Exhibit 1.1
[LETTERHEAD OF TRIDENT SECURITIES, INC.]
September 10, 1997
Board of Directors
Baltimore County Savings Bank, F.S.B.
0000 X. Xxxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxx 00000
RE: Mutual Holding Company Marketing Services
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Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and Baltimore County Savings Bank, F.S.B. (the
"Bank") concerning Trident's investment banking services in connection with the
reorganization ("Reorganization") of the Bank into a mutual holding company
("MHC") and the issuance of shares of the stock savings bank subsidiary of the
MHC in a community offering (the "Offering").
Trident is prepared to assist the Bank in connection with the offering of shares
of common stock of the MHC's stock savings bank subsidiary during the Offering
as such term is defined in the Bank's Plan of Mutual Holding Company
Reorganization and Stock Issuance Plan (the "Plan"). It is expected that Trident
will assist the Bank in the Offering as follows: (1) as financial advisor to
Management, (2) targeting sales efforts in the Bank's local communities, (3)
conducting information meetings for prospective investors (as desired), (4)
training and educating the Bank's management and employees regarding the
mechanics and regulatory requirements of the process, (5) providing support for
the administration and processing of orders and establishing a Stock Information
Center on site in Baltimore, and (6) listing stock of the Bank on the NASDAQ
System and acting as a market maker for the shares. The specific terms of the
services contemplated hereunder shall be set forth in a definitive Sales Agency
Agreement (the "Agreement") between Trident and the Bank to be executed on the
date the Offering Circular is declared effective by the appropriate regulatory
authorities. The price of the shares during the Offering will be the price
established by the Bank's Board of Directors, based upon an independent
appraisal as approved by the appropriate regulatory authorities, provided such
price is mutually acceptable to Trident and the Bank.
At the appropriate time, Trident, in conjunction with its counsel will conduct
an examination of the relevant documents and records of the Bank as Trident and
its counsel deem necessary and appropriate. The Bank will make all documents,
records and other information deemed necessary by Trident or its counsel
available to them upon request.
For its services, Trident will receive the following compensation and
reimbursement from the Bank:
Board of Directors
September 10, 1997
Page 2
1. A commission equal to one and one-half percent (1.5%) of the
aggregate dollar amount of capital stock sold in the subscription
and community offerings, excluding any shares of stock sold to
the Bank's directors, officers, employees and the employee
benefit plans. Additionally, commissions will be excluded on
those shares sold to "Associates" of the Bank's directors and
executive officers. The term "Associates" as used herein shall
have the same meaning as that found in the Bank's Plan of
Reorganization.
2. For stock sold by other NASD member firms under selected dealer's
agreements, the commission shall not exceed a fee to be agreed
upon jointly by Trident and the Bank to reflect market
requirements at the time of the stock allocation in a Syndicated
Community Offering.
3. The foregoing fees and commissions are to be payable to Trident
at closing as defined in the Agreement to be entered into between
the Bank and Trident.
4. Trident shall be reimbursed for out-of-pocket expenses incurred
by them and their counsel, whether or not the Agreement is
consummated. Trident's out-of-pocket expenses will not exceed
$9,000 and its legal fees will not exceed $27,500. The Bank will
forward to Trident a check in the amount of $9,000 as an advance
payment to defray the expenses of Trident.
It further is understood that the Bank will pay all other expenses of the
offering including but not limited to its attorneys' fees, National Association
of Securities Dealers ("NASD") filing fees, and fees of either Trident's
attorneys or other attorneys relating to any required state securities laws
filings, transfer agent charges, telephone charges, air freight, rental
equipment, supplies, fees relating to auditing and accounting and costs of
printing all documents necessary in connection with the foregoing. These
expenses are to be in addition to those enumerated in Paragraph (4) above.
For purposes of Trident's obligation to file certain documents and to make
certain representations to the NASD in connection with the reorganization, the
Bank warrants that: (a) the Bank has not privately placed any securities within
the last 18 months; (b) there have been no material dealings within the last 12
months between the Bank and any NASD member or any person related to or
associated with any such member; (c) none of the officers or directors of the
Bank has any affiliation with the NASD; (d) except as contemplated by this
engagement letter with Trident, the Bank has no financial or management
consulting contracts outstanding with any NASD member or any person related to
or associated with any such member; (e) the Bank has not granted Trident a right
of first refusal with respect to the underwriting of any future offering of the
Bank's stock; and, (f) there has been no intermediary between Trident and the
Bank in connection with the public offering of the Bank's shares, and no NASD
member or any person related to or associated with any such member is being
compensated in any manner for providing such service.
The Bank agrees to indemnify and hold harmless Trident and each person, if any,
who controls the firm against all losses, claims, damages or liabilities, joint
or several and all legal or other expenses reasonably incurred by them in
connection with the investigation or defense thereof (collectively,
Board of Directors
September 10, 1997
Page 3
"Losses"), to which they may become subject under securities laws or under the
common law, that arise out of or are based upon the reorganization or the
engagement hereunder of Trident. If the foregoing indemnification is unavailable
for any reason, the Bank agrees to contribute to such Losses in the proportion
that its financial interest in the reorganization bears to that of the
indemnified parties. If the agreement is entered into with respect the common
stock to be issued in the reorganization, the Agreement will provide for
indemnification, which will be in addition to any rights that Trident or any
other indemnified party may have at common law or otherwise. The indemnification
provision of this paragraph will be superseded by the indemnification provisions
of the Agreement entered into by the Bank and Trident.
This letter is merely a statement of intent and is not a binding legal agreement
except as to paragraph (4) above with regard to the obligation to reimburse
Trident for allocable expenses to be incurred prior to the execution of the
Agreement and the indemnity described in the preceding paragraph. While Trident
and the Bank agree in principle to the contents hereof and propose to proceed
promptly, and in good faith, to work out the arrangements with respect to the
proposed offering, any legal obligations between Trident and the Bank shall be
only as set forth in the duly executed Agreement. Such Agreement shall be in
form and content satisfactory to Trident and among other things, there being in
Trident's opinion no material adverse change in the condition or obligations of
the Bank or no market conditions which might render the sale of the shares by
the Bank hereby contemplated inadvisable.
Please acknowledge your agreement to the foregoing by signing below and
returning to Trident one copy of this letter along with the advance payment of
$9,000. This proposal is open for your acceptance for a period of thirty (30)
days from the date hereof.
Yours very truly,
TRIDENT SECURITIES, INC.
By: /s/ X. Xxx Xxxxxxx, Xx.
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X. Xxx Xxxxxxx, Xx.
Managing Director
RLB:cs
Agreed and accepted this
____ day of _________, 1997
BALTIMORE COUNTY SAVINGS BANK, F.S.B.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President
