Engagement Letter between Lake Shore Savings Bank, Lake Shore Bancorp, Inc. and Lake Shore, MHC and Raymond James & Associates, Inc

Exhibit 1.1

CONFIDENTIAL

31 East Fourth Street

Dunkirk, NY 14048

Attention: Kim C. Liddell, President, Chief Executive Officer & Director

This letter agreement (together with all addenda hereto, which are incorporated herein and made a part hereof, this “Agreement”) sets forth the terms pursuant to which Lake Shore Savings Bank (“Lake Shore Bank”), Lake Shore, MHC (“Lake Shore MHC”), and Lake Shore Bancorp, Inc. (“Lake Shore Holding Company” and together with Lake Shore MHC and Lake Shore Bank, collectively, the “Company”) hereby engages Raymond James & Associates, Inc. (including any of its affiliates assisting in executing matters under this engagement, “Raymond James” and, together with the Company, the “Parties”) to act, subject to Section 12 below, as financial advisor, marketing agent, and records agent to the Company in connection with the conversion of Lake Shore MHC from a mutual form of organization to a stock form of organization (the “Conversion”), including the services delineated in Sections 1 and 2 below during (and, at the Company’s express written request or consent, prior to) the Term (as defined in Section 8 below). It is further understood that the Conversion will include the associated sale of common stock of Lake Shore Holding Company as further described below.

Pursuant to a Plan of Conversion (the “Plan”), Lake Shore Holding Company will offer and sell shares of its common stock to Lake Shore Bank’s qualifying account holders in a subscription offering (the “Subscription Offering”). Shares not subscribed for in the Subscription Offering may, at the discretion of the Company, be offered to the local community (as defined in the Plan) and the general public in a community offering (the “Community Offering”), and if necessary, through a syndicate of one or more broker-dealers managed by Raymond James (a “Syndicated Community Offering”, and with a Subscription Offering and a Community Offering, collectively, the “Offerings”).

222 South Riverside Plaza – 7^th Floor // Chicago, IL 60606

###-###-#### // raymondjames.com

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

Lake Shore Bancorp, Inc.

January 3, 2025

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Lake Shore Bancorp, Inc.

January 3, 2025

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Raymond James shall not provide or render any legal, accounting, regulatory, appraisal, tax advice or any formal opinion with respect to any matter hereunder (“Excluded Matters”) and shall be permitted to deliver the Services on the assumption that the Company shall have sole responsibility for such Excluded Matters.

If the Company requests that Raymond James provide any services other than those expressly set out in Sections 1 and 2 (“Additional Services”), the Parties shall either amend this Agreement or enter into an additional agreement, in either case setting forth the nature and scope of such Additional Services, appropriate compensation with respect thereto, and other customary engagement-related matters, as mutually agreed upon in writing between the Parties.

Lake Shore Bancorp, Inc.

January 3, 2025

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Lake Shore Bancorp, Inc.

January 3, 2025

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If there an Engagement Termination (as defined in Section 8 below) of this Agreement and/or if the Offerings are terminated for any reason, Raymond James shall have earned and be entitled to be paid all Fees accrued through the moment at which such Engagement Termination occurs. For avoidance of doubt, the Company’s obligations to pay to Raymond James the full Success Fee upon completion of any Offering shall survive any Engagement Termination, including any Engagement Termination occurring prior to the completion of such Offerings. The payment of compensation by the Company to Raymond James pursuant to this Section 6 may be subject to FINRA’s review of such compensation, if such review is required under applicable FINRA rules and regulations.

Regardless of whether or not any Offering Closes and/or the Plan is consummated, the Company shall (subject to the parameters set forth below) reimburse Raymond James for all (a) non-attorney out-of-pocket expenses reasonably incurred by Raymond James in connection with performing the Services (“Ordinary Expenses”), and (b) all Services-Related Legal Expenses, as defined below; provided that, without the Company’s written consent (which shall not be unreasonably withheld, conditioned or delayed), Ordinary Expenses shall not exceed $35,000 (the “Ordinary Expenses Cap”) and Services-Related Legal Expenses shall not exceed $100,000 (the “Legal Expenses Cap” and, alternatively with the Ordinary Expenses Cap (each an “Expenses Cap”); except that, for clarity, the foregoing Expenses Cap shall not apply to or have any impact on the Company’s separate reimbursement obligations under Sections 11 and 13(b) below and/or under Addendum A hereto (“Non-Process Legal Expenses”). “Services-Related Legal Expenses” means the reasonable fees and disbursements of outside legal counsel (apart from Non-Process Legal Expenses), expressly excluding legal expenses incurred in connection with the preparation of this Agreement.

The Company acknowledges and agrees that: (i) the Expense Caps assume no unusual circumstances or delays, and no re-solicitation in connection with the Offerings; and (ii) in the event unusual circumstances arise or a delay or re-solicitation occurs (including but not limited to a delay in the Offerings which would require an update of the financial information in tabular form to reflect a period later than that set forth in the original filing of any Offering documents), such Expense Caps may be increased by the following additional amounts without requiring the Company’s consent: up to an additional $10,000 in the case of Ordinary Expenses and up to an additional $25,000 in the case of Services-Related Legal Expenses.

Lake Shore Bancorp, Inc.

January 3, 2025

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In addition to the Company’s reimbursement obligations set forth in the preceding paragraphs of this Section 7, the Company will bear all of its own expenses of the proposed Offerings customarily borne by issuers, including, without limitation, any regulatory filing fees, SEC, “Blue Sky”, and FINRA filing and registration fees, and DTC eligibility and DRS participation fees; the fees and expenses of the Company’s accountants, attorneys, appraiser, business plan consultant, financial printer, proxy solicitor, and transfer agent; the costs of operating the Stock Information Center, including hiring temporary personnel if needed to assist with data entry and clerical functions, postage and overnight delivery service charges, and Syndicated Community Offering expenses associated with the Offerings; the Fees set forth in Section 6; and any fees for “Blue Sky” legal work.

The term of this Agreement (the “Term”) shall commence on the date executed by both Parties and shall terminate (an “Engagement Termination”) thirty (30) days following either Party’s receipt from the other Party of written notice to such effect (a “Termination Notice”), which must expressly refer to the termination of this Agreement. A Termination Notice must be delivered by the notifying party to the appropriate person(s) designated in Section 13(g) below at the receiving party by both an email and a hard copy sent by courier service (e.g., FedEx, UPS, DHL, with proof of delivery required), provided that only one form of notice shall be required if there is documentary or digital proof of actual receipt by the recipient of such notice (proof solely of transmission or sender-processing will not fulfill the condition of this proviso).

For clarity, (a) there shall never be any oral, constructive, implied or circumstantial form of termination of this Agreement or of Raymond James’s engagement hereunder, and (b) any instruction (written or oral) by the Company to Raymond James to cease any process for a specific Transaction or for all Transactions generally shall, absent a specific reference to the termination of this Agreement, not constitute an Engagement Termination.

Sections 4 through 13 of this Agreement and Addendum A hereto shall survive any Engagement Termination or Closing. Further, if Raymond James has not been fully reimbursed for its invoiced Expenses pursuant to Section 7 above within thirty (30) days after the effective date of any Engagement Termination hereunder (the “Termination Date”), the Tail Period will be extended by the number days between such Termination Date and the date on which Raymond James is fully reimbursed for such Expenses.

The Company acknowledges and agrees that Raymond James, as Records Agent hereunder, (a) shall have no duties or obligations other than the contractual obligations to the Company specifically set forth herein; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any order form or any stock certificates or the shares represented thereby, and will not be required to and will make no representations as to the validity, value or genuineness of the offer; (c) shall not be obliged to take any legal action hereunder which might in its judgment involve any expense or liability, unless it shall have been furnished with an indemnity satisfactory to it; and (d) may rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telex, telegram, or other document or security delivered to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties.

Lake Shore Bancorp, Inc.

January 3, 2025

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The Company also agrees neither Raymond James, nor any of its affiliates nor any officer, director, employee or agent of Raymond James or any of its affiliates, nor any person controlling Raymond James or any of its affiliates, shall be liable to any person or entity, including the Company and any purchaser or potential purchaser of Common Stock in the Offerings, by reason of any error of judgment, or for any act done by it in good faith, or for any mistake of law or fact in connection with this Agreement and the performance hereof, except to the extent arising as a direct and proximate cause from Raymond James’s Excluded Act (as defined in Addendum A). The foregoing shall be in addition to any rights that Raymond James, the Company or any Indemnified Party (as defined in Addendum A) may have at common law or otherwise, including, but not limited to, any right to contribution.

Anything in this Agreement to the contrary notwithstanding, in no event shall Raymond James be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Raymond James has been advised of the likelihood of such loss or damage and regardless of the form of action.

Lake Shore Bancorp, Inc.

January 3, 2025

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For avoidance of doubt, the Company acknowledges that Raymond James’s execution of any Agency Agreement shall also be subject to each of the following: (a) Raymond James’s satisfaction with its Due Diligence Review; (b) preparation of offering materials that are satisfactory to Raymond James; (c) compliance with all relevant legal and regulatory requirements to the reasonable satisfaction of Raymond James and its counsel; (d) agreement that the price established by the independent appraiser is reasonable; and (e) market conditions at the time of the proposed Offerings.

Other than a Dispositive Excluded Act Proceeding (which, per its definition above, must be adjudicated in a court of competent jurisdiction), any dispute and/or claim arising out of the interpretation, application or enforcement, or otherwise relating to the subject matter, of this Agreement, including without limitation any breach of this Agreement, will be settled by final and binding arbitration before a panel of three (3) arbitrators appointed by the American Arbitration Association, in accordance with the commercial rules then prevailing of the American Arbitration Association, with all arbitration hearings to be held in New York County, New York. The arbitrators chosen shall (A) be neutral persons, (B) have no prior relationship with or performance of any services for either arbitrating party, and (C) be knowledgeable of investment banking services, engagement contracts and fee practices. In the event that any arbitrator selected hereunder is unable to serve, his or her replacement will be selected in the same manner. Other than with respect to the reimbursement of expenses provided for under the last subparagraph of this Section 13(a), the arbitrators shall not have authority to award punitive or other non-compensatory damages to either arbitrating party. The decision of the arbitrators shall be binding on Raymond James and the Company and may be entered and enforced in any court of competent jurisdiction by either Party. The arbitration shall be pursued and brought to conclusion as rapidly as is possible.

TO THE EXTENT PERMITTED BY LAW, EACH OF RAYMOND JAMES AND THE COMPANY VOLUNTARILY AND IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT, THE ENGAGEMENT OF RAYMOND JAMES HEREUNDER, OR THE PERFORMANCE BY RAYMOND JAMES OF THE SERVICES.

In any action, suit, arbitration or proceeding between the Parties arising out of the interpretation, application or enforcement, or otherwise relating to the subject matter, of this Agreement, including without limitation any action for breach of this Agreement or dispute concerning an alleged Excluded Act, the prevailing Party shall be entitled to an award of reimbursement from the non-prevailing Party of the prevailing Party’s reasonable attorneys’ fees and costs, including fees and costs incurred by the prevailing Party in obtaining or enforcing such award or judgment.

Lake Shore Bancorp, Inc.

January 3, 2025

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The Company further acknowledges that (x) prior to the date of this Agreement, and in the ordinary course of business, Raymond James investment banking personnel (which may include investment banking personnel providing Services hereunder) may have from time to time held discussions with and provided information to parties who thereafter became categorized as prospective “Transaction Counterparties” hereunder regarding various market and strategic matters, including such parties consideration prior hereto of a potential transaction with the Company, and (y) there is the possibility that the information and content of such earlier discussions between Raymond James and such parties might be used or relied upon by such parties (in their subsequent status as a Prospective Counterparty hereunder) in connection with their determinations in respect of a potential Transaction with the Company.

Lake Shore Bancorp, Inc.

January 3, 2025

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Lake Shore Bancorp, Inc.

January 3, 2025

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If the foregoing correctly sets forth our mutual understanding, please so indicate by signing and returning this Agreement to the undersigned.

Lake Shore Bancorp, Inc.

January 3, 2025

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ADDENDUM A

Pursuant to Section 5 of this Agreement, the Company hereby agrees to indemnify, defend and hold harmless Raymond James and Raymond James Financial, Inc. (together, “RJ”) and their respective Affiliates, together with their and their Affiliates’ respective officers, directors, managers, members, partners, securityholders, employees and agents, and each Person (as defined below), if any, who controls RJ or any of its Affiliates within the meaning of the U.S. Securities Act of 1933, as amended, or the U.S. Securities Exchange Act of 1934, as amended (all of the foregoing are referred to collectively as “RJ Parties” and individually as an “RJ Party”), from and against any and all (a) claims, actions (including securityholder claims or actions, derivative or otherwise), demands, investigations and proceedings of any kind or nature (collectively, “Proceedings”) threatened, brought or established against any RJ Party by any party (“Person”),and (b) losses, claims, judgments, penalties, fines, charges, costs (including professional or legal fees and other costs of litigation or other proceedings), damages, taxes, liabilities of any kind or nature, whether joint or several (collectively, “Losses”), which such RJ Party may suffer or incur under any statute, common law, contract, tort or otherwise (including without limitation all such Losses suffered or incurred in considering, preparing for, responding to, disputing, or otherwise dealing with any actual or potential Proceedings, including any Proceeding brought in connection with any RJ Party’s right to be indemnified pursuant to this Addendum A), directly or indirectly arising out of, relating to or in connection with (i) the Agreement, the services provided in connection with the Agreement, or the exercise of RJ’s rights under the Agreement (including this Addendum A), or (ii) any transaction referred to in the Agreement or any transaction arising out of the transactions contemplated by the Agreement (each an “Indemnified Claim”), except solely to the extent that any such Indemnified Claim is found, in a final, unappealable judgment by a court of competent jurisdiction (a “Dispositive Excluded Act Proceeding”), to have resulted solely and exclusively and as a direct and proximate cause from said RJ Party’s bad faith, willful misconduct or gross negligence (other than an action or failure to act undertaken or refrained from being undertaken at the written or express request of or with the written or express consent of the Company) (an “Excluded Act”).

No Proceeding will be brought against any RJ Party to recover any Losses that the Company, its securityholders, officers, directors/managers or creditors, or any other Person in connection with any Indemnified Claim, may suffer or incur by reason of or in connection with any Indemnified Claim, and no RJ Party will have any liability to the Company, its securityholders, officers, directors/managers or creditors, or any other Person by reason of or in connection with any Indemnified Claim, whether such Loss arises under any statute, common law, contract, tort or otherwise, except solely to the extent that any such Losses or liability is found, in a Dispositive Excluded Act Proceeding, to have resulted solely and exclusively and as a direct and proximate cause from said RJ Party’s Excluded Act.

Nothing in the Agreement (including this Addendum A) will be construed as rendering RJ or any other RJ Party liable, under any circumstances and under any theory of law, to the Company, the Company’s securityholders, officers, directors/managers or creditors, or any other Person in respect of any indirect, incidental, special, consequential or punitive damages even if RJ or any other RJ Party have been advised as to the possibility thereof.

The Company agrees that no RJ Party shall have any liability to the Company, the Company’s securityholders, officers, directors/managers or creditors, and any other Person, under any statute, common law, contract, tort or otherwise, for any Loss suffered by such party arising out of, relating to or in connection with the Agreement or the services provided thereunder, however the Loss is caused, except to the extent that any such Loss or liability is found, in a Dispositive Excluded Act Proceeding, to have resulted solely, exclusively and as a direct and proximate cause from said RJ Party’s Excluded Act.

The Company will reimburse each RJ Party for all reasonable costs and expenses (including, without limitation, fees and expenses of outside counsel) incurred by the RJ Parties (including all such costs and expenses incurred to enforce the terms of this Addendum A) as they are incurred in connection with investigating, preparing, defending or settling or otherwise relating to any threatened or pending Proceeding for which indemnification or contribution has or could be sought by the RJ Party, whether or not in connection with a Proceeding in which any RJ Party is a named party; provided, that, if any such reimbursement is for expenses relating to a Loss that is found, in a Dispositive Excluded Act Proceeding, to have resulted solely and exclusively and as a direct and proximate cause from said RJ Party’s Excluded Act, such RJ Party will promptly repay such amount to the Company.

Lake Shore Bancorp, Inc.

January 3, 2025

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RJ or the applicable RJ Party will promptly notify the Company in writing if an RJ Party receives written notice of the commencement of any Proceeding or other Indemnified Claim against such RJ Party (provided, that no failure or delay by RJ or such RJ Party to so notify the Company will relieve the Company from its obligations under this Addendum A, except as and to the extent it is found, in a Dispositive Excluded Act Proceeding, that such failure or delay actually and materially prejudiced the Company), and the Company will immediately assume the full defense of such Proceeding or other Indemnified Claim (including the employment of counsel reasonably satisfactory to the RJ Party and the payment of the fees and expenses of such counsel), other than any Proceeding or other Indemnified Claim (x) brought by the Company or (y) any and all proceedings or hearings before any regulatory bodies and/or authorities (an “RJ Regulatory Proceeding”). In any such event, the RJ Party may employ its own counsel and participate in the defense of such Proceeding or other Indemnified Claim, provided, that the Company will be required to pay the fees and expenses of such counsel of the RJ Party only if (i) the Company has failed to assume the defense and promptly defend such Proceeding or other Indemnified Claim using counsel reasonably satisfactory to the RJ Party, or (ii) such RJ Party is advised by its counsel that a conflict of interest exists or may exist which makes representation by counsel chosen by the Company not advisable or that representation of both Parties by common counsel would be inappropriate due to actual or potential differing interests between them.

If for any reason the foregoing indemnity is unavailable to an RJ Party or is insufficient to fully hold any RJ Party harmless, the Company will contribute to the amount paid or payable by such RJ Party as a result of such unavailability or insufficiency in such proportion as is appropriate to reflect the relative benefits received by and fault of the Company on the one hand, and the relative benefits received by and fault of the RJ Party on the other hand, as well as any relevant equitable considerations. The relative benefits to the Company on the one hand and an RJ Party on the other hand will be deemed to be in the same proportion as the total value paid or received or contemplated to be paid or received by the Company and its securityholders, as the case may be, whether or not the transaction contemplated by the Agreement closes, bears to the fees actually received by RJ pursuant to the Agreement, and the relative fault of the Company on the one hand and an RJ Party on the other hand will be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or incorrect opinion or conclusion or the omission or alleged omission to state a material fact related to information supplied by the Company or its agents, advisors or Affiliates on the one hand or by the RJ Party on the other hand, as well as the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement, opinion, conclusion or omission. Notwithstanding anything in this Addendum A to the contrary, the aggregate contribution of all of the RJ Parties for all Indemnified Claims will not exceed the amount of the Transaction Fee actually received by RJ.

The indemnity, contribution and expense reimbursement agreements and obligations set forth in this Addendum will (i) be in addition to any other rights, remedies or indemnification as to which any RJ Party may have or be entitled at common law or otherwise and (ii) remain operative and in full force and effect regardless of any investigation made by or on behalf of any RJ Party. The Company further agrees that the indemnification, contribution and reimbursement obligations set forth in this Addendum A will apply whether or not RJ or any other RJ Party is a formal party in any such Indemnified Claim.

The Company will not settle, compromise or consent to judgment, or participate in or otherwise facilitate any such settlement, compromise or consent, with respect to any Indemnified Claim without the prior written consent of RJ or any RJ Party involved in such Indemnified Claim (which consent shall not be unreasonably withheld, delayed or conditioned) unless (i) there is no admission of wrongdoing, negligence or improper activity of any kind of or by RJ or such RJ Party in such settlement, compromise or consent and (ii) there is an unconditional release of all RJ Parties from all liability on claims that are the subject matter of or arise out of such Indemnified Claim, provided, however, that, notwithstanding the foregoing, the Company may not control or facilitate any settlement, compromise or consent with respect to any and all RJ Regulatory Proceedings.

This Addendum A will survive any termination or completion of the engagement provided by the Agreement.

Lake Shore Bancorp, Inc.

January 3, 2025

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Agreed and accepted (this Addendum A may be executed in one or more counterparts and sent by facsimile or electronic transmission, with each such counterpart being an original and all collectively constituting one and the same instrument):