**EXHIBIT 10.14**

 

**REVOLVING CREDIT AGREEMENT**

 

This REVOLVING CREDITAGREEMENT is made and entered into as of November 19, 2008, by and amongLANDMARK BANCORP, INC., a Delaware corporation (the “Borrower”) and FIRSTNATIONAL BANK OF OMAHA, a national banking association with principal officesin Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Borrower has requested that the Bankprovide a revolving credit facility in the aggregate amount not to exceed NineMillion and No/100ths Dollars ($9,000,000.00) for the purposes describedherein; and

 

WHEREAS, the Bank is willing to provide suchrevolving credit facility to the Borrower upon, and subject to, the terms,provisions and conditions herein set forth.

 

NOW, THEREFORE, inconsideration of the foregoing recitals and the promises herein made, and inreliance upon the representations, warranties and covenants herein contained,and intending to be legally bound hereby, the parties hereby agree as follows:

 

**ARTICLEI**

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**DEFINITIONSAND ACCOUNTING TERMS**

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**Section 1.01.  DefinedTerms.**  As used in this Agreement, thefollowing terms have the following meanings (terms defined in the singular tohave the same meaning when used in the plural and vice versa):

 

“*Affiliate*”means any Person, other than a Subsidiary, (a) which directly orindirectly controls, or is controlled by, or is under common control with theBorrower or a Subsidiary; (b) which directly or indirectly beneficiallyowns or holds ten percent (10%) or more of any interest of the Borrower or anySubsidiary; (c) ten percent (10%) or more of the voting stock of which isdirectly or indirectly beneficially owned or held by the Borrower or aSubsidiary; or (d) ten percent (10%) or more of any membership interest orother interest in any other entity of which is directly or indirectlybeneficially owned or held by the Borrower or a Subsidiary. The term “control”means the possession, directly or indirectly, of the power to direct or causethe direction of the management and policies of a Person, whether through theownership of voting securities, through the ownership of interests in a limitedliability company, partnership or other entity, by contract, or otherwise.

 

“*Agreement*”means this Revolving Credit Agreement and all schedules and exhibits to thisAgreement, in each case as amended, supplemented, or modified from time totime.

 

“*Applicable Law*” means any applicable federal, state, localstatute, rule, regulation, ordinance, order, directive, code or such otherrequirements.

 

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“*Assets*” means anything owned or controlled by the referencedentity or any right or interest of the referenced entity therein.

 

“*AuthorizedPerson*” means, an individual authorized to act on behalf of theBorrower or Landmark National Bank, in accordance with its OrganizationalDocuments or appropriate resolutions adopted in accordance therewith.

 

“*Bank*” shallhave the meaning given such term in the preamble hereto.

 

“*Bank Regulatory Authority*” means the Board, the Comptrollerof the Currency, the Federal Deposit Insurance Corporation and all otherrelevant regulatory authorities (including, without limitation, any relevantstate bank regulatory authorities).

 

“*Bank Stock*”****means all ofthe outstanding shares of stock of Landmark National Bank.

 

“*Bank Subsidiary*” means Landmark National Bank and any otherSubsidiary of the Borrower that is a federal or state bank, savings and loan,or thrift institution, under Applicable Law.

 

“*BankruptcyCode*” means Title 11 of the United States Code, as now constitutedor hereafter amended.

 

“*Board*” meansthe Board of Governors of the Federal Reserve System of the United States ofAmerica.

 

“*Borrower*” shallhave the meaning given such term in the preamble hereto.

 

“*Business Day*”means any day other than a Saturday, Sunday, or other day on which the Bank isauthorized or required to close under the laws of the State of Nebraska or theUnited States.

 

“*Call Report*”means, with respect to the Borrower, its FR Y-9C (consolidated) and FR Y-9LP(unconsolidated) quarterly reports to the Federal Reserve System, and, withrespect to Landmark National Bank, its “Consolidated Reports of Condition andIncome” (or similar reports) filed with its applicable Bank RegulatoryAuthority, or such other forms of call reports as may be required by the BankRegulatory Authority from time to time; provided,however, if at any time such reports are not required by the applicable BankRegulatory Authorities, then “Call Reports” shall mean reports containinginformation similar to the reports set forth above or such other reports as theparties hereto agree upon.

 

“*Capital Leases*”means all leases which have been or should be capitalized on the books of thelessee in accordance with GAAP.

 

“*Change in Control”* shall be deemed to haveoccurred if at any time (a) any Person or group of Persons not an owner ofan Equity Interest of Borrower on the Effective Date shall have acquiredbeneficial ownership of Equity Interests representing fifty percent (50%) ormore in voting power of the outstanding voting interests in the Borrower, (b) amajority of the Board of Directors of the 

 

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Borrowershall at any time not consist of (i) individuals who shall have beenmembers of the Board of Directors of the Borrower on the Effective Date and (ii) individualswhose nomination or election to such Board of Directors shall have beenrecommended or approved by a vote of a majority of the members of such Board ofDirectors described in the preceding clause (i) or in this clause (ii), or(c) the Borrower shall cease to, directly or indirectly, own and controlone hundred percent (100%) of the Equity Interests of Landmark National Bank orthe sale by Landmark National Bank, of substantially all of its Assets.

 

“*Code*” means theInternal Revenue Code of 1986, as amended from time to time, and theregulations and published interpretations thereunder.

 

“*Collateral*”means all property which is subject or is to be subject to the Lien granted bythe Pledge Agreement.

 

“*Commitment*” shallhave the meaning ascribed thereto in Section 2.01.

 

“*Commonly Controlled Entity*”means an entity, whether or not incorporated, which is under common controlwith the Borrower within the meaning of Section 414(b) or 414(c) ofthe Code.

 

“*Conditions Precedent*”shall have the meaning ascribed thereto in Section 3.01.

 

“*Debt*” means (a) indebtednessor liability for borrowed money; (b) obligations evidenced by bonds,debentures, notes, or other similar instruments; (c) obligations for thepayment of deferred purchase price of property or services (including tradeobligations); (d) obligations as lessee under Capital Leases; (e) currentliabilities in respect of unfunded vested benefits under Plans covered byERISA; (f) obligations under letters of credit; (g) obligations underacceptance facilities; and (h) all guaranties, endorsements (other thanfor collection or deposit in the ordinary course of business), and othercontingent obligations to purchase, to provide funds for payment, to supplyfunds to invest in any Person or entity, or otherwise to assure a creditoragainst loss.

 

 “*Default*” means any of the events specified in Section 8.01of this Agreement, whether or not any requirement for the giving of notice, thelapse of time, or both, or any other condition, has been satisfied.

 

“*Effective Date*”means the date of this Agreement.

 

“*Environmental Permits*”shall have the meaning ascribed to such term in Section 4.15 of thisAgreement.

 

“*Environmental Requirements*”means all federal, state, local, and foreign statutes, regulations, andordinances concerning pollution or protection of the environment, health andsafety, including, but not limited to, all those relating to the presence, use,production, generation, handling, transportation, treatment, storage, disposal,distribution, labeling, testing, processing, discharge, release, threatenedrelease, control, or cleanup of any hazardous materials, substances, or wastes,as such requirements are enacted and in effect on or prior to the EffectiveDate.

 

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“*Equity Interests*” means,with respect to any Person, all of the units or capital stock of (or otherownership or profit interests in) such Person, all of the warrants, options orother rights for the purchase or acquisition from such Person of units orshares of capital stock of (or other ownership or profit interests in) suchPerson, all of the securities convertible into or exchangeable for units orshares of capital stock of (or other ownership or profit interests in) suchPerson or warrants, rights or options for the purchase or acquisition from suchPerson of such units or shares (or such other interests), and all of the otherownership or profit interests in such Person (including partnership, member ortrust interests therein), whether voting or nonvoting, and whether or not suchunits or shares, warrants, options, rights or other interests are outstandingon any date of determination, in each such case including all voting rights andeconomic rights related thereto.

 

“*ERISA*” meansthe Employee Retirement Income Security Act of 1974, as amended from time totime, and the regulations and published interpretations thereof.

 

“*Event of Default*”means any of the events specified in Section 8.01 of this Agreement, providedthat any requirement for the giving of notice, the lapse of time, or both, orany other condition, has been satisfied.

 

“*GAAP*” meansgenerally accepted accounting principles in the United States.

 

“*Governmental Authority*”shall mean any federal, state, county, or local governmental department,commission, board, bureau, agency, authority, instrumentality or judicial orregulatory body or entity having or asserting jurisdiction over the Borrower orany Subsidiary.

 

“*Knowledge*”means, as to any representation or warranty of the Borrower, to the knowledgeof any of the executive officers of the Borrower and/or Landmark National Bank,after due inquiry.

 

“*Landmark National Bank*”means Landmark National Bank, a national banking association.

 

“*Lien*” means anymortgage, deed of trust, pledge, security interest, hypothecation, assignment,deposit arrangement, encumbrance, lien (statutory or other), or preference,priority, or other security agreement or preferential arrangement, charge, orencumbrance of any kind or nature whatsoever (including, without limitation,any conditional sale or other title retention agreement, any financing leasehaving substantially the same economic effect as any of the foregoing, and thefiling of any financing statement under the UCC or comparable law of anyjurisdiction to evidence any of the foregoing).

 

“*Loans*” shallhave the meaning ascribed thereto in Section 2.01.

 

“*Loan Documents*”means, collectively, this Agreement, the Revolving Note, the Pledge Agreement(including the Stock Transfer Power and Assignment delivered in connectiontherewith), and any other instruments, filings or documents delivered inconnection with the foregoing or otherwise relating to the Loans.

 

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“*Loan Loss Reserves*” means as of the date of determinationthe amount denominated as the “loan loss reserve” or the “allowance for loanand lease losses” in the Call Report of such Person.

 

“*Loan Termination Date*”means the earliest to occur of the following: (a) November       ,2009, (b) the date the Obligations are accelerated pursuant to thisAgreement or the Revolving Note and (c) the date the Bank has received (i) noticein writing from the Borrower of the Borrower’s election to terminate thisAgreement or the Revolving Note or (ii) indefeasible payment in full ofthe Obligations.

 

“*Material Adverse Effect*” means anychange in, or effect on, or series of related changes in, or related effectson, the business of the Borrower, Landmark National Bank, or any Subsidiary, ascommonly conducted by each of them, that would have a material and adverseeffect on (a) the condition (financial or otherwise), of the Assets,liabilities, business, prospects or operations of the Borrower and itsSubsidiaries (b) the ability of the Borrower or any Subsidiary to performits obligations under the Loan Documents to which it is a party, or (c) therights or benefits available to the Bank relating to the Collateral, provided that none of the following shall alone, and not in conjunctionwith one another or other factors, be deemed to constitute a Material AdverseEffect: any adverse change, event, development, or effect arising from orrelating to (i) changes in United States generally accepted accountingprinciples, (ii) changes in laws, rules, regulations, orders, or otherbinding directives issued by any Governmental Authority or (iii) thetaking by the Borrower of any action required by this Agreement and the otheragreements contemplated hereby.

 

“*Maximum Rate*”shall have the meaning ascribed thereto in Section 9.06.

 

“*Non-Performing Assets*” means with respect to a Person, thesum of (a) Non-Performing Loans, (b) leases and other Assets forwhich payments or other obligations are past due or in default by ninety (90)days or more, (c) the total of all non-accrual leases and other Assets,and (d) all other Assets acquired by such Person through foreclosure orother realization upon collateral or rearrangement or satisfaction of Debt.

 

“*Non-Performing Loans*” means, as of any date ofdetermination, the sum of:

 

(a)           loans classified as non-accrual(regardless of whether such classification is internal or as reported to ordirected by a Bank Regulatory Authority); plus

 

(b)           loans past due by ninety (90) or moredays that are still accruing interest; plus

 

(c)           loans for which the obligee hasreduced the agreed interest rate, reduced the principal or interest obligation,applied interest payments to reduce principal, capitalized interest orotherwise renegotiated the terms of the obligation based upon the actual orasserted inability of the obligor or obligors of such loans to perform their 

 

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obligations pursuant to theagreements with the obligee prior to such modification or renegotiation.

 

“*Obligation*” or “*Obligations*” shall mean, collectively, (a) each of theobligations and covenants of Borrower under this Agreement, the PledgeAgreement, the Revolving Note, and any of the other Loan Documents, togetherwith all modifications, substitutions, extensions and renewals of each, whetherabsolute or contingent, liquidated or unliquidated, existing now or arising inthe future and (b) all present and future indebtedness and obligations ofBorrower or any of its Subsidiaries to the Bank whether direct, indirect,absolute, or contingent and whether arising by note, guaranty, overdraft, orotherwise.

 

“*Organizational Documents*” means (a) with respect to alimited liability company, the articles of organization and operatingagreement, (b) with respect to a corporation, the articles ofincorporation and bylaws, and (c) with respect to a national bank, any ofits formation or organizational documents including but not limited to anyarticles of association and bylaws.

 

*“PermittedLiens”* means (a) Liens for taxes or assessments or other governmentcharges or levies not yet due and payable, or, if due and payable, beingcontested in good faith, by appropriate proceedings for which appropriatereserves are maintained; (b) statutory liens of landlords, liens ofcarriers, warehousemen, mechanics and materialmen incurred in the ordinarycourse of business for sums not yet due and payable, or, if due and payable,being contested in good faith, by appropriate proceedings for which appropriatereserves are maintained; (c) Liens incurred or deposits made in theordinary course of business in connection with workers’ compensation,unemployment insurance and social security; (d) zoning, building codes,and other land use laws regulating the use or occupancy of real property or theactivities conducted thereon; and (e) easements, covenants, conditions,restrictions, and other similar matters affecting title to real property.

 

 “*Person*” means an individual, partnership, limited liabilitycompany, corporation, business trust, joint stock company, trust,unincorporated association, joint venture, governmental authority, or otherentity of whatever nature.

 

“*Plan*” means anypension plan which is covered by Title IV of ERISA and in respect of which theBorrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) ofERISA.

 

“*Plan Requirements*”means all federal, state, local, and foreign statutes, regulations, andordinances concerning any Plan.

 

“*Pledge Agreement*”means the Pledge Agreement executed by Borrower, dated the Effective Date,whereby Borrower pledges one hundred percent (100%) of the issued andoutstanding shares of Bank Stock and any other shares of Bank Stock acquired byBorrower to the Bank to secure the Obligations, in the form attached hereto as Exhibit “A”and incorporated herein by this reference; as the same may be amended, executedand delivered to the Bank from time to time to 

 

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reflect any acquisition of an Equity Interestin a Bank Subsidiary by Borrower following the Effective Date.

 

“*Premises*” shallhave the meaning ascribed to such term in Section 4.15.

 

“*Prime Rate*” meansa floating rate equal to the rate published as the “prime rate” from time to time in the Money Rates Section of The Wall Street Journal (or, if The Wall Street Journal ceases publishing a prime rate, the rate established by the Bank in its sole discretion from time to time as the Prime Rate).

 

“*Principal Office*”means the Bank’s office at 1620 Dodge Street, Omaha, Nebraska 68102.

 

“*Revolving Note*”shall have the meaning ascribed thereto in Section 2.04.

 

“*ROA*”**means the return on assets expressed as a percentage anddetermined by dividing Landmark National Bank’s pre-tax net income lessextraordinary and/or non-recurring items (as determined in accordance withGAAP) for such fiscal year by the total assets of Landmark National Bank as ofthe last day of such fiscal year, as reported in the most recent Call Report.

 

“*Subsidiary*”means, as to the Borrower, (a) a corporation of which shares of stockhaving ordinary voting power (other than stock having such power only by reasonof the happening of a contingency) to elect a majority of the board ofdirectors or other managers of such corporation are at the time owned, or themanagement of which is otherwise controlled, directly or indirectly through oneor more intermediaries, or both, by the Borrower; or (b) a limitedliability company of which the Borrower owns a greater than fifty percent (50%)membership interest, has the ability to elect the majority of the managers ofthe limited liability company, or the management of which is otherwisecontrolled, directly or indirectly through one or more intermediaries, or both,by the Borrower; or (c) any partnership or other entity of which theBorrower owns a greater than fifty percent (50%) interest or the management ofwhich is controlled, directly or indirectly through one or more intermediaries,or both, by the Borrower; or (d) any Bank Subsidiary.  Subsidiary as to the Borrower shall includeLandmark National Bank or any other Subsidiary that is permitted to be formedin accordance with the terms of this Agreement.

 

“*Tier 1 Capital*”means, at any time, for any Person on any date, the amount, for such Person onsuch date, of its consolidated “Tier 1 capital” within the meaning given tosuch term in the applicable regulations or other Applicable Law of anyGovernmental Authority having authority as such regulations are applicable tosuch Person.

 

“*Tier 1 Risk Based CapitalRatio*” shall mean Tier 1 Risk Based Capital Ratio as currentlydefined in the Call Reports.

 

“*Total Capital*” means, at any time, for any Person on anydate, the amount, for such Person on such date, of its consolidated “totalcapital” within the meaning given to such term in the 

 

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applicableregulations or other Applicable Law of any Governmental Authority havingauthority as such regulations are applicable to such Person.

 

“*UCC*”means the Uniform Commercial Code of the State of Nebraska, as amended fromtime to time.

 

**Section 1.02.  Accounting Terms and Regulatory Terms.**  All accounting terms not specifically definedherein shall be construed in accordance with GAAP consistent with those appliedin the preparation of the financial statements of the Borrower pursuant to theterms and provisions hereof, and all financial data submitted pursuant to thisAgreement shall be prepared in accordance with such principles.  All regulatory terms not specifically definedherein shall be construed in accordance with the rules and regulations ofany applicable Governmental Authority.

 

**ARTICLEII**

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**AMOUNTAND TERMS OF THE LOANS**

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**Section 2.01.  Revolving Credit.**  The Bank agrees on the terms and conditionshereinafter set forth, to make loans (the “Loans”) to the Borrower from time totime during the period from the Effective Date of this Agreement up to, but notincluding, the Loan Termination Date in an aggregate principal amount not toexceed at any time outstanding Nine Million and No/100ths Dollars($9,000,000.00) (the “Commitment”) upon delivery by the Borrower to the Bank ofa telephonic or written borrowing request relating thereto in a form reasonablyacceptable to the Bank pursuant to the terms and provisions of thisAgreement.  Within the limits of theCommitment, the Borrower may borrow, prepay and reborrow under this Section 2.01.  The Bank’s obligation to make Loans hereundershall be subject to the Borrower’s satisfaction of the ConditionsPrecedent.  It is the intention of theparties that the outstanding balance of the Revolving Note shall not exceed theCommitment, and if at any time said balance exceeds the Commitment, theBorrower shall forthwith pay the Bank sufficient funds to reduce the balance ofthe Revolving Note until it is in compliance with this requirement.  The Borrower may elect to terminate theRevolving Note at any time, without penalty, upon written notice to theBank.  In the event the Borrower soelects to terminate the Revolving Note, the aggregate principal amount of theRevolving Note outstanding, together with any accrued and unpaid interestthereon, as well as any other amounts due the Bank pursuant to any of the otherLoan Documents, shall be due and payable to the Bank on the date of suchelection, if not sooner paid and the Revolving Note shall be deemed for allpurposes terminated and the Bank shall have no further or additional obligationto loan funds to the Borrower pursuant to the terms and provisions of thisAgreement.

 

**Section 2.02.** **Notice and Manner ofBorrowing.**  Upon receipt bythe Bank from the Borrower of a telephonic or written borrowing request (whichnotice shall be irrevocable once given), in a form reasonably acceptable to theBank, for a Loan not later than 2:00 P.M. (Central Time) on the dateBorrower is requesting such Loan (which must be a Business Day), providedBorrower has fulfilled or complied with the applicable Conditions Precedent,the Bank will make 

 

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such Loan available to theBorrower in immediately available funds by crediting the amount thereof to theBorrower’s deposit account with the Bank.

 

**Section 2.03.**  **Interest.**  The Borrower shall pay interest to the Bankon the outstanding and unpaid principal amount of the Loans made hereunder at arate per annum equal to the Prime Rate, adjusted on a daily basis, minus twentyfive (25) basis points, prior to acceleration or maturity.  Interest shall be calculated on the basis ofa year of three hundred sixty (360) days for the actual number of dayselapsed.  All accrued and unpaid interestrelating to the activity for the preceding calendar quarter shall be paid inimmediately available funds on the first day of each calendar quarter(commencing January 1, 2009 and on every January 1, April 1, July 1,and October 1, thereafter).  Allpayments of principal and interest made hereunder, whether during the termhereof or upon the stated maturity of the Loans, shall be made at the PrincipalOffice.  Following and during thecontinuation of an Event of Default, any principal amount and accrued, butunpaid interest shall bear interest at a rate per annum equal at all times tothe Prime Rate, in effect from time to time, plus six hundred (600) basispoints.

 

**Section 2.04.  Note.**  All Loans made by the Bank under thisAgreement shall be evidenced by, and repaid with interest in accordance with,the Revolving Note in the form attached hereto as Exhibit “B” andincorporated herein by this reference (the “Revolving Note”). The Borrowerhereby authorizes the Bank to maintain an electronic ledger of alldisbursements to the Borrower under the Revolving Note and this Agreement andany payments of the principal amount under the Revolving Note, accrued butunpaid interest, and other charges due under the Revolving Note or thisAgreement, which notations on such electronic ledger shall, in the absence ofmanifest error or mutual agreement among the parties, be conclusive; provided,however, that the failure to make any such notation shall not limit orotherwise affect the obligations of the Borrower under the Revolving Note orthis Agreement.

 

**Section 2.05.  Method of Payment.**  The Borrower shall make each payment underthis Agreement and under the Revolving Note not later than 2:00 P.M.(Central Time) on the date when due in lawful money of the United States to theBank at its Principal Office in immediately available funds.  The Borrower hereby authorizes the Bank, ifand to the extent Bank receives a telephonic request from an officer orAuthorized Person to take such action, to charge from time to time against anyaccount of the Borrower with the Bank any amount requested.  Whenever any payment to be made under thisAgreement or under the Revolving Note shall be stated to be due on a day otherthan a Business Day, such payment shall be made on the next succeeding BusinessDay, and such extension of time shall in such case be included in thecomputation of the payment of interest.

 

**Section 2.06.  Reimbursement of the Bank or Payment byBorrower.**  The Borrower shall pay all costs associatedwith the negotiation and preparation of the Loan Documents and transactionscontemplated by this Agreement that are incurred prior to, on or immediatelyfollowing the Effective Date, including, but not limited to, the out-of-pocketcosts associated with the Bank’s due diligence, and such other reasonableout-of-pocket costs and expenses incurred by the Bank relating to thetransactions described in this Agreement, provided, however, 

 

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the Borrower shall not be obligated to pay orreimburse the Bank for the Bank’s legal fees associated with the negotiationand preparation of the Loan Documents.

 

**Section 2.07.  Use of Proceeds.**  The proceeds of the Loans hereunder shall beused by the Borrower to (i) repay the outstanding principal and accruedinterest balances due the Bank with respect to that certain operating line ofcredit in the amount of Nine Million and No/100ths Dollars ($9,000,000.00)evidenced by the Loan Agreement dated as of April 1, 2004 by and betweenthe Borrower and the Bank, and the Documents, as such term is defined therein, (ii) financethe operational needs of Borrower and the Subsidiaries and (iii) otherwisefor working capital and general company or corporate purposes of the Borrowerand the Subsidiaries.  Borrower will not,directly or indirectly, use any part of such proceeds for any other purpose orpurposes, including the purpose of purchasing or carrying any margin stockwithin the meaning of Regulation U of the Board or to extend credit to anyPerson for the purpose of purchasing or carrying any such margin stock, or forany purpose which violates, or is inconsistent with, Regulation X of the Board.

 

**ARTICLEIII**

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**CONDITIONSPRECEDENT**

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**Section 3.01.  Condition Precedent to Loans.**  The obligation of the Bank to make anyadvances hereunder (the initial advance as well as any subsequent advances) tothe Borrower pursuant to the Commitment is subject to the following conditionsprecedent (collectively, the “Conditions Precedent”):

 

(a)           **Closing Documents to beProvided.**  That the Bank shallhave received, or waived in writing the obligation to receive, on or before theEffective Date each of the following, in form and substance satisfactory to theBank and its counsel:

 

(1)   ThisAgreement duly executed on behalf of the Borrower;

 

(2)   TheRevolving Note duly executed by the Borrower;

 

(3)   The PledgeAgreement duly executed on behalf of Borrower; together with (i) a Stock Transfer Power and Assignmentduly executed in blank for the benefit of the Bank, to which is attached theoriginal of each stock certificate evidencing the Bank Stock; (ii) acknowledgmentcopies of the financing statements duly filed under the Uniform Commercial Codeof all jurisdictions necessary or, in the opinion of the Bank, desirable toperfect the security interest created by the Pledge Agreement; and (iii) certifiedcopies of Requests for Copies or Information (Form UCC-11) identifying allof the financing statements on file with respect to the Borrower in alljurisdictions referred to under (ii), including the financing statements filedby the Bank against the Borrower, indicating that no Person or entity claims aninterest in any of the Collateral, except for the Bank;

 

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(4)   Certified(as of the Effective Date) copies of the resolutions of the respective Boardsof Directors, authorizing the execution, delivery, and performance of the LoanDocuments to which it is a party and each other document to be deliveredpursuant to this Agreement;

 

(5)   Acertificate (dated as of the Effective Date) of the Secretary, or such otherofficer (acceptable to the Bank), as the case may be, of the Borrower and ofLandmark National Bank certifying the names and true signatures of the AuthorizedPerson(s) of the Borrower and of Landmark National Bank respectively,authorized to sign the Loan Documents to which it is a party and the otherdocuments to be delivered by the Borrower and Landmark National Bank under thisAgreement;

 

(6)   Certificate(dated as of the date of this Agreement) of an Authorized Person of theBorrower certifying a copy of the Borrower’s Organizational Documents, and anyamendments, if applicable;

 

(7)   Certificate(dated as of the date of this Agreement) of an Authorized Person of LandmarkNational Bank certifying a copy of Landmark National Bank’s OrganizationalDocuments, and any amendments, if applicable; and

 

(8)   Acertificate of good standing for the Borrower from the Secretary of State ofDelaware.

 

(b)           **Additional ConditionsPrecedent.**

 

(1)   Thefollowing statements shall be true and the Bank shall have received acertificate signed by an Authorized Person dated the date of such Loan, statingthat:

 

(i)  The Conditions Precedent containedin Section 3.01 of this Agreement have been complied with by the Borrowerand each Subsidiary in all respects;

 

(ii)  The representations and warranties contained in Article IVof this Agreement and in the Pledge Agreement, are true and correct on and asof the date of such Loan as though made on and as of such date, instead of theEffective Date;

 

(iii)  The proceeds from the Loan shall be used solely for thepurposes stated in Section 2.07; and

 

(iv)  No Default or Event of Default has occurred and iscontinuing, or would result from such Loan; and

 

(2)   TheBank shall have received such other documents as the Bank may reasonablyrequest.

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**ARTICLEIV**

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**REPRESENTATIONSAND WARRANTIES**

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The Borrower represents and warrants to the Bank asfollows:

 

**Section 4.01.  Organization, Good Standing, and DueQualification.**  The Borrowerand each Subsidiary are duly organized, validly existing, and in good standingunder the laws of their respective states or jurisdictions of formation; havethe power and authority to own their Assets and to transact the business inwhich they are now engaged or proposed to be engaged in; and are duly qualifiedand in good standing under the laws of each other jurisdiction in which suchqualification is required.

 

**Section 4.02.  Power and Authority.**  The execution, delivery, and performance bythe Borrower of each of the Loan Documents, have been duly authorized by allnecessary action and do not and will not (a) require any consent orapproval which has not previously been obtained; (b) contravene Borrower’sOrganizational Documents as amended from time to time or Landmark National Bank’sOrganizational Documents as amended from time to time; (c) violate anyprovision of any law, rule, regulation (including, without limitation,Regulations U and X of the Board), order, writ, judgment, injunction, decree,determination, or award presently in effect having applicability to theBorrower or any Subsidiary; (d) result in a breach of or constitute adefault under any indenture or loan or credit agreement or any other materialagreement, lease, or instrument to which the Borrower or its Subsidiary is aparty or by which it or its properties may be bound or affected; or (e) resultin, or require, the creation or imposition of any Lien, upon or with respect toany of the properties now owned or hereafter acquired by the Borrower or anySubsidiary (except in favor of the Bank).

 

**Section 4.03.  Legally Enforceable Agreement.**  This Agreement is, and each of the other LoanDocuments, when delivered under this Agreement will be, legal, valid, andbinding obligations of the Borrower, and enforceable against the Borrower inaccordance with their respective terms, except to the extent that suchenforcement may be limited by applicable bankruptcy, insolvency, and othersimilar laws affecting creditors’ rights generally.

 

**Section 4.04.  Provided Information.**  No information, exhibit, or report furnishedby the Borrower or any Subsidiary to the Bank in connection with thenegotiation of this Agreement contained any material misstatement of fact oromitted to state a material fact or any fact necessary to make the statementcontained therein not materially misleading.

 

**Section 4.05.  Labor Disputes and Acts of God.**  Neither the business nor the properties ofthe Borrower or any Subsidiary are affected by any fire, explosion, accident,strike, lockout or other labor dispute, drought, storm, hail, earthquake,embargo, act of God or of the public enemy, or other casualty (whether or notcovered by insurance) adversely affecting such business properties or theoperation of the Borrower or any Subsidiary.

 

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**Section 4.06.  Other Agreements.**  The Borrower is not a party to any indenture,loan, or credit agreement, or to any lease or other agreement or instrument, orsubject to any charter or restriction which could have a Material AdverseEffect on the business, Assets, operations, or conditions, financial orotherwise, of the Borrower, or on the ability of the Borrower to carry out itsobligations under the Loan Documents to which it is a party.  The Borrower is not in default in any respectin the performance, observance, or fulfillment of any of the obligations, covenants,or conditions contained in any agreement or instrument material to its businessor to which it is a party.

 

**Section 4.07.  Litigation.**  There is no pending or, to Borrower’sKnowledge, threatened action or proceeding against or affecting the Borrower orany Subsidiaries before any court, Governmental Authority, or arbitrator whichmay, in any one case or in the aggregate, have a Material Adverse Effect.

 

**Section 4.08.  No Defaults on Outstanding Judgments orOrders.**  Neither the Borrower nor anySubsidiary is in default with respect to any judgment, writ, injunction,decree, rule, or regulation of any court, arbitrator, or federal, state,municipal, or other Governmental Authority, commission, board, bureau, agencyor instrumentality, domestic or foreign except where such default would nothave a Material Adverse Effect.

 

**Section 4.09.  Ownership and Liens.**  The Borrower and each Subsidiary have titleto, or valid leasehold interests in, all of the Assets, real and personal(other than any Assets disposed of in the ordinary course of business) used inthe operation of their respective businesses, and none of the properties andAssets owned by the Borrower or any Subsidiary and none of their leaseholdinterests is subject to any Lien, except for Liens in favor of the Bank andsuch as may be permitted pursuant to Section 6.01 of this Agreement.

 

**Section 4.10.  Subsidiaries.**  The Borrower has no Subsidiaries other thanLandmark National Bank, Landmark Capital Trust I, and Landmark Capital TrustII.  All equity ownership interests ofeach Subsidiary have been validly issued, are fully paid andnonassessable.  All of the shares ofLandmark National Bank are wholly owned by the Borrower free and clear of allLiens, except for Liens in favor of the Bank. All of the common shares of Landmark Capital Trust I, and LandmarkCapital Trust II are wholly owned by the Borrower free and clear of all Liens,except for Liens in favor of the Bank.

 

**Section 4.11.  ERISA. **The Borrower and each Subsidiary are in compliance in all materialrespects with all Plan Requirements.

 

**Section 4.12.  Operation of Business. **The Borrower and itsSubsidiaries possess all licenses, permits, franchises, patents, copyrights,trademarks, and trade names, or rights thereto, to conduct their respectivebusinesses as now conducted and as presently proposed to be conducted, andneither the Borrower nor its Subsidiaries are in violation in any respect ofany valid rights of others with respect to any of the foregoing, except wheresuch failure(s) or violation(s) would not, or could not reasonably beexpected to, individually or in the aggregate, have a Material Adverse Effect.

 

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**Section 4.13.  Taxes.**  The Borrower and each of its Subsidiarieshave filed all tax returns (federal, state, and local) required to be filed andhave paid all taxes, assessments, and governmental charges and levies thereonto be due, including interest and penalties or have filed appropriateextensions or contested such taxes, in each case by appropriate proceedings andwith reserves established in accordance with GAAP.

 

**Section 4.14.  Debt.**  Neither the Borrower nor any of itsSubsidiaries have any credit agreements, indentures, purchase agreements,guaranties, Capital Leases, and other investments, agreements, and arrangementsin effect on the Effective Date providing for or relating to extensions ofcredit (including agreements and arrangements for the issuance of letters ofcredit or for acceptance financing) in respect of which the Borrower or anySubsidiary is in any manner directly or contingently obligated, excluding (i) debtincurred in the normal course of banking business by the Borrower from theFederal Home Loan Bank, (ii) trust preferred debt of the Borrower or itsSubsidiaries, (iii) other debt of the Borrower to the Bank, and (iv) contingentliquidity lines of credit incurred in the ordinary course of banking businessby the Borrower from a third party lender.

 

**Section 4.15.  Environment.**  The Borrower and each Subsidiary have dulycomplied with, and their businesses, operations, Assets, equipment, property,leaseholds, or other facilities are in compliance, with all materialEnvironmental Requirements. The Borrower and each Subsidiary have been issuedand will maintain in all material respects all required federal, state, andlocal permits, licenses, certificates, and approvals relating to (a) airemissions; (b) discharges to surface water or groundwater; (c) noiseemissions; (d) solid or liquid waste disposal; (e) the use,generation, storage, transportation, or disposal of toxic or hazardoussubstances or wastes (intended hereby and hereafter to include any and all suchmaterials listed in any federal, state, or local law, code or ordinance and allrules and regulations promulgated thereunder as hazardous or potentiallyhazardous); or (f) other environmental, health, or safety matters(collectively, the “Environmental Permits”). Except in accordance with a valid Environmental Permit, to the Borrower’sKnowledge, there has been no emission, spill, release, or discharge into orupon (a) the air; (b) soils; or any improvements located thereon; (c) surfacewater or groundwater; or (d) the sewer, septic system or waste treatment,storage or disposal system servicing any real property, building or other improvementowned or leased by the Borrower or any Subsidiary (collectively, the “Premises”)of any toxic or hazardous substances or wastes at or from the Premises; andaccordingly, to the Borrower’s Knowledge, the Premises are free of all suchtoxic or hazardous substances or wastes. To the Borrower’s Knowledge, there hasbeen no complaint, order, directive, claim, citation, or notice in writing byany Governmental Authority or any person or entity with respect to (a) airemissions; (b) spills, releases or discharges to soils or improvementslocated thereon, surface water, groundwater or the sewer, septic system orwaste treatment, storage or disposal systems servicing the Premises; (c) noiseemissions; (d) solid or liquid waste disposal; (e) the use, generation,storage, transportation, or disposal of toxic or hazardous substances or waste;or (f) other environmental, health, or safety matters against the Borroweror its business, operations, Assets, equipment, property, leaseholds, or otherfacilities.

 

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**Section 4.16.  Fictitious Business Names. **Borrower does not do and hasnot done business during the past five (5) years under any corporate name,trade name, or fictitious name other than “Landmark Bancorp, Inc.”

 

**Section 4.17.  Corporate Structure.**  Borrower owns one hundred percent (100%) ofthe issued and outstanding shares of Landmark National Bank and no other Personhas any right to acquire any Bank Stock or other Equity Interest in LandmarkNational Bank.

 

**Section 4.18.  Financial Statements. **The financial statements ofBorrower and each Subsidiary, provided to the Bank are complete and correct andfairly present the financial condition of the Borrower and each Subsidiary asat such dates and the results of the operations of the Borrower and eachSubsidiary for the periods covered by such statements, all in accordance withGAAP, and as of the date of this Agreement there has been no Material AdverseEffect.

 

**Section 4.19.  Bank Holding Company. **The Borrower has compliedwith all Applicable Laws pertaining to bank holding companies, includingwithout limitation the Bank Holding Company Act of 1956, as amended, and thereare no conditions precedent or subsequent to its engaging in the business ofbeing a registered bank holding company.

 

**Section 4.20.  FDIC Insurance. **The deposits of each BankSubsidiary are insured by the FDIC to the extent permitted by Applicable Lawand no act has occurred which would adversely affect the status of any BankSubsidiary as an FDIC insured bank.

 

**Section 4.21.  Director Qualifying Shares. **None of the members of theboard of directors of the Borrower or any Subsidiary own shares of stock in theBorrower or such Subsidiary held merely due to the fact that such individual isa member of such board of directors.

 

**ARTICLEV**

** **

**BORROWER’SAFFIRMATIVE COVENANTS**

** **

At all times that any amounts are outstandingunder the Revolving Note, this Agreement or any of the other Loan Documents orthe Bank shall have any Commitment under this Agreement, unless the Bank shallotherwise agree in writing, the Borrower will:

 

**Section 5.01.  Maintenance of Existence.**  Preserve and maintain, and cause each of itsSubsidiaries to preserve and maintain, its corporate/organizational existenceand good standing in the jurisdiction of its incorporation/organization, andqualify and remain qualified, and cause each of its Subsidiaries to qualify andremain qualified, as a foreign corporation/limited liability company in eachjurisdiction in which such qualification is required, except where the failureto be qualified and in good standing would not have a Material Adverse Effecton such Borrower or Subsidiaries.

 

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**Section 5.02.  Maintenance of Records.**  Keep, and cause each of its Subsidiaries tokeep, adequate records and books of account, in which complete entries will bemade in accordance with GAAP consistently applied, reflecting all financialtransactions of the Borrower or any Subsidiaries or if required by anyGovernmental Authority, adequate records and books of account, in accordancewith Applicable Law.

 

**Section 5.03.  Maintenance of Assets.**  Maintain, keep, and preserve, and cause eachSubsidiary to maintain, keep, and preserve, all of its Assets (tangible andintangible) necessary or useful in the proper conduct of its business in goodworking order and condition, ordinary wear and tear excepted.

 

**Section 5.04.  Conduct of Business.**  Continue, and cause each Subsidiary tocontinue, to engage in a business of the same general type as conducted orplanned to be conducted by it on the date of this Agreement.

 

**Section 5.05.  Maintenance of Insurance.**  Maintain, and cause each Subsidiary tomaintain, insurance with financially sound and reputable insurance companies orassociations in such amounts and covering such risks as are usually carried bycompanies engaged in the same or a similar business and similarly situated,which insurance may provide for reasonable deductibility from coverage thereofand shall reflect the Bank as an additional named insured or additional losspayee thereunder.

 

**Section 5.06.  Compliance With Laws.**  Comply, and cause each Subsidiary to comply,in all material respects with all Applicable Laws relating to the operation ofits business, including but not limited to all Environmental Requirements andPlan Requirements.

 

**Section 5.07.  Right of Inspection.**  To the extent permitted by applicable law, atany reasonable time and from time to time, permit the Bank or any agent orrepresentative thereof to examine and make copies of and abstracts from therecords and books of account of, and visit the properties of, the Borrower andany Subsidiary, and to discuss the affairs, finances, and accounts of theBorrower and any Subsidiary with any of their respective officers, directors,employees and independent accountants.

 

**Section 5.08.  Reporting Requirements.**  Furnish or cause to be furnished to the Bank,in a form and substance satisfactory to the Bank and at the Borrower’s solecost and expense:

 

(a)           Promptly upon the filing thereof with the applicable BankRegulatory Authority (but in no event more than forty five (45) days after theend of each calendar quarter), a copy of the Call Report for the Borrower;

 

(b)           Promptly upon the filing thereof with the applicable BankRegulatory Authority (but in no event more than forty five (45) days after theend of each calendar quarter), a copy of the Call Report for each BankSubsidiary of Borrower;

 

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(c)           Promptly upon the filing thereof with the Securities andExchange Commission (but in no event more than forty-five (45) days after theend of each fiscal quarter), a copy of each signed Quarterly Report on Form 10-Qof the Borrower.  Such report shallinclude the Borrower’s quarterly financial statements, including but notlimited to consolidated balance sheets of the Borrower as of the end of suchfiscal quarter and consolidated statements of income and retained earnings ofthe Borrower for the period commencing at the end of the previous fiscal yearand ending with the end of such fiscal quarter, all in reasonable detail andstating in comparative form the respective figures for the corresponding dateand period in the previous fiscal year and all prepared in accordance with GAAPconsistently applied and certified by the President of the Borrower to fairlypresent the financial condition of the Borrower (subject to year-endadjustments);

 

(d)           Promptly upon the filing thereof withthe Securities and Exchange Commission (but in no event more than one hundredtwenty (120) days after the end of each fiscal year), a copy of each signedAnnual Report on Form 10-K of the Borrower.  Such report shall include the Borrower’sannual financial statements (including therein consolidated balancesheets and statements of income, retained earnings and cash flows of theBorrower as at the end of such fiscal year) prepared in accordance with GAAP consistently appliedand audited by KPMG (or such other independent public accountants acceptable tothe Bank) and certified by the President of the Borrower to fairly present thefinancial condition of the Borrower and the Subsidiaries, together with acomparison with the financial statements for the previous fiscal year;

 

(e)           As soon as available but in no eventlater than ninety (90) days after the end of each fiscal year, a copy of theAnnual Report of Bank Holding Company (FRY-6) of the Borrower required to befiled with the Federal Reserve Bank in the applicable Federal Reserve District;

 

(f)            As soon as available and in any event within forty-five(45) days after the end of each fiscal quarter of Borrower (other than thefiscal quarter ending at the end of the fiscal year) of each year during whichany amount is outstanding under the Revolving Loan or in the event theCommitment remains effective, a Quarterly Compliance Certificate, in the formattached hereto as Exhibit “C” and incorporated herein by this reference,as of such date confirming compliance by the Borrower with all of thecovenants, conditions, and undertakings of the Borrower under or pursuant tothis Agreement together with a certificate of the chief financial officer ofthe Borrower certifying that to the best of the chief financial officer’sKnowledge no Default or Event of Default has occurred and is continuing or, ifa Default or Event of Default has occurred and is continuing, a statement as tothe nature thereof and the action which is proposed to be taken with respectthereto;

 

(g)           As soon as available and in any event within one hundredtwenty (120) days after the end of each fiscal year of the Borrower, an AnnualCompliance Certificate, in the form attached hereto as Exhibit “D” andincorporated herein by this reference, as of the end of such fiscal yearconfirming compliance by the Borrower with all of the covenants, conditions,and undertakings of the Borrower under or pursuant to this Agreement togetherwith a 

 

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certificateof the chief financial officer of the Borrower certifying that to the best ofthe chief financial officer’s Knowledge no Default or Event of Default hasoccurred and is continuing or, if a Default or Event of Default has occurredand is continuing, a statement as to the nature thereof and the action which isproposed to be taken with respect thereto;

 

(h)           To the extent permitted by applicable law, promptly afterthe Borrower has been served with notice thereof, notice of all actions, suits,and proceedings before any court or Governmental Authority, affecting theBorrower or any Subsidiary, which, if determined adversely to the Borrower orsuch Subsidiary, could have a Material Adverse Effect;

 

(i)            As soon as possible and in any event within five (5) daysafter Borrower becoming aware of the occurrence of each Default or Event ofDefault, a written notice setting forth the details of such Default or Event ofDefault and the action which is proposed to be taken by the Borrower withrespect thereto;

 

 (j)           Tothe extent permitted by applicable law, promptly after the sending or filingthereof, copies of all proxy statements, financial statements, and reportswhich the Borrower or any Subsidiary sends to its stockholders, and copies ofall regular, periodic, and special reports, and statements which the Borroweror any Subsidiary files with any Governmental Authority; and

 

(k)           Such other information respecting the condition oroperations, financial or otherwise, of the Borrower or any Subsidiary as theBank may from time to time reasonably request.

 

**Section 5.09.**  **Lending Limits.**  The Borrower shall cause each of its BankSubsidiaries to comply with all Applicable Laws pertaining to the making ofloans, including, without limitation, lending limit laws. In addition, forpurposes of this Agreement, it is agreed that in determining whether its BankSubsidiary is in compliance with lending limits, the rules set forth in 12C.F.R. §32.5 (combining loans to separate borrowers) shall apply unless itsBank Subsidiary is subject to more stringent rules under the laws orregulations otherwise applicable to them.

 

**Section 5.10.  Other DebtSubordinated.**  Except withrespect to any Lien existing as of the Effective Date and reflected on Exhibit Eattached hereto and incorporated herein by this reference, all Debt incurred bythe Borrower, or security interests granted in the Assets of, the Borrower,other than loans from, and security interests granted to, the Bank, will beformally subordinated to the Loan.

 

**Section 5.11.  Environment.**  Be and remain, and cause each Subsidiary tobe and remain, in compliance in all respects with all EnvironmentalRequirements; notify the Bank immediately of any written notice of a hazardousdischarge or environmental complaint received from any Governmental Authority orany other party; notify the Bank promptly after Borrower becoming aware of anyhazardous discharge from or affecting its Premises; immediately contain andremove the same, in compliance with all Applicable Laws; promptly pay or bondaround any fine or penalty assessed in connection therewith; and, upon Borrower’sor Bank’s receipt of notice or 

 

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otherwise becoming aware ofany noncompliance by Borrower with an Environmental Requirement, any noticefrom any Governmental Authority of any noncompliance with an EnvironmentalRequirement, any hazardous discharge or environmental compliant, or anycondition or event that could give rise to any of the foregoing with respect toany of Borrower’s assets, Borrower shall (i) permit the Bank, at theBorrower’s sole cost and expense, to inspect the Premises, to conduct teststhereon, and to inspect all books, correspondence, and records pertainingthereto, and (ii) at the Bank’s request, and at the Borrower’s sole cost andexpense, provide a report of a qualified environmental engineer, satisfactoryin scope, form, and content to the Bank, and such other and further assurancesreasonably satisfactory to the Bank that the condition has been corrected.

 

**ARTICLEVI**

** **

**NEGATIVECOVENANTS**

** **

At all times that any amounts are outstandingunder the Revolving Note, this Agreement or any of the other Loan Documents orthe Bank shall have any Commitment under this Agreement, unless the Bank shallotherwise agree in writing, the Borrower will not or allow any Subsidiary to:

 

**Section 6.01.  Liens.**   Create, incur, assume, or suffer to exist,or permit Landmark National Bank (other than in the ordinary course of itsbanking business, including Liens in favor of the Federal Reserve Bank) to create,incur, assume, or suffer to exist, any Lien upon or with respect to any of itsAssets, now owned or hereafter acquired, except (a) Liens in favor of theBank, (b) Liens securing Debt outstanding as of the Effective Date to theextent such Liens are reflected on Exhibit “E,” (c) Permitted Liens,and (d) Liens securing contingent liquidity lines of credit incurred inthe ordinary course of banking business by the Borrower from a third partylender existing as of the Effective Date so long as such Liens do not in anyway encumber, or otherwise create or result in any Lien upon, the Collateral.

 

**Section ****6****.02.  Debt.**  Create, incur, assume, or suffer to exist, orpermit any Subsidiary (other than any Bank Subsidiary, including LandmarkNational Bank, and only in the ordinary course of its banking business) tocreate, incur, assume, or suffer to exist, any Debt, except (a) Debt ofthe Borrower under this Agreement and the Revolving Note, (b) Debtconsisting of trade payables incurred in the ordinary course of business, (c) Debtoutstanding as of the Effective Date to the extent reflected on Exhibit “E,”and (d) contingent liquidity lines of credit incurred in the ordinarycourse of banking business by the Borrower from a third party lender existingas of the Effective Date.

 

**Section 6.03.  Mergers, Etc.**  (a) Wind up, liquidate or dissolveitself, reorganize, merge or consolidate with or into, or convey, sell, assign,transfer, lease, or otherwise dispose of (whether in one transaction or in aseries of transactions) all or substantially all of its Assets (whether nowowned or hereafter acquired) to any Person, or (b) acquire all orsubstantially all of the Assets or the business of any Person, or cause orpermit any Subsidiary to do so.

 

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**Section 6.04.  Formation of Additional Subsidiaries. **Form or acquire anySubsidiary, other than Landmark National Bank, Landmark Capital Trust I andLandmark Capital Trust II, without the Bank’s prior written consent which maynot be unreasonably withheld.

 

**Section 6.05.  Sale of Assets.**  Sell, lease, assign, transfer, or otherwisedispose of, or permit any Subsidiary to sell, lease, assign, transfer, orotherwise dispose of, any of its now owned or hereafter acquired Assets inexcess of Five Hundred Thousand Dollars ($500,000.00) in the aggregate withoutthe prior written consent of the Bank, which will not be unreasonably withheld(including, without limitation, shares of stock and indebtedness ofSubsidiaries, receivables, and leasehold interests), without the Bank’s priorwritten consent which may be withheld in its sole discretion, except: (a) inventorydisposed of in the ordinary course of business; and (b) the sale or otherdisposition of Assets no longer used or useful in the conduct of its business.

 

**Section 6.06.  Transactions With Affiliates.** Enter into any transaction, including, withoutlimitation, the purchase, sale, or exchange of property or the rendering of anyservice, with any Affiliate, or permit any Subsidiary to enter into anytransaction, including, without limitation, the purchase, sale, or exchange ofproperty or the rendering of any service, with any Affiliate, except in theordinary course of and pursuant to the reasonable requirements of the Borrower’sor such Subsidiary’s business and upon fair and reasonable terms no lessfavorable to the Borrower or such Subsidiary than would be obtained in acomparable arm’s-length transaction with a Person not an Affiliate.

 

**Section 6.07.  Capital Expenditures. **Make any expenditures forfixed or capital Assets if, after giving effect thereto, the aggregate of allsuch expenditures made by the Borrower and each of the Subsidiaries wouldexceed Two Million and No/100ths Dollars ($2,000,000.00) during any fiscal yearof Borrower, other than capital expenditures associated with the constructionof a branch bank in Lawrence, Kansas the expenditure for which shall not exceedFour Million and No/100ths Dollars ($4,000,000.00).

 

**Section 6.08.  Issue or Sale of Stock. **Sell, or permit LandmarkNational Bank to sell any common stock of Landmark National Bank.

 

**ARTICLEVII**

** **

**FINANCIALCOVENANTS**

** **

At all times that any amounts are outstandingunder the Revolving Note, this Agreement or any of the other Loan Documents towhich the Borrower is a party, unless the Bank shall otherwise agree inwriting, the Borrower will:

 

**Section 7.01.  Maintenance of Capital and Reserves. **Cause each Bank Subsidiaryto maintain, with compliance tested as of the end of each fiscal quarter of theBorrower, unless otherwise indicated:

 

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(a)           ROA.  An ROA of noless than sixty five hundredths percent (0.65%) (to be tested at the end ofeach fiscal year, only).

 

(b)           Tier 1 Risk Based Capital Ratio.  The Tier 1 Risk Based Capital Ratio(expressed as a percentage), as stated in the most recent Call Report of suchPerson, of not less than six percent (6%).

 

(c)           Non-Performing Assets to TotalCapital Ratio.  The ratio (expressed as a percentage) of Non-Performing Assets to TotalCapital of less than twenty-five percent (25%).

 

(d)           Non-Performing Assets to Total Loans Ratio.  The ratio (expressed as a percentage) ofNon-Performing Assets to the total of all loans made by such Person of lessthan five percent (5%).

 

(e)           Loan Loss Reserves to Total Loans Ratio.  The ratio (expressed as a percentage) of LoanLoss Reserves to the total of all loans made by such Person, shall not be lessthan the lesser of (i) one percent (1%) to be measured as of March 31,2009, or (ii) the allowance amount as shall be required by Applicable Lawor Governmental Authority.

 

**ARTICLEVIII**

** **

**EVENTSOF DEFAULT**

** **

**Section ****8****.01.  Events of Default. **If any of the followingevents shall occur:

 

(a)           The Borrower should fail to pay the principal of, orinterest on, the Revolving Note or any other fee or expense, on the date whensuch amount is due and payable, and such failure is not cured within seven (7) BusinessDays after written notice to Borrower of such failure;

 

(b)           Any representation or warranty made or deemed made by theBorrower in this Agreement, the Pledge Agreement or any of the other LoanDocuments, or which is contained in any certificate, document, opinion, orfinancial or other statement furnished at any time under or in connection withany Loan Document shall prove to have been incorrect, incomplete, or misleadingin any material respect on or as of the date made or deemed made;

 

(c)           The Borrower shall fail to perform or observe any covenantor agreement, other than an obligation referenced in Section 8.01(a) above,made by the Borrower in this Agreement, the Pledge Agreement or any of theother Loan Documents, and such breach is not cured within fifteen (15) BusinessDays after written notice to Borrower of such breach;

 

(d)           The Borrower or any of its Subsidiaries shall (i) failto pay any indebtedness for borrowed money (other than the Revolving Note) ofthe Borrower or such Subsidiary, as the case may be, or any interest or premiumthereon, when due (whether by scheduled maturity, required prepayment, acceleration,demand, or otherwise); or (ii) fail to perform or observe 

 

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anyterm, covenant, or condition on its part to be performed or observed under anyagreement or instrument relating to any such indebtedness, when required to beperformed or observed, if the effect of such failure to perform or observe isto accelerate, or to permit the acceleration of, after the giving of notice orpassage of time, or both, the maturity of such indebtedness, unless suchfailure to perform or observe shall have been waived in writing by the holderof such indebtedness; or (iii) any such indebtedness shall be declared tobe due and payable, or required to be prepaid (other than by a regularlyscheduled required prepayment), prior to the stated maturity thereof;

 

(e)           The Borrower or any of its Subsidiaries (i) shallgenerally not pay, or shall be unable to pay, or shall admit in writing itsinability to pay, its Debts as such Debts become due; (ii) shall make anassignment for the benefit of creditors, or petition or apply to any tribunalfor the appointment of a custodian, receiver, or trustee for it or asubstantial part of its Assets; (iii) shall commence any proceeding underany bankruptcy, reorganization, arrangement, readjustment of Debt, dissolution,or liquidation law or statute of any jurisdiction, whether now or hereafter ineffect; (iv) shall have had any such petition or application filed or anysuch proceeding commenced against it in which an order for relief is entered oran adjudication or appointment is made, and which remains undismissed for aperiod of ten (10) days or more; (v) shall consent to, approve of, oracquiesce in any such petition, application, proceeding, or order for relief orthe appointment of a custodian, receiver, or trustee for all or any substantialpart of its properties; or (vi) shall suffer any such custodianship,receivership, or trusteeship to continue undischarged for a period of thirty(30) days or more;

 

(f)            One or more judgments, decrees, or orders for the paymentof money in excess of Two Hundred Fifty Thousand and No/100ths Dollars($250,000.00) in the aggregate shall be rendered against the Borrower or any ofits Subsidiaries and such judgments, decrees, or orders shall continue unsatisfiedand in effect for a period of thirty (30) consecutive days without beingvacated, discharged, satisfied, or stayed or bonded pending appeal;

 

(g)           The Pledge Agreement shall at any time after its executionand delivery and for any reason cease (i) to create a valid and perfectedfirst priority security interest (subject to Liens permitted under Section 6.01above) in and to the property purported to be subject to such Pledge Agreement;or (ii) to be in full force and effect or shall be declared null and void,or the validity or enforceability thereof shall be contested by the Borrower orany Subsidiary or the Borrower or any Subsidiary shall deny it has any furtherliability or obligation under the Pledge Agreement, or the Borrower or anySubsidiary shall fail to perform any of its obligations under the PledgeAgreement or any of the other Loan Documents; or

 

(h)           The occurrence of a Change in Control.

 

Then, and in any such event,the Bank may, in its sole discretion, (i) declare its Commitment to makeLoans to be terminated, whereupon the same shall forthwith terminate, and (ii) declarethe Revolving Note, all interest thereon, and all other amounts payable underthis Agreement or the Revolving Note to be forthwith due and payable, whereuponthe Revolving Note, all such 

 

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interest, and all suchamounts shall become and be forthwith due and payable, without presentment,demand, protest, or further notice of any kind, all of which are herebyexpressly waived by the Borrower, to the extent permitted by Applicable Law.

 

Upon the occurrence of anyEvent of Default, the Bank is hereby authorized at any time and from time totime, without written notice to the Borrower or any Subsidiary (any such noticebeing expressly waived by the Borrower and each Subsidiary), to set off andapply any and all deposits (general or special, time or demand, provisional orfinal) at any time held and other indebtedness at any time owing by the Bank toor for the credit or the account of the Borrower or any Subsidiary against anyand all of the Obligations of the Borrower now or hereafter existing under thisAgreement or the Revolving Note or any other Loan Document, irrespective ofwhether or not the Bank shall have made any demand under this Agreement or theRevolving Note or such other Loan Document and although such Obligations may beunmatured. The Bank agrees promptly to notify the Borrower after any suchsetoff and application, however, the parties hereto agree that the failure togive such notice shall in no way affect the validity of such setoff andapplication. The rights of the Bank under this Section 8.01 are inaddition to other rights and remedies (including, without limitation, otherrights of setoff) which the Bank may have under Applicable Law.

 

**ARTICLE IX**

** **

**MISCELLANEOUS**

** **

**Section 9****.****01.  Amendments, Etc.**  No amendment, modification, termination, orwaiver of any provision of any Loan Document, nor consent to any departure fromany provision of any of the Loan Documents, shall in any event be effectiveunless the same shall be in writing and signed by the Bank, and then suchwaiver or consent shall be effective only in the specific instance and for thespecific purpose for which given.

 

**Section 9.02.  Notices, Etc.**  Except as otherwise expressly providedherein, all notices, requests, demands and other communications provided forunder the Loan Documents shall be in writing and sent by mail or telecopy (ifby telecopy with a confirmation mailed within two (2) Business Daysthereafter), to the applicable party at its address indicated below:

 

| If to the Borrower: |   | Landmark Bancorp, Inc.  701 Poyntz Ave.  Manhattan, Kansas 66502  Attention: Mark Herpich, CFO                                  |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                 |
| If to the Bank:     |   | First National Bank of  Omaha  1620 Dodge Street  STOP 1090  Omaha, NE 68102  Attention: Natalie E. Mason  Facsimile: (402) 633-3760 |

 

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or, as to each party, at such other address as shallbe designated by such party in a written notice to the other party complying asto delivery with the terms of this Section. All such notices, requests, demands and other communications, whenmailed, shall be effective when deposited in the mails, addressed as aforesaid,or, when telefaxed, shall be effective when confirmation of receipt isreceived.

 

**Section 9.03.  No Waiver.**  No failure or delay on the part of the Bankin exercising any right, power, or remedy hereunder shall operate as a waiverthereof; nor shall any single or partial exercise of any such right, power, orremedy preclude any other or further exercise thereof or the exercise of anyother right, power, or remedy hereunder. The rights and remedies providedherein are cumulative, and are not exclusive of any other rights, powers,privileges, or remedies, now or hereafter existing, at law or in equity orotherwise.

 

**Section 9.04.  Successors and Assigns.**  This Agreement shall be binding upon andinure to the benefit of the Borrower, the Subsidiaries and the Bank and theirrespective successors and assigns, except that neither the Borrower nor any ofthe Subsidiaries may assign or transfer any of its rights or obligations underany Loan Document to which it is a party without the prior written consent ofthe Bank.

 

**Section 9.05.  Costs, Expenses, and Taxes. **The Borrower agrees to payon demand all costs and expenses incurred by the Bank in connection with theexecution, delivery, filing and administration of the Loan Documents and of anyamendment, modification, or supplement to the Loan Documents, including, withoutlimitation, the fees and out-of-pocket expenses of counsel for the Bankincurred in connection with advising the Bank as to its rights andresponsibilities hereunder. Notwithstanding anything else herein to thecontrary, the Borrower shall not be required to pay for the Bank’s attorneysfees related to the preparation of the Loan Documents.  The Borrower also agrees to pay all suchcosts and expenses, including court costs, incurred in connection withenforcement of the Loan Documents, or any amendment, modification, orsupplement thereto, whether by negotiation, legal proceedings, or otherwise. Inaddition, the Borrower shall pay any and all stamp and other taxes and feespayable or determined to be payable in connection with the execution, delivery,filing, and recording of any of the Loan Documents and the other documents tobe delivered under any such Loan Documents, and agrees to hold the Bankharmless from and against any and all liabilities with respect to or resultingfrom any delay in paying or omission to pay such taxes, fees, or expenses. Thisprovision shall survive termination of this Agreement.

 

**Section ****9.06****.  Prohibition Against Usury.**  In no event, either before or after theoccurrence of an Event of Default, shall the amount of interest due under theRevolving Note or any other Loan Document exceed the maximum, lawful, nonusurious interest rate of the State of Nebraska or any other applicable law(the “Maximum Rate”).  The Revolving Noteand the other Loan Documents are hereby expressly limited so that in no eventwhatsoever, whether by reason of acceleration or otherwise, shall the amountpaid, or agreed to be paid to the Bank for the use, forbearance or detention ofthe sums advanced to the Borrower exceed the Maximum Rate.  If fulfillment of any provisions hereof, atthe time performance of such provision shall be due, shall involve thepotential for transcending the Maximum Rate, the obligation to be fulfilledshall be 

 

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reduced to the Maximum Rate, and if from any suchcircumstance the Bank shall ever receive as interest an amount which wouldexceed the Maximum Rate, such excess shall be applied to the reduction of theprincipal amount of the Obligations and not the payment of interest, or if suchexcessive interest exceeds the unpaid balance of the principal amount of theObligations, such excess shall be refunded to the Borrower.  All sums paid and agreed to be paid to theBank for use, forbearance or detention of the indebtedness of the Borrowershall, to the extent permitted by the laws of the State of Nebraska, beamortized, prorated, allocated, and spread through the whole term of suchindebtedness so that the actual rate of interest on account of suchindebtedness is uniform throughout the term thereof.

 

**Section 9.07.  Integration.**  This Agreement and the Loan Documents containthe entire agreement between the parties relating to the subject matter hereofand supersede all oral statements and prior writings with respect thereto.

 

**Section 9.08.  Indemnity. **The Borrower and each of the Subsidiaries hereby agree to defend,indemnify, and hold the Bank harmless from and against any and all claims,damages, judgments, penalties, costs, and expenses (including attorney fees andcourt costs now or hereafter arising from the aforesaid enforcement of thisclause) arising directly or indirectly from the activities of the Borrower andits Subsidiaries, or arising directly from (i) the violation of anyEnvironmental Requirement, (ii) the violation of any Plan Requirement, or (iii) theoccurrence of any Event of Default hereunder. This indemnity shall survivetermination of this Agreement.

 

**Section 9.09.  Governing Law.**  This Agreement and the Revolving Note shallbe governed by, and construed in accordance with, the laws of the State ofNebraska without giving effect to any choice or conflict of law provision or rule (whetherof the State of Nebraska or any other jurisdiction) that would cause theapplication of the laws of any jurisdiction other than the State of Nebraska.

 

**Section 9.10.  Severability of Provisions.**  Any provision of any Loan Document which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions of such Loan Document or affecting thevalidity or enforceability of such provision in any other jurisdiction.

 

**Section 9.11.  Headings.**  Article and Section headings in theLoan Documents are included in such Loan Documents for the convenience ofreference only and shall not constitute a part of the applicable Loan Documentsfor any other purpose.

 

**Section 9.12.  **Counterpart**s.**  This Agreement may be executed in one or morecounterparts, any one of which need not contain the signatures of more than oneparty, but all such counterparts taken together will constitute one and thesame instrument.  A facsimile signaturewill be considered an original signature.

 

**Section 9.13.  Jury Trial Waiver.**  THE BANK AND THE BORROWER, BOTH ON ITS BEHALFAND ON BEHALF OF EACH OF THE SUBSIDIARIES, HEREBY WAIVE TRIAL 

 

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BY JURY IN ANY ACTION,PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR INEQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOANDOCUMENTS. NO OFFICER OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFYTHIS PROVISION.

 

**Section 9.14.  Waiver ofConsequential Damages.**  THEBANK, ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,AGENTS, REPRESENTATIVES, LEGAL COUNSEL AND CONSULTANTS SHALL NOT BE RESPONSIBLEOR LIABLE TO THE BORROWER OR ANY OTHER PERSON FOR ANY PUNITIVE, EXEMPLARY ORCONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT,ANY OF THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY, EVEN IF THEBANK OR ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,AGENTS, REPRESENTATIVES, LEGAL COUNSEL OR CONSULTANTS HAVE BEEN ADVISED ORKNEW, OR SHOULD HAVE KNOWN, OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS.

 

**Section 9.15.  Submission to Jurisdiction; Venue.**  The Borrower and any Subsidiary collectivelyor individually as the case may be, hereby submit to the jurisdiction of anystate or federal court sitting in Omaha, Nebraska, in any action or proceedingarising out of or relating to this Agreement and agree that all claims inrespect of the action or proceeding may be heard and determined in any suchcourt.  The Borrower and any Subsidiaryalso agree not to bring any action or proceeding arising out of or relating tothis Agreement in any other court.  TheBorrower and any Subsidiary waive any defense of inconvenient forum to themaintenance of any action or proceeding so brought and waives any bond, surety,or other security that might be required of the Bank.  The Borrower and any Subsidiary agree that afinal judgment in any action or proceeding so brought shall be conclusive andmay be enforced by suit on the judgment or in any other manner provided by lawor at equity.  The Borrower and anySubsidiary hereby waive any rights they may have to transfer or change thevenue of any suit, action or other proceeding brought against the Borrower bythe Bank in accordance with this Section 9.16 or in connection with thisAgreement or any other Loan Documents.

 

**Section 9.16.  Incorporation by Reference and Exhibits.**  The recitals reflected above, and eachExhibit, Loan Document or other document referred to in this Agreement, areincorporated herein by this reference. The Bank, Borrower and any Subsidiary acknowledge and agree that theExhibits attached hereto reflect the form thereof as of the date of executionof this Agreement and shall, in the reasonable discretion of the Bank, beamended from time to time or expanded to reflect the appropriate party orparties thereto, to effectuate the transactions, commitments and undertakingsprovided for herein and prior to the Effective Date, and such amended orexpanded Exhibits shall be deemed attached hereto and incorporated herein bythis reference.

 

**Section 9.17.  No Third Party Beneficiaries.**  Nothing in this Agreement, whether express orimplied, is intended or shall be construed to confer upon, either directly orindirectly, or give any Person other than the parties hereto and theirrespective successors, permitted assigns, 

 

26

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personal representatives, heirs or beneficiaries anylegal or equitable right, remedy or claim under or in respect of this Agreementor any covenant, condition or other provision contained herein.

 

**Section 9.18.  Counterparts. **This Agreement may be executed in one or more counterparts, each ofwhich shall be deemed to be an original, but which together shall constituteone and the same instrument. The signatures of the parties hereto need notappear on the same counterpart, and delivery of an executed counterpartsignature page by facsimile is as effective as executing and deliveringthis Agreement in the presence of the other parties to this Agreement. Anyparty delivering an executed counterpart of this Agreement by facsimile shallalso deliver a manually executed counterpart of this Agreement, but the failureto do so shall not affect the validity, enforceability or binding effect of thisAgreement.

 

**Section 9.19.  Credit Agreement****.**  **A CREDIT AGREEMENT MUST BEIN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT THE PARTIES HERETO FROM ANYMISUNDERSTANDING OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING, OROFFER TO FORBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIALACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OFCREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FORANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED INCONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE INWRITING TO BE EFFECTIVE.**

 

IN WITNESS WHEREOF, theparties have caused this Agreement to be executed by their respective officersthereunto duly authorized, as of the date first above written.

 
|   | “Borrower”            |
|--------|---------------------------------|
|   |                            |
|   | LANDMARK BANCORP, INC.,         |
|   | a Delaware corporation          |
|   |                            |
|   | By:                             | /s/ Mark A. Herpich |
|   | Title:                          | EVP / CFO |
|   |                            |
|   | “Bank”                |
|   |                            |
|   | FIRST  NATIONAL BANK OF OMAHA,  |
|   | a  national banking association |
|   |                            |
|   | By:                             | /s/  Natalie E. Mason |
|   |                            | Natalie  E. Mason, Vice President |

 

27

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** **

**PLEDGE AGREEMENT**

# ** **

# **THIS PLEDGE AGREEMENT (this “Agreement”)**is made and entered intoeffective as of the 19th day ofNovember, 2008, by and between LANDMARK BANCORP, INC., a Delaware corporation (the “Pledgor”), and FIRST NATIONAL BANK OFOMAHA, a national banking association (“FNB”).

# ** **

WHEREAS, the Pledgor hasentered into a Revolving Credit Agreement of even date herewith (as amended,supplemented, or otherwise modified from time to time, the “Credit Agreement”),with FNB, pursuant to which, among other things, Pledgor has undertaken certaincovenants and has executed and delivered to FNB a Revolving Note of even dateherewith payable to the order of FNB in the total principal amount of NineMillion and No/100ths Dollars ($9,000,000.00) (the “Note”), the proceeds ofwhich may be drawn upon by the Pledgor for the purposes described in the CreditAgreement, in accordance with and subject to the terms and restrictionscontained in the Credit Agreement; and

 

WHEREAS, Pledgor is the owner of one hundredpercent (100%) of the outstanding Equity Interests of Landmark National Bank, anational banking association (“Landmark Bank”), consisting of Two Million(2,000,000) shares of common stock of Landmark Bank represented by stockcertificate number(s) R3, as of the date hereof (the “Stock”); and

 

WHEREAS, under the CreditAgreement it is a condition precedent to FNB’s making of any disbursements orLoans to Pledgor that the Pledgor shall have executed and delivered thisAgreement to FNB, securing the timely performance of all of the Obligations, asdefined in the Credit Agreement, of the Pledgor under the Credit Agreement; and

 

WHEREAS, to secure the Obligations, Pledgor hasagreed to pledge to FNB, the Stock and all after-acquired Equity Interests inLandmark Bank, including, without limitation, all rights in and to all profits,proceeds and distributions of every kind and nature whatsoever due to Pledgorwith respect to such Stock, whether pursuant to the terms of the bylaws ofLandmark Bank, a shareholder agreement or other similar agreement, or otherwise(collectively, the “Pledged Stock”);****and

 

WHEREAS, in accordance with terms and provisionsof the Credit Agreement and this Agreement, Pledgor shall (i) pledge toFNB all of its right, title and interest in and to any and all stock or otherEquity Interests of Landmark Bank, including but not limited to the PledgedStock, and (ii) deliver all certificates evidencing the Pledged Stock orother Equity Interests of Landmark Bank and any and all financing statements orother documents sufficient to create a valid and perfected first prioritysecurity interest in and to the Pledged Stock or other Equity Interests infavor of FNB as additional collateral to secure repayment of Pledgor’sObligations under the Credit Agreement.

 

NOW, THEREFORE, inconsideration of the premises set forth above, and other good and valuableconsideration, the receipt and adequacy of which are hereby acknowledged, andintending to be legally bound, and in order to induce FNB to enter into theCredit Agreement and to make disbursements to Pledgor of Loans, the Pledgorhereby represents, warrants, covenants, and agrees with FNB, for FNB’s benefit,as follows:

 

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1.             Definitions: All capitalized terms used in this Agreement, including its preamble andrecitals, that are not otherwise defined herein shall have the meaning ascribedto them in the Credit Agreement.

 

2.             Security Interest:  Pledgor hereby BARGAINS, SELLS, GRANTS, CONVEYS, TRANSFERS, PLEDGES, HYPOTHECATES, and ASSIGNS to FNB for its benefit, a first priority security interest (the “Security Interest”) in the Pledged Stock, together with all increases, replacements, additions and substitutions related thereto, all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Stock and all subscription warrants, rights or options issued thereon or with respect thereto, together with, and including, all rights of Pledgor pursuant to its bylaws, any shareholder agreement or other similar agreements of Landmark Bank (collectively, the “Pledge Agreement Collateral”), to secure the complete and timely payment, performance or discharge of (i) each of the obligations and covenants of Pledgor under this Agreement, the Credit Agreement, the Note or the other Loan Documents, and all modifications, substitutions, extensions and renewals of each, whether absolute or contingent, liquidated or unliquidated, existing now or arising in the future and (ii) all present and future indebtedness and obligations of Pledgor to the Secured Parties whether direct, indirect, absolute, or contingent and whether arising by note, guaranty, overdraft, or otherwise (individually, an “Obligation” and collectively, the “Obligations”).  The Security Interest shall be effective with respect to each item of Pledge Agreement Collateral for so long as any Obligation remains outstanding or FNB has any Commitment under the Credit Agreement, regardless of whether Pledgor becomes the owner of such Pledge Agreement Collateral prior to or contemporaneously with or subsequent to the incurring of such Obligation.

 

3.             Priority of Security Interest;Financing Statements.  Pledgor herebyacknowledges and agrees that so long as this Agreement remains in force andeffect, the Security Interest granted hereunder to FNB shall be a firstperfected security interest in the Pledge Agreement Collateral. Pledgor hereby irrevocably authorizes FNB at anytime and from time to time to file in any Uniform Commercial Code jurisdictionany initial financing statements, amendments and continuations thereto, in thename of Pledgor and describing the Pledge Agreement Collateral.

 

4.             Delivery of Security Collateral.  Upon execution of this Agreement, allcertificates or instruments representing or evidencing the Pledge Agreement Collateral shall bedelivered by the Pledgor to FNB, held by FNB, in suitable form for transfer,and accompanied by a duly executed Collateral Stock Transfer and AssignmentPower in the form set forth in Exhibit “A” attached hereto andincorporated herein by this reference (the “Collateral Stock Transfer Power”).  If, at any time, Pledgor subsequently obtainspossession of any certificate(s) or instrument(s) constituting orrepresenting any of the PledgeAgreement Collateral or any other Equity Interest in Landmark Bank,Pledgor shall deliver such certificate(s) or instrument(s) to FNBforthwith, together with a Collateral Stock Transfer Power duly executed byPledgor, and the same shall be subject to the terms of this Agreement.  Subject to the terms of this Agreement,Pledgor hereby irrevocably appoints FNB as Pledgor’s attorney-in-fact (suchappointment being coupled with an interest), with power of substitution, andFNB shall have the right, upon the occurrence of an Event of Default, ashereinafter defined, or event which, with the giving of notice or the lapse oftime, or both, would become an Event of Default, at any time in its discretionand without notice to the Pledgor, to transfer to or to register in the name ofFNB, or 

 

2

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any of itsnominees, any or all of the Pledge Agreement Collateral, subject to theprovisions of Section 9 of this Agreement.

 

5.             Representations, Warranties andCovenants.  Pledgor represents,warrants and covenants with FNB that:

 

a.             The Pledged Stock constitutes allof Pledgor’s Equity Interest in Landmark Bank, and the Pledge Agreement Collateralis free and clear of all liens, encumbrances, security interests, adverseclaims and restrictions of any nature (other than those created under the termsof this Agreement). This representation and warranty shall be deemed made withrespect to each item of property that becomes Pledge Agreement Collateralafter the date hereof;

 

b.             Pledgor has obtained all consents or approvals,including but not limited to Governmental Authority consents or approvals,necessary to enter into, and effectuate the terms and provisions of thisAgreement;

 

c.             Pledgor shall, from and after thedate hereof, (i) keep the PledgeAgreement Collateral free and clear of allliens, encumbrances, security interests and restrictions, except for theSecurity Interest and liens permitted under Section 6.01 of the CreditAgreement, and (ii) maintain and preserve the Security Interest and FNB’sfirst perfected priority security interest in the Pledge Agreement Collateralso long as this Agreement shall remain in effect; and

 

d.            Following the date hereof, Pledgor will neither sell noroffer to sell nor otherwise transfer nor further pledge or encumber any portionof the Pledge Agreement Collateral (other than liens permitted under Section 6.01of the Credit Agreement); nor will Pledgor enter into any agreement whichrelates to the voting of or restricts the transfer of any of the PledgeAgreement Collateral, without the prior written consent of FNB.

 

6.             Distributions. So long as noEvent of Default, or event which, with the giving of notice or the lapse oftime, or both, would become an Event of Default, shall have occurred, thePledgor shall be entitled to receive and retain any and all distributions andinterest paid, if applicable, in respect of the Pledge Agreement Collateral,provided, however,**that:

 

a.             Pledgor shall not accept or receiveany payments with respect to the Pledge Agreement Collateral other than (i) incash, or (ii) stock splits or dividends relating to the Pledge AgreementCollateral, provided that upon any distribution permitted under this subsection(ii), such distribution shall become part of the Pledge Agreement Collateral,in accordance with, and subject to, the terms and provisions of this Agreement;or

 

b.             Pledgor shall not accept or receiveany payments of any kind in respect of Pledge Agreement Collateral or any partthereof, in connection with a partial or total liquidation or dissolution ofPledgor or Landmark Bank,

 

3

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andin the event any payments, whether or not specifically permitted hereunder, describedin items (a) through (b), including (i) and (ii) of item (a),are made, they shall be forthwith delivered to FNB to hold as part of thePledge Agreement Collateral for the benefit of FNB and shall, if received bythe Pledgor, be received in trust for the benefit of FNB, be segregated fromthe other property or funds of the Pledgor, and be forthwith delivered to FNBas part of the Pledge Agreement Collateral in the same form as so received(with any and all necessary endorsement or assignment).

 

7.             Rightsof Pledgor.  Except as otherwiseprovided herein, during the period while this Agreement remains in force and aslong as an Event of Default, or event which, with the giving of notice or thelapse of time, or both, would become an Event of Default, shall have notoccurred, Pledgor shall be entitled to exercise all rights with respect to thePledged Stock, subject to the Security Interest granted hereunder, including,but not limited to, the right to vote the Pledged Stock.

 

8.             Events of Default.  Each of the following occurrences shallconstitute an Event of Default under this Agreement (herein called “Event ofDefault”):

 

a.             The occurrence of an Event of Default under theCredit Agreement or under any of the other Loan Documents; and

 

b.             Pledgor shall hypothecate, transferor assign, or shall attempt to hypothecate, transfer or assign, the PledgeAgreement Collateral to any person or entity without FNB’s prior writtenconsent.

 

9.             RemediesUpon Event of Default.  Upon theoccurrence of an Event of Default and subject to the terms of this Agreement,

 

a.             All rights of the Pledgor toexercise or refrain from exercising its voting rights which it would otherwisebe entitled to exercise pursuant to Section 7 above and to receive thedistributions and interest payments, if applicable, which it would otherwise beauthorized to receive and retain pursuant to Section 6 shall cease, andall such rights shall thereupon become vested in FNB who shall thereupon havethe right to exercise or refrain from exercising such voting and otherconsensual rights and to receive and hold as Pledge Agreement Collateral suchdistributions and interest payments; and

 

b.             Alldistributions and interest payments, if applicable, which are received by thePledgor contrary to the provisions of paragraph a of this Section 9 shallbe received in trust for the benefit of FNB, shall be segregated from otherfunds of the Pledgor and shall be forthwith paid over to FNB as PledgeAgreement Collateralin the same form as so received (with anyand all necessary endorsement or assignment); and

 

c.             FNBmay, in connection with the exercise of its foreclosure rights under ApplicableLaw and to the extent permitted thereunder, as the attorney-in-fact for thePledgor, transfer all of the Pledgor’s right, title and interest in and to thePledged Stock to FNB thereby terminating any and all right, title and interestof Pledgor in or to Landmark Bank or any of its assets; and FNB may exerciseand enforce any or all other rights and remedies available to FNB by law oragreement against the Pledge Agreement Collateral, 

 

4

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againstPledgor or against any other person or property; provided, however, that FNB shall givePledgor not less than ten (10) days’ written notice of its intention tomake any such public or private sale or at any broker’s board or on anysecurities exchange (with such notice to state the time and place of such sale)of the Pledged Stock.

 

10.           ContinuingSecurity Interest. This Agreement shall create a continuing SecurityInterest in the Pledge AgreementCollateral and shallremain in full force and effect until the complete discharge of all of thePledgor’s Obligations under this Agreement, the Credit Agreement, the Note andall other Loan Documents. Upon the discharge of all of Pledgor’s Obligationsunder this Agreement, the Credit Agreement, the Note and all other LoanDocuments, the Security Interest shall cease and terminate, the PledgeAgreement Collateral shall revert to the Pledgor, and FNB, at Pledgor’sexpense, agrees to execute such documents as the Pledgor shall reasonablyrequest to evidence such termination.

 

11.           Miscellaneous.

 

a.             This Agreement may be waived,modified, amended, terminated or discharged, and the Security Interest may bereleased, only (i) upon complete discharge of Pledgor’s Obligations underthe Credit Agreement, the Note and the other Loan Documents or (ii) explicitlyin a writing signed by FNBand the Pledgor.** **A waiver signed by FNB shall beeffective only in the specific instance and for the specific purpose given.

 

b.             Nofailure or delay on the part of FNB in exercising any right, power, or remedyhereunder shall operate as a waiver thereof or otherwise preclude the exerciseor enforcement of any of FNB’s rights or remedies hereunder.

 

c.             All rights and remedies of FNB shall be cumulative and may beexercised singularly or concurrently, at FNB’soption, and the exercise or enforcement of any one such right or remedy shallneither be a condition to nor bar the exercise or enforcement of any other.

 

d.             All notices to be given to Pledgor shall be deemedsufficiently given if delivered or mailed by registered or certified mail,postage prepaid, to Pledgor at its address as set forth in the CreditAgreement.

 

e.             FNBshall not be obligated to preserve any rights Pledgor may have against anyother parties, to exercise at all or in any particular manner any rights whichmay be available to FNB withrespect to any Pledge AgreementCollateral, to realize on the PledgeAgreement Collateral at all or in any particular manner or order, or toapply any cash proceeds of PledgeAgreement Collateral in any particular order of application.

 

f.              Pledgor will reimburse FNB for all expenses (includingreasonable attorneys’ fees and legal expenses) incurred by FNB in the protection, defense orenforcement of the Security Interest, including expenses incurred in anylitigation or bankruptcy or insolvency proceedings.

 

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g.             This Agreement shall be binding upon and inure to thebenefit of Pledgor and FNBand their respective heirs, representatives, successors and assigns, provided,however, that the Pledgor may not assign any of its rights or obligationshereunder or to the Pledged Stock without the prior written consent of FNB, which consent may be withheld in FNB’s sole discretion.

 

h.             This Agreement shall take effect when signed by Pledgorand delivered to FNB.  Pledgor hereby waives notice of FNB’s acceptance hereof.

 

i.              Time is an essential element to the performance of eachof the terms of this Agreement.

 

j.              All headings appearing in this Agreement are forconvenience of reference only and shall be disregarded in construing thisAgreement.  The recitals contained aboveand all documents referred to herein are incorporated herein by this reference.

 

k.             This Agreement shall be governed by, and construed inaccordance with, the laws of the State of Nebraska without giving effect to any choice orconflict of law provision or rule (whether of the State of Nebraska or anyother jurisdiction) that would cause the application of the laws of anyjurisdiction other than the State of Nebraska (the “Governing Law”).

 

l.              Pledgor submits to the jurisdiction of any federalcourt sitting in Omaha, Nebraska, in any action or proceeding arising out of orrelating to this Agreement and agrees that all claims in respect of the actionor proceeding may be heard and determined in any such court.  Pledgor also agrees not to bring any actionor proceeding arising out of or relating to this Agreement in any othercourt.  Pledgor waives any defense ofinconvenient forum to the maintenance of any action or proceeding so broughtand waives any bond, surety, or other security that might be required of FNB. Pledgor agrees that a final judgment in any action or proceeding sobrought shall be conclusive and may be enforced by suit on the judgment or inany other manner provided by law or at equity. Pledgor hereby waives any rights it may have to transfer or change thevenue of any suit, action or other proceeding brought against Pledgor by FNB in accordance with this paragraphor in connection with this Agreement.

 

m.            PLEDGOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION,PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR INEQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT.  NO EMPLOYEE OF FNB HAS AUTHORITY TO WAIVE, CONDITION,OR MODIFY THE TERMS AND PROVISIONS OF THIS PARAGRAPH OF THIS AGREEMENT.

 

n.             If any provision or application of this Agreement isheld unlawful or unenforceable in any respect, such illegality orunenforceability shall not affect other provisions or application which can begiven effect, and this Agreement shall be construed as if the unlawful orunenforceable provision or application had never been contained herein orprescribed hereby.

 

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INWITNESS WHEREOF, the parties have executed this Agreement effective as of thedate and year first above written.

 

|   | “Pledgor”            |
|--------|--------------------------------|
|   |                           |
|   | LANDMARK BANCORP, INC.,        |
|   | a Delaware corporation         |
|   |                           |   |
|   | By:                            | /s/ Mark A. Herpich |
|   |                           |   |
|   | Its:                           | EVP/CFO |
|   |                           |   |
|   |                           |   |
|   | “FNB”                |
|   |                           |
|   | FIRST NATIONAL BANK OF OMAHA,  |
|   | a national banking association |
|   |                           |   |
|   | By:                            | /s/ Natalie E. Mason |
|   |                           |   |
|   | Its:                           | Vice President |

 

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**EXHIBIT “A”**

 

**Collateral StockTransfer and Assignment Power**

 

[See the Attached]

 

 

8

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**REVOLVINGNOTE**

** **

| $9,000,000.00 |   | November 19, 2008 |
|---------------|--------|------------------------|
|          |   | Omaha, Nebraska        |

 

FORVALUE RECEIVED, the undersigned, LANDMARK BANCORP, INC., a Delaware corporation(“Borrower”), HEREBY PROMISES TO PAY to the order of FIRST NATIONAL BANK OFOMAHA (the “Lender”) in lawful money of the United States and in immediatelyavailable funds, the principal amount of Nine Million and No/100ths Dollars($9,000,000.00) or, if less, the aggregate unpaid principal amount of the Loansmade by the Lender to Borrower pursuant to the terms and provisions of theCredit Agreement, as hereinafter defined (the “Principal Amount”).

 

Borrower further promises topay (a) the Principal Amount, (b) interest on the unpaid PrincipalAmount from the date advanced at the rates and times specified in the CreditAgreement and (c) fees, costs and expenses at such times and at such ratesand amounts specified in the Credit Agreement; each without off-set, deductionor counterclaim, until such time as all of the foregoing are paid in full.  The unpaid Principal Amount hereof, togetherwith all accrued and unpaid interest and fees, shall be due and payable on thedate that is the earliest to occur of the following: (a) November 19,2009, (b) the date the Obligations are accelerated pursuant to the CreditAgreement or this Revolving Note and (c) the date the Lender has receivedindefeasible payment in full of the Obligations.  All payments of the Principal Amount,interest, and fees, costs and expenses due and payable, when paid shall be madeto the Lender at the Lender’s office in accordance with the Credit Agreement.

 

ThisRevolving Note is the Revolving Note referred to in the Revolving CreditAgreement, dated as of the date hereof, by and between Borrower and the Lender(as amended, supplemented, or otherwise modified from time to time, the “CreditAgreement”), the terms and conditions of which are incorporated herein by thisreference.  This Revolving Note isentitled to the benefits set forth in the Loan Documents.  In the event of a conflict or inconsistencybetween the terms of this Revolving Note and the Credit Agreement, the termsand provisions of the Credit Agreement shall govern.  Capitalized terms not otherwise defined inthis Revolving Note which are defined in the Credit Agreement shall have the meaningsascribed thereto in the Credit Agreement.

 

TheCredit Agreement, among other things, contains (a) enumerated Events ofDefault, (b) provisions for acceleration of the maturity of this RevolvingNote upon the happening of certain stated events, (c) provisions forprepayments of the Principal Amount of this Revolving Note prior to thematurity of the Revolving Note, and (d) provisions for modification orwaiver of this Revolving Note upon the terms and conditions specified in theCredit Agreement.

 

Theoccurrence of any Event of Default enumerated in the Credit Agreement or any ofthe other Loan Documents shall constitute an Event of Default under thisRevolving Note.  Upon any such Event ofDefault, the Lender shall have any and all rights and remedies provided in theCredit Agreement or any of the other Loan Documents, including but not limitedto the right, but not the obligation, to accelerate the due date of thisRevolving Note and to declare all Obligations set forth herein or thereinimmediately due and payable, and such other remedies as 

 

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are provided by law.  No failure to exercise, and no delay inexercising, any rights hereunder on the part of the Lender shall operate as awaiver of such rights.

 

Borroweracknowledges that the Obligations evidenced by this Revolving Note are forbusiness purposes only and are not an extension of consumer or individualcredit.

 

ThisRevolving Note is made under and governed by the laws of, and shall be deemedto have been executed in, the State of Nebraska without giving effect to choiceof law principles (whether of the State of Nebraska or any otherjurisdiction) that would cause the application of the laws of any jurisdictionother than the State of Nebraska.

 

THELENDER AND BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING,CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY,ARISING OUT OF OR IN ANY WAY RELATED TO THIS REVOLVING NOTE.  NO OFFICER OR EMPLOYEE OF THE LENDER HASAUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

 

Timeis of the essence as to each and every date and each and every Obligation ofBorrower set forth in this Revolving Note.

 

BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLESTEXTENT PERMITTED BY GOVERNING LAW, PRESENTMENT FOR PAYMENT, NOTICE OFNONPAYMENT, NOTICE OF DISHONOR, PROTEST, NOTICE OF PROTEST, DEMAND, NOTICE OFEVERY KIND IN CONNECTION HEREWITH AND DILIGENCE IN ENFORCING PAYMENT ORBRINGING SUIT AGAINST ANY PARTY HERETO.

 

IN WITNESS WHEREOF, Borrower has caused thisRevolving Note to be executed and delivered to the Lender as of the day andyear first written above.

 

|   | LANDMARK BANCORP, INC., |
|--------|-------------------------|
|   | a Delaware corporation  |
|   |                    |   |
|   | By:                     | /s/ Mark A. Herpich |
|   |                    |   |
|   | Its:                    | EVP/CFO |

 

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