Exhibit 1.1
[TRIDENT SECURITIES, INC. LETTERHEAD]
March 16, 1999
Board of Trustees
Westborough Savings Bank
100 East Main Street
Westborough, Massachusetts 01581-0670
RE: MUTUAL HOLDING COMPANY MARKETING SERVICES
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and Westborough Savings Bank, Westborough,
Massachusetts (the "Bank") concerning Trident's investment banking services in
connection with the reorganization ("Reorganization") of the Bank into a mutual
holding company ("MHC") and the issuance of shares of the stock savings bank
subsidiary of the MHC in a community offering (the "Offering").
Trident is prepared to assist the Bank in connection with the offering of shares
of common stock of the MHC's stock holding subsidiary during the Offering as
such term is defined in the Bank's Plan of Mutual Holding Company Reorganization
and Stock Issuance Plan (the "Plan"). It is expected that Trident will assist
the Bank in the Offering as follows: (1) as financial advisor to the Bank,
(2) targeting sales efforts in the Bank's local communities, (3) conducting
information meetings for prospective investors (as directed by the Board of
Trustees), (4) training and educating the Bank'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 Westborough, and (6) listing
stock of the Bank on the NASDAQ System and 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 Bank 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 Bank's Board of
Trustees, based upon an independent appraisal as approved by appropriate
regulatory authorities, provided such price is mutually acceptable to Trident
and the Bank.
At the appropriate time, Trident, in conjunction with its counsel will conduct
an examination of the relevant documents and records of the Bank as Trident and
its counsel deem 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, Trident will receive the following compensation and
reimbursement from the Bank:
TRIDENT SECURITIES, INC.
Board of Trustees
March 16, 1999
Page 2
1. A commission equal to two percent (2.0%) of the aggregate dollar amount
of stock sold in the subscription and community offerings, excluding
any shares of stock sold to the Bank's trustees, executive officers,
employees and employee benefit plans. Additionally, commissions will be
excluded on those shares sold to "Associates" of the Bank's trustees
and executive officers. The term "Associates" as used herein shall have
the same meaning as that found in the Bank's Plan of Reorganization.
2. For stock sold by other NASD member firms under selected dealer's
agreements, the commission shall not exceed a fee of 4.5%.
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 Bank
and Trident.
4. Trident shall be reimbursed for out-of-pocket expenses incurred by them
and their counsel, whether or not Agreement is consummated. Trident's
out-of-pocket expenses will not exceed $15,000 and its legal fees will
not exceed $30,000. The Bank 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 Bank 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 go be in addition to those enumerated in Paragraph (4) above.
For the purpose of Trident's obligation to file certain documents and to make
certain representations to the NASD in connection with the reorganization, 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 trustees 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 NASD member or any person related to
or associated with any such member: (e) the Bank has not granted Trident a right
of first refusal with respect to the underwriting of any future offering of the
Bank's 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 NASD
member or any person related to or associated with any such member is being
compensated in any manner for providing such service. The foregoing
representation excludes the Bank's agreement with Fisco to provide third party
marketing services of non-deposit products to the Bank's customers.
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
TRIDENT SECURITIES, INC.
Board of Trustees
March 16, 1999
Page 3
expense 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 Bank agrees to contribute to
such Losses in the proportion that its unavailable for any reason, the Bank
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 Bank and Trident.
This letter is merely a statement of intent and 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 theindemnity 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 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 Bank or no market conditions which might render the sale of the shares by
the Bank hereby contemplated inadvisable. The Bank consents to the assignment of
Trident's rights and obligations under this letter or the Agreement to McDonald
Investments, Inc.
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/ Timothy E. Lavelle
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Timothy E. Lavelle
Manageing Director
TEL:cs
Agreed and accepted this
29th day of March, 1999
WESTBOROUGH SAVINGS BANK
By: /s/ Joseph F. MacDonough
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Joseph F. MacDonough
President and CEO