Document:

pfbi8k050108exhibit10-1.htm

    Exhibit
10.1

     

    BUSINESS
LOAN AGREEMENT

    

    
      	
              Principal

            	
              Loan
      Date

            	
              Maturity

            	
              Loan
      No

            	
              Call
      / Coll

            	
              Account

            	
              Officer

            	
              Initials

            
	
              $11,550,000.00

            	
              04-30-2008

            	
              04-30-2013

            	
              25915746

            	
              220
      / 54

            	 
      	
              EJD

            	 
      
	
              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 April 30, 2008, 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 $11,550,000.00 for the following purpose:
REFINANCE #25791389/NEW MONEY
FOR BANK ACQUISITION.

     

    BORROWER'S NOTE. Lender
has agreed to consider making Loan Advances to Borrower from time to time
on a multiple advance, non-self replenishing basis, up to an aggregate maximum
principal amount not to exceed $11,550,000.00.  Borrower agrees to be
bound and obligated under the terms and conditions of this Agreement and
Lender’s procedures and additional requirements for requesting Loan Advances, as
well as any and all Security Agreements directly or indirectly securing
repayment of the same.

     

    MULTIPLE
ADVANCES.  Borrower’s Note shall evidence multiple Loan
Advances to be made by Lender to Borrower from time to time on a non-self
replenishing basis.  Loan Advances under the Borrower’s Note may be
requested orally or in writing.  Lender may, but need not, require
that all oral requests be confirmed in writing. Borrower agrees to be liable for
all sums advanced by Lender under Borrower’s Loan and Note in accordance with
the instructions of any officer or other representative of Borrower or credited
to Borrower’s deposit account(s) with Lender.  Borrower additionally
agrees that the unpaid principal balance outstanding under Borrower’s Loan and
Note shall at all times be evidenced by endorsements on the Note, or
alternatively, by Lender’s internal records, including Lender’s daily computer
print-out.  Borrower additionally agrees that Lender may, within its
sole judgment, refuse to extend Loan Advances to Borrower whenever Lender
determines or has reason to believe that any one or more of the following
conditions exists or will occur:  (a) the amount of the requested Loan
Advance will result in Borrower exceeding its maximum Loan commitments; (b)
Borrower is not complying or has not complied with Lender’s procedures and
additional requirements for requesting Loan Advances; (c) Borrower has failed to
provide Lender with satisfactory documentation to support the requested Loan
Advance; (d) Lender has reason to believe that Borrower is not presently
complying, or has not complied with the terms and conditions of this Agreement,
or has committed or is in the process of committing an Event of Default
hereunder or under any Security Agreement directly or indirectly securing
repayment of Borrower’s Loan an Note; or (e) Lender deems itself to be insecure
with regard to the repayment of Borrower’s Loan and Note.  Lender
shall have no obligation or liability to Borrower or to any other person or
persons arising out of or in any way accruing from Lender’s reasonable refusal
to extend Loan Advances to Borrower for any of the reasons stated
above.

     

    TERM. This
Agreement shall be effective as of April 30, 2008, 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 April 30,
2013.

     

    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, or 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.

    
      
         

      

      
         

        
          

        

      

       

    

     

    
      	
              BUSINESS
      LOAN AGREEMENT

            
	
              Loan
      No: 25915746

            	
              (Continued)

            	
              Page
      2

            

    

     

    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 (c) 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 Hazardous Substances. Borrower hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify, defend, 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 and defend, 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
and 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 affecting 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 end 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: $5,000.00 Loan Fee and $150.00 Document Prep
Fee.

     

    Loan
Proceeds. Use all Loan proceeds solely for the following specific purposes:
REFINANCE #25791389/NEW MONEY
FOR BANK ACQUISITION.

     

    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.

    
      
         

      

      
         

        
          

        

      

       

    

     

    

    
      	
              BUSINESS
      LOAN AGREEMENT

            
	
              Loan
      No: 25915746

            	
              (Continued)

            	
              Page
      3

            

    

     

    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 may 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 may
request, all at Borrower's expense.

     

    Compliance
Certificates. Unless waived in writing by Lender, provide Lender at least
annually, with a certificate executed by Borrower's chief financial officer, or
other officer or person acceptable to Lender, certifying that the
representations and warranties set forth in this Agreement are true and correct
as of the date of the certificate and further certifying that, as of the date of
the certificate, no Event of Default exists under this Agreement.

     

    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 (30) 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.

     

    RECOVERY
OF ADDITIONAL COSTS. If the imposition of or any change in any law, rule,
regulation or guideline, or the interpretation or application of any thereof by
any court or administrative or governmental authority (including any request or
policy not having the force of law) shall impose, modify or make applicable any
taxes (except federal, state or local income or franchise taxes imposed on
Lender), reserve requirements, capital adequacy requirements or other
obligations which would (A) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(C) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.

     

    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 for 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:

     

    Indebtedness
and Liens. (1) Except for trade debt incurred in the normal course of business
and indebtedness to Lender contemplated by this Agreement, create, incur or
assume indebtedness for borrowed money, including capital leases, (2) sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3)
sell with recourse any of Borrower's accounts, except to Lender.

     

    Continuity
of Operations. (1) Engage in any business activities substantially different
than those in which Borrower is presently engaged, (2) 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

     

    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.

     

    CESSATION
OF ADVANCES.  If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor’s guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.

    
      
         

      

      
         

        
          

        

      

       

    

     

    

    
      	
              BUSINESS
      LOAN AGREEMENT

            
	
              Loan
      No: 25915746

            	
              (Continued)

            	
              Page
      4

            

    

     

    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 Creditors. Should Borrower or any Guarantor file 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.

     

    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 or 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.

     

    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
injunction4,
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."

     

    OTHER
TERMS AND CONDITIONS:.   1.    FIRST GUARANTY BANK LOAN
TO BOOK VALUE OF BOONE COUNTY BANK STOCK SHALL NOT TO EXCEED 60%.

     

    2.      BOONE
COUNTY BANK MAY NOT DIVIDEND EARNINGS TO PREMIER BANCORP IF LOAN TO BOOK VALUE
EXCEEDS 60%.

     

    3.      LOAN
WILL HAVE AN INTEREST RATE CAP OF 10.00%.

     

    4.      IF
WALL STREET JOURNAL PRIME IS BETWEEN 5% AND 6%, THE RATE WILL BE 5%. IF WALL
STREET JOURNAL PRIME FALLS BELOW 5%, THEN THE RATE WILL BE WALL STREET JOURNAL
PRIME FLOATING.

     

    5.      ANY
SPECIFIC LANGUAGE LINED OUT AN INITIALED SHALL BE CONSIDERED AMENDED OR EXCLUDED
FROM THIS CONTRACT.

     

    MISCELLANEOUS PROVISIONS.
The following miscellaneous provisions are 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.

     

    Attorneys'
Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and
expenses, including Lender's reasonable attorneys' fees in an amount not
exceeding 25.000% 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 25.000% 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 25.000%
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.

     

    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.

    
      
         

      

      
         

        
          

        

      

       

    

     

    

    
      	
              BUSINESS
      LOAN AGREEMENT

            
	
              Loan
      No: 25915746

            	
              (Continued)

            	
              Page
      5

            

    

     

    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 to 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 bind 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.

     

    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 and all their successors and
assigns.

     

    Collateral.
The word "Collateral" means all property and assets granted as collateral
security for a Loan, whether real or personal property, 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, deed 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 and 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.

    
      
         

      

      
         

        
          

        

      

       

    

     

    

    
      	
              BUSINESS
      LOAN AGREEMENT

            
	
              Loan
      No: 25915746

            	
              (Continued)

            	
              Page
      6

            

    

     

    Note.
The word "Note" means the Note executed by PREMIER FINANCIAL BANCORP, INC. in
the principal amount of
$11,550,000.00 dated
April 30, 2008, 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 (1) liens and security interests
securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, yet delinquent; (4) purchase money liens or
purchase money security interests upon or in any property acquired or held by
Borrower in the mechanics, warehousemen, or carriers, or other like liens
arising in the ordinary course of business and securing obligations which are
notordinary 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"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (6) 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 APRIL 30, 2008.

     

    BORROWER:

     

           
PREMIER FINANCIAL BANCORP, INC.

     

            /s/
Robert W. Walker, President & CEO

           
ROBERT W. WALKER, President & CEO of PREMIER

           
FINANCIAL BANCORP, INC.

     

     

    LENDER:

     

    FIRST
GUARANTY BANK

     

    By:    /s/ Eric
J. Dosch                                            

        
Eric J Dosch, Vice-President/Credit Managerpfbi8k050108exhibit10-2.htm

    Exhibit
10.2

     

    

      PROMISSORY
NOTE

      

      
        	
                Principal

              	
                Loan
      Date

              	
                Maturity

              	
                Loan
      No

              	
                Call
      / Coll

              	
                Account

              	
                Officer

              	
                Initials

              
	
                $11,550,000.00

              	
                04-30-2008

              	
                04-30-2013

              	
                25915746

              	
                220
      / 54

              	 
      	
                EJD

              	 
      
	
                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

              

      

      

      
        	
                Principal
      Amount: $11,550,000.00

              	
                Initial
      Rate:  5.000%

              	
                Date
      of Note:  April 30, 2008

              

      

       

      PROMISE
TO PAY. PREMIER FINANCIAL BANCORP, INC. ("Borrower") promises to pay to the
order of FIRST GUARANTY BANK ("Lender"), in lawful money of the United States of
America the sum of Eleven Million Eight Hundred Thousand & 00/100
Dollars(U.S. $11,800,000.00), together with simple interest assessed on a
variable rate basis at the rate per annum equal to 1.000 percentage point under
the Index provided herein, as the Index under this Note may be adjusted from
time to time, one or more times, with interest being assessed on the unpaid
principal balance of this Note as outstanding from time to time, commencing on
April 30, 2008 and continuing until this Note is paid in full.

       

      MULTIPLE
ADVANCE LOAN.  This Note contemplates multiple loan
advances.  Once the total amount of principal has been advanced under
this Note, Borrower will not be entitled to further loan
advances.  Advances under this Note, as well as directions for payment
from Borrower’s accounts, may be requested orally or in writing by Borrower or
by an authorized person.  Lender may, but need not, require that all
oral requests be confirmed in writing.  Borrower agrees to be liable
for all sums either:  (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower’s deposit accounts
with Lender.  The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender’s internal
records, including daily computer print-outs.

       

      PAYMENT.
Borrower will pay this loan in full immediately upon Lender's demand. If no
demand is made, Borrower will pay this loan in accordance with the following
payment schedule:

       

      59
PRINCIPAL PAYMENTS OF $50,000.00 PLUS ACCRUED INTEREST BEGINNING 05/30/2008 AND
ONE FINAL PAYMENT FOR PRINCIPAL BALANCE AND ACCRUED INTEREST DUE
04/30/2013.

       

      Unless
otherwise agreed or required by applicable law, payments will be applied first
to any accrued unpaid interest; then to principal; then to any unpaid collection
costs; and then to any late charges. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.

       

      VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to
time based on changes in an independent index which is the Prime rate as
published in the Money Section of the Wall Street Journal. When a range of rates
has been published, the higher of the rates will be used. (the "Index"). The
Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current
Index rate upon Borrower's request. The interest rate change will not occur more
often than each day. Borrower understands that Lender may make loans based on
other rates as well. The Index currently is 5.250% per annum. The interest rate
to be applied to the unpaid principal balance during this Note will be at a rate
of 1.000 percentage point under the Index, adjusted if necessary for any minimum
and maximum rate limitations described below, resulting in an initial rate of
5.000% per annum. Under no circumstances will the interest rate on this Note be
less than 5.000% per annum or more than (except for any higher default rate
shown below) the lesser of 10.000% per annum or the maximum rate allowed by
applicable law.

       

      PREPAYMENT.
Other than Borrower's obligation to pay any prepayment penalty, Borrower may
prepay this Note in full at any time by paying the then unpaid principal balance
of this Note, plus accrued simple interest and any unpaid late charges through
date of prepayment. If Borrower prepays this Note in full, or if Lender
accelerates payment, Borrower understands that, unless otherwise required by
law, any prepaid fees or charges will not be subject to rebate and will be
earned by Lender at the time this Note is signed. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation
to continue to make payments under the payment schedule. Rather, early payments
will reduce the principal balance due and may result in Borrower's making fewer
payments. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: FIRST
GUARANTY BANK, 400 East Thomas Street, P . 0. Box 2009 Hammond, LA
70404-2009.

       

      LATE
CHARGE. If Borrower fails to pay any payment under this Note in full within 10
days of when due, Borrower agrees to pay Lender a late payment fee in an amount
equal to 5.000% of the unpaid portion of the regularly scheduled payment or
$25.00, whichever is greater with a maximum of $250.00. Late charges will not be
assessed following declaration of default and acceleration of the maturity of
this Note.

       

      INTEREST
AFTER DEFAULT. If Lender declares this Note to be in default, Lender has the
right prospectively to adjust and fix the simple interest rate under this Note
until this Note is paid in full, as follows: (A) If the original principal
amount of this Note is $250,000 or less, the fixed default interest rate shall
be equal to eighteen (18%) percent per annum, or three (3%) percent per annum in
excess of the interest rate under this Note, whichever is greater. (B) If the
original principal amount of this Note is more than $250,000, the fixed default
interest rate shall be equal to twenty-one (21 %) percent per annum, or three
(3%) percent per annum in excess of the interest rate under this Note at the
time of default, whichever is greater.

       

      DEFAULT.
Each of the following shall constitute an event of default ("Event of Default")
under this Note:

       

      Default
Under Loan Agreement. If an event of default occurs or exists under the terms of
Borrower's Loan Agreement in favor of Lender.

       

      Payment
Default. Borrower fails to make any payment when due under this
Note.

       

      Default
Under Security Agreements. Should Borrower or any guarantor violate, or fail to
comply fully with any of the terms and conditions of, or default under any
security right, instrument, document, or agreement directly or indirectly
securing repayment of this Note.

       

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

       

      Default
in Favor of Third Parties. Should Borrower or any guarantor default under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may affect
any property or other collateral directly or indirectly securing repayment of
this Note.

       

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

       

      Death or
Interdiction. Should any guarantor of this Note die or be
interdicted.

       

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

       

      Assignment
for Benefit of Creditors. Should Borrower or any guarantor file 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 related documents 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.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                PROMISSORY
      NOTE

              
	
                Loan
      No: 25915746

              	
                (Continued)

              	
                Page
      2

              

      

       

      Material
Adverse Change. Should any material adverse change occur in the financial
condition of Borrower or any guarantor of this Note or should any material
discrepancy exist between the financial statements submitted by Borrower or any
guarantor and the actual financial condition of Borrower or such
guarantor.

       

      Insecurity.
Lender in good faith believes itself insecure with regard to repayment of this
Note.

       

      LENDER'S
RIGHTS UPON DEFAULT. Should any one or more default events occur or exist under
this Note as provided above, Lender shall have the right, at Lender's sole
option, to declare formally this Note to be in default and to accelerate the
maturity and insist upon immediate payment in full of the unpaid principal
balance then outstanding under this Note, plus accrued interest, together with
reasonable attorneys' fees, costs, expenses and other fees and charges as
provided herein. Lender shall have the further right, again at Lender's sole
option, to declare formal default and to accelerate the maturity and to insist
upon immediate payment in full of each and every other loan, extension of
credit, debt, liability and/or obligation of every nature and kind that Borrower
may then owe to Lender, whether direct or indirect or by way of assignment, and
whether absolute or contingent, liquidated or unliquidated, voluntary or
involuntary, determined or undetermined, secured or unsecured, whether Borrower
is obligated alone or with others on a "solidary" or "joint and several" basis,
as a principal obligor or otherwise, all without further notice or demand,
unless Lender shall otherwise elect.

       

      ATTORNEYS'
FEES; EXPENSES. If Lender refers this Note to an attorney for collection, or
files suit against Borrower to collect this Note, or if Borrower files for
bankruptcy or other relief from creditors, Borrower agrees to pay Lender's
reasonable attorneys' fees in an amount not exceeding 25.000% of the principal
balance due on the loan.

       

      GOVERNING
LAW. This Note 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 Note has been accepted by Lender
in the State of Louisiana.

       

      NSF
CHARGE. In the event that Borrower makes any payment under this Note by check or
electronic payment and Borrower's check or electronic payment is returned to
Lender unpaid due to non-sufficient funds in Borrower's deposit account or
otherwise, Borrower agrees to pay Lender an NSF charge in an amount of $25.00 or
5.000% of the dishonored item (whether check or electronic payment), whichever
is less.

       

      DEPOSIT
ACCOUNTS. As collateral security for repayment of this 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 this 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.

       

      COLLATERAL.
Borrower acknowledges this Note is secured by COMMERCIAL PLEDGE AGREEMENT DATED
01/31/2006 (STOCK). Collateral securing other loans with Lender may also secure
this Note as the result of cross-collateralization.

       

      FINANCIAL STATEMENTS.
Borrower agrees to provide Lender with such financial statements and
other related information at such frequencies and in such detail as Lender may
reasonably request.

       

      MODIFICATIONS TO THE PROMISSORY NOTE. 1. In
the section entitled "INTEREST AFTER DEFAULT" item (B) is revised to read as
follows: (B) If the original principal amount of this Note is more than
$250,000, the fixed default interest rate shall be equal to twelve (12%) percent
per annum, or three (3%) percent per annum in excess of the interest rate under
this Note at the time of default, whichever is greater.

       

      2. In
the section "ATTORNEYS' FEES; EXPENSES" this paragraph shall read as follows:
"If Lender refers this Note to an attorney for collection, or files suit against
Borrower to collect this Note, or if Borrower files for bankruptcy or other
relief from creditors, Borrower agrees to pay Lender's reasonable attorneys'
fees in an amount not exceeding 12.000% of the principal balance due on the
loan.

       

      WAIVERS.
Borrower and each guarantor of this Note hereby waive demand, presentment for
payment, protest, notice of protest and notice of nonpayment, and all pleas of
division and discussion, and severally agree that their obligations and
liabilities to Lender hereunder shall be on a "solidary" or "joint and several"
basis. Borrower and each guarantor further severally agree that discharge or
release of any party who is or may be liable to Lender for the indebtedness
represented hereby, or the release of any collateral directly or indirectly
securing repayment hereof, shall not have the effect of releasing any other
party or parties, who shall remain liable to Lender, or of releasing any other
collateral that is not expressly released by Lender. Borrower and each guarantor
additionally agree that Lender's acceptance of payment other than in accordance
with the terms of this Note, or Lender's subsequent agreement to extend or
modify such repayment terms, or Lender's failure or delay in exercising any
rights or remedies granted to Lender, shall likewise not have the effect of
releasing Borrower or any other party or parties from their respective
obligations to Lender, or of releasing any collateral that directly or
indirectly secures repayment hereof. In addition, any failure or delay on the
part of Lender to exercise any of the rights and remedies granted to Lender
shall not have the effect of waiving any of Lender's rights and remedies. Any
partial exercise of any rights and/or remedies granted to Lender shall
furthermore not be construed as a waiver of any other rights and remedies; it
being Borrower's intent and agreement that Lender's rights and remedies shall be
cumulative in nature. Borrower and each guarantor further agree that, should any
default event occur or exist under this Note, any waiver or forbearance on the
part of Lender to pursue the rights and remedies available to Lender, shall be
binding upon Lender only to the extent that Lender's specifically agrees to any
such waiver or forbearance in writing. A waiver or forbearance on the part of
Lender as to one default event shall not be construed as a waiver or forbearance
as to any other default. Borrower and each guarantor of this Note further agree
that any late charges provided for under this Note will not be charges for
deferral of time for payment and will not and are not intended to compensate
Lender's for a grace or cure period, and no such deferral, grace or cure period
has or will be granted to Borrower in return for the impositon of any late
charge. Borrower recognizes that Borrower's failure to make timely payment of
amounts due under this Note will result in damages to Lender, including but not
limited to Lender's loss of the use of amounts due, and Borrower agrees that any
late charges imposed by Lender hereunder will represent reasonable compensation
to Lender for such damages. Failure to pay in full any installment or payment timely
when due under this Note, whether or not a late charge is assessed, will remain
and shall constitute an Event of Default hereunder.

       

      SUCCESSORS AND ASSIGNS LIABLE.
Borrower's and each guarantor's obligations and agreements under this
Note shall be binding upon Borrower's and each guarantor's respective
successors, heirs, legatees, devisees, administrators, executors and assigns.
The rights and remedies granted to Lender under this Note shall inure to the
benefit of Lender's successors and assigns, as well as to any subsequent holder
or holders of this Note.

       

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

       

      SEVERABILITY.
If any provision of this Note is held to be invalid, illegal or unenforceable by
any court, that provision shall be deleted from this Note and the balance of
this Note shall be interpreted as if the deleted provision never
existed.

       

      PRIOR NOTE. PROMISSORY NOTE
#25791389.

       

      SUCCESSOR INTERESTS. The
terms of this Note shall be binding upon Borrower, and upon Borrower's
successors, heirs, legatees, devisees, administrators, executors and assigns,
and shall inure to the benefit of Lender and its successors and
assigns.

       

      APPLICABLE
LENDING LAW. To the extent not preempted by federal law, this business or
commercial loan is being made under the terms and provisions of La. R.S. 9:3509,
et seq.

       

      PRIOR TO SIGNING
THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS.

       

      BORROWER:

       

      PREMIER FINANCIAL BANCORP,
INC.

       

          /s/
Robert W. Walker, President & CEO       

             
ROBERT W. WALKER, President & CEO of PREMIER

             
FINANCIAL BANCORP, INC.

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