GUARANTEE AGREEMENT BNCCORP, INC. Dated as of July 30, 2007
Exhibit
10.3
BNCCORP,
INC.
Dated
as
of July 30, 2007
TABLE
OF
CONTENTS
| Page |
|
DEFINITIONS
AND INTERPRETATION
|
1
|
|
|
Section
1.1.
|
Definitions
and Interpretation
|
1
|
|
ARTICLE
II
|
POWERS,
DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
|
4
|
|
|
Section
2.1.
|
Powers
and Duties of the Guarantee Trustee
|
4
|
|
|
Section
2.2.
|
Certain
Rights of the Guarantee Trustee
|
5
|
|
|
Section
2.3.
|
Not
Responsible for Recitals or Issuance of Guarantee
|
7
|
|
|
Section
2.4.
|
Events
of Default; Waiver
|
7
|
|
|
Section
2.5.
|
Events
of Default; Notice
|
8
|
|
ARTICLE
III
|
THE GUARANTEE TRUSTEE |
8
|
|
|
Section
3.1.
|
The
Guarantee Trustee; Eligibility
|
8
|
|
|
Section
3.2.
|
Appointment,
Removal and Resignation of the Guarantee Trustee
|
9
|
|
ARTICLE
IV
|
GUARANTEE |
10
|
|
|
Section
4.1.
|
Guarantee
|
10
|
|
|
Section
4.2.
|
Waiver
of Notice and Demand
|
10
|
|
|
Section
4.3.
|
Obligations
Not Affected
|
10
|
|
|
Section
4.4.
|
Rights
of Holders
|
11
|
|
|
Section
4.5.
|
Guarantee
of Payment
|
11
|
|
|
Section
4.6.
|
Subrogation
|
12
|
|
|
Section
4.7.
|
Independent
Obligations
|
12
|
|
|
Section
4.8.
|
Enforcement
|
12
|
|
ARTICLE
V
|
LIMITATION OF TRANSACTIONS; SUBORDINATION |
12
|
|
|
Section
5.1.
|
Limitation
of Transactions
|
12
|
|
|
Section
5.2.
|
Ranking
|
13
|
|
ARTICLE
VI
|
TERMINATION |
14
|
|
|
Section
6.1.
|
Termination
|
14
|
|
ARTICLE
VII
|
INDEMNIFICATION |
14
|
|
|
Section
7.1.
|
Exculpation
|
14
|
|
|
Section
7.2.
|
Indemnification
|
14
|
|
|
Section
7.3.
|
Compensation;
Reimbursement of Expenses
|
15
|
|
|
-i- |
TABLE
OF CONTENTS
(continued)
| Page |
|
ARTICLE
VIII
|
MISCELLANEOUS |
16
|
|
|
Section
8.1.
|
Successors
and Assigns
|
16
|
|
|
Section
8.2.
|
Amendments
|
16
|
|
|
Section
8.3.
|
Notices
|
16
|
|
|
Section
8.4.
|
Benefit
|
17
|
|
|
Section
8.5.
|
Governing
Law
|
17
|
|
|
Section
8.6.
|
Counterparts
|
17
|
|
|
-ii- |
This
GUARANTEE AGREEMENT (the “Guarantee”), dated as of July 30, 2007, is executed
and delivered by BNCCORP, Inc., a bank holding company incorporated in North
Dakota (the “Guarantor”), and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the “Guarantee Trustee”), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of BNC Statutory Trust III, a Delaware statutory trust (the
“Issuer”).
WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
dated as of July 30, 2007, among the trustees named therein of the Issuer,
BNCCORP, Inc., as sponsor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on
the
date hereof securities, having an aggregate liquidation amount of up to
$15,000,000, designated the Capital Securities (the “Capital Securities”);
and
WHEREAS,
as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the purchase by each Holder of the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit
of
the Holders.
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
Section
1.1. Definitions
and Interpretation.
In
this
Guarantee, unless the context otherwise requires:
(a) capitalized
terms used in this Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) a
term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all
references to “the Guarantee” or “this Guarantee” are to this Guarantee as
modified, supplemented or amended from time to time;
(d) all
references in this Guarantee to Articles and Sections are to Articles and
Sections of this Guarantee, unless otherwise specified;
(e) terms
defined in the Declaration as of the date of execution of this Guarantee have
the same meanings when used in this Guarantee, unless otherwise defined in
this
Guarantee or unless the context otherwise requires; and
(f) a
reference to the singular includes the plural and vice versa.
“Beneficiaries”
means any Person to whom the Issuer is or hereafter becomes indebted or
liable.
“Corporate
Trust Office” means the office of the Guarantee Trustee at which the corporate
trust business of the Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Guarantee is located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
“Covered
Person” means any Holder of Capital Securities.
“Debentures”
means the junior subordinated debentures of BNCCORP, Inc., designated the
Floating Rate Junior Subordinated Debt Securities due 2037, held by the
Institutional Trustee (as defined in the Declaration) of the
Issuer.
“Event
of
Default” has the meaning set forth in Section 2.4.
“Guarantee
Payments” means the following payments or distributions, without duplication,
with respect to the Capital Securities, to the extent not paid or made by the
Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration)
which are required to be paid on such Capital Securities to the extent the
Issuer has funds available in the Property Account (as defined in the
Declaration) therefor at such time, (ii) the Redemption Price (as defined in
the
Indenture) to the extent the Issuer has funds available in the Property Account
therefor at such time, with respect to the Capital Securities at maturity or
any
Capital Securities called for redemption by the Issuer, (iii) the Special
Redemption Price (as defined in the Indenture) to the extent the Issuer has
funds available in the Property Account therefor at such time, with respect
to
Capital Securities called for redemption upon the occurrence of a Special Event
(as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than
in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser
of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer has funds available in the Property Account therefor at such time,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer after satisfaction of liabilities to
creditors of the Issuer as required by applicable law (in either case, the
“Liquidation Distribution”).
“Guarantee
Trustee” means Wilmington Trust Company, until a Successor Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Guarantee and thereafter means each such Successor Guarantee
Trustee.
“Holder”
means any holder, as registered on the books and records of the Issuer, of
any
Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Capital Securities have
given
any request, notice, consent or waiver hereunder, “Holder” shall not include the
Guarantor or any Affiliate of the Guarantor.
2
“Indemnified
Person” means the Guarantee Trustee (including in its individual capacity), any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of
the Guarantee Trustee.
“Indenture”
means the Indenture, dated as of July 30, 2007, between the Guarantor and
Wilmington Trust Company, not in its individual capacity but solely as trustee,
and any indenture supplemental thereto pursuant to which the Debentures are
to
be issued to the Institutional Trustee of the Issuer.
“Liquidation
Distribution” has the meaning set forth in the definition of “Guarantee
Payments” herein.
“Majority
in liquidation amount of the Capital Securities” means Holder(s) of outstanding
Capital Securities, voting together as a class, but separately from the holders
of Common Securities, of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or
otherwise, plus accrued and unpaid Distributions to, but excluding, the date
upon which the voting percentages are determined) of all Capital Securities
then
outstanding.
“Obligations”
means any costs, expenses or liabilities (but not including liabilities related
to taxes) of the Issuer, other than obligations of the Issuer to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms
of
the Trust Securities.
“Officer’s
Certificate” means, with respect to any Person, a certificate signed by one
Authorized Officer of such Person. Any Officer’s Certificate
delivered with respect to compliance with a condition or covenant provided
for
in this Guarantee shall include:
(a) a
statement that each officer signing the Officer’s Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a
brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officer’s Certificate;
(c) a
statement that each such officer has made such examination or investigation
as,
in such officer’s opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a
statement as to whether, in the opinion of each such officer, such condition
or
covenant has been complied with.
“Person”
means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
“Responsible
Officer” means, with respect to the Guarantee Trustee, any officer within the
Corporate Trust Office of the Guarantee Trustee with direct responsibility
for
the administration of any matters relating to this Guarantee, including any
vice
president, any assistant vice president, any secretary, any assistant secretary,
the treasurer, any assistant treasurer, any trust officer or other officer
of
the Corporate Trust Office of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers
and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer’s knowledge of
and familiarity with the particular subject.
3
“Successor
Guarantee Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 3.1.
“Trust
Securities” means the Common Securities and the Capital Securities.
ARTICLE
II
POWERS,
DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section
2.1. Powers
and Duties of the Guarantee Trustee.
(a) This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his
or
her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If
an Event of Default actually known to a Responsible Officer of the Guarantee
Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
this
Guarantee for the benefit of the Holders of the Capital Securities.
(c) The
Guarantee Trustee, before the occurrence of any Event of Default and after
the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.4(b)) and is actually known
to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Guarantee, and
use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own
affairs.
(d) No
provision of this Guarantee shall be construed to relieve the Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
4
(i) prior
to the occurrence of any Event of Default and after the curing or waiving of
all
Events of Default that may have occurred:
(A) the
duties and obligations of the Guarantee Trustee shall be determined solely
by
the express provisions of this Guarantee, and the Guarantee Trustee shall not
be
liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee, and no implied covenants or
obligations shall be read into this Guarantee against the Guarantee Trustee;
and
(B) in
the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the requirements of this
Guarantee; but in the case of any such certificates or opinions furnished to
the
Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the
same to determine whether or not on their face they conform to the requirements
of this Guarantee;
(ii) the
Guarantee Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
proved that such Responsible Officer of the Guarantee Trustee or the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the
Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of the Holders of not less than a Majority in liquidation amount of the Capital
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or exercising any trust
or
power conferred upon the Guarantee Trustee under this Guarantee;
and
(iv) no
provision of this Guarantee shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably assured to it under the
terms
of this Guarantee, or security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not reasonably assured
to
it.
Section
2.2. Certain
Rights of the Guarantee Trustee.
(a) Subject
to the provisions of Section 2.1:
(i) The
Guarantee Trustee may conclusively rely, and shall be fully protected in acting
or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the
proper party or parties.
5
(ii)
Any
direction or act of the Guarantor contemplated by this Guarantee shall be
sufficiently evidenced by an Officer’s Certificate.
(iii) Whenever,
in the administration of this Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless other evidence
is
herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officer’s Certificate of the Guarantor
which, upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The
Guarantee Trustee shall have no duty to see to any recording, filing or
registration of any instrument or other writing (or any rerecording, refiling
or
reregistration thereof).
(v) The
Guarantee Trustee may consult with counsel of its selection, and the advice
or
opinion of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
(vi) The
Guarantee Trustee shall be under no obligation to exercise any of the rights
or
powers vested in it by this Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses and the expenses of the
Guarantee Trustee’s agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided, however, that nothing contained in this Section
2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee.
(vii) The
Guarantee Trustee shall not be bound to make any investigation into the facts
or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other
evidence of indebtedness or other paper or document, but the Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
6
(viii) The
Guarantee Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not be responsible
for
any misconduct or negligence on the part of any agent or attorney appointed
with
due care by it hereunder.
(ix) Any
action taken by the Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the Guarantee Trustee
or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with any
of
the terms and provisions of this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee’s or its agent’s taking such
action.
(x) Whenever
in the administration of this Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders of a Majority in liquidation amount of the Capital
Securities, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (C) shall be protected
in
conclusively relying on or acting in accordance with such
instructions.
(xi) The
Guarantee Trustee shall not be liable for any action taken, suffered, or omitted
to be taken by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Guarantee.
(b) No
provision of this Guarantee shall be deemed to impose any duty or obligation
on
the Guarantee Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which
it
shall be illegal or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law to perform any such act or acts
or
to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Guarantee Trustee shall be construed to
be a
duty.
Section
2.3. Not
Responsible for Recitals or Issuance of Guarantee.
The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representation as
to the validity or sufficiency of this Guarantee.
Section
2.4. Events
of Default; Waiver.
(a) An
Event of Default under this Guarantee will occur upon the failure of the
Guarantor to perform any of its payment or other obligations
hereunder.
7
(b) The
Holders of a Majority in liquidation amount of the Capital Securities may,
voting or consenting as a class, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease
to exist, and shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default
or
Event of Default or impair any right consequent thereon.
Section
2.5. Events
of Default; Notice.
(a) The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities and the Guarantor, notices of all Events of Default actually
known to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided,
however, that the Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Guarantee Trustee
in
good faith determines that the withholding of such notice is in the interests
of
the Holders of the Capital Securities.
(b) The
Guarantee Trustee shall not be charged with knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice thereof from
the
Guarantor or a Holder of the Capital Securities, or a Responsible Officer of
the
Guarantee Trustee charged with the administration of this Guarantee shall have
actual knowledge thereof.
ARTICLE
III
THE
GUARANTEE TRUSTEE
Section
3.1. The
Guarantee Trustee; Eligibility.
(a) There
shall at all times be a Guarantee Trustee which shall:
(i) not
be an Affiliate of the Guarantor; and
(ii) be
a corporation or national association organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the
District of Columbia, or Person authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such
corporation or national association publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or examining
authority referred to above, then, for the purposes of this Section 3.1(a)(ii),
the combined capital and surplus of such corporation or national association
shall be deemed to be its combined capital and surplus as set forth in its
most
recent report of condition so published.
8
(b) If
at any time the Guarantee Trustee shall cease to be eligible to so act under
Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner
and
with the effect set forth in Section 3.2(c).
(c) If
the Guarantee Trustee has or shall acquire any “conflicting interest” within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
shall either eliminate such interest or resign to the extent and in the manner
provided by, and subject to, this Guarantee.
Section
3.2. Appointment,
Removal and Resignation of the Guarantee Trustee.
(a) Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default.
(b) The
Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until
a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The
Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed
by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and
has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 3.2 within 60 days after delivery of
an
instrument of removal or resignation, the Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of
a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No
Guarantee Trustee shall be liable for the acts or omissions to act of any
Successor Guarantee Trustee.
(f) Upon
termination of this Guarantee or removal or resignation of the Guarantee Trustee
pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee
all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued
to
the date of such termination, removal or resignation.
9
ARTICLE
IV
GUARANTEE
Section
4.1. Guarantee.
(a) The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by
the
Issuer), as and when due, regardless of any defense (except as defense of
payment by the Issuer), right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor’s obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
(b) The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer
and
in the event any such Obligation is not so assumed, subject to the terms and
conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and
all
Obligations to such Beneficiaries. This Guarantee is intended to be
for the Beneficiaries who have received notice hereof.
Section
4.2. Waiver
of Notice and Demand.
The
Guarantor hereby waives notice of acceptance of this Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment,
any
right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and
demands.
Section
4.3. Obligations
Not Affected.
The
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term
or
condition relating to the Capital Securities to be performed or observed by
the
Issuer;
(b) the
extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Special Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Capital Securities (other than an
extension of time for the payment of the Distributions, Redemption Price,
Special Redemption Price, Liquidation Distribution or other sums payable that
results from the extension of any interest payment period on the Debentures
or
any extension of the maturity date of the Debentures permitted by the
Indenture);
10
(c) any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred
on
the Holders pursuant to the terms of the Capital Securities, or any action
on
the part of the Issuer granting indulgence or extension of any
kind;
(d) the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any
invalidity of, or defect or deficiency in, the Capital Securities;
(f) the
settlement or compromise of any obligation guaranteed hereby or hereby incurred;
or
(g) any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this
Section 4.3 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.
There
shall be no obligation of the Holders to give notice to, or obtain consent
of,
the Guarantor with respect to the happening of any of the
foregoing.
Section
4.4. Rights
of Holders.
(a) The
Holders of a Majority in liquidation amount of the Capital Securities have
the
right to direct the time, method and place of conducting any proceeding for
any
remedy available to the Guarantee Trustee in respect of this Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee; provided, however, that (subject to Sections
2.1 and 2.2) the Guarantee Trustee shall have the right to decline to follow
any
such direction if the Guarantee Trustee shall determine that the actions so
directed would be unjustly prejudicial to the Holders not taking part in such
direction or if the Guarantee Trustee being advised by counsel determines that
the action or proceeding so directed may not lawfully be taken or if the
Guarantee Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceeding so directed would involve
the Guarantee Trustee in personal liability.
(b) Any
Holder of Capital Securities may institute a legal proceeding directly against
the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person. The Guarantor waives any right or remedy
to require that any such action be brought first against the Issuer, the
Guarantee Trustee or any other Person before so proceeding directly against
the
Guarantor.
Section
4.5. Guarantee
of Payment.
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This
Guarantee creates a guarantee of payment and not of collection.
Section
4.6. Subrogation.
The
Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
Securities against the Issuer in respect of any amounts paid to such Holders
by
the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable provisions
of
law) be entitled to enforce or exercise any right that it may acquire by way
of
subrogation or any indemnity, reimbursement or other agreement, in all cases
as
a result of payment under this Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
Section
4.7. Independent
Obligations.
The
Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Capital Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
4.3 hereof.
Section
4.8. Enforcement.
A
Beneficiary may enforce the Obligations of the Guarantor contained in Section
4.1(b) directly against the Guarantor, and the Guarantor waives any right or
remedy to require that any action be brought against the Issuer or any other
person or entity before proceeding against the Guarantor.
The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by applicable provisions of law) be entitled
to enforce or exercise any rights that it may acquire by way of subrogation
or
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if, after giving effect to such payment, any
amounts are due and unpaid under this Guarantee.
ARTICLE
V
LIMITATION
OF TRANSACTIONS; SUBORDINATION
Section
5.1. Limitation
of Transactions.
So
long
as any Capital Securities remain outstanding, if (a) there shall have occurred
and be continuing an Event of Default or (b) the Guarantor shall have selected
an Extension Period as provided in the Declaration and such period, or any
extension thereof, shall have commenced and be continuing, then the Guarantor
may not (x) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with
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Section
5.2. Ranking.
This
Guarantee will constitute an unsecured obligation of the Guarantor and will
rank
subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor. By their
acceptance thereof, each Holder of Capital Securities agrees to the foregoing
provisions of this Guarantee and the other terms set forth herein.
The
right
of the Guarantor to participate in any distribution of assets of any of its
subsidiaries upon any such subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary, except
to the extent the Guarantor may itself be recognized as a creditor of that
subsidiary. Accordingly, the Guarantor’s obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor’s subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee
does not limit the incurrence or issuance of other secured or unsecured debt
of
the Guarantor, including Senior Indebtedness of the Guarantor, under any
indenture or agreement that the Guarantor may enter into in the future or
otherwise.
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ARTICLE
VI
TERMINATION
Section
6.1. Termination.
This
Guarantee shall terminate as to the Capital Securities (i) upon full
payment of the Redemption Price or the Special Redemption Price, as the case
may
be, of all Capital Securities then outstanding, (ii) upon the distribution
of
all of the Debentures to the Holders of all of the Capital Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration
upon
dissolution of the Issuer. This Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
of Capital Securities must restore payment of any sums paid under the Capital
Securities or under this Guarantee.
ARTICLE
VII
INDEMNIFICATION
Section
7.1. Exculpation.
(a) No
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Guarantor or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission of such Indemnified Person in good
faith in accordance with this Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred
on
such Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of
such Indemnified Person’s negligence or willful misconduct with respect to such
acts or omissions.
(b) An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Issuer or the Guarantor and upon such information, opinions,
reports or statements presented to the Issuer or the Guarantor by any Person
as
to matters the Indemnified Person reasonably believes are within such other
Person’s professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.
Section
7.2. Indemnification.
(a)
The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on the part of
the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including but not limited
to
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person’s powers or duties hereunder. The obligation to
indemnify as set forth in this Section 7.2 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this
Guarantee.
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(b)
Promptly after receipt by an Indemnified Person under this Section 7.2 of
notice of the commencement of any action, such Indemnified Person will, if
a
claim in respect thereof is to be made against the Guarantor under this
Section 7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not relieve the
Guarantor from liability under paragraph (a) above unless and to the extent
that
the Guarantor did not otherwise learn of such action and such failure results
in
the forfeiture by the Guarantor of substantial rights and defenses and
(ii) will not, in any event, relieve the Guarantor from any obligations to
any Indemnified Person other than the indemnification obligation provided in
paragraph (a) above. The Guarantor shall be entitled to appoint
counsel of the Guarantor’s choice at the Guarantor’s expense to represent the
Indemnified Person in any action for which indemnification is sought (in which
case the Guarantor shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the Indemnified Person or Persons except
as
set forth below); provided, however, that such counsel shall be
satisfactory to the Indemnified Person. Notwithstanding the
Guarantor’s election to appoint counsel to represent the Indemnified Person in
any action, the Indemnified Person shall have the right to employ separate
counsel (including local counsel), and the Guarantor shall bear the reasonable
fees, costs and expenses of such separate counsel, if (i) the use of
counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Person and the Guarantor and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it and/or
other Indemnified Persons which are different from or additional to those
available to the Guarantor, (iii) the Guarantor shall not have employed
counsel satisfactory to the Indemnified Person to represent the Indemnified
Person within a reasonable time after notice of the institution of such action
or (iv) the Guarantor shall authorize the Indemnified Person to employ
separate counsel at the expense of the Guarantor. The Guarantor will
not, without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.
Section
7.3. Compensation;
Reimbursement of Expenses.
The
Guarantor agrees:
(a) to
pay to the Guarantee Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree to from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and
15
(b) except
as otherwise expressly provided herein, to reimburse the Guarantee Trustee
upon
request for all reasonable expenses, disbursements and advances incurred or
made
by it in accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct.
The
provisions of this Section 7.3 shall survive the resignation or removal of
the
Guarantee Trustee and the termination of this Guarantee.
ARTICLE
VIII
MISCELLANEOUS
Section
8.1. Successors
and Assigns.
All
guarantees and agreements contained in this Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or consolidation of
the Guarantor with or into another entity or any sale, transfer or lease of
the
Guarantor’s assets to another entity, in each case to the extent permitted under
the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders
of
not less than a Majority in liquidation amount of the Capital
Securities.
Section
8.2. Amendments.
Except
with respect to any changes that do not adversely affect the rights of Holders
of the Capital Securities in any material respect (in which case no consent
of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of
the
Capital Securities. The provisions of the Declaration with respect to
amendments thereof shall apply equally with respect to amendments of the
Guarantee.
Section
8.3. Notices.
All
notices provided for in this Guarantee shall be in writing, duly signed by
the
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:
(a) If
given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set
forth below (or such other address as the Guarantee Trustee may give notice
of
to the Holders of the Capital Securities):
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate
Capital Markets
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
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(b) If
given to the Guarantor, at the Guarantor’s mailing address set forth below (or
such other address as the Guarantor may give notice of to the Holders of the
Capital Securities and to the Guarantee Trustee):
BNCCORP,
Inc.
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
(c) If
given to any Holder of the Capital Securities, at the address set forth on
the
books and records of the Issuer.
All
such
notices shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except
that if a notice or other document is refused delivery or cannot be delivered
because of a changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such refusal
or
inability to deliver.
Section
8.4. Benefit.
This
Guarantee is solely for the benefit of the Holders of the Capital Securities
and, subject to Section 2.1(a), is not separately transferable from the Capital
Securities.
Section
8.5. Governing
Law.
THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF.
Section
8.6. Counterparts.
This
Guarantee may contain more than one counterpart of the signature page and this
Guarantee may be executed by the affixing of the signature of the Guarantor
and
the Guarantee Trustee to any of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.
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THIS
GUARANTEE is executed as of the day and year first above written.
|
|
BNCCORP,
INC.,
|
|
|
as
Guarantor
|
|
|
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
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Title:
President and Chief Executive
Officer
|
WILMINGTON
TRUST COMPANY, as Guarantee Trustee
|
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By:
/s/ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
|
|
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Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
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Title:
Financial Services Officer
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18