Exhibit 1.1
[TRIDENT SECURITIES, INC. LETTERHEAD]
Board of Directors
Revere Federal Savings and Loan Association
310 Broadway
Revere, Massachusetts 02151
RE: Mutual Holding Company Marketing Services
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and Revere Federal Savings and Loan Association
(the "Association") concerning Trident's investment banking services in
connection with the reorganization ("Reorganization") of the Association into a
mutual holding company ("MHC") and the issuance of shares of the stock savings
bank subsidiary of the MHC or its holding company in a community offering (the
"Offering").
Trident is prepared to assist the Association in connection with the offering of
shares of common stock of the MHC's stock savings bank subsidiary or its holding
company during the Offering as such terms are defined in the Association's Plan
of Mutual Holding Company Reorganization and Stock Issuance Plan (the "Plan").
It is expected that Trident will assist the Association in the Offering as
follows: (1) as financial advisor to Management, (2) targeting sales efforts in
the Association's local communities, (3) conducting information meetings for
prospective investors (as desired), (4) training and educating the Association'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 Revere, and (6)
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 Association 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 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.
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 and its counsel deem 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, Trident will receive the following compensation and
reimbursement from the Association:
1. A management fee in the amount of .50% of the total amount of stock
sold in the offering.
Board of Directors
December 22, 1997
Page 2
2. 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 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 Reorganization.
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 Association 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
Association and Trident.
5. 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 $18,000 excluding
legal fees. The Association will forward to Trident a check in the
amount of $10,000 as an advance payment to defray the expenses of
Trident.
It further is understood that the Association 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
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 NASD member or
any person related to or associated with any such member; (e) the Association
has not granted Trident a right of first refusal with respect to the
underwriting of any future offering of the Association's 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 NASD member or any
person related to or associated with any such member 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
Board of Directors
December 22, 1997
Page 3
other expenses reasonably incurred by them in connection with the investigation
or defense thereof (collectively, "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 Association 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 Association
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 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 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 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:
-------------------------------
Timothy E. Lavelle
Managing Director
Agreed and accepted this
day of , 1997
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REVERE FEDERAL SAVINGS AND LOAN ASSOCIATION
By:
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James J. McCarthy
President and CEO
Exhibit I
TRIDENT SECURITIES, INC.'s COMMUNITY OFFERING SERVICES
PROGRAM FEATURES
Structuring and managing the sale of stock to Revere Federal's Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members.
o Sales and marketing assistance
Trident will assign a team of experienced NASD-registered
professionals from our staff to remain on-site at the
Association throughout the stock offering. Trident will be
responsible for managing all aspects of the local Subscription
Offering. Each Trident senior staff member has successfully
managed at least 95 mutual to stock conversions over the past
eleven years.
Trident will participate in "due diligence" sessions with
management and assist in drafting the offering circular or
prospectus.
Trident will offer financial advice of a general nature as
well as specific recommendations with respect to ways of
enhancing the marketability of the stock at the local level.
Trident will draft and help design all supplementary marketing
materials including question and answer brochures,
advertisements, press releases and other corollary material.
Trident will work closely with management and the board of
directors to identify prospective investors who, in their
opinion, would make good long-term investors.
Trident will coordinate and conduct a series of community
meetings in an effort to educate and inform targeted
investors, customers and local residents about Revere Federal
in general and the risks and the merits of the investment in
particular.
Trident will prepare a slide presentation to be used at the
community meetings and will draft scripts for management. We
will also help prepare management for any questions they may
receive from the audience.
Trident will be available to discuss the merits of an
investment in Association on an individual basis with
prospective investors, or will accompany a member of Revere
Federal at their request.
Administrative and Operational Support
o Establish and manage the Stock Information Center
Trident will help organize and supervise a Stock Information
Center, which will centralize all operational aspects of the
conversion and serve as the focal point for the flow of all
conversion related data and information.
Trident and its staff will work with members of the
Association's staff to process stock order forms, proxies and
routine correspondence and to answer routine telephone
inquires. Any non-routine questions of a financial or
investment nature will be handled by a Trident representative
in an effort to minimize any possibility of inappropriate
statements made by Revere Federal's personnel.
Trident will be responsible for maintaining accurate records
of all stock subscriptions and providing management with a
constant flow of information on the status of the offering.
All recordkeeping functions employ Trident's proprietary
conversion management software, developed exclusively for use
in community offering stock sales.
As manager of the Stock Information Center, Trident will also
supervise and assist Association in performing the following
functions:
- Maintain records of prospective investors and action
taken with respect to each.
- Coordinate the community meetings by maintaining
records of invitations and responses.
- Provide management with daily progress reports and make
sure that the subscription records are balanced daily.
- Provide proxy solicitation assistance (see section
below) and mail "proxygrams", if necessary.
- Provide your transfer agent with a final list of
subscribers at the conclusion of the conversion.
- Handle the allocation of shares in the event of an
oversubscription.
- Supply data for the calculation of interest and refund
checks, 1099 information (if requested) and otherwise
assist in the closing of the subscription/community
offering.
- Conduct periodic strategy sessions with management and
the board of directors to "fine tune" the marketing
effort and resolve any operational problems.
Proxy Solicitation
o Assist Revere Federal in soliciting the required vote for the
special meeting of members.
Establish procedures for tabulating proxies and coordinating
this function with the Inspector of Election or Records
Manager.
Monitor the vote total and mail a "proxygram", if one is
required.
Make arrangements for and supervise a telephone solicitation,
if required.
Education and Training
o Provide extensive training which will ensure that officers,
directors and employees understand the conversion process and
encourage them to participate in the offering up to their level
of competence and comfort.
Trident will meet with the directors and senior management
regularly in the months preceding the commencement of the
offering to discuss organizational issues and to review
financial and investment considerations relating to the stock
sale.
Trident will conduct training sessions designed to familiarize
all employees with the mutual holding company reorganization
process and outline their roles and responsibilities.
Trident will provide training manuals which will serve as
reference material throughout the offering. Manuals will be
targeted to the level of the employee and will vary from
simple, easy to read handouts to sophisticated financial
models.
Trident will work closely with the board of directors,
senior management and branch managers to help them
understand the concerns most investors and customers will
have and how to best address them.
Market Making
o Trident will act as the Association's primary market maker once
the conversion is completed. We will assure that the Association
or its Holding Company qualifies to be quoted on NASDAQ's
"Bulletin Board."
Financial Advisory Services
o Financial Advisory Services encompass a variety of services
intended to support the Association in the aftermarket. These
services include, but are not limited to:
- Establish an Investor Relations Program
- Assistance in developing press releases, quarterly reports and
shareholder letters
- Analyze and develop a plan for external growth opportunities
- Analyze and assist in business planning issues
- Evaluate and analyze business extension strategies
- Periodic "capital planning" sessions
- Advice on dividend policy and share repurchase programs
- Acting as agent in repurchasing shares for the Company or
purchasing shares for employee benefit plans
- Participation in our Annual Client Conference