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

 
     Capital Guidelines shall have the meaning ascribed thereto in Section 5.11.     Capitalized Lease shall mean any lease which, in accordance with GAAP, is required tobe capitalized on the balance sheet of the lessee.     Code shall mean the Internal Revenue Code of 1986, as amended, and any successorstatute of similar import, together with the regulations thereunder, in each case as in effect fromtime to time. References to sections of the Code shall be construed to also refer to any successorsections.     Collateral shall have the meaning ascribed to such term in the Borrower Pledge and theSubsidiary Pledge.     Consolidated Fixed Charge Coverage Ratio shall mean for the period in question, theratio of: (a) the sum of (i) Consolidated Net Income, plus (ii) Consolidated InterestExpense, plus (iii) non-cash items included in operating expenses, minus (iv)non-cash items included in Consolidated Net Income, minus (v) Distributions; to (b) thesum of (i) an amount equal to $2,500,000 (representing Lender’s Revolving Credit Commitmentplus the maximum principal amount of the Term Loan, divided by twelve (12)),plus (ii) Consolidated Interest Expense during such period, all determined on aconsolidated basis and in accordance with GAAP.     Consolidated Interest Expense shall mean, for the period in question, withoutduplication, all gross interest expense of Borrower and its Consolidated Subsidiaries (including,without limitation, all commissions, discounts and/or related amortization and other fees andcharges owed by Borrower and its Consolidated Subsidiaries with respect to letters of credit, thenet costs associated with interest swap obligations of Borrower and its Consolidated Subsidiaries,capitalized interest expense, the interest portion of capitalized lease obligations and theinterest portion of any deferred payment obligation) during such period, all determined on aconsolidated basis and in accordance with GAAP.     ConsolidatedNet Income shall mean the after-tax net income (or loss) of Borrower andits Consolidated Subsidiaries for the period in question, determined on a consolidated basis andin accordance with GAAP.     Consolidated Subsidiary shall mean with respect to any Person at any date, anySubsidiary or other entity the assets and liabilities of which are or should be consolidated withthose of such Person in its consolidated financial statements as of such date in accordance withGAAP.     Controlled Bank shall mean any state or federally chartered bank and/or any bankholding company which Borrower controls. For purposes of this definition, “control” shall have themeaning ascribed thereto in Section 225.2(e) of Regulation Y of The Board of Governors of TheFederal Reserve System, as from time to time amended.     Default shall mean an event or condition the occurrence of which would, with thelapse of time, the giving of notice, or both, become or constitute an Event of Default as definedin Section 7 hereof.     Distribution in respect of any corporation shall mean: (a) dividends or otherdistributions on capital stock of the corporation; and (b) the redemption, repurchase or otheracquisition of such stock or of warrants, rights or other options to purchase such stock (exceptwhen solely in exchange for such stock).     Environmental Laws shall have the meaning ascribed thereto in Section8.04.     Environmental Lien shall have the meaning ascribed thereto inSection 5.14(g).
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     Equity Capital shall mean, with respect to any Person, the sum of the common stock,perpetual preferred stock (meaning preferred stock with no maturity date and which may not beredeemed at the option of the holder), paid-in surplus and retainedearnings of such Person, alldetermined in accordance with GAAP, less the sum of the total of goodwill and other intangibleassets of such Person, if any.     ERISAshall mean the Employee Retirement Income Security Act of 1974, as amended, andany successor statute of similar import, together with the regulations thereunder, in each case asin effect from time to time (references to sections of ERISA shall be construed to also refer toany successor sections).     ERISA Affiliate shall mean any corporation, trade or business that is, along withBorrower, a member of a controlled group of corporations or a controlled group of trades orbusinesses, as described in Sections 414(b) and 414(c), respectively, of the Code or Section 4001of ERISA.     Event of Default shall have the meaning ascribed thereto in Section 7.     GAAP shall mean, at any time, generally accepted accounting principles consistentlyapplied at such time in the United States.     Indebtedness of any Person shall mean and include all obligations of such Person whichin accordance with GAAP are or should be classified upon a balance sheet of such Person asliabilities of such Person, any and all contingent obligations (other than those incurred in theordinary course of banking business), indebtedness and/or liabilities of such Person, whether ornot reflected on the balance sheet of such Person and any and all obligations of such Person underany Capitalized Lease.     Indemnified Liabilities shall have the meaning ascribed thereto inSection 8.05.     Indemnitees shall have the meaning ascribed thereto inSection 8.05.     Interest Differential shall mean that sum equal to the greater of zero (0) or thefinancial loss incurred by Lender resulting from prepayment, calculated as the difference betweenthe amount of interest Lender would have earned (from like investments in the Money Markets as ofthe first day of the applicable LIBOR Loan) had prepayment not occurred and the interest Lenderwill actually earn (from like investments in the Money Markets as of the date of prepayment) as aresult of the redeployment of funds from the prepayment; provided, that, because of the short-termnature of this facility, Borrower agrees that the Interest Differential shall not be discounted toits present value.     Lender’s Revolving Loan Commitment shall mean up to Fifteen Million Dollars($15,000,000.00).     LIBOR Loan shall have the meaning ascribed thereto in Section 2.04(a).     Lien shall mean any interest in Property securing an obligation owed to, or a claimby, a Person other than the owner of the Property, whether such interest is based on common law,statute or contract, including, without limitation, any security interest, mortgage, deed oftrust, pledge, lien or other encumbrance of any kind or nature whatsoever, any conditional sale ortrust receipt and any lease, consignment or bailment for security purposes.     Loan shall mean each Revolving Credit Loan and the Term Loan; and Loans shallmean any or all of the foregoing.     Loan Period shall mean the period commencing on the advance date of the applicableLIBOR Loan and ending on the numerically corresponding day one (1), two (2), three (3), or six (6)months
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thereafter matching the interest rate term selected by Borrower; provided, however, (a) if anyLoan Period would otherwise end on a day which is not a New York Banking Day, then the Loan Periodshall end on the next succeeding New York Banking Day unless the next succeeding New York BankingDay falls in another calendar month, in which case the Loan Period shall end on the immediatelypreceding New York Banking Day; or (b) if any Loan Period begins on the last New York Banking Dayof a calendar month (or on a day for which there is no numerically corresponding day in thecalendar month at the end of the Loan Period), then the Loan Period shall end on the last New YorkBanking Day of the calendar month at the end of such Loan Period.     Material Adverse Effect shall mean (a) a material adverse effect on the Properties,assets, liabilities, business, operations, prospects, income or condition (financial or otherwise)of Borrower, Royal Palm, any Subsidiary Bank, and/or any Subsidiary, (b) material impairment of theability of Borrower, Royal Palm, any Subsidiary Bank, and/or any Subsidiary to perform any of itsobligations under this Agreement, the Notes, or any of the other Transaction Documents or (c)material impairment of the enforceability of the rights of, or benefits available to, Lender underthis Agreement, the Notes, or any of the other Transaction Documents.     Money Markets shall mean one or more wholesale funding markets available to andselected by Lender, including negotiable certificates of deposit, commercial paper, Eurodollardeposits, bank notes, federal funds, interest rate swaps or others.     MultiemployerPlan shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is maintained for employees of Borrower, Royal Palm, any other Obligor, anyERISA Affiliate, any Subsidiary Bank or any Subsidiary.     Net Income shall mean, with respect to any Person for any period, the aggregate netincome (or net loss) of such Person for such period equal to net revenues and other proper incomeless the aggregate amount of any and all items which are treated as expenses under GAAP, and lessFederal, state and local income taxes, but excluding from the definition of Net income anyextraordinary gains or losses or any gains or losses from the sale or disposition of assets otherthan in the ordinary course of business, all determined in accordance with GAAP.     New York Banking Day shall mean any day (other than a Saturday or Sunday) on whichcommercial banks are open for business in New York, New York.     Non-Performing Assets shall mean, with respect to any Person, assets which: (a)constitute or are classified as other real estate owned (as such term is defined in theguidelines, rules and regulations of The Board of Governors of the Federal Reserve Boardpertaining to capital adequacy in effect from time to time) or (b) in the case of a particularasset, is (at the time of such calculation) classified as a loan or other extension of credit (1)which has been placed on nonaccrual status or has been required to be so placed by any RegulatoryAgency, (2) which has been classified as renegotiated pursuant to guidelines now or hereafterestablished by the Federal Financial Institutions Examination Council or (3) with respect to whichany payment of any principal or interest is past due for a period ofninety (90) days or more.     Note shall mean each of the Revolving Note and the Term Note; and Notes shallmean either or both of the foregoing.     Obligations shall mean any and all indebtedness, liabilities and obligations ofBorrower and/or Royal Palm to Lender under the Notes, this Agreement, the Borrower Pledge, theSubsidiary Pledge, and any of the other Transaction Documents or any other agreement, instrumentor document heretofore, now or hereafter executed and delivered by Borrower and/or Royal Palm toLender, in each case whether now existing or hereafter arising, absolute or contingent, jointand/or several, secured or unsecured, direct or indirect, expressed or implied in law, contractualor tortious, liquidated or
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unliquidated, at law or in equity, or otherwise, and whether created directly or acquired byLender by assignment or otherwise, and any and all costs of collection and/or Attorneys’ Feesincurred or to be incurred in connection therewith.     Obligor shall mean Borrower and each other Person who is or shall become primarily orsecondarily liable on any of the Obligations or who grants Lender a Lien upon any Property orassets of such Person as collateral for any of the Obligations.     PBGC shall mean the Pension Benefit Guaranty Corporation and any entity succeeding toany or all of its functions under ERISA.     Pension Plan shall mean any “pension plan” as such term is defined in Section 3(2) ofERISA which is subject to the provisions of Title IV of ERISA and which is established ormaintained by Borrower, Royal Palm, any other Obligor, any ERISA Affiliate, any Subsidiary Bank,or any Subsidiary other than a Multiemployer Plan.     Person shall mean an individual, partnership, corporation, limited liability company,trust, unincorporated organization or association, and a government or agency or politicalsubdivision thereof.     Primary Capital shall mean, with respect to any Person, the Equity Capital of suchPerson plus the total allowance for possible loan and lease losses of such Person, all asdetermined in accordance with GAAP.     Prime Rate shall mean the interest rate announced from time to time by Lender as its“prime rate” on commercial loans, which rate shall fluctuate as and when said prime rate shallchange.     Prime Rate Loan shall have the meaning ascribed thereto in Section 2.04(a).     Property shall mean any interest in any kind of property or asset, whether real,personal or mixed, or tangible or intangible. Properties shall mean the plural ofProperty. For purposes of this Agreement, Borrower, Royal Palm, each Subsidiary and eachSubsidiary Bank, as the case may be, shall be deemed to be the owner of any Property which it hasacquired or holds subject to a conditional sale agreement, financing lease or other arrangementpursuant to which title to the Property has been retained by or vested in some other Person forsecurity purposes.     Regulatory Agency shall mean any Federal, state or local governmental or regulatoryagency, authority, entity or official having jurisdiction over the banking or other relatedactivities of Borrower, Royal Palm, Subsidiary Banks, and/or any Subsidiary, including, withoutlimitation (to the extent applicable), the Board of Governors of the Federal Reserve System, theOffice of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the UnitedStates Securities and Exchange Commission, the Illinois Department of Financial and ProfessionalRegulation, the Florida Office of Financial Regulation, and the Missouri Division of Finance.     Related Party shall mean any Person which directly or indirectly through one or moreintermediaries controls, or is controlled by or is under common control with, Borrower, or anySubsidiary Bank. The term “control” shall mean the possession, directly or indirectly, of thepower to vote Ten Percent (10%) or more of the capital stock of any Person or the power to director cause the direction of the management and policies of a Person, whether through the ownershipof voting securities, by contract or otherwise.     Reportable Event shall have the meaning given to such term in ERISA.     Revolving Credit Period shall mean the period commencing on the date of thisAgreement and ending June 30, 2007.
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     RevolvingLoan and Revolving Loans shall have the meanings ascribed thereto inSection 2.01(a).     Revolving Note shall have the meaning ascribed thereto inSection 2.03(a).      RoyalPalm shall mean Royal Palm Bancorp, Inc.,a Florida corporation.     Royal Palm Merger Agreement shall mean the Agreement and Plan of Merger dated as ofMay 30, 2006, executed by Borrower, Mercantile Merger Corp., Royal Palm, and The Royal Palm Bank ofFlorida.     Royal Palm Merger Transaction shall mean collectively the transactions contemplatedby and described in the Royal Palm Merger Agreement.     Subsidiary shall mean, with respect to any Person, any corporation of which TenPercent (10%) or more of the issued and outstanding capital stock entitled to vote for theelection of directors (other than by reason of default in the payment of dividends) is at the timeowned directly or indirectly by such Person.     SubsidiaryBank shall mean, each of: Heartland Bank, a Kansas banking corporation;Farmers State Bank of Northern Missouri, a Missouri banking corporation; Security State Bank ofHamilton, an Illinois banking corporation; State Bank of Augusta, an Illinois banking corporation;New Frontier Bank, a Missouri banking corporation; Brown County State Bank, an Illinois bankingcorporation; Perry State Bank, a Missouri banking corporation; Marine Bank & Trust, an Illinoisbanking corporation; and Mercantile Trust & Savings Bank, an Illinois banking corporation; and,upon consummation of the Royal Palm Merger Transaction, shall also mean The Royal Palm Bank ofFlorida, a Florida banking corporation; and Subsidiary Banks shall mean some or all of theforegoing.     Subsidiary Pledge shall mean the Stock Pledge Agreement (Subsidiary) dated as of thedate hereof, to be executed by Royal Palm and delivered to Lender pursuant to Section 3 hereof asthe same may from time to time be amended.     Term Loan shall have the meaning ascribed thereto in Section2.02.     Term Note shall have the meaning ascribed thereto inSection 2.03(b).     ThirdParty Collateral shall mean any Property or assets of any Obligor other thanBorrower which secure the payment or performance of any of the Obligations.     Transaction Documents shall mean this Agreement, the Notes, the Borrower Pledge, theSubsidiary Pledge and all other agreements, documents, instruments and certificates connected withor otherwise relating to this Agreement or the Loans made hereunder, all as the same may from timeto time be amended, modified, extended or renewed.SECTION2 — THE LOANS     2.01 Revolving Credit Commitment.          (a) Subject to the terms and conditions set forth in this Agreement and so long as no Defaultor Event of Default has occurred and is continuing, during the Revolving Credit Period, Lenderagrees to make such loans to Borrower (individually, a“Revolving Credit Loan”; andcollectively, the “Revolving Credit Loans”) as Borrower may from time to time requestpursuant to Section 2.01(b). Each Revolving Credit Loan under this Section 2.01(a) shall be foran aggregate principal amount of at
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least $500,000 or any larger multiple of $25,000. The aggregate principal amount of RevolvingCredit Loans which Lender shall be required to have outstanding under this Agreement as of any dateshall not exceed the amount of Lender’s Revolving Credit Commitment as of such date. In no eventshall the aggregate principal amount of all Revolving Credit Loans outstanding as of any dateexceed the amount of Lender’s Revolving Credit Commitment as of such date. Within the foregoinglimits, Borrower may borrow under this Section 2.01(a), prepay under Section 2.04(e) and reborrowat any time during the Revolving Credit Period under this Section 2.01(a). All Revolving CreditLoans not paid prior to the last day of the Revolving Credit Period, together with all accrued andunpaid interest thereon and all fees and other amounts owing by Borrower to Lender with respectthereto, shall be due and payable on the last day of the Revolving Credit Period.          (b) Borrower shall give oral or written notice to Lender by 10:00 a.m. (St. Louis time) on theBusiness Day of each advance of a Revolving Loan specifying (a) the date of such advance, whichmust be a Business Day, and (b) the aggregate principal amount of such advance. Unless Lenderdetermines that any applicable condition specified in Section 3 of this Agreement has not beensatisfied, Lender shall make the proceeds of the advance available to Borrower by crediting suchfunds to a demand deposit account (or such other account mutually agreed upon in writing betweenLender and Borrower) at Lender specified by Borrower. Borrower hereby irrevocably authorizes Lenderto rely on telephonic, telegraphic, telecopy, telex or written instructions of any individualidentifying himself or herself as one of the individuals listed on Schedule 2.01(b)attached hereto (or any other individual from time to time authorized to act on behalf of Borrowerpursuant to a resolution adopted by the Board of Directors of Borrower and certified by theSecretary of Borrower and delivered to Lender) with respect to any request to make an advance or arepayment hereunder, and on any signature which Lender believes to be genuine, and Borrower shallbe bound thereby in the same manner as if such individual were actually authorized or suchsignature were genuine. Borrower also hereby agrees to indemnify Lender and hold Lender harmlessfrom and against any and all claims, demands, damages, liabilities, losses, costs and expenses(including, without limitation, reasonable attorneys’ fees and expenses) relating to or arising outof or in connection with the acceptance of instructions for making advances or repaymentshereunder.          (c) If the amount of Lender’s Revolving Credit Commitment on any date is less than theaggregate principal amount of all Revolving Credit Loans outstanding as of such date, Borrowershall be automatically required (without demand or notice of any kind by Lender, all of which arehereby expressly waived by Borrower) to immediately repay the Revolving Credit Loans in an amountsufficient to reduce the amount of the aggregate principal amount of all Revolving Credit Loansoutstanding as of such date to an amount equal to or less than the amount of Lender’s RevolvingCredit Commitment.     2.02 Term Loan Commitment. Subject to the terms and conditions set forth in thisAgreement and so long as no Default or Event of Default under this Agreement has occurred and iscontinuing, Lender agrees to make to Borrower a term loan of Fifteen Million Dollars($15,000,000.00) (the “Term Loan”). The Term Loan shall be advanced in one disbursement on theeffective date of this Agreement. The Term Loan is not revolving in nature and any principal repaidon the Term Loan may not be reborrowed. The principal amount of the Term Loan shall be due andpayable in three (3) equal consecutive quarterly installments in the amount of $375,000.00 each,due and payable on December 31, 2008, March 30, 2009, and June 30, 2009, and a final installment inthe amount of the then outstanding and unpaid principal balance of the Term Loan due and payable onNovember 10, 2009.     2.03 Notes.          (a) The Revolving Credit Loans shall be evidenced by the RevolvingCredit Note of Borrower dated as of the date hereof, and payable to the orderof Lender in a principal amount equal to the maximum amount of Lender’sRevolving Credit Commitment, which Revolving Credit Note shall be insubstantially the form of Exhibit A attached hereto and incorporated herein byreference (as the same may from time to time be amended, modified, extended,renewed or restated, the “Revolving Note”).
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          (b) The Term Loan shall be evidenced by the Term Loan Promissory Note of Borrower dated as ofthe date hereof, and payable to the order of Lender in the original principal amount of $15,000,000.00, which Term Loan Promissory Note shall be in substantially the form of ExhibitB attached hereto and incorporated herein by reference (as the same may from time to time beamended, modified extended, renewed or restated, the “Term Note”).          (c) Lender shall record in its books and records the date and amount of each Loan made toBorrower and each payment of principal and/or interest made by Borrower with respect thereto;provided, however, that the obligation of Borrower to repay each Loan made to Borrower hereundershall be absolute and unconditional, notwithstanding any failure of Lender to make any suchrecordation or any mistake by Lender in connection with any such recordation. The books and recordsof Lender showing the account between Lender and Borrower shall be admissible in evidence in anyaction or proceeding and shall constitute prima facie proof of the items therein set forth.     2.04 Interest Rates and Payments.          (a) Interest on each Loan shall accrue at one of the following annual rates selected byBorrower: (i) upon notice to Lender, One and 5/10 Percent (1,5%) below the prime rateannounced by Lender from time to time, as and when such rate changes(each, a “Prime Rate Loan”);or (ii) upon a minimum of two (2) New York Banking Days prior notice, One and 3/10 Percent (1.3%)above the one (1), two (2), three (3), or six (6) month LIBOR rate quoted by Lender fromTelerate Page 3750 or any successor thereto (which shall be the LIBOR rate in effect two (2) NewYork Banking Days prior to commencement of the Loan), adjusted for any reserve requirement and anysubsequent costs arising from a change in government regulation (each, a “LIBOR Loan”). Intereston each Prime Rate Loan shall be paid in consecutive quarterly installments due and payable on thefirst day of each calendar quarter and on the last day of the Revolving Credit Period. Intereston each LIBOR Loan shall be payable for each Loan Period on the last day thereof, unless theduration of such Loan Period exceeds three (3) months, in whichcase such interest shall be payableon the last day of each three (3) month period during such Loan Period and on the last day of suchLoan Period.          (b) In the event Borrower does not timely select another interest rate option at least two (2)New York Banking Days before the end of the Loan Period for a LIBOR Loan, Lender may at any timeafter the end of the Loan Period convert the LIBOR Loan to a Prime Rate Loan, but until suchconversion, the funds advanced under the LIBOR Loan shall continue to accrue interest at the samerate as the interest rate in effect for such LIBOR Loan prior to the end of the Loan Period.          (c) No LIBOR Loan (made under the Revolving Loan) may extend beyond the last day of theRevolving Credit Period; and no LIBOR Loan (made under the Term Loan) may extend beyond thematurity date of the Term Note. In any event, if the Loan Period for a LIBOR Loan should happen toextend beyond the maturity of this Note, such Loan must be prepaid at the time the Loan matures.Lender’s internal records of applicable interest rates shall be determinative in the absence ofmanifest error. Each LIBOR Loan shall be in a minimum principal amount of $100,000. The aggregatenumber of LIBOR Loans in effect at any one time may not exceed six (6).          (d) After maturity of any Loan, whether by reason of acceleration or otherwise, interest shallaccrue on such Loan and be payable on demand on the entire outstanding principal balance thereof atan annual rate equal to Two Percent (2%) over and above the then existing rate(s). Interest on eachLoan shall be payable quarterly in arrears on each March 31, June 30, September 30 and December 31,on the last day of the Revolving Credit Period (with respect to the Revolving Loans), and at thematurity of the Term Note, whether by reason of acceleration or otherwise. All payments shall beapplied first to the payment of all accrued and unpaid interest, with the balance, if any, to beapplied to the payment of principal. Lender’s internal records of applicable interest ratesshall be determinative in the absence of manifest error.
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          (e) Borrower shall have the right to prepay the Loans in whole or in part at any time,provided; (i) all billed/due and unpaid interest shall accompany such prepayment; (ii) there is noDefault or Event of Default at the time of prepayment; (iii) all prepayments shall be credited andapplied to the installments of principal in inverse order of their stated maturity; and (iv) if aLIBOR Loan is prepaid prior to the end of a Loan Period for suchLIBOR Loan, whether voluntarilyor because prepayment is required due to such LIBOR Loan maturing or due to acceleration of suchLIBOR Loan upon default or otherwise, Borrower agrees to pay all of Lender’s costs, expenses andinterest Differential (as determined by Lender) incurred as a result of such prepayment (anyprepayment of a LIBOR Loan shall be in an amount equal to the remaining entire principal balanceof such LIBOR Loan).     2.05 General Provisions as to Payments. Borrower shall make each payment of principalof, and interest on, the Loans and all interest, fees and other amounts payable by Borrower underthis Section 2 not later than 2:00 p.m. (St. Louis time) on the date when due, in Federal or otherfunds immediately available in St. Louis, Missouri, to Lender at its address referred to in Section8.07. Any such payment received by Lender after 2:00 p.m. (St. Louis time) shall be deemed to havebeen paid on the next succeeding Business Day. Whenever any payment of principal of, or intereston, the Loans shall be due on a day which is not a Business Day, the date for payment thereof shallbe extended to the next succeeding Business Day. If the date for any payment of principal isextended by operation of law or otherwise, interest thereon, at the then applicable rate, shall bepayable for such extended time.     2.06 Late Fees. If Borrower fails to make any payment of any principal of or intereston any Loan within ten (10) days after the same becomes due, whether by reason of maturity,acceleration or otherwise, in addition to all of the other rights and remedies of Lender under thisAgreement and at law or in equity, Borrower shall pay Lender on demand with respect to each suchlate payment a late fee in an amount not to exceed Five Percent (5%)of each late payment.SECTION 3 — PRECONDITIONS TO LOANS     3.01 Initial Loans. Notwithstanding any provision contained in this Agreementto the contrary, Lender shall have no obligation to make the initial Revolving Loan and the TermLoan under this Agreement unless Lender shall have first received the following, all in form andsubstance acceptable to Lender:          (a) this Agreement and the Notes, each executed by a duly authorized officer of Borrower;          (b) the Borrower Pledge, Subsidiary Pledge, collateral schedules, stock powers, UCC financingstatements, and such other documents as Lender may require in connection with the Borrower Pledgeand Subsidiary Pledge, each executed by a duly authorized officer of Borrower and/or Royal Palm;          (c) 360,000 shares of the common stock of Mercantile Trust & Savings Bank, representing all ofthe issued and outstanding common stock of Mercantile Trust & Savings Bank (as verified by theSecretary of Mercantile Trust & Savings Bank), said shares to be issued in Borrower’s name andaccompanied by stock powers duly executed in blank by an authorized officer of Borrower;          (d) 1,038,294shares of the common stock of The Royal Palm Bank of Florida, representing allof the issued and outstanding common stock of The Royal Palm Bank of Florida (as verified by theSecretary of The Royal Palm Bank of Florida), said shares to be issued in Royal Palm’s name andaccompanied by stock powers duly executed in blank by an authorized officer of Royal Palm;          (e) the Certificate of President, executed by the President of Borrower;
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          (f) copies of resolutions of the Board of Directors of Borrower and Royal Palm, duly adopted,which authorize the execution, delivery and performance of this Agreement and the other TransactionDocuments, certified by the Secretary of Borrower and the Secretary of Royal Palm, respectively;          (g) copies of the Articles or Certificate of Incorporation of Borrower and Royal Palm,including any amendments thereto, certified by the Secretary of State of the State of Delaware(Borrower), and the Secretary of State of the State of Florida (Royal Palm);          (h) copiesof the Bylaws of Borrower and Royal Palm, including any amendments thereto,certified by the Secretary of Borrower, and the Secretary of Royal Palm, respectively;          (i) a certificate of good standing for Borrower issued by the Secretary of State of the Stateof Delaware, a certificate of good standing for Borrower issued by the Secretary of State of theState of Illinois, and a certificate of good standing for Royal Palm issued by the Secretary ofState of the State of Florida;          (j) an opinion of counsel from Schmiedeskamp, Robertson, Neu & Mitchell, the counselrepresenting Borrower, Subsidiary and Subsidiary Banks, in the form acceptable to Lender;          (k) evidence that no change in the financial condition of Borrower, Royal Bank, anySubsidiary Bank, or any Subsidiary shall have occurred since June 30, 2006 that could have aMaterial Adverse Effect;          (I) copiesof all documents executed in connection with the Royal Palm Merger Transactionincluding, but not limited to the Royal Palm Merger Agreement, and evidence satisfactory to Lenderthat the Royal Palm Merger Transaction has been approved by all applicable Regulatory Agencies;          (m) copies of all documents executed in connection with the issuance by Borrower of PooledTrust Preferred Securities on or about July 13, 2006; and          (n) such other agreements, documents, instruments, certificates and assurances as Lender mayreasonably request.     3.02 All Advances. Notwithstanding any provision contained in this Agreement tothe contrary, Lender shall have no obligation to make any Loan under this Agreement unless:          (a) for every Revolving Loan, Lender shall have received a notice of borrowing as required bySection 2.01(b);          (b) no change in the Properties, assets, liabilities, business, operations, prospects, incomeor condition (financial or otherwise) of Borrower, Subsidiary any Subsidiary Bank, or anySubsidiary that could have a Material Adverse Effect shall have occurred since the date of thisAgreement and be continuing;          (c) all of the representations and warranties of Borrower and Royal Palm contained in thisAgreement and in the other Transaction Documents shall be true and correct in all material respectson and as of the date of the making of such advance as if made on and as of the date of the makingof such advance; and          (d) on the date of and immediately after the making of such advance, no Default or Event ofDefault under this Agreement shall have occurred and be continuing.
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Each request for a Loan by Borrower under this Agreement shall be deemed to be a representationand warranty by Borrower on the date of the making of such advance as to the facts specified inclauses (b), (c) and (d) of this Section 3.02.SECTION 4 — REPRESENTATIONS AND WARRANTIES     To induce Lender to make the Loans, Borrower hereby represents and warrants to Lenderthat:     4.01 Corporate Existence and Power. Each of Borrower, Royal Palm, each Subsidiary Bank,and each Subsidiary: (a) is duly incorporated or organized, validly existing and in good standingunder the laws of the jurisdiction of its incorporation or organization; (b) has all requisitecorporate or other powers and all governmental licenses, authorizations, consents and approvalsrequired to carry on its business as now conducted; and (c) isduly qualified to do business in alljurisdictions in which the nature of the business conducted by it makes such qualificationnecessary and where failure to so qualify would have a Material Adverse Effect on its business,financial condition or operations. Borrower and Royal Palm are each a “bank holding company” asdefined in and within the meaning of 12 U.S.C. §1841 (a), and as such Borrower and Royal Palm havefiled all necessary reports with and received all necessary approvals from The Board of Governorsof the Federal Reserve System. Each Subsidiary Bank is an “insured bank” as defined in and withinthe meaning of 12 U.S.C. §1813.     4.02 Corporate Authorization. The execution, delivery and performance by Borrowerand/or Royal Palm of this Agreement, the Notes, Borrower Pledge, Subsidiary Pledge and the otherTransaction Documents are within the corporate powers of Borrower and Royal Palm and have been dulyauthorized by all necessary corporate action.     4.03 Binding Effect. This Agreement, the Note, Borrower Pledge, Subsidiary Pledge andthe other Transaction Documents have been duly authorized, executed and delivered and constitutethe legal, valid and binding obligations of Borrower and/or Royal Palm enforceable in accordancewith their respective terms, except as such enforceability may be limited by bankruptcy, insolvencyor other similar laws affecting creditors’ rights in general.     4.04 Financial Statements. Borrower has furnished Lender with the followingfinancial statements, identified by the principal financial officer of Borrower: (a) consolidatedbalance sheets and profit and loss statements of Borrower and its Consolidated Subsidiaries as ofDecember 31, 2005, all certified by Borrower’s independent certified public accountants, whichfinancial statements have been prepared in accordance with GAAP; (b) the Consolidated FinancialStatements for Bank Holding Companies (FR Y-9C) of Borrower and its Consolidated Subsidiaries as ofJune 30, 2006; (c) the Parent Company Only Financial Statements for Large Bank Holding Companies(FR Y-9LP) for Borrower as of June 30, 2006; and (d) the Consolidated Reports of Condition andIncome For A Bank With Domestic Offices Only (FFIEC 041) of each Subsidiary Bank as of June 30,2006, certified by the President or Chief Financial Officer of each Subsidiary Bank. Borrowerfurther represents that: (1) said financial statements fairly present the condition of Borrower andits Consolidated Subsidiaries as of the dates thereof, (2) there has been no change in thecondition or operation, financial or otherwise, of Borrower or any of its Consolidated Subsidiariessince June 30, 2006 that could have a Material Adverse Effect, and (3) neither Borrower nor any ofits Consolidated Subsidiaries has any direct or contingent liabilities which are not disclosed onsaid financial statements which could have a Material Adverse Effect.     4.05 Litigation. Except as disclosed in Schedule 4.05 attached hereto, thereis no action or proceeding pending or, to the knowledge of Borrower, threatened against oraffecting Borrower, Royal Palm, any Subsidiary or any Subsidiary Bank before any court, arbitratoror governmental, regulatory or administrative body, agency or official which could result in anychange in the condition or operation, financial or otherwise, of Borrower, Royal Palm, anySubsidiary or any Subsidiary Bank that could have a Material Adverse Effect, and neither Borrower,Royal Palm, any Subsidiary nor any Subsidiary Bank
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is in default with respect to any order, writ, injunction, decision or decree of any court,arbitrator or governmental, regulatory or administrative body, agency or official which could havea Material Adverse Effect on Borrower, Royal Palm, any Subsidiary or any Subsidiary Bank.     4.06 Pension and Welfare Plans. Each Pension Plan complies with all applicablestatutes and governmental rules and regulations; no Reportable Event has occurred and is continuingwith respect to any Pension Plan; neither Borrower, Royal Palm, any ERISA Affiliate, any Subsidiarynor any Subsidiary Bank has withdrawn from any Multiemployer Plan in a “complete withdrawal” or a“partial withdrawal” as defined in sections 4203 or 4205 of ERISA, respectively; no steps have beeninstituted by Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary or any Subsidiary Bank toterminate any Pension Plan; no condition exists or event or transaction has occurred in connectionwith any Pension Plan or Multiemployer Plan which could result in the incurrence by Borrower, RoyalPalm, any ERISA Affiliate, any Subsidiary, or any Subsidiary Bank of any material liability, fineor penalty; and neither Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary, nor anySubsidiary Bank is a “contributing sponsor” as defined in Section 4001 (a) (13) of ERISA of a“single-employer plan” as defined in Section 4001 (a) (15) of ERISA which has two or morecontributing sponsors at least two of whom are not under common control. Neither Borrower, RoyalPalm, any Subsidiary nor any Subsidiary Bank has any contingent liability with respect to any“employee welfare benefit plans”, as such term is defined in Section 3(a) of ERISA, which coversretired employees and their beneficiaries.     4.07 Tax Returns and Parent. Borrower, Royal Palm, each Subsidiary Bank, and eachSubsidiary has filed all Federal, state and local income tax returns and all other tax returnswhich are required to be filed and has paid all taxes due pursuant to such returns or pursuant toany assessment received by Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, exceptfor the filing of such returns, if any, in respect of which an extension of time for filing is ineffect.     4.08 Subsidiaries. Borrower, Royal Bank, Subsidiaries and Subsidiary Banks haveno Subsidiaries other than as identified on Schedule 4.08 attached hereto, as the same mayfrom time to time be amended, modified or supplemented as provided herein. Except as disclosed onSchedule 4.08 attached hereto, neither Borrower, Royal Bank, any Subsidiary, nor anySubsidiary Bank, individually or collectively, owns or holds, directly or indirectly, any capitalstock of or equity interest in any corporation, partnership, limited liability company or otherentity. Borrower may at any time amend, modify or supplement Schedule 4.08 by notifyingLender in writing of any changes thereto, including any formation, acquisition, merger orliquidation of any Subsidiary or any change in the capitalization of any Subsidiary, in each case,in accordance with the terms of this Agreement, and thereby the representations and warrantiescontained in this Section 4.08 shall be amended accordingly so long as such amendment, modificationor supplement is made within thirty (30) days after the occurrence of any such changes in the factsstated therein and that such changes reflect transactions that are permitted under this Agreement.     4.09Compliance With Other Instruments: None Burdensome. None of the execution anddelivery by Borrower and Royal Palm of the Transaction Documents, the consummation of thetransactions therein contemplated or the compliance with the provisions thereof will violate anylaw, rule, regulation, order, writ, judgment, injunction, decree or award binding on Borrower,Royal Palm, any Subsidiary, or any Subsidiary Bank, or any of the provisions of their Articles orCertificate of Incorporation or Association, or Bylaws or any of the provisions of any indenture,agreement, document, instrument or undertaking to which Borrower, Royal Palm, any Subsidiary, orany Subsidiary Bank is a party or subject, or by which it or its Property is bound. No order,consent, approval, license, authorization or validation of, or filing, recording orregistration with, the exemption by, any governmental, regulatory, administrative or publicbody or authority, or any subdivision thereof, is required to authorize, or is otherwiserequired in connection with, the execution, delivery or performance of, or the legality,validity, binding effect or enforceability of, any of the Transaction Documents.
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     4.10 Other Loans and Guarantees. Except as disclosed on Schedule 4.10 attachedhereto, neither Borrower, Royal Palm, any Subsidiary, or any Subsidiary Bank (except in theordinary course of the banking business) is borrower, guarantor or obligor with respect to any loantransaction, guarantee or other indebtedness for borrowed money.     4.11Title to Property. Borrower, Royal Palm, each Subsidiary Bank, and eachSubsidiary are each the sole and absolute owner of, or has the legal right to use and occupy, allProperty it claims to own or which is necessary for Borrower, Royal Palm, Subsidiary Bank, and eachSubsidiary to conduct its business. Neither Borrower, Royal Palm, Subsidiary Bank, nor eachSubsidiary has signed (or authorized the filing of) any financing statements, security agreementsor chattel mortgages with respect to any of its Property, has granted or permitted any Liens withrespect to any of its Property or has any knowledge of any Liens with respect to any of itsProperty, except as disclosed on Schedule 4.11 attached hereto.     4.12 Regulation U. No part of the proceeds of the Loan will be used, whetherdirectly or indirectly, and whether immediately, incidentally or ultimately (a) to purchase orcarry margin stock or to extend credit to others for the purpose of purchasing or carrying marginstock, or to refund or repay indebtedness originally incurred for such purpose or (b) for anypurpose which entails a violation of, or which is inconsistent with, the provisions of theRegulations of The Board of Governors of the Federal Reserve System, including, without limitation,Regulations G, U, T or X thereof, as amended. If requested by Lender, Borrower shall furnish toLender a statement in conformity with the requirements of Federal Reserve Form U-1 referred to inRegulation U.     4.13 Environmental Matters. There are no disputes pending (nor, to the knowledge ofBorrower, are there any disputes threatened nor, to the knowledge of Borrower, is there any basistherefor) affecting Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, whether or not inor before any court or arbitrator of any kind or involving any governmental or regulatory body,which, if adversely determined could, singly or in the aggregate, have a Material Adverse Effect onthe business, Properties, assets, liabilities, financial condition, results of operations orbusiness prospects of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, or on theability of Borrower and Royal Palm to perform its obligations hereunder or under this Agreement,the Notes or any of the other Transaction Documents, relating to environmental matters, including,without limitation, any notice from any agency, state or Federal, that Borrower, Royal Palm, anySubsidiary Bank, or any Subsidiary is a potentially responsible party for the cleanup of anyenvironmental waste site, that Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary is inviolation of any environmental permit or regulation, that Borrower, Royal Palm, any SubsidiaryBank, or any Subsidiary has been placed on any registry of solid or hazardous waste disposal sites,or of the expiration, revocation or denial of any environmental permit or other loss of interimstatus or other current authorization to operate any unit or portion of the facilities of Borrower,Royal Palm, any Subsidiary Bank, or any Subsidiary.     4.14 Shares of Subsidiary Banks. The authorized capital of each Subsidiary Bankconsists solely of the shares of common stock set forth onSchedule 4.14 attached hereto,having the par value set forth in Schedule 4.14, As of the date hereof, the sole legaland beneficial owner(s) of each Subsidiary Bank is/are set forth in Schedule 4.14 and eachsuch owner(s) own(s) all of the outstanding and issued shares of common stock of each applicableSubsidiary Bank, subject to no Liens, warrants, options, proxies, restrictions on transfer, resaleor other disposition (except those in favor of Lender); that all of such shares are all validlyissued, fully paid and nonassessable; and that each such owner(s) has the unqualified right andpower to grant a security interest in such shares without the consent of any other Person beingrequired therefor. As of the date hereof, there are no warrants or options, or any agreements toissue any warrants or options, outstanding with respect to any class of capital stock of anySubsidiary Bank.SECTION 5 — AFFIRMATIVE COVENANTS
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     Borrower covenants and agrees that, so long as any of the Obligations areoutstanding, it will:     5.01 Insurance. Keep adequately insured, and cause Royal Palm, each Subsidiary Bank,and each Subsidiary to keep adequately insured, by financially sound and reputable insurersacceptable to Lender and in amounts reasonably acceptable to Lender, all Property of Borrower,Royal Palm, each Subsidiary Bank, and each Subsidiary of the character usually insured bycorporations engaged in the same or similar businesses similarly situated, against loss or damageof the kind customarily insured against by such Persons and acceptable to Lender, and (b) causeeach Subsidiary Bank and any other banking Subsidiary to maintain coverage under a banker’s blanketbond in an amount equal to the greater of the amount of coverage currently maintained by eachSubsidiary Bank and each other banking Subsidiary or the minimum coverage recommended by theapplicable Regulatory Agency(ies), plus such excess fidelity coverage as Lender may reasonablyrequest from time to time. Promptly after Lender’s request there for, Borrower shall provideLender with evidence that Royal Palm, each Subsidiary Bank, and each Subsidiary maintain, theinsurance required under this Section 5.01, and evidence of the payment of all premiums therefor.**Notice Required by Section 427.120(3) R.S.Mo.: “Unless you provide evidence of the insurancecoverage required by your agreement with us, we may purchase insurance at your expense to protectour interests in your collateral. This insurance may, but need not, protect your interests. Thecoverage that we purchase may not pay any claim that you make or any claim that is made against youin connection with the collateral. You may later cancel any insurance purchased by us, but onlyafter providing evidence that you have obtained insurance as required by our agreement. If wepurchase insurance for the collateral, you will be responsible for the costs of that insurance,including the insurance premium, interest and any other charges we may impose in connection withthe placement of the insurance, until the effective date of the cancellation or expiration of theinsurance. The costs of the insurance may be added to your total outstanding balance or obligation.The costs of the insurance may be more than the cost of insurance you may be able to obtain on yourown.”**     5.02Payment of Taxes. Duly file, and cause Royal Palm, each Subsidiary Bank, andeach Subsidiary to duly file, all Federal, state and local income tax returns and all other taxreturns and reports of Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, as the casemay be, which are required to be filed; and pay, and cause Royal Palm, each Subsidiary Bank, andeach Subsidiary to pay, when due, all taxes and governmental charges assessed against or uponBorrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, as the case may be, or upon theirrespective Properties, assets, income or franchises.     5.03 Financial Data. Deliver to Lender:          (a) As soon as practicable and in any event within forty five (45) days after the end of eachfiscal quarter: (i) the Consolidated Reports of Condition and Income For A Bank With DomesticOffices Only (FFIEC 041) of each Subsidiary Bank, certified by the President or Chief FinancialOfficer of such Subsidiary Bank; (ii) the Consolidated Financial Statements for Bank HoldingCompanies (FR Y-9C) of Borrower and its Consolidated Subsidiaries; and (iii) the Parent CompanyOnly Financial Statements for Large Bank Holding Companies (FR Y-9LP) for each of Borrower andRoyal Palm, certified by the President or Chief Financial Officer of Borrower and Royal Palmrespectively.          (b) As soon as practicable and in any event within ninety (90) days after the end of eachfiscal year of Borrower, consolidated and consolidating statements of earnings and retainedearnings of Borrower and its Consolidated Subsidiaries for such year, consolidated andconsolidating statements of cash flow of Borrower and its Consolidated Subsidiaries for such year,and consolidated and consolidating balance sheets of Borrower and its Consolidated Subsidiaries asat the end of such year, setting forth in each case in comparative form corresponding figures fromthe preceding fiscal year, all such statements to be prepared in accordance with GAAP and reportedand accompanied by
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the unqualified opinion of BKD, LLP or other independent certified public accountants selected byBorrower and acceptable to Lender together with (i) a certificate from such accountants to theeffect that, in making the examination necessary for the signing of such annual audit report, suchaccountants have not become aware of any Default or Event of Default that has occurred or iscontinuing, or, if such accountants have become aware of any such event, describing it and thesteps, if any, being taken to cure it and (ii) the computations of such accountants evidencingBorrower’s compliance with the financial covenants contained in this Agreement;          (c) Contemporaneously with the delivery of the financial statements pursuant to Sections5.03(a) and (b) hereof, a certificate in substantially the form of that attached hereto and made apart hereof as Exhibit C (with appropriate insertions), executed by the principal financialofficer of Borrower;          (d) As soon as practicable and in any event within forty five (45) days after each fiscalquarter, such financial statements of Royal Palm, any Subsidiary Bank, and/or any Subsidiary asLender shall reasonably request.          (e) Promptly after filing with any Regulatory Agency, and in any event within ten (10) daysafter the filing thereof, copies of all financial statements, reports, filings and other documentswhich Borrower, Royal Palm, Subsidiary Bank, and/or any Subsidiary shall file with any regulatoryagency; and          (f) With reasonable promptness, such other financial information and data as Lender may fromtime to time reasonably request.Lender is hereby authorized to deliver a copy of any financial statement or other information madeavailable by Borrower, Royal Palm, Subsidiary Bank, and/or any Subsidiary to any RegulatoryAuthority having jurisdiction over Lender, pursuant to any request therefore.     5.04 Maintenance of Property. Maintain, and cause Royal Palm, Subsidiary Bank, andeach Subsidiary to maintain, all Property, plants and equipment (except obsolete equipment) ofBorrower, Royal Palm, Subsidiary Bank, and each Subsidiary in good operating order, and from timeto time make, and cause Royal Palm, Subsidiary Bank, and each Subsidiary to make, all needful andproper repairs, renewals, replacements, additions, betterments and improvements thereto so that atall times the efficiency thereof shall be fully preserved and maintained.     5.05 Inspection. Permit, and cause Royal Palm, each Subsidiary Bank, and eachSubsidiary to permit, any person designated by Lender to visit, inspect and audit any of theProperties, corporate books, loan documentation, loan portfolios, loan files and financial recordsof Borrower, Royal Palm, Subsidiary Bank, and each Subsidiary and to discuss the affairs, financesand accounts of Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary with the principalofficers of Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, all at such reasonabletimes with reasonable notice and as often as Lender may reasonably request.     5.06 Corporate Existence. Do or cause to be done all things necessary to (a) preserveand keep in full force and effect the corporate existence, rights and franchises of itself, RoyalPalm, each Subsidiary Bank, and each Subsidiary, (b) dulyqualify itself, Royal Palm, eachSubsidiary Bank, and each Subsidiary to do business in all jurisdictions where the nature ofProperty owned or leased by Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary, or thenature of the business of Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiaryrequires such qualification, (c) maintain its status and Royal Palm’s status as a “bank holdingcompany” under and within the meaning of 12 U.S.C. §1841 (a), (d) cause each Subsidiary Bank topreserve and keep in full force and effect its existence, franchise and right to do business as anational bank or a state banking corporation, as the case may be, under the laws of thejurisdiction of its incorporation, and (e) maintain
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each Subsidiary Bank’s status as an “insured bank” as defined in, or within the meaning of, 12U.S.C. §1813, and to otherwise maintain each Subsidiary Bank’s eligibility for federal depositinsurance.     5.07 Compliance with Law. Comply to the best of Borrower’s knowledge in all materialrespects with, and cause Royal Palm, each Subsidiary Bank, and each Subsidiary to comply in allmaterial respects with, any and all laws, ordinances and governmental and regulatory rules andregulations to which it, Royal Palm, each Subsidiary Bank, and each Subsidiary is subject; andobtain, and cause Royal Palm, each Subsidiary Bank, and each Subsidiary to obtain, any and alllicenses, permits, franchises and other governmental and regulatory authorizations necessary to theownership of the Properties of itself, Royal Palm, each Subsidiary Bank, and each Subsidiary, or tothe conduct of the business of itself, Royal Palm, each Subsidiary Bank, and each Subsidiary, whichviolation or failure to obtain might materially adversely affect the business, prospects, profits,Properties or condition (financial or otherwise) of Borrower, Royal Palm, each Subsidiary Bank, andeach Subsidiary.     5.08 ERISA Compliance. If Borrower, Royal Palm, each Subsidiary Bank, or eachSubsidiary shall have, or in the future create, any Pension Plan, Borrower shall comply with, andshall cause Royal Palm, each Subsidiary Bank, and each Subsidiary to comply with, all requirementsof ERISA relating to such plan. Without limiting the generality of the foregoing, Borrower willnot: (a) permit, or cause or allow Royal Palm, each Subsidiary Bank, and each Subsidiary topermit, any Pension Plan maintained by it, Royal Palm, each Subsidiary Bank, or each Subsidiary, asthe case may be, to engage in any nonexempt “prohibited transaction”, as such term is defined insection 4975 of the Internal Revenue Code of 1986, as amended; (b) permit, or cause or allow RoyalPalm, each Subsidiary Bank, and each Subsidiary to permit, any Pension Plan maintained by it, RoyalPalm, any Subsidiary Bank, or any Subsidiary, as the case may be, to incur any “accumulated fundingdeficiency,” as such term is defined in Section 302 of ERISA, 29 U.S.C. §1082, whether or notwaived; (c) terminate, or cause or allow Royal Palm, each Subsidiary Bank, and each Subsidiary toterminate, any such Pension Plan in a manner which could result in the imposition of a Lien on theProperty of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, as the case may be,pursuant to section 4068 of ERISA, 29 U.S.C, § 1368; or (d) take, or cause or allow Royal Palm, anySubsidiary Bank, or any Subsidiary to take, any action which would constitute or give rise to acomplete or partial withdrawal from a multi-employer plan within the meaning of Sections 4203 and4205 of Title IV of ERISA. Notwithstanding any provision contained in this Section 5.08 to thecontrary, an act by Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary shall not bedeemed to constitute a violation of subparagraphs (a) through (d) hereof unless Lender determinesin good faith that said action, individually or cumulatively with other acts of the Borrower, RoyalPalm, any Subsidiary Bank, or any Subsidiary, does have or is likely to cause a significant adversefinancial effect upon Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary. Borrower shallhave the affirmative obligation hereunder to report to Lender any of those acts identified insubparagraphs (a) through (d) hereof, regardless of whether said act does or is likely to cause asignificant adverse financial effect upon Borrower, Royal Palm, any Subsidiary Bank, or anySubsidiary, and failure by Borrower to report such act promptly upon Borrower’s becoming aware ofthe existence thereof shall constitute an Event of Default hereunder.     5.09 [RESERVED]     5.10 [RESERVED]     5.11 Capital Adequacy Guidelines. Comply with, and it will cause Royal Palm,each Subsidiary Bank and each Subsidiary to comply with, to the extent applicable, (a) the capitaladequacy guidelines for bank holding companies of The Board of Governors of the Federal ReserveSystem as set forth in Appendices A, B, D and E to 12 C.F.R. Part 225, (b) the capital adequacyguidelines for state member banks of The Board of Governors of the Federal Reserve System as setforth in Appendices A, B and E to 12 C.F. R. 208 and in Appendix B to 12 C.F.R. Part 225, (c) thecapital adequacy guidelines for state nonmember banks of the Federal Deposit Insurance Corporationas set forth in Appendices A and B to 12 C.F.R. Part 325, (d) the capital adequacy guidelines fornational
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banking associations of the Office of the Comptroller of the Currency as set forth in Appendices Aand B to 12 C.F.R, Part 3, and (e) the capital adequacy guidelines for savings associations of theOffice of Thrift Supervision as set forth in 12 C.F.R. Part 567, as from time to time amended, orin any successor law, rule or regulation of similar import (collectively, the “CapitalGuidelines”). In addition, Borrower will cause each Subsidiary Bank to maintain at all times duringthe Term of this Agreement a “well-capitalized” rating under the Capital Guidelines.     5.12 [RESERVED]     5.13 Consolidated Fixed Charge Coverage Ratio. Maintain a Consolidated FixedCharge Coverage Ratio of at least 1.10 to 1.00 for each four (4) consecutive fiscal quarter periodcommencing with the four (4) consecutive fiscal quarter period ending December 31, 2006.     5.14 Notices. Notify Lender in writing of any of the following within five (5)Business Days after learning of the occurrence thereof, describing the same and, if applicable, thesteps being taken by the Person(s) affected with respect thereto:          (a) Default. The occurrence of any Default or Event of Default under this Agreement orany default or event of default by Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiaryunder any note, indenture, loan agreement, mortgage, deed of trust, security agreement, lease orother similar agreement, document or instrument to which Borrower, Royal Palm, any Subsidiary Bank,or any Subsidiary, as the case may be, is a party or by which it is bound or to which it issubject;          (b) Litigation. The institution of any litigation, arbitration proceeding orgovernmental or regulatory proceeding affecting Borrower, Royal Palm, any Subsidiary Bank, anySubsidiary, any Collateral or any Third Party Collateral, whether or not considered to be coveredby insurance, in an amount of greater than $100,000;          (c) Judgment. The entry of any judgment or decree against Borrower, Royal Palm, anySubsidiary Bank, or any Subsidiary in an amount of greater than $100,000;          (d) Pension Plans. The occurrence of a Reportable Event with respect to any PensionPlan; the filing of a notice of intent to terminate a Pension Plan by Borrower, any ERISAAffiliate, any other Obligor, any Subsidiary, or any Subsidiary Bank; the institution ofproceedings to terminate a Pension Plan by the PBGC or any other Person to terminate any PensionPlan; the withdrawal in a “complete withdrawal” or a “partial withdrawal” as defined in Sections4203 and 4205, respectively, of ERISA by Borrower, any ERISA Affiliate, any other Obligor, anySubsidiary, or any Subsidiary Bank from any Multiemployer Plan; or the incurrence of any materialincrease in the contingent liability of Borrower, any other Obligor, any Subsidiary, or anySubsidiary Bank with respect to any “employee welfare benefit plan” as defined in Section 3(1) ofERISA which covers retired employees and their beneficiaries;          (e) Change of Name. Any change in the name of Borrower, Royal Palm, any SubsidiaryBank, or any Subsidiary;          (f)Change in Place(s) of Business. Any proposed opening, closing or other change ofthe chief executive office of Borrower, or the main banking branch of any Subsidiary Bank;          (g)Environmental Matters. Receipt of any notice that the operations of Borrower,Royal Palm, any Subsidiary Bank, or any Subsidiary are not in full compliance with any of therequirements of any applicable Federal, state or local environmental, health or safety law, rule orregulation; receipt of notice that Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary issubject to any Federal, state or local investigation evaluating whether any remedial action isneeded to respond to the release of any hazardous or toxic waste, substance or constituent or othersubstance
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into the environment; or receipt of notice that any of the Properties or assets of Borrower, RoyalPalm, any Subsidiary Bank, or any Subsidiary are subject to an “Environmental Lien.” For purposesof this Section 5.14, “Environmental Lien” shall mean a Lien in favor of any governmentalor regulatory agency, entity, authority or official for (1) any liability under Federal, state orlocal environmental laws, rules or regulations or (2) damages arising from or costs incurred by anysuch governmental or regulatory agency, entity, authority or official in response to a release of ahazardous or toxic waste, substance or constituent or other substance into the environment;          (h) Material Adverse Effect. The occurrence of any change in the business, operationsor condition, financial or otherwise, of Borrower, Royal Palm, any Subsidiary Bank, or anySubsidiary that could have a Material Adverse Effect; and          (i) Regulatory Matters. The issuance of any cease and desist order against Borrower,Royal Palm, any Subsidiary Bank, or any Subsidiary and/or the entry of any memorandum ofunderstanding or other agreement between Borrower, Royal Palm, any Subsidiary Bank, or anySubsidiary and any Regulatory Agency, regardless of whether the same is voluntary or involuntary.     5.15 Utilization of Loan Proceeds. Utilize the proceeds of any advance made under theLoan solely to: (a) repay Borrower’s existing Indebtedness with Lender; (b) finance the purchaseprice of the Royal Palm Merger Transaction; and (c) other proper corporate purposes.SECTION 6 — NEGATIVE COVENANTS     Borrower covenants and agrees that, as long as any of the Obligations are outstanding,it will not, and it will not cause or permit Royal Palm, any Subsidiary Bank, or any Subsidiaryto, without the prior written consent of Lender:     6.01 Indebtedness. Create or incur any Indebtedness except (a) Indebtedness dueLender, (b) the other Indebtedness described on Schedule 4.10, and (c) Indebtedness ofSubsidiary Banks to creditors in the ordinary course of their banking business.     6.02Merger or Consolidation etc. Merge into or consolidate with any other entity(provided that Royal Palm may merge into Borrower, and Security State Bank of Hamilton and StateBank of Augusta may merge into Marine Bank & Trust), or cause or permit any material change in theownership of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, or in the identity ofBorrower’s executive officers or directors (except for changes necessitated by death, incapacity,natural retirement or similar causes).     6.03 Sale of Property. Sell, lease, transfer or otherwise dispose of any Property orassets of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, as the case may be, exceptin the ordinary course of business; provided, however, that the foregoing shall not precludeBorrower, Royal Palm, any Subsidiary Bank, or any Subsidiary from selling, leasing, transferring orotherwise disposing of less than substantially all of its assets so long as the purchase price forsaid assets shall be equal to or greater than the depreciated book value of said assets.     6.04 Distributions. Declare or incur any liability to make any Distribution inrespect of the capital stock of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary,except (a) Subsidiary Banks shall be permitted to pay cash Distributions to Royal Palm and/orBorrower to the extent necessary to pay the Obligations then due and payable to Lender and whichare actually applied toward payment of the Obligations; (b) Royal Palm shall be permitted to paycash Distributions to Borrower to the extent necessary to pay the Obligations then due and payableto Lender and which are actually applied toward payment of the Obligations; and (c) so long as noDefault or Event of Default under this Agreement has occurred and is continuing or is createdthereby (i) Borrower shall be permitted to declare and pay cash Distributions on its capital stockin an aggregate amount of up to
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Three Million Dollars ($3,000,000.00) during each calendar year ending during the Term of thisAgreement, and (ii) Subsidiary Banks shall be permitted to declare and pay cash Distributions ontheir respective capital stock.     6.05Issuance of Stock etc. Authorize or issue any new types, varieties or classes ofcapital stock of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, either preferred orcommon, voting or nonvoting, or any bonds or debentures, subordinated or otherwise, or any stockwarrants or options, or authorize or issue any additional shares of stock of any existing class ofstock of Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary, or grant any person otherthan Lender any proxy for existing shares, or cause or allow or declare any stock splits or takeany other action which could, directly or indirectly, decrease Borrower’s ownership interest inRoyal Palm or which could, directly or indirectly, decrease Borrower’s ownership interests inSubsidiary Banks and its other Subsidiaries, except as described in Schedule 6.05 attachedhereto.     6.06Capital Expenditures. Make any capital expenditures, enter into any CapitalizedLeases or obtain any purchase money financing, except that (a) Borrower or Mercantile Trust &Savings Bank make capital expenditures in 2006 and 2007 in connection with the proposedconstruction of a new main banking facility for Mercantile Trust & Savings Bank, and (b) Borrower,Royal Palm, the Subsidiary Banks and the Subsidiaries may make other capital expenditures, acquireassets subject to purchase money liens given by Borrower or retained by the seller thereof, andenter into Capitalized Leases, provided such expenditures and Capitalized Leases do not exceed TwoMillion Dollars ($2,000,000.00) in the aggregate on a combined basis during any consecutive twelve(12) month period during the term of this Agreement.     6.07Default. Allow to occur, or to continue unremedied, any act, event or conditionwhich constitutes an event of default, or which, with the passage of time or giving of notice, orboth, would constitute an event of default under, any agreement, document or instrument to whichBorrower, Royal Palm, any Subsidiary Bank, or any Subsidiary is a party or by which Borrower,Royal Palm, any Subsidiary Bank, or any Subsidiary may be bound.     6.08Investments. Make any advances or loans or extensions of credit to, purchase anystock, bonds, notes, debentures or other securities of, make any expenditures on behalf of or inany manner assume liability (direct, contingent or otherwise) for the Indebtedness of, any Person,except (a) such Guarantees, loans, advances and/or investments made by Subsidiary Banks in theordinary course of their banking business (whether or not such investments fall within any of theother exceptions set forth in clauses (c), (d) or (e) below), (b) loans or advances from Borrowerto any Subsidiary Bank, (c) investments in certificates of deposit, repurchase agreements or othershort-term direct obligations of any commercial bank located in the United States of America havingcapital resources in excess of $20,000,000.00 (provided, however, that such certificates ofdeposit, repurchase agreements and/or other short-term direct obligations shall mature not morethan one (1) year from the date of acquisition thereof), (d) investments in obligations of theUnited States government or any agency thereof which are backed by the full faith and credit of theUnited States (provided, however, that such obligations shall mature not more than one (1) yearfrom the date of acquisition thereof) and (e) shares of stock, obligations and/or other securitiesreceived in settlement of claims arising in the ordinary course of business.     6.09Liens. Create, incur, assume, permit the imposition of or allow the continuanceof any Lien on any of the Property or assets of Borrower, Royal Palm, any Subsidiary Bank, or anySubsidiary (including the stock of any Subsidiary Banks), except for (i) Liens securing governmentdeposits at Subsidiary Banks; (ii) Liens on Property or assets acquired by any of Subsidiary Banksby foreclosure or by deed in lieu of foreclosure; (iii) liens expressly permitted, or consented to,by Lender; (iv) liens of judgment creditors provided such liens do not exceed, in the aggregate, atany time, $50,000, other than liens bonded or insured to the reasonable satisfaction of Lender; (v)liens for taxes not yet due and payable or which are being diligently contested in good faith byBorrower, Royal Palm, any Subsidiary
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Bank, orany Subsidiary by appropriate proceedings; and (vi) the Lienslisted on Schedule 4.11 attached hereto; and (vii) subject to the limitation ofSection 6.06 above, liens on anyProperty acquired after the date hereof, provided that each such lien shall attach only to theProperty acquired.     6.10Subsidiaries and Related Companies. Other than as permitted by this Agreement(a) Transfer any Property to any Related Party, (b) purchase or sign any agreement to purchase anysecurities of any Related Party (whether debt, equity or otherwise), underwrite or guarantee thesame, or otherwise become obligated with respect thereto, or (c) take any other action or permitany action to be taken with respect to any Related Party which would jeopardize either Borrower’sability to repay the Loans, or any portion thereof, as the same becomes due and payable, or thesecurity given to Lender with respect to the Loans.     6.11Use of Proceeds.Without Lender’s prior written consent, permit any proceeds ofany advance under the Loans to be used either directly or indirectly for the purpose (whetherimmediate, incidental or ultimate) of “purchasing or carrying any margin stock” within the meaningof Regulation U of the Board of Governors of the Federal Reserve System, as from time to timeamended.     6.12Non-Performing Assets. Permit the aggregate amount of Non-Performing Assets ofall Subsidiary Banks on a combined basis to equal or exceed Fifteen Percent (15%) of the thenPrimary Capital of all Subsidiary Banks at anytime during the term of this Agreement, as determinedaccording to GAAP.     6.13Nature of Business. Conduct or engage in any business if, as a result thereof,the general nature of the business which would thereafter be engaged in by Borrower, Royal Palm,Subsidiary Bank, or any Subsidiary, as the case may be, would be substantially changed from thegeneral nature of the business engaged in on the date of this Agreement by Borrower, Royal Palm,any Subsidiary Bank, or any Subsidiary, as the case may be.     6.14Other Agreements. Enter into any agreement containing any provision which wouldbe violated or breached by the performance of its obligations hereunder or under any instrument ordocument delivered or to be delivered by it hereunder or in connection herewith.     6.15Management and Employment Contracts. Except for the agreements described inSchedule 6.15, allow any Subsidiary Bank to enter into any written management agreements orwritten employment contracts or any other similar contracts oragreements providing for totalcompensation in excess of $6,000,000 in the aggregate for all such contracts and agreements duringany consecutive twelve (12) month period during the term of this Agreement, unless the same areterminable by such Subsidiary Bank without penalty at any time in itssole and absolute discretion.SECTION 7 — EVENTS OF DEFAULT     Ifany of the following (each, an “Event of Default”) shall occur and becontinuing, unless otherwise waived in writing by Lender:     7.01 Borrower shall fail to pay any of the Obligations as and when the same shall become dueand payable, whether by reason of demand, maturity, acceleration or otherwise, and any such failureshall remain unremedied for five (5) days;     7.02 Any representation or warranty of Borrower, Royal Palm, and/or Subsidiary Bank made inthis Agreement or in any of the other Transaction Documents or in any certificate, agreement,instrument or statement furnished or made or delivered pursuant hereto or thereto or in connectionherewith or therewith, shall prove to have been untrue or incorrect in any material respect whenmade or effected;
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     7.03 Borrower shall fail to perform or observe any term, covenant or provision contained insections 5.11, 5.13, 5.14, 5.15 or Section 6 hereof;     7.04 Borrower shall fail to perform or observe any other term, covenant or provision containedin this Agreement, and any such failure shall remain unremedied for thirty (30) days after theearlier of (a) written notice of default is given to Borrower by Lender or (b) any executiveofficer of Borrower obtaining actual knowledge of such failure;     7.05 This Agreement or any of the other Transaction Documents shall at any time for any reasoncease to be in full force and effect or shall be declared to be null and void by a court ofcompetent jurisdiction, or if the validity or enforceability hereof or thereof shall be contestedor denied by Borrower, Royal Palm or any Obligor, or if Borrower, Royal Palm or any Obligor shalldeny that it has any further liability or obligation hereunder or thereunder or if Borrower, RoyalPalm or any Obligor shall fail to comply with or observe any of the terms, provisions or conditionscontained in any of the Transaction Documents (other than this Agreement);     7.06 An “Event of Default” (as defined therein) shall occur under or within the meaning of theBorrower Pledge or Subsidiary Pledge;     7.07 [RESERVED];     7.08 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligorshall (a) voluntarily commence any proceeding or file any petition seeking relief under Title 11 ofthe United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership,liquidation or similar law, (b) consent to the institution of, or fail to contravene in a timelyand appropriate manner, any such proceeding or the filing of any such petition, (c) apply for orconsent to the appointment of a receiver, trustee, custodian, sequestrator or similar official ofitself, himself or herself or of a substantial part of its Property or assets, (d) file an answeradmitting the material allegations of a petition filed against itself, himself or herself in anysuch proceeding, (e) make a general assignment for the benefit of creditors, (f) become unable,admit in writing its, his or her inability or fail generally to pay its, his or her debts as theybecome due, (g) become insolvent in either the equity or bankruptcy sense of the term or (h) takeany corporate or other action for the purpose of effecting any of the foregoing;     7.09 An involuntary proceeding shall be commenced or an involuntary petition shall be filed ina court of competent jurisdiction seeking (a) relief in respect of Borrower, Royal Palm, anySubsidiary Bank, any Subsidiary or any other Obligor, or of a substantial part of the Property orassets of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor, underTitle 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency,receivership, liquidation or similar law, (b) the appointment of a receiver, trustee, custodian,sequestrator or similar official of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary orany other Obligor or of a substantial part of the Property or assets of Borrower, Royal Palm, anySubsidiary Bank, any Subsidiary or any other Obligor or (c) the winding-up or liquidation ofBorrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor; and any suchproceeding or petition shall continue undismissed for sixty (60) consecutive days or an order ordecree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty(60) consecutive days;     7.10 Any Subsidiary Bank shall be placed in receivership by any Regulatory Agency;     7.11 Any Regulatory Agency shall notify any Subsidiary Bank that its capital has been impairedand such Subsidiary Bank does not cure such impairment within five (5) Business Days after receiptof such notice;     7.12 Any Subsidiary Bank shall cease to be an “insured bank” under or within the meaning ofthe Federal Deposit Insurance Act of 1959, as amended, or a cease and desist order, memorandum of
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understanding or other agreement shall be issued by any Regulatory Authority against or affectingBorrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor which (in Lender’sreasonable opinion) has or could have a Material Adverse Effect on the business, operation orcondition, financial or otherwise, of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary orany other Obligor;     7.13 Any litigation or governmental or regulatory proceeding is instituted against Borrower,Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor which, in Lender’s reasonableopinion, will have a Material Adverse Effect on the financial condition of Borrower, Royal Palm,any Subsidiary Bank, any Subsidiary or any other Obligor or on the continued operation of Borrower,Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor, after taking into accountinsurance coverage and reserves therefor (if any);     7.14 Any Property of Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any otherObligor shall be seized, attached or levied upon, unless released within thirty (30) days after thedate upon which Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligorobtains actual notice or knowledge thereof;     7.15 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor shall havea judgment entered against it by a court having jurisdiction in the premises, and such judgmentshall not be appealed in good faith or satisfied by Borrower, Royal Palm, any Subsidiary Bank orsuch Obligor, as the case may be, within thirty (30) days after the entry of such judgment;     7.16 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor shall fail(and such failure shall not have been cured or waived) to perform or observe any term, provision orcondition of, or any other default or event of default shall occur under, any agreement, documentor instrument evidencing or securing any outstanding indebtedness of Borrower, Royal Palm, anySubsidiary Bank, any Subsidiary or any other Obligor, as the case may be, for borrowed money (otherthan the Obligations), if the effect of such failure or default is to cause or permit suchindebtedness to be declared to be due and payable or otherwise accelerated, or required to beprepaid (other than by a regularly scheduled required prepayment), prior to the stated maturitythereof;     7.17 The institution by Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary Bank, or anySubsidiary of steps to terminate any Pension Plan if, in order to effectuate such termination,Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary Bank, or any Subsidiary would be requiredto make a contribution to such Pension Plan or would incur a liability or obligation to suchPension Plan in excess of $50,000; or the institution by the PBGC of steps to terminate any PensionPlan;     7.18 Borrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor shall bedeclared by Lender to be in default on, or pursuant to the terms of, (a) any other present orfuture obligation to Lender, including, without limitation, any other loan, line of credit,revolving credit, guaranty or letter of credit reimbursement obligation, or (b) any other presentor future agreement purporting to convey to Lender a Lien upon any of the Property or assets ofBorrower, Royal Palm, any Subsidiary Bank, any Subsidiary or any other Obligor;THEN, and in each such event (other than an event described in Sections 7.08, 7.09 or 7.10),Lender may declare the entire outstanding principal balance of and all accrued and unpaid intereston the Notes issued under this Agreement and all other amounts payable by Borrower hereunder to beimmediately due and payable, whereupon all of such outstanding principal balance and accrued andunpaid interest and all such other amounts shall become and be immediately due and payable,without presentment, demand, protest or further notice of any kind, all of which are herebyexpressly waived by Borrower, and Lender may exercise any and all other rights and remedies whichit may have under any of the other Transaction Documents or under applicable law; provided,however, that upon the occurrence of any event described in Sections 7.08, 7.09 or 7.10, theentire outstanding principal
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balance of and all accrued and unpaid interest on the Notes issued under this Agreement andall other amounts payable by Borrower hereunder shall automatically become immediately due andpayable, without presentment, demand, protest or further notice of any kind, all of which arehereby expressly waived by Borrower, and Lender may exercise any and all other rights and remedieswhich it may have under any of the other Transaction Documents orunder applicable law.SECTION 8 — GENERAL     8.01No Waiver. No failure or delay by Lender or the holder of the Notes in exercisingany right, remedy, power or privilege hereunder or under any other Transaction Document shalloperate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power or privilege. Theremedies provided herein and in the other Transaction Documents are cumulative and not exclusive ofany remedies provided by law. Nothing herein contained shall in any way affect the right ofLender to exercise any statutory or common law right of banker’s lien or set-off.     8.02Right of Set-Off. Upon the occurrence and during the continuance of any Event ofDefault under this Agreement, Lender is hereby authorized at any time and from time to time toset-off and apply any and all deposits (general or special, time or demand, provisional or final)at any time held and any and all other indebtedness at any time owing by Lender to or for thecredit or the account of Borrower against any and all of the Obligations irrespective of whether ornot Lender shall have made any demand hereunder or thereunder. Lender agrees promptly to notifyBorrower after any such set-off and application made by Lender, provided, however, that the failureto give such notice shall not affect the validity of such set-off and application. The rights ofLender under this Section 8.02 are in addition to any other rights and remedies (including, withoutlimitation, other rights of set-off) which Lender may have. Nothing contained in this Agreement orany other Transaction Document shall impair the right of Lender to exercise any right of set-off orcounterclaim it may have against Borrower and to apply the amount subject to such exercise to thepayment of indebtedness of Borrower unrelated to this Agreement or the other Transaction Documents.     8.03Cost and Expenses. Borrower agrees to pay (a) all out-of-pocket costs and expensesof Lender in connection with the preparation, negotiation and execution of this Agreement, the Noteand the other Transaction Documents, including, without limitation, reasonable Attorneys’ Fees,provided that such Attorneys’ Fees shall not exceed $6,000, (b) all recording and filing feesincurred in connection with this Agreement and the other Transaction Documents, (c) allout-of-pocket expenses of Lender in connection with the preparation of any waiver or consenthereunder or any amendment hereof or any Event of Default or alleged Event of Default hereunder,including, without limitation, reasonable Attorneys’ Fees, (d) if an Event of Default occurs, allout-of-pocket costs and expenses incurred by Lender, including, without limitation, reasonableAttorneys’ Fees, in connection with such Event of Default and collection and other enforcementproceedings resulting there from and (e) all other Attorneys’ Fees incurred by Lender relating toor arising out of or in connection with this Agreement or any of the other Transaction Documents.     8.04Environmental Indemnity. Borrower hereby agrees to indemnify Lender and holdLender harmless from and against any and all losses, liabilities, damages, injuries, costs,expenses and claims of any and every kind whatsoever (including, without limitation, court costsand Attorneys’ Fees) which at any time or from time to time may be paid, incurred or suffered by,or asserted against, Lender for, with respect to or as a direct or indirect result of the violationby Borrower, Royal Palm, any Subsidiary Bank, or any Subsidiary of any laws or regulations relatingto solid waste and/or hazardous waste treatment, storage, disposal, generation and transportation,air, water and/or noise pollution, soil or ground or water contamination, the handling, storage orrelease into the environment of hazardous materials or hazardous substances, and the transportationof hazardous materials (“Environmental Laws”)  or with respect to, or as a direct or indirectresult of the presence on or under, or the escape, seepage, leakage, spillage, discharge, emissionor release from, properties utilized by Borrower, Royal
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Palm, any Subsidiary Bank, or any Subsidiary in the conduct of their respective businessesinto or upon any land, the atmosphere or any watercourse, body of water or wetland, of anyhazardous material or substances (including, without limitation, any losses, liabilities, damages,injuries, costs, expenses or claims asserted or arising under the Environmental Laws); and theprovisions of and undertakings and indemnification set out in this Section 8.04 shall survive thesatisfaction and payment of the Obligations and termination of this Agreement.     8.05General Indemnity. In addition to the payment of expenses pursuant to Section9.03, whether or not the transactions contemplated hereby shall be consummated, Borrower herebyagrees to indemnify, pay and hold Lender and any holder of any of the Notes, and the officers,directors, employees, agents and affiliates of Lender and such holder(s) (collectively called the“Indemnitees”) harmless from and against any and all other liabilities, obligations, losses,damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of anykind or nature whatsoever (including, without limitation, the reasonable fees and disbursements ofcounsel for such indemnities in connection with any investigative, administrative or judicialproceeding commenced or threatened, whether or not such Indemnitees shall be designated a partythereto), that may be imposed on, incurred by or asserted against the Indemnitees, in any mannerrelating to or arising out of this Agreement, the other Transaction Documents, or other agreementsexecuted and delivered by Borrower, Royal Palm, or any other Obligor in connection herewith, thestatements contained in any commitment letters delivered by Lender, Lender’s agreement to make theLoan hereunder or the use or intended use of the proceeds of the Loanhereunder (the “IndemnifiedLiabilities”): that Borrower shall have no obligation to the Indemnitees with respect toIndemnified Liabilities arising from the negligence or willful misconduct of the Indemnitees asdetermined by a court of competent jurisdiction. To the extent that the undertaking to indemnify,pay and hold harmless set forth in the preceding sentence may be unenforceable because it isviolative of any law or public policy, Borrower shall contribute the maximum portion that it ispermitted to pay and satisfy under applicable law to the payment and satisfaction of allIndemnified Liabilities incurred by the Indemnitees or any of them. The provisions of theundertakings and indemnification set out in this Section 8.05 shall survive satisfaction andpayment of the Obligations and termination of this Agreement.     8.06Authority to Act. Lender shall be entitled to act on any notices andinstructions (telephonic or written) reasonably believed by Lender to have been delivered by anyPerson authorized to act on behalf of Borrower pursuant hereto, regardless of whether such noticeor instruction was in fact delivered by a Person authorized to act on behalf of Borrower, andBorrower hereby agrees to indemnify Lender and hold Lender harmlessfrom and against any and alllosses and expenses, if any, ensuing from any such action.     8.07Notices. Each notice, request, demand, consent, confirmationand/or other communication under this Agreement shall be in writing and delivered in person orsent by telecopy, recognized overnight courier or registered or certified mail, return receiptrequested and postage prepaid, to the applicable party at its address or telecopy number set forthon the signature page(s) of this Agreement, or at such other address or telecopy number as anyparty hereto may designate as its address or telecopy number for communications under thisAgreement by notice so given. Such notices shall be deemed effective on the day on whichdelivered or sent if delivered in person or sent by telecopy, on thefirst (1st)Business Day after the day on which sent, if sent by recognized overnight courier or on the third(3rd) Business Day after the day on which mailed, if sent by registered or certified mail,     8.08CONSENT TO JURISDICTION WAIVER OF JURY TRIAL.BORROWER IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT SITTINGIN ST. LOUIS COUNTY, MISSOURI, OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERNDISTRICT OF MISSOURI, AS LENDER MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF ORRELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. BORROWER HEREBY IRREVOCABLY AGREESTHAT
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ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAYBE HELD AND DETERMINED IN ANY OF SUCHCOURTS. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICHBORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDINGBROUGHT IN ANY SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT,ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWERHEREBY EXPRESSLY WAIVES ALL RIGHTS OF ANY OTHER JURISDICTION WHICH BORROWER MAY NOW OR HEREAFTERHAVE BY REASON OF ITS PRESENT OR SUBSEQUENT DOMICILES. BORROWER AUTHORIZES THE SERVICE OF PROCESSUPON BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS SET FORTH IN SECTION 8.07.**BORROWER AND LENDER IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION INWHICH BORROWER AND LENDER ARE PARTIES.     8.09Lender’s Books and Records. Lender’s books and records showing theaccount between Borrower and Lender shall be admissible in evidence in any action or proceeding andshall constitute prima facie proof thereof.     8.10Governing Law: Amendments. This Agreement, the Note, Borrower Pledge, SubsidiaryPledge and all of the other Transaction Documents shall be governed by and construed in accordancewith the internal laws of the State of Missouri, and this Agreement and the other TransactionDocuments may not be changed, nor may any term, condition or Event of Default be waived, modifiedor discharged orally but only by an agreement in writing, signed by the party against whomenforcement of any waiver, change, modification or discharge is sought.     8.11References: Headings for Convenience. Unless otherwise specifiedherein, all references herein to Section numbers refer to section numbers of this Agreement, andall references herein to Schedules 2.01(b), 4.05,4.08, 4.10, 4.11, 4.14, 6.05, or6.15 or Exhibits A, B, or C refer to attachedSchedules 2.01(b), 4.05, 4.08, 4.10,4.11, 4.14, 6.05, or 6.15, or ExhibitsA, B, or  C,  which are herebyincorporated herein by reference. The section headings are furnished for the convenience of theparties and are not to be considered in the construction or interpretation of this Agreement.     8.12Binding Agreement. This Agreement shall be binding upon and inure to the benefitof Borrower and its successors and Lender and its successors and assigns. Borrower may not assignor delegate any of its rights or obligations under this Agreement without Lender’s prior writtenconsent.     8.13 Severability. In the event any one or more of the provisions contained in thisAgreement should be invalid, illegal or unenforceable in any respect the validity, legalityand enforceability of the remaining provisions contained herein shall not in any way be affected orimpaired thereby.     8.14Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all of which together shall constitute one and the sameinstrument.     8.15Resurrection of Obligations To the extent that Lender receives any payment onaccount of any of the Obligations, and any such payment(s) or any part thereof are subsequentlyinvalidated, declared to be fraudulent or preferential, set aside, subordinated and/or required tobe repaid to a trustee, receiver or any other Person under any bankruptcy act, state or Federallaw, common law or equitable cause, then, to the extent of such payment(s) received, theObligations or part thereof intended to be satisfied and any and all liens, security interests,mortgages, deeds of trust and/or other encumbrances upon or pertaining to any assets of Borrowerand theretofore created and/or existing in favor of Lender as security for the payment of such theObligations shall be revived and continue in full force and effect, as if such payment(s) had notbeen received by Lender and applied on account of the Obligations.
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     8.16Entire Agreement This Agreement embodies the entire agreement and understandingbetween the parties hereto and supersedes all prior agreements and understandings (oral or written)relating to the subject matter hereof. This Agreement shall amend, restate and replace theOriginal Agreement.     8.17Notice Required by Section 432.047 R. S. Mo. This notice is providedpursuant to Section 432,047 R.S.Mo. As used herein, “creditor” means Lender and “this writing”means this Agreement and the other Transaction Documents. **ORAL AGREEMENTS OR COMMITMENTS TO LOANMONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TOEXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT ISBASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S))AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACHCOVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVESTATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.**     8.18USA PATRIOT Act. Lender hereby notifies Borrower that pursuant to therequirements of the USA PATRIOT Act, Title III of Pub. L 107-56 (signed into law October 26, 2001)(the “Act”), it is required to obtain, verify and record information that identifies Borrower,which information includes the name and address of Borrower and otherinformation that will allowLender to identify Borrower in accordance with the Act.     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year firstabove written.**(SIGNATURES ON FOLLOWING PAGE)**
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**SIGNATURE PAGE-****