Exhibit 1.2
October
3, 2007
Board
of Directors
Home
Federal Savings and Loan Association
624
Market Street
Shreveport,
LA 71101
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Attention:
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Mr.
Daniel R. Herndon
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Chairman of the Board, President and Chief Executive
Officer
Ladies
and Gentlemen:
We
understand that Home Federal Mutual Holding Company of
Louisiana (the “MHC”), Home Federal Bancorp, Inc.
of Louisiana (the “HFBL”) and Home Federal Savings
and Loan Association (the “Bank”) are considering
the adoption of a Plan of Conversion pursuant to which the
Company (as defined below) will be converted from mutual
holding company to full stock form (the
“Reorganization”), and all of the shares of HFBL
currently outstanding will be exchanged for shares of common
stock of a new holding company to be formed in
connection with the Reorganization (the “Holding
Company”). Concurrently with the
Reorganization, the Holding Company also intends to offer and
sell certain shares of common stock to the Bank’s
eligible account holders in a Subscription Offering, to
members of the Bank’s community in a Direct Community
Offering, and under certain circumstances, to the general
public in a Syndicated Community Offering (collectively, the
“Offerings”). The MHC, HFBL, the
Holding Company and the Bank are sometimes collectively
referred to herein as the
“Company.” Sandler O’Neill &
Partners, L.P. (“Sandler O’Neill”) is
pleased to assist the Company with the Offerings and this
letter is to confirm the terms and conditions of our
engagement. Sandler O’Neill and the Company have entered
into an agreement dated October 3, 2007 pursuant to which
Sandler O’Neill will provide a fairness opinion to the
Company (the “Advisory Engagement Letter”) in
connection with a possible business combination involving
First Louisiana Bancshares, Inc. and its subsidiary First
Louisiana Bank (the “Merger”). The
terms of this engagement letter shall not affect the terms of
the Advisory Engagement Letter, which shall continue to be in
full force and effect.
MARKETING AGENT SERVICES
Sandler
O’Neill will act as exclusive marketing agent for the
Company in the Offerings. We will work with the
Company’s management, counsel, accountants and other
advisors and anticipate that our services will include the
following, each as may be necessary and as the Company may
reasonably request:
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1.
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Consulting
as to the securities marketing implications of any aspect of the
Plan of Reorganization;
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2.
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Reviewing
with the Company’s Board of Directors the financial impact of
the Offerings on the Company, based upon the independent
appraiser's appraisal of the common stock;
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3.
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Reviewing
all offering documents, including the Prospectus, stock order forms
and related offering materials (it being understood that
preparation and filing of such documents will be the responsibility
of the Company and its counsel);
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4.
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Assisting
in the design and implementation of a marketing strategy for the
Offerings;
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5.
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As
necessary, assisting the Company’s management in scheduling
and preparing for meetings with potential investors and/or other
broker-dealers in connection with the Offerings; and
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6.
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Providing
such other general advice and assistance as may be requested to
promote the successful completion of the
Reorganization.
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SUBSCRIPTION AND COMMUNITY OFFERING FEES
If
the Offerings are consummated, the Company agrees to pay
Sandler O'Neill for its services a fee of 1.40% of the
aggregate Actual Purchase Price (defined below) of the shares
of common stock sold in the Subscription Offering and Direct
Community Offering, excluding in each case shares purchased by
or on behalf of (i) any employee benefit plan of the Company
established for the benefit of their directors, officers
and/or employees, (ii) any charitable foundation established
by the Company (or any shares contributed thereto); and (iii)
any director, officer or employee of the Company or members of
their immediate families. It is understood that no
fee shall be paid with respect to any shares issued to
minority shareholders in exchange for their current shares as
a result of the Reorganization or any shares issued to
shareholders of First Louisiana Bancshares, Inc., pursuant to
the Merger.
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If
(i) Sandler O'Neill's engagement hereunder is terminated for
any of the reasons provided for under the second paragraph of
the section of this letter captioned "Definitive Agreement,"
or (ii) the Offerings are terminated by the Company, no fees
shall be payable by the Company to Sandler O'Neill hereunder;
however, the Company shall reimburse Sandler O'Neill for its
reasonable out-of-pocket expenses (including legal fees)
incurred in connection with its engagement hereunder and for
any fees and expenses incurred by Sandler O’Neill on
behalf of the Company pursuant to the second paragraph under
the section captioned “Costs and Expenses”
below.
For
purposes of this letter, the term “Actual Purchase
Price” shall mean the price at which the shares of the
Holding Company’s common stock are sold in the
Reorganization. All fees payable to Sandler O'Neill
hereunder shall be payable in cash at the time of the closing
of the Offerings. In recognition of the long lead
times involved in the reorganization process, the Company
agrees to make an advance payment to Sandler O'Neill in the
amount of $25,000, which shall be credited against any fees or
reimbursement of expenses payable hereunder. In the event that
the advance payment exceeds the amount due in payment of fees
and reimbursement of expenses hereunder, the excess shall be
refunded to the Company.
SYNDICATED COMMUNITY OFFERING
If
any shares of the common stock remain available after the
expiration of the Subscription Offering and the Direct
Community Offering, at the request of the Company and subject
to the continued satisfaction of the conditions set forth in
the second paragraph under the caption “Definitive
Agreement” below, Sandler O'Neill will seek to form a
syndicate of registered dealers to assist in the sale of such
common stock in a Syndicated Community Offering on a best
efforts basis, subject to the terms and conditions to be set
forth in a selected dealers agreement. With respect
to any shares of the common stock sold by Sandler
O’Neill or any other FINRA member firm under any
selected dealers agreements in a Syndicated Community
Off
