Exhibit 4.2

GUARANTEE AGREEMENT

TIERONE CORPORATION

Dated as of April 26,
2004

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# TABLE OF CONTENTS

|            |                                                               | Page
|----------- | ------------------------------------------------------------- | ----
|            | ARTICLE I                                                     |     
|            | DEFINITIONS AND INTERPRETATION                               
|SECTION 1.1 | Definitions and Interpretation                                | 1   
|            | ARTICLE II                                                   
|            | POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE           
|SECTION 2.1 | Powers and Duties of the Guarantee Trustee                    | 4   
|SECTION 2.2 | Certain Rights of the Guarantee Trustee                       | 5   
|SECTION 2.3 | Not Responsible for Recitals or Issuance of Guarantee         | 7   
|SECTION 2.4 | Events of Default; Waiver                                     | 7   
|SECTION 2.5 | Events of Default; Notice                                     | 8   
|            | ARTICLE III                                                  
|            | THE GUARANTEE TRUSTEE                                        
|SECTION 3.1 | The Guarantee Trustee; Eligibility                            | 8   
|SECTION 3.2 | Appointment, Removal and Resignation of the Guarantee Trustee | 9   
|            | ARTICLE IV                                                   
|            | GUARANTEE                                                    
|SECTION 4.1 | Guarantee                                                     | 9   
|SECTION 4.2 | Waiver of Notice and Demand                                   | 10  
|SECTION 4.3 | Obligations Not Affected                                      | 10  
|SECTION 4.4 | Rights of Holders                                             | 11  
|SECTION 4.5 | Guarantee of Payment                                          | 11  
|SECTION 4.6 | Subrogation                                                   | 11  
|SECTION 4.7 | Independent Obligations                                       | 12  
|SECTION 4.8 | Enforcement                                                   | 12  
|            | ARTICLE V                                                    
|            | LIMITATION OF TRANSACTIONS; SUBORDINATION                    
|SECTION 5.1 | Limitation of Transactions                                    | 12  
|SECTION 5.2 | Ranking                                                       | 13  

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|            |                                         | Page
|----------- | --------------------------------------- | ----
|            |                                         |     
|            | ARTICLE VI                             
|            | TERMINATION                            
|SECTION 6.1 | Termination                             | 13  
|            | ARTICLE VII                            
|            | INDEMNIFICATION                        
|SECTION 7.1 | Exculpation                             | 13  
|SECTION 7.2 | Indemnification                         | 14  
|SECTION 7.3 | Compensation; Reimbursement of Expenses | 15  
|            | ARTICLE VIII                           
|            | MISCELLANEOUS                          
|SECTION 8.1 | Successors and Assigns                  | 15  
|SECTION 8.2 | Amendments                              | 16  
|SECTION 8.3 | Notices                                 | 16  
|SECTION 8.4 | Benefit                                 | 16  
|SECTION 8.5 | Governing Law                           | 16  
|SECTION 8.6 | Counterparts                            | 17  

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GUARANTEE AGREEMENT

This
GUARANTEE AGREEMENT (the Guarantee), dated as of April 26, 2004, is executed
and delivered by TierOne Corporation, a savings and loan holding company incorporated in
Wisconsin (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 TierOne Capital Trust I, a Delaware statutory trust (the Issuer).

WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the Declaration),
dated as of April 26, 2004, among the trustees named therein of the Issuer, TierOne
Corporation, as sponsor, and the Holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date hereof
securities, having an aggregate liquidation amount of $30,000,000, designated in the
Declaration as MMCapSSM (the Capital Securities); and

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

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

ARTICLE I

DEFINITIONS AND
INTERPRETATION

SECTION
1.1 Definitions and Interpretation.

In
this Guarantee, unless the context otherwise requires:

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

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

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

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

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

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

Beneficiaries
means any Person to whom the Issuer is or hereafter becomes indebted or liable.

Common
Securities has the meaning specified in the Declaration.

Corporate
Trust Office means the office of the Guarantee Trustee at which at any particular
time its corporate trust business shall be principally administered, which at all times
shall be located within the United States and at the time of the execution of this
Guarantee shall be Rodney Square North, 1100 North Market Street, Wilmington, DE
19890-0001.

Covered
Person means any Holder of Capital Securities.

Debenture
Issuer means TierOne Corporation or any successor entity resulting from any
consolidation, amalgamation, merger or other business combination, in its capacity as
issuer of the Debentures.

Debentures
means the junior subordinated debentures of the Debenture Issuer that are designated in
the Indenture as the Floating Rate Junior Subordinated Debt Securities due
2034 and held by the Institutional Trustee (as defined in the Declaration) of the
Issuer.

Event
of Default has the meaning set forth in Section 2.4.

Guarantee
Payments means the following payments or distributions, without duplication, with
respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions (as defined in the Declaration) which are required to be
paid on such Capital Securities to the extent the Issuer has funds available in the
Property Account (as defined in the Declaration) therefor at such time, (ii) the price
payable upon the redemption of any Capital Securities to the extent the Issuer has funds
available in the Property Account therefor at such time, with respect to any Capital
Securities that are (1) called for redemption by the Issuer or (2) mandatorily redeemed by
the Issuer, in each case, in accordance with the terms of such Capital Securities, and
(iii) 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 of the Capital Securities and all accrued
and unpaid Distributions on the Capital Securities to the date of payment, to the extent
the Issuer has funds available in the Property Account therefor at such time, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer as
required by applicable law (in either case, the Liquidation Distribution).

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

Holder
means any Person in whose name any Capital Securities are registered on the books and
records of the Issuer; 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.

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

Indenture
means the Indenture, dated as of April 26, 2004, between the Debenture Issuer and
Wilmington Trust Company, not in its individual capacity but solely as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.

Liquidation
Distribution has the meaning set forth in the definition of Guarantee
Payments herein.

Majority
in liquidation amount of the Capital Securities means Holder(s) of outstanding
Capital Securities, voting together as a class, but separately from the holders of Common
Securities, of more than 50% of the aggregate liquidation amount (including the amount
that would be paid upon the redemption, liquidation or otherwise on the date upon which
the voting percentages are determined, plus unpaid Distributions accrued thereon to such
date) 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 such 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 such officer in rendering the Officer's Certificate;

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

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

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

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

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

Trust
Securities means the Common Securities and the Capital Securities.

ARTICLE II

POWERS, DUTIES AND
RIGHTS OF THE GUARANTEE TRUSTEE

SECTION
2.1       Powers and Duties of the Guarantee Trustee.

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

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

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

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(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 or bad faith, except that:

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

| | (A)              the
duties and obligations of the Guarantee Trustee shall be determined solely           by
the express provisions of this Guarantee, and the Guarantee Trustee shall not
          be liable except for the performance of such duties and obligations as are
          specifically set forth in this Guarantee, and no implied covenants or
          obligations shall be read into this Guarantee against the Guarantee Trustee;
and
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| | (B)              in
the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
          Trustee may conclusively rely, as to the truth of the statements and the
          correctness of the opinions expressed therein, upon any certificates or
opinions           furnished to the Guarantee Trustee and conforming to the requirements
of this           Guarantee; but in the case of any such certificates or opinions
furnished to the           Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the           same to determine whether or not on their face they conform to
the requirements           of this Guarantee;
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| | (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;
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| | (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 a Majority in liquidation amount of the Capital
Securities           relating to the time, method and place of conducting any proceeding
for any           remedy available to the Guarantee Trustee, or exercising any trust or
power           conferred upon the Guarantee Trustee under this Guarantee; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

SECTION
2.2 Certain Rights of the Guarantee Trustee.

(a)    
Subject to the provisions of Section 2.1:

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

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

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

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

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

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

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

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

SECTION
2.3 Not Responsible for Recitals or Issuance of Guarantee.

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

SECTION
2.4 Events of Default; Waiver.

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

(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.

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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, notices of all Events of Default actually known to a
          Responsible Officer of the Guarantee Trustee, unless such defaults have been
          cured before the giving of such notice, provided, however, that the Guarantee
          Trustee shall be protected in withholding such notice if and so long as a
          Responsible Officer of the Guarantee Trustee in good faith determines that the
          withholding of such notice is in the interests of the Holders of the Capital
          Securities.

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

ARTICLE III

THE GUARANTEE TRUSTEE

SECTION
3.1 The Guarantee Trustee; Eligibility.

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

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

| | (ii)              be
a corporation or national association organized and doing business under the
          laws of the United States of America or any state 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 or District of Columbia authority. If such corporation or national
          association publishes reports of condition at least annually, pursuant to law
or           to the requirements of the supervising or examining authority referred to
above,           then, for the purposes of this Section 3.1(a)(ii), the combined capital
and           surplus of such corporation or national association shall be deemed to be
its           combined capital and surplus as set forth in its most recent report of
condition           so published.
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(b)              If
at any time the Guarantee Trustee shall cease to be eligible to so act under
          Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner
and           with the effect set forth in Section 3.2(c).

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

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

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

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

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

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

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

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

ARTICLE IV

GUARANTEE

SECTION
4.1 Guarantee.

(a)              The
Guarantor irrevocably and unconditionally agrees to pay in full to the           Holders
the Guarantee Payments (without duplication of amounts theretofore paid           by the
Issuer), as and when due, regardless of any defense (except 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.

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

SECTION
4.2 Waiver of Notice and Demand.

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

SECTION
4.3 Obligations Not Affected.

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

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

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

(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

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

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

SECTION
4.4 Rights of Holders.

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

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

SECTION
4.5 Guarantee of Payment.

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

SECTION
4.6 Subrogation.

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

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SECTION
4.7 Independent Obligations.

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

SECTION
4.8 Enforcement.

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

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

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 a Default or an Event of Default or (b) Debenture Issuer shall have selected an
Extension Period as provided in the Indenture and such period, or any extension thereof,
shall have commenced and be continuing, then the Guarantor may not (x) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantors capital stock, (y) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor that rank in all respects pari passu with or junior in
interest to the Debentures or (z) make any payment under any guarantees of the Guarantor
that rank in all respects pari passu with or junior in interest to this Guarantee
(other than (i) repurchases, redemptions or other acquisitions of shares of capital stock
of the Guarantor (A) in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers, directors,
or consultants, (B) in connection with a dividend reinvestment or stockholder stock
purchase plan or (C) in connection with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital stock), as consideration in an
acquisition transaction entered into prior to the occurrence of the Event of Default or
the applicable Extension Period, (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 stockholders rights plan, or the issuance of rights,
stock or other property under any stockholders rights plan, or the redemption or
repurchase of rights pursuant thereto, or (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 in interest to such stock).

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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.

ARTICLE VI

TERMINATION

SECTION
6.1 Termination.

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

ARTICLE VII

INDEMNIFICATION

SECTION
7.1 Exculpation.

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

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(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, willful misconduct or bad faith 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.

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

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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 the negligence, willful misconduct or bad faith of the
Guarantee           Trustee.

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

ARTICLE VIII

MISCELLANEOUS

SECTION
8.1 Successors and Assigns.

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

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SECTION
8.2 Amendments.

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

SECTION
8.3       Notices.

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

(a)              if
given to the Guarantee Trustee, at the Guarantee Trustees mailing           address
set forth below (or such other address as the Guarantee Trustee may give           notice
of to the Holders of the Capital Securities): Wilmington Trust Company,           Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
          Attention: Corporate Trust Administration, Telecopy: 302-651-8882, Telephone:
          302-651-1000;

(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): TierOne Corporation,           1235
N Street, P.O. Box 83009, Lincoln, Nebraska 68507-3009,           Attention:
Gilbert G. Lundstrom, Telecopy: (402) 435-0427, Telephone: (402)           473-6250; or

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

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

SECTION
8.4       Benefit.

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

SECTION
8.5 Governing Law.

THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OF SAID STATE OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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SECTION
8.6 Counterparts.

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

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

| | TIERONE CORPORATION,                       
| | -------------------------------------------
| | as Guarantor                               
| | By:  /s/ Gilbert G. Lundstrom              
| | Name: Gilbert G. Lundstrom                 
| | Title: Chairman and Chief Executive Officer
| | WILMINGTON TRUST COMPANY,                  
| | as Guarantee Trustee                       
| | By:  /s/ Denise M. Geran                   
| | Name: Denise M. Geran                      
| | Title: Vice President                      

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