Exhibit 1.1
June 3, 1997
Board of Directors
Wyman Park Federal Savings and Loan Association
11 West Ridgely Road
Lutherville, Maryland 21094
RE: Conversion Stock Marketing Services
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and Wyman Park Federal Savings and Loan
Association, (the "Association") concerning our investment banking services in
connection with the 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 such terms are defined in the Association's Plan of Conversion (the
"Plan"). 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.
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 use its best efforts to make all documents, records and other
information reasonably 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:
1. A commission equal to 1.85% of the aggregate dollar amount of capital
stock sold to residents in the state of Maryland and 1.40% of the
aggregate dollar amount of capital stock sold to residents outside the
state of Maryland in the subscription and community offerings,
excluding any shares of conversion stock sold to the Association's
directors, executive officers and the employee benefit plans.
Additionally, commissions will be
excluded on those shares sold to "associates" of the Association's
directors and executive 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. In
this respect, Trident's out-of-pocket expenses will not exceed $12,000
and its legal fees will not exceed $28,000 and $6,000 for "Blue Sky"
work. The Association 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 Association 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.
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) except for Jay Salkin,
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 Trident and its affiliates (as
defined in Rule 405 under the Securities Act of 1933, as amended) and their
respective directors, officers, employees, agents and controlling persons
(Trident and each such person being an "Indemnified Party") harmless from and
against any and all losses, claims, damages and liabilities (or actions,
including shareholder actions, in respect thereof), joint or several, to which
such Indemnified Party may become subject under any applicable federal or state
law, or otherwise, and related to or arising our of the performance by Trident
of the services contemplated by, or the engagement of Trident and will reimburse
any Indemnified Party for all expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense arising therefrom, whether or not such Indemnified
Party
is a party and whether or not such claim, action or proceeding is initiated or
brought by the Association. The Association will not be liable to any
Indemnified Party under the foregoing indemnification provision (i) in any
settlement by an Indemnified Party effected without its prior written consent;
or (ii) to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from Trident's bad faith, willful misconduct or gross negligence.
Trident agrees to indemnify and hold the Association and its affiliates (as
defined in Rule 405 under the Securities Act of 1933, as amended) and its
respective directors, officers, employees, agents and controlling persons (the
Association, its holding company and each such person being an "Indemnified
Party") harmless from and against any and all losses, claims, damages and
liabilities (or actions, including shareholder actions, in respect thereof),
joint or several, to which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, and related to or arising out of
the bad faith, willful misconduct or gross negligence of Trident, as found in a
final judgment by a court of competent jurisdiction, in the performance by
Trident of the services contemplated by, or the engagement of Trident and will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) in connection with the investigation of, preparation for or
defense arising therefrom, whether or not such Indemnified Party is a party and
whether or not such claim, action or proceeding is initiated or brought by
Trident. Trident will not be liable to any Indemnified Party under the foregoing
indemnification provision (i) in any settlement by an Indemnified Party effected
without its prior written consent; or (ii) to the extent that any loss, claim,
damage or liability is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Association's bad faith,
willful misconduct or gross negligence.
As promptly as possible after receipt by an Indemnified Party of notice of an
intention to commence, or the commencement of, any action, suit or proceeding
for which an Indemnified Party may seek indemnification, an Indemnified Party
shall notify the indemnifying party in writing thereof, enclosing a copy of all
letters or documents received and/or papers served; provided that a failure or
delay in giving any such notice shall not affect the obligation of the
indemnifying party to indemnify the Indemnified Party, unless and to the extent
that such failure or delay materially adversely affects the indemnifying party.
In case any such action, suit or proceeding shall be brought against an
Indemnified Party, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof.
After notice form the indemnifying party to any Indemnified Party of the same's
election to assume the defense thereof, the indemnifying party shall not be
liable to an Indemnified Party for any legal fees or other expenses subsequently
incurred by an Indemnified Party in the defense thereof, other than for
reasonable costs or investigation and except as provided in the next paragraph.
An Indemnified Party shall have the right to employ its or his own counsel in
any such action, suit or proceeding, but in such event the Indemnified Party's
legal fees and other expenses shall not be reimbursed by the indemnifying party
unless (i) the employment of such counsel has been requested by the Indemnified
Party and authorized by the indemnifying party or (ii) the Indemnified Party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying party and the Indemnified Party in the defense of such action,
suit or proceeding. In the event the Indemnified Party concludes that there may
be such a conflict of interest, (i) the indemnifying party shall not have the
right to assume and direct the defense of such action, suit or proceeding on
behalf of the Indemnified Party and (ii) the indemnifying party shall indemnify
the Indemnified Party for all reasonable legal fees and other
expenses reasonably incurred by the Indemnified Party, but the indemnifying
party shall not be liable for any settlement or negotiated disposition of such
action, suit or proceeding or any part thereof effected without the written
consent of the indemnifying party.
If the indemnification provided for in this agreement is for any reason held
unenforceable by an Indemnified Party, the Association agrees to contribute to
the losses, claims, damages and liabilities for which such indemnification is
held unenforceable (i) in such proportion as is appropriate to reflect the
relative benefits to the Association, on the one hand, and Trident on the other
hand, of the transaction as contemplated (whether or not the transaction is
consummated) or, (ii) if (but only if) the allocation provided for in clause (i)
is for any reason unenforceable, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
fault of the Association, on the one hand, and Trident on the other hand, as
well as other relevant equitable considerations. The Association agrees that for
the purposes of this paragraph, the relative benefits of the Association and
Trident of the transaction as contemplated shall be deemed to the in the same
proportion that the total value received or contemplated to be received by the
Association or its shareholders, as the case may be, as a result of or in
connection with the transaction bears to the fees paid or to be paid to Trident
under this legal agreement.
The Association and Trident each agree that without each other's prior written
consent, which shall not be unreasonably withheld, neither will settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
under the indemnification provision of this letter agreement (whether or not
Trident, the Association or any other Indemnified Party is an actual or
potential party to such claim, action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action or proceeding.
Notwithstanding the above, to the extent that the Association's indemnification
or contribution is a "covered transaction" as defined in 12 U.S.C. 371c(b)(7),
the Association's holding company shall assume the Association's obligation to
indemnify or contribute.
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 herein. 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.
Trident agrees to maintain in confidence all information and documents (to be
read in the broadest sense) received from the Association, and not to disclose
any such information or documents except to Trident's officers, directors,
counsel and representatives who need to know such information for the purpose of
evaluating the transaction and who will, prior to being provided such
information or documents, agree to
be bound by the terms of this agreement, unless disclosure is required by law or
regulation, in which case Trident will provide timely notice so that the
Association may seek a protective order or other appropriate remedy and/or
permit disclosure of only that portion of such information or documents which is
legally required to be disclosed.
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 9th day
of June, 1997
WYMAN PARK FEDERAL SAVINGS AND LOAN ASSOCIATION
By: /s/ Ernest A. Moretti
Ernest A. Moretti
President