Exhibit 10.36 to Citizens Financial 8-K

EXHIBIT
    10.36
     

     

    SUBJECT
      TO THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF DECEMBER 19, 2002 FROM
      BORROWER AND LENDER TO NATIONAL CITY BANK OF KENTUCKY 

     

    SECOND
      AMENDED, CONSOLIDATED AND RESTATED PROMISSORY NOTE
      ($5,330,000)

    
 

    
      
        	
                $5,330,000.00

              	
                Louisville,
                  Kentucky

              
	 	
                December
                  28, 2006

                 

              


      

    

          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 FIVE
      MILLION THREE HUNDRED THIRTY THOUSAND DOLLARS
      ($5,330,000.00), 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, 2007 (the
“Final
      Maturity Date”).

     

    This
      Second Amended, Consolidated and Restated Promissory Note (this “Note”)
      amends, consolidates, restates and replaces the following instruments made
      by
      Maker to the order of Payee (collectively, the “Prior
      Notes”):

     

    Amended,
      Consolidated and Restated Promissory Note ($4,000,000) dated as of March 23,
      2006;

    


    Promissory
      Note ($360,000) dated as of March 29, 2006;

    


    Promissory
      Note ($400,000) dated as of July 7, 2006; and

    


    Promissory
      Note ($370,000) dated as of September 19, 2006.

    


    This
      Note
      is not intended to be and shall not be construed as a novation of the
      indebtedness evidenced by the Prior Notes. This Note shall be entitled to the
      benefits (in the same priority) of, inter alia,
      any
      security at any time granted and pledged by Maker to Payee in conjunction with
      the original execution and delivery of the Prior Notes or predecessor notes
      or
      by Maker 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 Two Hundred Thousand Dollars ($200,000.00).

     

    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 as it
      existed at the opening of business on October 1, 2006. The rate per annum shall
      be reset at the opening of business on the first day of each January, April,
      July and October  thereafter (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
        October 1, 2006, 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%).

    

     

    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

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    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 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    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. 

     

    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 Lender’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. 

     

    LENDER
      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 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        
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/ Len E. Schweitzer

            
	 	
              Len
                E. Schweitzer

            
	 	
              Vice
                President, Accounting,
                and Chief Financial Officer

            


    

     

     

     

    -5-