Exhibit 4.3


 




 


 





GUARANTEE
AGREEMENT


 


by and between


 


TENNESSEE
COMMERCE BANCORP, INC.


 


and


 


WILMINGTON
TRUST COMPANY


 


Dated as of June 20,
2008


 




 





 





















 


GUARANTEE
AGREEMENT


 


This GUARANTEE AGREEMENT (this “Guarantee”),
dated as of June 20, 2008, is executed and delivered by Tennessee Commerce
Bancorp, Inc., a Tennessee corporation (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 Tennessee Commerce Statutory
Trust II, a Delaware statutory trust (the “Issuer”).


 


WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the “Declaration”), dated as of the date hereof, among
Wilmington Trust Company, not in its individual capacity but solely as
institutional trustee, the administrators of the Issuer named therein, the
Guarantor, 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 those undivided beneficial interests, having an aggregate
liquidation amount of $14,500,000.00
(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”
or “Sections” are to Articles or 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.


 


“Affiliate” has the same meaning as
given to that term in Rule 405 of the Securities Act of 1933, as amended,
or any successor rule thereunder.


 





















 


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


 


“Capital Securities” has the meaning
set forth in the recitals to this Guarantee.


 


“Common Securities” means the common
securities issued by the Issuer to the Guarantor pursuant to the Declaration.


 


“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 19890-1600,
Attention:  Corporate Trust
Administration.


 


“Covered Person” means any Holder of
Capital Securities.


 


“Debentures” means the debt securities
of the Guarantor designated the Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2038 held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.


 


“Declaration Event of Default” means
an “Event of Default” as defined in the Declaration.  “Event of Default” has the meaning set forth
in Section 2.4(a).


 


“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 shall have funds available therefor, (ii) the
Redemption Price to the extent the Issuer has funds available therefor, with
respect to any Capital Securities called for redemption by the Issuer, (iii) the
Special Redemption Price to the extent the Issuer has funds available therefor,
with respect to Capital Securities redeemed upon the occurrence of a Special
Event, 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 shall have
funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(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.


 


“Guarantor” means Tennessee Commerce
Bancorp, Inc. and each of its successors and assigns.


 


“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.


 


“Indemnified Person” means the
Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.


 


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“Indenture” means the Indenture dated
as of the date hereof 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.


 


“Issuer” has the meaning set forth in
the opening paragraph to this Guarantee.


 


“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 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 the 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 the officer in rendering the
Officer’s Certificate;


 


(c)           a statement that the 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
the 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.


 


“Redemption Price” has the meaning set
forth in the Indenture.


 


“Responsible Officer” means, with
respect to the Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of the
above designated officers and also, 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.


 


“Special Event” has the meaning set
forth in the Indenture.


 


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“Special Redemption Price” has the
meaning set forth in the Indenture.


 


“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

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 curing 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 waived
pursuant to Section 2.4) 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:


 


(i)            prior to the occurrence of any Event of
Default and after the curing or waiving of all such 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 


 


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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 that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
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 relating to the exercise of 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 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.


 


(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 any
re-recording, refiling or re-registration 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 


 


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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 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.


 


(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 (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) 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,
without negligence, 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 


 


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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.


 


(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 deemed to
have knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice from the Guarantor or a Holder of the Capital
Securities (except in the case of a payment default), or a Responsible Officer
of the Guarantee Trustee charged with the administration of this Guarantee
shall have obtained actual knowledge thereof.


 


ARTICLE III


 


GUARANTEE
TRUSTEE


 


Section 3.1.           Guarantee Trustee; Eligibility.


 


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


 


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


 


(ii)           be a corporation organized and doing
business under the laws of the United States 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
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 


 


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3.1(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.


 


(b)           If at any time the Guarantee Trustee shall
cease to be eligible to so act under Section 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 of 1939, as amended, 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
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.


 


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, 


 


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regardless of any defense (except the 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 benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries 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 payment of Distributions,
Redemption Price, Special Redemption Price, Liquidation Distribution or other
sum 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);


 


(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.


 


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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 Section 2.1) the Guarantee Trustee shall
have the right to decline to follow any such direction 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 committees or a trust committee of
directors or trustees and/or Responsible Officers shall determine that the
action or proceedings 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.  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
mandatory 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 by a
Beneficiary.  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 mandatory
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 at the
time of any such payment, and after giving effect to such payment, any amounts
are due and unpaid under this Guarantee.


 


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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 a Declaration 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 shall not and shall not permit any Affiliate
to (x) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Guarantor’s or such Affiliate’s capital stock (other than payments of dividends
or distributions to the Guarantor or payments of dividends from direct or
indirect subsidiaries of the Guarantor to their parent corporations, which also
shall be direct or indirect subsidiaries of the Guarantor) or make any
guarantee payments with respect to the foregoing 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 or any Affiliate that rank pari
passu in all respects with or junior in interest to the Debentures (other than,
with respect to clauses (x) and (y) above, (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Guarantor
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the occurrence of the Event of Default, Declaration Event of Default
or Extension Period, as applicable, (ii) 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, (iii) 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, (iv) any declaration of a dividend in
connection with any shareholders’ rights plan, or the issuance of rights, stock
or other property under any shareholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (v) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional shares issued
in connection therewith, (vi) payments of principal or interest on debt
securities or payments of cash dividends or distributions on any capital stock
issued by an Affiliate that is not, in whole or in part, a subsidiary of the
Guarantor (or any redemptions, repurchases or liquidation payments on such
stock or securities) or (vii) payments under this Guarantee).


 


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 hereunder.  This Guarantee
does not limit the 


 


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incurrence or issuance of other secured or
unsecured debt of the Guarantor, including Senior Indebtedness of the
Guarantor, under any indenture that the Guarantor may enter into in the future
or otherwise.


 


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
Special Redemption Price 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 performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person’s negligence or willful misconduct with respect to such
acts or omissions.


 


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


 


Section 7.2.           Indemnification.


 


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


 


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(b)           Promptly after receipt by an Indemnified
Person under this Section 7.2 of notice of the commencement of any action,
such Indemnified Person will, if a claim in respect thereof is to be made
against the Guarantor under this Section 7.2, notify the Guarantor in
writing of the commencement thereof; but the failure so to notify the Guarantor
(i) will not relieve the Guarantor from liability under paragraph (a) above
unless and to the extent that the Guarantor did not otherwise learn of such
action and such failure results in the forfeiture by the Guarantor of
substantial rights and defenses and (ii) will not, in any event, relieve
the Guarantor from any obligations to any Indemnified Person other than the indemnification
obligation provided in paragraph (a) above.  The Guarantor shall be entitled to appoint
counsel of the Guarantor’s choice at the Guarantor’s expense to represent the
Indemnified Person in any action for which indemnification is sought (in which
case the Guarantor shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the Indemnified Person or Persons
except as set forth below); provided, however, that such counsel
shall be reasonably satisfactory to the Indemnified Person.  Notwithstanding the Guarantor’s election to
appoint counsel to represent the Guarantor in an 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 Person(s) 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


 


(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.


 


For purposes of clarification, this Section 7.3
does not contemplate the payment by the Guarantor of acceptance or annual
administration fees owing to the Guarantee Trustee for services to be provided
by the Guarantee Trustee under this Guarantee or the fees and expenses of the
Guarantee Trustee’s counsel in connection with the closing of the transactions
contemplated by this Guarantee.  The
provisions of this Section 7.3 shall survive the resignation or removal of
the Guarantee Trustee and the termination of this Guarantee.


 


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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 at least 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 apply to the giving of such approval.


 


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 and the Guarantor):


 


Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention:  Corporate Trust
Administration

Telecopy:  302-636-4140


 


(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):


 


Tennessee Commerce Bancorp, Inc.

381 Mallory Station Road, Suite 207

Franklin, Tennessee 37067-8264

Attention:  Michael Sapp

Telecopy:  615-599-2275


 


(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.


 


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Section 8.4.           Benefit.  This Guarantee is solely for the benefit of
the Beneficiaries 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 AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).


 


Section 8.6.           Counterparts.  This Guarantee may be executed in one or more
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the
same instrument.


 


Section 8.7            Separability.  In
case one or more of the provisions contained in this Guarantee shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Guarantee, but this Guarantee shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein.


 


Signatures appear on the following page


 


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


 


 


	
   

  	
  TENNESSEE COMMERCE BANCORP, INC.,
  as 

  Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Michael R. Sapp

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael R. Sapp

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON
  TRUST COMPANY, as Guarantee 

  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Christopher J. Slaybaugh

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christopher J. Slaybaugh

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
								



 


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