Document:

Exhibit 10.1

 

CEO
SEVERANCE AGREEMENT

 

 

CEO SEVERANCE AGREEMENT dated as of the 17th day of December 2009,
by and between The Ryland Group, Inc., a Maryland corporation (the “Company”),
and Larry T. Nicholson (the “Executive”).

 

In consideration
of the mutual covenants and agreements of the parties set forth in this
Agreement, and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties agree as follows:

 

1.                                    Position and
Responsibilities.  The Executive shall serve as the President
and Chief Executive Officer of the Company. 
In his capacity as President and Chief Executive Officer, the Executive
shall be the Company’s highest ranking executive officer and shall have full
authority and responsibility for formulating and administering the plans and
policies of the Company subject to the control of the Board of Directors.

 

2.                                    Performance of Duties.  The Executive
shall devote his full time attention and energies to the Company’s business and
will not engage in consulting work or any business for his own account or for
any person, firm or corporation.  The
Executive may serve as a director of other companies so long as this service
does not interfere with the performance of his duties with the Company.  In accordance with the “Guidelines on
Significant Corporate Governance Issues,” the Executive “will advise the
Chairperson of the Nominating and Governance Committee in advance of accepting
any directorship with a for-profit entity, to allow for a review of potential conflicts”
and to allow for an assessment that service as a director will not interfere
with the performance of the Executive’s duties with the Company.  The Nominating and Governance Committee will
continue to monitor and assess the appropriateness of the Executive’s service
as a director with other for-profit entities in light of the Executive’s duties
with the Company.

 

3.                                    Employment Termination.

 

3.1                            Termination Due to Death.  In the event
the Executive’s employment is terminated by reason of death, the Executive’s
benefits shall be determined in accordance with the Company’s Retirement, SERP,
insurance or other applicable program then in effect.  In addition, the Company shall pay to the
Executive’s beneficiaries or estate a pro rata share of the Bonus for the year
in which the termination occurs based on the Executive’s Bonus program and the
results of the Company for that fiscal year. 
This pro rata Bonus shall be determined by multiplying the Bonus for the
applicable fiscal year by a fraction, the numerator of which is the number of
days in such fiscal year prior to the date of termination and the denominator
of which is the total number of days in such fiscal year.  The pro rata Bonus shall be paid in a lump
sum within sixty (60) days after the end of the applicable fiscal year, unless Section 3.6
is applicable to this payment.

 

3.2                            Termination Due to
Disability.  In the event the Executive becomes Disabled
(as defined below) and is unable to perform his duties for more than one
hundred twenty (120) days during any period of twelve (12) months or, in the
reasonable determination of the Board of Directors, the Executive’s Disability
(as defined below) will exist for more than one hundred twenty (120) days, the
Company has the right to terminate the Executive’s employment and the Company’s
obligation to pay and provide compensation shall expire, except the Company
shall pay to the Executive a pro rata share of the Bonus for the year in which
the termination occurs based on the Executive’s Bonus program and the results
of the Company for that fiscal year determined as provided in Section 3.1.  The pro rata Bonus shall be paid in a lump
sum within sixty (60) days after the end of the applicable fiscal year, unless Section 3.6
is applicable to this payment.  The
Company shall pay the Executive his base salary through the effective date of
termination and shall pay all benefits to which the Executive has a vested
right at that time in accordance with the terms of the plan, document or
agreement governing such benefits.

 

The term “Disabled”
or “Disability” means the incapacity of the Executive, due to injury, illness,
disease or bodily or mental infirmity, to engage in the performance of his
duties 

 

1

 

with the Company.
A Disability is determined by the Board of Directors upon receipt of and in
reliance on competent medical advice from one or more individuals selected by
the Board who are qualified to give professional medical advice, as well as any
individuals who are involved with the treatment and assessment of the Executive’s
Disability and who are qualified to give professional medical advice.  These individuals may also assist the Board
of Directors in its determination of the period of time during which the Disability
will exist and its impact on the Executive’s performance in accordance with the
prior paragraph of this Section 3.2.

 

3.3                            Voluntary Termination by
the Executive.  The Executive may terminate his employment
with the Company at any time by giving the Board of Directors written notice of
intent to terminate delivered at least ninety (90) days prior to the effective
date of such termination.  Upon the
expiration of this ninety (90) day period, the termination by the Executive
shall become effective.  The Company
shall pay the Executive his base salary through the effective date of
termination and shall pay all benefits to which the Executive has a vested
right at that time in accordance with the terms of the plan, document or agreement
governing such benefits. The Executive shall not receive a Bonus for the fiscal
year in which voluntary termination occurs.

 

3.4                            Termination by the Company
Without Cause.  The Board of Directors may terminate the
Executive’s employment for reasons other than death, Disability or for Cause
(as defined in Section 3.5) by notifying the Executive in writing at least
sixty (60) days prior to the effective date of termination.  Upon the expiration of this sixty (60) day
period, the termination by the Company is effective.  Within thirty (30) days after the date of
termination, unless Section 3.6 is applicable to this payment, the Company
shall pay to the Executive a lump sum cash payment equal to the aggregate
amount of twenty-four (24) months of the base salary as in effect prior to the
date of notice of termination.  The
Executive’s participation in the life, medical, dental, vision, AD&D,
prescription drug, long-term disability and executive medical reimbursement
programs provided to the Executive prior to the date of notice of termination
shall be continued or equivalent benefits provided by the Company, at the Company’s
expense, for a period of two (2) years from the date of the Executive’s
Separation from Service.  Also, within
thirty (30) days after the date of termination, unless Section 3.6 is
applicable to this payment, the Company shall pay to the Executive a lump sum
cash payment equal to the value of coverage under the Company’s executive life
insurance program, personal health services allowance and health club benefit program
for a period equal to twenty-four (24) months.  The Company shall pay to the Executive a pro
rata share of the Bonus for the year in which the termination occurs based on
the Executive’s Bonus program and the results of the Company for that fiscal year
determined as provided in Section 3.1. 
The pro rata Bonus shall be paid in a lump sum within sixty (60) days
after the end of the applicable fiscal year, unless Section 3.6 is
applicable to this payment. The Company shall also pay to the Executive all
benefits to which the Executive has a vested right at the time of termination in
accordance with the terms of the plans, documents or agreements governing those
benefits.  The Executive shall be fully
vested in any unvested grants of equity, stock option or restricted stock unit
awards previously received and shall be fully vested in any prior year awards
that remain unvested or any awards made for the fiscal year in which
termination occurs under the TRG Incentive Plan or any successor plan.  All vested awards under any equity incentive
or other incentive programs shall be paid in accordance with the terms of the
governing plan or program, notwithstanding any provision of the governing plan
or program calling for forfeiture of benefits upon termination. Within thirty
(30) days after the date of termination, unless Section 3.6 is applicable,
the Company shall also pay the Executive a separation from service lump sum
cash payment for the year in which termination occurs equal to twice the highest
amount of the Bonus paid or payable in respect of the three previous fiscal
years prior to the year in which termination occurs as well as a separation
from service equity award equal to the highest restricted stock award granted
during the three previous fiscal years prior to the year in which termination
occurs.  The separation from service
equity award described above shall be paid in the form of a grant of
unrestricted shares of common stock of the Company; provided, however,
that if 

 

2

 

for any reason a
grant of such shares cannot be made to the Executive, then the separation from
service equity award shall be paid in the form of a lump sum cash payment in an
amount determined by multiplying (i) the closing price for the common
stock of the Company, as reported on the New York Stock Exchange, as of the day
immediately preceding the payment date, times (ii) the number of shares
that otherwise would have been granted under the separation from service equity
award.  In accordance with the “Policy
Regarding Stockholder Approval of Severance Agreements,” which was adopted by
the Board of Directors on December 6, 2006 (the “Severance Policy”), all
payments and Benefits (as such term is defined in the Severance Policy) provided
pursuant to this Section 3.4 are subject to and shall not exceed the
Severance Benefits Limitation set forth in the Severance Policy.  In the event that the aggregate present value
of all payments and Benefits (as such term is defined in the Severance Policy)
to be provided under this Section 3.4 would, but for the preceding
sentence, exceed the Benefits Threshold (as such term is defined in the
Severance Policy), the payments and Benefits shall be reduced or forgone to
comply with the Severance Benefits Limitation set forth in the Severance Policy
by first reducing the pro rata Bonus payment, next reducing any other lump sum
cash payments and then reducing the Benefits provided.

 

3.5                            Termination for Cause.  The Board of
Directors may terminate the Executive’s employment at any time for “Cause.”  “Cause” is determined by the Board of
Directors and is defined as the Executive’s (i) willful and continued
failure to perform the material duties of his position after receiving notice
of such failure and being given reasonable opportunity to cure such failure; (ii) willful
misconduct which is demonstrably and materially injurious to the Company; or (iii) conviction
of a felony.  No act or failure to act on
the part of the Executive shall be considered “willful” unless it is done or
omitted to be done in bad faith or without reasonable belief that the action or
omission was in the best interest of the Company.  In the event this Agreement is terminated by
the Board of Directors for Cause, the Company shall pay the Executive his base
salary through the date of termination and the Executive shall forfeit all
rights and benefits he is entitled to receive including any right to a Bonus
for the fiscal year in which the termination occurs, but excluding any benefits
in which he has a vested right.

 

3.6                            Delay of Payment Pursuant
to Section 409A.  Should any of the payments
made to the Executive in accordance with Section 3 of this Agreement be
determined to be payments from a nonqualified deferred compensation plan, as
defined by Section 409A of the Internal Revenue Code of 1986 as amended
(the “Code”), these payments, to the extent otherwise payable within six (6) months
after the Executive’s date of Separation from Service, will be made on the date
that is six (6) months after the Executive’s date of Separation from
Service.  For purposes of this Section 3,
a “Separation from Service” means an anticipated permanent reduction in the
level of bona fide services to twenty percent (20%) or less of the average
level of bona fide services performed over the immediately preceding thirty-six
(36) month period.  For purposes of Section 409A
of the Code, the payments to be made to the Executive in accordance with Section 3
of this Agreement shall be treated as a right to a series of separate payments.

 

Also, should any
of the payments to be made to the Executive in accordance with Section 3
of this Agreement be determined to be an acceleration of payment from a
nonqualified deferred compensation plan in violation of Code Section 409A,
such payment shall not be made until the date determined in accordance with the
terms of the plan, document or agreement governing such deferred compensation.

 

4.                                Dispute Resolution. Either the Executive or the Company may elect to have
any good faith dispute or controversy arising under or in connection with this
Agreement settled by arbitration by providing written notice of such election
to the other party specifying the nature of the dispute to be arbitrated.  If arbitration is selected, such proceeding
shall be conducted before a panel of three (3) arbitrators sitting in a
location agreed to by the Company and the Executive within fifty (50) miles
from the location of the Executive’s principal place of employment in
accordance with the rules of the American Arbitration Association.  Judgment may be entered on the award of or
decision made by the arbitrators in any court having competent
jurisdiction.  To the extent that the Executive

 

3

 

prevails in any
litigation or arbitration seeking to enforce the provisions of this Agreement,
the Executive is entitled to reimbursement by the Company of all expenses of
such litigation or arbitration, including any legal fees and expenses and any
costs and disbursements.

 

The Executive
shall be entitled to reimbursement of the fees and expenses described under
this Section 4 during the period commencing on the effective date of this
Agreement and ending on his death.  Any
reimbursement of fees and expenses under this Agreement shall be made on or
before the last day of the year following the year in which the expense is
incurred.  The amount of fees and
expenses eligible for reimbursement during a year shall not affect the expenses
eligible for reimbursement in any other year except for any medical
reimbursement arrangement providing for the reimbursement of expenses referred
to in Section 105(b) of the Code. 
The right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

5.                                    Release of Claims and
Obligations.  In consideration of the payments and benefits
to be provided as indicated in this Agreement, it is agreed that you, on behalf
of yourself, your heirs, representatives and assigns, release the Company from
any and all claims, causes of action, demands, obligations, agreements,
promises, liability, damages, costs and/or fees arising out of or relating to
your employment or your separation from employment and any claim for equitable
relief or recovery of monies or damages, any contract, express or implied, any
tort, or any federal, state or local law relating to employment, including
employment discrimination, such as a fair employment practice law (e.g., The
California Fair Employment and Housing Act), and including, but not limited to,
42 U.S.C. §§ 1091, 1981 and 1983, Title VII of the Civil Rights Act of
1964,  the Age Discrimination in
Employment Act, as amended, the Employee Retirement Income Security Act, the
Rehabilitation Act, the Americans with Disabilities Act, the Civil Rights Act
of 1991, the Family and Medical Leave Act, the Fair Labor Standards Act and any
other local, state or federal law.  By
this paragraph, you are waiving any claims against the Company which includes
claims against the Company’s directors, officers, employees, agents and all
other related or affiliated persons.

 

6.                                    Miscellaneous.

 

6.1                            Mitigation. 
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under this Agreement,
and the obtaining of any other employment shall not result in a reduction of
the Company’s obligations to make the payments, benefits and arrangements
required to be made under this Agreement.

 

6.2.                        Entire Agreement.  Except as
provided in the next sentence, this Agreement supersedes any prior agreements
or understandings, oral or written, between the Executive and the Company with
respect to the subject matter hereof, and constitutes the entire agreement of
the parties with respect thereto. 
Nothing in this Agreement is intended to adversely effect any rights the
Executive may have under the Senior Executive Severance Agreement dated July 7,
2004, as amended, in the event of a termination of employment.  In the event of a Change of Control (as
defined in the Senior Executive Severance Agreement), the Executive has the right
as determined by the Executive, to have a termination of employment governed by
the provisions of the Senior Executive Severance Agreement and not by the
provisions of this Agreement.

 

6.3                            Modification.  This Agreement
shall not be varied, altered, modified, cancelled, changed or in any way
amended except by mutual agreement of the parties in a written instrument
executed by the parties or their legal representatives.

 

6.4                            Severability.  In the event
that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions of this
Agreement shall be unaffected and shall remain in full force and effect.

 

6.5                            Tax Withholding.  The Company
may withhold all Federal, state, city or other taxes required pursuant to any
law or governmental regulation or ruling.

 

4

 

6.6                            Beneficiaries.  The Executive
may designate one or more persons or entities as the primary and/or contingent
beneficiaries of any amounts to be received under this Agreement.  Such designation must be in a signed writing
acceptable to the Board of Directors, the Company or designees of the Board or
Company.  The Executive may change such
designation at any time.

 

6.7                            Board Committee.  Any action
taken or determination made by the Board of Directors under this Agreement may
be taken or made by the Compensation Committee or any other Committee of the
Board of Directors.

 

6.8                            Governing Law.  To the extent
not preempted by Federal law, the provisions of this Agreement shall be
construed and enforced in accordance with the laws of the State of California.

 

6.9                            Notice.  Any notices,
requests, demands or other communications required by or provided for in this
Agreement shall be sufficient if in writing and sent by registered or certified
mail to the Executive at the last address he has filed in writing with the
Company or, in the case of the Company, at its principal office.

 

IN WITNESS WHEREOF,
the Executive and the Company have executed this Agreement as of the date first
above written.

 

	
  THE RYLAND GROUP, INC.

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William L. Jews

  	
   

  	
  /s/ Larry T. Nicholson

  
	
   

  	
  William L. Jews, Chairman

  	
   

  	
  Larry T. Nicholson

  
	
   

  	
  Compensation Committee of the

  	
   

  	
   

  
	
   

  	
  Board of Directors

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  /s/ Timothy J. Geckle

  	
   

  	
   

  
	
   

  	
  Timothy J. Geckle, Secretary

  	
   

  	
   

  
						

 

5EXHIBIT 10.1

 

SUBSCRIPTION AGREEMENT

FOR NON-AFFILIATE INVESTORS

 

Tennessee Commerce Bancorp, Inc.

381 Mallory Station Road, Suite 207

Franklin, Tennessee 37067

 

Gentlemen:

 

The
undersigned (the “Investor”)
hereby confirms its agreement with Tennessee
Commerce Bancorp, Inc., a Tennessee corporation (the “Company”),
as follows:

 

1.             This Subscription Agreement, including the Terms and
Conditions for Purchase of Shares attached hereto as Annex I
(collectively, this “Agreement”)
is made as of the date set forth below between the Company and the Investor.

 

2.             The Company has authorized the sale and issuance to
certain investors of up to an aggregate of 948,115 shares (the “Shares”) of its common stock, par value $0.50 per share (the
“Common Stock”), for a purchase price of
$3.63 per share (the “Purchase Price”)
for investors that are not affiliates of the Company.

 

3.             The offering and sale of the Shares (the “Offering”) is being made pursuant to (a) an effective
Registration Statement on Form S-3 (Registration No. 333-160712) (the
“Registration Statement”) filed by the
Company with the Securities and Exchange Commission (the “Commission”),
which contains the base prospectus dated July 20, 2009 (the “Base Prospectus”) and was declared effective by the
Commission on July 27, 2009, (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities
Act of 1933, as amended (the “Act”)), that
have been or will be filed with the Commission and delivered to the Investor on
or prior to the date hereof and (c) a final prospectus supplement (the “Prospectus Supplement” and together with the Base
Prospectus, the “Prospectus”) containing certain
supplemental information regarding the Shares and terms of the Offering that
has been filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version
thereof with the Commission).

 

4.             The Company and the Investor agree that the Investor
will purchase from the Company and the Company will issue and sell to the
Investor the number of Shares set forth below for the aggregate purchase price
set forth below. The Shares shall be purchased pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as Annex I and
incorporated herein by this reference as if fully set forth herein. The
Investor acknowledges that the minimum number of shares that the Investor may
purchase in connection with the Offering is 2,500 and the maximum number of
shares that the Investor may purchase in connection with the Offering is
250,000.

 

5.             (a)           The
manner of settlement of the Shares purchased by the Investor shall be determined
by the Investor as follows (check one):

 

o            (1)           Delivery
by crediting the account of the Investor’s broker-dealer (as specified by such
Investor on Exhibit A attached hereto) with The Depository Trust
Company (“DTC”) through its Deposit/Withdrawal At
Custodian (“DWAC”) system, whereby Investor’s
broker-dealer shall initiate a DWAC transaction on the Closing Date using its
DTC participant identification number, and released by Registrar and Transfer
Company, the Company’s transfer agent (the “Transfer 

 

 

Agent”), at the Company’s direction. NO LATER
THAN ONE BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND
THE COMPANY, THE INVESTOR SHALL DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT
OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES.

 

o            (2)           Delivery
of the Shares in physical, certificated form to the address set forth on the
signature page hereto, registered
in the name of the Investor or,
if so indicated on the Investor Questionnaire attached hereto as Exhibit A,
in the name of a nominee designated by the Investor. The Investor hereby
acknowledges and agrees that the Transfer Agent will mail the Shares in
physical, certificated form within a commercially reasonable time after
Closing.

 

(b)           NO LATER THAN ONE BUSINESS DAY
AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL REMIT THE AMOUNT OF FUNDS EQUAL TO THE
AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR BY (A) CHECK
MADE PAYABLE TO THE ORDER OF “TENNESSEE COMMERCE BANCORP, INC.” OR (B) WIRE
TRANSFER TO THE FOLLOWING ACCOUNT:

 

Bank Name: Tennessee Commerce Bank

ABA #

Account Name: Tennessee Commerce Bancorp, Inc.

Account Number:

Swift:

Reference: Tennessee Commerce Bancorp, Inc.
Stock Offering

Contact: Chris Bick

 

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) DELIVER
THE NECESSARY CHECK, MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) IF THE INVESTOR ELECTS TO SETTLE THE
SHARES IT PURCHASED THROUGH DTC’S DWAC DELIVERY SYSTEM, ARRANGE FOR SETTLEMENT
BY WAY OF DWAC IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE
AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS
FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.

 

6.             The Investor represents that, except as set forth below,
(a) it has had no position, office or other material relationship within
the past three years with the Company or persons known to it to be affiliates
of the Company, (b) it is not a member of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) or an
Associated Person (as such term is defined under the FINRA Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither
the Investor nor any group of Investors (as identified in a public filing made
with the Commission) of which the Investor is a part in connection with the
Offering of the Shares, acquired, or obtained the right to acquire, 20% or more
of the Common Stock (or securities convertible into or exercisable for Common
Stock) or the voting power of the Company on a post-transaction basis.  Exceptions:

 

 

(If no exceptions, write “none.” If left blank, response will be deemed
to be “none.”)

 

7.             The Investor
represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the
Base Prospectus, which is part of the Company’s Registration Statement, the
documents incorporated by reference therein, and any issuer free writing
prospectus (as set forth in Commission Rule 433, relating to the Shares in
the form filed or required to be filed with the Commission or, if not required
to be filed, in the form retained in the Company’s records pursuant to Rule 433(g))
(collectively, the “Disclosure Package”),
prior to or in 

 

2

 

connection
with the receipt of this Agreement. The Investor acknowledges that, prior to
the execution and delivery of this Agreement to the Company, the Investor will
receive certain additional information regarding the Offering, including
pricing information (the “Offering Information”).
Such information may be provided to the Investor by any means permitted under
the Act, including the Prospectus Supplement, an issuer free writing prospectus
and oral communications.

 

8.             No offer by the Investor to buy Shares will be accepted
and no part of the Purchase Price will be delivered to the Company until the
Investor has received the Offering Information and the Company has accepted
such offer by countersigning a copy of this Agreement, and any such offer may
be withdrawn or revoked, in whole or in part, without obligation or commitment
of any kind, at any time prior to the Company sending (orally, in writing or by
electronic mail) notice of its acceptance of such offer. This Agreement will
involve no obligation or commitment of any kind until the Investor has been
delivered the Offering Information and this Agreement is accepted and
countersigned by or on behalf of the Company.

 

[Remainder of Page Intentionally
Left Blank]

 

3

 

Number of Shares:

 

Purchase Price Per Share:  $3.63

 

Aggregate Purchase Price:  $

 

Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.

 

 

	
   

  	
  Dated
  as of: December       , 2009

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed
  and Accepted

  	
   

  
	
  this
         day of December, 2009:

  	
   

  
	
   

  	
   

  
	
  TENNESSEE COMMERCE BANCORP, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

4

 

ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

 

1.             Authorization and Sale of the Shares. 
Subject to the terms and conditions of this Agreement, the
Company has authorized the sale of the Shares.

 

2.             Agreement to Sell and Purchase the Shares.

 

2.1           At the Closing (as defined in Section 3.1), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon the
terms and conditions set forth herein, the number of Shares set forth on the
last page of the Agreement to which these Terms and Conditions for
Purchase of Shares are attached as Annex I (the “Signature Page”)
for the aggregate purchase price therefor set forth on the Signature Page.

 

2.2           The Company proposes to enter into subscription
agreements with certain other affiliate and non-affiliate investors (the “Other Investors”) and expects to
complete sales of Shares to them.  The
Investor and the Other Investors are hereinafter sometimes collectively
referred to as the “Investors,”
and this Agreement and the subscription agreements executed by the Other
Investors are hereinafter sometimes collectively referred to as the “Agreements.”

 

2.3           The Company represents that
the only material, non-public information relating to the Company or its
subsidiaries that the Company, its employees or agents has provided to the
Investor in connection with the Offering prior to the date hereof is the
existence of the Offering. The Company confirms that neither it nor any other
person acting on its behalf has provided the Investor or its agents or counsel
with any information, other than information relating to the Offering, that
constitutes or could reasonably be expected to constitute material, non-public
information, except as will be disclosed in the Disclosure Package and the
Company’s Current Report on Form 8-K to be filed with the Commission in
connection with the Offering. The Company understands and confirms that the
Investor will rely on the foregoing representations in purchasing the Shares.

 

3.             Closing and Delivery of the Shares and Funds.

 

3.1           Closing.  The
completion of the purchase and sale of the Shares (the “Closing”) shall
occur on December 18, 2009 (the “Closing Date”) at a place to be
specified by the Company.  At the
Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered
in the name of the Investor or, if so indicated on the Investor Questionnaire
attached hereto as Exhibit A, in the name of a nominee designated
by the Investor and (b) the aggregate purchase price for the Shares being
purchased by the Investor will be delivered by or on behalf of the Investor to
the Company.

 

3.2           Conditions to the
Obligations of the Parties.

 

(a)           Conditions
to the Company’s Obligations.  The Company’s
obligation to issue and sell the Shares to the Investor shall be subject to (i) the
receipt by the Company of the purchase price for the Shares being purchased
hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.

 

(b)           Conditions
to the Investor’s Obligations.  The Investor’s obligation to
purchase the Shares shall be subject to (i) the delivery by the Company of
the Shares in accordance with

 

5

 

the
provisions of this Agreement and (ii) the accuracy of the representations
and warranties made by the Company and the fulfillment of those undertakings of
the Company to be fulfilled prior to the Closing Date. The Investor’s obligations
are expressly not conditioned on the purchase by any or all of the Other
Investors of the Shares that they have agreed to purchase from the Company.

 

3.3           Delivery of Funds. No later than one business day after the execution of this Agreement by
the Investor and the Company, the Investor shall remit
the amount of funds equal to the aggregate purchase price for the Shares being
purchased by the Investor by (a) a check made payable to the order of “Tennessee
Commerce Bancorp, Inc.” or (b) wire transfer to the following account
designated by the Company:

 

Bank Name: Tennessee
Commerce Bank

ABA #

Account Name: Tennessee
Commerce Bancorp, Inc.

Account Number:

Swift:

Reference: Tennessee
Commerce Bancorp, Inc. Stock Offering

Contact: Chris Bick

 

Such
funds shall be held in escrow by the Company until the Closing upon the
satisfaction of the conditions set forth in Section 3.2 hereof.

 

3.4           Delivery of Shares.  

 

(a)           DWAC Delivery. If
the Investor elects to settle the Shares it purchased through DTC’s DWAC
delivery system, no later than one
business day after the execution of this Agreement by the Investor and the
Company, the Investor shall direct the broker-dealer at
which the account or accounts to be credited with the Shares being purchased by
such Investor are maintained, which broker-dealer shall be a DTC participant,
to set up a DWAC instructing the Transfer Agent to credit such account or
accounts with the Shares. Such DWAC instruction shall indicate the settlement
date for the deposit of the Shares. At the Closing, the Company shall direct
the Transfer Agent to credit the Investor’s account or accounts with the Shares
pursuant to the information contained in the DWAC.

 

(b)           Physical Certificate.
If the Investor elects to settle the
Shares it purchased through receipt of a physical certificate, at the
Closing, the Company shall direct the Transfer Agent to mail the Shares in
physical, certificated form to the address set forth on the signature page hereto
within a commercially reasonable time after Closing.

 

4.             Representations,
Warranties and Covenants of the Investor.

 

The
Investor acknowledges, represents and warrants to, and agrees with, the Company
that:

 

4.1           The Investor (a) is
knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Shares, including
investments in securities issued by the Company and investments in comparable
companies, (b) has answered all questions on the Signature Page and
the Investor Questionnaire attached hereto as Exhibit A and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date, (c) in connection with its decision to
purchase the number of Shares set forth on the Signature Page, has received and
is relying only upon the Disclosure Package and the documents incorporated by
reference therein and the Offering Information and (d) is either an “accredited
investor” as defined in Rule 501(a) under the Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Act.

 

4.2           (a) No action has been or will be taken in any
jurisdiction outside the United States by the Company that would permit an
offering of the Shares, or possession or distribution of offering materials in
connection with the issue of the Shares, in any jurisdiction outside the United
States where action for that purpose is required and (b) if the Investor
is outside the United States, it will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells
or delivers Shares or has in its possession or distributes any offering
material, in all cases at its own expense.

 

6

 

4.3           (a) The
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of this
Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation).

 

4.4           The Investor understands that nothing in this Agreement,
the Prospectus, the Disclosure Package, the Offering Information or any other
materials presented to the Investor in connection with the purchase and sale of
the Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors and made such investigation as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.

 

4.5           Since the date on which the Company first contacted the
Investor about the Offering (the “Initial
Date”), the Investor has not disclosed any information regarding the
Offering to any third parties (other than its legal, tax and other advisors)
and has not engaged in any purchases or sales involving the securities of the
Company (including, without limitation, any Short Sales involving the Company’s
securities).  The Investor covenants that
it has not engaged in any purchases or sales involving the securities of the
Company (including Short Sales) during the period commencing on the Initial
Date and ending at the time that the transactions contemplated by this
Agreement are publicly disclosed.  The
Investor agrees that it will not use any of the Shares acquired pursuant to
this Agreement to cover any short position in the Common Stock if doing so
would be in violation of applicable securities laws.  For purposes hereof, “Short Sales” include, without limitation,
all “short sales” as defined in Rule 200 promulgated under Regulation SHO
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
whether or not against the box, and all types of direct and indirect stock
pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange
Act) and similar arrangements (including on a total return basis), and sales
and other transactions through non-US broker-dealers or foreign regulated
brokers.

 

5.             Survival of
Representations, Warranties and Agreements; Third Party Beneficiary.  Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the
Investor of the Shares being purchased and the payment therefor.

 

6.             Notices.  All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States, by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile or (b) if delivered from
outside the United States, by International Federal Express or facsimile, and (c) will
be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed
and (iv) if delivered by facsimile, upon electronic confirmation of
receipt, and will be delivered and addressed as follows:

 

7

 

(a)                      if to the Company, to:

 

Tennessee
Commerce Bancorp, Inc.

381 Mallory Station Road, Suite 207

Franklin,
Tennessee 37067

Facsimile:  (615) 599-2275

 

(b)                     with copies to:

 

Waller Lansden Dortch &
Davis, LLP

511 Union Street, Suite 2700

Nashville, Tennessee 37219

Attention:  David G. Wilson, Esq.

Facsimile:  (615) 244-6804

 

(c)                      if to the Investor, at its address on the Signature Page hereto, or
at such other address or addresses as may have been furnished to the Company in
writing.

 

7.             Changes.  This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.

 

8.             Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.

 

9.             Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.

 

10.           Governing Law.  This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Tennessee,
without giving effect to the principles of conflicts of law that would require
the application of the laws of any other jurisdiction.

 

11.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

 

12.           Confirmation of Sale.  The Investor acknowledges and agrees that the
Investor’s receipt of the Company’s signed counterpart to this Agreement,
together with the Prospectus Supplement (or the filing by the Company of an
electronic version thereof with the Commission), shall constitute written
confirmation of the Company’s sale of Shares to the Investor.

 

13.           Press Release.  The Company and the Investor agree that the
Company may, in its sole discretion, (a) issue a press release announcing
the Offering and disclosing all material information regarding the Offering and
(b) file a Current Report on Form 8-K with the Commission including a
form of this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

8

 

EXHIBIT A

 

TENNESSEE COMMERCE BANCORP, INC.

 

INVESTOR QUESTIONNAIRE

 

Pursuant
to Section 3 of Annex I to the Agreement, please provide us
with the following information:

 

	
  1.

  	
  The
  exact name in which your Shares are to be registered. You may use a nominee
  name if appropriate:

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  The
  relationship between the Investor and the registered holder listed in
  response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  The
  mailing address of the registered holder listed in response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  The
  Social Security Number or Tax Identification Number of the registered holder
  listed in the response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Name
  of DTC Participant (broker-dealer at which the account or accounts to be
  credited with the Shares are maintained); please include the name and
  telephone number of the contact person at the broker-dealer:

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  DTC
  Participant Number:

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Name
  of Account at DTC Participant being credited with the Shares:

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Account
  Number at DTC Participant being credited with the Shares:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]