Exhibit 1.2
[LETTERHEAD OF TRIDENT SECURITIES, INC. APPEARS HERE]
Board of Directors
Northfield Federal Savings
1844 East Joppa Road
Baltimore, Maryland 21234
RE: Conversion Stock Marketing
Gentlemen:
This letter sets forth the terms of the proposed engagement between TRIDENT
SECURITIES, INC. ("TRIDENT") and Northfield Federal Savings (the "Association")
concerning our investment banking services in connection with the contemplated
conversion of the Association from a mutual to a capital stock form of
organization.
TRIDENT is prepared to assist the Association in connection with the
offering of its shares of common stock during the subscription offering and
community offering as terms are defined in the Association'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 Association 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 Association'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 Association.
In connection with the subscription offering and community offering,
TRIDENT will act as financial advisor and exercise its best efforts to assist
the Association 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 Association will determine the selected dealers to assist the
Association 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 the Association as TRIDENT deems necessary and
appropriate. The Association 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 Association:
TRIDENT SECURITIES, INC.
Board of Directors
October 27, 1997
Page 2
1. A commission equal to two percent (2.0%) of the aggregate dollar
amount of capital stock sold in the subscription and community
offerings, excluding any shares of conversion stock sold to the
Association's directors, executive officers and all employee benefit
plans. Additionally, commissions will be excluded on those shares sold
to "associates" of the Association's directors and executors officers.
The term "associates" as used herein shall have the same meaning as
that found in the Association's Plan of Conversion.
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 Association 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
Association and TRIDENT.
4. 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 and its legal
fees will not exceed $28,000. The Association will forward to TRIDENT
a check in the amount of $10,000 as an advance payment to defray the
allocable expenses to TRIDENT.
It further is understood that the Association will pay all other expenses
of the conversion including but not limited to its attorney's 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.
For purposes of TRIDENT's obligation to file certain documents and to make
certain representations to the NASD in connection with the conversion, the
Association warrants that: (a) the Association 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 Association and any NASD member or any
person related to or associated with any such member; (c) none of the officers
or directors of the Association has any affiliation with the NASD; (d) except as
contemplated by this engagement letter with TRIDENT, the Association has no
financial or management consulting contracts outstanding with any other person;
(e) the Association has not granted TRIDENT a right of first refusal with
respect to the underwriting of any future offering of the Association stock; and
(f) there has been no intermediary between TRIDENT and the Association in
connection with the public offering of the Association's shares, and no person
is being compensated in any manner for providing such service.
The Association 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
TRIDENT SECURITIES, INC.
Board of Directors
October 27, 1997
Page 3
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 Association 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
Association 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 Association 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 Association shall be only as set forth in a duly executed Agreement. Such
Agreement shall be in form and content satisfactory to TRIDENT and the
Association, 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 Association or no
market conditions which might render the sale of the shares by the Association
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
$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. Lee Burrows, Jr.
---------------------------------
R. Lee Burrows, Jr.
Managing Director
Agreed and accepted to this 20 day
of November, 1997
Northfield Federal Savings
By: /s/ G. Ronald Jobson
-----------------------------
G. Ronald Jobson
President
RLB/jc