EXHIBIT 1.1
TRIDENT SECURITIES, INC.
0000 XXX XXXXX XXXX, XXXXX 000
XXXXXXX, XXXXX XXXXXXXX 00000
TELEPHONE (000) 000-0000
FACSIMILE (000) 000-0000
February 2, 1999
Board of Directors
Xxxxxxx Federal Bank, FSB
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
RE: Conversion Stock Marketing Services
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc., together with its successors and assigns, ("Trident") and
Xxxxxxx Federal Bank, FSB, Douglasville, Georgia, together with its successors
and assigns, (the "Bank") concerning our investment banking services in
connection with the conversion of the Bank from a mutual to a capital stock form
of organization.
Trident is prepared to assist the Bank in connection with the offering of its
shares of common stock during the subscription offering and community offering
as such terms are defined in the Bank's Plan of Conversion. 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/prospectus is declared effective by the
appropriate regulatory authorities. The price of the shares during the
subscription offering and community 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.
In connection with the subscription offering and community offering, Trident
will act as financial advisor and exercise its best efforts to assist the Bank
in the sale of its common stock during the subscription offering and community
offering. Additionally, Trident may enter into agreements with other National
Association of Securities Dealers, Inc., ("NASD") member firms to act as
selected dealers, assisting in the sale of the common stock. Trident and the
Bank will determine the selected dealers to assist the Bank during the community
offering. At the appropriate time, Trident in conjunction with its counsel, will
conduct an examination of the relevant documents and records of
TRIDENT SECURITIES, INC.
Board of Directors
February 2, 1999
Page 2
the Bank as Trident deems 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 hereunder, Trident will receive the following compensation and
reimbursement from the Bank:
1. A management fee in the amount of $40,000.
2. A commission equal to 1.65% of the aggregate dollar amount of capital
stock sold in the subscription and community offerings, excluding any
shares of conversion stock sold to the Bank's directors, executive
officers and the employee benefit plan. 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
Conversion.
3. 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.
4. 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.
5. Trident shall be reimbursed for allocable expenses incurred by them,
including legal fees, whether or not the Agreement is consummated.
Trident's out-of-pocket expenses will not exceed $10,000, excluding
legal fees. The Bank will forward to Trident a check in the amount of
$10,000 as an advance payment to defray the allocable expenses of
Trident.
It further is understood that the Bank will pay all other expenses of the
conversion including but not limited to its attorneys' fees, NASD filing fees,
and filing and registration fees and fees of either Trident's attorneys or the
attorneys relating to any required state securities law filings, telephone
charges, air freight, rental equipment, supplies, transfer agent charges, fees
relating to auditing and accounting and costs of printing all documents
necessary in connection with the foregoing.
TRIDENT SECURITIES, INC.
Board of Directors
February 2, 1999
Page 3
For purposes of Trident's obligation to file certain documents and to make
certain representations to the NASD in connection with the conversion, 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 other person; (e) the Bank has not
granted Trident a right of first refusal with respect to the underwriting of any
future oftering of the Bank 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 person 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, Losses"), to
which they may become subject under the securities laws or under the common law,
that arise out of or are based upon the conversion 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 conversion bears to that of the indemnified parties. If the
Agreement is entered into with respect to the common stock to be issued in the
conversion, 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 (5) 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 a duly executed Agreement. Such Agreement shall be in form
and content satisfactory to Trident and the Bank, as well as their counsel, and
Trident's obligations thereunder shall be subject to, 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.
TRIDENT SECURITIES, INC. EXHIBIT 1.1
Board of Directors
February 2, 1999
Page 4
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
$10,000. 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/ R. Xxx Xxxxxxx, Xx.
---------------------------------
R. Xxx Xxxxxxx, Xx.,
Managing Director
Agreed and accepted to this
3rd day of February, 1999
XXXXXXX FEDERAL BANK, FSB
By: /s/ Alpha X. Xxxxxx, Xx.
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Alpha X. Xxxxxx, Xx.,
Chairman of the Board
