Loan Agreement between Premier Financial and First Guaranty Bank


    EXHIBIT
      10.6

     

    BUSINESS
      LOAN AGREEMENT

    


    
      	
              Principal

            	
              Loan
                Date

            	
              Maturity

            	
              Loan
                No

            	
              Call
                / Coll

            	
              Account

            	
              Officer

            	
              Initials

            
	
              $7,000,000.00

            	
              01-31-2006

            	
              09-28-2017

            	
              25791389

            	
              220
                / 54

            	
               

            	
              MFL

            	
               

            
	
              References
                in the shaded area are for Lender’s use only and do not limit the
                applicability of this document to any particular loan or
                item.

              Any
                item above containing “ * * * “ has been omitted due to text length
                limitations

            


    

    


    
      	
              Grantor:

            	
              PREMIER
                FINANCIAL BANCORP, INC. (TIN:

              61-1206757)

              2883
                FIFTH AVE.

              HUNTINGTON,
                WV 25702

            	 	
              Lender:

            	
              FIRST
                GUARANTY BANK

              First
                Guaranty Square Banking Center - Commercial

              Lending

              400
                East Thomas Street

              P
                0
                Box 2009

              Hammond,
                LA 70404-2009

              (985)
                345-7685

            


    

    
THIS
      BUSINESS LOAN AGREEMENT dated January 31, 2006, Is made and executed between
      PREMIER FINANCIAL BANCORP, INC. ("Borrower") and FIRST GUARANTY BANK ("Lender")
      on the following terms and conditions. Borrower has applied to Lender for a
      loan
      or loans or other financial accommodations, including those which may be
      described on any exhibit or schedule attached to this Agreement ("Loan").
      Borrower understands and agrees that: (A) In granting, renewing, or extending
      any Loan, Lender is relying upon Borrower's representations, warranties, and
      agreements as set forth In this Agreement; (B) the granting, renewing, or
      extending of any Loan by Lender at all times shall be subject to Lender's sole
      judgment and discretion; and (C) all such Loans shall be and remain subject
      to
      the terms and conditions of this Agreement.

     

    APPLICATION
      FOR AND PURPOSE OF THE LOAN.
      Borrower has applied to Lender for a Loan in the aggregate principal amount
      of
      $7,000,000 for
      the
      following purpose:
      TO PAYOFF 7MM IN 9.75% DEBENTURES.

     

    BORROWER'S
      NOTE.
      Lender
      has agreed to extend a Loan to Borrower in the amount of $7,000,000.00 subject
      to the terms and conditions of this Agreement and Borrower's attached Note.
      Borrower agrees to be bound and obligated under the terms and conditions of
      this
      Agreement and Borrower's Note.

     

    TERM.
      This
      Agreement shall be effective as of January 31, 2006, and shall continue in
      full
      force and effect until such time as all of Borrower's Loans in favor of Lender
      have been paid in full, including principal, interest, costs, expenses,
      attorneys' fees, and other fees and charges, or until September 28,
      2017.

     

    CONDITIONS
      PRECEDENT TO EACH ADVANCE.
      Lender's obligation to make the Initial Advance and each subsequent Advance
      under this Agreement shall be subject to the fulfillment to Lender's
      satisfaction of all of the conditions set forth in this Agreement and In the
      Related Documents.

     

    Loan
      Documents.
      Borrower shall provide to Lender the following documents for the Loan: (1)
      the
      Note; (2) Security Agreements granting to Lender security interests in the
      Collateral; (3) financing statements and all other documents perfecting Lender's
      Security Interests; (4) evidence of insurance as required below; (5) together
      with all such Related Documents as Lender may require for the Loan; all in
      form
      and substance satisfactory to Lender and Lender's counsel. 

     

    Borrower's
      Authorization.
      Borrower shall have provided in form and substance satisfactory to Lender
      properly certified resolutions, duly authorizing the execution and delivery
      of
      this Agreement, the Note and the Related Documents. In addition, Borrower shall
      have provided such other resolutions, authorizations, documents and instruments
      as Lender or its counsel, may require. 

     

    Payment
      of Fees and Expenses.
      Borrower shall have paid to Lender all fees, charges, and other expenses which
      are then due and payable as specified in this Agreement or any Related
      Document. 

     

    Representations
      and Warranties.
      The
      representations and warranties set forth in This Agreement, in the Related
      Documents, and in any document or certificate delivered to Lender under this
      Agreement are true and correct. 

     

    No
      Event of Default.
      There
      shall not exist at the time of any Advance a condition which would constitute
      an
      Event of Default under this Agreement or under any Related Document. 

     

    REPRESENTATIONS
      AND WARRANTIES.
      Borrower represents and warrants to Lender, as of the date of this Agreement,
      as
      of the date of each disbursement of loan proceeds, as of the date of any
      renewal, extension or modification of any Loan, and at all times any
      Indebtedness exists: 

     

    Organization.
      Borrower is a corporation for profit which is, and at all times shall be, duly
      organized, validly existing, and in good standing under and by virtue of the
      laws of the Commonwealth of Kentucky. Borrower is duly authorized to transact
      business in all other states in which Borrower is doing business, having
      obtained all necessary filings, governmental licenses and approvals for each
      state in which Borrower is doing business. Specifically, Borrower is, and at
      all
      times shall be, duly qualified as a foreign corporation in all states in which
      the failure to so qualify would have a material adverse effect on its business
      or financial condition. Borrower has the full power and authority to own its
      properties and to transact the business in which it is presently engaged or
      presently proposes to engage. Borrower maintains its principal office at 2883
      FIFTH AVE., HUNTINGTON, WV 25702. Unless Borrower has designated otherwise
      in
      writing, this is the principal office at which Borrower keeps its books and
      records including its records concerning the Collateral. Borrower will notify
      Lender prior to any change in the location of Borrower's state of organization
      or any change in Borrower's name. Borrower shall do all things necessary to
      preserve and to keep in full force and effect its existence, rights and
      privileges, and shall comply with all regulations, rules, ordinances, statutes,
      orders and decrees of any governmental or quasi-governmental authority or court
      applicable to Borrower and Borrower's business activities. 

     

    Assumed
      Business Names.
      Borrower has filed or recorded all documents or filings required by law relating
      to all assumed business names used by Borrower. Excluding the name of Borrower,
      the following is a complete list of all assumed business names under which
      Borrower does business: None. 

     

    Authorization.
      Borrower's execution, delivery, and performance of this Agreement and all the
      Related Documents have been duly authorized by all necessary action by Borrower
      and do not conflict with, result in a violation of, or constitute a default
      under (1) any provision of (a) Borrower's articles of incorporation or
      organization, of bylaws, or (b) any agreement or other instrument binding upon
      Borrower or (2) any law, governmental regulation, court decree, or order
      applicable to Borrower or to Borrower's properties. 

     

    Financial
      Information.
      Each of
      Borrower's financial statements supplied to Lender truly and completely
      disclosed Borrower's financial condition as of the date of the statement, and
      there has been no material adverse change in Borrower's financial condition
      subsequent to the date of the most recent financial statement supplied to
      Lender. Borrower has no material contingent obligations except as disclosed
      in
      such financial statements. 

     

    Legal
      Effect.
      This
      Agreement constitutes, and any instrument or agreement Borrower is required
      to
      give under this Agreement when delivered will constitute legal, valid, and
      binding obligations of Borrower enforceable against Borrower in accordance
      with
      their respective terms. 

     

    Properties.
      Except
      as contemplated by this Agreement or as previously disclosed in Borrower's
      financial statements or in writing to Lender and as accepted by Lender, and
      except for property tax liens for taxes not presently due and payable. Borrower
      owns and has good title to all of Borrower's properties free and clear of all
      Security Interests, and has not executed any security documents or financing
      statements relating to such properties. All of Borrower's properties are titled
      in Borrower's legal name, and Borrower has not used or filed a financing
      statement under any other name for at least the last five (5) years. 

     

    Hazardous
      Substances.
      Except
      as disclosed to and acknowledged by Lender In writing, Borrower represents
      and
      warrants that: (1) During the period of Borrower's ownership of the Collateral,
      there has been no use, generation, manufacture, storage, treatment, disposal,
      release or threatened release of any Hazardous Substance by any person on,
      under, about or from any of the Collateral. (2) Borrower has no knowledge of,
      or
      reason to believe that there has been (a) any breach or violation of any
      Environmental Laws; (b) any use, generation, manufacture, storage, treatment,
      disposal, release or threatened release of any Hazardous Substance on, under,
      about or from the Collateral by any prior owners or occupants of any of the
      Collateral; or is any actual or threatened litigation or claims of any kind
      by
      any person relating to such matters. (3) Neither Borrower nor any tenant,
      contractor, agent or other authorized user of any of the Collateral shall use,
      generate, manufacture, store, treat, dispose of or release any Hazardous
      Substance on, under, about or from any of the Collateral; and any such activity
      shall be conducted in compliance with all applicable federal, state, and local
      laws, regulations, and ordinances, including without limitation all
      Environmental Laws, Borrower authorizes Lender and its agents to enter upon
      the
      Collateral to make such inspections and tests as Lender may deem appropriate
      to
      determine compliance of the Collateral with this section of the Agreement.
      Any
      inspections or tests made by Lender shall be at Borrower's expense and for
      Lender's purposes only and shall not be construed to create any responsibility
      or liability on the part of Lender to Borrower or to any other person. The
      representations and warranties contained herein are based on Borrower's due
      diligence in investigating the Collateral for hazardous waste and



    
       

      
        
          

        

      

       

    

     

    
      	
              BUSINESS
                LOAN AGREEMENT

            
	
              Loan
                No: 25791389

            	
              (Continued)

            	
              Page
                2

            


    

     

    Hazardous
      Substances.
      Borrower hereby (1) releases and waives any future claims against Lender or
      indemnity or contribution in the event Borrower becomes liable for cleanup
      or
      other costs under any such laws, and (2) agrees to indemnify and hold harmless
      Lender against any and all claims, losses, liabilities, damages, penalties,
      and
      expenses which Lender may directly or indirectly sustain or suffer resulting
      from a breach of this section of the Agreement or as a consequence of any use,
      generation, manufacture, storage, disposal, release or threatened release of
      a
      hazardous waste or substance on the Collateral. The provisions of this section
      of the Agreement, Including the obligation to indemnify, shall survive the
      payment of the Indebtedness and the termination, expiration or satisfaction
      of
      this Agreement and shall not be affected by Lender's acquisition of any interest
      in any of the Collateral, whether by foreclosure or otherwise. 

     

    Litigation.
      There
      are no suits or proceedings pending, or to the knowledge of Borrower, threatened
      against or affecting Borrower or Borrower's assets, before any court or by
      any
      governmental agency, other than those previously disclosed to Lender in writing,
      which, if adversely determined, may have a material adverse effect on Borrower's
      financial condition or business. 

     

    Taxes.
      To the
      best of Borrower's knowledge, all of Borrower's tax returns and reports that
      are
      or were required to be filed, have been filed, and all taxes, assessments and
      other governmental charges have been paid in full, except those presently being
      or to be contested by Borrower in good faith in the ordinary course of business
      and for which adequate reserves have been provided. 

     

    Information.
      All
      information heretofore or contemporaneously herewith furnished by Borrower
      to
      Lender for the purposes of or in connection with this Agreement or any
      transaction contemplated hereby is, and all Information hereafter furnished
      by
      or on behalf of Borrower to Lender will be, true and accurate in every material
      respect on the date as of which such information is dated or certified; and
      none
      of such information is or will be incomplete by omitting to state any material
      fact necessary to make such Information not misleading. 

     

    Lien
      Priority.
      Unless
      otherwise previously disclosed to Lender in writing. Borrower has not entered
      Into or granted any Security Agreements, or permitted the filing or attachment
      of any Security Interests on or affecting any of the Collateral directly or
      indirectly securing repayment of Borrower's Loan and Note, that would be prior
      or that may in any way be superior to Lender's Security Interests end rights
      in
      and to such Collateral. 

     

    Binding
      Effect.
      This
      Agreement, the Note, all Security Agreements (if any), and all Related Documents
      are binding upon the signers thereof, as well as upon their successors,
      representatives and assigns, and are legally enforceable in accordance with
      their respective terms. 

     

    AFFIRMATIVE
      COVENANTS.
      Borrower covenants and agrees with Lender that, so long as this Agreement
      remains in effect. Borrower will: 

     

    Notices
      of Claims and Litigation.
      Promptly inform Lender in writing of (1) all material adverse changes In
      Borrower's financial condition, and (2) all existing and all threatened
      litigation, claims, investigations, administrative proceedings or similar
      actions effecting Borrower or any Guarantor which could materially affect the
      financial condition of Borrower or the financial condition of any Guarantor.
      

     

    Financial
      Records.
      Maintain its books and records in accordance with GAAP, applied on a consistent
      basis, and permit Lender to examine and audit Borrower's books and records
      at
      all reasonable times. 

     

    Financial
      Statements.
      Furnish Lender with the following: 

     

    Annual
      Statements.
      As soon
      as available, but in no event later than ninety (90) days after the and of
      each
      fiscal year, Borrower's balance sheet and Income statement for the year ended,
      audited by a certified public accountant satisfactory to Lender.

     

    Interim
      Statements.
      As
      soon as available, but in no event later than 45 days after the end of each
      fiscal quarter. Borrower's balance sheet and profit and loss statement for
      the
      period ended, prepared by Borrower.

     

    Tax
      Returns.
      As soon
      as available, but in no event later than ninety (90) days after the applicable
      filing date for the tax reporting period ended. Federal and other governmental
      tax returns, prepared by a certified public accountant satisfactory to
      Lender.

    


     

    All
      financial reports required to be provided under this Agreement shall be prepared
      in accordance with GAAP, applied on a consistent basis, and certified by
      Borrower as being true and correct. 

     

    Additional
      Information.
      Furnish
      such additional Information and statements, as Lender may request from time
      to
      time. 

     

    Insurance
      Maintain fire and other risk insurance, public liability insurance, and such
      other insurance as Lender may require with respect to Borrower's properties
      and
      operations, in form, amounts, coverages and with insurance companies acceptable
      to Lender, Borrower, upon request of Lender, will deliver to Lender from time
      to
      time the policies or certificates of insurance in form satisfactory to Lender,
      including stipulations that coverages will not be cancelled or diminished
      without at least thirty (30) days prior written notice to Lender, Each insurance
      policy also shall include an endorsement providing that coverage in favor of
      Lender will not be impaired in any way by any act, omission or default of
      Borrower or any other person. In connection with all policies covering assets
      in
      which Lender holds or is offered a Security interest for the Loans, Borrower
      will provide Lender with such lender's loss payable or other endorsements as
      Lender may require. 

     

    Insurance
      Reports.
      Furnish to Lender, upon request of Lender, reports on each existing insurance
      policy showing such information as Lender may reasonably request, including
      without limitation the following: (1) the name of the insurer; (2) the risks
      insured: (3) the amount of the policy; (4) the properties insured; (5) the
      then
      current property values on the basis of which insurance has been obtained,
      and
      the manner of determining those values; and (6) the expiration date of the
      policy. In addition, upon request of Lender (however not more often than
      annually), Borrower will have an independent appraiser satisfactory to Lender
      determine, as applicable, the actual cash value or replacement cost of any
      Collateral. The cost of such appraisal shall be paid by Borrower. 

     

    Other
      Agreements.
      Comply
      with all terms and conditions of all other agreements, whether now or hereafter
      existing, between Borrower and any Other party and notify Lender immediately
      in
      writing of any default in connection with any other such agreements.


     

    Loan
      Fees. Charges and Expenses. In addition to all other agreed upon fees, charges,
      and expenses, pay the following; $70,000.00
      LOAN FEE AND $150.00 DOCUMENT PREP FEE. 

     

    Loan
      Proceeds.
      Use all
      Loan proceeds solely for the following specific purposes: TO
      PAYOFF 7MM IN 9.75% DEBENTURES. 

     

    Taxes,
      Charges and Liens. Pay
      and
      discharge when due all of its indebtedness and obligations, including without
      limitation all assessments, taxes, governmental charges, levies and liens,
      of
      every kind and nature, imposed upon Borrower or its properties, income, or
      profits, prior to the date on which penalties would attach, and all lawful
      claims that, if unpaid, might become a lien or charge upon any of Borrower's
      properties, income, or profits. 

     

    Performance.
      Perform
      and comply, in a timely manner, with all terms, conditions, and provisions
      set
      forth in this Agreement, in the Related Documents, and in all other Instruments
      and agreements between Borrower and Lender. Borrower shall notify Lender
      Immediately in writing of any default in connection with any agreement.


     

    Operations.
      Maintain executive and management personnel with substantially the same
      qualifications and experience as the present executive and management personnel;
      provide written notice to Lender of any change in executive and management
      personnel; conduct its business affairs in a reasonable and prudent manner.
      

     

    Environmental
      Studies.
      Promptly conduct and complete, at Borrower's expense, all such investigations,
      studies, samplings and testings as mav be requested by Lender or any
      governmental authority relative to any substance, or any waste or by-product
      of
      any substance defined as toxic or a hazardous substance under applicable
      federal, state, or local law. rule, regulation, order or directive, at or
      affecting any property or any facility owned, leased or used by Borrower.


     

    Compliance
      with Governmental Requirements.
      Comply
      with all laws, ordinances, and regulations, now or hereafter in effect, of
      all
      governmental authorities applicable to the conduct of Borrower's properties,
      businesses and operations, and to the use or occupancy of the Collateral,
      including without limitation, the Americans With Disabilities Act. Borrower
      may
      contest in good faith any such law, ordinance, or regulation and withhold
      compliance during any proceeding, including appropriate appeals, so long as
      Borrower has notified Lender in writing prior to doing so and so long as, in
      Lender's sole opinion, Lender's interests in the Collateral are not jeopardized.
      Lender may require Borrower to post adequate security or a surety bond,
      reasonably satisfactory to Lender, to protect Lender's interest. 

     

    Inspection.
      Permit
      employees or agents of Lender at any reasonable time to inspect any and all
      Collateral for the Loan or Loans and Borrower's other properties and to examine
      or audit Borrower's books, accounts, and records and to make copies and
      memoranda of Borrower's books, accounts, and records. If Borrower now or at
      any
      time hereafter maintains any records (including without limitation computer
      generated records and computer software programs for the generation of such
      records) in the possession of a third party, Borrower, upon request of Lender,
      shall notify such party to permit Lender free access to such records at all
      reasonable times and to provide Lender with copies of any records it rnay
      request, all at Borrower's expense. 


    
       

      
        
          

        

      

       

    

     

    
      	
              BUSINESS
                LOAN AGREEMENT

            
	
              Loan
                No: 25791389

            	
              (Continued)

            	
              Page
                3

            


    

     

    Environmental
      Compliance and Reports.
      Borrower shall comply in all respects with any and all Environmental Laws;
      not
      cause or permit to exist, as a result of an intentional or unintentional action
      or omission on Borrower's part or on the part of any third party, on property
      owned and/or occupied by Borrower, any environmental activity where damage
      may
      result to the environment, unless such environmental activity Is pursuant to
      and
      in compliance with the conditions of a permit issued by the appropriate federal,
      state or local governmental authorities; shall furnish to Lender promptly and
      in
      any event within thirty 130) days after receipt thereof a copy of any notice,
      summons. lien, citation, directive, letter or other communication from any
      governmental agency or instrumentality concerning any intentional or
      unintentional action or omission on Borrower's part in connection with any
      environmental activity whether or not there is damage to the environment
      and/or other natural resources. 

     

    Additional
      Assurances. Make,
      execute and deliver to Lender such promissory notes, mortgages, deeds of trust,
      security agreements, assignments, financing statements, instruments, documents
      and other agreements as Lender or its attorneys may reasonably request to
      evidence and secure the Loans and to perfect all Security Interests.


     

    LENDER'S
      EXPENDITURES.
      Borrower recognizes and agrees that Lender may incur certain expenses in
      connection with Lender's exercise of rights under this Agreement. If any action
      or proceeding is commenced that would materially affect Lender's interest in
      the
      Collateral or if Borrower fails to comply with any provision of this Agreement
      or any Related Documents, including but not limited to Borrower's failure to
      discharge or pay when due any amounts Borrower is required to discharge or
      pay
      under this Agreement or any Related Documents, Lender on Borrower's behalf
      may
      (but shall not be obligated to) take any action that Lender deems appropriate,
      including but not limited to discharging or paying all taxes. Encumbrances
      and
      other claims, at any time levied or placed on any Collateral and paying all
      costs (or insuring, maintaining and preserving any Collateral, including without
      limitation, the purchase of insurance protecting only Lender's interest in
      any
      Collateral, Lender may further take such other action or actions and incur
      such
      additional expenditures as Lender may deem to be necessary and proper to cure
      or
      rectify any actions or inactions on Borrower's part as may be required under
      this Agreement. Nothing under this Agreement or otherwise shall obligate Lender
      to take any such actions or to incur any such additional expenditures on
      Borrower's behalf, or as making Lender in any way responsible or liable for
      any
      loss, damage, or injury to any Collateral, to Borrower, or to any other person
      or persons, resulting from Lender's election not to take such actions or to
      incur such additional expenses. In addition, Lender's election to take any
      such
      actions or to incur such additional expenditures shall not constitute a waiver
      or forbearance by Lender of any Event of Default under this Agreement. All
      such
      expenditures incurred or paid by Lender for such purposes will then bear
      interest at the rate charged under the Note from the date incurred or paid
      by
      Lender to the date of repayment by Borrower. All such expenses will become
      a
      part of the indebtedness and, at Lender's option, will (A) be payable on demand;
      (B) be added to the balance of the Note and be apportioned among and be payable
      with any installment payments to become due during either (1) the term of any
      applicable insurance policy; or (2) the remaining term of the Note; or (C)
      be
      treated as a balloon payment which will be due and payable at the Note's
      maturity. 

     

    NEGATIVE
      COVENANTS.
      Borrower covenants and agrees with Lender that while this Agreement Is in
      effect, Borrower shall not, without the prior written consent of Lender:


     

    Continuity
      of Operations.
      (1)
      Engage in any business activities substantially different than those In which
      Borrower is presently engaged, 12) cease operations, liquidate, merge, transfer,
      acquire or consolidate with any other entity, change Its name, dissolve or
      transfer or sell Collateral out of the ordinary course of business, or (3)
      Borrower may pay cash dividends on its stock to its shareholders or purchase
      or
      retire any of Borrower's outstanding shares or alter of amend Borrower's capital
      structure. 

     

    Loans,
      Acquisitions and Guaranties.
      (2)
      purchase, create or acquire any interest in any other enterprise or entity,
      or
      (3) incur any obligation as surety or guarantor other than in the ordinary
      course of business. 

     

    Agreements.
      Borrower will not enter into any agreement containing any provisions which
      would
      be violated or breached by the performance of Borrower's obligations under
      this
      Agreement or in connection herewith.

     

    DEPOSIT
      ACCOUNTS.
      As
      collateral security for repayment of Borrower's Note and all renewals and
      extensions, as well as to secure any and all other loans, notes, indebtedness
      and obligations that Borrower may now and in the future owe to Lender or incur
      in Lender's favor, whether direct or indirect, absolute or contingent, due
      or to
      become due, of any nature and kind whatsoever (with the exception of any
      indebtedness under a consumer credit card account), and to the extent permitted
      by law. Borrower is granting Lender a continuing security interest in any and
      all funds that Borrower may now and in the future have on deposit with Lender
      or
      in certificates of deposit or other deposit accounts as to which Borrower is
      an
      account holder (with the exception of IRA, pension, and other tax-deferred
      deposits). Borrower further agrees that, to the extent permitted by law, Lender
      may at any time apply any funds that Borrower may have on deposit with Lender
      or
      in certificates of deposit or other deposit accounts as to which Borrower is
      an
      account holder against the unpaid balance of Borrower's Note and any and all
      other present and future indebtedness and obligations that Borrower may then
      owe
      to Lender, in principal, Interest, fees, costs, expenses, and reasonable
      attorneys' fees. 

     

    EVENTS
      OF DEFAULT.
      The
      following actions or inactions or both shall constitute Events of Default under
      this Agreement: 

     

    Default
      Under the Note.
      Should
      Borrower default in the payment of principal or interest under the Note or
      any
      of the Indebtedness. 

     

    Default
      Under this Agreement.
      Should
      Borrower violate, or fail to comply fully with any of the terms and conditions
      of, or default under this Agreement. 

     

    Default
      Under other Agreements.
      Should
      any default occur or exist under any Related Document which directly or
      indirectly secures repayment of the Loan and any of the Indebtedness.


     

    Other
      Defaults in Favor of Lender. Borrower
      or any guarantor defaults under any other loan, extension of credit, security
      right, instrument, document, or agreement, or obligation in favor of Lender.
      

     

    Insolvency.
      Should
      the suspension, failure or insolvency, however evidenced, of Borrower or any
      Guarantor occur or exist. 

     

    Readjustment
      of Indebtedness.
      Should
      proceedings for readjustment of indebtedness, reorganization, composition or
      extension under any insolvency law be brought by or against Borrower or any
      Guarantor.

     

    Assignment
      for Benefit of Creditor.
      Should
      Borrower or any Guarantor tile proceedings for a respite or make a general
      assignment for the benefit of creditors. 

     

    Receivership.
      Should
      a receiver of all or any part of Borrower's property, or the property of any
      Guarantor, be applied for or appointed. 

     

    Dissolution
      Proceedings.
      Proceedings for the dissolution or appointment of a liquidator of Borrower
      or
      any guarantor are commenced. 

     

    False
      Statements.
      Any
      warranty, representation or statement made or furnished to Lender by Borrower
      or
      on Borrower's behalf, the Note, is false or misleading in any material respect,
      either now or at the time made or furnished or becomes false or misleading
      at
      any time thereafter. 

     

    Insecurity.
      Lender
      in good faith believes itself insecure with regard to repayment of the Loan.
      

     

    Effect
      of an Event of Default.
      If any
      Event of Default shall occur, except where otherwise provided in this Agreement
      or the Related Documents, all commitments and obligations of Lender under this
      Agreement or the Related Documents or any other agreement immediately will
      terminate (including any obligation to make further Loan Advances or
      disbursements), and, at Lender's option, all indebtedness immediately will
      become due and payable, all without notice of any kind to Borrower, except
      that
      in the case of an Event of Default of the type described in the "Insolvency"
      subsection above, such acceleration shall be automatic and not optional. In
      addition, Lender shall have all the rights and remedies provided in the Related
      Documents or available at law, in equity, or otherwise. 

     

    Lender
      shall have the right at its sole option, to accelerate payment of Borrower's
      Note in full, in principal, interest, costs, expenses, attorneys' fees, and
      other fees and charges, as well as to accelerate the maturity of any and all
      other loans and/or obligations that Borrower may then owe to Lender, whether
      direct or indirect, or by way of assignment or purchase of a participation
      interest, and whether absolute or contingent, liquidated or unliquidated,
      voluntary or involuntary, determined or undetermined, due or to become due,
      and
      whether now existing or hereafter arising, and whether Borrower is obligated
      alone or with others on a "solidary" or "joint and several" basis, as a
      principal obligor or as a surety, of every nature and kind whatsoever, whether
      any such indebtedness may be barred under any statute of limitations or
      otherwise may be unenforceable or voidable for any reason whatsoever.


     

    Lender
      shall have the additional right, again at its sole option, to file an
      appropriate collection action against Borrower and/or against any guarantor
      or
      guarantors of Borrower's Loan and Note, and/or to proceed or exercise any rights
      against any Collateral then securing repayment of Borrower's Loan and Note,
      Borrower and each guarantor further agree that Lender's remedies shall be
      cumulative in nature and nothing under this Agreement or otherwise, shall be
      construed as to limit or restrict the options and remedies available to Lender
      following any event of default under this Agreement or otherwise. 

    



    
       

      
        
          

        

      

       

    

     

    
      	
              BUSINESS
                LOAN AGREEMENT

            
	
              Loan
                No: 25791389

            	
              (Continued)

            	
              Page
                4

            


    

     

    Except
      as may be prohibited by applicable law, all of Lender's rights and remedies
      shall be cumulative and may be exercised singularly or concurrently. Election
      by
      Lender to pursue any remedy shall not exclude pursuit of any other remedy,
      and
      an election to make expenditures of to take action to perform an obligation
      of
      Borrower or of any Grantor shall not affect Lender's right to declare a default
      and to exercise its rights and remedies. 

     

    OTHER
      TERMS AND CONDITIONS: 

    1.
      BORROWERS MUST NOTIFY LENDER OF ANY MATERIAL CHANGE IN FINANCIAL CONDITION.
      

    2.
      LOAN
      TO BOOK VALUE OF BOONE COUNTY BANK STOCK SHALL NEVER EXCEED 40%.

     

    MODIFICATIONS
      TO THIS BUSINESS LOAN AGREEMENT.

    1.
      In
      the section entitled "Miscellaneous Provisions" under the subtopic "Attorneys'
      Fees; Expenses" this paragraph shall read as follows:"Borrower agrees to pay
      upon demand all of Lender's costs and expenses. Including Lender's reasonable
      attorneys' fees in an amount not exceeding 12.000% of the principal balance
      due
      on the Loan and Lender's legal expenses, incurred in connection with the
      enforcement of this Agreement. Lender may hire or pay someone else to help
      enforce this Agreement, and Borrower shall pay the costs and expenses of such
      enforcement. Costs and expenses include Lender's reasonable attorneys' fees
      in
      an amount not exceeding 12.000% of the principal balance due on the Loan and
      legal expenses whether or not there is a lawsuit, including reasonable
      attorneys' fees in an amount not exceeding 12.000% of the principal balance
      due
      on the Loan and legal expenses for bankruptcy proceedings including efforts
      to
      modify or vacate any automatic stay or injunction), appeals, and any anticipated
      post-judgment collection services. Borrower also shall pay all court costs
      and
      such additional fees as may be directed by the court," 

    2.
      In
      the section "AFFIRMATIVE COVENANTS" under the subtopic "Financial Statements:
      Interim Statements" the following sentence will be added: "In lieu of an interim
      statement the Borrower shall provide and Lender shall accept the Borrower's
      10Q
      statement as filed with the Securities and Exchange Commission." 

     

    Miscellaneous
      Provisions. The
      following miscellaneous provisions ere a part of this Agreement: 

     

    Amendments.
      No
      amendment, modification, consent or waiver of any provision of this Agreement,
      and no consent to any departure by Borrower therefrom, shall be effective unless
      the same shall be in writing signed by a duly authorized officer of Lender,
      and
      then Shall be effective only as to the specific instance and for the specific
      purpose for which given. 

     

    Caption
      Headings.
      Caption
      headings in this Agreement are for convenience purposes only and are not to
      be
      used to interpret or define the provisions of this Agreement. 

     

    Consent
      to Loan Participation.
      Borrower agrees and consents to Lender's sale or transfer, whether now or later,
      of one or more participation interests in the Loan to one or more purchasers,
      whether related or unrelated to Lender, Lender may provide, without any
      limitation whatsoever, to any one or more purchasers, or potential purchasers,
      any information or knowledge Lender may have about Borrower or about any other
      matter relating to the Loan, and Borrower hereby waives any rights to privacy
      Borrower may have with respect to such matters. Borrower additionally waives
      any
      and all notices of sale of participation interests, as well as all notices
      of
      any repurchase of such participation interests. Borrower also agrees that the
      purchasers of any such participation interests will be considered as the
      absolute owners of such interests in the Loan and will have all the rights
      granted under the participation agreement or agreements governing the sale
      of
      such participation interests. Borrower further waives all rights of offset
      or
      counterclaim that it may have now or later against Lender or against any
      purchaser of such a participation interest and unconditionally agrees that
      either Lender or such purchaser may enforce Borrower's obligation under the
      Loan
      irrespective of the failure or insolvency of any holder of any interest in
      the
      Loan. Borrower further agrees that the purchaser of any such participation
      interests may enforce its interests irrespective of any personal claims or
      defenses that Borrower may have against Lender. 

     

    Governing
      Law. This Agreement will be governed by federal law applicable to Lender and.
      to
      the extent not preempted by federal law, the laws of the State of Louisiana
      without regard to its conflicts of law provisions. This Agreement has been
      accepted by Lender In the State of Louisiana. 

     

    No
      Waiver by Lender.
      Lender
      shall not be deemed lo have waived any rights under this Agreement unless such
      waiver is given in writing and signed by Lender. No delay or omission on the
      part of Lender in exercising any right shall operate as a waiver of such right
      or any other right. A waiver by Lender of a provision of this Agreement shall
      not prejudice or constitute a waiver of Lender's right otherwise to demand
      strict compliance with that provision or any other provision of this Agreement.
      No prior waiver by Lender, nor any course of dealing between Lender and
      Borrower, or between Lender and any Grantor, shall constitute a waiver of any
      of
      Lender's rights or of any of Borrower's or any Grantor's obligations as to
      any
      future transactions. Whenever the consent of Lender is required under this
      Agreement, the granting of such consent by Lender in any instance shall not
      constitute continuing consent to subsequent instances where such consent is
      required and in all cases such consent may be granted or withheld in the sole
      discretion of Lender. 

     

    Notices.
      To give
      Borrower any notice required under this Agreement, Lender may hand deliver
      or
      mail the notice to Borrower at Borrower's last address in Lender's records.
      If
      there is more than one Borrower under this Agreement, notice to a single
      Borrower shall be considered as notice to all Borrowers. To give Lender any
      notice under this Agreement, Borrower (or any Borrower! shall mail the notice
      to
      Lender by registered or certified mail at the address specified in this
      Agreement, or at any other address that Lender may have given to Borrower (or
      any Borrower) by written notice as provided in this section. All notices
      required or permitted under this Agreement must be in writing and will be
      considered as given on the day it is delivered by hand or deposited in the
      U.S.
      Mail as provided herein. 

     

    Severability
      If any
      provision of this Agreement is held to be illegal. Invalid or unenforceable
      under present or future laws effective during the term hereof, such provision
      shall be fully severable. This Agreement shall be construed and enforceable
      as
      if the illegal, invalid or unenforceable provision had never comprised a part
      of
      it, and the remaining provisions of this Agreement shall remain in full force
      and effect and shall not be affected by the illegal, invalid or unenforceable
      provision or by its severance herefrom. Furthermore, In lieu of such illegal,
      invalid or unenforceable provision, there shall be added automatically as a
      part
      of this Agreement, a provision as similar in terms to such illegal, invalid
      or
      unenforceable provision as may be possible and legal, valid and enforceable.
      

     

    Subsidiaries
      and Affiliates of Borrower.
      To the
      extent the context of any provisions of this Agreement makes it appropriate,
      including without limitation any representation, warranty or covenant, the
      word
      "Borrower" as used in this Agreement shall include all of Borrower's
      subsidiaries and affiliates. Notwithstanding the foregoing however, under no
      circumstances shall this Agreement be construed to require Lender to make any
      Loan or other financial accommodation to any of Borrower's subsidiaries or
      affiliates. 

     

    Successors
      and Assigns.
      All
      covenants and agreements by or on behalf of Borrower contained in this Agreement
      or any Related Documents shall hind Borrower's successors and assigns and shall
      Inure to the benefit of Lender and its successors and assigns, Borrower shall
      not, however, have the right to assign Borrower's rights under this Agreement
      or
      any interest therein, without the prior written consent of Lender. 

     

    Survival
      of Representations and Warranties
      Borrower understands and agrees that in making the Loan, Lender is relying
      on
      all representations, warranties, and covenants made by Borrower in this
      Agreement or in any certificate or other instrument delivered by Borrower to
      Lender under this Agreement or the Related Documents. Borrower further agrees
      that regardless of any investigation made by Lender, all such representations,
      warranties and covenants will survive the making of the Loan and delivery to
      Lender of the Related Documents, shall be continuing in nature, and shall remain
      in full force and effect until such time as Borrower s Indebtedness shall be
      paid in full, or until this Agreement shall be terminated in the manner provided
      above, whichever is the last to occur. 

     

    Definitions.
      The
      following capitalized words and terms shall have the following meanings when
      used in this Agreement, unless specifically stated to the contrary, all
      references to dollar amounts shall mean amounts in lawful money of the United
      States of America. Words and terms used in the singular shall include the
      plural, and the plural shall include the singular, as the context may require.
      Words and terms not otherwise defined in this Agreement shall have the meanings
      attributed to such terms in the Louisiana Commercial Laws (La. R.S.
      10:9-101. et seq.). Accounting words and terms not otherwise defined in this
      Agreement shall have the meanings assigned to them in accordance with generally
      accepted accounting principles as in effect on the date of this Agreement:
      

     

    Advance.
      The
      word "Advance” means a disbursement of Loan funds made, or to be made, to
      Borrower or on Borrower's behalf on a line of credit or multiple advance basis
      under the terms and conditions of this Agreement. 


    
       

      
        
          

        

      

       

    

     

    
      	
              BUSINESS
                LOAN AGREEMENT

            
	
              Loan
                No: 25791389

            	
              (Continued)

            	
              Page
                5

            


    

     

    Agreement.
      The
      word "Agreement" means this Business Loan Agreement, as this Business Loan
      Agreement may be amended or modified from time to time, together with all
      exhibits and schedules attached or to be attached to this Business Loan
      Agreement from time to time. 

     

    Borrower.
      The
      word "Borrower" means PREMIER FINANCIAL BANCORP, INC. and Includes all
      co-signers and co-makers signing the Note. 

     

    Collateral.
      The
      word "Collateral" means all property and assets granted as collateral security
      for a Loan, whether real or personal properly, whether granted directly or
      indirectly, whether granted now or in the future, and whether granted in the
      form of a security Interest, mortgage, collateral mortgage, dead of trust,
      assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
      chattel trust, factor's lien, equipment trust, conditional sale, trust receipt,
      lien, charge, lien or title retention contract, lease or consignment intended
      as
      a security device, or any other security or lien interest whatsoever, whether
      created by law, contract, or otherwise. 

     

    Environmental
      Laws.
      The
      words "Environmental Laws' mean any and all state, federal and local statutes,
      regulations and ordinances relating to the protection of human health or the
      environment, including without limitation the Comprehensive Environmental
      Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
      9601, et. Seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act
      of
      1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act,
      49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act,
      42
      U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules,
      or regulations adopted pursuant thereto. 

     

    Event
      of Default.
      The
      words "Event of Default" mean any of the events of default set forth in this
      Agreement in the default Section of this Agreement. 

     

    GAAP.
      The
      word "GAAP" means generally accepted accounting principles. 

     

    Grantor.
      The
      word "Grantor" means each and all of the persons or entities granting a Security
      Interest In any Collateral for the Loan, including without limitation all
      Borrowers granting such a Security Interest. 

     

    Guarantor.
      The
      word "Guarantor" means any guarantor, surety, or accommodation party of any
      or
      all of the Loan. 

     

    Hazardous
      Substances,
      The
      words "Hazardous Substances" mean materials that, because of their quantity,
      concentration or physical, chemical or infectious characteristics, may cause
      or
      pose a present or potential hazard to human health or the environment when
      improperly used, treated, stored, disposed of, generated, manufactured,
      transported or otherwise handled. The words "Hazardous Substances" are used
      in
      their very broadest sense and include without limitation any and all hazardous
      or toxic substances, materials or waste as defined by or listed under the
      Environmental Laws. The term "Hazardous Substances" also includes, without
      limitation, petroleum and petroleum by-products or any fraction thereof end
      asbestos. 

     

    Indebtedness.
      The
      word "Indebtedness" means the indebtedness evidenced by the Note or Related
      Documents, in principal, interest, costs, expenses and attorneys' fees and
      all
      other fees and charges together with all other indebtedness and costs and
      expenses for which Borrower is responsible under this Agreement or under any
      of
      the Related Documents-

     

    Lender.
      The
      word "Lender" means FIRST GUARANTY BANK, its successors and assigns, and any
      subsequent holder or holders of Borrower's Loan and Note, or any interest
      therein. 

     

    Loan.
      The
      word "Loan" means any and all loans and financial accommodations from Lender
      to
      Borrower whether now or hereafter existing, and however evidenced, including
      without limitation those loans and financial accommodations described herein
      or
      described on any exhibit or schedule attached to this Agreement from time to
      time. 

     

    Note.
      The
      word "Note" means the Note executed by PREMIER FINANCIAL BANCORP. INC. in the
      principal
      amount of $7,000,000.00 dated January 31, 2006,
      together with all renewals, extensions, modifications, refinancings,
      consolidations and substitutions of and for the note or credit agreement.


     

    Permitted
      Liens.
      The
      words "Permitted Liens" mean (a) liens and security interests securing
      indebtedness owed by Borrower to Lender; (b) liens for taxes, assessments,
      or
      similar charges either not yet due or being contested in good faith; (c) liens
      of materialmen, mechanics, warehousemen, or carriers, or other like liens
      arising in the ordinary course of business and securing obligations which are
      not yet delinquent; (d) purchase money liens or purchase money security
      interests upon or in any property acquired or held by Borrower in the ordinary
      course of business to secure indebtedness outstanding on the date of this
      Agreement or permitted to be incurred under the paragraph of this Agreement
      titled "indebtedness and Liens"; (e) liens and security interests which, as
      of
      the date of this Agreement, have been disclosed to and approved by the Lender
      in
      writing; and (f) those liens and security interests which in the aggregate
      constitute an immaterial and insignificant monetary amount with respect to
      the
      net value of Borrower's assets. 

     

    Related
      Documents.
      The
      words "Related Documents" mean all promissory notes, credit agreements, loan
      agreements, environmental agreements, guaranties, security agreements,
      mortgages, deeds of trust, security deeds, collateral mortgages, and all other
      instruments, agreements and documents, whether now or hereafter existing,
      executed in connection with the Loan. 

     

    Security
      Agreement.
      The
      words "Security Agreement" mean and include individually, collectively,
      interchangeably and without limitation any agreements, promises, covenants,
      arrangements, understandings or other agreements, whether created by law,
      contract, or otherwise, evidencing, governing, representing, or creating a
      Security Interest.

     

    Security
      Interest.
      The
      words "Security Interest" mean, without limitation, any and all types of
      collateral security, present and future, whether in the form of a lien, charge,
      encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop
      pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's
      lien. equipment trust, conditional sale, trust receipt, lien or title retention
      contract, lease or consignment intended as a security device, or any other
      security or lien interest whatsoever whether created by law, contract, or
      otherwise. 

     

    BORROWER
      ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT
      AND
      BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JANUARY
      31.
      2006.

    


    BORROWER:

     

    PREMIER
      FINANCIAL BANCORP. INC.

     

    By:
      /s/
      Robert W. Walker    

           
      ROBERT W. WALKER, President & CEO of PREMIER

    FINANCIAL
      BANCORP, INC.

     

    LENDER:

     

    FIRST
      GUARANTY BANK

     

    By:
      /s/
      Michael F. Lofaso    

         
      Michael F. Lofaso, Senior Vice President