EXHIBIT 10.13
2003 Promissory Note to Darrell R.
Wells and Related Subordination Agreement
SUBJECT TO THAT CERTAIN
SUBORDINATION AGREEMENT DATED AS OF DECEMBER 19, 2002
FROM BORROWER AND LENDER TO NATIONAL CITY BANK OF KENTUCKY
PROMISSORY NOTE
$1,000,000.00
Louisville, Kentucky
December 23, 2003
FOR VALUE RECEIVED, the undersigned, CITIZENS FINANCIAL CORPORATION,
a
Kentucky corporation, ("Borrower"), having an address of Suite 300, The
Marketplace, 12910 Shelbyville Road,
Louisville, Kentucky 40243, hereby promises
and agrees to pay to the order of Darrell R. Wells, ("Lender"), having an
address of Suite 310, 4310 Brownsboro
Road, Louisville, Kentucky 40207, the
aggregate principal sum of ONE MILLION DOLLARS ($1,000,000.00), 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, 2005 (the "Final Maturity Date").
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
at the opening of business on the
date of this Note. The rate per annum shall be reset
at the opening of business
on the first day of each April,
July, October and January hereafter (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 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 the date of this
Note, the Prime Rate of the Bank is four
percent (4.00%),
and accordingly the
interest rate per annum on this Note until
the first Adjustment
Date shall be
six percent (6%).
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 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
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 provisi
