Exhibit 10.3
PROMISSORY
NOTE
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$3,500,000
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November 10, 2006
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(1) For
value received, the undersigned, Premier Financial Bancorp, Inc., a
Kentucky corporation with principal offices in Huntington, West
Virginia (“Borrower”) hereby promises to pay in lawful
money of the United States of America to the order of The
Bankers’ Bank of Kentucky, Inc., a Kentucky banking
organization, with main offices in Frankfort, Kentucky
(“Lender”), at the main offices of Lender, 107 Progress
Drive, Frankfort, Kentucky, 40602, on November 9 of 2007, the
outstanding principal amount loaned to Borrower under this
Promissory Note, and not previously repaid, together with interest
due and owing as of such date upon such outstanding principal
amount, as reflected by the books and records of the Lender. The
Parties agree and acknowledge that the Borrower may request and
receive monies from Lender under this Promissory Note from time to
time, but the aggregate outstanding principal balance at any time
shall not exceed Three Million Five Hundred Thousand ($3,500,000)
Dollars, and that the right to request and receive monies from
Lender hereunder shall cease and terminate on November 9, 2007.
(2) The outstanding principal balance under
this Promissory Note shall bear annual interest at the rate of the
Prime Rate, as announced from time to time by J.P. Morgan Chase
Bank, New York, New York, minus one (1%) percent, adjusted daily.
In addition to the interest payments required under this Paragraph
(1) above, interest on this Promissory Note shall be due and
payable on the 5th day of each, January, April, July and October
during the term of this Promissory Note, and at the maturity date
hereof. The Prime Rate of J.P. Morgan Chase Bank will function only
as a tool for setting the rate on this Promissory Note and Lender
does not represent that such rate has any relationship to the rate
it charges its other customers.
(3) All payments on account of indebtedness
evidenced by this Promissory Note shall be first applied to
interest, costs and expenses, and then to principal, and interest
shall be computed on the basis of a 360-day year.
(4)
The occurrence of any one or more of the following shall constitute
a Default or Event of Default under this Promissory Note as those
terms are defined under the Loan Agreement described above:
(i) Failure to make any payment of principal, interest or
costs within ten (10) days after any such payment is due hereunder;
and
(ii) The occurrence of a
