exv10w7



 



10.7



Promissory Note, $122,500 between Champion Industries, Inc. and Community Trust
Bank dated as of January 9, 2003.


 






 


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:
	 	Community Trust Bank Inc.
	 	 	
P.O. Box 2968
	 	 	 	Main Office
	 	 	
Huntington, WV 25728-2968
	 	 	 	346 North Mayo Trail
	 	 	 	 	 	 	P.O. Box 2947
	 	 	 	 	 	 	Pikeville, KY 41502-2947



Principal Amount: $122,500.00 Initial Rate: 4.250% Date of Note: January 9,
2003


PROMISE TO PAY. CHAMPION INDUSTRIES, INC. (“Borrower”) promises to pay to
Community Trust Bank, Inc. (“Lender”), or order, in lawful money of the United
States of America, the principal amount of One Hundred Twenty-two Thousand Five
Hundred & 00/100 Dollars ($122,500.00), together with interest on the unpaid
principal balance from January 9, 2003, until paid in full.


PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 36 payments of $3,633.48 each payment.
Borrower’s first payment is due February 9, 2003, and all subsequent payments
are due on the same day of each month after that. Borrower’s final payment will
be due on January 9, 2006, 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 accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges. The annual interest rate for this
Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days’ multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender’s address shown
above or at such other place as Lender may designate in writing.


VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the Highest
Prime Rate most recently published in “The Wall Street Journal’s money rates
column” as the base rate on corporate loans at large U.S. money center
commercial banks. (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, [Any
change in the Prime Rate shall be effective as of the day on which the change
is announced to become effective]. Borrower understands that Lender may make
loans based on other rates as well. The Index currently is 4.250% 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, resulting In an initial rate of 4.250%
per annum. NOTICE: Under no circumstances will the interest rate on this Note
be more than 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. 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: Community Trust Bank, Inc., P.O. Box 2947 Pikeville, KY
41502-2947.


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


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 2.000 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 or against Borrower.
	 
	 	 	Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture



 






 





	 	 	proceeding and if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for
the creditor or forfeiture proceeding, in an amount determined by Lender,
in its sole discretion, as being an adequate reserve or bond for the
dispute.
	 
	 	 	Events Affecting Guarantor. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation
party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this
Note. 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
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 reasonable
attorneys’ fees and Lender’s legal expenses whether or not there is a lawsuit,
including reasonable attorneys’ fees and legal 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 Commonwealth of Kentucky. This
Note has been accepted by Lender in the Commonwealth of Kentucky.


CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request
to submit to the jurisdiction of the courts of Pike County, Commonwealth of
Kentucky.


DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 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 an 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


COLLATERAL Borrower acknowledges this Note is secured by (2) Digital Imaging
Groups.


INTEREST INCREASE. THIS NOTE’S INTEREST RATE WILL BE INCREASED BY 2% PER ANNUM
IF ANY PAYMENT IS NOT RECEIVED WITHIN 30 DAYS OF ITS DUE DATE.


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.


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 Lander
may renew or extend (repeatedly and for any length of the) this loan or release
any party u guarantee 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.


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	 	 	 	: TONEY ADKINS, Vice President at CHAMPION INDUSTRIES, INC.
	 	 	


	 	 



LENDER:


COMMUNITY TRUST BANK, INC.



	 
	X
	

Authorized Signer