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                                                                     EXHIBIT 1.1

                         900,000 Shares of Common Stock

                              Glacier Bancorp, Inc.

                             UNDERWRITING AGREEMENT

                                                                  August 3, 2006

D. A. DAVIDSON & CO.
8 Third Street North
The Davidson Building
Great Falls, Montana 59401

Ladies and Gentlemen:

      Glacier Bancorp, Inc., a Montana corporation (the "Company") proposes to
sell to D.A. Davidson & Co. (the "Underwriter"), an aggregate of 900,000 shares
of outstanding common stock, par value $0.01 per share (the "Common Stock"), of
the Company. The 900,000 shares of Common Stock to be sold by the Company are
collectively called the "Firm Common Shares." In addition, the Company has
granted to the Underwriter an option to purchase up to an additional 100,000
shares of Common Stock (the "Optional Common Shares") as provided in Section 2
hereof. The Firm Common Shares and, if and to the extent such option is
exercised, the Optional Common Shares, are collectively called the "Common
Shares."

      The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") an "automatic shelf registration statement," as
defined under Rule 405 of the Securities Act of 1933, as amended (the "Act"), on
Form S-3 (File No. 333-134787), which contains a prospectus used in connection
with the public offering and sale of the Common Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, and the documents incorporated by reference in the prospectus
contained in the registration statement under the Act, and the rules and
regulations promulgated thereunder (collectively, the "Rules and Regulations"),
and including any prospectus supplement and other required information deemed to
be a part thereof pursuant to Rule 430A, Rule 430B or Rule 430C under the Act,
or pursuant to the Securities Exchange Act of 1934, as amended (collectively,
the "Exchange Act"), and the rules and regulations promulgated thereunder, is
called the "Registration Statement;" provided, that in the event of any
amendment thereto before the Closing Date (as hereinafter defined), including a
registration statement (if any) filed pursuant to Rule 462 under the Act, the
term Registration Statement shall include such amendment.

      The prospectus included in the Registration Statement at the time it
became effective is hereinafter called the "Base Prospectus," except that if any
prospectus differs from the prospectus on file at the time the Registration
Statement became effective, the term "Prospectus" shall refer to such differing
prospectus as of and from the time such prospectus is filed with the Commission
pursuant to Rule 424(b), and as of and from the time it is first provided to the
Underwriter by the Company for such

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use. The term "Preliminary Prospectus" as used herein means collectively, (i)
each preliminary prospectus contained in the Registration Statement and (ii) any
preliminary prospectus supplement subject to completion that is filed with the
Commission pursuant to Rule 424(b), including the Sale Preliminary Prospectus.
The term "Sale Preliminary Prospectus" as used herein means the Preliminary
Prospectus dated July 31, 2006. References herein to any Base Prospectus,
Preliminary Prospectus, Sale Preliminary Prospectus or Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such Base
Prospectus, Preliminary Prospectus, Sale Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment or supplement to any Base
Prospectus, Preliminary Prospectus, Sale Preliminary Prospectus or Prospectus
shall be deemed to refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the Common Shares
filed with the Commission pursuant to Rule 424(b) under the Act and any
documents filed after the date of such Base Prospectus, Preliminary Prospectus,
Sale Preliminary Prospectus or Prospectus, as the case may be, under the
Exchange Act and incorporated by reference in such Base Prospectus, Preliminary
Prospectus, Sale Preliminary Prospectus or Prospectus, as the case may be; and
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement.

      "Issuer Free Writing Prospectus" as used herein means any "issuer free
writing prospectus" as defined in Rule 433 under the Act relating to the Common
Shares identified on ANNEX I hereto. "Disclosure Package" as used herein means
the Base Prospectus, Preliminary Prospectus, Sale Preliminary Prospectus,
Prospectus, any Issuer Free Writing Prospectus, and any pricing terms set forth
in ANNEX II to this Agreement.

      For purposes of this Agreement, the term "Subsidiaries" refers to the
entities listed in Exhibit 21 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2005 (the "Form 10-K"), or described in the
Form 10-K, which is incorporated by reference in the Registration Statement, and
the term "Incorporated Documents" refers to those reports filed under the
Exchange Act and incorporated by reference into the Registration Statement,
Disclosure Package, Prospectus, Sale Preliminary Prospectus or Preliminary
Prospectus.

      1. Representations and Warranties of the Company. The Company represents
and warrants to the Underwriter as follows:

      (a) The Registration Statement has been filed with the Commission not
earlier than three years prior to the date hereof; and such Registration
Statement, and any post-effective amendment thereto, became effective on filing.
The Company has complied with all requests of the Commission for additional or
supplemental information. If required by Rule 430A, Rule 430B or Rule 430C under
the Act, the Company will prepare and file a prospectus pursuant to Rule 424(b)
that discloses the

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information required by Rule 430A, Rule 430B or Rule 430C. Copies of the
Registration Statement, the Base Prospectus, each Preliminary Prospectus, the
Sale Preliminary Prospectus and the Prospectus, any amendments or supplements
thereto, and all documents incorporated by reference therein that were filed
with the Commission on or prior to the date of this Agreement (including one
executed copy of the Registration Statement and of each amendment thereto) have
been delivered or made available to the Underwriter.

      (b) No stop order preventing or suspending the effectiveness of the
Registration Statement or the use of any Preliminary Prospectus or any Issuer
Free Writing Prospectus has been issued to the Company by the Commission nor has
the Company received notice that any proceedings have been instituted or, to the
Company's knowledge, threatened for that purpose, and no notice of objection of
the Commission to the use of such Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by
the Company.

      (c) Each of the Base Prospectus, Preliminary Prospectus, Sale Preliminary
Prospectus and Registration Statement, including the documents incorporated by
reference therein, conforms, and the Prospectus and any amendments or
supplements to the Registration Statement or the Prospectus, including the
documents incorporated by reference therein, will, when they become effective or
are filed with the Commission, as the case may be, conform, in all respects to
the requirements of the Act and the Rules and Regulations. The Registration
Statement, at the time it became effective, including the documents incorporated
by reference therein, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; the Prospectus, and any
amendment or supplement thereoto, as of the applicable filing date, and the Sale
Preliminary Prospectus, and any amendment or supplement thereto, as of [-]
Eastern Time on the date of this Agreement (the "Initial Sale Time"), including
the documents incorporated by reference therein, do not and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; the Disclosure
Package, as of the Initial Sale Time, including the documents incorporated by
reference therein, does not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each Issuer Free Writing
Prospectus does not and will not conflict with the information contained in the
Registration Statement, the Sale Preliminary Prospectus or the Prospectus;
provided, that no representation or warranty is made as to information contained
in or omitted from the Registration Statement, the Prospectus, the Sale
Preliminary Prospectus or any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by the
Underwriter specifically for inclusion therein as identified in Section 10
hereof.

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      (d) (i) At the time of filing the Registration Statement, (ii) at the time
of the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or
form of prospectus), and (iii) at the time the Company or any person acting on
its behalf (within the meaning, for this clause only, of Rule 163(c) under the
Act) made any offer relating to the Securities in reliance on the exemption of
Rule 163 under the Act, the Company was (and currently is) a "well-known
seasoned issuer" as defined in Rule 405 under the Act; and (B) at the earliest
time after the filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the Act) of the Securities, the Company was not (and currently
is not) an "ineligible issuer" as defined in Rule 405 under the Act. Other than
written communications approved in advance by the Underwriter or listed in ANNEX
I hereto, the Company has not prepared or used, and will not prepare or use, a
free writing prospectus, as such term is defined in Rule 405 of the Rules and
Regulations (a "Free Writing Prospectus"), in connection with the offering and
sale of the Common Shares.

      (e) There are no contracts, agreements or other documents of the Company
or any Subsidiary that are required to be described in the Disclosure Package,
Sale Preliminary Prospectus and Prospectus or filed as exhibits to the
Registration Statement which have not been so described or filed as required by
the Act and the Rules and Regulations.

      (f) There are no business relationships or related-party transactions
involving the Company or any Subsidiary or any other person required to be
described in the Disclosure Package, Sale Preliminary Prospectus and Prospectus
which have not been described as required.

      (g) The consolidated financial statements of the Company and its
Subsidiaries, together with the notes thereto, filed as part of or incorporated
by reference in the Registration Statement or included or incorporated by
reference in the Disclosure Package, Sale Preliminary Prospectus or Prospectus,
comply in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder and fairly present the financial position
of the Company and its Subsidiaries, as of the dates indicated and the results
of operations and changes in financial position for the periods therein
specified; and said consolidated financial statements have been prepared in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated in the related notes
thereto). No other financial statements or schedules are required to be filed as
part of or incorporated by reference in the Registration Statement or included
or incorporated by reference in the Disclosure Package, Sale Preliminary
Prospectus or Prospectus. The financial information included in the Sale
Preliminary Prospectus and Prospectus under the caption "Selected Historical
Financial Information" presents fairly the information set forth therein at the
dates and for the periods indicated. Pro Forma financial statements are not
required to be included in the Registration Statement or the Sale Preliminary
Prospectus or the

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Prospectus under the Act or the Rules and Regulations. The assumptions used in
preparing pro forma financial statements included in documents incorporated by
reference in the Registration Statement or the Sale Preliminary Prospectus or
the Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.

      (h) BKD, LLP and KPMG LLP, who have expressed their opinions with respect
to certain of the financial statements and the related notes thereto
incorporated in the Disclosure Package, Sale Preliminary Prospectus and the
Prospectus, and who have audited the Company's internal control over financial
reporting and management's assessment thereof, are independent registered public
accountants with respect to the Company as required by the Act and the Rules and
Regulations.

      (i) The Company and each Subsidiary maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for its assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

      (j) This Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the rights of creditors generally and by equitable
principles, and except as obligations of the Company under the indemnification
provisions hereof may be limited under federal or state securities laws and
public policy relating thereto.

      (k) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby, will not
(i) result in a breach or violation of any of the terms and 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 or encumbrance upon any property or assets of the Company or
its Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement, instrument, franchise,
license or permit to which the Company or any Subsidiary is a party or by which
it is bound, or to which any of the property or assets of the Company or any
Subsidiary is subject, or (ii) violate any judgment, decree, order, statute,
rule or regulation of any court or any governmental or regulatory agency or
body, or any arbitrator, having jurisdiction over the Company or any of its
Subsidiaries or any of their respective properties or assets, which breaches,

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violations, defaults or liens would have a material adverse effect upon the
condition (financial or otherwise), earnings, operations, results of operations,
management, properties, business or business prospects of the Company and its
Subsidiaries, taken as a whole (a "Material Adverse Effect"); or (iii) violate
or conflict with any provision of the articles or certificate of incorporation,
charter, bylaws or other governing documents of the Company or any of its
Subsidiaries. No consent, approval, authorization, order or decree of any court
or governmental or regulatory agency or body, or any arbitrator having
jurisdiction over the Company or its Subsidiaries or any of their respective
properties or assets is required for the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby,
except (i) such as have been made or obtained under the Act, (ii) as may be
required under state securities or blue sky laws or (iii) such as may be
required pursuant to the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD").

      (l) The Common Shares have been duly authorized and, when issued and
delivered against payment therefor as provided in this Agreement, will be duly
and validly issued, and fully paid and nonassessable and free of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company; and there are no persons with registration
or other similar rights to have any equity or debt securities registered for
sale under the Registration Statement or included in the offering contemplated
by this Agreement, except for such rights as have been duly waived.

      (m) Other than as contemplated by this Agreement or described in each of
the Sale Preliminary Prospectus and the Prospectus, the Company has not incurred
any liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.

      (n) The Common Shares have been approved to be quoted on the Nasdaq
Global Select under the symbol "GBCI."

      (o) The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Montana, is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended, and is
qualified and licensed to do business and is in good standing as a foreign
corporation in each other jurisdiction in which the ownership or leasing of
properties or the conduct of its business requires such qualification and
licensing, except where failure to be so qualified or licensed would not have a
Material Adverse Effect. Each Subsidiary has been duly organized and is in good
standing as a corporation and a state-chartered bank (except for First National
Bank-West, which is a national banking association) under the laws of its
jurisdiction of organization and is qualified and licensed to do business and is
in good standing as a foreign corporation and a state-chartered bank in each
jurisdiction in which the ownership or leasing of properties or the conduct of
its business requires such qualification and licensing, except where failure to
be so qualified or licensed would not have a Material Adverse

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Effect. The Company and its Subsidiaries have all requisite power and authority
to own their respective properties and to conduct their respective businesses as
currently being carried on and as described in the Registration Statement, the
Disclosure Package and the Prospectus.

      (p) The authorized, issued and outstanding capital stock of the Company is
as set forth in the consolidated balance sheet of the Company as of March 31,
2006 included in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2006, and incorporated by reference into the Registration
Statement, Disclosure Package, Sale Preliminary Prospectus and Prospectus (other
than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Incorporated Documents or upon exercise of outstanding options
pursuant to stock option plans or upon exercise of warrants described in the
Incorporated Documents). The Common Stock conforms in all material respects to
the description thereof incorporated by reference into each of the Registration
Statement, Sale Preliminary Prospectus and the Prospectus. All of the issued and
outstanding shares of Common Stock have been, and the Common Shares to be sold
by the Company pursuant hereto will be, duly authorized and validly issued,
fully paid and nonassessable and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its Subsidiaries other than those described in the
Incorporated Documents. The description of the Company's stock option, stock
bonus and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Incorporated Documents accurately and
fairly summarize, in all material respects, such plans, arrangements, options
and rights.

      (q) The Company does not own or control, directly or indirectly, any
corporation, limited liability company, trust, or other entity required to be
listed in Exhibit 21 to the Form 10-K that is not so listed (or described in the
Form 10-K).

      (r) All the outstanding shares of capital stock, debentures, membership
interests or partnership interests of each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and have been issued
in compliance with all federal and state securities laws. Such shares of capital
stock, debentures, membership interests or partnership interests were not issued
in violation of any preemptive right, resale right, right of first refusal or
similar right; and all outstanding shares of capital stock, debentures,
membership interests or partnership interests of the Subsidiaries are owned by
the Company either directly or through wholly-owned Subsidiaries free and clear
of any security interests, claims, liens, charges or encumbrances.

      (s) Except for restrictions imposed by (i) applicable loan or credit
facilities or (ii) applicable law, no Subsidiary is currently restricted,
directly or

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indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock or membership or partnership
interests, or from repaying any loans or advances made by the Company to such
Subsidiary, and no Subsidiary is restricted from transferring any of its
property or assets to the Company.

      (t) Neither the Company nor any Subsidiary is (i) in violation of its
articles or certificate of incorporation, charter, bylaws or other governing
documents, (ii) in violation of any judgment, decree, order, statue, rule or
regulation of any court or any governmental or regulatory agency or body, or any
arbitrator, having jurisdiction over the Company or any of its Subsidiaries or
any of their respective properties or assets, except for violations that,
individually or in the aggregate, would not have a Material Adverse Effect, or
(iii) in violation, breach or default of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other material agreement, instrument, franchise, license or
permit to which the Company or any such Subsidiary is a party or by which it is
bound, or to which any of the property or assets of the Company or any such
Subsidiary is subject, where any such violation, breach or default would have,
individually or in the aggregate, a Material Adverse Effect.

      (u) The Company and its Subsidiaries have good and marketable title in fee
simple to all real property, and good and marketable title to all items of
personal property, described as being owned by them in the Incorporated
Documents that are material to the respective businesses of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and
defects, except as (i) do not materially interfere with the current or
reasonably anticipated use of such properties; (ii) described in the
Incorporated Documents (including pursuant to any credit facility, or document
entered into in connection therewith); or (iii) would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
and any real and personal property held under leases by the Company and its
Subsidiaries are held by them under valid and enforceable leases with such
exceptions as are not material and do not materially interfere with the use of
such properties by the Company and its Subsidiaries.

      (v) Each of the Company and its Subsidiaries owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by them as described in the Incorporated Documents. None
of the Company or its Subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how that, if such assertion of infringement or
conflict were sustained, would have a Material Adverse Effect.

      (w) Except to the extent that the Company is self-insured as described in
the Incorporated Documents, the Company and its Subsidiaries have insurance
coverage in such amounts and with such deductibles and covering such risks that
the

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Company deems to be adequate to protect the Company and its Subsidiaries and
their respective businesses and as are customary for their respective businesses
including, policies covering real and personal property owned or leased by the
Company and its Subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes, general liability and directors' and officers'
liability. The Company has no reason to believe that it or any Subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not have a Material Adverse Effect. Neither the Company nor
any Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied during the last five years. There are no material 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. The Company and its Subsidiaries have in effect
performance and payment bonds that the Company deems to be adequate for the
conduct of their respective businesses as currently conducted, and neither the
Company nor any of its Subsidiaries has knowledge that it will not be able to
renew its existing performance and payment bonds or obtain new bonds as may be
necessary to continue its business.

      (x) The Company and its Subsidiaries have filed all federal, state, local,
or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes pursuant to the Internal Revenue Code of 1986, as amended (the
"Code"), Section 59A), customs, duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax (collectively "Tax" or
"Taxes") returns, declarations, reports, claims for refund, or information
return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof (collectively, "Tax Returns") and
have paid or made provision for the payment of all Taxes required to be paid by
any of them (whether or not shown on any Tax Return) and, if due and payable,
any related assessment, fine, penalty, or addition thereto, whether disputed or
not, and including any obligations to indemnify or otherwise assume or succeed
to the Tax liability of any other person other than those that, if not paid
would not, individually or in the aggregate, have a Material Adverse Effect. The
Company has made adequate charges, accruals and reserves in the financial
statements referred to in Section 1(g) above in respect of all Taxes for all
periods as to which the Tax liability or obligation of the Company or any of its
Subsidiaries has not been finally determined. The Company has no knowledge of
any Tax deficiency asserted or threatened against the Company that would
reasonably be expected to have a Material Adverse Effect.

      (y) The Company and each of its Subsidiaries have all consents, approvals,
authorizations, orders, registrations, qualifications, certificates, franchises,
licenses and permits issued by the appropriate public, regulatory or
governmental agencies and bodies, material to the ownership of their respective
properties and

                                        9
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conduct of their respective businesses as now being conducted and as described
in the Incorporated Documents. The conduct of the business of the Company and
each of the Subsidiaries is in compliance with all applicable federal, state,
local and foreign laws and regulations, except where failure to be so in
compliance would not have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such consents, approvals,
authorizations, orders, registrations, qualifications, certificates, franchises,
licenses and permits which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would reasonably be expected to have
a Material Adverse Effect.

      (z) Since the date as of which information was given in the Sale
Preliminary Prospectus through the date hereof, and except as otherwise
disclosed in the Incorporated Documents, (i) there has been no change or
development that could reasonably be expected to have a Material Adverse Effect
(a "Material Adverse Change"); (ii) there have been no transactions entered into
by the Company or its Subsidiaries which would materially affect the Company or
its Subsidiaries, taken as a whole; (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on its equity
securities; (iv) neither the Company nor any Subsidiary has incurred any
material liabilities or obligations, indirect, direct or contingent; and (v)
there has not been (A) any issuance of warrants, convertible securities or other
rights to purchase equity securities of the Company or the capital stock or
membership or other equity interests of any Subsidiary, or (B) any material
increase in the short-term or long-term debt (including capitalized lease
obligations) of the Company or any Subsidiary, other than borrowings after such
dates under the credit facilities described in the Incorporated Documents;
except, in the case of each of clauses (ii) and (iv), pursuant to contracts
related to construction projects awarded to the Company in the ordinary course
of business. Neither the Company nor any of its Subsidiaries has any contingent
liabilities which are not disclosed in the Incorporated Documents that are
material to the Company and its Subsidiaries, taken as a whole.

      (aa) There is not pending or, to the knowledge of the Company, threatened
or contemplated, any investigation, action, suit or proceeding to which the
Company or any Subsidiary is a party or to which any of their assets may be
subject, before or by any court or governmental agency, authority or body,
domestic or foreign, or any arbitrator, the disposition of which, individually
or in the aggregate, would reasonably be expected to (i) have a Material Adverse
Effect, or (ii) materially and adversely affect the Company's performance under
this Agreement or the consummation of any of the transactions contemplated
hereby; and there are no current or pending actions, suits or proceedings that
are required under the Securities Act to be described in the Sale Preliminary
Prospectus and in the Prospectus that are not so described.

      (bb) None of the Company or any Subsidiary is, nor will any of them be,
after giving effect to the offer and sale of the Common Shares, an "investment
company" or an entity "controlled" by an "investment company" within the meaning

                                       10
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of the Investment Company Act of 1940, as amended (the "Investment Company
Act").

      (cc) Neither the Company nor any of its affiliates has taken, directly or
indirectly, any action designed to cause or result in the stabilization or
manipulation of the price of the Common Stock to facilitate the resale of the
Common Shares. The Company acknowledges that the Underwriter may engage in
passive market making transactions in the Common Stock on the Nasdaq Global
Select Market in accordance with Regulation M under the Exchange Act.

      (dd) All offers and sales of the Company's capital stock prior to the date
hereof were at all relevant times (i) duly registered under the Act, and duly
qualified or registered under the requirements of all applicable state
securities or Blue Sky laws, or (ii) exempt from the registration requirements
of the Act, and were the subject of an available exemption from the registration
requirements of all applicable state securities or Blue Sky laws; and all
offering materials prepared in connection therewith did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

      (ee) Each of the Company and its Subsidiaries, and each "employee benefit
plan" (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA")) for which the Company and its Subsidiaries
or their "ERISA Affiliates" (as defined below) have any liability (each, a
"Plan"), are in compliance in all material respects with all applicable
statutes, rules and regulations, including ERISA and the Code. "ERISA Affiliate"
means, with respect to the Company or a Subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company or such Subsidiary is a member. With respect to each Plan subject to
Title IV of ERISA, (a) no "reportable event" (as defined in ERISA) has occurred
or is reasonably expected to occur, (b) no "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived, has occurred or is reasonably expected to occur, (c) the fair
market value of the assets under each Plan exceeds the present value of all
benefits accrued under such Plan (determined based on those assumptions used to
fund such Plan), and (d) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under (i) Title IV of
ERISA (other than contributions to the Plan or premiums to the Pension Benefit
Guaranty Corporation in the ordinary course and without default) in respect of a
Plan (including a "multiemployer plan" within the meaning of Section 4001(c)(3)
of ERISA), or (ii) Sections 412 or 4971 of the Code. Each Plan that is intended
to be qualified under Section 401(a) of the Code is so qualified, and nothing
has occurred or is expected to occur, whether by action or by failure to act,
which would cause the loss of such qualification.

      (ff) To the knowledge of the Company, no hazardous substances, hazardous
wastes, pollutants or contaminants (i) have been released, deposited or

                                       11
<PAGE>

disposed of in, on or under any properties during the period in which the
Company or any Subsidiary has owned, leased, managed, controlled or operated
such properties; or (ii) have been released, deposited or disposed of by or on
behalf of the Company in, on or under any such properties, in the case of each
of clauses (i) and (ii) in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any release, violation or remedial action (other
than remedial actions of the type routinely carried out at facilities of like
character to those operated by the Company and its Subsidiaries) which would not
have, or would not be reasonably expected to have, individually or in the
aggregate with all such releases, violations or remedial actions, a Material
Adverse Effect. To the knowledge of the Company, neither the Company nor its
Subsidiaries is in violation of any federal or state law or regulation relating
to occupational safety and health or to the storage, handling or transportation
of hazardous or toxic material; and the Company and its Subsidiaries, have
received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct their respective businesses, and each of the
Company and its Subsidiaries, are in compliance with all terms and conditions of
any such permit, license or approval.

      (gg) No labor disturbance by the employees of the Company or any of its
Subsidiaries that would reasonably be expected to have a Material Adverse Effect
exists or, to the knowledge of the Company, is contemplated or threatened.

      (hh) The Company and its Subsidiaries are in compliance in all material
respects with all applicable laws administered by, and regulations of, the Board
of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation ("FDIC"), the Office of the Comptroller of the Currency, the
applicable state banking authorities, and any other regulatory authority having
jurisdiction over them, as the case may be (the "Bank Regulatory Authorities"),
the failure to comply with which would have a Material Adverse Effect. Other
than the Bank Regulatory Authorities, neither the Company nor its Subsidiaries
is subject to regulation as a bank holding company or a bank, respectively, by
any other governmental authority. Neither the Company nor its Subsidiaries is a
party to any written agreement or memorandum of understanding with, or a party
to any commitment letter or similar undertaking to, or is subject to an order or
directive by, or is a recipient of any extraordinary supervisory letter from any
Bank Regulatory Authority, specifically directed at the Company or it
Subsidiaries, which restricts the conduct of its business, or in any manner
relates to its capital adequacy, its credit policies or its management, nor have
the Company and its Subsidiaries, been advised in writing by any Bank Regulatory
Authority that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission, specifically directed at the Company or its Subsidiaries.
The Company and its Subsidiaries, and their respective operations, comply in all
material respects with all applicable laws and regulations, including, without
limitation, those relating to the practice of banking. The accounts of each
Subsidiary are insured by the FDIC up to the

                                       12
<PAGE>

maximum applicable amount in accordance with the rules and regulations of the
FDIC, and no proceedings for the termination or revocation of such membership or
insurance are pending, or, to the knowledge of the Company, threatened.

      (ii) No report or application filed (after giving effect to any amendments
thereto) by the Company or any Subsidiary with the Bank Regulatory Authorities
(each such report or application, together with all exhibits thereto, a
"Regulatory Report"), as of the date it was filed (after giving effect to any
amendments thereto), contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading when made or failed to comply in all material
aspects with the applicable requirements of the Bank Regulatory Authorities, as
the case may be. The Company and each Subsidiary have filed each Regulatory
Report that they were required to file with any Bank Regulatory Authorities
which is material to or could reasonably be expected to be material to the
business, operations, or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.

      (jj) Each of the Subsidiaries has properly administered, in accordance
with the terms of the governing documents and applicable state and federal law
and regulation and common law, in all respects material and which could
reasonably be expected to be material to the business, operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
all accounts for which it acts as a fiduciary, including, but not limited to,
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor. Neither any of the
Subsidiaries nor any director, officer or employee of any Subsidiary has
committed any breach of trust with respect to any such fiduciary account which
is material to or could reasonably be expected to be material to the business,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, and the accountings for each such fiduciary
account are true and correct in all respects material to the business,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, and accurately reflect the assets of such
fiduciary account in all respects material to the business, operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole.

      (kk) The Plan and Agreement of Merger dated April 20, 2006 between the
Company and Citizens Development Company, and the Plan and Agreement of Merger
dated May 31, 2006 between the Company and First National Bank of Morgan
(collectively, the "Merger Agreements"), have been duly authorized, executed and
delivered by the Company and constitute the valid and binding agreements of the
Company, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights generally or by general principles of equity (regardless of
whether considered in equity or at law). The Company has delivered to the
Underwriter and their counsel true, complete and correct copies of the Merger
Agreements, together with all exhibits and schedules thereto and all
instruments, agreements and documents

                                       13
<PAGE>

delivered in connection therewith or in connection with the transactions
contemplated thereby.

      (ll) The Company and its Subsidiaries maintain a system of "internal
control over financial reporting" (as such term is defined in Rule 13a-15(f)
under the Exchange Act). The Company's and its Subsidiaries' internal control
over financial reporting is effective and the Company and its Subsidiaries are
not aware of any material weaknesses in its internal control over financial
reporting.

      (mm) The Company and its Subsidiaries have established and maintain and
evaluate "disclosure controls and procedures" (as such term is defined in Rule
13a-15 (e) under the Exchange Act; such disclosure controls and procedures are
designed to ensure that material information relating to the Company, and its
Subsidiaries, required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is made known to the Company's Chief
Executive Officer and its Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are effective in providing
reasonable assurance that material information relating to the Company and its
Subsidiaries is made known to such persons, including during the period when the
Company prepares its periodic reports to be filed with or furnished to the
Commission. The Company does not have knowledge of (a) any material weaknesses
in its or its Subsidiaries' internal controls over financial reporting or (b)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company's or its Subsidiaries' internal
controls.

      (nn) All statistical or market-related data included in the Disclosure
Package, Sale Preliminary Prospectus or the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required.

      (oo) To the Company's knowledge, there are no affiliations or associations
between any member of the NASD and any of the Company's officers, directors or
5% or greater securityholders that are required to be described in the Sale
Preliminary Prospectus and the Prospectus and that are not so described as
required.

      (pp) Neither the Company nor any of its Subsidiaries 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 any of its Subsidiaries
has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii)
made any direct or indirect unlawful payment to any government official or
employee from corporate funds; or (iii) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

      (qq) Neither the Company, its Subsidiaries nor any of their respective
officers, directors or affiliates have caused any person, other than the
Underwriter, to be entitled to reimbursement or compensation of any kind,
including, without

                                       14
<PAGE>

limitation, any compensation that would be includable as underwriter
compensation under the NASD's Corporate Financing Rule with respect to this
offering, as a result of the consummation of this offering based on any activity
of such person as a finder, agent, broker, investment adviser or other financial
service provider.

      (rr) There are no persons with registration rights or other similar rights
to have any securities (debt or equity) (A) registered pursuant to the
Registration Statement or included in the offering contemplated by this
Agreement or (B) otherwise registered by the Company under the Act. There are no
persons with tag-along rights or other similar rights to have any securities
(debt or equity) included in the offering contemplated by this Agreement or sold
in connection with the sale of Common Shares by the Company pursuant to this
Agreement.

      (ss) Each of the Company's executive officers and directors has executed
and delivered to the Underwriter a lock-up agreement in the form of EXHIBIT B
hereto. EXHIBIT A hereto contains a true, complete and correct list of all
executive officers and directors of the Company.

      (tt) The outstanding shares of Common Stock and the Common Shares being
sold hereunder by the Company have been approved for listing, subject only to
official notice of issuance, on the Nasdaq Global Select Market.

      (uu) To the Company's knowledge, the Company is in compliance with all of
the provisions of the Sarbanes-Oxley Act of 2002 that are currently applicable
to it and all of the provisions of the Act, the Exchange Act and the Rules and
Regulations promulgated pursuant to such Act and Exchange Act that are currently
applicable to the Company.

      (vv) The Company acknowledges and agrees that the Underwriter is acting
solely in the capacity of an arm's length contractual counterparty to the
Company with respect to the offering of the Common Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as
a financial advisor, agent or fiduciary to the Company. Additionally, the
Underwriter is not advising the Company as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company has consulted
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriter shall have no responsibility or
liability to the Company with respect thereto. Any review by the Underwriter of
the Company, the transactions contemplated hereby or other matters relating to
such transactions will be performed solely for the benefit of the Underwriter
and shall not be on behalf of the Company.

      2. Purchase, Sale and Delivery of Common Stock.

      (a) On the basis of the representations, warranties and agreements herein
contained, and on the terms but subject to the conditions herein set forth, the
Company agrees to sell to the Underwriter, and the Underwriter agrees to
purchase

                                       15
<PAGE>

from the Company, an aggregate of 900,000 Common Shares. The purchase price per
share of Common Stock to be paid by the Underwriter to the Company shall be
$29.4325.

      (b) Delivery of the Firm Common Shares to be purchased by the Underwriter
against payment therefor shall be made as provided in this Section 2 at 8:00
a.m. Mountain time on August 9, 2006 or at such other time and date not later
than August 9, 2006 as the Underwriter shall designate by notice to the Company,
such time and date of payment and delivery being herein called the "Closing
Date."

      (c) In addition, on the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Company hereby grants an option to the Underwriter to
purchase the Optional Common Shares from the Company at the purchase price per
share to be paid by the Underwriter for the Firm Common Shares. The option
granted hereunder is for use by the Underwriter solely in covering any
over-allotments in connection with the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time or from time
to time upon notice by the Underwriter to the Company, which notice may be given
at any time within 30 days from the date of this Agreement. The time and date of
delivery of the Optional Common Shares, if subsequent to the Closing Date, is
referred to herein as the "Option Closing Date" and shall be determined by the
Underwriter and shall not be earlier than one nor later than five full business
days after delivery of such notice of exercise. The Underwriter may cancel the
option at any time prior to its expiration by giving written notice of such
cancellation to the Company.

      (d) Payment for the Common Shares shall be made at the Closing Date (and,
if applicable, at the Option Closing Date) by wire transfer of immediately
available funds to the order of the Company.

      (e) The Company hereby agrees that it will pay all stock transfer taxes,
stamp duties and other similar taxes, if any, payable upon the sale or delivery
of the Common Shares to be sold by the Company to the Underwriter, or otherwise
in connection with the performance of the Company's obligations hereunder.

      (f) The Company shall deliver, or cause to be delivered, a credit
representing the Firm Common Shares to an account or accounts at DTC, as
designated by the Underwriter at the Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company also shall deliver, or cause to be
delivered, a credit representing the Optional Common Shares that the Underwriter
has agreed to purchase at the Closing Date (or the Option Closing Date, as the
case may be), to an account or accounts at DTC as designated by the Underwriter,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriter hereunder.

                                       16
<PAGE>

      (g) Not later than 12:00 noon on the second business day following the
date the shares of Common Stock are released by the Underwriter for sale to the
public, the Company shall deliver or cause to be delivered copies of the
Prospectus in such quantities and at such places as the Underwriter shall
reasonably request.

      3. Offering by the Underwriter.

      The Underwriter hereby advises the Company that the Underwriter intends to
offer for sale to the public, as described in the Sale Preliminary Prospectus
and the Prospectus, the Firm Common Shares (and Optional Common Shares, as the
case may be) as soon after this Agreement has been executed as the Underwriter,
in its sole judgment, has determined is advisable and practicable.

      4. Covenants.

A. Covenants of the Company.

      The Company covenants and agrees with the Underwriter as follows:

      (a) The Company will notify the Underwriter promptly (i) of the time when
the Registration Statement or any post-effective amendment to the Registration
Statement has become effective; (ii) any supplement to the Prospectus or the
Sale Preliminary Prospectus has been filed; (iii) of the receipt of any comments
from the Commission; and (iv) of any request by the Commission for any amendment
or supplement to the Registration Statement, Prospectus or the Sale Preliminary
Prospectus or additional information. If required by Rule 430A, Rule 430B and
Rule 430C of the Rules and Regulations, the Company will prepare and file a
Prospectus containing the information required by Rule 430A, Rule 430B and Rule
430C with the Commission within the time period required by, and otherwise in
accordance with the provisions of, Rules 424(b) and 430A, Rule 430B and Rule
430C, if applicable. If the Company has elected to rely upon Rule 462 of the
Rules and Regulations, the Company will prepare and file a registration
statement with the Commission within the time period required by, and otherwise
in accordance with the provisions of, Rule 462. The Company will not file any
amendment or supplement to the Registration Statement, Disclosure Package,
Prospectus or the Sale Preliminary Prospectus which is not in compliance with
Sections 424(b), 430A, Rule 430B and Rule 430C or 433 of the Act or to which the
Underwriter shall reasonably object by notice to the Company after having been
furnished a copy thereof a reasonable time prior to the filing.

      (b) The Company will advise the Underwriter, promptly after the Company
receives notice or obtains knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Common Shares for offering or sale in
any jurisdiction or quoted for trading on the Nasdaq Global Select Market, or of
the initiation or, to the Company's knowledge, threatening of any proceeding for
any such purpose; and the Company will use its best efforts to prevent the
issuance of any

                                       17
<PAGE>

stop order or suspension or to obtain its withdrawal if such a stop order or
suspension should be issued.

      (c) During the period beginning on the Initial Sale Time and ending on the
later of the Closing Date or such date, as in the opinion of the Underwriter,
the Prospectus is no longer required by law to be delivered in connection with
sales by the Underwriter or a dealer (the "Distribution Period"), the Company
will comply with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
effect, so far as necessary to permit the sale and distribution of the Common
Shares by the Underwriter as contemplated by the provisions hereof and the
Prospectus. If, during the Distribution Period the Sale Preliminary Prospectus
is being used to solicit offers to purchase Common Shares at a time when the
Prospectus is not yet available and any event shall occur or condition exist as
a result of which it is necessary to amend or supplement the Sale Preliminary
Prospectus in writing in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if, in the
opinion of counsel for the Underwriter, it is necessary to amend or supplement
the Sale Preliminary Prospectus to comply with applicable law, the Company shall
promptly prepare, file with the Commission and furnish, at its own expense, to
the Underwriter and to any dealer upon request, either amendments or supplements
to the Sale Preliminary Prospectus so that the statements in the Sale
Preliminary Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Sale Preliminary Prospectus is delivered to a
prospective purchaser, be misleading or so that the Sale Preliminary Prospectus,
as amended or supplemented, will comply with applicable law. If during the
Distribution Period any event occurs, or fails to occur, as a result of which,
in the judgment of the Company or in the opinion of the Underwriter, (i) the
Prospectus would include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or (ii) it becomes necessary to
amend the Registration Statement or supplement the Prospectus to comply with the
Act, then the Company will promptly notify the Underwriter and will prepare and
file with the Commission, and furnish at its own expense to the Underwriter, an
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the Act.

      (d) The Company shall cooperate with the Underwriter and its counsel in
endeavoring to qualify the Common Shares for offering and sale under (or obtain
exemptions from the application of) the applicable securities laws of such
states and other jurisdictions of the United States as the Underwriter may
reasonably designate; provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would become subject to
service of general process, to qualification to do business as a foreign entity,
to registration as a securities dealer or to taxation as a foreign corporation.
In each jurisdiction in which the Common Shares have been so qualified, the
Company will file such statements and reports as

                                       18
<PAGE>

may be required to be filed by it by the laws of such jurisdiction to continue
such qualification in effect so long as required for the distribution of such
securities.

      (e) During the Distribution Period, the Company shall furnish to the
Underwriter copies of (i) the Registration Statement as originally filed
(including all exhibits filed therewith), each amendment thereto (without
exhibits) and (ii) each of the Preliminary Prospectuses, the Prospectus and all
amendments and supplements thereto, in each case as soon as available and, with
respect to the documents in clause (ii), in such quantities as the Underwriter
may from time to time reasonably request.

      (f) For a period of two years commencing with the date hereof, the Company
will furnish to the Underwriter copies of all documents, reports and other
information furnished by the Company to the holders of its Common Stock
generally except, in each case, if available on the Commission's Electronic Data
Gathering, Analysis and Retrieval System.

      (g) The Company shall make generally available to holders of the Common
Stock as soon as practicable, but in any event not later than 18 months after
the "effective date of the Registration Statement" (as defined in Rule 158(c))
of the Rules and Regulations), an earnings statement (which need not be audited)
complying with Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).

      (h) The Company will use the net proceeds received by it from the sale of
the Common Shares in the manner specified in the Prospectus under "Use of
Proceeds."

      (i) The Company shall not take, directly or indirectly, prior to the
termination of the offering contemplated by this Agreement, any action designed
to or which might reasonably be expected to cause or result in the stabilization
or manipulation of the price of the Common Stock to facilitate the sale or
resale of the Common Shares.

      (j) For so long as the shares of Common Stock sold in the offering
contemplated by this Agreement are listed on the Nasdaq Global Select Market or
a comparable securities exchange or market, the Company shall engage and
maintain a registrar and transfer agent for the Common Stock.

      (k) The Company shall file, on a timely basis, with the Commission all
reports and documents required to be filed under the Exchange Act during the
Distribution Period.

      (l) For a period of 60 days after the date of the Prospectus (the "Lock-Up
Period") neither the Company nor any of its executive officers or directors
shall, without the prior written consent of the Underwriter, (1) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
any Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or

                                       19
<PAGE>

other rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock, or enter into a transaction that
would have the same effect; or enter into any swap, hedge or other arrangement
that transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such aforementioned transaction is to
be settled by delivery of the Common Stock or such other securities, in cash or
otherwise; (2) publicly disclose the intention to make any such offer, sale,
hypothecation, pledge, grant or disposition, or to enter into any such
transaction, swap, hedge or other arrangement; or (3) file or cause to be
declared effective a registration statement under the Act relating to the offer
and sale of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock; provided, however, that the foregoing
restrictions do not apply to (i) the registration of the Common Shares and the
sales thereof to the Underwriter pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as outstanding
in the Prospectus and the Incorporated Documents, (iii) the grant of employee
stock options not exercisable during the Lock-Up Period pursuant to stock option
plans and described in the Incorporated Documents, (iv) the issuance by the
Company of Common Stock pursuant to the terms of the Merger Agreements, and (v)
transfers of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock by any of the persons subject to a lock-up
agreement (a) as a bona fide gift or gifts, (b) by will or intestacy or (c) to
any member of such person's immediate family or a trust created for the direct
or indirect benefit of such person or the immediate family thereof, provided
that, in any such case, the transferee or transferees shall execute and deliver
to the Underwriter, before such transfer, an agreement to be bound by the
restrictions on transfer described above; provided, further, that, if (x) within
17 days of the expiration of the Lock-Up Period, the Company issues an earnings
release or discloses material news, or a material event relating to the Company
occurs, or (y) before the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, then in any such case the
restrictions imposed by this Section 4(A)(l) shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release, the disclosure of the material news or the occurrence of the material
event; provided, moreover, that the foregoing clause shall not apply if the
Company delivers to the Underwriter, not sooner than 18 nor later than 16 days
before the last day of the Lock-Up Period, a certificate, signed by the chief
financial officer or chief executive officer of the Company, certifying on
behalf of the Company that the shares of Common Stock are "actively traded
securities," as defined in Rule 101(c)(1) of Regulation M under the Exchange
Act.

      (m) The Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by existing
Lock-Up Agreements for the duration of the periods contemplated in such
agreements.

      (n) The Company shall not, without the prior written consent of the
Underwriter, prepare or use a Free Writing Prospectus in connection with the
offering

                                       20
<PAGE>

and sale of the Common Shares or take any actions that would require the Company
or the Underwriter to file a Free Writing Prospectus pursuant to Rule 433 of the
Rules and Regulations. The Company has complied and will comply with the
requirements of Rule 433 under the Act applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission, or retention where
required, and legending. The Company agrees that if at any time following
issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a
result of which such Issuer Free Writing Prospectus would conflict with the
information in the Registration Statement, the Sale Preliminary Prospectus or
the Prospectus or would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances then prevailing, not misleading, the Company will
give prompt notice thereof to the Underwriter and, if requested by the
Underwriter, will prepare and furnish without charge to the Underwriter an
Issuer Free Writing Prospectus or other document which will correct such
conflict, statement or omission; provided, however, that this representation and
warranty shall not apply to any statements or omissions in an Issuer Free
Writing Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter expressly for use therein
as identified in Section 10 hereof.

B. Covenant of the Underwriter. The Underwriter agrees that, without the prior
written consent of the Company, it will not make any offer relating to the
Common Shares that would constitute a Free Writing Prospectus required to be
filed by the Company or the Underwriter with the Commission or retained by the
Company under Rule 433 of the Act. The Company and the Underwriter each
represent and agree that any such Free Writing Prospectus, the use of which has
been consented to by the Company and the Underwriter, is listed on ANNEX I.

      5. Costs and Expenses.

      (a) Whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, the Company will pay or cause to be paid all
costs, fees and expenses incident to the performance of its obligations
hereunder, including, without limitation, (i) all expenses (including transfer
taxes allocated to the respective transferees) incurred in connection with the
issuance, transfer and delivery of the Common Shares; (ii) all expenses and fees
(including fees and expenses of the Company's accountants and counsel but,
except as otherwise provided below, not including fees and expenses of the
Underwriter's counsel) in connection with the preparation, printing, filing,
delivery and shipping of the Registration Statement, each Preliminary
Prospectus, and the Prospectus; (iii) all filing fees and reasonable fees and
disbursements of the Underwriter's counsel incurred in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) the Common Shares for offering and sale by the Underwriter or
by dealers under the securities or blue sky laws of the states and other
jurisdictions which the Underwriter shall designate; (iv) the fees and expenses
of the transfer agent and registrar; (v) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriter in connection with,
any required review by

                                       21
<PAGE>

the NASD of the terms of the sale of the Common Shares; and (vi) fees incurred
to quote the Common Shares for trading on the Nasdaq Global Select Market.
Whether or not the transactions contemplated hereunder are consummated or this
Agreement is terminated, the Company will pay or cause to be paid (i) any fees
and expenses of counsel for the Company and (ii) all expenses and taxes incident
to the sale and delivery of the Common Shares by the Company.

      (b) Except as provided in this Section 5, Section 7, and Section 9(b), the
Underwriter will pay all of its own costs and expenses, including, without
limitation, transfer taxes on the resale of any shares of Common Stock by the
Underwriter and any advertising expenses incurred in connection with any offers
that they may make.

      (c) If the sale of the Common Stock provided for herein is not consummated
for any reason, then the Company shall reimburse the Underwriter for all
out-of-pocket disbursements (including, without limitation, reasonable fees and
disbursements of counsel for the Underwriter) incurred by the Underwriter in
connection with its investigation, preparing to market and marketing the Common
Stock or in contemplation of performing its obligations hereunder.

      6. Conditions of Underwriter's Obligations.

      The obligations of the Underwriter to purchase and pay for the Firm Common
Shares as provided herein on the Closing Date and, with respect to the Optional
Common Shares, the Option Closing Date, are subject to the accuracy of the
Company's representations and warranties set forth in Section 1 hereof, as of
the date hereof and at the Closing Date (as if made at the Closing Date) and,
with respect to the Optional Common Shares, as of the Option Closing Date (as if
made at the Option Closing Date), to the timely performance by the Company of
its covenants and other obligations hereunder, and to the following additional
conditions:

      (a) The Registration Statement shall have become effective prior to the
execution of this Agreement or at such later time and date as the Underwriter
shall have approved in writing, and all filings required by Rules 424 and 430A
of the Rules and Regulations shall have been timely made; the Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) under the Act within
the applicable time period prescribed for such filing by the rules and
regulations under the Act; any material required to be filed by the Company
pursuant to Rule 433(d) under the Act shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule 433; no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission and no notice of objection
of the Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been
received; no stop order suspending or preventing the use of the Prospectus or
any Issuer Free Writing Prospectus shall have been initiated or threatened by
the Commission; all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction; and

                                       22
<PAGE>

the NASD shall have raised no objection to the fairness and reasonableness of
the underwriting terms and arrangements.

      (b) Between the date hereof and the Closing Date (or the Option Closing
Date, as the case may be), no Material Adverse Change shall have occurred or
become known to the Company that, in the Underwriter's judgment, makes it
impracticable or inadvisable to proceed with the public offering of the Common
Shares as contemplated by the Prospectus.

      (c) The Underwriter shall have received, on the Closing Date and the
Option Closing Date, as the case may be, an opinion of Graham Dunn P.C., counsel
for the Company, substantially in the form of EXHIBIT C attached hereto, which
opinion shall be dated the Closing Date and the Option Closing Date, as the case
may be, and addressed to the Underwriter.

      (d) The Underwriter shall have received, on the Closing Date and the
Option Closing Date, as the case may be, an opinion from Dorsey & Whitney LLP,
counsel for the Underwriter, dated the Closing Date and the Option Closing Date,
as the case may be, and addressed to the Underwriter, as to such matters as the
Underwriter may reasonably request.

      (e) The Underwriter shall have received, on (i) the date hereof, (ii) the
Closing Date and (iii) the Option Closing Date, as the case may be, a letter
from BKD, LLP and a letter from KPMG LLP, independent certified public
accountants, dated no more than one business day prior to the date hereof and
three business days prior to the Closing Date and the Option Closing Date, as
the case may be, and addressed to the Underwriter, in the form previously agreed
with the Underwriter.

      (f) The Underwriter shall have received, on the Closing Date and the
Option Closing Date, as the case may be, a certificate of the Company, dated the
Closing Date or the Option Closing Date, as the case may be, signed by the Chief
Executive Officer and the Chief Financial Officer of the Company, to the effect
that:

            (i) the representations and warranties of the Company set forth in
      Section 1 of this Agreement are true and correct, as if made on and as of
      the Closing Date or the Option Closing Date, as the case may be, and the
      Company has complied with all of the agreements and satisfied all the
      conditions on its part to be performed or satisfied at or prior to the
      Closing Date or the Option Closing Date, as the case may be;

            (ii) for the period from and after the date hereof and prior to the
      Closing Date, there has not occurred any Material Adverse Change; and

            (iii) no stop order preventing or suspending the effectiveness of
      the Registration Statement or the use of any Preliminary Prospectus or any
      Issuer Free Writing Prospectus has been issued to the Company by the
      Commission nor has the Company received notice that any proceedings have
      been instituted or, to the Company's knowledge, threatened for that
      purpose, and no

                                       23
<PAGE>

      notice of objection of the Commission to the use of such Registration
      Statement or any post-effective amendment thereto pursuant to Rule
      401(g)(2) under the Act has been received by the Company.

      (g) The Underwriter and counsel for the Underwriter shall have received,
on or before each of the Closing Date and the Option Closing Date, as the case
may be, such information, documents and opinions as they may reasonably require
for the purposes of enabling them to pass upon the sale of the Common Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties or the satisfaction of any of the conditions or
agreements, herein contained.

      (h) On or prior to the date hereof, each of the Company's executive
officers and directors shall have furnished to the Underwriter lock-up
agreements in a form acceptable to the Underwriter, and each such agreement
shall be in full force and effect on each of the Closing Date and the Option
Closing Date.

      If any condition specified in this Section 6 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Underwriter by
notice to the Company at any time on or prior to the Closing Date and, with
respect to the Optional Common Shares, at any time prior to the Option Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 5, Section 7 and Section 8 shall at all
times be effective and shall survive such termination.

      All opinions, certificates, letters and other documents delivered pursuant
to this Section 6 will be in compliance with the provisions hereof only if they
are satisfactory in form and substance to the reasonable judgment of the
Underwriter.

      7. Indemnification and Contribution.

      (a) The Company agrees to indemnify and hold the Underwriter, its officers
and employees, and each person, if any, who controls the Underwriter within the
meaning of the Act, harmless against any losses, claims, damages, liabilities or
expenses ("Losses"), to which the Underwriter may become subject under the Act
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such Losses (or
actions in respect thereof) arise out of or are based (i) upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any Issuer
Free Writing Prospectus, Base Prospectus, Preliminary Prospectus, Sale
Preliminary Prospectus or the Prospectus, or any amendment or supplement
thereto, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company

                                       24
<PAGE>

will not be liable in any such case to the extent that any such Losses arise out
of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Issuer Free Writing
Prospectus, Base Prospectus, Preliminary Prospectus, Sale Preliminary Prospectus
or the Prospectus, or any amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company by the
Underwriter, specifically for use in the preparation thereof, it being
understood and agreed that the only such information furnished by the
Underwriter consists of the information described as such in Section 10 hereof.

      (b) The Underwriter agrees to indemnify and hold the Company, its
directors, officers and employees, and each person, if any, who controls the
Company within the meaning of the Act, harmless from and against any Losses to
which any such person may become subject, under the Act or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Underwriter), insofar as such Losses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any Issuer
Free Writing Prospectus, Base Prospectus, Preliminary Prospectus, Sale
Preliminary Prospectus or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Issuer Free Writing
Prospectus, Preliminary Prospectus, Sale Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by the Underwriter,
specifically for use in the preparation thereof, it being understood and agreed
upon that the only such information furnished by the Underwriter consists of the
information described as such in Section 10 hereof.

      (c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party in writing of
the commencement thereof; but the failure to so notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to
any indemnified party (i) unless and to the extent the failure results in the
forfeiture by the indemnifying party of substantial rights and defenses, (ii)
for contribution or (iii) otherwise than under this Section 7. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall elect, jointly with
any other indemnifying party similarly notified, by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, if the

                                       25
<PAGE>

defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties.

      After notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under the applicable
subsection above for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the reasonable expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party representing the indemnified
parties who are parties to such action); (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action; or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party, in each of which cases the reasonable fees and expenses of
counsel shall be at the expense of the indemnifying party.

      (d) The indemnifying party under this Section 7 shall not be liable for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, but if settled with such consent or
if there be a final non-appealable judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any Losses by reason of
such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement, compromise or consent to the
entry of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes (x) an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (y) does not include a
statement as to an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.

      (e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold an indemnified party harmless under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the Losses referred to in
subsection (a) or (b) above

                                       26
<PAGE>

(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriter, on the other
hand, from the offering of the Common Shares, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, then 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, on the one hand,
and the Underwriter, on the other hand, in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriter, on the other hand, shall be deemed to be in the same
respective proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or the Underwriter, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission.

      The Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account the equitable considerations referred to in the first paragraph of this
subsection (e). The amount paid by an indemnified party as a result of the
Losses referred to in the first paragraph of this subsection (e) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim
which is the subject of this subsection (e). Notwithstanding the provisions of
this subsection (e), no Underwriter shall be required to contribute any amount
in excess of the underwriting discounts and commissions applicable to the Common
Shares purchased by the Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

      (f) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have, including
liability for Losses incurred by the Underwriter, its officers and employees
that arise out of or are based in whole or in part upon (i) any inaccuracy in
the representations and warranties of the Company contained herein or (ii) the
failure of the Company to perform its obligations hereunder or under law and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act. The obligations of the
Underwriter under this Section 7 shall be in addition to any liability that the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.

                                       27
<PAGE>

      (g) Any Losses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such Losses are incurred, but in
all cases, no later than thirty (30) days after receipt of an invoice by the
indemnifying party.

      (h) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons and were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in the light of the ability of the parties to investigate the Company
and its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.

      8. Representations and Agreements to Survive Delivery.

      All representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Company and
the Underwriter contained in Section 7 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Underwriter or any controlling person thereof, the Company or any of its
officers, directors or controlling persons, and shall survive delivery of, and
payment for, the Common Shares to and by the Underwriter hereunder and any
termination of this Agreement. A successor to the Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in Section 7.

      9. Termination.

      (a) The Underwriter shall have the right to terminate this Agreement, by
notice as hereinafter specified, at any time at or prior to the Closing Date or,
in the case of the Optional Common Shares, prior to the Option Closing Date (i)
if there shall have occurred a Material Adverse Change (regardless of whether
any loss associated with such Material Adverse Change shall have been insured)
or development involving a prospective Material Adverse Change that, in the
reasonable judgment of the Underwriter, makes it impracticable or inadvisable to
market the Common Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of the Common Shares; (ii) if
there has occurred an outbreak or escalation of hostilities between the United
States and any foreign power, an outbreak or escalation of any insurrection or
armed conflict involving the United States, or any other calamity or crisis, or
material adverse change or development in political, financial or economic
conditions having an effect on the U.S. financial markets that, in the
reasonable judgment of the Underwriter, makes it impracticable or inadvisable to
market the Common Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of the Common Shares; or (iii)
if trading in the Common Stock has been suspended or limited by the Commission
or the Nasdaq National Market, or if trading in securities generally on

                                       28
<PAGE>

either 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 for securities have been required, by the Nasdaq
National Market or by order of the Commission or any other governmental
authority, or the NASD, or; (iv) if a general banking moratorium has been
declared by federal, Montana, or New York authorities.

      (b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of (i) the Company to the Underwriter,
except as provided in Section 5 hereof; (ii) the Underwriter to the Company, or
(iii) of any party hereto to any other party except that the provisions of
Section 7 shall at all times be effective and shall survive such termination.

      10. Information Furnished by Underwriter.

      The Company hereby acknowledges that the only information that the
Underwriter has furnished to the Company expressly for use in the Registration
Statement, any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth under the caption
"Underwriting" in the Prospectus; and the Underwriter confirms that such
statements are correct.

      11. Notices.

      Except as otherwise provided herein, all communications hereunder shall be
in writing and shall be mailed or delivered:

      If to the Underwriter:

      D.A. Davidson & Co.
      8 Third Street North
      Great Falls, Montana 54901
      Attention:  Syndicate Department

      with a copy to:

      Dorsey & Whitney LLP
      507 Davidson Building
      8 Third Street north
      Great Falls, Montana  59401
      Attention:  John W. Manning, Esq.

      If to the Company:

      Glacier Bancorp
      49 Commons Loop
      Kalispell, Montana  59901
      Attention:  Chief Executive Officer

                                       29
<PAGE>

      with a copy to:

      Graham & Dunn P.C.
      Pier 70
      2801 Alaskan Way, Suite 300
      Seattle, Washington  98121
      Attention: Stephen M. Klein, Esq.
                 Bart Bartholdt, Esq.

      Any party to this Agreement may change such address for notices by sending
to the parties to this Agreement written notice of a new address for such
purpose.

      12. Persons Entitled to Benefit of Agreement.

      This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 7. Nothing in this
Agreement is intended or shall be construed to give to any other person any
legal or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Common Shares
from the Underwriter.

      13. Governing Law.

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to any provisions relating
to conflicts of laws.

      14. Severability.

      The invalidity or unenforceability of any section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
section, paragraph or provision hereof. If any section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such changes as are necessary to make it valid
and enforceable.

      15. General Provisions.

      This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended or modified unless in writing by all
of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. Nothing herein contained shall constitute the Underwriter an
unincorporated association or partner with the Company. The Company acknowledges
and agrees that the Underwriter in providing investment banking services to the
Company in connection with the offering, including acting pursuant to the terms
of this Agreement, has acted

                                       30
<PAGE>

and is acting as an independent contractor and not as a fiduciary and the
Company does not intend the Underwriter to act in any capacity other than
independent contractor, including as a fiduciary or in any other position of
higher trust. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Underwriter
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with the transactions contemplated hereby.

      16. Counterparts.

      This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

                            [SIGNATURE PAGE FOLLOWS]

                                       31
<PAGE>

      Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement in accordance with
its terms.

                                   Very Truly Yours,

                                   GLACIER BANCORP, INC.

                                   By /s/ Michael J. Blodnick
                                      ----------------------------------------
                                   Print Name:  Michael J. Blodnick
                                   Title:  President and CEO

Accepted as of the date hereof.

D.A. DAVIDSON & CO.

By: /s/ Mark J. Semmens
    ----------------------------
    Name: Mark J. Semmens
    Title: Managing Director

                                       32
<PAGE>

                                    ANNEX I

                         Issuer Free Writing Prospectus




<PAGE>
                                    ANNEX II

                                  Pricing Terms

Price per share to the public:  $30.50

Underwriting discount per share (3.50%):  $1.0675

Offering proceeds to the Company (after underwriting discount but before
expenses):   $26,489,250

Closing Date:  August 9, 2006

<PAGE>
                        [EXHIBITS INTENTIONALLY OMITTED]


