Exhibit 1.1
[letterhead of Keefe, Bruyette
& Woods]
April 27, 2009
Harvard Savings, MHC
Harvard Illinois Financial Corp.
Harvard Savings Bank
58 N Ayer Street
Harvard, Illinois 60033
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Attention:
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Duffield J
Seyller III
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Ladies and Gentlemen:
This letter confirms the engagement
of Keefe, Bruyette & Woods, Inc. (“KBW”) to
act as the exclusive financial advisor to Harvard Savings, MHC (the
“MHC”), Harvard Illinois Financial Corp.(the
“Mid-Tier”) and Harvard Savings Bank (the
“Bank”) in connection with the MHC’s proposed
conversion from a mutual holding company to full stock form
pursuant to a Plan of Conversion and Reorganization (the
“Conversion”), including the offer and sale of certain
shares of the common stock (the “Common Stock”) of a
new stock holding company to be formed in connection with the
Conversion and Reorganization (the “Holding Company”)
to eligible persons in a Subscription Offering, with any remaining
shares offered to the general public in a Community Offering and,
under certain circumstances, to the general public in a Syndicated
Community Offering (the Subscription Offering the Community
Offering and any Syndicated Community Offering are collectively
referred to herein as the “Offerings”). In addition,
KBW will act as Records Agent in connection with the Offerings
pursuant to the terms of a separate agreement among the MHC,
Mid-Tier, Bank and KBW. The MHC, Mid-Tier, the Bank and the Holding
Company are sometimes collectively referred to herein as the
“Company” This letter sets forth the terms and
conditions of our engagement.
KBW will provide financial and
logistical advice to the Company and will assist the
Company’s management, legal counsel, accountants and other
advisors in connection with the Offerings and related issues. We
anticipate 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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Provide advice
on the financial and securities market implications of the Plan of
Conversion and any related corporate documents, including the
Company’s Business Plan;
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2.
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Assist in
structuring the Offerings, including developing and assisting in
implementing a marketing strategy for the Offerings;
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3.
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Reviewing all
offering documents, including the Prospectus, stock order forms,
letters, brochures and other 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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Harvard Savings, MHC
Harvard Illinois Financial Corp.
Harvard Savings Bank
April 27, 2009
Page 2 of 7
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4.
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Assisting the
Company in preparing for and scheduling meetings with potential
investors and broker-dealers, as necessary;
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5.
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Assist the
Company in analyzing proposals from outside vendors retained in
connection with the Offerings, including printers, transfer agents
and appraisal firms;
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6.
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Assist the
Company in the drafting and distribution of press releases as
required or appropriate in connection with the Offerings (it being
understood that preparation and filing of such documents will be
the responsibility of the Company and its counsel);
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7.
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Meet with the
Board of Directors and/or management of the Company to discuss any
of the above services; and
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8.
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such other
financial advisory and investment banking services in connection
with the Offerings as may be agreed upon by KBW and the
Company.
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The Company acknowledges and agrees
that KBW’s obligation to perform the services contemplated by
this agreement shall be subject to the satisfactory completion of
such investigations and inquiries relating to the Company, and its
directors, officers, agents and employees, as KBW and their counsel
in their sole discretion my deem appropriate under the
circumstances. The Company agrees 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 the board
of directors and management the operations and prospects of the
Company. KBW will treat all material non-public information as
confidential. The Company recognizes and confirms that KBW
(a) will use and rely on such information in performing the
services contemplated by this agreement without having
independently verified the same, and (b) does not assume
responsibility for the accuracy or completeness of the information
or to conduct any independent verification or any appraisal or
physical inspection of properties or assets. KBW will assume that
all financial forecasts have been reasonably prepared and reflect
the best then currently available estimates and judgments of the
Company’s management as to the expected future financial
performance of the Company.
The Company will cause appropriate
Offering documents to be filed with all regulatory agencies
including the Securities and Exchange Commission
(“SEC”), the Financial Industry Regulatory Authority
(“FINRA”), the appropriate federal and/or state bank
regulatory agencies. In addition, the Company and KBW agree that
the Company’s counsel shall serve as counsel with respect to
blue sky matters in connection with the Offerings, and that the
Company shall cause such counsel to prepare a Blue Sky Memorandum
related to the Offerings including KBW’s participation
therein and shall furnish KBW a copy thereof addressed to KBW or
upon which counsel shall state KBW may rely.
Harvard Savings, MHC
Harvard Illinois Financial Corp.
Harvard Savings Bank
April 27, 2009
Page 3 of 7
For the services hereunder, the
Company shall pay the following fees to KBW at closing unless
otherwise stated herein:
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(a)
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Management
Fee : A Management Fee of
$30,000 payable in five consecutive monthly installments of $6,000
commencing on the first day of the first month following the
execution of this engagement letter. 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.
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(b)
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Success
Fee : A Success Fee of
$140,000 for shares of Common Stock sold in the Subscription
Offering. In addition, a Success Fee of 2.5% shall be paid on the
aggregate Purchase Price of Common Stock sold in the Direct
Community Offering. The Management Fee described in 4(a) will be
credited against the first Success Fee paid pursuant to this
paragraph. The total of the Success Fees for the sale of shares of
Common Stock in
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