VERMILION BANCORP, INC.
255,000 TO 345,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
$10.00 PER SHARE
SALES AGENCY AGREEMENT
----------------------
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Vermilion Bancorp, Inc., a Delaware corporation (the "Company"), and
American Savings Bank of Danville, an Illinois chartered and federally insured
mutual savings bank (the "Bank"), hereby confirm, as of __________, 1997, their
respective agreements with Trident Securities, Inc. ("Trident"), 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. INTRODUCTORY. The Bank intends to convert from an Illinois chartered
mutual savings bank to an Illinois chartered stock savings bank 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 on November 6, 1996 (the "Plan"). In accordance with the Plan, the
Company is offering shares of its common stock, par value $.01 per share (the
"Shares" and the "Common Stock"), pursuant to nontransferable subscription
rights in a subscription offering (the "Subscription Offering") to certain
depositors of the Bank, the Bank's tax-qualified employee benefit plans (I.E.,
the Bank's Employee Stock Ownership Plan (the "ESOP")) and to employees,
officers and directors. Shares of the Common Stock not sold in the Subscription
Offering may be offered to the general public in a community offering (the
"Community Offering", and together with the Subscription Offering 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. It is anticipated that shares of the Common Stock not otherwise
subscribed for in the Subscription and Community Offerings may be offered at the
discretion of the Company to certain members of the general public as part of a
community offering on a best efforts basis by a selling group of selected
broker-dealers to be managed by Trident Securities, Inc. (the "Syndicated
Community Offering"). In the Offerings, the Company is offering between 255,000
and 345,000 shares, with the possibility of offering up to 396,750 Shares
without a resolicitation of subscribers. No Eligible
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 2
Account Holder or Other Member may purchase in their capacity as such more
than $50,000 of Common Stock in the Subscription Offering. No individual
person or other entity, together with associates of and persons acting in
concert with such person, may purchase in the Community Offering and the
Syndicated Community Offering more than $50,000 of Common Stock. No person,
individually or together with associates of and persons acting in concert
with such person, may purchase more than $150,000 of Common Stock in the
Conversion.
The Company and the Bank have been advised by Trident that it will utilize
its best efforts in assisting the Company and the Bank with the sale of the
Shares in the Offerings and, if deemed necessary by the Company, in a syndicated
community offering. Prior to the execution of this Agreement, the Company has
delivered to Trident the Prospectus dated __________, 1997 (as hereinafter
defined) and all supplements thereto to be used in the Offerings. Such
Prospectus contains information with respect to the Company, the Bank and the
Shares.
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Bank jointly and severally represent and
warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto,
on Form SB-2 (No. 333-____), including a Prospectus relating to the
Offerings, for the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"); and 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 (together with the enforceable published
policies and actions of the Commission thereunder, the "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 or mailed for filing to the Commission and shall include
any amendments or supplements thereto from and after their dates of
effectiveness or use,
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 3
respectively. If any Shares remain unsubscribed following
completion of the Subscription Offering and the Community Offering, the
Company (i) will, if required by the SEC Regulations, promptly file
with the Commission a post-effective amendment to such Registration
Statement relating to the results of the Subscription and the Community
Offerings, 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, or mail for
filing to, the Commission a prospectus or prospectus supplement
containing information relating to the results of the Subscription and
Community Offerings and pricing information pursuant to Rule 424(c) of
the Regulations, in either case in a form reasonably acceptable to the
Company and Trident.
(ii) The Bank has filed an Application for Approval of Conversion
including exhibits (as amended or supplemented, the "Conversion
Application" with the Illinois Commissioner of Banks and Real Estate
(the "Commissioner") under the Illinois Savings Bank Act and the rules
and regulations promulgated thereunder, which has been approved by the
Commissioner; and the Prospectus and the proxy statement for the
solicitation of proxies from members for the special meeting to
approve the Plan (the "Proxy Statement") included as part of the
Conversion Application have been approved for use by the Commissioner.
No order has been issued by the Commissioner preventing or suspending
the use of the Prospectus or the Proxy Statement; and no action by or
before the Commissioner revoking such approvals is, to the Bank's best
knowledge, pending or threatened.
(iii) The Company has filed with the Board of Governors of
the Federal Reserve System (the "FRB") an application on Form FRY-3
(the "FRY-3") under the Bank Holding Company Act and the regulations
promulgated thereunder and has received approval of its acquisition of
the Bank from the FRB.
(iv) The Bank has filed a Notice of Intent to Convert (as amended
or supplemented, the "Notice") with the Federal Deposit Insurance
Corporation (the "FDIC"). The FDIC has indicated its non-objection to
the Notice and the FDIC has not taken any action to revoke, alter or
rescind the basis of its order of non-objection to the Notice.
(v) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (i) the Registration
Statement and the Prospectus (as amended or supplemented, if amended
or supplemented) complied 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, in light of the
circumstances under which
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 4
they were made, not misleading, (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, (iv) the FRY-3 was complete and did
not contain an untrue statement or omit to state a 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
with leading, (v) the Notice was complete and did not contain an
untrue statement or omit to state a 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, and
(vi) the Conversion Application was complete and did not contain an
untrue statement or omit to state a 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 furnished to the Company or the Bank relating to
Trident by or on behalf of Trident expressly for use in the
Registration Statement or Prospectus.
(vi) The Company has been duly incorporated as a Delaware
corporation and the Bank has been duly organized as a mutual savings
and loan association 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 Registration
Statement and Prospectus; the Bank is a member in good standing of the
Federal Home Loan Bank of Chicago; and the deposit accounts of the
Bank are insured by the Federal Deposit Insurance Corporation
("FDIC") up to the applicable legal limits. The Company is qualified
to do business as a foreign corporation in the state of Illinois.
Except as noted above, neither the Company nor the Bank 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 operations of 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 other than the Company. Upon
amendment of the Bank's charter and bylaws to read in the form of an
Illinois stock charter as provided in the Savings Bank Act and the
rules and regulations promulgated thereunder and completion of the
sale by the Company of the Shares as contemplated by the Prospectus,
(i) the Bank will be converted pursuant to the Plan to an Illinois
chartered capital stock savings bank 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.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 5
(vii) The Bank has good and marketable title to all assets
material to its business and to those assets described in the
Prospectus as owned by it, free and clear of all material liens,
charges, encumbrances or restrictions, except for liens for taxes not
yet due, except as described in the Prospectus and except as could not
in the aggregate have a material adverse effect upon the operations or
financial condition of the Company and the Bank taken as a whole; and
all of the leases and subleases material to the operations or
financial condition of the Bank, under which it holds properties,
including those described in the Prospectus, are in full force and
effect as described therein.
(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 actions on the part of each of
the Company and the Bank, and this Agreement is a valid and binding
obligation with valid execution and delivery by 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 savings and loan holding companies the accounts of whose
subsidiaries 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 and business, including the
assets and properties, of the Company and the Bank, taken as a whole.
(x) The Company and the Bank have received the opinion of Xxxx
Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. to the effect that the
Conversion will constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and the opinion of
__________ to the effect that the Conversion will not be a taxable
transaction for the Company or the Bank under the income tax laws of
Illinois. The facts relied upon in such opinions are accurate and
complete.
(xi) 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
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 6
limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the (i) Commissioner in connection
with its approval Conversion Application, (ii) FDIC in connection with
its non-objection to the Notice, and (iii) FRB in connection with its
approval of the FRY-3, and except as may be required under the
securities, or "blue sky," laws of various jurisdictions, and
in the case of the Company, as of the Closing Date, will, to the
actual knowledge of the Bank, 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, to the
knowledge of the Company, 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 stock savings and
loan associations (the "Stock Charter"), the form of which Stock
Charter has been approved by the Commissioner.
(xii) Neither the Company nor the Bank is in violation of any
rule or regulation of the FRB, Commissioner or the FDIC that could
reasonably be expected to result in any enforcement action against the
Company, the Bank or their officers or directors that could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), operations, businesses, assets or properties
of the Company and the Bank, taken as a whole.
(xiii) The financial statements and any related notes or
schedules which are included in the Registration Statement and the
Prospectus fairly present the financial condition, income, retained
earnings and cash flows of the Bank at the respective dates thereof
and for the respective periods covered thereby and comply as to form
with the applicable accounting requirements of the SEC Regulations and
the applicable accounting regulations of the Commissioner and FDIC.
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 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.
(xiv) There has been no material change in the condition
(financial or otherwise), results of operations or business, including
assets and properties, of the Company and the Bank, 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
conform in all material respects to the descriptions thereof contained
in the
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 7
Prospectus. Neither the Company nor the Bank has any material
liabilities of any kind, contingent or otherwise, except as set forth
in the Prospectus.
(xv) 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 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 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),
operations, business, assets or properties of the Company and the Bank
taken as a whole; all agreements which are material to the condition
(financial or otherwise), results of operations or business of the
Company and the Bank 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 and the Bank, threatened any action or
proceeding wherein the Company or the Bank would be alleged to be in
default thereunder.
(xvi) Neither the Company nor the Bank is in violation of its
respective certificate of incorporation, charter or bylaws. The
execution and delivery hereof and the consummation of the transactions
contemplated hereby by the Company and the Bank do not conflict with
or result in a breach of the certificate of incorporation, charter or
bylaws of the Company or the Bank (in either mutual or stock form) 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 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 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 Commissioner in connection with its
approval of the Conversion Application, the FDIC non-objection to the
Notice and the FRB approval of the FRY-3), which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), operations or business of the
Company and the Bank taken as a whole.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 8
(xvii) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus and
prior to the Closing Date (as hereinafter defined), except as
otherwise may be indicated or contemplated therein, neither the
Company nor the Bank has issued any securities which will remain
issued at the Closing Date or incurred any liability or obligation,
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 is material in
light of the business of the Company and the Bank, taken as a whole.
(xviii) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range as set forth in the Prospectus under the caption
"Capitalization," and no Common Stock of the Company shall be
outstanding immediately prior to the Closing Date; the issuance and
the sale of the Shares of the Company have been duly authorized by all
necessary action of the Company and approved by the Commissioner and
consistent with the FDIC's non-objection to the Notice, and, when
issued in accordance with the terms of the Plan and paid for, 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 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 against 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 action of the Bank and the Company and appropriate
regulatory authorities (subject to the satisfaction of various
conditions imposed by the (i) Commissioner in connection with its
approval of the Conversion Application, (ii) the FDIC in connection
with its non-objection to the Notice, and (iii) FRB in connection with
its approval of the FRY-3), and such capital stock, when issued in
accordance with the terms of the Plan, will be fully paid and
nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus.
(xix) No approval of any regulatory or supervisory or other
public authority is required 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 Commissioner
and approval of the Company's application on FRY-3 by the FRB, the
issuance of the Stock Charter by the Office and as may be required
under the securities laws of various jurisdictions.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 9
(xx) All contracts and other documents required to be filed as
exhibits to the Registration Statement or the Conversion Application,
the FRY-3 and the Notice have been filed with the Commission, the
Commissioner, the FRB and the FDIC, as the case may be.
(xxi) Geo. Olive & Co. Inc. which has audited the financial
statements of the Bank at September 30, 1996 and 1995 and for the
years ended September 30, 1996, 1995 and 1996 included in the
Prospectus, is an independent public accountant within the meaning of
the Code of Professional Ethics of the American Institute of Certified
Public Accountants and Title 12 of the Code of Federal Regulations.
(xxii) The Company and the Bank have timely filed all required
federal, state and local franchise tax returns, and no deficiency has
been asserted with respect to such returns by any taxing authorities,
and the Company and the Bank have paid all taxes that have become due
and, to the best of their knowledge, have made adequate reserves for
similar 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 condition of the
Company and the Bank, taken as a whole or in the case of taxes which
the Bank is contesting in good faith.
(xxiii) All of the loans represented as assets of the Bank on
the most recent financial statements 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.
(xxiv) The records of account holders, depositors, borrowers
and other members of the Bank delivered to Trident by the Bank or its
agent for use during the Conversion have been prepared or reviewed by
the Bank and, to the best knowledge of the Company and the Bank, are
reliable and accurate.
(xxv) None of the Company, the Bank or the employees of the
Company or the Bank, has made any payment of funds to the Company or
the Bank 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.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 10
(xxvi) There are no actions, suits, regulatory investigations
or other proceedings pending or, to the best knowledge of the Company
or the Bank, threatened against the Company or the Bank relating to
environmental protection. To the best knowledge of the Company and
the Bank, 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, to the best
knowledge of the Company or the Bank, has occurred on, in or at any of
the facilities or properties of the Company or the Bank, except such
disposal, release or discharge which would not have a material adverse
effect on the Company or the Bank, taken as a whole.
(xxvii) 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
Savings Bank Act and regulations promulgated thereunder and all other
applicable laws, regulations, published decisions and orders,
including all terms, conditions, requirements and provisions precedent
to the Conversion imposed by the Commissioner.
(b) Trident represents and warrants to the Company and the Bank that:
(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and the NASD.
(ii) Trident 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 Trident,
and this Agreement is a legal, valid and binding obligation of
Trident, 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 whose may be
protected by the Securities Investor Protection Corporation 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).
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 11
(iv) Each of Trident and, to Trident's knowledge, its employees,
agents and representatives who shall perform any of the services
required hereunder to be performed by Trident shall be duly authorized
and shall have all licenses, approvals and permits necessary to
perform such services, and Trident 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 Trident, 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 Trident 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 Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) Any funds received by Trident to purchase Common Stock will
be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's knowledge,
threatened against Trident any action or proceeding before the
Commission, the NASD, any state securities commission or any state or
federal court concerning Trident's activities as a broker-dealer.
3. EMPLOYMENT OF TRIDENT; 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 Trident
as their agent to utilize its best efforts in assisting the Company with the
Company's sale of the Shares in the Subscription Offering and Community
Offering. The employment of Trident hereunder shall terminate (a) forty-five
(45) days after the Offerings close, unless the Company and the Bank, with the
approval of the Commissioner, are permitted to extend such period of time, or
(b) upon consummation of the Conversion, whichever date shall first occur.
In the event the Company is unable to sell a minimum of 255,000 Shares (or
such lesser amount as the Commissioner may permit) within the period herein
provided, this Agreement shall terminate, and the Company and the Bank shall
refund promptly to any persons who have 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)
and 9 hereof. Appropriate arrangements for placing the funds received from
subscriptions for Shares in special
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 12
interest-bearing accounts with the Bank until all Shares are sold and paid
for were made prior to the commencement of the Subscription 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 at 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 or at such other place as shall be agreed upon between the
parties hereto. The date upon which Trident is paid the compensation due
hereunder is herein called the "Closing Date."
Trident agrees either (a) upon receipt of executed order forms of
subscribers to forward, for deposit in a segregated account, the 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 Trident to the Bank or (b) to
solicit indications of interest in which event (i) Trident 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) Trident
will mail acknowledgments of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the third business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident 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. Trident 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, Trident shall
receive the following compensation for its services hereunder:
(a) (i) a commission equal to 2.0% of the aggregate dollar amount of
stock sold to eligible account holders, supplemental eligible account
holders and other members who reside in the Bank's market area; (ii) a
commission equal to 1.5% on sales of common stock sold to eligible account
holders, supplemental eligible account holders and other members who reside
outside the Bank's market area; and (iii) a commission to be agreed upon by
Trident and the Company for Shares sold by other member firms of the NASD
through a selected dealers arrangement (the "Selected Dealer Offering").
All such fees are to be payable in next-day funds to Trident on the Closing
Date.
(b) Trident shall be reimbursed for allocable expenses, including but
not limited to travel, communications, legal fees and postage, incurred by
it whether or not the Offerings are successfully completed; provided,
however, that reimbursable legal fees will
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 13
not exceed $22,500 (excluding reasonable out of pocket expenses), that other
reimbursable expenses will not exceed $10,000 and that neither the Company
nor the Bank shall pay or reimburse Trident for any of the foregoing
expenses accrued after Trident 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 Trident is in breach of this
Agreement. Full payment to defray Trident's reimbursable expenses shall be
made in next-day funds on the Closing Date or, if the Conversion is not
completed and is terminated for any reason, within ten (10) business days of
receipt by the Company of a written request from Trident for reimbursement
of its expenses. Trident acknowledges receipt of $10,000 advance payment
from the Bank which shall be credited against the total reimbursement due
Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in the immediately preceding paragraph (b), in
the event that a resolicitation or other event causes the Offerings to be
extended beyond their original expiration date, Trident shall be reimbursed
for its reasonable allocable expenses incurred during such extended period,
provided that the allowance for allocable expenses provided for in the
immediately preceding paragraph (b) above have been exhausted and subject
to the following. Such reimbursement shall not exceed an amount equal to
the product obtained by dividing $10,000 (original out-of-pocket expenses)
by the total number of days of the unextended Subscription Offering
(calculated from the date of the Prospectus to the intended close of the
Subscription Offering as stated in the Prospectus) and multiplying such
product by the number of days of the extension (that number of days from
the date of the supplemental prospectus used in the extended Subscription
Offering to the closing of the extension of the Subscription Offering
described in such supplemental prospectus).
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 reasonable expenses of the Conversion incurred by them or on their
prior approval including but not limited to their attorneys' fees, NASD filing
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, Trident is
assisting the Company on a best efforts basis in offering a minimum of 255,000
and a maximum of 345,000 Shares, with the possibility of offering up to 396,750
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.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 14
5. FURTHER AGREEMENTS. The Company and the Bank jointly and severally
covenant and agree that:
(a) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident 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 (other than those of a non-substantive nature) 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 moment.
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter
amended, and by the SEC 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 and the Bank, taken as a whole, shall occur as a
result of which it is necessary, in the opinion of counsel for Trident,
with the concurrence of counsel to the Company, to amend or supplement the
Prospectus in order to make the Prospectus not false or misleading in light
of the circumstances existing at the time it is delivered to a purchaser of
the Shares, the Company forthwith shall prepare and furnish to Trident 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 Trident) 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 Trident has not first been furnished a copy or to which Trident
shall reasonably object after having been furnished such copy. For the
purposes of this subsection the Company and
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 15
the Bank shall furnish such information with respect to themselves as
Trident from time to time may reasonably request.
(d) The Company and the Bank have taken or will take all reasonably
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 Trident and the Company 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 Trident 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 in accordance with the requirements of the Office.
(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
stock offering 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 regulations promulgated under the Act)
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 Trident, 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 Trident (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 Trident may reasonably request.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 16
(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 by Trident.
(k) The Company shall advise Trident, if necessary, as to the
allocation of deposits, in the case of eligible account holders and votes,
in the case of other members, and of the Shares in the event of an
oversubscription and shall provide Trident final instructions as to the
allocation of the Shares ("Allocation Instructions") in such event and such
information shall be accurate and reliable. Trident 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.
(l) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Trident in order for Trident to
ensure compliance with the NASD's "Interpretation Relating to Free-Riding
and Withholding."
6. PAYMENT OF EXPENSES. Whether or not the Conversion is consummated,
the Company and the Bank shall pay or reimburse Trident for (a) all filing fees
paid or incurred by Trident in connection with all filings with the NASD with
respect to the Subscription and Community Offerings and, (b) if the Company is
unable to sell a minimum of 255,000 Shares or such lesser amount as the FDIC and
Commissioner may permit or the Conversion is otherwise terminated, the Company
and the Bank shall reimburse Trident for allocable expenses incurred by Trident
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
Trident for any of the foregoing expenses accrued after Trident 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 Trident is in
breach of this Agreement.
7. CONDITIONS OF TRIDENT'S OBLIGATIONS. Except as may be waived by
Trident, the obligations of Trident 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 Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinion
of Xxxxx Xxxx Xxxxxxx & Xxxxxxx, L.L.P., special counsel for the Company
and the Bank, dated
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 17
the Closing Date, addressed to Trident, in form and substance reasonably
satisfactory to counsel for Trident and to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and the Bank is validly existing as a
savings and loan Bank in mutual form in good standing under the laws
of the State of Illinois, each with full corporate power and authority
to own its properties and conduct its business 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 FDIC
up to the applicable legal limits;
(iii) to the knowledge of such counsel, the activities of the
Bank as such activities are described in the prospectus are permitted
under federal and Delaware law to subsidiaries of a Delaware business
corporation and the Bank does not have any subsidiaries;
(iv) the Plan complies with, and to such counsel's knowledge, the
Conversion has been effected in all material respects in accordance
with, the Savings Bank Act and the regulations promulgated thereunder,
the FDIC regulations governing conversions by state chartered savings
banks and the Bank Holding Company Act; to such counsel's knowledge,
all of the terms, conditions, requirements and provisions with respect
to the Plan and the Conversion imposed by the Commissioner, FDIC and
FRB, except with respect to the filing or submission of certain
required post-Conversion reports or other materials by the Company or
the Bank, have been complied with by the Company and the Bank; and, to
the knowledge of such counsel, no person has sought to obtain
regulatory or judicial review of the final action of the Commissioner,
FDIC and FRB in approving the Plan;
(v) the Company has authorized Common Stock as set forth in the
Registration Statement and the Prospectus, and the description of such
Common Stock in the Registration Statement and the Prospectus is
accurate in all material respects;
(vi) the issuance and sale of the Shares have been duly and
validly authorized by all necessary corporate action on the part of
the Company; the Shares, upon receipt of payment and issuance in
accordance with the terms of the Plan and this Agreement, will be
validly issued, fully paid, nonassessable and free of preemptive
rights, and purchasers of the Shares from the Company, upon
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 18
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 applicable
Delaware law;
(viii) the issuance and sale of the capital stock of the Bank
to the Company have been duly authorized by all necessary corporate
action of the Bank and the Company and have received the approval of
the Commissioner, and such capital stock, upon receipt of payment and
issuance in accordance with the terms of the Plan, will be validly
issued, fully paid and nonassessable and owned of record and, to the
knowledge of such counsel, beneficially by the Company;
(ix) subject to the satisfaction of the conditions to the
Commissioner's approval of the Conversion Application, no further
approval, authorization, consent or other order of any public board or
body is required in connection with the execution and delivery of this
Agreement and the consummation of the Conversion, except with respect
to the issuance to the Bank of the Stock Charter by the Commission and
as may be required under the "blue sky" laws of various jurisdictions
and except as may be required under the rules and regulations of the
NASD;
(x) to the knowledge of such counsel, the Bank has obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of its business as such business is described
in the Prospectus, all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is 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, taken as a whole;
(xi) to the knowledge of such counsel, there are no material
legal or governmental proceedings pending or threatened against or
involving the assets of the Company or the Bank (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);
(xii) to the knowledge of such counsel, the execution and
delivery of this Agreement and the consummation of the Conversion by
the Company and the Bank do not constitute a material breach of or
default (or an event which, with notice or
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 19
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 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 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 (i) Commissioner in connection with its
approval of the Conversion Application, (ii) FDIC in connection with
its non-objection to the Notice and (iii) the FRB in connection with
its approval of the FRY-3), which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the Company and the Bank, taken as a whole; and
(xiii) to the knowledge of such counsel, there has been no
material breach of any provision of the Company's or the Bank's
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, bond, debenture, note, instrument or obligation to which
the Company or the Bank 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, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the Company and the Bank, taken as a whole;
(xiv) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly and validly authorized
by all necessary corporate action on the part of each of the Company
and the Bank;
(xv) this Agreement is a legal, 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, receivership,
conservatorship 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 or
savings and loan holding companies the accounts of whose subsidiaries
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
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 20
provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A, as to which no opinion need
be rendered);
(xvi) the statements in the Prospectus and incorporated by
reference in the Proxy Statement under the captions "Regulation,"
"Dividends," "Restrictions on Acquisitions of Stock and Related
Takeover Defensive Provisions" and "Description of Capital Stock,"
insofar as they are, or refer to, statements of law or legal
conclusions (excluding financial data included therein, as to which an
opinion need not be expressed), have been prepared or reviewed by such
counsel and are correct in all material respects;
(xvii) the Conversion Application has been approved by the
Commissioner, and the Prospectus and the Proxy Statement have been
authorized for use by the Commissioner; the Registration Statement and
any post-effective amendment thereto has been declared effective by
the Commission, the FDIC has issued a non-objection to the Notice and
to the knowledge of such counsel, no proceedings are pending by or
before the Commission, the Commissioner or the FDIC seeking to revoke
or rescind the orders declaring the Registration Statement effective
or approving the Conversion Application or Notice, or, to the
knowledge of such counsel, are contemplated or threatened;
(xviii) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the Bank do not
conflict with or result in a breach of the certificate of
incorporation, charter or bylaws of the Company or the Bank (in either
mutual or stock form); and
(xix) the Conversion Application, the Notice, the
Registration Statement, the Prospectus and the Proxy Statement, in
each case as amended, comply as to form in all material respects with
the requirements of the Act, the Bank Holding Company Act, the Savings
Bank Act, the SEC Regulations, the FDIC regulations governing
conversions and the Savings Bank Act Regulations, as the case may be
(except as to information with respect to Trident included therein and
financial statements, notes to financial statements, financial tables
and other financial and statistical data, including the appraisal,
included therein, as to which an opinion need not be expressed); to
such counsel's knowledge, 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.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 21
In rendering such opinions, such counsel may rely as to matters of
fact on certificates of officers and directors of the Company, the Bank and
the Subsidiary and certificates of public officials delivered pursuant
hereto. 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. Such opinion may be governed by, and interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section
of Business Law (1991), and, as a consequence, such opinion is subject to
the qualifications, exceptions, definitions, limitations on coverage and
other limitations, all as more particularly described in the Accord, and it
should be read in conjunction therewith. In addition, the General
Qualifications set forth in the Accord apply to the opinions set forth in
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 it 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, Xxxxx Xxxx
Xxxxxxx & Xxxxxxx. L.L.P. will opine solely as to matters of Federal
Securities and Banking law and Delaware law.
(c) At the Closing Date, Trident shall receive the letter of Xxxxx
Xxxx Xxxxxxx & Xxxxxxx, LLC, special counsel for the Company and the Bank,
dated the Closing Date, addressed to Trident, in form and substance
reasonably satisfactory to counsel for Trident and to the effect that:
based on such counsel's participation in conferences with representatives
of the Company, the Bank, its counsel, the independent appraiser, the
independent certified public accountants, Trident and its counsel, review
of documents and understanding of applicable law (including the
requirements of Form SB-2 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 or
supplemented (except as to information in respect of Trident contained
therein and except as to the financial statements, notes to financial
statements, financial tables and other financial and statistical data
contained therein, 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, in light of the
circumstances under which they were made, not misleading, or that the
Prospectus, as amended or supplemented (except as to information in respect
of Trident contained therein and except as to financial statements, notes
to financial statements, financial tables and other financial and
statistical data contained therein as to which such counsel need express no
comment), as of its date and at the
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 22
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 of
completeness or fairness thereof).
(d) Counsel for Trident 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 Trident, and for the purpose of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained, including but
not limited to, resolutions of the Board of Directors of the Company and
the Bank regarding the authorization of this Agreement and the transactions
contemplated hereby.
(e) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (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
such condition 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 after the latest date as of which the financial
condition of the Company and 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 materially
adverse to the Company and the Bank, taken as a whole; (iii) none of the
Company or the Bank shall have received from the Commissioner, FDIC or
Commission any direction (oral or written) to make any change in the method
of conducting their respective businesses which is material and adverse 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 affecting any of their respective assets, wherein an
unfavorable decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or income of 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
securities or blue sky laws of such jurisdictions as Trident and the
Company shall have agreed upon.
(f) At the Closing Date, Trident 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 Prospectus became
authorized by the Company 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
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 23
made, not misleading with respect to the Company or the Bank; (ii) since the
date the Prospectus became authorized by the Company 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 (iv) inclusive
of subsection (e) of this Section 7 have been satisfied; (iii) to the best
knowledge of such officers, no order has been issued by the Commission, the
Commissioner or the FDIC to suspend the Subscription Offering or the
Community Offering or the effectiveness of the Prospectus, and no action
for such purposes has been instituted or threatened by the Commission, the
Commissioner or the FDIC; (iv) to the best 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.
(g) At the Closing Date, Trident shall receive, among other
documents, (i) copies of the letters from the Commissioner authorizing the
use of the Prospectus and the Proxy Statement, (ii) if available, a copy of
the order of the Commission declaring the Registration Statement effective;
(iii) copies of the letters from the Commissioner 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 FDIC non-objection
order; (vii) a copy of the FRB order approving the FRY-3; and, (viii) if
available, a copy of the letter from the Commissioner approving the Bank's
Stock Charter.
(h) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Bank's Stock Charter executed by the
appropriate federal governmental authority.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Geo. S. Olive & Co., LLC, independent
certified public accountants, addressed to Trident and the Company, in
substance and form satisfactory to counsel for Trident, with respect to the
financial statements and certain financial information contained in the
Prospectus.
(j) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Geo. S. Olive & Co.,
LLC, independent certified public accountants, dated the Closing Date and
addressed to Trident and the Company, confirming the statements made by
them in the letter delivered by them pursuant to the
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 24
preceding subsection as of a specified date not more than five (5) days
prior to the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel.
Any certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company or the Bank
to Trident as to the statements made therein. If any condition to Trident's
obligations hereunder to be fulfilled prior to or at the Closing Date is not so
fulfilled, Trident may terminate this Agreement or, if Trident so elects, may
waive any such conditions which have not been fulfilled, or may extend the time
of their fulfillment. If Trident terminates this Agreement as aforesaid, the
Company and the Bank shall reimburse Trident 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 Trident, its officers, directors and employees and each
person, if any, who controls Trident 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 upon written demand 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 (A) 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 (i) the Registration Statement or the Prospectus or
(ii) any application 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 (B) written information furnished by
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 Commissioner, FDIC, FRB or
Commission, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company or the Bank
with respect to Trident by or on behalf of Trident expressly for use in the
Prospectus or any amendment or supplement thereof or in any Application, as
the case may be.
(b) The Company shall indemnify and hold Trident harmless for any
liability whatsoever arising out of (i) the Allocation Instructions or
(ii) any records of account
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 25
holders, depositors, borrowers and other members of the Bank delivered to
Trident by the Bank or its agents for use during the Conversion.
(c) Trident 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 Trident, but only with
respect to (A) 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 Trident by or on
behalf of Trident expressly for use in the Prospectus or in any
Application; (B) any misrepresentation or breach of warranty by Trident in
Section 2(b) of this Agreement; or (C) 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 principally and
directly resulted from gross negligence or willful misconduct of Trident.
(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 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
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 26
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 Trident, the Company and/or
the Bank other than in accordance with its terms, the Company or the Bank and
Trident 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 Trident (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Bank on the one
hand and Trident on the other 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 Trident 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 Trident on the other shall be deemed to be in the same
proportions as the total net proceeds from the Conversion received by the
Company and the Bank bear to the total fees received by Trident under this
Agreement. The relative fault of the Company or the Bank on the one hand and
Trident on the other 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 Trident 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 Trident 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, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident 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.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 27
10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Company and the Bank and Trident and the
representation and warranties of the Company and the Bank and of Trident 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 Trident 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 Trident, 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. Trident 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 Trident's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange
("NYSE") shall have suspended (except that this shall not apply to the
imposition of NYSE trading collars imposed on program trading); 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 a material effect on the Bank or the Conversion; or if
a moratorium in foreign exchange trading by major international banks or
persons has been declared; or if there shall have been a material adverse
change in the capitalization, 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 or
prospects of the Company or the Bank.
(b) If Trident elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by Trident by
telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, and to fulfill its 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 Trident 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(b), 3(c), 6, 8(a) and 9 of this
Agreement.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 28
12. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Mr. R. Xxx
Xxxxxxx, Xx. (with a copy to Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. Suite
400, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X., 00000, Attention: Xxxx
Xxxxxx, Esquire). and if sent to the Company or the Bank, shall be mailed,
delivered or telegraphed and confirmed to Vermilion Bancorp, Inc., 000 X.
Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx,
President (with a copy to Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx
Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx Xxxxxxxx,
Esquire).
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Trident, 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.
14. CONSTRUCTION. Unless governed by preemptive federal law, this
Agreement shall be governed by and construed in accordance with the substantive
laws of Louisiana.
15. COUNTERPARTS. 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.
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
VERMILION BANCORP, INC. AMERICAN SAVINGS BANK OF DANVILLE
By: By:
----------------------- --------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief President and Chief Executive Officer
Executive Officer
Date: -----------, 1997 Date: ----------------, 1997
Agreed to and accepted:
TRIDENT SECURITIES, INC.
Vermilion Bancorp, Inc.
Sales Agency Agreement
Page 29
By: ---------------------------
Date: ---------------, 1997
