ex10-4.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    


    Exhibit
      10.4

    BNC
      STATUTORY TRUST III

     

    


     

    $14,000,000

    Floating
      Rate Capital Securities

     

     

    Fully
      and
      Unconditionally Guaranteed as to Distributions

     

     

    and
      Other
      Payments by

     

     

    BNCCORP,
      INC.

     

    PURCHASE
      AGREEMENT

     

    


     

    July
      30,
      2007

     

    Merrill
      Lynch International

    4
      World
      Financial Center

    250
      Vesey
      Street, 7th
      Floor

    New
      York,
      New York 10080

    


    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 to Merrill Lynch International (the
“Purchaser”), 14,000 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”).  The Company also proposes to issue and sell an additional
      1,000 of capital securities pursuant to a placement agreement dated as of the
      date hereof, among the Offerors and the placement agent thereto.

     

    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 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 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 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 form 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 form 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 agree to sell to you as purchaser (the
      “Purchaser”), and the Purchaser agrees to purchase from the Company and the
      Trust, the Debt Securities with an aggregate stated liquidation amount of
      $14,000,000 at a purchase price equal to 100% of the stated liquidation amount
      thereof.

     

    The
      distribution rate of the Debt Securities, as of the date hereof, is the Floating
      Rate.

     

    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
      Purchaser 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 or any other securities laws, and are being offered for
      sale
      by the Offerors in a transaction not requiring registration under the Securities
      Act.  It is aware that the Debt Securities may not be offered, sold,
      pledged or otherwise transferred except in privately negotiated transactions
      that will not require registration of the Debt Securities 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.

     

    (d)           The
      Purchaser represents and warrants that it is purchasing the Debt Securities
      for
      its own account, for investment and not with a view to, or for offer or sale
      in
      connection with, any distribution thereof in violation of the Securities Act
      or
      other applicable securities laws, subject to any requirement of law that the
      disposition of its property be at all times within its control.

     

    (e)           [Reserved].

     

    (f)           The
      Purchaser has full power and authority to execute and deliver this Agreement,
      to
      make the representations and warranties specified herein, and to consummate
      the
      transactions contemplated herein and it has full right and power to purchase
      the
      Debt Securities and perform its obligations pursuant to this
      Agreement.

     

    (g)           The
      Purchaser believes it has received all of the information it considers necessary
      or appropriate for deciding whether to purchase the Debt
      Securities.  The Purchaser has had the opportunity to ask questions
      of, and receive answers and request additional information from, the Offerors,
      regarding the business, financial condition, results of operations and prospects
      of the Offerors and regarding the terms and conditions of the offering of the
      Debt Securities.  The Purchaser is aware that it may be required to
      bear the economic risk of an investment in the Debt Securities for an indefinite
      period of time.

     

    (h)           No
      filing with, or authorization, approval, consent, license, order, registration,
      qualification or decree of, any governmental body, agency or court having
      jurisdiction over the Purchaser, other than those that have been made or
      obtained, is necessary or required for the performance by the Purchaser of
      its
      obligations under this Agreement or to consummate the transactions contemplated
      herein.

     

    (i)           This
      Agreement has been duly authorized, executed and delivered by the Purchaser
      and
      is a valid and binding agreement of the Purchaser, enforceable against the
      Purchaser in accordance with its terms subject to Bankruptcy and
      Equity.

     

    (j)           The
      Purchaser is not in violation of or default under any term of its organizational
      documents, of any provision of any mortgage, indenture, contract, agreement,
      instrument or contract to which it is a party or by which it is bound or of
      any
      judgment, decree, order, writ or, to its knowledge, any statute, rule or
      regulation applicable to the Purchaser which would prevent the Purchaser from
      performing any material obligation set forth in this Agreement.  The
      execution, delivery and performance of and compliance with this Agreement,
      and
      the consummation of the transactions contemplated herein, will not, with or
      without the passage of time or giving of notice, result in any such material
      violation, or be in conflict with or constitute a default under any such term,
      or the suspension, revocation, impairment, forfeiture or non-renewal of any
      permit, license, authorization or approval applicable to the Purchaser, its
      business or operations or any of its assets or properties which would prevent
      the Purchaser from performing any material obligations set forth in this
      Agreement.

     

    (k)           The
      Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D
      under the Securities Act, with full power and authority to perform its
      obligations under this Agreement.

     

    (l)           The
      Purchaser understands and acknowledges that the Company will rely upon the
      truth
      and accuracy of the foregoing acknowledgments, representations, warranties
      and
      agreements.

     

    (m)           The
      Purchaser understands that no public market exists for any of the Debt
      Securities, and that it is unlikely that a public market will ever exist for
      the
      Debt Securities.

     

    5.           Agreements.  The
      Company and the Trust agree with 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 Purchaser.

     

    (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 Purchaser.

     

    (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 Purchaser.

     

    (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)           Neither
      the Company nor the Trust will, until 180 days following the Closing Date,
      without your prior written consent, offer, sell, contract to sell, grant any
      option to purchase or otherwise dispose of, directly or indirectly, (i) any
      Debt
      Securities or other securities of the Trust other than as contemplated by this
      Agreement, (ii) any securities that are substantially similar to the Securities
      or (iii) any other securities convertible into, or exercisable or exchangeable
      for, any of (i) or (ii), or enter into an agreement, or announce an intention,
      to do any of the foregoing.

     

    (h)           Neither
      you, nor any of your Affiliates, will include any information about the Company
      or any of its Affiliates (other than information related to this offering)
      in
      any registration statement, prospectus, offering circular, private placement
      memorandum or other similar document used in connection with any purchase of,
      or
      solicitation to purchase, the Debt Securities without prior written consent
      of
      the Company.

     

    (g)           The
      Company agrees to pay (i) the costs incident to the authorization, issuance,
      sale and delivery of the Debt Securities and any taxes payable in that
      connection and (ii)  the fees and expenses of the Institutional Trustee,
      the Guarantee Trustee and the Indenture Trustee.

     

    6.           Conditions
      to the Obligations of the Purchaser.  The Purchaser’s obligations
      on the Closing Date shall be subject to the accuracy of the representations
      and
      warranties on the part of the Company and the Trust contained herein as of
      the
      date and time that this Agreement is executed (the “Execution Time”) and the
      Closing Date, to the accuracy of the statements of the Company and the Trust
      made in any certificates pursuant to the provisions hereof, to the performance
      by the Company and the Trust of their obligations hereunder and to the following
      additional conditions:

     

    (a)           The
      Company shall have furnished to you the opinion of Jones, Walker, Waechter,
      Poitevent, Carrère & Denègre LLP, special counsel for the Company, dated the
      Closing Date, addressed to you, in substantially the form set out in Annex
      A
      hereto.

     

    (b)           The
      Company shall have furnished to you the opinion of Jones, Walker, Waechter,
      Poitevent, Carrère & Denègre LLP, special tax counsel for the Company, dated
      the Closing Date, containing such assumptions, qualifications and limitations
      as
      shall be reasonably acceptable to you and your counsel to the effect that for
      U.S. federal income tax purposes, the Subordinated Debt Securities will
      constitute indebtedness of the Company, in substantially the form set out in
      Annex B hereto.

     

    (c)           You
      shall have received the opinion of Morris James LLP, special Delaware counsel
      for the Company and the Trust, dated the Closing Date, addressed to you, in
      substantially the form set out in Annex C hereto.

     

    (d)           You
      shall have received the opinion of Morris James LLP, counsel for the Guarantee
      Trustee, the Institutional Trustee, the Delaware Trustee and the Indenture
      Trustee, dated the Closing Date addressed to you, in substantially the form
      set
      out in Annex D hereto.

     

    (e)           The
      Company shall have furnished to you a certificate of the Company, signed by
      the
      President or a Vice President and by a Treasurer or Chief Financial Officer
      of
      the Company, dated the Closing Date, to the effect that:

     

    (i)           the
      representations and warranties of the Company and the Trust in this Agreement
      are true and correct in all material respects on and as of the Closing Date
      with
      the same effect as if made on the Closing Date, and the Company and the Trust
      have complied with all the agreements and satisfied all the conditions on either
      of their part to be performed or satisfied at or prior to the Closing Date;
      and

     

    (ii)           since
      the date of the most recent financial statements provided to the Purchaser,
      there has been no material adverse change in the condition (financial or other),
      earnings, business or properties of the Company and its subsidiaries, whether
      or
      not arising from transactions in the ordinary course of business.

     

    (f)           Subsequent
      to the Execution Time there shall not have been any change, or any development
      involving a prospective change, in or affecting the business or properties
      of
      the Company and its subsidiaries the effect of which, is, in your reasonable
      judgment, so material and adverse as to make it impractical or inadvisable
      to
      proceed with the offering or delivery of the Debt Securities.

     

    (g)           Prior
      to the Closing Date, the Company and the Trust shall have furnished to you
      such
      further information, certificates and documents as you may reasonably
      request.

     

    (h)           At
      the Closing Date, each of the Operative Documents shall have been duly
      authorized, executed and delivered by each party thereto, and copies thereof
      shall have been delivered to you.

     

    If
      any of
      the conditions specified in this Section 6 shall not have been fulfilled in
      all material respects when and as provided in this Agreement, or if any of
      the
      opinions, certificates and documents mentioned above or elsewhere in this
      Agreement shall not be in all material respects reasonably satisfactory in
      form
      and substance to you, this Agreement and all the Purchaser’s obligations
      hereunder may be canceled at, or at any time prior to, the Closing Date by
      you.  Notice of such cancellation shall be given to the Company and
      the Trust in writing or by telephone or telegraph confirmed in
      writing.

     

    7.           Reimbursement
      of Expenses of the Purchaser.  If the sale of the Debt Securities
      provided for herein is not consummated because any condition set forth in
      Section 6 hereof is not satisfied, because of any termination pursuant to
      Section 9 hereof or because of any refusal, inability or failure on the
      part of the Company or the Trust to perform in all material respects any
      agreement herein or comply with any provision hereof other than by reason of
      a
      default by you, the Company will reimburse the Purchaser upon demand for all
      documented out-of-pocket expenses (including reasonable fees and disbursements
      of counsel) that shall have been incurred by the Purchaser in connection with
      the proposed offering and sale of the Debt Securities.

     

    8.           Indemnification
      and Contribution.  (a)  The Company and the Trust agree
      jointly and severally to indemnify and hold harmless the Purchaser and its
      directors, officers, employees and agents and each person who controls the
      Purchaser within the meaning of either the Securities Act or the Exchange Act
      against any and all losses, claims, damages or liabilities, joint or several,
      to
      which they or any of them may become subject under the Securities Act, the
      Exchange Act or other Federal or state statutory law or regulation, at common
      law or otherwise, insofar as such losses, claims, damages or liabilities (or
      actions in respect thereof) arise out of or are based upon any untrue statement
      or alleged untrue statement of a material fact contained in any written
      information or documents furnished or made available to the Purchaser by the
      Company or the Trust, or its representatives in connection with the transactions
      contemplated herein, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, and agrees to reimburse
      each such indemnified party, as incurred, for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability or action.  This indemnity
      agreement will be in addition to any liability which the Company or the Trust
      may otherwise have.

     

    (b)           The
      Company agrees to indemnify the Trust against all loss, liability, claim, damage
      and expense whatsoever, as due from the Trust under Section 8(a)
      hereunder.

     

    (c)           Promptly
      after receipt by an indemnified party under this Section 8 of notice of the
      commencement of any action, such indemnified party will, if a claim in respect
      thereof is to be made against the indemnifying party under this Section 8,
      notify the indemnifying party in writing of the commencement thereof; but the
      failure so to notify the indemnifying party (i) will not relieve the
      indemnifying party from liability under paragraph (a) above, unless and to
      the
      extent that the indemnifying party did not otherwise learn of such action and
      such failure results in the forfeiture by the indemnifying party of substantial
      rights and defenses and (ii) will not, in any event, relieve the
      indemnifying party from any obligations to any indemnified party other than
      the
      indemnification obligation provided in paragraph (a) above.  The
      indemnifying party shall be entitled to appoint counsel of the indemnifying
      party’s choice at the indemnifying party’s expense to represent the indemnified
      party in any action for which indemnification is sought (in which case the
      indemnifying party shall not thereafter be responsible for the fees and expenses
      of any separate counsel retained by the indemnified party or parties except
      as
      set forth below); provided, however, that such counsel shall be
      satisfactory to the indemnified party.  Notwithstanding the
      indemnifying party’s election to appoint counsel to represent the indemnified
      party in an action, the indemnified party shall have the right to employ
      separate counsel (including local counsel), and the indemnifying party shall
      bear the reasonable fees, costs and expenses of such separate counsel if
      (i) the use of counsel chosen by the indemnifying party to represent the
      indemnified party 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 party and the indemnifying party and the
      indemnified party shall have reasonably concluded that there may be legal
      defenses available to it and/or other indemnified parties which are different
      from or additional to those available to the indemnifying party, (iii) the
      indemnifying party shall not have employed counsel reasonably satisfactory
      to
      the indemnified party to represent the indemnified party within a reasonable
      time after notice of the institution of such action or (iv) the
      indemnifying party shall authorize the indemnified party to employ separate
      counsel at the expense of the indemnifying party.  An indemnifying
      party will not, without the prior written consent of the indemnified parties,
      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 parties are actual or potential parties to such claim or action)
      unless such settlement, compromise or consent includes an unconditional release
      of each indemnified party from all liability arising out of such claim, action,
      suit or proceeding.  An indemnified party will not, without the prior
      written consent of the indemnifying parties, 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 parties are actual
      or
      potential parties to such claim or action).

     

    (d)           In
      the event that the indemnity provided in paragraph (a), (b) or (c) of this
      Section 8 is unavailable or insufficient to hold harmless an indemnified party
      for any reason, the Company, the Trust and you agree to contribute to the
      aggregate losses, claims, damages and liabilities (including legal or other
      expenses reasonably incurred in connection with investigating or defending
      same)
      (collectively “Losses”) to which the Company, the Trust and you may be subject
      in such proportion as is appropriate to reflect the relative benefits received
      by the Company and the Trust on the one hand and by you on the other from the
      offering of the Securities; provided, however, that in no case
      shall you be responsible for any amount in excess of the purchase discount
      or
      commission applicable to the Securities purchased hereunder.  If the
      allocation provided by the immediately preceding sentence is unavailable for
      any
      reason, the Company, the Trust and you shall contribute in such proportion
      as is
      appropriate to reflect not only such relative benefits but also the relative
      fault of the Company and the Trust on the one hand and of you on the other
      in
      connection with the statements or omissions which resulted in such Losses,
      as
      well as any other relevant equitable considerations.  Benefits
      received by the Company and the Trust shall be deemed to be equal to the total
      net proceeds from the offering (before deducting expenses) received by it,
      and
      benefits received by you shall be deemed to be equal to the total purchase
      discounts or commissions applicable to the Securities purchased
      hereunder.  Relative fault shall be determined by reference to, among
      other things, whether any untrue or any alleged untrue statement of a material
      fact or the omission or alleged omission to state a material fact relates to
      information provided by the Company and the Trust on the one hand or you on
      the
      other, the intent of the parties and their relative knowledge, access to
      information and opportunity to correct or prevent such untrue statement or
      omission.  The Company, the Trust and you agree that it would not be
      just and equitable if contribution were determined by pro rata allocation or
      any
      other method of allocation which does not take account of the equitable
      considerations referred to above.  Notwithstanding the provisions of
      this paragraph (d), no person guilty of fraudulent misrepresentation (within
      the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.  For purposes of this Section 8, each person who
      controls the Purchaser within the meaning of either the Securities Act or the
      Exchange Act and each director, officer, employee and agent of the Purchaser
      shall have the same rights to contribution as you, and each person who controls
      the Company within the meaning of either the Securities Act or the Exchange
      Act,
      each officer and director of the Company and each Administrator of the Trust
      shall have the same rights to contribution as the Company, subject in each
      case
      to the applicable terms and conditions of this paragraph (d).

     

    9.           Termination.  This
      Agreement shall be subject to termination in the absolute discretion of you,
      by
      notice given to the Company and the Trust prior to delivery of and payment
      for
      the Debt Securities, if prior to such time (i) there has occurred any Material
      Adverse Effect, (ii) trading in any of the Company’s securities shall have
      been suspended by the Commission or the exchange upon which the Company’s
      securities are traded, if any, or trading in securities generally on the New
      York Stock Exchange shall have been suspended or limited or minimum prices
      shall
      have been established on such Exchange, (iii) a banking moratorium shall
      have been declared either by Federal or Delaware authorities, or (iv) there
      shall have occurred any outbreak or escalation of hostilities, declaration
      by
      the United States of a national emergency or war or other calamity or crisis
      the
      effect of which on financial markets is such as to make it, in your judgment,
      impracticable or inadvisable to proceed with the offering or delivery of the
      Debt Securities.

     

    10.           Representations
      and Indemnities to Survive.  The respective agreements,
      representations, warranties, indemnities and other statements of the Company
      and
      the Trust or their respective officers or trustees and of the Purchaser set
      forth in or made pursuant to this Agreement will remain in full force and
      effect, regardless of any investigation made by or on behalf of the Purchaser,
      the Company or the Trust or any of the officers, directors or trustees,
      administrators, controlling persons, and will survive delivery of and payment
      for the Debt Securities.  The provisions of Sections 7 and 8 hereof
      shall survive the termination or cancellation of this Agreement.

     

    11.           Notices.  All
      communications hereunder will be in writing and effective only on receipt,
      and,
      if sent to the Purchaser, will be mailed, delivered or telecopied and confirmed
      to it at 4 World Financial Center, 12th Floor,
      New York,
      New York  10080; if sent to the Company or the Trust, will be mailed,
      delivered or telecopied and confirmed to it at 322 East Main, Bismarck, North
      Dakota 58501.

     

    12.           Successors.  This
      Agreement will inure to the benefit of and be binding upon the parties hereto
      and their respective successors and the officers and directors and controlling
      persons, and, except as set forth below, no other person will have any right
      or
      obligation hereunder.

     

    The
      parties hereto agree that each transferee of the Debt Securities is an express
      and intended third-party beneficiary of this Agreement and 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 Debt Securities.

     

    13.           Applicable
      Law.  THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
      OF LAWS PRINCIPLES THEREOF.

     

    14.           Counterparts.  This
      Agreement may contain more than one counterpart of the signature page and this
      Agreement may be executed by the affixing of the signature of each of the
      Company, the Trust and you 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 signature page.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    If
      the
      foregoing is in accordance with your understanding of our agreement, please
      sign
      and return to us the enclosed duplicate hereof, whereupon this letter and your
      acceptance shall represent a binding agreement among the Company, the Trust
      and
      you.

     

    
      	
               

            	
              Very
                truly yours,

            


    

     

    
      	
               

            	
              BNCCORP,
                INC.

            


    

     

    
      	
               

            	
              By:
                /s/ Gregory K.
                Cleveland                           
                

            


    

     

    
      	
               

            	
              Name:  Gregory
                K. Cleveland

            


    

     

    
      	
               

            	
              Title:  President
                and Chief Executive Officer

            


    

     

    
      	
               

            	
              BNC
                STATUTORY TRUST III

            


    

     

    
      	
               

            	
              By:
                /s/ Timothy J.
                Franz                                    
                

            


    

     

    
      	
               

            	
              Name:
                Timothy J. Franz

            


    

     

    
      	
               

            	
              Title:  Administrator

            


    

     

    The
      foregoing Agreement is hereby

     

    confirmed
      and accepted as of the

     

    date
      first above written.

     

    MERRILL
      LYNCH INTERNATIONAL

     

    
      	
               

            	
              By:
                /s/ Ifther
                Ali                                  
                

            


    

     

    
      	
               

            	
              Name:
                Ifther Ali

            


    

     

    
      	
               

            	
              Title:
                Authorised Signatory

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              SCHEDULE
                1

            


    

     

    


     

    
      	
               

            	
              List
                of Subsidiaries

            


    

     

    
      	
               

            	
              BNC
                National Bank

            


    

     

    
      	
               

            	
              BNC
                Asset Management, Inc. (a subsidiary of BNC National
                Bank)

            


    

     

    
      	
               

            	
              BNC
                Capital Trust I

            


    

     

    
      	
               

            	
              BNC
                Statutory Trust II

            


    

     

    
      	
               

            	
              Bismarck
                Properties, Inc.

            


    

     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ANNEX
      A

     

    Pursuant
      to Section 6(a) of the Purchase Agreement, special counsel for the Company
      shall
      deliver an opinion in substantially the following form:

     

    (i)           each
      of the Company and the Subsidiaries (A) has been duly incorporated and is
      validly existing as a corporation in good standing under the laws of the
      jurisdiction in which it is chartered or organized, with full corporate power
      and authority to own its properties and conduct the business it currently
      transacts, (B) is duly qualified to do business as a foreign corporation and
      is
      in good standing under the laws of each jurisdiction which requires such
      qualification wherein it owns or leases properties or conducts business, except
      where the failure to be so qualified would not, singularly or in the aggregate,
      have a Material Adverse Effect, and (C) holds all material approvals,
      authorizations, orders, licenses, certificates and permits from governmental
      authorities necessary for the conduct of its business as now being conducted,
      except where the failure to hold such approvals, authorizations, orders,
      licenses, certificates and/or permits would not, singularly or in the aggregate,
      have a Material Adverse Effect;

     

    (ii)           no
      consent, approval, authorization or order of any court or governmental agency
      or
      body is required for the consummation of the transactions contemplated herein
      or
      in the Operative Documents, in connection with the solicitation of the purchase
      and sale of the Debt Securities by you or the purchase of the Subordinated
      Debt
      Securities by the Trust except such approvals (specified in such opinion) as
      have been obtained;

     

    (iii)           neither
      the issue and sale of the Debt Securities or the Subordinated Debt Securities,
      the execution and delivery of the Operative Documents by the Company or the
      Trust and the consummation of any other of the transactions therein contemplated
      in any Operative Document nor the fulfillment of the terms thereof will conflict
      with, result in a breach or violation of, or constitute a default under any
      law
      or the charter or by-laws of the Company or any of its Subsidiaries, the terms
      of any indenture or other agreement or instrument known to such counsel and
      to
      which the Company or any of its Subsidiaries is a party or bound or any
      judgment, order, decree, of any court, regulatory body, administrative agency,
      governmental body or arbitrator having jurisdiction over the Company or any
      of
      its Subsidiaries, or any provision of applicable law, known to such counsel
      after due inquiry to be applicable to the Company or any of its Subsidiaries,
      except for such conflicts, breaches, violations or defaults which are not,
      in
      the aggregate, material to the Company and its subsidiaries taken as a whole
      and
      which do not adversely affect the consummation of the transactions contemplated
      in this Agreement and the Operative Documents;

     

    (iv)           the
      Company is duly registered as a bank holding company under the Bank Holding
      Company Act and the regulations thereunder of the Federal Reserve, and the
      deposit accounts of the Company’s banking subsidiaries are insured by the FDIC
      to the fullest extent permitted by law and the rules and regulations of the
      FDIC, and, to the best of our knowledge no proceeding for the termination of
      such insurance is pending or threatened;

     

    (v)           each
      of the Indenture and the Guarantee Agreement has been duly authorized, executed
      and delivered by the Company, and (in the case of the Indenture and the
      Guarantee, respectively, assuming it is duly authorized, executed and delivered
      by the Indenture Trustee and the Guarantee Trustee, respectively) constitutes
      a
      legal, valid and binding instrument of the Company enforceable against the
      Company in accordance with its terms, subject to Bankruptcy and Equity; the
      Subordinated Debt Securities have been duly and validly authorized and delivered
      to the Indenture Trustee for authentication in accordance with the Indenture,
      and when authenticated in accordance with the provisions of the Indenture and
      delivered to and paid for by the Trust, will constitute legal, valid and binding
      obligations of the Company entitled to the benefits of the Indenture and
      enforceable against the Company in accordance with its terms, subject to
      Bankruptcy and Equity;

     

    (vi)           each
      of the Purchase Agreement, the Placement Agreement and the Capital Securities
      Subscription Agreement has been duly authorized, executed and delivered by
      the
      Company and constitutes a valid and binding instrument of the Company,
      enforceable against the Company in accordance with its terms, subject to
      Bankruptcy and Equity;

     

    (vii)           the
      Declaration has been duly authorized, executed and delivered by the Company
      and
      the Administrators;

     

    (viii)                      each
      of the Purchase Agreement, the Placement Agreement and the Capital Securities
      Subscription Agreement has been duly executed and delivered by the Trust and
      constitutes a valid and binding instrument of the Trust, enforceable against
      the
      Trust in accordance with its terms, subject to Bankruptcy and
      Equity;

     

    (ix)           neither
      the Company nor the Trust is, and, following the issuance of the Debt Securities
      and the consummation of the transactions contemplated by the Operative Documents
      and the application of the proceeds therefrom, neither the Company nor the
      Trust
      will be an “investment company” or an entity “controlled” by an “investment
      company,” required to be registered under the Investment Company Act;
      and

     

    (x)           assuming
      the accuracy of the representations and warranties and compliance with the
      agreements contained herein, no registration of any of the Securities under
      the
      Securities Act is required for the offer, and sale and delivery by the Trust
      to
      the Purchaser of the Debt Securities in the manner contemplated by this
      Agreement, and the Indenture, the Declaration and the Guarantee are not required
      to be qualified under the Trust Indenture Act of 1939.

     

    In
      rendering such opinions, such counsel may (A) state that its opinion is
      limited to the laws of New York, the corporate laws of the State of
      Delaware and the Federal laws of the United States and (B) rely as to
      matters involving the application of laws of any jurisdiction other than
      New York and Delaware or the United States, to the extent deemed
      proper and specified in such opinion, upon the opinion of other counsel of
      good
      standing believed to be reliable and who are satisfactory to you and as to
      matters of fact, and to the extent deemed proper, upon certificates of
      responsible officers of the Company and public officials and (C) in rendering
      such opinions, such counsel may (A) state that its opinion is limited to the
      laws of the States of Louisiana and New York, the corporate laws of the State
      of
      Delaware and the federal laws of the United States, (B) rely as to matters
      involving the application of laws of any jurisdiction other than the States
      of
      Louisiana, New York and Delaware or the United States, to the extent deemed
      proper and specified in such opinion, upon the opinion of other counsel of
      good
      standing believed to be reliable and who are satisfactory to you and as to
      matters of fact, to the extent deemed proper, on certificates of responsible
      officers of the Company and public officials and (C) if such counsel is not
      admitted to the Bar of the State of New York and is not relying on other counsel
      for New York as to matters involving the application of the laws of the State
      of
      New York, as to such matters assume that the jurisdiction in which such counsel
      is admitted to practice law governs and provide an enforceability opinion under
      the laws of the jurisdiction in which such counsel is admitted.  Such
      opinion shall provide that any Subsequent Pooled Trust Vehicle may rely on
      such
      opinion as if it was an addressee thereof.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    ANNEX
      B

     

    Pursuant
      to Section 6(b) of the Purchase Agreement, special tax counsel for the Company
      shall deliver an opinion in substantially the following form:

     

    We
      have
      acted as special tax counsel to BNCCORP, Inc., a Delaware corporation (the
      “Company”), in connection with the offering by BNC Statutory Trust III (the
“Trust”) of 15,000 Floating Rate Capital Securities (liquidation amount $1,000
      per capital security) (the “Debt Securities”).  The Debt Securities
      represent undivided beneficial ownership interests in $15,464,000 in aggregate
      principal amount of Floating Rate Junior Subordinated Debt Securities due 2037
      of the Company (the “Subordinated Debt Securities”).  This opinion
      letter is furnished pursuant to Section 6(b) of each of the Purchase Agreement
      dated July 30, 2007, among the Company, the Trust and the purchaser named
      therein and the Placement Agreement dated July 30, 2007, among the Company,
      the
      Trust and the placement agent named therein.

     

    In
      arriving at the opinions expressed below we have examined executed copies of
      (i)
      the Amended and Restated Declaration of Trust of the Trust dated the date hereof
      (the “Declaration”), and (ii) the Indenture relating to the issuance of the
      Subordinated Debt Securities dated the date hereof (the “Indenture”) (together,
      the “Operative Documents”).  In addition, we have made such
      investigations of law and fact as we have deemed appropriate as a basis for
      the
      opinion expressed below.

     

    It
      is our
      opinion that, under current law and assuming the performance of the Operative
      Documents in accordance with the terms described therein, the Subordinated
      Debt
      Securities will be treated for United States federal income tax purposes as
      indebtedness of the Company.

     

    Our
      opinion is based on the U.S. Internal Revenue Code of 1986, as amended, Treasury
      regulations promulgated thereunder, and administrative and judicial
      interpretations thereof, all as of the date hereof and all of which are subject
      to change, possibly on a retroactive basis.  In rendering this
      opinion, we are expressing our views only as to the federal income tax laws
      of
      the United States of America.

     

    Such
      opinion shall provide that any
      Subsequent Pooled Trust Vehicle may rely on such opinion as if it was an
      addressee thereof.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ANNEX
      C

     

    Pursuant
      to Section 6(c) of the Purchase Agreement, special Delaware counsel for the
      Company and the Trust shall deliver an opinion in substantially the following
      form:

     

    1.           The
      Trust has been duly formed and is validly existing in good standing as a
      statutory trust under the Act.

    


    2.           The
      Declaration constitutes a valid and binding obligation of the Sponsor and
      Trustees party thereto, enforceable against such Sponsor and Trustees in
      accordance with its terms.

    


    3.           Under
      the Act and the Declaration, the Trust has the requisite trust power and
      authority (i) to own its properties and conduct its business, all as described
      in the Declaration, (ii) to execute and deliver, and perform its obligations
      under, the Trust Documents, (iii) to authorize, issue, sell and perform its
      obligations under its Trust Securities, and (iv) to purchase and hold the
      Debentures.

    


    4.           The
      Debt Securities of the Trust have been duly authorized for issuance by the
      Trust
      and, when issued, executed and authenticated in accordance with the Declaration
      and delivered against payment therefor in accordance with the Declaration and
      the Purchase Agreement, will be validly issued and, subject to the
      qualifications set forth in paragraph 5 below, fully paid and nonassessable
      undivided beneficial interests in the assets of the Trust and the Debt Security
      Holders will be entitled to the benefits provided by the
      Declaration.

    


    5.           Each
      Debt Security Holder, in such capacity, will be entitled to the same limitation
      of personal liability extended to stockholders of private corporations for
      profit organized under the General Corporation Law of the State of
      Delaware.  We note, however, that the Debt Security Holders may be
      required to make payment or provide indemnity or security as set forth in the
      Declaration.

    


    6.           Under
      the Declaration and the Act, the issuance of the Trust Securities of the Trust
      is not subject to preemptive rights.

    


    7.           The
      Common Securities of the Trust have been duly authorized for issuance by the
      Trust and, when issued and executed in accordance with the Declaration and
      delivered against payment therefor in accordance with the Declaration and the
      Common Securities Subscription Agreement, will be validly issued undivided
      beneficial interests in the assets of the Trust and the Common Security Holders
      will be entitled to the benefits provided by the Declaration.

    


    8.           Under
      the Declaration and the Act, the execution and delivery by the Trust of the
      Trust Documents, and the performance by the Trust of its obligations thereunder,
      have been duly authorized by the requisite trust action on the part of such
      Trust.

    


    9.           The
      issuance and sale by the Trust of its Trust Securities, the execution, delivery
      and performance by the Trust of the Trust Documents, the consummation by the
      Trust of the transactions contemplated by the Trust Documents, and the
      compliance by the Trust with its obligations thereunder are not prohibited
      by
      (i) the Declaration or the Certificate, or (ii) any law or administrative
      regulation of the State of Delaware applicable to such Trust.

    


    10.           No
      authorization, approval, consent or order of any Delaware court or Delaware
      governmental authority or Delaware agency is required to be obtained by the
      Trust solely in connection with the issuance and sale by the Trust of its Trust
      Securities, the due authorization, execution and delivery by the Trust of the
      Trust Documents or the performance by the Trust of its obligations under the
      Trust Documents.

    


    


    


    11.           The
      Debt Security Holders (other than those Debt Security Holders who reside or
      are
      domiciled in the State of Delaware) will have no liability for income taxes
      imposed by the State of Delaware solely as a result of their participation
      in
      the Trust, and the Trust will not be liable for any income tax imposed by the
      State of Delaware.

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ANNEX
      D

     

    


     

    Pursuant
      to Section 6(d) of the Purchase Agreement, counsel for the Guarantee Trustee,
      the Institutional Trustee, the Delaware Trustee and the Indenture Trustee shall
      deliver an opinion in substantially the following form:

     

    1.           Wilmington
      Trust Company (“WTC”) is a Delaware banking corporation with trust powers, duly
      incorporated, validly existing and in good standing under the laws of the State
      of Delaware, with requisite corporate power and authority to execute and
      deliver, and to perform its obligations under, the Transaction
      Documents.

    


    2.           The
      execution, delivery, and performance by WTC of the Transaction Documents have
      been duly authorized by all necessary corporate action on the part of WTC,
      and
      the Transaction Documents have been duly executed and delivered by
      WTC.

    


    3.           The
      execution, delivery and performance of the Transaction Documents by WTC and
      the
      consummation of any of the transactions by WTC contemplated thereby are not
      prohibited by (i) the Charter or Bylaws of WTC, (ii) any law or administrative
      regulation of the State of Delaware or the United States of America governing
      the banking and trust powers of WTC, or (iii) to our knowledge (based and
      relying solely on the Officer Certificates), any agreements or instruments
      to
      which WTC is a party or by which WTC is bound or any judgments or order
      applicable to WTC.

    


    4.           The
      Debentures delivered on the date hereof have been authenticated by due execution
      thereof and delivered by WTC, as Debenture Trustee, in accordance with the
      Corporation Order.  The Debt Securities delivered on the date hereof
      have been authenticated by due execution thereof and delivered by WTC, as
      Institutional Trustee, in accordance with the related Trust Order.

    


    5.           None
      of the execution, delivery and performance by WTC of the Transaction Documents
      and the consummation of any of the transactions by WTC contemplated thereby
      requires the consent, authorization, order or approval of, the withholding
      of
      objection on the part of, the giving of notice to, the registration with or
      the
      taking of any other action in respect of, any governmental authority or agency,
      under any law or administrative regulation of the State of Delaware or the
      United States of America governing the banking and trust powers of WTC, except
      for the filing of the Certificate for the Trust with the Office of the Secretary
      of State of the State of Delaware pursuant to the Delaware Statutory Trust
      Act
      12 Del.C. §3801, etseq. (which filing has been duly
      made).