Exhibit 99.3
[XXXXXXX FINANCIAL LETTERHEAD APPEARS HERE]
May 28, 1997
Board of Directors
Spring Hill Savings Bank, F.S.B.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Gentlemen:
This letter sets forth the agreement between Spring Hill Savings Bank, FSB (the
"Bank") and Xxxxxxx Financial Advisors, Inc. ("FFA"), whereby the Bank has
engaged FFA to determine the estimated pro forma market value of the shares of
common stock that are to be issued and sold by the Bank (or, if applicable, its
holding company) in connection with the conversion of the Bank to the stock form
of organization.
XXX agrees to deliver the completed valuation, in writing, to the Bank at the
address above on or before a mutually agreed upon date. Further, FFA agrees to
perform such other services as are necessary or required of the appraiser in
connection with comments from the Bank's regulatory authorities and the re-
evaluations of the estimated pro forma market value of the Bank as may from time
to time be necessary both after approval by the Bank's regulatory authorities
and prior to the time the conversion is completed. FFA also agrees to assist
the Bank in the preparation of its regulatory business plan to be submitted in
conjunction with its Application for Conversion.
The Bank agrees to pay FFA a consulting fee of $12,500: $10,000 for FFA's
appraisal services and $2,500 for services in conjunction with the preparation
of the Bank's regulatory business plan. In addition, the Bank agrees to
reimburse FFA for certain expenses necessary and incident to the completion of
the services described above. These expenses shall not exceed $2,500 without
the prior consent of the Bank and those for travel, messenger services,
printing, purchased data, stock price data and report reproduction shall be paid
to FFA as incurred and billed. Payment of the consulting fee shall be made
according to the following schedule:
. $2,500 upon execution of this Agreement;
. $5,000 upon delivery of the completed appraisal report to the Bank;
. $2,500 upon delivery of the Bank's completed regulatory business plan;
and,
. $2,500 upon completion of the conversion.
If, during the course of the Bank's conversion, unforeseen events occur so as to
materially change the nature of the work content of the appraisal services
described above such that FFA must supply services beyond that contemplated at
the time this agreement was executed, the terms of this agreement shall be
subject to renegotiation by the Bank and FFA. Such unforeseen events shall
include, but not be limited to, major changes in the conversion regulations,
appraisal guidelines or processing procedures as they relate to conversion
appraisals, major changes in the Bank's management or operating policies, and
excessive delays or suspension of processing of
Board of Directors
Spring Hill Savings Bank, FSB
May 28, 1997
Page 2
the conversion. In the event the Bank shall for any reason discontinue the
conversion prior to delivery of the completed appraisal and payment of the
progress payment fee totaling $5,000, the Bank agrees to compensate FFA
according to FFA's standard billing rates for consulting services based on
accumulated and verifiable time expended, provided that the total of such
charges shall not exceed $7,500 plus reimbursable expenses not to exceed the
dollar limit set forth in the third paragraph of this letter.
In order to induce FFA to render the aforesaid services, the Bank agrees to the
following:
1. The Bank agrees to supply FFA such information with respect to the
Bank's business and financial condition as FFA may reasonably request in
order for FFA to perform the aforesaid services. Such information shall
include, without limitation: annual financial statements, periodic
regulatory filings and material agreements, corporate books and records,
and such other documents as are material for the performance by FFA of
the aforesaid services. To the extent such information is of a
confidential nature, FFA agrees to maintain such confidentiality unless
disclosure is required by law.
2. The Bank hereby represents and warrants to FFA (i) that any information
provided to FFA by or on behalf of the Bank, will not, at any relevant
time, contain any untrue statement of a material fact or fail to state a
material fact necessary to make the information or statements therein
not misleading, (ii) that the Bank will not use the product of FFA
services in any manner, including in a proxy or offering circular, in
connection with any untrue statement of a material fact or in connection
with the failure to state a material fact necessary to make other
statements therein not misleading, and (iii) that all documents
incorporating or relying upon FFA services or the product of FFA
services will otherwise comply in all material respects with all
applicable federal and state laws and regulations. Any valuations or
opinions issued by FFA may be included in its entirety in any
communication by the Bank in any application, proxy statement or
prospectus; however, such valuations or opinions may not be excerpted or
otherwise publicly referred to without FFA's prior written consent nor
shall FFA be publicly referred to without FFA's prior written consent;
however, in each case, such consent shall not be unreasonably withheld.
3. FFA's appraisal will be based upon the Bank's representation that the
information contained in the Application for Conversion and additional
information furnished to us by the Bank and its independent auditors is
truthful, accurate, and complete in all material respects. FFA will not
independently verify the financial statements and other information
provided
Board of Directors
Spring Hill Savings Bank, FSB
May 28, 1997
Page 3
by the Bank and its independent auditors, nor will FFA independently
value the assets or liabilities of the Bank. The valuation will consider
the Bank only as a going concern and will not be considered as an
indication of the liquidation value of the Bank.
4. FFA's valuation is not intended, and must not be represented to be, a
recommendation of any kind as to the advisability of purchasing shares
of common stock in the conversion. Moreover, because such valuation is
necessarily based upon estimates and projections of a number of matters,
all of which are subject to change from time to time, FFA will give no
assurance that persons who purchase shares of common stock in the
conversion will thereafter be able to sell such shares at prices related
to FFA's valuation.
5. The Bank agrees that it will indemnify and hold harmless FFA and its
affiliates, officers, directors, employees and representatives
(collectively, "FFA indemnified persons") from and against any and all
liabilities arising from or based upon this agreement or the services
provided by FFA hereunder, except to the extent that such liabilities
are adjudicated by a final judgment (after all appeals or the expiration
of time to appeal) to result from the negligence or willful misconduct
of a FFA indemnified person. The Bank agrees that it will promptly
reimburse, as incurred, all reasonable and documented legal fees and
expenses, and other related reasonable and documented out-of-pocket
disbursements, paid by any FFA indemnified person in defending,
preparing to defend or investigating any actual or threatened action or
proceeding (including any inquiry or investigation) against such FFA
indemnified person, or appearing or preparing for appearance as a
witness in any relevant proceeding (including any pretrial proceeding
such as a deposition); provided, however, that any such reimbursement by
the Bank shall be repaid by FFA if a final judgment (after all appeals
or the expiration of time to appeal) is entered against such person
based upon such person's negligence or willful misconduct; and provided
further, that the Bank shall not be required to make reimbursement or
payment for any settlement effected without its prior written consent.
Each FFA indemnified person shall give prompt written notice to the Bank
of the commencement of any action or proceeding and the Bank shall have
the right to participate, at its expense, in contesting, defending or
litigating the same. A FFA indemnified person shall have the right to
employ its own counsel in connection with all matters referred to in
this Paragraph, and such counsel shall have the right to take charge of
such matter for such person; provided, however, that the Bank shall not
be liable under this Paragraph for the reasonable and documented fees
and expenses of more than one counsel for all
Board of Directors
Spring Hill Savings Bank, FSB
May 28, 1997
Page 4
FFA indemnified persons unless an unwaived conflict of interest exists
between or among FFA indemnified persons. A waiver of a conflict of
interest shall not be unreasonably withheld.
6. The Bank and FFA are not affiliated, and neither the Bank nor FFA has an
economic interest in, or is held in common with, the other and has not
derived a significant portion of its gross revenues, receipts or net
income for any period from transactions with the other. It is
understood that FFA is not a seller of securities within the scope of
any federal or state securities law and any report prepared by FFA shall
not be used as an offer or solicitation with respect to the purchase or
sale of any security, it being understood that the foregoing shall not
be construed to prohibit the filing of any such report as part of the
Application for Conversion or SEC and blue sky filings or customary
references thereto in applications, filings, proxy statements and
prospectuses.
* * * * *
Please acknowledge your agreement to the foregoing by signing as indicated below
and returning a signed original of this letter to FFA.
Yours very truly,
XXXXXXX FINANCIAL ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
AGREED AND ACCEPTED:
SPRING HILL SAVINGS BANK, FSB
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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Date: June 9, 1997
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