EXHIBIT 1.1
October 27, 2005
Mr. Mark E. Hord
Executive Vice President/General Counsel
Community Credit Union
1309 W.15th Street
Suite 400
Plano, TX 75075
Dear Mr. Hord:
This proposal is in connection with Community Credit Union (the
"Client" or "Bank") intention to issue public shares from
its mutual holding company structure (the "Offering"). It is
contemplated that the Client will offer and sell common shares from its
mid-tier holding company ("Company") first to eligible persons
(pursuant to your Plan of Stock Issuance) in a Subscription and Community
Offering, Keefe, Bruyette and Woods, Inc. ("KBW") will act as the
Bank's and the Company's financial advisor and marketing agent in connection
with the Offering and stock issuance. This letter sets forth selected terms and
conditions of our engagement.
1. Advisory/Offering
Services. As the Bank's and Company's financial advisor and marketing
agent, KBW will provide the Bank and the Company with a comprehensive program
of services designed to promote an orderly, efficient, cost-effective and
long-term stock distribution. KBW will provide financial and logistical advice
to the Bank and the Company concerning the Offering and related issues. KBW
will assist in providing Offering enhancement services intended to maximize
stock sales in the Subscription Offering and to residents of the Bank's market
area, if necessary, in the Community Offering.
KBW shall provide financial advisory services to the Bank which are typical in
connection with an equity offering and include, but are not limited to, overall
financial analysis of the Client with a focus on identifying factors which
impact the valuation of the common stock and provide the appropriate
recommendations for the betterment of the equity valuation.
Additionally, post Offering financial advisory services will include advice on
shareholder relations, after-market trading, dividend policy (for both regular
and special dividends), stock repurchase strategy and communication with market
makers. Prior to the closing of the Offering, KBW shall furnish to client a
Post-Offering reference manual, which will include specifics relative to these
items. (The nature of the services to be provided by KBW as the Bank's and the
Company's financial advisor and marketing agent is further described in Exhibit
A attached hereto.)
Keefe,
Bruyette & Woods * 211 Bradenton Ave. * Dublin, 0H 43017
614.766.8400
* Fax 614.766.8406
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Mr. Mark E. Hord
October 27, 2005
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2. Preparation
of Offering Documents. The Bank, the Company and their counsel will draft
the Registration Statement, Application for Offering, Prospectus and other
documents to be used in connection with the Offering and minority stock
issuance. KBW will attend meetings to review these documents and advise you on
their form and content. KBW and its counsel will draft appropriate agency
agreement and related documents as well as marketing materials other than the
Prospectus.
3. Due
Diligence Review. Prior to filing the Registration Statement, Application
for Offering or any offering or other documents naming KBW as the Bank's and
the Company's financial advisor and marketing agent, KBW and their
representatives will undertake substantial investigations to learn about the
Bank's business and operations ("due diligence review") in order to
confirm information provided to us and to evaluate information to be contained
in the Bank's and/or the Company's offering documents. The Bank agrees that it
will make available to KBW all relevant information, whether or not publicly
available, which KBW reasonably requests, and will permit KBW to discuss with
management the operations and prospects of the Bank. KBW will treat all
material non-public information as confidential. The Bank acknowledges that KBW
will rely upon the accuracy and completeness of all information received from
the Bank, its officers, directors, employees, agents and representatives,
accountants and counsel including this letter to serve as the Bank's and the
Company's financial advisor and marketing agent.
4. Regulatory
Filings. The Bank and/or the Company will cause appropriate Offering and
offering documents to be filed with all regulatory agencies including, the
Securities and Exchange Commission ("SEC"), the National Association
of Securities Dealers ("NASD"), the Office of Thrift Supervision
("OTS"), and such state securities commissioners as may be determined
by the Bank.
5. Agency
Agreement. The specific terms of KBW's services, including stock offering
enhancement and syndicated offering services contemplated in this letter shall
be set forth in a mutually agreed upon Agency Agreement between KBW and the
Bank and the Company to be executed prior to commencement of the offering, and
dated the date that the Company's Prospectus is declared effective and/or
authorized to be disseminated by the appropriate regulatory agencies, the SEC,
the NASD, the OTS and such state securities commissioners and other regulatory
agencies as required by applicable law.
6. Representations,
Warranties and Covenants. The Agency Agreement will provide for to be
agreed upon representations, warranties and covenants by the Bank and KBW, and
for the Company to indemnify KBW and their controlling persons (and, if
applicable, the members of the selling group and their controlling persons),
and for KBW to indemnify the Bank and the Company against certain liabilities,
including, without limitation, liabilities under the Securities Act of 1933.
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Mr. Mark E. Hord
October 27, 2005
Page 3 of 5
7. Fees.
For the services hereunder, the Bank and/or Company shall pay the following
fees to KBW at closing unless stated otherwise:
(a) Management
Fee. A Management Fee of $50,040 payable in four consecutive monthly
installments of $12,250 commencing with the adoption of the Plan of Stock
Issuance. Such fees shall be deemed to have been earned when due. Should the
Offering be terminated for any reason not attributable to the action or
inaction of KBW, KBW shall have earned and be entitled to be paid fees accruing
through the stage at which point the termination occurred.
(b) Success
Fee: A Success Fee of 1.40% shall be charged based on the aggregate
Purchase Price of Common Stock sold in the Subscription Offering and Community
Offering excluding shares purchased by the Bank's officers, directors, or
employees (or members of their immediate family) plus any ESOP, charitable
foundation, tax-qualified or stock based compensation plans (except IRA's) or
similar plan created by the Bank for some or all of its directors or employees.
The Management Fee described in 7(a) will be applied against the Success Fee.
(c) Broker-Dealer
Pass-Through. If any shares of the Company's stock remain availabl
