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Exhibit 1.1
CONFIDENTIAL
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April 7, 2000
Mr. Charles Pearson
President & Chief Executive Officer
Harris Financial, Inc.
235 North Second Street
Harrisburg, PA 17105
Re: Second Step Conversion - Selling Agent Services, Proxy
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Solicitation & Administrative Services
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Dear Mr. Pearson:
Ryan, Beck & Co. ("Ryan, Beck") is pleased to submit this engagement letter
setting forth the terms of the proposed engagement between Ryan, Beck and Harris
Financial, Inc., (the "Company") in connection with the proposed conversion and
sale of the Common Stock of the Company held by Harris Financial M.H.C. (the
"MHC").
1. BACKGROUND ON RYAN, BECK
Ryan, Beck, Inc., was organized in 1946 and is one of the nation's leading
investment bankers for financial Companys. The firm is a registered broker-
dealer with the Securities and Exchange Commission, a member of the National
Association of Securities Dealers, Inc., Securities Industry Association and a
member of the Securities Investor Protection Corporation. Ryan, Beck's
corporate finance and research group represents one of the largest such groups
devoted solely to financial Company matters in the country. Moreover, Ryan,
Beck is one of the largest market makers in bank and thrift stocks.
2. SECOND STEP STOCK OFFERING AND SUBSEQUENT ACQUISITION
It is our understanding that the Company proposes to issue shares of common
stock of the Company held by the MHC in a subscription offering with any
remaining shares sold in a community offering and/or underwritten public
offering (collectively the "Offering"). Shares sold in the Offering shall
represent those shares representing the final independent appraisal times the
adjusted majority ownership of the MHC. Consequently, shares sold in the
Offering do not include any additional shares issued to the acquired
institution's shareholders by Harris in connection with the Acquisition. For
purposes herein, however, any unsold Offering shares used as consideration in
connection with the Acquisition shall still be considered as shares issued
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Mr. Charles Pearson
April 7, 2000
Page 2
in the Offering. In connection therewith, the Company's Board of Directors will
adopt a reorganization and stock issuance plan (the "Plan") whereby shares of
Common Stock will be offered for sale in the Offering. The Plan is being adopted
in connection with the simultaneous acquisition by the Institution of another
depository institution (the "Acquisition"). Ryan, Beck's services as financial
adviser to Harris in connection with the Acquisition are furnished pursuant to a
separate letter dated August 9, 1999. In connection with the Reorganization and
Offering, Ryan, Beck proposes to act as financial advisor to the Company with
respect to the Plan and selling agent/lead manager with respect to the
subscription, community offering, and any public underwriting. Specific terms of
services shall be set forth in a definitive agency agreement and/or underwriting
agreement (the "Definitive Agreement") between Ryan, Beck and the Company to be
executed on the date the offering document is declared effective by the
appropriate regulatory authorities. The Definitive Agreement will include
customary representations and warranties, covenants, conditions, termination
provisions and indemnification, contribution and limitation of liability
provisions, all to be mutually agreed upon by Ryan, Beck and the Company (and
its successors). Ryan, Beck's willingness to execute a Definitive Agreement and
conduct the Offering will be subject to its satisfaction, in its sole discretion
and judgment, with a number of other factors, including but not limited to the
following:
i. there being no material adverse change in the condition or operation
of the Company or any acquired company;
ii. satisfactory disclosure of all relevant financial information in the
disclosure documents and determination that the sale of the securities
is reasonable given such disclosures;
iii. the current financial position, earnings performance and future
prospects of the Company or any acquired company;
iv. receipt of a "comfort letter" from the Company's accountants
containing no material exceptions; and
v. the condition of the credit and equity markets and particularly as
they relate to securities of financial institutions.
3. SERVICES TO BE PROVIDED BY RYAN, BECK
a. Advisory Services - Thorough planning is essential to a successful
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offering. Ryan, Beck serves as lead coordinator of the marketing and
logistic efforts necessary to prepare for an offering. Our actions are
intended to clearly define responsibilities and timetables, while avoiding
costly surprises. We assume responsibility for the initial preparation of
marketing materials--saving you time and legal expense. Moreover, as your
investment banker, Ryan, Beck will evaluate the financial, marketing and
regulatory issues involved in the Offering. Our specific responsibilities
include:
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Mr. Charles Pearson
April 7, 2000
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- Review and advise with respect to the Plan;
- Review and provide input with respect to the Business Plan to be
prepared in connection with the Reorganization;
- Participate in drafting the Prospectus and assist in obtaining all
requisite regulatory approvals on terms most favorable to Harris;
- Assist Harris in minimizing the "divided waiver" adjustment and to
secure regulatory consent to utilize unsold shares as acquisition
currency;
- Review and opine to the Board of Directors on the adequacy of the
appraisal process;
- Develop a marketing plan for the Offering including direct mail,
advertising, community meetings and telephone solicitation;
- Provide specifications and assistance in selecting data processing
assistance, printer and other professionals;
- Develop an operating plan for the Stock Sale Center (the "Center");
- Provide a list of equipment and supplies needed for the Center;
- Draft marketing materials including letters, brochures, slide show
script and advertisements; and
- Assist in arranging market-makers for post-reorganization trading.
b. Administrative Services and Stock Sale Center Management - Ryan, Beck will
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manage all aspects of the Offering. A successful Offering requires an
enormous amount of attention to detail. Working knowledge and familiarity
with the law and "lore" of bank regulators, Securities and Exchange
Commission and NASD is essential. Ryan, Beck's experience in managing many
thrift reorganizations and second step conversion offerings will minimize
the burden on your management and disruption to normal banking business.
c. At the same time, our legal, accounting and regulatory background ensures
that details are attended to in a professional fashion. An Offering requires
accurate and timely record keeping and reporting. Furthermore, customer
inquiries must be handled professionally and accurately. The Center
centralizes all data and work effort relating to the Offering.
Ryan, Beck will supervise and administer the Center. We will train Center staff
to help record stock orders, answer customer inquiries and handle special
situations as they arise. Center activities include the following:
- Provide experienced on-site registered representatives to minimize
disruption of day-to-day business.
- Identify and organize space for the Center, the focal point of sales and
proxy solicitation activity;
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Mr. Charles Pearson
April 7, 2000
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- Administer the Center. All substantive stock and proxy related matters
will be handled by employees of Ryan, Beck.
- Organize and implement all proxy solicitation efforts;
- Prepare procedures for processing proxies, stock orders and cash, and
for handling requests for information;
- Ryan, Beck will outsource all reorganization agent/data
processing/transfer agent functions. Ryan, Beck recommends outsourcing
such services to Chase/Mellon Shareholder Services or Crowe Chizek and
Company LLP. The cost of such services will be borne by the Company and
are subject to separate agreement;
- Provide scripts, training and guidance for the telephone team in
soliciting proxies and in the stock sales telemarketing effort;
- Educate the Company's directors, officers and employees about the
Reorganization and Offering, their roles and relevant securities laws;
- Train branch managers and customer-contact employees on the proper
response to stock purchase inquiries;
- Train and supervise Center staff assisting with proxy and order
processing;
- Prepare daily sales reports for management and ensure funds received
balance to such reports;
- Coordinate functions with the data processing agent, printer, transfer
agent, stock certificate printer and other professionals;
- Design and implement procedures for handling IRA and Keogh orders; and
- Provide post-offering subscriber assistance and management of the pro-
ration process.
c. Securities Marketing Services - Ryan, Beck uses various sales techniques
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including direct mail, advertising, community investor meetings, telephone
solicitation, and if necessary, selling group formation. The sales approach
is tailored to fit your specific situation. Our techniques are designed to
attract a stockholder base comprised largely of community oriented
individuals loyal to the Company.
Our specific actions include:
- Assign licensed registered representatives from our staff to work at the
Center to solicit orders on behalf of the Company from eligible
prospects who have been targeted as likely and desirable stockholders;
- Assist management in developing a list of potential investors who are
viewed as priority prospects;
- Respond to inquiries concerning the Offering and investment
opportunities;
- Organize, coordinate and participate in community informational
meetings. These meetings are intended to both relieve customer anxiety
and attract potential investors.
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Mr. Charles Pearson
April 7, 2000
Page 5
The meetings generate widespread publicity for the Offering while
providing local exposure of the Company and promoting favorable
stockholder relations;
- Supervise and conduct a telemarketing campaign to identify prospects from
among the Company's customer base;
- Continually advise management on market conditions and the community's
responsiveness to the Offering; and
- If appropriate and at the request of the Company, arrange a syndicated
community Offering involving a selling group of selected broker-dealers
acting on a "best efforts" basis to assist in selling stock during the
Offering. In so doing, prepare broker "fact sheets" and arrange "road
shows" for the purpose of stimulating interest in the stock and informing
the brokerage community of the particulars of the Offering.
Alternatively, if so directed by the Company, Ryan, Beck will lead manage
a "stand-by" firm commitment underwriting including other underwriters
agreed to by the Company and Ryan, Beck. In the event the Company elects
to pursue a firm commitment underwriting, such arrangement shall be
subject to separate terms and agreement;
- Coordinate efforts to maximize after-market support and Company
sponsorship.
4. COMPENSATION
a. For its services hereunder, the Company will pay to Ryan, Beck the following
compensation in connection with the Reorganization and Offering.
(1) An advisory and management fee of $150,000 in connection with the
advisory, administrative and proxy solicitation services set forth in
section 3.a. and 3.b. hereof (the "Management Fee"); the Management Fee
shall be payable as follows: $50,000 upon signing this Agreement;
$50,000 upon the filing of the Registration Statement; and $50,000 upon
closing of the Offering.
(2) A fee of one and one-fifth percent (1.20%) of the dollar amount of the
Common Stock sold in the Offering other than those shares sold pursuant
to (3) below. No fee shall be payable pursuant to this subsection in
connection with the sale of stock to officers, directors, employees or
immediate family of such persons ("Insiders") and qualified and non-
qualified employee benefit plans of the Company or the Insiders.
(3) For stock sold by a group of NASD member firms (which will include
Ryan, Beck & Co.) pursuant to a syndicated community offering solely
managed by Ryan, Beck (the "Selling Group"), a fee equal to one and
one-fifth percent (1.20%), which fee along with the fee payable
directly by the Company to selected dealers shall not exceed six
percent and one half (6.50%) in the aggregate. Ryan, Beck will not
commence sales of
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Mr. Charles Pearson
April 7, 2000
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the stock through members of the Selling Group without the specific
prior approval of the Company. To the extent the Company elects to
employ Ryan, Beck as well as other broker-dealers to serve as "stand-
by" underwriters then any "stand-by" fees associated therewith are to
be paid separately by the Company. Such fees shall not exceed one
percent (1%) of the shares in the Offering. Sales concessions paid to
such firms are covered by paragraph 4 (a)(3) above.
Such fees (less the amount of any advance payments) are to be paid to
Ryan, Beck at the closing of the Offering. If, pursuant to a
resolicitation undertaken by the Company, Ryan, Beck is required to
provide significant additional services, or expend significant additional
time, the parties shall mutually agree to the dollar amount of the
additional compensation due.
b. If (i) the Plan is abandoned or terminated by the Company; (ii) the Offering
is not consummated by March 31, 2001; (iii) Ryan, Beck terminates this
relationship because there has been a material adverse change in the
financial condition or operations of the Company or the acquired institution
since December 31, 1999; or (iv) immediately prior to commencement of the
Offering, Ryan, Beck terminates this relationship because in its opinion,
which shall have been formed in good faith after reasonable determination
and consideration of all relevant factors, there has been a failure to
satisfactorily disclose all relevant information in the disclosure documents
or the existence of market conditions which might render the sale of the
shares by the Company hereby contemplated inadvisable; Ryan, Beck shall not
be entitled to the fees set forth above under subparagraph (a), but in
addition to reimbursement of its reasonable out-of-pocket expenses as set
forth in paragraph 7 below, shall be entitled to receive the Management Fee.
5. DOCUMENTS
The Company and its counsel will complete, file with the appropriate regulatory
authorities and, as appropriate, amend from time to time, the information to be
contained in the Company's applications to banking and securities regulators and
any related exhibits thereto. In this regard, the Company and its counsel will
prepare a prospectus and any other necessary disclosure documents relating to
the offering of the Common Stock in conformance with applicable rules and
regulations. As the Company's financial advisor, Ryan, Beck will in conjunction
with counsel, conduct an examination of the relevant documents and records of
the Company and will make such other reasonable investigation as deemed
necessary and appropriate under the circumstances. The Company agrees to make
all such documents, records and other information deemed necessary by Ryan,
Beck, or its counsel, available to them upon reasonable request. Ryan, Beck's
counsel will prepare, subject to the approval of the Company's
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Mr. Charles Pearson
April 7, 2000
Page 7
counsel, the Definitive Agreement. Ryan, Beck's counsel shall be selected by
Ryan, Beck, subject to the approval of the Company.
6. EXPENSES AND REIMBURSEMENT
The Company will bear all of its expenses in connection with the Reorganization
and the Offering of its Common Stock including, but not limited to, the
Company's attorney fees, NASD filing fees, "blue sky" legal fees, expenses for
appraisal, auditing and accounting services, advertising expenses, printing
expenses, "road show" expenses, syndicate related expenses, temporary personnel
expenses and the preparation of stock certificates. In the event Ryan, Beck
incurs such expenses on behalf of the Company, the Company shall pay or
reimburse Ryan, Beck for such reasonable fees and expenses regardless of whether
the Reorganization is successfully completed. Ryan, Beck will not incur any
single expense of more than $2,000, pursuant to this paragraph without the prior
approval of the Company.
The Company also agrees to reimburse Ryan, Beck for reasonable out-of-pocket
expenses, including legal fees and expenses, incurred by Ryan, Beck in
connection with the services contemplated hereunder. Ryan, Beck will not incur
legal fees (excluding the out-of-pocket expenses of counsel) in excess of
$125,000 without the approval of the Company. Other out-of-pocket expenses
directly incurred by Ryan, Beck will not exceed $50,000 without the approval of
the Company. The parties acknowledge, however, that such caps may be increased
by the mutual consent of the Company and Ryan, Beck in the event of any material
delay in the Offering which would require an update of the financial information
in tabular form contained in the Prospectus for a period later than that set
forth in the original Prospectus filing. Not later than three days before
closing, we will provide you with a detailed accounting of all reimbursable
expenses to be paid at closing.
7. MARKET MAKING & RESEARCH
For a period of at least three years, Ryan, Beck agrees to use its best efforts
to maintain a market and to solicit other broker-dealers to make a market in the
Common Stock after the Offering so that there are at least three market makers
for the Common Stock after the Offering. For a similar term, Ryan, Beck agrees
to provide research coverage on the Holding Company.
8. INFORMATION TO BE SUPPLIED; DOCUMENTS AND CONFIDENTIALITY
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Mr. Charles Pearson
April 7, 2000
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a. The Institution and its counsel will complete, file with the appropriate
regulatory authorities and, as appropriate, amend from time to time, the
information to be contained in the Institution's applications to banking and
securities regulators and any related exhibits thereto. In this regard, the
Institution and its counsel will prepare a prospectus and any other
necessary disclosure documents relating to the offering of the Common Stock
in conformance with applicable rules and regulations. As -the Institution's
financial advisor, Ryan, Beck will in conjunction with counsel, conduct an
examination of the relevant documents and records of the Institution and
will make such other reasonable investigation as deemed necessary and
appropriate under the circumstances.
b. The Institution acknowledges that all advice (written or oral) given by
Ryan, Beck to the Institution is intended solely for the benefit and use of
the Institution. Other than to the extent required to be reflected in Board
and committee meeting minutes, no advice (written or oral) of Ryan, Beck
hereunder shall be used, reproduced, disseminated, quoted or referred to at
any time, in any manner, or for any purpose, nor shall any public references
to Ryan, Beck be made by the Institution (or such persons), without the
prior written consent of Ryan, Beck.
c. Ryan, Beck will maintain the confidentiality of the Information and, unless
and until such information shall have been made publicly available by the
Institution or by others without breach of a confidentiality agreement,
shall disclose the Information only as authorized by the Institution or as
required by law or by order of a governmental authority or court of
competent jurisdiction. In the event that Ryan, Beck is legally required to
make disclosure of any of the Information, Ryan, Beck will give notice to
the Institution prior to such disclosure, to the extent that Ryan, Beck can
practically do so. The foregoing paragraph shall not apply to information
that:
i. at the time of disclosure by the Institution is, or thereafter
becomes, generally available to the public or within the
industries in which the Institution or Ryan, Beck or its
affiliates conduct business, other than as a result of a breach
by Ryan, Beck of its obligations under this Agreement;
ii. prior to or at the time of disclosure by the Institution, was
already in the possession of, or conceived by, Ryan, Beck or any
of its affiliates, or could have been developed by them from
information then in their possession, by the application of other
information or techniques in their possession, generally
available to the public, or available to Ryan, Beck or its
affiliates other than from the Institution;
iii. at the time of disclosure by the Institution or thereafter, is
obtained by Ryan, Beck or any of its affiliates from a third
party who Ryan, Beck reasonably believes to be in possession of
the information not in violation of any
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Mr. Charles Pearson
April 7, 2000
Page 9
contractual, legal or fiduciary obligation to the Institution
with respect to that information; or
iv. is independently developed by Ryan, Beck or its affiliates.
d. Ryan, Beck's counsel will prepare, subject to the approval of the
Institution's counsel, the Definitive Agreement. Ryan, Beck's counsel shall
be selected by Ryan, Beck, subject to the approval of the Institution.
e. In connection with Ryan, Beck's activities on behalf of the Institution, the
Institution and its acquisition partner will furnish Ryan, Beck with all
financial and other information regarding the Institution that Ryan, Beck
reasonably believes appropriate to its assignment (all such information so
furnished by the Institution, whether furnished before or after the date of
this Agreement, being referred to herein as the "Information"). The
Institution will provide Ryan, Beck with access to the officers, directors,
employees, independent accountants, legal counsel and other advisors and
consultants for the Institution. The Institution recognizes and agrees that
Ryan, Beck:
i. will use and rely primarily on the Information and information
available from generally recognized public sources in performing
the services contemplated by this Agreement without independently
verifying the information or such other information;
ii. does not assume responsibility for the accuracy of the
Information or such other information; and
iii. will not make an appraisal of any assets or liabilities owned or
controlled by the Institution or its market competitors.
f. Nothing in this Agreement shall be construed to limit the ability of Ryan,
Beck or its affiliates to pursue, investigate, analyze, invest in, or engage
in investment banking, financial advisory or any other business
relationships with, entities other than the Institution, notwithstanding
that such entities may be engaged in a business which is similar to or
competitive with the business of the Institution, and notwithstanding that
such entities may have actual or potential operations, products, services,
plans, ideas, customers or supplies similar or identical to the
Institution's , or may have been identified by the Institution as potential
merger or acquisition targets or potential candidates for some other
business combination, cooperation or relationship. The Institution expressly
acknowledges and agrees that it does not claim any proprietary interest in
the identity of any other entity in its industry or otherwise, and that the
identity of any such entity is not confidential information.
9. BLUE SKY
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Mr. Charles Pearson
April 7, 2000
Page 10
To the extent required by applicable state law, Ryan, Beck and the Institution
will need to obtain or confirm exemptions, qualifications or registration of the
Common Stock under applicable state securities laws and NASD policies. Such
work will be performed by the Institution's counsel and the cost of such legal
work and related filing fees will be paid by the Institution. The Institution
will cause the counsel performing such services to prepare a Blue Sky memorandum
related to the Offering including Ryan, Beck's participation therein and shall
furnish Ryan, Beck a copy thereof addressed to Ryan, Beck or upon which such
counsel shall state Ryan, Beck may rely.
To the extent required by applicable state law, Ryan, Beck and the Company will
need to obtain or confirm exemptions, qualifications or registration of the
Common Stock under applicable state securities laws and NASD policies. Such
work will be performed by the Company's counsel and the cost of such legal work
and related filing fees will be paid by the Company. The Company will cause the
counsel performing such services to prepare a Blue Sky memorandum related to the
Offering including Ryan, Beck's participation therein and shall furnish Ryan,
Beck a copy thereof addressed to Ryan, Beck or upon which such counsel shall
state Ryan, Beck may rely.
10. AVAILABILITY OF "STARS" PROGRAM
As an additional service to the Company, Ryan, Beck will make available for a
period of 1 year following the completion of the Offering, advisory services
through the Ryan, Beck Strategic Advisory Services ("STARS") program. The
undersigned will serve as the senior relationship manager for this program. If
the Company elects to avail itself of the STARS program, Ryan, Beck will meet
with the Company at its request. Ryan, Beck also will provide opinions and
recommendations, upon request, for the areas covered below:
Valuation Analysis
Merger and Acquisition Planning and Analysis
Merger and Acquisition Trends
Planning, Forecasting & Competitive Strategy
Capital, Asset & Liability Structure & Management
Stock Repurchase Programs
Dividend Policy
Dividend Reinvestment Programs
Market Development and Sponsorship of Bank Securities
Financial Disclosure
Financial Relations
Financial Reports
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Mr. Charles Pearson
April 7, 2000
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Branch Sales and Purchases
Stock Benefit Plan Analysis and Advisory
Stockholder & Investor Relations Presentations & Programs
Fairness Opinions
Scanning of Potential Acquisition Candidates
Based on Published Statement Information
(This screening does not extend to any in-depth merger and acquisition
analyses or studies which are available under Ryan, Beck's normal fee
schedule, and does not include retention of Ryan, Beck by the Company for
any specific merger/acquisition situation.)
If the Company elects to utilize the STARS program Ryan, Beck will waive the
regular retainer fee and hourly charges for this program for the first year. The
Company also will reimburse Ryan, Beck's reasonable out-of-pocket expenses
incurred in conjunction with the performance of these services. Such out-of-
pocket expenses shall include travel, legal and other miscellaneous expenses.
Ryan, Beck will not incur any single expense in excess of $2,000 pursuant to
this paragraph without the prior approval of the Company.
If negotiations for a transaction conducted during the term of the STARS
Advisory Agreement described above result in the execution of a definitive
agreement and/or consummation of a transaction for which Ryan, Beck customarily
would be entitled to a fee for its advisory or other investment banking
services, Ryan, Beck shall receive a contingent advisory fee ("Advisory Fee") in
accordance with the terms of a separate engagement letter with respect to such
transaction.
11. INDEMNIFICATION
The Definitive Agreement will provide for indemnification of the type usually
found in underwriting agreements as to certain liabilities, including
liabilities under the Securities Act of 1933. The Company also agrees to defend,
indemnify and hold harmless Ryan, Beck and its officers, directors, employees
and agents against all claims, losses, actions, judgments, damages or expenses,
including but not limited to reasonable attorneys' fees, arising solely out of
the engagement described herein, except that such indemnification shall not
apply to Ryan, Beck's own bad faith, willful misconduct or gross negligence.
12. CONFIDENTIALITY
To the extent consistent with legal requirements and except as otherwise set
forth in the Prospectus, all information given to Ryan, Beck by the Company,
unless publicly available or otherwise available to Ryan, Beck without
restriction to breach of any confidentiality agreement ("Confidential
Information"), will be held by Ryan, Beck in confidence and will not be
disclosed
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Mr. Charles Pearson
April 7, 2000
Page 12
to anyone other than Ryan, Beck's agents without the Company's prior approval or
used for any purpose other than those referred to in this engagement letter.
Upon any termination of its engagement, Ryan, Beck shall promptly deliver to the
Company all materials specifically produced for it and will return to the
Company all Confidential Information provided to Ryan, Beck during the course of
its engagement hereunder.
13. NASD MATTERS
Ryan, Beck has an obligation to file certain documents and to make certain
representations to the National Association of Security Dealers ("NASD") in
connection with the Reorganization. The Company agrees to cooperate with Ryan,
Beck and provide such information as may be necessary for Ryan, Beck to comply
with all NASD requirements applicable to it in connection with its participation
as contemplated herein in the Reorganization. Ryan, Beck is and will remain
through completion of the Reorganization a member in a good standing of the NASD
and will comply with all applicable NASD requirements.
14. OBLIGATIONS
(a) Except as set forth below, this engagement letter is merely a statement of
intent. While Ryan, Beck and the Company 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 Reorganization, any legal obligations
between Ryan, Beck and the Company shall be only: (i) those set forth herein
in paragraphs 2, 3 and 4 regarding services and payments; (ii) those set
forth in paragraph 7 regarding reimbursement for certain expenses; (iii)
those set forth in paragraph 10 regarding indemnification; (iv) those set
forth in paragraph 11 regarding confidentiality; and (v) as set forth in a
duly negotiated and executed Definitive Agreement.
(b) The obligation of Ryan, Beck to enter into the Definitive Agreement shall be
subject to there being, in Ryan, Beck's opinion, which shall have been
formed in good faith after reasonable determination and consideration of all
relevant factors: (i) no material adverse change in the condition or
operation of the Company; (ii) satisfactory disclosure of all relevant
information in the disclosure documents and a determination that the sale of
stock is reasonable given such disclosures; (iii) no market conditions which
might render the sale of the shares by the Company hereby contemplated
inadvisable; and (iv) agreement that the price established by the
independent appraiser is reasonable in the then prevailing market
conditions.
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Mr. Charles Pearson
April 7, 2000
Page 13
Please acknowledge your agreement to the foregoing by signing in the place
provided below and returning one copy of this letter to our office together with
the retainer payment in the amount of $50,000. We look forward to working with
you.
RYAN, BECK & CO., INC.
BY: /s/ Ben A. Plotkin
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Ben A. Plotkin
Chairman & Chief Executive Officer
Accepted and Agreed to This 23rd Day of April, 2000
HARRIS FINANCIAL, INC.
BY: /s/ Charles Pearson
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Charles Pearson
President & Chief Executive Officer
