Exhibit 1.1
PRESTIGE FINANCIAL CENTER, INC.
MEMBERS NASD, SIPC
May 15, 2001
Board of Directors
Peoples Federal Savings Bank
Second & Bridgeway Streets
P.O. Box 119
Aurora, IN 47001-0119
Attention: Mr. Mel E. Green, Chief Executive Officer
To the Members of the Board of Directors:
This letter sets forth the terms and conditions of the engagement (the
"Engagement") of Prestige Financial Center, Inc. ("Prestige") by Peoples Federal
Savings Bank (the "Company") to act as the Company's investment banker in
connection with the Company's:
o Conversion from the mutual form of organization to the stock form of
organization (the "Conversion").
In connection with the Engagement, Prestige will provide services to the
Company, including:
MARKETING ADVISORY SERVICES - SUBSCRIPTION AND COMMUNITY OFFERING
o Review of the offering materials from a marketing perspective;
o Provide the Company general securities training regarding the sale of
securities including the delivery of a training and compliance manual
for the Company's staff and Board of Directors to utilize as a
reference source to mitigate potential liability;
o Preparation of marketing materials for use in the Subscription and
Community Offering;
o Assist in the establishment and oversight of the Stock Sales Center
for the following:
o Tracking of sales prospects;
o Tabulation and reconciliation of stock orders; and,
o Preparation of daily sales reports.
o Upon conclusion of the Offering, assist in the preparation of data to
be provided to the transfer agent for issuance of stock certificates;
o Assistance in the collection and tabulation of Proxies including:
o Development of marketing materials detailing the importance of
the proxy solicitation to the Company's customers;
o Provide the Company's staff training regarding the proxy
solicitation process and development of a strategy to enhance the
return of proxies;
o Oversight of the processing of proxies received;
o Oversight of the tabulation of the proxies; and,
o Assist in the development of the proxy report to be delivered at
the special member meeting called to consider and vote on the
conversion.
North Shore Towers Financial Center
271-603 Grand Central Parkway, Floral Park, NY 11005
(718) 229-4500
Mr. Mel E. Green
Peoples Federal Savings Bank
May 15, 2001
Page 2
INVESTMENT BANKING SERVICES - SUBSCRIPTION AND COMMUNITY OFFERING
o Prestige will serve as investment banker to the Company in connection
with the Company's offering of common stock. As investment banker our
services will include:
o Prestige will act as placement agent on a best efforts basis for
the sale of the common stock to prospective investors;
o Organization of informational meetings to provide prospective
investors details on the Offering; and,
o Development of a marketing campaign related to the Subscription
and Community offering.
Prestige will provide on-sight sales support in the form of NASD licensed
professionals during the Subscription and Community Offering. The Company agrees
to provide facilities, equipment and staffing for the Sales Center as needed.
INVESTMENT BANKING SERVICES - BROKER-DEALER SYNDICATION OFFERING
In the event that the total shares offered by the Company are not sold during
either the Subscription or Community Offering, Prestige will seek to form a
broker-dealer syndicate organized to sell, on a best-efforts basis, the
remaining unsold shares.
ENGAGEMENT TERMS
As consideration for our services, the Company will compensate Prestige as
follows:
o A marketing fee equal to $85,000. Such marketing fee shall be payable
upon the completion of the Conversion and issuance of the common stock
by the Company.
o In the event that the total shares offered by the Company are not sold
in the Subscription and Community Offering and Prestige has been
authorized to form a group of broker-dealers by the Company to sell
the remaining shares on a best efforts basis, the cost to the Company
for the sale of these additional shares will be negotiated prior to
the formation of the broker-dealer syndicate.
In addition to any fees payable to Prestige pursuant to this Engagement, the
Company agrees to reimburse Prestige on a timely basis for all reasonable
out-of-pocket expenses and disbursements, including underwriter's counsel,
database charges, travel, printing, copying, communications, mailing and
delivery and all other related expenses incurred in connection with this
Engagement, however, such reimbursement shall not exceed $25,000.00 unless an
additional amount is agreed upon in writing by the Company.
In addition, the Company will pay all costs and expenses incident to the
purchase, sale and delivery of the shares of common stock, including, but not
limited to, all fees and expenses of filing with regulatory agencies and the
National Association of Securities Dealers, Inc. ("NASD"), all Blue Sky fees and
expenses, all auditing and accounting fees, all promotion and printing costs,
including costs of printing the registration statement, the placement agent
documents, blue sky memoranda and as many prospectuses as Prestige deems
reasonably necessary.
Mr. Mel E. Green
Peoples Federal Savings Bank
May 15, 2001
Page 3
The Company agrees to furnish Prestige with such information and data regarding
the Company, as Prestige reasonably believes appropriate to this Engagement and
to provide reasonable access to the Company's management, accountants and legal
representatives (collectively, "Information"). In connection with Prestige' use
of the Information, the Company represents and warrants that Prestige is
entitled to rely on the accuracy and completeness of such Information without
making any independent verification thereof.
DURATION OF ENGAGEMENT
The period of Prestige' Engagement will extend from the date hereof until May
31, 2002, or upon conclusion of the Conversion should the Conversion be
completed prior to May 31, 2002.
NON-DISCLOSURE
Any information given to Prestige by the Company which is designated by the
Company as confidential and marked as such will not be disclosed by Prestige or
its directors, officers or employees to any third party without the Company's
prior authorization, and Prestige will keep such information confidential except
to the extent (a) such information is disclosed by Prestige to its attorneys or
to its agents who need to know the information in connection with the services
of Prestige hereunder; (b) such information is otherwise publicly available
through a source other than Prestige; (c) disclosure thereof is required by law
or requested by any governmental agency or body, or; (d) such disclosure may be
required by court order in litigation in which Prestige or any of its present or
former directors, officers, employees, agents, representatives or any person who
controls Prestige is, or is threatened to be made, a party.
The Company acknowledges that all opinions and advice (written or oral) given by
Prestige to the Company in connection with Prestige' engagement are intended
solely for the benefit and use of the Company (including its management,
directors and attorneys) and the Company agrees that no such opinions or advice
shall be used to solicit any shareholder (or member) approval of the Conversion
or for any other purpose or reproduced, disseminated, quoted or referred to at
any time, in any manner or for any purpose, nor shall any public references to
Prestige be made by the Company (or such persons), without the prior written
consent of Prestige except to the extent that (a) such information is otherwise
publicly available through a source other than the Company; (b) disclosure
thereof is required by law or requested by any governmental agency or body, or;
(c) such disclosure may be required by court order in litigation in which the
Company or any of its present or former directors, officers, employees, agents,
representatives is, or is threatened to be made a party.
EXCLUSIVITY
Prestige may perform services for other clients (including other financial
institutions) during the effectiveness of this agreement.
INDEMNIFICATION
The Company shall indemnify and hold harmless Prestige and any of its directors,
officers, employees, agents and affiliates from and against any and all loss,
cost, damage, claim, liability (including, but not
Mr. Mel E. Green
Peoples Federal Savings Bank
May 15, 2001
Page 4
limited to, all losses and expenses in connection with claims under the state or
federal thrift, banking, and security laws) or expense of any kind, including
attorneys fees and other expenses incurred in investigating, preparing to defend
and defending any claim or claims in any manner arising in connection with the
services called for under this Engagement, provided however, that any payments
for in this section shall not be paid or payable if Prestige or any of its
directors, officers, employees, agents or affiliates is found by a court to have
been grossly negligent or to have acted in bad faith in performing the services
which are the subject of this Engagement.
Should Prestige or its personnel be requested by the Company to provide
documentary evidence or testimony in connection with any proceeding in which it
is not a party, the Company agrees to pay all reasonable expenses (including
fees incurred for legal counsel) in complying with any such request and $2,000
per day for any sworn testimony.
UNDERWRITING AGREEMENT
The Company and Prestige will enter into an Underwriting Agreement prior to
commencement of the Offering that will include the provisions contained herein
as well as the normal representations, warranties and other conditions for such
transactions.
ADDITIONAL PROVISIONS
Should the Conversion be consummated, Prestige may include, at its expense, a
tombstone or similar notice in selected periodicals.
APPLICABLE LAW
This Engagement will be governed by and construed in accordance with the laws of
the State of New York and will be binding upon, inure to the benefit of, and be
enforceable by the parties or their respective successors.
If you are in agreement with the terms of this letter of Engagement, please
sign, date and return one of the enclosed copies. One set of originals should be
retained for your files.
Sincerely, AGREED AND ACCEPTED BY:
PRESTIGE FINANCIAL CENTER, INC. PEOPLES FEDERAL SAVINGS BANK
BY: /s/ Lawrence Kirshbaum BY: /s/ Mel E. Green
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Lawrence Kirshbaum Mel E. Green
President Chief Executive Officer