DRAFT: ^ 5/19/97
$15,000,000
BNCCORP, Inc.
___% Subordinated Notes due 2004
UNDERWRITING AGREEMENT
May __, 1997
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
BNCCORP, Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to you (the
"Underwriter"), ____% Subordinated Notes due 2004 in an aggregate principal
amount of $15,000,000 (the "Notes"). The Notes will be issued under an
indenture, dated as of May ___, 1997 (the "Indenture"), between the Company and
Firstar ^ Trust Company, as trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-^ 26703) and a
related preliminary prospectus for the registration of the Notes under the
Securities Act of 1933, as amended (the "Act"). The registration statement, as
amended at the time it was declared effective, including the information (if
any) deemed to be part thereof pursuant to Rule 430A under the Act is herein
referred to as the "Registration Statement." The form of prospectus first filed
by the Company with the Commission pursuant to Rules 424(b) and 430A under the
Act is referred to herein as the "Prospectus." Each preliminary prospectus
included in the Registration Statement prior to the time it becomes effective or
filed with the Commission pursuant to Rule 424(a) under the Act is referred to
herein as a "Preliminary Prospectus." Copies of the Registration Statement,
including all exhibits and schedules thereto, any amendments thereto and all
Preliminary Prospectuses have been delivered to you.
The Company hereby confirms its agreements with respect to the purchase of
the Notes by the Underwriter as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, the
Underwriter that:
(i) The Registration Statement has been declared effective under
the Act, and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement.
No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been instituted or
threatened by the Commission.
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act^ and the rules and regulations of
the Commission promulgated thereunder and Industry Guide 3, Statistical
Disclosure by Bank Holding Companies (collectively, the "Regulations"), and
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 they were
made, not misleading; provided, however, the Company makes no
representation or warranty as to information contained in or omitted in
reliance upon, and in conformity with, written information furnished to the
Company by the Underwriter expressly for use in the preparation thereof.
(iii) The Registration Statement conforms, and the Prospectus and
any amendments or supplements thereto will conform, in all material
respects to the requirements of the Act, the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act") and the Regulations. Neither the
Registration Statement nor any amendment thereto, and neither the
Prospectus nor any supplement thereto, contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will 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; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted from
the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by the Underwriter, expressly for use in the
preparation thereof.
(iv) The Company is a "small business issuer" as such term is
defined in Rule 405 and Regulation S-B under the Act.
(v) The Company has been duly organized, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus, and is duly qualified
to transact business in all jurisdictions in which the conduct of its
business or its ownership or leasing of property requires such
qualification and the failure so to qualify would have a material adverse
effect on the business or condition, financial or otherwise, of the Company
and its subsidiaries, taken as a whole. The Company is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as
amended.
(vi) The Company does not own any stock or other equity interest in
any corporation, partnership, joint venture, unincorporated association or
other entity, other than BNC National Bank of Minnesota (the "Minnesota
Bank") and BNC National Bank of Bismarck (the "Bismarck Bank")
(collectively the "Subsidiary Banks"), BNC Financial Corporation, a
Minnesota corporation ("BNC Financial") and Bismarck Properties, Inc., an
inactive North Dakota corporation ("Bismarck Properties") (the Subsidiary
Banks, BNC Financial ^, Bismarck Properties and any such other entity being
collectively referred to herein as the ^"Company Subsidiaries"). The
Company Subsidiaries do not own any stock or other equity interest in any
corporation, partnership, joint venture, unincorporated association or
other entity, other than ▇.▇. ▇▇▇▇▇ Insurance Agency ("▇.▇. ▇▇▇▇▇") (▇.▇.
▇▇▇▇▇, the Company Subsidiaries and any such other entities being
collectively referred to herein as the "subsidiaries"). The Company or the
Company
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Subsidiaires, as the case may be, own all of the issued and outstanding
capital stock of the subsidiaries, free and clear of all liens,
encumbrances and security interests, except as disclosed in the Prospectus.
Except as disclosed in the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or other rights to
convert any obligations into, shares of capital stock or ownership
interests in any of the subsidiaries ^ are outstanding. All outstanding
shares of capital stock of each of the subsidiaries ^ have been duly
authorized and validly issued, are fully paid and non-assessable.
(vii) Each of the Subsidiary Banks are national banking associations
duly organized, validly existing and in good standing under the laws of the
United States and have the power and authority to own or lease their
respective properties and conduct their respective businesses as described
in the Prospectus. The Minnesota Bank is authorized to conduct the
business of banking in the State of Minnesota and the Bismarck Bank is
authorized to conduct the business of banking in the State of North Dakota.
None of the Subsidiary Banks are required to be qualified to transact
business as a foreign corporation in any jurisdiction. The Minnesota Bank
and the Bismarck Bank are members of the Federal Reserve Bank of
Minneapolis, and are each duly authorized to operate a banking business.
Each Subsidiary Bank is a member of the Bank Insurance Fund of the Federal
Deposit Insurance Corporation (the "FDIC") and its deposit accounts are
insured by the FDIC to the fullest extent provided by law. No proceeding
for the termination of such insurance is pending or is threatened.
(viii) BNC Financial ^, Bismarck Properties and ▇.▇. ▇▇▇▇▇ have been
duly incorporated, are validly existing as corporations in good standing
under the laws of their jurisdiction of incorporation, have the corporate
power and authority to own or lease their properties and conduct their
businesses as described in the Prospectus, and are duly qualified to
transact business in all jurisdictions in which the conduct of their
business or their ownership or leasing of property requires such
qualification and the failure so to qualify would have a material adverse
effect on the business or condition, financial or otherwise, of the Company
and ^ the subsidiaries, taken as a whole. Bismarck Properties is an
inactive North Dakota corporation that does not own or lease any properties
and does not currently conduct business.
(ix) The Company has the power and authority to enter into this
Agreement and the Indenture and to authorize, issue and sell the Notes it
will sell hereunder as contemplated hereby. This Agreement and the
Indenture have been duly and validly authorized, executed and delivered by
the Company and constitute valid and binding agreements of the Company in
accordance with their terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the rights of creditors generally, by general principles of
equity and, with respect to Section 7 hereof, by the public policy
underlying the federal or state securities laws. The Notes to be issued
under the Indenture and sold by the Company to the Underwriter pursuant to
this Agreement ^ have been duly authorized and, when executed and
authenticated in the manner set forth in the Indenture and issued, sold and
delivered in the manner set forth herein, will be the valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and the terms of the Indenture, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity. The Indenture has been duly qualified under
the Trust Indenture Act. The Indenture will be substantially in the form
filed as an exhibit to the Registration Statement and will comply with the
Trust Indenture Act and the regulations thereunder. The Indenture and the
Notes conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
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(x) The outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable. All offers and sales by the Company of outstanding shares
of capital stock and other securities of the Company, prior to the date
hereof, were made in compliance with the Act and all applicable state
securities or blue sky laws. ^ Neither the filing of the Registration
Statement nor the offering or the sale of the Notes as contemplated by this
Agreement gives rise to any rights for, or relating to, the registration of
any shares of capital stock or other securities of the Company, except such
rights which have been validly waived or satisfied. Except as described in
the Prospectus and those options and shares of restricted stock issued
under the Company's 1995 Stock Incentive Plan, there are no outstanding
options, warrants, agreements, contracts or other rights to purchase or
acquire from the Company any shares of its capital stock. The Company has
the authorized and outstanding capital stock as set forth under the heading
"Capitalization" in the Prospectus. ^
(xi) The financial statements, together with the related notes and
schedules as set forth in the Registration Statement and Prospectus,
present fairly the consolidated financial position, results of operations
and changes in financial position of the Company and ^ the subsidiaries on
the basis stated in the Registration Statement at the indicated dates and
for the indicated periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, and such financial statements
comply in all material ^ respects with the requirements of the Act and the
Regulations and all adjustments necessary for a fair presentation of
results for such periods have been made, except as otherwise stated
therein. The summary and selected financial and statistical data included
in the Registration Statement present fairly the information shown therein
on the basis stated in the Registration Statement and have been compiled on
a basis consistent with the financial statements presented therein. No
other financial statements or schedules are required to be included in the
Registration Statement or Prospectus. The allowance for loan losses of
each of the Subsidiary Banks is adequate based on management's assessment
of various factors affecting the loan portfolio, including a review of
problem loans, business conditions, historical loss experience, evaluation
of the quality of the underlying collateral and holding and disposal costs.
(xii) There is no action or proceeding pending or, to the knowledge
of the Company, threatened or contemplated against the Company or any of ^
the subsidiaries before any court or administrative or regulatory agency
which, if determined adversely to the Company or any of ^ the subsidiaries,
would, individually or in the aggregate, result in a material adverse
change in the business or condition (financial or otherwise), results of
operations, stockholders' equity or prospects of the Company and ^ the
subsidiaries, taken as a whole, except as set forth in the Registration
Statement.
(xiii) The Company has good and marketable title to all properties
and assets reflected as owned in the financial statements referred to above
(or as described as owned in the Prospectus), in each case free and clear
of all liens, encumbrances and defects, except such as are described in the
Prospectus or do not substantially affect the value of such properties and
assets and do not materially interfere with the use made and proposed to be
made of such properties and assets by the Company and ^ the subsidiaries;
and any real property and buildings held under lease by the Company and ^
the subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and ^ the subsidiaries.
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(xiv) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, and
except as disclosed in the Registration Statement and in any such
amendments or supplements, (A) there has not been any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the condition, financial or otherwise, of the Company and ^
the subsidiaries, taken as a whole, or the business affairs, management,
financial position, shareholders' equity or results of operations of the
Company and ^ the subsidiaries, taken as a whole, whether or not occurring
in the ordinary course of business, including, without limitation, any
increase in the amount or number of classified assets of the Subsidiary
Banks, any decrease in net interest margin for any month to a level below ^
4.25%^, or any material decrease in the volume of loan originations, the
amount of deposits or the amount of loans, (B) there has not been any
transaction not in the ordinary course of business entered into by the
Company or any of ^ the subsidiaries which is material to the Company and ^
the subsidiaries, taken as a whole, other than transactions described or
contemplated in the Registration Statement, (C) the Company and ^ the
subsidiaries have not incurred any material liabilities or obligations,
which are not in the ordinary course of business or which could result in a
material reduction in the future earnings of the Company and ^ the
subsidiaries, (D) the Company and ^ the subsidiaries have not sustained any
material loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether
or not covered by insurance, (E) there has not been any change in the
capital stock of the Company (other than upon the exercise of options and
warrants described in the Registration Statement), or any material increase
in the short-term or long-term debt (including capitalized lease
obligations) of the Company and ^ the subsidiaries, taken as a whole, other
than with respect to deposits ^, Federal Home Loan Bank advances and the
Notes to be sold pursuant to this Agreement, (F) there has not been any
declaration or payment of any dividends or any distributions of any kind
with respect to the capital stock of the Company, other than any dividends
or distributions described or contemplated in the Registration Statement,
or (G) there has not been any issuance of warrants, options, convertible
securities or other rights to purchase or acquire capital stock of the
Company.
(xv) Neither the Company nor any of ^ the subsidiaries is in
violation of, or in default under, its charter or bylaws, or any statute,
or any rule, regulation, order, judgment, decree or authorization of any
court or governmental or administrative agency or body having jurisdiction
over the Company or any of ^ the subsidiaries or any of their properties,
or any indenture, mortgage, deed of trust, loan agreement, lease,
franchise, license or other agreement or instrument to which the Company or
any of ^ the subsidiaries is a party or by which it or any of them are
bound or to which any property or assets of the Company or any of ^ the
subsidiaries is subject, which violation or default would have a material
adverse effect on the business, condition (financial or otherwise), results
of operations, stockholders' equity or prospects of the Company and ^ the
subsidiaries, taken as a whole.
(xvi) The issuance and sale of the Notes by the Company and the
compliance by the Company with all of the provisions of this Agreement and
the Indenture and the consummation of the transactions contemplated herein
and therein will not violate any provision of the Certificate of
Incorporation or Bylaws of the Company or any of ^ the subsidiaries or any
statute or any order, judgment, decree, rule, regulation or authorization
of any court or governmental or administrative agency or body having
jurisdiction over the Company or any of ^ the subsidiaries or any of their
properties, and will not conflict with, result in a breach or violation of,
or constitute, either by itself or upon notice or passage of time or both,
a default under any indenture, mortgage, deed of trust,
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loan agreement, lease, franchise, license or other agreement or instrument
to which the Company or any of ^ the subsidiaries is a party or by which
the Company or any of ^ the subsidiaries is bound or to which any property
or assets of the Company or any of ^ the subsidiaries is subject. No
approval, consent, order, authorization, designation, declaration or filing
by or with any court or governmental agency or body is required for the
execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated, except as may be
required under the Act, the Trust Indenture Act or any state securities or
blue sky laws.
(xvii) The Company and each of ^ the subsidiaries holds and is
operating in compliance in all material respects with all licenses,
approvals, certificates and permits from governmental and regulatory
authorities, foreign and domestic, which are necessary to the conduct of
its business as described in the Prospectus. Without limiting the
generality of the foregoing, the Company ^ and the Company Subsidiaries
have all necessary approvals of the Board of Governors of the Federal
Reserve System (the "Board of Governors") and the Office of the Comptroller
of the Currency (the "OCC") to own the stock of ^ the subsidiaries.
Neither the Company nor any of ^ the subsidiaries have received notice of
nor have knowledge of any basis for any proceeding or action relating
specifically to the Company or any of ^ the subsidiaries for the revocation
or suspension of any such consent, authorization, approval, order, license,
certificate or permit or any other action or proposed action by any
regulatory authority having jurisdiction over the Company or any of ^ the
subsidiaries that would have a material adverse effect on the Company and ^
the subsidiaries, taken as a whole. Except as disclosed in the Prospectus,
neither the Company nor any Subsidiary Bank is currently subject to any
cease and desist order, written agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or
is subject to any order or directive by, or is a recipient of any
extraordinary supervisory agreement letter from, or have adopted any board
resolutions at the request of the Board of Governors, the FDIC, the ^ OCC,
the North Dakota Department of Banking, the Minnesota Department of
Commerce or any other federal or state governmental authorities charged
with the supervision or regulation of national banking associations,
savings banks, banks, savings and loan companies or associations, bank
holding companies or savings and loan holding companies or engaged in the
insurance of bank deposits (collectively, the "Bank Regulators"), and
neither the Company nor any Subsidiary Bank has been advised by any of the
Bank Regulators that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar
undertaking.
(xviii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, which have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and
the rules and regulations thereunder.
(xix) The Company has not taken and will not take, directly or
indirectly, any action designed to, or which has constituted, or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(xx) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Notes other than any Preliminary Prospectus or the Prospectus
or other materials permitted by the Act to be distributed by the Company.
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(xxi) The Company is in compliance with all provisions of Florida
Statutes Section 517.075 (Chapter 92-198, laws of Florida). Neither the
Company nor any of ^ the subsidiaries does business, directly or
indirectly, with the government of Cuba or with any person or entity
located in Cuba.
(xxii) The Company and ^ the subsidiaries have filed all federal,
state, local and foreign tax returns or reports required to be filed, and
have paid in full all taxes indicated by said returns or reports and all
assessments received by it or any of them to the extent that such taxes
have become due and payable, except where the Company and ^ the
subsidiaries are contesting in good faith such taxes and assessments. The
Company and each Subsidiary Bank have also filed all required applications,
reports, returns and other documents and information with all Bank
Regulators.
(xxiii) The Company and each of ^ the subsidiaries owns or possesses
all patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service mark registrations, copyrights, licenses,
inventions, know-how, trade secrets and other similar rights ("Intellectual
Property Rights") necessary for the conduct of its business as ^ described
in the Prospectus. ^ The Company has no knowledge of any infringement by
it or any of the subsidiaries of any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service
mark registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others, and neither the Company nor any of ^ the
subsidiaries has received any notice or claim of conflict with the asserted
rights of others with respect any of the foregoing.
(xxiv) The Company is not, and upon completion of the sale of the
Notes contemplated hereby will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as amended.
(xxv) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and the rules of Bank Regulators, and to maintain accountability
for assets; (C) access to records is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(xxvi) Other than as contemplated by this Agreement, the Company has
not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xxvii) The minute books and stock record books of the Company and
the subsidiaries are complete and correct and accurately reflect all
material actions taken at meetings of the shareholders and directors of the
Company and the subsidiaries, and of all committees thereof, including,
without limitation, the loan committees and the audit committees of the
Subsidiary Banks, and all issuances and transfers of any shares of the
capital stock of the Company and the subsidiaries.
(xxviii) There has been no unlawful storage, treatment or disposal of
waste by the Company or any of ^ the subsidiaries (or any of their
predecessors-in-interest) at any of the
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facilities owned thereby, including, but not limited to, real estate owned
property, except for such violations which would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
affairs or business prospects of the Company and ^ the subsidiaries, taken
as a whole; there has been no material spill, discharge, leak, emission,
ejection, escape, dumping or release of any kind onto the properties owned
by the Company or any of ^ the subsidiaries, including, but not limited to,
real estate owned property, or into the environment surrounding those
properties of any toxic or hazardous substances as defined under any
federal, state or local regulations, laws or statutes, except for those
releases permissible under such regulations, laws or statutes or otherwise
allowable under applicable permits and except for such releases which would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, affairs or business prospects of the Company
and ^ the subsidiaries, taken as a whole.
(xxix) No material labor dispute with the employees of the Company or
any of ^ the subsidiaries exists or is imminent.
(xxx) Each employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or
other bonus, retirement, pension, profit sharing, stock bonus, thrift,
stock option, stock purchase, incentive, severance, deferred or other
compensation, cafeteria, vacation, disability, or other paid or unpaid
leave of absence, health, life or other welfare benefit plan, program,
agreement or arrangement of, or applicable to current or former employees
of ^ the Company or any of ^ the subsidiaries, which is presently in
existence, or with respect to which the Company or any subsidiary could
reasonably be expected to have, directly or indirectly, any liability
("Benefit Plans"), was or has been established, maintained and operated in
all material respects in compliance with its terms and with all applicable
federal, state, and local statutes, orders, governmental rules and
regulations, including, but not limited to, ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"). The Company and ^ the subsidiaries
do not, either directly or indirectly as a member of a controlled group
within the meaning of Sections 414(b), (c), (m) and (o) of the Code
("Controlled Group"), have any material liability that remains unsatisfied
for (A) the termination of any single employer plan under Sections 4062 or
4064 of ERISA, a cessation of operations pursuant to Section 4062(e) of
ERISA or a withdrawal from a multiple employer plan pursuant to Section
4063 of ERISA, (B) any interest payments under Section 302(e) of ERISA or
Section 412(m) of the Code, (C) any excise tax imposed by Section 4971,
Section 4972, Section 4975, Section 4976, Section 4977, Section 4979,
Section 4980B, Section 4999 or Section 5000 of the Code or civil penalty
imposed by Section 502 of ERISA, (D) any minimum funding contributions
under Section 302(c)(11) of ERISA or Section 412(c)(11) of the Code, (E)
any accumulated funding deficiency within the meaning of Section 412(a) of
the Code, whether or not waived, or (F) to the Internal Revenue Service,
the Department of Labor, the Pension Benefit Guaranty Corporation, or any
Benefit Plan under Subtitle D or Subtitle E of Title IV of ERISA, under
Subchapter D of Chapter 1 of Subtitle A of the Code or under Chapter 43 of
Subtitle D of the Code. No action, suit, grievance, arbitration or other
matter of litigation or claim with respect to any Benefit Plan (other than
routine claims for benefits made in the ordinary course of plan
administration for which plan administrative procedures have not been
exhausted) is pending or, to the Company's knowledge, threatened or
imminent against or with respect to any Benefit Plan, any member of a
Controlled Group that includes the Company, or any fiduciary within the
meaning of Section 3(21) of ERISA with respect to a Benefit Plan which, if
determined adversely to the Company, would have a material adverse effect
on the Company and ^ the subsidiaries, taken as whole. Neither the
Company, any of ^ the subsidiaries, nor any member of a Controlled Group
that includes the Company or ^ the subsidiaries, has any knowledge of any
facts with respect to any Benefit Plan
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that could give rise to any action, suit, grievance, arbitration or any
other manner of litigation or claim or could be expected to have a material
adverse effect on the Company and ^ the subsidiaries taken as a whole.
(xxxi) The Company and ^ the subsidiaries maintain insurance of the
types and in the amounts generally deemed adequate in their respective
businesses and consistent with insurance coverage maintained by similar
companies and businesses, and as required by the rules and regulations of
all governmental agencies having jurisdiction over the Company and ^ the
subsidiaries, including Bank Regulators, all of which insurance is in full
force and effect.
(xxxii) All transactions required to be disclosed pursuant to Item
404 of Regulation S-B between the Company and ^ the subsidiaries and the
officers, directors and shareholders who beneficially own more than 5% of
any class of the Company's voting securities of the Company and ^ the
subsidiaries have been accurately disclosed in the Prospectus.
(xxxiii) Neither the Company nor ^ the subsidiaries have, directly or
indirectly, at any time during the past five years (A) made any unlawful
contribution to any candidate for public office, or failed to disclose
fully any contribution in violation of law, or (B) made any payment to any
federal or state governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(xxxiv) Proceeds from the sale of the Notes will constitute "Tier ^
2" capital under applicable regulations promulgated by the Board of
Governors.
(b) Any certificate signed by any officer of the Company and delivered to
the Underwriter or counsel to the Underwriter shall be deemed to be a
representation and warranty of the Company to the Underwriter as to the matters
covered thereby.
2. PURCHASE, SALE AND DELIVERY OF NOTES.
(a) On the basis of the representations, warranties and covenants
contained herein, and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriter and the Underwriter agrees to purchase
from the Company the aggregate principal amount of Notes. The Notes will be
purchased at a price of 95.0% of ^ the principal amount thereof.
(b) The Notes to be purchased by the Underwriter hereunder, will be
registered in such denominations (which shall be authorized denominations under
the Indenture) and names as ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to you for the account of the Underwriter at such time and
place as shall hereafter be designated by the Underwriter, against payment by
the Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in next day
funds or by wire transfer. The time and date of such delivery and payment shall
be, with respect to the Notes, 8:30 a.m. Minneapolis time, at the offices of
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, on June __, 1997, or such other time and date as
you and the Company may agree upon in writing, such time and date being herein
referred to as the "Closing Date," or such other time and date as you and the
Company may agree upon in writing. The Notes will be made available for
checking and packaging at least twenty-four hours prior to the Closing Date at a
location as may be designated by you.
9
3. OFFERING BY UNDERWRITER. It is understood that the Underwriter
proposes to make a public offering of the Notes as soon as the Underwriter deems
it advisable to do so. The ^ initial price to public for the Notes will be ^
100% of the principal amount thereof. The Underwriter may from time to time
thereafter change the public offering price and other selling terms.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriter that:
(a) The Company will prepare and timely file with the Commission under
Rule 424(b) under the Act a Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on Rule
430A under the Act, and will not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Underwriter shall not
previously have been advised and furnished with a copy and as to which the
Underwriter shall have objected in writing promptly after reasonable notice
thereof or which is not in compliance with the Act or the Regulations.
(b) The Company will advise the Underwriter promptly of any request of the
Commission for amendment of the Registration Statement or for any supplement to
the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus, of the suspension of the qualification
of the Notes for offering or sale in any jurisdiction, or of the institution or
threatening of any proceedings for that purpose, and the Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus or suspending such qualification and to
obtain as soon as possible the lifting thereof, if issued.
(c) The Company will endeavor to qualify the Notes for sale under the
securities laws of such jurisdictions as the Underwriter may reasonably have
designated in writing and will, or will cause counsel to, make such
applications, file such documents, and furnish such information as may be
reasonably requested by the Underwriter, provided that the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time, prepare
and file such statements, reports and other documents as are or may be required
to continue such qualifications in effect for so long a period as the
Underwriter may reasonably request for distribution of the Notes.
(d) The Company will furnish the Underwriter with as many copies of any
Preliminary Prospectus as the Underwriter may reasonably request and, during the
period when delivery of a prospectus is required under the Act, the Company will
furnish the Underwriter with as many copies of the Prospectus in final form, or
as thereafter amended or supplemented, as the Underwriter may, from time to
time, reasonably request. The Company will deliver to the Underwriter, at or
before the Closing Date, two (2) signed copies of the Registration Statement and
all amendments thereto including all exhibits filed therewith, and will deliver
to the Underwriter such number of copies of the Registration Statement, without
exhibits, and of all amendments thereto, as the Underwriter may reasonably
request.
(e) If, during the period in which a prospectus is required by law to be
delivered by the Underwriter or any dealer, any event shall occur as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any 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, not misleading, or if for
any other reason it shall be necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the
10
Prospectus so that the Prospectus as so amended or supplemented will not include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein in light of the circumstances
existing when it is so delivered, not misleading, or so that the Prospectus will
comply with law. In case the Underwriter is required to deliver a prospectus in
connection with sales of any Notes at any time nine months or more after the
effective date of the Registration Statement, upon the request of the
Underwriter but at the expense of the Underwriter, the Company will prepare and
deliver to the Underwriter as many copies as the Underwriter may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the Act.
(f) The Company will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 thereunder and will advise you in writing when
such statement has been so made available.
(g) The Company will, for such period up to five years from the Closing
Date, deliver to the Underwriter copies of its annual report and copies of all
other documents, reports and information furnished by the Company to its
security holders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or the
Exchange Act. The Company will deliver to the Underwriter similar reports with
respect to significant subsidiaries, as that term is defined in the rules and
regulations under the Act, which are not consolidated in the Company's financial
statements.
(h) ^ The Company will apply the net proceeds from the sale of the Notes
to be sold by it hereunder substantially in accordance with the purposes set
forth under "Use of Proceeds" in the Prospectus.
(i) So long as any of the Notes are outstanding, the Company will furnish
to the Underwriter the reports required to be filed with the Trustee pursuant to
Section 704 of the Indenture, concurrently with such filing.
5. COSTS AND EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated, the Company will pay (directly or by
reimbursement) all costs, expenses and fees incident to the performance of the
obligations of the Company under this Agreement, including, without limiting the
generality of the foregoing, the following: (i) accounting fees of the Company;
(ii) the fees and disbursements of counsel for the Company; (iii) the fees and
expenses of the Trustee and counsel for the Trustee; (iv) rating agency fees, if
any; (v) the cost of preparing, printing and filing of the Registration
Statement, Preliminary Prospectuses and the Prospectus and any amendments and
supplements thereto and the printing, mailing and delivery to the Underwriter
and dealers of copies thereof and of this Agreement, any Selected Dealers
Agreement, the Underwriter's Selling Memorandum, the Blue Sky Memorandum and any
supplements or amendments thereto (excluding, except as provided below, fees and
expenses of counsel to the Underwriter); (vi) the filing fees of the Commission;
(vii) the filing fees and expenses (including legal fees and disbursements of
counsel for the Underwriter) incident to securing any required review by the
NASD of the terms of the sale of the Notes; (viii) listing fees, if any; (ix)
transfer taxes and the expenses, including the fees and disbursements of counsel
for the Underwriter incurred in connection with the qualification of the Notes
under state securities or blue sky laws; (x) the costs of preparing the Notes;
(xi) the costs and fees of any registrar or transfer agent; and (xii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 5.
11
In addition, the Company will pay all travel and lodging expenses incurred by
management of the Company in connection with any informational "road show"
meetings held in connection with the offering and will also pay for the
preparation of all materials used in connection with such meetings. The Company
shall not, however, be required to pay for any of the Underwriter's expenses
(other than those related to qualification of the Notes under state securities
or blue sky laws and those incident to securing any required review by the NASD
of the terms of the sale of the Notes) except that, if this Agreement shall not
be consummated because the conditions in Section 6 hereof are not satisfied or
by reason of any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on its part to be performed, unless such failure to
satisfy said condition or to comply with said terms shall be due to the default
or omission of the Underwriter, then the Company shall promptly upon request by
the Underwriter reimburse the Underwriter for all out-of-pocket accountable
expenses, including fees and disbursements of counsel, incurred in connection
with investigating, marketing and proposing to market the Notes or in
contemplation of performing its obligations hereunder; but the Company shall not
in any event be liable to the Underwriter for damages on account of loss of
anticipated profits from the sale by it of the Notes.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER. The obligations of the
Underwriter to purchase the Notes on the Closing Date are subject to the
condition that all representations and warranties of the Company contained
herein are true and correct, at and as of the Closing Date, the condition that
the Company shall have performed all of its covenants and obligations hereunder
and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
Regulations under the Act and in accordance with Section 4(a) hereof; no stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, or any part thereof shall have been issued and no proceedings
for that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Underwriter.
(b) The Underwriter shall have received on the Closing Date, the opinion
of ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., counsel for the
Company, dated the Closing Date, addressed to the Underwriter, to the effect
that:
(i) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus. The Company is
qualified as a foreign corporation to do business in ^ all jurisdictions in
which the conduct of its business or its ownership or leasing of property
requires such qualification except where the failure to so qualify would
not have a material adverse effect on the business or condition, financial
or otherwise, of the Company and its subsidiaries, taken as a whole. The
Company is a "small business issuer" as such term is defined in Rule 405 in
Regulation S-B under the Act.
(ii) Each subsidiary ^ has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to
own or lease its properties and conduct its business as described in the
Prospectus. None of the Subsidiary Banks are required to be qualified to
transact business as a foreign corporation in any jurisdiction. The
outstanding shares of capital stock of each subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and are
owned, directly by the Company, free and clear of all liens, encumbrances
and security interests, other than
12
security interests specifically disclosed in the Prospectus. To the
knowledge of such counsel, no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or ownership
interests in each such subsidiary are outstanding.
(iii) The Company has the corporate power and authority to enter
into this Agreement and to authorize, issue and sell the Notes as
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the valid and binding
agreement of the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting the rights of creditors
generally, by general principles of equity and, with respect to Section 7
hereof, by the public policy underlying the federal or state securities
laws.
(iv) The Company has all requisite corporate power to execute,
deliver and perform its obligations under the Indenture. The Indenture has
been duly and validly authorized by all requisite corporate action, duly
executed and duly delivered by the Company and constitutes a valid and
binding instrument of the Company, enforceable against the Company in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity. The
Notes have been duly and validly authorized, and, when executed,
authenticated, issued and delivered in accordance with the terms of the
Indenture, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles of
equity. The Notes and the Indenture conform, as to legal matters, to the
descriptions thereof contained in the Registration Statement and the
Prospectus. The Indenture complies in all material respects with the Trust
Indenture Act.
(v) The Company has authorized and outstanding capital stock as
described in the Prospectus. The outstanding shares of the Company's
capital stock have been duly authorized and validly issued and are fully
paid and nonassessable. No preemptive or, to the knowledge of such
counsel, other similar subscription rights of shareholders of the Company,
or of holders of warrants, options, convertible securities or other rights
to acquire shares of capital stock of the Company, exist, other than as
described in the Prospectus. To the knowledge of such counsel, no rights
to register outstanding shares of the Company's capital stock, or shares
issuable upon the exercise of outstanding warrants, options, convertible
securities or other rights to acquire shares of such capital stock, exist
which have not been validly exercised or waived with respect to the
Registration Statement.^
(vi) The Registration Statement has become effective under the Act
and the Indenture has been qualified under the Trust Indenture Act, and, to
the knowledge of such counsel, no stop order proceedings with respect
thereto have been instituted or are pending or threatened by the
Commission.
(vii) The Registration Statement, the Prospectus and each amendment
or supplement thereto comply as to form in all material respects with the
requirements of the Act and the Regulations thereunder (except that such
counsel need express no opinion as to the financial statements and related
schedules included therein).
13
(viii) The descriptions in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, contracts and other
documents (A) in the Prospectus under the captions "Risk Factors --
Subordination," "--Dependence on Dividends From Subsidiary Banks,"
"--Potential Liability for Undercapitalized Subsidiary," "--Government
Regulation and Recent Legislation," "Business -- Properties," "Management
-- Stock Incentive Plan," "--Incentive Bonus Plan," "--Employment
Agreements," "Limitations of Directors' Liability and Indemnification,"
"Certain Transactions, "Supervision and Regulation" and "Description of
Notes" and (B) in the Registration Statement in Item 24, are accurate
summaries and fairly present the information called for with respect to
such matters.
(ix) Such counsel does not know of any contracts, agreements,
documents or instruments required to be filed as exhibits to the
Registration Statement^ or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described
as required; and insofar as any statements in the Registration Statement or
the Prospectus constitute summaries of any contract, agreement, document or
instrument to which the Company is a party, such statements are accurate
summaries and fairly present the information called for with respect to
such matters.
(x) Such counsel knows of no legal or governmental proceeding,
pending or threatened, before any court or administrative body or
regulatory agency, to which the Company or any of ^ the subsidiaries is a
party or to which any of the properties of the Company or any of ^ the
subsidiaries is subject that are required to be described in the
Registration Statement or Prospectus and are not so described, or statutes
or regulations that are required to be described in the Registration
Statement or the Prospectus that are not so described.
(xi) The execution and performance of this Agreement, the Indenture
and the Notes and the consummation of the transactions herein and therein
contemplated do not and will not conflict with or result in a violation of
or default under the charter or bylaws of the Company or any of ^ the
subsidiaries, or under any statute, permit, judgment, decree, order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of ^ the subsidiaries,
including Bank Regulators, or any of their properties, or under any lease,
contract, indenture, mortgage, loan agreement or other agreement or other
instrument or obligation known to such counsel to which the Company or any
of ^ the subsidiaries is a party or by which the Company or any of ^ the
subsidiaries is bound or to which any property or assets of the Company or
any of ^ the subsidiaries is subject, except such agreements, instruments
or obligations with respect to which valid consents or waivers have been
obtained by the Company or any of ^ the subsidiaries.
(xii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery of this Agreement, the Indenture and the Notes and the
consummation of the transactions herein and therein contemplated (other
than as may be required by state securities and blue sky laws, as to which
such counsel need express no opinion) except such as have been obtained or
made, specifying the same.
(xiii) The Company is not, and immediately upon completion of the
sale of Notes contemplated hereby will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as amended.
14
(xiv) The Company is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended.
(xv) Each of the Subsidiary Banks are national banking associations
duly organized, validly existing and in good standing under the laws of the
United States and have the requisite power to carry on their respective
businesses as now conducted. The Minnesota Bank is authorized to conduct
the business of banking in the State of Minnesota. The Bismarck Bank is
authorized to conduct the business of banking in the State of North Dakota.
The Bismarck Bank and the Minnesota Bank are members of the Federal Reserve
Bank of Minneapolis, and are each duly authorized to operate a banking
business.
(xvi) The Company has all necessary approvals of the Board of
Governors to own the stock of ^ the subsidiaries. The Bismarck Bank has
all necessary approvals from the OCC to own the stock of ▇.▇. ▇▇▇▇▇.
Except as disclosed in the Prospectus, to the knowledge of such counsel,
neither the Company nor any Subsidiary Bank is subject to any cease and
desist order, written agreement or memorandum of understanding with, or are
a party to any commitment letter or similar undertaking to, or are subject
to any order or directive by, or is a recipient of any extraordinary
supervisory agreement letter from, or has adopted any board resolutions at
the request of any of the Bank Regulators, and, to the knowledge of such
counsel, neither the Company nor any Subsidiary Bank has been advised by
any of the Bank Regulators that it is contemplating issuing or requesting
(or is considering the appropriateness of issuing or requesting) any such
order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions or
similar undertaking. To the knowledge of such counsel, neither the Company
nor any subsidiary has received notice of or has knowledge of any basis for
any proceeding or action relating specifically to the Company or ^ the
subsidiaries for the revocation or suspension of any such consent,
authorization, approval, order, license, certificate or permit or any other
action or proposed action by any regulatory authority having jurisdiction
over the Company or ^ the subsidiaries that would have a material adverse
effect on the Company or any subsidiary.
(xvii) ^ Such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further amendment thereto
made by the Company prior to the Closing Date (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading or that, as of
the Closing Date either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
Closing Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; and they do not know of any amendment
to the Registration Statement required to be filed.
In rendering any such opinion, such counsel may rely (i) as to matters of
fact, to the extent such counsel deems reasonable, on certificates of
responsible officers of the Company and public officials
15
provided that the extent of such reliance is specified in such opinion and (ii)
as to matters involving the application of laws of any jurisdiction other than
the States of Louisiana or Delaware, to the extent satisfactory in form and
scope to counsel for the Underwriter, upon the opinions of bank regulatory or
local counsel acceptable to counsel for the Underwriter provided that such
counsel shall also state that such opinions of bank regulatory or local counsel
are satisfactory to them and that the Underwriter is justified in relying on
such opinions of such counsel, and copies of such opinions shall be delivered to
the Underwriter and counsel for the Underwriter.
(c) The Underwriter shall have received from ^ in house counsel for the
Trustee, an opinion dated the Closing Date, and in form satisfactory to counsel
for the Underwriter, to the effect that:
(i) The Trustee has been duly incorporated and is validly existing
in good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to authorize, execute, deliver and
perform its obligations under the Indenture.
(ii) The Indenture has been duly authorized, executed and delivered
by the Trustee and is a valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, except as
enforceability may be limited by general equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally.
(iii) The Notes being delivered on such Closing Date have been duly
authenticated by the Trustee in accordance with the Indenture.
In rendering such opinion such counsel may rely as to matters of fact, to
the extent they deem proper, on certificates of appropriate officers of the
Trustee and of public officials.
(d) On or prior to the Closing Date, the form and validity of the Notes
and the Indenture, the legality and sufficiency of the corporate proceedings and
matters relating to the incorporation of the Company and other matters incident
to the issuance of the Notes, the form of the Registration Statement and the
Prospectus and of any amendment thereof or supplement thereto filed prior to the
Closing Date (other than financial statements and schedules and other financial
or statistical data included therein), the authorization, execution, and
delivery of this Agreement and the description of the Notes and the Indenture
contained in the Prospectus shall have been reasonably approved by the
Underwriter based on the opinion of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Underwriter. In connection with such opinion, the Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters, and such counsel may rely
upon representations or certificates of public officials, of the Trustee and of
appropriate officers of the Company. In addition, in giving such opinion, such
counsel may rely as to matters of law, other than the law of the United States
and the State of Minnesota, upon an opinion or opinions of local counsel, who
may be counsel for the Company, which states that the Underwriter is entitled to
rely thereon, provided that any such opinion or opinions are delivered to the
Underwriter and that ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall state that they have no
reason to believe that such opinions are not correct.
(e) The Underwriter shall have received on each of the date hereof and the
Closing Date, a signed letter, dated as of the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriter, from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, to the effect that they are independent public accountants
with respect to the Company and ^ the subsidiaries within the meaning of the Act
and the related rules and regulations and containing statements and information
of the type ordinarily included in
16
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) ^ The Underwriter shall have received on the Closing Date a
certificate or certificates of the chief executive officer and the chief
financial officer of the Company to the effect that, as of the Closing Date,
each of them severally represents as follows:
(i) The Prospectus was filed with the Commission pursuant to Rule
424(b) within the applicable period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5 of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been
initiated or are, to his knowledge, threatened by the Commission.
(ii) The representations and warranties of the Company set forth in
Section 1 of this Agreement are true and correct at and as of the Closing
Date, and the Company has performed all of its obligations under this
Agreement to be performed at or prior to the Closing Date.
(g) The Company shall have furnished to the Underwriter such further
certificates and documents as the Underwriter may reasonably have requested.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Underwriter and to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriter.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriter hereunder may be terminated by the
Underwriter by notifying the Company of such termination in writing or by
facsimile at or prior to the Closing Date. In such event, the Company and the
Underwriter shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 7 hereof).
17
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
each officer and director thereof, and each person, if any, who controls the
Underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities to which the Underwriter or such persons may became subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus or the Prospectus,
including any amendments or supplements thereto^ or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, ^ and will reimburse the Underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by the Underwriter or such controlling person in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission, made in the Registration Statement, any Preliminary Prospectus
or the Prospectus, including any amendments or supplements thereto, in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter specifically for use therein^.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Underwriter will be liable in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by the Underwriter specifically for use therein.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity or
contribution may be sought pursuant to this Section 7, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 7(a) or (b) or contribution provided for
in Section 7(d) shall be available with respect to a proceeding to any party who
shall fail to give notice of such proceeding as provided in this Section 7(c) if
the party to whom notice was not given was unaware of the proceeding to which
such notice would have related and was prejudiced by the failure to give such
notice, but the failure to give such notice shall not relieve the indemnifying
party or parties from any liability which it or they may have to the indemnified
party otherwise than on account of the provisions of Section 7(a), (b) or (c).
In case any such proceeding shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof, the
indemnifying
18
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstanding
the foregoing, the indemnifying party shall pay promptly as incurred the
reasonable fees and expenses of the counsel retained by the indemnified party in
the event (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
at any time for all such indemnified parties. Such firm shall be designated in
writing by the Underwriter and shall be reasonably satisfactory to the Company
in the case of parties indemnified pursuant to Section 7(a) and shall be
designated in writing by the Company and shall be reasonably satisfactory to the
Underwriter in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriter on the other from the offering of the Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault 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 on the one hand
or the Underwriter on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereto)
referred to above in this Section 7(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), the Underwriter shall not be required to
contribute any
19
amount in excess of the underwriting discounts and commissions applicable to the
Notes purchased by the Underwriter; and 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 was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have, and the
obligations of the Underwriter under this Section 7 shall be in addition to any
liability which the Underwriter may otherwise have.
8. NOTICES. All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriter, to ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated, ▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇ ▇▇▇▇▇, with
copies to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.; and if
to the Company, to BNCCORP, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇, with copies to Jones, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, L.L.P., Place St. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
9. TERMINATION. This Agreement may be terminated by you by notice to the
Company as follows:
(a) at any time prior to the earlier of (i) the time the Notes are
released by you for sale or (ii) 4:00 p.m., Minneapolis time, on the first
business day following the later of the date on which the Registration Statement
becomes effective or the date of this Agreement; or
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change in or
affecting the condition, financial or otherwise, of the Company and ^ the
subsidiaries taken as a whole or the business affairs, management, financial
position, shareholders' equity or results of operations of the Company and ^ the
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or declaration of war
or national emergency after the date hereof or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or change
on the financial markets of the United States would, in your judgment, make the
offering or delivery of the Notes impracticable or inadvisable, (iii) suspension
of trading in securities on the New York Stock Exchange or the American Stock
Exchange or limitation on prices (other than limitations on hours or numbers of
days of trading) for securities on either such exchange, or a halt or suspension
of trading in securities generally which are quoted on the Nasdaq National
Market, or (iv) declaration of a banking moratorium by either federal or New
York State authorities.^
10. WRITTEN INFORMATION. For all purposes under this Agreement
(including, without limitation, Section 1, Section 2 and Section 7 hereof), the
Company understands and agrees with you that the following constitutes the only
written information furnished to the Company by or through the Underwriter
specifically for use in preparation of the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto:
(i) the information relating to stabilization on page two of the Preliminary
Prospectus and the Prospectus, ^(ii) the information set forth under the caption
"Underwriting" in the Preliminary Prospectus and the Prospectus, and (iii) the
information set forth in the final paragraph on the cover page of the
Preliminary Prospectus and the Prospectus.
20
11. SUCCESSORS. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Underwriter, the Company and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Notes merely because of such purchase.
12. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of the Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors and officers and (c) delivery of and payment for
the Notes under this Agreement.
Each provision of this Agreement shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable under any applicable
law or rule in any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality or unenforceability in such jurisdiction
or any provision hereof in any other jurisdiction
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Minnesota.
21
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
Underwriter in accordance with its terms.
Very truly yours,
BNCCORP, Inc.
By:
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Chairman of the Board and Chief
Executive Officer
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
By:
-------------------------------------
▇. ▇▇▇▇▇ ▇▇▇▇▇
Its:
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