EXHIBIT 1.2
Chesterfield Financial Corp.
2,635,000 to 3,565,000 Shares
(as may be increased to 4,099,750 shares)
Common Stock
($.01 Par Value Per Share)
Purchase Price: $10.00 Per Share
SALES AGENCY AGREEMENT
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___________________, 2001
Trident Securities, a Division of McDonald Investments, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Chesterfield Financial Corp., a Delaware corporation ("Company"), and
Chesterfield Savings and Loan Association (referred to herein as "Bank," in
mutual or stock form and including its subsidiaries as the context may require),
hereby confirm, as of ___________________, 2001, their respective agreements
with Trident Securities, a Division of McDonald Investments, Inc. together with
its successors and assigns as contemplated in Section 13 hereof (collectively,
"McDonald"), a broker-dealer registered with the Securities and Exchange
Commission ("Commission") and a member of the National Association of Securities
Dealers, Inc. ("NASD"), as follows:
1. Introduction. The Bank intends to convert from a federally chartered
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mutual savings association to a federally chartered capital stock savings and
loan association as a wholly owned subsidiary of the Company (together with the
Offerings, as defined below, the issuance of shares of common stock of the Bank
to the Company and the incorporation of the Company, the "Conversion") pursuant
to a plan of conversion adopted by the Bank's Board of Directors on October 17,
2000 [and amended on ______________] ("Plan"). In accordance with the Plan,
the Company is offering shares of its common stock, $.01 par value per share
("Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering ("Subscription Offering") to certain depositors and
borrowers of the Bank and to the Bank's tax-qualified employee benefit plans
(i.e., the Bank's Employee Stock Ownership Plan ("ESOP")). And shares of the
Common Stock not sold in the Subscription Offering are being offered to the
general public in a Community Offering ("Community Offering"), with preference
given to natural persons who are residents of Xxxx and Will Counties, Illinois
("Local Community") (the Subscription and Community Offerings are sometimes
referred to collectively as the "Subscription and Community Offering" or the
"Offerings"), subject to the right of the Company and the Bank, in their
absolute discretion, to reject orders in the Community Offering in whole or in
part. In the Subscription Offering (and the Community Offering, if applicable),
the Company is offering between 2,635,000 and 3,565,000
Trident Securities, a Division of McDonald Investments, Inc.
________________________, 2001
Page 2
shares of Common Stock ("Shares"), with the possibility of offering up to
4,099,750 shares without a resolicitation of subscribers, as contemplated by
Part 563b of Title 12 of the Code of Federal Regulations. Except for the ESOP,
no person may purchase shares with an aggregate purchase price of more than
$300,000 and no person or entity, together with associates of and persons acting
in concert with such person or other entity, may purchase more than $400,000 of
Common Stock.
McDonald has advised the Company and the Bank that it will utilize its best
efforts to assist the Company with the sale of the Shares in the Offerings.
Prior to the execution of this Agreement, the Company has delivered to McDonald
the prospectus dated ___________________, 2001 (as hereinafter defined) and all
supplements thereto, if any, to be used in the Offerings have also been
delivered to McDonald (or if after the date of this Agreement, will be promptly
delivered to McDonald). Such prospectus contains information with respect to
the Company, the Bank and the Shares.
2. Representations and Warranties.
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(a) The Company and the Bank jointly and severally represent and
warrant to McDonald that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto,
on Form S-1 (No. ___________ ), including a prospectus relating to the
Offerings, for the registration of the Shares under the Securities Act
of 1933, as amended ("Act"). Such registration statement has become
effective under the Act and no stop order has been issued with respect
thereto and no proceedings therefor have been initiated or, to the
Company's best knowledge, threatened by the Commission. Except as the
context may otherwise require, such registration statement, as amended
or supplemented, on file with the Commission at the time the
registration statement became effective, including the prospectus,
financial statements, schedules, exhibits and all other documents
filed as part thereof, as amended and supplemented, is herein called
the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration
Statement became effective is herein called the "Prospectus," except
that if the prospectus filed by the Company with the Commission
pursuant to Rule 424(b) of the general rules and regulations of the
Commission under the Act ("SEC Regulations") differs from the form of
prospectus on file at the time the Registration Statement became
effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with the Commission and
shall include any amendments or supplements thereto from and after
their dates of effectiveness or use, respectively. If any Shares
remain unsubscribed following completion of the Subscription Offering
and the Community Offering, if any, the Company (i) will, if required
by SEC Regulations, promptly file with the Commission a post-effective
amendment to such Registration Statement
Trident Securities, a Division of McDonald Investments, Inc.
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Page 3
relating to the results of the Subscription Offering and the Community
Offering, if any, any additional information with respect to the
proposed plan of distribution and any revised pricing information or
(ii) if no such post-effective amendment is required, will file with
the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and the
Community Offerings and pricing information pursuant to Rule 424(c) of
the SEC Regulations, in either case in a form reasonably acceptable to
the Company and McDonald.
(ii) The Bank has filed an Application for Approval of
Conversion on Form AC, including exhibits (as amended or supplemented,
the "Form AC" and together with the Form H-(e)1-S referred to below,
the "Conversion Application") with the Office of Thrift Supervision
("Office") under the Home Owners' Loan Act, as amended ("HOLA") and
the enforceable rules and regulations, including published policies
and actions, of the Office thereunder ("OTS Regulations"), which has
been approved by the Office; the Prospectus and the proxy statement
for the solicitation of proxies from members of the Bank for the
special meeting to approve the Plan ("Proxy Statement") included as
part of the Form AC have been approved for use by the Office. No order
has been issued by the Office preventing or suspending the use of the
Prospectus or the Proxy Statement; and no action by or before the
Office revoking such approvals is pending or, to the Bank's best
knowledge, threatened. The Company has filed with the Office the
Company's application on Form H-(e)1-S under the savings and loan
holding company provisions of the HOLA and the OTS Regulations, which
has been conditionally approved.
(iii) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (as hereinafter
defined) (i) the Registration Statement and the Prospectus (as amended
or supplemented, if amended or supplemented) complied and will comply
as to form in all material respects with the Act and the SEC
Regulations, (ii) the Registration Statement (as amended or
supplemented, if amended or supplemented) did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (iii) the Prospectus (as amended or supplemented, if
amended or supplemented) did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Representations or warranties in this subsection shall not apply to
statements or omissions made in reliance upon and in conformity with
written information about McDonald furnished to the Company or the
Bank by or on behalf of McDonald expressly for use in the Registration
Statement or Prospectus.
Trident Securities, a Division of McDonald Investments, Inc.
________________________, 2001
Page 4
(iv) The Company is duly incorporated as a Delaware corporation
and the Bank is duly organized as a mutual savings bank under the laws
of the United States, and each of them is validly existing and in good
standing under the laws of the jurisdiction of its organization with
full power and authority to own its property and conduct its business
as described in the Prospectus; the Bank is a member of the Federal
Home Loan Bank of Chicago; and the deposit accounts of the Bank are
insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC") up
to the applicable limits. Neither the Company nor the Bank or any of
its subsidiaries (referred to herein as "Subsidiaries") is required to
be qualified to do business as a foreign corporation in any
jurisdiction where non-qualification would have a material adverse
effect on the Company and the Bank, taken as a whole. The Bank does
not own equity securities of or an equity interest in any business
enterprise, except as described in the Prospectus. Upon amendment of
the Bank's charter and bylaws as provided in the OTS Regulations and
completion of the sale by the Company of the Shares as contemplated by
the Prospectus and the Plan, (i) the Bank will convert to a federally
chartered capital stock savings and loan association with full power
and authority to own its property and conduct its business as
described in the Prospectus, (ii) all of the authorized and
outstanding capital stock of the Bank will be owned of record and
beneficially by the Company, and (iii) the Company will have no direct
subsidiaries other than the Bank.
(v) The Subsidiaries are duly organized, under the laws of
their jurisdictions of organization, and each of them is validly
existing and in good standing under the laws of their jurisdiction of
organization with full power and authority to own their property and
conduct their businesses as described in the Prospectus.
(vi) The Bank and the Subsidiaries have good and marketable
title to all assets material to their businesses and to those assets
described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except as described in
the Prospectus and except as would not in the aggregate have a
material adverse effect on the Bank and the Subsidiaries; and all of
the leases and subleases material to the operations or financial
condition of the Bank and the Subsidiaries, under which they hold
properties, including those described in the Prospectus, are in full
force and effect as described therein.
(vii) The Bank and the Subsidiaries have obtained all licenses,
permits and other governmental authorizations currently required for
the conduct of its business, all such licenses, permits and other
governmental authorizations are in full force and effect and the Bank
and the Subsidiaries are in all material respects complying therewith,
except where the failure to hold or comply with such licenses, permits
or
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governmental authorizations would not have a material adverse effect
on the Company and the Bank and the Subsidiaries.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part
of each of the Company and the Bank, and this Agreement has been
validly executed and delivered by, and is a valid and binding
obligation of, each of the Company and the Bank, enforceable in
accordance with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or
similar laws relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of depository institutions
whose accounts are insured by the FDIC and of savings and loan holding
companies the accounts of whose subsidiary are insured by the FDIC or
by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and
except to the extent that the provisions of Sections 8 and 9 hereof
may be unenforceable as against public policy or pursuant to Section
23A of the Federal Reserve Act, 12 U.S.C. Section 371c ("Section
23A")).
(ix) There is no litigation or governmental proceeding pending
or, to the best knowledge of the Company or the Bank, threatened
against or involving the Company, the Bank, or any of their respective
assets which individually or in the aggregate would reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), results of operations, assets or properties of the
Company and the Bank, taken as a whole.
(x) Each of the Company and the Bank has all such corporate
power, authority, authorizations, approvals and orders as may be
required to enter into this Agreement and to carry out the provisions
and conditions hereof, subject to the limitations set forth herein and
subject to the satisfaction of certain conditions imposed by the
Office in connection with its approvals of the Form AC and the
Application H-(e)1-S, and except as may be required under the "blue
sky" laws of various jurisdictions, and in the case of the Company, as
of the Closing Date, will have such approvals and orders to issue and
sell the Shares to be sold by the Company as provided herein, and in
the case of the Bank, as of the Closing Date, will have such approvals
and orders to issue and sell the shares of its common stock to be sold
to the Company as provided in the Plan, subject to the issuance of an
amended charter in the form required for federally chartered capital
stock savings and loan association ("Stock Charter"), the form of
which Stock Charter has been filed with the Form AC and approved by
the Office.
(xi) Neither the Company nor the Bank or the Subsidiaries are
in violation of any rule or regulation of the Office, or the FDIC, or
any insurance regulator that
Trident Securities, a Division of McDonald Investments, Inc.
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Page 6
could reasonably be expected to result in any enforcement action
against the Company, the Bank, or their officers or directors that
would have a material adverse effect on the condition (financial or
otherwise), results of operations, businesses, assets or properties of
the Company and the Bank, taken as a whole.
(xii) The financial statements and the related notes or
schedules which are included in the Registration Statement and are
part of the Prospectus fairly present the financial condition, income
and comprehensive income, equity and cash flows of the Bank at the
respective dates thereof and for the respective periods covered
thereby and comply as to form in all material respects with the
applicable accounting requirements of the SEC Regulations and the
applicable accounting regulations of the Office. Such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as set forth therein, and such financial statements
are in all material respects consistent with financial statements and
other reports filed by the Bank with supervisory and regulatory
authorities except as such generally accepted accounting principles
may otherwise require. The tables in the Prospectus accurately present
the information purported to be shown thereby at the respective dates
thereof and for the respective periods therein.
(xiii) There has been no material change in the financial
condition, results of operations or business, including assets and
properties, of the Company and the Bank and the Subsidiaries, taken as
a whole, since the latest date as of which such condition is set forth
in the Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the Company
and the Bank and the Subsidiaries conform in all materials respects to
the descriptions thereof contained in the Prospectus. Neither the
Company nor the Bank or the Subsidiaries has any material liabilities
of any kind, contingent or otherwise, except as set forth in the
Prospectus.
(xiv) There has been no breach or default (or the occurrence of
any event which, with notice or lapse of time or both, would
constitute a default) under, or creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the Company or the Bank or the Subsidiaries pursuant to any of the
terms, provisions or conditions of, any agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which
the Company or the Bank or the Subsidiaries is a party or by which any
of them or any of their respective assets or properties may be bound
or is subject, or violation of any governmental license or permit or
any enforceable published law, administrative regulation or order or
court order, writ, injunction or decree, which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), results of operations, businesses,
assets or properties of the Company and the Bank and the
Trident Securities, a Division of McDonald Investments, Inc.
________________________, 2001
Page 7
Subsidiaries, taken as a whole; all agreements which are material to
the financial condition, results of operations or business, assets or
properties of the Company or the Bank or the Subsidiaries taken as a
whole are in full force and effect, and no party to any such agreement
has instituted or, to the best knowledge of the Company or the Bank or
the Subsidiaries, threatened any action or proceeding wherein the
Company or the Bank or the Subsidiaries is alleged to be in default
thereunder.
(xv) Neither the Company nor the Bank or the Subsidiaries are
in violation of their respective certificates of incorporation,
charters or bylaws. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by the
Company and the Bank and the Subsidiaries do not conflict with or
result in a breach of the respective certificates of incorporation,
charters or bylaws of the Company or the Bank (in either mutual or
stock form) or the Subsidiaries or constitute a material breach of or
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, give rise to any right of
termination, cancellation or acceleration contained in, or result in
the creation or imposition of any lien, charge or other encumbrance
upon any of the properties or assets of the Company or the Bank or the
Subsidiaries pursuant to any of the terms, provisions or conditions
of, any material agreement, contract, indenture, bond, debenture,
note, instrument or obligation to which the Company or the Bank or the
Subsidiaries is a party or violate any governmental license or permit
or any enforceable published law, administrative regulation or order
or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Office in connection
with its approval of the Conversion Application or the Application H-
(e)1-S), which breach, default, encumbrance or violation would have a
material adverse effect on the Company and the Bank and the
Subsidiaries, taken as a whole.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus and
prior to the Closing Date, except as otherwise may be indicated or
contemplated therein, neither the Company nor the Bank or the
Subsidiaries have issued any securities which will remain issued and
outstanding at the Closing Date or incurred any liabilities or
obligations, direct or contingent, or borrowed money, except
liabilities, obligations or borrowings in the ordinary course of
business, or entered into any other transaction not in the ordinary
course of business and consistent with prior practices, which are
material in light of the business of the Company and the Bank and the
Subsidiaries, taken as a whole.
(xvii) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range set forth in the Prospectus under the caption
"Capitalization," and no capital stock of the Company shall be
outstanding immediately prior to the Closing Date; the issuance and
the sale
Trident Securities, a Division of McDonald Investments, Inc.
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of the Shares have been duly authorized by all necessary corporate
action of the Company and the Bank and approved by the Office and,
when issued and paid for in accordance with the terms of the Plan,
shall be validly issued, fully paid and nonassessable and shall
conform to the description thereof contained in the Prospectus; the
issuance of the Shares is not subject to preemptive rights, except as
set forth in the Prospectus; and good title to the Shares will be
transferred by the Company to the purchasers thereof upon issuance
thereof against payment therefor, free and clear of all claims,
encumbrances, security interests and liens of the Company whatsoever.
The certificates representing the Shares will conform in all material
respects with the requirements of applicable laws and regulations. The
issuance and sale of the capital stock of the Bank to the Company has
been duly authorized by all necessary corporate action of the Bank and
the Company and has been approved by the Office (subject to the
satisfaction of various conditions imposed by the Office in connection
with its approval of the Conversion Application and the Application H-
(e)1-S), and such capital stock, when issued in accordance with the
terms of the Plan, will be fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus.
(xviii) No approval of any regulatory or supervisory or other
public authority is required of the Company or the Bank or the
Subsidiaries in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the declaration of
effectiveness of any required post-effective amendment by the
Commission and approval thereof by the Office and approval of the
Company's Application H-(e)1-S, the issuance of the Stock Charter by
the Office and as may be required under the "blue sky" laws of various
jurisdictions.
(xix) All contracts and other documents required to be filed
as exhibits to the Registration Statement or the Conversion
Application have been filed with the Commission or the Office, as the
case may be.
(xx) The Bank's financial statements as of June 30, 2000 and
for the year then ended included in this Prospectus, have been audited
by Xxxxx, Xxxxxx and Company LLP. The Bank's financial statements as
of June 30, 1999 and for the years ended June 30, 1999 and 1998 have
been audited by Ernst & Young LLP. Xxxxx, Xxxxxx and Company LLP and
Ernst & Young LLP are both independent public accountants with respect
to the Company and the Bank within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and such accountants are, with respect to the Company and
the Bank, independent certified public accountants as required by the
Act and the SEC Regulations.
Trident Securities, a Division of McDonald Investments, Inc.
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Page 9
(xxi) For the past five years, or in the case of the Company,
such lesser period corresponding to the Company's existence, the
Company and the Bank and the Subsidiaries have timely filed all
required federal, state and local tax returns, and no deficiency has
been asserted with respect to such returns by any taxing authorities,
and the Company and the Bank and the Subsidiaries have paid all taxes
that have become due and, to the best of their knowledge, have made
adequate reserves for known future tax liabilities, except where any
failure to make such filings, payments and reserves, or the assertion
of such a deficiency, would not have a material adverse effect on the
Company and the Bank and the Subsidiaries, taken as a whole.
(xxii) All of the loans represented as assets of the Bank on
the most recent statement of financial condition of the Bank included
in the Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without limitation
truth in lending (including the requirements of Regulation Z and 12
C.F.R. Part 226 and Section 563.99), real estate settlement
procedures, consumer credit protection, equal credit opportunity and
all disclosure laws applicable to such loans, except for violations
which, if asserted, would not have a material adverse effect on the
Company and the Bank, taken as a whole.
(xxiii) To the best knowledge of the Company and the Bank, the
records of account holders, depositors and other members of the Bank
delivered to McDonald by the Bank or its agent for use during the
Conversion are reliable and accurate.
(xxiv) To the best knowledge of the Company and the Bank and
the Subsidiaries, neither the Company nor the Bank or the Subsidiaries
nor the employees of the Company or the Bank or the Subsidiaries, have
made any payment of funds of the Company or the Bank or the
Subsidiaries prohibited by law, and no funds of the Company or the
Bank have been set aside to be used for any payment prohibited by law.
(xxv) To the best knowledge of the Company and the Bank and
the Subsidiaries, the Company and the Bank and the Subsidiaries are in
compliance with all laws, rules and regulations relating to the
discharge, storage, handling and disposal of hazardous or toxic
substances, pollutants or contaminants and neither the Company nor the
Bank or the Subsidiaries believes that the Company and Bank are
subject to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar
law, except for violations which, if asserted, would not have a
material adverse effect on the Company and the Bank and the
Subsidiaries, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending or, to the best
knowledge of the Company or the Bank and the Subsidiaries, threatened
against the Company or the Bank or the Subsidiaries relating to the
discharge, storage, handling and disposal of
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hazardous or toxic substances, pollutants or contaminants. To the best
knowledge of the Company and the Bank and the Subsidiaries, no
disposal, release or discharge of hazardous or toxic substances,
pollutants or contaminants, including petroleum and gas products, as
any of such terms may be defined under federal, state or local law,
has been caused by the Company or the Bank or the Subsidiaries or, to
the best knowledge of the Company or the Bank or the Subsidiaries, has
occurred on, in or at any of the facilities or properties of the
Company or the Bank or the Subsidiaries, except such disposal, release
or discharge which would not have a material adverse effect on the
Company and the Bank and the Subsidiaries, taken as a whole.
(xxvi) For purposes of McDonald's obligation to file certain
documents and to make certain representations to the National
Association of Securities Dealers ("NASD") in connection with the
conversion, the Bank and the Subsidiaries warrants that: (a) the Bank
and the Subsidiaries have not privately placed any securities within
the last 18 months; (b) there have been no materials dealings within
the last 12 months between the Bank and the Subsidiaries and any NASD
member or any person related to or associated with any such member;
(c) none of the officers or directors of the Bank or the Subsidiaries
have any affiliation with the NASD, (d) except as contemplated by the
engagement letter with McDonald, the Bank and the Subsidiaries have no
financial or management consulting contracts outstanding with any
other person; and (e) there has been no intermediary between McDonald
and the Bank in connection with the public offering of the Bank's
shares, and no person is being compensated in any manner for providing
such service.
(b) McDonald represents and warrants to the Company and the Bank
that:
(i) McDonald is registered as a broker-dealer with the
Commission and a member of the NASD, and is in good standing with the
Commission and the NASD.
(ii) McDonald is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to provide the services to be
furnished to the Company and the Bank hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of
McDonald, and this Agreement is a legal, valid and binding obligation
of McDonald, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts of whom may be
protected by the Securities Investor Protection Corporation or by
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general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A).
(iv) Each of McDonald, and to McDonald's best knowledge, its
employees, agents and representatives who shall perform any of the
services required hereunder to be performed by McDonald shall be duly
authorized and shall have all licenses, approvals and permits
necessary to perform such services, and McDonald is a registered
selling agent in the jurisdictions listed in Exhibit A hereto and will
remain registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until the
Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by McDonald,
the fulfillment of the terms set forth herein and the consummation of
the transactions contemplated hereby shall not violate or conflict
with the corporate charter or bylaws of McDonald or violate, conflict
with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both, would constitute a default) under,
any material agreement, indenture or other instrument by which
McDonald is bound or under any governmental license or permit or any
law, administrative regulation, authorization, approval or order or
court decree, injunction or order, except for such violations,
conflicts, breaches or defaults that would not have a material adverse
effect on McDonald.
(vi) All funds received by McDonald to purchase the Common
Stock will be handled in accordance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended ("Exchange Act").
(vii) There is not now pending or, to McDonald's best knowledge,
threatened against McDonald any action or proceeding before the
Commission, the NASD, any state securities commission or any state or
federal court concerning McDonald's activities as a broker-dealer.
3. Employment of McDonald; Sale and Delivery of the Shares. On the basis
-------------------------------------------------------
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank hereby employ McDonald
as their agent to utilize its best efforts in assisting the Company with the
sale of the Shares by the Company in the Offerings. McDonald will assist the
Bank in the Conversion by acting as marketing advisor with respect to the
Subscription Offering and will represent the Bank as placement agent on a best
efforts basis in the sale of the Common Stock in the Community Offering if one
is held; conduct training sessions with directors, officers and employees of the
Bank regarding the conversion process; and assist in the
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Page 12
establishment and supervision of the Bank's stock information center and, with
management's input, will train the Bank's staff to record properly and tabulate
orders for the purchase of Common Stock and to respond appropriately to customer
inquiries. The employment of McDonald hereunder shall terminate (a) forty-five
(45) days after the Offerings close, unless the Company and the Bank, with the
approval of the Office, are permitted to extend such period of time, or (b) upon
consummation of the Conversion, whichever date shall first occur.
If the Company is unable to sell a minimum of 2,635,000 Shares of Common
Stock (or such lesser amount as the Office may permit) within the period herein
provided, this Agreement shall terminate, and the Company and the Bank shall
refund promptly to any person who has subscribed for any of the Shares, the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the other party hereunder, except as set forth in Sections 6, 8(a), 8(d) and 9
hereof. Appropriate arrangements for placing the funds received from
subscriptions for Shares in a special interest-bearing account with the Bank
until all Shares are sold and paid for were made prior to the commencement of
the Subscription and Community Offering, with provision for prompt refund to the
purchasers as set forth above, or for delivery to the Company if all Shares are
sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company or at such other place as shall be agreed
upon between the parties hereto. The date upon which McDonald is paid the
compensation due hereunder is herein called the "Closing Date."
McDonald agrees either (a) upon receipt of an executed order form of a
subscriber to forward the aggregate offering price of the Common Stock ordered
on or before twelve noon on the next business day following receipt or execution
of an order form by McDonald to the Bank for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) McDonald will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii)
McDonald will mail acknowledgments of receipt of orders to each subscriber
confirming interest on the business day following such confirmation, (iii)
McDonald will debit accounts of such subscribers on the third business day
("debit date") following receipt of the confirmation referred to in (i), and
(iv) McDonald will forward completed order forms together with such funds to the
Bank on or before twelve noon on the next business day following the debit date
for deposit in a segregated account. McDonald acknowledges that if the procedure
in (b) is adopted, subscribers' funds are not required to be in their accounts
until the debit date.
In addition to the expenses specified in Section 6 hereof, McDonald shall
receive the following compensation for its services hereunder and reimbursement
of expenses:
Trident Securities, a Division of McDonald Investments, Inc.
________________________, 2001
Page 13
(a)(i) a non-refundable management fee of twenty thousand dollars
($20,000) payable on ___________ __, 20__; and (ii) a
commission equal to one and six-tenths percent (1.60%) of
the aggregate dollar amount of stock sold in the
Subscription and Community offerings, excluding any shares
of stock sold to the Bank's directors, executive officers
and their "Associates" and the Bank's employee benefit
plans. McDonald shall receive no commission for shares sold
in excess of the mid-point of the final valuation range. The
term "Associates" has the same meaning as that found in the
Plan. The commission is to be payable in same-day funds to
McDonald on the Closing Date.
(2) McDonald shall be reimbursed for out-of-pocket expenses
(including the legal fees and expenses of McDonald's
counsel) incurred, not to exceed $50,000, whether or not the
Agreement is consummated. In the event of resolicitation or
other event which causes the offering to be extended beyond
the date contemplated by the Prospectus, then McDonald shall
also be reimbursed for additional out of pocket and legal
expenses incurred as a result of such resolicitation or
extension. Such additional reimbursement shall be a pro rata
amount of the expenses incurred during the original period.
McDonald acknowledges receipt of $10,000 advance payment
from the Bank which shall be credited against the total
reimbursement due McDonald hereunder.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their attorneys' fees, NASD filing fees,
filing and registration fees, and attorneys' fees relating to any required state
securities laws research and filings, telephone charges, air freight, rental
equipment, supplies, transfer agent charges, fees relating to auditing and
accounting and costs of printing all documents necessary in connection with the
Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, McDonald is
--------
assisting the Company on a best efforts basis in offering a minimum of 2,635,000
and a maximum of 3,565,000 Shares,
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 14
with the possibility of offering up to 4,099,750 Shares (except as the Office
may permit to be decreased or increased) in the Subscription and Community
Offerings. The Shares are to be offered to the public at the price set forth on
the cover page of the Prospectus and the first page of this Agreement.
5. Further Agreements. The Company and the Bank jointly and severally
------------------
covenant and agree that:
(a) The Company shall deliver to McDonald, from time to time, such
number of copies of the Prospectus as McDonald reasonably may request. The
Company authorizes McDonald to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify McDonald or its counsel immediately upon
discovery, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement becomes effective or any supplement
to the Prospectus has been filed, (ii) of the issuance by the Commission of
any stop order relating to the Registration Statement or of the initiation
or the threat of any proceedings for that purpose, (iii) of the receipt of
any notice with respect to the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, and (iv) of the receipt of
any comments from the staff of the Commission relating to the Registration
Statement. If the Commission enters a stop order relating to the
Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible time.
(c) During the time when the Prospectus is required to be delivered
under the Act, the Company will comply with all requirements imposed upon
it by the Act, as now in effect and hereafter amended, and by the SEC
Regulations and the OTS Regulations, as from time to time in force, so far
as necessary to permit the continuance of offers and sales of or dealings
in the Shares in accordance with the provisions hereof and the Prospectus.
If, during the period when the Prospectus is required to be delivered in
connection with the offer and sale of the Shares, any event relating to or
affecting the Company or the Bank shall occur as a result of
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 15
which it is necessary, in the opinion of counsel for McDonald, with
concurrence of counsel of the Company, to amend or supplement the
Prospectus in order to make the Prospectus not false or misleading as to a
material fact in light of the circumstances existing at the time it is
delivered to a purchaser of the Shares, the Company shall prepare and
furnish to McDonald promptly a reasonable number of copies of an amendment
or amendments or of a supplement or supplements to the Prospectus (in form
and substance satisfactory to counsel for McDonald) which shall amend or
supplement the Prospectus so that, as amended or supplemented, the
Prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser of the Shares, not misleading. The Company will
not file or use any amendment or supplement to the Registration Statement
or the Prospectus of which McDonald has not first been furnished a copy or
to which McDonald shall reasonably object after having been furnished such
copy. For the purposes of this subsection the Company and the Bank shall
furnish such information with respect to themselves as McDonald from time
to time may reasonably request.
(d) The Company has taken or will take all necessary action as may be
required to qualify or register the Shares for offer and sale by the
Company under the securities or blue sky laws of such jurisdictions as
McDonald and either the Company or its counsel may agree upon; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any such jurisdiction. In each
jurisdiction where such qualification or registration shall be effected,
the Company, unless McDonald agrees that such action is not necessary or
advisable in connection with the distribution of the Shares, shall file and
make such statements or reports as are, or reasonably may be, required by
the laws of such jurisdiction.
(e) Appropriate entries will be made in the financial records of the
Bank sufficient to establish a liquidation account for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders in
accordance with the requirements of the Office.
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 16
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act prior to completion of the
Conversion pursuant to the Plan and shall request that such registration
statement be effective upon completion of the Conversion. The Company shall
maintain the effectiveness of such registration for a minimum period of
three years or for such shorter period as may be required by applicable
law.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the SEC Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal
quarter next following the effective date (as defined in said Rule 158) of
the Registration Statement.
(h) For a period of three (3) years from the date of this Agreement
(unless the Common Stock shall have been deregistered under the Exchange
Act), the Company will furnish to McDonald, as soon as publicly available
after the end of each fiscal year, a copy of its annual report to
shareholders for such year; and the Company will furnish to McDonald (i) as
soon as publicly available, a copy of each report or definitive proxy
statement of the Company filed with the Commission under the Exchange Act
or mailed to shareholders, and (ii) from time to time, such other public
information concerning the Company as McDonald may reasonably request.
(i) The Company shall use the net proceeds from the sale of the
Shares consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived in writing by McDonald.
(k) The Company shall advise McDonald, if necessary, as to the
allocation of deposits, in the case of Eligible Account Holders and
Supplemental Eligible Account Holders, and votes,
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 17
in the case of Other Members (as defined in the Plan), and of the Shares in
the event of an oversubscription and shall provide McDonald final
instructions as to the allocation of the Shares ("Allocation Instructions")
and such information shall be accurate and reliable. McDonald shall be
entitled to rely on such instructions and shall have no liability in
respect of its reliance thereon, including without limitation, no liability
for or related to any denial or grant of a subscription in whole or in
part, except for such liability contemplated under Section 8(b) of this
Agreement.
(l) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by McDonald in order for McDonald
to ensure compliance with the NASD's "Interpretation Relating to Free-
Riding and Withholding."
(m) At the Closing Date, the Company and the Bank will have completed
the conditions precedent to, and shall have conducted the Conversion in all
material respects in accordance with the Plan, the OTS Regulations and all
other applicable laws, regulations, published decisions and orders,
including all terms, conditions, requirements and provisions precedent to
the Conversion imposed by the Office, or appropriate waivers shall have
been obtained.
6. Payment of Expenses. Whether or not the Conversion is consummated,
-------------------
the Company and the Bank shall pay or reimburse McDonald for allocable expenses
incurred by McDonald relating to the offering of the Shares as provided in
Section 3 hereof; provided, however, that neither the Company nor the Bank shall
pay or reimburse McDonald for any of the foregoing expenses accrued after
McDonald shall have notified the Company or the Bank of its election to
terminate this Agreement pursuant to Section 11 hereof or after such time as the
Company or the Bank shall have given notice in accordance with Section 12 hereof
that McDonald is in breach of this Agreement.
7. Conditions of McDonald's Obligations. Except as may be waived by
------------------------------------
McDonald, the obligations of McDonald as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 18
Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, McDonald shall receive the favorable opinion
of Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the Company and
the Bank, dated the Closing Date, addressed to McDonald, in form and
substance satisfactory to McDonald to the effect that:
(i) The Company is a corporation in existence under the laws of
the State of Delaware, and the Bank is a savings and loan association
in existence under the laws of the United States, each having the
corporate power to execute, deliver and perform its respective
obligations under this Agreement and to carry on its business as now
conducted and as described in the Prospectus;
(ii) The Bank is a member of the Federal Home Loan Bank of
Chicago, and the deposit accounts of the Bank are insured by the SAIF
up to the applicable legal limits;
(iii) The activities of the Bank, the Subsidiaries and the
Company as described in the Prospectus comply, in all material
respects, with applicable federal and state law.
(iv) The Plan complies with, and, to the knowledge of such
counsel, the Conversion has been effected in all material respects in
accordance with, the HOLA and the OTS Regulations; to the knowledge of
such counsel, all of the terms, conditions, requirements and
provisions with respect to the Plan and the Conversion imposed by the
Office, except with respect to the filing or submission of certain
required post-Conversion reports by the Company or the Bank, have been
complied with by the Company and the Bank in all material respects;
and, to the best knowledge of such counsel, no person has sought to
obtain regulatory or judicial review of the final action of the Office
in approving the Plan;
(v) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus;
(vi) The Company has authorized the issuance and sale of the
Shares by all necessary corporate action; the Shares, upon receipt of
payment and issuance in accordance with the terms of the Plan, will be
validly issued, fully paid, nonassessable and, except as disclosed in
the Prospectus, free of preemptive rights;
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 19
and purchasers of the Shares from the Company, upon issuance thereof
against payment therefor, will acquire such Shares free and clear of
all claims, encumbrances, security interests and liens created by the
Company;
(vii) The form of certificate used to evidence the Shares is in
proper form and complies in all material respects with the applicable
requirements of Delaware law and the regulations of the Office;
(viii) The Bank has authorized the sale of its capital stock to
the Company by all necessary corporate action, which sale has been
approved by the Office, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of the Plan and the
Prospectus, will be validly issued, fully paid and nonassessable and
owned of record and beneficially by the Company;
(ix) Subject to the satisfaction of the conditions to the
Office's approval of the Conversion Application and Application H-
(e)1-S and the issuance by the Office of the Bank's Stock Charter, no
consent, approval, authorization or other action by, or filing or
registration with, any governmental agency is required to be obtained
or made by the Company or the Bank for the execution and delivery of
this Agreement, the issuance of the Shares and the consummation of the
Conversion except as may be required under the "blue sky" laws of
various jurisdictions;
(x) The Company and the Bank have authorized the execution,
delivery and performance of this Agreement by all necessary corporate
action;
(xi) The Plan has been duly adopted by the requisite vote of
the Board of Directors of the Bank and by the requisite vote of the
Board of Directors of the Company; and, based upon the report of the
Inspector of Election, the Plan has been approved by the requisite
vote of the eligible voting members of the Bank at a duly called
meeting;
(xii) The statements in the Prospectus under the captions
"Dividend Policy," "Regulation," "Taxation," "Description of Capital
Stock," and "Restrictions on Acquisitions of Chesterfield Financial
Corp." insofar as they are, or refer to, statements of law or legal
conclusions (excluding financial data included therein or omitted
therefrom, as to which an opinion need not be expressed), have been
prepared or reviewed by such counsel and are accurate in all material
respects;
(xiii) The Conversion Application, the Registration Statement,
the Prospectus and the Proxy Statement, in each case as amended or
supplemented, comply as to form in all material respects with the
requirements of the Act, the SEC Regulations, the HOLA and the OTS
Regulations, as the case may be (except as to
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 20
information with respect to McDonald included therein and financial
statements, notes to financial statements, financial tables and other
financial and statistical data, including the appraisal, included
therein or omitted therefrom, as to which no opinion need be
expressed); to such counsel's knowledge after due inquiry, all
documents and exhibits required to be filed with the Conversion
Application and the Registration Statement have been so filed and the
descriptions in the Conversion Application and the Registration
Statement of such documents and exhibits are accurate in all material
respects;
(xiv) The Form AC has been approved by the Office, and the
Prospectus and the Proxy Statement have been authorized for use by the
Office; the Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission; no proceedings
are pending by or before the Commission or the Office seeking to
revoke or rescind the orders declaring the Registration Statement
effective or approving the Conversion Application or, to such
counsel's knowledge, are contemplated or threatened (provided that for
this purpose such counsel need not regard any litigation or
governmental procedure to be "threatened" unless the potential
litigant or government authority has manifested to the management of
the Company or the Bank, or to such counsel, a present intention to
initiate such litigation or proceeding);
(xv) The execution and delivery of this Agreement, and the
consummation of the Conversion by the Company and the Bank, do not
violate any provision of the certificate of incorporation, charter or
bylaws of the Company or the Bank, do not violate or constitute a
breach of or default under any contract, agreement or instrument
described in the Prospectus or filed as an exhibit to the Registration
Statement, and, to the knowledge of such counsel, do not violate any
applicable law, regulation or any judgment or order of any government,
governmental instrumentality or court that is binding on the Company
or the Bank (including any requirements imposed on the Bank as a
result of its conversion from a federal credit union to a federal
savings and loan association) or any of its assets, properties or
operations;
(xvi) To such counsel's knowledge, the Company and the Bank and
the Subsidiaries have obtained all licenses, permits and other
governmental authorizations currently required for the conduct of
their respective businesses as such businesses are described in the
Prospectus, all such licenses, permits and other governmental
authorizations are in full force and effect and the Company and the
Bank and the Subsidiaries are in all material respects complying
therewith, except where the failure to hold such licenses, permits or
governmental authorizations or the failure to so comply would not have
a material adverse effect on the Company and the Bank and the
Subsidiaries;
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 21
(xvii) To such counsel's knowledge, there is no action, suit,
proceedings, inquiry or investigation before or by any court or
governmental agency or body, now pending or threatened, against either
the Company or the Bank or the Subsidiaries which individually, or in
the aggregate, would have a material adverse effect on the Company and
the Bank, taken as a whole;
(xviii) This agreement has been duly executed and delivered by
the Company and the Bank and is enforceable against the Bank and the
Company (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of insured depository
institutions or by general equity principles, regardless of whether
such enforceability is considered in a proceeding in equity or at law,
and except to the extent that the provisions of Sections 8 and 9
hereof may be unenforceable as against public policy or pursuant to
Section 23A);
(xix) To such counsel's knowledge, the execution and delivery
of this Agreement and the consummation of the Conversion by the
Company and the Bank do not constitute a breach of or default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or imposition of
any lien, charge or other encumbrance upon any of the properties or
assets of the Company or the Bank or the Subsidiaries pursuant to any
of the terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or obligation
to which the Company or the Bank or the Subsidiaries are a party or
violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court order,
writ, injunction or decree (except as may be required under the "blue
sky" laws as to which no opinion need be expressed), which breach,
default, encumbrance or violation would have a material adverse effect
on the Company and the Bank, taken as a whole; and
(xx) To such counsel's knowledge, there has been no material
breach of any provision of the Company's or the Bank's respective
certificate of incorporation, charter or bylaws or breach or default
(or the occurrence of any event which, with notice or lapse of time or
both, would constitute a default) under any agreement, contract,
indenture, debenture, bond, note, instrument or obligation to which
the Company or the Bank or the Subsidiaries is a party or by which any
of them or any of their respective assets or properties may be bound,
or any governmental license or permit, or a violation of any
enforceable published law, administrative regulation or order, or
court order, writ, injunction or decree which breach, default,
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 22
encumbrance or violation would have a material adverse effect on the
Company and the Bank, taken as a whole.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of officers and directors of the Company and the Bank and
certificates of public officials delivered pursuant to this Agreement. Such
counsel may assume that any agreement is the valid and binding obligation of any
parties to such agreement other than the Company and the Bank and the
Subsidiaries. Such opinion may be governed by, and interpreted in accordance
with, the Legal Opinion Accord ("Accord") of the ABA Section of Business Law
(1991), and, as a consequence, such opinion may be rendered subject to the
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord. Further,
references in such opinion to such counsel's "knowledge" may be limited to
"knowledge" as defined in the Accord (or knowledge based on certificates). In
addition, the "General Qualifications" set forth in the Accord and other
customary assumptions and limitations may apply to such opinion. Such opinion
may be limited to present statutes, regulations and judicial interpretations and
to facts as they presently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement them should the present laws be
changed by legislative or regulatory action, judicial decision or otherwise; and
such counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company and the Bank of this Agreement or the issuance of the Shares.
Further, in rendering such opinions, Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
may rely on the opinion of _______________________, with respect to any matter
of __________ law.
(b) At the Closing Date, McDonald shall receive the letter of Xxxx
Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., special counsel for the Company and
the Bank, dated the Closing Date, addressed to McDonald, in form and
substance satisfactory to McDonald and to the effect that: based on such
counsel's participation in conferences with representatives of the Company,
the Bank, the independent appraiser, the independent certified public
accountants, McDonald and its counsel, review of documents and
understanding of applicable law (including the requirements of Form S-1 and
the character of the Registration Statement contemplated thereby) and the
experience such counsel has gained in its practice under the Act, nothing
has come to such counsel's attention that would lead it to believe that the
Registration Statement, as amended (except as to information in respect of
McDonald contained therein and except as to the appraisal, financial
statements, notes to financial statements, financial tables and other
financial and statistical data contained therein or omitted therefrom, as
to which such counsel need express no comment), at the time it became
effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements made therein, not misleading, or that the Prospectus, as
amended or supplemented (except as to information in respect of McDonald
contained therein and except as to the appraisal, financial statements,
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 23
notes to financial statements, financial tables and other financial and
statistical data contained therein or omitted therefrom as to which such
counsel need express no comment), at the time the Prospectus was filed with
the Commission under Rule 424(b), and at the Closing Date, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (in making this statement such
counsel may state that it has not undertaken to verify independently the
information in the Registration Statement or Prospectus and, therefore,
does not assume any responsibility for the accuracy or completeness
thereof).
(c) Counsel for McDonald shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or
pass upon the matters required by McDonald, and for the purpose of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions contained in this Agreement,
including but not limited to, resolutions of the Board of Directors of the
Company and the Bank regarding the authorization, execution and delivery of
this Agreement and the transactions contemplated by the Plan and this
Agreement.
(d) Prior to and at the Closing Date, in the reasonable opinion of
McDonald, (i) there shall have been no material adverse change in the
condition (financial or otherwise), business or results of operations of
the Company and the Bank, taken as a whole, since the latest date as of
which information is set forth in the Prospectus, except as referred to
therein; (ii) there shall have been no transaction entered into by the
Company or the Bank or the Subsidiaries after the latest date as of which
the financial condition of the Company or the Bank is set forth in the
Prospectus other than transactions referred to or contemplated therein,
transactions in the ordinary course of business, and transactions which are
not material to the Company and the Bank, taken as a whole; (iii) neither
the Company nor the Bank or the Subsidiaries shall have received from any
governmental authority any direction (oral or written) to make any change
in the method of conducting their respective businesses which is material
to the business of the Company and the Bank, taken as a whole, with which
they have not complied; (iv) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or threatened against the Company
or the Bank or the Subsidiaries affecting any of their respective assets,
wherein an unfavorable decision, ruling or finding would have a material
adverse effect on the Company and the Bank, taken as a whole; and (v) the
Shares shall have been qualified or registered for offering and sale by the
Company under the "blue sky" laws of such jurisdictions as McDonald and the
Company shall have agreed upon.
(e) At the Closing Date, McDonald shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company and the Bank, dated the Closing Date, to the effect that: (i)
they have examined the Prospectus and, at the time the Registration
Statement was declared effective by the Commission and at the time
Trident Securities, a Division of McDonald Investments, Inc.
__________________, 2001
Page 24
the Prospectus was authorized by the Office for use, the Prospectus did not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading with respect to
the Company or the Bank; (ii) since the date the Registration Statement was
declared effective by the Commission and since the date the Prospectus
became authorized by the Office for use, no event has occurred which should
have been set forth in an amendment or supplement to the Prospectus which
has not been so set forth, including specifically, but without limitation,
any material change in the business, condition (financial or otherwise) or
results of operations of the Company or the Bank, and the conditions set
forth in clauses (ii) through (v) inclusive of subsection (d) of this
Section 7 have been satisfied; (iii) no order has been issued by the
Commission or the Office to suspend the Offering or the effectiveness of
the Prospectus, and no action for such purposes has been instituted or, to
the knowledge of such officers, threatened by the Commission or the Office;
(iv) to the knowledge of such officers, no person has sought to obtain
review of the final actions of the Office approving the Plan; and (v) all
of the representations and warranties contained in Section 2 of this
Agreement are true and correct, with the same force and effect as though
expressly made on the Closing Date.
(f) At the Closing Date, McDonald shall receive, among other
documents, (i) copies of the letters from the Office authorizing the use of
the Prospectus and the Proxy Statement and the approval of the Conversion
Application (ii) if available, a copy of the order of the Commission
declaring the Registration Statement effective; (iii) a copy of the letter
from the Office evidencing the corporate existence of the Bank; (iv) a copy
of the letter from the appropriate Delaware authority evidencing the
incorporation (and, if generally available from such authority, good
standing) of the Company; (v) a copy of the Company's Certificate of
incorporation certified by the appropriate Delaware governmental authority;
(vi) a copy of the letter from the Office approving the Bank's Stock
Charter; (vii) copy of the certificate from the FDIC certifying to the
insured status by the Bank; and (viii) copy of the letter to FHLB of
Chicago evidencing the Bank's membership therein.
(g) As soon as available after the Closing Date, McDonald shall
receive a certified copy of the Bank's Stock Charter as executed by the
Office.
(h) Concurrently with the execution of this Agreement, McDonald shall
receive letters from both Xxxxx, Xxxxxx & Company LLP and Ernst & Young
LLP, independent certified public accountants, addressed to McDonald, the
Company and the Bank, in substance and form satisfactory to McDonald, with
respect to the financial statements of the Bank and other financial
information contained in the Prospectus.
(i) At the Closing Date, McDonald shall receive letters in form and
substance satisfactory to McDonald from both Xxxxx, Xxxxxx & Company LLP
and Ernst & Young LLP, independent certified public accountants, dated the
Closing Date and addressed to
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 25
McDonald, the Company and the Bank, confirming the statements made by
them in the letters delivered by them pursuant to the preceding
subsection as of a specified date not more than five (5) business days
prior to the Closing Date.
(j) At the Closing Date, McDonald shall receive the opinion of
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., special counsel to the
Company and the Bank, dated the Closing Date, in form and substance
satisfactory to McDonald and to the Conversion will constitute a tax-
free organization under the Internal Revenue Code of 1986, as amended;
McDonald shall have also received the letter of Xxxxx Xxxxxx and
Company, dated the Closing Date, in form and substance satisfactory to
McDonald and to the effect that the Conversion will not be a taxable
transaction for the Bank or the Company under the laws of Illinois;
and that the facts and representations upon which such entities relied
upon in rendering their respective opinions to the Bank and the
Company are accurate and complete.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of McDonald and its counsel, satisfactory to McDonald. Any certificates
signed by an officer or director of the Company or the Bank prepared for
McDonald's reliance and delivered to McDonald or to counsel for McDonald shall
be deemed a representation and warranty by the Company and the Bank to McDonald
as to the statements made therein. If any condition to McDonald's obligations
hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled,
McDonald may terminate this Agreement or, if McDonald so elects, may waive any
such conditions which have not been fulfilled, or may extend the time of their
fulfillment. If McDonald terminates this Agreement as aforesaid, the Company and
the Bank shall reimburse McDonald for its expenses as provided in Section 3(b)
hereof.
8. Indemnification.
---------------
(a) The Company and the Bank jointly and severally agree to
indemnify and hold harmless McDonald, its officers, directors,
employees and agents and each person, if any, who controls McDonald
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever and shall further promptly reimburse such persons
for any legal or other expenses reasonably incurred by each or any of
them in investigating, preparing to defend or defending against any
such action, proceeding or claim (whether commenced or threatened)
arising out of or based upon (i) any misrepresentation by the Company
or the Bank in this Agreement or any breach of warranty by the Company
or the Bank with respect to this Agreement or arising out of or based
upon any untrue or alleged untrue statement of a material fact or the
omission or alleged omission of a material fact required to be stated
or necessary to make not misleading any statements contained in (A)
the Registration Statement or the Prospectus or (B) any application
(including the Form AC and the Form H-(e)1-S) or other document or
communication (in this Section 8 collectively called "Application")
prepared or executed by or on behalf of the Company or the Bank or
based upon information furnished in writing by
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 26
or on behalf of the Company or the Bank, whether or not filed in any
jurisdiction, to effect the Conversion or qualify the Shares under the
securities laws thereof or filed with the Office or Commission, unless
such statement or omission was made in reliance upon and in conformity
with information furnished to the Company or the Bank with respect to
McDonald by or on behalf of McDonald expressly for use in the
Prospectus or any amendment or supplement thereof or in any
Application, as the case may be, or (ii) the participation by McDonald
in the Conversion; provided, however, that this indemnification
agreement will not apply to any loss, liability, claim, damage or
expense found in a final judgment by a court of competent jurisdiction
to have resulted primarily from the bad faith, willful misconduct or
gross negligence of McDonald or any other party who may otherwise be
entitled to indemnification pursuant to this Section 8(a). This
indemnity shall be in addition to any liability the Company and the
Bank may otherwise have to McDonald.
(b) The Company shall indemnify and hold harmless McDonald, its
officers, directors, employees and agents and each person, if any, who
controls McDonald within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act for any liability whatsoever arising
out of (i) the Allocation Instructions or (ii) any records of account
holders, depositors, borrowers and other members of the Bank delivered
to McDonald by the Bank or its agents for use during the Conversion;
provided, however, that this indemnification agreement will not apply
to any loss, liability, claim, damage or expense found in a final
judgment by a court of competent jurisdiction to have resulted
principally and directly from the bad faith, willful misconduct or
gross negligence of McDonald or any other party who may otherwise be
entitled to indemnification pursuant to this Section 8(b). This
indemnity shall be in addition to any liability the Company and the
Bank may otherwise have to McDonald.
(c) McDonald agrees to indemnify and hold harmless the Company
and the Bank, their officers, directors and employees and each person,
if any, who controls the Company and the Bank within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the
same extent as the foregoing indemnity from the Company and the Bank
to McDonald, but only with respect to (i) statements or omissions, if
any, made in the Prospectus or any amendment or supplement thereof, in
any Application or to a purchaser of the Shares in reliance upon, and
in conformity with, written information furnished to the Company or
the Bank with respect to McDonald by McDonald expressly for use in the
Prospectus or in any Application; (ii) any misrepresentation by
McDonald in Section 2(b) of this Agreement; or (iii) any liability of
the Company or the Bank which is found in a final judgment by a court
of competent jurisdiction (not subject to further appeal) to have
resulted principally and directly from gross negligence, bad faith or
willful misconduct of McDonald.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 27
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with the other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable cost of
investigation except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified
party may retain additional counsel, but shall bear the fees and
expenses of such counsel unless (i) the indemnifying party shall have
specifically authorized the indemnified party to retain such counsel
or (ii) the parties to such suit include such indemnifying party and
the indemnified party, and such indemnified party shall have been
advised by counsel that one or more material legal defenses may be
available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought
shall not be liable to indemnify an indemnified party under this
Section 8 if any settlement of any such action is effected without
such indemnifying party's consent. To the extent required by law, this
Section 8 is subject to and limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to McDonald, the
Company and/or the Bank other than in accordance with its terms, the Company or
the Bank and McDonald shall contribute to the aggregate losses, liabilities,
claims, damages, and expenses of the nature contemplated by said indemnity
agreement incurred by the Company or the Bank and McDonald (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Bank, on the one hand, and McDonald, on the other hand, from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above, but also the
relative fault of the Company or the Bank, on the one hand, and McDonald, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Bank, on the one hand, and McDonald, on the other hand, shall be deemed
to be in the same proportion as the total net proceeds from the Conversion
received by the Company and the Bank bear to the total fees and expenses
received by McDonald under this Agreement. The relative fault of the Company or
the
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 28
Bank, on the one hand, and McDonald, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Bank or by McDonald and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Bank and McDonald agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, McDonald shall not be required
to contribute any amount in excess of the amount by which fees owed McDonald
pursuant to this Agreement exceeds the amount of any damages which McDonald has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. To the extent required by law, this Section 9 is subject to
and limited by the provisions of Section 23A.
10. Survival of Agreements, Representations and Indemnities. The
--------------------------------------------------------
respective indemnities of the Company and the Bank and McDonald and the
representations and warranties of the Company and the Bank and the Subsidiaries
and of McDonald set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of McDonald or the Company
or the Bank or any controlling person or indemnified party referred to in
Section 8 hereof, and shall survive any termination or consummation of this
Agreement and/or the issuance of the Shares, and any legal representative of
McDonald, the Company, the Bank and any such controlling persons shall be
entitled to the benefit of the respective agreements, indemnities, warranties
and representations.
11. Termination. McDonald may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in McDonald's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become involved in a war
or major hostilities; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the Bank or
the Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 29
declared; or if there shall have been a material adverse change in the
capitalization, financial condition or business of the Company, or if the
Bank shall have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or
malicious act, whether or not said loss shall have been insured; or if
there shall have been a material adverse change in the condition, financial
or otherwise, or prospects of the Company or the Bank or the Subsidiaries.
(b) If McDonald elects to terminate this Agreement as provided in
this Section, the Company and the Bank shall be notified promptly by
McDonald by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by McDonald for any of the
reasons set forth in subsection (a) above, and to fulfill their
obligations, if any, pursuant to Sections 3, 6, 8(a) and 9 of this
Agreement and upon demand, the Company and the Bank shall pay McDonald the
full amount so owing thereunder.
(d) The Bank may terminate the Conversion in accordance with the
terms of the Plan. Such termination shall be without liability to any
party, except that the Company and the Bank shall be required to fulfill
their obligations pursuant to Sections 3, 6, 8(a), 8(d) and 9 of this
Agreement.
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to McDonald shall be
mailed, delivered or faxed and confirmed to Trident Securities, Inc., 0000 Xxx
Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxx X.
Xxxxxxxxxx (with a copy to Silver, Freedmand & Taff L.L.P., 0000 Xxx Xxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxx X. Xxxxxxxx) and
if sent to the Company or the Bank, shall be mailed, delivered or telegraphed
and confirmed to Chesterfield Savings and Loan Association, 00000 Xxxxx Xxxxxxx
Xxx., Xxxxxxx, XX 00000, Attention: Xxxxxxx XxXxxx, President and Chief
Executive Officer of the Company and the Bank (with a copy to Xxxx Xxxxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000, (Attention: Xxxx Xxxxxx.)
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, McDonald, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The undersigned consent to the assignment of rights and obligations of Trident
Securities, Inc. hereunder to McDonald Investments Inc.
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 30
14. Construction. This Agreement shall be governed by and construed in
------------
accordance with the substantive laws of North Carolina regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
15. Counterparts and Definitions. This Agreement may be executed in
----------------------------
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute but one and the same
instrument. Any initially capitalized terms not defined herein shall have the
meanings ascribed thereto in the Prospectus.
* * *
[Signature page follows]
Trident Securities, a Division of McDonald Investments, Inc.
_________________,2001
Page 31
Please acknowledge your agreement to the foregoing as of the date above
written by signing below and returning to the Company one copy of this letter.
CHESTERFIELD FINANCIAL CORP. CHESTERFIELD SAVINGS & LOAN
ASSOCIATION
By: ________________________ By: _______________________
Xxxxxxx X. XxXxxx Xxxxxxx X. XxXxxx
President and Chief Executive President and Chief Executive
Officer Officer
Agreed to and accepted:
MCDONALD INVESTMENTS INC.
By: _________________________
__________
________________________
Exhibit A
McDonald Investments, Inc. is a registered selling agent in the jurisdictions
--
listed below:
Alabama Montana
Xxxxxx Xxxxxxxx
Arizona Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of Columbia North Dakota
Florida Ohio
Georgia Oklahoma
Hawaii Oregon
Idaho Pennsylvania
Illinois Rhode Island
Indiana South Carolina
Iowa South Dakota
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
