EXECUTION COPY
GUARANTEE AGREEMENT
between
BNCCORP, INC.
as Guarantor,
and
FIRST UNION NATIONAL BANK
as Guarantee Trustee
Dated as of July 12, 2000
BNC CAPITAL TRUST I
TABLE OF CONTENTS
ARTICLE I INTERPRETATION AND DEFINITIONS
SECTION1.1. Interpretation..................................................2
SECTION1.2. Definitions.....................................................2
ARTICLE II REPORTS
SECTION2.1. List of Holders.................................................6
SECTION2.2. Periodic Reports to the Guarantee Trustee.......................6
SECTION2.3. Events of Default; Waiver.......................................6
SECTION2.4. Event of Default; Notice........................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION3.1. Powers and Duties of the Guarantee Trustee......................7
SECTION3.2. Certain Rights of Guarantee Trustee.............................8
SECTION3.3. Compensation...................................................10
SECTION3.4. Indemnity......................................................10
SECTION3.5. May Hold Securities............................................10
ARTICLE IV GUARANTEE TRUSTEE
SECTION4.1. Guarantee Trustee: Eligibility.................................11
SECTION4.2. Appointment, Removal and Resignation of the Guarantee Trustee..11
ARTICLE V GUARANTEE
SECTION5.1. Guarantee......................................................12
SECTION5.2. Waiver of Notice and Demand....................................12
SECTION5.3. Obligations Not Affected.......................................12
SECTION5.4. Rights of Holders..............................................13
SECTION5.5. Guarantee of Payment...........................................14
SECTION5.6. Subrogation....................................................14
SECTION5.7. Independent Obligations........................................14
ARTICLE VI COVENANTS AND SUBORDINATION
SECTION6.1. Dividends, Distributions and Payments..........................14
SECTION6.2. Subordination..................................................15
SECTION6.3. Pari Passu Guarantees..........................................15
ARTICLE VII TERMINATION
SECTION7.1. Termination....................................................15
ARTICLE VIII MISCELLANEOUS
SECTION8.1. Successors and Assigns.........................................16
SECTION8.2. Amendments.....................................................16
SECTION8.3. Notices........................................................16
SECTION8.4. Benefit........................................................17
SECTION8.5. Governing Law..................................................17
SECTION8.6. Counterparts...................................................18
GUARANTEE AGREEMENT, dated as of July 12, 2000, executed and delivered by
BNCCORP, INC., a Delaware corporation (the "Guarantor") having its principal
office at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, XX 00000, and FIRST UNION NATIONAL
BANK, a national banking association, as trustee (in such capacity, the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of BNC CAPITAL
TRUST I, a Delaware business trust (the "Issuer").
W I T N E S S E T H :
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
July 12, 2000 (the "Trust Agreement"), among the Guarantor, as Depositor, the
Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $7,500,000 aggregate Liquidation
Amount (as defined in the Trust Agreement) of its 12.045% Preferred Securities
(Liquidation Amount $1,000 per preferred security) (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Notes (as
defined in the Trust Agreement) of the Guarantor, which will be deposited with
First Union National Bank, as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred 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
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.2;
(b) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) the words "hereby", "herein", "hereof" and "hereunder" and other words
of similar import refer to this Guarantee Agreement as a whole and not to any
particular Article, Section or other subdivision;
(f) a reference to the singular includes the plural and vice-versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, that the Issuer shall not be
deemed to be an Affiliate of the Guarantor. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means either the board of directors of the Guarantor
or any duly authorized committee of that board.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person, whether currently existing or hereafter
incurred, and whether or not contingent and without duplication, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable arising in the ordinary course of business); (v) every
capital lease obligation of such Person; (vi) all indebtedness of such Person,
whether incurred on or prior to the date of this Guarantee Agreement or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options,
swaps and similar arrangements; (vii) every obligation of the type referred to
in clauses (i) through (vi) of another Person and all dividends of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor or otherwise, and
(viii) any renewals, extensions, refundings, amendments or modifications of any
obligation of the type referred to in clauses (i) through (vii).
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, that except with
respect to a default in payment of any Guarantee Payments, the Guarantor shall
have received notice of default from the Guarantee Trustee and shall not have
cured such default within 30 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption and any premium paid on the redemption
of any notes comprising assets of the Issuer (the "Redemption Price"), with
respect to any Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary termination, winding up or liquidation of
the Issuer, unless Notes are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount of $1,000 per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent that the Issuer shall have funds available 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 in accordance with applicable law (in
either case, the "Liquidation Distribution").
"Guarantee Trustee" means First Union National Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, that in determining whether the
holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of July 12,
2000, as supplemented and amended, between the Guarantor and First Union
National Bank, as trustee.
"List of Holders" has the meaning specified in Section 2.1.
"Majority in Liquidation Amount of the Preferred Securities" means a vote
or consent by the Holder(s), voting separately as a class, of more than 50% of
the aggregate Liquidation Amount of all then outstanding Preferred Securities
issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, Chief Financial Officer, President or a
Vice President of such Person, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
(other than the certificate provided pursuant to Section 2.4) shall include:
(a) a statement that each officer signing the Officers' 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 Officers' Certificate;
(c) a statement that each 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 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, 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
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee 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.
"Senior Debt" means the principal of and any premium and interest on
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding) all Debt of the
Guarantor, whether incurred on or prior to the date of this Guarantee Agreement
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Notes or this Guarantee
Agreement or to other Debt which is pari passu with, or subordinated to, the
Notes or this Guarantee Agreement; provided, that Senior Debt shall not be
deemed to include (i) any Notes, (ii) any Debt of the Guarantor which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code, as amended, was without recourse to the Guarantor, (iii)
any Debt of the Guarantor to any of its subsidiaries which are not "banks" as
defined in the Bank Holding Company Act of 1956, as amended, (iv) any Debt to
any employee of the Guarantor, and (v) any Debt incurred under the indenture for
$15,000,000 of 8-5/8% Subordinated Notes due 2004 and any guarantee issued in
connection therewith, which Debt described in this subparagraph (v) is pari
passu with the Notes and this Guarantee Agreement.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
ARTICLE II
REPORTS
SECTION 2.1. List of Holders.
The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before June 30 and December 31 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders (the "List of Holders") as of a date not more than
15 days prior to the delivery thereof and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
SECTION 2.2. Periodic Reports to the Guarantee Trustee.
The Guarantor shall deliver to the Guarantee Trustee, within 120 days after
the end of each fiscal year of the Guarantor ending after the date of this
Guarantee Agreement, an Officers' Certificate covering the preceding fiscal
year, stating whether or not to the knowledge of the signers thereof the
Guarantor is in default in the performance or observance of any of the terms,
provisions and conditions of this Guarantee Agreement (without regard to any
period of grace or requirement of notice provided hereunder) and, if the
Guarantor shall be in default, specifying all such defaults and the nature and
status thereof of which they have knowledge.
SECTION 2.3. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred Securities
may, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.4. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of a
default, transmit to the Holders, notices of all defaults actually known to the
Guarantee Trustee, unless such defaults have been cured or waived before the
giving of such notice, provided, that except in the case of a default in the
payment of a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as the Board of Directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of Default
from the Guarantor or a Holder.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights pursuant
to Section 5.4(iv) 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, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, 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) The rights, immunities, duties and responsibilities of the Guarantee
Trustee shall be as provided by this Guarantee Agreement and there shall be no
other duties or obligations, express or implied, of the Guarantee Trustee.
Notwithstanding the foregoing, no provisions of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not herein
expressly so provided, every provision of this Guarantee Agreement relating to
the conduct or affecting the liability of or affording protection to the
Guarantee Trustee shall be subject to the provisions of this Section 3.1. To the
extent that, at law or in equity, the Guarantee Trustee has duties and
liabilities relating to the Guarantor or the Holders, the Guarantee Trustee
shall not be liable to any Holder for the Guarantee Trustee's good faith
reliance on the provisions of this Guarantee Agreement. The provisions of this
Guarantee Agreement, to the extent that they restrict the duties and liabilities
of the Guarantee Trustee otherwise existing at law or in equity, are agreed by
the Guarantor and the Holders to replace such other duties and liabilities of
the Guarantee Trustee.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, negligent
failure to act or own willful misconduct, except that:
(i) 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 the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made; and
(ii) 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 direction of the Holders of not less than a Majority in Liquidation
Amount of the Preferred 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 Agreement.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(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 reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein;
(iii) the Guarantee Trustee may consult with counsel, and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon and in accordance with such
advice. Such counsel may be counsel to the Guarantee Trustee, the Guarantor
or any of its Affiliates and may be one of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iv) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee reasonable security or indemnity against the
costs, expenses (including attorneys' fees and expenses) 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, that nothing contained in this Section 3.2(a)(iv) 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 Agreement;
(v) 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, and if the Guarantee Trustee shall determine to make such inquiry or
investigation, it shall be entitled to examine the books, record, and
premises of the Guarantor, personally or by agent or attorney;
(vi) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents, attorneys, custodians or nominees and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent, attorney, custodian or nominee appointed with due care by
it hereunder;
(vii) whenever in the administration of this Guarantee Agreement 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 Preferred 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
acting in accordance with such instructions.
(viii) except as otherwise expressly provided by this Guarantee
Agreement, the Guarantee Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this Guarantee
Agreement; and
(ix) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take 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 rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor;
(b) no provision of this Guarantee Agreement 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 to act in accordance with such power and
authority.
SECTION 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provisions of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provisions of
this Guarantee Agreement, except any such expense, disbursement or advance as
may be attributable to its negligence, bad faith or wilful misconduct.
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify and hold harmless the Guarantee Trustee
and any of its Affiliates and any of their officers, directors, shareholders,
employees, representatives or agents from and against any loss, damage,
liability, tax (other than income, franchise or other taxes imposed on amounts
paid pursuant to Section 3.3), penalty, expense or claim of any kind or nature
whatsoever incurred without negligence, bad faith or willful misconduct on its
part, arising out of or in connection with the acceptance or administration of
this Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
SECTION 3.5. May Hold Securities.
The Guarantee Trustee or any other agent of the Guarantee Trustee, in its
individual or any other capacity, may become the owner or pledgee of Common or
Preferred Securities.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. 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 organized and doing business under the laws of
the United States or of any State thereof, authorized to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State
authority and having an office within the United States. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of such supervising or examining authority,
then, for the purposes of this Section 4.1, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed 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 hereunder 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 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 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, 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.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which 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. The Guarantor shall give prompt
written notice to the Guarantee Trustee in the event it makes any direct payment
to the Holders hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
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 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement 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 Preferred 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 (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Notes as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(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 Preferred 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 Preferred
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 5.3 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 the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Preferred 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 Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the Trust
Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which 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 Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. 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 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred 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 Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Dividends, Distributions and Payments.
So long as any Preferred Securities remain outstanding, if there shall have
occurred and be continuing an Event of Default or the Guarantor shall have
selected an Extension Period as provided for in the Indenture, then the
Guarantor may not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make liquidation payment with respect to, any of
the Guarantor's capital stock or (b) make any payment of principal of or any
interest or premium on or repay, repurchase or redeem any debt securities of the
Guarantor that rank pari passu in all respects with or junior in interest to the
Preferred Securities (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one of more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(ii) as a result of an exchange or conversion of any class or series of the
Guarantor's capital stock (or any capital stock of a subsidiary of the
Guarantor) for any class or series of the Guarantor's capital stock or any class
of series of the Guarantor's indebtedness for any class or series of the
Guarantor's capital stock, (iii) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversions or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) any declaration of a dividend in connection with any rights plan, the
issuance of rights, stock or other property under any rights plan or the
redemption or repurchase of rights pursuant thereto, or (v) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock).
SECTION 6.2. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor.
SECTION 6.3. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall rank
pari passu with the obligations of the Guarantor under any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred
securities issued by the Trust (as defined in the Indenture).
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (a) full payment of the Redemption Price of all Preferred
Securities, (b) the distribution of Notes to the Holders in exchange for all of
the Preferred Securities or (c) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Section 3.3 and
3.4 shall survive any such termination and the resignation or removal of the
Guarantee Trustee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Guarantor, the Guarantee Trustee and the Holders of not less
than a Majority in Liquidation Amount of the Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings or consents
of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or facsimile number set forth
below or such other address, facsimile number or to the attention of such other
Person as the Guarantor may give notice to the Guarantee Trustee and the
Holders:
BNCCORP, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx or Xxxxxx X. Rebel
(b) if given to the Issuer, at the Issuer's address or facsimile number set
forth below or such other address, facsimile number or to the attention of such
other Person as the Issuer may give notice to the Guarantee Trustee and the
Holders:
BNC Capital Trust I
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx or Xxxxxx X. Rebel
(c) if given to the Guarantee Trustee, at the address or facsimile number
set forth below or such other address, facsimile number or to the attention of
such other Person as the Guarantee Trustee may give notice to the Guarantor and
the Holders:
First Union National Bank
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder 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 Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 8.6. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have executed this Guarantee
Agreement as of the date first above written.
BNCCORP, INC.
By:____________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
not in its individual capacity, but solely
as Guarantee Trustee
By:____________________________________
Name:
Title:
