Document:

Exhibit 10.1

 

Up to 575,000 Shares of Common Stock

 

BNCCORP, INC.

 

PLACEMENT AGENCY AGREEMENT

 

September 19, 2005

 

Sandler O’Neill &
Partners, L.P.

919 Third Avenue

6th Floor

New York, NY  10022

 

Ladies and Gentlemen:

 

BNCCORP, Inc., a Delaware
corporation (the “Company”), and BNC National Bank, a national banking
association headquartered in Bismarck, North Dakota and wholly-owned subsidiary
of the Company (the “Bank Subsidiary”) confirm their agreement (the “Agreement”)
with Sandler O’Neill & Partners, L.P. (the “Placement Agent”) with
respect to the issue and sale by the Company of up to 575,000 shares (the “Shares”)
of its common stock, par value $0.01 per share (the “Common Stock”).  The Shares are to be offered and sold without
being registered under the Securities Act of 1933, as amended (the “1933 Act”),
in reliance upon exemptions therefrom (including any exemptions under the rules and
regulations of the Securities and Exchange Commission (the “Commission”) under
the 1933 Act (the “1933 Act Regulations”)).

 

The Company and the Bank
Subsidiary have prepared and delivered to the Placement Agent copies of a confidential
private placement memorandum dated September 14, 2005 (the “Offering
Memorandum”) and will deliver to the Placement Agent, not later than the date
of distribution, any supplements to the Offering Memorandum, as may be
reasonably requested, each for use by the Placement Agent in connection with
its solicitation of purchasers of the Shares. 
“Offering Documents” means, with respect to any date or time referred to
in this Agreement, the offering Memorandum, or any amendment or supplement thereto,
including exhibits thereto and any documents incorporated therein by reference,
which has been prepared and delivered by the Company to the Placement Agent in
connection with its solicitation of purchasers of the Shares.

 

SECTION 1.                                Representations
and Warranties.

 

(a)                                  The
Company and the Bank Subsidiary jointly and severally represent and warrant to
the Placement Agent as of the date hereof and as of the Closing Time (as
defined below), and agree with the Placement Agent, as follows:

 

(1)                            Similar
Offerings.  Except as described in
the Offering Documents, the Company has not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any
United States citizen or resident, any security which is or would be integrated
with the sale of the Shares in a manner that would require the Shares to be
registered under the 1933 Act.

 

 

(2)                            Offering
Documents.  The Offering Documents do
not, and at the Closing Time will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

(3)                            Independent
Auditors.  The auditors of the
Company who certified the consolidated financial statements included in the
Offering Documents are have advised the Company and the Bank in writing that
they are independent public accountants within the meaning of the Code of
Ethics of the American Institute of Certified Public Accountants and a
registered public accounting firm with the Public Company Accounting Oversight
Board, and such auditors are, with respect to the Company, independent
certified public accountants as required by the 1933 Act, the 1933 Act Regulations
and Public Company Accounting Oversight Board (including the rules promulgated
by such entity.

 

(4)                            Financial
Statements.  The consolidated
financial statements of the Company, together with the notes, included in the
Offering Documents present fairly, in all material respects, the consolidated
statement of financial condition of the Company and its consolidated
subsidiaries at the respective dates indicated, and the consolidated statements
of income and cash flows of the Company and its consolidated subsidiaries for
the respective periods specified; said financial statements have been prepared
in conformity with generally accepted accounting principles (“GAAP”) in the
United States applied on a consistent basis throughout the periods involved,
except as disclosed in the notes to such financial statements.  The supporting schedules, if any, included in
the Offering Documents present fairly, in all material respects, the
information stated therein, and have been or will be properly compiled on the
bases described therein, and the assumptions used in the preparation thereof
are or will be reasonable and the adjustments used therein are or will be
appropriate to give effect to the transaction and circumstances referred to
therein, and the summary financial data included in the Offering Documents
present fairly, in all material respects, the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Offering Documents.

 

(5)                            No
Undisclosed Liabilities.  Except as
described in the Offering Documents, neither the Company nor any of its
subsidiaries has any material liability of any kind, contingent or otherwise
except for liabilities incurred in the ordinary course of business since the
date of the most recent balance sheet included in the consolidated financial
statement of the Company included in the Offering Documents.

 

(6)                            No
Material Adverse Change.  Since the
respective dates as of which information is given in the Offering Documents,
except as otherwise stated therein, there has not been (A) any material
adverse change or any development (including any change in statutes or
regulations affecting the Company, the Bank Subsidiary or its subsidiaries)
which could reasonably be expected to result in a material adverse change, in
the financial condition or in the earnings, business affairs or business
prospects of the Company and its subsidiaries, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), (B) any
transaction entered into by the Company or any of the Company’s subsidiaries,
other than in the ordinary course of business, that is material to the Company
and its subsidiaries, or (C) any dividend or distribution, of any kind,
declared, paid or made by the Company on any class of its capital stock.

 

(7)                            Regulatory
Enforcement Matters.  Neither the
Company nor any of its subsidiaries is subject or is party to, or has received
any notice or advice that any of

 

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them may become subject
or party to any investigation with respect to, any cease-and-desist order, agreement,
consent agreement, memorandum of understanding or other regulatory enforcement
action, proceeding or order with or by, or is a party to any commitment letter
or similar undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board resolutions
at the request of, any Regulatory Agency (as defined below) that currently
restricts in any material respect the conduct of their business or that in any
material manner relates to their capital adequacy, their credit policies, their
management or their business (each, a “Regulatory Agreement”), nor has the
Company or any of its subsidiaries been advised by any Regulatory Agency that
it is considering issuing or requesting any such Regulatory Agreement; and
there is no unresolved violation, or any alleged violation asserted by any
Regulatory Agency with respect to any report or statement relating to any
examinations of the Company or any of its subsidiaries which, in the reasonable
judgment of the Company, is expected to result in a Material Adverse
Effect.  As used herein, the term “Regulatory
Agency” means any federal or state agency charged with the supervision or
regulation of depositary institutions, or holding companies of depositary
institutions, or engaged in the insurance of depository institution deposits,
or any court, administrative agency or commission or other governmental agency,
authority or instrumentality having supervisory or regulatory authority with
respect to the Company or any of its subsidiaries.

 

(8)                            Good
Standing of the Company.  The Company
has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full power and
authority under such laws to own, lease and operate its properties and to
conduct its business as now being conducted as described in the Offering
Documents and to enter into and perform its obligations under this Agreement;
and the Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (“BHCA”).

 

(9)                            Good
Standing of the Bank Subsidiary.  The
Bank Subsidiary has been duly organized and is validly existing under the laws
of the United States and has full power and authority under such laws to own,
lease and operate its properties and to conduct its business as now being
conducted as described in the Offering Documents; and the Bank Subsidiary’s
deposit accounts are insured up to the applicable limit by the Bank Insurance
Fund of the Federal Deposit Insurance Corporation (“FDIC”) to the fullest
extent permitted by law and the rules and regulations of the FDIC; and no
proceeding for the revocation or termination of such insurance is pending or,
to the knowledge of the Company, threatened.

 

(10)                      Other
Subsidiaries.  There are no
subsidiaries of the Company other than the Bank Subsidiary, BNC Capital Trust
I, BNC Statutory Trust II and Bismarck Properties, Inc. and there are no
subsidiaries of the Bank Subsidiary other than BNC Insurance Services, Inc.,
BNC Asset Management, Inc. and (the “Other Subsidiaries”).  The Other Subsidiaries have been duly
organized and are validly existing and in good standing under the laws of their
jurisdiction of incorporation and have the power and authority to own, lease
and operate their properties and to conduct their business as described in the
Offering Documents.

 

(11)                      Foreign
Qualifications.  The Company and each
of its subsidiaries are duly qualified as foreign entities to transact business
and are each in good standing in each jurisdiction in which such qualification
is required, whether by reason of the

 

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ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.

 

(12)                      Capital
Stock Duly Authorized and Validly Issued. 
All of the issued and outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and nonassessable; all of
the issued and outstanding capital stock of the Bank Subsidiary and each of the
Other Subsidiaries has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right; and none of the issued and outstanding
capital stock of the Company or its subsidiaries was issued in violation of any
preemptive or similar rights arising by operation of law, the certificate of
incorporation, charter or bylaws of the Company, the Bank Subsidiary or the
Other Subsidiaries or of any agreement to which the Company, the Bank
Subsidiary or the Other Subsidiaries is a party.

 

(13)                      Capitalization.  The authorized, issued and outstanding
capital stock of the Company as of June 30, 2005 is as set forth in the
Offering Documents under the caption of “Capitalization”; there have not been
any subsequent issuances of capital stock of the Company; and, except as
described in the Offering Documents, there has not been any additional long
term (maturity greater than one year) borrowings incurred by the Company.

 

(14)                      Authorization
of the Shares.  At the Closing Time,
the Shares will have been duly authorized for issuance by the Company and, when
duly issued and executed and delivered by the Company to the Purchasers (as
defined in Section 2(a)) against payment therefor in accordance with the
subscription agreement therefor, will be validly issued and fully paid and
nonassessable shares of Common Stock; the issuance of the Shares is not subject
to preemptive or other similar rights; and the Shares will conform in all
material respects to the description thereof in the Offering Documents.

 

(15)                      Authorization
of Agreement  This Agreement has been
duly authorized, executed and delivered by each of the Company and the Bank
Subsidiary.

 

(16)                      Not
an Investment Company.  The Company
is not, and immediately following consummation of the transaction contemplated
hereby and the application of the net proceeds as described in the Offering
Documents, the Company will not be, an “investment company” required to be
registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(17)                      Absence
of Defaults and Conflicts.  Neither
the Company nor any of its subsidiaries is in violation of its respective
certificate of incorporation, bylaws or other similar organizational documents,
except to the extent such violation, conflict, breach or default would not
adversely affect the transaction contemplated hereby or have a Material Adverse
Effect.  The Company and each of its
subsidiaries have conducted and are conducting their business so as to comply
in all material respects with all applicable statutes, regulations and
administrative and court decrees.  None
of the Company or any of its subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by which it or
any of them may be bound or to which any of its properties or assets is subject
(collectively, “Agreements and Instruments”), except for such defaults under
Agreements and Instruments that would not result in a Material Adverse Effect.  The execution, delivery and

 

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performance of this
Agreement by the Company, the issuance, sale and delivery of the Shares, the
consummation of the transaction contemplated by this Agreement, and compliance
by the Company and the Bank Subsidiary with the terms of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Company and the Bank Subsidiary and do not and will not, whether with or
without the giving of notice or passage of time or both, violate, conflict with
or constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any, security interest,
mortgage, pledge, lien, charge, encumbrance, claim or equitable right upon any
properties or assets of the Company or any of its subsidiaries pursuant to, any
of the Agreements and Instruments, except to the extent such violation, conflict,
breach or default would not adversely affect the transactions contemplated
hereby or have a Material Adverse Effect, nor will such action result in any
violation of the provisions of the certificate of incorporation, charter or
bylaws of the Company or any of its subsidiaries or  any violation by the Company or any of its
subsidiaries of any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government authority, agency or
instrumentality or court, domestic or foreign, including, without limitation,
the Board of Governors of the Federal Reserve (“FRB”), the Office of the
Comptroller of the Currency (the “OCC”), and the FDIC, having jurisdiction over
the Company or any of its subsidiaries or their respective properties or assets
(collectively, “Governmental Entities”), except to the extent such violation,
conflict, breach or default would not adversely affect the transactions
contemplated hereby or have a Material Adverse Effect.  As used herein, a “Repayment Event” means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries prior to its
scheduled maturity.

 

(18)                      Absence
of Labor Dispute.  No labor dispute
with the employees of the Company or any of its subsidiaries exists or, to the
knowledge of the executive officers of the Company, is imminent, which, in the
reasonable judgment of the Company, is expected to result in a Material Adverse
Effect.

 

(19)                      Absence
of Proceedings.  There is no action,
suit, proceeding, inquiry or investigation before or brought by any Governmental
Entity, now pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries, which, in the reasonable
judgment of the Company, is expected to result in a Material Adverse Effect, or
which in the reasonable judgment of the Company would materially and adversely
affect the properties or assets thereof or the consummation of the transactions
contemplated by this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of
which any of their respective properties or assets is the subject which are not
described in the Offering Documents, including any ordinary routine litigation
incidental to the business, are not, in the reasonable judgment of the Company,
expected to result in a Material Adverse Effect.

 

(20)                      Absence
of Further Requirements.  No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that have
been made or obtained, is necessary or required for the performance by the
Company of its obligations hereunder, or the consummation by the Company of the
transactions contemplated hereby, except as may be required under federal or
state securities laws.

 

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(21)                      Possession
of Licenses and Permits.  Each of the
Company and the subsidiaries of the Company possesses such permits, licenses,
approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate Governmental Entities necessary to conduct
the business now operated by them, and each of the Company and the subsidiaries
of the Company is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure to so possess or to so comply
would not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and none of the Company or any subsidiaries of the Company has
received any written notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, in the reasonable judgment of the Company, is expected to result in
a Material Adverse Effect.

 

(22)                      Title
to Property.  Each of the Company and
the subsidiaries of the Company has good and marketable title to all of their
respective real and personal properties owned by them, in each case free and
clear of all liens, encumbrances and defects, except as stated in the Offering
Documents, or such as would not result in a Material Adverse Effect; and all of
the leases and subleases under which the Company or any subsidiary holds
properties, are in full force and effect, except where the failure of such
leases and subleases to be in full force and effect individually or in the
aggregate, would not have a Material Adverse Effect, and none of the Company or
any subsidiaries of the Company has any written notice of any claim that has
been asserted by anyone adverse to the rights of the Company or any
subsidiaries of the Company under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such entity to the continued
possession of the leased or subleased premises under any such lease or
sublease, except for any such claim which, in the reasonable judgment of the
Company, singly or in the aggregate,  is
not expected to result in a Material Adverse Effect.

 

(23)                      Intellectual
Property.  Each of the Company and
the subsidiaries of the Company owns or possesses, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions, copyrights, know
how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property (collectively, “Intellectual
Property”) presently employed by them in connection with the business now
operated by them or reasonably necessary in order to conduct such business,
except to the extent the failure to so own, possess or be able to obtain such
Intellectual Property would not have a Material Adverse Effect; and neither the
Company nor any of the Company’s subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its subsidiaries
therein, which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, in the reasonable judgment of the Company, is likely to result in a
Material Adverse Effect.

 

(24)                      Payment
of Taxes.  The Company has filed all
foreign, federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty

 

6

 

levied against it, to the
extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
would not result in a Material Adverse Effect.

 

(25)                      Insurance.  The Company and each of its subsidiaries are
insured for reasonable amounts by insurance companies with an A.M. Best
rating of A- or better against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; all policies
of insurance and fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and
directors are in full force and effect in all material respects; the Company
and its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; there are no claims by the Company or any
of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Company nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor any
of its subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Effect.

 

(26)                      Payment
of Dividends.  No subsidiary of the
Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such subsidiary’s
capital stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s
property or assets to the Company or any other subsidiary of the Company,
except as described in the Offering Documents and as such subsidiaries may be
limited by regulations issued by Regulatory Agencies of general applicability.

 

(27)                      Internal
Control.  The Company and each of its
subsidiaries have established and maintain adequate internal control over
financial reporting and such internal control over financial reporting has not
been changed during the Company’s last fiscal quarter in any way that
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting. 
The Company’s independent registered public accountants and the Audit
Committee of the Board of Directors have been advised of: (i) any known significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize, and
report financial data and (ii) any known fraud, whether or not material,
that involves management or other employees who have a role in the Company’s
internal controls; and such deficiencies or fraud have either been disclosed in
the Offering Documents or will not result in a Material Adverse Effect.

 

(28)                      Environmental.  The Company and each of its subsidiaries (i) are
in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii) have
not received any written notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in

 

7

 

the aggregate, result in
a Material Adverse Effect.  Except as
described in the Offering Documents, neither the Company nor any of the
subsidiaries has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.

 

(29)                      ERISA.  Each of the Company and its subsidiaries has
fulfilled, in all material respects, its obligations, if any, under the minimum
funding standards of Section 302 of the United States Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), and the regulations
promulgated thereunder with respect to each “plan” (as defined in Section 3(3) of
ERISA and the regulations thereunder), which is maintained by the Company and
its subsidiaries for their employees, and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and the
regulations thereunder.  The Company and
its subsidiaries have not incurred any unpaid liability under Title IV of ERISA
to the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan.

 

(30)                      Disclosure
Controls.  The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “1934 Act”)); and such disclosure
controls and procedures are designed to ensure that material information
relating to the Company is made known to the Company’s Chief Executive Officer
and its Chief Financial Officer by others within the Company to allow timely
decisions regarding disclosures.

 

(31)                      Foreign
Corrupt Practices Act.  The
operations of the Company and the Bank Subsidiary are and have been conducted
at all times in compliance in all material respects with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, also known as the Bank Secrecy
Act, the money laundering statues of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any Governmental Entity having jurisdiction
over the Company or the Bank Subsidiary (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or the Bank
Subsidiary with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened. 
Neither the Company, the Bank Subsidiary, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or the Bank Subsidiary has (A) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (B) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee; (C) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; (D) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment; or (E) made any
payment of funds to the Company or the Bank Subsidiary or received or retained
funds in violation of any law, rule or regulation.

 

(32)                      NASD
Affiliations.  To the knowledge of
the Company, there are no affiliations or associations (as such terms are
defined by the National Association of Securities Dealers, Inc. (“NASD”))
between any member of the NASD and any of the Company’s officers or directors.

 

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(33)                      Stabilization.  The Company has not taken and will not take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Shares.

 

(34)                      No
General Solicitation.  Neither the
Company nor any of their Affiliates (as defined in Rule 501(b) under
the 1933 Act) or any person acting on its or any of their behalf (other than
the Placement Agent, as to whom the Company and the Bank Subsidiary make no
representation) has engaged or will engage, in connection with the offering of
the Shares, in any form of general solicitation or general advertising within
the meaning of Rule 502(c) under the 1933 Act.

 

(35)                      No
Registration.  It is not necessary in
connection with the offer, sale and delivery of the Shares by the Company in
the manner contemplated by this Agreement to register the Shares under the 1933
Act.

 

(b)                                 Any
certificate signed by any duly authorized officer of the Company or any of its
subsidiaries and delivered to the Placement Agent or to counsel for the
Placement Agent shall be deemed a representation and warranty by the Company or
its subsidiaries to the Placement Agent as to the matters covered thereby.

 

SECTION 2.                                Sale
and Delivery of the Shares; Closing.

 

(a)                                  On
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company agrees to sell an
aggregate of up to 575,000 Shares to the persons who have duly filled out the
Subscription Agreement included in the Offering Documents which has been
accepted by the Company (collectively, the “Purchasers”), at a price per Share
which shall be set forth in the Subscription Agreement.

 

(b)                                 Deliveries
of certificates for the Shares shall be made at the offices of Barack
Ferrazzano Kirschbaum Perlman & Nagelberg LLP, 333 W. Wacker Drive, Suite 2700,
Chicago, Illinois 60606, or such other place as may be agreed to by the
Placement Agent and the Company, on such date and at such time as shall be
agreed upon by the Placement Agent and the Company (such time and date of
delivery being herein called the “Closing Time”).  Each Purchaser shall pay the purchase price
for the Shares subscribed for by wire transfer of immediately available funds
to an escrow account maintained by an escrow agent to be designated by the
Company and the Placement Agent and identified in the Subscription Agreement at
least two (2) business days preceding the Closing Time.

 

(c)                                  The
Placement Agent, relying on the representations and warranties given by each of
the Company and the Bank Subsidiary herein, hereby undertakes, subject to and
in accordance with the provisions of this Agreement, to act as agent for the
Company and, in such capacity, to use its best efforts to procure qualified
subscribers to subscribe for or purchase an aggregate of up to 575,000
Shares.  The Company expressly
acknowledges and agrees that the Placement Agent’s obligations hereunder are on
a best efforts basis only and that the execution of this Agreement does not
constitute a commitment by the Placement Agent to purchase the Shares and does
not ensure the successful placement of the Shares or any portion thereof or the
success of Placement Agent with respect to securing any other financing on
behalf of the Company.  As compensation
to the Placement Agent for its commitments hereunder, the Company hereby agrees
to pay at the Closing Time to the Placement Agent in

 

9

 

immediately available funds a commission of 7.00% of
the gross proceeds from the sale of the Shares.

 

(d)                                 In
performing its duties under this Agreement, the Placement Agent shall be
entitled to rely upon any written notice, signature or other writing which the
Placement Agent shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. 
The Placement Agent may rely upon any opinions or certificates or other
documents delivered by the Company, the Bank Subsidiary or its counsel or
designees to it.

 

SECTION 3.                                Covenants
of the Company and the Bank Subsidiary. 
The Company and the Bank Subsidiary covenant with the Placement Agent as
follows:

 

(a)                                  Offering Documents.  The Company and the Bank Subsidiary, as
promptly as possible, will furnish to the Placement Agent, without charge, such
number of copies of the Offering Memorandum and any amendments and supplements
thereto as the Placement Agent may reasonably request.

 

(b)                                 Notice and Effect of Material Events.  Prior to the Closing Time, the
Company and the Bank Subsidiary will immediately notify the Placement Agent,
and confirm such notice in writing, of (x) any filing made by the Company and
the Bank Subsidiary of information relating to the offering of the Shares with
any regulatory body in the United States, and (y) any Material Adverse Effect,
which, in the reasonable judgment of the Company (i) makes any statement
in the Offering Documents false or misleading or (ii) is not disclosed in
the Offering Documents.  In such event or
if during such time any event shall occur as a result of which it is necessary,
in the reasonable judgment of the Company, its counsel or the Placement Agent
or counsel to such Placement Agent, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances then existing, the Company will amend or supplement the Offering
Memorandum by preparing and furnishing to the Placement Agent an amendment or
amendments of, or a supplement or supplements to, the Offering Memorandum (in
form and substance satisfactory in the reasonable opinion of counsel for the
Placement Agent) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.

 

(c)                                  Amendment to Offering Documents.  The
Company and the Bank Subsidiary will advise the Placement Agent promptly of any
proposal to amend or supplement the Offering Documents and will not effect such
amendment or supplement without the prior written consent of the Placement
Agent (which such consent may not be unreasonably withheld, conditioned or
delayed).  Neither the consent of the
Placement Agent nor such Placement Agent’s delivery of any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in Section 5
hereof.

 

(d)                                 Blue Sky Qualifications.  The
Company will use its reasonable best efforts, in cooperation with the Placement
Agent, to qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Placement Agreement may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the date of the
Offering Memorandum or any amendment or supplement thereto; provided, however,
that the Company shall not be

 

10

 

obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.  In each jurisdiction in which the Shares have
been so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the later of the date of the
Offering Memorandum or any amendment or supplement thereto.

 

(e)                                  Use of Proceeds.  The Company and the Bank Subsidiary will use the proceeds received by it from the
sale of the Shares as described in the Offering Memorandum.

 

(f)                                    Listing.  The
Company will use its reasonable best efforts to effect and maintain the
quotation of the Common Stock on the Nasdaq National Market and will file with
the Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq National
Market.

 

(g)                                 Lock-Up.  Except under any benefit plan or arrangement
maintained by or on behalf of the Company or its subsidiaries, during the
180-day period after the Closing Time, the Company will not, without the prior
written consent of the Placement Agent, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, Common Stock, any security convertible into, exchangeable or exercisable for
Common Stock or any equity security substantially similar to the Common Stock.

 

(h)                                 Reporting Requirements.  The
Company will comply with the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations so as to permit the completion
of the distribution of the Securities as contemplated in this Placement
Agreement and the Offering Memorandum.  The
Company, during and after the period of the Private Placement, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.

 

SECTION 4.                                Payment
of Expenses.

 

(a)                                  Expenses.  The
Company will pay all expenses incident to the performance of its obligations
under this Agreement, including, without limitation, (i) the cost of
obtaining all regulatory approvals; (ii) the cost of preparation, printing
and delivery of such documents as may be required in connection with the
offering, purchase, sale and delivery of the Shares; (iii) the cost of
preparing, including printing and distributing, the Offering Documents; (iv) the
costs of blue sky qualification (including fees and expenses of blue sky
counsel to the Placement Agent) of the Shares in the various states; and (v) all
fees and disbursements of the Company’s counsel, accountants, agents and other
advisors.  In the event the Placement
Agent incurs any such fees and expenses on behalf of the Company, the Company
will reimburse the Placement Agent for such fees and expenses whether or not
the transactions contemplated hereby are consummated.

 

(b)                                 In
addition to the expenses to be borne by the Company under paragraph (a) above,
the Company shall reimburse the Placement Agent, upon request made from time to
time, for its reasonable out-of-pocket expenses incurred in connection with the
transaction contemplated hereby, regardless of whether such transactions are
consummated, including, without limitation, reasonable legal fees and disbursements
of Barack Ferrazzano Kirschbaum

 

11

 

Perlman & Nagelberg LLP, counsel for the
Placement Agent, and reasonable out-of-pocket marketing, syndication and travel
expenses.

 

SECTION 5.                                Conditions of Placement Agent’s Obligations.  The Company and the Placement Agent agree that
the obligations of the Placement Agent hereunder are subject to the accuracy of
the representations and warranties of the Company and the Bank Subsidiary
contained in Section 1 hereof or in certificates of any officer of the
Company or any of its subsidiaries delivered pursuant to the provisions hereof,
to the performance by the Company and the Bank Subsidiary of their obligations
hereunder, and to the following further conditions:

 

(a)                                  Opinion of Counsel for Company and the Bank
Subsidiary.  At the Closing
Time, the Placement Agent shall have received the favorable opinion, dated as
of the Closing Time, of Jones, Walker, Waechter, Poitevent, Carrère &
Denègre, L.L.P., counsel for the Company and the Bank Subsidiary, in form and
substance reasonably satisfactory to counsel for the Placement Agent, and in
substantially the form annexed hereto as Exhibit A.  Such counsel may state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company or any of its subsidiaries
and certificates of public officials.

 

(b)                                 Opinion of Counsel for Placement Agent.  At the Closing Time, the Placement Agent
shall have received the favorable opinion, dated as of the Closing Time, of Barack
Ferrazzano Kirschbaum Perlman & Nagelberg LLP, counsel for the
Placement Agent, with respect to the incorporation and legal existence of the
Company, the issuance of the Shares, the disclosure in the Offering Documents
and other related matters as the Placement Agent may require.  Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of Shares, officers of the Company or any of its
subsidiaries and public officials.

 

(c)                                  Certificates.  At
the Closing Time, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Offering Documents,
any Material Adverse Effect, and the Placement Agent shall have received a
certificate of the President and Chief Executive Officer of the Company and of
the Chief Financial Officer of the Company, dated as of the Closing Time, to
the effect that (i) there has been no such Material Adverse Effect, (ii) the
representations and warranties in Section 1 hereof were true and correct
when made and are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Company and
the Bank Subsidiary have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to the
Closing Time.

 

(d)                                 Officers’
Certificate.  At the Closing Time, the Placement Agent
shall have received a certificate of the President and Chief Executive Officer
of the Company and of the Bank Subsidiary and the Chief Financial Officer of
the Company and of the Bank Subsidiary, dated as of Closing Time, to the effect
that (i) they have reviewed the contents of the Offering Documents; (ii) based
on each of their knowledge, the Offering Documents do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which such statements were made, not misleading; and (iii) based on each
of their knowledge, the financial statements and other financial information
included in the Offering Memorandum fairly present in all material respects the
financial condition and results of operations of the

 

12

 

Company and its subsidiaries
as of and for the dates and periods presented in the Offering Documents.

 

(e)                                  Independent Auditors’ Comfort Letter.  At the time of the execution of
this Agreement, the Placement Agent shall have received a letter from each of KPMG, LLP (the “Company Independent
Auditor”), dated such date, in form and substance reasonably satisfactory to
the Placement Agent, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to placement agents in
private placements with respect to the financial statements and certain
financial information included in the Offering Documents.

 

(f)                                    Bring-down Comfort Letter.  At the Closing Time, the Placement
Agent shall have received from the Company Independent Auditor a letter, dated
as of the Closing Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (e) of this Section,
except that the specified date referred to shall be a date not more than three
business days prior to the Closing Time.

 

(g)                                 Lock-up Agreements.  At
the date of this Placement Agreement, the Placement Agent shall have received
an agreement substantially in the form of Exhibit B hereto signed by the
persons listed on Schedule A hereto.

 

(h)                                 Additional Documents. 
At the Closing Time, counsel for the Placement Agent shall
have been furnished such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Shares as herein contemplated, or in order to evidence the accuracy of any of
the representations or warranties of the Company and the Bank Subsidiary, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Bank Subsidiary in connection with the issuance
and sale of the Shares as herein contemplated shall be satisfactory in form and
substance to the Placement Agent and counsel for the Placement Agent.

 

(i)                                     Termination of Agreement. 
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Placement Agent by notice to the Company and the Bank
Subsidiary at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as provided
in Section 4 hereof and except that Section 6 and 7 hereof shall
survive any such termination and remain in full force and effect.

 

SECTION 6.                                Indemnification.

 

(a)                                  Indemnification of Placement Agent.  The Company and the Bank
Subsidiary agree to jointly and
severally indemnify and hold harmless: (x) the Placement Agent; (y) each
person, if any, who controls (within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act) the Placement Agent (each such person,
a “controlling person”); and (z) the respective partners, directors, officers,
employees and agents of the Placement Agent or any such controlling person as
follows:

 

(1)                            against
any and all loss, liability, claim, damages and expense whatsoever, as
incurred, relating to or arising out of, or based upon, in whole or in part, (A) any
untrue statement or alleged untrue statement of a material fact included in the
Offering Memorandum, or the omission or alleged omission therefrom of a
material fact necessary in

 

13

 

order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (B) any untrue statement or alleged untrue statement
of material fact contained in any information or documents executed in favor of
or furnished or made available to the Placement Agent by the Company and the Bank
Subsidiary; (C) any omission or alleged omission to state in any
information or documents executed
in favor of or furnished or made available to the Placement Agent by the
Company and the Bank Subsidiary a material fact necessary to make the statements
therein not misleading; or (D) the breach or alleged breach of any
representation, warranty and agreement of the Company and the Bank Subsidiary
contained herein;

 

(2)                            against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, or breach or
alleged breach of any such representation, warranty or agreement; provided that
(subject to Section 6(d) hereof) any such settlement is effected with
the written consent of the Company and the Bank Subsidiary; and

 

(3)                            against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Placement Agent), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, or breach or alleged breach of any
such representation, warranty or agreement, to the extent that any such expense
is not paid under (1) or (2) above;

 

provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or expense (A) to
the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by the Placement Agent or their counsel
expressly for use in the Offering Documents (or any amendment or supplement
thereto) (the “Placement Agent’s Information”) or (B) which is found by a
final unappealable order of a court with jurisdiction over the matter to have
been directly caused by the gross negligence or willful misconduct of the
Placement Agent.

 

(4)                            Notwithstanding the foregoing,
the indemnification provided for in this paragraph (a) shall not apply to
the Bank Subsidiary to the extent that such indemnification by the Bank
Subsidiary is found in a final, non-appealable judgment by a court of competent
jurisdiction to constitute a violation of any financial institution law or
regulation applicable to national banks and the Bank Subsidiary, including if
such indemnification is so found to constitute a covered transaction under 23A
of the Federal Reserve Act.  Further, the
indemnification provided for in this paragraph (a) shall be the sole and exclusive
remedy against the Bank Subsidiary with respect to any breach of this
Agreement.  This Section 6(a)(4) does
not, in any manner, limit any actions, recourse or remedies the Placement Agent
may seek to enforce against the Company or any entity or person other than the
Bank Subsidiary.

 

(b)                                 Indemnification of Offerors, Directors, Officers and
Employees.  The Placement
Agent agrees to indemnify and hold harmless the Company, the Bank Subsidiary, and their direct and
indirect subsidiaries, their respective directors, officers and employees,

 

14

 

and each person, if any, who controls the Company, or
its subsidiaries within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a) above, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in conformity with the Placement Agent’s
Information.

 

(c)                                  Actions against Parties; Notification.  Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof, and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement.  In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified
parties shall be selected by the Placement Agent, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company and the Bank Subsidiary.  An indemnifying party may participate at its
own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the indemnified
party.  In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances.  No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this Section 6
or Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes
an unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

 

(d)                                 Settlement without Consent if Failure to
Reimburse.  If at any time an
indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(2) effected without its written
consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

 

SECTION 7.                                Contribution.  In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in Section 6
hereof is for any reason held to be unenforceable by an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Bank Subsidiary, on the one hand, and the
Placement Agent, on the other hand, from the offering of the Shares pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable

 

15

 

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 and the Bank Subsidiary, on the one hand, and the
Placement Agent, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

 

The relative benefits
received by the Company and the Bank Subsidiary, on the one hand, and the Placement Agent, on the
other hand, in connection with the offering of the Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the Company and the Bank Subsidiary and the total commission
received by the Placement Agent bear to the aggregate initial offering price of
the Shares.

 

The relative fault of the
Company and the Bank Subsidiary,
on the one hand, and the Placement Agent, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statements of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company and the
Bank Subsidiary or by the
Placement Agent and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

The Company and the Bank Subsidiary and the Placement Agent
agree that it would not be just and equitable if contribution pursuant to this Section 7
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.  The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.

 

Notwithstanding the
provisions of this Section 7, the Placement Agent shall not be required to
contribute any amount in excess of the amount by which its commissions received
pursuant to Section 2(c) hereof exceeds the amount of any damages
which the Placement Agent 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 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7,
each person, if any, who controls the Placement Agent within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and the respective partners,
directors, officers, employees and agents of such Placement Agent or any such
controlling person shall have the same rights to contribution as the Placement
Agent, while each officer and director of the Company and the Bank Subsidiary,
and each person, if any, who controls the Company and the Bank Subsidiary
within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company and the Bank
Subsidiary.

 

16

 

SECTION 8.                                Representations,
Warranties and Agreements to Survive Delivery.  All representations, warranties and
agreements contained in this Agreement or in certificates of officers of the
Company or the Bank Subsidiary submitted pursuant hereto shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the Placement Agent or controlling person, or by or on behalf of the
Company or the Bank Subsidiary, and shall survive delivery of the Shares to the
purchasers thereof.

 

SECTION 9.                                Termination
of Agreement.

 

(a)                                  Termination; General. 
The Placement Agent may terminate this Agreement, by notice
to the Company and the Bank Subsidiary,
at any time at or prior to the Closing Time if, since the time of execution of
this Agreement or since the respective dates as of which information is given
in the Offering Documents, (i) there has occurred any Material Adverse
Effect, or (ii) any condition specified in Section 5 hereof (other
than Section 5(b)) shall not have been fulfilled when and as required to
be fulfilled), or (iii) there has occurred any material adverse change in
the financial markets in the United States, any outbreak of hostilities or
escalation thereof or any other calamity or crisis, or any change or
development involving a prospective change in political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Placement Agent, impracticable to market the Shares or to
enforce contracts for the sale of the Shares, or (iv) trading generally on
the American Stock Exchange, the New York Stock Exchange or the Nasdaq National
Market has been suspended or limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of
said exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers or any other governmental authority, or (v) a
banking moratorium has been declared by the United States, New York, North
Dakota or Arizona authorities.

 

(b)                                 Liabilities.  If
this Agreement is terminated pursuant to this Section, such termination shall
be without liability of any party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 6 and 7 hereof shall survive such
termination and remain in full force and effect.

 

SECTION 10.                          Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication.  Notices to the Placement Agent shall be
directed to Sandler O’Neill & Partners, L.P., 919 Third Avenue, 6th
Floor, New York, New York 10022, Facsimile (212) 466-7711, Attention: General
Counsel, with a copy to Barack Ferrazzano Kirschbaum Perlman &
Nagelberg LLP, 333 W. Wacker Drive, Suite 2700, Chicago, Illinois 60606, Facsimile
(312) 984-3150, Attention: John E. Freechack; and notices to the Company
and the Bank Subsidiary shall be
directed to 322 East Main, Bismarck, North Dakota 58501, Facsimile (710)222-3653,
Attention: Gregory K. Cleveland, with a copy to Jones, Walker, Waechter,
Poitevent, Carrere & Denegre L.L.P., 10001 Woodloch Forest Drive, Suite 35,
The Woodlands, Texas 77380, Facsimile (281) 296-4404, Attention: William
Masters.

 

SECTION 11.                          Parties.  This Agreement shall inure to the benefit of
and be binding upon the Placement Agent and the Company and the Bank Subsidiary and their respective
successors.  Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Placement Agent and the Company and
the Bank Subsidiary, and their
respective successors and the controlling persons and other persons referred to
in Sections 1, 6 and 7 hereof and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this

 

17

 

Agreement or any provision herein contained.  This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Placement Agent and the Company and the Bank Subsidiary and their respective successors,
and said controlling persons and other persons and their heirs and legal
representatives, and for the benefit of no other person, firm or
corporation.  No purchaser of Shares
shall be deemed to be a successor by reason merely of such purchase.

 

SECTION 12.                          Counterparts;
Facsimile.  This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, and signature pages may be delivered by facsimile, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

SECTION 13.                          GOVERNING
LAW; JURISDICTION.  THIS AGREEMENT
SHALL BE  GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

 

EACH OF THE COMPANY AND
THE BANK SUBSIDIARY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT.  EACH OF THE COMPANY AND THE BANK SUBSIDIARY,
ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

SECTION 14.                          Effect
of Headings.  The Article and Section headings
herein are for convenience only and shall not affect the construction hereof. 

 

SECTION 15.                          Entire
Agreement.  This Agreement represents
the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and supersedes any and all other oral or
written agreements heretofore made.

 

18

 

If the foregoing is in
accordance with your understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Placement Agent and the
Company and the Bank Subsidiary
in accordance with its terms.

 

	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BNCCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory K.
  Cleveland

  	
   

  
	
   

  	
   

  	
  Name: Gregory K.
  Cleveland

  
	
   

  	
   

  	
  Title: President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BNC NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory K.
  Cleveland

  	
   

  
	
   

  	
   

  	
  Name: Gregory K.
  Cleveland

  
	
   

  	
   

  	
  Title: President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CONFIRMED AND
  ACCEPTED,

  	
   

  	
   

  
	
  as of the date
  first above written:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SANDLER
  O’NEILL & PARTNERS, L.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Sandler
  O’Neill & Partners Corp.,

  	
   

  	
   

  
	
   

  	
  the sole general
  partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert A.
  Kleinert

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Robert A.
  Kleinert

  	
   

  	
   

  
	
   

  	
  Title: an
  officer

  	
   

  	
   

  
							

 

19

 

SCHEDULE A

 

Gregory K. Cleveland

Denise Forte-Pathroff,
M.D.

John A. Hipp, M.D.

Richard M. Johnsen, Jr.

Tracey J. Scott

E. Thomas Welch

Jerry R. Woodcox

Neil M. Brozen

Shawn Cleveland Goll

Dave Hoekstra

Richard W. Milne, Jr.

Mark E. Peiler

Jerry D. Renk

Jess Roman

 

 

EXHIBIT A

 

Pursuant to Section 5(a) of
the Placement Agency Agreement, counsel for the Company and the Bank Subsidiary shall deliver an opinion in
substantially the following form:

 

1.                                       The Company is
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware.

 

2.                                       The Company has the
corporate power and authority to (i) execute and deliver, and to perform
its obligations under the Agreement and (ii) own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum.

 

3.                                       The Company is
registered with the FRB as a bank holding company under the BHCA; and the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not have a Material
Adverse Effect.

 

4.                                       The Bank Subsidiary
is validly existing and in good standing under the laws of the United States,
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum, and is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not have a Material Adverse Effect.  The deposit accounts of the Bank Subsidiary
are insured by the FDIC up to the maximum amount allowable under applicable
law.

 

5.                                       Each of the
Company’s “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X, the “Significant Subsidiaries”) is organized and validly
existing and in good standing under the laws of its jurisdictions of
incorporation or formation and has the corporate or other organizational power
and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum.

 

6.                                       The Company, the
Bank Subsidiary and the Other Subsidiaries are not required to qualify as a
foreign corporation to transact business in any jurisdiction other than the
States of [                  ].

 

7.                                       All of the
issued and outstanding capital stock of the Company has been duly authorized
and validly issued, and is fully paid and nonassessable; none of the capital
stock of the Company was issued in violation of the preemptive rights of any
shareholder of the Company; all of the issued and outstanding shares of capital
stock of each of the Company’s Significant Subsidiaries have been duly
authorized and validly issued, and are fully paid and nonassessable and to the
best of such counsel’s knowledge, such shares of capital stock of each such
subsidiary are owned of record by the Company, directly or through the Bank
Subsidiary, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right; and none of such outstanding shares of
capital stock of the Company’s Significant Subsidiaries was issued in violation
of any preemptive or similar rights arising by operation of law, of the
certificate of incorporation, by-laws or similar organizational documents of
the Company, or its Significant Subsidiaries or, to the knowledge of such

 

A-1

 

counsel, of any agreement to which the Company, or any
off its Significant Subsidiaries is a party.

 

8.                                       Based on such
counsel’s review of the Company’s records, the authorized, issued and
outstanding capital stock of the Company as set forth in the Offering
Memorandum under “Capitalization,” at the date indicated therein, and there
have not been any subsequent issuances of capital stock of the Company, other
than issuances of the Company’s common stock under any benefit plan or
arrangement maintained by or on behalf of the Company or its subsidiaries.

 

9.                                       No consent,
approval, authorization or order of or filing, registration or qualification
with any governmental agency or authority is required under any law or
regulation of the United States or any jurisdiction in which the Company or any
of its subsidiaries is organized or incorporated or engages in any business in
connection with the execution and delivery by the Company of the Agreement and
the consummation of the transactions contemplated thereby except (i) as
may be required under the Blue Sky laws of the various states of the United
States in connection with any sales of Shares therein or (ii) as have
already been obtained or made.

 

10.                                 The issuance and sale
by the Company of the Shares, the execution, delivery and performance by the
Company and the Bank Subsidiary of the Agreement, the consummation by the
Company and the Bank Subsidiary of the transactions contemplated thereby are
not prohibited by any statute or administrative regulation of the State of Delaware
applicable to them.

 

11.                                 The Agreement has been
duly authorized, executed and delivered by the Company and the Bank Subsidiary.

 

12.                                 The Shares have been
duly authorized for issuance by the Company, and when issued, executed and
delivered against payment therefor in accordance with the Agreement, will be
validly issued and fully paid and nonassessable.

 

13.                                 The execution,
delivery and performance of the Agreement by the Company and the Bank
Subsidiary and the consummation by the Company and the Bank Subsidiary of the
transaction contemplated by the Agreement, (i) will not result in any
violation of the certificate of incorporation or bylaws of the Company or any of
its Significant Subsidiaries, and (ii) will not conflict with, or result
in a breach of any of the terms or provisions of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the creation or imposition of any lien, charge and
encumbrance upon any assets or properties of the Company or any of its
Significant Subsidiaries under, (a) any agreement, indenture, mortgage or
instrument of which we are aware that the Company or any of its Significant
Subsidiaries is a party to or by which it may be bound or to which any of its
assets or properties may be subject, or (b) any existing applicable law, rule or
administrative regulation of any court or governmental agency or authority
having jurisdiction over the Company or any of its Significant Subsidiaries or
any of their respective assets or properties, except in case of (ii), where any
such violation, conflict, breach, default, lien, charge or encumbrance, would
not have a Material Adverse Effect.

 

14.                                 The Shares conform in
all material respects to the description thereof contained in the Offering
Documents.

 

A-2

 

15.                                 The statements in the
Offering Documents under the captions “Supervision and Regulation,” “Description
of Capital Stock,” and “Plan of Distribution,” to the extent that such
statements constitute matters of law or legal conclusions, have been reviewed
by such counsel and are fair summaries and accurately present the information
disclosed therein in all material respects.

 

16.                                 To the best of such
counsel’s knowledge, there are no legal or governmental actions, suits,
investigations or proceedings, pending or threatened against the Company or any
subsidiary of the Company which otherwise would be required to be disclosed in
the Offering Documents, if the Offering Documents were included in a
registration statement filed pursuant to the 1933 Act, other than those
described or referred to therein.

 

17.                                 Assuming (i) the
accuracy of the representations and warranties, and compliance with the
agreements, contained in the Agreement and (ii) that the Shares are sold
in the manner contemplated by, and in accordance with, the Agreement, and the
Offering Documents, it is not necessary in connection with the offer, sale and
delivery of the Shares to register the Shares under the 1933 Act.

 

18.                                 The Company is not,
and, following the issuance of the Shares and the consummation of the
transaction contemplated by the Agreement and the application of the proceeds
therefrom, the Company will not be, an “investment company” required to be
registered under the Investment Company Act of 1940, as amended.

 

19.                                 During the course of
the preparation of the Offering Memorandum, we reviewed and participated in the
preparation of the Offering Memorandum, reviewed certain documents and
participated in discussions with officers of the Corporation and their
advisors, and the Placement Agent and its advisors.  Although we have not undertaken to determine
independently, and are not passing upon or assuming any responsibility for, the
accuracy, completeness or fairness of the statements contained in the Offering
Memorandum on the basis of such review and discussions, nothing has come to our
attention that causes us to believe that the Offering Memorandum (other than
the financial statements, notes to financial statements, schedules and other
financial, statistical or accounting information and data included therein or
omitted therefrom, as to which we express no view), as of the date of the
Offering Memorandum or at the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

A-3

 

EXHIBIT B

 

[Form of lock-up from
directors, officers or other stockholders]

 

September   
, 2005

 

Sandler
O’Neill & Partners, L.P.

919
Third Avenue

6th
Floor

New
York, New York 10022

 

Re:                               Proposed Offering by BNCCORP, Inc.

 

Dear
Sirs:

 

The undersigned, a stockholder and an officer and/or
director of BNCCORP, Inc., a Delaware corporation (the “Company”),
understands that Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”)
proposes to enter into a Placement Agreement (the “Placement Agreement”) with
the Company providing for the private placement of shares (the “Securities”) of
the Company’s common stock, $0.01 par value per share (the “Common Stock”).  In recognition of the benefit that such an
offering will confer upon the undersigned as a stockholder and an officer
and/or director of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with Sandler O’Neill to be named in the Placement Agreement that, during
a period of 180 days from the date of the Placement Agreement, the
undersigned will not, without the prior written consent of Sandler O’Neill,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company’s Common Stock or any securities convertible
into or exchangeable or exercisable for Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities,
in cash or otherwise.  Notwithstanding
the foregoing, the undersigned shall not be prohibited from exercising,
receiving any shares of the Company’s common stock issued pursuant to the
exercise of, or receiving any options granted to the undersigned pursuant to
any benefit plan or arrangement maintained by or on behalf of the Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
					

 

B-1Exhibit 10.2

 

FORM OF REGISTRATION
RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of September 21, 2005 between
BNCCORP, Inc, a Delaware corporation (the “Company”),
and each of the Persons (as defined below) who have executed this Agreement and
are named in Annex A hereto (each, an “Investor”
and, collectively, the “Investors”).

 

Execution and delivery of this Agreement by
the parties hereto are conditions to each Investor purchasing Shares (as
defined below) from the Company under the Subscription Agreement (as defined
below).  Accordingly, the parties hereto
hereby agree as follows:

 

Section 1.                                          Definitions.  Unless the context
otherwise requires, the terms defined in this Section 1 have the meanings
herein specified for all purposes of this Agreement, applicable to both the
singular and plural forms of such terms:

 

“Closing
Date” has the meaning given in the Subscription Agreement; provided that if there is more than one
Closing Date pursuant to the Subscription Agreement, this term shall refer to
the latest such Closing Date.

 

“Common
Stock” means the common stock, $0.01 par value, of the Company.

 

“Commission” means the Securities and Exchange
Commission.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Holder”
means the record owner of Registrable Securities.

 

“Person”
means any natural person, corporation, trust, association, limited liability
company, partnership, joint venture or other entity and any government,
governmental agency, instrumentality or political subdivision.

 

“Register,”
“registered” and “registration” refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

 

“Registrable
Securities” means the Shares and any shares of capital stock issued
or issuable from time to time as a dividend or other distribution with respect
to, or in exchange for or in replacement of, the Shares if and so long as:  (i) they have not been sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction; or (ii) they have not been sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect to such Shares are removed
upon the consummation of such sale; or (iii) they could not be sold
without registration by any Holder thereof pursuant to Rule 144
promulgated under the Securities Act.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Shares”
means the shares of Common Stock sold and issued to the Investors pursuant to
the Subscription Agreement.

 

“Subscription
Agreement” means one or more Subscription Agreements of even date
herewith between the Company and each Investor relating to the purchase and
sale of the Shares.

 

 

Section 2.                                          Required Registration.

 

(a)                                  Subject to the receipt of all necessary information from the
Investors, the Company shall use its reasonable best efforts to prepare and
file a “shelf” registration statement on Form S-3 under the Securities Act
covering an offering of the Registrable Securities on a continuous basis
pursuant to Rule 415 under the Securities Act (the “Registration Statement”), on or before the
date that is ninety (90) days after the Closing Date (the “Filing
Date”), and shall use its reasonable best efforts to cause such
Registration Statement to become effective as soon as practicable after filing,
and in any event no later than one-hundred twenty (120) days after the Filing
Date (the “Effectiveness Date”); provided, however, that if the Company
receives notification from the Commission that the Registration Statement will
receive no action or review from the Commission, then the Company will, subject
to its rights under Section 2(c) below, cause the Registration
Statement to become effective within five (5) business days after such
Commission notification. Notwithstanding the foregoing, if Form S-3 is not
available for use by the Company, then the Company will file a Registration
Statement on such form as is then available to effect a registration of the
Registrable Securities, subject to the consent of the Holders of a majority of
the Registrable Securities then outstanding, which consent will not be
unreasonably withheld, conditioned or delayed.

 

(b)                                 The Company shall use its reasonable best efforts to maintain the
effectiveness of the Registration Statement under the Securities Act until the
earliest of:  (i) the date that is
two (2) years after the Closing Date; and (ii) the date on which all
of the Registrable Securities have been sold pursuant to the Registration
Statement or no longer constitute Registrable Securities (the “Registration Period”).

 

(c)                                  Notwithstanding the foregoing, the Company’s obligations under
Sections 2(a) and 2(b) to file a Registration Statement, and to cause
such Registration Statement to become and remain effective, shall be suspended,
at the option of the Company, for a total of not more than ninety (90) days (an
“Allowed Delay”) if the Company
determines in good faith that an event has occurred or a condition exists that
results or may result in a Misstatement (as defined in Section 10 below).

 

Section 3.                                          Demand Registration.

 

(a)                                  If, at any time after the Effectiveness Date and prior to the
expiration of the Registration Period, a Registration Statement is not
effective with respect to all of the Shares (except by reason of an Allowed
Delay), the Holders of a majority of the Registrable Securities then
outstanding (the “Majority Holders”) may request
registration under the Securities Act of all or part of their Registrable
Securities (“Demand Registration”) on Form S-3,
if available, or, if Form S-3 is not available for the Demand
Registration, on such form as may be prescribed by the Commission.  Each request for a Demand Registration shall
specify the number of Registrable Securities requested to be registered and the
anticipated per share price range for such offering.  Within ten (10) days after receipt of
any request for a Demand Registration, the Company will, subject to the other
provisions of this Agreement, give written notice of such requested
registration to all other Holders of Registrable Securities, if any, and,
subject to Section 1(d) below, will include in such registration the
Registrable Securities of any such Holder from which the Company has received
written requests for inclusion therein within fifteen (15) days after the receipt
by such Holder of the Company’s notice.

 

(b)                                 The
Majority Holders will be entitled to request no more than three (3) Demand
Registrations.  The Company will pay all
expenses (pursuant to Section 6 herein); provided that a registration will
not count as one of the permitted Demand Registrations until it

 

2

 

has become effective and unless the Holders
of Registrable Securities are able to register at least eighty percent (80%) of
the Registrable Securities requested to be included in such registration
(excluding from such calculation any Registrable Securities held by a Holder
that is excluded from participating in such registration for failing to provide
any information required by this Agreement); and provided,
further, that in any event the Company will pay all expenses in
connection with any registration initiated as a Demand Registration whether or
not it has become effective and whether or not it is counted as a permitted
Demand Registration.

 

(c)                                  The Company will not include in any Demand Registration any
securities that are not Registrable Securities without the prior written
consent of the Holders of a majority of the Registrable Securities included in
such registration.  If a Demand
Registration is an underwritten offering and the managing underwriters in good
faith advise the Company in writing that in their judgment the number of
Registrable Securities and, if permitted hereunder, other securities requested
to be included in such offering exceeds the number of Registrable Securities
and other securities, if any, that can be sold therein without materially
reducing the price of such Registrable Securities, the Company will include in
such registration, prior to the inclusion of any securities that are not
Registrable Securities, the number of Registrable Securities requested to be
included, in the good faith judgment of such underwriters can be sold without
materially reducing the price of such Registrable Securities, pro rata among the respective Holders of Registrable
Securities on the basis of the number of shares of Registrable Securities that
each Holder of Registrable Securities has requested to be included in such
registration.

 

(e)                                  The investment banker(s) and managing underwriter(s) administering
an offering initiated as a Demand Registration shall be the investment bankers
and managing underwriters selected by the Company and agreed to by the Holders
of a majority of the Registrable Securities included in any such Demand
Registration at the time of its effectiveness.

 

(f)                                    The Company will not grant to any Persons the right to request the
Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, that would
be superior to or otherwise interfere with the registration rights granted
hereunder.  The Company represents and
warrants to the Investor that no Person has the contractual right to require
the Company to register any equity securities of the Company other than
pursuant to this Agreement.

 

Section 4.                                          Registration Procedures.  If and whenever the Company
is required by the provisions of Section 2 or 3 hereof to effect the
registration of Registrable Securities under the Securities Act, the Company
will:

 

(a)                                  In accordance with the Securities Act and all applicable rules and
regulations thereunder, prepare and file with the Commission a registration
statement with respect to such securities and use its reasonable best efforts
to cause such registration statement to become effective, and use its
reasonable best efforts to cause such registration statement to remain
effective (including preparing and filing with the Commission such amendments
and supplements to such registration statement and the prospectus contained
therein as may be necessary to keep such registration statement effective)
until the securities covered by such registration statement have been sold or
as otherwise set forth in Section 2 or 3;

 

(b)                                 If
the offering is to be underwritten in whole or in part, enter into a customary
written underwriting agreement in form and substance reasonably satisfactory to
the

 

3

 

managing underwriter of the public offering,
the Company and the Holders of a majority of the Registrable Securities
participating in such offering;

 

(c)                                  Furnish
to the Holders participating in such registration and to the underwriters of
the securities being registered such number of copies of the registration
statement and each amendment and supplement thereto, preliminary prospectus,
final prospectus and such other documents as such underwriters and Holders may
reasonably request in order to facilitate the public offering of such
securities;

 

(d)                                 Use its reasonable best efforts to register or qualify the
securities covered by such registration statement under such state securities
or blue sky laws of such jurisdictions as such participating Holders and
underwriters may reasonably request prior to the effectiveness of such
registration statement;

 

(e)                                  Notify
the Holders participating in such registration, promptly after it receives
notice thereof, of the date and time when such registration statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;

 

(f)                                    Notify
such Holders promptly of any request by the Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information;

 

(g)                                 Prepare
and file with the Commission, promptly upon the request of any such Holders,
any amendments or supplements to such registration statement or prospectus
which, in the written opinion of counsel for such Holders, which opinion shall
be reasonably acceptable to counsel for the Company, is required under the
Securities Act or the rules and regulations of the Commission thereunder
in connection with the distribution of the Registrable Securities by such
Holders;

 

(h)                                 Prepare
and file promptly with the Commission, and promptly notify such Holders of the
filing of, such amendments or supplements to such registration statement or
prospectus as may be necessary to correct any statements or omissions if, at
the time when a prospectus relating to such securities is required to be
delivered under the Securities Act, any event has occurred as the result of
which any such prospectus or any other prospectus as then in effect would
include an 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;

 

(i)                                     Advise such Holders, promptly after it receives notice or obtains
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation
or threatening of any proceeding for that purpose and promptly use its
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued; and

 

(j)                                     At the request of any Holder of Registrable Securities covered by
such registration statement, furnish to such Holder on the effective date of
the registration statement or, if such registration includes an underwritten
public offering, at the closing provided for in the underwriting agreement, an
opinion dated such date of the counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any, and to
the Holder or Holders making such request, covering such matters with respect
to the registration statement, the prospectus and each amendment or supplement
thereto, proceedings under state

 

4

 

and federal securities laws, other matters
relating to the Company, the securities being registered and the offer and sale
of such securities as are customarily the subject of opinions of issuer’s
counsel provided to underwriters in underwritten public offerings.

 

(k)                                  Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the Effectiveness Date.

 

Section 5.                                          Accuracy of Registration
Statement. 
Subject to the Company’s rights under Section 10, any registration
statement (including any amendments or supplements thereto and prospectuses
contained therein) filed by the Company covering Registrable Securities will
not contain any 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 in which they were made, not
misleading.  Subject to the limitations
set forth in Section 10, the Company will prepare and file with the
Commission such amendments (including post-effective amendments) and
supplements to any registration statement and the prospectus used in connection
with the registration statement as may be necessary to permit sales pursuant to
the registration statement at all times during the Registration Period, and,
during such period, will comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by any registration statement until the termination of the Registration Period,
or if earlier, until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in the registration statement.

 

Section 6.                                          Additional Obligations of
the Company.

 

6.1                                Review by Investors.  The Company will permit
Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, to review any
registration statement covering Registrable Securities and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the Commission,
and will not file any document in a form to which such counsel reasonably
objects, unless otherwise required by law in the opinion of the Company’s
counsel.  The sections of any such
registration statement including information with respect to the Investors, the
Investors’ beneficial ownership of securities of the Company or the Investors’
intended method of disposition of Registrable Securities must conform to the
information provided to the Company by each of the Investors.

 

6.2                                Expenses. 
With respect to the registration effected pursuant to Section 2
or 3 hereof, the Company will bear all fees, costs and expenses of and
incidental to such registration and the public offering in connection
therewith; provided, however,
that the Company shall not be liable for any underwriting discounts and
commissions, which in all cases shall be borne by the Holders.  Such fees, costs and expenses of registration
to be borne as provided in the preceding sentence, include, without limitation,
all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, all expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified and reasonable
fees and disbursements (not to exceed $50,000 per registration statement
pursuant to Section 2 or 3) of one firm of counsel for all selling
security holders, selected by the Holders of a majority of the Registrable
Securities to be included in such registration, and reasonably acceptable to
the Company.

 

6.3                                Due Diligence. 
The Company will make available during normal business hours for
inspection by any Investor whose Registrable Securities are being sold pursuant
to a registration statement and one firm of attorneys retained by the Investors
(collectively, the

 

5

 

“Inspectors”), all pertinent financial and other records,
pertinent corporate documents and properties of the Company (collectively, the “Records”), as each Inspector reasonably
deems necessary to enable the Inspector to exercise its due diligence
responsibility.  The Company will cause
its officers, directors and employees to supply all information that any
Inspector may reasonably request for purposes of performing such due
diligence.  Each Inspector will hold in
confidence, and will not make any disclosure of, any Records or other
information that the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless:  (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any registration
statement; (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court or government body of competent
jurisdiction, or (iii) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement.

 

Notwithstanding any of the foregoing, nothing
herein shall obligate the Company to provide to the Investors, or to any
advisors or representatives of the Investors, any material nonpublic information.  The Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and
provides the Investors, such advisors and representatives with the opportunity
to accept or refuse to accept such material nonpublic information for review
and any Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.

 

Section 7.                                          Indemnification.

 

(a)                                  The Company will, and does hereby undertake to, indemnify and hold
harmless each Holder, each of its officers, directors and partners, and each
person controlling such Holder within the meaning of the Securities Act, with
respect to which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter within the meaning of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including settlement of any litigation, commenced or threatened, to
which they may become subject under the Securities Act, the Exchange Act, or
other federal or state law, arising out of or based on compliance with, any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus (preliminary or final), offering
circular or other document or amendments thereto, or arising out of or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or arising out of or any
violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by an instrument executed by such Holder or underwriter
expressly for use in connection with such registration.

 

6

 

(b)                                 Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or compliance
is being effected, indemnify and hold harmless the Company, each of its
directors and officers, agents and employees, each underwriter, if any, of the
Company’s securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of the Securities
Act, and each other such Holder, each of its officers, directors and partners
and each person controlling such Holder within the meaning of the Securities
Act, against all claims, losses, damages and liabilities (or actions in respect
thereof to which they may become subject) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
such registration statement, prospectus, offering circular or other document,
or amendments thereto, or any omission (or alleged omission) to state therein a
material fact required to be stated therein in light of the circumstances in
which they were made, or necessary to make the statements therein, not misleading,
and will reimburse the Company, such Holders, such directors, officers,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
executed by such Holder expressly for use in connection with such registration;
provided, however, that the obligations of such Holders hereunder shall be
limited to an amount equal to the proceeds to each such Holder of Registrable
Securities from the sale of such Registrable Securities as contemplated herein.

 

(c)                                  Each party entitled to indemnification under this Section (the “Indemnified Party”) shall give notice to the party required
to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall deliver written notice to the
Indemnifying Party of commencement thereof. 
The Indemnifying Party, at its sole option, may participate in or assume
the defense of any such claim or any litigation resulting therefrom with
counsel reasonably satisfactory to the Indemnified Party, and the Indemnified
Party may participate in such defense at Indemnified Party’s expense.

 

(d)                                 The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Party or any officer, director or controlling person of such
Indemnified Party and will survive the transfer of Registrable Securities.  The Indemnifying Party also agrees to make
such provisions, as are reasonably requested by an Indemnified Party, for
contribution to such party in the event the Indemnifying Party’s
indemnification is unavailable for any reason. 
The failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section except
to the extent that such failure to give notice shall materially adversely
affect the Indemnifying Party in the defense of any such litigation.  No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term a release from all liability in respect to
such claim or litigation by the claimant or plaintiff to such Indemnified
Party.

 

(e)                                  If the indemnification provided for in subsection (a) or (b) of
this Section is held by a court of competent jurisdiction to be
unavailable to a party to be indemnified with respect to any claims, actions,
demands, losses, damages, liabilities, costs or expenses referred to therein,
then each Indemnifying Party under any such subsection, in lieu of indemnifying
such Indemnified Party thereunder, agrees to contribute to the amount paid or
payable by such

 

7

 

Indemnified Party as a result of such claims,
actions, demands, losses, damages, liabilities, costs or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such claims, actions,
demands, losses, damages, liabilities, costs or expenses, as well as any other
relevant equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party will 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 Indemnifying Party or by the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.  Notwithstanding the foregoing, the amount any
Holder of Registrable Securities will be obligated to contribute pursuant to
this subsection will be limited to an amount equal to the per share public
offering price (less any underwriting discount and commissions) multiplied by
the number of shares of Registrable Securities sold by such Holder pursuant to
the registration statement which gives rise to such obligation to contribute
(less the aggregate amount of any damages which such Holder has otherwise been
required to pay in respect of such claim, action, demand, loss, damage,
liability, cost or expense or any substantially similar claim, action, demand,
loss, damage, liability, cost or expense arising from the sale of such
Registrable Securities). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution hereunder from any person who was not guilty of such
fraudulent misrepresentation.

 

Section 8.                                          Reporting Requirements
Under Exchange Act.  The Company will maintain the effectiveness
of its registration under Section 12 of the Exchange Act and timely file
(whether or not it is then required to do so) such information, documents and
reports as the Commission may require or prescribe under Section 15(d) of
the Exchange Act.  The Company will,
forthwith upon written request, furnish to any Holder of Registrable Securities
a written statement by the Company that it has complied with such reporting
requirements.  In addition, the Company
will take such other measures and file such other information, documents and
reports, as may be required of it hereafter by the Commission as a condition to
the availability of Rule 144 under the Securities Act (or any similar
exemptive provision hereafter in effect).

 

Section 9.                                          Holder Information.  The rights of each Holder
of Registrable Securities to participate in any registration to be effected
pursuant to this Agreement is subject to such Holder furnishing the Company
with such information with respect to such Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
and as may be required by law or by the Commission in connection therewith, and
each Holder of Registrable Securities as to which any registration is to be
effected pursuant to this Agreement shall furnish the Company with such information
by a written instrument executed by such Holder.

 

Section 10.                                   Suspension
of Sales.  Upon receipt of written notice from the
Company that a registration statement or prospectus contains an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading (a “Misstatement”), each Holder of Registrable
Securities shall forthwith discontinue disposition of Registrable Securities
until such Holder has received copies of the supplemented or amended prospectus
that corrects such Misstatement, or until such Holder is advised in writing by
the Company that the use of the prospectus may be resumed, and, if so directed
by the Company, such Holder shall deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

 

8

 

Section 11.                                   Forms.  All references in this
Agreement to particular forms of registration statements are intended to
include, and will be deemed to include, references to all successor forms which
are intended to replace, or to apply to similar transactions as, the forms
herein referenced.

 

Section 12.                                   Miscellaneous.

 

12.1                           Waivers and Amendments.  With the written consent of
the Holders of a majority of the Registrable Securities then outstanding, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), and with the same consent the Company may enter into a
supplementary agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of any
supplemental agreement or modifying in any manner the rights and obligations
hereunder of the Holders and the Company;
provided, however, that no such waiver or supplemental agreement may
reduce the aforesaid proportion of Registrable Securities, the Holders of which
are required to consent to any waiver or supplemental agreement, without the
consent of the Holders of all the Registrable Securities; and provided further, and notwithstanding any provision herein to the contrary, that
any such waiver amendment or supplement that applies only to a particular
registration shall require only the written consent of the Holders of a
majority of the Registrable Securities included in such registration. Upon the
effectuation of each such waiver, consent or agreement of amendment or
modification, the Company will give prompt written notice thereof to the
Holders of the Registrable Securities who have not previously consented thereto
in writing.  Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally or
by course of dealing, except by a statement in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought,
except to the extent provided in this Section 12.1.  Specifically, but without limiting the
generality of the foregoing, the failure of any Investor at any time or times
to require performance of any provision hereof by the Company will not affect
the right of any Investor at a later time to enforce the same.  No waiver by any party of the breach of any
term or provision contained in this Agreement, in any one or more instances,
will be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.

 

12.2                           Effect of Waiver or Amendment.  Each Investor acknowledges
that by operation of Section 12.1 the Holders of a majority of the
Registrable Securities will, subject to the limitations contained in Section 12.1,
have the right and power to diminish or eliminate certain rights of such
Investor under this Agreement.

 

12.3                           Rights of Investors Inter Se.  Each Investor has the
absolute right to exercise or refrain from exercising any right or rights which
such Investor may have by reason of this Agreement or any Registrable Security,
including, without limitation, the right to consent to the waiver of any
obligation of the Company under this Agreement and to enter into an agreement
with the Company for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such Investor will not incur any liability
to any other Investor or Investors with respect to exercising or refraining
from exercising any such right or rights.

 

12.4                           Notices.  All notices, requests, consents and other
communications required or permitted hereunder will be in writing and will be
delivered, or mailed first class postage prepaid, registered or certified mail,

 

9

 

(a)                                  If to any Investor, addressed to such Investor at its address shown
on Annex A hereto, or at such other address as such Investor may specify by
written notice to the Company; or

 

(b)                                 If to the Company, at 322 East Main Avenue, Bismarck, North Dakota
58501, with a copy to Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P., 201 St. Charles Avenue, 51st Floor, New Orleans,
Louisiana  70170, Attention:  William B. Masters, or at such other address
as the Company may specify by written notice to the Investors;

 

and each such notice, request, consent and
other communication will for all purposes of this Agreement be treated as being
effective or having been given when delivered, if delivered personally, or, if
sent by mail, at the earlier of its actual receipt or three (3) days after
the same has been deposited in a regularly maintained receptacle for the
deposit of United States mail, addressed and postage prepaid as aforesaid.

 

12.5                           Severability.  If any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement is
determined to be illegal or unenforceable, it is the intention of the parties
hereto that all other provisions of this Agreement and of each other agreement
entered into pursuant to this Agreement should be given effect separately from
the provision or provisions determined to be illegal or unenforceable and not be
affected thereby.

 

12.6                           Parties in Interest.  All the terms and provisions of this
Agreement will be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, whether so
expressed or not and, in particular, will inure to the benefit of and be
enforceable by the Holder or Holders at the time of any registration of
Registrable Securities.  Subject to the
immediately preceding sentence, this Agreement will not run to the benefit of
or be enforceable by any Person other than a party to this Agreement and its
successors and assigns.

 

12.7                           Headings.  The headings of the sections, subsections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement.

 

12.8                           Entire Agreement.  This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior understanding
among such parties.

 

12.9                           Choice of Law.  This Agreement and any and all matters
related to or arising under this Agreement shall be governed by the internal
laws of the State of North Dakota, regardless of any provisions on choice of or
conflicts of law.

 

12.10                     Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document.  All such counterparts will be deemed an
original, will be construed together and will constitute one and the same
instrument.

 

12.11                     Assignment of Registration Rights.  The rights of the Investors
hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, will be automatically assigned by the
Investors to transferees or assignees of all or any portion of the Registrable
Securities, but only if:  (a) the
Investor agrees in writing with

 

10

 

the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written
notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned; (c) after such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act and applicable state securities laws; and (d) at or before
the time the Company received the written notice contemplated by clause (b) of
this sentence, the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein.

 

(Signature page follows)

 

11

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed personally or by a duly authorized representative thereof as of the
day and year first above written.

 

	
  BNCCORP, INC.

  	
   

  	
   

  
	
   

  	
  Printed Name of Investor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

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