exv10w3



 



10.3



Business Loan Agreement, $351,000 commercial loan between Champion Industries,
Inc. and City National Bank together with promissory note dated as of August
14, 2003.


 






 


BUSINESS LOAN AGREEMENT



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.



	 	 	 	 	 	 	 
	Borrower:	 	
CHAMPION INDUSTRIES, INC.
	 	Lender:
	 	City National Bank
	 	 	
(TIN: 55-0717455)
	 	 	 	of West Virginia
	 	 	
2450-901ST AVENUE
	 	 	 	Huntington Branch
	 	 	
HUNTINGTON, WV 25703
	 	 	 	1900 Third Avenue
Huntington, WV 25703
	 	 	 	 	 	 	(304) 526-6200



THIS BUSINESS LOAN AGREEMENT dated August 14 2003, Is made and executed between
CHAMPION INDUSTRIES, INC. (“Borrower”) and City National Bank of West Virginia
(“Lender”) on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial 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.


TERM. This Agreement shall be effective as of August 14, 2003, 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 such time as
the parties may agree in writing to terminate this Agreement.


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 State of West Virginia. 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 an
office at 2450-90 1ST AVENUE, HUNTINGTON, WV 25703. Unless Borrower has
designated otherwise in writing, the principal office is the 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 Borrower’s articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (2) any law, governmental regulation,
court decree, or order applicable to Borrower or to Borrower’s properties.
	 
	 	 	Financial Information. Each of Borrower’s financial statements supplied to
Lender truly and completely disclosed Borrower’s financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower’s financial condition subsequent to the date of the most recent



 






 







	 	 	financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
	 
	 	 	Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
	 
	 	 	Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower’s financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower’s
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All
of Borrower’s properties are titled in Borrower’s legal name, and Borrower
has not used or filed a financing statement under any other name for at least
the last five (5) years.
	 
	 	 	Hazardous Substances. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period of
Borrower’s ownership of Borrower’s 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 and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on
the Collateral. The provisions of this section of the Agreement, including
the obligation to indemnify, shall survive the payment of the Indebtedness
and the termination, expiration or satisfaction of this Agreement and shall
not be affected by Lender’s acquisition of any interest in any of the
Collateral, whether by foreclosure or otherwise.



 






 







	 	 	Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may
materially adversely affect Borrower’s financial




	 	 	 	 
	Loan No: 99908226	 	
BUSINESS LOAN AGREEMENT

(Continued)	 




	 	 	condition or properties, other than litigation, claims, or other events, if
any, that have been disclosed to and acknowledged by Lender in writing.
	 
	 	 	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, end 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.
	 
	 	 	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 end income statement for the year ended, compiled by a certified
public accountant satisfactory to Lender.
	 
	 	 	 	Tax Returns. As soon as available, but in no event later than
one-hundred-twenty (120) 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 ten (10) 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; 14) 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 Proceeds. Use ail Loan proceeds solely for Borrower’s business
operations unless specifically consented to the contrary by Lender in
writing.
	 
	 	 	Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed
upon Borrower or its properties, income, or profits, prior to the date on
which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s properties, income, or
profits.
	 
	 	 	Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower and
Lender. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.



 






 







	 	 	Operations. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner.
	 
	 	 	Environmental Studies. Promptly conduct and complete, at Borrower’s expense,
all such investigations, studies, samplings and testings as 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, Lenders 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 trusts, 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. 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, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying ail
costs for insuring, maintaining and preserving any Collateral. 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. (l) 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 (3) pay any dividends on Borrower’s stock
(other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if
Borrower is a “Subchapter S Corporation” (as defined in the internal Revenue
Code of 1986, as amended), Borrower may pay cash dividends on its stock to
its shareholders from time to time in amounts necessary to enable the
shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from
their status as Shareholders of a Subchapter S Corporation because of their
ownership of shares of Borrower’s stock, or purchase or retire any of
Borrower’s outstanding shares or alter or amend Borrower’s capital structure.
	 
	 	 	Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets, (2) purchase, create or acquire any interest in any other enterprise
or entity, or (3) incur any obligation as surety or guarantor other than in
the ordinary course of business.



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


RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s 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
Indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.


DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:



	 	 	Payment Default. Borrower fails to make any payment when due under the Loan.



 






 







	 	 	Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement 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.
	 
	 	 	Default In Favor of Third Parties. Borrower or any Grantor defaults 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
materially affect any of Borrower’s or any Grantor’s property or Borrower’s
or any Grantor’s ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents.
	 
	 	 	False Statements. Any warranty, representation or statement made or
furnished; to Lender by Borrower or on Borrower’s behalf under this Agreement
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.
	 
	 	 	Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
	 
	 	 	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 of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness. In the event of a death, Lender, at its option,
may, but shall not be required to, permit the Guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
	 
	 	 	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 the
Loan is impaired.



 






 







	 	 	Insecurity. Lender in good faith believes itself insecure.
	 
	 	 	Right to Cure. If any default, other than a default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been given a
notice of a similar default within the preceding twelve (12) months, it may
be cured (and no Event of Default will have occurred) if Borrower or Grantor,
as the case may be, after receiving written notice from Lender demanding cure
of such default: (1) cure the default within ten (10) days; or (2) if the
cure requires more than ten (10) days, immediately initiate steps which
Lender deems in Lender’s sole discretion to be sufficient to cure the default
and thereafter continue and complete all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.



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. 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.


MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement



	 	 	Amendments. This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment.
	 
	 	 	Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s
costs and expenses, including Lender’s attorneys’ fees 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 attorneys’ fees and legal expenses whether or not
there is a lawsuit, including attorneys’ fees 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
maybe 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.



 






 







	 	 	Consent to Loan Participation. Borrower agrees and consents to Lenders 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, construed and enforced in
accordance with federal law and the laws of the State of West Virginia. This
Agreement has been accepted by Lender in the State of West Virginia.
	 
	 	 	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. Any notice required to be given under this Agreement shall be given
in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when deposited
with a nationally recognized overnight courier, or, if mailed, when deposited
in the United States mail, as first class, certified or registered mail
postage prepaid, directed to the addresses shown near the beginning of this
Agreement. Any party may change its address for notices under this Agreement
by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party’s address. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower’s current
address. Unless otherwise provided or required by law, if there is more than
one Borrower, any notice given by Lender to any Borrower is deemed to be
notice given to all borrowers.



 






 







	 	 	Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability of any
other provision of this Agreement.
	 
	 	 	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 contained by or on
behalf of Borrower 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.
	 
	 	 	Time is of the Essence. Time is of the essence in the performance of this
Agreement.
	 
	 	 	Waive Jury. All parties to this Agreement hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by any party against
any other party.



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 Uniform Commercial Code.
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 to this Business Loan
Agreement from time to time.
	 
	 	 	Borrower. The word “Borrower” means CHAMPION INDUSTRIES, INC., and all other
persons and entities signing the Note in whatever capacity.
	 
	 	 	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.
	 
	 	 	Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
	 
	 	 	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, including all principal and interest 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 City National Bank of West Virginia, its
successors and assigns.
	 
	 	 	Loan. The word “Loan” means any and all loans and financial accommodations
from Lender to Borrower whether now or hereafter existing, and however
evidenced, including without limitation those loans and financial
accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.
	 
	 	 	Note. The word “Note” means the Note executed by CHAMPION INDUSTRIES, INC. in
the principal amount of $351,000.00 dated August 14, 2003, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations
of, and substitutions 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, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (4) purchase money liens
or purchase money security interests upon or in any property acquired or held
by Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be incurred under
the paragraph of this Agreement titled “Indebtedness and Liens”; (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 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 AUGUST 14, 2003.


BORROWER:



CHAMPION INDUSTRIES, INC.


By:

        TODD R FRY, VICE PRESIDENT & CFO of CHAMPION INDUSTRIES, INC.


LENDER:


CITY NATIONAL BANK OF WEST VIRGINIA


By:

        Authorized Signer


 






 



PROMISSORY NOTE



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.



	 	 	 	 	 	 	 
	Borrower:	 	
CHAMPION INDUSTRIES, INC. (TIN: 55-0717455)
	 	Lender:
	 	City National Bank
	 	 	
2450-90 1ST AVENUE
	 	 	 	of West Virginia
	 	 	
HUNTINGTON, WV 25703
	 	 	 	Huntington Branch
	 	 	 	 	 	 	1900 Third Avenue
	 	 	 	 	 	 	Huntington, WV
	 	 	 	 	 	 	25703
	 	 	 	 	 	 	(304) 526-6200



Principal Amount: $351,000.00 Initial Rate: 4.000% Date of Note: August 14,
2003


PROMISE TO PAY. CHAMPION INDUSTRIES, INC. (“Borrower”) promises to pay to City
National Bank of West Virginia (“Lender”), or order, in lawful money of the
United States of America, the principal amount of Three Hundred Fifty-one
Thousand & 00/100 Dollars ($351,000.00), together with interest on the unpaid
principal balance from August 14, 2003, until paid in full. The interest rate
will not increase above 18.000%.


PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 59 payments of $6,473.80 each payment and an
irregular last payment estimated at $6,473.71 Borrower’s first payment is due
September 14, 2003, and all subsequent payments are due on the same day of each
month after that. Borrower’s final payment will be due on August 14, 2008, and
will be for all principal and all accrued Interest not yet paid. Payments
include principal and interest. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection costs
and any late charges, then to any unpaid interest, and any remaining amount to
principal. 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 The
Wall Street Journal Prime Rate as published in the Money Rates Section of 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 notice to
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 4.000% per annum. The Interest rate to be applied to the unpaid
principal balance of this Note will be at a rate equal to the Index, adjusted
if necessary for any minimum and maximum rate limitations described below,
resulting in an initial rate of 4.000% per annum. Notwithstanding the
foregoing, the variable interest rate or rates provided for in this Note will
be subject to the following minimum and maximum rates. NOTICE: Under no
circumstances will the interest rate on this Note be less than 1.000% per annum
or more than (except for any higher default rate shown below) the lesser of
18.000% per annum or the maximum rate allowed by applicable law. Whenever
increases occur in the interest rate, Lender, at its option, may do one or more
of the following: (A) increase Borrower’s payments to ensure Borrower’s loan
will pay off by its original final maturity date, (B) increase Borrower’s
payments to cover accruing interest, (C) increase the number of Borrower’s
payments, and (D) continue Borrower’s payments at the same amount and increase
Borrower’s final payment.


PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $7.50. Other than Borrower’s obligation to pay any minimum interest
charge, 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
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: City National
Bank of West Virginia, Huntington Branch, 1900 Third Avenue, Huntington, WV
25703.


LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $25.00, whichever is greater.


INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 4.000 percentage points
over the Index. The interest rate will not exceed the maximum rate permitted by
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.



 






 







	 	 	Default in Favor of Third Parties. Borrower or any Grantor defaults 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 materially affect any of Borrower’s property or Borrower’s
ability to repay this Note or perform Borrower’s obligations under this
Note or any of the related documents.
	 
	 	 	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 q~ 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. In the event of a death, Lender, at its option, may, but shall not
be required to, permit the guarantor’s estate to assume unconditionally
the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default.
	 
	 	 	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.
	 
	 	 	Insecurity. Lender in good faith believes itself insecure.
	 
	 	 	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 (and no event of default will have occurred) 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 on 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.


JURY WAIVER. Lender and Borrower hereby waive the right to any Jury trial in
any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other.


GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of West Virginia. This
Note has been accepted by Lender in the State of West Virginia.


DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower
makes a payment on Borrower’s loan and the check or preauthorized charge with
which Borrower pays is later dishonored.


RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s 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
indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.


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: City National
Bank of West Virginia, 25 Gatewater Road, PO Box 7220, Cross Lanes, WV
25313-7220


GENERAL PROVISIONS. 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 allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the


 






 


terms of this Note, and unless otherwise expressly stated 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 Borrower’s agreement with Lender, Lender
may purchase insurance at Borrowers 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 affective 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:
	

	TODD R FRY, VICE PRESIDENT & CFO of
	CHAMPION INDUSTRIES, INC.