EX-99.4 4 a19-5389_1ex99d4.htm EXHIBIT 4

Exhibit 4

 

Bridgewater Bancshares, Inc.

3800 American Blvd West, Suite 100

Bloomington, MN 55431

 

September 1,2015

 

Castle Creek Capital Partners V, LP

6051 E1 Tordo

Rancho Santa Fe, CA 92091

 

Dear Sir/Madam:

 

Reference is made to the Securities Purchase Agreement by and between Bridgewater Bancshares, Inc., a Minnesota corporation (the “Corporation”), and Castle Creek Capital Partners V, LP, a Delaware limited partnership (the “VCOC Investor”), dated as of September 1, 2015 (the “Agreement”), pursuant to which the VCOC Investor agreed to purchase from the Corporation shares of its voting common stock, $0.01 par value per share (the “Common Stock”), and shares of its non-voting common stock, $0.01 par value per share (the “Non-Voting Common Stock” and, together with the Common Stock, the “Securities”). Capitalized terms used herein without definition shall have the respective meanings in the Agreement.

 

For good and valuable consideration acknowledged to have been received, the Corporation hereby agrees that it shall, without limitation or prejudice of any of the rights provided to the VCOC Investor under the Agreement or any other agreement or otherwise, provide the VCOC Investor or its designated representative with:

 

(i)                                     the observation rights set forth in Section 4.20 of the Agreement;

 

(ii)                                  the right to visit and inspect any of the offices and properties of the Corporation and its subsidiaries and inspect the books and records of the Corporation and its subsidiaries at such times as the VCOC Investor shall reasonably request upon three (3) business days’ notice but not more frequently than once per calendar quarter;

 

(iii)                               consolidated balance sheets and statements of income and cash flows of the Corporation and its subsidiaries prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis (A) as of the end of each quarter of each fiscal year of the Corporation as soon as practicable after preparation thereof but in no event later than ninety (90) days after the end of such quarter, and (B) with respect to each fiscal year end statement, as soon as practicable after preparation thereof but in no event later than one hundred and twenty (120) days after the end of such fiscal year together with an auditor’s report thereon; and

 

 

(iv)                              to the extent the Corporation or any of its subsidiaries is required by law or pursuant to the terms of any outstanding indebtedness of the Corporation or any subsidiary to prepare such reports, any annual reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 or otherwise, actually prepared by the Corporation or any of its subsidiaries as soon as available;

 

provided that, in each case, if the Corporation makes the information described in clauses (iii) and (iv) above available through public filings on the EDGAR system or any successor or replacement system of the U.S. Securities and Exchange Commission, the delivery of the information shall be deemed satisfied by such public filings; and

 

(v)                                 make appropriate officers and directors of the Corporation, and its subsidiaries, available periodically and at such times as reasonably requested by the VCOC Investor for consultation with the VCOC Investor or its designated representative, but not more frequently than once per calendar quarter, with respect to matters relating to the business and affairs of the Corporation and its subsidiaries;

 

provided, however, that the rights of the VCOC Investor and obligations of the Corporation described in clauses (i) through (v) above shall not entitle the VCOC Investor to or require the Corporation, or any affiliate of the VCOC Investor or the Corporation, as applicable, to disclose confidential bank supervisory communications, customer financial records or other “exempt records” as defined by 12 C.F.R. Part 309, or reports of examination of any Minnesota-chartered bank, including reports of the Minnesota Department of Commerce and of a bank holding company pursuant to 12 C.F.R. Subpart 6, which information may only be disclosed by the Corporation or any subsidiary of the Corporation in accordance with the provisions and subject to the limitations of applicable law or regulation.

 

If the VCOC Investor’s regular outside counsel determines in writing that other rights of consultation are reasonably necessary under applicable legal authorities promulgated after the date of this agreement to preserve the qualification of VCOC Investor’s investment in the Corporation as a “venture capital investment” for purposes of the United States Department of Labor Regulation published at 29 C.F.R. Section 2510.3-101(d)(3)(i) (the “Plan Asset Regulation”), the Corporation agrees to cooperate in good faith with the VCOC Investor to amend to this letter agreement to reflect such other rights that are mutually satisfactory to the Corporation and the VCOC Investor and consistent with the Federal Reserve Policy Statement on Equity Investments in Banks and Bank Holding Companies; provided that such consultation rights shall be limited to once per calendar quarter.

 

The Corporation agrees to consider, in good faith, the recommendations of the VCOC Investor or its designated representative in connection with the matters on which it is consulted as described above, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Corporation.

 

The VCOC Investor agrees, and will require each designated representative of the VCOC Investor to agree, to hold in confidence and not use or disclose to any third party (other than its

 

 

legal counsel and accountants) any confidential information provided to or learned by such party in connection with the VCOC Investor’s rights under this letter agreement except as may otherwise be required by law or legal, judicial or regulatory process, provided that the VCOC Investor takes reasonable steps to minimize the extent of any such required disclosure.

 

In the event the VCOC Investor transfers all or any portion of its investment in the Corporation to an affiliated entity (or to a direct or indirect wholly-owned conduit subsidiary of any such affiliated entity) that is intended to qualify as a venture capital operating company under the Plan Asset Regulation, such affiliated entity shall be afforded the same rights that the Corporation has afforded to the VCOC Investor hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder.

 

The rights described herein shall terminate and be of no further force or effect upon such time as the VCOC Investor, directly or through one or more Affiliates, ceases to hold any Securities (or any securities into which such Securities may be converted or exchanged).

 

This letter agreement and the rights and the duties of the parties hereto shall be governed by, and construed in accordance with, the laws of the State of Minnesota and may be executed in counterparts, 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 instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

BRIDGEWATER BANCSHARES, INC.

 

 

 

 

By:

/s/ Jerry Baack

 

Name:

Jerry Baack

 

Title:

Chief Executive Officer

 

Agreed and acknowledged as of the date first above written:

 

CASTLE CREEK CAPITAL PARTNERS V, LP

 

 

 

 

By:

/s/ David Volk

 

Name:

David Volk

 

Title:

Principal

 

 

[SIGNATURE PAGE TO VCOC LETTER AGREEMENT]