Exhibit 10.1
THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN
AGREEMENT (this “Agreement”) is made and entered into
as of November 10, 2006, by and between: MERCANTILE
BANCORP, INC., a Delaware corporation (
“Borrower” ); and U.S. BANK NATIONAL
ASSOCIATION, formerly known as Firstar Bank, N.A., a national
banking association ( “Lender” ), the successor
by merger to Mercantile Bank National Association (
“MBNA” ); and has reference to the following
facts and circumstances:
A. Borrower and MBNA previously
entered into the Second Amended and Restated Term Loan Agreement
dated as of December 2, 1997, as subsequently amended (the
“Original Loan Agreement” ).
B. Lender is the successor by
merger to MBNA.
C. Borrower and Lender desire to
amend and restate the Original Loan Agreement to, among other
things, increase the revolving credit facility to the aggregate
amount of up to $15,000,000, and to allow for a new term loan in
the original principal amount of $15,000,000 upon, and subject to,
the terms, provisions and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of
the premises, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby mutually agree and promise as follows:
SECTION 1 — DEFINITIONS.
In addition to the terms defined
elsewhere in this Agreement or in any Exhibits or Schedules hereto,
when used in this Agreement, the following terms shall have the
following meanings (such meanings shall be equally applicable to
the singular and plural forms of the terms used, as the context
requires):
Act shall have the meaning
ascribed thereto in Section 8.18.
Attorneys’ Fees means
the reasonable value of the services (and costs, charges and
expenses related thereto) of the attorneys employed by Lender
(including, without limitation, attorneys who are employees of
Lender) from time to time to represent Lender (a) in the
preparation or amendment of this Agreement and the other
Transaction Documents, (b) in any litigation, contest or
proceeding or to take any other action in or with respect to any
litigation, contest or proceeding (whether instituted by Lender,
Borrower or any other Person and whether in bankruptcy or
otherwise) in any way or respect relating to the Collateral, any
Third Party Collateral, this Agreement or any of the other
Transaction Documents, Borrower, Royal Palm, any Subsidiary Banks,
any Subsidiary or any other Obligor, (c) to protect, collect,
lease, sell, take possession of or liquidate any of the Collateral
or any Third Party Collateral and (d) to enforce any of
Lender’s rights to collect any of the Obligations; provided,
that such Attorneys’ Fees shall be determined on the basis of
rates then generally applicable to the attorneys (and all
paralegals, accountants and other staff employed by such attorneys)
employed by Lender, which may be higher than the rates such
attorneys (and all paralegals, accountants and other staff employed
by such attorneys) charge Lender in certain matters.
Borrower Pledge shall mean
the Stock Pledge Agreement (Borrower) dated as of the date hereof
to be executed by Borrower and delivered to Lender pursuant to
Section 3 hereof as the same may from time to time be
amended.
Business Day shall mean any
day except a Saturday, Sunday or legal holiday observed by
Lender.
Capital Guidelines shall have
the meaning ascribed thereto in Section 5.11.
Capitalized Lease shall mean
any lease which, in accordance with GAAP, is required to be
capitalized on the balance sheet of the lessee.
Code shall mean the Internal
Revenue Code of 1986, as amended, and any successor statute of
similar import, together with the regulations thereunder, in each
case as in effect from time to time. References to sections of the
Code shall be construed to also refer to any successor
sections.
Collateral shall have the
meaning ascribed to such term in the Borrower Pledge and the
Subsidiary Pledge.
Consolidated Fixed Charge
Coverage Ratio shall mean for the period in question, the ratio
of: (a) the sum of (i) Consolidated Net Income,
plus (ii) Consolidated Interest Expense, plus
(iii) non-cash items included in operating expenses,
minus (iv) non-cash items included in Consolidated Net
Income, minus (v) Distributions; to (b) the sum of
(i) an amount equal to $2,500,000 (representing Lender’s
Revolving Credit Commitment plus the maximum principal
amount of the Term Loan, divided by twelve (12)),
plus (ii) Consolidated Interest Expense during such
period, all determined on a consolidated basis and in accordance
with GAAP.
Consolidated Interest Expense
shall mean, for the period in question, without duplication, all
gross interest expense of Borrower and its Consolidated
Subsidiaries (including, without limitation, all commissions,
discounts and/or related amortization and other fees and charges
owed by Borrower and its Consolidated Subsidiaries with respect to
letters of credit, the net costs associated with interest swap
obligations of Borrower and its Consolidated Subsidiaries,
capitalized interest expense, the interest portion of capitalized
lease obligations and the interest portion of any deferred payment
obligation) during such period, all determined on a consolidated
basis and in accordance with GAAP.
Consolidated Net Income shall
mean the after-tax net income (or loss) of Borrower and its
Consolidated Subsidiaries for the period in question, determined on
a consolidated basis and in accordance with GAAP.
Consolidated Subsidiary shall
mean with respect to any Person at any date, any Subsidiary or
other entity the assets and liabilities of which are or should be
consolidated with those of such Person in its consolidated
financial statements as of such date in accordance with GAAP.
Controlled Bank shall mean
any state or federally chartered bank and/or any bank holding
company which Borrower controls. For purposes of this definition,
“control” shall have the meaning ascribed thereto in
Section 225.2(e) of Regulation Y of The Board of
Governors of The Federal Reserve System, as from time to time
amended.
Default shall mean an event
or condition the occurrence of which would, with the lapse of time,
the giving of notice, or both, become or constitute an Event of
Default as defined in Section 7 hereof.
Distribution in respect of
any corporation shall mean: (a) dividends or other
distributions on capital stock of the corporation; and (b) the
redemption, repurchase or other acquisition of such stock or of
warrants, rights or other options to purchase such stock (except
when solely in exchange for such stock).
Environmental Laws shall have
the meaning ascribed thereto in Section 8.04.
Environmental Lien shall have
the meaning ascribed thereto in Section 5.14(g).
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Equity Capital shall mean,
with respect to any Person, the sum of the common stock, perpetual
preferred stock (meaning preferred stock with no maturity date and
which may not be redeemed at the option of the holder), paid-in
surplus and retained earnings of such Person, all determined in
accordance with GAAP, less the sum of the total of goodwill and
other intangible assets of such Person, if any.
ERISA shall mean the Employee
Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time (references
to sections of ERISA shall be construed to also refer to any
successor sections).
ERISA Affiliate shall mean
any corporation, trade or business that is, along with Borrower, a
member of a controlled group of corporations or a controlled group
of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001 of
ERISA.
Event of Default shall have
the meaning ascribed thereto in Section 7.
GAAP shall mean, at any time,
generally accepted accounting principles consistently applied at
such time in the United States.
Indebtedness of any Person
shall mean and include all obligations of such Person which in
accordance with GAAP are or should be classified upon a balance
sheet of such Person as liabilities of such Person, any and all
contingent obligations (other than those incurred in the ordinary
course of banking business), indebtedness and/or liabilities of
such Person, whether or not reflected on the balance sheet of such
Person and any and all obligations of such Person under any
Capitalized Lease.
Indemnified Liabilities shall
have the meaning ascribed thereto in Section 8.05.
Indemnitees shall have the
meaning ascribed thereto in Section 8.05.
Interest Differential shall
mean that sum equal to the greater of zero (0) or the
financial loss incurred by Lender resulting from prepayment,
calculated as the difference between the amount of interest Lender
would have earned (from like investments in the Money Markets as of
the first day of the applicable LIBOR Loan) had prepayment not
occurred and the interest Lender will actually earn (from like
investments in the Money Markets as of the date of prepayment) as a
result of the redeployment of funds from the prepayment; provided,
that, because of the short-term nature of this facility, Borrower
agrees that the Interest Differential shall not be discounted to
its present value.
Lender’s Revolving Loan
Commitment shall mean up to Fifteen Million Dollars
($15,000,000.00).
LIBOR Loan shall have the
meaning ascribed thereto in Section 2.04(a).
Lien shall mean any interest
in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is
based on common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust, pledge,
lien or other encumbrance of any kind or nature whatsoever, any
conditional sale or trust receipt and any lease, consignment or
bailment for security purposes.
Loan shall mean each
Revolving Credit Loan and the Term Loan; and Loans shall
mean any or all of the foregoing.
Loan Period shall mean the
period commencing on the advance date of the applicable LIBOR Loan
and ending on the numerically corresponding day one (1), two (2),
three (3), or six (6) months
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thereafter matching the interest rate term selected by Borrower;
provided, however, (a) if any Loan Period would otherwise end
on a day which is not a New York Banking Day, then the Loan Period
shall end on the next succeeding New York Banking Day unless the
next succeeding New York Banking Day falls in another calendar
month, in which case the Loan Period shall end on the immediately
preceding New York Banking Day; or (b) if any Loan Period
begins on the last New York Banking Day of a calendar month (or on
a day for which there is no numerically corresponding day in the
calendar month at the end of the Loan Period), then the Loan Period
shall end on the last New York Banking Day of the calendar month at
the end of such Loan Period.
Material Adverse Effect shall
mean (a) a material adverse effect on the Properties, assets,
liabilities, business, operations, prospects, income or condition
(financial or otherwise) of Borrower, Royal Palm, any Subsidiary
Bank, and/or any Subsidiary, (b) material impairment of the
ability of Borrower, Royal Palm, any Subsidiary Bank, and/or any
Subsidiary to perform any of its obligations under this Agreement,
the Notes, or any of the other Transaction Documents or (c)
material impairment of the enforceability of the rights of, or
benefits available to, Lender under this Agreement, the Notes, or
any of the other Transaction Documents.
Money Markets shall mean one
or more wholesale funding markets available to and selected by
Lender, including negotiable certificates of deposit, commercial
paper, Eurodollar deposits, bank notes, federal funds, interest
rate swaps or others.
Multiemployer Plan shall mean
a “multiemployer plan” as defined in
Section 4001(a) (3) of ERISA which is maintained for
employees of Borrower, Royal Palm, any other Obligor, any ERISA
Affiliate, any Subsidiary Bank or any Subsidiary.
Net Income shall mean, with
respect to any Person for any period, the aggregate net income (or
net loss) of such Person for such period equal to net revenues and
other proper income less the aggregate amount of any and all items
which are treated as expenses under GAAP, and less Federal, state
and local income taxes, but excluding from the definition of Net
income any extraordinary gains or losses or any gains or losses
from the sale or disposition of assets other than in the ordinary
course of business, all determined in accordance with GAAP.
New York Banking Day shall
mean any day (other than a Saturday or Sunday) on which commercial
banks are open for business in New York, New York.
Non-Performing Assets shall
mean, with respect to any Person, assets which: (a) constitute or
are classified as other real estate owned (as such term is defined
in the guidelines, rules and regulations of The Board of Governors
of the Federal Reserve Board pertaining to capital adequacy in
effect from time to time) or (b) in the case of a particular
asset, is (at the time of such calculation) classified as a loan or
other extension of credit (1) which has been placed on nonaccrual
status or has been required to be so placed by any Regulatory
Agency, (2) which has been classified as renegotiated pursuant
to guidelines now or hereafter established by the Federal Financial
Institutions Examination Council or (3) with respect to which
any payment of any principal or interest is past due for a period
of ninety (90) days or more.
Note shall mean each of the
Revolving Note and the Term Note; and Notes shall mean
either or both of the foregoing.
Obligations shall mean any
and all indebtedness, liabilities and obligations of Borrower
and/or Royal Palm to Lender under the Notes, this Agreement, the
Borrower Pledge, the Subsidiary Pledge, and any of the other
Transaction Documents or any other agreement, instrument or
document heretofore, now or hereafter executed and delivered by
Borrower and/or Royal Palm to Lender, in each case whether now
existing or hereafter arising, absolute or contingent, joint and/or
several, secured or unsecured, direct or indirect, expressed or
implied in law, contractual or tortious, liquidated or
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unliquidated, at law or in equity, or otherwise, and whether
created directly or acquired by Lender by assignment or otherwise,
and any and all costs of collection and/or Attorneys’ Fees
incurred or to be incurred in connection therewith.
Obligor shall mean Borrower
and each other Person who is or shall become primarily or
secondarily liable on any of the Obligations or who grants Lender a
Lien upon any Property or assets of such Person as collateral for
any of the Obligations.
PBGC shall mean the Pension
Benefit Guaranty Corporation and any entity succeeding to any or
all of its functions under ERISA.
Pension Plan shall mean any
“pension plan” as such term is defined in
Section 3(2) of ERISA which is subject to the provisions of
Title IV of ERISA and which is established or maintained by
Borrower, Royal Palm, any other Obligor, any ERISA Affiliate, any
Subsidiary Bank, or any Subsidiary other than a Multiemployer
Plan.
Person shall mean an
individual, partnership, corporation, limited liability company,
trust, unincorporated organization or association, and a government
or agency or political subdivision thereof.
Primary Capital shall mean,
with respect to any Person, the Equity Capital of such Person plus
the total allowance for possible loan and lease losses of such
Person, all as determined in accordance with GAAP.
Prime Rate shall mean the
interest rate announced from time to time by Lender as its
“prime rate” on commercial loans, which rate shall
fluctuate as and when said prime rate shall change.
Prime Rate Loan shall have
the meaning ascribed thereto in Section 2.04(a).
Property shall mean any
interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible. Properties shall mean
the plural of Property. For purposes of this Agreement, Borrower,
Royal Palm, each Subsidiary and each Subsidiary Bank, as the case
may be, shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
Regulatory Agency shall mean
any Federal, state or local governmental or regulatory agency,
authority, entity or official having jurisdiction over the banking
or other related activities of Borrower, Royal Palm, Subsidiary
Banks, and/or any Subsidiary, including, without limitation (to the
extent applicable), the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the United States Securities and
Exchange Commission, the Illinois Department of Financial and
Professional Regulation, the Florida Office of Financial
Regulation, and the Missouri Division of Finance.
Related Party shall mean any
Person which directly or indirectly through one or more
intermediaries controls, or is controlled by or is under common
control with, Borrower, or any Subsidiary Bank. The term
“control” shall mean the possession, directly or
indirectly, of the power to vote Ten Percent (10%) or more of the
capital stock of any Person or the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
Reportable Event shall have
the meaning given to such term in ERISA.
Revolving Credit Period shall
mean the period commencing on the date of this Agreement and ending
June 30, 2007.
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Revolving Loan and
Revolving Loans shall have the meanings ascribed thereto in
Section 2.01(a).
Revolving Note shall have the
meaning ascribed thereto in Section 2.03(a).
Royal Palm shall mean Royal
Palm Bancorp, Inc., a Florida corporation.
Royal Palm Merger Agreement
shall mean the Agreement and Plan of Merger dated as of
May 30, 2006, executed by Borrower, Mercantile Merger Corp.,
Royal Palm, and The Royal Palm Bank of Florida.
Royal Palm Merger Transaction
shall mean collectively the transactions contemplated by and
described in the Royal Palm Merger Agreement.
Subsidiary shall mean, with
respect to any Person, any corporation of which Ten Percent (10%)
or more of the issued and outstanding capital stock entitled to
vote for the election of directors (other than by reason of default
in the payment of dividends) is at the time owned directly or
indirectly by such Person.
Subsidiary Bank shall mean,
each of: Heartland Bank, a Kansas banking corporation; Farmers
State Bank of Northern Missouri, a Missouri banking corporation;
Security State Bank of Hamilton, an Illinois banking corporation;
State Bank of Augusta, an Illinois banking corporation; New
Frontier Bank, a Missouri banking corporation; Brown County State
Bank, an Illinois banking corporation; Perry State Bank, a Missouri
banking corporation; Marine Bank & Trust, an Illinois banking
corporation; and Mercantile Trust & Savings Bank, an Illinois
banking corporation; and, upon consummation of the Royal Palm
Merger Transaction, shall also mean The Royal Palm Bank of Florida,
a Florida banking corporation; and Subsidiary Banks shall
mean some or all of the foregoing.
Subsidiary Pledge shall mean
the Stock Pledge Agreement (Subsidiary) dated as of the date
hereof, to be executed by Royal Palm and delivered to Lender
pursuant to Section 3 hereof as the same may from time to time
be amended.
Term Loan shall have the
meaning ascribed thereto in Section 2.02.
Term Note shall have the
meaning ascribed thereto in Section 2.03(b).
Third Party Collateral shall
mean any Property or assets of any Obligor other than Borrower
which secure the payment or performance of any of the
Obligations.
Transaction Documents shall
mean this Agreement, the Notes, the Borrower Pledge, the Subsidiary
Pledge and all other agreements, documents, instruments and
certificates connected with or otherwise relating to this Agreement
or the Loans made hereunder, all as the same may from time to time
be amended, modified, extended or renewed.
SECTION 2 — THE LOANS
2.01 Revolving Credit
Commitment.
(a) Subject
to the terms and conditions set forth in this Agreement and so long
as no Default or Event of Default has occurred and is continuing,
during the Revolving Credit Period, Lender agrees to make such
loans to Borrower (individually, a “Revolving Credit
Loan” ; and collectively, the “Revolving Credit
Loans”) as Borrower may from time to time request
pursuant to Section 2.01(b). Each Revolving Credit Loan under
this Section 2.01(a) shall be for an aggregate principal
amount of at
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least
$500,000 or any larger multiple of $25,000. The aggregate principal
amount of Revolving Credit Loans which Lender shall be required to
have outstanding under this Agreement as of any date shall not
exceed the amount of Lender’s Revolving Credit Commitment as
of such date. In no event shall the aggregate principal amount of
all Revolving Credit Loans outstanding as of any date exceed the
amount of Lender’s Revolving Credit Commitment as of such
date. Within the foregoing limits, Borrower may borrow under this
Section 2.01(a), prepay under Section 2.04(e) and
reborrow at any time during the Revolving Credit Period under this
Section 2.01(a). All Revolving Credit Loans not paid prior to
the last day of the Revolving Credit Period, together with all
accrued and unpaid interest thereon and all fees and other amounts
owing by Borrower to Lender with respect thereto, shall be due and
payable on the last day of the Revolving Credit Period.
(b) Borrower
shall give oral or written notice to Lender by 10:00 a.m. (St.
Louis time) on the Business Day of each advance of a Revolving Loan
specifying (a) the date of such advance, which must be a
Business Day, and (b) the aggregate principal amount of such
advance. Unless Lender determines that any applicable condition
specified in Section 3 of this Agreement has not been
satisfied, Lender shall make the proceeds of the advance available
to Borrower by crediting such funds to a demand deposit account (or
such other account mutually agreed upon in writing between Lender
and Borrower) at Lender specified by Borrower. Borrower hereby
irrevocably authorizes Lender to rely on telephonic, telegraphic,
telecopy, telex or written instructions of any individual
identifying himself or herself as one of the individuals listed on
Schedule 2.01(b) attached hereto (or any other
individual from time to time authorized to act on behalf of
Borrower pursuant to a resolution adopted by the Board of Directors
of Borrower and certified by the Secretary of Borrower and
delivered to Lender) with respect to any request to make an advance
or a repayment hereunder, and on any signature which Lender
believes to be genuine, and Borrower shall be bound thereby in the
same manner as if such individual were actually authorized or such
signature were genuine. Borrower also hereby agrees to indemnify
Lender and hold Lender harmless from and against any and all
claims, demands, damages, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys’ fees
and expenses) relating to or arising out of or in connection with
the acceptance of instructions for making advances or repayments
hereunder.
(c) If
the amount of Lender’s Revolving Credit Commitment on any
date is less than the aggregate principal amount of all Revolving
Credit Loans outstanding as of such date, Borrower shall be
automatically required (without demand or notice of any kind by
Lender, all of which are hereby expressly waived by Borrower) to
immediately repay the Revolving Credit Loans in an amount
sufficient to reduce the amount of the aggregate principal amount
of all Revolving Credit Loans outstanding as of such date to an
amount equal to or less than the amount of Lender’s Revolving
Credit Commitment.
2.02 Term Loan Commitment.
Subject to the terms and conditions set forth in this Agreement and
so long as no Default or Event of Default under this Agreement has
occurred and is continuing, Lender agrees to make to Borrower a
term loan of Fifteen Million Dollars ($15,000,000.00) (the “
Term Loan ”). The Term Loan shall be advanced in one
disbursement on the effective date of this Agreement. The Term Loan
is not revolving in nature and any principal repaid on the Term
Loan may not be reborrowed. The principal amount of the Term Loan
shall be due and payable in three (3) equal consecutive
quarterly installments in the amount of $375,000.00 each, due and
payable on December 31, 2008, March 30, 2009, and
June 30, 2009, and a final installment in the amount of the
then outstanding and unpaid principal balance of the Term Loan due
and payable on November 10, 2009.
2.03 Notes.
(a) The
Revolving Credit Loans shall be evidenced by the Revolving Credit
Note of Borrower dated as of the date hereof, and payable to the
order of Lender in a principal amount equal to the maximum amount
of Lender’s Revolving Credit Commitment, which Revolving
Credit Note shall be in substantially the form of
Exhibit A attached hereto and incorporated herein by
reference (as the same may from time to time be amended, modified,
extended, renewed or restated, the “ Revolving Note
”).
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(b) The
Term Loan shall be evidenced by the Term Loan Promissory Note of
Borrower dated as of the date hereof, and payable to the order of
Lender in the original principal amount of $15,000,000.00, which
Term Loan Promissory Note shall be in substantially the form of
Exhibit B attached hereto and incorporated herein by
reference (as the same may from time to time be amended, modified
extended, renewed or restated, the “ Term Note
”).
(c) Lender
shall record in its books and records the date and amount of each
Loan made to Borrower and each payment of principal and/or interest
made by Borrower with respect thereto; provided, however, that the
obligation of Borrower to repay each Loan made to Borrower
hereunder shall be absolute and unconditional, notwithstanding any
failure of Lender to make any such recordation or any mistake by
Lender in connection with any such recordation. The books and
records of Lender showing the account between Lender and Borrower
shall be admissible in evidence in any action or proceeding and
shall constitute prima facie proof of the items therein set
forth.
2.04 Interest Rates and
Payments.
(a) Interest
on each Loan shall accrue at one of the following annual rates
selected by Borrower: (i) upon notice to Lender, One and 5/10
Percent (1,5%) below the prime rate announced by Lender from
time to time, as and when such rate changes (each, a “
Prime Rate Loan ”); or (ii) upon a minimum of two
(2) New York Banking Days prior notice, One and 3/10 Percent
(1.3%) above the one (1), two (2), three (3), or six
(6) month LIBOR rate quoted by Lender from Telerate Page 3750
or any successor thereto (which shall be the LIBOR rate in effect
two (2) New York Banking Days prior to commencement of the
Loan), adjusted for any reserve requirement and any subsequent
costs arising from a change in government regulation (each, a
“ LIBOR Loan ”). Interest on each Prime Rate
Loan shall be paid in consecutive quarterly installments due and
payable on the first day of each calendar quarter and on the last
day of the Revolving Credit Period. Interest on each LIBOR Loan
shall be payable for each Loan Period on the last day thereof,
unless the duration of such Loan Period exceeds three
(3) months, in which case such interest shall be payable on
the last day of each three (3) month period during such Loan
Period and on the last day of such Loan Period.
(b) In
the event Borrower does not timely select another interest rate
option at least two (2) New York Banking Days before the end of the
Loan Period for a LIBOR Loan, Lender may at any time after the end
of the Loan Period convert the LIBOR Loan to a Prime Rate Loan, but
until such conversion, the funds advanced under the LIBOR Loan
shall continue to accrue interest at the same rate as the interest
rate in effect for such LIBOR Loan prior to the end of the Loan
Period.
(c) No
LIBOR Loan (made under the Revolving Loan) may extend beyond the
last day of the Revolving Credit Period; and no LIBOR Loan (made
under the Term Loan) may extend beyond the maturity date of the
Term Note. In any event, if the Loan Period for a LIBOR Loan should
happen to extend beyond the maturity of this Note, such Loan must
be prepaid at the time the Loan matures. Lender’s internal
records of applicable interest rates shall be determinative in the
absence of manifest error. Each LIBOR Loan shall be in a minimum
principal amount of $100,000. The aggregate number of LIBOR Loans
in effect at any one time may not exceed six (6).
(d) After
maturity of any Loan, whether by reason of acceleration or
otherwise, interest shall accrue on such Loan and be payable on
demand on the entire outstanding principal balance thereof at an
annual rate equal to Two Percent (2%) over and above the then
existing rate(s). Interest on each Loan shall be payable quarterly
in arrears on each March 31, June 30, September 30
and December 31, on the last day of the Revolving Credit
Period (with respect to the Revolving Loans), and at the maturity
of the Term Note, whether by reason of acceleration or otherwise.
All payments shall be applied first to the payment of all accrued
and unpaid interest, with the balance, if any, to be applied to the
payment of principal. Lender’s internal records of applicable
interest rates shall be determinative in the absence of manifest
error.
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(e) Borrower
shall have the right to prepay the Loans in whole or in part at any
time, provided; (i) all billed/due and unpaid interest shall
accompany such prepayment; (ii) there is no Default or Event
of Default at the time of prepayment; (iii) all prepayments
shall be credited and applied to the installments of principal in
inverse order of their stated maturity; and (iv) if a LIBOR
Loan is prepaid prior to the end of a Loan Period for such LIBOR
Loan, whether voluntarily or because prepayment is required due to
such LIBOR Loan maturing or due to acceleration of such LIBOR Loan
upon default or otherwise, Borrower agrees to pay all of
Lender’s costs, expenses and interest Differential (as
determined by Lender) incurred as a result of such prepayment (any
prepayment of a LIBOR Loan shall be in an amount equal to the
remaining entire principal balance of such LIBOR Loan).
2.05 General Provisions as to
Payments. Borrower shall make each payment of principal of, and
interest on, the Loans and all interest, fees and other amounts
payable by Borrower under this Section 2 not later than 2:00
p.m. (St. Louis time) on the date when due, in Federal or other
funds immediately available in St. Louis, Missouri, to Lender at
its address referred to in Section 8.07. Any such payment received
by Lender after 2:00 p.m. (St. Louis time) shall be deemed to have
been paid on the next succeeding Business Day. Whenever any payment
of principal of, or interest on, the Loans shall be due on a day
which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. If the date for any
payment of principal is extended by operation of law or otherwise,
interest thereon, at the then applicable rate, shall be payable for
such extended time.
2.06 Late Fees. If Borrower
fails to make any payment of any principal of or interest on any
Loan within ten (10) days after the same becomes due, whether
by reason of maturity, acceleration or otherwise, in addition to
all of the other rights and remedies of Lender under this Agreement
and at law or in equity, Borrower shall pay Lender on demand with
respect to each such late payment a late fee in an amount not to
exceed Five Percent (5%) of each late payment.
SECTION 3 — PRECONDITIONS TO LOANS
3.01 Initial Loans.
Notwithstanding any provision contained in this Agreement to the
contrary, Lender shall have no obligation to make the initial
Revolving Loan and the Term Loan under this Agreement unless Lender
shall have first received the following, all in form and substance
acceptable to Lender:
(a) this
Agreement and the Notes, each executed by a duly authorized officer
of Borrower;
(b) the
Borrower Pledge, Subsidiary Pledge, collateral schedules, stock
powers, UCC financing statements, and such other documents as
Lender may require in connection with the Borrower Pledge and
Subsidiary Pledge, each executed by a duly authorized officer of
Borrower and/or Royal Palm;
(c) 360,000
shares of the common stock of Mercantile Trust & Savings Bank,
representing all of the issued and outstanding common stock of
Mercantile Trust & Savings Bank (as verified by the Secretary
of Mercantile Trust & Savings Bank), said shares to be issued
in Borrower’s name and accompanied by stock powers duly
executed in blank by an authorized officer of Borrower;
(d) 1,038,294
shares of the common stock of The Royal Palm Bank of Florida,
representing all of the issued and outstanding common stock of The
Royal Palm Bank of Florida (as verified by the Secretary of The
Royal Palm Bank of Florida), said shares to be issued in Royal
Palm’s name and accompanied by stock powers duly executed in
blank by an authorized officer of Royal Palm;
(e) the
Certificate of President, executed by the President of
Borrower;
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(f) copies
of resolutions of the Board of Directors of Borrower and Royal
Palm, duly adopted, which authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents,
certified by the Secretary of Borrower and the Secretary of Royal
Palm, respectively;
(g) copies
of the Articles or Certificate of Incorporation of Borrower and
Royal Palm, including any amendments thereto, certified by the
Secretary of State of the State of Delaware (Borrower), and the
Secretary of State of the State of Florida (Royal Palm);
(h) copies
of the Bylaws of Borrower and Royal Palm, including any amendments
thereto, certified by the Secretary of Borrower, and the Secretary
of Royal Palm, respectively;
(i) a
certificate of good standing for Borrower issued by the Secretary
of State of the State of Delaware, a certificate of good standing
for Borrower issued by the Secretary of State of the State of
Illinois, and a certificate of good standing for Royal Palm issued
by the Secretary of State of the State of Florida;
(j) an
opinion of counsel from Schmiedeskamp, Robertson, Neu &
Mitchell, the counsel representing Borrower, Subsidiary and
Subsidiary Banks, in the form acceptable to Lender;
(k) evidence
that no change in the financial condition of Borrower, Royal Bank,
any Subsidiary Bank, or any Subsidiary shall have occurred since
June 30, 2006 that could have a Material Adverse Effect;
(I) copies
of all documents executed in connection with the Royal Palm Merger
Transaction including, but not limited to the Royal Palm Merger
Agreement, and evidence satisfactory to Lender that the Royal Palm
Merger Transaction has been approved by all applicable Regulatory
Agencies;
(m) copies
of all documents executed in connection with the issuance by
Borrower of Pooled Trust Preferred Securities on or about
July 13, 2006; and
(n) such
other agreements, documents, instruments, certificates and
assurances as Lender may reasonably request.
3.02 All Advances.
Notwithstanding any provision contained in this Agreement to the
contrary, Lender shall have no obligation to make any Loan under
this Agreement unless:
(a) for
every Revolving Loan, Lender shall have received a notice of
borrowing as required by Section 2.01(b);
(b) no
change in the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or otherwise)
of Borrower, Subsidiary any Subsidiary Bank, or any Subsidiary that
could have a Material Adverse Effect shall have occurred since the
date of this Agreement and be continuing;
(c) all
of the representations and warranties of Borrower and Royal Palm
contained in this Agreement and in the other Transaction Documents
shall be true and correct in all material respects on and as of the
date of the making of such advance as if made on and as of the date
of the making of such advance; and
(d) on
the date of and immediately after the making of such advance, no
Default or Event of Default under this Agreement shall have
occurred and be continuing.
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Each
request for a Loan by Borrower under this Agreement shall be deemed
to be a representation and warranty by Borrower on the date of the
making of such advance as to the facts specified in clauses (b),
(c) and (d) of this Section 3.02.
SECTION 4 — REPRESENTATIONS AND WARRANTIES
To induce Lender to make the Loans,
Borrower hereby represents and warrants to Lender that:
4.01 Corporate Existence and
Power. Each of Borrower, Royal Palm, each Subsidiary Bank, and
each Subsidiary: (a) is duly incorporated or organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization; (b) has all
requisite corporate or other powers and all governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted; and (c) is duly qualified to do
business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect on its
business, financial condition or operations. Borrower and Royal
Palm are each a “bank holding company” as defined in
and within the meaning of 12 U.S.C. §1841 (a), and as such
Borrower and Royal Palm have filed all necessary reports with and
received all necessary approvals from The Board of Governors of the
Federal Reserve System. Each Subsidiary Bank is an “insured
bank” as defined in and within the meaning of 12 U.S.C.
§1813.
4.02 Corporate Authorization.
The execution, delivery and performance by Borrower and/or Royal
Palm of this Agreement, the Notes, Borrower Pledge, Subsidiary
Pledge and the other Transaction Documents are within the corporate
powers of Borrower and Royal Palm and have been duly authorized by
all necessary corporate action.
4.03 Binding Effect. This
Agreement, the Note, Borrower Pledge, Subsidiary Pledge and the
other Transaction Documents have been duly authorized, executed and
delivered and constitute the legal, valid and binding obligations
of Borrower and/or Royal Palm enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting
creditors’ rights in general.
4.04 Financial Statements.
Borrower has furnished Lender with the following financial
statements, identified by the principal financial officer of
Borrower: (a) consolidated balance sheets and profit and loss
statements of Borrower and its Consolidated Subsidiaries as of
December 31, 2005, all certified by Borrower’s
independent certified public accountants, which financial
statements have been prepared in accordance with GAAP; (b) the
Consolidated Financial Statements for Bank Holding Companies (FR
Y-9C) of Borrower and its Consolidated Subsidiaries as of
June 30, 2006; (c) the Parent Company Only Financial
Statements for Large Bank Holding Companies (FR Y-9LP) for Borrower
as of June 30, 2006; and (d) the Consolidated Reports of
Condition and Income For A Bank With Domestic Offices Only (FFIEC
041) of each Subsidiary Bank as of June 30, 2006, certified by
the President or Chief Financial Officer of each Subsidiary Bank.
Borrower further represents that: (1) said financial
statements fairly present the condition of Borrower and its
Consolidated Subsidiaries as of the dates thereof, (2) there
has been no change in the condition or operation, financial or
otherwise, of Borrower or any of its Consolidated Subsidiaries
since June 30, 2006 that could have a Material Adverse Effect,
and (3) neither Borrower nor any of its Consolidated
Subsidiaries has any direct or contingent liabilities which are not
disclosed on said financial statements which could have a Material
Adverse Effect.
4.05 Litigation. Except as
disclosed in Schedule 4.05 attached hereto, there is no
action or proceeding pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, Royal Palm, any
Subsidiary or any Subsidiary Bank before any court, arbitrator or
governmental, regulatory or administrative body, agency or official
which could result in any change in the condition or operation,
financial or otherwise, of Borrower, Royal Palm, any Subsidiary or
any Subsidiary Bank that could have a Material Adverse Effect, and
neither Borrower, Royal Palm, any Subsidiary nor any Subsidiary
Bank
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is in
default with respect to any order, writ, injunction, decision or
decree of any court, arbitrator or governmental, regulatory or
administrative body, agency or official which could have a Material
Adverse Effect on Borrower, Royal Palm, any Subsidiary or any
Subsidiary Bank.
4.06 Pension and Welfare
Plans. Each Pension Plan complies with all applicable statutes
and governmental rules and regulations; no Reportable Event has
occurred and is continuing with respect to any Pension Plan;
neither Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary
nor any Subsidiary Bank has withdrawn from any Multiemployer Plan
in a “complete withdrawal” or a “partial
withdrawal” as defined in sections 4203 or 4205 of ERISA,
respectively; no steps have been instituted by Borrower, Royal
Palm, any ERISA Affiliate, any Subsidiary or any Subsidiary Bank to
terminate any Pension Plan; no condition exists or event or
transaction has occurred in connection with any Pension Plan or
Multiemployer Plan which could result in the incurrence by
Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary, or any
Subsidiary Bank of any material liability, fine or penalty; and
neither Borrower, Royal Palm, any ERISA Affiliate, any Subsidiary,
nor any Subsidiary Bank is a “contributing sponsor” as
defined in Section 4001 (a) (13) of ERISA of a
“single-employer plan” as defined in Section 4001
(a) (15) of ERISA which has two or more contributing sponsors
at least two of whom are not under common control. Neither
Borrower, Royal Palm, any Subsidiary nor any Subsidiary Bank has
any contingent liability with respect to any “employee
welfare benefit plans”, as such term is defined in Section
3(a) of ERISA, which covers retired employees and their
beneficiaries.
4.07 Tax Returns and Parent.
Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary has
filed all Federal, state and local income tax returns and all other
tax returns which are required to be filed and has paid all taxes
due pursuant to such returns or pursuant to any assessment received
by Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary,
except for the filing of such returns, if any, in respect of which
an extension of time for filing is in effect.
4.08 Subsidiaries. Borrower,
Royal Bank, Subsidiaries and Subsidiary Banks have no Subsidiaries
other than as identified on Schedule 4.08 attached
hereto, as the same may from time to time be amended, modified or
supplemented as provided herein. Except as disclosed on
Schedule 4.08 attached hereto, neither Borrower, Royal
Bank, any Subsidiary, nor any Subsidiary Bank, individually or
collectively, owns or holds, directly or indirectly, any capital
stock of or equity interest in any corporation, partnership,
limited liability company or other entity. Borrower may at any time
amend, modify or supplement Schedule 4.08 by notifying
Lender in writing of any changes thereto, including any formation,
acquisition, merger or liquidation of any Subsidiary or any change
in the capitalization of any Subsidiary, in each case, in
accordance with the terms of this Agreement, and thereby the
representations and warranties contained in this Section 4.08
shall be amended accordingly so long as such amendment,
modification or supplement is made within thirty (30) days
after the occurrence of any such changes in the facts stated
therein and that such changes reflect transactions that are
permitted under this Agreement.
4.09 Compliance With Other
Instruments: None Burdensome. None of the execution and
delivery by Borrower and Royal Palm of the Transaction Documents,
the consummation of the transactions therein contemplated or the
compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award
binding on Borrower, Royal Palm, any Subsidiary, or any Subsidiary
Bank, or any of the provisions of their Articles or Certificate of
Incorporation or Association, or Bylaws or any of the provisions of
any indenture, agreement, document, instrument or undertaking to
which Borrower, Royal Palm, any Subsidiary, or any Subsidiary Bank
is a party or subject, or by which it or its Property is bound. No
order, consent, approval, license, authorization or validation of,
or filing, recording or registration with, the exemption by, any
governmental, regulatory, administrative or public body or
authority, or any subdivision thereof, is required to authorize, or
is otherwise required in connection with, the execution, delivery
or performance of, or the legality, validity, binding effect or
enforceability of, any of the Transaction Documents.
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4.10 Other Loans and
Guarantees. Except as disclosed on Schedule 4.10
attached hereto, neither Borrower, Royal Palm, any Subsidiary, or
any Subsidiary Bank (except in the ordinary course of the banking
business) is borrower, guarantor or obligor with respect to any
loan transaction, guarantee or other indebtedness for borrowed
money.
4.11 Title to Property.
Borrower, Royal Palm, each Subsidiary Bank, and each Subsidiary are
each the sole and absolute owner of, or has the legal right to use
and occupy, all Property it claims to own or which is necessary for
Borrower, Royal Palm, Subsidiary Bank, and each Subsidiary to
conduct its business. Neither Borrower, Royal Palm, Subsidiary
Bank, nor each Subsidiary has signed (or authorized the filing of)
any financing statements, security agreements or chattel mortgages
with respect to any of its Property, has granted or permitted any
Liens with respect to any of its Property or has any knowledge of
any Liens with respect to any of its Property, except as disclosed
on Schedule 4.11 attached hereto.
4.12 Regulation U. No
part of the proceeds of the Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately
(a) to purchase or carry margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock, or
to refund or repay indebtedness originally incurred for such
purpose or (b) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of
The Board of Governors of the Federal Reserve System, including,
without limitation, Regulations G, U, T or X thereof, as amended.
If requested by Lender, Borrower shall furnish to Lender a
statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in Regulation U.
4.13 Environmental Matters.
There are no disputes pending (nor, to the knowledge of Borrower,
are there any disputes threatened nor, to the knowledge of
Borrower, is there any basis therefor) affecting Borrower, Royal
Palm, any Subsidiary Bank, or any Subsidiary, whether or n
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