ex10-3.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    


    Exhibit
      10.3

    GUARANTEE
      AGREEMENT

     

    BNCCORP,
      INC.

     

    Dated
      as
      of July 30, 2007

     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
              TABLE
        OF
        CONTENTS      
                                                                                                              


    
      	 	 	 Page  


    

     

    
      	
              ARTICLE
                I

            	
              DEFINITIONS
                AND INTERPRETATION 

            	
              1

            


    

     

    
      	
               

            	
              Section
                1.1.

            	
              Definitions
                and Interpretation 

            	
              1

            


    

     

    
      	
              ARTICLE
                II

            	
              POWERS,
                DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 

            	
              4

            


    

     

    
      	
               

            	
              Section
                2.1.

            	
              Powers
                and Duties of the Guarantee Trustee 

            	
              4

            


    

     

    
      	
               

            	
              Section
                2.2.

            	
              Certain
                Rights of the Guarantee Trustee 

            	
              5

            


    

     

    
      	
               

            	
              Section
                2.3.

            	
              Not
                Responsible for Recitals or Issuance of Guarantee 

            	
              7

            


    

     

    
      	
               

            	
              Section
                2.4.

            	
              Events
                of Default; Waiver 

            	
              7

            


    

     

    
      	
               

            	
              Section
                2.5.

            	
              Events
                of Default; Notice 

            	
              8

            


    

     

    
      	
              ARTICLE
                III

            	   THE
              GUARANTEE TRUSTEE	
              8

            


    

     

    
      	
               

            	
              Section
                3.1.

            	
              The
                Guarantee Trustee; Eligibility 

            	
              8

            


    

     

    
      	
               

            	
              Section
                3.2.

            	
              Appointment,
                Removal and Resignation of the Guarantee Trustee 

            	
              9

            


    

     

    
      	
              ARTICLE
                IV

            	 GUARANTEE	
               10

            


    

     

    
      	
               

            	
              Section
                4.1.

            	
              Guarantee 

            	
              10

            


    

     

    
      	
               

            	
              Section
                4.2.

            	
              Waiver
                of Notice and Demand 

            	
              10

            


    

     

    
      	
               

            	
              Section
                4.3.

            	
              Obligations
                Not Affected 

            	
              10

            


    

     

    
      	
               

            	
              Section
                4.4.

            	
              Rights
                of Holders 

            	
              11

            


    

     

    
      	
               

            	
              Section
                4.5.

            	
              Guarantee
                of Payment 

            	
              11

            


    

     

    
      	
               

            	
              Section
                4.6.

            	
              Subrogation 

            	
              12

            


    

     

    
      	
               

            	
              Section
                4.7.

            	
              Independent
                Obligations 

            	
              12

            


    

     

    
      	
               

            	
              Section
                4.8.

            	
              Enforcement 

            	
              12

            


    

     

    
      	
              ARTICLE
                V

            	 LIMITATION
              OF TRANSACTIONS; SUBORDINATION	
              12

            


    

     

    
      	
               

            	
              Section
                5.1.

            	
              Limitation
                of Transactions 

            	
              12

            


    

     

    
      	
               

            	
              Section
                5.2.

            	
              Ranking 

            	
              13

            


    

     

    
      	
              
                ARTICLE
                  VI 

              

            	 TERMINATION	
              14

            


    

     

    
      	
               

            	
              Section
                6.1.

            	
              Termination 

            	
              14

            


    

     

    
      	
              ARTICLE
                VII

            	 INDEMNIFICATION	
              14

            


    

     

    
      	
               

            	
              Section
                7.1.

            	
              Exculpation 

            	
              14

            


    

     

    
      	
               

            	
              Section
                7.2.

            	
              Indemnification 

            	
              14

            


    

     

    
      	
               

            	
              Section
                7.3.

            	
              Compensation;
                Reimbursement of Expenses 

            	
              15

            


    

     

    
      
        
          	
                                    
              	     -i-                               	 

             

      

      
        
        

        
          
            

          

           

        

      

      
        
          TABLE
            OF CONTENTS            

            (continued)            
                                                                                                 

        

      

       

    

    
      	 	 	 Page


    

     

    
      	
              ARTICLE
                VIII 

            	 MISCELLANEOUS	
              
                16

              

            


    

     

    
      	
               

            	
              Section
                8.1.

            	
              Successors
                and Assigns 

            	
              16

            


    

     

    
      	
               

            	
              Section
                8.2.

            	
              Amendments 

            	
              16

            


    

     

    
      	
               

            	
              Section
                8.3.

            	
              Notices 

            	
              16

            


    

     

    
      	
               

            	
              Section
                8.4.

            	
              Benefit 

            	
              17

            


    

     

    
      	
               

            	
              Section
                8.5.

            	
              Governing
                Law 

            	
              17

            


    

     

    
      	
               

            	
              Section
                8.6.

            	
              Counterparts 

            	
              17

            


    

     

     

    


    



    
      
              
        

          
            	                

                                      
              	      -ii-                               	 


          
      
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    GUARANTEE
      AGREEMENT

     

    This
      GUARANTEE AGREEMENT (the “Guarantee”), dated as of July 30, 2007, is executed
      and delivered by BNCCORP, Inc., a bank holding company incorporated in North
      Dakota  (the “Guarantor”), and Wilmington Trust Company, a Delaware banking
      corporation, as trustee (the “Guarantee Trustee”), for the benefit of the
      Holders (as defined herein) from time to time of the Capital Securities (as
      defined herein) of BNC Statutory Trust III, a Delaware statutory trust (the
      “Issuer”).

     

    WHEREAS,
      pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
      dated as of July 30, 2007, among the trustees named therein of the Issuer,
      BNCCORP, Inc., as sponsor, and the Holders from time to time of undivided
      beneficial interests in the assets of the Issuer, the Issuer is issuing on
      the
      date hereof securities, having an aggregate liquidation amount of up to
      $15,000,000, designated the Capital Securities (the “Capital Securities”);
      and

     

    WHEREAS,
      as incentive for the Holders to purchase the Capital Securities, the Guarantor
      desires irrevocably and unconditionally to agree, to the extent set forth in
      this Guarantee, to pay to the Holders of Capital Securities the Guarantee
      Payments (as defined herein) and to make certain other payments on the terms
      and
      conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the purchase by each Holder of the Capital
      Securities, which purchase the Guarantor hereby agrees shall benefit the
      Guarantor, the Guarantor executes and delivers this Guarantee for the benefit
      of
      the Holders.

     

                
      ARTICLE
      I                                

     

    


     

    DEFINITIONS
      AND INTERPRETATION

     

    Section
      1.1.  Definitions
      and Interpretation.

     

    In
      this
      Guarantee, unless the context otherwise requires:

     

    (a)  capitalized
      terms used in this Guarantee but not defined in the preamble above have the
      respective meanings assigned to them in this Section 1.1;

     

    (b)  a
      term defined anywhere in this Guarantee has the same meaning
      throughout;

     

    (c)  all
      references to “the Guarantee” or “this Guarantee” are to this Guarantee as
      modified, supplemented or amended from time to time;

     

    (d)  all
      references in this Guarantee to Articles and Sections are to Articles and
      Sections of this Guarantee, unless otherwise specified;

     

    (e)  terms
      defined in the Declaration as of the date of execution of this Guarantee have
      the same meanings when used in this Guarantee, unless otherwise defined in
      this
      Guarantee or unless the context otherwise requires; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)  a
      reference to the singular includes the plural and vice versa.

     

    “Beneficiaries”
      means any Person to whom the Issuer is or hereafter becomes indebted or
      liable.

     

    “Corporate
      Trust Office” means the office of the Guarantee Trustee at which the corporate
      trust business of the Guarantee Trustee shall, at any particular time, be
      principally administered, which office at the date of execution of this
      Guarantee is located at Rodney Square North, 1100 North Market Street,
      Wilmington, Delaware 19890-0001.

     

    “Covered
      Person” means any Holder of Capital Securities.

     

    “Debentures”
      means the junior subordinated debentures of BNCCORP, Inc., designated the
      Floating Rate Junior Subordinated Debt Securities due 2037, held by the
      Institutional Trustee (as defined in the Declaration) of the
      Issuer.

     

    “Event
      of
      Default” has the meaning set forth in Section 2.4.

     

    “Guarantee
      Payments” means the following payments or distributions, without duplication,
      with respect to the Capital Securities, to the extent not paid or made by the
      Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration)
      which are required to be paid on such Capital Securities to the extent the
      Issuer has funds available in the Property Account (as defined in the
      Declaration) therefor at such time, (ii) the Redemption Price (as defined in
      the
      Indenture) to the extent the Issuer has funds available in the Property Account
      therefor at such time, with respect to the Capital Securities at maturity or
      any
      Capital Securities called for redemption by the Issuer, (iii) the Special
      Redemption Price (as defined in the Indenture) to the extent the Issuer has
      funds available in the Property Account therefor at such time, with respect
      to
      Capital Securities called for redemption upon the occurrence of a Special Event
      (as defined in the Indenture), and (iv) upon a voluntary or involuntary
      liquidation, dissolution, winding-up or termination of the Issuer (other than
      in
      connection with the distribution of Debentures to the Holders of the Capital
      Securities in exchange therefor as provided in the Declaration), the lesser
      of
      (a) the aggregate of the liquidation amount and all accrued and unpaid
      Distributions on the Capital Securities to the date of payment, to the extent
      the Issuer has funds available in the Property Account therefor at such time,
      and (b) the amount of assets of the Issuer remaining available for distribution
      to Holders in liquidation of the Issuer after satisfaction of liabilities to
      creditors of the Issuer as required by applicable law (in either case, the
      “Liquidation Distribution”).

     

    “Guarantee
      Trustee” means Wilmington Trust Company, until a Successor Guarantee Trustee has
      been appointed and has accepted such appointment pursuant to the terms of this
      Guarantee and thereafter means each such Successor Guarantee
      Trustee.

     

    “Holder”
      means any holder, as registered on the books and records of the Issuer, of
      any
      Capital Securities; provided, however, that, in determining
      whether the holders of the requisite percentage of Capital Securities have
      given
      any request, notice, consent or waiver hereunder, “Holder” shall not include the
      Guarantor or any Affiliate of the Guarantor.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Indemnified
      Person” means the Guarantee Trustee (including in its individual capacity), any
      Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
      members, partners, employees, representatives, nominees, custodians or agents
      of
      the Guarantee Trustee.

     

    “Indenture”
      means the Indenture, dated as of July 30, 2007, between the Guarantor and
      Wilmington Trust Company, not in its individual capacity but solely as trustee,
      and any indenture supplemental thereto pursuant to which the Debentures are
      to
      be issued to the Institutional Trustee of the Issuer.

     

    “Liquidation
      Distribution” has the meaning set forth in the definition of “Guarantee
      Payments” herein.

     

    “Majority
      in liquidation amount of the Capital Securities” means Holder(s) of outstanding
      Capital Securities, voting together as a class, but separately from the holders
      of Common Securities, of more than 50% of the aggregate liquidation amount
      (including the stated amount that would be paid on redemption, liquidation
      or
      otherwise, plus accrued and unpaid Distributions to, but excluding, the date
      upon which the voting percentages are determined) of all Capital Securities
      then
      outstanding.

     

    “Obligations”
      means any costs, expenses or liabilities (but not including liabilities related
      to taxes) of the Issuer, other than obligations of the Issuer to pay to holders
      of any Trust Securities the amounts due such holders pursuant to the terms
      of
      the Trust Securities.

     

    “Officer’s
      Certificate” means, with respect to any Person, a certificate signed by one
      Authorized Officer of such Person.  Any Officer’s Certificate
      delivered with respect to compliance with a condition or covenant provided
      for
      in this Guarantee shall include:

     

    (a)  a
      statement that each officer signing the Officer’s Certificate has read the
      covenant or condition and the definitions relating thereto;

     

    (b)  a
      brief statement of the nature and scope of the examination or investigation
      undertaken by each officer in rendering the Officer’s Certificate;

     

    (c)  a
      statement that each such officer has made such examination or investigation
      as,
      in such officer’s opinion, is necessary to enable such officer to express an
      informed opinion as to whether or not such covenant or condition has been
      complied with; and

     

    (d)  a
      statement as to whether, in the opinion of each such officer, such condition
      or
      covenant has been complied with.

     

    “Person”
      means a legal person, including any individual, corporation, estate,
      partnership, joint venture, association, joint stock company, limited liability
      company, trust, unincorporated association, or government or any agency or
      political subdivision thereof, or any other entity of whatever
      nature.

     

    “Responsible
      Officer” means, with respect to the Guarantee Trustee, any officer within the
      Corporate Trust Office of the Guarantee Trustee with direct responsibility
      for
      the administration of any matters relating to this Guarantee, including any
      vice
      president, any assistant vice president, any secretary, any assistant secretary,
      the treasurer, any assistant treasurer, any trust officer or other officer
      of
      the Corporate Trust Office of the Guarantee Trustee customarily performing
      functions similar to those performed by any of the above designated officers
      and
      also means, with respect to a particular corporate trust matter, any other
      officer to whom such matter is referred because of that officer’s knowledge of
      and familiarity with the particular subject.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Successor
      Guarantee Trustee” means a successor Guarantee Trustee possessing the
      qualifications to act as Guarantee Trustee under Section 3.1.

     

    “Trust
      Securities” means the Common Securities and the Capital Securities.

     

    ARTICLE
      II                                

     

    


     

    POWERS,
      DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

     

    Section
      2.1.  Powers
      and Duties of the Guarantee Trustee.

     

    (a)  This
      Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
      of the Capital Securities, and the Guarantee Trustee shall not transfer this
      Guarantee to any Person except a Holder of Capital Securities exercising his
      or
      her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on
      acceptance by such Successor Guarantee Trustee of its appointment to act as
      Successor Guarantee Trustee.  The right, title and interest of the
      Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee,
      and such vesting and cessation of title shall be effective whether or not
      conveyancing documents have been executed and delivered pursuant to the
      appointment of such Successor Guarantee Trustee.

     

    (b)  If
      an Event of Default actually known to a Responsible Officer of the Guarantee
      Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
      this
      Guarantee for the benefit of the Holders of the Capital Securities.

     

    (c)  The
      Guarantee Trustee, before the occurrence of any Event of Default and after
      the
      curing or waiving of all Events of Default that may have occurred, shall
      undertake to perform only such duties as are specifically set forth in this
      Guarantee, and no implied covenants shall be read into this Guarantee against
      the Guarantee Trustee.  In case an Event of Default has occurred (that
      has not been cured or waived pursuant to Section 2.4(b)) and is actually known
      to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall
      exercise such of the rights and powers vested in it by this Guarantee, and
      use
      the same degree of care and skill in its exercise thereof, as a prudent person
      would exercise or use under the circumstances in the conduct of his or her
      own
      affairs.

     

    (d)  No
      provision of this Guarantee shall be construed to relieve the Guarantee Trustee
      from liability for its own negligent action, its own negligent failure to act,
      or its own willful misconduct, except that:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (i)  prior
      to the occurrence of any Event of Default and after the curing or waiving of
      all
      Events of Default that may have occurred:

     

    (A)  the
      duties and obligations of the Guarantee Trustee shall be determined solely
      by
      the express provisions of this Guarantee, and the Guarantee Trustee shall not
      be
      liable except for the performance of such duties and obligations as are
      specifically set forth in this Guarantee, and no implied covenants or
      obligations shall be read into this Guarantee against the Guarantee Trustee;
      and

     

    (B)  in
      the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
      Trustee may conclusively rely, as to the truth of the statements and the
      correctness of the opinions expressed therein, upon any certificates or opinions
      furnished to the Guarantee Trustee and conforming to the requirements of this
      Guarantee; but in the case of any such certificates or opinions furnished to
      the
      Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the
      same to determine whether or not on their face they conform to the requirements
      of this Guarantee;

     

    (ii)  the
      Guarantee Trustee shall not be liable for any error of judgment made in good
      faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
      proved that such Responsible Officer of the Guarantee Trustee or the Guarantee
      Trustee was negligent in ascertaining the pertinent facts upon which such
      judgment was made;

     

    (iii)  the
      Guarantee Trustee shall not be liable with respect to any action taken or
      omitted to be taken by it in good faith in accordance with the written direction
      of the Holders of not less than a Majority in liquidation amount of the Capital
      Securities relating to the time, method and place of conducting any proceeding
      for any remedy available to the Guarantee Trustee, or exercising any trust
      or
      power conferred upon the Guarantee Trustee under this Guarantee;
      and

     

    (iv)  no
      provision of this Guarantee shall require the Guarantee Trustee to expend or
      risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights or
      powers, if the Guarantee Trustee shall have reasonable grounds for believing
      that the repayment of such funds is not reasonably assured to it under the
      terms
      of this Guarantee, or security and indemnity, reasonably satisfactory to the
      Guarantee Trustee, against such risk or liability is not reasonably assured
      to
      it.

     

    Section
      2.2.  Certain
      Rights of the Guarantee Trustee.

     

    (a)  Subject
      to the provisions of Section 2.1:

     

    (i)  The
      Guarantee Trustee may conclusively rely, and shall be fully protected in acting
      or refraining from acting upon, any resolution, certificate, statement,
      instrument, opinion, report, notice, request, direction, consent, order, bond,
      debenture, note, other evidence of indebtedness or other paper or document
      believed by it to be genuine and to have been signed, sent or presented by
      the
      proper party or parties.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (ii)
      Any
      direction or act of the Guarantor contemplated by this Guarantee shall be
      sufficiently evidenced by an Officer’s Certificate.

     

    (iii)  Whenever,
      in the administration of this Guarantee, the Guarantee Trustee shall deem it
      desirable that a matter be proved or established before taking, suffering or
      omitting any action hereunder, the Guarantee Trustee (unless other evidence
      is
      herein specifically prescribed) may, in the absence of bad faith on its part,
      request and conclusively rely upon an Officer’s Certificate of the Guarantor
      which, upon receipt of such request, shall be promptly delivered by the
      Guarantor.

     

    (iv)  The
      Guarantee Trustee shall have no duty to see to any recording, filing or
      registration of any instrument or other writing (or any rerecording, refiling
      or
      reregistration thereof).

     

    (v)  The
      Guarantee Trustee may consult with counsel of its selection, and the advice
      or
      opinion of such counsel with respect to legal matters shall be full and complete
      authorization and protection in respect of any action taken, suffered or omitted
      by it hereunder in good faith and in accordance with such advice or
      opinion.  Such counsel may be counsel to the Guarantor or any of its
      Affiliates and may include any of its employees.  The Guarantee
      Trustee shall have the right at any time to seek instructions concerning the
      administration of this Guarantee from any court of competent
      jurisdiction.

     

    (vi)  The
      Guarantee Trustee shall be under no obligation to exercise any of the rights
      or
      powers vested in it by this Guarantee at the request or direction of any Holder,
      unless such Holder shall have provided to the Guarantee Trustee such security
      and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
      costs, expenses (including attorneys’ fees and expenses and the expenses of the
      Guarantee Trustee’s agents, nominees or custodians) and liabilities that might
      be incurred by it in complying with such request or direction, including such
      reasonable advances as may be requested by the Guarantee Trustee;
provided, however, that nothing contained in this Section
      2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence
      of an Event of Default, of its obligation to exercise the rights and powers
      vested in it by this Guarantee.

     

    (vii)  The
      Guarantee Trustee shall not be bound to make any investigation into the facts
      or
      matters stated in any resolution, certificate, statement, instrument, opinion,
      report, notice, request, direction, consent, order, bond, debenture, note,
      other
      evidence of indebtedness or other paper or document, but the Guarantee Trustee,
      in its discretion, may make such further inquiry or investigation into such
      facts or matters as it may see fit.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (viii)  The
      Guarantee Trustee may execute any of the trusts or powers hereunder or perform
      any duties hereunder either directly or by or through agents, nominees,
      custodians or attorneys, and the Guarantee Trustee shall not be responsible
      for
      any misconduct or negligence on the part of any agent or attorney appointed
      with
      due care by it hereunder.

     

    (ix)  Any
      action taken by the Guarantee Trustee or its agents hereunder shall bind the
      Holders of the Capital Securities, and the signature of the Guarantee Trustee
      or
      its agents alone shall be sufficient and effective to perform any such
      action.  No third party shall be required to inquire as to the
      authority of the Guarantee Trustee to so act or as to its compliance with any
      of
      the terms and provisions of this Guarantee, both of which shall be conclusively
      evidenced by the Guarantee Trustee’s or its agent’s taking such
      action.

     

    (x)  Whenever
      in the administration of this Guarantee the Guarantee Trustee shall deem it
      desirable to receive instructions with respect to enforcing any remedy or right
      or taking any other action hereunder, the Guarantee Trustee (A) may request
      instructions from the Holders of a Majority in liquidation amount of the Capital
      Securities, (B) may refrain from enforcing such remedy or right or taking such
      other action until such instructions are received and (C) shall be protected
      in
      conclusively relying on or acting in accordance with such
      instructions.

     

    (xi)  The
      Guarantee Trustee shall not be liable for any action taken, suffered, or omitted
      to be taken by it in good faith and reasonably believed by it to be authorized
      or within the discretion or rights or powers conferred upon it by this
      Guarantee.

     

    (b)  No
      provision of this Guarantee shall be deemed to impose any duty or obligation
      on
      the Guarantee Trustee to perform any act or acts or exercise any right, power,
      duty or obligation conferred or imposed on it, in any jurisdiction in which
      it
      shall be illegal or in which the Guarantee Trustee shall be unqualified or
      incompetent in accordance with applicable law to perform any such act or acts
      or
      to exercise any such right, power, duty or obligation.  No permissive
      power or authority available to the Guarantee Trustee shall be construed to
      be a
      duty.

     

    Section
      2.3.  Not
      Responsible for Recitals or Issuance of Guarantee.

     

    The
      recitals contained in this Guarantee shall be taken as the statements of the
      Guarantor, and the Guarantee Trustee does not assume any responsibility for
      their correctness.  The Guarantee Trustee makes no representation as
      to the validity or sufficiency of this Guarantee.

     

    Section
      2.4.  Events
      of Default; Waiver.

     

    (a)  An
      Event of Default under this Guarantee will occur upon the failure of the
      Guarantor to perform any of its payment or other obligations
      hereunder.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (b)  The
      Holders of a Majority in liquidation amount of the Capital Securities may,
      voting or consenting as a class, on behalf of the Holders of all of the Capital
      Securities, waive any past Event of Default and its
      consequences.  Upon such waiver, any such Event of Default shall cease
      to exist, and shall be deemed to have been cured, for every purpose of this
      Guarantee, but no such waiver shall extend to any subsequent or other default
      or
      Event of Default or impair any right consequent thereon.

     

    Section
      2.5.  Events
      of Default; Notice.

     

    (a)  The
      Guarantee Trustee shall, within 90 days after the occurrence of an Event of
      Default, transmit by mail, first class postage prepaid, to the Holders of the
      Capital Securities and the Guarantor, notices of all Events of Default actually
      known to a Responsible Officer of the Guarantee Trustee, unless such defaults
      have been cured before the giving of such notice, provided,
however, that the Guarantee Trustee shall be protected in withholding
      such notice if and so long as a Responsible Officer of the Guarantee Trustee
      in
      good faith determines that the withholding of such notice is in the interests
      of
      the Holders of the Capital Securities.

     

    (b)  The
      Guarantee Trustee shall not be charged with knowledge of any Event of Default
      unless the Guarantee Trustee shall have received written notice thereof from
      the
      Guarantor or a Holder of the Capital Securities, or a Responsible Officer of
      the
      Guarantee Trustee charged with the administration of this Guarantee shall have
      actual knowledge thereof.

     

                              
      ARTICLE
      III                                

     

    


     

    THE
      GUARANTEE TRUSTEE

     

    Section
      3.1.  The
      Guarantee Trustee; Eligibility.

     

    (a)  There
      shall at all times be a Guarantee Trustee which shall:

     

    (i)  not
      be an Affiliate of the Guarantor; and

     

    (ii)  be
      a corporation or national association organized and doing business under the
      laws of the United States of America or any State or Territory thereof or of
      the
      District of Columbia, or Person authorized under such laws to exercise corporate
      trust powers, having a combined capital and surplus of at least 50 million
      U.S.
      dollars ($50,000,000), and subject to supervision or examination by Federal,
      State, Territorial or District of Columbia authority.  If such
      corporation or national association publishes reports of condition at least
      annually, pursuant to law or to the requirements of the supervising or examining
      authority referred to above, then, for the purposes of this Section 3.1(a)(ii),
      the combined capital and surplus of such corporation or national association
      shall be deemed to be its combined capital and surplus as set forth in its
      most
      recent report of condition so published.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (b)  If
      at any time the Guarantee Trustee shall cease to be eligible to so act under
      Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner
      and
      with the effect set forth in Section 3.2(c).

     

    (c)  If
      the Guarantee Trustee has or shall acquire any “conflicting interest” within the
      meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
      shall either eliminate such interest or resign to the extent and in the manner
      provided by, and subject to, this Guarantee.

     

    Section
      3.2.  Appointment,
      Removal and Resignation of the Guarantee Trustee.

     

    (a)  Subject
      to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
      cause at any time by the Guarantor except during an Event of
      Default.

     

    (b)  The
      Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until
      a
      Successor Guarantee Trustee has been appointed and has accepted such appointment
      by written instrument executed by such Successor Guarantee Trustee and delivered
      to the Guarantor.

     

    (c)  The
      Guarantee Trustee appointed to office shall hold office until a Successor
      Guarantee Trustee shall have been appointed or until its removal or
      resignation.  The Guarantee Trustee may resign from office (without
      need for prior or subsequent accounting) by an instrument in writing executed
      by
      the Guarantee Trustee and delivered to the Guarantor, which resignation shall
      not take effect until a Successor Guarantee Trustee has been appointed and
      has
      accepted such appointment by an instrument in writing executed by such Successor
      Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
      Trustee.

     

    (d)  If
      no Successor Guarantee Trustee shall have been appointed and accepted
      appointment as provided in this Section 3.2 within 60 days after delivery of
      an
      instrument of removal or resignation, the Guarantee Trustee resigning or being
      removed may petition any court of competent jurisdiction for appointment of
      a
      Successor Guarantee Trustee.  Such court may thereupon, after
      prescribing such notice, if any, as it may deem proper, appoint a Successor
      Guarantee Trustee.

     

    (e)  No
      Guarantee Trustee shall be liable for the acts or omissions to act of any
      Successor Guarantee Trustee.

     

    (f)  Upon
      termination of this Guarantee or removal or resignation of the Guarantee Trustee
      pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee
      all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued
      to
      the date of such termination, removal or resignation.

     

    


     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


     

                                
      ARTICLE
      IV                                

     

    


     

    GUARANTEE

     

    Section
      4.1.  Guarantee.

     

    (a)  The
      Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
      the Guarantee Payments (without duplication of amounts theretofore paid by
      the
      Issuer), as and when due, regardless of any defense (except as defense of
      payment by the Issuer), right of set-off or counterclaim that the Issuer may
      have or assert.  The Guarantor’s obligation to make a Guarantee
      Payment may be satisfied by direct payment of the required amounts by the
      Guarantor to the Holders or by causing the Issuer to pay such amounts to the
      Holders.

     

    (b)  The
      Guarantor hereby also agrees to assume any and all Obligations of the Issuer
      and
      in the event any such Obligation is not so assumed, subject to the terms and
      conditions hereof, the Guarantor hereby irrevocably and unconditionally
      guarantees to each Beneficiary the full payment, when and as due, of any and
      all
      Obligations to such Beneficiaries.  This Guarantee is intended to be
      for the Beneficiaries who have received notice hereof.

     

    Section
      4.2.  Waiver
      of Notice and Demand.

     

    The
      Guarantor hereby waives notice of acceptance of this Guarantee and of any
      liability to which it applies or may apply, presentment, demand for payment,
      any
      right to require a proceeding first against the Issuer or any other Person
      before proceeding against the Guarantor, protest, notice of nonpayment, notice
      of dishonor, notice of redemption and all other notices and
      demands.

     

    Section
      4.3.  Obligations
      Not Affected.

     

    The
      obligations, covenants, agreements and duties of the Guarantor under this
      Guarantee shall in no way be affected or impaired by reason of the happening
      from time to time of any of the following:

     

    (a)  the
      release or waiver, by operation of law or otherwise, of the performance or
      observance by the Issuer of any express or implied agreement, covenant, term
      or
      condition relating to the Capital Securities to be performed or observed by
      the
      Issuer;

     

    (b)  the
      extension of time for the payment by the Issuer of all or any portion of the
      Distributions, Redemption Price, Special Redemption Price, Liquidation
      Distribution or any other sums payable under the terms of the Capital Securities
      or the extension of time for the performance of any other obligation under,
      arising out of, or in connection with, the Capital Securities (other than an
      extension of time for the payment of the Distributions, Redemption Price,
      Special Redemption Price, Liquidation Distribution or other sums payable that
      results from the extension of any interest payment period on the Debentures
      or
      any extension of the maturity date of the Debentures permitted by the
      Indenture);

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (c)  any
      failure, omission, delay or lack of diligence on the part of the Holders to
      enforce, assert or exercise any right, privilege, power or remedy conferred
      on
      the Holders pursuant to the terms of the Capital Securities, or any action
      on
      the part of the Issuer granting indulgence or extension of any
      kind;

     

    (d)  the
      voluntary or involuntary liquidation, dissolution, sale of any collateral,
      receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
      reorganization, arrangement, composition or readjustment of debt of, or other
      similar proceedings affecting, the Issuer or any of the assets of the
      Issuer;

     

    (e)  any
      invalidity of, or defect or deficiency in, the Capital Securities;

     

    (f)  the
      settlement or compromise of any obligation guaranteed hereby or hereby incurred;
      or

     

    (g)  any
      other circumstance whatsoever that might otherwise constitute a legal or
      equitable discharge or defense of a guarantor, it being the intent of this
      Section 4.3 that the obligations of the Guarantor hereunder shall be absolute
      and unconditional under any and all circumstances.

     

    There
      shall be no obligation of the Holders to give notice to, or obtain consent
      of,
      the Guarantor with respect to the happening of any of the
      foregoing.

     

    Section
      4.4.  Rights
      of Holders.

     

    (a)  The
      Holders of a Majority in liquidation amount of the Capital Securities have
      the
      right to direct the time, method and place of conducting any proceeding for
      any
      remedy available to the Guarantee Trustee in respect of this Guarantee or to
      direct the exercise of any trust or power conferred upon the Guarantee Trustee
      under this Guarantee; provided, however, that (subject to Sections
      2.1 and 2.2) the Guarantee Trustee shall have the right to decline to follow
      any
      such direction if the Guarantee Trustee shall determine that the actions so
      directed would be unjustly prejudicial to the Holders not taking part in such
      direction or if the Guarantee Trustee being advised by counsel determines that
      the action or proceeding so directed may not lawfully be taken or if the
      Guarantee Trustee in good faith by its board of directors or trustees, executive
      committee or a trust committee of directors or trustees and/or Responsible
      Officers shall determine that the action or proceeding so directed would involve
      the Guarantee Trustee in personal liability.

     

    (b)  Any
      Holder of Capital Securities may institute a legal proceeding directly against
      the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
      without first instituting a legal proceeding against the Issuer, the Guarantee
      Trustee or any other Person.  The Guarantor waives any right or remedy
      to require that any such action be brought first against the Issuer, the
      Guarantee Trustee or any other Person before so proceeding directly against
      the
      Guarantor.

     

    Section
      4.5.  Guarantee
      of Payment.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    This
      Guarantee creates a guarantee of payment and not of collection.

     

    Section
      4.6.  Subrogation.

     

    The
      Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
      Securities against the Issuer in respect of any amounts paid to such Holders
      by
      the Guarantor under this Guarantee; provided, however, that the
      Guarantor shall not (except to the extent required by applicable provisions
      of
      law) be entitled to enforce or exercise any right that it may acquire by way
      of
      subrogation or any indemnity, reimbursement or other agreement, in all cases
      as
      a result of payment under this Guarantee, if, after giving effect to any such
      payment, any amounts are due and unpaid under this Guarantee.  If any
      amount shall be paid to the Guarantor in violation of the preceding sentence,
      the Guarantor agrees to hold such amount in trust for the Holders and to pay
      over such amount to the Holders.

     

    Section
      4.7.  Independent
      Obligations.

     

    The
      Guarantor acknowledges that its obligations hereunder are independent of the
      obligations of the Issuer with respect to the Capital Securities and that the
      Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
      Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
      of any event referred to in subsections (a) through (g), inclusive, of Section
      4.3 hereof.

     

    Section
      4.8.  Enforcement.

     

    A
      Beneficiary may enforce the Obligations of the Guarantor contained in Section
      4.1(b) directly against the Guarantor, and the Guarantor waives any right or
      remedy to require that any action be brought against the Issuer or any other
      person or entity before proceeding against the Guarantor.

     

    The
      Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
      the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
      under this Guarantee; provided, however, that the Guarantor shall
      not (except to the extent required by applicable provisions of law) be entitled
      to enforce or exercise any rights that it may acquire by way of subrogation
      or
      any indemnity, reimbursement or other agreement, in all cases as a result of
      payment under this Guarantee, if, after giving effect to such payment, any
      amounts are due and unpaid under this Guarantee.

     

    ARTICLE
      V                                

     

    


     

    LIMITATION
      OF TRANSACTIONS; SUBORDINATION

     

    Section
      5.1.  Limitation
      of Transactions.

     

    So
      long
      as any Capital Securities remain outstanding, if (a) there shall have occurred
      and be continuing an Event of Default or (b) the Guarantor shall have selected
      an Extension Period as provided in the Declaration and such period, or any
      extension thereof, shall have commenced and be continuing, then the Guarantor
      may not (x) declare or pay any dividends or distributions on, or redeem,
      purchase, acquire, or make a liquidation payment with 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        
respect
        to, any of the Guarantor’s capital stock or (y) make any payment of principal of
        or interest or premium, if any, on or repay, repurchase or redeem any debt
        securities of the Guarantor that rank pari passu in all respects with
        or junior in interest to the Debentures (other than (i) payments under this
        Guarantee, (ii) repurchases, redemptions or other acquisitions of shares
        of
        capital stock of the Guarantor (A) in connection with any employment contract,
        benefit plan or other similar arrangement with or for the benefit of one
        or more
        employees, officers, directors, or consultants, (B) in connection with a
        dividend reinvestment or stockholder stock purchase plan or (C) in connection
        with the issuance of capital stock of the Guarantor (or securities convertible
        into or exercisable for such capital stock), as consideration in an acquisition
        transaction entered into prior to the occurrence of the Event of Default
        or the
        applicable Extension Period, (iii) as a result of any exchange or conversion
        of
        any class or series of the Guarantor’s capital stock (or any capital stock of a
        subsidiary of the Guarantor) for any class or series of the Guarantor’s capital
        stock or of any class or series of the Guarantor’s indebtedness for any class or
        series of the Guarantor’s capital stock, (iv) the purchase of fractional
        interests in shares of the Guarantor’s capital stock pursuant to the conversion
        or exchange provisions of such capital stock or the security being converted
        or
        exchanged, (v) any declaration of a dividend in connection with any
        stockholder’s rights plan, or the issuance of rights, stock or other property
        under any stockholder’s rights plan, or the redemption or repurchase of rights
        pursuant thereto, or (vi) any dividend in the form of stock, warrants, options
        or other rights where the dividend stock or the stock issuable upon exercise
        of
        such warrants, options or other rights is the same stock as that on which
        the
        dividend is being paid or ranks pari passu with or junior to
        such stock).

    

     

    Section
      5.2.  Ranking.

     

    This
      Guarantee will constitute an unsecured obligation of the Guarantor and will
      rank
      subordinate and junior in right of payment to all present and future Senior
      Indebtedness (as defined in the Indenture) of the Guarantor.  By their
      acceptance thereof, each Holder of Capital Securities agrees to the foregoing
      provisions of this Guarantee and the other terms set forth herein.

     

    The
      right
      of the Guarantor to participate in any distribution of assets of any of its
      subsidiaries upon any such subsidiary’s liquidation or reorganization or
      otherwise is subject to the prior claims of creditors of that subsidiary, except
      to the extent the Guarantor may itself be recognized as a creditor of that
      subsidiary.  Accordingly, the Guarantor’s obligations under this
      Guarantee will be effectively subordinated to all existing and future
      liabilities of the Guarantor’s subsidiaries, and claimants should look only to
      the assets of the Guarantor for payments thereunder.  This Guarantee
      does not limit the incurrence or issuance of other secured or unsecured debt
      of
      the Guarantor, including Senior Indebtedness of the Guarantor, under any
      indenture or agreement that the Guarantor may enter into in the future or
      otherwise.

     

    
       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

                                
      ARTICLE
      VI                                

     

    


     

    TERMINATION

     

    Section
      6.1.  Termination.

     

    This
      Guarantee shall terminate as to the Capital Securities (i) upon full
      payment of the Redemption Price or the Special Redemption Price, as the case
      may
      be, of all Capital Securities then outstanding, (ii) upon the distribution
      of
      all of the Debentures to the Holders of all of the Capital Securities or (iii)
      upon full payment of the amounts payable in accordance with the Declaration
      upon
      dissolution of the Issuer.  This Guarantee will continue to be
      effective or will be reinstated, as the case may be, if at any time any Holder
      of Capital Securities must restore payment of any sums paid under the Capital
      Securities or under this Guarantee.

     

                              
      ARTICLE
      VII                                

     

    


     

    INDEMNIFICATION

     

    Section
      7.1.  Exculpation.

     

    (a)  No
      Indemnified Person shall be liable, responsible or accountable in damages or
      otherwise to the Guarantor or any Covered Person for any loss, damage or claim
      incurred by reason of any act or omission of such Indemnified Person in good
      faith in accordance with this Guarantee and in a manner that such Indemnified
      Person reasonably believed to be within the scope of the authority conferred
      on
      such Indemnified Person by this Guarantee or by law, except that an Indemnified
      Person shall be liable for any such loss, damage or claim incurred by reason
      of
      such Indemnified Person’s negligence or willful misconduct with respect to such
      acts or omissions.

     

    (b)  An
      Indemnified Person shall be fully protected in relying in good faith upon the
      records of the Issuer or the Guarantor and upon such information, opinions,
      reports or statements presented to the Issuer or the Guarantor by any Person
      as
      to matters the Indemnified Person reasonably believes are within such other
      Person’s professional or expert competence and who, if selected by such
      Indemnified Person, has been selected with reasonable care by such Indemnified
      Person, including information, opinions, reports or statements as to the value
      and amount of the assets, liabilities, profits, losses, or any other facts
      pertinent to the existence and amount of assets from which Distributions to
      Holders of Capital Securities might properly be paid.

     

    Section
      7.2.  Indemnification.

     

    (a)
      The
      Guarantor agrees to indemnify each Indemnified Person for, and to hold each
      Indemnified Person harmless against, any and all loss, liability, damage, claim
      or expense incurred without negligence or willful misconduct on the part of
      the
      Indemnified Person, arising out of or in connection with the acceptance or
      administration of the trust or trusts hereunder, including but not limited
      to
      the costs and expenses (including reasonable legal fees and expenses) of the
      Indemnified Person defending itself against, or investigating, any claim or
      liability in connection with the exercise or performance of any of the
      Indemnified Person’s powers or duties hereunder.  The obligation to
      indemnify as set forth in this Section 7.2 shall survive the resignation or
      removal of the Guarantee Trustee and the termination of this
      Guarantee.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (b)
      Promptly after receipt by an Indemnified Person under this Section 7.2 of
      notice of the commencement of any action, such Indemnified Person will, if
      a
      claim in respect thereof is to be made against the Guarantor under this
      Section 7.2, notify the Guarantor in writing of the commencement thereof;
      but the failure so to notify the Guarantor (i) will not relieve the
      Guarantor from liability under paragraph (a) above unless and to the extent
      that
      the Guarantor did not otherwise learn of such action and such failure results
      in
      the forfeiture by the Guarantor of substantial rights and defenses and
      (ii) will not, in any event, relieve the Guarantor from any obligations to
      any Indemnified Person other than the indemnification obligation provided in
      paragraph (a) above.  The Guarantor shall be entitled to appoint
      counsel of the Guarantor’s choice at the Guarantor’s expense to represent the
      Indemnified Person in any action for which indemnification is sought (in which
      case the Guarantor shall not thereafter be responsible for the fees and expenses
      of any separate counsel retained by the Indemnified Person or Persons except
      as
      set forth below); provided, however, that such counsel shall be
      satisfactory to the Indemnified Person.  Notwithstanding the
      Guarantor’s election to appoint counsel to represent the Indemnified Person in
      any action, the Indemnified Person shall have the right to employ separate
      counsel (including local counsel), and the Guarantor shall bear the reasonable
      fees, costs and expenses of such separate counsel, if (i) the use of
      counsel chosen by the Guarantor to represent the Indemnified Person would
      present such counsel with a conflict of interest, (ii) the actual or
      potential defendants in, or targets of, any such action include both the
      Indemnified Person and the Guarantor and the Indemnified Person shall have
      reasonably concluded that there may be legal defenses available to it and/or
      other Indemnified Persons which are different from or additional to those
      available to the Guarantor, (iii) the Guarantor shall not have employed
      counsel satisfactory to the Indemnified Person to represent the Indemnified
      Person within a reasonable time after notice of the institution of such action
      or (iv) the Guarantor shall authorize the Indemnified Person to employ
      separate counsel at the expense of the Guarantor.  The Guarantor will
      not, without the prior written consent of the Indemnified Persons, settle or
      compromise or consent to the entry of any judgment with respect to any pending
      or threatened claim, action, suit or proceeding in respect of which
      indemnification or contribution may be sought hereunder (whether or not the
      Indemnified Persons are actual or potential parties to such claim or action)
      unless such settlement, compromise or consent includes an unconditional release
      of each Indemnified Person from all liability arising out of such claim, action,
      suit or proceeding.

     

    Section
      7.3.  Compensation;
      Reimbursement of Expenses.

     

    The
      Guarantor agrees:

     

    (a)  to
      pay to the Guarantee Trustee from time to time such compensation for all
      services rendered by it hereunder as the parties shall agree to from time to
      time (which compensation shall not be limited by any provision of law in regard
      to the compensation of a trustee of an express trust); and

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b)  except
      as otherwise expressly provided herein, to reimburse the Guarantee Trustee
      upon
      request for all reasonable expenses, disbursements and advances incurred or
      made
      by it in accordance with any provision of this Guarantee (including the
      reasonable compensation and the expenses and disbursements of its agents and
      counsel), except any such expense, disbursement or advance as may be
      attributable to its negligence or willful misconduct.

     

    The
      provisions of this Section 7.3 shall survive the resignation or removal of
      the
      Guarantee Trustee and the termination of this Guarantee.

     

                             
      ARTICLE
      VIII                                

     

    


     

    MISCELLANEOUS

     

    Section
      8.1.  Successors
      and Assigns.

     

    All
      guarantees and agreements contained in this Guarantee shall bind the successors,
      assigns, receivers, trustees and representatives of the Guarantor and shall
      inure to the benefit of the Holders of the Capital Securities then
      outstanding.  Except in connection with any merger or consolidation of
      the Guarantor with or into another entity or any sale, transfer or lease of
      the
      Guarantor’s assets to another entity, in each case to the extent permitted under
      the Indenture, the Guarantor may not assign its rights or delegate its
      obligations under this Guarantee without the prior approval of the Holders
      of
      not less than a Majority in liquidation amount of the Capital
      Securities.

     

    Section
      8.2.  Amendments.

     

    Except
      with respect to any changes that do not adversely affect the rights of Holders
      of the Capital Securities in any material respect (in which case no consent
      of
      Holders will be required), this Guarantee may be amended only with the prior
      approval of the Holders of not less than a Majority in liquidation amount of
      the
      Capital Securities.  The provisions of the Declaration with respect to
      amendments thereof shall apply equally with respect to amendments of the
      Guarantee.

     

    Section
      8.3.  Notices.

     

    All
      notices provided for in this Guarantee shall be in writing, duly signed by
      the
      party giving such notice, and shall be delivered, telecopied or mailed by first
      class mail, as follows:

     

    (a)  If
      given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set
      forth below (or such other address as the Guarantee Trustee may give notice
      of
      to the Holders of the Capital Securities):

     

    Wilmington
      Trust Company

    Rodney
      Square North

    1100
      North Market Street

    Wilmington,
      Delaware 19890-0001

     

    Attention:  Corporate
      Capital Markets

     

    Telecopy:   302-636-4140

     

    Telephone:  302-651-1000

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (b)  If
      given to the Guarantor, at the Guarantor’s mailing address set forth below (or
      such other address as the Guarantor may give notice of to the Holders of the
      Capital Securities and to the Guarantee Trustee):

     

    BNCCORP,
      Inc.

    322
      East
      Main

    Bismarck,
      North Dakota 58501

    Attention:
      Annette Eckroth

    Telecopy:
      (701) 222-3653

    Telephone:
      (701) 250-3040

     

    (c)  If
      given to any Holder of the Capital Securities, at the address set forth on
      the
      books and records of the Issuer.

     

    All
      such
      notices shall be deemed to have been given when received in person, telecopied
      with receipt confirmed, or mailed by first class mail, postage prepaid, except
      that if a notice or other document is refused delivery or cannot be delivered
      because of a changed address of which no notice was given, such notice or other
      document shall be deemed to have been delivered on the date of such refusal
      or
      inability to deliver.

     

    Section
      8.4.  Benefit.

     

    This
      Guarantee is solely for the benefit of the Holders of the Capital Securities
      and, subject to Section 2.1(a), is not separately transferable from the Capital
      Securities.

     

    Section
      8.5.  Governing
      Law.

     

    THIS
      GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
      THEREOF.

     

    Section
      8.6.  Counterparts.

     

    This
      Guarantee may contain more than one counterpart of the signature page and this
      Guarantee may be executed by the affixing of the signature of the Guarantor
      and
      the Guarantee Trustee to any of such counterpart signature pages.  All
      of such counterpart signature pages shall be read as though one, and they shall
      have the same force and effect as though all of the signers had signed a single
      signature page.

     


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    THIS
      GUARANTEE is executed as of the day and year first above written.

     

    
      	
               

            	
              BNCCORP,
                INC.,

            


    

     

    
      	
               

            	
              as
                Guarantor

            


    

     

    
      	
               

            	
              By:
                /s/ Gregory K.
                Cleveland                          
                

            


    

     

    
      	
               

            	
              Name:
                Gregory K. Cleveland

            


    

     

    
      	
               

            	
              Title:
                President and Chief Executive
                Officer

            


    

     

    WILMINGTON
      TRUST COMPANY, as Guarantee Trustee

     

    
      	
               

            	
              By:
                /s/ Geoffrey J.
                Lewis                                   
                

            


    

     

    
      	
               

            	
              Name:
                Geoffrey J. Lewis

            


    

     

    
      	
               

            	
              Title:
                Financial Services Officer

            


    

     


    
      
        
        

      

      
        18