigation  of any  operating  business  which the  Company  seeks to acquire
("Target  Business")  or obtain the services of any vendor  unless and until the
Target  Business  or the vendor  executes a waiver  letter in the form  attached
hereto as Exhibit A and B, respectively.  Furthermore, each officer and director
of the Company  shall  execute a waiver  letter in the form  attached  hereto as
Exhibit C.

     (c) The Company  shall not take any action or omit to take any action which
would cause a breach of any of the Insider Letters executed between each Initial
Stockholder  and the  Representatives  and will not allow any  amendments to, or
waivers of,  such  Insider  Letters  without  the prior  written  consent of the
Representatives.

     (d) The  Company  shall not take any action or omit to take any action that
would  cause the  Company to be in breach or  violation  of its  Certificate  of
Incorporation or By-Laws.  Prior to the consummation of a Business  Combination,
the  Company  will not amend its  Certificate  of  Incorporation  with the prior
written consent of the Representatives.

     (e) The  Company  shall  provide  counsel to the  Representatives  with ten
copies  of all  proxy  information  and all  related  material  filed  with  the
Commission  in connection  with a Business  Combination  concurrently  with such
filing with the  Commission.  In addition,  the Company  shall furnish any other
state in which its initial public  offering was registered  such  information as
may be requested by such state.

     (f) The Company agrees: (i) that, prior to the consummation of any Business
Combination,  it will submit such transaction to the Company's  stockholders for
their  approval  ("Business  Combination  Vote")  even  if  the  nature  of  the
acquisition is such as would not ordinarily require  stockholder  approval under
applicable  state law;  and (ii) that,  in the event that the  Company  does not
effect a Business  Combination  within 18 months from the  consummation  of this
Offering (subject to extension for an additional  six-month period, as described
in the  Prospectus),  the Company will be liquidated and will  distribute to all
holders of IPO Shares  (defined  below) an aggregate  sum equal to the Company's
"Liquidation  Value." With respect to the Business Combination Vote, the Company
shall cause all of the Initial  Stockholders  to vote the shares of Common Stock
owned by them immediately  prior to this Offering in accordance with the vote of

                                       25
<PAGE>

the  holders of a majority  of the IPO  Shares.  At the time the  Company  seeks
approval of any potential Business  Combination,  the Company will offer each of
holders of the Company's Common Stock issued in this Offering ("IPO Shares") the
right to convert  their IPO Shares at a per share  price  equal to the amount in
the Trust Fund  (inclusive  of any interest  income  therein) on the record date
("Conversion Price") for determination of stockholders entitled to vote upon the
proposal to approve such Business  Combination  ("Record  Date")  divided by the
total number of IPO Shares.  The  Company's  "Liquidation  Value" shall mean the
Company's  book value,  as  determined by the Company and audited by Hein. In no
event,  however,  will the  Company's  Liquidation  Value be less than the Trust
Fund,  inclusive of any net interest income thereon. If holders of less than 20%
in interest of the Company's IPO Shares vote against such approval of a Business
Combination,  the Company may,  but will not be required  to,  proceed with such
Business  Combination.  If the  Company  elects to so proceed,  it will  convert
shares,  based upon the Conversion  Price,  from those holders of IPO Shares who
affirmatively  requested  such  conversion  and who voted  against the  Business
Combination. Only holders of IPO Shares shall be entitled to receive liquidating
distributions  and the  Company  shall  pay no  liquidating  distributions  with
respect to any other shares of capital  stock of the Company.  If holders of 20%
or more in  interest of the IPO Shares vote  against  approval of any  potential
Business   Combination,   the  Company  will  not  proceed  with  such  Business
Combination and will not convert such shares.

     (i) The  Company  agrees  that it will use its best  efforts to prevent the
Company  from  becoming  subject  to  Rule  419  under  the  Act  prior  to  the
consummation of any Business Combination, including but not limited to using its
best efforts to prevent any of the Company's  outstanding  securities from being
deemed to be a "penny  stock" as defined in Rule 3a-5l-1  under the Exchange Act
during such period.

     (j) The Company shall cause each of the Initial Stockholders to agree that,
in order to  minimize  potential  conflicts  of  interest  which may arise  from
multiple affiliations,  the Initial Stockholders will present to the Company for
its  consideration,  prior to presentation  to any other person or company,  any
suitable opportunity to acquire an operating business,  until the earlier of the
consummation  by the Company of a Business  Combination,  the liquidation of the
Company or until such time as the Initial Stockholders cease to be an officer or
director of the Company,  subject to any pre-existing  fiduciary obligations the
Initial Stockholders might have.

     (k) The Company  agrees that the initial  Target  Business that it acquires
must have a fair market value equal to at least 80% of the  Company's net assets
at the time of such acquisition.  The fair market value of such business must be
determined  by the  Board of  Directors  of the  Company  based  upon  standards
generally  accepted by the  financial  community,  such as actual and  potential
sales,  earnings and cash flow and book value.  If the Board of Directors of the
Company is not able to  independently  determine that the target  business has a
fair market value of at least 80% of the Company's fair market value at the time
of such  acquisition,  the Company will obtain an opinion from an  unaffiliated,
independent  investment  banking firm which is a member of the NASD with respect
to the  satisfaction of such criteria.  The Company is not required to obtain an
opinion  from an  investment  banking  firm as to the fair  market  value if the
Company's Board of Directors  independently  determines that the Target Business
does have sufficient fair market value.

     (l)  The  Company  agrees  that,  until  the  consummation  of  a  Business
Combination as contemplated  in the Prospectus,  in the event that it intends to
engage any person or entity,  regardless of NASD association or affiliation,  to
assist it in its search for a merger  candidate  or to provide any other  merger
and acquisition services, the Company will, prior to such engagement (a) provide
the following  information to the  Representatives  (i) complete  details of all

                                       26
<PAGE>

services and copies of agreements governing said services and (ii) any documents
or  materials  reasonably  requested  by  the  Representatives,  such  that  the
Representatives  may provide to the NASD a justification as to why the person or
entity providing the merger and acquisition services should not be considered an
"underwriter  and  related  person" as defined  in Rule  2710(a)(6)  of the NASD
Conduct  Rules;  (b) make proper  disclosure  of such  arrangement  or potential
arrangement  in the  Registration  Statement  and (c)  and  cooperate  with  the
Representatives  in  submitting  such  information  to the NASD for  review  and
approval.  The Company  agrees  that it will not enter into any such  engagement
without the prior written approval of the Representatives.

     9.  Representations  and  Agreements  to  Survive  Delivery.  Except as the
context  otherwise  requires,  all  representations,  warranties  and agreements
contained in this Agreement  shall be deemed to be  representations,  warranties
and  agreements at the Closing Dates and such  representations,  warranties  and
agreements of the Underwriters and Company,  including the indemnity  agreements
contained  in Section 5 hereof,  shall  remain  operative  and in full force and
effect regardless of any investigation  made by or on behalf of any Underwriter,
the  Company or any  controlling  person,  and shall  survive the  issuance  and
delivery of the Securities to the several  Underwriters until the earlier of the
expiration of any applicable statute of limitations and the seventh  anniversary
of the later of the Closing Date or the Option  Closing  Date,  if any, at which
time the representations, warranties and agreements shall terminate and be of no
further force and effect.

     10. Effective Date of This Agreement and Termination.

     (a) This Agreement shall become effective on the Effective Date at the
time the Registration Statement is declared effective by the Commission.

     (b) You shall have the right to terminate  this Agreement at any time prior
to any  Closing  Date,  (i) if any  domestic  or  international  event or act or
occurrence  has materially  disrupted,  or in your opinion will in the immediate
future materially  disrupt,  general securities markets in the United States; or
(ii) if trading on the New York Stock Exchange, the American Stock Exchange, the
Boston Stock  Exchange or on the NASD OTC Bulletin  Board (or successor  trading
market)  shall have been  suspended,  or minimum or maximum  prices for  trading
shall have been fixed,  or maximum ranges for prices for  securities  shall have
been fixed, or maximum ranges for prices for securities shall have been required
on the NASD OTC  Bulletin  Board or by  order  of the  Commission  or any  other
government  authority having  jurisdiction,  or (iii) if the United States shall
have become involved in a new war or an increase in major  hostilities,  or (iv)
if a  banking  moratorium  has  been  declared  by a New York  State or  federal
authority,  or (v) if a moratorium on foreign exchange trading has been declared
which materially  adversely impacts the United States securities market, or (vi)
if the Company shall have  sustained a material loss by fire,  flood,  accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in your opinion, make it
inadvisable  to proceed with the  delivery of the Units,  or (vii) if any of the
Company's  representations,  warranties or covenants hereunder are breached, and
if not otherwise qualified by materiality, there is a material adverse effect or
(viii) if the  Representatives  shall have become aware after the date hereof of
such a material adverse change in the conditions or prospects of the Company, or
such adverse  material change in general market  conditions,  including  without
limitation as a result of terrorist  activities after the date hereof, as in the
Representatives'  judgment  would  make it  impracticable  to  proceed  with the
offering,  sale and/or delivery of the Units or to enforce contracts made by the
Underwriters for the sale of the Securities.

     (c) In the event  that this  Agreement  shall  not be  carried  out for any
reason  whatsoever,  within the time specified herein or any extensions  thereof
pursuant to the terms herein,  the  obligations of the Company to pay the out of
pocket  expenses  related  to the  transactions  contemplated  herein  shall  be
governed by Section 3(s) hereof.

                                       27
<PAGE>

     (d) Notwithstanding any contrary provision contained in this Agreement, any
election hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise  carried out, the provisions of Section 5 shall not be in
any way effected by, such  election or  termination  or failure to carry out the
terms of this Agreement or any part hereof.

     11. Miscellaneous.

     (a) All communications  hereunder,  except as herein otherwise specifically
provided,  shall be in writing and shall be mailed,  delivered or telecopied and
confirmed  and  shall be  deemed  given  when so  delivered  or  telecopied  and
confirmed or if mailed, two days after such mailing.

If to the Representatives:

               I-Bankers Securities Incorporated
               1560 East Southlake Boulevard, Suite 232
               Southlake, TX  76092
               Attn:    Mike McCrory

               Newbridge Securities Corporation
               1451 West Cypress Creek Road, Suite 204
               Fort Lauderdale, FL 33309
               Attn:    Guy S. Amico, President

               Newbridge Securities Corporation
               5350 S. Roslyn Street, Suite 440
               Greenwood Village, CO 80111
               Attn: James E. Hosch, Senior Vice President Investment Banking

Copy to:       Dilworth Paxson LLP
               1818 N Street, NW, Suite 400
               Washington, DC  20036
               Attn:    Ralph V. De Martino, Esq.

If to the Company:

               Coastal Bancshares Acquisition Corp.
               9821 Katy Freeway
               Suite 500
               Houston, TX  77024
               Attn:    Cary M. Grossman, Chief Executive Officer

Copy to:       Jenkens & Gilchrist, P.C.
               1445 Ross Avenue, Suite 3200
               Dallas, TX  75202
               Attn:    Gregory J. Schmitt, Esq.

     (b) The headings  contained  herein are for the sole purpose of convenience
of  reference,  and  shall  not in any  way  limit  or  affect  the  meaning  or
interpretation of any of the terms or provisions of this Agreement.

     (c) This Agreement may only be amended by a written instrument  executed by
each of the parties hereto.

     (d) This Agreement  (together with the other agreements and documents being
delivered  pursuant to or in  connection  with this  Agreement)  constitute  the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof,  and  supersede  all prior  agreements  and  understandings  of the
parties, oral and written, with respect to the subject matter hereof.

     (e) This  Agreement  shall  inure  solely  to the  benefit  of and shall be
binding  upon  the  Representatives,  the  Underwriters,  the  Company  and  the
controlling persons, directors and officers referred to in Section 5 hereof, and

                                       28
<PAGE>

their respective  successors,  legal  representatives and assigns,  and no other
person shall have or be construed to have any legal or equitable  right,  remedy
or claim under or in respect of or by virtue of this Agreement or any provisions
herein contained.

     (f) This  Agreement  shall be governed  by and  construed  and  enforced in
accordance  with the laws of the State of New  York,  without  giving  effect to
conflict of laws. The Company hereby agrees that any action, proceeding or claim
against  it  arising  out of,  relating  in any way to this  Agreement  shall be
brought and enforced in the courts of the State of New York of the United States
of America for the Southern  District of New York,  and  irrevocably  submits to
such jurisdiction,  which  jurisdiction  shall be exclusive.  The Company hereby
waives  any  objection  to such  exclusive  jurisdiction  and that  such  courts
represent an inconvenient  forum.  Any such process or summons to be served upon
the  Company  may be served by  transmitting  a copy  thereof by  registered  or
certified mail, return receipt  requested,  postage prepaid,  addressed to it at
the  address  set forth in  Section  11  hereof.  Such  mailing  shall be deemed
personal  service and shall be legal and binding upon the Company in any action,
proceeding or claim.  The Company agrees that the  prevailing  party(ies) in any
such action  shall be entitled to recover from the other  party(ies)  all of its
reasonable  attorneys'  fees and expenses  relating to such action or proceeding
and/or incurred in connection with the preparation therefor.

     (g) This Agreement may be executed in one or more counterparts,  and by the
different parties hereto in separate counterparts, each of which shall be deemed
to be an original,  but all of which taken together shall constitute one and the
same agreement,  and shall become  effective when one or more  counterparts  has
been signed by each of the  parties  hereto and  delivered  to each of the other
parties hereto.

     (h) The failure of any of the parties  hereto to at any time enforce any of
the provisions of this Agreement shall not be deemed or construed to be a waiver
of any such  provision,  nor to in any way effect the validity of this Agreement
or any provision  hereof or the right of any of the parties hereto to thereafter
enforce  each and every  provision of this  Agreement.  No waiver of any breach,
non-compliance  or  non-fulfillment  of any of the  provisions of this Agreement
shall be  effective  unless set forth in a written  instrument  executed  by the
party or parties against whom or which enforcement of such waiver is sought; and
no  waiver  of any  such  breach,  non-compliance  or  non-fulfillment  shall be
construed  or  deemed  to  be a  waiver  of  any  other  or  subsequent  breach,
non-compliance or non-fulfillment.

                   [Balance of page intentionally left blank]


                                       29
<PAGE>
     If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.


                                         Very truly yours,


                                         COASTAL BANCSHARES ACQUISITION CORP.

                                                     /s/ Cary M. Grossman
                                                     -----------------------
                                            Name:    Cary M. Grossman
                                            Title:   Chief Executive Officer

Accepted on the date first above written.

I-BANKERS SECURITIES INCORPORATED
Acting severally on behalf of itself and as one
of the Representatives of the several Underwriters
named in Schedule I annexed hereto


By:   /s/ Shelley Gluck
      --------------------------------
Name:     Shelley Gluck
Title:    Chief Financial Officer


                                       30

<PAGE>

                                   SCHEDULE I

                      COASTAL BANCSHARES ACQUISITION CORP.

                                 4,800,000 UNITS


Underwriter                                Number of Firm Units to be Purchased
-----------                                ------------------------------------

I-Bankers Securities Incorporated

Newbridge Securities Corporation

     Total                                              4,800,000



                                       31

<PAGE>

                                                                     EXHIBIT A





Coastal Bancshares Acquisition Corp.
9821 Katy Freeway
Suite 500
Houston, TX  77024

Gentlemen:

     Reference is made to the Final Prospectus of Coastal Bancshares Acquisition
Corp ("Coastal"), dated _______________, 2005 ("Prospectus").  Capitalized terms
used and not otherwise  defined herein shall have the meanings  assigned to them
in Prospectus.

     We have read the Prospectus and understand that Coastal has established the
Trust Fund,  initially in an amount of $__________ for the benefit of the Public
Stockholders  and that Coastal may disburse  monies from the Trust Fund only (i)
to the Public Stockholders in the event of the redemption of their shares or the
liquidation  of  Coastal  or (ii) to  Coastal  after it  consummates  a Business
Combination.

     For and in  consideration  of Coastal  agreeing to evaluate the undersigned
for purposes of  consummating a Business  Combination  with it, the  undersigned
hereby agrees that it does not have any right,  title,  interest or claim of any
kind in or to any monies in the Trust Fund ("Claim") and hereby waives any Claim
it may have in the future as a result of, or arising  out of, any  negotiations,
contracts  or  agreements  with Coastal and will not seek  recourse  against the
Trust Fund for any reason whatsoever.



                                       ----------------------------------------
                                       Print Name of Officer/Director



                                       ----------------------------------------
                                       Authorized Signature of Officer/Director




                                       32


<PAGE>

                                                                     EXHIBIT B





Coastal Bancshares Acquisition Corp.
9821 Katy Freeway
Suite 500
Houston, TX  77024


Gentlemen:

     Reference is made to the Final Prospectus of Coastal Bancshares Acquisition
Corp. ("Coastal"), dated __________, 2005 ("Prospectus"). Capitalized terms used
and not  otherwise  defined  herein shall have the meanings  assigned to them in
Prospectus.

     We have read the Prospectus and understand that Coastal has established the
Trust Fund, initially in an amount of  $________________  for the benefit of the
Public  Stockholders  and that Coastal may  disburse  monies from the Trust Fund
only (i) to the  Public  Stockholders  in the event of the  redemption  of their
shares or the  liquidation  of Coastal or (ii) to Coastal after it consummates a
Business Combination.

     For  and  in   consideration  of  Coastal  engaging  the  services  of  the
undersigned,  the  undersigned  hereby  agrees  that it does not have any right,
title,  interest  or claim of any kind in or to any  monies  in the  Trust  Fund
("Claim")  and hereby waives any Claim it may have in the future as a result of,
or arising out of, any  contracts or  agreements  with Coastal and will not seek
recourse against the Trust Fund for any reason whatsoever.



                                       ----------------------------------------
                                       Print Name of Officer/Director



                                       ----------------------------------------
                                       Authorized Signature of Officer/Director




                                       33

<PAGE>


                                                                     EXHIBIT C





Coastal Bancshares Acquisition Corp.
9821 Katy Freeway
Suite 500
Houston, TX  77024


Gentlemen:

     The undersigned officer or director of Coastal Bancshares Acquisition Corp.
("Coastal")  hereby  acknowledges  that Coastal has  established the Trust Fund,
initially in an amount of $_________ for the benefit of the Public  Stockholders
and that Coastal may disburse  monies from the Trust Fund only (i) to the Public
Stockholders  in the event of the redemption of their shares or the  liquidation
of Coastal or (ii) to Coastal after it consummates a Business Combination.

     The  undersigned  hereby  agrees  that it does not have any  right,  title,
interest  or claim of any kind in or to any monies in the Trust  Fund  ("Claim")
and hereby waives any Claim it may have in the future as a result of, or arising
out of, any  contracts or  agreements  with  Coastal and will not seek  recourse
against the Trust Fund for any reason whatsoever.

     Notwithstanding  the  foregoing,  such waiver shall not apply to any shares
acquired by the undersigned in the public market.


                                       ----------------------------------------
                                       Print Name of Officer/Director



                                       ----------------------------------------
                                       Authorized Signature of Officer/Director




                                       34