exv10w01



 





Exhibit 10.1









	 	 	 
	 

	 	M&l Marshall & Ilsley Bank

770 North Water Street
 Milwaukee, Wl 53202-3509

414 765-7700

mibank.com






September 28, 2007




Mr. Daniel R. Kadolph

Executive Vice President & CFO

Midwest Banc Holdings, Inc.

501 W. North Avenue

Melrose Park, IL 60160




Dear Mr. Kadolph:




     This Letter Agreement (the “Agreement”) is made and entered into as of this 28th day of
September, 2007, by and between Midwest Banc Holdings, Inc. (the “Borrower”) and M&I Marshall & Ilsley Bank (the “Lender”).



     Borrower covenants that so long as any obligation is owed to Lender or Lender has any
outstanding commitment to lend to Borrower, under the terms and conditions of any promissory
note from Borrower to Lender under the Revolving Loan(s), in the aggregate principal amount of
$25,000,000.00 (the “Revolving Credit Limit”) dated September 28, 2007 and a promissory note
from Borrower to Lender under the Term Loan, in the aggregate principal amount of $75,000,000.00
dated September 28, 2007, or under any note(s) evidencing a loan, (the “Note(s)”) and all
extensions, renewals or modifications of the Note(s). The Revolving Loan(s) and Term Loan
collectively are called (the “Loan(s)”):




	 	1.	 	Lender shall have received the following security documents
(the “Security
Documents”) in form and substance satisfactory to Lender:






	 	(i)	 	Promissory Note(s);
	 
	 	(ii)	 	Commercial Pledge Agreement;
	 
	 	(iii)	 	100% of Midwest Bank and Trust Company stock; and
	 
	 	(iv)	 	Irrevocable Stock or Bond Power.






	 	2.	 	Borrower shall furnish to Lender, as soon as available, such financing
information respecting Borrower as Lender from time to time requests, and without request furnish to Lender:






(i) Within 120 days after the end of each fiscal year of Borrower, a
balance sheet of Borrower as of the close of such fiscal year and related
statements of income and retained earnings and cash flow for such year all
in reasonable detail and satisfactory in scope to Lender, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, audited by an independent certified public accountant,
selected by Borrower and acceptable to Lender.



 









 






(ii) Within 45 days after the end of each quarter, a balance sheet of
Borrower as of the end of such quarter and related statements of income and
retained earnings and cash flow for the period from the beginning of the fiscal
year to the end of such quarter, prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject to normal year-end
adjustments, certified by a financial representative of Borrower.




(iii) Copies of all quarterly Federal Financial Institution Examination Council
Form 031 (“Call Reports”) required by Midwest Bank and Trust Company (the “Bank”)
no later than the due date required by these agencies prepared in accordance with
agency requirements, certified by the financial representatives of Bank now owned
or hereafter acquired.




(iv) Within 45 days after the end of each quarter, grid price
monitoring will be required.




	 	3.	 	Borrower shall timely perform and observe the following financial covenant(s), all
calculated in accordance with generally accepted accounting principles applied on a
consistent basis. A financial covenant violation will be an indication of an adverse
change to the Borrower’s financial condition:






(i) Bank shall maintain at all times a ratio of Non-performing Loans to Total
Loans of not greater than 3.00%, tested quarterly. “Non-performing Loans” means
loans outstanding which are not accruing interest, have been classified as
renegotiated pursuant to guidelines established by the Federal Financial
Institutions Examination council or are 90 days or more past due in the payment of
principal or interest. “Total Loans” means the sum of loans and direct lease
financings, net of unearned income by Bank.




(ii) Bank must report a quarterly profit, tested quarterly, excluding charges
related to acquisitions.




(iii) Bank must remain well capitalized.




	 	4.	 	Borrower shall not merge into or consolidate with any other business enterprise or
another business enterprise shall not merge into the Borrower, without prior written
consent of Lender. For the mergers where the Borrower is the “surviving” entity,
approval by the Lender shall be obtained following the announcement of a definitive
agreement.
	 
	 	5.	 	An event of default will occur if either the Borrower or Bank becomes subject to an
adverse regulatory action (including a Memorandum of Understanding which limits
in any way the ability of the bank to pay dividends to the holding company, a written
agreement or Cease & Desist order).




 









 






	 	6.	 	Use of the Revolving Loan for the purpose of acquisitions must be
approved by Lender following the announcement of a definitive agreement.
	 
	 	7.	 	All outstanding debt due on the sale of Bank or Borrower.
	 
	 	8.	 	In the event of a change in executive management, Borrower shall provide
Lender with acceptable succession plan within 90 days.
	 
	 	9.	 	Other Borrower debt greater than $2,000,000 is prohibited without prior
written consent of Lender; excluding Trust Preferred indebtedness, which approval will not be unreasonably withheld.
	 
	 	10.	 	This Letter Agreement amends and restates in its entirety an existing
Letter
Agreement dated April 4, 2007 by and between Borrower and Lender.





     A breach of any term or condition in this Agreement shall constitute an additional event of
default under the Note(s) and Lender may, at its option, declare the Note(s) due and payable, and
may pursue all remedies available to it with regard to the Note(s). The undersigned shall reimburse
Lender for all expenses incurred by it in protecting or enforcing its rights under this Note(s),
including without limitation, costs of administration of the Note(s) and costs of collection before
and after judgment, including reasonable attorney’s fees and legal expenses. There will be a 10 day
cure period for payment defaults and a 30 day cure period for covenant defaults. Any cure period
shall begin on the date of receipt of notice thereof. This applies to the line of credit and term
loan referenced herein.



     In the case of any ambiguity or conflict between this Agreement, any note evidencing a Loan,
or any Security Document, this Agreement will govern.



     Please confirm your acknowledgment and acceptance of the terms and conditions of this
Agreement by signing and dating below.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Very truly yours,	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John J. Kadlac
	 	 	 	By:
	 	/s/ [ILLEGIBLE]	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	John J. Kadlac, Vice President	 	 	 	Title:	 	Vice President	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Accepted and Agreed: September 28 , 2007	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Midwest Banc Holdings, Inc.	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Daniel R. Kadolph, Executive V.P./C.F.O.	 	 	 	 	 	 	 	 	 	 







 












 





*00037956985-10000-095509142007*



PROMISSORY NOTE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$25,000,000.00

	 	09-28-2007
	 	04-03-2008
	 	37956985-10000-
	 	U100 / P0
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202






					
	 	 	 	 	 
	Principal Amount: $25,000,000.00
	 	Initial Rate: 6.870%
	 	Date of Note: September 28, 2007
	 	 	 	 	 





PROMISE TO PAY. Midwest Banc Holdings, Inc. (“Borrower”) promises to pay to M&l Marshall & llsley
Bank (“Lender”), or order, in lawful money of the United States of America, the principal amount
of Twenty-five Million & 00/100 Dollars ($25,000,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each advance.



PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on April 3, 2008. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning October 3, 2007, with all
subsequent interest payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied to Accrued Interest, Principal and
Late Charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender’s address shown above or at such other place as
Lender may designate in writing.



VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an independent index which is the British Bankers Association (BBA) LIBOR and
reported by a major news service selected by Lender (such as Reuters, Bloomberg or Moneyline
Telerate). If BBA LIBOR for the one month period is not provided or reported on the first day of
a month because, for example, it is a weekend or holiday or for another reason, the One Month
LIBOR Rate shall be established as of the preceding day on which a BBA LIBOR rate is provided for
the one month period and reported by the selected news service (the “Index”). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after notifying Borrower.
Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate
change will not occur more often than each first day of each calendar month and will become
effective without notice to the Borrower. If the Index becomes unavailable during the term of the
Note, the Lender may substitute a comparable Index. Borrower understands that Lender may make
loans based on other rates as well. The interest rate to be applied to the unpaid principal
balance during this Note will be at a rate equal to the Index plus the Applicable Margin. NOTICE:
Under no circumstances will the interest rate on this Note be more than the maximum rate allowed
by applicable law.



PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it
is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments
marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will
remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment
constitutes “payment in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or delivered to: M&l
Marshall & llsley Bank, P.O. 3114 Milwaukee, Wl 53201-3114.



LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid
portion of the regularly scheduled payment.



INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by adding a 3.000 percentage point margin (“Default Rate
Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that
would have applied had there been no default. However, in no event will the interest rate exceed
the maximum interest rate limitations under applicable law.



DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under
this Note:




Payment Default. Borrower fails to make any payment when due under this Note.




Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply
with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.




Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of Borrower’s property or
Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any
of the related documents.




False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.




Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of
any



 









 






proceeding under any bankruptcy or insolvency laws by or against Borrower.




Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the loan. This includes a
garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in
an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute.




Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event
of a death, Lender, at its option, may, but shall not be required to, permit the guarantor’s
estate to assume unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.




Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common
stock of Borrower.




Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.




Insecurity. Lender in good faith believes itself insecure.



LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.



ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums provided by law.



JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.



GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of
law provisions. This Note has been accepted by Lender in the State of Wisconsin.



CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Milwaukee County, State of Wisconsin.



DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower makes a payment on
Borrower’s loan and the check or preauthorized charge with which Borrower pays is later
dishonored.



RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and all such accounts,
and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect
Lender’s charge and setoff rights provided in this paragraph.



LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well
as directions for payment from Borrower’s accounts, may be requested orally or in writing by
Borrower or by an authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance
with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with
Lender. The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender’s internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor
is in default under the terms of this Note or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the signing of this Note; (B)
Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims
or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any
other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes
other than those authorized by Lender; or (E) Lender in good faith believes itself insecure.



ISDA. Obligations and Indebtedness includes, without limitation all obligations, indebtedness and
liabilities arising pursuant to or in connection with any interest rate swap transaction, basis
swap, forward rate transaction, interest rate option or any similar transaction between the
Borrower and Lender.



GRID PRICING. An exhibit, titled “Applicable Margin,” is attached to this Note and by this
reference is made a part of this Note just as if all the provisions, terms and conditions of the
Exhibit had been fully set forth in this Note.



SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.



GENERAL PROVISIONS. This Note benefits Lender and its successors and assigns, and binds Borrower
and Borrower’s heirs, successors, assigns, and representatives. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any
of its rights or remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand
for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest
in the collateral; and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.



 









 





PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING
THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.



BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.



BORROWER:




	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
	 	 
	 

	 	 	 	 
	Daniel R. Kadolph, Executive VP/CFO of Midwest

Banc Holdings, Inc.	 	 






LASER PRO Lending, Ver, 5.34.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2007. All Rights Reserved. -Wl L:\LPL\CFI\LPL\D20.FC TR-104298 PR-2(M)




 









 





APPLICABLE MARGIN




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$25,000,000.00

	 	09-28-2007
	 	04-03-2008
	 	37956985-10000-
	 	U100 / P0
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202






This APPLICABLE MARGIN is attached to and by this reference is made a part of the Promissory Note,
dated September 28, 2007, and executed in connection with a loan or other financial accommodations
between M&l MARSHALL & ILSLEY BANK and Midwest Banc Holdings, Inc.



Initial pricing will be Libor + 115 bp. Pricing will be subject to a performance-based grid below:



	 	 	 
	Company is profitable for two consecutive quarters

	 	Libor + 130bp
	 
	 	 
	ROA> .50% -1.03% for two consecutive quarters

	 	Libor + 115bp
	 
	 	 
	ROA> 1.04% for two consecutive quarter

	 	Libor + 100bp






 




* ROA to exclude restructuring charges associated with merger and acquisition activity.



THIS APPLICABLE MARGIN IS EXECUTED ON SEPTEMBER 28, 2007.



BORROWER:



	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
	 	 
	 

	 	 	 	 
	Daniel R. Kadolph, Executive VP/CFO of Midwest

Banc Holdings, Inc.	 	 






LASER PRO Lending, Ver, 5.34.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2007. All Rights Reserved. -Wl L:\LPL\CFI\LPL\D20.FC TR-104298 PR-2(M)




 









 










DISBURSEMENT REQUEST AND AUTHORIZATION




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No.	 	Call / Coll	 	Account	 	Officer	 	Initials
	$25,000,000.00

	 	09-28-2007
	 	04-03-2008
	 	37956985-10000
	 	U100 / PO
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202






LOAN TYPE. This is a Variable Rate Nondisclosable Revolving Line of Credit Loan to a
Corporation for $25,000,000.00 due on April 3, 2008. The reference rate (British Bankers
Association (BBA) LIBOR and reported by a major news service selected by Lender (such as
Reuters, Bloomberg or Moneyline Telerate). If BBA LIBOR for the one month period is not
provided or reported on the first day of a month because, for example, it is a weekend or
holiday or for another reason, the One Month LIBOR Rate shall be established as of the
preceding day on which a BBA LIBOR rate is provided for the one month period and reported by
the selected news service, currently 5.720%) is added to the margin of 1.150%, resulting in an
initial rate of 6.870.



PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:




o Personal, Family or Household Purposes or Personal Investment.




o Agricultural Purposes.




þ Business Purposes.



SPECIFIC PURPOSE. The specific purpose of this loan is: Renewal.



DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be disbursed until
all of Lender’s conditions for making the loan have been satisfied. Please disburse the loan
proceeds of $25,000,000.00 as follows:



	 	 	 	 	 
	Undisbursed Funds:
	 	$	25,000,000.00	 
	 
	 	 	 
	 
	 	 	 	 
	Note Principal:
	 	$	25,000,000.00	 






AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower’s
Demand Deposit — Checking account,
numbered                     , the amount of any loan payment. If the funds in the account are insufficient to
cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time and for any reason, Borrower
or Lender may voluntarily terminate Automatic Payments.



JOINT CREDIT INTENT. If the application was for joint credit, all persons signing below confirm
that their intent at time of application was to apply for joint credit.



VOIDED CHECK. If automatic loan payment is to be made via ACH from another lending institution,
please attach a voided check to this form.



INSTRUCTIONS TO BANKER.




	1)	 	Please put an “X” next to the fees listed above that RCC is to pay.
	 
	2)	 	Please complete the following section as applicable:
	 
	a)	 	Bank deposited fees into account number:            
                      
                      
                
	 
	 	 	Total dollar amount deposited into this account: $              
                      
                      
   
	 
	b)	 	Bank deposited fees into customer related :               
                      
                      
           
	 
	 	 	Total dollar amount deposited into this account: $             
                      
                      
   .





FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER
THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL
ADVERSE CHANGE IN BORROWER’S FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S MOST RECENT
FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED SEPTEMBER 28, 2007.



 









 





DISBURSEMENT REQUEST AND AUTHORIZATION




					
	 	 	 	 	 
	Loan No: 37956985-10000-
	 	(Continued)
	 	Page 2
	 	 	 	 	 





BORROWER:




	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
 

Daniel R. Kadolph, Executive VP/CFO of Midwest
	 	 
	 

	 	Banc Holdings, Inc.	 	 







LASER
PRO Lending, Ver, 5.34.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2007. All Rights Reserved. -Wl L:\LPL\CFI\LPL\D20.FC TR-104298 PR-2





 









 





*00037956985-10000-095509142007*




PROMISSORY NOTE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$75,000,000.00

	 	9-28-2007
	 	9-28-2010
	 	37956985-10001-
	 	U100 / P0
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202






					
	 	 	 	 	 
	Principal Amount: $75,000,000.00
	 	Initial Rate: 7.120%
	 	Date of Note: September 28, 2007
	 	 	 	 	 





PROMISE TO PAY. Midwest Banc Holdings, Inc. (“Borrower”) promises to pay to M&l Marshall & llsley
Bank (“Lender”), or order, in lawful money of the United States of America, the principal amount
of Seventy-five Million & 00/100 Dollars ($75,000,000.00), together with interest on the unpaid
principal balance from September 28, 2007, until paid in full.



PAYMENT. Borrower will pay this loan in one principal payment of $75,000,000.00 plus interest on
September 28, 2010. This payment due on September 28, 2010, will be for all principal and all
accrued interest not yet paid. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning November 1, 2007, with all
subsequent interest payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied to Accrued Interest, Principal and
Late Charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender’s address shown above or at such other place as
Lender may designate in writing.



VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an independent index which is the British Bankers Association (BBA) LIBOR and
reported by a major news service selected by Lender (such as Reuters, Bloomberg or Moneyline
Telerate). If BBA LIBOR for the one month period is not provided or reported on the first day of
a month because, for example, it is a weekend or holiday or for another reason, the One Month
LIBOR Rate shall be established as of the preceding day on which a BBA LIBOR rate is provided for
the one month period and reported by the selected news service (the “Index”). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after notifying Borrower.
Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate
change will not occur more often than each first day of each calendar month and will become
effective without notice to the Borrower. If the Index becomes unavailable during the term of the
Note, the Lender may substitute a comparable Index. Borrower understands that Lender may make
loans based on other rates as well. The interest rate to be applied to the unpaid principal
balance during this Note will be at a rate equal to the Index plus the Applicable Margin. NOTICE:
Under no circumstances will the interest rate on this Note be more than the maximum rate allowed
by applicable law.



PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it
is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments under the payment schedule. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments
marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will
remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment
constitutes “payment in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or delivered to: M&l
Marshall & llsley Bank, P.O. 3114 Milwaukee, Wl 53201-3114.



LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid
portion of the regularly scheduled payment.



INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by adding a 3.000 percentage point margin (“Default Rate
Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that
would have applied had there been no default. However, in no event will the interest rate exceed
the maximum interest rate limitations under applicable law.



DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under
this Note:




Payment Default. Borrower fails to make any payment when due under this Note.




Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply
with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.




Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of Borrower’s property or
Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any
of the related documents.




False
Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.




Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Borrower.




Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help,



 









 






repossession or any other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the loan. This includes a garnishment of any of Borrower’s
accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the dispute.




Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor,
endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes
the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.
In the event of a death, Lender, at its option, may, but shall not be required to, permit the
guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of Default.




Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the
common stock of Borrower.




Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.




Insecurity. Lender in good faith believes itself insecure.



LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.



ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by
applicable law, Borrower also will pay any court costs, in addition to all other sums provided by
law.



JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.



GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts
of law provisions. This Note has been accepted by Lender in the State of Wisconsin.



CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Milwaukee County, State of Wisconsin.



DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower makes a payment on
Borrower’s loan and the check or preauthorized charge with which Borrower pays is later
dishonored.



RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the debt against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender
to protect Lender’s charge and setoff rights provided in this paragraph.



ISDA. Obligations and Indebtedness includes, without limitation all obligations, indebtedness and
liabilities arising pursuant to or in connection with any interest rate swap transaction, basis
swap, forward rate transaction, interest rate option or any similar transaction between the
Borrower and Lender.



GRID PRICING. An exhibit, titled “Applicable Margin,” is attached to this Note and by this
reference is made a part of this Note just as if all the provisions, terms and conditions of the
Exhibit had been fully set forth in this Note.



SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.



GENERAL PROVISIONS. This Note benefits Lender and its successors and assigns, and binds Borrower
and Borrower’s heirs, successors, assigns, and representatives. If any part of this Note cannot
be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment,
demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest
in the collateral; and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the modification is made. The
obligations under this Note are joint and several.



PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.



BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.



BORROWER:




	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
	 	 
	 

	 	 	 	 
	Daniel R. Kadolph, Executive VP/CFO of Midwest

Banc Holdings, Inc.	 	 






 









 





APPLICABLE MARGIN




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$75,000,000.00

	 	9-28-2007
	 	9-28-2010
	 	37956985-10001-
	 	U100 / P0
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202







This APPLICABLE MARGIN is attached to and by this reference is made a part of the Promissory Note,
dated September 28, 2007, and executed in connection with a loan or other financial accommodations
between M&l MARSHALL & ILSLEY BANK and Midwest Banc Holdings, Inc.




Initial pricing will be Libor + 140bp. Pricing will be subject to a performance-based grid below:



	 	 	 
	Company is profitable for two consecutive quarters

	 	Libor + 155bp
	 
	 	 
	ROA> .50% - 1.03% for two consecutive quarters

	 	Libor + 140bp
	 
	 	 
	ROA> 1.04% for two consecutive quarters

	 	Libor + 125bp






 




*ROA to exclude restructuring charges associated with merger and acquisition activity



THIS APPLICABLE MARGIN IS EXECUTED ON SEPTEMBER 28, 2007.



BORROWER:




	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
	 	 
	 

	 	 	 	 
	Daniel R. Kadolph, Executive VP/CFO of Midwest

Banc Holdings, Inc.	 	 






LASER PRO Lending, Ver, 5.34.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2007. All Rights Reserved. -Wl L:\LPL\CFI\LPL\D20.FC TR-104298 PR-2(M)






 









 










DISBURSEMENT REQUEST AND AUTHORIZATION




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$75,000,000.00

	 	09-28-2007
	 	09-28-2010
	 	37956985-10001
	 	U100 / PO
	 	 	00005106953	 	 	 	06564	 	 	 






References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.




Any item above containing “***” has been omitted due to text length limitations.




	 	 	 	 	 	 	 
	Borrower:

	 	Midwest Banc Holdings, Inc.
	 	Lender:
	 	M&l Marshall & Ilsley Bank
	 

	 	501 W. North Avenue
	 	 	 	Correspondent Banking
	 

	 	Melrose Park, IL 60160
	 	 	 	770 N. Water Street
	 

	 	 	 	 	 	Milwaukee, Wl 53202






LOAN TYPE. This is a Variable Rate Nondisclosable Loan to a Corporation for $75,000,000.00
due on September 28, 2010. The reference rate (British Bankers Association (BBA) LIBOR and
reported by a major news service selected by Lender (such as Reuters, Bloomberg or Moneyline
Telerate). If BBA LIBOR for the one month period is not provided or reported on the first day
of a month because, for example, it is a weekend or holiday or for another reason, the One
Month LIBOR Rate shall be established as of the preceding day on which a BBA LIBOR rate is
provided for the one month period and reported by the selected news service, currently
5.720%) is added to the margin of 1.400%, resulting in an initial rate of 7.120.



PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:




o Personal, Family or Household Purposes or Personal Investment.




o Agricultural Purposes.




þ Business Purposes.



SPECIFIC PURPOSE. The specific purpose of this loan is: New term loan.



DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be disbursed until
all of Lender’s conditions for making the loan have been satisfied. Please disburse the loan
proceeds of $75,000,000.00 as follows:



	 	 	 	 	 
	Amount paid to Borrower directly:
	 	$	75,000,000.00	 
	$75,000,000.00 Deposited to Account #
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Note Principal:
	 	$	75,000,000.00	 






AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower’s
Demand Deposit — Checking account,
numbered                     , the amount of any loan payment. If the funds in the account are insufficient to
cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time and for any reason, Borrower
or Lender may voluntarily terminate Automatic Payments.



JOINT CREDIT INTENT. If the application was for joint credit, all persons signing below
confirm that their intent at time of application was to apply for joint credit.



VOIDED CHECK. If automatic loan payment is to be made via ACH from another lending institution,
please attach a voided check to this form.



INSTRUCTIONS TO BANKER.




	1)	 	Please put an “X” next to the fees listed above that RCC is to pay.
	 
	2)	 	Please complete the following section as applicable:
	 
	a)	 	Bank deposited fees into account number:               
                      
                      
             
	 
	 	 	Total dollar amount deposited into this account: $              
                      
                      
   
	 
	b)	 	Bank deposited fees into customer related :               
                      
                      
           
	 
	 	 	Total dollar amount deposited into this account: $              
                      
                      
   .





FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO
LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO
MATERIAL ADVERSE CHANGE IN BORROWER’S FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S MOST
RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED SEPTEMBER 28, 2007.



 









 





DISBURSEMENT REQUEST AND AUTHORIZATION




					
	 	 	 	 	 
	Loan No: 37956985-10001-
	 	(Continued)
	 	Page 2
	 	 	 	 	 





BORROWER:




	 	 	 	 	 
	MIDWEST BANC HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Daniel R. Kadolph
 

Daniel R. Kadolph, Executive VP/CFO of Midwest
	 	 
	 

	 	Banc Holdings, Inc.	 	 






LASER PRO Lending, Ver, 5.34.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2007. All Rights Reserved. -Wl L:\LPL\CFI\LPL\D20.FC TR-104298 PR-2