DISCRETIONARY REVOLVING LINE OF CREDIT NOTE
Exhibit 10.38
|
$7,500,000.00
|
Louisville,
Kentucky
|
|
as
of June 29, 2007
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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 Suite 000, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, the principal
sum of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00) or so much thereof as may be advanced by Xxxxxx to or
for the account of Borrower (the “Loan”), together with
interest thereon or on the balance thereof from time to time outstanding, to
be
computed as hereinafter provided from the date hereof until the said principal
sum shall be fully repaid, all without any relief whatever from valuation or
appraisement laws and with reasonable attorney’s fees, on or before June 30,
2008 (the “Final Maturity Date”).
NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, THE HOLDER OF THIS DISCRETIONARY REVOLVING
LINE
OF CREDIT NOTE (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.
This
Note
amends, consolidates, restates and replaces the Third Amended, Consolidated
and
Restated Promissory Note ($5,630,000.00) dated as of April 2, 2007 made by
Borrower to the order of Lender (the “Prior
Note”). This Note is not intended to be and shall not be
construed as a novation of the indebtedness evidenced by the Prior
Note. This Note shall be entitled to the benefits (in the same
priority) of, interalia, any security at any time granted and
pledged by Borrower to Lender in conjunction with the original execution and
delivery of the Prior Note or predecessor notes or by Borrower 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 One Hundred Thirty Thousand Dollars ($130,000.00). As of
the date hereof, this Note evidences a principal balance disbursed and
outstanding of Five Million Seven Hundred Sixty Thousand Dollars ($5,760,000.00)
plus interest accrued under the Prior Note and a predecessor note from and
after
April 1, 2007.
Xxxxxx
may make disbursements of the Loan hereunder (“Advances”) from
time to time in his sole and absolute discretion to or for the account of
Xxxxxxxx, including without limitation payments of interest on the
Loan. Borrower may borrow, repay in whole or in part without premium
or penalty, and reborrow hereunder, subject to the terms hereof.
Xxxxxx
shall record in his accounts the date and amount of each Advance and each
payment on this Note from time to time, which accounts shall be deemed correct
and complete in the absence of manifest error.
The
principal sums actually disbursed and outstanding hereon from time to time
shall
bear interest for each calendar quarter (each such calendar quarter, an
“Interest Period”) 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 the first day of
such
Interest Period. The interest rate per annum shall be reset at the
opening of business on the first day of each Interest Period hereafter (each
an
“Adjustment Date”) so that for the Interest Period beginning on
that day the interest rate per annum shall equal the greater
of [i] six percent (6%) or [ii] one percent (1%) in excess 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 (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 April 1, 2007, 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%).
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 Interest Period and also on the Final Maturity
Date or any other date on which the principal balance of this Note is paid
in
full. Failure of Lender to make an Advance for the payment of
interest on this Note shall not relieve Borrower of the obligation to pay
interest accrued on this Note.
All
payments of principal and interest and any other sums due under this Note shall
be made in immediately available funds to Lender at his 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 his 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 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 Xxxxxxxx makes an
assignment for the
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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 Xxxxxxxx’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 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.
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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 Xxxxxx’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.
XXXXXX
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 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.
CITIZENS
FINANCIAL CORPORATION
By:
/s/ Xxx X.
Xxxxxxxxxx
Xxx
X.
Xxxxxxxxxx
Vice
President, Accounting, and Chief
Financial
Officer
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