NOTE
DATE: July 31, 1996 Shepherdsville,
Kentucky
1. XXXXXXXX'S PROMISE TO PAY
In return for a loan that I have received, I, FREEDOM
FINANCIAL CORPORATION, an Indiana corporation, (Borrower),
promise to pay U.S. ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS
AND NO/100 ($1,800,000.00) (this amount is called "principal"),
plus interest, to the order of the Lender. The Lender is PIONEER
BANK. I, understand that the Lender may transfer this Note. The
Lender or anyone who takes this Note by transfer and who is
entitled to receive payments under this Note is called the "Note
Holder."
2. INTEREST AND PAYMENTS
2.1 Repayment. The loan of ONE MILLION EIGHT HUNDRED
THOUSAND DOLLARS AND NO/100 ($1,800,000.00) shall be repaid as
follows:
2.1 Installments of Principal and Interest Under the Note
This loan provides a commercial loan in the amount of ONE MILLION
EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($1,800,000.00) for a
term of one year, which term shall expire on the 31st day of
July, 1997, if not renewed or extended by the Bank, at the Bank's
sole option.
Interest on this Loan of ONE MILLION EIGHT HUNDRED THOUSAND
AND NO/100 ($1,800,000.00), shall be paid to the Bank in
quarterly payments. The term of the Loan shall be a one (1) year
period, requiring quarterly payments of interest on the
outstanding balance of the principal borrowed and one final
payment of the outstanding balance of accrued interest and
principal borrowed due on the 31st day of July, 1997.
This is a variable interest rate Note. The interest rate
charged on the outstanding balance is a floating rate of one
percent (1%) per annum in excess of the New York prime rate as
quoted in the Wall Street Journal. On this date, the interest
rate is nine and one quarter percent (9.25%) per annum. This
interest rate may fluctuate on a daily basis. Any increase in
the interest rate will result in higher quarterly interest
payments.
Notice by the Bank to the Borrower of any increase, decrease
or no change, in the interest rate being charged shall be given
prior to a payment of interest being due.
In addition to the quarterly interest payments, Borrower
will also make quarterly principal payments of FIFTY THOUSAND
DOLLARS AND NO/100 ($50,000.00) each to be applied to the
outstanding principal balance.
The Loan may be renewed or extended at the sole discretion
of the Bank.
2.2 Application of Payments. All payments on the Note of
any nature whatsoever, whether received by the Bank by direct
remittance, set-off, foreclosure or other enforcement of security
or otherwise shall be applied first to interest accrued to date
of receipt, then against the principal in accordance with the
terms of the Note thereof, then to any expenses or charges
payable hereunder, finally to the balance -if any- against the
principal in accordance with the terms of the Note thereof.
All payments of principal and accrued interest shall be made
in legal tender of the United States of America in immediately
available funds at the Bank's principal office on the dated
specified herein.
2.3 Pre-payment Penalty. There is no prepayment penalty
associated with this loan. Borrower can prepay the loan in whole
or in part without penalty at any time during the term of the
loan.
I will make all payments at Pioneer Bank, P.O. Box 669,
Munfordville, Kentucky 42765, or at a different place if
required by Note Holder.
3. XXXXXXXX'S RIGHT TO PREPAY
I have the right to make payments of principal at any time
before they are due. A payment of principal only is known as a
"prepayment". When I make a prepayment, I will tell the Note
Holder in writing that I am doing so. I may make a full
prepayment or partial prepayments without paying any prepayment
charge except as noted hereinabove. The Note Holder will use all
of my prepayments to reduce the amount of principal that I owe
under this Note. If I make a partial prepayment, there will no
changes in the due date or in the amount of my quarterly payments
unless the Note Holder agrees in writing to those changes.
4. LOAN CHARGES
If a law, which applies to this loan and which sets maximum
loan charges, is finally interpreted so that the interest or
other loan charges collected or to be collected in connection
with this loan exceed the permitted limits, then: (i) any such
loan charge will be reduced by the amount necessary to reduce the
charge to the permitted limit; and (ii) any sums already
collected from me which exceeded permitted limits will be
refunded to me. The Note Holder may choose to make this refund
by reducing the principal I owe under this Note or by making a
direct payment to me. If a refund reduces principal, the
reduction will be treated as a partial prepayment.
5. XXXXXXXX'S FAILURE TO PAY AS REQUIRED
(A) Late Charge for Overdue Payments:
If the Note Holder has not received the full amount of any
payment by the end of 10 calendar days after the date it is due,
I will pay a late charge to the Note Holder. The amount of the
charge will be 5% of my overdue payment of principal and
interest. I will pay this late charge promptly but only once on
each late payment.
(B) Default
If I do not pay the full amount of each payment on the date
it is due, I will be in default.
(C) Notice of Default:
If I am in default, the Note Holder may send me a written
notice telling me that if I do not pay the overdue amount by a
certain date, the Note Holder may require me to pay immediately
the full amount of principal which has not been paid and all the
interest that I owe on that amount. That date must be at least
30 days after the date on which the notice is delivered or mailed
to me.
(D) No Waiver by Note Holder:
Even if, at a time when I am in default, the Note Holder
does not require me to pay immediately in full as described
above, the Note Holder will still have the right to do so if I am
in default at a later time.
(E) Payment of Note Holder's Cost and Expenses
If the Note Holder has required me to pay immediately in
full as described above, the Note Holder will have the right to
be paid back by me for its costs and expenses, including
reasonable attorney's fees in enforcing this Note (both pre- and
post-judgment costs and expenses).
6. GIVING OF NOTICES
Unless applicable law requires a different method, any
notice that must be given to me under this Note will be given by
delivering it or by mailing it by first class mail to me at 0000
Xxxxxxxxxxx Xxxx, Xxxxx X, Xxx Xxxxxx, XX 00000. Any notice that
must be given to the Note Holder under this Note will be given by
mailing it by first class mail to the Note Holder at the address
stated in Section 2 above or at a different address if I am given
a notice of that different address.
7. OBLIGATIONS OF PERSONS UNDER THIS NOTE
If more than one person signs this Note, each person is
fully and personally obligated to keep all the promises made in
this Note, including the promise to pay the full amount owed.
Any person who is a guarantor, surety or endorser of this Note is
also obligated to do these things. Any person who takes over
these obligations, including the obligations of a guarantor,
surety or endorser of this Note, is also obligated to keep all of
the promises made in this Note. The Note Holder may enforce its
rights under this Note against each person individually or
against all of us together. This means that any one of us may be
required to pay all of the amounts owed under this Note.
8. WAIVERS
I and any other person who has obligations under this Note
waive the rights of presentiment and notice of dishonor.
"Presentment" means the right to require the Note Holder to
demand payment of amounts due. "Notice of dishonor" means the
right to require the Note Holder to give notice to other persons
that amounts due have not been paid.
9. UNIFORM SECURED NOTE
This Note is a uniform instrument with limited variations in
some jurisdictions. In addition to the protections given to the
Note Holder under this Note, a Loan Agreement, Stock Pledge
Agreement and Guaranty Agreement (the "Security Instrument"),
dated the same date as this Note, protects the Note Holder from
possible losses which might result if I do not keep the promises
which I make in this Note. That Security Instrument described
how and under what conditions I may be required to make immediate
payment in full or all amounts I owe under this Note. Some of
those conditions are described as follows:
Transfer of the Property of a Beneficial Interest in
Borrower. If all or any part of the Property or any interest in
it is sold or transferred (or if a beneficial interest in
Borrower is sold or transferred and Borrower is not a natural
person) without Xxxxxx's prior written consent, Lender may, at
its option, require immediate payment in full or all sums secured
by this Security Instrument. However, this option will not be
exercised by Lender if exercise is prohibited by federal law as
of the date of this Security Instrument.
If Lender exercised this option, Lender will give Borrower
notice of acceleration. The notice will provide a period of not
less than 30 days from the date the notice is delivered or mailed
within which Borrower must pay all sums secured by this Security
Instrument. If Xxxxxxxx fails to pay these sums prior to the
expiration of this period, Lender may invoke any remedies
permitted by this Security Instrument without further notice or
demand on Borrower.
FREEDOM FINANCIAL CORPORATION
BY: /s/ X. Xxxxxxx Xxxxxxx
X. XXXXXXX XXXXXXX, CHAIRMAN & CEO
