EXHIBIT 10.1
 

PROMISSORY NOTE
_____________________________________________________________________________________________________________________________________________________________________________
 Principal
Loan Date 
Maturity 
Loan No
Call / Coll 
Account 
Officer  
Initials 
 $600,000
06-10-2009 
06-10-2014 
1764000 
      23
 
GSS 
 

_____________________________________________________________________________________________________________________________________________________________________________
 References in the boxes above 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.
_____________________________________________________________________________________________________________________________________________________________________________

 

 
Borrower:
 
 
 
 
Champion Industries, Inc.
2450 1st Avenue
Huntington, WV
 
 
Lender:
FIRST SENTRY BANK
P.O. BOX 2107
823 8TH STREET
HUNTINGTON, WV 25721

 
 

Principal Amount: $600,000 Date of Note: June 10, 2009 

 
 
PROMISE TO PAY. Champion Industries, Inc. (“Borrower”) promises to pay to FIRST
SENTRY BANK (“Lender,.), or order, in lawful money of the United States of
America, the principal amount of Six Hundred Thousand & 00/100 Dollars
($600,000.00), together with interest on the unpaid outstanding principal
balance from June 10, 2009, until paid in full. 
 
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 59 principal payments of $10,000.00 each and one
final principal and interest payment of $10,043.06. Borrower's first principal
payment is due July 10, 2009, and all subsequent principal payments are due on
the same day of each month after that. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date,
beginning July 10, 2009, with all subsequent interest payments to be due on the
same day of each month after that. Borrower's finanl payment due June 10, 2014,
will be for all principal and all accrued interest not yet paid. Unless
otherwise agreed or required by applicable law, payments will be applied first
to any unpaid collection costs; then to any late charges; then to any accrued
unpaid interest; and then to principal. 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 Wall Street Journal (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 3.250% per annum. The interest rate to be applied
to the unpaid principal balance of this Note will be calculated as described in
the “INTEREST CALCULATION METHOD” paragraph using a rate equal to the Index,
adjusted if necessary for any minimum and maximum rate limitations described
below, resulting in an initial rate of 5.000% per annum based on a year of 360
days. NOTICE: Under no circumstances will the interest rate on this Note be less
than 5.000% per annum or more than the maximum rate allowed by applicable law.
 
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the 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. All interest payable under
this Note is computed using this method.
 
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower’s obligation to continue to make payments
of accrued unpaid interest, Rather, early payments will reduce the principal
balance due. 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 fur
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
SENTRY BANK, P.O. BOX 2107 HUNTINGTON, WV 25721.
 
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
$25.00.
 
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the total sum due under this Note will continue to accrue interest at
the interest rate under this Note. However, in no event will the interest rate
exceed the maximum interest rate limitations under applicable law.
 
DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note:
 

 
Payment Default. Borrower fails to make any payment when due under this Note.
 
 
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.
 
 
False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note or the 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.
 
 
Insolvency. The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of
creditor workout or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
 
 
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.
 
 
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note.
 
 
Change In Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.
 
 
Adverse Change. A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.
 
 
Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured if Borrower,
after receiving written notice from Lender demanding cure of such default: (1)
cures the default within ten (10) days; or (2) if the cure requires more than
ten (10) days, immediately initiates steps which Lender deems in Lender’s sole
discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

 
LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.
 
ATTORNEYS’ FEES; EXPENSES, Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.
 
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 West
Virginia without regard to its conflicts of law provisions. This Note has been
accepted by Lender in the State of West Virginia.
 
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of CABELL County, State of West
Virginia.
 
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff ri all Borrowers accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.
 
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
 
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please notify us if we report any inaccurate information about your account(s)
to a consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: FIRST SENTRY BANK
P.O. BOX 2107 HUNTINGTON, WV 25721.
 
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent lIowed by law,
waive presentment, demand for payment, and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly slated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender’s security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.
 
 
WEST VIRGINIA INSURANCE NOTICE. Unless Borrower provides Lender with evidence of
the insurance coverage required by Borrowers agreement with Lender, Lender may
purchase insurance at Borrower's expense to protect Lender's interests in the
collateral. This insurance may, but need not, protect Borrower's interests. The
coverage that Lender purchases may not pay any claim that Borrower makes or any
claim that is made against Borrower in connection with the collateral. Borrower
may later cancel any insurance purchased by Lender, but only after providing
Lender with evidence that Borrower has obtained insurance as required by their
agreement. If Lender purchases insurance for the collateral, Borrower will be
responsible for the costs of that insurance, including interest and any other
charges. Lender may impose in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the insurance. The
costs of the insurance may be added to Borrower's total outstanding balance or
obligation. The costs of the insurance may be more than the cost of insurance
Borrower may be able to obtain on Borrower's own.
 
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.
 
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
 
 
BORROWER:
CHAMPION iNDUSTRIES, INC.
 
By: COPY /s/Toney K. Adkins                          
       TONEY K. ADKINS, President of Champion Industries, Inc.