Exhibit 10.1
THIRD AMENDED AND RESTATED LOAN AGREEMENT
     THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT (this “Agreement”) is made
and entered into as of November 10, 2006, by and between: MERCANTILE BANCORP,
INC., a Delaware corporation (“Borrower”); and U.S. BANK NATIONAL ASSOCIATION,
formerly known as Firstar Bank, N.A., a national banking association (“Lender”),
the successor by merger to Mercantile Bank National Association (“MBNA”); and
has reference to the following facts and circumstances:
     A. Borrower and MBNA previously entered into the Second Amended and
Restated Term Loan Agreement dated as of December 2, 1997, as subsequently
amended (the “Original Loan Agreement”).
     B. Lender is the successor by merger to MBNA.
     C. Borrower and Lender desire to amend and restate the Original Loan
Agreement to, among other things, increase the revolving credit facility to the
aggregate amount of up to $15,000,000, and to allow for a new term loan in the
original principal amount of $15,000,000 upon, and subject to, the terms,
provisions and conditions hereinafter set forth.
     NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby mutually agree and promise as follows:
SECTION 1 — DEFINITIONS.
     In addition to the terms defined elsewhere in this Agreement or in any
Exhibits or Schedules hereto, when used in this Agreement, the following terms
shall have the following meanings (such meanings shall be equally applicable to
the singular and plural forms of the terms used, as the context requires):
     Act shall have the meaning ascribed thereto in Section 8.18.
     Attorneys’ Fees means the reasonable value of the services (and costs,
charges and expenses related thereto) of the attorneys employed by Lender
(including, without limitation, attorneys who are employees of Lender) from time
to time to represent Lender (a) in the preparation or amendment of this
Agreement and the other Transaction Documents, (b) in any litigation, contest or
proceeding or to take any other action in or with respect to any litigation,
contest or proceeding (whether instituted by Lender, Borrower or any other
Person and whether in bankruptcy or otherwise) in any way or respect relating to
the Collateral, any Third Party Collateral, this Agreement or any of the other
Transaction Documents, Borrower, Royal Palm, any Subsidiary Banks, any
Subsidiary or any other Obligor, (c) to protect, collect, lease, sell, take
possession of or liquidate any of the Collateral or any Third Party Collateral
and (d) to enforce any of Lender’s rights to collect any of the Obligations;
provided, that such Attorneys’ Fees shall be determined on the basis of rates
then generally applicable to the attorneys (and all paralegals, accountants and
other staff employed by such attorneys) employed by Lender, which may be higher
than the rates such attorneys (and all paralegals, accountants and other staff
employed by such attorneys) charge Lender in certain matters.
     Borrower Pledge shall mean the Stock Pledge Agreement (Borrower) dated as
of the date hereof to be executed by Borrower and delivered to Lender pursuant
to Section 3 hereof as the same may from time to time be amended.
     Business Day shall mean any day except a Saturday, Sunday or legal holiday
observed by Lender.

 

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     Capital Guidelines shall have the meaning ascribed thereto in Section 5.11.
     Capitalized Lease shall mean any lease which, in accordance with GAAP, is
required to be capitalized on the balance sheet of the lessee.
     Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of the Code
shall be construed to also refer to any successor sections.
     Collateral shall have the meaning ascribed to such term in the Borrower
Pledge and the Subsidiary Pledge.
     Consolidated Fixed Charge Coverage Ratio shall mean for the period in
question, the ratio of: (a) the sum of (i) Consolidated Net Income, plus
(ii) Consolidated Interest Expense, plus (iii) non-cash items included in
operating expenses, minus (iv) non-cash items included in Consolidated Net
Income, minus (v) Distributions; to (b) the sum of (i) an amount equal to
$2,500,000 (representing Lender’s Revolving Credit Commitment plus the maximum
principal amount of the Term Loan, divided by twelve (12)), plus
(ii) Consolidated Interest Expense during such period, all determined on a
consolidated basis and in accordance with GAAP.
     Consolidated Interest Expense shall mean, for the period in question,
without duplication, all gross interest expense of Borrower and its Consolidated
Subsidiaries (including, without limitation, all commissions, discounts and/or
related amortization and other fees and charges owed by Borrower and its
Consolidated Subsidiaries with respect to letters of credit, the net costs
associated with interest swap obligations of Borrower and its Consolidated
Subsidiaries, capitalized interest expense, the interest portion of capitalized
lease obligations and the interest portion of any deferred payment obligation)
during such period, all determined on a consolidated basis and in accordance
with GAAP.
     Consolidated Net Income shall mean the after-tax net income (or loss) of
Borrower and its Consolidated Subsidiaries for the period in question,
determined on a consolidated basis and in accordance with GAAP.
     Consolidated Subsidiary shall mean with respect to any Person at any date,
any Subsidiary or other entity the assets and liabilities of which are or should
be consolidated with those of such Person in its consolidated financial
statements as of such date in accordance with GAAP.
     Controlled Bank shall mean any state or federally chartered bank and/or any
bank holding company which Borrower controls. For purposes of this definition,
“control” shall have the meaning ascribed thereto in Section 225.2(e) of
Regulation Y of The Board of Governors of The Federal Reserve System, as from
time to time amended.
     Default shall mean an event or condition the occurrence of which would,
with the lapse of time, the giving of notice, or both, become or constitute an
Event of Default as defined in Section 7 hereof.
     Distribution in respect of any corporation shall mean: (a) dividends or
other distributions on capital stock of the corporation; and (b) the redemption,
repurchase or other acquisition of such stock or of warrants, rights or other
options to purchase such stock (except when solely in exchange for such stock).
     Environmental Laws shall have the meaning ascribed thereto in Section 8.04.
     Environmental Lien shall have the meaning ascribed thereto in
Section 5.14(g).

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     Equity Capital shall mean, with respect to any Person, the sum of the
common stock, perpetual preferred stock (meaning preferred stock with no
maturity date and which may not be redeemed at the option of the holder),
paid-in surplus and retained earnings of such Person, all determined in
accordance with GAAP, less the sum of the total of goodwill and other intangible
assets of such Person, if any.
     ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time (references
to sections of ERISA shall be construed to also refer to any successor
sections).
     ERISA Affiliate shall mean any corporation, trade or business that is,
along with Borrower, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
     Event of Default shall have the meaning ascribed thereto in Section 7.
     GAAP shall mean, at any time, generally accepted accounting principles
consistently applied at such time in the United States.
     Indebtedness of any Person shall mean and include all obligations of such
Person which in accordance with GAAP are or should be classified upon a balance
sheet of such Person as liabilities of such Person, any and all contingent
obligations (other than those incurred in the ordinary course of banking
business), indebtedness and/or liabilities of such Person, whether or not
reflected on the balance sheet of such Person and any and all obligations of
such Person under any Capitalized Lease.
     Indemnified Liabilities shall have the meaning ascribed thereto in
Section 8.05.
     Indemnitees shall have the meaning ascribed thereto in Section 8.05.
     Interest Differential shall mean that sum equal to the greater of zero
(0) or the financial loss incurred by Lender resulting from prepayment,
calculated as the difference between the amount of interest Lender would have
earned (from like investments in the Money Markets as of the first day of the
applicable LIBOR Loan) had prepayment not occurred and the interest Lender will
actually earn (from like investments in the Money Markets as of the date of
prepayment) as a result of the redeployment of funds from the prepayment;
provided, that, because of the short-term nature of this facility, Borrower
agrees that the Interest Differential shall not be discounted to its present
value.
     Lender’s Revolving Loan Commitment shall mean up to Fifteen Million Dollars
($15,000,000.00).
     LIBOR Loan shall have the meaning ascribed thereto in Section 2.04(a).
     Lien shall mean any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract, including, without limitation, any
security interest, mortgage, deed of trust, pledge, lien or other encumbrance of
any kind or nature whatsoever, any conditional sale or trust receipt and any
lease, consignment or bailment for security purposes.
     Loan shall mean each Revolving Credit Loan and the Term Loan; and Loans
shall mean any or all of the foregoing.
     Loan Period shall mean the period commencing on the advance date of the
applicable LIBOR Loan and ending on the numerically corresponding day one (1),
two (2), three (3), or six (6) months

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thereafter matching the interest rate term selected by Borrower; provided,
however, (a) if any Loan Period would otherwise end on a day which is not a New
York Banking Day, then the Loan Period shall end on the next succeeding New York
Banking Day unless the next succeeding New York Banking Day falls in another
calendar month, in which case the Loan Period shall end on the immediately
preceding New York Banking Day; or (b) if any Loan Period begins on the last New
York Banking Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of the Loan
Period), then the Loan Period shall end on the last New York Banking Day of the
calendar month at the end of such Loan Period.
     Material Adverse Effect shall mean (a) a material adverse effect on the
Properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower, Royal Palm, any Subsidiary Bank,
and/or any Subsidiary, (b) material impairment of the ability of Borrower, Royal
Palm, any Subsidiary Bank, and/or any Subsidiary to perform any of its
obligations under this Agreement, the Notes, or any of the other Transaction
Documents or (c) material impairment of the enforceability of the rights of, or
benefits available to, Lender under this Agreement, the Notes, or any of the
other Transaction Documents.
     Money Markets shall mean one or more wholesale funding markets available to
and selected by Lender, including negotiable certificates of deposit, commercial
paper, Eurodollar deposits, bank notes, federal funds, interest rate swaps or
others.
     Multiemployer Plan shall mean a “multiemployer plan” as defined in
Section 4001(a) (3) of ERISA which is maintained for employees of Borrower,
Royal Palm, any other Obligor, any ERISA Affiliate, any Subsidiary Bank or any
Subsidiary.
     Net Income shall mean, with respect to any Person for any period, the
aggregate net income (or net loss) of such Person for such period equal to net
revenues and other proper income less the aggregate amount of any and all items
which are treated as expenses under GAAP, and less Federal, state and local
income taxes, but excluding from the definition of Net income any extraordinary
gains or losses or any gains or losses from the sale or disposition of assets
other than in the ordinary course of business, all determined in accordance with
GAAP.
     New York Banking Day shall mean any day (other than a Saturday or Sunday)
on which commercial banks are open for business in New York, New York.
     Non-Performing Assets shall mean, with respect to any Person, assets which:
(a) constitute or are classified as other real estate owned (as such term is
defined in the guidelines, rules and regulations of The Board of Governors of
the Federal Reserve Board pertaining to capital adequacy in effect from time to
time) or (b) in the case of a particular asset, is (at the time of such
calculation) classified as a loan or other extension of credit (1) which has
been placed on nonaccrual status or has been required to be so placed by any
Regulatory Agency, (2) which has been classified as renegotiated pursuant to
guidelines now or hereafter established by the Federal Financial Institutions
Examination Council or (3) with respect to which any payment of any principal or
interest is past due for a period of ninety (90) days or more.
     Note shall mean each of the Revolving Note and the Term Note; and Notes
shall mean either or both of the foregoing.
     Obligations shall mean any and all indebtedness, liabilities and
obligations of Borrower and/or Royal Palm to Lender under the Notes, this
Agreement, the Borrower Pledge, the Subsidiary Pledge, and any of the other
Transaction Documents or any other agreement, instrument or document heretofore,
now or hereafter executed and delivered by Borrower and/or Royal Palm to Lender,
in each case whether now existing or hereafter arising, absolute or contingent,
joint and/or several, secured or unsecured, direct or indirect, expressed or
implied in law, contractual or tortious, liquidated or

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unliquidated, at law or in equity, or otherwise, and whether created directly or
acquired by Lender by assignment or otherwise, and any and all costs of
collection and/or Attorneys’ Fees incurred or to be incurred in connection
therewith.
     Obligor shall mean Borrower and each other Person who is or shall become
primarily or secondarily liable on any of the Obligations or who grants Lender a
Lien upon any Property or assets of such Person as collateral for any of the
Obligations.
     PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
     Pension Plan shall mean any “pension plan” as such term is defined in
Section 3(2) of ERISA which is subject to the provisions of Title IV of ERISA
and which is established or maintained by Borrower, Royal Palm, any other
Obligor, any ERISA Affiliate, any Subsidiary Bank, or any Subsidiary other than
a Multiemployer Plan.
     Person shall mean an individual, partnership, corporation, limited
liability company, trust, unincorporated organization or association, and a
government or agency or political subdivision thereof.
     Primary Capital shall mean, with respect to any Person, the Equity Capital
of such Person plus the total allowance for possible loan and lease losses of
such Person, all as determined in accordance with GAAP.
     Prime Rate shall mean the interest rate announced from time to time by
Lender as its “prime rate” on commercial loans, which rate shall fluctuate as
and when said prime rate shall change.
     Prime Rate Loan shall have the meaning ascribed thereto in Section 2.04(a).
     Property shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible. Properties shall mean the
plural of Property. For purposes of this Agreement, Borrower, Royal Palm, each
Subsidiary and each Subsidiary Bank, as the case may be, shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes.
     Regulatory Agency shall mean any Federal, state or local governmental or
regulatory agency, authority, entity or official having jurisdiction over the
banking or other related activities of Borrower, Royal Palm, Subsidiary Banks,
and/or any Subsidiary, including, without limitation (to the extent applicable),
the Board of Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
United States Securities and Exchange Commission, the Illinois Department of
Financial and Professional Regulation, the Florida Office of Financial
Regulation, and the Missouri Division of Finance.
     Related Party shall mean any Person which directly or indirectly through
one or more intermediaries controls, or is controlled by or is under common
control with, Borrower, or any Subsidiary Bank. The term “control” shall mean
the possession, directly or indirectly, of the power to vote Ten Percent (10%)
or more of the capital stock of any Person or the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
     Reportable Event shall have the meaning given to such term in ERISA.
     Revolving Credit Period shall mean the period commencing on the date of
this Agreement and ending June 30, 2007.

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     Revolving Loan and Revolving Loans shall have the meanings ascribed thereto
in Section 2.01(a).
     Revolving Note shall have the meaning ascribed thereto in Section 2.03(a).
     Royal Palm shall mean Royal Palm Bancorp, Inc., a Florida corporation.
     Royal Palm Merger Agreement shall mean the Agreement and Plan of Merger
dated as of May 30, 2006, executed by Borrower, Mercantile Merger Corp., Royal
Palm, and The Royal Palm Bank of Florida.
     Royal Palm Merger Transaction shall mean collectively the transactions
contemplated by and described in the Royal Palm Merger Agreement.
     Subsidiary shall mean, with respect to any Person, any corporation of which
Ten Percent (10%) or more of the issued and outstanding capital stock entitled
to vote for the election of directors (other than by reason of default in the
payment of dividends) is at the time owned directly or indirectly by such
Person.
     Subsidiary Bank shall mean, each of: Heartland Bank, a Kansas banking
corporation; Farmers State Bank of Northern Missouri, a Missouri banking
corporation; Security State Bank of Hamilton, an Illinois banking corporation;
State Bank of Augusta, an Illinois banking corporation; New Frontier Bank, a
Missouri banking corporation; Brown County State Bank, an Illinois banking
corporation; Perry State Bank, a Missouri banking corporation; Marine Bank &
Trust, an Illinois banking corporation; and Mercantile Trust & Savings Bank, an
Illinois banking corporation; and, upon consummation of the Royal Palm Merger
Transaction, shall also mean The Royal Palm Bank of Florida, a Florida banking
corporation; and Subsidiary Banks shall mean some or all of the foregoing.
     Subsidiary Pledge shall mean the Stock Pledge Agreement (Subsidiary) dated
as of the date hereof, to be executed by Royal Palm and delivered to Lender
pursuant to Section 3 hereof as the same may from time to time be amended.
     Term Loan shall have the meaning ascribed thereto in Section 2.02.
     Term Note shall have the meaning ascribed thereto in Section 2.03(b).
     Third Party Collateral shall mean any Property or assets of any Obligor
other than Borrower which secure the payment or performance of any of the
Obligations.
     Transaction Documents shall mean this Agreement, the Notes, the Borrower
Pledge, the Subsidiary Pledge and all other agreements, documents, instruments
and certificates connected with or otherwise relating to this Agreement or the
Loans made hereunder, all as the same may from time to time be amended,
modified, extended or renewed.
SECTION 2 — THE LOANS
     2.01 Revolving Credit Commitment.
          (a) Subject to the terms and conditions set forth in this Agreement
and so long as no Default or Event of Default has occurred and is continuing,
during the Revolving Credit Period, Lender agrees to make such loans to Borrower
(individually, a “Revolving Credit Loan”; and collectively, the “Revolving
Credit Loans”) as Borrower may from time to time request pursuant to
Section 2.01(b). Each Revolving Credit Loan under this Section 2.01(a) shall be
for an aggregate principal amount of at

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least $500,000 or any larger multiple of $25,000. The aggregate principal amount
of Revolving Credit Loans which Lender shall be required to have outstanding
under this Agreement as of any date shall not exceed the amount of Lender’s
Revolving Credit Commitment as of such date. In no event shall the aggregate
principal amount of all Revolving Credit Loans outstanding as of any date exceed
the amount of Lender’s Revolving Credit Commitment as of such date. Within the
foregoing limits, Borrower may borrow under this Section 2.01(a), prepay under
Section 2.04(e) and reborrow at any time during the Revolving Credit Period
under this Section 2.01(a). All Revolving Credit Loans not paid prior to the
last day of the Revolving Credit Period, together with all accrued and unpaid
interest thereon and all fees and other amounts owing by Borrower to Lender with
respect thereto, shall be due and payable on the last day of the Revolving
Credit Period.
          (b) Borrower shall give oral or written notice to Lender by 10:00 a.m.
(St. Louis time) on the Business Day of each advance of a Revolving Loan
specifying (a) the date of such advance, which must be a Business Day, and
(b) the aggregate principal amount of such advance. Unless Lender determines
that any applicable condition specified in Section 3 of this Agreement has not
been satisfied, Lender shall make the proceeds of the advance available to
Borrower by crediting such funds to a demand deposit account (or such other
account mutually agreed upon in writing between Lender and Borrower) at Lender
specified by Borrower. Borrower hereby irrevocably authorizes Lender to rely on
telephonic, telegraphic, telecopy, telex or written instructions of any
individual identifying himself or herself as one of the individuals listed on
Schedule 2.01(b) attached hereto (or any other individual from time to time
authorized to act on behalf of Borrower pursuant to a resolution adopted by the
Board of Directors of Borrower and certified by the Secretary of Borrower and
delivered to Lender) with respect to any request to make an advance or a
repayment hereunder, and on any signature which Lender believes to be genuine,
and Borrower shall be bound thereby in the same manner as if such individual
were actually authorized or such signature were genuine. Borrower also hereby
agrees to indemnify Lender and hold Lender harmless from and against any and all
claims, demands, damages, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) relating to or
arising out of or in connection with the acceptance of instructions for making
advances or repayments hereunder.
          (c) If the amount of Lender’s Revolving Credit Commitment on any date
is less than the aggregate principal amount of all Revolving Credit Loans
outstanding as of such date, Borrower shall be automatically required (without
demand or notice of any kind by Lender, all of which are hereby expressly waived
by Borrower) to immediately repay the Revolving Credit Loans in an amount
sufficient to reduce the amount of the aggregate principal amount of all
Revolving Credit Loans outstanding as of such date to an amount equal to or less
than the amount of Lender’s Revolving Credit Commitment.
     2.02 Term Loan Commitment. Subject to the terms and conditions set forth in
this Agreement and so long as no Default or Event of Default under this
Agreement has occurred and is continuing, Lender agrees to make to Borrower a
term loan of Fifteen Million Dollars ($15,000,000.00) (the “Term Loan”). The
Term Loan shall be advanced in one disbursement on the effective date of this
Agreement. The Term Loan is not revolving in nature and any principal repaid on
the Term Loan may not be reborrowed. The principal amount of the Term Loan shall
be due and payable in three (3) equal consecutive quarterly installments in the
amount of $375,000.00 each, due and payable on December 31, 2008, March 30,
2009, and June 30, 2009, and a final installment in the amount of the then
outstanding and unpaid principal balance of the Term Loan due and payable on
November 10, 2009.
     2.03 Notes.
          (a) The Revolving Credit Loans shall be evidenced by the Revolving
Credit Note of Borrower dated as of the date hereof, and payable to the order of
Lender in a principal amount equal to the maximum amount of Lender’s Revolving
Credit Commitment, which Revolving Credit Note shall be in substantially the
form of Exhibit A attached hereto and incorporated herein by reference (as the
same may from time to time be amended, modified, extended, renewed or restated,
the “Revolving Note”).

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          (b) The Term Loan shall be evidenced by the Term Loan Promissory Note
of Borrower dated as of the date hereof, and payable to the order of Lender in
the original principal amount of $15,000,000.00, which Term Loan Promissory Note
shall be in substantially the form of Exhibit B attached hereto and incorporated
herein by reference (as the same may from time to time be amended, modified
extended, renewed or restated, the “Term Note”).
          (c) Lender shall record in its books and records the date and amount
of each Loan made to Borrower and each payment of principal and/or interest made
by Borrower with respect thereto; provided, however, that the obligation of
Borrower to repay each Loan made to Borrower hereunder shall be absolute and
unconditional, notwithstanding any failure of Lender to make any such
recordation or any mistake by Lender in connection with any such recordation.
The books and records of Lender showing the account between Lender and Borrower
shall be admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth.
     2.04 Interest Rates and Payments.
          (a) Interest on each Loan shall accrue at one of the following annual
rates selected by Borrower: (i) upon notice to Lender, One and 5/10 Percent
(1,5%) below the prime rate announced by Lender from time to time, as and when
such rate changes (each, a “Prime Rate Loan”); or (ii) upon a minimum of two
(2) New York Banking Days prior notice, One and 3/10 Percent (1.3%) above the
one (1), two (2), three (3), or six (6) month LIBOR rate quoted by Lender from
Telerate Page 3750 or any successor thereto (which shall be the LIBOR rate in
effect two (2) New York Banking Days prior to commencement of the Loan),
adjusted for any reserve requirement and any subsequent costs arising from a
change in government regulation (each, a “LIBOR Loan”). Interest on each Prime
Rate Loan shall be paid in consecutive quarterly installments due and payable on
the first day of each calendar quarter and on the last day of the Revolving
Credit Period. Interest on each LIBOR Loan shall be payable for each Loan Period
on the last day thereof, unless the duration of such Loan Period exceeds three
(3) months, in which case such interest shall be payable on the last day of each
three (3) month period during such Loan Period and on the last day of such Loan
Period.
          (b) In the event Borrower does not timely select another interest rate
option at least two (2) New York Banking Days before the end of the Loan Period
for a LIBOR Loan, Lender may at any time after the end of the Loan Period
convert the LIBOR Loan to a Prime Rate Loan, but until such conversion, the
funds advanced under the LIBOR Loan shall continue to accrue interest at the
same rate as the interest rate in effect for such LIBOR Loan prior to the end of
the Loan Period.
          (c) No LIBOR Loan (made under the Revolving Loan) may extend beyond
the last day of the Revolving Credit Period; and no LIBOR Loan (made under the
Term Loan) may extend beyond the maturity date of the Term Note. In any event,
if the Loan Period for a LIBOR Loan should happen to extend beyond the maturity
of this Note, such Loan must be prepaid at the time the Loan matures. Lender’s
internal records of applicable interest rates shall be determinative in the
absence of manifest error. Each LIBOR Loan shall be in a minimum principal
amount of $100,000. The aggregate number of LIBOR Loans in effect at any one
time may not exceed six (6).
          (d) After maturity of any Loan, whether by reason of acceleration or
otherwise, interest shall accrue on such Loan and be payable on demand on the
entire outstanding principal balance thereof at an annual rate equal to Two
Percent (2%) over and above the then existing rate(s). Interest on each Loan
shall be payable quarterly in arrears on each March 31, June 30, September 30
and December 31, on the last day of the Revolving Credit Period (with respect to
the Revolving Loans), and at the maturity of the Term Note, whether by reason of
acceleration or otherwise. All payments shall be applied first to the payment of
all accrued and unpaid interest, with the balance, if any, to be applied to the
payment of principal. Lender’s internal records of applicable interest rates
shall be determinative in the absence of manifest error.

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          (e) Borrower shall have the right to prepay the Loans in whole or in
part at any time, provided; (i) all billed/due and unpaid interest shall
accompany such prepayment; (ii) there is no Default or Event of Default at the
time of prepayment; (iii) all prepayments shall be credited and applied to the
installments of principal in inverse order of their stated maturity; and (iv) if
a LIBOR Loan is prepaid prior to the end of a Loan Period for such LIBOR Loan,
whether voluntarily or because prepayment is required due to such LIBOR Loan
maturing or due to acceleration of such LIBOR Loan upon default or otherwise,
Borrower agrees to pay all of Lender’s costs, expenses and interest Differential
(as determined by Lender) incurred as a result of such prepayment (any
prepayment of a LIBOR Loan shall be in an amount equal to the remaining entire
principal balance of such LIBOR Loan).
     2.05 General Provisions as to Payments. Borrower shall make each payment of
principal of, and interest on, the Loans and all interest, fees and other
amounts payable by Borrower under this Section 2 not later than 2:00 p.m. (St.
Louis time) on the date when due, in Federal or other funds immediately
available in St. Louis, Missouri, to Lender at its address referred to in
Section 8.07. Any such payment received by Lender after 2:00 p.m. (St. Louis
time) shall be deemed to have been paid on the next succeeding Business Day.
Whenever any payment of principal of, or interest on, the Loans shall be due on
a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon, at the
then applicable rate, shall be payable for such extended time.
     2.06 Late Fees. If Borrower fails to make any payment of any principal of
or interest on any Loan within ten (10) days after the same becomes due, whether
by reason of maturity, acceleration or otherwise, in addition to all of the
other rights and remedies of Lender under this Agreement and at law or in
equity, Borrower shall pay Lender on demand with respect to each such late
payment a late fee in an amount not to exceed Five Percent (5%) of each late
payment.
SECTION 3 — PRECONDITIONS TO LOANS
     3.01 Initial Loans. Notwithstanding any provision contained in this
Agreement to the contrary, Lender shall have no obligation to make the initial
Revolving Loan and the Term Loan under this Agreement unless Lender shall have
first received the following, all in form and substance acceptable to Lender:
          (a) this Agreement and the Notes, each executed by a duly authorized
officer of Borrower;
          (b) the Borrower Pledge, Subsidiary Pledge, collateral schedules,
stock powers, UCC financing statements, and such other documents as Lender may
require in connection with the Borrower Pledge and Subsidiary Pledge, each
executed by a duly authorized officer of Borrower and/or Royal Palm;
          (c) 360,000 shares of the common stock of Mercantile Trust & Savings
Bank, representing all of the issued and outstanding common stock of Mercantile
Trust & Savings Bank (as verified by the Secretary of Mercantile Trust & Savings
Bank), said shares to be issued in Borrower’s name and accompanied by stock
powers duly executed in blank by an authorized officer of Borrower;
          (d) 1,038,294 shares of the common stock of The Royal Palm Bank of
Florida, representing all of the issued and outstanding common stock of The
Royal Palm Bank of Florida (as verified by the Secretary of The Royal Palm Bank
of Florida), said shares to be issued in Royal Palm’s name and accompanied by
stock powers duly executed in blank by an authorized officer of Royal Palm;
          (e) the Certificate of President, executed by the President of
Borrower;

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          (f) copies of resolutions of the Board of Directors of Borrower and
Royal Palm, duly adopted, which authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents, certified by
the Secretary of Borrower and the Secretary of Royal Palm, respectively;
          (g) copies of the Articles or Certificate of Incorporation of Borrower
and Royal Palm, including any amendments thereto, certified by the Secretary of
State of the State of Delaware (Borrower), and the Secretary of State of the
State of Florida (Royal Palm);
          (h) copies of the Bylaws of Borrower and Royal Palm, including any
amendments thereto, certified by the Secretary of Borrower, and the Secretary of
Royal Palm, respectively;
          (i) a certificate of good standing for Borrower issued by the
Secretary of State of the State of Delaware, a certificate of good standing for
Borrower issued by the Secretary of State of the State of Illinois, and a
certificate of good standing for Royal Palm issued by the Secretary of State of
the State of Florida;
          (j) an opinion of counsel from Schmiedeskamp, Robertson, Neu &
Mitchell, the counsel representing Borrower, Subsidiary and Subsidiary Banks, in
the form acceptable to Lender;
          (k) evidence that no change in the financial condition of Borrower,
Royal Bank, any Subsidiary Bank, or any Subsidiary shall have occurred since
June 30, 2006 that could have a Material Adverse Effect;
          (I) copies of all documents executed in connection with the Royal Palm
Merger Transaction including, but not limited to the Royal Palm Merger
Agreement, and evidence satisfactory to Lender that the Royal Palm Merger
Transaction has been approved by all applicable Regulatory Agencies;
          (m) copies of all documents executed in connection with the issuance
by Borrower of Pooled Trust Preferred Securities on or about July 13, 2006; and
          (n) such other agreements, documents, instruments, certificates and
assurances as Lender may reasonably request.
     3.02 All Advances. Notwithstanding any provision contained in this
Agreement to the contrary, Lender shall have no obligation to make any Loan
under this Agreement unless:
          (a) for every Revolving Loan, Lender shall have received a notice of
borrowing as required by Section 2.01(b);
          (b) no change in the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or otherwise) of Borrower,
Subsidiary any Subsidiary Bank, or any Subsidiary that could have a Material
Adverse Effect shall have occurred since the date of this Agreement and be
continuing;
          (c) all of the representations and warranties of Borrower and Royal
Palm contained in this Agreement and in the other Transaction Documents shall be
true and correct in all material respects on and as of the date of the making of
such advance as if made on and as of the date of the making of such advance; and
          (d) on the date of and immediately after the making of such advance,
no Default or Event of Default under this Agreement shall have occurred and be
continuing.

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Each request for a Loan by Borrower under this Agreement shall be deemed to be a
representation and warranty by Borrower on the date of the making of such
advance as to the facts specified in clauses (b), (c) and (d) of this
Section 3.02.
SECTION 4 — REPRESENTATIONS AND WARRANTIES
     To induce Lender to make the Loans, Borrower hereby represents and warrants
to Lender that:
     4.01 Corporate Existence and Power. Each of Borrower, Royal Palm, each
Subsidiary Bank, and each Subsidiary: (a) is duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization; (b) has all requisite corporate or other powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted; and (c) is duly qualified to do
business in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure to so qualify would have
a Material Adverse Effect on its business, financial condition or operations.
Borrower and Royal Palm are each a “bank holding company” as defined in and
within the meaning of 12 U.S.C. §1841 (a), and as such Borrower and Royal Palm
have filed all necessary reports with and received all necessary approvals from
The Board of Governors of the Federal Reserve System. Each Subsidiary Bank is an
“insured bank” as defined in and within the meaning of 12 U.S.C. §1813.
     4.02 Corporate Authorization. The execution, delivery and performance by
Borrower and/or Royal Palm of this Agreement, the Notes, Borrower Pledge,
Subsidiary Pledge and the other Transaction Documents are within the corporate
powers of Borrower and Royal Palm and have been duly authorized by all necessary
corporate action.
     4.03 Binding Effect. This Agreement, the Note, Borrower Pledge, Subsidiary
Pledge and the other Transaction Documents have been duly authorized, executed
and delivered and constitute the legal, valid and binding obligations of
Borrower and/or Royal Palm enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors’ rights in general.
     4.04 Financial Statements. Borrower has furnished Lender with the following
financial statements, identified by the principal financial officer of Borrower:
(a) consolidated balance sheets and profit and loss statements of Borrower and
its Consolidated Subsidiaries as of December 31, 2005, all certified by
Borrower’s independent certified public accountants, which financial statements
have been prepared in accordance with GAAP; (b) the Consolidated Financial
Statements for Bank Holding Companies (FR Y-9C) of Borrower and its Consolidated
Subsidiaries as of June 30, 2006; (c) the Parent Company Only Financial
Statements for Large Bank Holding Companies (FR Y-9LP) for Borrower as of
June 30, 2006; and (d) the Consolidated Reports of Condition and Income For A
Bank With Domestic Offices Only (FFIEC 041) of each Subsidiary Bank as of
June 30, 2006, certified by the President or Chief Financial Officer of each
Subsidiary Bank. Borrower further represents that: (1) said financial statements
fairly present the condition of Borrower and its Consolidated Subsidiaries as of
the dates thereof, (2) there has been no change in the condition or operation,
financial or otherwise, of Borrower or any of its Consolidated Subsidiaries
since June 30, 2006 that could have a Material Adverse Effect, and (3) neither
Borrower nor any of its Consolidated Subsidiaries has any direct or contingent
liabilities which are not disclosed on said financial statements which could
have a Material Adverse Effect.
     4.05 Litigation. Except as disclosed in Schedule 4.05 attached hereto,
there is no action or proceeding pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, Royal Palm, any Subsidiary or any
Subsidiary Bank before any court, arbitrator or governmental, regulatory or
administrative body, agency or official which could result in any change in the
condition or operation, financial or otherwise, of Borrower, Royal Palm, any
Subsidiary or any Subsidiary Bank that could have a Material Adverse Effect, and
neither Borrower, Royal Palm, any Subsidiary nor any Subsidiary Bank

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is in default with respect to any order, writ, injunction, decision or decree of
any court, arbitrator or governmental, regulatory or administrative body, agency
or official which could have a Material Adverse Effect on Borrower, Royal Palm,
any Subsidiary or any Subsidiary Bank.
     4.06 Pension and Welfare Plans. Each Pension Plan complies with all
applicable statutes and governmental rules and regulations; no Reportable Event
has occurred and is continuing with respect to any Pension Plan; neither
Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary nor any Subsidiary
Bank has withdrawn from any Multiemployer Plan in a “complete withdrawal” or a
“partial withdrawal” as defined in sections 4203 or 4205 of ERISA, respectively;
no steps have been instituted by Borrower, Royal Palm, any ERISA Affiliate, any
Subsidiary or any Subsidiary Bank to terminate any Pension Plan; no condition
exists or event or transaction has occurred in connection with any Pension Plan
or Multiemployer Plan which could result in the incurrence by Borrower, Royal
Palm, any ERISA Affiliate, any Subsidiary, or any Subsidiary Bank of any
material liability, fine or penalty; and neither Borrower, Royal Palm, any ERISA
Affiliate, any Subsidiary, nor any Subsidiary Bank is a “contributing sponsor”
as defined in Section 4001 (a) (13) of ERISA of a “single-employer plan” as
defined in Section 4001 (a) (15) of ERISA which has two or more contributing
sponsors at least two of whom are not under common control. Neither Borrower,
Royal Palm, any Subsidiary nor any Subsidiary Bank has any contingent liability
with respect to any “employee welfare benefit plans”, as such term is defined in
Section 3(a) of ERISA, which covers retired employees and their beneficiaries.
     4.07 Tax Returns and Parent. Borrower, Royal Palm, each Subsidiary Bank,
and each Subsidiary has filed all Federal, state and local income tax returns
and all other tax returns which are required to be filed and has paid all taxes
due pursuant to such returns or pursuant to any assessment received by Borrower,
Royal Palm, each Subsidiary Bank, and each Subsidiary, except for the filing of
such returns, if any, in respect of which an extension of time for filing is in
effect.
     4.08 Subsidiaries. Borrower, Royal Bank, Subsidiaries and Subsidiary Banks
have no Subsidiaries other than as identified on Schedule 4.08 attached hereto,
as the same may from time to time be amended, modified or supplemented as
provided herein. Except as disclosed on Schedule 4.08 attached hereto, neither
Borrower, Royal Bank, any Subsidiary, nor any Subsidiary Bank, individually or
collectively, owns or holds, directly or indirectly, any capital stock of or
equity interest in any corporation, partnership, limited liability company or
other entity. Borrower may at any time amend, modify or supplement Schedule 4.08
by notifying Lender in writing of any changes thereto, including any formation,
acquisition, merger or liquidation of any Subsidiary or any change in the
capitalization of any Subsidiary, in each case, in accordance with the terms of
this Agreement, and thereby the representations and warranties contained in this
Section 4.08 shall be amended accordingly so long as such amendment,
modification or supplement is made within thirty (30) days after the occurrence
of any such changes in the facts stated therein and that such changes reflect
transactions that are permitted under this Agreement.
     4.09 Compliance With Other Instruments: None Burdensome. None of the
execution and delivery by Borrower and Royal Palm of the Transaction Documents,
the consummation of the transactions therein contemplated or the compliance with
the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Borrower, Royal Palm, any
Subsidiary, or any Subsidiary Bank, or any of the provisions of their Articles
or Certificate of Incorporation or Association, or Bylaws or any of the
provisions of any indenture, agreement, document, instrument or undertaking to
which Borrower, Royal Palm, any Subsidiary, or any Subsidiary Bank is a party or
subject, or by which it or its Property is bound. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, the exemption by, any governmental, regulatory, administrative or public
body or authority, or any subdivision thereof, is required to authorize, or is
otherwise required in connection with, the execution, delivery or performance
of, or the legality, validity, binding effect or enforceability of, any of the
Transaction Documents.

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     4.10 Other Loans and Guarantees. Except as disclosed on Schedule 4.10
attached hereto, neither Borrower, Royal Palm, any Subsidiary, or any Subsidiary
Bank (except in the ordinary course of the banking business) is borrower,
guarantor or obligor with respect to any loan transaction, guarantee or other
indebtedness for borrowed money.
     4.11 Title to Property. Borrower, Royal Palm, each Subsidiary Bank, and
each Subsidiary are each the sole and absolute owner of, or has the legal right
to use and occupy, all Property it claims to own or which is necessary for
Borrower, Royal Palm, Subsidiary Bank, and each Subsidiary to conduct its
business. Neither Borrower, Royal Palm, Subsidiary Bank, nor each Subsidiary has
signed (or authorized the filing of) any financing statements, security
agreements or chattel mortgages with respect to any of its Property, has granted
or permitted any Liens with respect to any of its Property or has any knowledge
of any Liens with respect to any of its Property, except as disclosed on
Schedule 4.11 attached hereto.
     4.12 Regulation U. No part of the proceeds of the Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately (a) to purchase or carry margin stock or to extend credit to others
for the purpose of purchasing or carrying margin stock, or to refund or repay
indebtedness originally incurred for such purpose or (b) for any purpose which
entails a violation of, or which is inconsistent with, the provisions of the
Regulations of The Board of Governors of the Federal Reserve System, including,
without limitation, Regulations G, U, T or X thereof, as amended. If requested
by Lender, Borrower shall furnish to Lender a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U.
     4.13 Environmental Matters. There are no disputes pending (nor, to the
knowledge of Borrower, are there any disputes threatened nor, to the knowledge
of Borrower, is there any basis therefor) affecting Borrower, Royal Palm, any
Subsidiary Bank, or any Subsidiary, whether or not in or before any court or
arbitrator of any kind or involving any governmental or regulatory body, which,
if adversely determined could, singly or in the aggregate, have a Material
Adverse Effect on the business, Properties, assets, liabilities, financial
condition, results of operations or business prospects of Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary, or on the ability of Borrower and Royal
Palm to perform its obligations hereunder or under this Agreement, the Notes or
any of the other Transaction Documents, relating to environmental matters,
including, without limitation, any notice from any agency, state or Federal,
that Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary is a
potentially responsible party for the cleanup of any environmental waste site,
that Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary is in
violation of any environmental permit or regulation, that Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary has been placed on any registry of solid
or hazardous waste disposal sites, or of the expiration, revocation or denial of
any environmental permit or other loss of interim status or other current
authorization to operate any unit or portion of the facilities of Borrower,
Royal Palm, any Subsidiary Bank, or any Subsidiary.
     4.14 Shares of Subsidiary Banks. The authorized capital of each Subsidiary
Bank consists solely of the shares of common stock set forth on Schedule 4.14
attached hereto, having the par value set forth in Schedule 4.14, As of the date
hereof, the sole legal and beneficial owner(s) of each Subsidiary Bank is/are
set forth in Schedule 4.14 and each such owner(s) own(s) all of the outstanding
and issued shares of common stock of each applicable Subsidiary Bank, subject to
no Liens, warrants, options, proxies, restrictions on transfer, resale or other
disposition (except those in favor of Lender); that all of such shares are all
validly issued, fully paid and nonassessable; and that each such owner(s) has
the unqualified right and power to grant a security interest in such shares
without the consent of any other Person being required therefor. As of the date
hereof, there are no warrants or options, or any agreements to issue any
warrants or options, outstanding with respect to any class of capital stock of
any Subsidiary Bank.
SECTION 5 — AFFIRMATIVE COVENANTS

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     Borrower covenants and agrees that, so long as any of the Obligations are
outstanding, it will:
     5.01 Insurance. Keep adequately insured, and cause Royal Palm, each
Subsidiary Bank, and each Subsidiary to keep adequately insured, by financially
sound and reputable insurers acceptable to Lender and in amounts reasonably
acceptable to Lender, all Property of Borrower, Royal Palm, each Subsidiary
Bank, and each Subsidiary of the character usually insured by corporations
engaged in the same or similar businesses similarly situated, against loss or
damage of the kind customarily insured against by such Persons and acceptable to
Lender, and (b) cause each Subsidiary Bank and any other banking Subsidiary to
maintain coverage under a banker’s blanket bond in an amount equal to the
greater of the amount of coverage currently maintained by each Subsidiary Bank
and each other banking Subsidiary or the minimum coverage recommended by the
applicable Regulatory Agency(ies), plus such excess fidelity coverage as Lender
may reasonably request from time to time. Promptly after Lender’s request there
for, Borrower shall provide Lender with evidence that Royal Palm, each
Subsidiary Bank, and each Subsidiary maintain, the insurance required under this
Section 5.01, and evidence of the payment of all premiums therefor.
Notice Required by Section 427.120(3) R.S.Mo.: “Unless you provide evidence of
the insurance coverage required by your agreement with us, we may purchase
insurance at your expense to protect our interests in your collateral. This
insurance may, but need not, protect your interests. The coverage that we
purchase may not pay any claim that you make or any claim that is made against
you in connection with the collateral. You may later cancel any insurance
purchased by us, but only after providing evidence that you have obtained
insurance as required by our agreement. If we purchase insurance for the
collateral, you will be responsible for the costs of that insurance, including
the insurance premium, interest and any other charges we may impose in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to your total outstanding balance or obligation. The costs of the
insurance may be more than the cost of insurance you may be able to obtain on
your own.”
     5.02 Payment of Taxes. Duly file, and cause Royal Palm, each Subsidiary
Bank, and each Subsidiary to duly file, all Federal, state and local income tax
returns and all other tax returns and reports of Borrower, Royal Palm, each
Subsidiary Bank, and each Subsidiary, as the case may be, which are required to
be filed; and pay, and cause Royal Palm, each Subsidiary Bank, and each
Subsidiary to pay, when due, all taxes and governmental charges assessed against
or upon Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, as the
case may be, or upon their respective Properties, assets, income or franchises.
     5.03 Financial Data. Deliver to Lender:
          (a) As soon as practicable and in any event within forty five
(45) days after the end of each fiscal quarter: (i) the Consolidated Reports of
Condition and Income For A Bank With Domestic Offices Only (FFIEC 041) of each
Subsidiary Bank, certified by the President or Chief Financial Officer of such
Subsidiary Bank; (ii) the Consolidated Financial Statements for Bank Holding
Companies (FR Y-9C) of Borrower and its Consolidated Subsidiaries; and (iii) the
Parent Company Only Financial Statements for Large Bank Holding Companies (FR
Y-9LP) for each of Borrower and Royal Palm, certified by the President or Chief
Financial Officer of Borrower and Royal Palm respectively.
          (b) As soon as practicable and in any event within ninety (90) days
after the end of each fiscal year of Borrower, consolidated and consolidating
statements of earnings and retained earnings of Borrower and its Consolidated
Subsidiaries for such year, consolidated and consolidating statements of cash
flow of Borrower and its Consolidated Subsidiaries for such year, and
consolidated and consolidating balance sheets of Borrower and its Consolidated
Subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding figures from the preceding fiscal year, all such
statements to be prepared in accordance with GAAP and reported and accompanied
by

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the unqualified opinion of BKD, LLP or other independent certified public
accountants selected by Borrower and acceptable to Lender together with (i) a
certificate from such accountants to the effect that, in making the examination
necessary for the signing of such annual audit report, such accountants have not
become aware of any Default or Event of Default that has occurred or is
continuing, or, if such accountants have become aware of any such event,
describing it and the steps, if any, being taken to cure it and (ii) the
computations of such accountants evidencing Borrower’s compliance with the
financial covenants contained in this Agreement;
          (c) Contemporaneously with the delivery of the financial statements
pursuant to Sections 5.03(a) and (b) hereof, a certificate in substantially the
form of that attached hereto and made a part hereof as Exhibit C (with
appropriate insertions), executed by the principal financial officer of
Borrower;
          (d) As soon as practicable and in any event within forty five
(45) days after each fiscal quarter, such financial statements of Royal Palm,
any Subsidiary Bank, and/or any Subsidiary as Lender shall reasonably request.
          (e) Promptly after filing with any Regulatory Agency, and in any event
within ten (10) days after the filing thereof, copies of all financial
statements, reports, filings and other documents which Borrower, Royal Palm,
Subsidiary Bank, and/or any Subsidiary shall file with any regulatory agency;
and
          (f) With reasonable promptness, such other financial information and
data as Lender may from time to time reasonably request.
Lender is hereby authorized to deliver a copy of any financial statement or
other information made available by Borrower, Royal Palm, Subsidiary Bank,
and/or any Subsidiary to any Regulatory Authority having jurisdiction over
Lender, pursuant to any request therefore.
     5.04 Maintenance of Property. Maintain, and cause Royal Palm, Subsidiary
Bank, and each Subsidiary to maintain, all Property, plants and equipment
(except obsolete equipment) of Borrower, Royal Palm, Subsidiary Bank, and each
Subsidiary in good operating order, and from time to time make, and cause Royal
Palm, Subsidiary Bank, and each Subsidiary to make, all needful and proper
repairs, renewals, replacements, additions, betterments and improvements thereto
so that at all times the efficiency thereof shall be fully preserved and
maintained.
     5.05 Inspection. Permit, and cause Royal Palm, each Subsidiary Bank, and
each Subsidiary to permit, any person designated by Lender to visit, inspect and
audit any of the Properties, corporate books, loan documentation, loan
portfolios, loan files and financial records of Borrower, Royal Palm, Subsidiary
Bank, and each Subsidiary and to discuss the affairs, finances and accounts of
Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary with the
principal officers of Borrower, Royal Palm, each Subsidiary Bank, and each
Subsidiary, all at such reasonable times with reasonable notice and as often as
Lender may reasonably request.
     5.06 Corporate Existence. Do or cause to be done all things necessary to
(a) preserve and keep in full force and effect the corporate existence, rights
and franchises of itself, Royal Palm, each Subsidiary Bank, and each Subsidiary,
(b) duly qualify itself, Royal Palm, each Subsidiary Bank, and each Subsidiary
to do business in all jurisdictions where the nature of Property owned or leased
by Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, or the
nature of the business of Borrower, Royal Palm, each Subsidiary Bank, and each
Subsidiary requires such qualification, (c) maintain its status and Royal Palm’s
status as a “bank holding company” under and within the meaning of 12 U.S.C.
§1841 (a), (d) cause each Subsidiary Bank to preserve and keep in full force and
effect its existence, franchise and right to do business as a national bank or a
state banking corporation, as the case may be, under the laws of the
jurisdiction of its incorporation, and (e) maintain

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each Subsidiary Bank’s status as an “insured bank” as defined in, or within the
meaning of, 12 U.S.C. §1813, and to otherwise maintain each Subsidiary Bank’s
eligibility for federal deposit insurance.
     5.07 Compliance with Law. Comply to the best of Borrower’s knowledge in all
material respects with, and cause Royal Palm, each Subsidiary Bank, and each
Subsidiary to comply in all material respects with, any and all laws, ordinances
and governmental and regulatory rules and regulations to which it, Royal Palm,
each Subsidiary Bank, and each Subsidiary is subject; and obtain, and cause
Royal Palm, each Subsidiary Bank, and each Subsidiary to obtain, any and all
licenses, permits, franchises and other governmental and regulatory
authorizations necessary to the ownership of the Properties of itself, Royal
Palm, each Subsidiary Bank, and each Subsidiary, or to the conduct of the
business of itself, Royal Palm, each Subsidiary Bank, and each Subsidiary, which
violation or failure to obtain might materially adversely affect the business,
prospects, profits, Properties or condition (financial or otherwise) of
Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary.
     5.08 ERISA Compliance. If Borrower, Royal Palm, each Subsidiary Bank, or
each Subsidiary shall have, or in the future create, any Pension Plan, Borrower
shall comply with, and shall cause Royal Palm, each Subsidiary Bank, and each
Subsidiary to comply with, all requirements of ERISA relating to such plan.
Without limiting the generality of the foregoing, Borrower will not: (a) permit,
or cause or allow Royal Palm, each Subsidiary Bank, and each Subsidiary to
permit, any Pension Plan maintained by it, Royal Palm, each Subsidiary Bank, or
each Subsidiary, as the case may be, to engage in any nonexempt “prohibited
transaction”, as such term is defined in section 4975 of the Internal Revenue
Code of 1986, as amended; (b) permit, or cause or allow Royal Palm, each
Subsidiary Bank, and each Subsidiary to permit, any Pension Plan maintained by
it, Royal Palm, any Subsidiary Bank, or any Subsidiary, as the case may be, to
incur any “accumulated funding deficiency,” as such term is defined in
Section 302 of ERISA, 29 U.S.C. §1082, whether or not waived; (c) terminate, or
cause or allow Royal Palm, each Subsidiary Bank, and each Subsidiary to
terminate, any such Pension Plan in a manner which could result in the
imposition of a Lien on the Property of Borrower, Royal Palm, any Subsidiary
Bank, or any Subsidiary, as the case may be, pursuant to section 4068 of ERISA,
29 U.S.C, § 1368; or (d) take, or cause or allow Royal Palm, any Subsidiary
Bank, or any Subsidiary to take, any action which would constitute or give rise
to a complete or partial withdrawal from a multi-employer plan within the
meaning of Sections 4203 and 4205 of Title IV of ERISA. Notwithstanding any
provision contained in this Section 5.08 to the contrary, an act by Borrower,
Royal Palm, any Subsidiary Bank, or any Subsidiary shall not be deemed to
constitute a violation of subparagraphs (a) through (d) hereof unless Lender
determines in good faith that said action, individually or cumulatively with
other acts of the Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary,
does have or is likely to cause a significant adverse financial effect upon
Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary. Borrower shall
have the affirmative obligation hereunder to report to Lender any of those acts
identified in subparagraphs (a) through (d) hereof, regardless of whether said
act does or is likely to cause a significant adverse financial effect upon
Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, and failure by
Borrower to report such act promptly upon Borrower’s becoming aware of the
existence thereof shall constitute an Event of Default hereunder.
     5.09 [RESERVED]
     5.10 [RESERVED]
     5.11 Capital Adequacy Guidelines. Comply with, and it will cause Royal
Palm, each Subsidiary Bank and each Subsidiary to comply with, to the extent
applicable, (a) the capital adequacy guidelines for bank holding companies of
The Board of Governors of the Federal Reserve System as set forth in Appendices
A, B, D and E to 12 C.F.R. Part 225, (b) the capital adequacy guidelines for
state member banks of The Board of Governors of the Federal Reserve System as
set forth in Appendices A, B and E to 12 C.F. R. 208 and in Appendix B to 12
C.F.R. Part 225, (c) the capital adequacy guidelines for state nonmember banks
of the Federal Deposit Insurance Corporation as set forth in Appendices A and B
to 12 C.F.R. Part 325, (d) the capital adequacy guidelines for national

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banking associations of the Office of the Comptroller of the Currency as set
forth in Appendices A and B to 12 C.F.R, Part 3, and (e) the capital adequacy
guidelines for savings associations of the Office of Thrift Supervision as set
forth in 12 C.F.R. Part 567, as from time to time amended, or in any successor
law, rule or regulation of similar import (collectively, the “Capital
Guidelines”). In addition, Borrower will cause each Subsidiary Bank to maintain
at all times during the Term of this Agreement a “well-capitalized” rating under
the Capital Guidelines.
     5.12 [RESERVED]
     5.13 Consolidated Fixed Charge Coverage Ratio. Maintain a Consolidated
Fixed Charge Coverage Ratio of at least 1.10 to 1.00 for each four
(4) consecutive fiscal quarter period commencing with the four (4) consecutive
fiscal quarter period ending December 31, 2006.
     5.14 Notices. Notify Lender in writing of any of the following within five
(5) Business Days after learning of the occurrence thereof, describing the same
and, if applicable, the steps being taken by the Person(s) affected with respect
thereto:
          (a) Default. The occurrence of any Default or Event of Default under
this Agreement or any default or event of default by Borrower, Royal Palm, any
Subsidiary Bank, or any Subsidiary under any note, indenture, loan agreement,
mortgage, deed of trust, security agreement, lease or other similar agreement,
document or instrument to which Borrower, Royal Palm, any Subsidiary Bank, or
any Subsidiary, as the case may be, is a party or by which it is bound or to
which it is subject;
          (b) Litigation. The institution of any litigation, arbitration
proceeding or governmental or regulatory proceeding affecting Borrower, Royal
Palm, any Subsidiary Bank, any Subsidiary, any Collateral or any Third Party
Collateral, whether or not considered to be covered by insurance, in an amount
of greater than $100,000;
          (c) Judgment. The entry of any judgment or decree against Borrower,
Royal Palm, any Subsidiary Bank, or any Subsidiary in an amount of greater than
$100,000;
          (d) Pension Plans. The occurrence of a Reportable Event with respect
to any Pension Plan; the filing of a notice of intent to terminate a Pension
Plan by Borrower, any ERISA Affiliate, any other Obligor, any Subsidiary, or any
Subsidiary Bank; the institution of proceedings to terminate a Pension Plan by
the PBGC or any other Person to terminate any Pension Plan; the withdrawal in a
“complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 and
4205, respectively, of ERISA by Borrower, any ERISA Affiliate, any other
Obligor, any Subsidiary, or any Subsidiary Bank from any Multiemployer Plan; or
the incurrence of any material increase in the contingent liability of Borrower,
any other Obligor, any Subsidiary, or any Subsidiary Bank with respect to any
“employee welfare benefit plan” as defined in Section 3(1) of ERISA which covers
retired employees and their beneficiaries;
          (e) Change of Name. Any change in the name of Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary;
          (f) Change in Place(s) of Business. Any proposed opening, closing or
other change of the chief executive office of Borrower, or the main banking
branch of any Subsidiary Bank;
          (g) Environmental Matters. Receipt of any notice that the operations
of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary are not in full
compliance with any of the requirements of any applicable Federal, state or
local environmental, health or safety law, rule or regulation; receipt of notice
that Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary is subject to
any Federal, state or local investigation evaluating whether any remedial action
is needed to respond to the release of any hazardous or toxic waste, substance
or constituent or other substance

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into the environment; or receipt of notice that any of the Properties or assets
of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary are subject to
an “Environmental Lien.” For purposes of this Section 5.14, “Environmental Lien”
shall mean a Lien in favor of any governmental or regulatory agency, entity,
authority or official for (1) any liability under Federal, state or local
environmental laws, rules or regulations or (2) damages arising from or costs
incurred by any such governmental or regulatory agency, entity, authority or
official in response to a release of a hazardous or toxic waste, substance or
constituent or other substance into the environment;
          (h) Material Adverse Effect. The occurrence of any change in the
business, operations or condition, financial or otherwise, of Borrower, Royal
Palm, any Subsidiary Bank, or any Subsidiary that could have a Material Adverse
Effect; and
          (i) Regulatory Matters. The issuance of any cease and desist order
against Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary and/or the
entry of any memorandum of understanding or other agreement between Borrower,
Royal Palm, any Subsidiary Bank, or any Subsidiary and any Regulatory Agency,
regardless of whether the same is voluntary or involuntary.
     5.15 Utilization of Loan Proceeds. Utilize the proceeds of any advance made
under the Loan solely to: (a) repay Borrower’s existing Indebtedness with
Lender; (b) finance the purchase price of the Royal Palm Merger Transaction; and
(c) other proper corporate purposes.
SECTION 6 — NEGATIVE COVENANTS
     Borrower covenants and agrees that, as long as any of the Obligations are
outstanding, it will not, and it will not cause or permit Royal Palm, any
Subsidiary Bank, or any Subsidiary to, without the prior written consent of
Lender:
     6.01 Indebtedness. Create or incur any Indebtedness except (a) Indebtedness
due Lender, (b) the other Indebtedness described on Schedule 4.10, and
(c) Indebtedness of Subsidiary Banks to creditors in the ordinary course of
their banking business.
     6.02 Merger or Consolidation etc. Merge into or consolidate with any other
entity (provided that Royal Palm may merge into Borrower, and Security State
Bank of Hamilton and State Bank of Augusta may merge into Marine Bank & Trust),
or cause or permit any material change in the ownership of Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary, or in the identity of Borrower’s
executive officers or directors (except for changes necessitated by death,
incapacity, natural retirement or similar causes).
     6.03 Sale of Property. Sell, lease, transfer or otherwise dispose of any
Property or assets of Borrower, Royal Palm, any Subsidiary Bank, or any
Subsidiary, as the case may be, except in the ordinary course of business;
provided, however, that the foregoing shall not preclude Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary from selling, leasing, transferring or
otherwise disposing of less than substantially all of its assets so long as the
purchase price for said assets shall be equal to or greater than the depreciated
book value of said assets.
     6.04 Distributions. Declare or incur any liability to make any Distribution
in respect of the capital stock of Borrower, Royal Palm, any Subsidiary Bank, or
any Subsidiary, except (a) Subsidiary Banks shall be permitted to pay cash
Distributions to Royal Palm and/or Borrower to the extent necessary to pay the
Obligations then due and payable to Lender and which are actually applied toward
payment of the Obligations; (b) Royal Palm shall be permitted to pay cash
Distributions to Borrower to the extent necessary to pay the Obligations then
due and payable to Lender and which are actually applied toward payment of the
Obligations; and (c) so long as no Default or Event of Default under this
Agreement has occurred and is continuing or is created thereby (i) Borrower
shall be permitted to declare and pay cash Distributions on its capital stock in
an aggregate amount of up to

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Three Million Dollars ($3,000,000.00) during each calendar year ending during
the Term of this Agreement, and (ii) Subsidiary Banks shall be permitted to
declare and pay cash Distributions on their respective capital stock.
     6.05 Issuance of Stock etc. Authorize or issue any new types, varieties or
classes of capital stock of Borrower, Royal Palm, any Subsidiary Bank, or any
Subsidiary, either preferred or common, voting or nonvoting, or any bonds or
debentures, subordinated or otherwise, or any stock warrants or options, or
authorize or issue any additional shares of stock of any existing class of stock
of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, or grant any
person other than Lender any proxy for existing shares, or cause or allow or
declare any stock splits or take any other action which could, directly or
indirectly, decrease Borrower’s ownership interest in Royal Palm or which could,
directly or indirectly, decrease Borrower’s ownership interests in Subsidiary
Banks and its other Subsidiaries, except as described in Schedule 6.05 attached
hereto.
     6.06 Capital Expenditures. Make any capital expenditures, enter into any
Capitalized Leases or obtain any purchase money financing, except that
(a) Borrower or Mercantile Trust & Savings Bank make capital expenditures in
2006 and 2007 in connection with the proposed construction of a new main banking
facility for Mercantile Trust & Savings Bank, and (b) Borrower, Royal Palm, the
Subsidiary Banks and the Subsidiaries may make other capital expenditures,
acquire assets subject to purchase money liens given by Borrower or retained by
the seller thereof, and enter into Capitalized Leases, provided such
expenditures and Capitalized Leases do not exceed Two Million Dollars
($2,000,000.00) in the aggregate on a combined basis during any consecutive
twelve (12) month period during the term of this Agreement.
     6.07 Default. Allow to occur, or to continue unremedied, any act, event or
condition which constitutes an event of default, or which, with the passage of
time or giving of notice, or both, would constitute an event of default under,
any agreement, document or instrument to which Borrower, Royal Palm, any
Subsidiary Bank, or any Subsidiary is a party or by which Borrower, Royal Palm,
any Subsidiary Bank, or any Subsidiary may be bound.
     6.08 Investments. Make any advances or loans or extensions of credit to,
purchase any stock, bonds, notes, debentures or other securities of, make any
expenditures on behalf of or in any manner assume liability (direct, contingent
or otherwise) for the Indebtedness of, any Person, except (a) such Guarantees,
loans, advances and/or investments made by Subsidiary Banks in the ordinary
course of their banking business (whether or not such investments fall within
any of the other exceptions set forth in clauses (c), (d) or (e) below),
(b) loans or advances from Borrower to any Subsidiary Bank, (c) investments in
certificates of deposit, repurchase agreements or other short-term direct
obligations of any commercial bank located in the United States of America
having capital resources in excess of $20,000,000.00 (provided, however, that
such certificates of deposit, repurchase agreements and/or other short-term
direct obligations shall mature not more than one (1) year from the date of
acquisition thereof), (d) investments in obligations of the United States
government or any agency thereof which are backed by the full faith and credit
of the United States (provided, however, that such obligations shall mature not
more than one (1) year from the date of acquisition thereof) and (e) shares of
stock, obligations and/or other securities received in settlement of claims
arising in the ordinary course of business.
     6.09 Liens. Create, incur, assume, permit the imposition of or allow the
continuance of any Lien on any of the Property or assets of Borrower, Royal
Palm, any Subsidiary Bank, or any Subsidiary (including the stock of any
Subsidiary Banks), except for (i) Liens securing government deposits at
Subsidiary Banks; (ii) Liens on Property or assets acquired by any of Subsidiary
Banks by foreclosure or by deed in lieu of foreclosure; (iii) liens expressly
permitted, or consented to, by Lender; (iv) liens of judgment creditors provided
such liens do not exceed, in the aggregate, at any time, $50,000, other than
liens bonded or insured to the reasonable satisfaction of Lender; (v) liens for
taxes not yet due and payable or which are being diligently contested in good
faith by Borrower, Royal Palm, any Subsidiary

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Bank, or any Subsidiary by appropriate proceedings; and (vi) the Liens listed on
Schedule 4.11 attached hereto; and (vii) subject to the limitation of
Section 6.06 above, liens on any Property acquired after the date hereof,
provided that each such lien shall attach only to the Property acquired.
     6.10 Subsidiaries and Related Companies. Other than as permitted by this
Agreement (a) Transfer any Property to any Related Party, (b) purchase or sign
any agreement to purchase any securities of any Related Party (whether debt,
equity or otherwise), underwrite or guarantee the same, or otherwise become
obligated with respect thereto, or (c) take any other action or permit any
action to be taken with respect to any Related Party which would jeopardize
either Borrower’s ability to repay the Loans, or any portion thereof, as the
same becomes due and payable, or the security given to Lender with respect to
the Loans.
     6.11 Use of Proceeds.Without Lender’s prior written consent, permit any
proceeds of any advance under the Loans to be used either directly or indirectly
for the purpose (whether immediate, incidental or ultimate) of “purchasing or
carrying any margin stock” within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as from time to time amended.
     6.12 Non-Performing Assets. Permit the aggregate amount of Non-Performing
Assets of all Subsidiary Banks on a combined basis to equal or exceed Fifteen
Percent (15%) of the then Primary Capital of all Subsidiary Banks at anytime
during the term of this Agreement, as determined according to GAAP.
     6.13 Nature of Business. Conduct or engage in any business if, as a result
thereof, the general nature of the business which would thereafter be engaged in
by Borrower, Royal Palm, Subsidiary Bank, or any Subsidiary, as the case may be,
would be substantially changed from the general nature of the business engaged
in on the date of this Agreement by Borrower, Royal Palm, any Subsidiary Bank,
or any Subsidiary, as the case may be.
     6.14 Other Agreements. Enter into any agreement containing any provision
which would be violated or breached by the performance of its obligations
hereunder or under any instrument or document delivered or to be delivered by it
hereunder or in connection herewith.
     6.15 Management and Employment Contracts. Except for the agreements
described in Schedule 6.15, allow any Subsidiary Bank to enter into any written
management agreements or written employment contracts or any other similar
contracts or agreements providing for total compensation in excess of $6,000,000
in the aggregate for all such contracts and agreements during any consecutive
twelve (12) month period during the term of this Agreement, unless the same are
terminable by such Subsidiary Bank without penalty at any time in its sole and
absolute discretion.
SECTION 7 — EVENTS OF DEFAULT
     If any of the following (each, an “Event of Default”) shall occur and be
continuing, unless otherwise waived in writing by Lender:
     7.01 Borrower shall fail to pay any of the Obligations as and when the same
shall become due and payable, whether by reason of demand, maturity,
acceleration or otherwise, and any such failure shall remain unremedied for five
(5) days;
     7.02 Any representation or warranty of Borrower, Royal Palm, and/or
Subsidiary Bank made in this Agreement or in any of the other Transaction
Documents or in any certificate, agreement, instrument or statement furnished or
made or delivered pursuant hereto or thereto or in connection herewith or
therewith, shall prove to have been untrue or incorrect in any material respect
when made or effected;

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     7.03 Borrower shall fail to perform or observe any term, covenant or
provision contained in sections 5.11, 5.13, 5.14, 5.15 or Section 6 hereof;
     7.04 Borrower shall fail to perform or observe any other term, covenant or
provision contained in this Agreement, and any such failure shall remain
unremedied for thirty (30) days after the earlier of (a) written notice of
default is given to Borrower by Lender or (b) any executive officer of Borrower
obtaining actual knowledge of such failure;
     7.05 This Agreement or any of the other Transaction Documents shall at any
time for any reason cease to be in full force and effect or shall be declared to
be null and void by a court of competent jurisdiction, or if the validity or
enforceability hereof or thereof shall be contested or denied by Borrower, Royal
Palm or any Obligor, or if Borrower, Royal Palm or any Obligor shall deny that
it has any further liability or obligation hereunder or thereunder or if
Borrower, Royal Palm or any Obligor shall fail to comply with or observe any of
the terms, provisions or conditions contained in any of the Transaction
Documents (other than this Agreement);
     7.06 An “Event of Default” (as defined therein) shall occur under or within
the meaning of the Borrower Pledge or Subsidiary Pledge;
     7.07 [RESERVED];
     7.08 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor shall (a) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership, liquidation or similar
law, (b) consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(c) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official of itself, himself or herself or of a
substantial part of its Property or assets, (d) file an answer admitting the
material allegations of a petition filed against itself, himself or herself in
any such proceeding, (e) make a general assignment for the benefit of creditors,
(f) become unable, admit in writing its, his or her inability or fail generally
to pay its, his or her debts as they become due, (g) become insolvent in either
the equity or bankruptcy sense of the term or (h) take any corporate or other
action for the purpose of effecting any of the foregoing;
     7.09 An involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (a) relief
in respect of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any
other Obligor, or of a substantial part of the Property or assets of Borrower,
Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor, under
Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (b) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor or of a substantial part of the Property or assets of Borrower, Royal
Palm, any Subsidiary Bank, any Subsidiary or any other Obligor or (c) the
winding-up or liquidation of Borrower, Royal Palm, any Subsidiary Bank, any
Subsidiary or any other Obligor; and any such proceeding or petition shall
continue undismissed for sixty (60) consecutive days or an order or decree
approving or ordering any of the foregoing shall continue unstayed and in effect
for sixty (60) consecutive days;
     7.10 Any Subsidiary Bank shall be placed in receivership by any Regulatory
Agency;
     7.11 Any Regulatory Agency shall notify any Subsidiary Bank that its
capital has been impaired and such Subsidiary Bank does not cure such impairment
within five (5) Business Days after receipt of such notice;
     7.12 Any Subsidiary Bank shall cease to be an “insured bank” under or
within the meaning of the Federal Deposit Insurance Act of 1959, as amended, or
a cease and desist order, memorandum of

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understanding or other agreement shall be issued by any Regulatory Authority
against or affecting Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary
or any other Obligor which (in Lender’s reasonable opinion) has or could have a
Material Adverse Effect on the business, operation or condition, financial or
otherwise, of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any
other Obligor;
     7.13 Any litigation or governmental or regulatory proceeding is instituted
against Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor which, in Lender’s reasonable opinion, will have a Material Adverse
Effect on the financial condition of Borrower, Royal Palm, any Subsidiary Bank,
any Subsidiary or any other Obligor or on the continued operation of Borrower,
Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor, after
taking into account insurance coverage and reserves therefor (if any);
     7.14 Any Property of Borrower, Royal Palm, any Subsidiary Bank, any
Subsidiary or any other Obligor shall be seized, attached or levied upon, unless
released within thirty (30) days after the date upon which Borrower, Royal Palm,
any Subsidiary Bank, any Subsidiary or any other Obligor obtains actual notice
or knowledge thereof;
     7.15 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor shall have a judgment entered against it by a court having jurisdiction
in the premises, and such judgment shall not be appealed in good faith or
satisfied by Borrower, Royal Palm, any Subsidiary Bank or such Obligor, as the
case may be, within thirty (30) days after the entry of such judgment;
     7.16 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor shall fail (and such failure shall not have been cured or waived) to
perform or observe any term, provision or condition of, or any other default or
event of default shall occur under, any agreement, document or instrument
evidencing or securing any outstanding indebtedness of Borrower, Royal Palm, any
Subsidiary Bank, any Subsidiary or any other Obligor, as the case may be, for
borrowed money (other than the Obligations), if the effect of such failure or
default is to cause or permit such indebtedness to be declared to be due and
payable or otherwise accelerated, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
     7.17 The institution by Borrower, Royal Palm, any ERISA Affiliate, any
Subsidiary Bank, or any Subsidiary of steps to terminate any Pension Plan if, in
order to effectuate such termination, Borrower, Royal Palm, any ERISA Affiliate,
any Subsidiary Bank, or any Subsidiary would be required to make a contribution
to such Pension Plan or would incur a liability or obligation to such Pension
Plan in excess of $50,000; or the institution by the PBGC of steps to terminate
any Pension Plan;
     7.18 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor shall be declared by Lender to be in default on, or pursuant to the
terms of, (a) any other present or future obligation to Lender, including,
without limitation, any other loan, line of credit, revolving credit, guaranty
or letter of credit reimbursement obligation, or (b) any other present or future
agreement purporting to convey to Lender a Lien upon any of the Property or
assets of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other
Obligor;
THEN, and in each such event (other than an event described in Sections 7.08,
7.09 or 7.10), Lender may declare the entire outstanding principal balance of
and all accrued and unpaid interest on the Notes issued under this Agreement and
all other amounts payable by Borrower hereunder to be immediately due and
payable, whereupon all of such outstanding principal balance and accrued and
unpaid interest and all such other amounts shall become and be immediately due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower, and Lender may exercise
any and all other rights and remedies which it may have under any of the other
Transaction Documents or under applicable law; provided, however, that upon the
occurrence of any event described in Sections 7.08, 7.09 or 7.10, the entire
outstanding principal

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balance of and all accrued and unpaid interest on the Notes issued under this
Agreement and all other amounts payable by Borrower hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrower, and Lender may exercise any and all other rights and remedies which
it may have under any of the other Transaction Documents or under applicable
law.
SECTION 8 — GENERAL
     8.01 No Waiver. No failure or delay by Lender or the holder of the Notes in
exercising any right, remedy, power or privilege hereunder or under any other
Transaction Document shall operate as a waiver thereof; nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The remedies provided
herein and in the other Transaction Documents are cumulative and not exclusive
of any remedies provided by law. Nothing herein contained shall in any way
affect the right of Lender to exercise any statutory or common law right of
banker’s lien or set-off.
     8.02 Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default under this Agreement, Lender is hereby authorized at any
time and from time to time to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and any and all
other indebtedness at any time owing by Lender to or for the credit or the
account of Borrower against any and all of the Obligations irrespective of
whether or not Lender shall have made any demand hereunder or thereunder. Lender
agrees promptly to notify Borrower after any such set-off and application made
by Lender, provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of Lender under
this Section 8.02 are in addition to any other rights and remedies (including,
without limitation, other rights of set-off) which Lender may have. Nothing
contained in this Agreement or any other Transaction Document shall impair the
right of Lender to exercise any right of set-off or counterclaim it may have
against Borrower and to apply the amount subject to such exercise to the payment
of indebtedness of Borrower unrelated to this Agreement or the other Transaction
Documents.
     8.03 Cost and Expenses. Borrower agrees to pay (a) all out-of-pocket costs
and expenses of Lender in connection with the preparation, negotiation and
execution of this Agreement, the Note and the other Transaction Documents,
including, without limitation, reasonable Attorneys’ Fees, provided that such
Attorneys’ Fees shall not exceed $6,000, (b) all recording and filing fees
incurred in connection with this Agreement and the other Transaction Documents,
(c) all out-of-pocket expenses of Lender in connection with the preparation of
any waiver or consent hereunder or any amendment hereof or any Event of Default
or alleged Event of Default hereunder, including, without limitation, reasonable
Attorneys’ Fees, (d) if an Event of Default occurs, all out-of-pocket costs and
expenses incurred by Lender, including, without limitation, reasonable
Attorneys’ Fees, in connection with such Event of Default and collection and
other enforcement proceedings resulting there from and (e) all other Attorneys’
Fees incurred by Lender relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents.
     8.04 Environmental Indemnity. Borrower hereby agrees to indemnify Lender
and hold Lender harmless from and against any and all losses, liabilities,
damages, injuries, costs, expenses and claims of any and every kind whatsoever
(including, without limitation, court costs and Attorneys’ Fees) which at any
time or from time to time may be paid, incurred or suffered by, or asserted
against, Lender for, with respect to or as a direct or indirect result of the
violation by Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary of any
laws or regulations relating to solid waste and/or hazardous waste treatment,
storage, disposal, generation and transportation, air, water and/or noise
pollution, soil or ground or water contamination, the handling, storage or
release into the environment of hazardous materials or hazardous substances, and
the transportation of hazardous materials (“Environmental Laws”) or with respect
to, or as a direct or indirect result of the presence on or under, or the
escape, seepage, leakage, spillage, discharge, emission or release from,
properties utilized by Borrower, Royal

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Palm, any Subsidiary Bank, or any Subsidiary in the conduct of their respective
businesses into or upon any land, the atmosphere or any watercourse, body of
water or wetland, of any hazardous material or substances (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section 8.04 shall survive
the satisfaction and payment of the Obligations and termination of this
Agreement.
     8.05 General Indemnity. In addition to the payment of expenses pursuant to
Section 9.03, whether or not the transactions contemplated hereby shall be
consummated, Borrower hereby agrees to indemnify, pay and hold Lender and any
holder of any of the Notes, and the officers, directors, employees, agents and
affiliates of Lender and such holder(s) (collectively called the “Indemnitees”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such indemnities in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitees shall be designated a
party thereto), that may be imposed on, incurred by or asserted against the
Indemnitees, in any manner relating to or arising out of this Agreement, the
other Transaction Documents, or other agreements executed and delivered by
Borrower, Royal Palm, or any other Obligor in connection herewith, the
statements contained in any commitment letters delivered by Lender, Lender’s
agreement to make the Loan hereunder or the use or intended use of the proceeds
of the Loan hereunder (the “Indemnified Liabilities”): that Borrower shall have
no obligation to the Indemnitees with respect to Indemnified Liabilities arising
from the negligence or willful misconduct of the Indemnitees as determined by a
court of competent jurisdiction. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. The provisions of the
undertakings and indemnification set out in this Section 8.05 shall survive
satisfaction and payment of the Obligations and termination of this Agreement.
     8.06 Authority to Act. Lender shall be entitled to act on any notices and
instructions (telephonic or written) reasonably believed by Lender to have been
delivered by any Person authorized to act on behalf of Borrower pursuant hereto,
regardless of whether such notice or instruction was in fact delivered by a
Person authorized to act on behalf of Borrower, and Borrower hereby agrees to
indemnify Lender and hold Lender harmless from and against any and all losses
and expenses, if any, ensuing from any such action.
     8.07 Notices. Each notice, request, demand, consent, confirmation and/or
other communication under this Agreement shall be in writing and delivered in
person or sent by telecopy, recognized overnight courier or registered or
certified mail, return receipt requested and postage prepaid, to the applicable
party at its address or telecopy number set forth on the signature page(s) of
this Agreement, or at such other address or telecopy number as any party hereto
may designate as its address or telecopy number for communications under this
Agreement by notice so given. Such notices shall be deemed effective on the day
on which delivered or sent if delivered in person or sent by telecopy, on the
first (1st) Business Day after the day on which sent, if sent by recognized
overnight courier or on the third (3rd) Business Day after the day on which
mailed, if sent by registered or certified mail,
     8.08 CONSENT TO JURISDICTION WAIVER OF JURY TRIAL. BORROWER IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT SITTING IN
ST. LOUIS COUNTY, MISSOURI, OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE
EASTERN DISTRICT OF MISSOURI, AS LENDER MAY ELECT, IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT. BORROWER HEREBY IRREVOCABLY AGREES THAT

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ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAYBE HELD AND
DETERMINED IN ANY OF SUCH COURTS. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. BORROWER HEREBY EXPRESSLY WAIVES ALL RIGHTS OF ANY OTHER
JURISDICTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE BY REASON OF ITS PRESENT
OR SUBSEQUENT DOMICILES. BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON
BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS SET FORTH IN SECTION
8.07. BORROWER AND LENDER IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY ACTION IN WHICH BORROWER AND LENDER ARE PARTIES.
     8.09 Lender’s Books and Records. Lender’s books and records showing the
account between Borrower and Lender shall be admissible in evidence in any
action or proceeding and shall constitute prima facie proof thereof.
     8.10 Governing Law: Amendments. This Agreement, the Note, Borrower Pledge,
Subsidiary Pledge and all of the other Transaction Documents shall be governed
by and construed in accordance with the internal laws of the State of Missouri,
and this Agreement and the other Transaction Documents may not be changed, nor
may any term, condition or Event of Default be waived, modified or discharged
orally but only by an agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
     8.11 References: Headings for Convenience. Unless otherwise specified
herein, all references herein to Section numbers refer to section numbers of
this Agreement, and all references herein to Schedules 2.01(b), 4.05, 4.08,
4.10, 4.11, 4.14, 6.05, or 6.15 or Exhibits A, B, or C refer to attached
Schedules 2.01(b), 4.05, 4.08, 4.10, 4.11, 4.14, 6.05, or 6.15, or Exhibits A,
B, or C, which are hereby incorporated herein by reference. The section headings
are furnished for the convenience of the parties and are not to be considered in
the construction or interpretation of this Agreement.
     8.12 Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of Borrower and its successors and Lender and its successors and
assigns. Borrower may not assign or delegate any of its rights or obligations
under this Agreement without Lender’s prior written consent.
     8.13 Severability. In the event any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
     8.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
     8.15 Resurrection of Obligations To the extent that Lender receives any
payment on account of any of the Obligations, and any such payment(s) or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, subordinated and/or required to be repaid to a trustee,
receiver or any other Person under any bankruptcy act, state or Federal law,
common law or equitable cause, then, to the extent of such payment(s) received,
the Obligations or part thereof intended to be satisfied and any and all liens,
security interests, mortgages, deeds of trust and/or other encumbrances upon or
pertaining to any assets of Borrower and theretofore created and/or existing in
favor of Lender as security for the payment of such the Obligations shall be
revived and continue in full force and effect, as if such payment(s) had not
been received by Lender and applied on account of the Obligations.

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     8.16 Entire Agreement This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings (oral or written) relating to the subject matter hereof. This
Agreement shall amend, restate and replace the Original Agreement.
     8.17 Notice Required by Section 432.047 R. S. Mo. This notice is provided
pursuant to Section 432,047 R.S.Mo. As used herein, “creditor” means Lender and
“this writing” means this Agreement and the other Transaction Documents. ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.
     8.18 USA PATRIOT Act. Lender hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L 107-56 (signed into law
October 26, 2001) (the “Act”), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act.
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
(SIGNATURES ON FOLLOWING PAGE)

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SIGNATURE PAGE-
THIRD AMENDED AND RESTATED LOAN AGREEMENT

              Borrower:
 
            MERCANTILE BANCORP, INC.
 
       
 
  By:   /s/ Dan S. Dugan
 
       
 
      Dan S. Dugan, Chairman, President & CEO
 
  Address: 440 Maine Street
P.O. Box 371
Quincy, Illinois 62301
 
    Attention:                                        
 
       
 
  Telecopier:  (___)                          Lender:
 
            U.S. BANK NATIONAL ASSOCIATION
 
       
 
  By:   /s/ Gary D. Taylor
 
       
 
      Gary D. Taylor, Vice President
 
  Address: One US Bank Plaza
 
    7th Street & Washington Avenue
St. Louis, Missouri 63101
 
    Attention: Correspondent Banking Department
 
       
 
  Telecopier:  (314) 418-8394

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SCHEDULE 2.01(b)
(Authorized Individuals)
Dan S. Dugan, Chairman, President & CEO
Ted T. Awerkamp, Vice President & Secretary
Michael P. McGrath, Vice President & Treasurer
Daniel J. Cook, Vice President- Investments

 

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SCHEDULE 4.05

(Litigation)

None.

 

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SCHEDULE 4.08
(Subsidiaries)
Mid-America Bancorp, Inc.
     Heartland Bank
Farmers State Bank of Northern Missouri
New Frontier Bancshares, Inc.
     NFBI Capital Trust I
     New Frontier Bank
     New Frontier Personal Investment Centers, Inc.
Mercantile Bancorp Capital Trust I
Mercantile Bancorp Capital Trust II
Mercantile Bancorp Capital Trust III
Brown County State Bank
Perry State Bank
Marine Bank & Trust
Mercantile Merger Corp.
Mercantile Trust & Savings Bank
     Mercantile Investments Inc.
Royal Palm Bancorp, Inc.
     The Royal Palm Bank of Florida

 

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SCHEDULE 4.10
(Other Loans and Guarantees)
Trust Preferred Securities:
Mercantile Bancorp Capital Trust I
Mercantile Bancorp Capital Trust II
Mercantile Bancorp Capital Trust Ill
NFBI Capital Trust I

 

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SCHEDULE 4.11
(Liens)
The Liens permitted under Section 6.09 and the following Liens reflected in the
lien search results received by Lender prior to execution of this Agreement:
Liens granted by Mercantile Trust & Savings Bank in favor of the Federal Home
Loan Bank of Chicago.
Liens granted by The Royal Palm Bank of Florida in favor of Resun Leasing,
Incorporated and the the Federal Home Loan Bank of Atlanta.
Real estate tax liens against the real Property of Borrower’s Subsidiaries to
the extent that such real estate taxes are not yet due.

 

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SCHEDULE 4.14

(Stock of Subsidiary Banks)

              Subsidiary Bank   Owner   Authorized Capital   Par Value
Heartland Bank
  Mid-America Bancorp, Inc.   3,000 shares   $100.00
 
           
Farmers State Bank of Northern Missouri
  Mercantile Bancorp, Inc.   2,700 shares   $100.00
 
           
New Frontier Bank
  New Frontier Bancshares, Inc.   30,000 shares   $100.00
 
           
Brown County State Bank
  Mercantile Bancorp, Inc.   3,000 shares   $100.00
 
           
Perry State Bank
  Mercantile Bancorp, Inc.   2,700 shares   $100.00
 
           
Marine Bank & Trust
  Mercantile Bancorp, Inc.   13, 010 shares   $100.00
 
           
Mercantile Trust & Savings Bank
  Mercantile Bancorp, inc.   360,000 shares   $    6.25
 
           
The Royal Palm Bank of Florida
  Royal Palm Bancorp, Inc.   3,000,000 shares   $    5.00
 
            Shares Owned by Owner            
Heartland Bank
  3,000 shares        
 
           
Farmers State Bank of Northern Missouri
  2,700 shares        
 
           
New Frontier Bank
  30,000 shares        
 
           
Brown County State Bank
  3,000 shares        
 
           
Perry State Bank
  2,700 shares        
 
           
Marine Bank & Trust
  13,010 shares        
 
           
Mercantile Trust & Savings Bank
  360,000 shares        
 
           
The Royal Palm Bank of Florida
  1,038 ,294 shares        

 

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SCHEDULE 6.05
(Issuance of Stock etc.)
Stock warrants or options, or authorization or issuance of additional shares of
stock of any existing class of stock of Mid-America Banccorp, Inc. or New
Frontier Bancshares, Inc.
Mid-America Bancorp, Inc. — The following is a list of employees at Mid-America
Bancorp, Inc. that have entered into Nonqualified Stock Option Agreements.
Michael F. Tomandl
Joseph P. O’Flaherty
Amy D. Hulse
Mark Fitzpatrick
Michael J. Corless
Martin G. Baughman

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SCHEDULE 6.15
(Management Agreements and Employment Contracts)
1. Farmers State Bank of Northern Missouri — The following is a list of
employees at Farmers State Bank of Northern Missouri that have entered into
Advanced Compensation Agreements, Employment Agreements and Financial Advisor
Agreements.
Richard Allen Heck
James T. Utley
D. Kent Anderson
Chuck W. Sinclair
Donald Eggebrecht
2. Heartland Bank — Heartland Bank entered into a Mortgage Loan Officer
Compensation Agreement with Craig Leible, a copy of which is attached hereto and
made a part hereof. Heartland Bank entered into an Advanced Compensation
Agreement and an Employment Agreement with Joseph P. Gravino.
3. The Royal Palm Bank of Florida has entered into an Employment Agreement with
Arnold J. Haake dated February 21, 2003, as amended by Amendments dated
February 20, 2006 and June 20, 2006.
4. Mercantile Trust & Savings Bank has entered into Salary Continuation
Agreements with Dan S. Dugan and Ted T. Awerkamp dated December 8, 1994 and the
Amendments thereto dated April 26, 2004.
5. Marine Bank & Trust has entered into a Salary Continuation Agreement with
Jerald L. Bartell dated December 8, 1994 and the Amendment thereto dated
April 26, 2004.

 

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EXHIBIT A

(Form of Revolving Note)
REVOLVING CREDIT NOTE

      $15,000,000.00   St. Louis, Missouri     November 10, 2006

     FOR VALUE RECEIVED, on the last day of the Revolving Credit Period (as
defined in the Loan Agreement [defined below]), the undersigned, MERCANTILE
BANCORP, INC., a Delaware corporation (“Borrower”), hereby promises to pay to
the order of U.S. BANK NATIONAL ASSOCIATION, a national banking association
(“Lender”), the principal sum of Fifteen Million Dollars ($15,000,000.00), or
such lesser sum as may then constitute the aggregate unpaid principal amount of
all Revolving Loans made by Lender to Borrower pursuant to the Loan Agreement.
The aggregate principal amount of Loan advances which Lender shall be committed
to have outstanding under this Revolving Credit Note (this “Note”) at any one
time shall not exceed Fifteen Million Dollars ($15,000,000.00), which amount may
be borrowed, paid, reborrowed and repaid, in whole or in part, subject to the
terms and conditions of this Note and of the Loan Agreement.
     Borrower further promises to pay to the order of Lender interest on the
unpaid principal balance from time to time outstanding under this Note at the
rate(s) and on the dates set forth in the Loan Agreement.
     All payments received by Lender under this Note shall be allocated among
the principal, interest, collection costs and expenses and other amounts due
under this Note in such order and manner as Lender shall elect. The amount of
interest accruing under this Note shall be computed on an actual day, 360-day
year basis.
     All payments of principal and interest under this Note shall be made in
lawful currency of the United States in Federal or other immediately available
funds at the office of Lender situated at One US Bank Plaza, 7lh Streets
Washington Avenue, St. Louis, Missouri 63101, or at such other place as Lender
may from time to time designate in writing.
     Lender shall record in its books and records the date and amount of each
Loan advance made by it to Borrower under this Note and the date and amount of
each payment of principal and/or interest made by Borrower with respect thereto;
provided, however, that the obligation of Borrower to repay each Loan advance
made to Borrower under this Note shall be absolute and unconditional,
notwithstanding any failure of Lender to make any such recordation or any
mistake by Lender in connection with any such recordation. The books and records
of Lender showing the account between Lender and Borrower shall be admissible in
evidence in any action or proceeding and shall constitute prima facie proof of
the items therein set forth.
     This Note is the Revolving Note referred to in the Third Amended and
Restated Loan Agreement dated as of the date hereof by and between Borrower and
Lender, as the same may from time to time be amended, modified, extended,
renewed or restated (the “Loan Agreement”; all capitalized terms used and not
otherwise defined in this Note shall have the respective meanings ascribed to
them in the Loan Agreement). The Loan Agreement, among other things, contains
provisions for acceleration of the maturity of this Note upon the occurrence of
certain stated events and also for prepayments on account of the principal of
this Note and interest on this Note prior to the maturity of this Note upon the
terms and conditions specified therein.
     If Borrower shall fail to make any payment of any principal of or interest
on this Note as and when the same shall become due and payable whether by reason
of demand, maturity, acceleration or

 

--------------------------------------------------------------------------------

 

otherwise, and any such failure shall remain unremedied for five (5) days, or if
any other Event of Default shall occur under or within the meaning of the Loan
Agreement, then Lender’s obligation to make additional Loan advances under this
Note may be terminated in the manner and with the effect as provided in the Loan
Agreement and the entire outstanding principal balance of this Note and all
accrued and unpaid interest thereon may be declared to be immediately due and
payable in the manner and with the effect as provided in the Loan Agreement.
     In the event that any payment of any principal of or interest on this Note
is not paid when due, whether by reason of maturity, acceleration or otherwise,
and this Note is placed in the hands of an attorney or attorneys for collection,
or if this Note is placed in the hands of an attorney or attorneys for
representation of Lender in connection with bankruptcy or insolvency proceedings
relating to or affecting this Note, Borrower hereby promises to pay to the order
of Lender, in addition to all other amounts otherwise due on, under or in
respect of this Note, the costs and expenses of such collection, foreclosure and
representation, including, without limitation, reasonable attorneys’ fees and
expenses (whether or not litigation shall be commenced in aid thereof). All
parties hereto severally waive presentment for payment, demand for payment,
protest, notice of protest and notice of dishonor.
     This Note shall be governed by and construed in accordance with the
substantive laws of the State of Missouri (without reference to conflict of law
principles).

              Borrower:
 
            MERCANTILE BANCORP, INC.
 
       
 
  By:   /s/ Dan S. Dugan
 
       
 
      Dan S. Dugan, Chairman, President & CEO

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EXHIBIT B
(Form of Term Note)
TERM LOAN PROMISSORY NOTE

      $15,000,000.00   St. Louis, Missouri     November 10, 2006

     FOR VALUE RECEIVED, the undersigned, MERCANTILE BANCORP, INC., a Delaware
corporation (“Borrower”), promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION, a national banking association (“Lender”), the principal sum of
Fifteen Million Dollars ($15,000,000.00) or, if less, the aggregate unpaid
principal amount of all advances made by Lender to Borrower and evidenced by
this Term Loan Promissory Note (this “Note”). The principal amount of this Note
shall be due and payable in the amounts and on the dates set forth in the Loan
Agreement (defined below). Borrower further promises to pay to the order of
Lender interest on the unpaid principal balance from time to time outstanding
under this Note at the rate(s) and on the dates set forth in the Loan Agreement.
     All payments received by Lender under this Note shall be allocated among
the principal, interest, collection costs and expenses and other amounts due
under this Note in such order and manner as Lender shall elect. The amount of
interest accruing under this Note shall be computed on an actual day, 360-day
year basis.
     All payments of principal and interest under this Note shall be made in
lawful currency of the United States in Federal or other immediately available
funds at the office of Lender situated at One US Bank Plaza, 7th Street &
Washington Avenue, St. Louis, Missouri 63101, or at such other place as Lender
may from time to time designate in writing.
     Lender shall record in its books and records the date and amount of each
Loan advance made by it to Borrower under this Note and the date and amount of
each payment of principal and/or interest made by Borrower with respect thereto;
provided, however, that the obligation of Borrower to repay each Loan advance
made to Borrower under this Note shall be absolute and unconditional,
notwithstanding any failure of Lender to make any such recordation or any
mistake by Lender in connection with any such recordation. The books and records
of Lender showing the account between Lender and Borrower shall be admissible in
evidence in any action or proceeding and shall constitute prima facie proof of
the items therein set forth.
     This Note is the Term Note referred to in the Third Amended and Restated
Loan Agreement dated as of the date hereof by and between Borrower and Lender,
as the same may from time to time be amended, modified, extended, renewed or
restated (the “Loan Agreement”; all capitalized terms used and not otherwise
defined in this Note shall have the respective meanings ascribed to them in the
Loan Agreement). The Loan Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the occurrence of certain stated
events and also for prepayments on account of the principal of this Note and
interest on this Note prior to the maturity of this Note upon the terms and
conditions specified therein.
     If Borrower shall fail to make any payment of any principal of or interest
on this Note as and when the same shall become due and payable whether by reason
of demand, maturity, acceleration or otherwise, and any such failure shall
remain unremedied for five (5) days, or if any other Event of Default shall
occur under or within the meaning of the Loan Agreement, then Lender’s
obligation to make additional Loan advances under this Note may be terminated in
the manner and with the effect as

 

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provided in the Loan Agreement and the entire outstanding principal balance of
this Note and all accrued and unpaid interest thereon may be declared to be
immediately due and payable in the manner and with the effect as provided in the
Loan Agreement.
     In the event that any payment of any principal of or interest on this Note
is not paid when due, whether by reason of maturity, acceleration or otherwise,
and this Note is placed in the hands of an attorney or attorneys for collection,
or if this Note is placed in the hands of an attorney or attorneys for
representation of Lender in connection with bankruptcy or insolvency proceedings
relating to or affecting this Note, Borrower hereby promises to pay to the order
of Lender, in addition to all other amounts otherwise due on, under or in
respect of this Note, the costs and expenses of such collection, foreclosure and
representation, including, without limitation, reasonable attorneys’ fees and
expenses (whether or not litigation shall be commenced in aid thereof). All
parties hereto severally waive presentment for payment, demand for payment,
protest, notice of protest and notice of dishonor. This Note shall be governed
by and construed in accordance with the substantive laws of the State of
Missouri (without reference to conflict of law principles).

              Borrower;
 
            MERCANTILE BANCORP, INC.
 
       
 
  By:   /s/ Dan S. Dugan
 
       
 
      Dan S. Dugan, Chairman, President & CEO

- 2 -

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EXHIBIT C
(Form of Certificate)
                                        , 200_
U.S. Bank National Association
One US Bank Plaza
7th Street & Washington Avenue
St. Louis, Missouri 63101
Attention: Correspondent Banking Department
Gentlemen:
     Reference is hereby made to the Third Amended and Restated Loan Agreement
dated as of November 10, 2006, by and between you and the undersigned (as from
time to time amended, the “Agreement”: all capitalized terms used and not
otherwise defined herein shall have the respective meanings ascribed to them in
the Agreement).
     The undersigned hereby certifies to you to the best of his/her knowledge
that as of the date hereof:
          (a) all of the representations and warranties set forth in Section 4
of the Agreement are true and correct;
          (b) no violation or breach of any of the affirmative covenants set
forth in Section 5 of the Agreement has occurred and is continuing;
          (c) no violation or breach of any of the negative covenants set forth
in Section 6 of the Agreement has occurred and is continuing;
          (d) no Default or Event of Default under the Agreement has occurred
and is continuing;
          (e) the financial statements of Borrower, Royal Palm, Subsidiary Banks
and Subsidiary delivered to you with this letter are true, correct and complete
and have been prepared in accordance with GAAP; and the financial covenant
information set forth in Schedule 1 to this letter is true and correct.

              Very truly yours,
 
            MERCANTILE BANCORP, INC.
 
       
 
  By:   /s/ Dan S. Dugan
 
       
 
  Title:   Chairman, President & CEO
 
       

 

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SCHEDULE 1
Financial Covenant information
as of                                           , _________

         
Financial Covenant
  Actual   Required