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EXHIBIT 99.1
[XXXXXXX FINANCIAL ADVISORS, INC. LETTERHEAD]
August 20, 1997
Board of Directors
Atlantic Liberty Savings, F.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Gentlemen:
This letter sets forth the agreement between Atlantic Liberty Savings, F.A.
(the "Association") and Xxxxxxx Financial Advisors, Inc. ("FFA"), whereby the
Association has engaged FFA to provide an independent appraisal of the
estimated aggregate pro forma market value (the "Valuation") of the shares of
common stock that are to be outstanding upon completion of the reorganization
of the Association from a federally chartered savings and loan association into
the mutual holding company structure and the contemporaneous issuance of a
minority ownership interest in the resulting stock savings and loan association
subsidiary (the "Reorganization").
FFA agrees to deliver the Valuation, in writing, to the Association at the
address above on or before a mutually agreed upon date. Further, FFA agrees to
perform such other services as are necessary or required of the independent
appraiser in connection with comments from the Association's regulatory
authorities and updates of the Valuation as from time to time may be necessary,
both after initial approval by the Association's regulatory authorities and
prior to the time the Reorganization is completed. FFA also agrees to assist
the Association in the preparation of its regulatory business plan in
connection with the Reorganization application to be filed with the Office of
Thrift Supervision ("OTS") and to accompany the Association at all meetings
with the OTS to review the business plan. FFA will also assist the Association
in responding to all OTS inquiries regarding the business plan.
The Association agrees to pay FFA a consulting fee of $14,000: $11,000 for
FFA's appraisal services and $3,000 for services in conjunction with the
preparation of the Association's regulatory business plan. The Association
also agrees to reimburse FFA for certain out-of-pocket expenses necessary and
incident to the completion of the services described above. These expenses
shall not exceed $2,000 without the prior consent of the Association.
Reimbursable expenses for courier delivery, copying, travel, data materials and
report reproduction shall be paid to FFA as incurred and billed. Payment of
the consulting fee shall be made according to the following schedule:
- $2,000 upon execution of this Agreement;
- $3,000 upon completion of the Association's regulatory
business plan;
- $6,000 upon delivery of the completed appraisal report to the
Association; and,
- $3,000 upon completion of the Reorganization.
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XXXXXXX FINANCIAL ADVISORS, INC.
Board of Directors
Atlantic Liberty Savings, F.A.
August 20, 1997
Page 2
If, during the course of the Association's Reorganization, unforeseen events
occur so as to materially change the nature of the work content of the
appraisal services described above such that FFA must supply services beyond
that contemplated at the time this contract was executed, the terms of this
agreement shall be subject to renegotiation by the Association and FFA. Such
unforeseen events shall include, but not be limited to, major changes in the
stock conversion and mutual holding company regulations, appraisal guidelines
or processing procedures as they relate to conversion appraisals, major changes
in the Association's management or operating policies, and excessive delays or
suspension of processing of the Reorganization.
In the event the Association shall for any reason discontinue the
Reorganization prior to delivery of the completed appraisal and payment of the
progress payment fee totaling $6,000, the Association agrees to compensate FFA
according to FFA's standard billing rates for consulting appraisal services
based on accumulated and verifiable time expended, provided that the total of
such charges shall not exceed $8,000 plus reimbursable expenses.
In order to induce FFA to render the aforesaid services, the Association agrees
to the following:
1. The Association agrees to supply FFA such information with
respect to the Association's business and financial condition
as FFA may reasonably request in order for FFA to perform the
aforesaid services. Such information shall include, without
limitation: annual financial statements, periodic regulatory
filings and material agreements, corporate books and records,
and such other documents as are material for the performance
by FFA of the aforesaid services.
2. The Association hereby represents and warrants to FFA (i) that
to its best knowledge any information provided to FFA by or on
behalf of the Association, will not, at any relevant time,
contain any untrue statement of a material fact or fail to
state a material fact necessary to make the information or
statements therein not false or misleading, (ii) that the
Association will not use the product of FFA services in any
manner, including in a proxy or offering circular, in
connection with any untrue statement of a material fact or in
connection with the failure to state a material fact necessary
to make other statements not false or misleading, and (iii)
that all documents incorporating or relying upon FFA services
or the product of FFA services will otherwise comply with all
applicable federal and state laws and regulations. Any
valuations or opinions issued by FFA may be included in its
entirety in any communication by the Association in any
application, proxy statement or prospectus; however, such
valuations or opinions may not be excerpted or otherwise
publicly referred to without FFA's prior written consent nor
shall FFA be publicly referred to without FFA's prior written
consent; however, such consent shall not be unreasonably
withheld.
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XXXXXXX FINANCIAL ADVISORS, INC.
Board of Directors
Atlantic Liberty Savings, F.A.
August 20, 1997
Page 3
3. FFA's Valuation will be based upon the Association's
representation that the information contained in the
Reorganization application and additional information
furnished to us by the Association and its independent
auditors is truthful, accurate, and complete in all material
respects. FFA will not independently verify the financial
statements and other information provided by the Association
and its independent auditors, nor will FFA independently value
the assets or liabilities of the Association. The Valuation
will consider the Association only as a going concern and will
not be considered as an indication of the liquidation value of
the Association.
4. FFA's Valuation is not intended, and must not be represented
to be, a recommendation of any kind as to the advisability of
purchasing shares of common stock in the Reorganization.
Moreover, because the Valuation is necessarily based upon
estimates and projections of a number of matters, all of which
are subject to change from time to time, FFA will give no
assurance that persons who purchase shares of common stock in
the Reorganization will thereafter be able to sell such shares
at prices related to FFA's Valuation.
5. The Association agrees that it will indemnify and hold
harmless FFA and its officers and employees (collectively,
"FFA indemnified persons") from and against any and all
liabilities arising from or based upon this agreement or the
services provided by FFA hereunder, except to the extent that
such liabilities are adjudicated by a final judgment (after
all appeals or the expiration of time to appeal) to result
from the negligence or willful misconduct of a FFA indemnified
person. The Association agrees that it will promptly
reimburse, as incurred, all reasonable legal fees and
expenses, and other reasonable out-of-pocket disbursements,
paid by any FFA indemnified person in connection with any
claim subject to indemnification hereunder in advance of the
final determination of any proceeding if the FFA indemnified
person furnishes the Association: (i) a written statement
that it is FFA's good faith belief that the FFA indemnified
person is entitled to indemnification hereunder; (ii) a
written undertaking by such indemnified person to repay the
advance if a final judgment (after all appeals or the
expiration of time to appeal) is entered against such person
based upon such person's negligence or willful misconduct; and
(iii) an acknowledgment that the FFA indemnified person shall
not be entitled to indemnification hereunder and shall
promptly reimburse any advancement of fees and expenses if the
FFA indemnified person enters into any settlement of a claim
subject to indemnification hereunder without the prior written
consent of the Association. Each FFA indemnified person shall
give prompt written notice to the Association of the
commencement of any action or proceeding and the Association
shall have the right to participate, at its expense, in
contesting, defending or litigating the
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XXXXXXX FINANCIAL ADVISORS, INC.
Board of Directors
Atlantic Liberty Savings, F.A.
August 20, 1997
Page 4
same. A FFA indemnified person shall have the right to employ
its own counsel in connection with all matters referred to in
this Paragraph, and such counsel shall have the right to take
charge of such matter for such person; provided, however, that
the Association shall not be liable under this Paragraph for
the fees and expenses of more than one counsel for all FFA
indemnified persons unless a conflict of interest exists
between or among FFA indemnified persons.
6. The Association and FFA are not affiliated, and neither the
Association nor FFA has an economic interest in, or is held in
common with, the other and has not derived a significant
portion of its gross revenues, receipts or net income for any
period from transactions with the other. It is understood
that FFA is not a seller of securities within the scope of any
federal or state securities law and any report prepared by FFA
shall not be used as an offer or solicitation with respect to
the purchase or sale of any security, it being understood that
the foregoing shall not be construed to prohibit the filing of
any such report as part of the Reorganization application or
SEC and blue sky filings or customary references thereto in
applications, filings, proxy statements and prospectuses.
* * * *
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to FFA a signed copy of this letter.
Yours very truly,
XXXXXXX FINANCIAL ADVISORS, INC.
By: /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
President
AGREED AND ACCEPTED:
ATLANTIC LIBERTY SAVINGS, F.A.
By: [SIG]
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Title: President
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Date: 8/27/97
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