Exhibit 10.5
BNC STATUTORY TRUST III
$1,000,000
Floating
Rate Capital Securities
Fully
and Unconditionally Guaranteed as to
Distributions
and
Other Payments by
BNCCORP, INC.
PLACEMENT AGREEMENT
July
30, 2007
StoneCastle
Securities, LLC
120
West 45 th
Street
New
York, New York 10036
Ladies
and Gentlemen:
BNCCORP,
Inc., a bank holding company incorporated in Delaware (the
“Company”) and BNC Statutory Trust III, a Delaware
statutory trust (the “Trust” and, collectively
with the Company, the “Offerors”), propose,
subject to the terms and conditions stated herein, to issue
and sell 1,000 of Floating Rate Capital Securities of the
Trust (the “Debt Securities”), having a stated
liquidation amount of $1,000 per capital security and bearing
a variable distribution rate per annum, reset quarterly, equal
to LIBOR (as defined in the Indenture (as defined below)) plus
1.40% (the “Floating
Rate”). StoneCastle Securities, LLC is acting
as the exclusive agent of the Company and the Trust in
connection with the offering of the Debt
Securities. The Company also proposes to issue and
sell an additional 14,000 of capital securities pursuant to a
purchase agreement dated as of the date hereof, among the
Offerors and the purchaser named therein.
The
Debt Securities will be fully and unconditionally guaranteed
on a subordinated basis by the Company with respect to
distributions and amounts payable upon liquidation, redemption
or repayment (the “Guarantee”) pursuant to the
Guarantee Agreement (the “Guarantee Agreement”),
to be dated as of the Closing Date specified in Section 3
hereof, and executed and delivered by the Company and
Wilmington Trust Company, as trustee (the “Guarantee
Trustee”), for the benefit of the holders from time to
time of the Debt Securities. The entire proceeds
from the sale of the Debt Securities will be combined with the
entire proceeds from the sale by the Trust to the Company of
its common securities (the “Common Securities”),
and will be used by the Trust to purchase $15,464,000 in
principal amount of the Floating Rate Junior Subordinated Debt
Securities due 2037 of the Company (the “Subordinated
Debt Securities”). The Debt Securities and
the Common Securities of the Trust will be issued pursuant to
the Amended and Restated Declaration of Trust (the
“Declaration”), to be dated as of the Closing Date
among the Company, as sponsor, the Administrator(s) named
therein (the “Administrators”), Wilmington Trust
Company, as Delaware trustee (the “Delaware
Trustee”), Wilmington Trust Company, as institutional
trustee (the “Institutional Trustee”), and the
holders from time to time of undivided beneficial interests in
the assets of the Trust. The Subordinated Debt
Securities will be issued pursuant to an Indenture, to be
dated as of the Closing Date (the “Indenture”),
between the Company and Wilmington Trust Company, as indenture
trustee (the “Indenture Trustee”).
The
Debt Securities, the Common Securities and the Subordinated
Debt Securities are collectively referred to herein as the
“Securities.” This Agreement, the
Indenture, the Declaration, the Guarantee Agreement, the
Debenture Subscription Agreement, the Common Securities
Subscription Agreement, the Capital Securities Subscription
Agreement and the Securities are referred to collectively as
the “Operative Documents.” Capitalized
terms used herein without definition have the respective
meanings specified in the Declaration.
The
Securities have not been and will not be registered under the
Securities Act of 1933, as amended (the “Securities
Act”).
1.
Representations and Warranties . The Company
and the Trust jointly and severally represent and warrant to,
and agree with you and the Purchaser (as defined in Section 2
hereof) as set forth below in this Section 1 (
provided , that, none of the following representations
or warranties apply or relate to any acts or omissions by
you).
(a) Neither
the Company nor the Trust, nor any of their Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities
Act (“Regulation D”)), nor any person acting on
its or their behalf has, directly or indirectly, made offers
or sales of any security, or solicited offers to buy any
security, under circumstances that would require the
registration of any of the Securities under the Securities
Act.
(b) Neither
the Company nor the Trust, nor any of their Affiliates, nor
any person acting on its or their behalf has engaged in any
form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or
sale of any of the Securities.
(c) The
Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(d) Neither
the Company nor the Trust, nor any of their Affiliates, nor
any person acting on its or their behalf, has engaged or will
engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S.
(e) Neither
the Company nor the Trust is, nor after giving effect to the
offering and sale of the Securities will be, an
“investment company” or an entity
“controlled” by an “investment
company,” required to be registered under the Investment
Company Act of 1940, as amended (the “Investment Company
Act”).
(f) Neither
the Company nor the Trust has paid or agreed to pay to any
person any compensation for soliciting another to purchase any
of the Securities.
(g) The
Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory
Trust Act, 12 Del. C. 3801, et seq. (the “Statutory
Trust Act”) with the power and authority to own property
and to conduct the business it transacts and proposes to
transact and to enter into and perform its obligations under
the Operative Documents. The Trust is duly
qualified to transact business as a foreign entity and is in
good standing in each jurisdiction in which such qualification
is necessary, except where the failure to so qualify or be in
good standing would not have a material adverse effect on such
Trust. The Trust is not a party to or otherwise
bound by any agreement other than the Operative
Documents. The Trust is and will, under current
law, be classified for federal income tax purposes as a
grantor trust and not as an association taxable as a
corporation.
(h) The
Declaration has been duly authorized by the Company and, on
the Closing Date, will have been duly executed and delivered
by the Company and the Administrators of the Trust, and,
assuming due authorization, execution and delivery by the
Delaware Trustee and the Institutional Trustee, be a valid and
binding obligation of the Company and such Administrators,
enforceable against them in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general
principles of equity (“Bankruptcy and
Equity”). Each of the Administrators of the
Trust is an employee or a director of the Company and has been
duly authorized by the Company to execute and deliver the
Declaration.
(i) Each
of the Guarantee Agreement and the Indenture has been duly
authorized by the Company and, on the Closing Date will have
been duly executed and delivered by the Company, and, assuming
due authorization, execution and delivery by the Guarantee
Trustee, in the case of the Guarantee, and by the Indenture
Trustee, in the case of the Indenture, be a valid
and binding obligation of the Company enforceable against it
in accordance with its terms, subject to Bankruptcy and
Equity.
(j) The
Debt Securities and the Common Securities have been duly
authorized by the Declaration and, when issued and delivered
against payment therefor on the Closing Date to you, in the
case of the Debt Securities, and to the Company, in the case
of the Common Securities, each in accordance with this
Agreement, the Declaration, the Capital Securities
Subscription Agreement and the Common Securities Subscription
Agreement, respectively, will be validly issued and represent
undivided beneficial interests in the assets of the
Trust. The issuance of the Debt Securities or the
Common Securities is not subject to any preemptive or other
similar rights. On the Closing Date, all of the
issued and outstanding Common Securities will be directly
owned by the Company free and clear of any pledge, security
interest, claim, lien or other encumbrance.
(k) The
Subordinated Debt Securities have been duly authorized by the
Company and, at the Closing Date, will have been duly executed
and delivered to the Indenture Trustee for authentication in
accordance with the Indenture and the debenture subscription
agreement, and, when authenticated in the manner provided for
in the Indenture and delivered against payment therefor by the
Trust, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture enforceable
against the Company in accordance with their terms, subject to
Bankruptcy and Equity.
(l) This
Agreement has been duly authorized, executed and delivered by
the Company and the Trust.
(m) The
Trust is not in violation of any provision of the Statutory
Trust Act and when the Declaration is executed and delivered
will not be in violation of the Declaration. The
execution, delivery and performance of the Operative Documents
to which it is a party by the Company or the Trust, and the
consummation of the transactions contemplated herein or
therein, will not conflict with or constitute a breach of, or
a default under, or result in the creation or imposition of
any lien, charge or other encumbrance upon any property or
assets of the Trust, the Company or any of the Company’s
subsidiaries pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Trust, the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the
property or assets of any of them is subject, except for a
conflict, breach, default, lien, charge or encumbrance which
could not reasonably be expected to have an adverse effect on
the consummation of the transactions contemplated herein or
therein, nor will such action result in any violation of the
Declaration or the Statutory Trust Act or require the consent,
approval, authorization or order of any court or governmental
agency or body.
(n) The
Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware,
with all requisite corporate power and authority to own its
properties and conduct the business it transacts and proposes
to transact, and is duly qualified to transact business and is
in good standing as a foreign corporation in each jurisdiction
where the nature of its activities requires such qualification
except where the failure of the Company to be so qualified
would not, singly or in the aggregate, have a materially
adverse effect on the condition (financial or otherwise),
earnings or business of the Company and its subsidiaries taken
as a whole, whether or not occurring in the ordinary course of
business (a “Material Adverse
Effect”).
(o) Each
of the Company’s subsidiaries is listed in Schedule 1
(the “Subsidiaries”) and has been duly
incorporated and is validly existing as an entity in good
standing under the laws of the jurisdiction in which it is
chartered or organized, with all requisite corporate power and
authority to own its properties and conduct the business it
transacts and proposes to transact, and is duly qualified to
transact business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its
activities requires such qualification except where the
failure of such Subsidiary to be so qualified would not,
singly or in the aggregate, have a Material Adverse
Effect.
(p) The
Company and each of its Subsidiaries have all requisite power
and authority, and all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from
regulatory or governmental officials, bodies and tribunals, to
own or lease their respective properties and to conduct their
respective businesses as now being conducted, and neither the
Company nor any of the Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any
such authorizations, approvals, orders, licenses, certificates
or permits which, singly or in the aggregate, if the failure
to be so licensed or approved or if the subject of an
unfavorable decision, ruling or finding, would have a Material
Adverse Effect; and the Company and its Subsidiaries are in
compliance with all applicable laws, rules, regulations and
orders and consents, the violation of which would have a
Material Adverse Effect.
(q) The
audited consolidated financial statements (including the notes
thereto) and schedules of the Company and its consolidated
subsidiaries for the year ended December 31, 2006 (the
“Financial Statements”) and the interim unaudited
consolidated financial statements of the Company and its
consolidated subsidiaries for the three months ended March 31.
2007 (the “Interim Financial Statements”) provided
to you are the most recent available audited and unaudited
consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in
all material respects, in accordance with generally accepted
accounting principles, the financial position of the Company
and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the dates
and for the periods therein specified, subject, in the case of
Interim Financial Statements, to year-end
adjustments. Such consolidated financial statements
and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted
therein).
(r) The
Company’s report on FR Y-9C dated March 31, 2007
provided to you is the most recent available such report and
the information therein fairly presents in all material
respects the financial position of the Company and its
subsidiaries as of the date thereof.
(s) Since
the respective dates of the Financial Statements, the Interim
Financial Statements and the FR Y-9C, there has been no
material adverse change or development with respect to the
financial condition or earnings of the Company and its
subsidiaries, taken as a whole.
(t) Neither
the Company nor any of the Subsidiaries is in violation of its
respective charter or by-laws or similar organizational
documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which it or any of them
may be bound or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, the effect of
which violation or default in performance or observance would
have a Material Adverse Effect.
(u) The
Company is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the “Bank
Holding Company Act”), and the regulations of the Board
of Governors of the Federal Reserve System (the “Federal
Reserve”), and the deposit accounts of the
Company’s subsidiary banks are insured by the Federal
Deposit Insurance Corporation (“FDIC”) to the
fullest extent permitted by law and the rules and regulations
of the FDIC, and no proceeding for the termination of such
insurance is pending or to the best of our knowledge
threatened.
(v) No
action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries or its or
their property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this
Agreement, the Indenture, the Declaration and the Guarantee,
or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) could reasonably be expected to
have a Material Adverse Effect.
(w) Neither
the Company nor any of its Subsidiaries is party to or
otherwise the subject of any consent decree, memorandum of
understanding, written commitment or other written supervisory
agreement or enforcement action with the FDIC or any other
Federal or state authority or agency charged with the
supervision or insurance of the Company and its
subsidiaries.
(x) Each
of the Company and its Subsidiaries owns or leases all such
properties as are necessary to the conduct of its operations
as presently conducted.
2.
Sale of the Debt Securities . Subject to the
terms and conditions of this Agreement and in reliance upon
the representations and warranties herein set forth, the
Company and the Trust jointly and severally hereby appoint you
as placement agent (the “Placement Agent”), and
you hereby accept such appointment, to act as the agent of the
Company and the Trust, in connection with the offering of the
Debt Securities contemplated hereby, for the purpose of
soliciting offers and sales of the Debt Securities from the
Purchaser (as defined below). You agree to use your
best efforts, subject to the terms and conditions of this
Agreement, on or prior to the Closing Date, to effect such
placement of the Debt Securities with an aggregate stated
liquidation amount of $1,000,000 at a purchase price equal to
100% of the stated liquidation amount thereof.
The
Company and the Trust propose to issue and sell the Debt
Securities on the Closing Date to U.S. Capital Funding VI,
Ltd., a newly formed company with limited liability
established under the laws of the Cayman Islands (the
“Purchaser”), pursuant to the terms of the Capital
Securities Subscription Agreement, to be entered into on the
Closing Date (the “Capital Securities Subscription
Agreement”), between the Company, the Trust and the
Purchaser. The Company and the Trust agree to
execute the Capital Securities Subscription Agreement with the
Purchaser and to return the same to you. In
addition, the Company and the Trust agree that the Purchaser
(and any subsequent transferee that is an entity that holds a
pool of trust preferred securities, debt securities and/or
similar securities or a trustee thereof (a “Subsequent
Pooled Trust Vehicle”)) shall be entitled to the benefit
of, and to rely on, the provisions of this Agreement to the
extent such provisions address or relate to the Purchaser or
the Debt Securities. No Placement Agent shall, in
fulfilling its obligations hereunder, act as an underwriter
for the Debt Securities.
The
distribution rate of the Debt Securities, as of the date
hereof, is the Fixed/Floating Rate. Under certain
circumstances, the distribution rate of the Debt Securities
may be reduced pursuant to a written agreement among you, the
Purchaser and the Company made prior to the Closing
Date.
3.
Delivery and Payment . Delivery of and
payment for the Debt Securities shall be made at 10:00 a.m.
New York City time, on July 30, 2007, which date and time may
be postponed by agreement between you, on the one hand, and
the Company and the Trust, on the other hand (such date and
time of delivery and payment for the Debt Securities being
herein called the “Closing Date”); provided
, that the Closing Date may be no later than 30 days from the
date hereof.
Delivery
of the Debt Securities shall be made at such location, and in
such names and denominations, as you shall designate at least
one business day in advance of the Closing
Date. The Company and the Trust agree to have the
Debt Securities available for inspection and checking by you
in Washington, D.C., not later than 1:00 p.m. on the
business day prior to the Closing Date. The closing
for the purchase and sale of the Debt Securities shall occur
at the offices of McKee Nelson LLP, 1919 M Street, N.W.,
Washington, D.C. 20036, or such other place as the parties
hereto shall agree.
4.
Representations . The Placement Agent
represents to the Company and the Trust that:
(a) It
is aware that the Debt Securities have not been and will not
be registered under the Securities Act and may not be offered
or sold within the United States or to U.S. persons except in
accordance with Rule 903 of Regulation S under the Securities
Act or pursuant to another exemption from the registration
requirements of the Securities Act. It will not
offer, sell or arrange for the offer or sale of any Securities
to purchasers except in privately negotiated transactions that
will not require registration of the Securities under the
Securities Act. Terms used in the first sentence of
this Section 4 have the meanings given to them by Regulation S
under the Securities Act.
(b) Neither
it, nor any of its Affiliates, nor any person acting on its or
their behalf has engaged, or will engage, in any form of
general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale
of the Debt Securities.
(c) Neither
it, nor any of its Affiliates, nor any person acting on its or
their behalf has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the
Securities Act with respect to the Debt
Securities.
5.
Agreements . The Company and the Trust agree
with the Placement Agent and the Purchaser that:
(a) Neither
the Company nor the Trust will, nor will either of them permit
any of its Affiliates to, resell any Debt Securities that have
been acquired by any of them.
(b) Neither
the Company nor the Trust will, nor will either of them permit
any of its Affiliates, nor any person acting on its or their
behalf, to, directly or indirectly, make offers or sales of
any security, or solicit offers to buy any security, under
circumstances that would require the registration of any of
the Securities under the Securities Act, provided,
however , this obligation does not apply to acts or
omissions of the Placement Agent.
(c) Neither
the Company nor the Trust will, nor will either of them permit
any of its Affiliates, nor any person acting on its or their
behalf, to, engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities,
provided, however , this obligation does not
apply to acts or omissions of the Placement
Agent.
(d) Neither
the Company nor the Trust will, nor will either of them permit
any of its Affiliates, nor any person acting on its or their
behalf, to, engage in any directed selling efforts within the
meaning of Regulation S under the Securities Act with respect
to the Securities, provided, however , this
obligation does not apply to acts or omissions of the
Placement Agent.
(e) So
long as any of the Securities are outstanding and are
“restricted securities” within the meaning of Rule
144(a)(3) under the Securities Act, each of the Company and
the Trust will, during any period in which it is not subject
to and in compliance with Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the
“Exchange Act”) or it is not exempt from such
reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser
(as designated by such holder) of such restricted securities,
upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under
the Securities Act. This covenant is intended to be
for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such
restricted securities. The information provided by
the Company and the Trust pursuant to this Section 5(e) will
not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f)
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