Guarantee Agreement


    

      Exhibit
        10.1


      


       

       

       

      
        
          

        



      


      


      GUARANTEE
        AGREEMENT

      


      


      between

      


      


      HORIZON
        BANCORP,

      As
        Guarantor,

      


      


      and

      


      


      WILMINGTON
        TRUST COMPANY,

      As
        Guarantee Trustee

      


      


      Dated
        as of December 15, 2006 

      


      


      


      HORIZON
        BANCORP CAPITAL TRUST III

      


      


      


      


      
        
          

        



      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      TABLE
        OF CONTENTS

      


       

      

        
          	
                  ARTICLE
                    I

                	
                  INTERPRETATION
                    AND DEFINITIONS

                	
                  2

                
	
                  SECTION
                    1.1

                	
                  Interpretation.

                	
                  2

                
	
                  SECTION
                    1.2

                	
                  Definitions.

                	
                  2

                
	 	 	 
	
                  ARTICLE
                    II

                	
                  REPORTS

                	
                  6

                
	
                  SECTION
                    2.1

                	
                  List
                    of Holders.

                	
                  6

                
	
                  SECTION
                    2.2

                	
                  Periodic
                    Reports to the Guarantee Trustee.

                	
                  6

                
	
                  SECTION
                    2.3

                	
                  Event
                    of Default; Waiver.

                	
                  6

                
	
                  SECTION
                    2.4

                	
                  Event
                    of Default; Notice.

                	
                  7

                
	 	 	 
	
                  ARTICLE
                    III

                	
                  POWERS,
                    DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

                	
                  7

                
	
                  SECTION
                    3.1

                	
                  Powers
                    and Duties of the Guarantee Trustee.

                	
                  7

                
	
                  SECTION
                    3.2

                	
                  Certain
                    Rights of the Guarantee Trustee.

                	
                  8

                
	
                  SECTION
                    3.3

                	
                  Compensation.

                	
                  10

                
	
                  SECTION
                    3.4

                	
                  Indemnity.

                	
                  10

                
	
                  SECTION
                    3.5

                	
                  Securities.

                	
                  11

                
	 	 	 
	
                  ARTICLE
                    IV

                	
                  GUARANTEE
                    TRUSTEE

                	
                  11

                
	
                  SECTION
                    4.1

                	
                  Guarantee
                    Trustee; Eligibility.

                	
                  11

                
	
                  SECTION
                    4.2

                	
                  Appointment,
                    Removal and Resignation of the Guarantee Trustee.

                	
                  12

                
	 	 	 
	
                  ARTICLE
                    V

                	
                  GUARANTEE

                	
                  12

                
	
                  SECTION
                    5.1

                	
                  Guarantee.

                	
                  12

                
	
                  SECTION
                    5.2

                	
                  Waiver
                    of Notice and Demand.

                	
                  13

                
	
                  SECTION
                    5.3

                	
                  Obligations
                    Not Affected.

                	
                  13

                
	
                  SECTION
                    5.4

                	
                  Rights
                    of Holders.

                	
                  14

                
	
                  SECTION
                    5.5

                	
                  Guarantee
                    of Payment.

                	
                  14

                
	
                  SECTION
                    5.6

                	
                  Subrogation.

                	
                  14

                
	
                  SECTION
                    5.7

                	
                  Independent
                    Obligations.

                	
                  15

                
	
                  SECTION
                    5.8

                	
                  Enforcement.

                	
                  15

                
	 	 	 
	
                  ARTICLE
                    VI

                	
                  COVENANTS
                    AND SUBORDINATION

                	
                  15

                
	
                  SECTION
                    6.1

                	
                  Dividends,
                    Distributions and Payments.

                	
                  15

                
	
                  SECTION
                    6.2

                	
                  Subordination.

                	
                  16

                
	
                  SECTION
                    6.3

                	
                  Pari
                    Passu Guarantees.

                	
                  16

                
	 	 	 
	
                  ARTICLE
                    VII

                	
                  TERMINATION

                	
                  17

                
	
                  SECTION
                    7.1

                	
                  Termination.

                	
                  17

                
	 	 	 
	
                  ARTICLE
                    VIII

                	
                  MISCELLANEOUS

                	
                  17

                
	
                  SECTION
                    8.1

                	
                  Successors
                    and Assigns.

                	
                  17

                
	
                  SECTION
                    8.2

                	
                  Amendments.

                	
                  17

                


        




      
        
          
          

        

        
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                  SECTION
                    8.3

                	
                  Notices.

                	
                  17

                
	
                  SECTION
                    8.4

                	
                  Benefit.

                	
                  18

                
	
                  SECTION
                    8.5

                	
                  Governing
                    Law.

                	
                  19

                
	
                  SECTION
                    8.6

                	
                  Submission
                    to Jurisdiction.

                	
                  19

                
	
                  SECTION
                    8.7

                	
                  Counterparts;
                    Facsimile.

                	
                  19

                


        
 

       

       

      
 

      
        
          
          

        

        
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      GUARANTEE
        AGREEMENT, dated as of December 15, 2006, executed and
        delivered by HORIZON BANCORP, an Indiana corporation (the “Guarantor”)
        having its principal office at 515 Franklin Square, Michigan City, IN 46360,
        and
        WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (in
        such
        capacity, the “Guarantee Trustee”), for the benefit of the Holders (as
        defined herein) from time to time of the Preferred Securities (as defined
        herein) of Horizon Bancorp Capital Trust III, a Delaware statutory trust
        (the
“Issuer”).

      


      W
        I T N E S S E T H :

      


      WHEREAS,
        pursuant to an Amended and Restated Trust Agreement,
        dated as of the date hereof (the “Trust Agreement”), among the
        Guarantor, as Depositor, the Property Trustee, the Delaware Trustee and the
        Administrative Trustees named therein and the holders from time to time of
        the
        Preferred Securities (as hereinafter defined), the Issuer is issuing $12,000,000
        aggregate Liquidation Amount (as defined in the Trust Agreement) of its Floating
        Rate Preferred Securities (Liquidation Amount $1,000 per preferred security)
        (the “Preferred Securities”) representing preferred undivided
        beneficial interests in the assets of the Issuer and having the terms set
        forth
        in the Trust Agreement;

      


      WHEREAS,
        the Preferred Securities will be issued by the Issuer and
        the proceeds thereof, together with the proceeds from the issuance of the
        Issuer’s Common Securities (as defined below), will be used to purchase the
        Notes (as defined in the Trust Agreement) of the Guarantor; and

      


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

      


      NOW,
        THEREFORE, in consideration of the purchase by each Holder of
        Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
        the Guarantor, the Guarantor executes and delivers this Guarantee Agreement
        to
        provide as follows for the benefit of the Holders from time to time of the
        Preferred Securities:

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      ARTICLE
        I

      INTERPRETATION
        AND DEFINITIONS

      SECTION
        1.1 Interpretation.

      


      In
        this Guarantee Agreement, unless the context otherwise
        requires:

      


      (a) capitalized
        terms used in this Guarantee Agreement but
        not defined in the preamble hereto have the respective meanings assigned
        to them
        in Section 1.2;

      


      (b) the
        words “include”, “includes” and “including” shall be
        deemed to be followed by the phrase “without limitation”;

      


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

      


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

      


      (e) the
        words “hereby”, “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Guarantee Agreement as a
        whole
        and not to any particular Article, Section or other subdivision;

      


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

      


      (g) the
        masculine, feminine or neuter genders used herein
        shall include the masculine, feminine and neuter genders.

       

      SECTION
        1.2 Definitions.

      


      As
        used in this Guarantee Agreement, the terms set forth below
        shall, unless the context otherwise requires, have the following meanings:

      


      “Affiliate”
        of any specified Person means any other
        Person directly or indirectly controlling or controlled by or under direct
        or
        indirect common control with such specified Person; provided, that the
        Issuer shall not be deemed to be an Affiliate of the Guarantor. For the purposes
        of this definition, “control” when used with respect to any specified
        Person means the power to direct the management and policies of such Person,
        directly or indirectly, whether through the ownership of voting securities,
        by
        contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

      


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

      



      
        
          
          

        

        
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      “Board
        of Directors” means either the board of directors
        of the Guarantor or any duly authorized committee of that board.

      


      “Common
        Securities” means the securities representing
        common undivided beneficial interests in the assets of the Issuer.

      


      “Debt”
        means with respect to any Person, whether recourse
        is to all or a portion of the assets of such Person, whether currently existing
        or hereafter incurred, and whether or not contingent and without duplication,
        (i) every obligation of such Person for money borrowed; (ii) every obligation
        of
        such Person evidenced by bonds, debentures, notes or other similar instruments,
        including obligations incurred in connection with the acquisition of property,
        assets or businesses; (iii) every reimbursement obligation of such Person
        with
        respect to letters of credit, bankers’ acceptances or similar facilities issued
        for the account of such Person; (iv) every obligation of such Person issued
        or
        assumed as the deferred purchase price of property or services (but excluding
        trade accounts payable arising in the ordinary course of business); (v) every
        capital lease obligation of such Person; (vi) all indebtedness of such Person,
        whether incurred on or prior to the date of this Guarantee Agreement or
        thereafter incurred, for claims in respect of derivative products, including
        interest rate, foreign exchange rate and commodity forward contracts, options,
        swaps and similar arrangements; (vii) every obligation of the type referred
        to
        in clauses (i) through (vi) of another Person and all dividends of another
        Person the payment of which, in either case, such Person has guaranteed or
        is
        responsible or liable for, directly or indirectly, as obligor or otherwise;
        and
        (viii) any renewals, extensions, refundings, amendments or modifications
        of any
        obligation of the type referred to in clauses (i) through (vii).

      


      “Event
        of Default” means a default by the Guarantor on
        any of its payment or other obligations under this Guarantee Agreement;
        provided, that except with respect to a default in payment of any Guarantee
        Payments, the Guarantor shall have received notice of default from the Guarantee
        Trustee and shall not have cured such default within thirty (30) days after
        receipt of such notice.

      


      “Guarantee
        Payments” means the following payments or
        distributions, without duplication, with respect to the Preferred Securities,
        to
        the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
        and unpaid Distributions (as defined in the Trust Agreement) required to
        be paid
        on the Preferred Securities, to the extent the Issuer shall have funds on
        hand
        available therefor at such time, (ii) the Redemption Price (as defined in
        the
        Trust Agreement) with respect to any Preferred Securities to the extent the
        Issuer shall have funds on hand available therefor at such time, and (iii)
        upon
        a voluntary or involuntary termination, winding up or liquidation of the
        Issuer,
        unless Notes are distributed to the Holders, the lesser of (a) the aggregate
        of
        the Liquidation Amount of $1,000 per Preferred Security plus accumulated
        and
        unpaid Distributions on the Preferred Securities to the date of payment,
        to the
        extent that

      



      
        
          
          

        

        
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      the
        Issuer shall have funds available therefor at such time and
        (b) the amount of assets of the Issuer remaining available for distribution
        to
        Holders in liquidation of the Issuer after satisfaction of liabilities to
        creditors of the Issuer in accordance with applicable law (in either case,
        the
“Liquidation Distribution”).

      


      “Guarantee
        Trustee” means Wilmington Trust Company in its
        capacity as trustee hereunder, until a Successor Guarantee Trustee, as defined
        below, has been appointed and has accepted such appointment pursuant to the
        terms of this Guarantee Agreement, and thereafter means each such Successor
        Guarantee Trustee.

      


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

      


      “Indenture”
        means the Junior Subordinated Indenture,
        dated as of the date hereof, as supplemented and amended, between the Guarantor
        and Wilmington Trust Company, as trustee.

      


      “List
        of Holders” has the meaning specified in
Section 2.1.

      


      “Majority
        in Liquidation Amount of the Preferred
        Securities” means a vote by the Holder(s), voting separately as a class, of
        more than fifty percent (50%) of the aggregate Liquidation Amount of all
        then
        outstanding Preferred Securities issued by the Issuer.

      


      “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.

      


      “Officers’
Certificate”
        means, with respect to any
        Person, a certificate signed by the Chief Executive Officer, Chief Financial
        Officer, President or a Vice President of such Person, and by the Treasurer,
        an
        Assistant Treasurer, the Secretary or an Assistant Secretary of such Person,
        and
        delivered to the Guarantee Trustee. Any Officers’ Certificate delivered with
        respect to compliance with a condition or covenant provided for in this
        Guarantee Agreement (other than the certificate provided pursuant to Section
        2.4) shall include:

      


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

      


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

      



      
        
          
          

        

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

      


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

      


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

      


      “Responsible
        Officer” means, with respect to the
        Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant
        Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
        Assistant Treasurer, any Financial Services Officer or Assistant Financial
        Services Officer or any other officer in the Corporate Trust Office of the
        Guarantee Trustee with direct responsibility for the administration of this
        Guarantee Agreement and also means, with respect to a particular corporate
        trust
        matter, any other officer to whom such matter is referred because of that
        officer’s knowledge of and familiarity with the particular subject.

      


      “Senior
        Debt” means the principal of and any premium and
        interest on (including interest accruing on or after the filing of any petition
        in bankruptcy or for reorganization relating to the Guarantor whether or
        not
        such claim for post-petition interest is allowed in such proceeding) all
        Debt of
        the Guarantor, whether incurred on or prior to the date of the Indenture
        or
        thereafter incurred, unless it is provided in the instrument creating or
        evidencing the same or pursuant to which the same is outstanding, that such
        obligations are not superior in right of payment to the Preferred Securities;
        provided, however, that if the Guarantor is subject to the regulation
        and supervision of an “appropriate Federal banking agency” within the meaning of
        12 U.S.C. 1813(q), the Guarantor shall have received the approval of such
        appropriate Federal banking agency prior to issuing any such obligation if
        not
        otherwise generally approved or authorized; provided further, that
        Senior Debt shall not include any other debt securities, and guarantees in
        respect of such debt securities, issued to any trust other than the Issuer
        (or a
        trustee of such trust), partnership or other entity affiliated with the
        Guarantor that is a financing vehicle of the Guarantor (a “financing entity”),
        in connection with the issuance by such financing entity of equity securities
        or
        other securities that are treated as equity capital for regulatory capital
        purposes guaranteed by the Guarantor pursuant to an instrument that ranks
        pari passu with or junior in right of payment to this Guarantee
        Agreement, including, without limitation, securities issued by Alliance
        Financial Statutory Trust I, Horizon Statutory Trust I and Horizon Bancorp
        Capital Trust II.

      



      
        
          
          

        

        
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      “Successor
        Guarantee Trustee” means a successor Guarantee
        Trustee possessing the qualifications to act as Guarantee Trustee under Section
        4.1.

      


      “Trust
        Indenture Act” means the Trust Indenture Act of
        1939, as amended and as in effect on the date of this Guarantee Agreement.

      


      Capitalized
        or otherwise defined terms used but not otherwise
        defined herein shall have the meanings assigned to such terms in the Trust
        Agreement as in effect on the date hereof.

      


      ARTICLE
        II

      REPORTS

      SECTION
        2.1 List of Holders.

      


      The
        Guarantor shall furnish or cause to be furnished to the
        Guarantee Trustee at such times as the Guarantee Trustee may request in writing,
        within thirty (30) days after the receipt by the Guarantor of any such request,
        a list, in such form as the Guarantee Trustee may reasonably require, of
        the
        names and addresses of the Holders (the “List of Holders”) as of a date
        not more than fifteen (15) days prior to the time such list is furnished,
        in
        each case to the extent such information is in the possession or control
        of the
        Guarantor and is not identical to a previously supplied list of Holders or
        has
        not otherwise been received by the Guarantee Trustee in its capacity as such.
        The Guarantee Trustee may destroy any List of Holders previously given to
        it on
        receipt of a new List of Holders.

       

      SECTION
        2.2 Periodic Reports to the Guarantee
        Trustee.

      


      The
        Guarantor shall deliver to the Guarantee Trustee, within one
        hundred and twenty (120) days after the end of each fiscal year of the Guarantor
        ending after the date of this Guarantee Agreement, an Officers’ Certificate
        covering the preceding fiscal year, stating whether or not to the knowledge
        of
        the signers thereof the Guarantor is in default in the performance or observance
        of any of the terms or provisions or any of the conditions of this Guarantee
        Agreement (without regard to any period of grace or requirement of notice
        provided hereunder) and, if the Guarantor shall be in default thereof,
        specifying all such defaults and the nature and status thereof of which they
        have knowledge.

       

      SECTION
        2.3 Event of Default; Waiver.

      


      The
        Holders of a Majority in Liquidation Amount of the Preferred
        Securities may, on behalf of the Holders, waive any past Event of Default
        and
        its consequences. Upon such waiver, any such Event of Default shall cease
        to
        exist, and any Event of Default arising therefrom shall be deemed to have
        been
        cured, for every purpose of this Guarantee Agreement, but no such waiver
        shall
        extend to any subsequent or other default or Event of Default or impair any
        right consequent therefrom.

      



      
        
          
          

        

        
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      SECTION
        2.4 Event of Default; Notice.

      


      (a) The
        Guarantee Trustee shall, within ninety (90) days
        after the occurrence of a default, transmit to the Holders notices of all
        defaults actually known to the Guarantee Trustee, unless such defaults have
        been
        cured or waived before the giving of such notice, provided, that,
        except in the case of a default in the payment of a Guarantee Payment, the
        Guarantee Trustee shall be protected in withholding such notice if and so
        long
        as the Board of Directors, the executive committee or a trust committee of
        directors and/or Responsible Officers of the Guarantee Trustee in good faith
        determine that the withholding of such notice is in the interests of the
        Holders. For the purpose of this Section 2.4, the term “default”
        means any event that is, or after notice or lapse of time or both would become,
        an Event of Default.

      


      (b) The
        Guarantee Trustee shall not be deemed to have
        knowledge of any default or Event of Default unless the Guarantee Trustee
        shall
        have received written notice, or a Responsible Officer charged with the
        administration of this Guarantee Agreement shall have received written notice,
        of such default or Event of Default from the Guarantor or a Holder.

      


      ARTICLE
        III

      POWERS,
        DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

       

      SECTION
        3.1 Powers and Duties of the Guarantee
        Trustee.

      


      (a) This
        Guarantee Agreement shall be held by the Guarantee
        Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
        transfer this Guarantee Agreement to any Person except a Holder exercising
        its
        rights pursuant to Section 5.4(d) or to a Successor Guarantee Trustee
        upon acceptance by such Successor Guarantee Trustee of its appointment to
        act as
        Successor Guarantee Trustee. The right, title and interest of the Guarantee
        Trustee shall automatically vest in any Successor Guarantee Trustee, upon
        acceptance by such Successor Guarantee Trustee of its appointment hereunder,
        and
        such vesting and cessation of title shall be effective whether or not
        conveyancing documents have been executed and delivered pursuant to the
        appointment of such Successor Guarantee Trustee.

      


      (b) The
        rights, immunities, duties and responsibilities of
        the Guarantee Trustee shall be as provided by this Guarantee Agreement and
        there
        shall be no other duties or obligations, express or implied, of the Guarantee
        Trustee. Notwithstanding the foregoing, no provisions of this Guarantee
        Agreement shall require the Guarantee Trustee to expend or risk its own funds
        or
        otherwise incur any financial liability in the performance of any of its
        duties
        hereunder, or in the exercise of any of its rights or powers, if it shall
        have
        reasonable grounds for believing that repayment of such funds or adequate
        indemnity against such risk or liability is not reasonably assured to it.
        Whether or not herein expressly so

      



      
        
          
          

        

        
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      provided,
        every provision of this Guarantee Agreement relating to
        the conduct or affecting the liability of or affording protection to the
        Guarantee Trustee shall be subject to the provisions of this Section 3.1.
        To the extent that, at law or in equity, the Guarantee Trustee has duties
        and
        liabilities relating to the Guarantor or the Holders, the Guarantee Trustee
        shall not be liable to any Holder for the Guarantee Trustee’s good faith
        reliance on the provisions of this Guarantee Agreement. The provisions of
        this
        Guarantee Agreement, to the extent that they restrict the duties and liabilities
        of the Guarantee Trustee otherwise existing at law or in equity, are agreed
        by
        the Guarantor and the Holders to replace such other duties and liabilities
        of
        the Guarantee Trustee.

      


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

      


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

      


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

       

      SECTION
        3.2 Certain Rights of the Guarantee
        Trustee.

      


      (a) Subject
        to the provisions of Section 3.1:

      


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

      


      (ii) any
        direction or act of the Guarantor contemplated by
        this Guarantee Agreement shall be sufficiently evidenced by an Officers’
Certificate unless otherwise prescribed herein;

      


      (iii) the
        Guarantee Trustee may consult with counsel, and the
        advice of such counsel shall be full and complete authorization and protection
        in respect of any action taken, suffered or omitted to be taken

      



      
        
          
          

        

        
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      by
        it hereunder in good faith and in reliance thereon and in
        accordance with such advice. Such counsel may be counsel to the Guarantee
        Trustee, the Guarantor or any of its Affiliates and may be one of its employees.
        The Guarantee Trustee shall have the right at any time to seek instructions
        concerning the administration of this Guarantee Agreement from any court
        of
        competent jurisdiction;

      


      (iv) the
        Guarantee Trustee shall be under no obligation to
        exercise any of the rights or powers vested in it by this Guarantee Agreement
        at
        the request or direction of any Holder, unless such Holder shall have provided
        to the Guarantee Trustee reasonable security or indemnity against the costs,
        expenses (including reasonable attorneys’ fees and expenses) and liabilities
        that might be incurred by it in complying with such request or direction,
        including such reasonable advances as may be requested by the Guarantee Trustee;
        provided, that, nothing contained in this Section 3.2(a)(iv)
        shall be taken to relieve the Guarantee Trustee, upon the occurrence of an
        Event
        of Default, of its obligation to exercise the rights and powers vested in
        it by
        this Guarantee Agreement;

      


      (v) the
        Guarantee Trustee shall not be bound to make any
        investigation into the facts or matters stated in any resolution, certificate,
        statement, instrument, opinion, report, notice, request, direction, consent,
        order, bond, debenture, note, other evidence of indebtedness or other paper
        or
        document, but the Guarantee Trustee, in its discretion, may make such further
        inquiry or investigation into such facts or matters as it may see fit, and
        if
        the Guarantee Trustee shall determine to make such inquiry or investigation,
        it
        shall be entitled to examine the books, records and premises of the Guarantor,
        personally or by agent or attorney;

      


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

      


      (vii) whenever
        in the administration of this Guarantee
        Agreement the Guarantee Trustee shall deem it desirable to receive instructions
        with respect to enforcing any remedy or right hereunder, the Guarantee Trustee
        (A) may request instructions from the Holders of a Majority in Liquidation
        Amount of the Preferred Securities, (B) may refrain from enforcing such remedy
        or right or taking such other action until such instructions are received
        and
        (C) shall be protected in acting in accordance with such instructions;

      


      (viii) except
        as otherwise expressly provided by this
        Guarantee Agreement, the Guarantee Trustee shall not be under any obligation
        to

      



      
        
          
          

        

        
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      take
        any action that is discretionary under the provisions of this
        Guarantee Agreement; 

      


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

      


      (x) 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).

      


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

       

      SECTION
        3.3 Compensation.

      


      The
        Guarantor shall pay to the Guarantee Trustee from time to time
        reasonable compensation agreed upon by the Guarantor and the Guarantee Trustee
        for all services rendered by it hereunder (which compensation shall not be
        limited by any provisions of law in regard to the compensation of a trustee
        of
        an express trust) and to reimburse the Guarantee Trustee upon request for
        all
        reasonable expenses, disbursements and advances (including the reasonable
        fees
        and expenses of its attorneys and agents) incurred or made by the Guarantee
        Trustee in accordance with any provisions of this Guarantee Agreement.

       

      SECTION
        3.4 Indemnity.

      


      The
        Guarantor agrees to indemnify and hold harmless the Guarantee
        Trustee (including in its individual capacity) and any of its Affiliates
        and any
        of their officers, directors, shareholders, employees, representatives or
        agents
        from and against any loss, damage, liability, tax (other than income, franchise
        or other taxes imposed on amounts paid pursuant to Section 3.3), penalty,
        expense or claim of any kind or nature whatsoever incurred without negligence,
        bad faith or willful misconduct on its part, arising out of or in connection
        with the acceptance or administration of this Guarantee Agreement, including
        the
        costs and expenses of defending itself against any claim or liability in
        connection with the exercise or performance of any of its rights, powers
        or
        duties

      



      
        
          
          

        

        
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      hereunder.
        The Guarantee Trustee will not claim or exact any lien
        or charge on any Guarantee Payments as a result of any amount due to it under
        this Guarantee Agreement. This indemnity shall survive the termination of
        this
        Agreement or the resignation or removal of the Guarantee Trustee.

      


      In
        no event shall the Guarantee Trustee be liable for any
        indirect, special, punitive or consequential loss or damage of any kind
        whatsoever, including, but not limited to, lost profits, even if the Guarantee
        Trustee has been advised of the likelihood of such loss or damage and regardless
        of the form of action.

      


      In
        no event shall the Guarantee Trustee be liable for any failure
        or delay in the performance of its obligations hereunder because of
        circumstances beyond its control, including, but not limited to, acts of
        God,
        flood, war (declared or undeclared), terrorism, fire, riot, embargo or
        government action, including any laws, ordinances, regulations, governmental
        action or the like which delay, restrict or prohibit the providing of the
        services contemplated by this Guarantee Agreement.

       

      SECTION
        3.5 Securities.

      


      The
        Guarantee Trustee or any other agent of the Guarantee Trustee,
        in its individual or any other capacity, may become the owner or pledgee
        of
        Common or Preferred Securities.

      


      ARTICLE
        IV

      GUARANTEE
        TRUSTEE

       

      SECTION
        4.1 Guarantee Trustee; Eligibility.

      


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

      


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

      


      (ii) be
        a corporation organized and doing business under the
        laws of the United States or of any State thereof, authorized to exercise
        corporate trust powers, having a combined capital and surplus of at least
        fifty
        million dollars ($50,000,000), subject to supervision or examination by Federal
        or State authority and having an office within the United States. If such
        corporation publishes reports of condition at least annually, pursuant to
        law or
        to the requirements of such supervising or examining authority, then, for
        the
        purposes of this Section 4.1, the combined capital and surplus of such
        corporation shall be deemed to be its combined capital and surplus as set
        forth
        in its most recent report of condition so published.

      


      (b) If
        at any time the Guarantee Trustee shall cease to be
        eligible to so act under Section 4.1(a), the Guarantee Trustee shall
        immediately resign in the manner and with the effect set out in Section
        4.2(c).

      



      
        
          
          

        

        
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      (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 in the manner and with the effect set out in Section 4.2(c).

       

      SECTION
        4.2 Appointment, Removal and Resignation of the
        Guarantee Trustee.

      


      (a) Subject
        to Section 4.2(b), the Guarantee Trustee
        may be appointed or removed without cause at any time by the Guarantor, except
        during an Event of Default.

      


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

      


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

      


      (d) If
        no Successor Guarantee Trustee shall have been
        appointed and accepted appointment as provided in this Section 4.2 within
        thirty (30) days after delivery to the Guarantor of an instrument of
        resignation, the resigning Guarantee Trustee may petition, at the expense
        of the
        Guarantor, any court of competent jurisdiction for appointment of a Successor
        Guarantee Trustee. Such court may thereupon, after prescribing such notice,
        if
        any, as it may deem proper, appoint a Successor Guarantee Trustee. 

      


      ARTICLE
        V

      GUARANTEE

       

      SECTION
        5.1 Guarantee.

      


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

      



      
        
          
          

        

        
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      amounts
        to the Holders. The Guarantor shall give prompt written
        notice to the Guarantee Trustee in the event it makes any direct payment
        to the
        Holders hereunder.

      


      (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
        5.2 Waiver of Notice and Demand.

      


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

       

      SECTION
        5.3 Obligations Not Affected.

      


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

      


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

      


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

      


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

      


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

      



      
        
          
          

        

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

      


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

      


      (g) any
        other circumstance whatsoever that might otherwise
        constitute a legal or equitable discharge or defense of a guarantor, it being
        the intent of this Section 5.3 that the obligations of the Guarantor
        hereunder shall be absolute and unconditional under any and all
        circumstances.

      


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

       

      SECTION
        5.4 Rights of Holders.

      


      The
        Guarantor expressly acknowledges that: (a) this Guarantee
        Agreement will be deposited with the Guarantee Trustee to be held for the
        benefit of the Holders; (b) the Guarantee Trustee has the right to enforce
        this
        Guarantee Agreement on behalf of the Holders; (c) the Holders of a Majority
        in
        Liquidation Amount of the Preferred Securities have the right to direct the
        time, method and place of conducting any proceeding for any remedy available
        to
        the Guarantee Trustee in respect of this Guarantee Agreement or exercising
        any
        trust or power conferred upon the Guarantee Trustee under this Guarantee
        Agreement; and (d) any Holder may institute a legal proceeding directly against
        the Guarantor to enforce its rights under this Guarantee Agreement, without
        first instituting a legal proceeding against the Guarantee Trustee, the Issuer
        or any other Person.

       

      SECTION
        5.5 Guarantee of Payment.

      


      This
        Guarantee Agreement creates a guarantee of payment and not of
        collection. This Guarantee Agreement will not be discharged except by payment
        of
        the Guarantee Payments in full (without duplication of amounts theretofore
        paid
        by the Issuer) or upon distribution of Notes to Holders as provided in the
        Trust
        Agreement.

       

      SECTION
        5.6 Subrogation.

      


      The
        Guarantor shall be subrogated to all (if any) rights of the
        Holders against the Issuer in respect of any amounts paid to the Holders
        by the
        Guarantor under this Guarantee Agreement and shall have the right to waive
        payment by the Issuer pursuant to Section 5.1; provided, that,
        the Guarantor shall not (except to the extent required by mandatory provisions
        of law) be entitled to enforce or exercise any rights it may acquire by way
        of
        subrogation or any indemnity, reimbursement or other agreement, in all cases
        as
        a result of payment under this Guarantee Agreement, if, at the time of any
        such
        payment, any amounts are due and unpaid under this Guarantee Agreement. If
        any
        amount shall be paid to the Guarantor in violation of the preceding sentence,
        the Guarantor agrees to hold such amount in trust for the Holders and to
        pay
        over such amount to the Holders.

      



      
        
          
          

        

        
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      SECTION
        5.7 Independent Obligations.

      


      The
        Guarantor acknowledges that its obligations hereunder are
        independent of the obligations of the Issuer with respect to the Preferred
        Securities and that the Guarantor shall be liable as principal and as debtor
        hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
        Agreement notwithstanding the occurrence of any event referred to in subsections
        (a) through (g), inclusive, of Section 5.3.

       

      SECTION
        5.8 Enforcement.

      


      A
        Beneficiary may enforce the Obligations of the Guarantor
        contained in Section 5.1(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.

      


      ARTICLE
        VI

      COVENANTS
        AND SUBORDINATION

       

      SECTION
        6.1 Dividends, Distributions and
        Payments.

      


      So
        long as any Preferred Securities remain outstanding, if there
        shall have occurred and be continuing an Event of Default or the Guarantor
        shall
        have entered into an Extension Period as provided for in the Indenture and
        such
        period, or any extension thereof, shall have commenced and be continuing,
        then
        the Guarantor may not (a) 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 Equity Interests (as defined in the Indenture), (b) vote in
        favor of or permit or otherwise allow any of its Subsidiaries (as defined
        in the
        Indenture) to declare or pay any dividends or distributions on, or redeem,
        purchase, acquire or make a liquidation payment with respect to or otherwise
        retire, any of such Subsidiary’s Equity Interests entitling the holders thereof
        to a stated rate of return other than dividends or distributions on Equity
        Interests payable to the Guarantor or any Subsidiary thereof (for the avoidance
        of doubt, whether such Equity Interests are perpetual or otherwise), or (c)
        make
        any payment of principal of or any interest or premium on or repay, repurchase
        or redeem any debt securities of the Guarantor that rank pari passu in
        all respects with or junior in interest to the junior subordinated notes
        issued
        by the Guarantor pursuant to the Indenture (other than (i) repurchases,
        redemptions or other acquisitions of Equity Interests of the Guarantor in
        connection with (1) any employment contract, benefit plan or other similar
        arrangement with or for the benefit of any one or more employees, officers,
        directors or consultants, (2) a dividend reinvestment or stockholder stock
        purchase or similar plan with respect to any Equity Interests or (3) the
        issuance of Equity Interests of the Guarantor (or securities convertible
        into or
        exercisable for such Equity Interests) as consideration in an acquisition
        transaction entered into prior to the occurrence of such Event of Default
        or the
        applicable Extension Period, (ii) as a result of an exchange or conversion
        of
        any class or series of the Guarantor’s Equity Interests (or any Equity Interests
        of a Subsidiary of the Guarantor) for any class or series of the Guarantor’s
        Equity Interests or any class of series of the

      



      
        
          
          

        

        
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      Guarantor’s
        indebtedness for any class or series of the
        Guarantor’s Equity Interests, (iii) the purchase of fractional interests in
        Equity Interests of the Guarantor pursuant to the conversion or exchange
        provisions of such Equity Interests or the security being converted or
        exchanged, (iv) any declaration of a dividend in connection with any rights
        plan, the issuance of rights, Equity Interests or other property under any
        rights plan or the redemption or repurchase of rights pursuant thereto, or
        (v)
        any dividend in the form of Equity Interests, warrants, options or other
        rights
        where the dividend Equity Interests or the Equity Interests issuable upon
        exercise of such warrants, options or other rights are the same Equity Interests
        as those on which the dividend is being paid or rank pari passu with or
        junior to such Equity Interests).

       

      SECTION
        6.2 Subordination.

      


      The
        obligations of the Guarantor under this Guarantee Agreement
        will constitute unsecured obligations of the Guarantor and will rank subordinate
        and junior in right of payment to all Senior Debt of the Guarantor.

       

      SECTION
        6.3 Pari Passu Guarantees.

      


      (a) The
        obligations of the Guarantor under this Guarantee
        Agreement shall rank pari passu with the obligations of the Guarantor
        under any similar guarantee agreements issued by the Guarantor with respect
        to
        preferred securities (if any) similar to the Preferred Securities, issued
        by
        trusts other than the Issuer established or to be established by the Guarantor
        (if any), in each case similar to the Issuer, including, without limitation,
        (ii) the Guarantee Agreement, dated March 26, 2002, issued by the Guarantor
        with
        respect to the preferred securities issued by Horizon Statutory Trust I,
        (ii)
        the Guarantee Agreement, dated June 17, 2004, issued by the Guarantor with
        respect to the preferred securities issued by Alliance Financial Statutory
        Trust
        I and (iii) the Guarantee Agreement, dated October 21, 2004, issued by the
        Guarantor with respect to the preferred securities issued by Horizon Bancorp
        Capital Trust II.

      


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

      



      
        
          
          

        

        
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      ARTICLE
        VII

      TERMINATION

      SECTION
        7.1 Termination.

      


      This
        Guarantee Agreement shall terminate and be of no further
        force and effect upon (a) full payment of the Redemption Price of all Preferred
        Securities, (b) the distribution of Notes to the Holders in exchange for
        all of
        the Preferred Securities or (c) full payment of the amounts payable in
        accordance with the Trust Agreement upon liquidation of the Issuer.
        Notwithstanding the foregoing, this Guarantee Agreement will continue to
        be
        effective or will be reinstated, as the case may be, if at any time any Holder
        must restore payment of any sums paid with respect to Preferred Securities
        or
        this Guarantee Agreement. The obligations of the Guarantor under Sections
        3.3 and 3.4 shall survive any such termination or the resignation and
        removal of the Guarantee Trustee.

      


      ARTICLE
        VIII

      MISCELLANEOUS

       

      SECTION
        8.1 Successors and Assigns.

      


      All
        guarantees and agreements contained in this Guarantee
        Agreement shall bind the successors, assigns, receivers, trustees and
        representatives of the Guarantor and shall inure to the benefit of the Holders
        of the Preferred Securities then outstanding. Except in connection with a
        consolidation, merger or sale involving the Guarantor that is permitted under
        Article VIII of the Indenture and pursuant to which the successor or assignee
        agrees in writing to perform the Guarantor’s obligations hereunder, the
        Guarantor shall not assign its rights or delegate its obligations hereunder
        without the prior approval of the Holders of a Majority in Liquidation Amount
        of
        the Preferred Securities.

       

      SECTION
        8.2 Amendments.

      


      Except
        with respect to any changes that do not adversely affect
        the rights of the Holders in any material respect (in which case no consent
        of
        the Holders will be required), this Guarantee Agreement may only be amended
        with
        the prior approval of the Guarantor, the Guarantee Trustee and the Holders
        of
        not less than a Majority in Liquidation Amount of the Preferred Securities.
        The
        provisions of Article VI of the Trust Agreement concerning meetings or consents
        of the Holders shall apply to the giving of such approval.

       

      SECTION
        8.3 Notices.

      


      Any
        notice, request or other communication required or permitted
        to be given hereunder shall be in writing, duly signed by the party giving
        such
        notice, and delivered, telecopied or mailed by first class mail as
        follows:

      



      
        
          
          

        

        
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      (a) if
        given to the Guarantor, to the address or facsimile
        number set forth below or such other address, facsimile number or to the
        attention of such other Person as the Guarantor may give by notice to the
        Guarantee Trustee and the Holders:

      


      Horizon
        Bancorp

      515
        Franklin Square

      Michigan
        City, IN 46360

      Facsimile
        No.: (219) 874-9280

      Attention:
        James H. Foglesong

      


      (b) if
        given to the Issuer, at the Issuer’s address or
        facsimile number set forth below or such other address, facsimile number
        or to
        the attention of such other Person as the Issuer may give by notice to the
        Guarantee Trustee and the Holders:

      


      Horizon
        Bancorp Capital Trust III

      c/o
        Horizon Bancorp

      515
        Franklin Square

      Michigan
        City, IN 46360

      Facsimile
        No.: (219) 874-9280

      Attention:
        Administrative Trustee

      


      (c) if
        given to the Guarantee Trustee, at the address or
        facsimile number set forth below or such other address, facsimile number
        or to
        the attention of such other Person as the Guarantee Trustee may give by notice
        to the Guarantor and the Holders:

      


      Wilmington
        Trust Company 

      Rodney
        Square North, 1100 North Market Street

      Wilmington,
        Delaware 19890-0001

      Facsimile
        No.: (302) 636-4140

      Attention:
        Corporate Capital Markets

      


      (d) if
        given to any Holder, at the address set forth on the
        books and records of the Issuer.

      


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

       

      SECTION
        8.4 Benefit.


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      


      This
        Guarantee Agreement is solely for the benefit of the Holders
        and is not separately transferable from the Preferred Securities.

      


      SECTION
        8.5 Governing Law.

      


      This
        Guarantee Agreement and the rights and obligations of
        each party hereto, shall be construed and enforced in accordance with and
        governed by the laws of the State of New York without reference to its conflict
        of laws provisions (other than Section 5-1401 of the General Obligations
        Law).

       

      SECTION
        8.6 Submission to Jurisdiction.

      


      ANY
        LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR
        WITH RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT
        IN OR
        REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF
        NEW
        YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
        YORK
        (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY
        OF
        THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF
        ITS
        PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
        COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT
        OF OR
        IN CONNECTION WITH THIS GUARANTEE AGREEMENT.

       

      SECTION
        8.7 Counterparts; Facsimile.

      


      This
        instrument may be executed in any number of counterparts,
        each of which so executed shall be deemed to be an original, but all such
        counterparts shall together constitute but one and the same instrument. Delivery
        of an executed signature page of this Guarantee Agreement by facsimile
        transmission shall be effective as delivery of a manually executed counterpart
        hereof.

      


      [THE
        NEXT PAGE IS THE SIGNATURE PAGE]

      


      



      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the undersigned have executed this Guarantee
        Agreement as of the date first above written.

      

        

          
            	 	
                    HORIZON
                      BANCORP

                  
	 	 	 
	 	
                    By:

                  	
                    /s/
                      Craig M. Dwight

                  
	 	 	
                    Craig
                      M. Dwight

                  
	 	 	
                    President
                      and Chief Executive Officer

                     

                  
	 	 
	 	 
	 	
                    WILMINGTON
                      TRUST COMPANY,
                      not in its individual capacity, but solely as Guarantee
                      Trustee

                  
	 	 	 
	 	
                    By:

                  	/s/
                    W.T. Morris II
	 	 	
                    Name: 
                      W. Thomas Morris, II

                  
	 	 	
                    Title: 
                      Assistant Vice
                      President