Exhibit 10.13


 





 


PROMISSORY NOTE


 




	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $

  	
  5,000,000.00

  	
   

  	
  02-03-2006

  	
   

  	
  09-30-2006

  	
   

  	
  3003236S

  	
   

  	
  04A0 / BLKT

  	
   

  	
   

  	
   

  	
  81154

  	
   

  	
   

  	
   

  
																	






 


References in the  shaded
area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item. Any item above containing “* * *” has
been omitted due to text length limitations.


 


	
  Borrower:

  	
  Tennessee
  Commerce Bancorp, Inc. (TIN:

  62-1815881)

  381 Mallory Station. Suite 207

  Frankling, TN 37067

  	
   

  	
  Lender:

  	
  First
  Tennessee Bank National Association

  Financial institutions

  845 Crossover Lane, Suite 150

  Memphis. TN 38117

  (901) 435-7972

  



 


	
  Principal
  Amount:

  	
  $5,000,000.00

  	
  Initial
  Rate:

  	
  7.040%

  	
  Date
  of Note:

  	
  February 3,
  2006

  



 


PROMISE TO PAY. Tennessee Commerce
Bancorp, Inc. (“Borrower”) promises to pay to First Tennessee Bank National
Association (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00)
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.


 


PAYMENT. Borrower will pay this loan
in one payment of all outstanding principal plus all accrued unpaid interest on
September 30. 2006. In addition. Borrower will pay regular quarterly
payments of all accrued unpaid interest due as of each payment date, beginning April 1,
2006, with all subsequent interest payments to be due on the same day of each
quarter after that. Unless otherwise agreed or required by applicable law,
payments will be applied first to any accrued unpaid interest; then to
principal; and then to any unpaid collection costs. The annual interest rate
for this Note is computed on a 365/360 basis: that is, by applying the ratio of
the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender’s address shown
above or at such other place as Lender may designate in writing.


 


VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on
changes in an independent index which is the LIBOR Rate (as hereinafter
defined), adjusted and determined as of the opening of business on the first
day of the month in which this Note is executed (the “Initial Pricing Date”)
and on the 1st day of every third month hereafter each an “Interest Rate Change
Date”). The LIBOR Rate shall mean the London Interbank Offered Rate of interest
for an interest period of three (3) months, as reported in The Wall Street
Journal published on each Interest Rate Change Date. Each change in the Index
which results from a change in the LIBOR Rate shall become effective, without
notice to the Borrower, on each Interest Rate Change Date: provided, however,
that if The Wall Street Journal is not published on such date, the LIBOR Rate
shall be determined by reference to The Wall Street Journal last published
immediately preceding such date (the “Index”). The Index is not necessarily the
lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current Index rate upon
Borrower’s request. The interest rate change will not occur more often than
each every third month. Borrower understands that Lender may make loans based
on other rates as well. The Index currently is
4.540% per annum. The Interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 2.500 percentage points over the
Index, resulting in an initial rate of 7.040% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.


 


PREPAYMENT. Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower’s
obligation to continue to make payments of accrued unpaid interest. Rather,
early payments will reduce the principal balance due. Borrower agrees not to
send Lender payments marked “paid in full”, “without recourse”, or similar
language. If Borrower sends such a payment, Lender may accept it without losing
any of Lender’s rights under this Note, and Borrower will remain obligated to
pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that
indicates that the payment constitutes “payment in full” of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: First Tennessee Bank
National Association, Financial Institutions, 845 Crossover Lane, Suite 150,
Memphis, TN 38117.


 


INTEREST AFTER DEFAULT. Upon default, including failure to pay upon
final maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 21.000% per annum. In no
event will the effective total interest rate on this Note be greater than the
rate permitted by applicable law.


 


DEFAULT.  Each of the following shall constitute an
event of default (“Event of Default”) under this Note:


 


Payment Default.  Borrower fails to make any payment when due
under this Note.


 


Other Defaults. Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower


 


Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay
this Note or perform Borrower’s obligations under this Note or any of the
related documents.


 


False Statements. Any warranty, representation or statement
made or furnished to Lender by Borrower or on Borrower’s behalf under this Note
or the related documents is false or misleading in any material respect, either
now or at the time made or furnished or becomes false or misleading at any time
thereafter.


 


Insolvency. The dissolution or termination of Borrower’s
existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.


 


Creditor or Forfeiture
Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by Judicial
proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the
loan. This includes a garnishment of any of Borrower’s accounts, including
deposit accounts, with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by Borrower as to the validity or reasonableness
of the claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.


 


Events Affecting Guarantor. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any of
the indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this Note. In
the event of a death, Lender, at its option, may, but shall not be required to,
permit the guarantor’s estate to assume unconditionally the obligations arising
under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
any Event of Default.


 


Change In Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.


 


Adverse Change. A material adverse change occurs in Borrower’s
financial condition, or Lender believes the prospect of payment or performance
of this Note is impaired.


 


Cure Provisions. If any default, other than a default in
payment or failure to satisfy Lender’s requirement in the Insufficient Market
Value of Securities section is curable and if Borrower has not been given
a notice of a breech of the
same provision of this Note within the preceding twelve (12) months, it may be
cured if Borrower, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within fifteen (15) days; or (2) if
the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender’s sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.


 


LENDER’S RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.


 


Any payment not made when due hereunder (whether by
acceleration or otherwise) shall bear interest after maturity at the maximum
effective contract rate of interest which the Lender may lawfully charge.


 

















 


In the event of any renewal or extension of the loan
indebtedness evidenced hereby, unless the parties otherwise agree to a lower
rate, the Lender shall have the right to charge interest at the highest of the
following rates: (i) the maximum rate permissible at the time the contract
to make the loan was
executed; or (ii) the maximum rate permissible at the time the loan was
made; or (iii) the maximum rate permissible at the time of such renewal or
extension; or (iv) the maximum rate permitted by applicable federal law;
it being intended that those statutes and laws, state or federal, from time to
time in effect, which permit the charging of the higher rate of interest shall
govern the maximum rate which may be charged hereunder. In the event that for
any reason the foregoing provisions hereof shall not contain a valid,
enforceable designation of a rate of interest prior to maturity or method of
determining the same, then the indebtedness hereby evidenced shall bear
interest prior to maturity at the maximum effective rate which may be lawfully
charged by the Lender under applicable law.


 


Regardless of any provision herein, or in any other
document executed in connection herewith, the holder hereof shall never be
entitled to receive, collect, or apply, as interest hereon, any amount in
excess of the maximum contract rate which may be lawfully charged by the holder
hereof under applicable law; and in the event the holder hereof ever receives,
collect, or applies at interest, any such excess, such amount which would be
excessive interest shall be deemed a partial
prepayment of principal and treated hereunder as such: and, if the principal
hereof is paid in full, any remaining excess shall forthwith be paid to the
undersigned. In determining whether or not the interest paid or payable, under
any specific contingency, exceeds the maximum lawful contract rate, the
undersigned and the holder hereof shall, to the maximum extent permitted by
applicable law, (a) characterize any non-principal payment as a reasonable
loan charge, rather than as interest;
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize,
prorate, allocate, and spread, in equal parts, the total amount of interest
throughout the entire contemplated term hereof, so that the interest accrued or
to accrue throughout the entire term contemplated hereby shall at no time
exceed the maximum lawful contract rate.


 


ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender’s
attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit,
including attorneys’ fees, expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and appeals. If
not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.


 


JURY WAIVER. Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the other.


 


DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00
if Borrower makes a payment on Borrower’s loan and the check or preauthorized
charge with which Borrower pays is later dishonored.


 


RIGHT OF SETOFF. To the extent permitted by applicable law, Lander
reserves a right of setoff in all Borrower’s accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower
may open in the future. However, this does not include any IRA or Keogh
accounts, or any trust accounts for which setoff would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to
charge or setoff all sums owing on the indebtedness against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts
to allow Lender to protect Lender’s charge and setoff rights provided in this
paragraph.


 


FINANCIAL STATEMENTS. The undersigned agrees to furnish a current
financial statement upon the request of Lender from time to time, and further
agrees to execute and deliver all other instruments and take such other actions
as Lender may from time to time reasonably request in order to carry out the
provisions and intent hereof.


 


LATE FEE. For any payment which is not made within 10
days of the due date for such payment, the Borrower shall pay a late fee. The
late fee shall equal 5% of the unpaid portion of the past-due payment.


 


EXCLUSION FROM INDEBTEDNESS. 
Excluded from indebtedness shall be any indebtedness governed by the
Federal Truth in Lending Act.


 


COLLATERAL. Borrower acknowledges this Note is secured by
the following collateral described in the security instrument listed herein:
securities or investment property described in a Commercial Pledge Agreement
dated February 3, 2006.


 


LINE OF CREDIT. This Note evidences a revolving line of
credit. Advances under this Note may be requested either orally or in writing
by Borrower or by an authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender’s
office shown above. Borrower agrees to
be liable for all sums either: (A) advanced in accordance with the
instructions of an authorized person or (B) credited to any of Borrower’s
accounts with Lender. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender’s internal
records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (A) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (B) Borrower or any guarantor ceases doing business
or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such guarantor’s guarantee of this Note or any other
loan with Lender; or (D) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender.


 


USA PATRIOT ACT. Important
information about procedures for opening a new account. To help the government fight the funding of
terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies each
business entity that opens an account.


 


What this means to you: When you open an account, we
will ask for Federal Tax Identification Number, physical street address of your
business, full legal name of your business and other information that will
allow us to identify your company. We may also ask you to provide copies of
certain documents that will aid in confirming this information.


 


SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Borrower, and upon Borrower’s heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.


 


GENERAL PROVISIONS. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender’s security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.


 


PRIOR TO SIGNING THIS NOTE, BORROWER
READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
PROMISSORY NOTE.


 


BORROWER:


 


 


TENNESSEE COMMERCE BANCORP, INC.


 


	
  By:

  	
  /s/ George Fort

  	
   

  
	
   

  	
  George Fort, Chief Financial Officer of Tennessee

  
	
   

  	
  Commerce Bancorp, Inc.

  



 


 


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