exv10w2



 



10.2



Commercial Security Agreement, $450,050 commercial loan between Champion
Industries, Inc. and First Century Bank dated as of March 2, 2003.


 






 



	 	 	 
	DEBTOR NAME AND ADDRESS	 	SECURED PARTY NAME AND ADDRESS
	CHAMPION INDUSTRIES, INC	 	
FIRST CENTURY BANK, N.A.
	P. O. BOX 2968	 	
500 FEDERAL STREET
	HUNTINGTON, WV 25703	 	
BLUEFIELD, WV 24701



55-0717455



Type: o individual o partnership n corporation o          

State of organization/registration (if applicable) WV          

o If checked, refer to addendum for additional Debtors and signatures.


COMMERCIAL SECURITY AGREEMENT



The date of this Commercial Security Agreement (Agreement) is
04-02-2003         .



	SECURED DEBTS. This
Agreement will secure all sums advanced by Secured Party under the terms of this Agreement and the payment and performance of the
following described Secured Debts that (check one)
o Debtor
o
                

_______________________________________________________________________(Borrower)
owes to Secured party:

	 
	 
	 	 	n Specific Debts. The following debts and all extensions, renewals,
refinancings, modifications, and replacements (describe): LOAN # 1393995 IN
THE AMOUNT OF $450,050.00 DATED 4/2/03
	 
	 	 	o All Debts. All present and future debts. even if this Agreement is not
referenced, the debts are also secured by other collateral, or the future
debt is unrelated to or of a different type than the current debt. Nothing
in this Agreement is a commitment to make future loans or advances.



SECURITY INTEREST. To secure the payment and performance of the Secured Debts,
Debtor gives Secured Party a security interest in all of the Property described
in this Agreement that Debtor owns or has sufficient rights in which to
transfer an interest, now or in the future, wherever the Property is or will be
located, and all proceeds and products of the Property. “Property” includes all
parts, accessories, repairs, replacements, improvements, and accessions to the
Property; any original evidence of tide or ownership; and all obligations that
support the payment or performance of the Property. “Proceeds’’ includes
anything acquired upon the sale, lease, license, exchange, or other disposition
of the Property; any rights and claims arising from the Property; and any
collections and distributions on account of the Property. This Agreement
remains in effect until terminated in writing, even if the Secured Debts are
paid and Secured Party is no longer obligated to advance funds to Debtor or
Borrower.


PROPERTY DESCRIPTION. The Property is described as follows:




	 	 	o Accounts and Other Rights to Payment: All rights to payment, whether or
not earned by performance, including, but not limited to, payment for
property or services sold, leased, rented, licensed, or assigned. This
includes any rights and interests (including all liens) which Debtor may
have by law or agreement against any account debtor or obligor of Debtor.
	 
	 	 	o Inventory: All inventory held for ultimate sale or lease, or which has
been or will be supplied under contracts of service, or which are raw
materials, work in process, or materials used or consumed in Debtor’s
business.
	 
	 	 	o Equipment: All equipment including, but not limited to, machinery,
vehicles, furniture, fixtures, manufacturing equipment, farm machinery and
equipment, shop equipment, office and record keeping equipment, parts, and
tools. The Property



 






 







	 	 	includes any equipment described in a list or schedule
Debtor gives to Secured Party, but such a list is not necessary to create a
valid security interest in all of Debtor’s equipment.
	 
	 	 	o Instruments and Chattel Paper: All instruments, including negotiable
instruments and promissory notes and any other writings or records that
evidence the right to payment of a monetary obligation, and tangible and
electronic chattel paper.
	 
	 	 	o General Intangibles: All general intangibles including, but not limited
to, tax refunds, patents and applications for patents, copyrights,
trademarks, trade secrets, goodwill, trade names, customer lists, permits
and franchises, payment intangibles, computer programs and all supporting
information provided in connection with a transaction relating to computer
programs, and the right to use Debtor’s name.
	 
	 	 	o Documents: All documents of title including, but not limited to, bills of
lading, dock warrants and receipts, and warehouse receipts.
	 
	 	 	o Farm Products and Supplies: All farm products including, but not limited
to, all poultry and livestock and their young, along with their produce,
products, and replacements; all crops, annual or perennial, and all products
of the crops; and all feed, seed, fertilizer, medicines, and other supplies
used or produced in Debtor’s farming operations.
	 
	 	 	o Government Payments and Programs: All payments, accounts, general
intangibles, and benefits including, but not limited to, payments in kind,
deficiency payments, letters of entitlement, warehouse receipts, storage
payments, emergency assistance and diversion payments, production
flexibility contracts, and conservation reserve payments under any
preexisting, current, or future federal or state government program.
	 
	 	 	o Investment Property: All investment property including, but not limited
to, certificated securities, uncertificated securities, securities
entitlements, securities accounts, commodity contracts, commodity accounts,
and financial assets.
	 
	 	 	o Deposit Accounts: All deposit accounts including, but not limited to,
demand, time, savings, passbook, and similar accounts.
	 
	 	 	n Specific Property Description: The Property includes, but is not limited
by, the following (if required, provide real estate description):
	 
	 	 	DEMO HEIDELBERG QMD146-4 PRO OFFSET PRESS S/N 991619 WITH ALL STANDARD
EQUIPMENT



USE OF PROPERTY. The Property will be used for o personal n business
o agricultural o purposes.


 






 


SIGNATURES. Debtor agrees to the terms on pages 1 and 2 of this Agreement and
acknowledges receipt of a copy of this Agreement.



	 	 	 
	DEBTOR	 	
SECURED PARTY
	CHAMPION INDUSTRIES, INC	 	
FIRST CENTURY BANK, N.A.
	 	 	 
	
	 	


	TODD R. FRY	 	
JEFFERY L. FORLINES
	VICE PRESIDENT & CFO	 	
SENIOR VICE PRESIDENT
	 	 	 
	     	 	 




___________________

GENERAL PROVISIONS. Each Debtor’s obligations under this Agreement are
independent of the obligations of any other Debtor. Secured Party may sue each
Debtor individually or together with any Debtor will remain obligated under
this Agreement. The duties and benefits of this Agreement will bind the
successors and assigns of Debtor and Secured Party. No modification of this
Agreement is effective unless made in writing and signed by Debtor and Secured
Party. Whenever used, the plural includes the singular and the singular
includes the plural. Time is of the essence.


APPLICABLE LAW. This Agreement is governed by the laws of the state in which
Secured Party is located. In the event of a dispute, the exc forum, venue, and
place of jurisdiction will be the state in which Secured Party is located,
unless otherwise required by law. If any provision of this Agreement is
unenforceable by law, the unenforceable provision will be severed and the
remaining provisions will still be enforceable.


NAME AND LOCATION. Debtor’s name indicated on page 1 is Debtor’s exact legal
name. If Debtor is not an individual, Debtor’s address is the location of
Debtor’s chief executive offices or sole place of business. If Debtor is an
entity organized and registered under state law, Debtor will provide
verification of registration and location upon Secured Party’s request. Debtor
will provide Secured Party with at least 30 days notice prior to any change in
Debtor’s name, address, or state of the organization or registration.


WARRANTIES AND REPRESENTATIONS. Debtor has the right, authority, and power to
enter into this Agreement. The execution and delivery of this Agreement will
not violate any agreement governing Debtor or Debtor’s property, or to which
Debtor is a party. Debtor makes the following warranties and representations
which continue as long as this Agreement is in effect:



	(1)	 	Debtor is duly organized and validly existing in all jurisdictions in
which Debtor does business;
	 
	(2)	 	The execution and performance of the terms of this Agreement have been
duly authorized, have received all necessary governmental approval, and
will not violate any provision of law or order;
	 
	(3)	 	Other than previously disclosed to Secured Party, Debtor has not changed
Debtor’s name or principal place of business within the last 10 years and
has not used any other trade or fictitious name; and
	 
	(4)	 	Debtor does not and will not use any other name without Secured Party’s
prior written consent.



Debtor owns all of the Property, and Secured Party’s claim to the Property is
ahead of the claims of any other creditor, except as otherwise agreed and
disclosed to Secured party prior to any advance on the Secured Debts. The
Property has not been used for any purpose that would violate any laws or
subject the Property to forfeiture or seizure.


DUTIES TOWARD PROPERTY. Debtor will protect the Property and Secured Party’s
interest against any competing claim. Except as otherwise agreed, Debtor will
keep the Property in Debtor’s possession at the address indicated on page 1 of
this Agreement. Debtor will keep the Property in good repair and use the
Property only for purposed specified on page 1. Debtor will not use the
Property in violation of any law and will pay all taxes and assessments levied
or assessed against the Property. Secured Party has the right of


 






 


reasonable
access to inspect the Property, including the right to require Debtor to
assemble and make the Property available to Secured Party. Debtor will
immediately notify Secured Party of any loss or damage to the Property. Debtor
will prepare and keep books, records, and accounts about the Property and
Debtor’s business, to which Debtor will not sell, offer to sell, license, lease
or otherwise transfer or encumber the Property without Secured Party’s prior
written consent. Any disposition of the Property will violate Secured Party’s
rights, unless the Property is inventory sold in the ordinary course of
business at fair market value. If the Property includes chattel paper or
instruments, either as original collateral or as proceeds of the Property,
Debtor will record Secured Party’s interest on the face of the chattel paper or
instruments. If the Property includes accounts, Debtor will collect all
accounts in the ordinary course of business, unless otherwise required by
Secured Party. Debtor will keep the proceeds of the accounts, and any goods
returned to Debtor, in trust for Secured Party and will not commingle the
proceeds or returned goods with any of Debtor’s other property. Secured Party
has the right to require Debtor to pay Secured Party the full price on any
returned items. Secured Party may require account debtors to make payments
under the accounts directly to Secured Party. Debtor will deliver the accounts
to Secured Party at Secured Party’s request. Debtor will give Secured Party all
statements, reports, certificates, lists of account debtors (showing names,
addresses, and amounts owing), invoices applicable to each account, and any
other data pertaining to the accounts as Secured Party requests.


If the Property includes farm products, Debtor will provide Secured Party with
a list of the buyers, commission merchants, and selling agents to or though
whom Debtor may sell the farm products. Debtor authorizes Secured Party to
notify any additional parties regarding Secured Party’s interest in Debtor’s
farm products, unless prohibited by law. Debtor agrees to plant, cultivate,
and harvest crops in due season. Debtor will be in default if any loan proceeds
are used for a purpose that will contribute to excessive erosion of highly
erodible land or to the conversion of wetland to produce or to make possible
the production of an agricultural commodity, further explained in 7 CFR Part
940, Subpart G, Exhibit M. If Debtor pledges the Property to Secured Party
(delivers the Property into the possession or control of Secured Party or a
designated third party), Debtor will, upon receipt, deliver any proceeds and
products of the Property to Secured Party. Debtor will provide Secured party
with any noted documents, financial statements, reports, and other information
relating to the Property Debtor receives as the owner of the Property.


PERFECTION OF SECURITY INTEREST. Debtor authorizes Secured Party to file a
financing statement covering the Property. Debtor will comply with, facilitate,
and otherwise assist Secured Party in connection with obtaining possession or
control over the Property for purposes of perfecting Secured Party’s interest
under the Uniform Commercial Code.


INSURANCE. Debtor agrees to keep the Property insured against the risks
reasonably associated with the Property until the Property is released from
this Agreement. Debtor will maintain this insurance in the amounts Secured
Party requires. Debtor may choose the insurance company, subject to Secured
Party’s approval, which will not be unreasonably withheld. Debtor will have the
insurance provider name Secured Party as loss payee on the insurance policy.
Debtor will give Secured Party and the insurance proceeds toward the Secured
Debts. Secured Party may require additional security as a condition of
permitting any insurance proceeds to be used to repair or replace the Property.
If Secured Party acquires the Property in damaged condition, Debtor’s rights to
any insurance policies and proceeds will pass to Secured Party to the extent of
the Secured Debts. Debtor will immediately notify Secured Party of the
cancellation or termination of insurance. If Debtor fails to keep the Property
insured, or fails to provide Secured Party with proof of insurance, Secured
Party may obtain insurance to protect Secured Party’s interest in the Property.
The insurance may include coverages not originally required of Debtor, may be
written by a company other than one Debtor would choose, and may be written at
a higher rate than Debtor could obtain if Debtor purchased the insurance.


AUTHORITY TO PERFORM. Debtor authorizes Secured Party to do anything Secured
Party deems reasonably necessary to protect the Property and Secured Party’s
interest in the


 






 


Property. If Debtor fails to perform any of Debtor’s duties
under this Agreement, Secured Party is authorized, without notice to Debtor, to
perform the duties or cause them to be performed. These authorizations include,
but are not limited to, permission to pay for the repair, maintenance, and
preservation of the Property and take any action to realize the value of the
Property. Secured Party’s authority to perform for Debtor does not create an
obligation to perform, and Secured Party’s failure to perform will not preclude
Secured Party from exercising any other rights under the law or this Agreement.
If Secured Party performs for Debtor, Secured Party will use reasonable care.
Reasonable care will not include any steps necessary to preserve rights against
prior parties or any duty to take action in connection with the management of
the Property.


If Secured Party comes into possession of the Property, Secured Party will
preserve and protect the Property to the extent required by law. Secured
Party’s duty of care with respect to the Property will be satisfied if Secured
Party exercises reasonable care in the safekeeping of the Property or in the
selection of a third party in possession of the Property.


Secured Party may enforce the obligations of an account debtor or other rights
with respect to the account debtor’s or other person’s obligations to make
payment or otherwise render performance to Debtor, and enforce any security
interest that secures such obligations.


PURCHASE MONEY SECURITY INTEREST. If the Property includes items purchased
with the Secured Debts, the Property purchased with the Secured Debts will
remain subject to Secured Party’s security interest until the Secured Debts are
paid in full. Payments on any non-purchase money loan also secured by this
Agreement will not be applied to the purchase money loan. Payments on the
purchase money loan will be applied first to the non-purchase money portion of
the loan, if any, and then to the purchase money portion in the order in which
the purchase money Property was acquired. If the purchase money Property was
acquired at the same time, payments will be terminated by application of this
formula.


DEFAULT. Debtor will be in default if:



	(1)	 	Debtor (or Borrower, if not the same) fails to make a payment in full
when due;
	 
	(2)	 	Debtor fails to perform any condition or keep any covenant on this or any
debt or agreement Debtor has with Secured Party;
	 
	(3)	 	a default occurs under the terms of any instrument or agreement
evidencing or pertaining to the Secured Debts;
	 
	(4)	 	anything else happens that either causes Secured Party to reasonably
believe that Secured Party will have difficulty in collecting the Secured
Debts or significantly impairs the value of the Property.



REMEDIES. After Debtor defaults, and after Secured Party gives any legally
required notice and opportunity to cure the default, Secured Party may at
Secured Party’s option do any one or more of the following:



	(1)	 	make all or any part of the Secured Debts immediately due and accrue
interest at the highest post-maturity interest rate;
	 
	(2)	 	require Debtor to gather the Property and make it available to Secured
Party in a reasonable fashion;
	 
	(3)	 	enter upon Debtor’s premises and take possession of all or any part of
Debtor’s property for purposes of preserving the Property or its value and
use and operate Debtor’s property to protect Secured Party’s interest, all
without payment or compensation to Debtor;
	 
	(4)	 	use any remedy allowed by state or federal law, or provided in any
agreement evidencing or pertaining to the Secured Debts.



If Secured Party repossesses the Property or enforces the obligations of an
account debtor, Secured Party may keep or dispose of the Property as provided
by law. Secured Party will apply the proceeds of any collection or disposition
first to Secured Party’s expenses of enforcement, which includes reasonable
attorneys’ fees and legal expenses to the extent not prohibited by law, and
then to the Secured Debts. Debtor (or Borrower, if no the same) will be liable
for the deficiency, if any.


 






 


By choosing any one or more of these remedies, Secured Party does not give up
the right to use any other remedy. Secured Party does not waive default by not
using a remedy.


WAIVER. Debtor waives all claims for damages caused by Secured Party’s acts or
omissions where Secured Party acts in good faith.


NOTICE AND ADDITIONAL DOCUMENTS. Where notice is required, Debtor agrees that
10 days prior written notice will be reasonable notice to Debtor under the
Uniform Commercial Code. Notice to one party is notice to all parties. Debtor
agrees to sign, deliver, and file any additional documents and certifications
Secured Party considers necessary to perfect, continue, or preserve Debtor’s
obligations under this Agreement and to confirm Secured Party’s lien status on
the Property.



	 	 	 	 	 
	CHAMPION INDUSTRIES, INC	 	
FIRST CENTURY BANK, N.A.	 	 
	P.O. BOX 2968	 	
500 FEDERAL STREET	 	 
	HUNTINGTON, WV 25703	 	
BLUEFIELD, WV 24701
	 	Loan Number: 1393995     
	 	 	 	 	Date: 04-02-2003     
	 	 	 	 	Maturity Date: 04-02-2008_
	BORROWER’S NAME AND	 	
LENDER’S NAME AND ADDRESS
	 	Loan Amount: $450,000.00     
	ADDRESS	 	
“You” means the lender,
	 	Renewal of           
	“I” includes each	 	
its successors and
	 	BR/RESP 01/801
	borrower above, jointly	 	
assigns.	 	 
	and severally	 	 	 	 



For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of FOUR HUNDRED FIFTY THOUSAND FIFTY AND NO/100
Dollars $450,050.00



	n Single Advance: I will receive all of this principal sum on 04-02-2003     .
No additional advances are contemplated under this note.

	 
	o Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On                       
I will
receive the amount of $             
and future principal advances
are contemplated.
Conditions: The conditions for future
advances are
                                                
                                                
                                   
                                                
                                                
                                                
                                                
                                                

o
Open End Credit: You and I agree that I may borrow up to the maximum amount
of principal more than one time. This feature is subject to all other
conditions and expires on
                      
              
              .

o Closad End Credit: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).


	 
	INTEREST: I agree to pay interest on the outstanding principal balance from
04-02-2003      at the rate of 4.250 % per year until 04-03-2003 .
	 
	 	 	n Variable Rate: This rate may then change as stated below.
	 
	 	 	n Index Rate: The future rate will be EQUAL TO the following index rate:
THE HIGHEST RATE ON CORPORATE LOANS POSTED BY AT LEAST 75% OF THE USA’S
THIRTY LARGEST BANKS KNOWN AS THE WALL STREET JOURNAL PRIME RATE. THE RESULT
OF THIS CALCULATION WILL BE ROUNDED UP TO THE NEAREST 0.125 .
	 
	 	 	o No Index: The future rate will not be subject to any internal or external
index. It will be entirely in your control.
	 
	 	 	n Frequency and Timing: The rate on this note may change as often as EVERY
DAY BEGINNING 04-03-2003 . A change in the interest rate will take
effect ON THE SAME DAY .
	 
	 	 	o Limitations: During the term of this loan, the applicable annual interest
rate will not be more than                       % or less than                       %.
The rate may not change more than                       % each                       .
	 
	 	 	Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:



 






 







	 	 	n The amount of each scheduled payment will change. o The amount of the
final payment will change.
	 
	 	 	o_______________________________________________________________________.



ACCRUAL METHOD: Interest will be calculated on a ACTUAL/360 basis.


POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:



	 	 	n on the same fixed or variable rate basis in effect before maturity (as
indicated above).
	 
	 	 	o
at a rate equal to
_________________________________________________________.



n LATE CHARGE: if a payment is made more than 10 days after it is due, I
agree to pay a late charge of 5.000% OF THE LATE AMOUNT.


n ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which n are o are not included in the principal amount above:


______________________________________________________________________________.


PAYMENTS: I agree to pay this note as follows:


ON DEMAND, BUT IF NO DEMAND IS MADE THEN 60 MONTHLY PAYMENTS OF $8,352.55
BEGINNING 05-02-2003. THIS IS A VARIABLE RATE LOAN AND THE PAYMENT AMOUNTS MAY
CHANGE AFTER THE 1ST PAYMENT AND EVERY PAYMENT THEREAFTER.


ADDITIONAL TERMS:




	 
	n SECURITY: This note is separately secured by (describe separate document by type and date):
	 
	SEPARATE SECURITY AGREEMENT DATED APRIL 2, 2003
	 
	(This section is for your internal use. Failure to list a separate security document does not mean the agreement will not secure this note.)
	 
	PURPOSE: The purpose of this loan is
PURCHASE EQUIPMENT.
	 
	SIGNATURES: I AGREE TO THE TERMS OF
THIS NOTE (INCLUDING THOSE ON PAGE 2).
	I have received a copy on
today’s date.




	 	 	 
	Signature for Lender	 	
CHAMPION INDUSTRIES, INC.
	 	 	 
	
	 	


	JEFFERY L. FORLINES, SENIOR VICE PRESIDENT	 	
TODD R. FRY, VICE PRESIDENT & CFO
	 	 	 
	
	 	


	 	 	 
	 	 	


	 	 	 
	UNIVERSAL NOTE	 	





DEFINITIONS: As used on page 1, “n” means the terms that apply to this loan.
“I,” “me” or “my” means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this note (together referred to as “us”). “You” or “your means the Lender
and its successors and assigns.


APPLICABLE LAW: The law of the state in which you are located will govern this
note. Any term of this note which is contrary to applicable law will not be
effective, unless the


 






 


law permits you and me to agree to such variation. If
any provision of this agreement cannot be enforced according to its terms, this
fact will not affect the enforceability of the remainder of this agreement. No
modification of this agreement may be made without your express written
consent. Time is of the essence in this element.


COMMISSIONS OR OTHER REMUNERATION: I understand and agree that any insurance
premiums paid to insurance companies as part of this note will involve money
retained by you or paid back to you as commissions or other remuneration.


     In addition, I understand and agree that some other payments to third
parties as part of this note may also involve money retained by you or paid
back to you as commissions or other remuneration.


PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to a different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will note excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).


INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree by law and this agreement, you agree to refund it to me.


INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the
rate on this note will be the same rate you charge on any other loans or class
of loans to me or other borrowers.


ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For purpose of interest calculation, the accrual method will determine
the number of days in a “year.” If no accrual method is stated, then you may
use any reasonable accrual method for calculating interest.


POST MATURITY RATE: For purposed of deciding when the “Post Maturity Rate” (
shown on page 1) applies, the term “maturity” means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.


SINGLE ADVANCE LOANS. If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the “PAYMENTS BY LENDER”
paragraph below.


MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
you will make more than one advance of principal. If this is closed and credit,
repaying a part of the principal will not entitle me to additional credit.


PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat
those payments made by you as advances and add them to the unpaid principal
under this note, or you may demand immediate payment of the charges.


SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.



	 	 	 	“Right to receive money from you” means:
	 
	 	(1)	 	any deposit account balance I have with you;
	 
	 	(2)	 	any money owed to me on an item presented to you or in your possession
for collection or exchange; and
	 
	 	(3)	 	any repurchase agreement or other nondeposit obligation.



 






 






     “Any amount due and payable under this note” means that total amount of
which you are entitled to demand payment under the terms of this note at the
time you set off. This total includes any balance the due date for which you
properly accelerate under this note.


     If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.


     You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree to
hold you harmless from any such claims arising as a result of your exercise of
your right of set-off.


REAL ESTATE OF RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent
not prohibited by law and not contrary to the terms of the separate security
instrument, by the “Default” and “Remedies” paragraphs herein.


DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without
first notifying you before making such a change; (10) I fail to plant,
cultivate and harvest crops in due season if I am a producer of crops; (11) any
loan proceeds are used for a purpose that will contribute to excessive erosion
of highly erodible land or to the conversion of wetlands to produce an
agricultural commodity, as further explained in 7 C.F.R. Part 940, Subpart G,
Exhibit M.


REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:



	 	(1)	 	You may demand immediate payment o all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
	 
	 	(2)	 	You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the “Set-Off” paragraph herein.
	 
	 	(3)	 	You may demand security, additional security, or additional parties to
be obligated to pay this note as a condition for not using any other
remedy.
	 
	 	(4)	 	You may refuse to make advances to me or allow purchases on credit by
me.
	 
	 	(5)	 	You may use any remedy you have under state and federal law.



By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default
if it continues or happens again.


COLLECTION COSTS AND ATTORNEY’S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee you
incur with such attorney plus court costs (except where prohibited by law). To
the extent permitted by the United States Bankruptcy Code, I also agree to pay
the reasonable attorney’s fees and costs you incur to collect this debt as
awarded by any court exercising jurisdiction under the Bankruptcy Code.


 






 


WAIVER: I give up my rights to require you to do certain things. I will not
require you to:



	 	(1)	 	demand payment of amounts due (presentment);
	 
	 	(2)	 	obtain official certification of nonpayment (protest); or
	 
	 	(3)	 	give notice that amounts due have not been paid (notice of dishonor).
	 
	 	I waive any defenses I have based on suretyship or impairment of collateral.



OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a
separate guarantee or endorsement). You may sue me alone, or anyone else who is
obligated on this note, or any number of us together, to collect this note. You
may do so without any notice that it has not been paid (notice of dishonor).
You may without notice release any party to this agreement without releasing
any other party. If you give up any of your rights, with or without notice, it
will not affect my duty to pay this note. Any extension of new credit to any of
us, or renewal of this note by all or less than all of us will not release me
from my duty to pay it. (Of course, you are entitled to only one payment in
full.) I agree that you may at your option extend this note or the debt
represented by this note, or any portion of the note or debt, from time to time
without limit or notice and for any term without affecting my liability for
payment of the note, I will not assign my obligation under this agreement
without your prior written approval.


FINANCIAL INFORMATION: I agree to provide you, upon request, any financial
statement or information you may deem necessary. I warrant that the financial
statements and information I provide to you are or will be accurate, correct
and complete.


NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in
writing of any change in my address. I will give any notice to you by mailing
it first class to your address stated on page 1 of this agreement, or to any
other address that you have designated.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BORROWER’S	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	INITIALS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	INTEREST
	DATE OF	 	PRINCIPAL	 	(not	 	PRINCIPAL	 	PRINCIPAL	 	INTEREST	 	INTEREST	 	PAID
	TRANSACTION	 	ADVANCE	 	required)	 	PAYMENTS	 	BALANCE	 	RATE	 	PAYMENTS	 	THROUGH:
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$	 	 	 	 	 	 
	 
	 	$	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	$