SUBJECT TO THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF DECEMBER 19, 2002 FROM BORROWER AND LENDER TO NATIONAL CITY BANK OF KENTUCKY SECOND AMENDED, CONSOLIDATED AND RESTATED PROMISSORY NOTE ($5,330,000)
EXHIBIT
10.36
of
the
Prime Rate at the opening of business on that day. The “Prime
Rate,
as used
in this Note, shall mean that rate of interest announced from time to time
by
National City Bank, Kentucky (the “Bank”)
to be
its prime rate at its principal office in Louisville,
Kentucky, it being understood and agreed that such rate shall not necessarily
be
the lowest rate the Bank then offers to its most creditworthy borrowers.
As of
October 1, 2006, the Prime Rate of the Bank was eight
and
one-quarter percent (8-1/4%),
and
accordingly the interest rate per annum on this Note until the first Adjustment
Date shall be nine and one-quarter percent (9-1/4%).
CONSEQUENCES
OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT TO
ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION WITH THIS
NOTE OR ANY RELATED DOCUMENTS.
SUBJECT
TO THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF DECEMBER 19, 2002 FROM
BORROWER AND LENDER TO NATIONAL CITY BANK OF KENTUCKY
SECOND
AMENDED, CONSOLIDATED AND RESTATED PROMISSORY NOTE
($5,330,000)
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$5,330,000.00
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Louisville,
Kentucky
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December
28, 2006
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FOR
VALUE
RECEIVED,
the
undersigned, CITIZENS
FINANCIAL CORPORATION,
a
Kentucky corporation (“Borrower”),
having an address of Suite 300, The Marketplace, 00000 Xxxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, hereby promises and agrees to pay to the order
of
Xxxxxxx X. Xxxxx (“Lender”),
having an address of Xxxxx 000, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx
00000, the aggregate principal sum of FIVE
MILLION THREE HUNDRED THIRTY THOUSAND DOLLARS
($5,330,000.00), or so much thereof as may be advanced hereunder, together
with
interest hereon as hereinafter provided, in lawful money of the United States
of
America, in the manner set forth herein, on or before June 30, 2007 (the
“Final
Maturity Date”).
This
Second Amended, Consolidated and Restated Promissory Note (this “Note”)
amends, consolidates, restates and replaces the following instruments made
by
Maker to the order of Payee (collectively, the “Prior
Notes”):
Amended,
Consolidated and Restated Promissory Note ($4,000,000) dated as of March 23,
2006;
Promissory
Note ($360,000) dated as of March 29, 2006;
Promissory
Note ($400,000) dated as of July 7, 2006; and
Promissory
Note ($370,000) dated as of September 19, 2006.
This
Note
is not intended to be and shall not be construed as a novation of the
indebtedness evidenced by the Prior Notes. This Note shall be entitled to the
benefits (in the same priority) of, inter alia,
any
security at any time granted and pledged by Maker to Payee in conjunction with
the original execution and delivery of the Prior Notes or predecessor notes
or
by Maker or any other person at any time thereafter. This Note also evidences
an
additional loan from Lender to Borrower made on the date hereof in the original
principal amount of Two Hundred Thousand Dollars ($200,000.00).
The
principal of this Note shall bear interest on the unpaid balance thereof at
a
rate per annum equal to the greater
of [i]
six percent (6%) or [ii] one percent (1%) in excess of the Prime Rate as it
existed at the opening of business on October 1, 2006. The rate per annum shall
be reset at the opening of business on the first day of each January, April,
July and October thereafter (each an “Adjustment
Date”)
so
that for the calendar quarter beginning on that day the rate per annum shall
equal the greater
of [i]
six
percent (6%) or [ii] one percent (1%) in excess
All
interest on this Note shall be computed daily on the basis of the actual number
of days elapsed over a year assumed to consist of three hundred sixty (360)
days.
Principal
of this Note shall be paid in a single payment on the Final Maturity Date.
All
accrued and unpaid interest shall be paid on each Adjustment Date for the
preceding calendar quarter and also on the Final Maturity Date or any other
date
on which the principal balance of this Note is paid in full.
The
holder of this Note shall have the right to require repayment in full of this
Note in whole or in part and all accrued and unpaid interest hereon by giving
written notice to Borrower at the address first set forth above specifying
a
date for repayment that shall be not less than ninety (90) days after the date
Borrower receives such notice.
Borrower
reserves the right to repay the principal of this Note in whole or in part
without penalty or premium at any time; provided, however, that Borrower shall
have no right to reborrow any amounts so repaid.
Notwithstanding
any other provision of this Note, the rights and obligations of Borrower and
Lender hereunder to demand, pay or receive payments and prepayments of the
principal hereof, interest hereon, and other sums payable hereunder are subject
to the terms and conditions of a Subordination Agreement from Borrower and
Lender to the Bank dated as of December 19, 2002, as it may be amended, modified
or replaced from time to time. In particular, Borrower’s failure to pay any
installment of principal of or interest on this Note that it is not permitted
to
pay in order to comply with the Subordination Agreement shall not constitute
a
default on this Note nor shall it give rise to any obligation to pay any
increased interest or late payment charges in respect of any such unpaid
installment until ten (10) days after the Bank notifies Borrower that it may
pay
such installment.
All
payments of principal and interest and any other sums due under this Note shall
be made in immediately available funds to Lender at its address set forth above
in this Note or to such other person or at such other address as may be
designated in writing by the holder of this Note. All payments on this Note
shall be applied first to the payment of any expenses or charges payable
hereunder, and next to accrued interest, and then to the principal balance
hereof, or in such other order as Lender may elect in its sole discretion.
Any
payment on this Note that is overdue for more
than five (5) days from its due date shall, if requested by and at the sole
option of the holder of this Note, in order to compensate the holder for the
inconvenience and administrative expense incident to such delinquency and not
as
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a
penalty, be increased by an amount equal to five percent (5%) of the overdue
payment, unless such increase would exceed the maximum increase permitted by
law, in which event the overdue payment shall be increased by such lesser
increment, if any, as would not exceed the maximum increase permitted by law.
The charging or collection of a late charge shall not be deemed a waiver of
any
of the holder’s other rights and remedies hereunder, including, if applicable,
the right to exercise the remedies of the holder upon a default under this
Note
as hereinafter provided.
The
occurrence of any one or more of the following shall constitute a default under
this Note: [i] Borrower does not pay any installment of principal of, or
interest on, this Note as and when due or within five (5) days thereafter;
[ii]
a proceeding is filed or commenced against Borrower for dissolution or
liquidation that is not dismissed within sixty (60) days after filing; [iii]
Borrower becomes insolvent, or a custodian, trustee, liquidator or receiver
is
appointed for Borrower or for any of its property, or Borrower makes an
assignment for the benefit of its creditors, files a petition under bankruptcy,
insolvency or debtor’s relief law or for any readjustment of indebtedness,
composition or extension or [iv] any such proceeding is filed against Borrower
and is not dismissed within sixty (60) days).
Whenever
there is a default under this Note, the entire principal balance of and all
accrued interest on this Note, shall, at the option of Lender, become forthwith
due and payable, without presentment, notice, protest or demand of any kind
(all
of which are expressly waived by Borrower). Upon any such default, the rate
of
interest applicable to the entire unpaid principal balance of this Note shall,
at the sole and exclusive option of the holder of this Note, be increased by
four percent (4%) per annum, unless the resulting rate would exceed the maximum
rate permitted by law, in which event the rate of interest shall be increased
to
a rate that shall not exceed such maximum rate.
This
Note
is hereby expressly limited so that in no event whatsoever, whether by reason
of
acceleration of the maturity hereof or otherwise, shall the amount paid or
agreed to be paid to the holder of this Note for the use, forbearance or
retention of money loaned hereunder exceed the maximum amount permissible under
applicable law. If from any circumstance the holder of this Note shall ever
receive anything of value deemed by applicable law to be interest in any amount
that would exceed the highest lawful rate payable hereunder, an amount equal
to
any excessive interest shall be applied to the reduction of the principal amount
owing hereunder and not to the payment of the interest, and if the amount that
would be excessive interest exceeds the principal balance then owing, such
excess shall be refunded to the party paying the same.
Failure
of the holder of this Note to exercise any of its rights and remedies shall
not
constitute a waiver of the right to exercise the same at that or any other
time.
All rights and remedies of the holder for default under this Note shall be
cumulative to the greatest extent permitted by law. Time shall be of the essence
in the payment of all installments of interest and principal on this Note and
the performance of Borrower’s other obligations under this Note.
If
there is any default under this Note, and this
Note is placed in the hands of an attorney for collection or is collected
through any court, including any bankruptcy court, Borrower promises to pay
to
the holder hereof its reasonable attorneys’ fees and court costs incurred in
collecting or attempting to collect or securing or attempting to secure this
Note or enforcing the
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holder’s
rights in any collateral securing this Note, provided the same is legally
allowed by the laws of the Commonwealth of Kentucky or any state where the
collateral or part thereof is situated.
If
any
provision, or portion thereof, of this Note, or the application thereof to
any
persons or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Note, or the application of such provision, or portion
thereof, to any other person or circumstances shall not be affected thereby,
and
each provision of this Note shall be valid and enforceable to the fullest extent
permitted by law.
This
Note, including matters of construction, validity and performance, and the
obligations arising hereunder, shall be construed in accordance with and
otherwise governed in all respects by the laws of the Commonwealth of Kentucky
applicable to contracts made and performed in such state and any applicable
law
of the United States of America.
Borrower
and any other party who may become primarily or secondarily liable for any
of
the obligations of Borrower hereunder hereby jointly and severally waive
presentment, demand, notice of dishonor, protest, notice of protest, and
diligence in collection, and further waive all exemptions to which they may
now
or hereafter be entitled under the laws of the Commonwealth of Kentucky or
any
other state or of the United States, and further agree that the holder of this
Note shall have the right without notice, to deal in any way, at any time,
with
Borrower, or with any other party who may become primarily or secondarily liable
for, or pledge any collateral as security for, any of the obligations of
Borrower under this Note and to grant any extension of time for payment of
this
Note or any other indulgence or forbearance whatsoever, and may release any
security for the payment of this Note and/or modify the terms of the
any other
documents securing or pertaining to this Note, without in any way affecting
the
liability of Borrower, or such other party who may pledge any collateral as
security for, or become primarily or secondarily liable for, the obligations
of
Borrower hereunder and without waiving any rights the holder may have hereunder
or by virtue of the laws of this state or any other state of the Unites States.
Borrower
hereby consents to the jurisdiction of any state or federal court located within
the County of Jefferson, Commonwealth of Kentucky, and irrevocably agrees that,
subject to Lender’s sole and absolute election, any case or proceeding relating
to Title 11 of the United States Code and any actions relating to the
indebtedness evidenced hereby shall be litigated in such courts, and Borrower
waives any objection that it may have based on improper venue or forum non
conveniens to the conduct of any proceeding in any such court. Nothing contained
in this paragraph shall affect the right of Lender to bring any action or
proceeding against Borrower or its property in the courts of any other
jurisdiction.
LENDER
AND BORROWER ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY
EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY
AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE
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CITIZENS
FINANCIAL CORPORATION
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By:
/s/ Xxx X. Xxxxxxxxxx
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Xxx
X. Xxxxxxxxxx
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Vice
President, Accounting,
and Chief Financial Officer
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